Britain is the Dorian Gray economy, hiding its ugly truths from the world. Now they are exposed

From Tony Blair to George Osborne, our rulers painted false pictures of success while real wealth and wages withered away writes Aditya Chakrabortty in The Guardian 

You know the central conceit of Oscar Wilde’s The Picture of Dorian Gray, of course you do. A lad of sun-kissed beauty is presented with a stunning likeness of himself. Disturbed at the notion that he will grow old while the painting doesn’t, he locks it away – where it is the portrait that ages and uglifies while Dorian stays boyish and beautiful. But perhaps you’ve forgotten what happens next.

The story has come to my mind many times, as the foulness of British politics becomes ever harder to ignore. Genteel liberals wonder how their land of cricket whites and orderly queues could be ruled by a grasping liar such as Boris Johnson and I hear a whisper on the wind: Dorian Gray. The New York Times and Der Spiegel report in bewilderment on a country with pockets of deep poverty and unslaked anger, and again rasps that hoarse voice: the horror was hidden here all along.

Now it’s all out in the open. In one of the richest societies in human history, inhabitants are starting to twig that by 2030 or thereabouts they will earn less per head than the Poles they so recently patronised. Whatever the politicians and pundits may argue, this debacle owes nothing to Jeremy Corbyn or Brexit or any supposedly un-British “populism”. It is homegrown and has deep roots.

Like Dorian Gray, Britain has for too long presented one face to the world while concealing the awful truth. The author of that novel, Oscar Wilde, was the son of an Irish nationalist and a graduate of Oxford, where he became a fine student of the British upper classes and their mellifluous hypocrisy. He would have recognised much of the mess we’re in, because it grew among shadows and cover-ups. From Tony Blair’s Cool Britannia through to George Osborne’s “march of the makers”, our rulers have trumpeted every false success, while ugly facts have been waved away as anomalies: from the former manufacturing suburbs and towns turned into giant warehouses of surplus people, to the fact that 15% of adults in England are on antidepressants. We’re winning the global race, claimed David Cameron, even as the population’s life expectancy fell far behind other rich countries. We shan’t stunt future generations with debt, he boasted, as our five-year-olds became the shortest in Europe.

Or take the housing bubble that politicians pretended was true prosperity – until this week, as the Bank of England hiked rates for the 13th time in a row and the prospect of it bursting began to terrify them. Yet the Westminster classes blew their hardest into that bubble. As soon as estate agents were out of lockdown, Rishi Sunak gave up £6bn of taxpayers’ money for a stamp duty holiday – an act as prudent as pouring petrol on a fire. Many of those he lured up the property ladder will be hardest hit by rising mortgage rates. Analysis done for me by UK Finance suggests that 465,000 house purchases during that tax break were financed with two- or three-year fixed rate mortgages – the very ones running out right now. In other words, nearly half a million households took the chancellor’s inducement; many will plunge into dangerous financial straits; some face losing their homes. They were mis-sold a dream by Sunak. Still, at least the Tories enjoyed a bounce in the polls.

Helmut Berger stars in the 1970 film adaptation of The Picture of Dorian Gray. Photograph: Sargon/Kobal/Rex/Shutterstock


“Sin is a thing that writes itself across a man’s face,” Dorian is told by his portraitist Basil Hallward. “If a wretched man has a vice, it shows itself in the lines of his mouth, the droop of his eyelids, the moulding of his hands even … But you, Dorian, with your pure, bright, innocent face and your marvellous untroubled youth – I can’t believe anything against you.” The picture of Dorian, which would have revealed the grotesque truth, is hidden away. So, too, has the UK avoided admitting its ills. Even now, in a country where patently so little works for people who rely on work for their income, commentators and frontbenchers still blame supposedly all-powerful interlopers: Boris, Nigel, Jeremy. And from Sunak to Starmer, all push growth and jobs as the remedy for what ails us.

Yet growth in this country is falling and not because of Ukraine or Covid or Brexit. Since the 1950s, the growth rate adjusted for inflation has been on a gentle but insistent downward slide. Our economy has become ever more stagnant and dependent on debt. It is fatuous to pretend this is going to turn around through magicking Britain into an AI free-for-all or a jolly green industrial giant. Employment? One in four employees are on low weekly wages – either because the pay is too low or the hours aren’t enough – while the average real wage has flatlined for many years.

Much of this analysis comes from a new book, When Nothing Works, written by a team of scholars. Although specialising in economics and accountancy, what they have produced is an essential text for understanding British government: the polarised politics of a highly unequal and increasingly stagnant society.

Take the issue at the top of today’s agenda: wages. Why can’t you and I take home more money? Because of a lack of productivity, politicians will say. Yet the researchers point to how labour has got a smaller and smaller share of economic output since the 1970s.

If the same share of GDP was paid out in wages today as in 1976, the average working-age household would have an extra £9,744 a year. We haven’t lost that 10 grand a year through laziness at work but because politicians from Thatcher onwards smashed up trade unions, undermined labour rights, and crowed over the result as a “flexible labour market”. What they really created was a low-wage workforce, in a low-growth country ruled by politicians with low ambitions for everyone bar themselves.

“The prayer of your pride has been answered,” Basil counsels Dorian, when he finally sees the portrait and its horrific truth. “The prayer of your repentance will be answered also.” When Nothing Works will inevitably be termed pessimistic, but it is no such thing. Realism comes from facing who we are and dropping the pretence that a growth miracle is just around the corner. Instead of trying to boost “the economy”, it is high time to boost our people: to ensure they have the basics they need to live a life free from indignity and free to flourish. This will come from redistribution rather than growth, from replacing extractive businesses with fair ones. Such ideas will not go down well in SW1, where both Tory and Labour are increasingly hostile to pluralism and brittle in their dogmatism. Self-knowledge is the hardest knowledge, as one of the book’s authors, Karel Williams, says. And self-delusion leads eventually to disaster.

Unable to face his loathsome self-image, Dorian slashes that portrait. He is found by servants. “Lying on the floor was a dead man, in evening dress, with a knife in his heart. He was withered, wrinkled and loathsome of visage. It was not till they examined the rings that they recognised who it was.”

The Difference between Bullshit and Lying

We have suffered both. Some never speak the truth because they don’t know or care about it. Others know the truth but lie anyway wrires Aditya Chakrabortty in The Guardian

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llustration: Ben Jennings/The Guardian 

 
Sometimes it falls to an old book to tell us what’s new, to a white-bearded philosopher based far from Westminster or Washington to clarify the shifts in our sharp-suited politics. So spare yourself the annual round-ups in the newspapers or the boy-scout enthusiasm of podcasters. To understand the great political shift of this year, the work you need is a piece of philosophy called ­– what else? – On Bullshit.

I offer it to you this Christmas because surely no reader of mine can resist an essay that begins: “One of the most salient features of our culture is that there is so much bullshit. Everyone knows this.” Statements like that made it a bestseller upon re-publication in 2005 and turned its then-75-year-old author, Harry Frankfurt, from a distinguished moral philosopher at Yale and Princeton into a chatshow guest.

But to open the book now is to get a blast of something quite different, in a climate that just didn’t exist two decades ago. Read today, On Bullshit taxonomises an entire style of government. It foretells the age of Donald Trump and Boris Johnson.

The task Frankfurt sets himself is to define bullshit. What it is not, he argues, is lying. Both misrepresent the truth, but with entirely different intentions. The liar is “someone who deliberately promulgates a falsehood”. He or she knows the truth or could lay hands on it – but they certainly aren’t giving it to you. The bullshitter, on the other hand, “does not care whether the things he says describe reality correctly. He just picks them out, or makes them up, to suit his purpose.” Bullshitters couldn’t give two hoots about the truth. They just want a story.

In that distinction lies an explanation for this era of politics. Commentators have struggled for years to coin the phrase for now. “Populist” doesn’t work. Too often, it merely denotes what the author and their friends dislike, throwing together clowns such as Beppe Grillo with social democrats such as Jeremy Corbyn. A similar problem bedevils “strongman”, a label stuck on Xi Jinping and Jair Bolsonaro alike. But “bullshitter” – that sums up just how different Trump and Johnson are from their predecessors.

‘Bullshit is where newspaper stories about Italians demanding smaller condoms meet plans for an airport on an island in the Thames.’ Photograph: Peter Byrne/PA

Some enterprising future editor of a dictionary of political terms will carry the word “bullshit” and cite as examples: writing two opposing columns on Brexit, claiming the NHS will be £350m a week better off and affecting a hurt expression when asked the whereabouts of your promised 40 new hospitals. Come on! Those little-doggy eyes beseech the hard-faced TV interviewer. Didn’t everyone know that was bullshit?

Socially, there is little to distinguish Johnson from David Cameron: both are Bullingdon boys manufactured at Eton. In policy, too, there is a fair carryover between George Osborne’s “northern powerhouse” and Johnson’s “levelling up”, or between Cameron’s vow to get net immigration down to the tens of thousands and the pledges made by Johnson’s home secretary, Priti Patel. The great divide is in rhetoric: how Johnson talked to voters and the promises he made us. They were never meant to be taken at face value.

Among the media class’s artisanal industries of the past few years has been trying to find a thread that runs through Johnson the journalist, the globalist mayor of London and the Brexit prime minister. Frankfurt furnishes that link: it is bullshit.

Bullshit is where newspaper stories about Italians demanding smaller condoms meet plans for an airport on an island in the Thames meet promises of an “oven-ready” Brexit deal. They are electioneering fables rather than manifesto commitments, grand gestures over small print, cheerful dishonesty in place of lawyered mendacity. In other words, they are all just careerist bullshit.

Much the same goes for Liz Truss, although she was clearly not as good at it. Looking back, this summer’s Tory leadership contest can be seen as a final hurrah for the “anything goes” era. And it certainly applies to Trump. “I will build a great, great wall on our southern border, and I will have Mexico pay for that wall.” Bullshit. “Sorry losers and haters, but my IQ is one of the highest.” Bullshit. A “sea of love” at his inauguration that broke all records. Bullshit, bullshit, bullshit. Frankfurt’s book offers a theory of a generation of politicians who now appear to be leaving the stage.

‘A ‘sea of love’ at Donald Trump’s inauguration that broke all records. Bullshit.’ Photograph: Saul Loeb/EPA

Lies can be shown up: Saddam Hussein had no weapons of mass destruction. But there is no point factchecking bullshit, as parts of the British media still do over Brexit or the New York Times did with Trump. For a bullshitter, facts are beside the point – the real aim is to produce a story that erases the line between truth and falsehood. It’s why the philosopher concludes: “Bullshit is a greater enemy of truth than lies are.”

We all lie sometimes, and around millions of tables there will be much bullshit spoken over the Christmas turkey. In British politics, the era of bullshit followed on naturally from a long spell of lies. Before Johnson, the most effective Tory of the post-Thatcher era was Osborne.

He blamed Labour and Gordon Brown for the banking crash, only later admitting that was untrue. He declared Labour’s 2008 package to bail out the banks would spark a run on the pound, before confessing: “Broadly speaking, the government did what was necessary.”

Most of all, he claimed that slashing benefits was essential to bring down borrowing and was being done fairly. Remember “we are all in this together”? Except a study at the end of the coalition by the late John Hills, of the LSE, alongside other leading academics, showed that the coalition’s tax and benefit changes had “a net fiscal cost” – which meant they increased the deficit. Not only that, but “the poorest 30% [of Britons] lost or broke even on average and the top half gained”. Heading the Treasury, Osborne was in charge of a machine that could calculate the effects of his policies. He would have or should have known the truth as he laid out each budget. And yet voters were fed something entirely different.

One might see these as common or garden political lies – falsehoods that could be checked and that aimed at nothing more than establishing a poll lead for Osborne’s team. They were not the alternative reality of Vote Leave. But if the currency of truth is sufficiently debased, voters may eventually choose the altogether more entertaining humbugger. In that lies a warning for both Rishi Sunak, the down-to-earth multimillionaire, and Keir Starmer, the man who said he was Corbyn before revealing himself to be Tony Blair meets Gordon Brittas, the TV sitcom manager whose words never match results or deeds.

One topic Frankfurt doesn’t address is the audience for bullshit. Why do people buy it? To which we might add another question. Why have swathes of the political establishment and the press spent the past few years claiming Brexit is a success or that levelling up is serious or that any alternative to the most venal dishonesty is just impossible? Answers would be welcome but were we to press for any, I suspect we’d be told to drop the bullshit.

The secret of Johnson’s success lies in his break with Treasury dominance

Gordon Brown’s rule-based approach shaped Whitehall for two decades. But the Tories are forging a new politics that has little regard for prudence writes William Davies in The Guardian

 

Illustration: Eva Bee/The Guardian Thu 20 May 2021 07.00 BST

 

The Conservative party’s growing electoral dominance in non-metropolitan England, so starkly re-emphasised by results in the north-east, has been attributed to various causes. Brexit and the popularity of Boris Johnson both count for a great deal. But while Labour is busy telling voters how much it deserved to lose, this is only half the picture. A major part of Johnson’s appeal is the way he has escaped the shadow cast by one of Britain’s three most significant political figures of the past 45 years: not Margaret Thatcher or Tony Blair, but Gordon Brown. 

The 1994 meeting between Blair and Brown at the Granita restaurant in Islington, north London, shortly after John Smith’s death, is the founding myth of New Labour: the moment when Brown agreed to let Blair stand for the leadership, on certain conditions. In addition to Blair’s much disputed commitment to serve only two terms in office should he become prime minister, there was also his promise that Brown, as chancellor, would get control over the domestic policy agenda. At least the second of these commitments was honoured, resulting in a situation where, from 1997 to 2007, the Treasury held an overwhelming dominance over the rest of Whitehall, while Brown was implicitly unsackable.

But, together with his adviser Ed Balls, Brown was also the architect of a new apparatus of economic policymaking designed for the era of globalisation. The central problem that Balls and Brown confronted was how to build the capacity for higher levels of social spending, while also retaining financial credibility in an age of far more mobile capital than any confronted by previous Labour governments. The fear was that, with financial capital able to cross borders at speed, a high-spending government might be viewed suspiciously by investors and lenders, making it harder for the state to borrow cheaply. The first part of their answer endures to this day: operational independence was handed to the Bank of England, accompanied by an inflation target. No longer could politicians seek to win elections by cutting interest rates, a move that aimed to win the trust of the markets.

On top of this, Brown also introduced a culture of almost obsessive fiscal discipline, as if the bond markets would attack the moment he showed any flexibility – the same paranoia that shaped Clintonism. His “golden rule”, outlined in his first budget, stated that, over the economic cycle, the government could borrow only to invest, not for day-to-day spending. The Treasury governed the rest of Whitehall according to a strict economic rubric, demanding every spending proposal was audited according to orthodox neoclassical economics.

Balls later wrote that their thinking had been guided by an influential 1977 article, Rules Rather than Discretion, in which two economists, Finn Kydland and Edward Prescott, sought to demonstrate that policymakers will produce far better economic outcomes if they stick rigidly to certain principles and heuristics of policy, rather than seeking to intervene on a case-by-case basis. Brown’s robotic persona and his mantra of “prudence” conveyed a programme that was so focused on policy as to be oblivious to more frivolous aspects of politics.

Elements of this Brownite machine remained in place during the David Cameron-George Osborne years: a chancellor acting as a kind of parallel prime minister, transforming society through force of cost-benefit analysis, only now the fiscal tide was going out rather than in. Even “Spreadsheet Phil” Hammond sustained the template as far as he could, in the face of ever-rising attacks from the Brexit extremists in his own party. The point is that, from 1997 to 2019, the government largely meant the Treasury. Those powers that are so foundational for the modern nation state – to tax, borrow and spend – were the basis on which governments asked to be judged, by voters and financial markets.

Various things have happened to weaken the Treasury’s political authority over the past five years, though – significantly – none of these has yet seemed to weaken the government’s credibility in the eyes of the markets. First, there was the notorious cooked Brexit forecast published in May 2016, predicting an immediate recession, half a million job losses and a house price crash, should Britain vote to leave. The referendum itself, a mass refusal to view the world in terms of macroeconomics, meant there could be no going back to a world in which politics was dominated by economists.

Consider how different things are now from in Brown’s heyday. Johnson’s first chancellor, Sajid Javid, lasted little more than six months in the job, resigning after one of his aides was sacked by Dominic Cummings without his knowledge. His second, Rishi Sunak, may have high political ambitions and approval ratings, but scarcely forms the kind of double-act with Johnson that Brown did with Blair, or Osborne with Cameron. Johnson’s cabinet is notable for lacking any obvious next-in-line leader.

What’s more interesting are the parts of Whitehall that have suddenly risen in profile under Johnson: communities and local government under Robert Jenrick, and the Department for Digital, Culture Media and Sport under Oliver Dowden. With the “levelling up” agenda of the former, (manifest in such pork barrel politics as the Towns Fund) and the “culture war” agenda of the latter (evident in attacks on the autonomy of museums), a new vision of government is emerging, one that is no longer afraid of expressing cultural favouritism or fixing deals. Balls and Brown were inspired by “rules rather than discretion”; now there’s no better way to sum up Jenrick’s disgraceful governmental career to date than “discretion rather than rules”.

In the background, of course, are the unique fiscal and financial circumstances produced by Covid, in which all notions of prudence have been thrown out of the window. With the Bank of England buying most of the additional government bonds issued over the last 15 months (beyond the wildest imaginings of Balls and Brown), and with the cost of borrowing close to zero, the rationale for strict fiscal discipline or austerity has currently evaporated. Paradoxically, a situation in which the Treasury can find an emergency £60bn to pay the country’s wages makes for a popular chancellor, but may make for a less powerful Treasury.

Amid all this, Labour is left in an unenviable position, which is in many ways deeply unfair. So long as the Tories are associated with Brexit, England and Johnson, the voters don’t expect them to exercise any kind of discipline, fiscal or otherwise. Meanwhile, Labour remains associated with a Treasury worldview: technocratic, London-centric, British not English, rules not discretion. What’s doubly unfair is that, thanks to the serial fictions of Osborne and the Tory press from 2010 onwards that Labour had “spent all the money”, it is not even viewed as economically trustworthy. In the end, it turned out that public perceptions of financial credibility were largely shaped by political messaging and media narratives, not by adherence to self-imposed fiscal rules.

In the eyes of party members, New Labour will be for ever tarred by Blair and Iraq. In the eyes of much of the country, however, it will be tarred by some vague memory of centralised Brownite spending regimes. The fact that Labour receives so little credit for Brown’s undoubted successes as a spending chancellor is due to many factors, but ultimately consists in the fact that the technocratic, Treasury view of the world was never adequately translated into a political story. Osborne simply presented himself as the inheritor of a centralised “mess” that needed cleaning up.

The recent elections demonstrated that all political momentum is now with the cities and nations of Britain: the Conservatives in leave-voting England, Andy Burnham in Manchester, the SNP in Scotland, Labour in Wales. Rather than making weak gestures towards the union jack or against London, Labour needs to think deeply about the kind of statecraft and policy style that is suited to such a moment, so as to finally leave the world of Granita and “golden rules” behind.

UK and China: how the love affair faded

Patrick Wintour in The Guardian

In 2003, the Cabinet Office decided to allow the Chinese state-backed Huawei telecommunications network to start supplying BT for the first time. Nobody bothered to put a note on the security implications into the red box of the then business secretary, Patrica Hewitt. A minor discussion, solely on the competition implications, did take place.

The then head of MI6, Sir Richard Dearlove, used to daily cooperation with BT to secure wire taps, was shocked and concerned when he heard of the plan, but was told: “It is nothing to do with you. These are issues we can control.”

The path was set fair for the open trading relationship with China which reached its zenith with George Osborne and David Cameron in 2015. “No economy in the world is as open to Chinese investment as the UK,” Osborne boasted on a five-day visit to China in September of that year. In a speech to the Shanghai stock exchange, he vowed London would act as China’s bridge to European financial markets. “Whatever the headlines … we shouldn’t be running away from China,” he said. “Through the ups and downs, let’s stick together.”

David Cameron and George Osborne visit the Forbidden City in Beijing in 2015. Photograph: Andrew Parsons/Press Association

Osborne knew he was taking a risky bet and Britain, against vehement US objections, joined the Asian Infrastructure Investment Bank.

UK trade with China is worth approximately £7bn, making it Britain’s’s fourth-largest trading partner, the sixth-largest export market and the third-largest import market. By comparison, in 1999 China was the UK’s 26th largest export market and 15th largest source of imports.

But Britain is now veering away from China, despite Osborne’s pledge. It has moved from being China’s greatest advocate in Europe, a wide open door for Chinese investment, into one of its sternest critics. Overall, it represents as swift and complete a reversal in foreign policy as the UK’s shift from treating Russia as an ally in 1945 to cold war foe in 1946.

Yet how this course correction happened, the extent to which it was internally driven, or imposed on the UK by the Trump administration, and whether its limits has been finally set remains largely unresolved.

People walking past the Huawei logo during the Consumer Electronics Expo in Beijing. Photograph: Fred Dufour/AFP/Getty Images

In the last fortnight alone two major government bills have been published, one aimed primarily at screening out Chinese investment from 17 UK strategic industries, and another cutting Huawei out of the UK telecommunications network entirely from 2027. This reverses the decision taken, in defiance of the US, at the start of the year to give Huawei limited access.

A third bill, in front of the Lords, has been amended in an attempt to prevent any UK trade deals with China if its human rights record is found wanting.

The government’s integrated foreign and security policy review, due in the new year, will contain a British tilt to the Indo-Pacific, shorthand for greater political and military support for the forces of democracy in the South China Sea.

On the Tory benches, the intellectual commanding heights are now dominated by China critics, so much so, it is argued, that Sino-scepticism is the New Euro-scepticism. There is probably no more active group of parliamentarians than the Tory China Research Group, only set up in January. The group, established by Tom Tugendhat, the foreign affairs select committee chairman, and Neil O’Brien, now head of the Conservative policy board, were instrumental in March in mounting the rebellion of 40 MPs who pushed to have Huawei excluded.

Across the Tory thinktanks that matter – Policy Exchange, the Legatum Institute, Henry Jackson Society, – hostility to the Chinese Communist party is unanimous.

China footage reveals hundreds of blindfolded and shackled prisoners. Photograph: youtube

Labour, committed to human rights, takes a similar view. It is a British human rights barrister, Rodney Dixon, who is leading the claim that China can be taken to the international criminal court over its treatment of Uighur Muslims. Hong Kong Watch is one of the most active pressure groups defending the steady stream of jailed activists. The UK has become a safe harbour for the exiles, and nearly 60,000 British National (Overseas) passports were handed out to Hong Kongers in September alone.

By contrast the business lobbies, especially finance capital that previously worked assiduously to secure deals with China, have fallen silent, or found themselves struggling for a hearing. British board members on Huawei such as Lord John Browne have resigned. Other former advocates for Huawei such as Alexander Downer, the former Australian high commissioner to London, have long converted, urging the UK to engage with the geopolitical threat posed by China, and “not just see the country as a place to sell Land Rovers and Jaguars”.

Huawei’s own warnings about the potential cost to the UK economy of delaying 5G are ignored.

It can be argued, as Keynes did, that when the facts change, it is advisable to change your mind. The destruction of Hong Kong’s freedoms, China’s secretive mishandling of the coronavirus outbreak, its wolf warrior diplomacy, the revelations about treatment of the Uighur people, the wholesale theft of intellectual property, and the bullying of one of the UK’s natural partners, Australia, has ended illusions about China. In July, the former head of M16 Sir John Sawers wrote that the last six months have “revealed more about China under President Xi Jinping than the previous six years”.

Rory Stewart, the former Foreign Office minister, says: “China has broken a lot of our beliefs about how we thought about things for 200 years. For 200 years there seemed to be a connection between economic growth and liberal democracy. Many, many people thought 20 years ago it was almost inevitable China would move in a liberal, democratic way. Today we are in a much more gloomy place.”

China’s entry into the WTO in December 2001 proved not to be the prelude to the country opening up, but instead a high-water mark.

But these views are now being wrapped into an ideological perception of China as an imperialist power intent on dominating the west technologically, politically and militarily, a view enshrined in a 70-page US state department policy paper entitled Elements of the China Challenge published this month. The paper argues the west utterly misconstrued China as a fledgling economic super power with no imperial ambitions, when in reality “it is determined fundamentally to revise the world order, placing the People’s Republic of China at the centre and serving Beijing’s authoritarian goals and hegemonic ambitions”.

Riot police detain a man as they clear protesters taking part in a rally against the national security law in Hong Kong in July. Photograph: Dale de la Rey/AFP/Getty Images

In a lecture given to Policy Exchange, Matthew Pottinger, Donald Trump’s chief adviser on China, drew a sinister portrait. “The party’s overseas propaganda has two consistent themes: ‘We own the future, so make your adjustments now.’ And: ‘We’re just like you, so try not to worry.’ Together, these assertions form the elaborate con at the heart of all Leninist movements.”

It is this kind of thinking deep in the Trump administration that led to the remorseless commercial and political pressure on the UK this summer to change its mind over Huawei.

There are distinctions between the America and British process of disillusionment, according to Sophie Gaston at the British Foreign Policy Group. The US came at the China issue via trade and the loss of manufacturing jobs while the UK came at it primarily through the lens of human rights and national security. But the two views have now blended into a melange of concern about human rights, the race for quantum supremacy and protection of the national infrastructure ranging from power stations to university freedom.

For Martin Jacques, the former British editor of Marxism Today and enthusiastic chronicler of China’s rise, the UK has been gripped by a form of paranoia – reds under the bed replaced by reds under the hard drive. “What’s happening is a very serious regression in the mentality in the UK toward China. It reminds me very much of the cold war. In fact, the thinking is cold war thinking: China is just the evil enemy that has to be rejected. The rightwing reduces China to the communist regime, the communist threat, and the whole Chinese history is lost in the process. So they have no understanding whatsoever of China really. They’ve just got this extraordinary backward view of China, which is just, frankly, plain ignorant. But it’s making the running.”

Another surprising figure despairing at the trend is Vince Cable. The Liberal Democrat was business secretary in the Osborne era and bemoans “the unholy alliance” of Trumpists, neocons, British Conservatives and Labour opposition who, he says, are blowing apart the government’s post-Brexit strategy to invest in China.

But Dearlove kicks back, arguing there is something sinister about China’s methods. He cites three Chinese maxims. “Kill with a borrowed sword – that is, get what you can. Loot a burning house – bear that in mind in terms of taking advantage of the current pandemic. The third one is hide a knife behind a smile.”

Xi Jinping waits to greet Theresa May in Beijing in 2018. Photograph: Bloomberg/Getty Images

China, he says, assembled an influence network in the UK. It “recruited a whole group of leading British business and political figures into that group who were designated cheerleaders for a burgeoning relationship with China. Huawei was an important part of that. The composition – the British membership of the Huawei board – was a very impressive lineup of people who were there to persuade us to drop our guard.”

Quite how far the UK, mired in recession, will go in specific policy terms to distance itself from China, and how China reacts, is in question. The China Research Group in its recent manifesto stops short of Trumpian decoupling of the west from China’s economy, but backs measures including sanctions on UK finance houses operating in Hong Kong that extend the reach of the Communist party, a ban on Chinese state-owned enterprises investing in UK critical infrastructure and a ban on UK firms exporting goods and services that are used to abuse human rights. Tariffs are mentioned only as a last resort.

Some of this is enough to make Lord Grimstone, the former head of Standard Chartered and now a trade minister, blanch. The new China-Britain Business Council chair, and head of public affairs at HSBC, Sir Sherard Cowper-Coles, has also been leading a discreet fightback, pointing out that after Brexit, Britain needs to insert itself into the Asian-Pacific growth area. China, after all, is the economy taking the world out of recession.

So far, the British elite have managed to keep the Liu Xiaoming, the Chinese ambassador, onside. Despite smarting from the Huawei 5G ban, he has not descended into the name-calling disfiguring Chinese relations with Australia. He has not, for instance, like his colleague in Canberra, sent a 14-point checklist of mistakes that the UK must correct.

Instead, he spoke last month to the third China-UK Economic Forum about the continued chances for synergy with UK business. Ahead of the forum, a survey showed continued Chinese enthusiasm to invest in the UK, despite a fall-back in investment due to coronavirus.

The Foreign Office is clearly nervous of being cast in a vanguard role, while Japan and Germany, for instance, allow Huawei into its 5G networks. The UK has not yet sanctioned anyone over Hong Kong, only provided safe haven. The Trump administration by contrast has sanctioned 14 Chinese officials specifically over Hong Kong, including the chief executive, Carrie Lamb.

Britain will also be cautious because it does not want to be left beached on the high tide of Trumpian anti-Chinese rhetoric only to find that tide went out with Joe Biden’s election. Biden is, at a minimum, likely to take a less aggressive unilateral sanctions-based approach to trade, and it is not yet clear if his planned alliance of democratic nations will be explicitly anti-Chinese.

If the Biden administration is interested in re-stabilising the US-China relationship, the UK is likely to want to be in the slipstream of this process, probably using the climate change agenda as the way back in.

After all, the advocates of pragmatic British engagement have not gone away, just gone quiet.

Lord Powell, a former chairman of the China-Britain Business Council and private secretary to Margaret Thatcher, put it succinctly in a lecture last year. He explained: “I have to admit when visiting China, as a I frequently do, I never get the sense that parliamentary democracy is anything like the highest priority for most people. At least at this stage in the country’s development, their priority is material progress, even if it comes at the price of freedom.”

He added: “I know pragmatism is a dirty word in any discussion of ethical values but when the other guy – in this case China – indisputably has the stronger hand, it is prudent not to provoke unwinnable fights.”

‘Sir’ Nick Clegg? A true sign of how Britain’s elite rewards failure

Owen Jones in The Guardian







The establishment is a safety net for the shameful and the shameless. Once you’re in, you’re in: and even if you played a prominent role in plunging your country into crisis, and inflicting injustice on your fellow citizens, there are still baubles to be had.

Former chancellor George Osborne got his own newspaper, and ex-deputy prime minister Nick Clegg is reportedly to be made a knight of the realm. It has become fashionable in certain liberal circles to rehabilitate both as courageous warriors against the calamity of Brexit. But here are surely two architects of our crisis-stricken nation.

Nick Clegg to be knighted in New Year honours, say reports



Let’s start with Clegg. For those wonks who sifted through his speeches before he led his Lib Dem party into the coalition in 2010, there was ample evidence that Clegg would prove an amenable ally to a slash-and-burn Conservative government. Three years before Osborne began wielding his scalpel, Clegg promised to “define a liberal alternative to the discredited politics of big government”. Months before the banks plunged Britain into national calamity, he railed against “nationalised education, nationalised health, and nationalised welfare”.

But in order to get elected, the Lib Dems made cast-iron pledges to scrap tuition fees, and had students queuing around the block on polling day. “Students can make the difference in countless seats in this election,” said Clegg, which they did; and hiking fees to £7,000 (let alone £9,000) would be a “disaster” because “you can’t build a future on debt”. The Lib Dem’s flagship political broadcast was titled “Say goodbye to broken promises”, in which Clegg bemoaned the dishonesty of the political elite.
Clegg said after the election that he had no choice but to go back on his word: a national economic disaster loomed, national interest trumps party politics, amassing power and all its trappings through brazen dishonesty was actually an act of sacrifice! As former Liberal leader David Steel put it, Clegg could have met Gordon Brown first “instead of leaving talks with Labour to his acolytes later”, and used the prospect of a Lib-Lab coalition to extract “far better from the Tories”. But he didn’t.

Clegg claimed that new information about Britain’s economic plight from Bank of England governor Mervyn King was critical to his U-turn. But King himself said he had told Clegg nothing the Lib Dem leader didn’t already know.

So here is the truth. Clegg formed an austerity coalition because his socially liberal anti-state worldview was fundamentally in accordance with that of Tory leader David Cameron. “If we keep doing this we won’t find anything to bloody disagree on in the bloody TV debate!” as he was accidentally recorded cooing to Cameron in 2011.

So everything that then happened is on him, as much as anyone else. The longest squeeze in wages for generations; the ideologically driven privatisation of the NHS; a bedroom tax that disproportionately compelled disabled people to pay for the housing crisis; the humiliating and degrading work assessments forced on disabled people in a failed attempt to balance the nation’s books on their shoulders; the surging homelessness.


A man who uses human misery as a chess piece should, in a decent country, lose their privileged position in public life


But this is nothing compared with the indulgence of George Osborne, just because a dinner party friend has given him a newspaper to play out a vengeful grudge against Theresa May based far more on personal affront than political principle, like a toy catapult handed to a spiteful toddler. The bedroom tax, the £12bn pledged in social security cuts; the benefit cap; the systematic demonisation of benefit claimants. As Nick Clegg – once the voters had thrown him out of government – said himself, Osborne’s behaviour was “very unattractive, very cynical”; for him, welfare “was just a bottomless pit of savings, and it didn’t really matter what the human consequences were”, it was just a means to boost his party’s popularity.

This is grotesque behaviour, like a child who takes a magnifying glass to ants. A man who uses human misery as a political chess piece should, in a decent country, lose their privileged position in public life.

“Ah, but Osborne and Clegg oppose Brexit!” is a common comment. But no one who ever utters this has been a victim of the bedroom tax. Yes, this Tory Brexit is a national disaster. But the details of Britain’s relationship with a trading bloc is a secondary issue for those who spend their waking hours worrying over paying their food and energy bills.

In any case, if you want to understand why Brexit happened, look no further than these two individuals. Is it any wonder that, in a referendum on the status quo, so many opted for the Big Red Button?

These individuals are far from alone in being protected by the establishment, of course. Tony Blair is one of the most unpopular individuals, let alone politicians, in the country; but the man who helped lay Iraq to waste and works for torturing and murderous dictatorships is treated by much of the media as an oracle of wisdom.

If we are to have an honours system that is more than a sordid backslapping exercise, there are far more deserving recipients than Clegg, such as Maria Brabiner, a Mancunian bedroom tax victim who fought back. Surely those who struggle against injustice should be honoured, not those who impose it.

But let me offer some praise. Both Osborne and Clegg were in many ways also architects of the Corbyn project. They played critical roles in creating the army of the disillusioned who flocked to join the Labour party, and then in their millions voted against a bankrupt status quo. Thanks to them the self-serving, mutual appreciation society – otherwise known as the British establishment – may soon find its time is running out.

Yes this really is the end of Tory austerity – because it was never about economics in the first place

Ben Chu in The Independent

“The crisis”, the economist Rudiger Dornbusch once noted, “takes a much longer time coming than you think. And then it happens much faster than you would have thought.” A similar dynamic describes the progress of Conservative austerity politics.

The stunning failure of Theresa May in last week’s general election signalled to Tory MPs that the public have had enough of spending cuts. Though the deficit still stands at £50bn and the national debt is £1,700bn (and rising), austerity is over, we’re now told.

Seven years of Tory lectures that eradicating the deficit for the good of future generations is paramount suddenly fall silent. Politicians who have tarred critics as criminally irresponsible for suggesting an increase in public borrowing have now, in an instant, changed their tune.

People who insisted that if we did not balance the budget at the earliest possible date Britain was destined to become an economic basket case, like Greece, apparently no longer fear such a gruesome outcome. The collapse of the citadel of austerity rhetoric is truly remarkable in its rapidity.

But it was a very long time coming. It became clear within a year of George Osborne’s 2010 “emergency budget”, which forced through huge cuts in capital budgets and an intense squeeze on Whitehall departments and welfare spending, that the austerity medicine was hurting, not helping.
The economy was flatlining, teetering on the verge of recession. Whether this was primarily due to the crisis in the neighbouring eurozone or because the negative knock-on impact of the government’s domestic spending cuts was bigger than initially thought is still debated by economists.

But it doesn’t really matter. Even the conservative estimates of the Office for Budget Responsibility suggest that GDP growth would have been around one per cent higher in both 2010-2011 and 2011-2012, if the Coalition government hadn’t slashed domestic spending on the scale and pace it did.

With interest rates as low as they could go and the Bank of England struggling to support demand through money printing, this was a time for the Government to ramp up capital investment spending to offset the general slowdown – something numerous distinguished academic economists, and even the IMF eventually, urged. It would have made us all better off, putting idle resources to use.

But despite such a capital spending stimulus being permitted under his own fiscal rules, the former Chancellor George Osborne refused to do it. He told us that the international bond markets would lose confidence in the UK’s creditworthiness if we deviated from his original plan – a risible claim given that UK borrowing costs were plumbing new depths as investors around the world ploughed money into government bonds.

The reality was that Mr Osborne didn’t want to do it because it would have meant losing face. He would have had to admit that his previous pigheaded insistence that he didn’t need a fiscal “plan B” was wrong. The credibility risk was not to the UK’s borrowing status but his own political stock.

With the help of a cynically conceived and distorting subsidy to the housing market, the Conservatives managed to eke out a surprise victory in the 2015 general election. Drawing the lesson that austerity had become an electoral asset and useful stick with which to beat Labour, the Chancellor doubled down. He tightened his fiscal rules in a way that virtually the entire economics profession regarded as economically illiterate, making no distinction whatsoever between day-to-day government spending and productive capital spending, and also unveiled a round of large welfare cuts for the working poor.

Hubris set in. And nemesis soon followed. Unexpected parliamentary resistance mounted to Osborne’s welfare cuts, prompting a humiliating reversal on tax credits. At the same time the impact of extensive cuts to policing, schools, social care and the NHS finally became apparent in the form of deteriorating services. It took longer than expected, but it finally arrived.
Yet when Theresa May replaced David Cameron as Prime Minister and Philip Hammond replaced George Osborne as Chancellor last year, they didn’t reverse any of the inherited departmental spending or welfare cuts. And they went into the 2017 election with the same old scare stories about Labour’s reasonable capital investment plans, the same old specious lines like “no magic money tree”. Only now has the dam of Conservative denial crumbled.

Reducing the UK’s deficit, which had ballooned to 10 per cent of GDP in 2010 due to the financial crisis, was a necessity. Cutting it without regard for the state of the overall economy and the feedback effects on aggregate demand was unscientific stupidity and wanton vandalism. Austerity, as practiced by the Conservatives, was a policy driven not by economics, but by politics and ideology. The politics was baiting Labour. And the ideology was the desire to reduce the size of the state.

Who was to blame? The prime culprits were George Osborne and David Cameron of course. But Treasury civil servants were also enthusiastic supporters. It was enabled by two senior Coalition Liberal Democrats, Nick Clegg and Danny Alexander. It was endorsed by economists in the City of London and cheered on by Tory-supporting newspapers. It was abetted by ostensibly neutral political journalists, who unthinkingly succumbed to the fatally misleading idea that a government’s finances can be compared to a household’s budget.
They say victory has a thousand fathers whereas defeat is an orphan. But if we look carefully it’s clear the austerity failure of the past seven years has a sprawling parentage.

Of course Theresa May offers stability – just look at her unchanging positions on Brexit and general elections

Mark Steel in The Independent


The Conservative slogan for the election is “Strong and stable”. Because that’s the main thing we want from a government, strength and stability, like you get with Vladimir Putin.

Only idiots get obsessed with the details of what their leaders are strong and stable about, because the important thing is they’re strong while they’re doing it, and they keep doing it even if it’s insane.

Jeremy Corbyn should prove he can match their stability by burning down a public building at precisely half past nine every morning, and display his strength by punching people in the face as they run out the door screaming.

But this would barely touch the Government’s record of strength and stability. For example, every year since they took over in 2010, there has been a rise in the numbers dependent on food banks, going up every year, nice and stable, not haphazardly up one year and down the next so you don’t know where you stand. And weak governments might see hungry kids and feel a pang of conscience, but not this lot because they’re like sodding Iron Man.

George Osborne was so stable he missed every target he set, not just a few or 80 per cent, but every single one because business needs predictability, and when Osborne announced a target, our wealth creators could guarantee he’d come nowhere near it.

I expect they’ll also refer every day to their universal credit scheme, which is five years behind schedule and cost £16bn. You have to be strong to lose that amount and not care. Weak people would get to £3-4bn and think “Oh dear, maybe we should stop”, but not if you’re strong and stable.

The current Chancellor is nearly as impressive. After the Tories promised that under no circumstances would they raise National Insurance, Philip Hammond then raised National Insurance and cancelled raising it a few days later as it was so unpopular, exuding the sort of strength and stability that puts you in mind of Churchill.

Boris Johnson has exhibited the same values, displaying why we can trust him to stand up to dictators such as Syria’s President Assad. After one of Assad’s military victories, Boris wrote: “I cannot conceal my elation as the news comes in from Palmyra and it is reported that the Syrian army is genuinely back in control of the entire Unesco site… any sane person should feel a sense of satisfaction at what Assad’s troops have accomplished”, in an article headlined: “Bravo for Assad – he is a vile tyrant but he has saved Palmyra from [Isis]”.

Since then, the Foreign Secretary has steadfastly stuck with maximum stability to this view, with only the mildest amendment such as: “We must bomb Assad immediately; no sane person could ever wish him to control anything unless they’re a communist terrorist mugwump.”

What a model of stability, because most military experts agree it doesn’t really matter which side you’re on in a war, as long as you don’t compromise your strength or stability by not being in the war at all.

Then there was the Prime Minister’s line on not having an election, from which she hasn’t wavered one bit, and her insistence that we had to remain in the EU, which she’s adjusted a tiny bit to insisting we can only thrive outside the EU, but always either inside or outside, and never once has she suggested we must be somewhere else such as a split in the cosmos consisting of dark antimatter in which we can be both in and out of the EU due to time and space being governed by the European Court of Human Rights.

Thankfully the Labour Party is standing up to Conservative arguments with a dynamic campaign in which they explain how miserable everyone is.

The next party political broadcast will consist of Labour leaders walking through a shopping centre in Wolverhampton, pointing at people and saying: “Look at that bloke – utterly crestfallen. That’s a Tory government for you.”

It feels as if most people have already switched off in this election, so Labour’s best hope could be to answer questions by talking about an entirely different issue. So when Diane Abbott is asked whether Labour’s plans for education have been properly costed, she says, “I’m not sure. But I’ve been reading about koala bears. Did you know they’re not bears at all but marsupials, closer to the kangaroo?”

It doesn’t help that, as in any election, the Conservatives have much greater resources. If we lived in a proper democracy, these would be evened up.

Each newspaper would have to support a different party for each election, so The Daily Telegraph might support the Greens. And the letters column would read: “Dear Sir; with regard to current controversies concerning the use of television replays in Test match cricket, which jeopardise the ultimate authority of the umpire and therefore threaten the rule of law itself, it occurs to me the most sensible way to resolve these matters might be to renationalise the railways and install 40,000 wind turbines round Sussex. Yours sincerely, Sir Bartholomew Clutterbuck.”  

And if a wealthy businessman has money to donate to a party, the one it went to would be decided by lottery. So if Lord Bamford wants to contribute to society, he hands over £1m, then is thrilled to learn it’s gone to the Maoist Rastafarian Ban Fishing on Sundays Alliance.

The Conservatives would be delighted to give money to Maoists, because Mao was always strong and stable. You didn’t get him calling off a Great Leap Forward because he was offended by being called a mugwump. General Franco, Stalin, Ayatollah Khomeini – these are the strong and stable models to aspire to, not these weedy liberal Gandhi types, though Nelson Mandela might qualify as a figure of stability, as he kept to pretty much the same routine for 27 years.

George Osborne: history will not be kind to a man whose flaws led to Brexit

Larry Elliott in The Guardian

Had things turned out differently, George Osborne would now be counting down the days to becoming prime minister. His close friend David Cameron had pledged to stand down before the next general election and a smooth transition was planned. As the architect of Cameron’s unexpected overall majority at the 2015 election, Osborne appeared to have the keys to 10 Downing Street there for the taking.

Instead, he is living proof of Enoch Powell’s dictum that all political careers end in failure unless they are cut off in midstream at an opportune moment. Osborne will be remembered as the austerity chancellor who got the Brexit referendum campaign spectacularly wrong and was then brutally sacked by Theresa May.

His personal responsibility for last June’s referendum needs to be put into perspective. He was against the decision to hold a plebiscite and told Cameron he was taking an unnecessary risk. Once the decision had been taken, however, he took control of the campaign and opted for the same strategy that had proved successful in the Scottish referendum of 2014 and the general election the following year: a warning that a vote for change would have severe economic costs.

This time it didn’t work. In part, that was because the EU referendum was an opportunity to protest about low pay, welfare cuts and stagnant living standards. In part, it was because the Conservative-supporting papers – who had backed Osborne when he was taking on Alex Salmond and Ed Miliband – came out strongly against what they called Project Fear. In part, it was due to overkill.

When it became clear that many voters were impervious to the warnings, Osborne doubled down. He warned that the economy would plunge into an immediate recession in the event of a vote for Brexit. He said he would be forced to bring in an emergency budget that would raise taxes and cut spending by £30bn. But there was no last-minute swing to remain and when Cameron stepped down as prime minister on the morning after the referendum, Osborne’s days were numbered. A political career that saw him become an MP before his 30th birthday, shadow chancellor before he was 35 and chancellor before turning 40 was effectively over at the age of 45.

Osborne’s rise was smoothed by the financial crisis of 2007 and the deep recession that followed. As shadow chancellor, he had two main lines of attack: Labour had failed to regulate the City properly and had borrowed too much. 

The first charge was justified, and Osborne responded by giving far more power to the Bank of England to ensure there was no repeat of the reckless lending seen before 2007. The global nature of the crisis meant the second charge was specious, but Osborne showed himself to be a master of the political dark arts by making it stick.

As Labour turned in on itself during the leadership contest that followed the 2010 election, Osborne said he had no choice but to impose a tough austerity package because Labour had “failed to mend the roof while the sun was shining”. The new chancellor said voters should blame Gordon Brown for the spending cuts and the tax increases he had been forced to impose. Voters believed Osborne in 2010 and carried on believing him right up until the 2015 election.

Unfortunately, Osborne’s economic strategy proved less successful than his political strategy. The economy had been on the mend by the time of the 2010 election, but too much austerity too soon resulted in growth slowing down. Plans to tackle the deficit in one parliament proved wildly optimistic.

By halfway through the 2010-15 parliament, Osborne was in a spot. He had claimed – correctly – that the UK economy had been too dependent on debt in the years before the crisis, but now found that the economy was flatlining.

His solution was to get a moribund housing market moving by giving banks and building societies money to lend. A growing economy allowed Osborne to claim that his critics were wrong and that austerity had worked. Collapsing oil prices led to falling inflation and a surge in living standards that peaked around the time of the 2015 election. It was little more than a sugar rush, but Osborne was seen as a political wizard.

He capitalised on victory in 2015 by announcing a fresh assault on the deficit. There would be fresh cuts in spending by government departments and £12bn of additional welfare cuts in order to put the public finances back in the black by the end of the parliament. Osborne softened the blow by announcing a souped-up national minimum wage and outlining plans to create a “northern powerhouse”. At the Conservative party conference in October 2015, he made a clear leadership pitch with his “we are the builders” speech. It was the moment his career peaked.

Whatever his tenure as editor of the Evening Standard has in store, history is unlikely to be kind to Osborne, and not just because the referendum campaign went so badly wrong. He marketed himself as a one-nation Conservative, yet targeted the poor for spending cuts. He made deficit reduction the acid test of his chancellorship, yet austerity will continue deep into a third parliament. He said he would sort out Britain’s structural problems, but will leave parliament with the economy as dependent on debt and low-skill, low-productivity jobs as it has ever been. Those failures helped create the conditions for Brexit – and for his political demise.

Brexit - An Alternative Narrative

 John Pilger in The Hindu

The majority vote by Britons to leave the European Union was an act of raw democracy. Millions of ordinary people refused to be bullied, intimidated and dismissed with open contempt by their presumed betters in the major parties, the leaders of the business and banking oligarchy and the media.

This was, in great part, a vote by those angered and demoralised by the sheer arrogance of the apologists for the “remain” campaign and the dismemberment of a socially just civil life in Britain. The last bastion of the historic reforms of 1945, the National Health Service, has been so subverted by Tory and Labour-supported privateers it is fighting for its life.


Nothing but blackmail

A forewarning came when the Treasurer, George Osborne, the embodiment of both Britain’s ancien regime and the banking mafia in Europe, threatened to cut £30 billion from public services if people voted the wrong way; it was blackmail on a shocking scale.
 
Immigration was exploited in the campaign with consummate cynicism, not only by populist politicians from the lunar right, but by Labour politicians drawing on their own venerable tradition of promoting and nurturing racism, a symptom of corruption not at the bottom but at the top. The reason millions of refugees have fled the Middle East — first Iraq, now Syria — are the invasions and imperial mayhem of Britain, the United States, France, the European Union and NATO. Before that, there was the wilful destruction of Yugoslavia. Before that, there was the theft of Palestine and the imposition of Israel.

The pith helmets may have long gone, but the blood has never dried. A nineteenth century contempt for countries and peoples, depending on their degree of colonial usefulness, remains a centrepiece of modern “globalisation”, with its perverse socialism for the rich and capitalism for the poor: its freedom for capital and denial of freedom to labour; its perfidious politicians and politicised civil servants. All this has now come home to Europe, enriching the likes of Tony Blair and impoverishing and disempowering millions. On 23 June, the British said no more.

The London class

The most effective propagandists of the “European ideal” have not been the far right, but an insufferably patrician class for whom metropolitan London is the United Kingdom. Its leading members see themselves as liberal, enlightened, cultivated tribunes of the 21st century zeitgeist, even “cool”. What they really are is a bourgeoisie with insatiable consumerist tastes and ancient instincts of their own superiority. In their house paper, the Guardian, they have gloated, day after day, at those who would even consider the EU profoundly undemocratic, a source of social injustice and a virulent extremism known as “neoliberalism”.

The aim of this extremism is to install a permanent, capitalist theocracy that ensures a two-thirds society, with the majority divided and indebted, managed by a corporate class, and a permanent working poor. In Britain today, 63 per cent of poor children grow up in families where one member is working. For them, the trap has closed. More than 600,000 residents of Britain’s second city, Greater Manchester, are, reports a study, “experiencing the effects of extreme poverty” and 1.6 million are slipping into penury.

Little of this social catastrophe is acknowledged in the bourgeois controlled media, notably the Oxbridge dominated BBC. During the referendum campaign, almost no insightful analysis was allowed to intrude upon the clichéd hysteria about “leaving Europe”, as if Britain was about to be towed in hostile currents somewhere north of Iceland.

On the morning after the vote, a BBC radio reporter welcomed politicians to his studio as old chums. “Well,” he said to “Lord” Peter Mandelson, the disgraced architect of Blairism, “why do these people want it so badly?” The “these people” are the majority of Britons.

The wealthy war criminal Tony Blair remains a hero of the Mandelson “European” class, though few will say so these days. The Guardian once described Mr. Blair as “mystical” and has been true to his “project” of rapacious war. The day after the vote, the columnist Martin Kettle offered a Brechtian solution to the misuse of democracy by the masses. “Now surely we can agree referendums are bad for Britain”, said the headline over his full-page piece. The “we” was unexplained but understood — just as “these people” is understood. “The referendum has conferred less legitimacy on politics, not more,” wrote Mr. Kettle. “…the verdict on referendums should be a ruthless one. Never again.”

The kind of ruthlessness Mr. Kettle longs for is found in Greece, a country now airbrushed. There, they had a referendum and the result was ignored. Like the Labour Party in Britain, the leaders of the Syriza government in Athens are the products of an affluent, highly privileged, educated middle class, groomed in the fakery and political treachery of post-modernism. The Greek people courageously used the referendum to demand their government sought “better terms” with a venal status quo in Brussels that was crushing the life out of their country. They were betrayed, as the British would have been betrayed.

Perpetual forgetfulness

On Friday, the Labour Party leader, Jeremy Corbyn, was asked by the BBC if he would pay tribute to the departed Mr. Cameron, his comrade in the “remain” campaign. Mr. Corbyn fulsomely praised Mr. Cameron’s “dignity” and noted his backing for gay marriage and his apology to the Irish families of the dead of Bloody Sunday. He said nothing about Mr. Cameron’s divisiveness, his brutal austerity policies, his lies about “protecting” the Health Service. Neither did he remind people of the war mongering of the Cameron government: the dispatch of British special forces to Libya and British bomb aimers to Saudi Arabia and, above all, the beckoning of world war three.

In the week of the referendum vote, no British politician and, to my knowledge, no journalist referred to Vladimir Putin’s speech in St. Petersburg commemorating the seventy-fifth anniversary of Nazi Germany’s invasion of the Soviet Union on 22 June, 1941. The Soviet victory — at a cost of 27 million Soviet lives and the majority of all German forces — won the Second World War.

Mr. Putin likened the current frenzied build up of NATO troops and war material on Russia’s western borders to the Third Reich’s Operation Barbarossa. NATO’s exercises in Poland were the biggest since the Nazi invasion; Operation Anaconda had simulated an attack on Russia, presumably with nuclear weapons. On the eve of the referendum, the quisling secretary-general of NATO, Jens Stoltenberg, warned Britons they would be endangering “peace and security” if they voted to leave the EU. The millions who ignored him and Mr. Cameron, Mr. Osborne, Mr. Corbyn, Mr. Obama and the man who runs the Bank of England may, just may, have struck a blow for real peace and democracy in Europe.

Osborne is all for renationalisation – so long as the nation isn’t Britain

Aditya Chakrabortty in The Guardian

Steel yourself, for an unlikely source is about to spout a highly unfashionable idea. This week, George Osborne will come out for renationalisation.

You won’t hear the N-word from his lips, of course. Nor shall the chancellor go full Corbyn and seize some of the FTSE’s crown jewels. Instead, you can expect something far more in keeping with the spirit of 21st-century Britain. The government will indeed put some of our most vital infrastructure under state control – but the states in question will be France and China.

At some point during this week’s visit of president Xi Jinping – perhaps sandwiched between lunch at the palace and a trip to Chequers – Osborne shall confirm that nuclear plants will be built at Hinkley in Somerset and Sizewell in Suffolk, by the energy giant EDF, nearly 85% owned by the French government, and China. What’s more, Beijing will get a shot at designing and building its own nuclear facility at Bradwell in Essex.

Britain has made 'visionary' choice to become China's best friend, says Xi


Even as that announcement is made with all the fanfare available to the British state, the promises of privatisation will be revealed as lies. What were voters guaranteed by Margaret Thatcher and John Major, as they flogged off electricity and the rest of our publicly-owned utilities? More competition, lower bills and greater investment: all the plump fruit of a more dynamic capitalism.

A generation later and their children, David Cameron and Osborne, are handing Britain’s nuclear future back to the public sector – of two foreign countries – and paying handsomely for the privilege.

Take Hinkley, which at £24.5bn will cost as much as the London Olympics, Crossrail and a new terminal at Heathrow put together. Osborne will proudly blare that taxpayers aren’t chipping in a penny towards the costs. True enough, but his civil servants will quietly admit that we are guaranteeing up to £17bn of the total cost. In the screwy logic of Britain’s renationalised capitalism, the public assumes the risk while the corporations get to scoop the profits.

Because rest assured, there will be profits – all of us will be making sure of that. To secure EDF as a builder, Cameron guaranteed a fixed price for electricity from Hinkley of £92.50 per megawatt hour. That is around double the going rate for electricity on the wholesale markets, a price so high that equity analysts term it“financial insanity”. Change your supplier as often as you like, you and everyone else in Britain will be paying for that de facto subsidy in your electricity bills for decades to come. Britons will in effect be paying more for their energy so that French households can pay less. Indeed, so generous are the terms of this deal that the government of Austria is currently taking Britain to court on the grounds that it’s handing out state aid to EDF.

Holidaymakers in Burnham-on-Sea, Somerset, across from Hinkley Point nuclear power station. Photograph: SWNS.com

Yes, you read that last sentence right: the UK stands accused of dispensing state aid – to another state. How many times have you read about some age-old manufacturer and thousands of jobs going down the swanee, while ministers wrung their hands over European state aid rules? Now we know that such rules can be tested – provided the recipient is headquartered not in Port Talbot, but Paris.

When questioned about these eye-watering numbers, ministers will inevitably defend them as a price worth paying to stop the lights going out. But like the sanctity of the state-aid regulations, this is a bogeyman deployed to shut down conversation. True, Britain has a clapped-out generating system. Realistically, the price we face for that is not our TVs going dark in the middle of Gogglebox, or our smartphones no longer charging, but paying a lot more for our electricity. Except, with Hinkley, we’re guaranteed to be paying a lot more anyway.

As James Meek points out in his prize-winning book Private Island, the publicly owned energy-generating system was in very good nick, enjoying both investment and domestic engineering expertise. A generation of privatisation has seen off both of those. Sue Ion, a fellow of the Royal Academy of Engineering who has spent over 30 years in nuclear power, says, “We have no capacity to make a reactor design from scratch.”

Hinkley’s boss, Nigel Cann, boasted to this paper last year of the thousands of local jobs his plant would bring. He gave just one example: “We’ve already seen a local food co-op … set up in preparation for feeding what we estimate to be the 25,000 people” who’ll move through the site. One insider predicts that the British will largely be employed “digging ditches, laying concrete and running the pie wagon”. The big-boy jobs will go to those calling the shots – that is, the French and the Chinese.

A share-owning democracy, Thatcher promised, as she auctioned off BT. Britons were about to be put in charge of their economy. Another fib: in 1981, ordinary Britons owned over 25% of the stock market; they now hold less than half that.

She offered a capitalism in which private firms took risks and reaped rewards, while the customer benefited. What she delivered was very different. A system in which you can’t get 3G on trains, can’t rely on broadband or buses in the countryside, and in which train operators and energy firms compete not on service – but on how many tariffs they can bamboozle customers with. In which parastatal organisations from France and China, Germany and the Netherlands take an easy clip from ordinary British customers and plough the bare minimum back. This isn’t a dynamic capitalism, it is lazy, arthritic and very expensive.

And still Whitehall and Westminster, and their mini-mes in town halls up and down the country, carry on down the same road. Cameron proposes to sell anything left in the cupboard, even old student loans. Civil servants let Redcar and thousands of steel jobs go down the drain, as they lend millions to Roman Abramovich to keep his foreign steel plant going.

Nuclear power is merely the punchline to this whole rotten joke. We won’t build it, we won’t own it, we certainly won’t control it. But we will pay for it: in lost jobs, in vanishing taxes, in whopping great winter fuel bills.

George Osborne got away with his Big Lie.

William Keegan in the Guardian

What's now in the box? Osborne outside 11 Downing Street before delivering his last budget speech ahead of May's general election. Photograph: Dominic Lipinski/PA

The inquest on Labour’s electoral defeat will run and run, and the recriminations will no doubt persist throughout the party’s inordinately long timetable for selecting a new leader. But there is a limit to which candidates should surrender to the Big Lie that George Osborne, more than anyone else, has managed to get away with.

Take a report in the Times’s recent “investigation” into Labour’s “disastrous campaign”. We are told that “as early as 2010, Labour’s pollsters sent a memo saying the party should argue ‘the deficit is the number one challenge facing the country’ and back ‘tough spending cuts’.”

The truth is that the deficit was not the problem: it was the solution. What the much-maligned government of Gordon Brown did was to recognise this, and act accordingly. One of the principal beneficiaries of this sensible Keynesian response was George Osborne, who inherited the economy in which the prospect of a 1930s depression had been warded off. He proceeded to make wholly misleading analogies with the state of the benighted Greek economy and embark on a programme of austerity which Ed Balls rightly warned would stop the recovery in its tracks.

 It is not for me to join the chorus maintaining that Labour should have admitted that all the extra spending on schools and hospitals was a mistake. The most serious mistake was not to get across with sufficient emphasis that by far the biggest contribution to a rise in public sector debt was caused by the banking crisis. Moreover, as my old mentor, the Nobel laureate Professor Amartya Sen, pointed out recently in a lecture reproduced in the New Statesman: “Even if we want to reduce public debt quickly, austerity is not a particularly effective way of achieving this (which the European and British experiences confirm)”.

It is tragic that the Big Lie was not dealt with by Ed Miliband. Apparently he dismissed advice from Alastair Campbell, way back, that he should commission an independent report, by a respected figure, on Labour’s past spending plans – plans that had been supported at the time by Messrs Cameron and Osborne. Even the Times reflects that such a report “would almost certainly have cleared Labour of blame, with a minor dispute around whether the party could have spent less in 2007”.

But the deficit story was allowed to run and run, and poor Miliband failed to scotch it on at least two prominent occasions. Yet, as Sir Nicholas Macpherson, the Treasury’s top civil servant, has stated: “The 2008 crisis was a banking crisis pure and simple.”

That crisis was a cataclysm. It demanded a short-term approach to warding off catastrophic consequences, and a long-term approach to reducing a national debt that, notwithstanding the impact of the crisis, remained, as Sen emphasises, remarkably low by historical standards. As he says, put quite simply, for reducing the debt, “we need economic growth; and austerity, as Keynes noted, is essentially anti-growth”.

But such wisdom will cut no ice with a cocky chancellor who can hardly believe his luck at how Labour played into his hands. By winning a mere 37% of votes cast, he thinks he now has the support of the country for a renewal of austerity. He plans a budget which – by not treating capital expenditure as something to be financed over the lifetime of the project, but from a single year’s revenue – is going to place huge burdens on the public services. Just brace yourselves for the real cuts.

Osborne’s first austerity programme brought us reductions in capital expenditure when borrowing costs for much-needed projects were negligible. In the past year or so, he has finally woken up to this country’s infrastructure problems and – who knows? – before long may even find himself reinventing the National Economic Development Office.

As Sen points out, had the British public been frightened after the second world war by the debt ratio, which was more than twice what it has been in recent years, “the NHS would never have been born, and the great experiment of having a welfare state in Europe (from which the whole world from China, Korea and Singapore to Brazil and Mexico would learn) would not have found a foothold”.

We were helped after the war by a loan from the US (mainly) and Canada, which was finally paid off in 2006. And a war loan dating from the first world war was finally redeemed earlier this year!

Osborne has rightly attracted ridicule, even from friendly commentators, for his absurd plan to try to bind all future governments to a law that demands not just budget balance but budget surpluses during “normal times” – a phrase that opens up great scope for debate. Apart from anything else, it is evident from the frequent revisions to statistics, and therefore analysis made by the Office for National Statistics and the Office for Budget Responsibility, that it is often not obvious at the time whether one is indeed living in “normal times”.

Rather like his distinguished predecessor, Lord Lawson, Osborne has become obsessed by “rules”. But as one of Macpherson’s distinguished predecessors, Sir Douglas Allen, used to say, what matters is not budget balance, let alone budget surplus, but a balanced economy. That is not what is on offer from the present chancellor.