Good prices and plenty of choice

Whilst shopping on Saturday I was struck again by the huge range of choice of products, the good displays and by some of the keen prices on offer on the High Street.

I saw a Potato masher made of good strong stainless steel with a pleasant wood handle for just £3.99. Assuming a 50% only mark up by the retailer that means it was bought for just £2.67 from the manufacturer, including all packaging and shipping costs. Maybe the mark up was higher and the item cost just £2 delivered half way round the world. It had come from China by ship and truck. What UK manufacturer could match that cost?

Or take a well made and strong pair of kitchen scissors for £5.99. They came with plastic handles over the steel, good cutting edges, and all encased in a rigid see through plastic pack for ease of getting home. They may well have cost the shop between £3 and £4.

There is plenty of manufacturing capacity in the world for everything from clothes to housewares, offering a great array of different styles, colours and specifications. The excess capacity in China and elsewhere means strong downward pressures on the prices of many goods. The family budgets are under pressure thanks to the cost of government – Income Tax, Council Tax, VAT, fuel tax, car park charges, vehicle and broadcast licences, rail fares and the rest – and the increases in prices of various services with a higher labour content.

Consumers are spending relatively more on services and less on goods. As real wages rise so people can afford a few more luxury or discretionary items, with basics taking less of the budget. The new Wokingham Town Centre has a higher ratio of restaurants, coffee bars, specialist food bars and cocktail parlours, reflecting the wish of shoppers to afford an experience as well as simply buying more goods. The digital pound is also surging, with more being spent on mobile phones and tablets, on film downloads, on internet papers and magazines and various specialist apps.

The public sector needs to get smarter at adapting modern technology so it too can be more flexible in the services it offers and keener in their costing or pricing. The USA is pushing back on China to stop it dominating in tec as well as consumer goods, and to protect their data and networks.

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30 Comments

  1. Posted May 18, 2019 at 9:29 am | Permalink

    No America is “pushing back ” at China for domestic political ends. The massive trade deficit is caused by US corporations offshoring manufacturing and jobs to China to increase their bottom line whilst eviscerating the US economy. Trump and co are attempting to divert attention from the results so that people don’t catch on to how they have been conned. Seems to be working well so far, at least it will until all the numerous problems attendant to a trade war come back to bite them all in the squishy bits.

    • Posted May 18, 2019 at 1:45 pm | Permalink

      My reading of the Trump message is that he wants US companies to onshore activities thay have previously off-shored. Moreover he has been very frank about it. Previous US administrations were very ready to promote off shoring by US corporations – though the smarter ones usually ensured they retained some key technology or process in the USA. That is becoming more difficult as the Chinese economy matures and starts to challeng US technology for leadership in newly emerging technologies. That is a challenge to the US in their application in both the commercial and military spheres.

  2. Posted May 18, 2019 at 9:36 am | Permalink

    Let’s not be naive here. The UK public sector is a political entity not a service provider. It is a source of employment, it is a source of union power, it is a source of political power for Labour and represents everything that the private sector isn’t

    The Tory government won’t reform Labour’s client state. Why?

    Labour’s aim is total state dependency as this affords them huge political leverage and creates embedded electoral loyalty. The abuse of the Exchequer and the taxpayer to construct a compliant public sector is at the heart of socialist Labour

    And every Tory government sits in silence and allows it to happen

    Why is it so difficult to explain to the voter the strategy of socialist Labour?

    Why can’t a Tory leader go to the heart of Labour’s politics and reveal their dark arts? Propaganda. Client state politics. Quango politics. Politicisation of human relationships as a source of political power and political leverage over the opponent. Open border policy to achieve electoral success.

    Labour use their historical commitment to the public sector to deceive their core vote. Unfortunately, their core vote fail to focus on their non-economic plans to reconstruct the UK in their own image

    The contemporary Tory party is either clueless or complicit. I can’t decide which one it is. I know the party is terrified of having the ‘race card’ played against it so its capitulates on social policy.

    For god’s sake you only have to explain to the public the strategy at the heart of Labour’s use of human differences to create a political dynamic to destroy their opponents. Jonathan Powell admitted to this very tactic in an interview some years ago

    Stop pandering to the Marxists and the liberal left and understand that they represent a tiny minority of the electorate.

    Unbelievable

  3. Posted May 18, 2019 at 9:42 am | Permalink

    ‘the cost of Government’ is certainly the cause of much financial stress and frustration. The delivery of services is disasterous – one Council is ‘impounding bins as a punishment for not properly recycling’. This balance of power must be reversed and to aid that process, I now sign all my letters to The State so – ‘You are, Sir, my obedient servant’.

    • Posted May 19, 2019 at 5:48 am | Permalink

      The distinction between goods & services is often an illusion. A man may buy a drill when all he needs is some holes. He may purchase that service from a handyman. A drill is a tool defined as a good. The handyman purchased his drill as a service to assist both his business & the person purchasing the holes it delivers.

  4. Posted May 18, 2019 at 9:55 am | Permalink

    “What UK manufacturer could match that cost?”

    Non probably, due to over taxation etc, not helped by to many customers still far to happy to know the value of everything but the worth of nothing. Sir John, you might be happy with a Chinese made potato masher for £3.99, on the other hand growing numbers are -given a choice- more than willing to pay more if it has a “Made in the UK” label, it is not just ‘food miles’ they understand but also the impact of off-shoring.

    What the hell do you think much of Brexit is about, when even some on the left understand were Trump’s tariff policies are coming from even if they detest the man on a personal level – Brexit, and then the 2017 GE, were our MAGA moments.

    “[scissors] encased in a rigid see through plastic pack for ease of getting home.”

    FAIL… What is so wrong with a cardboard package, with a picture of the item printed on the box, just as easy to get the item home and a damned sight more convenient to unpack – you often need a pair of scissors to unpack those blasted blister packs, not good if you have bought the scissors to replace the broken pair you already have!

    I have no problem with plastic packaging were it is necessary, a tin or glass bottle of washing up liquid would be rather inconvenient for example, blister packs are for marketing, nothing else.

    Indeed there would be no pressure on household budgets if Govts kept both direct and indirect taxes under control, if they spent less on quangos and top down management of the NHS etc. There would be less need for companies to off-shore, with the lost jobs that result here in the UK, forced up govt spending due to increased JSA/UC payments. What jobs are available, such as in hospitality, or service sectors, are often NMW, or subsided via apprenticeship funding etc, again often increasing in-work state welfare benefits.

  5. Posted May 18, 2019 at 9:59 am | Permalink

    Good morning.

    The family budgets are under pressure thanks to the cost of government . . .

    Well those lavish pensions need to be financed somehow.

    The public sector needs to get smarter at adapting modern technology . . .

    It will never happen. Where you have an effective monopoly there is no incentive as, Darwin’s Law for business does not apply.

    • Posted May 18, 2019 at 12:09 pm | Permalink

      MB,
      I used the term ‘Darwinian economics’ back in 2007, hoping that governments would let ‘nature’ takes its course during the financial crash; of course governments didn’t leave alone so we are now looking at an even worse problem. However, even governments cannot stop Darwinian Economics in the end, Venezuela is a good example, and so even a government monopoly will eventually collapse. Sadly, where governments are concerned, individual interests keep zombie activities running well beyond their cremation date.

    • Posted May 18, 2019 at 12:52 pm | Permalink

      “those lavish pensions need to be financed somehow. ” – – -and so does every refugee/asylum seeker – -and inevitably their whole families who turn up after 2 claims of “Can’t deport i’ll be persecuted” followed by ” Right to family life”. . . .Arrive, sit down, laugh themselves silly as our taxes are handed over to supply them with free lives. Council tax up – council services down. I do NOT wonder why.

  6. Posted May 18, 2019 at 10:02 am | Permalink

    Stick a chicken on a capless empty coffee jar in the oven. She chose to pat it with salt as is their custom. Resulting in not as dry meat as one might think. She was good other things too.
    But that’s another story.
    When I finish writing all… my books… my life-expectancy will be zero.

  7. Posted May 18, 2019 at 10:05 am | Permalink

    My wife and I had a wonderful day out window shopping in Oxford yesterday and the icing on the cake was hearing Sir John’s one hour talk in the afternoon at All Souls campus, which had a full house.
    The setting contrasted with the revolution in big party politics as he outlined in his book and also contrasted with the empty hall in Bristol for Theresa May.
    The QA session was slightly overshadowed by people wanting news of leadership options but nevertheless is was excellent and reminded me of the best of British traditions of patience, good manners and fair play that once prevailed by default just taken for granted.

    We noticed how Oxford shopping has changed out of all recognition from just 10 years ago with many new large up-market outlets but surprisingly large oriental shops whose names escape me – my keyboard does not have them! There certainly is a bewildering choice but you can still dine frugally if you shop around such as street food.
    Not all towns are so lucky such as Bournemouth, Weston etc where several national stores have pulled out of town unfortunately, not help by Phil Hammond’s business rates hikes. It may be he has left it too little and too late to save the retail fabric of many towns taken over by Charity shops in poorer areas of the country.

  8. Posted May 18, 2019 at 10:06 am | Permalink

    Agreed JR

    The cost of my Wokingham Council tax is now 50% of the basic rate of the State Pension.

    Just completing the financial affairs of a family member who has passed on, I see the new fee’s for Probate is now based on a percentage of the estate value, and it has now soared to a possible cost of many thousands of pounds, from the original simple flat fee of a couple of hundred pounds, in years past.

    So the message is what, spend all of your money as fast as you can before you die, and if it goes abroad on foreign holidays or foreign made goods, who cares, because if and when the Government get it they will waste most of it anyway, some of it will even fund foreign aid spending. !

    Not to forget HS2 and similar vanity projects.

    Is this really the right message to promote ?

    • Posted May 18, 2019 at 4:19 pm | Permalink

      You have to think laterally about your taxes. Imagine if a political party were to say that your tax free allowance was going to be reduced by 10,000. Would they be elected? As most band D council tax is closing in towards £2,000 that is the reduction of your tax free allowance in PAYE terms to cover it at 20%.
      And that is just one lump sum tax to pay. Add in all the other taxes and your tax free allowance easily becomes negative. This is why flat rate taxes are not popular with western governments.

  9. Posted May 18, 2019 at 10:17 am | Permalink

    Don’t shop on impulse, know what you want before leaving home. The availability is excellent and we should not get fussed that the UK is not making these everyday needs in house. We need to always be at the ctting edge of technology in terms of what we manufacture. We should be designing and making our own 5g or ramping up for 6g. We need to be pushing for fusion energy and when we have it not handing it to the rest of the World as we have done with all previous products of UK inovation.

    If you wish to investigate pricing, audit why most auto parts cost the punter in the street ten times what they cost the vehicle manufacturer. This has a knock on effect to the cost of auto insurance. Something useful for a parliamentry committee to look into.

    • Posted May 18, 2019 at 2:14 pm | Permalink

      Who would manufacture our 5g? In 1979, the Post Office together with the UK’s primary telecoms manufacturers, GEC, Plessey, and STC, showcased their System X exchange. So where are our telecom manufacturers now? GEC took over Plessey (GEC was a company built on takeovers as opposed to endogenous growth); STC took over ICL, a computer comglomerate of three incompatible computer manufacturers created by Tony Benn as Technology Minister, and passed away. STC had invented optical fibre and Pulse Code Modulation, both vital technologies for high speed data transmission and for the encoding of analogue waves into digital pulses respectively. The unmourned GEC’s main invention was the cost plus government contract in which it could charge the taxpayer what it liked and not provide anything that worked in return.

      Huawei was founded in 1987 and is now a major international supplier of telecoms equipment. Its Chairman and CEO were both educated at Technological Universities.

      I do not believe Huawei would incorporate spyware into their systems unless they were requested to do so by a client government. Where is the risk/reward upside? The ‘West’ is obsessed about the growing power of China but perhaps needs to realise that deliberately creating a multiculture with components imported from countries with not notably high GDPs per capita and filling our ‘universities’ with courses in grievance studies will not compete successfully with a monoculture of high average intelligence with hundreds of thousands in education at Polytechnics.

      • Posted May 19, 2019 at 1:37 am | Permalink

        You might add that there are around 100,000 Chinese students studying at UK universities in the UK, and another 70,000 studying at UK institutions remotely.

  10. Posted May 18, 2019 at 10:23 am | Permalink

    Please push back about this nonsense of saving the High Street. King Canute springs to mind. In the last week I have visited some well known names whose idea of customer care is zero, one or two people actually taking the money and umpteen filling the shelves, queues build up until a desultory person pitches up, annoyed through having to stop whatever they were doing and then the last person in my queue pounces and I am left still waiting.

    I can buy online without any of this rubbish, have it delivered to my house, can return it without problem and at a competitive price.

    It is not about saving the high street, it is about helping it move forward to what the customer wants, as you have evidenced.

    Continuing calls from politicians about maintaining the status quo demonstrate why the Public Sector is so far behind.

  11. Posted May 18, 2019 at 10:26 am | Permalink

    Sir John,
    You make no mention of the problems the High St. faces with internet shopping? Customers can use shops to view and assess quality, then buy via internet stores. The High St. have costs the internet business does not. This is partly why a relatively wealthy town like Wokingham will have, some might say, too many service outlets, pubs, restaurants, coffee shops. What is your view on tackling business costs internet vs High St.?

    • Posted May 18, 2019 at 11:00 am | Permalink

      An excellent question, having been myself involved in two high street businesses which had a good run for a time until finally forced to face reality — the first falling to a large chain outlet opening nearby (and deliberately pricing below actual cost for the first six months, wiping out five shops similar to my own) and the second to inevitable internet competition. Now I’m part of the latter and work from home, happier than I’ve ever been, but I do so miss the convenience and thriving community bustle of a local high street — which is now all carpet fitters, takeaways and taxi offices.

      Not all “progress” is actually progress.

  12. Posted May 18, 2019 at 10:28 am | Permalink

    It’s a shame that so many householders are living so close to the breadline that they need the help of places like China to be able to purchase required items…
    Britain could excel with items mentioned by making better quality than those imported, but in the current climate we spenders watch our pennies. Cheap items do not last long, and that is surely driving some environmental issues – In a renewed Britain, after Brexit, we need to concentrate on quality and design to compete… We need cars that will not rot away after 15 years – Yes, we do need to consume less by buying things that last – this is a lesson we have lost through advertising, that we recycle what we bought last year and buy new today. Being a nation of consumers is one thing, but making the same replacement purchases every year is irrational.

  13. Posted May 18, 2019 at 10:30 am | Permalink

    The best potato mashers I find come from charity shops or use a potato ricer or a Mouli. The older ones tend to be rather better designed and more sturdy. New things tend to be designed minimising the metal and material content to such an extreme extent that they work only for a short time. A new corkscrew I bought recently (as a distress purchase) broke on the second bottle if wine (could have been worse I suppose)!

    Loo seats that fall to pieces after just a year or two, door handles that break, springs that fail, plastics that become brittle and shatter (garden chairs in particular). Even coat hooks that seem to be made of bendy metal that seem to bend like rubber under just the weight of a heavy coat or knives where the plastic handle shatters if you cut a potato in half!

    So many shops now want to sell thinks worth £2 or less for at least £22. Two distress purchase I had to make recently when in Central London – a pair of reading glasses £30 was the cheapest I found but on line 6 pairs of better quality ones for £12. Also a cable I needed bought from Maplin (before they stopped trading) £22 yet on line about £3 on line delivered for free next day.

    • Posted May 18, 2019 at 1:52 pm | Permalink

      Not that easy to compete on price with expensive green crap energy costs, hugely high and complex taxes, expensive UK property, restrictive planning, high employment costs, restrictive employment laws, the threat of Corbyn, uncompetitive banking …… in short with endless government lunacy and red tape everywhere you look.

  14. Posted May 18, 2019 at 10:36 am | Permalink

    In essence thing you cannot easily do on line – such nail bars, tanning salons,hair & beauty salons, coffee shops, restaurants, wine bars …… have survived. Plus the odd pound shop (where often the quality is no really much worse than the main shops charging perhaps five times more) for many items.

  15. Posted May 18, 2019 at 11:03 am | Permalink

    These cheap goods are not a good thing, they are symptom of a world run by big businesses on a global basis.

    When labour gets short in one country, that used to create upward pressure on wages – now they simply import workers from another country. That keeps the local population out of work or taking low-paid jobs. That means that they can only afford to buy cheap imported goods.

    Eventually the workers in the other country become better off and their wages rise, which means that eventually, so does the price of the goods they make.

    Worse, the country in this case has a population over 1 billion and is increasingly assertive on the international stage, so in many ways this economic model is a house of cards waiting to come down around our ears. It’s a toss-up whether we end up subjugated to big business or by China.

    One day something stops China sending in their goods and we don’t have people who know how to make those items any more. That’s dependency.

    Prevent immigration of cheap labour and prices rise, but so do wages. We end up with the same goods, paying more for them but earning more to pay for them – and saving the trouble of shipping them all around the world, while being self-sufficient.

    So please don’t fall into the trap of thinking that Chinese goods is a good thing.

    P.S. When you buy from (some on line ed), for example, the price and the way it arrives strongly suggests to me that tariffs have not been paid. Something for a good MP to look into perhaps?

  16. Posted May 18, 2019 at 11:06 am | Permalink

    Please can Boris or whoever, pity it is not you JR, put the boot in to this Climate Change hysteria?
    I bump into childhood friends. We all recall, the weather as was. Sunburn and snowballs. Now weather reports “This is a record” which provides us with merriment as they are false.
    Heaven knows from whence their records spring. We recall too our parents recollections of their youth which by no means were always sunshine or freezing days.They would laugh at our weather reports of historical data. So why the con?
    Didn’t Luke Skywalker with his immaculate conception and his mother “knowing not a man” provide the possibly new religion for our street-wise youth? Must we go back to pagan days of Mother Earth worship to stop them drugging and knifing it?
    This Climate Change ideology would be okay if it wasn’t all ready costing us a mint for no economic and social good. University Professors and notables though grey bearded seem to lack personal memories and professional honesty. If not they are thick, as the best balanced assessment of them could ever be.
    Perhaps the world is not going to end in 12 years. Beef cattle have lives too. If we don’t eat them they are too slow to survive except in zoos. The keepers too weak to contain them on grass sausages. Is our fate to milk Liberal lefties to make icecream?

    • Posted May 18, 2019 at 8:47 pm | Permalink

      Indeed climate alarmism is, to say the least, rather exaggerated. Especially by that appalling unfairly subsidised, propaganda organisation the BBC.

  17. Posted May 18, 2019 at 11:30 am | Permalink

    High Street stores are heavily penalised via Business Rates plus an array of Government taxes. Out of town warehouses which stock for the on-line traders, do not have such huge overheads.
    Either those out of town Enterprises must carry an extra tax burden to balance the burden of those in the High Street or Business Rates et al are drastically reduced to make the local stores more competitive. If nothing is done, High Street shopping will die. Is that the intention of our Government?

  18. Posted May 18, 2019 at 11:41 am | Permalink

    Don’t talk about potato mashers , I am hungry trying to cut out these carbs and long for a bit of bulk and those beautiful Jersey Royal potatoes. Ikea has much cheaper kitchen products, but yes that was one example of the things we could make. What ever happened to all those Sheffield products?
    Climate change is bringing us more outdoor life and we could use this for more social gatherings where money could be made. I noticed in your photograph album you have a celebration in a marquee . Why have we not got many more of these occasions ( not specifically to mark an anniversary or other) but for community get together’s.My local garden centre have social events with jazz singers and supper a few times a year. The tickets are always completely sold out. If I had some spare capital and help I would organise more elsewhere and we could escape from the media community to actually enjoying outside entertainment , make money and utilise the products needed for social events. English wine , home grown foods , talented artists, seats , furniture etc

  19. Posted May 18, 2019 at 12:49 pm | Permalink

    National insurance employee tax – a large amount of a persons tax if on Schedule E.
    EU import tarrifs on non -eu goods.

  20. Posted May 18, 2019 at 7:47 pm | Permalink

    I don’t accept that we should accept this view, that we should applaud without reservation the benefit of being able to get cheap products from overseas just so we may feel better off and comfortable.

    We should be regretting that we don’t make more of our own consumables. Government should incentivise home manufacturing. Where is the promotion of English brands? Tories are too much in bed with the City, it’s a dirty story.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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