1 00:00:07,240 --> 00:00:09,255 People are struggling, 2 00:00:09,280 --> 00:00:10,855 costs are going through the roof 3 00:00:10,880 --> 00:00:13,935 and I'm not sure there's anyway of stopping it. 4 00:00:13,960 --> 00:00:17,895 There's lots of people currently working just to pay the bills, 5 00:00:17,920 --> 00:00:19,295 not having any sort of life. 6 00:00:20,800 --> 00:00:25,495 We struggle just so we can have a roof over our head. 7 00:00:25,520 --> 00:00:29,135 Millions of Britons have effectively had a pay cut. 8 00:00:29,160 --> 00:00:31,495 Wages aren't keeping up with costs, 9 00:00:31,520 --> 00:00:33,975 public services are struggling too. 10 00:00:34,000 --> 00:00:35,455 It's tough right now 11 00:00:35,480 --> 00:00:39,095 and I can't be the only one who's asking what's going on? 12 00:00:39,120 --> 00:00:41,495 The Government offers this explanation. 13 00:00:41,520 --> 00:00:46,095 It's the legacy of Covid and it's, of course, what Putin is doing. 14 00:00:46,120 --> 00:00:49,695 But are Ukraine and Covid the full story? 15 00:00:49,720 --> 00:00:54,095 I think the UK is probably poorer than most people think. 16 00:00:54,120 --> 00:00:57,615 The system isn't producing like it should. 17 00:00:57,640 --> 00:01:00,775 That is the result of choices we've made. 18 00:01:00,800 --> 00:01:02,735 This is definitely not what normal looks like. 19 00:01:02,760 --> 00:01:04,295 This is what failure looks like. 20 00:01:04,320 --> 00:01:07,495 The Government rejects talk of failure or decline, 21 00:01:07,520 --> 00:01:11,575 and it's true, Britain's one of the richest countries in the world, 22 00:01:11,600 --> 00:01:15,455 but if that's the case, why do so many people feel so poor? 23 00:01:24,000 --> 00:01:27,615 Cornwall is home to more than 500,000 people. 24 00:01:27,640 --> 00:01:30,855 It's where I grew up and where my parents still live. 25 00:01:35,200 --> 00:01:37,535 These days, Cornwall relies on fishing, 26 00:01:37,560 --> 00:01:40,455 farming and, most of all, tourism. 27 00:01:40,480 --> 00:01:43,535 It's one of the most popular destinations in the country 28 00:01:43,560 --> 00:01:46,775 but it's also one of the poorest parts of the UK. 29 00:01:48,520 --> 00:01:51,615 Cornish workers are among the UK's lowest paid. 30 00:01:53,240 --> 00:01:56,735 With rising food, housing and energy prices, 31 00:01:56,760 --> 00:02:00,975 life has got harder in the last few years for many people. 32 00:02:03,080 --> 00:02:05,055 Andy Collins is one of them. 33 00:02:08,400 --> 00:02:09,775 So, where are we off to? 34 00:02:09,800 --> 00:02:11,815 We're off to Luxulyan, 35 00:02:11,840 --> 00:02:15,015 which is a small village outside of Par, 36 00:02:15,040 --> 00:02:17,415 to follow up on a patient that we saw last week. 37 00:02:18,760 --> 00:02:20,935 Andy used to be a health care assistant, 38 00:02:20,960 --> 00:02:25,175 then, after four years of training, he became a nurse. 39 00:02:25,200 --> 00:02:27,055 And you enjoy it? Love it. 40 00:02:27,080 --> 00:02:28,575 Wouldn't trade it for the world. 41 00:02:28,600 --> 00:02:31,015 I absolutely adore my job. 42 00:02:31,040 --> 00:02:32,495 He qualified a year ago. 43 00:02:32,520 --> 00:02:35,855 Right. Got my mask, got my gloves, got my apron. Happy clays. 44 00:02:39,680 --> 00:02:42,255 How you doing? Oh, it's you. It's me. 45 00:02:42,280 --> 00:02:45,295 Hello. Were you expecting somebody else? 46 00:02:45,320 --> 00:02:50,815 Andy works full-time and earns just short of £24,000 a year. 47 00:02:50,840 --> 00:02:55,415 How do you feel now you're back on the bed? I'm fine. You're fine? 48 00:02:55,440 --> 00:02:57,815 OK. All clone. 49 00:02:57,840 --> 00:03:00,735 I can hear in how you talk about your job, the passion that you 50 00:03:00,760 --> 00:03:03,455 have for it, the commitment you have to the job, to the patients, 51 00:03:03,480 --> 00:03:05,095 to all of it, really, 52 00:03:05,120 --> 00:03:09,135 but does the level of pay you receive for it 53 00:03:09,160 --> 00:03:11,655 have an impact on how you feel about this? 54 00:03:11,680 --> 00:03:12,775 It does. 55 00:03:12,800 --> 00:03:17,815 It's starting to get close to being that I can't afford to do this. 56 00:03:17,840 --> 00:03:19,935 It's becoming a problem in that, 57 00:03:19,960 --> 00:03:23,735 does the level of pay that we receive match our outgoings? 58 00:03:23,760 --> 00:03:27,215 But are the concerns so pronounced that you would consider quitting? 59 00:03:28,240 --> 00:03:29,455 It's getting close. 60 00:03:30,760 --> 00:03:34,455 Right now, inflation is close to a 40-year high 61 00:03:34,480 --> 00:03:39,455 and, even with his promotion, for Andy the sums just don't add up. 62 00:03:39,480 --> 00:03:42,255 As soon as I qualified, it was October 63 00:03:42,280 --> 00:03:44,215 and up went the rate of gas, 64 00:03:44,240 --> 00:03:46,175 up went the electric, up went fuel, 65 00:03:46,200 --> 00:03:50,015 so whatever I've earned in extra has just disappeared into bills. 66 00:03:50,040 --> 00:03:52,455 I'm seeing colleagues that are struggling. 67 00:03:52,480 --> 00:03:56,735 I'm seeing gaps in the workforce that mean we are really, really 68 00:03:56,760 --> 00:04:00,095 busy and we can't always spend as much time as we want with patients. 69 00:04:00,120 --> 00:04:01,575 CARS HONK 70 00:04:01,600 --> 00:04:04,695 Nurses' pay has failed to keep up with the cost of living. 71 00:04:06,800 --> 00:04:08,375 When you factor in inflation, 72 00:04:08,400 --> 00:04:12,015 they're now 10% worse off than they were in 2010. 73 00:04:12,040 --> 00:04:14,255 People are still being forced to, 74 00:04:14,280 --> 00:04:16,175 you know, rely on food banks 75 00:04:16,200 --> 00:04:18,535 and things and then come to work to look after people. 76 00:04:18,560 --> 00:04:21,535 That's a situation that is just completely untenable. 77 00:04:21,560 --> 00:04:25,055 Nurses are now considering a new pay offer from the Government 78 00:04:25,080 --> 00:04:26,615 but, across the country, 79 00:04:26,640 --> 00:04:30,175 many public and private sector workers are taking action. 80 00:04:30,200 --> 00:04:32,655 What do we want? PROTESTERS SHOUT 81 00:04:32,680 --> 00:04:35,095 When do we want it? Now! 82 00:04:35,120 --> 00:04:37,535 The Government doesn't deny it's difficult right now, 83 00:04:37,560 --> 00:04:42,135 but says big wage rises risk fuelling inflation further. 84 00:04:42,160 --> 00:04:46,095 What do we want? Decent pay! When do we want it? Now! 85 00:04:46,120 --> 00:04:49,535 Arguments over pay are happening now 86 00:04:49,560 --> 00:04:52,095 but the experience of so many workers 87 00:04:52,120 --> 00:04:55,015 is part of a story that reaches back years. 88 00:04:55,040 --> 00:04:56,055 Here's how. 89 00:05:01,600 --> 00:05:04,975 The UK is in one of the longest periods of slow wage growth 90 00:05:05,000 --> 00:05:06,415 in living memory. 91 00:05:06,440 --> 00:05:09,495 This graph shows the average wage in the UK. 92 00:05:09,520 --> 00:05:12,055 It's more than doubled since 2000. 93 00:05:12,080 --> 00:05:13,775 But look what happens when this is 94 00:05:13,800 --> 00:05:16,375 adjusted to factor in rising prices 95 00:05:16,400 --> 00:05:19,815 to show how much a wage can actually buy. 96 00:05:19,840 --> 00:05:23,735 In the 15 years since the financial crash of 2008, 97 00:05:23,760 --> 00:05:25,015 it's hardly grown at all. 98 00:05:27,840 --> 00:05:31,255 Panorama asked the think tank the Resolution Foundation 99 00:05:31,280 --> 00:05:32,935 to look at the data on wages. 100 00:05:34,400 --> 00:05:35,775 It estimated that 101 00:05:35,800 --> 00:05:40,175 if wage growth had continued as it was doing before 2008, 102 00:05:40,200 --> 00:05:45,495 workers would have, on average, around £11,000 more a year 103 00:05:45,520 --> 00:05:47,335 than they do today. 104 00:05:47,360 --> 00:05:50,095 But that's not what's happened. 105 00:05:50,120 --> 00:05:52,335 The wage stagnation of the last 15 years 106 00:05:52,360 --> 00:05:53,815 is almost completely unprecedented. 107 00:05:53,840 --> 00:05:56,255 Nobody who's alive and working in the British economy today 108 00:05:56,280 --> 00:05:58,335 has ever seen anything like this. 109 00:05:58,360 --> 00:05:59,775 Nobody thought it could happen 110 00:05:59,800 --> 00:06:02,375 and I think that it is a danger that we treat that as normal. 111 00:06:02,400 --> 00:06:04,855 We've got used to it over the last 15 years and we've forgotten 112 00:06:04,880 --> 00:06:06,815 this is definitely not what normal looks like - 113 00:06:06,840 --> 00:06:08,175 this is what failure looks like. 114 00:06:08,200 --> 00:06:10,615 And this is being felt. 115 00:06:10,640 --> 00:06:13,495 In 2008, the typical German household 116 00:06:13,520 --> 00:06:15,975 earned over £500 a year more 117 00:06:16,000 --> 00:06:18,855 than the average UK household. 118 00:06:18,880 --> 00:06:22,775 By 2020 the gap was over £4,000 - 119 00:06:22,800 --> 00:06:24,895 an eightfold increase. 120 00:06:24,920 --> 00:06:27,375 Or, as the Institute for Fiscal Studies puts it, 121 00:06:27,400 --> 00:06:29,855 the slow-down in wage growth in the UK... 122 00:06:33,040 --> 00:06:35,615 Something that had lasted decades. 123 00:06:35,640 --> 00:06:37,375 The idea that each generation 124 00:06:37,400 --> 00:06:39,695 does at least as well as the one before 125 00:06:39,720 --> 00:06:42,295 has, for the moment, ended. 126 00:06:50,360 --> 00:06:56,055 So, how do we explain why wages in real terms have stopped growing? 127 00:06:56,080 --> 00:07:01,175 Many economists say it's the UK's low level of productivity. 128 00:07:01,200 --> 00:07:06,135 In other words, the work we do needs to produce more. 129 00:07:06,160 --> 00:07:09,295 There's a quote about this from the Nobel prize-winning economist 130 00:07:09,320 --> 00:07:11,015 Paul Krugman, who says... 131 00:07:16,720 --> 00:07:18,935 The argument being that if you want to increase 132 00:07:18,960 --> 00:07:21,535 people's living standards in the long run, 133 00:07:21,560 --> 00:07:23,935 well, by far the best way of doing that 134 00:07:23,960 --> 00:07:26,495 is to increase the output of each worker. 135 00:07:27,680 --> 00:07:32,215 So productivity is how much you produce with a unit of lab our 136 00:07:32,240 --> 00:07:33,815 over the machine. 137 00:07:33,840 --> 00:07:36,415 The more you can produce, 138 00:07:36,440 --> 00:07:38,335 the more you get rewarded for it. 139 00:07:41,120 --> 00:07:43,855 Most of us, if we think about productivity, 140 00:07:43,880 --> 00:07:47,455 would probably think about how well we work as individuals, 141 00:07:47,480 --> 00:07:50,735 how efficient we are, how much we produce or achieve. 142 00:07:52,080 --> 00:07:53,255 Here in Harlyn Bay, 143 00:07:53,280 --> 00:07:56,495 I want to talk to this group of local businesspeople... 144 00:07:56,520 --> 00:07:58,575 ...once they get out of the sea. 145 00:07:58,600 --> 00:08:00,975 I mean, I'm pretty keen on going in the water in Cornwall 146 00:08:01,000 --> 00:08:04,015 when I come back home, but this is next level. 147 00:08:04,040 --> 00:08:06,655 I'm not sure I'd be doing this in February. 148 00:08:06,680 --> 00:08:08,855 But these swimmers are braver than me. 149 00:08:10,560 --> 00:08:14,015 We should point out it's absolutely freezing when you're on the beach 150 00:08:14,040 --> 00:08:17,975 and you're dry, so goodness knows what they're experiencing out there. 151 00:08:18,000 --> 00:08:21,935 Amazing actually. Very alive. Good. Very alive, very tingly, very blue. 152 00:08:21,960 --> 00:08:26,415 It definitely takes the cobwebs out, shall we say, for a morning. 153 00:08:26,440 --> 00:08:30,055 For some of the group, this is part of improving their own productivity. 154 00:08:31,320 --> 00:08:33,815 If you allow yourself time 155 00:08:33,840 --> 00:08:37,175 to get outside, go for a walk, go for a swim, 156 00:08:37,200 --> 00:08:39,855 I think perhaps you get your brain going in a different way 157 00:08:39,880 --> 00:08:43,415 and you can then be more productive in a shorter space of time. 158 00:08:43,440 --> 00:08:47,615 Would you be surprised if I said the UK had a productivity issue? 159 00:08:47,640 --> 00:08:49,255 To be honest, not really, 160 00:08:49,280 --> 00:08:52,815 because I think we've been barking up some of the wrong trees, I think. 161 00:08:54,280 --> 00:08:58,095 Do you think the British are kind of going at it the whole time 162 00:08:58,120 --> 00:09:02,015 but maybe not always so efficiently? Perhaps. Perhaps. 163 00:09:02,040 --> 00:09:04,855 Maybe we've been too long slaves to our desks, 164 00:09:04,880 --> 00:09:09,295 feeling like you're working hard but not necessarily working smart. 165 00:09:09,320 --> 00:09:12,295 Personal productivity is one thing. 166 00:09:12,320 --> 00:09:15,615 You can also measure the productivity of a company, 167 00:09:15,640 --> 00:09:18,415 or indeed of a country, 168 00:09:18,440 --> 00:09:22,055 and the UK's productivity is lagging behind. 169 00:09:22,080 --> 00:09:23,415 Here's how. 170 00:09:28,240 --> 00:09:32,495 Productivity has long been a concern for the UK's economy. 171 00:09:32,520 --> 00:09:34,415 UK productivity has grown 172 00:09:34,440 --> 00:09:37,575 0.4% per year since 2008. 173 00:09:38,640 --> 00:09:40,055 To put that in context, 174 00:09:40,080 --> 00:09:41,455 the average across other 175 00:09:41,480 --> 00:09:44,295 developed countries is 0.9%. 176 00:09:46,240 --> 00:09:47,655 For example, in Germany, 177 00:09:47,680 --> 00:09:49,415 the value of a worker's output 178 00:09:49,440 --> 00:09:52,535 is more than £47 per hour. 179 00:09:52,560 --> 00:09:55,415 In France, it's more than £51. 180 00:09:55,440 --> 00:09:59,015 But in the UK, it's around £43.50. 181 00:10:01,160 --> 00:10:04,535 And all of this affects how much people get paid. 182 00:10:04,560 --> 00:10:11,415 So it is true that we, as a nation, cannot afford wage increases 183 00:10:11,440 --> 00:10:13,215 that are higher than inflation, 184 00:10:13,240 --> 00:10:15,335 unless we have a productivity miracle 185 00:10:15,360 --> 00:10:18,575 and we're not on the verge of a productivity miracle unfortunately. 186 00:10:18,600 --> 00:10:22,215 An increase in productivity is particularly hard 187 00:10:22,240 --> 00:10:24,815 because of the nature of the UK's economy. 188 00:10:24,840 --> 00:10:28,535 Our manufacturing industry has been shrinking for decades. 189 00:10:28,560 --> 00:10:30,895 These days, nearly 80% of the economy 190 00:10:30,920 --> 00:10:36,375 comes from services like financial services, hospitality and retail. 191 00:10:36,400 --> 00:10:39,495 Services are lower productivity than manufacturing 192 00:10:39,520 --> 00:10:42,375 so that, again, has slowly been putting downward pressure 193 00:10:42,400 --> 00:10:44,295 on productivity, 194 00:10:44,320 --> 00:10:46,575 and that, again, feeds through to real wages. 195 00:10:47,840 --> 00:10:51,895 All of which means, until the UK solves its productivity puzzle, 196 00:10:51,920 --> 00:10:55,055 its low wage growth will be hard to resolve. 197 00:10:57,000 --> 00:11:02,295 One way to try to boost productivity is to increase investment. 198 00:11:02,320 --> 00:11:06,975 This is Callestick Farm. It's been making ice cream since the 1980s. 199 00:11:07,000 --> 00:11:10,135 Did you buy this farm to make ice cream 200 00:11:10,160 --> 00:11:12,695 or does it go further back? No, it goes a lot further back than that. 201 00:11:12,720 --> 00:11:15,415 My grandmother bought this farm in 1935. 202 00:11:16,800 --> 00:11:20,895 Much more recently, they signed a big, new contract with M&S. 203 00:11:20,920 --> 00:11:24,535 Father and son Sebastian and Ben Parker 204 00:11:24,560 --> 00:11:27,095 needed to triple the farm's output 205 00:11:27,120 --> 00:11:28,975 and that costs money. 206 00:11:30,760 --> 00:11:33,855 Investment is obviously key to be able to produce 207 00:11:33,880 --> 00:11:35,415 the volume that we're doing. 208 00:11:36,920 --> 00:11:39,215 You know, if you don't have the infrastructure 209 00:11:39,240 --> 00:11:41,855 and the equipment in place to be able to do that, 210 00:11:41,880 --> 00:11:44,335 you know, you can't do it - it's as simple as that. 211 00:11:46,120 --> 00:11:48,615 Callestick spent more than £1 million, 212 00:11:48,640 --> 00:11:50,975 including on this spiral freezer. 213 00:11:51,000 --> 00:11:53,935 Now they can produce three times the amount of ice cream 214 00:11:53,960 --> 00:11:56,735 with only a small increase in staffing. 215 00:11:56,760 --> 00:12:00,615 The result is a big rise in their productivity. 216 00:12:00,640 --> 00:12:02,615 It very much represents a step change 217 00:12:02,640 --> 00:12:04,455 in the way that we've clone things. 218 00:12:04,480 --> 00:12:08,535 With smaller equipment with a low output, clearly, you know, you can't 219 00:12:08,560 --> 00:12:12,215 produce the output you need to do to be able to fulfil a larger contract. 220 00:12:14,960 --> 00:12:17,455 Greater efficiency means they may, in time, 221 00:12:17,480 --> 00:12:19,175 be able to pay their staff more. 222 00:12:20,920 --> 00:12:24,415 We've been through a round of massive investment into the business 223 00:12:24,440 --> 00:12:27,015 in terms of equipment and infrastructure. 224 00:12:28,320 --> 00:12:31,295 Ancl in the longer term, that will mean that we can, 225 00:12:31,320 --> 00:12:35,855 the business can sustain higher rates of pay for all. 226 00:12:35,880 --> 00:12:41,375 The extra dimension here is the UK's very low levels of unemployment. 227 00:12:41,400 --> 00:12:44,015 Businesses are competing for staff, 228 00:12:44,040 --> 00:12:46,375 so the ability to pay more helps. 229 00:12:47,720 --> 00:12:51,015 Callestick's experience shows how business investment can 230 00:12:51,040 --> 00:12:54,695 increase productivity and that can help deliver higher pay. 231 00:12:56,000 --> 00:12:59,215 But across the UK, it's not happening enough. 232 00:13:09,040 --> 00:13:12,695 Low investment is a challenge for the UK's economy now 233 00:13:12,720 --> 00:13:14,975 but this isn't new. 234 00:13:15,000 --> 00:13:18,815 Britain's big problem is just very low levels of investment. 235 00:13:18,840 --> 00:13:20,735 Low levels of investment by our firms, 236 00:13:20,760 --> 00:13:22,655 low levels of investment not only in kit, 237 00:13:22,680 --> 00:13:24,935 like, it's actually hard to get something built in Britain 238 00:13:24,960 --> 00:13:28,455 if you're a company, but low levels of investment in their staff. 239 00:13:28,480 --> 00:13:30,855 Between 1997 and 2017, 240 00:13:30,880 --> 00:13:34,135 investment from both private companies and the Government 241 00:13:34,160 --> 00:13:35,295 was equivalent to 242 00:13:35,320 --> 00:13:37,615 16% of the UK's GDP. 243 00:13:37,640 --> 00:13:40,055 That's 16% of the total value 244 00:13:40,080 --> 00:13:41,455 of the economy. 245 00:13:43,120 --> 00:13:44,975 But look at how that compares 246 00:13:45,000 --> 00:13:47,215 with other developed countries. 247 00:13:47,240 --> 00:13:48,975 We're last on this list, 248 00:13:49,000 --> 00:13:50,775 behind Canada, France, 249 00:13:50,800 --> 00:13:53,495 the US, Germany and many others. 250 00:13:53,520 --> 00:13:57,495 The UK's level of investment has been low since the '90s 251 00:13:57,520 --> 00:14:00,575 but, in the years after the financial crash of 2008, 252 00:14:00,600 --> 00:14:03,215 the coalition government put the brakes on spending 253 00:14:03,240 --> 00:14:05,455 and investment went even lower. 254 00:14:06,880 --> 00:14:09,815 Professor Diane Coyle at Cambridge University told us... 255 00:14:25,240 --> 00:14:28,175 This is Engineered Arts in Falmouth. 256 00:14:28,200 --> 00:14:31,895 And this is a humanoid robot called Ameca. 257 00:14:31,920 --> 00:14:34,895 Studies suggest that the country is lagging behind 258 00:14:34,920 --> 00:14:38,735 other advanced economies in terms of output per hour worked. 259 00:14:40,320 --> 00:14:44,335 Ameca interacts with humans using artificial intelligence 260 00:14:44,360 --> 00:14:47,615 to sift information from the internet. 261 00:14:47,640 --> 00:14:51,055 She's sold to businesses and universities around the world. 262 00:14:53,080 --> 00:14:56,095 The Government is introducing several initiatives 263 00:14:56,120 --> 00:14:59,655 to try and increase productivity rates, but more needs to be clone. 264 00:15:00,840 --> 00:15:06,095 The company's received £45 million from investors in North America. 265 00:15:06,120 --> 00:15:09,055 None from within the UK. 266 00:15:09,080 --> 00:15:13,775 Do you think the UK takes engineering and mechanisation 267 00:15:13,800 --> 00:15:16,535 as seriously as other countries do? 268 00:15:16,560 --> 00:15:18,535 No. The UK operates... 269 00:15:18,560 --> 00:15:23,295 ...er, with a kind of banking mind-set. You know, 270 00:15:23,320 --> 00:15:25,815 the cost of everything, the value of nothing. 271 00:15:27,280 --> 00:15:30,215 I think there's lip service paid to this idea 272 00:15:30,240 --> 00:15:34,575 that we're investing in technology for our future prosperity, 273 00:15:34,600 --> 00:15:39,935 but the reality is that, on the ground, it just doesn't happen. 274 00:15:39,960 --> 00:15:43,295 Will's creation, though, is more positive. 275 00:15:43,320 --> 00:15:47,495 Ameca, could you tell me about business investment in the UK? 276 00:15:47,520 --> 00:15:49,855 The UK Government is taking an active role 277 00:15:49,880 --> 00:15:51,455 in encouraging investment 278 00:15:51,480 --> 00:15:55,175 and providing incentives for businesses to grow and develop. 279 00:15:57,200 --> 00:16:00,215 The man she shares an office with begs to differ. 280 00:16:00,240 --> 00:16:02,775 He says more Government investment is needed 281 00:16:02,800 --> 00:16:05,535 in education, technology and infrastructure. 282 00:16:08,440 --> 00:16:10,855 It's very hard for us to recruit people 283 00:16:10,880 --> 00:16:15,095 with the necessary engineering skills from UK institutions. 284 00:16:15,120 --> 00:16:18,495 If you want business, you have to provide space for business, 285 00:16:18,520 --> 00:16:20,695 and I think there's a definite lack, 286 00:16:20,720 --> 00:16:23,975 and there's also a lack of planning for space. 287 00:16:24,000 --> 00:16:27,015 I think there has not been that much support in terms of 288 00:16:27,040 --> 00:16:29,255 capital investment from the Government. 289 00:16:29,280 --> 00:16:34,015 And Willjackson's experience fits with the national picture. 290 00:16:34,040 --> 00:16:38,015 The UK invests less in things like skills and innovation 291 00:16:38,040 --> 00:16:40,535 and infrastructure than other countries. 292 00:16:40,560 --> 00:16:43,135 This is especially the case since 2010, 293 00:16:43,160 --> 00:16:45,735 but actually it's also a longer-term problem. 294 00:16:45,760 --> 00:16:47,295 That was seen over the years. 295 00:16:48,800 --> 00:16:51,415 The Government doesn't deny there's a problem here. 296 00:16:51,440 --> 00:16:54,975 Since 2020, it's increased its own spending on investments, 297 00:16:55,000 --> 00:16:58,255 and last year Rishi Sunak asked this... 298 00:16:58,280 --> 00:17:01,895 Why is investment in capital so low? 299 00:17:01,920 --> 00:17:03,735 My analysis is clear. 300 00:17:03,760 --> 00:17:06,695 The problem is no longer the Government. 301 00:17:06,720 --> 00:17:09,455 Businesses simply aren't investing enough. 302 00:17:09,480 --> 00:17:11,655 But why might that be? 303 00:17:11,680 --> 00:17:15,975 Because businesses don't take investment decisions in a vacuum, 304 00:17:16,000 --> 00:17:18,455 and one factor in their decision-making 305 00:17:18,480 --> 00:17:21,055 is political turbulence. 306 00:17:21,080 --> 00:17:22,775 Most economists would tell you, 307 00:17:22,800 --> 00:17:25,095 what is the number one thing you can do to make sure... 308 00:17:25,120 --> 00:17:26,975 ...to incentivise business investment, 309 00:17:27,000 --> 00:17:29,375 private sector investment and therefore drive growth, 310 00:17:29,400 --> 00:17:32,815 is to have stability and certainty and strong institutions, 311 00:17:32,840 --> 00:17:36,495 and we seem to have gone out of our way over the last few years, anyway, 312 00:17:36,520 --> 00:17:38,575 to undermine some of those things. 313 00:17:40,560 --> 00:17:45,135 Since 2016, there have been five prime ministers. 314 00:17:45,160 --> 00:17:47,495 Thank you, and goodbye. Thank you. 315 00:17:47,520 --> 00:17:49,775 As well as Covid and the war on Ukraine, 316 00:17:49,800 --> 00:17:53,015 there was also the financial turmoil of Liz Truss's leadership... 317 00:17:54,520 --> 00:17:58,455 ...and years of uncertainty over Brexit. 318 00:17:58,480 --> 00:18:01,215 All of this has come at a price. 319 00:18:01,240 --> 00:18:03,735 For example, the Government's official watchdog, 320 00:18:03,760 --> 00:18:05,895 the Office for Budget Responsibility, 321 00:18:05,920 --> 00:18:10,495 projects that Brexit will shrink the UK economy by 4%. 322 00:18:11,640 --> 00:18:13,015 It also says that... 323 00:18:16,960 --> 00:18:20,855 The Government would say Brexit is a long-term plan. 324 00:18:20,880 --> 00:18:22,455 Rishi Sunak has talked of... 325 00:18:26,680 --> 00:18:30,655 And while there are debates about investment strategy for the future, 326 00:18:30,680 --> 00:18:33,535 it's beyond dispute that the UK's investment 327 00:18:33,560 --> 00:18:36,335 is low compared to other developed countries. 328 00:18:36,360 --> 00:18:38,735 It's been low for years, 329 00:18:38,760 --> 00:18:43,175 and this, in the short term, is being exacerbated by Brexit. 330 00:18:43,200 --> 00:18:47,935 And none of that helps increase productivity or wages. 331 00:18:50,080 --> 00:18:54,055 Across the UK, families are feeling the squeeze. 332 00:18:54,080 --> 00:18:56,895 Polling shared exclusively with Panorama 333 00:18:56,920 --> 00:18:59,895 suggested one in four people are finding it difficult 334 00:18:59,920 --> 00:19:01,495 on their current income, 335 00:19:01,520 --> 00:19:04,975 and nearly half are worried about their financial situation. 336 00:19:06,080 --> 00:19:09,855 Nicky Rogers works around 20 hours a week as a carer, 337 00:19:09,880 --> 00:19:12,455 and gets £10.50 an hour. 338 00:19:12,480 --> 00:19:14,695 She also receives Universal Credit, 339 00:19:14,720 --> 00:19:16,255 has various loans, 340 00:19:16,280 --> 00:19:18,255 and borrows from friends. 341 00:19:18,280 --> 00:19:20,175 But it's not enough. 342 00:19:20,200 --> 00:19:23,055 She lives with her daughter Leah and son Archie. 343 00:19:25,920 --> 00:19:30,055 It's really sad that, you know, that we struggle 344 00:19:30,080 --> 00:19:33,495 just so we can have a roof over our head. 345 00:19:33,520 --> 00:19:35,695 With a light bulb gone, 346 00:19:35,720 --> 00:19:40,375 they say they can't even afford to buy a new one until the next payday. 347 00:19:40,400 --> 00:19:42,615 I pay for my own petrol to get to work 348 00:19:42,640 --> 00:19:45,215 and Leah pays for her own petrol to get to work, 349 00:19:45,240 --> 00:19:48,095 so that's over £100 a week. 350 00:19:48,120 --> 00:19:52,375 Ancl I don't get no extras, no mileage or anything, 351 00:19:52,400 --> 00:19:54,815 which...is a pig. 352 00:19:54,840 --> 00:19:59,295 So I get paid weekly with work so that's what holds us over 353 00:19:59,320 --> 00:20:03,135 for the week. I got paid on Friday and it was gone Saturday morning. 354 00:20:03,160 --> 00:20:05,615 In the nicest way possible, if I moved out, 355 00:20:05,640 --> 00:20:08,735 Mum wouldn't be able to survive, even worse than she already does. 356 00:20:08,760 --> 00:20:11,255 Because it's my money that we live off. 357 00:20:11,280 --> 00:20:14,455 Archie goes to school to be fed, basically. 358 00:20:14,480 --> 00:20:16,935 He doesn't care about school like he should. 359 00:20:16,960 --> 00:20:19,215 It's the norm now. 360 00:20:19,240 --> 00:20:22,575 I think it's reasonable for all of us to have 361 00:20:22,600 --> 00:20:27,335 a better standard of living, because at the moment, we're not. 362 00:20:27,360 --> 00:20:30,295 We're just muddling through. We're not... This isn't... 363 00:20:30,320 --> 00:20:32,215 You know, this isn't normal, is it? 364 00:20:33,520 --> 00:20:35,335 This ISN'T normal. 365 00:20:35,360 --> 00:20:37,495 And in a cost of living crisis, 366 00:20:37,520 --> 00:20:40,415 it's the lowest paid who are hit hardest. 367 00:20:40,440 --> 00:20:43,255 The current shock is particularly bad 368 00:20:43,280 --> 00:20:47,575 in that it's driven by inflation in energy prices and also food prices. 369 00:20:47,600 --> 00:20:49,495 These are things that low-income households 370 00:20:49,520 --> 00:20:50,855 spend more of their income on, 371 00:20:50,880 --> 00:20:53,295 so the inflation that they face is actually higher than 372 00:20:53,320 --> 00:20:55,775 the inflation rates faced by higher income households. 373 00:20:57,160 --> 00:20:59,975 This is made worse by inequality. 374 00:21:00,000 --> 00:21:02,935 The UK's highest earners are among the richest in Europe... 375 00:21:05,120 --> 00:21:07,455 ...but our lowest-income families 376 00:21:07,480 --> 00:21:09,095 are more than 20% poorer 377 00:21:09,120 --> 00:21:11,615 than those in France and Germany. 378 00:21:11,640 --> 00:21:14,375 That's nearly £4,000 a year lower 379 00:21:14,400 --> 00:21:16,975 than their French equivalents. 380 00:21:18,520 --> 00:21:23,575 Just before Christmas, Nicky turned to a food bank for the first time. 381 00:21:23,600 --> 00:21:26,215 My wages weren't covering anything that I needed. 382 00:21:26,240 --> 00:21:27,855 I can't remember my mum saying, 383 00:21:27,880 --> 00:21:29,815 "We've got to sit in the dark for the night," 384 00:21:29,840 --> 00:21:32,415 or, "You can't have that because I can't afford it this week." 385 00:21:32,440 --> 00:21:34,975 You know, that we couldn't put our heating on 386 00:21:35,000 --> 00:21:37,775 because we've only got £1 left in our meter. 387 00:21:37,800 --> 00:21:39,655 My mum never said none of that to me, 388 00:21:39,680 --> 00:21:44,295 and I find that I'm saying that to my children, and that's shocking. 389 00:21:44,320 --> 00:21:46,455 Everything seems to be falling apart. 390 00:21:48,000 --> 00:21:51,135 None of this is going to let up soon. 391 00:21:51,160 --> 00:21:53,495 The polling shared with Panorama 392 00:21:53,520 --> 00:21:57,135 suggests 44% of people think their standard of living 393 00:21:57,160 --> 00:21:59,975 is going to get worse in the next year. 394 00:22:00,000 --> 00:22:02,855 And the data suggest they're right. 395 00:22:02,880 --> 00:22:05,295 The Government's independent watchdog says 396 00:22:05,320 --> 00:22:06,775 in the next two years, 397 00:22:06,800 --> 00:22:09,655 we'll see the largest two-year fall in living standards 398 00:22:09,680 --> 00:22:12,935 since their records began - in the '50s. 399 00:22:19,200 --> 00:22:22,695 Let's go. Come on, let's go! 400 00:22:22,720 --> 00:22:27,215 In Penzance, this group of dancers is meeting for their latest class. 401 00:22:29,120 --> 00:22:32,135 Sennen is 17 and doing A-levels. 402 00:22:33,760 --> 00:22:38,735 Definitely feel... a sense of unfairness. 403 00:22:38,760 --> 00:22:40,415 Well clone. 404 00:22:40,440 --> 00:22:42,295 Swinging the back leg round to the front. 405 00:22:42,320 --> 00:22:46,215 It has angered me a lot and it has made me quite upset. 406 00:22:47,400 --> 00:22:49,455 These concerns are shared by Abigail, 407 00:22:49,480 --> 00:22:52,415 who's also 17, and a photography student. 408 00:22:53,600 --> 00:22:56,615 I feel like things that were more achievable 409 00:22:56,640 --> 00:22:59,295 back in the clay for the past generation 410 00:22:59,320 --> 00:23:02,735 aren't going to be as achievable for my generation. 411 00:23:04,440 --> 00:23:08,135 If I was to have a family in the future, it would be quite difficult 412 00:23:08,160 --> 00:23:11,455 and a lot of stress, maybe, put on me. 413 00:23:11,480 --> 00:23:13,535 Had all these dreams since I was younger 414 00:23:13,560 --> 00:23:15,895 and all these expectations, 415 00:23:15,920 --> 00:23:19,295 and now it's all kind of just crashed down. 416 00:23:21,000 --> 00:23:24,295 The Government says there are still many reasons to be hopeful. 417 00:23:25,640 --> 00:23:29,295 And when our leaders have addressed the pressures of recent years, 418 00:23:29,320 --> 00:23:32,775 they've focused on recent events. 419 00:23:32,800 --> 00:23:34,015 ...the legacy of Covid... 420 00:23:34,040 --> 00:23:36,855 ...caused by the lingering effects of Covid. 421 00:23:36,880 --> 00:23:39,015 There is a global energy crisis... 422 00:23:39,040 --> 00:23:41,415 Global pressures on prices. 423 00:23:41,440 --> 00:23:45,215 ...a global inflation crisis and a global economic crisis. 424 00:23:45,240 --> 00:23:47,095 It's, of course, what Putin is doing. 425 00:23:49,160 --> 00:23:51,615 There's no denying these global factors, 426 00:23:51,640 --> 00:23:55,535 but some of our problems are specific to the UK. 427 00:23:55,560 --> 00:23:57,495 We're now, like, thousands of pounds, 428 00:23:57,520 --> 00:23:59,855 the typical Brit is thousands of pounds poorer 429 00:23:59,880 --> 00:24:02,135 than the typical German, the typical French person, 430 00:24:02,160 --> 00:24:04,335 the typical Australian, the typical Canadian. 431 00:24:04,360 --> 00:24:06,575 I mean, the typical American is now 60% richer 432 00:24:06,600 --> 00:24:08,975 than the typical Brit. It's not 6, it's 60. 433 00:24:10,120 --> 00:24:13,055 This is an uneasy message to hear, 434 00:24:13,080 --> 00:24:16,215 and we're not hearing it from the politicians. 435 00:24:16,240 --> 00:24:19,655 I think there is a lack of diagnosis or understanding 436 00:24:19,680 --> 00:24:23,255 of actually what the real structural issues facing the economy are. 437 00:24:23,280 --> 00:24:26,335 I think that's particularly true at a political level. 438 00:24:28,440 --> 00:24:31,255 If politicians do understand the problem, 439 00:24:31,280 --> 00:24:33,335 they're not keen to say it out loud. 440 00:24:33,360 --> 00:24:35,775 I wanted to ask the Government about this, 441 00:24:35,800 --> 00:24:38,495 but no minister was willing to speak to us. 442 00:24:38,520 --> 00:24:41,175 In a statement, the Government said... 443 00:24:50,560 --> 00:24:51,935 JOURNALISTS SHOUT 444 00:24:51,960 --> 00:24:54,495 And in last week's Budget, the Chancellor Jeremy Hunt 445 00:24:54,520 --> 00:24:57,895 announced measures to try to boost productivity, 446 00:24:57,920 --> 00:25:01,175 including investment zones and tax incentives. 447 00:25:02,760 --> 00:25:05,215 Today we build for the future. 448 00:25:05,240 --> 00:25:08,575 With inflation down, debt falling, and growth up, 449 00:25:08,600 --> 00:25:12,015 the declinists are wrong and the optimists are right. 450 00:25:12,040 --> 00:25:13,935 CHEERING 451 00:25:13,960 --> 00:25:16,575 We stick to the plan, because the plan is working, 452 00:25:16,600 --> 00:25:18,575 and I commend this statement to the House. 453 00:25:18,600 --> 00:25:21,375 CHEERING 454 00:25:21,400 --> 00:25:23,415 The current state of the UK economy 455 00:25:23,440 --> 00:25:27,295 is not everyone's definition of a plan that's working. 456 00:25:27,320 --> 00:25:30,255 And some economists argue Mr Hunt's budget 457 00:25:30,280 --> 00:25:32,535 doesn't address the scale of the challenge. 458 00:25:34,200 --> 00:25:38,455 What was missing, though, was a clear long-term plan 459 00:25:38,480 --> 00:25:40,255 to boost business investment, 460 00:25:40,280 --> 00:25:42,735 which will boost productivity in this country, 461 00:25:42,760 --> 00:25:45,855 and instead what we saw was more tinkering around the edges, 462 00:25:45,880 --> 00:25:48,575 more temporary policies that might have, you know, 463 00:25:48,600 --> 00:25:50,935 some short-term effect on growth, 464 00:25:50,960 --> 00:25:54,215 but we're still set to see the biggest drop in living standards 465 00:25:54,240 --> 00:25:57,375 for two consecutive years, so, despite the Budget 466 00:25:57,400 --> 00:25:59,975 and the perhaps most optimistic outlook, 467 00:26:00,000 --> 00:26:03,015 people are still going to feel much poorer than they were before. 468 00:26:04,840 --> 00:26:07,695 That isn't to say this is a lost cause. 469 00:26:07,720 --> 00:26:10,015 All the economists Panorama spoke to 470 00:26:10,040 --> 00:26:14,415 agree it should be possible to get living standards rising again. 471 00:26:15,480 --> 00:26:18,455 There's every reason to be optimistic. 472 00:26:18,480 --> 00:26:21,935 We have the best universities in the world. 473 00:26:23,920 --> 00:26:28,655 We have many pockets of excellence. 474 00:26:28,680 --> 00:26:34,015 We have a legitimate democratic system in place. 475 00:26:34,040 --> 00:26:38,495 It's as if you are a football team and you have all the players 476 00:26:38,520 --> 00:26:42,495 but somehow, those players haven't coalesced together. 477 00:26:42,520 --> 00:26:44,735 Forwards and backwards as normal. 478 00:26:44,760 --> 00:26:46,175 Normal match-day warm-up, yeah? 479 00:26:46,200 --> 00:26:47,655 OK, ladies. Brilliant. 480 00:26:47,680 --> 00:26:49,375 Helston women's football team 481 00:26:49,400 --> 00:26:52,775 are training for their next match at the weekend. 482 00:26:52,800 --> 00:26:55,815 Nice little light steps, just loosening up the upper body as well. 483 00:26:55,840 --> 00:26:58,615 But there are other things on their mind too. 484 00:26:59,800 --> 00:27:02,575 What are the difficulties that you didn't quite anticipate? 485 00:27:02,600 --> 00:27:06,215 Being in Cornwall, we've got some of the most expensive houses down here. 486 00:27:06,240 --> 00:27:09,415 Most of us are going to have to go through either shared ownership 487 00:27:09,440 --> 00:27:12,015 or a different kind of route just to get on the housing ladder. 488 00:27:12,040 --> 00:27:15,935 The money side of things and things like that, you know. 489 00:27:15,960 --> 00:27:20,135 There's lots of people currently working just to pay the bills, 490 00:27:20,160 --> 00:27:21,855 not having any sort of life. 491 00:27:21,880 --> 00:27:25,935 Many moons ago, I went to primary school here in Helston 492 00:27:25,960 --> 00:27:29,015 and, a few years later, when I was around the same age 493 00:27:29,040 --> 00:27:30,815 as some of the players here... 494 00:27:30,840 --> 00:27:32,415 Little bit of Strictly Come Dancing. 495 00:27:32,440 --> 00:27:35,655 ...| guess there was an assumption about life in the UK 496 00:27:35,680 --> 00:27:38,455 that the next generation would be a little better off 497 00:27:38,480 --> 00:27:41,535 than the one before, that the state would do what it could 498 00:27:41,560 --> 00:27:44,215 to look after you if you were poorly, 499 00:27:44,240 --> 00:27:47,815 and, to put it more broadly, that things get better. 500 00:27:47,840 --> 00:27:50,895 But right now, those assumptions are being eroded 501 00:27:50,920 --> 00:27:53,175 by the state of the UK economy. 502 00:27:54,600 --> 00:27:56,775 What we're seeing is, in effect, 503 00:27:56,800 --> 00:28:00,255 a national pay cut that's been years in the making. 504 00:28:00,280 --> 00:28:03,895 It's changing what people can expect from their jobs, 505 00:28:03,920 --> 00:28:05,895 from public services, 506 00:28:05,920 --> 00:28:07,655 and from their country. 507 00:28:07,680 --> 00:28:10,095 It might not be comfortable to admit it 508 00:28:10,120 --> 00:28:13,255 but, by several measures, we're poorer than we think.