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Public Sector Hit:
I read in the times yesterday that there are to be widespread job losses in the public sector, most notably local council offices. It was reported that in the region of 7,000 redundancies would have to be made.

The reasons for the bulk of these redundancies was the collapse in the housing market, which has led to a fall in fees from property developers, land searches and domestic planning applications. I found this interesting that even though the state is responsible for these functions, there does seem to be some common sense operating within these departments, in so much that a decrease in the workload has led to a reduction in the staff needed.

Maybe I’m just too cynical, but I just assume that most people that work for the state do so because they expect a nice easy life, with an above inflationary payrise each year and a nice pension at the end of it - oh, and job security. I had never really considered that, as in private enterprise, these departments would have to effectively be self funding, and thus employ at a level that is sustained by the current level of activity.

Private Sector Hit:
I heard on the BBC news at lunch time that Honda in Swindon would have to stop production during April and May of this year. This is on top of a proposed shutdown in February and March, which would mean they are unproductive for 1/3 of the year. This is quite incredible, and what’s more so, is the fact that they are not laying people off, they will be keeping them, but won’t have any work for them during this period.

There were some mutterings during the bulletin about how the government was going to have to bailout the car industry in this country. I don’t see why they should, the car industry is probably bloated and inefficient in this country and could probably use this recession to transform itself into a more competitive sector. And if it can’t, then what’s wrong with importing cars? No doubt they would be cheaper - you can already buy a European right hand drive car in Europe for far less than you can in the UK.

I suspect there are probably import duties for non-EU manufactured cars, a way of the government protecting the interests of the UK car manufacturing industry - which last time I checked, was not British at all, Ford is American, Honda & Nissan are Japanese, Jaguar Land Rover is Indian, Rover is Chinese, and any other manufacturers tend to be small sports cars and not mass market cars.

So it does beg the question, should the UK government really be bending over backwards to help foreign owned UK manufacturing concerns? And in fact, wouldn’t the government serve it’s people better by increasing the competition and thus lowering prices substantially, such that we all wouldn’t be so reliant on credit to make a new car purchase? As it is the lack of credit and economic uncertainty that has caused such a drastic drop in demand for new cars at the moment anyway.

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