The paper examines specific features of structural change in the UK since 1997, contrasting the decline in industrial jobs with the rise in a variety of service jobs. It examines the proximate causes of structural change, in particular whether the chronically slow growth of manufacturing output in the 1980s has persisted. The implications of this structural change are considered, particularly the effects on the balance of payments and regional employment patterns. The paper suggests that the main impact of government policies on regional employment may have been through the direct and multiplier effects of public expenditure

Coutts, Ken

Glyn, Andrew

Rowthorn, Bob

English

Apollo (Cambridge)

Structural change under New Labour

The decline in the importance of tradeable goods production in providing employment has continued in the past decade; distribution, public serices and business and financial services all provide more jobs than tradeable goods. Manufacturing output has stragnated under New Labour despite rapid growth of expenditure on manufactures. The result has been a sharp deterioration in the trade balance in manufactures. However the current account has only been in modest deficit shielded by additional net exports from finance and business services, higher earnings on overseas investments and an improvement in the terms of trade. The North of the country lost more industrial jobs than the South, but since 2000 the North has seen a greater expansion of jobs in public services and also finance and business services. Combined with a slower growth of population this has implied that the employment rate has actually risen in the North as compared to the South - a striking reversal of a long running trend. The government has taken a relaxed attitude to the decline in manufacturing over the past decade and has played down the importance of deliberate policies to bring jobs to the most affected regions. Paradoxically the major reason for the recent narrowing of the regional employment gap in recent years has been the very rapid expansion of jobs linked directly to public spending

Oxford University Research Archive

Structural Change under New Labour.

The decline in the importance of tradeable goods production in providing employment
has continued in the past decade; distribution, public serices and business and
financial services all provide more jobs than tradeable goods. Manufacturing output
has stragnated under New Labour despite rapid growth of expenditure on
manufactures. The result has been a sharp deterioration in the trade balance in
manufactures. However the current account has only been in modest deficit shielded
by additional net exports from finance and business services, higher earnings on
overseas investments and an improvement in the terms of trade. The North of the
country lost more industrial jobs than the South, but since 2000 the North has seen a
greater expansion of jobs in public services and also finance and business services.
Combined with a slower growth of population this has implied that the employment
rate has actually risen in the North as compared to the South - a striking reversal of a
long running trend. The government has taken a relaxed attitude to the decline in
manufacturing over the past decade and has played down the importance of
deliberate policies to bring jobs to the most affected regions. Paradoxically the major
reason for the recent narrowing of the regional employment gap in recent years has
been the very rapid expansion of jobs linked directly to public spending

Oxford University Research Archive (ORA)

https://www.repository.cam.ac.uk/handle/1810/194701

Structural change under New Labour

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Apollo (Cambridge)

Oxford University Research Archive

Oxford University Research Archive (ORA)