What's it with Chuka Umunna and Audis. In the last episode of BBC Question Time (30/11/17), Umunna must have mentioned his preference for Audis half a dozen times. Anything less than an Audi was just not good enough for this Labour MP.
Go back 50 years and Labour MPs had other priorities. Harold Wilson, for instance, felt his challenge was the Balance of Trade. Maximising our exports and reducing our imports was key to economic success in the 1960s. But then came Thatcher and the survival of British Industry was no longer a priority. Indeed the Tories and the neo-Tories seemed to make the destruction of UK industry a priority. The mines, steel, cars, nuclear energy, the UK went from being world leaders to abdicating power to overseas producers. The Tories, for instance, stopped ordering new trains for British Railways three full years before privatisation, putting every UK owned locomotive manufacturer out of business. Now the only manufacturer of trains in the UK is Canadian owned.
Forty four years after Ted Heath took us into the EU, the UK now has a massive trade deficit with the EU27. £90 billion for the last year alone. A whole generation, Chuka Umunna amongst them has forgotten that to import Audis the country needs money. That is why public and private debt is at an historic high. That is why so many UK manufacturers have been sold to foreign companies, using our historic capital to fund revenue expenditure. As any accountant will tell you, using your capital to fund day to day revenue expenditure is a recipe for disaster.
We need Brexit to bring some sanity back into our Balance of Trade. We need to protect and develop UK industry. The new industries of driver less cars and robots need to be built for UK consumers in the UK. Because there are now few items of family silver left to flog off (as former Tory PM Harold Macmillan so famously described privatisation) to pay for our consumerism. We have little credit left to borrow any more money. And we need to jettison politicians like Chuka Umunna, whose primary consideration seems to be the comfort of his backside in his imported car.
Showing posts with label Balanceofpayments. Show all posts
Showing posts with label Balanceofpayments. Show all posts
Monday 4 December 2017
Tuesday 21 November 2017
The Green and Economically Successful Solution to the UK Trade Deficit
It is one of the great ironies of this world that the most successful capitalist country of recent times is the communist controlled Peoples' Republic of China. The reason for this is not difficult to see. As Irwin Stelzer said in the Sunday Times (19/11/17), "subsidised Chinese Companies have an immense competitive advantage".
As Jeremy Clarkson was so fond of telling us, China has been making knock off copies of European cars for years. How many people realise that the new MG cars now being sold are made by a Chinese company in China? If a foreign company wants to sell cars in China, they must manufacture them there with a Chinese partner, or pay a 25% duty on imported cars.
And yet China has been a member of the World Trade Organisation since 2001, so presumably what it does is within WTO rules?
It is one of the great mysteries to me that the UK does not do the same thing. A 25% import duty on cars would reduce the number of imports and encourage manufacturers to make the cars in the UK. With all parties committed to facilitate the switch from petrol and diesel to electric cars, now seems an ideal time to introduce the measure and ensure the new factories are built in the UK to service our 60 million+ consumers.
Of course, such a tariff is contrary to EU rules, which are designed to help the multi-national companies to source their goods from low wage economies. With 30,000 lobbyists in Brussels, the multi-nationals have ensured that their economic growth is enshrined in EU law. But the UK has voted to leave the EU, which brings forth a multitude of opportunities to have much greener policies. And there is nothing greener than reducing the number of vehicles and the miles they have to travel to get to the customer.
As Jeremy Clarkson was so fond of telling us, China has been making knock off copies of European cars for years. How many people realise that the new MG cars now being sold are made by a Chinese company in China? If a foreign company wants to sell cars in China, they must manufacture them there with a Chinese partner, or pay a 25% duty on imported cars.
And yet China has been a member of the World Trade Organisation since 2001, so presumably what it does is within WTO rules?
It is one of the great mysteries to me that the UK does not do the same thing. A 25% import duty on cars would reduce the number of imports and encourage manufacturers to make the cars in the UK. With all parties committed to facilitate the switch from petrol and diesel to electric cars, now seems an ideal time to introduce the measure and ensure the new factories are built in the UK to service our 60 million+ consumers.
Of course, such a tariff is contrary to EU rules, which are designed to help the multi-national companies to source their goods from low wage economies. With 30,000 lobbyists in Brussels, the multi-nationals have ensured that their economic growth is enshrined in EU law. But the UK has voted to leave the EU, which brings forth a multitude of opportunities to have much greener policies. And there is nothing greener than reducing the number of vehicles and the miles they have to travel to get to the customer.
Saturday 23 April 2016
Here is the Evidence that the UK WILL be better off after BREXIT
Over the last few weeks we have heard a cacophony of vested interests telling us that it was not in THEIR best interests for the UK to leave the EU. From the US President and US treasury, the IMF, the Bank of England and George Osbourne's minions, there has been an orchestrated message of dire warnings about perceived threats to the personal wealth of every man, woman and child in the UK.
But all of these warnings have been predicated on one hypothesis: that if the UK leave the EU, the UK's trade will reduce. This is not a fact, it is a forecast, a prediction, basically a guess. And lo and behold, what is the outcome of this hypothetical scenario? Why we all get poorer.
A reasonable hypothesis you might think, but is it? It is based on us losing, as we are repeated told, an export market of 500 million people. That, of course, is a lie. Nearly 66 million of that 500 million are in the UK market, so we are actually talking about are exports to a market of 430 million people. What the hypothetical models do not take account of is the dynamic between the UK market of 66 million and the other 430 million in the EU.
So let us look at that dynamic: something the EU does not do, because it is only concerned with the whole market, not with the individual members, and least of all individual people like you and me. That is why the EU forces poverty and unemployment on vast swathes of the EU, from Greece to Portugal, young people in particular are suffering from this emphasis on the EU market as a whole, not the wealth of individual countries.
When we joined the EU, in the days of Ted Heath and Harold Wilson, the most important UK national statistic was the Balance of Payments. The difference between what we, the UK, as a nation export in goods and services and what we import. Indeed for many of the post war years, as we struggled to pay off the biggest debts of any nation after WW2 (any nation that actually paid its debts that is), we had import controls, because as a nation, we decided that we could not afford imports.
You rarely hear of the balance of payments these days. Yes, it was mentioned by the Bank of England as the Financial Policy Committee (29/3/16) dutifully trotted out its carefully worded support for REMAIN and the interests of international bankers. But only as a footnote: it merely said it had "concerns" about the UK's balance of payments deficit(1).
Yes, deficit. Because ever since we joined the Common Market, we have had a deficit with the rest of the EU. And as the EU has got bigger and bigger, so too has our deficit with the rest of the EU.
So here's the rub. Here is the evidence that yes, we would be better off if we LEAVE the EU.
In the last three years alone (2013-2015), according to the UK Office of National Statistics(2) , we have had a balance of payments deficit with the rest of the world of £267 billion. Within that, our trade deficit with the rest of the EU has been a staggering £303 billion. Yes, we actually had a modest SURPLUS of trade with the rest of the world outside the EU, of £36 billion.
And that deficit with the rest of the EU is going up, from £89 billion in 2013 to £107 billion in 2015. If we REMAIN, and the status quo does not change, then over the next ten years, based on these figures, we will have a net deficit with the rest of the EU of over ONE TRILLION POUNDS (£1,000 billion).
So, how will we pay for this trillion pound spending spree? Well, the Bank of England told us. As a nation, there are only two ways to pay for this massive trade deficit. Either by flogging off our capital, or, by increasing our debt. Well, our national assets have gone to pay for the profligacy of the past. Margaret Thatcher started it by selling off our North Sea Oil too cheaply, such that last year whilst Shell paid Norway over $4billion, the UK actually paid Shell $123 million in tax rebates(3). Since then the railways, water, utilities and many other public and private assets have been sold and are now owned by overseas, particularly EU interests. The profits from which are, no doubt, squirreled away in Luxembourg tax avoidance schemes set up under the now EU Commission president, Jean Claude Juncker, when he was president of Luxembourg (free the "LuxLeaks" whistle blowers now under arrest in Luxembourg!)
So, as the BoE pointed out, the only way to pay for the £trillion pound balance of payments deficit with the EU expected over the next ten years is by debt. A debt that is frankly, unsustainable.
Yes, if the UK remain in the EU, within ten years the UK will be bankrupt.
So, what is the Brexit alternative? Well one alternative is to stop importing this stuff we don't need and start making ourselves the stuff we do need. We could stop importing quite so much and invest in our own economy instead; in steel, manufacturing, the NHS, local farming etc.. We can say good riddance to all these trade deals like TTIP whose primary purpose is to allow multi-nationals free rein to satisfy their greed for a privatised NHS, schools and other public works.
Another alternative is to stop worshiping consumerism and embrace conservation. We have the opportunity to be world leaders in sensible technology like renewable energy and home insulation.
Investing in the UK will cost us far less than the Trillion pounds the UK will have to find in the next ten years to feed our addiction to EU imports. That is why the world's vested interests are united in spending so much time and money on persuading us that our addiction to EU imports must continue, no matter what the cost to the British people. That Trillion pounds goes into the coffers of those same vested interests and further increases the servitude of debt into which every UK citizen is daily encouraged to fall.
The reality is that, after BREXIT, we will continue to trade with the EU, but on our terms, not theirs. The EU will still want its Scotch and other UK products, but more importantly, the EU cannot afford to lose all of that Trillion Pound bonanza it is expecting over the next ten years. The EU will be falling over itself to strike a trade deal with the UK, because it cannot afford to lose its largest export market. We just need to have faith in ourselves, in our country and have the courage to say NO to membership of the EU and stand on our own feet again.
References:
(1) www.bankofengland.co.uk/publications/Documents/news/2016/032.pdf point 11
(2)www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/balanceofpayments/octtodecandannual2015 & previous periods
(3)http://www.standard.co.uk/business/nick-goodway-why-do-we-pay-shell-to-extract-our-oil-assets-a3228751.html
But all of these warnings have been predicated on one hypothesis: that if the UK leave the EU, the UK's trade will reduce. This is not a fact, it is a forecast, a prediction, basically a guess. And lo and behold, what is the outcome of this hypothetical scenario? Why we all get poorer.
A reasonable hypothesis you might think, but is it? It is based on us losing, as we are repeated told, an export market of 500 million people. That, of course, is a lie. Nearly 66 million of that 500 million are in the UK market, so we are actually talking about are exports to a market of 430 million people. What the hypothetical models do not take account of is the dynamic between the UK market of 66 million and the other 430 million in the EU.
So let us look at that dynamic: something the EU does not do, because it is only concerned with the whole market, not with the individual members, and least of all individual people like you and me. That is why the EU forces poverty and unemployment on vast swathes of the EU, from Greece to Portugal, young people in particular are suffering from this emphasis on the EU market as a whole, not the wealth of individual countries.
When we joined the EU, in the days of Ted Heath and Harold Wilson, the most important UK national statistic was the Balance of Payments. The difference between what we, the UK, as a nation export in goods and services and what we import. Indeed for many of the post war years, as we struggled to pay off the biggest debts of any nation after WW2 (any nation that actually paid its debts that is), we had import controls, because as a nation, we decided that we could not afford imports.
You rarely hear of the balance of payments these days. Yes, it was mentioned by the Bank of England as the Financial Policy Committee (29/3/16) dutifully trotted out its carefully worded support for REMAIN and the interests of international bankers. But only as a footnote: it merely said it had "concerns" about the UK's balance of payments deficit(1).
Yes, deficit. Because ever since we joined the Common Market, we have had a deficit with the rest of the EU. And as the EU has got bigger and bigger, so too has our deficit with the rest of the EU.
So here's the rub. Here is the evidence that yes, we would be better off if we LEAVE the EU.
In the last three years alone (2013-2015), according to the UK Office of National Statistics(2) , we have had a balance of payments deficit with the rest of the world of £267 billion. Within that, our trade deficit with the rest of the EU has been a staggering £303 billion. Yes, we actually had a modest SURPLUS of trade with the rest of the world outside the EU, of £36 billion.
And that deficit with the rest of the EU is going up, from £89 billion in 2013 to £107 billion in 2015. If we REMAIN, and the status quo does not change, then over the next ten years, based on these figures, we will have a net deficit with the rest of the EU of over ONE TRILLION POUNDS (£1,000 billion).
So, how will we pay for this trillion pound spending spree? Well, the Bank of England told us. As a nation, there are only two ways to pay for this massive trade deficit. Either by flogging off our capital, or, by increasing our debt. Well, our national assets have gone to pay for the profligacy of the past. Margaret Thatcher started it by selling off our North Sea Oil too cheaply, such that last year whilst Shell paid Norway over $4billion, the UK actually paid Shell $123 million in tax rebates(3). Since then the railways, water, utilities and many other public and private assets have been sold and are now owned by overseas, particularly EU interests. The profits from which are, no doubt, squirreled away in Luxembourg tax avoidance schemes set up under the now EU Commission president, Jean Claude Juncker, when he was president of Luxembourg (free the "LuxLeaks" whistle blowers now under arrest in Luxembourg!)
So, as the BoE pointed out, the only way to pay for the £trillion pound balance of payments deficit with the EU expected over the next ten years is by debt. A debt that is frankly, unsustainable.
Yes, if the UK remain in the EU, within ten years the UK will be bankrupt.
So, what is the Brexit alternative? Well one alternative is to stop importing this stuff we don't need and start making ourselves the stuff we do need. We could stop importing quite so much and invest in our own economy instead; in steel, manufacturing, the NHS, local farming etc.. We can say good riddance to all these trade deals like TTIP whose primary purpose is to allow multi-nationals free rein to satisfy their greed for a privatised NHS, schools and other public works.
Another alternative is to stop worshiping consumerism and embrace conservation. We have the opportunity to be world leaders in sensible technology like renewable energy and home insulation.
Investing in the UK will cost us far less than the Trillion pounds the UK will have to find in the next ten years to feed our addiction to EU imports. That is why the world's vested interests are united in spending so much time and money on persuading us that our addiction to EU imports must continue, no matter what the cost to the British people. That Trillion pounds goes into the coffers of those same vested interests and further increases the servitude of debt into which every UK citizen is daily encouraged to fall.
The reality is that, after BREXIT, we will continue to trade with the EU, but on our terms, not theirs. The EU will still want its Scotch and other UK products, but more importantly, the EU cannot afford to lose all of that Trillion Pound bonanza it is expecting over the next ten years. The EU will be falling over itself to strike a trade deal with the UK, because it cannot afford to lose its largest export market. We just need to have faith in ourselves, in our country and have the courage to say NO to membership of the EU and stand on our own feet again.
References:
(1) www.bankofengland.co.uk/publications/Documents/news/2016/032.pdf point 11
(2)www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/bulletins/balanceofpayments/octtodecandannual2015 & previous periods
(3)http://www.standard.co.uk/business/nick-goodway-why-do-we-pay-shell-to-extract-our-oil-assets-a3228751.html
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