Ta Ta to the British car industry

Now you wouldn't expect me to be sad to see the back of a car manufacturing plant - and I'm not. But I am a bit confused about why finance companies can be bailed out to the tune of many billions, when the last of our manufacturing industry is allowed to pass into foreign ownership with no concern - from government or the unions. Why are the unions not creating a fuss about this? Because Tata have agreed not to send any jobs to their home base for the next five years. There is nothing to tie them to that promise.

At last we have heard the words 'food security' cross the lips of government ministers, but they don't seem to see a strategic role for steel, or cars, or even explosives. It is only just over a year since Ta-Ta bought what remains of British steel for a couple of billion - a small fraction of what we (as taxpayers) have sent the way of Northern Rock. In the same week that they bought Jaguar and Rover the UK's last military explosives factory - the Royal Ordnance Factory near Bridgwater - also closed. Again, not a favourite of mine - but surely a strategically important industry? How long can we rely on the Chinese for explosives?

As my colleague Richard Godfrey (from whom I stole the title for this blog - the Western Mail didn't want it!) pointed out in an august national newspaper last week:

'The UK is often described as a post-industrial nation and yet we still derive 20% of our income and £150bn. worth of exports from manufacturing.'

Yet manufacturing is expected to survive in the free-market jungle while those who do little of value beyond gambling are bailed out when their business plans turn out to be more like fairy tales.

The spectacle of reverse colonialism - whether in the UK car and steel industries or the buying of US companies by sovereign Welsh funds - is amusing, but the loss of our ability to produce basic products may not be for long. Tweet

Call to Freedom

Last night I attended the first proper meeting of Transition Wootton. Wooton-under-Edge is a delightful small town in semi-rural Gloucestershire. No doubt people there are as concerned as people everywhere about the reality of climate change. They would be willing to do their bit, make the necessary sacrifices, given the right political leadership.

But I must admit I came away from the meeting feeling alienated and depressed. The level of disempowerment amongst the 30 or so people attending was palpable. The two most enthusiastic discussions were about the technical aspects of energy generation (this is largely a displacement activity in my view) and a shared whinge about public transport.

A significant minority were for lobbying our local authority - around half of whose members are the Tory friends of big business who got us into this mess. My own suggestions for actually doing something - the something in question ranging from joining the car club to setting up a community farm and switching from buying a sofa to paying for a weekly massage - were dismissed as anarchism. Anarchism, it was pointed out as though this were holy writ, doesn't work.

Aside from my gloom at the self-imposed oppression of many of the people there I was hugely flattered to have been dismissed as an anarchist. What a noble tradition that is! From Kropotkin's ideal rural communities to Shelley's calls for non-violent action right up to Bob Marley's demand that we 'liberate ourselves from mental slavery' it is those who can shake off the shackles of received opinions who most powerfully change the world.

Shelley ends his rousing poem 'Call to Freedom' with these lines:

Rise like Lions after slumber
In unvanquishable number -
Shake your chains to earth like dew
Which in sleep had fallen on you -
Ye are many - they are few.

You can find the whole poem on this blog.

Shelley is gorgeous. I first came across him in my teens when a boyfriend who is sadly no longer around to cause consternation to the bastions of authority gave me a book of his verse. I immediately learned Ozymandius by heart. Who could resist a poem that begins 'I met a traveller from an antique land' and includes the line 'two vast and trunkless legs of stone'?!

Of course it is anarchism that won't work. The system of authoritarian control, injustice and inequality is working very well. That is why we see children starving and the planet burning. What further evidence of success could we require? Tweet

You only give me your funny paper

The really mysterious thing about the operation of central banks around the world is how they can - as if by magic - 'inject' money into failing banks and finance businesses. Where does this money come from? (Here is what Richard Douthwaite has to say about this.)

Although the Bank of England is officially apolitical, it is in fact deeply political. It can create money by selling government bonds, in other words mortgaging the country in order to create money. At present it is creating money in this way to bail out banks and investment houses who have bought worthless assets. They took the risk but we are paying for it. They took their bonuses when they made the deals, but those bonuses are being paid by ourselves and future taxpayers.

I confess the workings of the central banks are highly arcane and deliberately obscure, so I may have this wrong. If so, I would be glad to be informed of where BoE can find a hidden stash of gold that is not available to others.


The nature of money creation is a shared scam by the commercial banks. They create debts which other banks accept as credits, and this allows the banking system as a whole to create money from nothing, which they share between themselves to create their massive profits.

The problem is that the reverse also applies. In troubling times a bank will refuse to accept another bank's paper but will rather ask for something of real value. Since the very nature of the system of money creation means there is nothing of real value there, the circle which was once (at least if you are a bank) virtuous, will very rapidly become vicious.

This explains the anomalous situation that, as the central bank cuts its own interest rate (meaning we are getting less back for our bonds), banks are actually charging us higher interest rates. They have become more risk-averse which means they have less trust about whether we (or other banks) will repay, which they reflect in making money more expensive. This also has the handy side-effect of increasing their profits at a time when their traditional means for doing this has folded up.

In the face of such disastrous mismanagement of the financial system the obvious solution is for political authorities to take back the power to make money. I predict that any suggestion along these lines will be met with some worthy bank stooge (my money would be on the Ken Clarke-Denis Healy double-act) waffling on about inflation. A shame they forgot to mention that when they allowed the banks to create worthless paper money. Tweet

Home-grown Hats

Most of us can trace our families back to the generation that left the land. In my case this was my grandmother's parents, both of whom lived in the small Devon town of Ivybridge. I'm proud to say that various bits of the family still make their living in Devon and from rural trades.

I have always been most proud of my second cousin who is a thatcher. At a recent family event I discovered that he has now become a teacher but another cousin has, inspired by his example, taken up the thatching trade. My practical limitations give me immense respect for people who actually have a craft and so I was full of interest. This was somewhat diminished when he told me that the thatch he uses on the cottages of Devonshire is actually grown in China.

Here is what William Cobbett has to say on a similar subject (in this case Leghorn bonnets) in his Cottage Economy (written in 1820-21):

'The practice of making hats and bonnets, and other things, of straw, is perhaps of a very ancient date. . . In this country the manufacture was, only a few years ago very flourishing; but it has now greatly declined, and has left in poverty and misery those whom it once well fed and clothed.


The cause of this change has been, the importation of the straw hats and bonnets from Italy, greatly superior, in durability and beauty, to those made in England. . . It seems odd that nobody should have set to work to find out how the Italians came by this fine straw. The importation of these Italisn articles was chiefly from the port of LEGHORN, and therefore the bonnets imported were called Leghorn Bonnets.

The straw manufacturers in this country seem to have made no effort to resist this invasion from Leghorn. And, which is very curious, the Leghorn straw has now begun to be imported, and to be plated in this country. So that we had hands to plat as well as the Italians. All that we wanted was the same kind of straw that the Italians had: and it is truly wonderful that these importations from Leghorn should have gone on increasing year after year, and our domestic manufacture dwindling away at a like pace, without there having been any inquiry relative to the way which the Italians got their straw! . . . There really seems to have been an opinion that England couldnot more produce this straw than it could produce sugar-cane.' Tweet

Darling fiddles on while the planet burns

You can't really feel surprised by the pitiful response politicians show in the face of global meltdown, it's the pusillanimous hypocrisy of making grand claims and then coming up with policies to confront plastic bags that really sticks in the craw. If the Chancellor can't fight his way out of a wet one of those, how can we trust him to steer a course through the choppy waters that unquestionably lie ahead?

Of course the main issue is not confronting climate change, it is confronting the corporate power blocs that are - if you will forgive a mixed metaphor - driving us towards the abyss. If anything became clear this year it is that finance capitalism is a high-risk strategy, but Darling has shown no courage in confronting this threat either. Of course the two threats are inextricably intertwined. The creation of money as debt forces economic growth; companies founded on debt have to grow exponentially if they are to avoid implosion.

Last year and this, the Green Party's policy supremo Brian Heatley has taxed his brain (no civil servants at his disposal except himself) to work through a budget that counts carbon as well as cash. The maths may be complex (and fairly heroic!); the policies are not. We can afford to raise the state pension to £100 as well as offering free personal care for the elderly, free school meals to all children, and the reintroducing student fees and maintenance grants. How do we pay for this? By addressing the real source of growing inequality - the unfair tax changes introduced since the time of Thatcherism with a new 60% tax rate for those receiving more than £100,000 per year.

For the excitement of fiscal nerds, other policies include re-introduction of the fuel-duty escalator to fund public transport investment; an increase in Air Passenger Duty to £100 for all flights; and the reduction of all speed limits to outlaw inefficient motoring. In addition, in a package that is revenue-neutral but would cut emissions by 6-9% in one year, the Party proposes to insulate at the public expense every home in Britain and offer £500m. in incentives for renewable energy.

That's right, Alastair, the art of the possible. That's what you signed up for: and all of this is possible, so why aren't you doing it? Tweet

Rip-off Britain?

The struggle between capital and labour over their shares of the national pie have become more overt recently. This is inevitable given that the environmental crisis has made it clear that the strategy of increasing the size of the pie has run up against the stops. In the Northern Rock fiasco the shareholders, who controlled around 1 per cent of the bank, attempted to extort money from the poor and middle-earners who pay taxes. The temporary nationalisation strategy represents a truce - since the ultimate decision about how much public subsidy will be given to the hedge funds is only delayed.

My recent visit to Portugal made clear the consequence in the transport sector of this commitment to business interests rather than people's interests - or a policy where the 'customer' (passenger) pays more of the costs of travel than the taxpayer, as the government prefers to phrase it. This is the explanation for a four-stop trip on the London tube costing £4 while a journey three times the length on the Paris Metro costs only E1.50. Meanwhile my trip from Irun to Lisbon, lasting 13 hours and including a bed and breakfast in the dining car, cost £99, while my 1.5-hour trip to London from Stroud was £108.

This is one of many examples of the way in which the poor subsidise the rich in a world where all the political parties have abandoned the interests of labour, or working people. Motorists are given huge subsidies in the form of free roads paid for from taxes which grow ever more regressive. Meanwhile bus and train companies are forced to fend for themselves - and pass the consequence on to passengers in the form of increasing prices and worsening service.


We see a similar picture in the world of energy - another key sector for price rises as oil supplies dwindle and competition for them increases. People who have run into arrears with electricity bills are put onto meters and then pay up to 45% more, subsiding the rich who can afford the cheap deals that come when you pay by direct debit. Save the Children identified that in most of the key consumption areas the poor are paying more than the rich.

The same applies in the debt/credit market, where small-time risk is penalised by high charges, whereas high-level risk is condoned. Years ago I wrote to my bank complaining that the £20 fine they had extracted for a £5 sally into the red was unreasonable. The letter justifying this extraction of money from the poor to be sent to the rich was signed by a 'Ms Swindell'. I intend to put this in a frame as a moral lesson. Tweet

Mending our Global Relationships

I was inspired by listening to Doreen Massey last week - especially by her approach to positive globalisation and her ability to make space and distance seem exciting rather than threatening.

One of her key themes was restitution. She raised the troubling issue of people's seeming need to apologise for things they had nothing to do with. An example is the apology by the contemporary citizens of Liverpool for the slave trade. Interesting, isn't it, how this phrase is so rarely used now - usually substituted for 'slavery'. Of course we wouldn't want to think of all trade as slavery would we?

But back to my theme of pointless apologies, I am left wondering what it is we think we are achieving by this. Is it any more than wearing a badge of postmodern right-on-ness, much as we used to wear lapel badges and as many still do where a rainbow of ribbons? How does it help that they tell us they know that breast cancer is a horrible disease?

But to action. Doreen drew my attention to an interesting piece of research from Medact which discusses the perverse subsidy that poor countries make to rich countries when health-care workers who have been trained at the public expense become the sorts of economic migrants we are happy to accept. Medact have designed a plan for genuine restitution: a reverse transfer to balance the subsidy.

This is similar to schemes proposed under the Contraction and Convergence framework for emissions trading and technology transfer. To balance the negative effects of our fossil greed, and the unfair share of the global climate commons we in the richer countries consume, the plan is that we should share sustainable technologies and expertise, as well as paying cash.

According to a letter to the BMJ from Robin Stott, vice-chair of Medact, 'Evidence from Mozambique suggests that this money will help trigger the latent entrepreneurial skills of the recipients. Given the likely market value of a tonne of carbon dioxide, it will more than provide the $110 dollars/person/year that the UN millennium project believes necessary to reach the millennium development goals in Africa.'


Doreen also mentioned a project to create a map of the Niger Delta-- in London, in other words raising awareness of the exploitation of people in this oil-rich African country that is necessary to feed our oil addiction. And also bringing this home to the City of London, which provides the finance for most of the world's trade-based enterprises.

Her final example was of the link being forged between Caracas, Venezuela and London--another form of local-to-local exchange and perhaps 'a form of alternative globalisation' cooked up by two ageing Marxists: Hugo Chavez and Ken Livingstone. Caracas is sending us cheap diesel, which fuels London's public transport and allows concessionary fares for the poor. Our contribution is more intangible-- sharing 'the capital's expertise in policing, tourism, transport, housing and waste disposal'--but it is a gesture in the right direction.


I wonder how long it took the Liberal Democrats in London to regret their comment that 'It makes us feel like a Third World country'! Tweet