Friday, 21 August 2009

Britain is dying


As I walk about the small town in the South Wales valleys that I now call home, I sometimes reflect on how vibrant and alive this place once was. I am not going back too far with my memories, but today the town is dying.
When I first came here to Blaenavon there was a butcher, a baker, a shop that sold all manner of things including the candlesticks, a number of florists, newsagents, hairdressers, greengrocers selling fresh fruit & veg, a plethora of book shops, cafe's ranging from a greasy Joes to a bohemian meeting place. There was manned Police Station, a Fire Station, 3 petrol stations, 20 public houses, 2 Post Offices, a swimming and sports complex and a population of around 6,500 who had painfully recovered economically from the closure of the mining industry a decade earlier.
In its day it was much larger, with a peak in population in 1921 of 12,500 supporting the string of mines that were present on both sides of the valley, the finest steel works in Britain and an Iron works that today stands in ruins and is supported by Heritage funds as a museum. The largest of the mines, Big Pit, still remains, although unproductive as it is now open to the public as a living museum.

Today however, after 12 years of Labour interference and mis-management in the Economy and the daily lives of everyone who lives here, the town is dying. The Butcher sold up, the baker has gone, the shop that sells everything now sells very little, the book shops are all gone, so are the cafes. The Police station is closed after an experiment to only have it open 2 hours a day, the Fire Station is part time, only 1 petrol station remains, 11 of the 20 pubs are gone, 1 of the post offices has been up for sale for over a year, the Swimming pool originally built with miners funds has been torn down, sold to developers (who intend to build a new police station?) and an increasingly confused population wondering where their next job and income is going to come from.

Pushing them further are the regulations, the interference in their lives, the touring DVLA vans with the ANPR camera, the host of newly installed CCTV poles, the mass of double yellow lines, the cut back in bus services, seeing Heritage grants diverted elsewhere, seeing their public buildings sold to developers, lack of toleration for any minor infraction of the rules, a lack of police presence.

The town itself has for many years been used as a training ground by the utilities companies, with more test holes dug and road patches laid here than anywhere else I have ever seen. Ex miners and their families had retrained as carpenters, electricians, builders, window fitters as they followed government advice and gained work from the rise of the social housing trusts that sprang up in surrounding towns and villages, that work is now dry as the funds are no longer flowing. The majority of those who still work are in public sector jobs or with companies that support the public sector.
That the people of this town have a work ethic goes without saying, given the opportunities they are hard working, given the opportunities they are adventurous as they have proven in rebuilding their lives after the mine closures, but yet again the rug is being pulled from beneath them by the very politicians who say they support them. It is soul destroying to see a town where nearly 40% of the population is on benefits of one kind or another sinking slowly because the disposable incomes have gone, and over the past 10 years the entire local economy has become dependent on government work or companies that provide services to local government or quangos, even then there is only enough to survive the daily payouts.

This situation is not unique to the one place where I live, it is repeated in town after town right across the UK, consequently to look from the bottom up we can see this country dying on its feet. That vital element in the recovery of any economy, the sustainable element, disposable income, has either gone or is diminished to such a level that everything begins to grind to a halt.

The Libertarian Party sees the recovery in a very different light to the other political parties. We do not see that bailing out banks and factories with taxpayer funds is either desirable or sustainable, nor is the latest Conservative idea of community work for benefits (pure communitarian not conservative). We do not believe that central and local government should be the only employers, further increasing the burden on taxpayers to sustain this huge monolithic spending machine.

People here do not want more state involvement, they do not want more debt through bank loans to survive, and the few businesses that are left want to be able to survive and grow on profits, not bank loans, and to do this they need customers.

Libertarians want to see people who are working keep their earnings, not working on half pay, giving them the disposable income to spend in the Butchers, the bakers, the candlestick shop, the pubs and all the other shops in the area. We know that this will mean replacement and replenishment, providing orders and growth to the factories and support businesses, who in turn will need to order and buy more raw materials. This is how the local, and in turn the national economy will recover.

In order to do that, we have proposed along with major reforms in monetary and fiscal policy, a range of far reaching manifesto items not least of which is the initial reduction and then elimination of income tax, not fiddling around the edges of tax policy, but scrapping it altogether. Putting money back into the powerhouse of any economic strategy, purchasing power.

In order that businesses can rise to this challenge, and survive afterwards we also propose scrapping many of the regulatory controls that currently restrict both the opening of new business and the sustainability of SME's. A huge reduction in Corporation Tax, setting it at a 10% flat rate and including a commitment to investigate the possibility of a 5 year exemption from Corporation Tax for start-ups (not deferment, an exemption).

We know that 10 factories paying the headline rate of corporation tax of 28% will not sustain the economy of this area, but 50 factories paying 10% will. Growth will be self sustaining as more people enter the workplace to support that growth, there will be more disposable income being spent, spurring even more factories and business to support and service that spending. The best bit however is that it can be done without reliance on bank lending, as it will be real money flowing up the chain, real profits creating that growth.

When growth is based on turnover in this way, taxation receipts will actually rise through volume, rather than decrease as it is at present by taking an ever bigger percentage of a diminishing pie, allowing everyone to gain and remove the need for government to borrow.

The current level of spending by Government cannot continue, and the Conservative and LibDems are already to committed to either maintain or increase spending in many areas. This is unsustainable.

Only today the PSBR (Public Sector Borrowing Requirement) has been released for July. In one month alone government has overspent and had to borrow the unsightly sum of £8.016 billion.

That means the government was over-spending by more than £258 million per day last month, which is living beyond our collective means by more than £10 million an hour, 24 hours a day, seven days a week. (H/T Guido) This means that the productive parts of our economy can no longer support such a huge government, the overspending and the restrictive regulations. (To give an example of how desperate these regulations have become, read this, punishment for attempting self help)

I look forward to the day when with the help of the Libertarian Party this small town that I live in can enjoy once again the vibrancy that it once knew, where it and its inhabitants can again be proud and self sustaining and above all self regulating as we diminish the power of the state to interfere and control.

Copied in full from PJC.

Old Holborn is not a member of the LPUK for reasons unknown

33 comments:

Anna Raccoon said...

What an utterly brilliant, evocative post.........

A.B. Gordon said...

CCTV you can use an angle grinder to be rid of them, or less drastically smear glue on a Tesco bag (or Waitrose if you are posh). Intrusion? Yes. Less government? In what way? We will always have the feckless. Magic wand. No DSS. Now if you have no job, no money and after 3 days no food what mood are you in? Plods worst nightmare? An baadaaass Taig who is coming to pay his dues.

Old Holborn said...

Anna,

I have to agree.

I was once a member of the LPUK. Pretty soon they'll thank me for not being aligned with them.

LSP said...

Thoroughly enjoyed the post - echoes, I thought, of Reagan.

But lets not expect the government to vote itself out of power anytime soon...

caesars wife said...

very good article , sums up nicely what zanu labour have done

Wardog said...

Great piece and telling.

The continuation of Thatcher's social project has led to corporation take-over and the reduction in variety and community, subsumed in globalised invisible money.

The libertarians have some radical policies which at the very least attempt to rethink Britain and locaism v globalisation.

It's coming for a' that

electro-kevin said...

"We know that 10 factories paying the headline rate of corporation tax of 28% will not sustain the economy of this area, but 50 factories paying 10% will."

And the false premise of this article is based on the pie-in-the-sky assumption that factories can just be magic-ed up.

The problem is that the industrial revolution has followed the cheapest labour out of here. The chance to consolidate our advantaged position into one of a sustainable and highly educated workforce involved in high tech manufacturing base has passed us by.

Rogerborg said...

With respect, that's wank. You don't need to be "educated" to manufacture things - you just need to be trained. It's a very different thing, and India and China understand it. While their manufacturing is done in cities, the workforce is largely ill-"educated" migrants from the countryside.

Thickos are cheap to employ. Education just makes them uppity, but then again, so does giving them handouts. Our major problem is that the Welfare State hands out more to our dolescum than Chinese and Indian workers earn. We cannot compete, and nor should we want to: the industrialised parts of China and India are ugly shitholes. So are the rural bits, but at least they're pretty shitholes.

You think it's bad that so many British "workers" now just push paper for the State? Well, maybe so, but it beats huffing in solder fumes on an assembly line. Plus, free intarnets!

Don't fret, it'll balance out soon enough. When we're as poor as China and India, then we'll take our kids out of school and start sending them back down the mines and into the mills again. Happy days!

electro-kevin said...

It appears that it's not me that's talking wank. Though, with respect, not all of what you say is wank - just some of it is wank.

By pure coincidence my most recent post includes The Wanker's Song by Ivor Biggun. I'll dedicate it to you if you want me to, Rogerbog.

(WV - pedanticsemantic)

IanPJ said...

And the false premise of this article is based on the pie-in-the-sky assumption that factories can just be magic-ed up.

Over the past 10 years the majority of what was left of our manufacturing base left the UK and set up in Ireland. Why?

Because their Corporation tax is set at 12.5% at present. I say at present because the EU want to standardise it across all 27 member countries at 28.5%

For the UK to set a rate of 10% for corporation tax will see a flood of manufacturing and service companies coming into the UK to set up their factories and business. We would experience the kind of boom that has served Ireland very well in the last decade.

http://www.idaireland.com/why-ireland/tax/

Henry North London said...

unfortunately thats not going to happen in the next few years. OH just don't do anything silly please.

But the glue and tesco bag is a lovely idea

Marchamont Needham said...

Maggie's legacy.

Anonymous said...

No doubt ZanuCon will continue the trend of making every town GENERIC.

The Economic Voice said...

Great post! Some nice ideas. It's all about giving people a true hope in their future, other than lining the taxman's pocket.

But to achieve any of this we need first to disentangle ourselves from the EU's tangled and sticky web.

As for magicking up factories, strange that we can magically lose them overnight and they spring up in other places across the world. Why can't we reverse that?

electro-kevin said...

Ian,

And what of the factories that went to China, Poland, Brazil, Mexico ?

For grunt-work our labour costs are too high to be competitive - this is because our general standard of living is relatively high.

Over successive decades government has come to replace industry as the primary employer - be it through the NHS, or local govt or welfare agencies (both sides of the counter).

Over successive decades government has borrowed in order to sustain a good standard of living - promised in five yearly election manifestos. The govt debt is then erroded by a deliberate policy of inflation. Have you ever wondered why Chancellors actually want inflation ? One of the reasons is to diminish public debt - a consequence of this is the almost unique fetish that the British people have for property. About the only 'investment' that beats such a monetary policy of deliberate government debt and inflation is housing. And spying the ever upward curve of housing as a high performing investment the people jumped on the bandwagon big time and then housing took off as an industry in its own right, with an impetus which caused house values to inflate way beyond reality.

So now that is what the British economy is primarily about. High living costs and borrowing against false equity. Except that particular bubble appears to have been spiked.

Forget factories coming back here in significant numbers - even with tax relief. Until our standard of living falls to that of Chindia our over-expectant and under-skills 'work force' is not going to appeal.

Ghost towns and boarded up shops are what happens in a country that is in decline.

Too many people, too few skills, unrealistic expectations ...

... seemples.

Man in the Street said...

Great post. Both very depressing and a little hopeful. Nothing will change until the Parliament we know and hate today is disbanded in what ever method possible.

Rogerborg said...

I agree that was wank when I said it, but when you say it, electro-kevin, it has the ring of truth. There's no enmity so great as between anonymous people who very nearly agree.

What stumps me is what we can do to get ourselves out of this pickle. The "security"[1] and "services"[2] industries are pretty much the only exports that we have left. I'm one of the decreasing number of people who actually bring money into the country, but I'm increasingly aware of how much of it is spent subsidising the rest of you spongers.

Tourism brings in some money, but since zanuLabor are obsessed with destroying everything British, that might have a short shelf life.

I'm open to ideas about what we can make or do that actually brings money into the country rather than flushing half a billion a week down the Globalisation toilet.

[1] cattle prods and the IT to tell you which citizens to use them on.
[2] consult: it's like con plus insult

Henry North London said...

and whats more we are being fed a diet of rubbish so we can't revolt and the amount of form filling and bureaucracy keeps us busy from day to day and stifles any independent thought.

Its a shocking state of affairs

How did we let our guard down so badly

Britain has been sleepwalking into this for the last 36 years

Old Holborn said...

Hold on Kevin

Name a quality product from China or India.

Now name 5 from Germany or Switzerland.

Anonymous said...

OH, I still vividly remember an episode of "Thats Life" where they dismantled a stereo from an upstart Japanese company called Sony. We all laughed to see the "stereo" was created by a toilet roll tube. Sony are number 1 now. Who pretends they don't own Sony stuff? China will eventually produce its own Sony, Toyota, or Samsung.

The commentators are largely correct above. The situation is desperate. I work in industry and have over 30 years seen the steel mills, car plants, engine works, earthmoving equipment plants, etc all close. The new economy is big crappy paper mache houses and Asda cheap nissen hut retail parks sitting on the old sites. In a generation or 2 we won't make anything here.

And why has this happened? I think it is inevitable. Mass manufacture depends on cheap resources. Those include labour, but also transport, raw materials, environmental standards and a host of other things. In our country taxes are high. Many are foisted on business. Rates, fuel taxes, inspectorates from health and safety to environmental protection are charged to business. It is only where a business has invested a lot of capital. or where there is a strategic necessity for it to exist, that we still have any presence. So we make guns and warplanes, or the robots make the cars. I don't think the process is reversible.

Who in their right mind would start up a factory in the UK today when they can trade from anywhere in the world? My DHL driver told us he regularly delivers single pairs of shoes that left China the night before. Nottingham is no further away than overnight from me.

So we are left now to address the social issues here. How big a tax burden is sustainable? What can we do about the underclass? Is it acceptable for some people to take the rest of us for a ride - MP's and junkies both.

Forget industry. Its not coming back.

Rogerborg said...

China: Most of the equipment that you just used (successfully, apparently) to ask that question. Many "Japanese" motorcycle engines and components. My £720 motorcycle from Guangdong Province, on which nothing has broken except the bits that I've fiddled with.

India: Honda CBF-125. Tata Consultancy Services - now they're gouging us.

If you're thinking of German cars, then think again. They're still marketed based on their historical quality, but so many components are now outsourced to the lowest bidder that they're just as prone to failure as any other marque. They make good lease cars, but only because it's someone else's problem when they break and their depreciation is relatively low - but only because there's still a perception of quality.

The Swiss are good at chocolate and money laundering, granted.

Old Holborn said...

Rogerborg

The Swiss export industry consists mainly of pharmaceuticals and engineering.

They run a very healthy trade surplus despite being landlocked within the EU and with some of the highest wages in Europe. They are a low taxation economy to boot.

They have the most educated citizens in Europe, the healthiest and wealthiest citizens in Europe, the most democratic electoral system in Europe and are unsurprisingly the happiest people in Europe.

Lets break that down again.

Education, democracy, low taxation.

So simple

Jonathan Cook said...

A great article - and so familiar across the whole of Britain.

I'd go further - the only shops that can afford to trade are these faceless chains which make every town identical, dull and depressing.

Also - check out the Renegade Economist - who also supports removal of income tax in favour of taxing land owners:

http://www.youtube.com/watch?v=ki-Od1MMa78&feature=channel_page

Dick Puddlecote said...

Great article, Ian.

@Henry NL: the amount of form filling and bureaucracy keeps us busy from day to day.

Too right. I started my company in 1995 with no major capital. Today I employ 80 staff and turn over close to £2m pa. If I tried to do the same in 2005, it would quite simply have been impossible. There are now so many barriers to the market that without a huge amount of startup capital, entry is blocked.

And all of that has come directly from central government.

bofl-too lazy to sign in! said...

industry in the uk is finished.....only 11% of the economy.the costs for setting up any business are incredibly high-rent,rates,equipment.......

true taxation for the individual is around 85%!!!!!!!!!!

think about it-almost everything we use or buy is taxed.......

this money is spent on short term fixes and stolen by the 'elite'......

all our politicians are criminals who feather their own nests ........

there will NEVER be enough traditional jobs due to technology....so we need new thinking.........but here in shitville uk we will just descend into poverty........

nearly 40 years of oil and gas-
£ TRILLIONS pissed away and stolen......what will replace this money?

answer= nothing!

get out while you can!

narcolept said...

OH, I agree with most of what you say about Switzerland, but it isn't exactly free'n'easy. The laws are many and various, and their immigration rules are enforced with extreme rigour. It doesn't bother me, because I'm too cowardly to risk annoying anyone, but a freer spirit might feel a bit cramped.

Wyrdtimes said...

Britain is dying eh? Well I for one wish it would fucking hurry up.

English taxes for England
English law for England
Home rule for England

Fausty said...

Very well-crafted and argued. It makes perfect sense.

The LP's manifest says it would protect intellectual property rights.

A Lew Rockwell interview, raises some interesting questions about the effect on the economy and innovation.

Indeed, many such rights have been purchased by large corporations in order to stifle competition, thus burying potentially useful innovations.

electro-kevin said...

OH - my car came from India (Suzuki).

Gillette razors come from China.

Roger - no emnity hear. I like a good wank.

Colin MacDonald said...
This comment has been removed by the author.
Rogerborg said...

>Education, democracy, low taxation.

Nazi gold, immigrants Not Welcome Here.

Just for completeness.

Old Holborn said...

Immigrants are very welcome in Switzerland. 30 % of the population were born overseas.

Unemployed, unskilled 3rd world criminal cretins however....

Anonymous said...

All by design, we are being led towards civil war.

The Elites don't want high IQ western Europeans.

http://davidduke.com

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