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tv   Panorama  BBC News  March 24, 2023 3:30am-4:01am GMT

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officials argue that such athletes have an unfair advantage due to a difference in strength and muscle mass. now on bbc news — panorama. people are struggling. costs are going through the roof. and i'm not sure there is any of stopping it. there are lots of people currently working just to pay the bills, not having any sort of life. we struggle just| so we can have a roof over our head. millions of britons have effectively had a pay cut. wages aren't keeping up with costs, public services are struggling too. it's tough right now, and i can't be the only one
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who's asking what's going on? the government offers this explanation. it's the legacy of covid and it's, of course, what putin is doing. but are ukraine and covid the full story? i think the uk is probably poorer than most people think. the system isn't producing like it should. that is the result - of choices we've made. this is definitely not what normal looks like. this is what failure looks like. the government rejects talk of failure or decline, and it's true, britain is one of the richest countries in the world, but if that's the case, why do so many people feel so poor? cornwall is home to more than half a million people. it's where i grew up and where my parents still live. these days, cornwall relies on fishing, farming and, most of all, tourism.
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it's one of the most popular destinations in the country. it's also one of the poorest in the uk. cornish workers are among the uk's lowest paid. with rising food, housing, and energy prices, life has got harder in the last few years for many people. andy collins is one of them. where are we off to? a small suburban village, to follow up on a patient we saw last week. andy used to be a healthcare assistant, then, afterfour years of training, he became a nurse. you enjoy it? love it, wouldn't trade it for the world. i absolutely adore myjob. he qualified a year ago. got me mask, got me gloves, got me apron. happy days.
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it's me. hello. were you expecting somebody else? andy works full and earns just short of £24,000 a year. are you feeling any better on the bed? fine. fine? all done. i can hear in how you talk about yourjob the passion you have for it, the commitment you have for the job, patients and all of it, but does the level of pay you receive for it have an impact on how you feel about this? it does, it's starting to get close to being that i can't afford to do this, it's becoming a problem and that does the level of pay we receive match our outgoings? are the concerns so pronounced you would consider quitting? it's getting close. right now, inflation is close to a ao—year high,
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and even with his promotion, for andy, the sums don't add up. as soon as i qualified it was october, up went the rate of gas went up, electric, fuel, whatever i've earned in extra has disappeared into bills. i am seeing that are colleagues struggling, i'm seeing gaps ,and we can't in the workforce that mean we are really busy always spend as much time as we want with patients. the pay of nurses has failed to catch up with the cost of living. factor in inflation, they are now 10% worse off than in 2010. people are still being forced to rely on food banks and things and then come to work to look after people, that is a situation that is completely untenable. nurses are considering a new pay offer from the government. but across the country, many public and private sector workers are taking action. what we want?
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the government doesn't deny it is difficult right now but says big wage rises risk feeling inflation further. what do we want? decent wage. when do we want it? now! arguments over pay are happening now, but the experience of so many workers is part of a story that reaches back years. here's how. the uk is in one of the longest periods of slow wage growth in living memory. this graph shows the average wage in the uk, it has more than doubled since 2000, but look what happens when this is adjusted to factor in rising prices to show how much a wage can actually buy. in the 15 years since the financial crash of 2008, it has hardly grown at all. panorama asked the think tank the resolution foundation to look at the data on wages. it estimated that if wage growth had continued as it was doing before 2008, workers would have on average
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around £11,000 more a year than they do today. but that's not what has happened. the wage stagnation of the last 15 years is completely unprecedented, no—one alive and working in the british economy today has seen anything like this, nobody thought it could happen, and it is a danger we treat that that as normal. we have got used to it and forgotten this is not what normal looks like, and this is what failure looks like. in 2008, the typical german household and over £500,000 more than the average uk household, by 2020, the gap was over £11000, an eightfold increase, or as the institute for fiscal studies puts it, the slowdown of wage growth in the uk spells the end of the long growth in living standards. something that had lasted decades.
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the idea that each decade does at least as well as the one before has, for the moment, ended. so how do we explain why wages in real terms, have stopped growing? many economists say it is the uk's low level of productivity. in other words, the work we do needs to produce more. there is a quote about this from the nobel prize winning economist, paul krugman, who says, "productivity isn't "everything but in the long run, it's almost everything. the argument being if you want to increase people's living standards in the long run, by far the best way of doing that is to increase the output of each worker. productivity is how much you produce with a unit of labour over the machine. the more you can produce, the more you get rewarded for it. most of us, if we think
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about productivity, would probably think about how well we work as individuals, how efficient we are, how much we produce or achieve. at harlem bay, i want to talk to this group of local business people, once they get out of the sea. i'm pretty keen on going in the water in cornwall when i come back home, but this is next level, not sure i would be doing this in february. but these swimmers are braver than me. we should point out it's absolutely freezing on the beach, and dry, goodness knows what they are experiencing out there. very nice. good. very alive. very tingly, very blue. takes the cobwebs, shall we way, out for a morning. for some of the group, this is part of improving their own productivity. if you allow yourself time to get outside, go for a walk, go for swim, perhaps you get your brain
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going in a different way and you can be more productive in a shorter space of time. would you be surprised if i said the uk had a productivity issue? to be honest, not really, we have been barking up some of the wrong trees. do you think the british are going at it the whole time but maybe not always so efficiently? perhaps, maybe we have been too long slaves to the desk, feeling like you are working hard but not necessarily working smart. personal productivity is one thing, you could also measure the productivity of a company or indeed of a country. and the uk's productivity is lagging behind. here's how. productivity has long been a concern for the uk economy. uk productivity has grown 0.4% a year since 2008. to put that in context, the average across other developed countries is 0.9%.
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for example, in germany, the value of the workers' output is more £47 an hour, in france, it is £51, in the uk, it is around £43.50. and all of this affects how much people get paid. so it is true, that we as a nation cannot afford wage increases that are higher than inflation, unless we have a productivity miracle. we are not on the verge of a productivity miracle, u nfortu nately. increasing productivity is especially hard because of the nature of the uk's economy. 0ur manufacturing industry has been shrinking for decades. these days, nearly 80% of the economy comes
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from services like financial services, hospitality and retail. services are lower productivity than manufacturing, that again again has slowly been putting downward pressure on productivity and that feeds to real wages. all this means until the uk solves its productivity puzzle, its slow wage growth will be hard to resolve. one way to try to boost productivity is to increase investment. this is callestick farm. it's been making ice cream since the 1980s. did you buy this farm to make ice cream or does it go further back? no, it goes a lot further back than that. my grandmother bought this farm in 1935. recently they signed a big contract with m&s. father and son sebastian and ben parker needed to triple the farm's output and that cost money. investment is obviously key to be able to produce the volume we are doing.
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if you don't have the infrastructure and equipment in place to be able to do that, you can't do it, it's as simple as that. callestick spent more than £1 million including on this on this spiralfreezer. now they can produce three times the amount of ice cream with only a small increase in staff. the result is a big rise in their productivity. it represents a step change in the way we have done things. with smaller equipment, lower output, clearly you can't produce the output you need to do to be able to fulfil a larger contract. great efficiency means they may in time be able to pay staff more. we have been through a round of massive investment into the business in terms of equipment and infrastructure. in the longer term that will mean that we can, the business can sustain higher rates of pay for all.
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the extra dimension here is the uk's very low levels of unemployment. businesses are competing for staff, so the ability to pay more helps. callestick�*s experience shows how business experience can increase productivity, and that can help deliver higher pay. but across the uk, it's not happening enough. low investment is a challenge for the uk economy now. but this isn't new. britain's big problem operation is just very low levels of investment by our firms, not only in kit, when it's hard to get some built in britain, but low levels of investment in staff. between 1997 and 2017, investment from private companies and the government was equivalent to 16% of the uk
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gdp, that's16% of the total value of the economy. but look at how that compares with other developed countries. we are last on the list, behind canada, france, the us, germany and many others. the uk's level of investment has been low since the �*90s but in the years after the financial crash of 2008, the coalition government put the brakes on spending, and investment went even lower. professor diane coil at cambridge university told us... this is engineered arts in falmouth. and this is a humanoid robot called ameca. studies suggest the country is lagging behind other advanced economies in terms of output per hour work.
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ameca interacts with humans using artificial intelligence to send information from the internet. she is sold to businesses and universities around the world. the government is introducing several initiatives to try and increase productivity rate but more needs to be done. the company's received £4.5 million from investments in north america, none from within the uk. do you think the uk takes engineering and mechanisation as seriously as other countries do? no, the uk operates with a kind of banking mindset, you know, and the cost of everything, the value of nothing. i think there is lip—service paid to this idea we are investing in technology for our future prosperity. but the reality is on the
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ground, just doesn't happen. will's creation, though, is more positive. ameca, can you tell me about business investment in the uk? the uk government is taking an active role in encouraging investment and providing incentives for businesses to grow and develop stop. the man she shares an office with begs to differ, he says more investment is needed in education, technology and infrastructure. it is very hard for us to recruit people with the necessary engineering skills from uk institutions, if you want business you have to provide space for business and there is a definite lack and a lack of planning for space. i think there has not been much support in terms of capital investment from the government. and willjackson's experience fits with the national picture. the uk invests less in things like skills, innovation, and infrastructure
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than in other countries. this is especially the case in 2010, but it is a longer term problem that we have seen over the years. the government doesn't deny there is a problem here. since 2020, it has increased its own spending on investments and last year, rishi sunak asked this. why is investment in capital so low? my analysis is clear, the problem is no longer the government. businesses simply aren't investing enough. but why might that be? because businesses don't take investment decisions in a vacuum and one factor in their decision—making is political turbulence. most economists would tell you what is the number one thing you can do to make sure, to incentivise business
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investment and private sector investment, and therefore drive stability is certainty and strong institutions and we seem to have gone out of our way in the last few years to undermine some of those things. since 2016, there have been five prime ministers. thank you and goodbye, thank you. as well as covid and the war in ukraine, there was also the financial turmoil of liz truss' leadership. and years of uncertainty over brexit. all of this has come at a price. for example, the government's official watchdog, the office for budget responsibility, projects that brexit will shrink the uk economy by 4%. it also says that business investment has stagnated since 2016. the government would say brexit is a long—term plan. rishi sunak has talked of building an economy that embraces the opportunities in brexit. and while there are debates about investment strategy for the future, it is beyond dispute that the uk's investment is low compared
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to other developed countries. it's been low for years, and this, in the short term, is being exacerbated by brexit and none of that helps increase productivity or wages. across the uk, families are feeling the squeeze. polling shared exclusively with panorama suggests that one in four people are finding it difficult on their current income and nearly half are worried about their financial situation. nikki rogers works around 20 hours a week as a carer and gets £10.50 per hour, she also receives universal credit, various loans, and borrows from friends — but it's not enough. she lives with her daughter leah and son archie. it's really sad that we struggle just so we can have a roof over our head.
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with a light bulb gone, they say they can't even afford to buy a new one until the next payday. i pay for my own petrol to get to work and leah pays for her own petrol to get to work, so that is over £100 a week, and i don't get no extras, no mileage or anything, which is a pig. so i'll get paid weekly with work, so that's what holds us over for the week. i got paid on friday and it was gone saturday morning. if i moved out mum wouldn't be able to survive. even worse than she already does. because it is my money that we live off. archie goes to school to be fed, basically. he doesn't care about school like you should. it's the norm now. i think it is reasonable for all of us to have a better standard of living, because at the moment we are not, we'rejust muddling through. this isn't normal, is it? this isn't normal. and in a cost—of—living crisis,
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it's the lowest paid who are hit the hardest. the current shock is particularly bad in that it is driven by inflation in energy prices and also food prices, these are things that low income households spend more of their income on. so the inflation they face is actually higher than the inflation rates faced by high income households. this is made worse by inequality. the uk's highest earners are among the richest in europe. but our lowest income families are more than 20% poorer than those in france and germany. that's nearly £4000 a year lower than their french equivalents. just before christmas, nikki turned to a foodbank for the first time. my wages weren't covering anything that i needed. i can't remember my mum saying we've got to sit in the dark
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for the night, or you can't have that because i can't afford it this week, that we couldn't put our heating on because we have only got £1 left in our metre. my mum never said none of that to me and ifind that i am saying that to my children and that's shocking. everything seems to be falling apart. none of this is going to let up soon. the polling shared with panorama suggest 44% of people think their standard of living is going to get worse in the next year. and the data suggests they're right. the government's independent watchdog says in the next two years we will see the largest two year fall in living standard since their record began in the 1950s. come on, let's go! in penzance, this group of dancers is meeting for their latest class. sennen is 17 and doing a levels. definitely feel a sense of unfairness.
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well done, swinging the back to the front. it has angered me a lot and made me quite upset. these concerns are shared by abigail, who is also 17 and a photography student. i feel like things that were more achievable back in the day for the past generation are not going to be as achievable for my generation. if i was to have a family in the future it would be quite difficult and a lot of stress may be put on me. having these dreams since i was younger and all these expectations and now it's all kind ofjust crashed down. the government says there are still many reasons to be hopeful. and when our leaders have addressed the pressures of recent years, they have focused on recent events. the legacy of covid. caused by the lingering effects of covid... there is a global energy crisis. i
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global pressures on prices. a global inflation crisis in a global economic crisis. it is of course what putin is doing. there is no denying these globalfactors, but some of our problems are specific to the uk. we are now like thousands of pounds, the typical brit is, thousands of pounds poorer than the typical german or french person, the typical australian, the typical american, they are 60% richer. this is not an easy message to hear. and we're not hearing it from the politicians. i think there is a lack of diagnosis or understanding of actually what the real structural issues facing the economy are. i think that is particularly true at a political level. if politicians do understand the problem, they are not keen to say it out loud. i wanted to ask the government about this but no minister was willing to speak to us.
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in a statement the government said: and in last week's budget the chancellor, jeremy hunt, announced measures to try and boost productivity, including investment zones and tax incentives. today we build for the future, with inflation down, debt falling, and growth up, the declinists are wrong and the optimists are right. we stick to the plan because the plan is working and i commend this statement to the house. the current state of the uk economy is not everyone's definition of a plan that's working. and some economists argue mr hunt's budget doesn't address the scale of the challenge. what was missing, though, was a clear long—term plan to boost business investment which will boost productivity
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in this country and instead what we saw was more tinkering around the edges, more temporary policies that might have, you know, some short—term effect on growth, but we are still set to see the biggest drop in living standards for two consecutive years, so despite the budget and perhaps a more optimistic outlook, people will feel much poorer than they did before. that isn't to say this is a lost cause. all the economists panorama spoke to agree it should be possible to get living standards rising again. there is every reason to be optimistic. we have the best universities in the world. we have many pockets of excellence. we have a legitimate democratic system in place. it's as if you are a football team and you have all
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the players, but somehow those players haven't coalesced together. helston women's football team are training for the next match at the weekend. but there are other things on their mind as well. what are the difficulties that you didn't quite anticipate? being in cornwall, we have some of the most expensive houses down here, most of us are going to have to go through a shared ownership or a different kind of route to get on the housing ladder. the money side of things and things like that, you know, there are lots of people currently working just to pay the bills, not having any sort of life. many moons ago, i went to primary school here in helston, and a few years later, when i was around the same age as some of the players here, i guess there was an assumption about life in the uk that the next generation would be a little better off
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than the one before, that the state would do what it could to look after you if you were poorly. and, to put it broadly, that things would get better. right now, those assumptions are being eroded by the state of the uk economy. what we're seeing is, effect, a national pay cut that has been years in the making. it's changing what people can expect from theirjobs, from public services, and from their country. it might not be comfortable to admit it, but by several measures, we're poorer than we think.
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hello. it's springtime, and the season of showers — quite a few of them on the way for friday, some of them possibly with hail and thunder. indeed, the next few days are looking quite unsettled. and from sunday onwards, it's also going to turn quite a bit colder, but mostly across northern parts of the uk. so the forecast through the early hours admittedly shows quieter weather across england and wales, with some clear skies, thicker cloud across the northern half of the uk. and the early morning temperatures will be typically between 5—7 celsius. so starts off really bright, if not sunny across many areas of england and wales, but the clouds will soon build. as this area of low pressure reaches ireland, to the south of it, very strong winds, gales around coasts, and it will be very blustery inland, too.
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now the showers will be fast—moving, some of them will be brief, but with hail and thunder. further north, the winds are lighter across scotland and northern ireland, so the showers will be slow—moving, around 13 celsius. nearby explosion bloody and brutal trench warfare. we join ukraine's forces just 700 metres from the frontline. get in, get down. breathes heavily. those two two russian shells that have just come in. i think it's tank fire. tiktok ceo grilled by us lawmakers, as he tries to convince them the chinese—owned app is not a threat to us national security. do kwon, founder of collapsed cryptocurrency terra luna, is arrested in montenegro after months on the run. and, transgender athletes are to be banned from female categories in world athletics international competitions.

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