The EU provides us with our balance of payments problem and harms our steel industry

Yesterday’s figures for the UK’s balance of payments made bad reading by the standards of this worrying series of figures. The deficit reach a new high of 5.2% of national output for last year, and 7% for the last quarter. These are records we do not want to break.

The deficit had three main components. There is first the running deficit on government  account. Overseas aid payments combined with payments to the EU which we do not get back amounted to 1.4% of GDP or one quarter of the total deficit. As government policy is to continue to increase these payments in line with economic growth only Brexit could reverse this trend and cut this part of the deficit.

The second is the gap between money we have to send abroad to foreign owners of property, businesses and shares in the UK and the money UK investors receive as interest and dividends on their overseas investments. The gap is likely to carry on growing. All the time we run such a large payments deficit it means more foreigner buying more UK assets and expecting more interest, rental  and dividend income to be paid to them.

The third is the gap on trade. The UK is still in trade surplus with the rest of the world, but is in massive deficit with the rest of the EU. Common EU policies from fish to steel and from farming to energy are pushing the UK into more and more dependence on imports. We now import electricity which we could produce at home, import steel and steel based products especially from Germany, import more fish as overseas vessels take more of our resource and import food as the vagaries of the Common Agricultural Policy do not always help us.

I would like the UK to adopt a policy of improving our balance of payments deficit. To do so it will be easier once out of the EU. We get the immediate benefit of not having to make contributions. We can then adjust domestic policies to help our industries more than the EU does. I appreciate that the UK has added to some of the difficulties created by the EU common energy policy, but the EU policy constraints are now being used as the main reason we cannot change. It is also the case that the UK feels very circumscribed in responding to the steel crisis by both the state aids rules and the public procurement policy. The problem with interventions in markets like the heavy interventions in energy cause distortions which then lead to the need for other interventions to try to offset them

This entry was posted in Uncategorized. Bookmark the permalink. Both comments and trackbacks are currently closed.

44 Comments

  1. CHRISTOPHER HOUSTON
    Posted April 1, 2016 at 5:50 am | Permalink

    The Balance of Payments problem is one thing.But to Joe Public the unemployment rate is kind of interesting. In the North-East of England it is about 8% ( 2015 ) . In 1977 it was about 8%. There’s stability for you. Nearly half a century. Timeless Britain.

    The STAY campaign would point out the unemployment rate is 10.5% in France (2015 ) ; 12.4% in Italy (2015) and 22% for Spain (2015). Obviously the Stay Campaign thinks 8% is better in than out. But how come they are not fervent in campaigning for the poor of Spain, France, and Italy which any refugee can tell you has very bad welfare benefits by comparison. Why doesn’t the UK Stay Campaign campaign for Leave… for Spain, Italy and France? Do they hate them even more than the people of North-East England?

    • Jerry
      Posted April 1, 2016 at 8:08 am | Permalink

      @CH; But what is the UK under employment figures for 2015 and 1977?… Many people have jobs but they are 16 hrs or less part time, zero hours contracts or (just about) qualifying as self-employed, the majority of people who had jobs in 1977 were in full time work or when in part time work it was usually above 16hrs.

      • Cliff. Wokingham.
        Posted April 1, 2016 at 6:17 pm | Permalink

        Jerry,

        I think you make fair points but there is another factor which no one wants to mention because it is not PC…..Today, far more women work, which they did not do forty or fifty years ago. It forms part of what I call the employment perfect storm, let me explain….Many of our labour intensive industries have gone overseas, many roles, which in the past have been performed by humans, are now done by machines, we have many more newcomers arriving in the UK and we have far more women wanting to, or having to, work. These factors keep wages low in many industries to such an extent that a Conservative (sic) government needs to intervene against the market in order to get pay up…..Of course, our industrial costs are much higher than those of many other countries because we expect our government to supply more and more goodies and to perform more and more roles so, at one level or another, these have to be factored in to our costs per man hour and thus why we have priced ourselves out of so many industries.

  2. Ex-expat Colin
    Posted April 1, 2016 at 5:54 am | Permalink

    Can we not simply rename UK as Greece_2? Lets buy German made arms as well and swell the numbers of foreign born plumbers buying Porsche Cayennes.

    I note NS&I reducing prizes and interest on ISA’s again. Govt issuing more bonds and thus the people pushed further out of financing (enjoying) their own country.

    BBC R4 seems to have hit on something to do with British Steel dying? About seeing it coming since 2007 as China and India develop…ummm, steel production. I have a suggestion for the 3 mile long P. Talbot plant…flatten it for another Shopping Mall? Multiple M&S outlets selling only costly over/under size stuff in one place…wow!

  3. Lifelogic
    Posted April 1, 2016 at 6:00 am | Permalink

    Exactly it will certainly be far easier to address these issues outside the EU but we will need a sensible UK government too.

    The main problem for the UK economy is Osborne’s totally idiotic and misguided steering of the economy. Today we have his absurd job destroying national minimum wage. In effect this prices many out of the job market totally, while being in effect a further tax increase on businesses (only 1/3 of the pay increase makes it into the pockets of the workers the rest is taken back by the state in tax and reduced benefits). This leaves businesses far less to invest in their businesses, making it very hard for them to improve productivity.

    It also destroys their incentives to invest for the future why bother if it is all going to be taxed of you anyway.

    They also have the idiotically designed Workplace Pension to fund and administer yet another damaging distraction for them.

    Osborne’s absurdly high tax rates, his IHT ratting, his expensive energy policies, the absurd complexity of his tax system, his endless waste on daft projects like Hinkley Point, offshore wind, HS2/3, endless greencrap subsidies, Cameron’s bonkers happiness index, bloated government and Hs2 all harm the economy hugely. Meanwhile they deliver generally appalling public services like the NHS and education which deteriorate further by the day. All made even worse by open door low skill/low paid/net liability immigration.

    The sooner this socialist, IHT ratting, pension destroying, landlord & tenant mugging, wealth attacking chancellor goes the better. Hopefully he will resign the day after the Bexit vote on 23rd June.

    Lower simpler tax rates will produce a virtuous cycle with higher tax receipts. Osborne approach is the hugely damaging reverse of a death spiral. Even higher taxes and tax complexity killing the golden goose of which the state sector feeds.

    • mickc
      Posted April 1, 2016 at 8:54 am | Permalink

      Yes, indeed! Who needs the LibDems when we have Cameron and Osborne? And no, Boris is not the answer!

      My money is on Corbyn winning the next election, probably forming a government with the SNP.

      • Know-dice
        Posted April 1, 2016 at 12:52 pm | Permalink

        Ouch…:-(

    • Bazman
      Posted April 1, 2016 at 4:20 pm | Permalink

      Giving more money tothe rich via IHT is a socialism for rich as I have pointed out to you before. You are repeating the same black propaganda as per. Not ratting but sensible and should increase the scope lower the threshold for scrounging relatives.
      You assume all tax cuts bring in more taxes not true and again see low paid low skill jobs should be low paid as you have no idea of how to increase their pay or believe they should by anything else than the minimum anyone employer can get away with.
      Scrounging corporate welfare is something you have never heard of and choose to believe cannot exist. Silent on housing inflation and subsidypiad for by taxes aren’t we..?

      • APL
        Posted April 2, 2016 at 12:35 pm | Permalink

        Bazman: “Giving more money to the rich via IHT is a socialism for rich as I have pointed out to you before. ”

        Like Humpty Dumpty, you use words and apply any meaning you choose, consequently when you try to string a few together, the result is meaningless nonsense.

        If you tax somebody’s estate, you are taking money off it if you tax the estate at a lesser rate, you are taking less money. In no non insane universe, can taking less money for an entity be described as a subsidy.

        Stop too, trying to rehabilitate the word Socialism.

        • Bazman
          Posted April 3, 2016 at 10:50 am | Permalink

          Taking less money for an entity be described as a subsidy? Yes it can if doing so has a cost to society and a benefit only for the entity, hence the reason for taxation.

  4. Mike Stallard
    Posted April 1, 2016 at 6:09 am | Permalink

    Everyone knows that we cannot continue to live like this. Sooner or later the debts will be called in and then we will be enslaved to the people who want their money back.

    Greece, Spain and Italy and Portugal are very good examples of countries which have enjoyed living off other people’s money and who are now having to pay back their debts.
    It is not pleasant. They cannot even keep out the flood of refugees in Greece, and Spain is now a wasteland of high rise blocks which stand largely empty. Italy too now has a severe immigrant problem and no ability to deal with it because it is broke and its democratically elected government have been simply replaced by an EU one.

    I should have said myself that debt is the greatest of all the challenges which we currently face.

    • alan jutson
      Posted April 1, 2016 at 8:22 am | Permalink

      Mike

      Yes I remember well the days of Harold Wilson, when monthly trade figures were deemed the most important facts for the state of the Countries economy, and the start of the I am backing Britain campaign.

      Shame no one seems to mention them now, almost as if it does not matter. !

      • Denis Cooper
        Posted April 1, 2016 at 1:13 pm | Permalink

        But that was when the government was still trying to maintain a fixed exchange rate for the pound, and when they failed it was a dramatic crisis.

        • Jerry
          Posted April 1, 2016 at 3:40 pm | Permalink

          @Denis Cooper; Was it a “dramatic crisis”, or a storm dreampt-up in a ‘hot-metal’ ladle on the right hand side of Fleet Street EC4? For the majority, life went on as before.

      • Stephen Berry
        Posted April 1, 2016 at 5:15 pm | Permalink

        Alan, I too remember the days of Harold Wilson when a bad month’s trade figures would mean a jolly little lecture from Jim Callaghan about how we all needed to pull our socks up. But Denis is right. Now that Sterling is floating against other currencies, the pound can fall on the foreign exchanges if foreigners don’t want to use it to buy British goods. In that way, the British goods become cheaper and more attractive to foreigners and this bogus balance of payments crisis nicely solves itself.

        Getting rid of the contribution to the EU and government overseas aid don’t need the balance of payments justification. They would be worth doing even if we had a surplus on current account.

        As long as we run a budget deficit, we are going to need our debt to be financed. It’s not a good thing that the Bank of England buys all our gilts, so we can thank foreigners for chipping in here. But they will need Sterling to be able to do this. As the budget deficit and (hopefully) the overall debt come down, foreigners will buy fewer gilts and the deficit on current account should fall somewhat in this regard.

        I have always suspected that much of this balance of payments ‘gap’ is down to the fact that UK overseas assets are still calculated at book value. Some 20 years ago, the Institute of Economic Affairs produced a well-researched pamphlet claiming that UK overseas assets registered at book value massively underestimated their true current value.

      • Cliff. Wokingham.
        Posted April 1, 2016 at 6:26 pm | Permalink

        I agree Alan….I have mentioned the I’m backing Britain campaign on here a few times now.
        I do wonder whether it would still be practical to rerun it?….Do we actually produce enough in our country now that we could only buy British made goods if we wanted to?
        I wonder whether “the balance of payments” figures would now be worked out just for the UK or The whole of the EU area? Perhaps the balance of payments figures will be more important after we vote to leave the EU in June.

    • Mitchel
      Posted April 1, 2016 at 9:33 am | Permalink

      Absolutely.It is debt which is enslaving us,reducing our flexibility and options and destroying our independence.But that’s surely what western governments want-their populations subdued,frightened they will lose all the goodies they have bought on the never-never,if they don’t tow the line.It’s only when people have nothing,or have lost everything that they rise up and that may yet come to us when our creditors realise that we cannot trade our way out of our accumulated debts and all our prized assets have been sold.

      By the way I don’t believe either Greece,Spain,Italy or Portugal “are now having to pay back their debts”;it’s more a case of them not being able to increase their debts at the rate they were or,in Greece’s case ,having part of their debt cancelled.The only European country I am aware of that has significantly reduced its external debt over the past couple of years is Russia(assuming you accept it as European!)

    • Jason Blake
      Posted April 1, 2016 at 12:31 pm | Permalink

      Debt is not so much of a problem as for the time being we have our own currency, and our borrowing costs are still extremely low. We can effectively borrow from ourselves. The economy is not the same as a household budget, where this is not possible. A declining economy is a major threat, we need to stimulate jobs growth and not worry so much about the national debt. Our debt is still much lower than it was post war, and we had a boom post war as the population were working at rebuilding the country. Austerity destroys jobs, so the economy declines and we then have nothing useful to show for it except for a higher welfare bill. However sensible infrastructure projects, housing and renewable energy projects are potential areas the government should be stimulating. We must stop selling off utilities & core businesses that provide steady income & jobs over the long term.

      Getting out of the EU is essential to reduce the size of the non productive part of the economy. Once out, we should also set to work on the tax havens that are robbing us. The country should pull together and stop purchasing products from companies that do not pay their fair share of tax in the UK. This will be easier when we are out of the EU.

      A serious strategy of building more houses urgebntly needs to be adopted, not just lip service. A land value tax also has to be implemented as well as a simplified route to self building. The cost of housing has to fall, if interest rates have to rise, many will suffer.

      Helicopter money will probably have to be used to stimulate spending & inflation, as well as a much reduced BTL portion of the housing markets. We can’t have the older generation trying to live off the younger generation indefinitely.

  5. Lifelogic
    Posted April 1, 2016 at 6:10 am | Permalink

    Osborne says the national living wage is the policy he is most proud of. What a misguided socialist dope he must be. How can one be proud of a job destroying, productivity damaging, economy damaging, tax increase?

    Why can he not just cut out some of the vast government waste and incompetence for a change?

    The way to better productivity is to leave companies alone and stop distracting and instructing them – they know best how to improve their productivity just leave them alone.

    • Know-dice
      Posted April 1, 2016 at 7:09 am | Permalink

      Clegg also says how proud he is that the Lib Dems pushed through 0.7% of GDP to go to International Development – They are just so good at throwing away our (borrowed) money…

    • Iain Moore
      Posted April 1, 2016 at 8:18 am | Permalink

      Sorry I disagree. The problem we have in the UK is the unlimited supply of cheap labour , made even cheaper by the Government subsidising wages with in work welfare payments . This means employers don’t have to invest in productivity ( a report this morning described how British supermarkets change prices by people going around changing price labels , where as French supermarkets have electronic displays which just requires someone to press a button). But don’t take this as my support of the minimum wage , I for I don’t, I think it a wrong headed policy, but while we have a truly insane mass immigration policy, a policy our ruling classes have absolutely no desire to sort out, then something has to be done to shore up wages at the bottom.

    • Bazman
      Posted April 1, 2016 at 4:21 pm | Permalink

      Like massive subsidies for landlords and property owners who produce nothing?

      • Cliff. Wokingham.
        Posted April 1, 2016 at 6:29 pm | Permalink

        Boo hoo hoo…..They’ve got something I haven’t got; take it off of them Nanny:-(

        • Bazman
          Posted April 2, 2016 at 12:36 pm | Permalink

          Boo hoo hoo! They’ve got something I haven’t got; take it off of them Nanny!
          That will be my taxes being paid on corporate welfare to private landlords sold houses at knock down prices will it?

  6. ian
    Posted April 1, 2016 at 6:56 am | Permalink

    That has always been the policy of government since 1979, sell everything and import millionaire, there is no turning back now its set in stone, land registry next with profit of 50 to 100 million a year.
    I always told people that the home deficit did not matter you can always fiddle the books but the balance of payment has to be paid.

    When you set out on this plan you cannot stand there now and say, you had no idea what would happen with policy like that, apart from the EU you have backed policy all the way, even your job at Rothschild bank was head privatization, its all got to go even steel that belong to tata a overseas company in fact well over 50% is owned by oversea companies and when you sell the land and buildings and lease back the buildings from overseas pension funds and all infrastructure from now on to be financed by overseas companies, government and pension funds because you are broke and say it dose not matter even the people houses are treated as government assets for borrowing.

    You start out on this road so you must keep going that is borrowing and selling till nothing is left.

    Reply My job in the mid 1980s was Head of Non UK global privatisation. I did not work in UK schemes for profit.

    • Know-dice
      Posted April 1, 2016 at 7:12 am | Permalink

      And has been found out to our children’s cost – you can only sell school playing fields once and end up with generations of unfit obese children…

      • Antisthenes
        Posted April 1, 2016 at 12:58 pm | Permalink

        Obesity is not about exercise or the food we eat it basically is about wealth. As we become better off we can afford to consume more so we do. Simple as that. It does rather point to the fact that poverty does not actually exist in the UK and many other places in the world any more.

        The health police who want to tax us to change our habits forget that they have no right to interfere with our rights and in this case it is the right of choice. That is the road to tyranny. Most of those who find the idea of tyranny abhorrent are the same ones who demand that people let others take their freedom of choice and other things away from them. Human logic is very puzzling. To me at least.

        • bluedog
          Posted April 1, 2016 at 8:29 pm | Permalink

          Yes but no. Obesity is indeed a life-style choice of the individual but the implications are that the obese become a direct cost to the state through the NHS. It therefore seems reasonable for the state to introduce price signals with a view to preventing the individual becoming a burden on the state through obesity. In principle this is no different to the price signals that the state offers to individuals with a view to encouraging them to work, rather than sitting at home becoming obese while on the dole.

    • Anonymous
      Posted April 1, 2016 at 8:00 am | Permalink

      The houses cannot be sold in quick time and if they were their value would slump.

      It is false to base our creditability on housing stock.

    • mickc
      Posted April 1, 2016 at 9:00 am | Permalink

      Ian,
      So how much of the state owned industry should have been kept? British Leyland? British Shipbuilders? National Coal Board?

  7. Antisthenes
    Posted April 1, 2016 at 7:13 am | Permalink

    The balance of payments gap is not as serious as you would have us believe unless of course you do not like foreign investment. Money may flow out but capital flows in. The wealth of a nation is not predicated on how large the exports are. Ireland used to export eight times as much as it imported and at the same time became poorer. People bemoan foreigners buying up British business then actively encourage foreigners to invest in the UK. Perverse thinking me thinks.

    Of course exporting is good it provides employment and aid growth so is to be encouraged but at the end of the day consumers must be allowed to buy their goods and services from where ever they find the price and quality they want. The EU is another matter not because they sell us more than we sell them but because of the restrictions they put on us and the tangled messes they have created that we are squandering our wealth on supporting. It could be said that our contribution is a capital investment. If it is then it is a bad one because the return on it is very negative.

  8. Ian Wragg
    Posted April 1, 2016 at 7:40 am | Permalink

    Year 6 economics question
    How will destroying our steel industry affect our balance of payments.
    Answers on a single pinhead please.

    Obviously not covered at Oxford.

  9. Anonymous
    Posted April 1, 2016 at 7:51 am | Permalink

    We sold off our big name brands, utilities and infrastructure. They said it was OK because “the businesses are still in the UK”.

    The chickens have come home to roost now !

    All the profits are going abroad and we are now an 80% service economy (whatever that is.)

    It’s only a matter of time before the housing ponzi grinds to a halt and then no government will be able to hide it.

  10. Shieldsman
    Posted April 1, 2016 at 7:54 am | Permalink

    This has all been brought about by bad decisions of incompetent politicians of all parties. Put quite simply the people that enter politics are in the main not up to the job. They lack common sense, pride in the United Kingdom, its people, culture and history, being plagued with political correctness.

    There is only one answer we must leave the EU and the current Government leadership must change.
    Without your own steel manufacturing you become a third world country. Cameron is doing his Nero act.

  11. Harry
    Posted April 1, 2016 at 8:41 am | Permalink

    Mr. Redwood, while being part of the EU surely contributes to the problem, the real problem is that Sterling is too strong. Let me explain why: There is a structural limit to the total amount of possible investment that can be made in productive capital, and this limit is determined mainly by the nation’s level and distribution of its capital stock relative to the development of technology. Structural reforms, education, and increased market flexibility can maybe increase this “speed limit” on productivity growth, but mainly over the long-run.

    In a situation of growth productivity growth “at the speed limit” and full employment, we would expect that financing a government budget deficit while the central bank kept interest rates low would cause inflation, since the central bank would have to print money to keep buying bonds that have a rate of return below a rate of return available in private investment. If the central bank didn’t keep rates low, the rate of return on government debt would increase and therefore crowd out investment in productive capital.

    What is remarkable today is that inflation has been consistently below-target while interest rates have remained low, full employment (of labour and investment) has been achieved, and the government’s deficit is quite large.

    What this means is that effectively, foreigners are willing to invest in Sterling-denominated investments despite low returns. The current account deficit equals the capital account surplus, and the mechanism by which these two measures are kept equal leads to demand pressure on Sterling, that is to say, on the foreign-exchange value of Sterling with the “rest of the world” in aggregate.

    Essentially, the problem is that the UK is attracting too much of global savings, and this extra saving is leading to rates of investment above the maximum amount of productive investment and thereby leading to bubbles (in real estate in the UK, for example). It is ironic, but George Osborne’s obsessive attempts to attract foreign direct investment are pushing the value of Sterling up, precisely in the wrong direction.

    The right answer might be a currency intervention on the part of the Bank of England to pursue a policy of devaluing Sterling (to counteract the massive influx of foreign savings) until the current account deficit drops to near zero. If this is outside the purview of the Bank of England, the Chancellor of the Exchequer could establish an instrument, funded by ordinary gilts, that will purchase foreign-denominated assets in order to push down the value of Sterling in a controlled manner.

    Essentially, this fund established by the Chancellor would act to move this excess foreign saving out of the UK in a controlled way.

    Reply Devaluing could also make the UK more attractive to foreign savings after the fall. Devaluing may help boost exports, but it does not reduce the government’s spending on overseas aid and EU contributions, nor does it necessarily reduce the deficit on investment account. Whilst our income from abroad will be worth more there is still the increase in the stock of inward investment moving the other way

    • Keefee
      Posted April 1, 2016 at 6:49 pm | Permalink

      Are our payments to the EU dependant on £/Euro exchange rates?

  12. Leslie Singleton
    Posted April 1, 2016 at 9:51 am | Permalink

    Best I gather, you and others allow 100 pence on the pound in value to the “money we get back” from the EU. Is there any analysis of this money? I for one suspect a lot of it is money down the drain. Thus I have recently being going for long walks in the countryside and to give some structure I have been finding the old WW2 pill boxes and gun emplacements that are mostly still where they were left and in lonely unvisited places. I cannot speak for the whole line of them but a lot of them to my surprise have shiny solidly ie expensively constructed EU information boards with maps explaining what the boxes are, who manned them and how they were to stop invading German tanks sweeping in across the East Anglian countryside. It was proudly made very clear that all this was funded by the EU. I find the idea of presumably Brussels deciding to dole back our own money on such as this offensive and wonder as I say what the rest of the money we get back looks like.

  13. graham1946
    Posted April 1, 2016 at 10:02 am | Permalink

    It seems that private savings are falling again and borrowing is going up. With the constant ratcheting up of house prices in another bubble and non existent interest payments on savings, seems like another perfect storm is on the way. This time, though, there is no money in the kitty for bailouts and it is doubtful whether we could borrow enough. It will have to be confiscation taxes next time.

    Looks like 2008 is coming again with knobs on. No wonder Boy George is getting his excuses in early. We used to have boom and bust in regular cycles, but this seems to be getting ever quicker and more deadly now.

    The posh bioys will just walk away with their pensions and directorships, and probably big EU jobs so that’s all right. Meanwhile the ‘also rans’ who are the majority will carry the can again.

    We get the government we deserve, says the old saw. No, we get the choice we are offered by the powerful and the last 20 years or more has been the poorest ever offered.

  14. Bert Young
    Posted April 1, 2016 at 10:18 am | Permalink

    The Deficit figures are alarming reading and a continuing reminder of the inability of Government direction and control . Once the world returns to a more realistic cost of borrowing and the bond markets reflect this , we are in for an enormous shock . We cannot allow outside directives to decide our cost of energy and our supply of vital resources ; we must take the view that we do have an emergency condition and must take matters under our own control . Restricting imports and turning our backs on the EU is one good way to start .

    For some time – post Suez , there has been a determined attack on this country’s place in the world ; the USA wanted us diminished followed , later , by the politicised and Germany dominated EU . It has now reached the point where we must respond more forcibly if we are to survive in any reasonable shape . Discarding the Commonwealth in favour of what was, and is no longer, a Common Market , was a huge mistake ; we have limped along since then hoping that our voice would still resonate , unfortunately it has not . There was some hope under the firm leadership of Margaret but it was short lived and has not in any way been equalled by other leaders since . Substantial change must now occur under a new leader able to stick his/her chin out and face the consequences .

  15. The Prangwizard
    Posted April 1, 2016 at 10:59 am | Permalink

    I’ve just had a look at the balance of payments charts. The deficits seem to be getting completely out of hand. It looks unsustainable to me with no possibility of reversing the trend with present attitudes in government and the City. And what good is selling off the Land Registry going to do? Just another of our dwindling assets being sold to the benefit of City spivs and probably foreigners.

    Having now sold almost all there is to sell where do we go now Mr Redwood? Do you think that ‘inward investment’ which this sale will end up being called no doubt if it goes abroad will be wise, now that profits, dividends rents and the like being sent overseas exceed the same coming in?

    As I have mentioned before here and elsewhere, some years ago we always told that our investments abroad were a good thing because we were ‘in profit’ from them and they offset deficits elsewhere. So if they were a good thing then how is it that selling our assets which reverse this is also a good thing?

    And I ask again whose nation is it when so much of our infrastructure, land, property and businesses are owned by foreign interests who, when things get difficult, act in their best interest not ours, and when they can while here will sink to blackmail with a weak government.

    Just how much pressure came from China for example to keep steel tariffs down? Have Chinese steel imports being increasing, what are the relative figures over the recent year or two. Just how much is Osborne responsible, desperate as he is to get his hands on Chinese money?

  16. ian
    Posted April 1, 2016 at 1:40 pm | Permalink

    MR MICKE
    The answer to your question is none because the government and unions have always made it unaffordable, as wet & mad would say, we are open for business and the long term economic plan like the highest climate levy, highest rates, energy, wages, without highest regulation from the EU and are own health and safety rules and that’s apart from over manning to help government with unemployment and always to many office staff in heavy industry at the end of the day it all a dead loss.

    Keep to bail out the banks and office staff.

  17. agricola
    Posted April 1, 2016 at 2:30 pm | Permalink

    Can it really be the fault of the EU if the UK buys more from the EU than we sell to them.
    Forget about steel for a moment.

    The UK has a first class range of specialist cheeses, but here in Spain you rarely see anything beyond the packaged slab of factory produced cheddar. What are the British Cheese Board doing to sell our cheeses such as Yarg, Worcester White, and Waterloo to European supermarkets and specialist shops. Not a lot in Spain I venture.

    In one supermarket here you can buy Kobe beef from Japan. I have yet to see any Aberdeen Angus beef or English/Welsh lamb. What does the National Beef Association do. Not a lot in Spain I venture.

    The selection of available apples here in Spain is abysmal. At the appropriate time of year, where are the Cox’s, Worcester’s and Bramley’s.

    The efforts of all these quangos seem inward looking. Tell me I am being unfair to them, but where is the evidence of their exports to the EU. All credit to the booze industries whose products are readily available.

  18. Lindsay McDougall
    Posted April 2, 2016 at 5:54 pm | Permalink

    If China dumps steel at below cost, the answer by the EU should be to add a tariff that takes the price of Chinese steel back up to its best estimate of market price. Then they should tell China that if it increased its export price, the tariff would come down. Or have I missed something?

    Another thing that needs doing is to ensure that our energy costs are as close to those of Germany and the other EU member states as is practically possible. And the EC must be expected to co-operate.

    That said, the only reasons for propping up industrial lame ducks are military ones. It’s high time that we heard from the leaders of our armed forces. How much are they willing to pay, through the defence budget, to keep domestic blast furnaces going?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page