Would Honda axe more jobs if the UK left the EU?

The news of Honda’s decision to axe 800 jobs at its Swindon plant is one of the gloomiest pieces of recent news for the UK economy. However, as it employs a total of 3,500 staff, many will thankfully still have employment after these cuts are made. The employer is hoping to make these staff reductions without compulsory redundancies, with layoffs taking place after a 90-day consultation period. Although the carmaker is acting in response to a drop in demand over the past year, Honda’s market in the UK itself has remained surprisingly buoyant, with the BBC reporting that the 54,208 Hondas registered in the country in 2012 represented a 7.2% increase upon the preceding year. The cuts in staff have rather been in response to a weakening of demand for its products elsewhere in the EU. Demand, unsurprisingly, has fallen off dramatically in those southern European states badly hit by the economic crisis: Greece, Italy and Portugal. It would therefore seem that the UK is more valuable to Honda as a manufacturing base and a market than certain other countries within the EU.

The loss of such a large number of jobs is bound to have an impact upon the local economy, but Honda’s commitment to maintain its manufacturing operations that began in the town back in 1992 is beyond doubt. As well as the 2,700 people who will remain employed at Honda, the automotive industry in the town is healthy, for BMW also employs 800 at its Swindon pressing plant which produces 90% of the parts required for the production of the Mini, and BMW’s sales position remains robust despite the subdued economic environment.

Whereas there has been much political and media chatter this week about the potentially ‘disastrous’ effects of the UK leaving the EU, Honda’s positive performance within the UK market compared to elsewhere in the EU demonstrates that transnational corporations (TNCs) that make productive rather than predatory capital investments in the UK (i.e. those that create jobs and real wealth in manufacturing) would not in reality wish to pull their investment out of the country were we to reassert our independence from Brussels, for it would be economically damaging for them to do so. Nor, in reality, would other nations in Europe wish to sever mutually beneficial trade: leaving the EU would not mean an end to our economic relations with the constituent nations of the bloc, but it would mean that we regained the right to formulate and implement our own laws and border controls without interference from overseas.

A desire to leave the EU is not some expression of ‘Europhobia’, but rather of the wish to revitalise democracy through recognising that sovereignty inheres within the people. However, this is not the narrative that is spun by certain sections of our press and by all but a tiny minority of individuals within our mainstream political parties; neither is it a position acknowledged as legitimate by political and corporate figures overseas who see the EU project as useful to their own ends, and the concept of popular sovereignty as an unwelcome inconvenience. It is influential individuals adhering to the latter perspective both in the US and Germany who have been particularly vocal this week, inveighing against the alleged ‘disastrous’ consequences for the UK should it leave the EU. Opponents of the UK’s independence tirelessly hammer away at the concept of popular sovereignty by knowingly employing the slurs that it is ‘xenophobic’, ‘exclusionary’ and ‘outdated’, but it seems that at least a section of the British public is waking up to the fact that these slurs are baseless.

Many have taken recent comments by David Cameron and George Osborne to indicate that a more Eurosceptic mood is now abroad in the Conservative Party, particularly with reference to Osborne’s latest comment that the UK could leave the EU if the latter does not negotiate a fresh settlement amongst its members. However, whereas our mainstream media together with diplomats in the US and EU foreign policy establishments may either perceive or seek to portray such pronouncements as possessing substance, those of us who are wearily seasoned observers of the British political scene will recognise this latest bout of high-profile Tory Euroscepticism as being a sop to a public that has grown increasingly hostile towards the EU and its ever-increasing integration. What truly lies at the root of this recent change in Tory mood music it would seem is electoral fear generated by the rise of UKIP. As previously commented on this blog, outside of EU elections UKIP does not and will not constitute a credible electoral force, for amongst other things it will find it nigh on impossible to win seats under the first-past-the-post system, but it is now strong enough to deprive many Conservative MPs of their majorities by taking the votes from Eurosceptic members of the public and thereby allowing Labour in by the backdoor.

When we reach the 2015 General Election, it is therefore likely that the Conservative Party will employ Eurosceptic rhetoric in its campaign, keen to neutralise the threat of UKIP and to distance itself from the Liberal Democrats, but in reality, the party line will be about as ‘Eurosceptic’ as Ken Clarke. Some of us may not be fooled again by such posturing, but will many of our fellow voters fall for this line? Alas, I feel inclined to predict that many will.

Swindon's Honda Plant

George Osborne’s Autumn Statement: why more investment in London?

George Osborne’s announcement in yesterday’s Autumn Statement brought little cheer to anyone, but for all of Labour’s jeering about the Condem’s inability to set the economy back on track, it is salutary to recall that it was the reckless excessive indebtedness incurred by the last Labour administration together with its full exposure of the UK’s capital markets to the full shock of globalisation that landed us in the economic predicament in which we find ourselves. Labour may call for additional public spending – its ‘Plan B’ option – but their proposals would simply incur yet more borrowing. Already, it has been announced that the UK could well lose its triple A credit rating next year, but if Labour had been in power, it is probable that this would already have gone.

Buried amidst the general gloom of his speech were a few faint glimmers, which no doubt were intended to garner positive headlines. Thus, besides the widely anticipated announcement that duty on petrol and diesel would not increase by the planned three pence per litre early in 2013, it was declared that the Chancellor intended to boost government investment in infrastructure projects. However, a significant chunk of this money – some £1 billion – has been set aside for the extension of the Northern Line to Battersea. Why? Is such an extension worth the money? How could it possibly merit such a massive investment? Could this money not be better used to improve rail services in the regions away from the capital, where rolling stock is often overcrowded and lines closed by Beeching could be usefully reinstated, easing congestion on the roads and assisting local economies?

The Campaign for Better Transport (CBT) has identified many decommissioned railway lines which it would like to see brought back into operation. One such example would be the reinstatement of the Skipton to Colne Railway, which would serve as a link between the Airedale Line and Lancashire. With respect to the Skipton to Colne link it states:

The 11.5 mile link between Skipton (North Yorkshire) and Colne (Lancashire) would link the Aire Valley and Yorkshire to East Lancashire, Manchester, Preston and beyond. Although under increasing threat, the trackbed is essentially intact and the railway could be restored at a relatively low cost: any further incursion would destroy a resource of national value and would be contrary to government policies.

Similarly, it is estimated that it would only cost £37 million to reopen the 10-mile line from Portishead to Bristol, which would be sure to ease commuter traffic. A Portishead Railway Group has been set up to campaign for its reinstatement.  

Too much of our investment is focused upon London. We need to direct more of our infrastructure investment away from the capital with a view to assisting an economic kickstart in our regions. We, after all, were left with the multi-billion pound bill of paying for the construction of the Olympic complex in Stratford that most of us will never see and never benefit from. In general, London sucks in too much from the rest of the country, and a considerable part of its population isn’t even English. The £1 billion earmarked for the extension of the Northern Line should be taken away, and redirected to fresh regional rail initiatives instead. 

Skipton to Colne Rail Link

George Osborne’s latest Idea: Power to the Workers! Or is it?

The Chancellor’s suggestion that workers should trade their employment rights for a stake in their companies strikes me as something of a curate’s egg. Whilst aware that for small firms in particular their desire to expand and take on new staff may be inhibited by obligations relating to redundancy payments, unfair dismissal and other employment rights, in general these hard won rights need protecting. We are all aware of notorious cases brought for unfair dismissal where such rights have been abused of course, but in most instances, this is legislation that has been designed to prevent people from losing their homes and their family lives in the event of them losing their jobs. Who, after all, benefits from such a scenario? Who, ultimately, is left to pick up the bill when such breakdown occurs?

The evisceration of many of Britain’s old industrial centres based on coal, steel, shipbuilding and manufacturing in the 1980s led in many instances to the collapse of local economies, multigenerational unemployment and a sense of apathy and listlessness that fed into drug addiction and other anti-social forms of behaviour. Anyone familiar with such areas will be aware that since then little has happened to generate the sense of hope and well-being that these areas require, for the high-paid jobs of the old industries have not been replaced. Call centre positions paying a paltry £13,000 to £14,000 per annum provide a decent living for nobody; they are not a fitting replacement for the well-paid blue-collar jobs that preceded them. They may be less dirty and less dangerous, but in many other respects, they are far inferior to the jobs of the past.

Osborne’s suggestion that workers should be given shares in the company that they work for is a good one. To provide employees with shares in their employers’ businesses gives them an active incentive to work to ensure that it prospers in the expectation of gaining something tangible in return. Where such schemes are implemented in a meaningful rather than a cosmetic manner they can assist in breaking down the antagonism that all too often, and frequently understandably, exists between management and employees. Indeed, in small start-up companies the offer of a generous share package could, providing that new members of staff are happy with the conditions, act as a great spur to the business succeeding. However, in any instance where these rights were to be waived, this should be a temporary measure, with full employment rights being put in place after a clearly defined transitional period necessary to establish the business. It would also be very negative if such good practice were to be used as cover to strip away employment rights across the board, which is what many must fear Osborne intends to do by floating this idea. Given his intent to cut the public sector whether or not there are private sector jobs for people to go to, the removal of employment rights could have severe implications for the lives of many.

The economy does need to be rebalanced so that we create more wealth through manufacturing and other cutting edge productive industrial research and development, but slashing employment rights and drastically downsizing the public sector in a precipitate fashion before we have started creating such opportunities is not the way to do it. Osborne is right to encourage a reduction in the antagonism between management and employees through incorporating the latter as meaningful shareholders in their own businesses, but wrong to posit this as an alternative rather than as a supplement to the employment rights that people already enjoy.  After all, statutory redundancy pay is hardly generous, being capped as it is at £430 for every year worked up until the age of 40, and then £645 for every year worked above that age. For the likes of George Osborne of course, such concerns will only ever be theoretical, but for the majority of working men and women, they are an ever present and worrying reality.

George Osborne: Money worries? Not likely!

“We are a big open economy. People have to be able to move in and out.” (David Willetts).

Does this statement square with the Conservative Party’s pledge at the last General Election to bring down net immigration to the “tens of thousands” annually? Does the recent announcement that George Osborne supports the Office for Budget Responsibility’s goal of allowing average net immigration of 140,000 each year between now and 2016 tally with this promise? Does the fact that in the past twelve months we have witnessed the highest ever level of net immigration, gaining some 252,000 people, illustrate any intent let alone move, to put a break on the mass settlement of our country by outsiders? Of course not! 

Does it surprise you? If so, why? Did you genuinely think that the Conservative Party seeks to represent the interests of the people of this country? Were you really gulled by the cod patriotism of this party of privilege? When it talks of “repatriating powers from Brussels” it has no real intention of bringing about a meaningful repatriation of sovereignty, or giving people a greater say in the governance of their country, for the only aspects of the EU that it truly dislikes are those pieces of legislation that afford protection to the wages and working conditions of the lowest paid and those in the least secure employment. It truly does believe in the concept of ‘UK PLC’, but unfortunately, it happens to be a party of asset strippers who care nothing for the ‘company’ that they run, thus its long-term viability and health are not their concern. It favours cheap, fragmented malleable labour, which is why it is intent upon facilitating mass immigration at a time of mass unemployment. The Conservative Party is just one of many self-interested entities promoting globalism to the detriment of the national interest.

Owing to immigration we have in the past year seen our population increase by the equivalent of more than a city the size of either Nottingham or Wolverhampton, and yet for each of the next five years, Osborne wishes to see it increase by the equivalent of another Bolton. Where are these people to live? We have a housing crisis, and England is according to Migration Watch the sixth most densely populated country on the planet. The Office for National Statistics reported that in the year to September 2011 the number of housing completions stood at 106,000. The rate at which we are building new homes is inadequate to meet the needs of the existing population, and the majority of these new houses and flats are of inferior dimensions compared to those that were built in the pre-Thatcher era.

Moreover, we cannot grow enough food or generate enough power to sustain ourselves at a time when a booming global population is placing increasing pressure on these resources and generating underlying structural inflation; our security is thereby jeopardised. Our transport infrastructure is groaning under sheer weight of numbers. We have permanent and rising mass unemployment, together with increasing social fragmentation and alienation. In many of our cities and an increasing number of towns, there is no sense of community, just a plurality of random ethnic groups from around the globe who happen to live next to each other. In such places there is no trust, and thus no glue to hold society together; there no longer is a society.

Why would anyone in full possession of their rational faculties therefore choose to exacerbate all of these problems still further for the sake of a nominal and highly marginal improvement in aggregate GDP? It is per capita GDP, not aggregate GDP that matters, for the former can increase at the same time as the latter falls, resulting in a decline in personal wealth and living standards. This is what we are witnessing. We are told that our economy is enjoying ‘growth’, but if this growth is said to have been 0.5% over the last quarter, up from 0.1% during the preceding period, is this actually growth when CPI and RPI are raging away at 5% and above? Does this not actually represent an aggregate contraction in our national wealth, rather than growth? 

Alas, we will not be hearing these questions raised by the BBC, for this mouthpiece of the dominant political interest in the UK is no more objective than Pravda during the Soviet era. The ideological ties that bind its editorial staff and leading journalists with those of the political elite (I prefer the term oligarchy) are strong, for they form a tightly knit social clique. For example, it is well known that many of them studied at the same elite institutions and took the same subjects; thus, this morning we witnessed David Willetts (Politics, Philosophy and Economics, University of Oxford) being interviewed by Evan Davis (Politics, Philosophy and Economics, University of Oxford) both concurring upon the desirability of mass immigration as exemplified by Willetts's quote which heads this article. To study this combination of subjects is no bad thing, but what is not so good is the fact that so many key figures within the public life of the UK took this subject at this venerable institution, which is to say, that it has produced the most powerful old boy (granted, there are also women within it) network in the country. For example, in the world of politics David Cameron and William Hague happen to have studied PPE at Oxford, as have the brothers Miliband, Ed Balls and James Purnell. In the BBC its alumni include David Dimbleby, Nick Robinson and Stephanie Flanders, and a frequent guest on Question Time – Islamist and New Statesman Senior Editor (Politics) Mehdi Hasan – is also included amongst their number.

Precisely what is on the PPE curriculum I do not know, for I have not studied any of these subjects at Oxford, and I am not personally acquainted with anyone who has done so; yet I suspect, given the consensus amongst PPE alumni with respect to the promotion of globalism, mass immigration and multiculturalism, that all of these are espoused by their tutors as being a ‘good thing’, and that the topics which they are asked to consider, and the authors and sources which they are recommended, tend towards the creation of a mental outlook supportive of all three. It is against this backdrop that Evan Davis’s seemingly naïve incomprehension at why a newly published Ipsos Mori poll revealed a “generally negative perception” of mass immigration must be understood. On last Friday's Today Programme he purported to find it odd that both Scotland and London had significantly “less cold” attitudes towards immigration than elsewhere in Britain, whereas the reasons suggest themselves readily enough to anyone not wearing PC blinkers: the Scots have not suffered mass immigration to anything like the extent witnessed in England, and a huge proportion of the poll’s sample from London will either have been made up of immigrants themselves or the recent descendants of immigrants. Evan Davis is it would seem, a bright chap, but not a very sharp one. Perhaps we ought to import some new journalists?

 

Taking the Piste: Davos on a Dinner Lady's Wages

“Irresponsible, left-wing and weak”. That is how David Cameron described Ed Miliband at today’s Prime Minister’s Question Time. I would prefer to characterise Miliband the Younger as an ignorant little rich boy, completely out of touch with the living standards of ordinary people. Why do I take this view? Well, how else could one possibly interpret his following retort to David Cameron:

“Unlike the Prime Minister, I’m not gonna demonise the dinner lady, the cleaner, the nurse. People who earn in a week what the Chancellor pays for his annual skiing holiday.”

Jesus! Unless George Osborne is booking last minute no-frills out-of-season deals in Bulgaria when there’s not a flake of snow to be seen, and is cashing in his loyalty card points on some supermarket special offer, cleaners, dinner ladies and nurses must be coining it. I’ve evidently gone into the wrong career and am now contemplating picking up duster, bucket and mop and getting down to work.

Cleaners typically earn the minimum wage of £6.08 per hour, as do dinner ladies. Nurses, naturally, earn rather more. So, assuming a standard 37-hour working week, a cleaner would earn £224.96 before deductions for tax and National Insurance. Dinner ladies tend to work part-time, so let’s be generous and say 25 hours on £6.08 which yields £152 gross. Are we then to assume that George Osborne spends in the region of £150 to £225 for his annual skiing holiday? Now, I’m thrifty, but even I’d be dubious about taking a skiing holiday (if I could ski) costing that amount. So, how much do such holidays actually cost?

Casting around the internet, I came across some good deals, the cheapest being 7 nights self-catering based on four sharing in Andorra. Including the flight from Manchester it came to £199. Another of the cheaper destinations – the Bulgarian resorts of Borovets and Bansko – offered skiing holidays from £342 per person. However, I am not convinced that Osborne would favour Andorra or Bulgaria, and might instead prefer somewhere with a little more snob appeal, such as Val d’Isere. Here, the cheapest deal on offer clocks in at £285, although there are some snags such as the following not being included: flights; food and bed linen. So, if the Chancellor should be tighter than old man Steptoe, be flexible enough to be able to go on holiday at the drop of a hat, and have eaten and imbibed enough to sustain himself for a week without recourse to meat or drink, then he might be able to survive for this period at an Andorran ski resort on a cleaner’s average wages. Even then, he’d have to walk to and from the airports both at home and in Andorra, so Miliband’s claim doesn’t really seem to add up.

Having looked at bargain basement ski deals, let’s take a look at what the Chancellor might actually spend on a week’s skiing holiday in Val d’Isere or Davos. I suggest that he would want at least four-star accommodation which would need to be exclusive enough to avoid the unwanted attentions of the ‘hoi polloi’. As you can see from the following link, he might just be able to get a good deal for £929 in Davos next month, or shell out somewhere in the region of £1,400 or £1,600 if he’s not quite so flexible with his dates.

So there we have it: Miliband claims that “the dinner lady, the cleaner, the nurse. . . . earn in a week what the Chancellor pays for his annual skiing holiday.” Nice work if you can get it: £1,400 a week for cleaning. Count me in! Evidence, if any were needed, that Miliband lives in La La Land, or, more accurately, a £1.6 million home in Dartmouth Park. 'Red Ed?' He ought to be red with embarrassment at today’s gaffe. Does he really have any idea of how much working-class people earn? Incidentally, the Milibands must have a cleaner or two. Does anyone know how much they earn? Watch Miliband make a fool of himself in the House of Commons today below the charming picture of the Davos piste.

Piste in Davos: is that a dinner lady or George Osborne?