River Wissey Lovell Fuller

A Worrying Trend

December 2003

Ron debates whether the ever increasing move of UK services to cheaper overseas locations is damaging our Manufacturing Base

In the last two decades we have seen a steady decline in our major industries as much of the work has gone overseas. So many manufactured items that we buy are made in China or other Asian countries. Many companies based in Britain, such as Avon Cosmetics, are themselves moving their operations out of the country to take advantage of cheaper labour. Shipbuilding is a mere fraction of what it once was, our motor industry is largely foreign owned and hangs on by a thread as more and more cars are imported and the pressure on the motor companies to close plants in the UK increases, at the same time the steel and coal industries employ a tiny fraction of the numbers that they once did. It is something of a mystery to me that we have continued to prosper in recent years despite the loss of all these jobs. The manner in which industries that were once a matter of national pride are now owned by larger international concerns further increases the risk that they will take such work as does remain elsewhere. Service industries, we are told, are the key to our prosperity and yet it is difficult to understand how many of these service industries are actually wealth creating.

In the last year or so there has been a new trend which would seem to further threaten our future prosperity. It started with 'call centres', many of which are now based overseas and, more recently, one of the larger banks operating in the UK, HSBC, has announced that it is transferring 4000 jobs out of this country. One should not be too surprised that HSBC would be the first bank to do this, after all it is The Hong Kong and Shanghai bank, but others may well follow. So it appears that sectors of the service industries are also going abroad and it represents a trend which is worrying. Furthermore the steady flow of immigrants that it seems impossible to stop can only exacerbate the situation. How can we possibly continue to prosper if, in the end, we are left only with farmers and retailers trying to sell their goods to people that have no jobs?

I recognise the dreadful imbalance that exists in the world between those like us in the rich nations and the grinding poverty in the third world, and admit the need for us to strive to relieve that poverty and to try to bring their living standards nearer to our own. Numerically the poor in the world greatly outnumber the wealthy, however, and the failure to spread knowledge on means of birth control, partly due to the irresponsible teaching of the Catholic Church in this respect, has helped to ensure that this continues to be so. It would seem, therefore, that there is practically no possibility of bringing the living standard of the poor to anywhere near that of the rich nations. The availability of resources alone would seem to make that impossible and so the chances of 'levelling up' living standards seem very slim and one must conclude that 'levelling down' is the most likely outcome. The move by HSBC could be the point at which the trend towards that downward slide begins. If this proves to be so then I fear that it will be a recipe for future conflict because the West will not accept a downward change willingly. Perhaps I am a false prophet of doom, I hope so, I confess to very little understanding of international economics. Maybe there is an economist among our readers who can scoff at my ideas and explain how we can expect to continue to prosper whilst improving the living standards of the rest of the world by passing over our jobs to them.

Ron Watts

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