The delusional little Englander ridiculousness of "Empire 2.0"

In the wake of the EU referendum result there has been plenty of out-of-touch drivel spouted about Britain's future trading relationships with the rest of the world by Tory ministers, but talk of an "Empire 2.0" strategy towards Africa pushes the boundaries of delusional ridiculousness to a whole new level.

The idea that trade relations with Africa could be any kind of tier one priority at a time when Theresa May is slow-marching the UK towards a socially and economically ruinous nuclear Brexit would be laughable enough in its own right, but reports that this so-called plan is being referred to as "Empire 2.0" just go to show how divorced from reality people in the corridors of power are becoming.

Under normal circumstances the idea of strengthening trade relations with African countries, especially some of the Commonwealth nations, would seem like a sensible enough proposition, but in light of Brexit, it's an extremely odd priority to be going on about to say the least.

To say that post-Brexit Britain's diplomatic capacities are in for a sustained period of over-stretch is putting it lightly. 

Aside from all the non-trade related diplomatic issues arising from Brexit (security co-operation, legal issues, borders in Ireland and Gibraltar, the environment, education ...) UK diplomats will surely be so hard-pressed concentrating on stabilising trade relations with their main trading partners (the Single Market nations, the US, China, Canada ...) there's no way that a sustained effort to woo Africa could be considered a tier one priority.

A bit of perspective

The UK's biggest export market in Africa is South Africa where we exported £4.2 billion worth of goods and services in 2014. Exports to Africa in 2014 totalled £16 billion, which means that if the entire continent of Africa were a single country (population 1.2 billion), then they'd be vying with Ireland (population 0.006 billion) to be the UK's 5th biggest export market.

Africa is obviously not unimportant, but in the grand scheme of things trade with Africa is clearly of far less importance than trade with either the United States our European neighbours. 

A 12% drop in UK exports to Germany would be the equivalent of wiping out 100% of our export market in South Africa. Conversely a literal doubling our exports to South Africa (a staggeringly optimistic proposition) would be the equivalent of increasing our exports to the United States by less than 8.5%.
  A bit of geopolitical pragmatism

Brexit is going to be the biggest challenge that the United Kingdom diplomatic corps have faced since the 1940s. The negotiations with our 27 former EU allies are going to occupy a huge proportion of our diplomatic capacity, and then there's the job of making sure that Brexit doesn't severely damage trade relations with other major trading partners like the United States and China.

Of course our diplomatic preoccupation with trying to mitigate the Brexit fallout with our biggest trading partners shouldn't be used as an excuse to turn our backs on Africa, but a bit of pragmatism is surely in order.

Let's say that increasing trade with Africa is a seriously important international trade priority for all players on the early 21st Century geopolitical scene. Given that the UK diplomatic corps is going to be stretched to the absolute limits by Brexit, does anyone seriously believe that over-stretched UK diplomats will be in a better position to negotiate new trade deals with Africa than rivals like China, Russia, the EU or the United States?

It's obvious that attention of the British diplomatic corps is going to be divided and diverted towards other priorities, whilst our geopolitical competitors will have very much more available manpower to focus on trade relations with Africa should they see it as a priority.

If improving trade relations with Africa were a race, then Brexit represents a massive pair of lead boots for the UK, and anyone blabbering on optimistically about "Empire 2.0" is clearly guilty of bragging about how grand their new set of lead running boots are!

The trade balance with Africa

Aside from the fact that exports to the entire continent of Africa are lower than exports to small European neighbours like Ireland and the Netherlands, and the fact that Brexit is clearly a pair of diplomatic lead boots (not the wonderful dawning of a new era that many right-wingers are pretending that it will be), there's also the fact that the UK is actually running a trade deficit with Africa.

Of course the trade deficit with Africa is relatively insignificant compared with our overall trade deficit, which is catastrophically bad after almost seven years of inept Tory economic mismanagement, but we still buy more from African nations than we sell them, which adds to our alarmingly weak balance of trade position.

If we look at just the trade in goods with Africa the situation is even worse, but a significant chunk of this deficit in goods is offset by a trade surplus in financial services.

Given the importance in exported financial services in offsetting the worst of our trade deficit with Africa, the impact of Brexit on the financial services industry seems very important. Will Brexit actually end up having a negative impact on the balance of trade with Africa as Africa-based financial services customers begin to opt for service providers from within the Single Market region?

You'd have to be an over-optimistic fool to refuse to even consider it as a possibility.

Not a bed of roses

Just the cursory look at UK trade relations with Africa should make it clear that it's all a lot more complicated than pretending that Brexit is some kind of amazing golden opportunity that can only turn out brilliantly, when it's clear that there are all kinds of potential pitfalls, especially since Brexit actually represents an extraordinarily heavy pair of diplomatic lead boots for the UK.

Empire 2.0

As if all of the ridiculously unrealistic over-optimism wasn't annoying enough, the fact people are actually calling it "Empire 2.0" is astounding. How on earth do you think a nickname like that is going to go down in countries like South Africa, Kenya, Congo, Algeria ... that suffered the terrible ravages of European colonialism?

Whoever came up with "Empire 2.0" could barely have come up with a more offensive name for the project if they'd tried ... Maybe "Colonialism Strikes Back"? Or "Operation Rape Africa"?

Feel good fodder for little Englanders

"Empire 2.0" is a nickname that could only ever appeal to little Englanders who idealise the bygone days of empire where Brits were free to travel to globe pillaging the resources of other countries and living the life of Riley, while "darkies" knew their place and stayed in their own god-damned countries.

An astounding 43% of Brits think that the British Empire was actually a good thing (rather than a brutal, repressive and deeply racist system of global wealth extraction), so this "Empire 2.0" gubbins is just a load of ridiculous feel good right-wing propaganda nonsense to keep them distracted from the fact that Theresa May is slow-marching their country towards a catastrophic nuclear Brexit.

Conclusion

It is a nice idea that Brexit could be a golden opportunity to improve our trade relations with Africa, but you'd have to be utterly delusional to imagine that this should be any kind of priority in comparison to preventing trade with our 27 former European allies falling off a cliff, or that the UK diplomatic corps will be suffering severe over-stretch because of Brexit.
If you take one thing from this article I hope that it's a little bit of perspective on the magnitude of all the Brexit consequences. As a political writer I spent hundreds of hours before the EU referendum researching and writing about the potential Brexit consequences, and trade relations with Africa barely made it onto my radar at all before the vote.

As a country we've voted for this thing, but the magnitude of the consequences is far beyond the ability of any one person to properly comprehend. Anyone who thinks they do know what Brexit is all about, and exactly how its all going to turn out in the end is clearly living in a bubble of underinformed self-deception.

"Empire 2.0" is a manifestation of this kind of self-deception. In reality the impact of Brexit on trade relations with Africa is going to be incredibly complicated, with many obvious pitfalls, but it's clearly being presented by the right-wing media as lightweight feel good nonsense for little Englanders who get some kind of nostalgic buzz from harking back to an age of Empire that very few Brexit voters are actually old enough to remember the appalling realities of.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

The Tory long-term economic plan

In the 1980s Margaret Thatcher and the Tories set about fundamentally restructuring the UK economy away from manufacturing and towards the service sector, especially financial services in the City of London. Now, with Tory "hard Brexit" they're intent on driving the financial services sector away from London by erecting a huge trade barrier against the rest of Europe.

In this article I'm going to take a look at this extraordinary Tory lunacy in a bit more detail.

Part 1

The two main reasons that the Tories steered the UK economy away from manufacturing and towards financial services were ideology and over-optimism.

The Tories wanted to destroy the power of the trade unions. The destruction of the heavy industries that the most powerful unions were based on was a core strategy in the Tory ideological war against worker power. Thus industries like coal mining, steel, ship building, rail industries and HGV manufacturing were left to ruin, or even subjected to deliberate ideological attack.

To put this Tory victory over worker power into perspective, the National Union of Miners had some 170,000 members in the early 1980s. Now there is not one single underground coal mine left in the UK and the once mighty NUM has just 100 odd members left.

Aside from wanting to destroy the power of industrial workers by destroying their jobs (and communities) the other Tory reason for this shift towards a financial sector dominated service-based economy was over-optimism. The 1970s was full of new theories like the post-industrial society, and the Tories thought that they could deliberately accelerate the process of becoming a modern post-industrial society by neglecting and undermining the industrial sectors and putting all of their efforts into turning London into a global financial services hub. They actually thought that they were modernising Britain when what they were actually doing was unforgivable economic vandalism. This delusional modernisation mentality was reflected in all of the slick political propaganda the Tories commissioned from trendy advertising agencies like Saachi and Saachi.

If we look at the UK balance of Trade the appalling consequences of this deliberate process of de-industrialisation becomes clear. Over the years the UK has been importing more and more manufactured goods, but this woeful trade imbalance has been partially offset by the trade surplus in services, mainly financial services.

Contrast with Germany

The contrast with the approach taken by Germany is profound. Instead of fighting damaging ideological wars with the trade unions, Germany actually has a law that requires worker representation on the board of company directors. Instead of taking an antagonistic class-warfare based approach to industrial relations the Germans adopted a more co-operative and conciliatory approach.

The difference in the German approach to industrial strategy is also profound.

Instead of gleefully kicking their core industries into the grave and concentrating on financial services, the Germans supported their manufacturing and heavy industries and encouraged modernisation with the aim of becoming a modern high-tech economy. Their success has been undeniable. While British vehicle, machine and machine tool industries have floundered and died off dramatically, the Germans have thrived.

The Germans don't need a vast over-sized financial services sector to offset their balance of trade deficit because they have a huge trade surplus.

Part 2

After having restructured the UK economy to make it fundamentally reliant on financial services the Tories decided to hold, and then lose a referendum on EU membership. After that they then decided to aim for a Tory "hard Brexit" that involves erecting a huge trade barrier between the UK and continental Europe.

London-based financial institutions are deeply worried that the new Tory trade barriers are going to lose them money, and they're drawing up plans to shift significant swathes of their businesses out of London to keep their access to the European Single Market. Cities like Paris, Frankfurt, Dublin, Madrid and Amsterdam are jostling to entice major financial institutions away from London. 

If the post-Brexit exodus of financial services happens, then the UK is going to be in deep economic trouble. The export of financial services will dwindle and stop partially offsetting the woeful trade deficit in goods, meaning the balance of payments is just going to get even worse than it already is.

The idea that this situation can be rectified quickly is absolute fantasy. Four decades of deliberate industrial neglect can't be undone overnight with a bit of optimistic Tory rhetoric.

If Britain wanted to rebalance towards high-tech industries in order to combat the trade deficit in goods, it needed a comprehensive industrial strategy a decade ago, not just some optimism-heavy but investment-light blibber blabber from Theresa May now.

Brexiter bobbins

The best that Brexiters seem to be able to come up with to justify the massive act of economic self-harm that we're about to do is to hurl the extraordinary accusation that "lefties" should hate banks, therefore they're hypocrites unless they support Brexit and the deliberate expulsion of tens of thousands of banking jobs, and £billions in tax revenue and £billions more in exported services.

The thing that makes this stance so extraordinary is the way that the people adopting it are so desperately willing to overlook the complete Tory U-turns on stuff like free trade (they're busy erecting a huge Brexit trade barrier with the continent) and banking (they've coddled the City of London for decades, but now they're intent on locking them out of the EU in order to please the baying hard Brexit mob).

You don't actually have to be a big fan of banking and hyper-financialisation in order to see the economic damage that Tory Brexit is going to do, you just have to be a pragmatist. It's just not a sane economic policy to spend four decades restructuring your economy towards financial services until you're completely reliant upon them, and then suddenly tell them all to "piss off"!

Part 3

Once the Tories have told the financial services sector to "piss off" what comes next?

What is the Tory plan when London loses tens of thousands of highly-paid jobs to the continent; when the Exchequer loses £billions in tax revenue; when the UK's already woeful trade deficit is made even worse by the exodus of financial services providers?

If the evidence of the last six years is anything to go by, then the prescription will be more austerity for the poor and ordinary, more wage repression, more politically partisan cuts to local government, more destruction of public services, and more tax cuts for corporations and the super-rich.

Conclusion

The long-term Tory economic plan that has played out over the last four decades is beyond belief:

"Let's put all of our eggs in one basket ... and then smash the basket up with a sledge hammer"

Despite the obvious economic lunacy of both parts of this "plan" people still insist on rote learning bizarre counter-factual narratives from the right-wing press about how the Tories are the party of economic competence. And the Tories will continue getting away with socially and economically ruinous incompetence as long as people keep rote learning ridiculous right-wing economic fairy stories from the right-wing press.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

OR

George Osborne just broke another unwanted record

In the fourth quarter of 2015 the UK recorded it's worst ever current account deficit figures since quarterly recording began in 1955. The gap between wealth flowing in and out of the UK swelled to a £32.7 billion deficit for the quarter, which is equivalent to 7% of GDP.

For the entire year of 2015 the current account deficit was £96.2 billion, which is 5.2% of UK GDP, the worst since annual reporting began in 1948.  

The budget deficit
  
The Tories have spent the last six years trying to convince the public that the size of a government's budget deficit is the single over-riding priority when it comes to economic sustainability. It's undeniable that the Tories have attempted to fixate as much public attention as possible on the size of the budget deficit in order to provide some kind of pseudo-economic justification for their ideological austerity agenda, whilst criminally neglecting the importance of other vital economic indicators like the current account deficit, balance of trade, GDP per capita and productivity.

It doesn't even matter to them that they spectacularly failed to keep their promise to eliminate the budget deficit by 2015, they simply set about repeating the mantra "we've cut the deficit by a third" to re-brand their epic failure as a boastworthy success, then moved the goalposts to elimination of the budget deficit by 2020!

Even though they utterly failed to achieve what they said they were going to achieve, the Tories still want you to think about the budget deficit as if it is the single most important economic indicator, one that massively over-rides every other measure of economic health.

The current account deficit

    

Image credit: Guardian

Stuff like the balance of trade and the current account deficit used to be quite high profile measures of economic success, but since the 1980s they have fallen out of favour, not because they don't tell us anything important about the state of the UK economy, but because both sets of figures have been unrelentingly bad for decades that no governing party in their right minds would ever want to draw public attention to them.

While other countries like Germany, Japan and China have all successfully managed to export more than they import for sustained periods over the last four decades, the UK has almost constantly imported more than it has exported.

Even though their New Labour predecessors oversaw the continued weakening of the UK balance of trade and current account balance, the successive Tory led governments since 2010 have set one record after another for the worst balance of trade on record and have just set the worst current account deficit in history. Even analysis in the rabidly pro-Tory Daily Telegraph admits that the UK current account deficit has widened significantly every single year since 2011.

What the future holds

There are lots of factors to consider when it comes to considering the future, but two issues stand out.

The first has been picked up by much of the mainstream media, which is the fear that "Brexit" would cause a rapid divestment from the UK causing an even worse current account deficit than the current monstrosity. It's hard to take financial market futurology too seriously given that the vast majority of economists completely failed to see the vast 2007-08 global financial sector insolvency crisis coming, but one thing is for sure - financial markets don't tend to react well to uncertainty. It's impossible to say what the long-term effects of "Brexit" would be, but the massive uncertainty over what a post-EU British economy would actually look like would be highly likely to cause some serious short-term financial instability and divestment verging on outright capital flight at the very least.

A second concern that is particularly topical is that David Cameron and the Tories seem determined to sacrifice the UK steel industry as a tribute their "special relationship" with the Chinese*. The further destruction of the UK steel industry would make the UK will be even more heavily reliant upon steel imports, worsening the UK balance of trade even more, and negatively impacting future UK current account deficits.
 
Conclusion

One of the core Tory propaganda narratives in favour of their ideological austerity agenda has been repetition of "living within our means". Even if George Osborne hadn't completely failed to eliminate the budget deficit by 2015 like he promised to (racking up more new debt than every Labour government in history in the process), it's pretty damned hard to reconcile the development of the biggest ever deficit in wealth flowing out of the UK economy with the endlessly repeated Tory "living within our means" mantra isn't it?

Still, the popularity of the right-wing folk mythology that the Tories are economically competent doesn't look like it will be going away any time soon, despite the overwhelming evidence that it's glaringly counter-factual gibberish. So we'll all have to put up with hearing about what a great job the Tories have been doing, even though there is an ever deepening chasm full of evidence of their record breaking failures.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

* = The Tories are so determined to kill the British steel industry that they actively voted down an EU proposal to allow higher import tariffs on dumped Chinese steel (like the United States have done to protect their own steel industry) and were "thanked" for their loyalty to Chinese economic interests when China slapped a 46% import tariff on Welsh steel products!

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 ANOTHER ANGRY VOICE 
         
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David Cameron's surrender to the Chinese

Some people (including David Cameron's former adviser Steve Hilton) have described the way that David Cameron and the UK establishment have been prostrating themselves before the Chinese as a "national humiliation", but I think it's actually far worse than just shameful behaviour, it's an abject surrender in the economic war that's been going on between China and the west for the last three decades. 

It's nothing new to see the British establishment sucking up to totalitarian human rights abusing regimes. After all it's only a couple of weeks since David Cameron was reduced to blustering incoherence when challenged about Britain's "squalid deal"  to get the vile Saudi Arabian regime representation on the UN human rights council (UNHRC). 

The British establishment has a long and sordid history of alignment with brutal totalitarian regimes when it suited their geostrategic interests to do so (think Saddam Hussain in the 1980s).

From a relationships with totalitarian regimes perspective, Cameron sucking up to China this week is no less embarrassing than Cameron sucking up to Saudi Arabia two weeks before, or Margaret Thatcher chumming it up with the likes of Pinochet, Suharto and Hussain back in the 1980s.

The particularly terrible element to Cameron's dealings with the Chinese is not so much about who he's dealing with, but the ludicrous terms to the deals he's signing with them. In this article I'm going to explain how the absurdly one-sided deals Cameron has agreed with the Chinese represent not just a surrender to Chinese economic interests, but also a stunningly clear demonstration of the abject failure of the central Tory ideology of hardline free-market economic dogma.

The steel industry

If you've been following the news you'll know about the appalling job losses in the British steel industry, and how cheap Chinese steel imports and high energy prices are cited as two of the main causal factors in the chaos.

Some 5,100 UK jobs in the steel industry are under threat, yet Cameron has done nothing to intervene, because Tory free-market dogma dictates that the state mustn't intervene in the economy. The problem of course is that at the same time as ignoring the plight of the UK steel industry and the communities set to be devastated by massive job losses, Cameron is busy bribing the Chinese state (and the French state) into building a staggeringly expensive nuclear power plant by promising to pay double the 2012 market rate for its electrical output for 35 years!

The ideological incoherence should be obvious to everyone. Why does David Cameron have such a visceral hatred of the idea of the British state intervening in the market (so we can't defend our steel industry or construct our own energy infrastructure), but sign ludicrously one-sided contracts with the Chinese and French states to build our energy infrastructure for us? 

Why is it that the Tories only seem to object to the British state intervening in the UK economy, while other foreign states aren't just welcomed in, but actually bribed to the tune of countless £billions to provide the infrastructure investment and services that the British state is deemed incapable of providing for itself?

Not only is Cameron doing nothing to defend the British steel industry from the glut of artificially cheap Chinese steel, he's also signed up to a deal to keep UK energy prices artificially high for 35 years. He's not just callously ignoring the death throes of the UK steel industry, he's busy nailing the coffin lid shut as fast as he can.

The nuclear price-fixing deal

[main article]

There are very few people who are willing to come out and defend such a ludicrously incoherent deal. It just makes no sense whatever from whichever perspective it is observed. Even George Osborne's father in law (a former Tory energy minister turned energy company lobbyist) describes the nuclear price fixing arrangement as "one of the worst deals ever" for the British energy industry and the UK consumer.

It's utterly bizarre that the Tories have pushed on with such a shambles of a deal. The idea of a supposedly free-market supporting Tory party compelling the UK state to intervene in the energy market with guarantees to pay the French state and the Chinese state double the 2012 market rate for electricity for 35 long years is bizarre enough in its own right, but against a backdrop of falling energy prices it looks like utter madness.

Pretty much everyone is aware of how energy prices have dropped since 2012, and anyone with even a passing interest in renewable technologies will know that the cost of renewables (especially solar) has fallen dramatically since the turn of the century, and continues a sustained downward trajectory towards grid parity (when the cost of production matches or falls below the electricity grid price). 

This general trend of falling energy prices makes the decision to tie the UK taxpayers into paying double the 2012 price look even more crazy. If the downwards trend continues, which seems likely given the downwards market trajectory (and the threat of a global deflationary spiral caused by another financial sector meltdown), a contract to pay double the market price set when energy prices peaked in 2012 is clearly an extraordinarily bad deal for the British taxpayer.

As terrible a deal as it is for the British taxpayer, it's a fabulous deal for the Chinese and French states, who would be able to pass these vast UK taxpayer funded windfalls on to their own economies through lower energy prices at home, rendering the UK economy even less competitive than it is already (the UK has been floundering far behind the other G7 economies when it comes to productivity).

I'm a well practiced writer, but even I have to admit defeat when it comes to finding the words to describe what a staggeringly, staggeringly bad deal this absurd nuclear-price fixing agreement is. There just aren't enough negative adjectives in the English language to explain how ridiculously terrible it is.

The economic war

Outright war is a very costly method of achieving geostrategic objectives. The scale of resource destruction from outright war, as well as the misdirection of resources away from productive industry, means that economic warfare is often a much more efficient method of shaping circumstances to your own advantage (think economic sanctions instead of an all-out ground invasion).

Making your country the workshop of the world is a pretty good global domination strategy compared to the misallocation of capital that would be necessary in order to build a military force strong enough to fight NATO for global supremacy, and the unimaginable destruction such a conflict would inevitably cause.

The shift of manufacturing to China has been cause for concern to a lot of economists for some time. Especially the way that complex financial shenanigans have allowed unscrupulous crony capitalists to buy up western companies, load them up with the debt it cost to buy them, fire the workforce, asset strip them, shift production to China, then fold the empty debt-laden shell into administration (leveraged buyouts). This vast global shift towards Chinese manufacturing was always going to eventually leave the smaller western economies at the mercies of the Chinese market. Thus these days the British steel industry can face ruination caused by fluctuations in Chinese demand for steel.

If we look back to the much maligned 1960s and '70s the British steel sector produced almost double the output of the whole of China (24.3 million metric tons to 14), and plenty enough to meet UK domestic demand. Since then British steel production has halved (to 11.9mmt), while Chinese output has grown 63 fold to account for almost half of the word output (882mmt).

It's beyond obvious that the UK steel industry (which is now just 1.3% the size of China's) must be afforded protection if it is to survive fluctuations in the gigantic Chinese steel market. The militant free-market enthusiast might choose to argue against industry protection out of misplaced faith in the idea that government intervention is somehow immoral, but it's a ludicrous stance to take given that the Chinese steel market is a vast example of state intervention in itself.

If the British steel industry is left to ruination out of adherence to this free-market non-intervention principle, British output will have to be replaced by Chinese imports originating in a much less free-market economy than the UK. By opposing British state intervention in the UK steel market, free-market militants are simply inviting Chinese state intervention in the UK steel market instead.

By adopting such a militant free-market stance the Tories are simply inviting China to obliterate the UK's core manufacturing industries, leaving our economy ever more dependent on Chinese imports in the future.

Tories know the cost of everything and the value of nothing

The idea that the British steel industry should just be left to ruination out of misguided adherence to free-market principles is absolutely crazy. Right-wingers like to defend Cameron's lack of action with arguments along the lines of "why should we waste money subsidising the British steel industry when we can buy cheap steel from China?". But this stance betrays a very simplistic balance-sheet approach to economics, and a refusal to take other factors into consideration.

Of course subsidising the British steel industry to save it from annihilation would cost money, but then allowing it to fail would also come with a price tag too. Just think of all of the unemployment benefits for 5,100 or more workers and the economic harm to communities like Redcar where the steel plant is the main employer. How much social and economic damage will be caused by letting cheap Chinese imports ruin the British steel industry? 

Another factor to consider is Britain's appalling trade deficit. Of course it's deeply unfashionable these days to concentrate on the balance of trade (the trade deficit) rather than public sector borrowing (the budget deficit), but just because the political class and the mainstream media don't like to talk about it doesn't mean that its not an important issue.

The UK has been running vast trade deficits for decades, especially in goods, but the press don't like to talk about this woeful state of affairs because it blows a gaping hole in the Tory "recovery" propaganda. How can the UK be have "recovered" when we're still so desperately dependent on imports, and increasingly so?

Right-wingers will tell anyone daft enough to listen that it's madness to subsidise the British steel industry to the tune of a few quid a ton, but they'll totally ignore the fact that buying Chinese steel instead means even more wealth flowing out of the UK, not circulating around the British economy. 

Defenders of this kind of ideological inaction are not only blind to the fact that rigid adherence to free-market fundamentalism is completely crackers if the main beneficiaries are very unfree economies like China, but also to the fact that the free-market fundmentalist ideology is highly damaging to the long-term health of the UK economy because it causes the ruination of British industries and ever greater flows of wealth out of the UK economy.

The media reaction

The media reaction to this abject kowtowing to the Chinese has been curious to say the least.

Just imagine if it was Jeremy Corbyn laying down so pathetically to kiss the feet of the Chinese and handing them vast bribes to build our energy infrastructure for us at the same time as cheap Chinese steel imports were destroying the British steel industry?

Does anyone seriously believe the right-wing media wouldn't be in all-out attack mode, shrieking on relentlessly about "dangerous lefties" inviting the communist takeover of the UK economy? 

But when Cameron's doing it, there's almost complete radio silence on the plight of the British steel industry and how much of shockingly poor deal the Tory nuclear price-fixing contract is for the UK economy, British bill payers and the British taxpayer alike.

Conclusion

The pathetic kowtowing to the Chinese and the ludicrously one-sided trade deals being signed are not just embarrassments to the UK, they're the terms of surrender.

Through his inaction David Cameron is telling the Chinese that he's happy to let the British steel industry die as a sacrifice to the economic might of China. The vast ludicrously one-sided price-fixing contracts he's signed us up to are appalling deals for the UK taxpayer and the long-term health of the UK economy that are more akin to terms of surrender than "trade deals".

David Cameron and the UK establishment aren't just embarrassing the UK, they're signing the terms of surrender while trying to spin the situation as if it's some kind of victory tro be celebrated. But by now we should all be familiar with this kind of Orwellian "war is peace" propaganda from the Tories after all their empty rhetoric about how they are the party for "hardworking people". 

I'm not sure the hard-working former steel workers in places like Redcar, Scunthorpe, Cambuslang and Motherwell will be merrily toasting David Cameron's dealings with the Chinese, nor believing his propaganda campaign about how much he supports "hardworking people" when he's so happy to let their jobs disappear without a fight.

 Another Angry Voice  is a "Pay As You Feel" website. You can have access to all of my work for free, or you can choose to make a small donation to help me keep writing. The choice is entirely yours.

MORE ARTICLES FROM
 ANOTHER ANGRY VOICE 
                 
Austerity is a con
                                       
The Tory nuclear price-fixing deal
                
The Tory "economic recovery" mantra is a lie
                         
George Osborne has created more debt than every Labour government in history combined
                        
How Ed Balls' austerity-lite agenda ruined Labour's election chances
           
The Tory ideological mission
                     
Asset stripping "bankrupt Britain"

                                
Margaret Thatcher's toxic neoliberal legacies
  

George Osborne's Fiscal Charter

The Tories Fiscal Charter is an appallingly brazen piece of economic posturing for purely political purposes and an affront to good economic reasoning. It defies belief that more people are not questioning the validity of such an arbitrary and economically incoherent bit of lawmaking carried out as some kind of attention seeking political stunt rather than for any coherent reason.

It's clear that the Tory party simply couldn't behave in this manner without a huge deal of complacency about how badly misinformed the general public are about the economy in general, and more importantly, the Tories' own appalling economic record of imposing socially and economically destructive ideology, despite the fact that most economists see austerity as dangerous economic nonsense.

George Osborne is a man who has overseen the slowest post-crisis recovery in history, the longest sustained decline in average wages in history, a shocking decline in comparative productivity with the other G7 economies, and the continued existence of the vast UK trade deficit. Yet there he was blustering away as if he's some kind of amazing guardian of the economy, rather than a hopelessly under-qualified chancer who has somehow been given a mandate by just 24% of the public to continue his hopelessly inept and often venal economic stewardship for another five years.

Instead of being derided for introducing one ludicrous piece of pure political posturing dressed up as some kind of grown up/prudent economic policy after another, Osborne and the Tories have been getting away with it virtually unscathed due to the complicity of the mainstream media and the failure over the previous five years of the Labour Party to properly speak out against the bizarre Tory/mainstream media consensus that ideologically driven austerity is not an incoherent and damaging policy, and to not subject them to constant scrutiny and criticism for continuing to stick with it despite so much evidence that it's bad for the UK economy.

If you think that the idea of legislating perpetual arbitrary budget surpluses is a good idea, you need to have an actual think about what that means. It means that the government will always have to collect more in taxes than it actually spends, even if it can be shown that spending the same as it raises in taxes (or borrowing some extra to invest) would be highly beneficial to the UK economy.

The Fiscal Charter is ridiculous arbitrary rubbish of the kind that riddles modern economies. Why should a government be bound in perpetuity into spending 3% less than it raises in taxes each year? Why 3% and not 2% or 4%? What is so mystical about this spending ratio of 97% of what is raised in taxation that it needs to be enshrined in government legislation like some kind of arbitrary unquestionable economic scripture?

It's ridiculous that so many people openly support the idea that in "ordinary economic times"* the state should be bound into always taking more from its citizens than it actually spends on services and investment, even if it can be shown that extra spending on particular services or strategic investment in specific sectors would dramatically improve the UK economy! How can anyone believe that such a rule constitutes rational, common-sense good stewardship of the economy?

It was an embarrassment to the UK that such a ridiculous piece of legislation was voted through parliament, but I was impressed by the Labour backbencher Jonathan Reynolds when he properly properly skewered Osborne's ludicrous posturing during the debate (see image). At least someone in Westminster has the wit to say what an obviously crap idea it is.

I do think it's a crying shame that there must be a certain number of economically literate Tory politicians who could see the truth in accusations that the Fiscal Charter is a load of ridiculously arbitrary political posturing, but who still voted in favour of it because they behave like drones, with no freedom to rebel against such patent idiocy.

It's also a shame that a number of Labour MPs abstained on the vote because they're apparently incapable of understanding how ridiculous the idea of legislating permanent arbitrary surpluses is, especially coming from a man who promised back in 2010 that his ideological austerity agenda would have us in surplus already by now and then failed so spectacularly to achieve it.

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* = What on earth are "ordinary economic times" anyway? No situation where the government has bound itself into not spending what they raise in taxes even when it could clearly be shown that such spending would be good for the economy cound ever be considered a "normal economic time". It would have to be considered an extraordinary economic period where economic illiteracy could be passed off to the public as "common sense" or "good economic housekeeping".

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