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Structural Change under New Labour


  • Andrew Glyn
  • Ken Coutts


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.

Suggested Citation

  • Andrew Glyn & Ken Coutts, 2007. "Structural Change under New Labour," Economics Series Working Papers 312, University of Oxford, Department of Economics.
  • Handle: RePEc:oxf:wpaper:312

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    References listed on IDEAS

    1. Robert Rowthorn, 2005. "Combined and Uneven Development: Reflections on the North-South Divide," Working Papers wp305, Centre for Business Research, University of Cambridge.
    2. Singh, Ajit, 1977. "UK Industry and the World Economy: A Case of De-industrialisation?," Cambridge Journal of Economics, Oxford University Press, vol. 1(2), pages 113-136, June.
    3. Erdem, Esra & Glyn, Andrew, 2001. " Job Deficits in UK Regions," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 63(0), pages 737-752, Special I.
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    Cited by:

    1. Andrea Ascani & Simona Iammarino, 2017. "Multinational enterprises, service outsourcing and regional structural change," Papers in Evolutionary Economic Geography (PEEG) 1724, Utrecht University, Department of Human Geography and Spatial Planning, Group Economic Geography, revised Sep 2017.
    2. Ken Coutts & Bob Rowthorn, 2009. "Prospects for the UK Balance of Payments," Working Papers wp394, Centre for Business Research, University of Cambridge.

    More about this item


    Deindustrialisation; North-South Divide; Public Sector Jobs; Balance of Payments;

    JEL classification:

    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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