The Changing UK Economy

• Before 1800: most people worked in primary sector - farming or mining.
• Industrial revolution/nineteenth century: people worked in manufacturing sector - many people moved to towns and cities for work making steel, ships or textiles.
• Last few decades: people work in tertiary sector - services such as health care, offices, finanical services and retailing. 
• Most recently: quaternary sector has developed - jobs in research, information technology and the media. 

Key causes of economic change:

• De-industrialisation and the decline of the UK's industrial base - fewer jobs are available in manufacturing and heavy industries which were once a primary source of employment and income for the UK GDP.
• Globalisation - a lot of manufacturing has moved overseas where labour costs are lower though headquarters have often remained in the UK. Trade with other countries is an increasingly important part of UK GDP.
• Governnment policies - government decisions on investment in new infrastructure and technology and support for businesses affect how well the economy grows. Membership in government groups make it easier for companies in the UK to operate across the world.

The UK is a post industrial economy - where manufacturing industry declines to be replaced by growth in the service sector and the corresponding development of a quaternary sector. This happened in the UK from the 1970s. 

By 2015, 78% of UK employment was in the tertiary sector and 10% in the quaternary sector.

Only 10% of employment was in manufacturing compared to 55% in 1900.

Tertiary and quaternary industries are growing as secondary manufacturing is declining in the UK. 

Important industries include:

• Services - retail, entertainment and personal services such as hairdressers. Retail is the UK's largest sector, employing 4.4 million people.
• Information technology - over 60,000 people are employed in the IT sector by companies such as Microsoft.
• Finance - the UK, especially London, is home to many global financial institutions. 
• Research - research and development makes use of the UK's skilled university graduates. In 2013, nearly £30 billion was spent on R&D in the UK. 

Globalisation - the growth and spread of ideas around the world. This can involve the movement or spread of cultures, people, money, goods and information. This has been made possible by development in transport, communications and the internet.

Globalisation has affected the structure of the UK:

• There has been a big shift to jobs in the tertiary sector such as health care, offices, financial services and retailing. 
• The quarternary sector has also developed with jobs in research, information technology and the media.
• Many people are now working on global brands and products. 

Science park - a group of scientific and technical knowledge-based businesses located on a single site.

There are over 100 science parks in the UK. 75,000 people work in science parks. 

Business park - an area of land occupied by a cluster of businesses.

Quaternary industries are increasingly found in science parks or business parks. These are often:

• On outskirts of cities near good transport links. E.g, motorways, A-roads and airports. 
• Land tends to be cheaper than in town centres - may be possible to expand businesses.
• Close to housing to accommodate the workforce.
• Near universities, allowing research in business and science parks to develop cutting edge technology.

The number of them has grown because:

• There is a growing demand for high-tech products. 
• The UK has a high number of strong research universities for business or science parks to form links with.
• Clusters of related businesses in one can place can boost each other. 

Location:

• Close to Stansted airport.
• Surrounded by motorways.
• On the edge of Cambridge city. 
• Close to Cambridge university. 

About:

• Home to more than 100 businesses which are involved in areas of expertise such as medical, IT and environment. 
• Large range of services on site to help people who work in the park. 

Benefits:

• Provides jobs (5,000.) 
• Other companies invest which employs people, causing a multiplier effect. 

Location:

• Located by the A1 - easy access to London.
• Close to the town of Stamford - workers can live there and have easy access to factory.
• Located on limestone area.

Advantages to area:

• Creates jobs for locals.
• Blasting now only allowed to take place between 11am and 2pm - not allowed at weekends or bank holidays.
• Has a positive multiplier effect.

Disadvantages to the area:

• Blasting for limestone - creates dust and noise.
• Congestion in Tinwell from heavy lorries.
• The cement works and lorries cause air pollution.
• Destroys natural habitats and scars the landscape.

• The quarry is one of the largest UK solar power farms.
• Bat caves and bat hedges.
• Castle cement is helping fund road safety in Tinwell.
• Filters in chimney trap pollutants which are caused when burning for power.
• Burns recycled waste so coal does not have to be used.
• Sends workers to clean cars or pay for cleaning of them if dust settles on cars.
• Many birds, badgers and bats are common on the vegetation around the cement works.

Rural landscapes in the UK are changing. 

An area of population growth: South Cambridgeshire 

• Population:150,000 - increasing due to migration in the area. Expected to reach 182,000 by 2031.
• Migrants arriving from Cambridge, other parts of the UK and Eastern Europe.
• 25% increase of registrations for National Insurance numbers from migrant workers compared to 2012.
• Proportion of people in South Cambridgeshire aged 65 or over is growing.

Social effects:

• Commuters continue to use services in the places where they work - negative effect on local rural economy.
• 80% car ownership is leading to increased traffic on narrow country roads and reducing demand for public transport.
• Young people cannot afford the high cost of houses and move away.

Economic effects of a growing population:

• Reduction in agricultural employment.
• Lack of affordable housing.
• High petrol prices.
• Increasing number of migrants = pressure on services. 

Area of population decline: The Outer Hebrides

• Population: 27,400 people.
• Most people live on the island of Lewis, one of the chain of 65 islands.
• Overall decline of more than 50% since 1901 when 46,000 people lives on the islands due to outward migration.
• Limited opportunities - younger people have chosen to move away in search of better-paid employment elsewhere.

Social impacts:

• Number of school children expected to fall over the next few years - may result in school closures.
• Fewer people of working age livng in the Outer Hebrides.
• Increasingly ageing population with fewer young people to support them - care issues in the future. 

Economic effects: Struggle to maintain the economy and many services are closing. 

• Farming - limited amount of hours for workers. 
• Fishing - shell production has increased but foreign-owned ships domiante deep-sea fishing, environmental concerns.
• Tourism - increase in number of tourists: current infrastructure unable to support scale of tourism.

Transport - the movement of people, goods and services. 

• Improvements in transport have enabled the UK's economy to grow and develop. 
• Remains a major issue for the future as transport developments affect both employment and regional growth.

Road improvements:

• In 2014, the government announced a £15 billion 'Road Investment Strategy.'
• Aim: to increase the capacity and improve the condition of UK roads.
• New road schemes will create thousands of construction jobs and boost local and regional economies:

Plans:

• 100 new road schemes by 2020.
• 1300 new lane miles added to motorways and trunk roads to tackle congestion.
• Extra lanes added onto major motorways to turn them into 'smart motorways' and improving links between London, Birmingham and the north. 

South-west 'super highway':

• A303 is the main route to the south-west.
• Stonehenge causes traffic as people slow down to look at it.
• Traffic flow can be 'stop-start' due to alternating stretches of dual and single carriageway. 
• At peak times, the road can become heavily congested. 
• £2 billion road-widening project.
• Will create hundreds of construction jobs. 
• Scheme will involve digging a 3km tunnel beneath Stonehenge. 

Investment in railways is vital to improve links between regions of the UK and the rest of Europe.

There are plans to stimulate economic growth in the north of the UK by improving the rail network:

• Electrification of the Trans-Pennine Express Railway between Manchester and York by 2020, reducing journey times. 
• Electrification of the Midland mainline between London and Sheffield by 2030. 

London Crossrail:

• New railway across London that links Reading and Heathrow to Shenfield and Abbey Wood (links west to east.)
• Due for completion in 2018.
• 32km of new twin-bore tunnels under central London.
• Cost: £14.8 billion.
• Will improve journey times, easing congestion and offering better connections to the Underground and to the rest of the UK and Europe.
• Will bring an additonal 1.5 million people within 45 mins commuting distance to London's key business districts.
• Around 200 million passengers are expected to use Crossrail each year.
• Mainline trains operating will carry 1500 passengers.

HS2 (High Speed 2) 

• £50 billion plan for a new high speed rail line to connect London with Birmingham and then to Sheffield, Leeds and Manchester.
• May be extended to Newcastle and into Scotland. 
• Scheme due to start in 2017 for completion in 2033.

Arguments for:

• Could act as a way of growing industries in the North.
• Money will be spread out over 20 years (£50 billion.)
• Will create 100,000 jobs.
• Will increase the UK's GDP.
• Will reduce transport costs.

Arguements against:

• More business for London and people's properties will be destroyed and rural landscape will be ruined.
• Very expensive and cost will increase when built.
• Money could be used to boost businesses in other ways.

The UK's ports industry is the largest in Europe due to:

• the length of the coastline.
• the UK's long trading history.

About:

• Around 32 million passengers travel through UK ports each year.
• They employ around 120,000 people.

Liverpool 2

• A new container terminal is being constructed at the Port of Liverpool.
• Scheme is to contruct a deep-water quay on the River Mersey.
• Cost: £300 million.
• Project will more than double the port's capacity to over 1.5 million containers a year.
• Due to begin contruction in 2016.
• The new terminal will: create thousands of jobs, boost the economy of the north-west and reduce the amount of traffic on the roads.

Aiports are very important to the economy of the UK:

• They provide thousands of jobs.
• Boost economic growth both regionally and nationally. 
• The aviation sector accounts 3.6% of the UK's GDP and employs over 300,000 people.
• More than 750,000 international flights depart from the UK annually to almost 400 airports in 114 countries.

Expanding London's airports:

• Need to expand London's airport capacity. 
• In 2015 there was a recommendation to build a third runway at Heathrow, although a final decision is yet to be made.
• Create more jobs and make more money for UK.
• Heathrow is one the world's major airports.
• In 2014, it handled over 73 million passengers.
• Over 76,000 people work at Heathrow and the airport supports many local businesses. 
• People nearby are concerned about noise from planes using the new runway. 
• Government recommended financial support for soundproofing homes and schools, and a ban on night time flights. 

The north-south divide - 

• In general, the south enjoys higher standards of living, longer life expectancy and higher incomes.
• It also has higher house prices, more congestion, and less 'happiness.'

Why is there north-south divide?

• During the Industrial Revolution, the UK's growth was centred on the coalfields in Wales, northern England and Scotland. 
• Heavy industries and engineering thrived in cities such as Manchester, Sheffield and Glasgow, generating wealth and prosperity. 
• Since the 1970s many industries have declined and unemployment increased. 
• Alternative sources of energy have reduced the importance of coalfields and modern industries have located elsewhere. 
• London and the South-East developed rapidly due to a fast-growing service sector. 
• London is a major global financial sector and has grown faster than the rest of the UK. 
• Led to high house prices across the South East. 

Local enterprise partnerships

• Voluntary partnerships between local authorities and businesses established in 2011.
• 39 LEP's in England.
• Identifies business needs in local areas and encourage companies to invest.
• Jobs will be created boosting the local economy.

Enterprise zones

• 55 Enterprise Zones have been created across England, Scotland and Wales.
• Offer companies a range of benefits for locating in enterprize zones, including:
• Reduced taxes, simpler planning rules, financial benefits, improved infrastructure.
• These measures can be used to encourage companies to locate in areas of high unemployment, bringing jobs and income which could help to reduce the north-south divide.

Lancashire LEP

• Promotes new businesses and will create 50,000 jobs by 2023.
• Businesses growth hubs, transport improvements, superfast broadband. 

Foreign investment 

• Has been encouraged in the north to help new businesses and improvements in infrastructure. 

The Northern Powerhouse

• Government's plan to reduce the inequality between the north and south.
• Attracting investment into the north.
• Improving transport links between northern cities.
• Has been criticised for being more of a concept than an actual plan. 

Devolving more powers

• Scotland, Wales and Northern Ireland have their own devolved governments, and some powers are being devolved to local councils in England too.
• This allows them to use money on schemes they feel will best benefit the local commnity. 

• As globalisation increases, the world is becoming more and more inter-dependent. 
• The UK has global links through trade, culture, transport and electronic communications.

Trade:

• The UK's most important trading links are with the EU.
• As a single market, goods can be traded between member states without tariffs.
• The USA is an important historic trading partner, with a recent growth in trade with China. 
• Largest export destination: Germany - £38,858 million.
• Largest import destination: China - £59,365 million.

Culture:

• The UK's strongest creative industries mean that UK culture is exported worldwide. 
• Television is one of the UK's most successful media exports. 

Transport:

• London Heathrow - one of the busiest airports in the world - provides links to countries around the world.
• Channel Tunnel - providing a route from the UK to Europe. 

Electronic communications

• 99% of all internet traffic passes along a multi-billion-dollar network of submarine high-power cables. The UK is a focus for these submarine cables within connections concentrated between the UK and the USA. 
• Arctic Fibre - first cables between London and Tokoyo, linking Europe and Asia.
• Due to be completed in 2016. 

European Union

• In 1973, the UK became a member of the EU which now has 28 member states. 
• The EU is an important trading group, but its powers have extended to exert political influence over its members and elsewhere in the world.

How the EU affects the UK:

• Finanical support for farmers.
• EU is the biggest single market in the world - goods can move freely between member states.
• High unemployment and low wages in EU countries - mass migration to the UK for work.
• UK may have to support member countries by paying more money to the EU.
• There are EU laws and controls on crimes, pollution and consumer rights which can be restrictive in the UK.

For:

• Low prices of goods.
• Citizens are free to move from one member country to another.
• More jobs are generated.
• Workers are protected.

Against:

• Not all policies are efficient.
• Overcrowding.
• The 'single currency' poses a great problem. 
• It is costly to be a member of the EU.

• The UK is a member of the Commonwealth, a group of 53 countries most of which were once British colonies. 
• Exists to improve the well being of everyone in Commonwealth countries.
• The Commonwealth Secretariat - represents Commonwealth countries and provides advice on a range of issues including human rights, social and economic development and youth economic development and youth empowerment.
• There are important trading and cultural links between the UK and the Commowealth. 
• There are also sporting connections. 

Industry can have negative effects on the environment.

• E.g, by releasing pollutants, greenhouse gases or by damaging the environment through raw material extraction.

Modern industrial developments are more environmentally sustainable than older plants as a result of:

• More strict environmental regulations.
• Better environmental awareness.
• Increasing energy and waste disposal costs.