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Thursday 12 January 2012

Verity Murphy | 15:45 UK time, Thursday, 12 January 2012

Tesco may have been "disappointed" by its Christmas trading, but many other firms reported "outstanding" results. So how is the UK economy faring in the New Year?

As David Cameron's recent EU veto demonstrates, in his opinion the City still commands a special place as a wealth generator, so will talk of re-balancing the economy come to anything or are we still reliant on consumer spending and investment banking as key components for growth?

Newsnight's Andrew Verity investigates, whilst Dragon Deborah Meaden and the FT's Gillian Tett join Emily Maitlis in the studio.

Also, in the wake of the Lords defeat for the government's welfare reforms, David Grossman asks where the proposals go from here. Employment Minister Chris Grayling and disability campaigner Sue Marsh debate the plans.

There has been a shocked response around the world after video footage appearing to show US marines urinating on dead Taliban fighters was posted on the internet.
US Secretary of State Hilary Clinton says it was "deplorable behaviour". Our Diplomatic editor Mark Urban asks if it could lead to a backlash against troops in Afghanistan.

And back to the economy, the BBC's Tokyo correspondent Roland Buerk looks at Japan's economic stagnation of the late 1980s and 90s, and asks if it really was a "lost decade" and what can the UK learn from it?


  • Comment number 1.

    "the City still commands a special place as a wealth generator"??????????

    Nonsense! Another loaded piece of opinion from the NN web team. The City is undoubtedly a centre of power, but how much of the current deficit and National Debt is due to its failings? The City creates nothing, but merely extracts rent from elsewhere.

  • Comment number 2.

    "And as David Cameron's recent EU veto demonstrates, the City still commands a special place as a wealth generator..."

    Please, please, please.....don't perpetuate the huge (deliberate?) misconception that the City is a wealth generator. They are simply skimmers that recycle and take a percentage of money from the real/productive parts of the economy.

    Karl Marx's defined that the only method of true wealth creation is to take a raw material, put WORK INTO it to turn it into a product and then sell it with a fair profit margin aka making real physical things.

    All the City does is make a few elite individuals rich at the expense of debasing the true productive part of the economy. Think Germany as the opposite - they make real things you know.

    Please someone explain this to Mr Verity before he goes on air tonight.

    Jeeze wept!

  • Comment number 3.

  • Comment number 4.

    'Dragon Deborah Meaden and the FT's Gillian Tett join Emily Maitlis in the studio.'


  • Comment number 5.

    Looks like the BBC are going to charge EVEN more. They will start charging for a pay-per-view service on the iplayer. This is on TOP of the licence fee!

  • Comment number 6.

    All this user's posts have been removed.Why?

  • Comment number 7.

    All this user's posts have been removed.Why?

  • Comment number 8.

    Consumer spending as a key component for growth?

    More oblate ellipsoids!! That can only help if you manufacture the products you consume or export something of comparable value: otherwise it's consumption without earning, as in Greece.

    "financial fraud and piracy" (Jim @6) has sustained the UK economy for too long, and though it's a cancer which will eventually kill the host, many livelihoods, particulary in the south of England, depend upon it. We are in a dilemma where removing the cancer might also kill the patient, or at least severely damage it in the short term. Unfortunately, some of those most threatened by the removal of the cancer have a tendency to think of themselves as superior to those who get their hands dirty creating real wealth, AND are strongly linked to our governing class.

  • Comment number 9.


    Premeditated killing of Johnnie Foreigner, even from the sky with a cowardly, unmanned drone, risking obscene 'collateral damage', is decent and even honourable - apparently. But once you have killed him, his corpse becomes sacrosanct.

    Is it me?

  • Comment number 10.

    I am listening to the debate now - should we all become plumbers or should we become pharmaceutical scientists.

    There is no point - there is no point as long as there are hundreds of thousands of immigrants coming into the UK each year undercutting everyone from plumbers, brickies, IT workers, scientists, etc.

    Perhaps BBC TV Presenters and FT journalists will only get why this is SO bad for the UK economy when Eastern European and Asian TV Presenters are presenting Newsnight for 10K a year or editing the FT for tuppence!

  • Comment number 11.

    We have nearly a 50% higher education participation rate - and a large vocational training sector. We have highly skilled graduates unable to find jobs.

    To argue that our skills base is the problem is complete and utter bunkum.

    There are not the jobs out there to fill - the problem is a lack of investment because multinationals can make more money offshoring manufacturing than they can investing here.

    This is because of unfair trade with rigged exchange rates and naked exploitation of workers by the likes of the Communist Party of China which maintains an army of millions to prevent any sign of rebellion by people paid near slave labour wages to produce goods which are dumped in the UK at below cost, thanks to the rigged chinese currency.

    Do we seriously believe that free schools are the answer - or even vaguely relevant?

    Do we seriously believe this do-nothing approach will work?

    We don't have 20 years - we probably don't have 20 months.

    The mindwashing by libertarian free marketeers of the chattering classes is evident from the discussion tonight. The participants all implicitly agreed with each other on this - they blamed everything under the sun, rather than confront the real issue - globalisation is the process by which developed economies are undercut by developing ones, whose manufacturing base is then hollowed out, unless their governments prevent it from happening - that's exactly what the German government has done.

    We have always sold our creative people short - inventors, innovators, all have been left to sink or swim by a culture of sneering rentiers who are only interested in making money out of property and unproductive, dubious "financial services". It's not surprising they go abroad.

    It will now be the market whcih sorts this out. UK PLC will go down the tubes, there will be a massive Sterling crisis and devaluation, then we won't be able to afford the imports and the gravy train will come to a halt.

    We could have done exactly what countries like India do - protect their industries to allow them to develop, tax goods coming from countries running large balance of payments surpluses with us and as with the German tripartite system, make sure companies taken decisions that are in the long term good of the nation, not short-termist decisions to line the pockets of greedy managers who are not accountable to anyone.

    Wittering on about "entrepreneurial spirit" is naive, bigoted and simply ignores the reality of the global economy - dreaming that all we need is a bunch of%2

  • Comment number 12.


    Wittering on about "entrepreneurial spirit" is naive, bigoted and simply ignores the reality of the global economy - dreaming that all we need is a bunch of loonytunes to set up "free schools" which will turn out miraculously skilled workers is delusion writ large.

    The free marketeers are about to find out what happens when you allow the market - which is anything but "free" - to determine the direction of your society.

    The standard of living of the British people is going to fall drastically - the fact that Tesco is feeling the pinch is simply a manifestation of our national failure to address the fundamental problems we face to redirect our economy away from useless financial services and consumption towards self-sufficent manufacturing, energy and food production - this is what government should have been doing for the last decade.

  • Comment number 13.

    #11 and 12 Well said Richard, an excellent post.

  • Comment number 14.

    All this user's posts have been removed.Why?

  • Comment number 15.

    It’s strange how one issue, event, subject is ‘selected’ by the media and is followed, examined and analysed ad-infinitum (Anybody out there thinking ‘ad-nauseum’? …. Naughty, naughty! ) whereas other parallels are ignored! This must surely raise the issue of where ‘power’ actually lies ( A v. good example being the two race-based murders highlighted at ….. 37. At 13:44 11th Jan 2012, by museV )

    Tonight’s news broadcasts on the BBC give considerable coverage - in more ways than one - to the ? ‘phone footage [Q … condemnation from around the world.” UnQ. ] of micturition over corpses (Ironically C4 gave far less coverage - both types - in it’s evening bulletin.) yet one cannot recall the same level of coverage for the ‘phone footage of a teenager beheading a man under tutelage of the Taliban!

    Or the current witchcraft killing!

    Or the Xmas Oxford Street killing!

    Or the right of a man to marry a nine year old girl!

    Or the …..

    The list drags on …. side-stepped, unreported, ignored, forgotten!

    Two wrongs decidedly do not make a ‘right’ but - much heralded ‘impartiality’ side - whom decides? And most importantly …. Why!

    Re: Tonight’s main story ….

    The financial future of the UK ( Whilst it still survives! ) starts - all too obvious really - before ante-natal classes. By the start of primary school it’s already way too late! And then it continues going downhill for - at least - another eleven years!


    And …. Oh Yes!

    Nn …. Ever heard of ‘Nine-to-five, Monday to Friday disability’? More common than most - would like to - believe?


    And …. Oh Yes! Again!

    The - above mentioned - ‘micturition’ footage was too distressing to show!

    Yet a few minutes later up come ‘phone footage of self-immolation!


    (Or - inevitably - not!)


  • Comment number 16.


    Fifteen above.

    For want of an ‘a’ an “aside” was lost!

    It was meant to read ….

    Two wrongs decidedly do not make a ‘right’ but - much heralded ‘impartiality’ aside - whom decides? And most importantly …. Why!


    Anyone seen a flail? …. Anyone!


  • Comment number 17.


    I have never heard the dead complain, but I note a great many who wish they had been asked (or at least considered) before conception.

    Would any of our 650 MPs even grasp that concept?

    Campbell said (for Tony) "We don't do God" - Westminster, as a whole, doesn't do philosophy. Until that changes, we shall decline.


  • Comment number 18.


    I sent my query by 'recorded delivery'. 'None out of four' would seem significant.

    I assert that our parties DO NOT EXIST UNDER LAW. Too much to expect NewsyNighty to find that interesting, of course.

    Weep Britain.

  • Comment number 19.

    All this user's posts have been removed.Why?

  • Comment number 20.


    Hey! I never though of writing to Obama (I tried Max Keiser).

    I think you will find Saints are dead people who worked miracles. I am alive and can't get a bloody thing done! You appear to be under a misapprehension.

  • Comment number 21.


    According to Michael Gove (Minister without Qualification) "NOTHING MATTERS MORE THAN THE TIME A CHILD SPENDS IN THE COMPANY OF A GIFTED ADULT."

    Wrong answer Gove; you will never get on in life as anything other than a cipher politician. Wretched boy.

    What matters most - pay attention Gove - is THE TIME A NATION LANGUISHES UNDER UN-GIFTED, SELF-SERVING, MPs, MASQUERADING AS GOVERNANCE. In the case of Britain, it has been FAR TOO LONG.

    It is difficult to be rid of a bad teacher - IT IS IMPOSSIBLE TO SACK A BAD POLITICIAN. Parties are rather fond of them - they make easy whip-boys.


  • Comment number 22.

    '5. At 18:55 12th Jan 2012, Mistress76uk wrote:
    Looks like the BBC are going to charge EVEN more. '

    Luckily, even though it got mentioned, they think they got away with it.

    This 'pay more get less' model could catch on with the BBC. Not with public sector pensions reporting of course, as that is unique, but elsewhere...

  • Comment number 23.

    Interesting really.

    Tesco management have stuffed up, it appears. So, with no cost to me I can discern, moves are afoot to address this at senior level, and pronto.

    Meanwhile, in another multi-billion, if even more of a monopoly corporation near... and uniquely so... you...

    Vast capital 'investment', and now increased running costs.

    This paying for failure lark is interesting in how it gets interpreted. Depending.

  • Comment number 24.

    @18 Barrie - like many private clubs, political parties are unincorporated associations, which means that they don't have a "separate legal personality", and their officers, as defined by their constitutions, have unlimited personal liability for any wrongdoing or debts incurred.

  • Comment number 25.

    At 16:14 12th Jan 2012, Sasha Clarkson wrote:

    "the City still commands a special place as a wealth generator"??????????

    Nonsense! Another loaded piece of opinion from the NN web team.


    Yes indeed - IMHO, the BBC swallow the globalist rhetoric at every turn as most/all at BBC believe it is also in their own interest as a global public sector broadcasting institution?

    The point still missed by most, is that the City of London/financial sector generates massive revenues/profits - but for a relatively very small number of beneficiaries and most of this effect is dissipated within about 2-3% of UK population/non-doms and overseas as is a more 'globalist effect' in terms of 'benefits' to the UK. This is all deliberately masked by the way in which UK GDP figures are both compiled & reported.

    When tax breaks & 'loop-holes' considered for City and govt 'protectionism' as is only aspect of UK economy that UK PM is prepared to have a fight over - the City of London/UK FI seriously under-performs in terms of the living standards for the average UK citizen.

    City of London/FI pays only about 10-12 % of total tax revenues, over last few years of UK in terms of total tax revenues which shows it still to be under-paying tax.

    Most economic commentators in politics/ media still can't the see the dangers here & what a difficult position UK is in with this macro-economic structure that is very inefficient & unfair in terms of the living standards of the average UK citizen. The effect of this is masked in the nonsense UK GDP figures which are incorrectly measuring international money flows from City/UK FI and BOE as 'sustainable' domestic product - as it is not any kind of product it is from intangible bent accounting.

    The ONS needs to publish more detail on how GDP figures compiled and full transparency on which companies have contributed to their analysis & GDP estimates - Why are certain companies selected as is not random & is always a biased sample of data for GDP estimating?

    You raise a good point and the BBC for all its economic advisers & editors are ignorant on this point; as, for all the wealth that is & appears to be generated in the City/UK FI - most of this wealth does not improve the position of the average UK citizen - in fact their position of the latter is et to deteriorate markedly as the rank & file taxpayers are carrying most of the risk in this ponzi wealth generation.

    UK population is too high and rising and has insufficient national product and resources to employ its working population - this is a very dangerous position for the UK to be in - this is all heading for a new 'crunch' in 5-10 years time with '2, 3 & 4 speed UK' - a crisis of employment & living standards in the UK as the rich get richer & the poorer get poorer;as exacerbated by UK regional variation.

    What BBC see as City of London/UK FI wealth generation is not going to help any of this - in fact the continued overseas export of spiv exploitation of vital UK capital will make things worse?

    BBC has never got into this issue & is doing the UK silent majority & its long suffering licence payers a major dis-service here with it attitude towards that 'shrine' which appears to be 'paved in gold'.

    Last night's all female economic debate was better than ususal as some of the contribuors highlighting just how entrenched UK problems are in time & monetary terms. Well worth watching on IP if you missed it?

    Problem for UK is that until UK economy managed by relevant economic criteria and measures like what's happening to household/average incomes, living standards etc and nonsense GDP management is ditched - the outlook for the UK is very gloomy indeed.

    I have no difficulty predicting another series of huge 'UK economic corrections' is on its way to the UK economy in 5 -10, 15-25 years as indicated above (from current weak UK strategic position) - a series of super-crunches' from e.g. population excess, insufficient resources - inability to finance the govt /public system due to excessive demand & insufficient UK resource base/govt revenues.

    The signs are there - being blurry eyed about City wealth generation is making things worse as leads to inertia in govt as protecting business, relationships & vested interests.

    UK needs massive jobs scheme for full employment as requiring many to do jobs they don't want to do - is only way to reduce the damage of the next 'super crunch'.
    Politicians saying that they are relaxed about a rising population is one thing in those countries with massive natural resources as including the population itself - but in a country like the UK - this is leading to disaster and economic malaise if there are insufficient jobs & sustainable product/revenue for that population.

    This is basic GCSE level Economics - This now appears to be beyond the understanding of BBC and UK politicians?

    Forget any kind of general UK recovery other than a politician's short term GDP blag for winning elections - its ain't goining to happen for many many years to come or even decades, as things stand, as our UK macro economic structure & models are bad & dangerously flawed.

  • Comment number 26.


    Thanks Sasha. I was across most of that, but the sites and detail are new to me.
    All the more telling that parties do not reply?

    The Conservative party concocted and distributed the Liar Flyer - undeniably a 'False Instrument' - and advantage accrued to both the MPs who used it, and to the party. The first offence falls under the Fraud Act and the second contravenes the Representation of The People Act 1983/115.

    Do you reckon the officers of the Conservative party are - joint and several - answerable? If so, are they answerable to the fraud, or breaking election law?

    Take into account: THIS IS THE AGE OF PERVERSITY

  • Comment number 27.

    Excellent debate by Emily with Prof Mezzocato/Truss/Tett/Meaden last night. I was
    surprised (and shocked) to see how much British manufacturing has shrunk since the 1970's....even as a non-economist, surely, the higher the manufacturing output, the, greater the economic power for the country and an increase in its GDP? Why on earth did Britain actively switch to such a surge in the service sector as opposed to manufacturing, and this with a succession of governments?

  • Comment number 28.

    Oh, and US stations two aircraft carriers opposite Iran, 15,000 troops in Kuwait

  • Comment number 29.


    NewsyNighty at its most - er - NewsyNighty.

  • Comment number 30.



    This has a deeply 'Westminster Ethos' feel about it! All part of the


  • Comment number 31.

    In the late 1960's, when politicians decided, primarily for reasons of political dogma, to make drastic changes to Englands education system, namely introducing the comprehensive system, professional educationalists stated that the outcome of these changes would not be seen for a few decades or so.

    I was reminded of this last night, when time and again, the (excellent) studio discussion between Emily Maitlis and her four lady guests kept coming back to the lack of 'employability' of todays youngsters.

    As David Blunkett bluntly pointed out, the comprehensive experiment (yes it was an experiment) has broadly failed and furthermore, he could have added, we have utterly failed to introduced the (third) technical secondary education stream in any meaningful way.

    Thus, the capability of our England to pay its way in the wider world has been crippled by politicians for the forseeable future and will continue in this vein until really radical measures are taken, which naturally should involve removing the key point of failure, namely politicians, from the education process.

  • Comment number 32.


    Comprehensives fail because - to MPs - some disciplines are more equal than others.
    Maastricht was the self aggrandising failure of a weak, needy man.
    The Lottery is state, coercive theft. A failure of integrity.
    Wind power is clearly intended to fail and usher in 'something'.
    The 'money for nothing' economy is a hallmark of juvenile governance.

    Dodgy Dave got only one thing right: WE CAN'T GO ON LIKE THIS.

  • Comment number 33.

    Japan unemployment BBC didn't mention the near zero immigration nor their desire to maintain cultural integrity. why?

    As for the general uk economic situation no mention of the all out economic , currency and intelligence war against us that destroys jobs and factories as surely as any wave of bombers would.

    Gas prices

    reduced by 5%? bet they would have gone up by more than 5% if the price rise had been 25%? Uk public is poorly served by a regulator that seems in cohoots with whatever the energy companies say. How come there has been hardly any price rises for gas or electricity in europe?


    is just too expensive. the so called price cuts only brought things down to normal price.

  • Comment number 34.

    Is it healthy to continually live in a distorted reality field?

    I only ask because most of the media input into daily life here tells us that we live in a United Kingdom and yet some of us English people might feel that that is a distorted political reality field and that the UK does not chime with our senses and that in actuality, we are in England - the forbidden word.

    It is all rather disorientating and we English must find our political way back to the garden.

  • Comment number 35.

    National ID cards? Well India's doing it for 1.2 billion long before we have it here too?

  • Comment number 36.

    34. At 13:00 13th Jan 2012, JohnConstable wrote:

    Yes indeed

    The real enemy of the 'English' - Is in those who insist in our calling ourselves British?

    If & when we are able to call ourselves 'English' - many of the 'problems' will 'disappear'?

  • Comment number 37.


    Are they SO WELL CHOSEN that even the drop-outs regard Westminster with respect and awe?

    Or do they SIGN SOME GAGGING PAPER without which they don't get the job?

    To my knowledge, Chris Mullin was about as good as it gets, and his fence-sitting was palpable. He certainly did not cry FOUL, unequivocally.

    There is something (else) we are not being told.

  • Comment number 38.

    Mistress76uk @ 35

    You say how long before we have national id cards here.

    Umm, where is here?

    See what I mean?

  • Comment number 39.

    #24 Sasha Clarkson wrote

    "@18 Barrie - like many private clubs, political parties are unincorporated associations, which means that they don't have a "separate legal personality", and their officers, as defined by their constitutions, have unlimited personal liability for any wrongdoing or debts incurred."


  • Comment number 40.

    #25 Good post!

  • Comment number 41.


    I'll read it later.

  • Comment number 42.

    "The real enemy of the 'English' - Is in those who insist in our calling ourselves British"

    So the children of an Anglo-Scottish father and a Welsh mother who insist on calling themselves British are your enemy?

    It sounds like Osijek or Mostar or Sarajaevo!

  • Comment number 43.

    #41 barrie

    My #39 is related to an incident in Birkehead where an attempt to arrest a serving judge in a court was made...

    Intruders have tried to arrest a judge after storming into a courtroom on Merseyside.

    You used to be able to see a film of the incident on youtube, but all that comes up now is a message saying "This content is not available in your country due to a government removal request."

  • Comment number 44.

    At 17:24 13th Jan 2012, Sasha Clarkson wrote:

    "The real enemy of the 'English' - Is in those who insist in our calling ourselves British"

    So the children of an Anglo-Scottish father and a Welsh mother who insist on calling themselves British are your enemy?


    Whether you like it or not - English people - are the only section of Britain denied their own national cultural identity by all things 'governmental' and 'institutional'



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