How to Ruin a Nation. The Decline of Great Britain.
Britain emerged from the Second World War with honour but economically exhausted, and proceeded inevitably to lose the last vestiges of Empire. Australia, Canada and New Zealand had long since become independent nations. Certain ties in the form of social values and family links remained with the Commonwealth, but Britain’s role had become symbolic rather than political. India and the rest gained their independence from the British Empire.
A truly significant post-war event was the Suez Crisis, when Britain with some French support invaded Egypt in order to control the Suez Canal, and was forced to concede owing to American opposition. It was becoming perfectly clear to anyone who cared to look that Britain had ceased to be an Imperial power capable of exercising power alone. “Sending a Gunboat” was a dead duck.
At home, political and industrial turmoil had a weakening effect on the industrial economy. Wholesale nationalisation of the means of production and distribution did little to build the economy and certainly did not greatly improve the infrastructure, especially roads and railways. The banking and finance systems remained in an international backwater. Trades Unions increased their sway over big centralised organisations and were able to speak to government with strong voices. But what remained of British industry contained many strong engineering and manufacturing organisations capable of holding their place in the wider world.
Then came a series of events that changed the face of Britain and its place in the world even more dramatically than Suez.
Another seminal event came to dominate international affairs; joining the European Common Market.
This happened as a result of a referendum in 1973, and under Harold Wilson in 1975, the UK joined the Common Market. Thus the UK had the protection of the largest free trade area in the world.
However, the UK continued to undermine itself from within………
Thatcher, the Free Market and Deregulation
The arrival of Margaret Thatcher and following her, Free Market dogma, has wrought a revolution. The UK banking system was de-regulated, allowing a flood of American banks to dominate the financial markets, bringing with them an aggressive deal-making culture. Margaret Thatcher encouraged the sale of publicly owned housing without a balancing programme of building replacement affordable homes. In time the housing market has become dominated by private renting – and the disastrous dearth of affordable housing which today is causing misery, anger and bitterness.
Shortly after her accession, Thatcher and finance minister Geoffrey Howe rapidly managed to undermine industry, raising interest rates to “balance” the economy.
The result of high interest rates was to drive up sterling even though domestic costs were rising faster than those overseas, fueled indeed by the further mistake of nearly doubling VAT and stoking up pay claims. Britain's unit labour costs rose by 63 per cent more than those of our trading partners between 1977 and 1981, an unprecedented loss of competitiveness that caused manufacturing output to plunge by a fifth.
Indeed, the proud record of Lord (Geoffrey) Howe is that he managed to destroy more of British manufacturing in two years than Hermann Goering and the Luftwaffe in five. Even Lord Howe, a master of disingenuous understatement, was forced to concede that this policy might at least have been presented better!
Since the free market took hold, a number of trends have become apparent:
- Britain’s export performance has steadily declined, and the Balance of Trade gap grown hugely. The UK is a massively poor performer compared with say, Germany (which exports many times more than Britain, despite EU tape!!).
- Massive Inequality. Since a period in the 1970’s when it appeared that the gaps between the rich and poor was narrowing, pay and particularly wealth inequality has burgeoned
- De-skilling of work, as high-pay, high skill occupations decline
- The financial markets have come to dominate industry, causing management to become a branch of accounting and companies to become mere toys to be traded at the whims of “investors”
- The values that dominate the financial markets have leaked into society as a whole. A friend who was Professor of Painting in a major art institution was apoplectic about the total “financialisation” of the art world, thus destroying creativity. The same has happened to education, which has become dominated by “The numbers”, rather than quality.
- The population has become infused by the desire to own more and more stuff, often running up unsustainable debts to do so. In many ways the Media and advertising industries have become children of financialisation.
- Having established control of vast swathes of society, the banks and financial markets then came very close to destroying the world economy in 2007
What has been left after this wholesale destruction is quite poisonous:
- In Britain, many communities have been virtually destroyed by industrial decay. This has also left pockets of wealth, especially in London and parts of the South of England
- The role of the state in offering support to those who have “Fallen Behind” has been reduced to a point where there is little help for people who need help and education to reboot their working lives. This has become further exacerbated by the pretence by post - Crash governments that the state needed to be decimated as the cause of the financial problems - and programmes of “Austerity” were needed to restore the economy.
- These actions have cruelly undermined the support for the poor, elderly and long-term unemployed. Brutal target-setting seems to have replaced caring support for those who need help. Some benefits are removed from people who fail to report daily to prove that they are looking for jobs. Those who find difficulty in understanding complex regulations are punished.
Britain, already weakened by the destruction of most of large industrial and engineering exporting companies through break-up, sale and financially-driven mergers and takeovers, often by foreign-owned companies; stands isolated in the modern world with huge foreign ownership of indigenous companies and assets. It has been calculated that more than 50% of UK exports are now made by companies owned from outside Britain. Add this to the fact that about 60% of exports are with the European Union and the picture becomes clear: Britain needs foreign support to survive in an increasingly hostile world.
Trauma and Anger
The result of all this (as in the United States) is trauma and widespread anger, especially in the areas most affected by industrial decline and financial collapse, accompanied by desperate destruction of whole communities.
Wide sections of the population have written off those in power, who seem to be distant, complacent and unaccountable (“Them up/out there”).
The Brexit Referendum
In June 2016 many people had a chance to vent their anger - and were offered a golden opportunity by one of ”Them” - (Prime Minister, lives in the South of England, wealthy, Old Etonian). The opportunity was a chance to vote in a referendum against everything many people disliked: “Foreigners”, “Them Up There”; and a golden chance to “Regain Control” - and (Shades of America) a chance to “Make Britain Great again”. Most of the Media waged a poisonous campaign in favour of Brexit, but Premier David Cameron was languidly confident that the population would follow his advice to stay in the EU.
Instead, large swathes of the population, especially from the more deprived parts of the country, with a disproportionate number of those who had been left behind by the “Gravy Train”; voted against government advice. The “Leave” campaign won a small but clear majority, to the amazement of much of the Establishment!
Is Brexit Good for Britain, a Country with serious Industrial and Trading problems??
Watch this space for News!
- One of Britain’s oldest, largest and most successful Companies, Unilever plc, has decided to move its HQ to the Netherlands. There it will both be safely inside the EU and also protected by Dutch law from the attacks of financial predators.
- GKN, one of Britain’s few large technology companies, its shares quoted in the UK Stock Market, has probably just been acquired by Melrose, a financial asset-stripper.
- Free Market Think Tank Institute of Economic Affairs defends Melrose takeover of GKN as “Representing the will of “Shareholders”.
Given the performance of the free market over the last 40 years, it is a wonder that IEA have the gall to push a free market solution when the wellbeing of the UK economy, GKN customers and employees is at stake if asset strippers get hold of the company. The idea that financial speculators are “investors” merits further scrutiny!
Vauxhall announce a major investment in a car plant in England
Not So Good News
- In September, new vehicle registrations fell by 9% compared with the same period the year before, according to the Society for Motor Manufacturers and Traders (SMMT). It continued a downward trend that has been visible for the past six months.
And this week, Pendragon, one of the country's biggest car dealers, issued a surprise profits warning. It said waning demand for new cars and a consequent fall in the price of older vehicles would take a heavy toll on its earnings.
The first causal factor is a sharp decline in the sale of diesel vehicles.
The other major factor, according is Brexit. SMMT’s Tamzen Isacsson insists it is "the greatest challenge the industry is facing at the moment".
Consumer confidence, she says, is key to the health of the new car market.
"If consumer confidence is low, people delay purchases of big-ticket items like cars.
"With so much confusion about the impact of Brexit and where the economy is heading, it's not surprising they're holding back.
"It is imperative for the future health of the new car market that we get some clarity on this."
But according to the SMMT, even though new car sales had been expected to fall this year, the decline has been far higher than expected.
- Indian Owned Jaguar Land Rover announce it will build a new electric vehicle plant – in Austria