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Structural Change under New Labour

Andrew Glyn, Kenneth Coutts () and Bob Rowthorn

No 312, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: The decline in the importance of tradeable goods production in providing employment has continued in the past decade; distribution, public services and business and financial services all provide more jobs than tradeable goods. Manufacturing output has stagnated 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.

Keywords: Deindustrialisation; North-South Divide; Public Sector Jobs; Balance of Payments (search for similar items in EconPapers)
JEL-codes: O14 O19 O52 R11 (search for similar items in EconPapers)
Date: 2007-02-01
New Economics Papers: this item is included in nep-geo and nep-his
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