Jacob Rees-Mogg speaks slowly and clearly. He has a reputation for expressing clear ideas, some of which are out of kilter with contemporary fashion; notably his strictly orthodox Roman Catholic attitudes to homosexuality and the procreation of children. Yesterday lunchtime he excelled himself in a discussion of the Commons committee report on the Brexit situation on the BBC2 show, the daily politics.
He displayed an astonishing degree of ignorance about the realities of contemporary human aspiration and about the nature of world trade. In his view, the mass of the British people want cheap food and cheap clothes; therefore the UK should open its borders to imports from the countries that can supply the cheapest food and the cheapest clothes.
He did not mention the need to have countervailing exports of British goods and services to other countries, with which to earn the foreign exchange to buy the cheap imports. he did not seem to have any awareness that the countries - like Bangladesh - that are home to the cheapest clothes manufacture have the least capability to pay for the high-tech exports on which the future of the UK depends.
It is a recurrent theme of this blog that the most advanced country, the USA, will never grant to Britain [or to the EU] truly most-favoured access to their domestic market, because they are anxious to nurture their advanced economic sectors: which is best done by enabling their innovating firms to make big enough profits continue with the research and development programmes. Even before Trump, and certainly after Trump, they will be unashamed to prefer US technology, entertainment, financial services and other highly profitable areas of activity. It is part of the American culture to preserve, protect and defend their own firms and their intellectual property.
As the world's second economy, China is notoriously prone to require firms trading into China to share their intellectual assets with Chinese 'partners'. Japan has been closely chauvinistic throughout its modern economic history, and India is developing on similar lines.
Thus, if Brexit Britain went down the route prescribed by Mr Mogg there would be a monumental and rapidly expanding balance-of-payments deficit.
Even more significant, however, is the implicit ignorance shown by Mogg about the pattern of consumer aspirations that has developed all over the world. Yes, the class of hereditary paupers that was created by the Thatcher regime [and subsequently consolidated as part-salaried welfare dependants producing low levels of output per head under Blair, Brown and Cameron-Clegg-May] does want cheap food and clothing. But they also want smart phones, computer games, access to popular music and sports coverage. A major reason why they want cheap food is to have enough money [and access to credit] to buy the high-end products and services that are most fashionable. Such a living standard is accessible to the poorer members of an advanced-economy common market: it is not available on WTO terms to a rapidly-declining economy that is denied access for its exports to the richest countries in the world.
Mogg has revealed to me the extent to which the extreme Brexiteers live in cloud cuckooland.
Showing posts with label WTO rules. Show all posts
Showing posts with label WTO rules. Show all posts
Saturday, 2 December 2017
Monday, 27 November 2017
A Less-than-half-cock Strategy
Mrs May was talking in January about the importance of the 'Industrial Strategy' on which her government was supposedly working very hard. It has now been unveiled, and although there is some straight thinking in it there is also grave incomprehension of economic realities. Just to list a few:
*Brexit: it is vitally important that any drugs, designs or other innovations are marketable throughout the European Union on more-or-less the same terms as at present: otherwise, firms that are subsidised to employ teams of researchers in the UK will do the final stages of development within the Union so that the product is not inhibited by regulatory barriers from getting to its primary market. Innovative products will be held up at any border by licensing and regulatory systems, to allow indigenous companies in the potential importer countries to catch up. WTO Rules will not stop such chauvinistic chicanery. Even before the advent of Trump, the USA was notorious in that regard: while firms in emergent economies - including China and India - are not above simple intellectual theft.
*Profits can be shoved abroad by alien companies. So the British state will be sponsoring and helping alien-owned firms to develop products - employing some British scientists and technicians, true - but also allowed to import their own managers and experts for the duration of the period of product development. The manufacturing of the developed idea can that be conducted anywhere on the globe, and the pricing structure can be adjusted so that British taxpayer gets little back for the investment by the British state. Although some share of the intellectual property in some ideas may go to British universities and individuals, the vast majority will be owned by alien organisations; and can thus be alienated as they wish.
*Fake apprenticeships such as are being developed with schools and universities in the UK are most unlikely to produce people with the skill-set that is achieved by real apprenticeship in Germany. It is therefore unlikely that the programme will develop a strong and longstanding skilled workforce such as exists in the dreams of the contributors to the strategic plan. The ongoing delay in the actual launch of the Apprenticeship-MBA will provide no obstacle to the companies that have already agreed to participate in the Industrial Strategy.
*Any genuine development of science and technology in the UK is greatly to be welcomed. But I have observed personally for more than forty years that a huge proportion of the research that is carried out in the best British universities of technology - places like Birmingham, Manchester and Sheffield - is done by alien research students. Not enough Brits are capable of getting good degrees in science and technology, because of the awful state and status of science in schools. Side-tracking kids into fake apprenticeships where they simulate industrial processes instead of doing full-time hard learning will set the UK back in its development of the right skills for the twenty-first century.
My overwhelming feeling about the strategy is: "too little, too late"!
Most importantly, the 'strategists' still have not got lesson number one: that productivity improves only when productiveness gets the prime place. Productiveness is improved only when the profit from any activity is devoted to improving the plant, the processes, the materials used and the people employed. When that is done, productivity can improve and real economic growth [in the sense of generating more income-per-head from the workforce] can be achieved. I do not see that productiveness will significantly be enhanced by this new Strategy.
*Brexit: it is vitally important that any drugs, designs or other innovations are marketable throughout the European Union on more-or-less the same terms as at present: otherwise, firms that are subsidised to employ teams of researchers in the UK will do the final stages of development within the Union so that the product is not inhibited by regulatory barriers from getting to its primary market. Innovative products will be held up at any border by licensing and regulatory systems, to allow indigenous companies in the potential importer countries to catch up. WTO Rules will not stop such chauvinistic chicanery. Even before the advent of Trump, the USA was notorious in that regard: while firms in emergent economies - including China and India - are not above simple intellectual theft.
*Profits can be shoved abroad by alien companies. So the British state will be sponsoring and helping alien-owned firms to develop products - employing some British scientists and technicians, true - but also allowed to import their own managers and experts for the duration of the period of product development. The manufacturing of the developed idea can that be conducted anywhere on the globe, and the pricing structure can be adjusted so that British taxpayer gets little back for the investment by the British state. Although some share of the intellectual property in some ideas may go to British universities and individuals, the vast majority will be owned by alien organisations; and can thus be alienated as they wish.
*Fake apprenticeships such as are being developed with schools and universities in the UK are most unlikely to produce people with the skill-set that is achieved by real apprenticeship in Germany. It is therefore unlikely that the programme will develop a strong and longstanding skilled workforce such as exists in the dreams of the contributors to the strategic plan. The ongoing delay in the actual launch of the Apprenticeship-MBA will provide no obstacle to the companies that have already agreed to participate in the Industrial Strategy.
*Any genuine development of science and technology in the UK is greatly to be welcomed. But I have observed personally for more than forty years that a huge proportion of the research that is carried out in the best British universities of technology - places like Birmingham, Manchester and Sheffield - is done by alien research students. Not enough Brits are capable of getting good degrees in science and technology, because of the awful state and status of science in schools. Side-tracking kids into fake apprenticeships where they simulate industrial processes instead of doing full-time hard learning will set the UK back in its development of the right skills for the twenty-first century.
My overwhelming feeling about the strategy is: "too little, too late"!
Most importantly, the 'strategists' still have not got lesson number one: that productivity improves only when productiveness gets the prime place. Productiveness is improved only when the profit from any activity is devoted to improving the plant, the processes, the materials used and the people employed. When that is done, productivity can improve and real economic growth [in the sense of generating more income-per-head from the workforce] can be achieved. I do not see that productiveness will significantly be enhanced by this new Strategy.
Thursday, 9 November 2017
Declining Britain: Again!
On a BBC News programme yesterday, I heard the UK defined as 'the world's sixth-largest economy'. I had been used to us being described as the fifth-largest, and had not seen any report of a new league table that relegated us; but that did not surprise me: I can't monitor everything, and we have become adept at burying bad news [as an unscrupulous civil servant suggested on 9/11].
It is no surprise to recognise that we will sometime be reduced to seventh, tenth and even - ultimately - twentieth unless policy is radically changed. As the superb Anthony Hilton pointed out in last night's Evening Standard, Mrs May's speech on Monday to the CBI Conference took her [and her government] no further forward on important issues; The 'industrial strategy' is yet to be be unveiled: but it is expected to be much less radical than had been expected in the first year of the May regime. There is no indication of the potential shape of a Transitional Agreement with the European Union after March 2019; to the obvious consternation of managers of large and small businesses in all sectors of the economy. The headbanging advocates of Britain being set adrift to sink - alone, alongside only Ecuador - in the cold waters of the WTO Rules, remain powerful in the government - to the extent that the Brexiteers are demanding that Priti Patel [who includes hard opposition to EU membership, or even close co-operation within the European Economic Area, to the stupidities that made her departure from government inevitable] must be replaced by someone with similar views.
Hilton points out that even the triumphant new-technology companies that now dominate the US stock market - Microsoft, Google, Apple etc - benefit from hugely from research that was done in state-funded laboratories decades ago. This observation does not belittle the originality and drive of those who have carried these concept into intellectual property which can then be marketed to millions of enthusiastic customers: they have - and deserve - their billions of dollars. But it does lead to the painful admission that the UK has no comparable corporation under British ownership; even though the country continues to be hugely generative of both deep concepts and and innovative applications of the highest thought. I have rabbited-on endlessly about the small British firms that have been created to implement such ideas, that have been unable to accumulate the finances necessary to support their voracious needs as they pass through the stages of implementation to the ability to deliver a final product to the market, and thus succumb to foreign ownership. In a few conspicuous cases, opportunist buyers have agreed - for the time being - to keep the company HQ and laboratories in the UK, but they can renege on that at any time; and the intellectual property - the all-important ik - is free for them to exploit anywhere, anytime.
A serious Industrial Strategy would provide finance for such emergent companies - or divisions of existing companies - in sufficient quantity and on sufficiently loose terms to allow developments to reach the global market in good time: recognising that not all the guesses can be correct. There will be losers as well as winners [though history shows that losers often have attributes that can be developed in different directions and circumstances to become successful themselves]. Even the sixth-richest country must be able to afford the few billions that would be involved [which the government could borrow on extremely favourable terms, against all historical comparisons].
The UK is also being criticised, deservedly, for its constant reductions in the size, efficiency and capability of the armed forces. One of the regular themes of this blog has been the symbiosis - over many centuries - of money spent on research for defensive weaponry and dividends later gained from the civil exploitation of those technologies, This is precisely the time when the country should be searching for new, super-effective weapons systems, communications and defence capabilities: in which the UK has led for almost a millennium.
Behind all these thoughts lies the need for investment - especially by the state, in combination with people with ideas - to bring new concepts, new materials and new processes into being. They can only be objectified by manufacturing, and it is through innovation in manufacturing that the productivity of the economy can be increased. Factories that produce highly-desired output [regardless of whether the buyer is the armed forces or the mass market] can make significant profits because the customers are prepared to support the exclusivity of the producer firm's ik, part of the profit can be reinvested in new concepts and processes, thus the productiveness of the firm is increased, which means that the average output per employee - the productivity - of the enterprise can be raised and the economy can grow substantially.
This virtuous circle cannot be achieved without individual entrepreneurship [both inside and outside companies] and the active, continuous support of the government. The cretinous Economics that has stressed free-enterprise and free markets with minimum state input has fostered the disastrous decline into which the British economy has been locked for more than a generation.
I will carry on blogging as a small voice for reason.
It is no surprise to recognise that we will sometime be reduced to seventh, tenth and even - ultimately - twentieth unless policy is radically changed. As the superb Anthony Hilton pointed out in last night's Evening Standard, Mrs May's speech on Monday to the CBI Conference took her [and her government] no further forward on important issues; The 'industrial strategy' is yet to be be unveiled: but it is expected to be much less radical than had been expected in the first year of the May regime. There is no indication of the potential shape of a Transitional Agreement with the European Union after March 2019; to the obvious consternation of managers of large and small businesses in all sectors of the economy. The headbanging advocates of Britain being set adrift to sink - alone, alongside only Ecuador - in the cold waters of the WTO Rules, remain powerful in the government - to the extent that the Brexiteers are demanding that Priti Patel [who includes hard opposition to EU membership, or even close co-operation within the European Economic Area, to the stupidities that made her departure from government inevitable] must be replaced by someone with similar views.
Hilton points out that even the triumphant new-technology companies that now dominate the US stock market - Microsoft, Google, Apple etc - benefit from hugely from research that was done in state-funded laboratories decades ago. This observation does not belittle the originality and drive of those who have carried these concept into intellectual property which can then be marketed to millions of enthusiastic customers: they have - and deserve - their billions of dollars. But it does lead to the painful admission that the UK has no comparable corporation under British ownership; even though the country continues to be hugely generative of both deep concepts and and innovative applications of the highest thought. I have rabbited-on endlessly about the small British firms that have been created to implement such ideas, that have been unable to accumulate the finances necessary to support their voracious needs as they pass through the stages of implementation to the ability to deliver a final product to the market, and thus succumb to foreign ownership. In a few conspicuous cases, opportunist buyers have agreed - for the time being - to keep the company HQ and laboratories in the UK, but they can renege on that at any time; and the intellectual property - the all-important ik - is free for them to exploit anywhere, anytime.
A serious Industrial Strategy would provide finance for such emergent companies - or divisions of existing companies - in sufficient quantity and on sufficiently loose terms to allow developments to reach the global market in good time: recognising that not all the guesses can be correct. There will be losers as well as winners [though history shows that losers often have attributes that can be developed in different directions and circumstances to become successful themselves]. Even the sixth-richest country must be able to afford the few billions that would be involved [which the government could borrow on extremely favourable terms, against all historical comparisons].
The UK is also being criticised, deservedly, for its constant reductions in the size, efficiency and capability of the armed forces. One of the regular themes of this blog has been the symbiosis - over many centuries - of money spent on research for defensive weaponry and dividends later gained from the civil exploitation of those technologies, This is precisely the time when the country should be searching for new, super-effective weapons systems, communications and defence capabilities: in which the UK has led for almost a millennium.
Behind all these thoughts lies the need for investment - especially by the state, in combination with people with ideas - to bring new concepts, new materials and new processes into being. They can only be objectified by manufacturing, and it is through innovation in manufacturing that the productivity of the economy can be increased. Factories that produce highly-desired output [regardless of whether the buyer is the armed forces or the mass market] can make significant profits because the customers are prepared to support the exclusivity of the producer firm's ik, part of the profit can be reinvested in new concepts and processes, thus the productiveness of the firm is increased, which means that the average output per employee - the productivity - of the enterprise can be raised and the economy can grow substantially.
This virtuous circle cannot be achieved without individual entrepreneurship [both inside and outside companies] and the active, continuous support of the government. The cretinous Economics that has stressed free-enterprise and free markets with minimum state input has fostered the disastrous decline into which the British economy has been locked for more than a generation.
I will carry on blogging as a small voice for reason.
Thursday, 2 November 2017
Redwood - Dead Wood - Tinder - Conflagration?
I have always thought that John Redwood was better than he is generally presented by the liberal media. He has seemed - to me - more sensible than the hard core of boneheaded right-wingers who have made the prime ministerial careers of John Major and Theresa May unnecessarily difficult. There was, of course, the extreme embarrassment of him being filmed [as Secretary of State for Wales] trying to move his lower jaw in time to the Welsh National Anthem: and failing utterly. But in general I saw him as a 'trier' who was honest and not lacking in intelligence.
Then I saw a bit of his performance in the House of Commons yesterday: oh dear!
The issue was Brexit. His face was distorted with extreme, vitriolic anger. He was fed up, he declared, with the people who do this country down. The remainers and the soft Brexiteers - from his perspective - belittle this great country. Of course we can stand alone in the world, and triumph economically [with the implication that this task is trivial compared to the glorious achievement of solitary Britain in 1940-42].
It was painful and tragic to see him reduced to such a stupid and irrational argument. In descending to this lack of serious content his speech was about the best argument against his side of the issue that I have yet encountered.
The hard Brexiteers ignore the realities of the economic situation in the world. WTO Rules do not offer a safe basis on which the UK can instantly build a pattern of close trade deals with countries outside the European Economic Area, as has so often been stressed in this blog. Tariffs are not the key issue: regulations and quid-pro-quo deals that get round WTO standards dominate in world trade agreements, and the UK does not have the intellectual resources of trained manpower that would be needed to get even tentative interim deals in place by March 2019; or, indeed, by December 2021.
By declining to vote in the Commons yesterday, on the motion to publish the dossiers on 52 sectors of the economy and the potential impact on them of leaving the EEA, the Conservative Party again displayed that it has lost control of the House. It is almost certain that when these dossiers are released, they will provide a massive stock of ammunition for the remainers and will seriously undermine the sanguine daydreams of the hard Brexiteers.
The resignation on the same day of the highly-regarded Defence Secretary, on grounds that most men [and many women] of his age and origin would think to be spectacularly trivial, indicates to me that Sir Michael Fallon welcomed an excuse to get out from under the bonfire that is being built in the Tory party.
Redwood is - in political terms - dead wood, tinder dry; ready to support a conflagration that could end the two centuries of Conservatism as the dominant political organisation in the United Kingdom. The arch-Brexiteers would [apparently] force the collapse of the May government if their diabolical mission to undermine the economy is defeated. An election before Christmas has become a strong possibility; thought not yet probable.
Corbyn has always regarded the EU as a capitalist club: so he has been against it, even though Labour under his leadership notionally supported the remainers in the 2016 referendum: where millions of old-Labour voters went the other way. I doubt if the Labour leader has a clear view of what the European Economic Area is: and it is problematic whether Keir Starmer can bring him to a sensible stance on that matter. This is the one factor that could loose a December [or February] election for Labour. Politics have suddenly become much more interesting: and more frightening!
Then I saw a bit of his performance in the House of Commons yesterday: oh dear!
The issue was Brexit. His face was distorted with extreme, vitriolic anger. He was fed up, he declared, with the people who do this country down. The remainers and the soft Brexiteers - from his perspective - belittle this great country. Of course we can stand alone in the world, and triumph economically [with the implication that this task is trivial compared to the glorious achievement of solitary Britain in 1940-42].
It was painful and tragic to see him reduced to such a stupid and irrational argument. In descending to this lack of serious content his speech was about the best argument against his side of the issue that I have yet encountered.
The hard Brexiteers ignore the realities of the economic situation in the world. WTO Rules do not offer a safe basis on which the UK can instantly build a pattern of close trade deals with countries outside the European Economic Area, as has so often been stressed in this blog. Tariffs are not the key issue: regulations and quid-pro-quo deals that get round WTO standards dominate in world trade agreements, and the UK does not have the intellectual resources of trained manpower that would be needed to get even tentative interim deals in place by March 2019; or, indeed, by December 2021.
By declining to vote in the Commons yesterday, on the motion to publish the dossiers on 52 sectors of the economy and the potential impact on them of leaving the EEA, the Conservative Party again displayed that it has lost control of the House. It is almost certain that when these dossiers are released, they will provide a massive stock of ammunition for the remainers and will seriously undermine the sanguine daydreams of the hard Brexiteers.
The resignation on the same day of the highly-regarded Defence Secretary, on grounds that most men [and many women] of his age and origin would think to be spectacularly trivial, indicates to me that Sir Michael Fallon welcomed an excuse to get out from under the bonfire that is being built in the Tory party.
Redwood is - in political terms - dead wood, tinder dry; ready to support a conflagration that could end the two centuries of Conservatism as the dominant political organisation in the United Kingdom. The arch-Brexiteers would [apparently] force the collapse of the May government if their diabolical mission to undermine the economy is defeated. An election before Christmas has become a strong possibility; thought not yet probable.
Corbyn has always regarded the EU as a capitalist club: so he has been against it, even though Labour under his leadership notionally supported the remainers in the 2016 referendum: where millions of old-Labour voters went the other way. I doubt if the Labour leader has a clear view of what the European Economic Area is: and it is problematic whether Keir Starmer can bring him to a sensible stance on that matter. This is the one factor that could loose a December [or February] election for Labour. Politics have suddenly become much more interesting: and more frightening!
Thursday, 19 October 2017
Mrs May's Incomprehension
In an emotional Commons sitting yesterday, Mrs May displayed her total incomprehension of the realities of life for the very people she has said she wants to convince that 'Britain is a country that works for everybody'. She absolutely refused to pause in the roll-out of the new single benefit, even though Tory MPs had lined up to warn her of the stress that this was causing in households up and down the land. She lauded the principle of the benefit, and gloated that it was forcing people to take low-paid jobs [though, of course, she did not formulate it quite in those terms].
The government more generally have emphasised that people can get an advance of 50% of their benefit for the six-plus weeks they have to wait to draw the main sum; downplaying the speed with which repayment of the advance is required once receipt of the benefit is confirmed. It is a matter of indifference to the government whether the 'helpline' charges 50p+ per minute or is free: no doubt, if more people can access, it more of the callers will find it constantly engaged.
The same day, figures were produced that show that more than a quarter of young mothers all over the country and of the people in north-east England lead the large league table of people who are locked-in to low-paid jobs, with no hope of shifting to better situations in the short term. Thus more people are more deeply depressed than have ever been since the introduction of the welfare state; with the food banks planning for a bumper Christmas this year.
A long way beyond Mrs May's comprehension is the fact that as more people are driven into low-paid employment, that is also low-productivity employment. So the more people 'gain' from the single benefit, the lower will be the average wage and the less will be the average output per head over the whole workforce: so the lower will be the average 'productivity' of labour: brilliant!
Today Mrs May is off to Brussels, to reveal her equally profound incomprehension of the plain English, French and German in which she and David Davis [and their team] have been told what the EU expects before they are willing to talk about giving Britain special access to the EU single market after Brexit. The Tory headbangers have sent her a formal warning not to be led into making any 'concession' to the EU: as if the UK has any real choice in the matter. Of course, none of the clots who have issued the warning lives on the breadline. None of them are dependent on the minimum wage, or on the single benefit; indeed, many of them have no need to earn their current income at all as they are rentiers or pensioners [or both]. So none of them will be in the categories who would experience extreme deprivation in an economically-isolated UK; but there are millions of people in Britain whose precarious living standards would be smashed to smithereens under WTO Rules. Thus these Privy Councillors and party hacks are showing the same arrogance of affluence as Mrs May and her Secretary of State for Work and Pensions showed yesterday. They are flexing their power to destroy the Conservative Party: perhaps they should be allowed to do just that; before the final vote in Parliament on the implementation of Brexit is held.
The government more generally have emphasised that people can get an advance of 50% of their benefit for the six-plus weeks they have to wait to draw the main sum; downplaying the speed with which repayment of the advance is required once receipt of the benefit is confirmed. It is a matter of indifference to the government whether the 'helpline' charges 50p+ per minute or is free: no doubt, if more people can access, it more of the callers will find it constantly engaged.
The same day, figures were produced that show that more than a quarter of young mothers all over the country and of the people in north-east England lead the large league table of people who are locked-in to low-paid jobs, with no hope of shifting to better situations in the short term. Thus more people are more deeply depressed than have ever been since the introduction of the welfare state; with the food banks planning for a bumper Christmas this year.
A long way beyond Mrs May's comprehension is the fact that as more people are driven into low-paid employment, that is also low-productivity employment. So the more people 'gain' from the single benefit, the lower will be the average wage and the less will be the average output per head over the whole workforce: so the lower will be the average 'productivity' of labour: brilliant!
Today Mrs May is off to Brussels, to reveal her equally profound incomprehension of the plain English, French and German in which she and David Davis [and their team] have been told what the EU expects before they are willing to talk about giving Britain special access to the EU single market after Brexit. The Tory headbangers have sent her a formal warning not to be led into making any 'concession' to the EU: as if the UK has any real choice in the matter. Of course, none of the clots who have issued the warning lives on the breadline. None of them are dependent on the minimum wage, or on the single benefit; indeed, many of them have no need to earn their current income at all as they are rentiers or pensioners [or both]. So none of them will be in the categories who would experience extreme deprivation in an economically-isolated UK; but there are millions of people in Britain whose precarious living standards would be smashed to smithereens under WTO Rules. Thus these Privy Councillors and party hacks are showing the same arrogance of affluence as Mrs May and her Secretary of State for Work and Pensions showed yesterday. They are flexing their power to destroy the Conservative Party: perhaps they should be allowed to do just that; before the final vote in Parliament on the implementation of Brexit is held.
Friday, 13 October 2017
Mrs May's Brexit: from Chaos to Catastrophe
Mrs May and Mr Hammond - her Finance Minister - are represented by various sections of the media as being in a serious conflict about making provision for a 'no deal' outcome from the current negotiation between the UK and the EU. The Chancellor [who is wedded, as tightly as if he were welded] to the concept of 'austerity' has told a Commons committee that he has contingency plans, but does not want to release any funds until the very last moment. He could not make that statement if staff time and some expenses [notably consultancy] had not been applied to the planning: so what he obviously means is that he is reluctant to release funds on implementing such a plan until that should appear to be the [utterly disastrous] inevitability.
Mrs May seems to be saying the same things, when she indicates that £250 million has been set aside for implementing a 'hard Brexit'. Yet the press, notably the Daily Mail, has become hysterical about the 'dispute' and the 'disloyalty' - even 'sabotage' - attributed to the Chancellor.
This stupid scenario shows that the minority of extreme Brexiteers are dragging the Tory party to its destruction; which would be no bad thing [in view of the appalling inadequacy that is apparent right across the government] if there was an opposition that combined honesty and competence over the board. But that is not the case. Labour is led by an unreconstructed Marxist who is as good as the late Comrade Suslov [the chief exponent of Leninist-Stalinist orthodoxy as the USSR was heading for destruction] at avoiding direct or evidence-based questions. The Momentum group show a dangerous revival of the 'entryism' that undermined the Labour government in the nineteen seventies, and thus opened up the way for Thatcherism and the dissipation of all that remained of the legacy of the first industrial revolution.
If May or Hammond was serious about managing a really 'hard' Brexit their first decision - however covertly it was taken - would be the abandonment of 'austerity'. Government spending far in excess of £250 billion would be needed to install a full customs border with the EU. The recruitment and training of hundreds of thousands of officials would need to begin now: somehow, the IT systems would have to be provided - almost instantly - despite the fact that even modest government schemes for computerisation are always over-cost and excessively delayed in implementation [to the extent that they often have to be abandoned].
British firms that still make things - there are many, often high-tech companies developed or reconstructed since 2008 - are almost all integrated into just-in-time Europe-wide supply chains [both in getting their necessary inputs and in selling components to EU companies]. Such businesses are making contingency plans that would require them at least to double the manpower and computer availability just to manage the 'paperwork' that would be involved in trying to maintain the flow of business after a default Brexit. Many such firms are already finding that their European customers are looking elsewhere for contingent supplies. Furthermore, insuring trade and the goods traded in a crash-Brexit situation will become massively more complex and thus expensive.
The clowns on the Tory right, with their airy assertions that all will be well 'under WTO Rules' [which they certainly do not understand:cf my many references to point protectionism], are driving an amazingly weak Cabinet towards the destruction of the national economy.
There must a popular movement, of Leavers and Remainers united, to avoid national economic destruction.
Mrs May seems to be saying the same things, when she indicates that £250 million has been set aside for implementing a 'hard Brexit'. Yet the press, notably the Daily Mail, has become hysterical about the 'dispute' and the 'disloyalty' - even 'sabotage' - attributed to the Chancellor.
This stupid scenario shows that the minority of extreme Brexiteers are dragging the Tory party to its destruction; which would be no bad thing [in view of the appalling inadequacy that is apparent right across the government] if there was an opposition that combined honesty and competence over the board. But that is not the case. Labour is led by an unreconstructed Marxist who is as good as the late Comrade Suslov [the chief exponent of Leninist-Stalinist orthodoxy as the USSR was heading for destruction] at avoiding direct or evidence-based questions. The Momentum group show a dangerous revival of the 'entryism' that undermined the Labour government in the nineteen seventies, and thus opened up the way for Thatcherism and the dissipation of all that remained of the legacy of the first industrial revolution.
If May or Hammond was serious about managing a really 'hard' Brexit their first decision - however covertly it was taken - would be the abandonment of 'austerity'. Government spending far in excess of £250 billion would be needed to install a full customs border with the EU. The recruitment and training of hundreds of thousands of officials would need to begin now: somehow, the IT systems would have to be provided - almost instantly - despite the fact that even modest government schemes for computerisation are always over-cost and excessively delayed in implementation [to the extent that they often have to be abandoned].
British firms that still make things - there are many, often high-tech companies developed or reconstructed since 2008 - are almost all integrated into just-in-time Europe-wide supply chains [both in getting their necessary inputs and in selling components to EU companies]. Such businesses are making contingency plans that would require them at least to double the manpower and computer availability just to manage the 'paperwork' that would be involved in trying to maintain the flow of business after a default Brexit. Many such firms are already finding that their European customers are looking elsewhere for contingent supplies. Furthermore, insuring trade and the goods traded in a crash-Brexit situation will become massively more complex and thus expensive.
The clowns on the Tory right, with their airy assertions that all will be well 'under WTO Rules' [which they certainly do not understand:cf my many references to point protectionism], are driving an amazingly weak Cabinet towards the destruction of the national economy.
There must a popular movement, of Leavers and Remainers united, to avoid national economic destruction.
Wednesday, 27 September 2017
Bombardier Bombarded: A Lesson for Brexiteers
The Canadian aircraft manufacturer, Bombardier, has suffered a huge blow at the hands of the US regulatory system: a tariff of 220% has been imposed on imports of its new aircraft to the USA: one of whose airlines has ordered 75 of the planes, with a further order pending. Both the British and Canadian governments have made grants to the company, to maintain its technological capabilities and to protect employment in Canada and in Northern Ireland; and Boeing, the US aircraft builder has cried 'foul' even though the new planes will not compete directly with any of their products.
Boeing has massive contracts with the US military and with NASA. The prices set on such products are necessarily sufficient to support the research and development that is necessary to design and build the craft and devices: thus giving Boeing a comfortable profit base that exempts the firm from any need openly to seek subsidies for its civil aviation sections. Bombardier - the former Short Brothers in Northern Ireland - now has little demand from the British defence sector, which is so strapped for funds that the national defences have been excessively depleted and the country only manages to present figures showing that it meets the NATO target of 2% of GNP on defence by cooking the books rather brazenly. It is absolutely essential that a country purporting to be any sort of power invests hugely in defence technologies, which are expensive. The more innovative the defences are, the more they are likely to cost: and the more effective they are likely to be. It is a quaint paradox that some of Corbyn's 'loony-left' colleagues are more likely to see this than are Tory Brexiteers, because they can see the linkage between economic development and military might in Russia, China and the USA.
On the same day as the US decision was taken on the new tariff, the British train building section of Bombardier also received very bad news. A long-planned consortium arrangement with Siemens to build a new generation of trains for the world market was abandoned by the German firm in favour of an alliance with the French firm, Alstom. This has, allegedly, been engineered at the behest of President Macron, whose government is reviewing all major sectors of the economy with a view to ensuring that the French presence in each, within a European context, is the best that it can be from a chauvinistic French viewpoint. Brexit Britain can expect many more similar snubs from the Macron regime.
Both these stories teach the lesson that an isolated Britain depending on free trade agreements under WTO rules cannot succeed. WTO rules do not prevent the US paying Boeing top prices for research of incalculable value. WTO rules will not stop President Macron's chauvinistic plans from coming into effect. Cash tariffs are trivial obstacles to trade, compared with regulations on product standards and safety that can be manipulated in to assist favoured products, and the 'needs of national defence'. The naive optimism of 'hard' Brexiteers is a form of idiocy. Unless the UK remains within the European Economic Area, with all its common standards and definitions, British firms and their products will be picked off [by being deemed not to meet standards] one by one, as their European competitors develop their capacity to supply the equivalent of their former exports.
British airlines and train companies are under no pressure to buy British: so the demise of the bombardier plant in Belfast and Derby is threatened. British jobs can be lost, and with them generations of accumulated knowledge: and the dimmer Tories won't even weep into their whiskies. Of course, there are intelligent people of conservative cast of mind: but few of them are content with the present deeply-riven government, and even fewer are comfortable about the prospect of a 'hard Brexit'. Despite his Marxist blinkers, John McDonnell shows some awareness of these issues. As the parties stand at the end of the Labour Conference today, Labour has the best of the bad arguments. I do not expect the Tories to gain any ground when they meet in conference next week.
Boeing has massive contracts with the US military and with NASA. The prices set on such products are necessarily sufficient to support the research and development that is necessary to design and build the craft and devices: thus giving Boeing a comfortable profit base that exempts the firm from any need openly to seek subsidies for its civil aviation sections. Bombardier - the former Short Brothers in Northern Ireland - now has little demand from the British defence sector, which is so strapped for funds that the national defences have been excessively depleted and the country only manages to present figures showing that it meets the NATO target of 2% of GNP on defence by cooking the books rather brazenly. It is absolutely essential that a country purporting to be any sort of power invests hugely in defence technologies, which are expensive. The more innovative the defences are, the more they are likely to cost: and the more effective they are likely to be. It is a quaint paradox that some of Corbyn's 'loony-left' colleagues are more likely to see this than are Tory Brexiteers, because they can see the linkage between economic development and military might in Russia, China and the USA.
On the same day as the US decision was taken on the new tariff, the British train building section of Bombardier also received very bad news. A long-planned consortium arrangement with Siemens to build a new generation of trains for the world market was abandoned by the German firm in favour of an alliance with the French firm, Alstom. This has, allegedly, been engineered at the behest of President Macron, whose government is reviewing all major sectors of the economy with a view to ensuring that the French presence in each, within a European context, is the best that it can be from a chauvinistic French viewpoint. Brexit Britain can expect many more similar snubs from the Macron regime.
Both these stories teach the lesson that an isolated Britain depending on free trade agreements under WTO rules cannot succeed. WTO rules do not prevent the US paying Boeing top prices for research of incalculable value. WTO rules will not stop President Macron's chauvinistic plans from coming into effect. Cash tariffs are trivial obstacles to trade, compared with regulations on product standards and safety that can be manipulated in to assist favoured products, and the 'needs of national defence'. The naive optimism of 'hard' Brexiteers is a form of idiocy. Unless the UK remains within the European Economic Area, with all its common standards and definitions, British firms and their products will be picked off [by being deemed not to meet standards] one by one, as their European competitors develop their capacity to supply the equivalent of their former exports.
British airlines and train companies are under no pressure to buy British: so the demise of the bombardier plant in Belfast and Derby is threatened. British jobs can be lost, and with them generations of accumulated knowledge: and the dimmer Tories won't even weep into their whiskies. Of course, there are intelligent people of conservative cast of mind: but few of them are content with the present deeply-riven government, and even fewer are comfortable about the prospect of a 'hard Brexit'. Despite his Marxist blinkers, John McDonnell shows some awareness of these issues. As the parties stand at the end of the Labour Conference today, Labour has the best of the bad arguments. I do not expect the Tories to gain any ground when they meet in conference next week.
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