I couldn’t help but appreciate a certain amount of irony yesterday as I watched the Liberal Democrat leader, Nick Clegg MP standing, smack bang in the centre of the City Of London, the very epicentre of Britain’s monetary engine room, and a place that has been very much central to the destructive ripples that have spread through the world’s financial markets of late, as he told the assembled journalists, and members of the electorate of the need to wean the British economy away from the casino culture of the financial markets.
On a personal level, and as a member of the Liberal Democrats, I very much welcome these comments.
The economy of the United Kingdom is, and has been for far too long, incredibly over reliant on the excesses of the ‘square mile’. Sure, the country has benefitted through elevated tax revenues during the times when the economy was booming, and even now, the levels of tax paid by bankers within the city far outstrip those paid by the vast majority of other professions (premiership footballers excluded possibly)
But this fact does not, and should not grant the banking sector some kind of ‘carte blanche’ to simply gamble away the hopes, dreams, aspirations, and futures of those who invest in the organisations who employ them, many of whom could only dream of earning the kinds of salaries and bonuses that are enjoyed by investment bankers and executives.
I have absolutely no problem with people earning high salaries. I have already pointed out after all, that when people do earn huge salaries, the state benefits from that, in so much as the level of tax that is taken from such salaries is at a vastly higher level than that based on the salaries of you or I.
The problem with the over reliance on the financial services sector is not essentially with the amount that these people earn. It goes much deeper than that. The problem lies with the fact that the prosperity of this great nation seems to rely almost entirely on glass clad, air conditioned computerised casinos that masquerade as banks, and on the decisions that the staff of these institutions take with impunity, and with no penalties for failure, or indeed consideration of the consequences of their actions.
This country was, at one time, an engineering powerhouse, a hotbed of innovation, a nation that was influential in so many different disciplines, industries, and inventions, that we could never have been rendered as vulnerable to global financial collapses as we are right now.
Britain was a world leader in Steel, Coal, Railways, Automotive Design, Aviation, Construction, Architecture, Research & Development, the list goes on!
Many things have contributed to the downfall of the UK as a manufacturing powerhouse; The advancement of the emerging nations of India, Brazil, Poland and the Eastern European nations, The rise of China as a superpower, the dogmatic actions of previous Conservative administrations, and the subsequent inaction of three Labour administrations, but to name a few.
All of these things though, have essentially led us into a financial mess that has been created by two main issues;
• The Government of the United Kingdom has, for many years now, ignored the long term financial problems faced by our economy which have been made worse by the culture of high borrowing instead of paying down public debts, and bolstering reserves, instead gorging itself on the proceeds of the ‘Betting Bonanza’ that has been going on for far too long in the City Of London, utilising the tax revenues garnished from these bankers and executives to bankroll political projects, which although may be laudable in terms of objectives, are now suffering, or being closed altogether, as a direct result of the over reliance on the financial sector, and the tax income it provides.
• Everything that I have just accused successive governments of has been done at the direct expense of our manufacturing and industrial capability. In the case of the Conservative administrations of the past, this has been done for largely dogmatic, and self serving reasons; Namely the reduction of the perceived power of the trade union movement, and the alleged financial betterment of several key ministers, MPs, and associates who happened to do very nicely out of the privatisation and dismantling of British Rail, British Coal, British Telecom, British Steel and the other industrial and revenue stream of the state, including the multi billion pound energy and utility industry that is now feathering the nests of foreign conglomerates, investors, and indeed governments.
The cancerous crisis that we have seen eating away at the economy of the UK was started years ago by a Conservative government that was obsessed with dogma, self interest, and with the breaking up of the trades union movement, and the instruments of the nation, diluting the state’s abilities to earn revenues and consolidate reserves, at the expense of one off ‘windfalls’ which were used to fund short term tax cuts that were instigated for the purposes of electioneering, and nothing more. As a result of these actions, the government of the UK was increasingly unable to fund its own social policies, and action its political aspirations through the activities of the utilities, the railways, the telecommunications markets, the mining and steel production industries etc.
This situation was exacerbated by the Labour administration who, upon taking office, found itself sitting on piles of revenues which were resultant of a ‘false prosperity’ fuelled by artificially, and ridiculously inflated house prices, and through the proceeds of the City Of London.
Not only did they base their entire fiscal policy on the outcome of what was essentially betting on an inflated game of ‘Play Your Cards Right’ they failed to take any action to install within the British economy any alternative means of powering our national prosperity, they failed to consolidate our national reserves and pay down the national debt, and they also failed to reverse the damage done by Margaret Thatcher and the Conservatives to the ability of the working classes to contribute toward the industrial policy and direction of the UK through organised, progressive, and engaged trade unions.
In fact, the former Labour Prime Minister Tony Blair has been overheard boasting to other heads of state that the UK’s Labour laws are amongst the ‘most flexible in the western world’
Not a bad thing in itself, but when you consider that our own Labour Laws are actually in breach of the conventions of the International Labour Organisation (of which we are a signatory) the shine is somewhat removed from what could be simply taken as a banally ‘pro-business’ statement.
Whereas the Conservatives were obsessed with dogma, self interests, and the dismantling of the state so as to fund headline grabbing tax cuts, Labour were, and are obsessed with playing to the centre ground at any and all costs, spinning headlines and saying whatever it takes, and doing whatever it takes to make those words more believable, without ever actually bringing about real change.
As all of this is consigned to the political dustbin marked ‘History’ we must look at what is required to relight the engines of the UK economy, and to protect it from such catastrophic exposure to the peaks and troughs of the global financial market in the future.
It is clear that we are in a global economy whereby it is highly improbable that we can be truly competitive with the conventional manufacturing costs of the emerging nations. The very fact that they have such low costs of living, and scant regard for the conditions within which their workers live and toil means that the cost of goods is simply not comparable with manufacturing costs here. Wages are much higher, Health & Safety laws more stringent, and environmental obligations more demanding than those elsewhere. Quite right too. We are a civilised country, and it is only right and proper that we expect people to be paid a wage on which they can exist. It is also right that we expect workers to be able to enjoy a reasonable level of safety in the workplace, and for companies to contribute towards the management of the environmental effects that their business brings to bear on the ecosystem, the workforce, and the wider community.
So what we need to do is build new industries. We need to ensure that the economy is never again addicted to the alluring drug of financial sector revenues. Of course, the revenues generated from these sectors are important, and would be to any economy, but we should not be so dependent upon them.
We need to build our green industries. British car companies should be leading the race to develop environmentally friendly engines for the mass market. I see nothing wrong in owning a Jaguar, 4x4 or people mover (SUV) if the engine is environmentally friendly.
We should be leading the world in the race to develop truly environmentally friendly buses and commercial vehicles. Real job opportunities lie in the development, installation, and maintenance of infrastructure that could support larger numbers of LPG, Electric and other alternative fuel vehicles. The search to meet our energy needs for the next generations to come will bring with them thousands of fresh job opportunities, lifting people out of unemployment or under employment, and providing career aspirations for thousands where currently there is only despair, and a struggle to make ends meet.
British Rail once led the world in Research & development within the railway sector, running electric trains in the 1930s, building the Intercity 125, and pioneering the APT project, which produced a train, powered by gas turbine capable of speeds nearing 160mph - in the 1970s!! They developed early magnetic levitation technology which is now in use in places across the globe, and developed fleets of rolling stock that are still in service and outperforming more modern trains in many ways.
We should be once more at the cutting edge of driving the world’s transportation and green agendas. Our transport infrastructure, despite being staffed by some of the most skilled, qualified, and dedicated men and women, is the laughing stock of the developed world, where once it was the envy. This is due in part to the failed privatisation that I have described above, and years of hands off supervision on the part of the Labour government who are not interested in long term projects, because they simply do not generate enough media coverage.
Our energy industries gave us financial and political stability in the past, because we had control over our own ‘fuel destiny’ We are now becoming more and more reliant on fossil fuels piped and shipped in from other countries, whose administrations are somewhat more ‘hawkish’ in their use of natural resources as a bargaining tool. We worked in partnership with the French government in order to bring into being the world’s first supersonic passenger plane. Only our own lack of ambition, and conviction prevented it from being rolled out across the globe.
What we need desperately is a root and branch reform of the way in which our nation generates its revenues. We need government policies that encourage the development of new technologies, we need an emphasis placing on the industries of the future, with Britain investing in them so that we can not only repair the mess that are our public finances, we can ensure that we are at the zenith of international innovation, industry and commerce for years to come without leaving ourselves vulnerable to the whims of the financial elite.
Yes it may well be costly in the short term, but there are ways in which we can start to generate the means to do this, the means to lift ourselves from the abyss in which we currently find ourselves, the means to ensure that the tax revenues that are generated are done so fairly and justly, with the very richest not being able to sidestep their obligations to the society that has contributed to their wealth, and the means to rescue, to stabilise, and to consolidate our ailing economy so as to build for a fairer, stronger, and more self believing, and self ambitious society in the future.
One thing I am certain of, is that if we carry on as we have been doing to date, we will all pay the price..