Make hay

Some people are arguing (usually from across the Commons benches) that Britain has become too heavily reliant on its financial services sector. As we headed, blissfully unaware, into this maelstrom, the City of London and associated banks and fund management corporations counted for just less than 20 per cent of Britain’s GDP. That’s probably too much.

Manufacturing. That’s what we need. That’s what the unions reckon. We need to make stuff that other countries need. Our only marketable export currently is actors. So this clearly needs to be addressed.

The argument that our country would be better placed to withstand the global financial slowdown if we manufactured and exported more goods is a strong one. But manufacturing is not a panacea. And it wouldn’t have saved us from this recession.

The best things in life are free

Yesterday, as most of Britain frolicked in a winter wonderland, businesses were counting the cost of the heaviest snowfall for almost 20 years.

It’s estimated that “snow day” cost Britain in excess of £1bn and that figure could rise to £3bn as the cold front looks set to remain for the rest of the week.

Over one fifth of all British workers (at least those who aren’t striking) couldn’t make it to their desks as transport links across most of South East England were disrupted. Of those who clambered through the wilderness to make it to work, 80 per cent of them did so late. Britons yesterday essentially pulled a nationwide sicky.

Save us the history lesson

Whisper it quietly. Shout it from the rooftops. It’s finally here. The word that has been written, reported, blogged and tweeted countless thousands of times since last September finally gains credence. The UK is officially in recession.

It’s perhaps not the most compelling or unexpected of news stories but it does lend some perspective to what the Tories are labelling, only half-unfairly, Gordon Brown’s Recession.

That an article of such economically cataclysmic content is treated as old news is news enough in itself.

We have just experienced our worst quarter since the depth of the last recession – the word’s usage has apparently increase 2000 fold recently – in 1990.

History is a guide to navigation in perilous times.

- Pulitzer Prize winner David McCullough

The natural tendency once something of this magnitude has been confirmed is to seek solace in history. Previous events set precedents that can cajole us into believing that, although we are in awful shape, we are not in that scariest of positions – uncharted territory.

We hear that the pound is at its weakest against the dollar for 23 years. Unemployment is encroaching on levels not seen for 15. Economic growth is the slowest in 27.

Yet we are are in unprecedented financial times in many ways. The Bank of England’s base rate has never been lower. Media reporting of job losses and instantaneity of market transactions have never been quicker nor, lamentably, more prone to error.

History cannot console us. Look back and comparable figures show that the last time Britain’s economy shrank by 1.5 per cent, we were still in the mire. The oil shocks of the Seventies were still rippling and inflation soared to levels not seen since – you get the idea.

Analysts understandably look to history in order to predict a recessions course. But all they provide us with are a set of rules that apply to different times. No recession is identical and no country has exactly similar problems. In this recession alone we have had ‘worst since 1990′, ‘worst since 1980′, ‘worst since 1929′ etc. Will we have the worst ever?

I wouldn’t bet against it, just as I wouldn’t advise anyone to attempt further predictions based on historical premise.

One modicum of solace can be taken from history, in the Nineties recession, to be exact. On the morning of 22 November, 1990 Prime Minister Margaret Thatcher, after over seeing a meteoric boom in unregulated financial growth followed by crippling bust, resigned from office. Are you listening Mr Brown?