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Corus, jobs and electricity usage

Robert Peston | 15:24 UK time, Thursday, 25 June 2009

As I have been saying for some time, it may well be the case that the rate of contraction in the economy has slowed markedly.

In fact, in a technical sense it is possible that the recession is over or almost over (though we won't be statistically sure of that for some time).

But any talk of recovery will look profoundly misplaced if you are one of 2,000 workers at Corus's British steel facilities who are to lose their jobs.

Corus Steelworks in Scunthorpe

They are victims of a halving in sales of steel over the past year - with the company saying there's no significant upturn in sight.

Coming on top of the 2,500 job losses announced in January, there will be a reduction in Corus's total British headcount of just under 20%.

The company, a subsidiary of giant Tata Steel of India, will emerge with just over 20,000 staff in Britain - though that could fall another 2,000 or so if a vulnerable plant on Teesside is shut.

So Corus remains a substantial if diminished presence in the UK.

Can we be certain it has shrunk as much as it will? Well we can't.

There's been no significant pick up in steel demand for construction or for manufacturing.

And here's my depressing statistic of the week, courtesy of the National Grid.

Last November, use of electricity in the UK fell 4% - which was the first ever recorded fall in electricity consumption (since at least World War II).

That was a leading indicator of the depth of Britain's recession, especially in manufacturing, as plants and factory lines ceased operating.

There's a lot of talk at the moment of factories re-restocking and production lines starting up again, but power usage remains 4% down (even after adjusting for seasonal factors).

So the bit of the economy that's particularly important to Corus - the bit that makes stuff - shows no discernable sign of recuperation.


  • Comment number 1.

    Why do you think this great country is in this awful mess:-

    1. Labour Government

    2. Gordon Brown

    3. Prime minister Peter Mandleson

    The only way we can start to even think about recovery is by getting rid of the above.

    The banks are waiting, business is waiting, commerce is waiting, and no one trusts the current government hence they are holding on.

    We the people should now demand a general election, why should we wait for Brown to decide. he is only making us wait for his benefit and his benefit alone. when are we going to learn?

    Many people also say that Cameron will do no better. well it just cannot get any worse and voting independent will mean total mayhem for this country.

    We need a main stream party, we need change, and we need freedom, jobs and democracy

  • Comment number 2.

    It's all very depressing Robert. This government is responsible for this mess, they simply don't give a damn about UK manufacturing.

  • Comment number 3.

    I'm not sure in a technical sense how the recession can be over.

    I think that there are so many experts out there contradicting themselves as to what is happening the only conclusion we can really come to is that none of them know what's going on.

    I would tend to believe someone like Mervyn King who has been honest enough to admit he is more uncertain than ever that this recession is reaching a natural conclusion based on past recessions.

    I tend to think that this restocking process is a natural reaction when stocks have been so run down, You either have to restock or you go out of business altogether. It's hardly a sign that the recession is over until sales stop falling.

    Not a good sign when our heavy manufacturing companies are shedding workers and there are no new businesses to take up the slack.

  • Comment number 4.

    Congratulations to the Conservative Party!!!

    Their operation to ensure that Robert's blogs get rapidly swamped with anti-Labour comments is working well.

    Never mind the subject of Robert's blog - just get in quick with 'It's the Govt's fault' or 'Brown must go' . . .

    C'mon guys - at least post some more imaginative & intelligent comments!!

  • Comment number 5.

    At least it is not getting worse, yet! The only way we are going to dig ourselves out of this Labour hole, is to get down to making stuff and selling it overseas. As "picking winners" does not have the best of track records by government, current OR previous, any tax breaks on R&D is vital especially at the moment.

  • Comment number 6.

    The only way out of a recession is a revival of consumer led demand and we're not going to get that for some time. We all know that taxes will have to rise, and public expenditure will have to be curtailed. Both factors will make consumers apprehensive. Its going to be a long slog but a general election to reset the political parties on the starting blocks would help. I have every sympathy for those that have lost their jobs at Corus. As for electricity perhaps the suppliers might opt for a summer sale given the the prices are higher than the wholesale market price would justify.

  • Comment number 7.

    All I here from Peston is I, Me and My! Instead of thinking about building your own image, did you ever stop to think that your Gloom, doom and despondency helped to feed the recession and panic?? For my part, I run my own business and advise other SME's on how best to restructure, change and cope with the pressures of todays business world and greed fed recession. I also work with some excellent bank managers who have to cope with the mess and confusion left behind. But at least thats a pro-active stance on managing the reality of the here and now. If you and other so-called Economic 'experts' got off your butts and did something constructive perhaps we'd all be better off.

  • Comment number 8.

    This was an ideal time for the government to build the affordable housing that this country is crying out for. But they are home owners too and more houses would bring the value of their properties down. Can't have that can we ! Now the steel and building supply industries seem to be in dire straights. Well, if we could have built the affordable housing we are in dire need of...... and on it goes.....

  • Comment number 9.

    "Voting independent will mean total mayhem for this country"

    Sorry, what? Going back and forth between labour and the conservatives has hardly been a great success for manufacturing, and banks have done very well for themselves under both.

    The fact that you want more democracy, but only as long as it gives you what you want, says it all really.

  • Comment number 10.

    "In fact, in a technical sense it is possible that the recession is over or almost over (though we won't be statistically sure of that for some time). "


  • Comment number 11.

    Writing about green shoots is a waste of ink. Green shoots appear on the apple tree, then comes the blossom. And if the coddling moth get into the blossom there's your apple crop down the chute.

  • Comment number 12.

    By my limited understanding (I have no pretentions to being an economist) it seems to me for it to be perfectly possible for major plants (such as steel, or car manufacturing) to continue to shut long after any recession has "ended", simply because of definitions that are either lazy, sloppy, or misleading.
    Now if recession is "negative growth" I am forced to ask "what is growth?" Now that might sound silly, but the question is seriously intended. Exactly *what* is measured from one month to the next, or one year to the next, from which "growth" or the lack of it can be determined?
    I have a suspicion that whatever is "measured" is so large, woolly and all encompassing that a lot of important detail can be either lost or worse, covered up.
    If I come back from a holiday to find the grass 6 inches higher but that all the pot plants have wilted or died can I claim "growth" or not; with more blades of grass than pot plants on balance I probably could. But any such claim would at best be misleading.
    Growth, I fear, may be a Humpty Dumpty word that means whatever those who speak it want it to mean. If anyone can enlighten me, please go ahead, but please note that that is not an invitation to indulge in econobabble.

  • Comment number 13.

    We're in a recession and manufacturing isn't doing very well. I'm shocked.

    But then actually, hang on a second- we live in (mostly) a service based economy. And ooh- wait a minute, manufacturing wasn't a strength even during 'boom' years.

    An interesting article nevertheless.

    [P.S - Why isn't the weak pound helping more? Is it simply global lack of demand or creeping protectionism/foreign ownership closing the doors to UK manufacturing?]

  • Comment number 14.

    The reduction in electricity (and gas) demand has been noticeable for many months now - mainly industrial demand, but also residential to a small extent. It is going to result in Big Trouble for some of the utilities who specialise in supplying the industrials.

    The problem, as highlighted here, is that the suppliers buy on long-term contracts with minimum-bill quantities, but most industrials do not. So when they (unilaterally) slash their demand, the suppliers are left sitting on a surplus, probably out-of-the-money.

    Another turn of the screw.

  • Comment number 15.

    Recessions are fundamentally psychological in both cause & recovery. This one was caused in part because of the 'credit crunch' but high fuel prices was also part of the 'shock' that tipped us into this mess.
    Recovery from recession is partly a function of time i.e. Consumption and profits come back as inventories fall to below demand levels, but there also needs to be 'confidence' that things will improve and this is dependent on there being a 'plan' at the macro level to prevent the recurrence of circumstances that caused the recession in the first place!
    We have a 'plan' at international level to prevent a future credit crunch, but there is a deafening silence on the energy subject. PR stunts like the review of electric / hybrid cars announced earlier this week are risible in the face of the problems faced.
    IF the UK were to set out acheivable and realistic plans to generate 100% of our energy needs through a combination of energy saving schemes & renewable generation projects within 10 years, funded through government borrowing, we could revitalise manufacturing in the UK & hand our children a legacy which would make them the envy of the World. Perhaps then businesses such as Corus could take people on, instead of laying them off. This is the kind of 'plan' that would inspire confidence at all levels within the economy, which is currently absent, principally because our high levels of borrowing are not being used to fund investments in infrastructure.
    N.b. I do NOT consider myself either 'green' or an 'eco warrior', just disappointed with our politicians of all shades for their lack of vision.

  • Comment number 16.

    #1 sharpy90210

    "Many people also say that Cameron will do no better. well it just cannot get any worse and voting independent will mean total mayhem for this country."

    ...and that's your analysis is it? This lot are so bad that the 'other lot' must be better by default? - despite the fact THEY presided over the LAST recession - and were pretty instrumental in causing that too (ERM, politically manipulated interest rates, following monetary policy)

    No thanks - I'll take my chances with the independents thanks - at least (as far as I am aware) - an independent (hung) parliment hasn't taken us into recession before - that puts them ahead of the game and better than both Labour and Tory.

  • Comment number 17.

    The question has to be why despite evidence of some sort of recovery in progress that manufacturing companies continue in recession?

    This is evidenced by a continued rise in unemployment. It is correct to say that once a recession has passed unemployment usually continues to rise for a period. I think in that case perhaps we need to redefine what is meant by a recession.

    On the other hand it is known that each recession has its own characteristics and the most impressive elements of this recession has been its speed and the extensive damage made to the manufacturing sector both here and abroad.

    The cause of this recession has been three-fold: the initial high cost of commodities which triggered the event, the collapse of the banks and the overall level of indebtedness all over the world and particularly in the developed countries. Surely, if you manufacture a commodity then you are very dependent upon the level of demand within the economy. There is strong evidence that a lot of that demand has collapsed, gone away or might be happening but at some later time.

    The continued flat nature of retail sales, despite reasonable growth in the food sector, is significant. This suggests that people are paying down debt. I would suggest the same is happening in the corporate sector as capital projects are either cancelled or postponed until demand recovers.

    This brings me then to the government. Where are the capital projects that can be brought forward to maintain steel production? How about those two aircraft carriers? Who is making the steel for the Olympic buildings? When will the CrossRail project start? There seems to be a gap between asperation and reality here; or is it that the government just does not have the money and is too scared to say so?

    I doubt that the current prospective recovery will last. I doubt even that it is a recovery; more a case of banks finally lending again plus quantative easing. This is a sign perhaps that some measures implemented to mitigate the recession are begining to work; but we have to accept that these are palliatives and not actual economic recovery. This has still to come and there are many perils still out there that could reverse these measures and return us all to a further more deadly recession.

    We are at a time when we need to change our political behaviour. It is no longer a case of knockabout fun on expenses. This is now grown-up stuff about getting good people back to work, reducing costs and increasing value. The political class must step up to the plate or be condemned. Those who call for a change in government are right, not because Tory will be better than Labour, but because we need to move on and the current government is just like a rabbit dazzled by headlights. The political debate will continue whoever is the next government and through this engagement decent, sensible people will gradually build the route out of recession. There is no quick fix this time round. Time to grow up methinks?

  • Comment number 18.

    #3 virtualsilverlady

    I made this point on Roberts earlier blog - when they talk about the recession being over - they are talking about 'the banking recession' i.e. the credit crunch - which may be nearing the end or at least bottoming out.

    However the ACTUAL recession is only just beginning - it will take a while for people to work this out but once they, and their neighbours, and their family members are all loosing their jobs there will be a realisation.

    ...I suspect that's when the increased anti-terror laws will come into play....

  • Comment number 19.

    One year ago...Conservative party was home and hosed.

    Now although it might appear that the Government is further battered by the economic slump and the recent Euro Elections...let's posit a series of interesting thoughts.

    1 The electorate is not as stupid as the media believes
    2 What would the Conservative Party have done over the last two years - bailed out Northern Rock? Bailed out the banks? Organised quantitive easing?......I would suggest that "out of office"...the Tories couldn't propose anything...If they suggested that they would have done all that the Government has done (which were probably the only rational course of action) the Tories would have opened themselve up to media criticism....
    3 Released from a predominantly PR stance...the PM has come into his own (MP's expenses notwithstanding) on the basis of his financial actions to counter global freefall....
    4 Yes Gordon was stupid. He is not charismatic....but as a whole...I am confident that the electorate know that the Government did not "cause" the recession.
    5 European Elections were not the elctorate beating up the Government by their was the Government being beaten up by the electoriate through inactivity......the drop in the Labout vote...did not include a proportionate increase in the Tory vote.

    Is the recession over - hell no!......but then there has never been a recssion like this for on the one extreme it's depth...counterbalanced by the fact that the the domestic sector is relatively buoyant.....there is a substantial amount of the UK consumer that still has access to money...even after they have paid their debts..... it not true that the current value of UK Real Estate is now £3.25trillion (down from £4.25 trillion.....thevalue of mortgages on that real estate is roughly £1.75 trillion....

    Overall the UK real estate is not in negative equity.

    Maybe as someone said...we will think in the future that Brown (for all his obvious failings) will be remembered as doing the dificult right thing in a difficult time....albeit...the debt lumbered on us...(as The Governor of BoE said) needs to be reduced far quicker than envisaged by HMG ....
    I look forward to the elctorate and the Tory Party working out how to deal with 25% cuts in NHS and Local Gov services in order to repay the debt inflicted on us...

    That debt was inflicted on the UK, not by the Government, but by Capitalist Excesses of the City.....greed for growth.....

  • Comment number 20.

    #4 robrob2002

    I completely agree with you Rob - this is not a boo yah "we're better than you" argument because BOTH PARTIES have proven themselves INCAPABLE of stopping a recession happening.

    Therefore it's totally logical that it matter not who is at the helm of the rudderless ship - it's the weather SYSTEM that selects the direction.

    The weather system is Capitalism - once we understand that - we understand why it keeps crashing on to the rocks every 20 years or so...

  • Comment number 21.

    #7 milliesgrumps

    "did you ever stop to think that your Gloom, doom and despondency helped to feed the recession and panic"

    Oh yes - that's right Peston caused the recession - and what about 1989? Robert must have been all of 25 then and not even a journalist, and what about 1929 - he was a mere twinkle in his fathers eye - did his doom and gloom cause that?

    Absolutely laughable the excuses people will trundle out in place of the truth they cannot accept.

  • Comment number 22.

    Manufacturing again suffers, wake up! It's the one of the only sectors of the economy that adds value to an economy. Rocks into steel, steel into tools, tools allow you to make well, everything- Geddit?

  • Comment number 23.

    #10 JavaMan

    Statistically speaking this recession doesn't actually exist - relatively we're better off than most of the third world, a large part of Asia and some of our European friends (mostly Eastern European) who's growth is seriously negative - so relatively speaking we're actually UP in the big picture - i.e. we're in a boom - wahey!

    (I just got a job in the Treasury as a statistical Economic forecaster)

  • Comment number 24.

    #11 newProtectorCromwell

    Gardening and Economic Philosphy rolled into one, very talented and topical.

  • Comment number 25.

    "Last November, use of electricity in the UK fell 4% - which was the first ever recorded fall in electricity consumption (since at least World War II)."

    Interesting contrast in the stats : BERR says domestic electricity prices inc vat in Q1 2009 were 19.7 percent higher in real terms than in Q1 2008.

  • Comment number 26.

    I have just finished your book, Robert, "Who Runs Britain?", which was excellent. It is also highly relevant to this topic. I have spent a large part of my career working in the manufacturing sector and helping SMEs. As you point out (at length) in your book, it is the financial sector that influences political thinking NOT manufacturing. The economic downturn is unlikely to change that situation. But the financial market is global and so is manufacturing and when the recovery does materialise, we need to recognise that global manufacturing is NOT declining, it is transforming. Producing steel in the UK at historical levels might not be the best use of our national talent. So let's not cling to the past but embrace the future with enthusiasm. In the same way as the financial gurus have made the City of London a global leader for financial services, we should help our manufacturing talent (there's plenty around!) to re-establish the UK as a leader in the advanced manufacturing sector, which in my view will only happen if we concentrate on the areas where we really can add value, which might not be steel production.

  • Comment number 27.

    #12 Radiowonk

    You have just completed part 1 of the course 'becoming a REAL Economist'

    The 'thing' you're looking for is GDP - and oh boy is it wooly. It would take too long to go through the number of holes that are in it's collection....but the scary part is all our major Economic decisions are taken from this statistic.

    On a personal level it would be like you doing the books at home but ignoring your wifes income, pretending your kids didn't 'borrow' money from your wallet and denying that you splurged anything on that time you went to the gadget shop.

    Here's an intersting GDP fact - Italy currently 'estimate' a huge proportion (I think it's 40%) of their GDP as "the black market". So they reckon they earn 40% more than they can actually prove - and the world accepts it!

  • Comment number 28.

    #15 oddjobbob

    "Recessions are fundamentally psychological in both cause & recovery"

    Where did you learn that nonsense from?

    If that were true then the solution to recession would be a dose of Prozac for everyone and it would all go away....

    People who blame Psychological reasons for recession are seriously mis-guided. What is true is that if you can 'convince' people that everything will be OK then they might go out and spend money - fuelling a consumer boom ad producing a recovery.
    As there is no capital around - most people would have to borrow money to supply this consumer boom and unfortunately that's exactly how we got into trouble in the first place - because it's unsustainable.

    It's the same principle people apply on a personal level when they keep borrowing on their credit card because they are 'confident their wages will keep increasing' - until of course they don't, or worse, they loose their job.

  • Comment number 29.

    RE #12 Radiowonk
    Economic Growth is basically an increase in the output of goods and services produced by a country. So you can see that when manufacturing output shrinks (as it has been doing in this country for 40 years by and large) in order for there to be any 'growth' in the economy it has to be provided by the service sector.. say oh, I don't know, mortgages for example.. which is why Governments of all persuasions kow-tow to the major financial institutions in this country, the only chance of positive growth comes from the service sector.

  • Comment number 30.

    My thanks to all commenters on this blog for their subtle and detailed insight into the causes of recession and the path to recovery. I have synthesised your views into the following article which I think the Bank of England and the Treasury should see immediately:

    Tomorrow I'll be over with the Youtube kiddies getting their opinions on monetary policy.

  • Comment number 31.

    I wish to introduce a term into the discussion. That term is "Zombie Plant".

    Major Industrial plant costs hundreds of millions of pounds and usually has an operating life of 20 - 25 years.
    I get the impression that no such plants have been built in this country for the last five years. I am talking about the manufacturing sector. There may have been some in oil refining and extraction. This I assume is because its uneconomic to do so due to our higher labour costs. Companies are better off in China or India or in the former eastern block countries. Where it is cheaper to both build and operate these plants.
    But 10 or 15 years ago things were very different. Eastern europe was in turmoil, the "permit raj" still ruled in India and Chinas industry was a quarter of what it is now and so then the UK attracted a lot of new investment in plants.
    But these plants would not be built here today. But as long as the plant can be kept going and its output sold then it is worthwhile to pay its relatively high labour costs rather than build a replacement where labour costs are lower. But if one of these plants closes, either because its obsolete, beyond economic repair or capacity has to be reduced in a downturn, any replacement will be built elsewhere.
    In effect, as things are now , our entire large scale industrial base may consist of the walking dead. Until this recession we could have hoped for another 10 - 20 years for the pendellum to swing back in our favour. For the chinese population to age, for eastern european wage rates to match ours.
    But if this recession continues and our goverment is unable or unwilling to keep the multinationals from closing UK plants, the whole thing may fast forward to the demise of British industry.
    So Mr Peston is my fears about Zombies irrational or is Peter Mandelson secretly our minister for saving Zombies.

  • Comment number 32.

    I'm not sure how you can blame the electricity useage drop on the recession. I think a significant factor would also be due to the green movement and people being more concious about what they use with prices being so high. I'm afraid that people with significant business influence like yourself should not be brandishing around flawed statistics and making judgements that can not stand up to scrutiny. In fact the link with Corus is a good one. Despite the increase in production at the Scunthorpe plant over recent weeks (although selling prices are low but they should rise to follow the increasing demand), and other positive signs, the Corus 'business analysts' are predicting that the worst of the recession is to come and will last many years. This is why todays knee jerked. Where do they get their information from? I sincerely hope it's not another case of a business analyst playing with his stats to 'prove' a point.

  • Comment number 33.

    #27 writingsonthewall & #29 citygambler

    I believe you both, and it scares the h*ll out of me. And of course with GDP being a "statistic" it is vulnerable to the "lies, damn lies and statistics" problem. Again I could be wrong but surely the service sector, with in many cases no clearly definable "product", it is surely much easier to make any figures mean what you want them to mean.

    We have been seriously let down over the years, haven't we, and I see nothing that will bring about a change. Maggie T once wanted to starve terrorists of the oxygen of publicity. I can think of a few other groups for whom the same approach would be worthwhile. Without the opportunity for publicity politicians would have less opportunity to spout misleading figures at us.
    Dream on, Radiowonk.

  • Comment number 34.

    The depressing figure is that the power companies are overcharging us by £70+ per household. I guess we will be made to fund the 4% drop in profits.

  • Comment number 35.

    Sadly comments about recent attitudes towards the manufacturing sector are missing one key point - that governments of all hues have allowed the manufacturing base of which Britain could once have been justifiably proud to wither on the vine..not just this one. We became bewitched by cheap food, cheap clothes and imported commodities without giving a jot where they had come from. Crocodile tears now are as useful as a chocolate teapot.

  • Comment number 36.

    many forget to learn from history and are doomed to repeat it.
    never a truer statement looking at this neu-labour government and the labour government of the 70,s.
    jobs going down the toilet,
    government too busy fighting itself,
    unhappy common folk,
    prices on the rise.
    banks in trouble,
    amongst many other problems too numerous to list.
    party system politics creates most of the problems and has past its sell by date.
    the honest hard working people of this country deserves a government that governs fairly and honestly.

  • Comment number 37.

    Stephen Heston is a greedy man. Robert you should make a documentary covering the fact that bankers or banksters have not really changed. If he is really worth TEN MILLION then he will have no problem having a camera folloiwing for a year. At British Airways Staff are working for free, but here we have a greedy pig sticking his nose in a trough full of taxpayers dough. We need a global reform led by the USA.

  • Comment number 38.

    In another example of how unemployment is deemed to be irrelevant by the markets - Initial Jobless claims in the US rose last month by 15,000 to 627,000 (they were expected to fall), however the Dow Jones, S & P and Nasdaq are all roaring ahead because it looks like Bernanke will be re-appointed as head of the Federal thats alright then

  • Comment number 39.

    I work in a factory and what RP is saying is quite true. Orders are down by 40%, so we just make what we can then shut the place down at the end of the month, or (as we are doing this month), roll two months together and then shut for two weeks.

    The target for this year is to break even. Ha! We should be so lucky...

    We have already shed 11% of the workforce and are onto our third change in shift pattern this year.

    I think its a little premature to say that the recession is "over", or that we have seen the worst.

    While I think inflation is under control, unemployment is rising. The biggest problem is demand for goods, its simply not there. Buyers have become conservative (small c) with their purchasing requirements. On top of that the more people out of work the less spending power the public have to fuel the demand for goods.

    Ask any SME about their prospects for this year and they are grim.

    (Actually that's not completely true I have a friend who works for a company making niche consumables. They were nearly bust 18 months ago, now there are not enough hours in the day to make things. The product? Paper for money printing!)

  • Comment number 40.

    Rate of retraction slowing down? Maybe but only in the sense I think that someone with an open artery will see the blood spurting less after a while.
    Wish I could see some green shoots of recovery. Recessions are due to lack of spending and where is the demand which would increase economic activity going to come from? is there a rush of investors into the UK?
    Simple way to stimulate the economy would be to deregulate but pig would fly first.
    Sting in the tail maybe is a friend who points out that there are some serious things to work out in the SWAPS market over the next 6-12 months which will make the current situation worse. George Soros also said recently that we are going "into a recession".

  • Comment number 41.

    The British Government needs to take action to stop the demise of these industries. We are seing more and more jobs being moved abroad, our economy is reliant upon vast sums of borrowed money, much of this money comes from the oil producing nations, the commodities are being brought by Asia, steel manufacture is going to India, lets assume that these countries get to a point where they want the goods and energy that they own and produce. What will we do then, the pound/dollar will no longer be the main currency, the scenario may not happen for the next few years, but if we allow the wrecking of our economy to continue, then poverty can only follow.And realistically ask yourself, if they allow the abuse and attrocious living conditions to prevail upon their own population now, do you think there will be any sympathy towards the West?

  • Comment number 42.

    #36 Delminster Why do British people deserve anything other than to be laughed at?

    In the UK you have endless stories about millionaire and multi millionaire bankers, traders, sportsmen, and corporate executives. Then you read that airline staff are voting to work for nothing.

    Bank executives need to be motivated to work - why not airline crew? What would be more deliterious to you personally - a failure of a bank of which you are a customer, or; a failure of an aircraft on which you are a passenger?

    The oligarchs tell you that the recession is ending, and that all it needs is for people to start consuming more. How and what are you going to consume if you are working for nothing?

    The problem with this kind of stuff is so obvious that it doesn´t need explaining. Yet "hard working British people" would prefer to close their hard working eyes to the inanity all around them.

    But no need to worry because the oligarchy have a lot more to offer those that "deserve" - let´s just hope you like it.

  • Comment number 43.


    Surely you have missed a journalistic trick here. You know as well as I do there is only one person blameable for the Corus job losses.


    It's obvious that this is the work of the UberSatan and how she can get away with it just goes to show that the Guardian, Independent and Mirror can no longer be trusted.

    This is how she did it.

    In 1972 an AMA report informed that lack of Calcium in human diet resulted in delusions of Grandeur. Extreme symptoms meant that the subjects believed they were the direct recipients of messages from God.

    The Milk Thatcher stopping free school milk in 1973?

    Tony Blair leading us into Iraq after the Almighty told him to do it.

    A coincidence? I think not.

    Symptom 2 of gross Calcium Deficiency was "Grand Hubris".

    Could Brown help declaring he had "ended boom and bust". No

    Nor could he help symptoms 3 and 4 of Ca deficit an urge to rob people and destroy their livelihood.

    No its all down to Thatcher.

  • Comment number 44.

    All extremely depressing especially when Tata note today that these job losses are all part of their "European Restructuring" and stating that there will be no job losses at all for India. It appears that at least somebody around the world does believe in protecting their own back yard, our beloved government tell us that that is protectionism an economic evil and that it is something you "cannot do".
    When the upturn finally does arrive do you think we will see further "European Restructuring" increases in jobs through Tata ?

    I think this is one of the final nails in the coffin of our steel industry which is suffering the same fate as shipbuilding, coal mining the railways etc etc. All sacrificed by governments for tax cuts or selective savings rather than dealing with the problems that their earlier counterparts signed us all up for by nationalising in the first place.

    It all sounds too familiar where politicians can readily walk away from a problem rather than face solving it. "Sold it therefore not my problem" seems to be be the continuing strategy. Next up is the Post Office.

    They found billions for the banks but can't scrape coppers for our manufacturing industry. Let's face it they don't like manufacturing, and why should they because in manufacturing people actually produce something !

  • Comment number 45.

    There are a lot of very bright people here who seem to know a lot about our economy. Experian was predicting 300,000 job losses in manufacturing between now and 2010.

    What I didnt see was how many manufacturing jobs that represents in percentage terms. Does anyone know? What is that as a percentage of the total workforce?

    How many manufacturing jobs were there in 1997 and what percentage was that of the total workforce?

    How many of the 3 to 4 million who will be unemployed by this time next year were in manufacturing jobs and therefore unlikely to find similar work?

    Are France and Germany suffering to the same degree? If not, are they using hidden subsidies? Or encouraging their people to buy their own products in the way that we used to with the Buy British campaign (now preumably illegal under the EU).

  • Comment number 46.

    Dear MR PESTON

    You've spent too much time with the CITY SLICKERS to realise what's on in the REAL ECONOMY where people work and actually get their hands
    dirty instead of in the till or milking their expenses.



  • Comment number 47.

    This "banana" hasn't even got started yet! All those who think it is "bottoming out" - like the OECD - are deluding themselves. Remember, The Great Depression lasted from 1929 to 1945 (16 years!) with plenty of false "bottoms" during that period. Governments are just making matters worse and prolonging the agony just like H. Hoover and FDR (The New Deal) did in the US during the 1930s. Those in government, the central banks and the "talking heads" in the media ought to study the depression that occurred in the US in 1920/21 and then compare it to what happened later on in that decade and also to what is happening now. It will raise a few eyebrows!

  • Comment number 48.

    #26 turkishmoon. Your utopian vision of Hi Tech Britain is.......utopian.

    Ordinary people do wiring and welding and sawing and lifting and driving and concreting and painting etc....only a miniscule number of people do "Hi Tech".

    So answer me please if you will what the point of a Hi-Tech Britain might be? Would it be to line the pockets of the snake oil salesmen? This is an utterly serious question.

  • Comment number 49.

    Well I for one certainly dropped my own Electricity usage by far more than 4% in the last year because I just couldn't afford the price increases.

    Unfortunately I think the more we all keep on finding ways to cut down on our Electricity usage the more they just keep on raising the prices to maintain their profits and it's a vicious circle. Surely the drop in consumption could be nothing more sinister than the fact that millions of people are all doing exactly the same thing as me, if we simply don't have any way to find the money to pay the price increases then we have no choice but to keep on cutting down on how much we use.

  • Comment number 50.

    Hi Robert

    Am not an economist and may be wrong in my understanding. However, if you agree with me that money (the pound) is simply a share of the overall economy/country resources then quantitave easing would simply means producing more shares which in turn devalue the company (economy and its currency)in the market. Given that output is either falling or stagnant the value of the company as a function of its actual assets (output) cannot be rising and hence the concept of "spending our way out of recession", dramatic reduction in interest rates to almost zero and encouraging banks to lend people money to spend/buy property ect are only sleeping tablets that at best may only result in unsustainable rise in public debt and at worst the situation will be compounded by a further cycle of imaginary green shoot/inflation or even temporary boom that will soon end in bankrupcy and hence the concerns of the governor of the bank of England Mr King. Unfortunately, policy makers appear to gambling with shareholders' (i.e. the people) future and I do not know what is the solution for this situation but am very concerned and pessimestic of the future.

  • Comment number 51.

    #7 milliesgrumps

    You are correct. Peston's "The Sun" style journalism is an appallingly blatent attempt to show his plumage amongst the BBC newsroom. 'I have uncovered this' 'I have found out that' and 'As I have been saying', me and if I'm not wrong, more me....

    Is today's business news so weak (in the biggest recession for 70years) that the business editor of the longest (and one might argue) most established network of public information broadcasters in the UK, has to fill the medium with self congratulatory ego-construction.

    I'm guessing the said business editor is projecting his insecurities about what he really truly knows and understands (as opposed to what he 'hears' and doesnt understand).

    Peston: Can we use less the opportunity to play to the audience (ooohhh the taxpayer this - woe is me, the Banker that - Boo hiss, the big company - arggghhhh), and please form some constructive (I hasten to dirty the BBC webpage when I say BALANCED) criticism and discussion.

    When the BBC's expenses and payoff scandals come to the fore imminently, the title of 'One trick pony' will be hard to shake off when looking for a job!

  • Comment number 52.

    Hallelujah, it's a piece about industry from Peston. Shame he couldn't think of anything much to say about it, though. Perhaps the business editor needs to pop into a library or bookshop and pick up something about modern manufacturing - it's an interesting topic.

    As for Britain, the country needs an industrial & manufacturing strategy - identifying the sectors to try and protect, to direct investment towards etc - otherwise you risk being severely mullered on the other side of this recession; China and the US do, believe me; and may I remind you of the Buy American and Buy Chinese protectionist walls that are being erected to protect their manufacturing base

    the Square Mile and the global financial industry may still be considered the UK's most strategically crucial 'industry' - hence the desire to avoid regulation and go back to business as usual - but if current trends continue that could leave more and more of the population redundant and surplus to requirements for the foreseeable future; and they won't be sailing off to NA, SA and Aus like in the 19th c, so not a recipe for domestic happiness

    As for the recession being over......... statistically except that the statistics won't be available for 6 months or so: I have seldom read such codswallop. The OECD sats Zero growth for the UK in 2010; if they are correct, then that is at least 6 more quarters of bumping along the bottom; one quarter may turn out to be +0.2 and the next -0.2 GDP but that's from a point that is 6% lower than 9 months ago

    Not that these measures of growth are the best way to measure economic performance any longer; for a start a primitive measure of GDP leaves out the crucial item of employment of the people

    It would be like remunerating a boss handsomely based on manipulating the share price of his business rather than increasing market share or expanding the number of employees etc

    Oh hang on, that IS how you decide if someone is a success and how much to pay them; how silly of me to forget

  • Comment number 53.

    It's a very sad state of affairs, once we stop manufacturing totally, which looks like it may happen in the very near future then we just become a huge service industry. We have produced the finest engineers and designers for the past 150 years and what do we do "we sell the manufacturing to the lowest bidder" from a third world country who care little about the enviroment or the health and safety of their workers just to give the shareholders more profit - Shame on us all

  • Comment number 54.

    #37 Modernizer

    I assume you refer to Stephen Hestor (not Heston) new CEO of RBS? If so, let the bloke does his stuff then you can jump on the inevitable bandwagon that the mass media will create, he aint 'raping' or 'pillaging' the taxpayer, quite the opposite = his one goal is to restore confidence in his Shareholders of which UKFI is one - why the ..... would he taint his reputation!

    By the way - a massive 800 BA staff agreed to work for nothing, not much out of 40,627 (as at last annual report date)... and I hate the fact I had to use that stat to qualify my argument, because for the pittance BA (and all cabincrew) get paid - I wouldnt give up the slightest either... what I'm trying to say is your comment should have started out on a tirade against Willie Walsh (BA CEO) who's doing quite the opposite to his Company that Shareholders want...he's taking it down! 1 month of salary for him - very noble, listening to his staff and customers - priceless.

  • Comment number 55.

    There is very little UK manufacturing left. Yet, what remains needs to be protected, to some extent, ideally to provide expertise and knowledge to our engineers of the future.

    But right now two major exporting countries, Japan and Germany, with high value manufacturing sectors are also struggling. Some reports suggest their levels of trade have fallen off the proverbial cliff! If Britain did have a manufacturing base, capable of competing with these countries, we would still not be immune to falling manufacturing production. So we can't assume the answer to our problems is to have a bigger manufacturing base. It might be nice to have such a thing but, at the moment it would struggle to pay its way and protecting it with subsidies would draw unwecome criticism.

    It's all too easy for me to say this, with a job, however, what has to be questioned is the ability of Britain's manufacturers to produce things that people want to buy. Perceptions of items labelled, "Made in England," mean that people are not exactly clamouring to the shops to buy.

    One aspect of the present recession, which has not been a feature of previous ones, is that interest rates fell to very low levels. Whereas in the past they rose fairly sharply. I think this has done much to prompt many, who have mortgages, to ask, crisis, what crisis? Falling rates have led to falling levels of repayments and greater levels of disposeable income, hence why some feel better off and perhaps this has resulted in certain people sensing and end to recession? When in fact it could simply be the calm before the storm with banks looking to raise rates and the government looking at higher taxes to pay off budget deficits, (squeezing consumers very hard.)

  • Comment number 56.

    If the lesson from this recession is trade and money imbalances, large debts, have got to be corrected, then the UK needs to consume less external goods and energy (oil & gas) and export more manufactured items. So problem government needs to tackle how to promote manufacturing internally ready to grow when world growth starts again. It would seem basics like improving our high speed electric rail infrastructure would tackle both these driving down our use oil in cars and driving up demand for steel. If we tie that into encouraging more renewable energy ready for the return of $150 oil we will be in better position for the future

  • Comment number 57.

    Morning Robert,
    I realise that you are probably out of your depth in reporting a business story that is non banking related but...your article was meant to be about Corus and jobs. You make no mention of the agreement by this government to bail out Tata Steel (the owners). What agreements were made? How many jobs would be guaranteed for enabling finance?
    There is still one part of steelmaking which is booming and very profitable i.e. making steel for tin cans. Where is that mentioned in your expose?
    Now for your bye-line, electricity usage.
    Consumption is down (in a recession) well fancy that.
    It's down in China as well.
    The one good point about measuring and publishing consumption figures is that they don't lie. The electricity consumption figures have embarrassed the Chinese Government who have had to significantly downgrade their growth figures. So too for the British Government. Large power users have had to cut back significantly. By analysing these figures I think you will get a true reflection of what's actually happening in manufacturing in this country as opposed to the political lies.
    As an aside, back to your favourite mastermind subject, I see the banks are at it again, manouvering for position to make huge (virtual) profits and pay themselves large bonuses. We clearly have learned nothing from the last year and a half and we are about to repeat the mistakes. The politicians are still chasing the money (maybe for future employment) and the bankers are still calling the tune. Roll on the next election when the British public will make their views plain.

  • Comment number 58.

    Electricity usage has fallen? That's brilliant news! In case none of you has noticed, the world's CO2 emissions are on track to cause massive and catastrophic climate change, including drowning low-lying cities like London this century. If we've any chance of preventing that we need to reduce power use. When will people get it and stop citing this as a 'depressing statistic'?

  • Comment number 59.

    Repeating one more time--------

    We had over a decade of unsustainable 'bubble' growth, pumped by the steroids of easy credit, massive borrowing and head-in-the-sand banking.
    There was basically no organic growth underlying it.

    Having hit the buffers, the very best we can expect is to go back to a period of zero growth, if we are lucky (and we aint going to be, while this government is hiding from the truth)

    It is insulting that commentators are trying to fool the public into believing good news is round the corner. There isn't much good news going to happen for many months. People need to be given the truth, so they can make plans.

    Investing our way out of the recession -says the Prime Minister. No we aren't. Borrowing money we dont have, and printing the rest -then letting the banks hoard it for their own ends.
    Publicising ill-thought-out initiatives and flushing huge amounts of cash down the toilet into the public sector. That isnt a cure.

    We are definitely in a very deep hole here, and still digging.


  • Comment number 60.

    #37 Modernizer

    A very potent point you make regarding the 'rewards of labour' in this country.

    If you assume money is a finite amount (until the government started printing it) then the bonuses the bankers took 2 years ago during the boom, are now being paid back by the BA workers who are working for free or a reduced salary.

    The Capitalist trick is for the gains to be made to individuals (in bonuses) but the losses to be spread out amongst the many - either through future taxation to pay off the bailouts or by small wage cuts across the workforce.
    This leads to more and more wealth being concentrated in a smaller number of people. The BA staff see it as a small reduction - but the sum of their sacrafice amounts to a huge bankers bonus.

    What I find staggering is that BA staff are assuming that a company that has to ask for some of it's workers to take a reduce pay will still be around and profitable for them to recieve their forefitted wages back!
    If BA are this desperate - when will they return to profitability? and will the payback be inflation linked? and to what measure, if they use one measure (including house prices) wages are falling, but the costs of goods and services - including essentials like energy - have been rising.

    If I forefitted £10000 of my salary today - I would want a damned sight more back in 6 months time - and I wouldn't want shares in a company that could be worthless by then.

    I don't blame the BA workers at all - it's blackmail, pure and simple.

  • Comment number 61.

    100 watt incadescent light bulbs were banned from sale in the UK at the beginning of September 2009

    Their compact fluorescent equivalents use about 25% of the electricity - a reduction of 75%.

    How many lightbulbs might have been replaced. Before the disbelievers jerk into action......

    I worked on a project with Phillips lighting and nearly 1000 US home owners. We calculated that if each home replaced 4 incandescents with CFL's they'd jointly save 100,000 per year and reduce CO2 emissions.

  • Comment number 62.

    No manufacturing means no exports means constant drain of wealth out of the country.

    There's no point blaming this government. They're as useless as the last lot.

    You're all to blame if you're driving around in German, French, Japanese or Korean built cars made of German, French, Japanese or Korean steel.

  • Comment number 63.

    beginning of september 2008, of course, silly me

  • Comment number 64.

    Interesting the amount of people on here who realise we need to manufacture our own stuff again but at the same time miss the obvious - oil.

    We are in the Peak Oil period. Whether we've peaked yet or whether we will over the next couple of years is an acedemic point, it doesn't detract from the fact it's here and when it starts to impact the effect will be very very fast - we all saw how fast oil prices moved last year and it was only the credit crunch that stopped it.

    So, some time in the next decade the entire western world is going to be in a scenario where imported goods become cost prohibitive. We will need a solid manufacturing base to meet our own needs and we are going to need it within a decade. You can play with figures all you like, but if we don't sort this out and sort it fast we are looking at catastrophe.

    Imagine a Britain where people on the average wage can no longer afford the amount of electricity or gas they use now. Where they can no longer afford petrol they way they do now, can no longer afford holidays abroad, can no longer afford imported food and they can no longer afford imported goods - TV's, cars, fridges, washing machines, DVD players etc etc.

    That Britain is coming and it is coming faster than you think no matter how far you bury your head in the sand. If we don't plan and build for this and do it now your children will be living the life of serfs.

  • Comment number 65.

    Robert, You are all doom and gloom. Perhaps the 4% drop in electricity useage is attributed in some part to the increased use of energy efficient appliances, light bulbs, and a general public awareness of the need to conserve energy? It's OK for someone with a pension, guaranteed by the state, funded by the public, to jump to conclusions without the fear of the economical effect. I think your attitude would be different if you were in the same boat as the most of us, and then you'd be trying to talk the situation up rather than down. Have a think about it?

  • Comment number 66.

    #48 iceland-express........ I am sorry if I gave the impression that UK's manufacturing should be aimed solely at 'Hi Tech' markets - the term 'Hi Tech' was never used in #26. I have worked in industry long enough to know that Utopia doesn't exist but the purpose of my comment was to make the point (obviously not very well!) that 'traditional' industries won't survive just because they are 'traditional' - look what happened to the cotton mills.

    I did refer to the 'advanced manufacturing sector', which is not synonymous with 'Hi Tech' but covers a plethora of industries where the UK is still in a position to compete on VALUE rather than COST per se. As an example our expertise in composite material design and manufacture is still a world leader and composites have been around long enough not to be regarded as 'Hi Tech'. Those who sell this capability are certainly not offering snake oil!

    As far as employnent is concerned, we might have to accept the fact that we no longer take the lead role in certain industries, e.g. shipbuilding, but the employment opportunities for those involved at the sub system (rather than system) level, are huge. Also, much of the employment is within SMEs.

  • Comment number 67.

    17 & 19 stanilic & cuteasfunk

    you hit the nail on the head - Gordo is not most peoples cup of tea but over the last year he has had few options and I agree history will look back on him favorably even if the Daily Mail doesn't.

    It's all we can do to avoid the Tory einsatzgruppen spiking Bob's blog.

    And what happened to Steph's blog? A bad case of the JJ's by the look of it?

  • Comment number 68.

    I have read every entry in your blog (as well as Stephanomics blog). Your idea about electricity consumption as leading indicator of economic activity is similiar to the one I used- but instead of electricity consumption, I used fuel consumption. I calculated the fuel consumption using the billing excizes. I did that because billing excizes,are due to their nature, directly proportional to fuel consumption.

  • Comment number 69.

    The owner of TATA is a great mate of Gordon's is he not Gordon mess the country up why because he is rubbish at the job as most of the those we see and hear from they do not run Britain never have the Whitehall suits do, Brown is just the mouth piece we vote for a party and they pick the leader of that party usually biased on how well these people will go along with there rules, Brown wanted to have a go at being leader why has he never been voted in because he was lost we lost before Blair left he made sure of that and now he has other no marks who love the media and being scene but if the USA can get another country to attack Iran after al how can the West be seen as powerful unless it thieves from other countries and their people now we learn that not only were banks allowed to keep our money we had to bail them out so making an other level of poor to support the wealthy of this country and others, and we forget who is paying for the wars that we have do they not course global warming ?? the motto for Britian is the Mushroom one.


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