Trouble is brewing…

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I worry that we’re going to see a lot more strikes over the next year or so as the full impact of brexit works its way through the economy. Already, there’s been a number of strikes, southern rail for example, multiple ones at Heathrow, the London underground, etc. But I worry that is just the start.

I’m not usually the one to get too involved in Union politics, but I happened to go along to a recent meeting and I think it highlights many of the problems. No doubt the Tories will try to spin any strikes as some sort of leftist plot to get Corbyn elected. Well his name, nor did the labour party come up once in the meeting. The only time I’ve heard any union member mention his name it was as the butt of a joke afterwards.

What the union did discuss was the hypocrisy of lay-offs of some research staff while on the teaching side we’re massively overloaded, largely because brexit has made it so much harder to recruit. At the same time the unions worry that the drop in the value of sterling and rising inflation means we’ll effectively be swallowing a 20% pay cut over the next few years. And deducting inflation from any pay rises since the start of the financial crisis means we’ve already had to take a 9% pay cut since then, which is better than the defacto 10.4% average pay cut across the UK. And this cut in wages in real terms at the same time as inflation rises is also a factor in why a third of UK families are living in a defacto state of poverty.

So naturally, the unions are less than pleased and the likelihood of industrial action is increasingly strong. And across the public sector, the NHS for example, this picture of workers stretched and overworked while being forced to swallow a defacto pay cut is replicated. And in the private sector too, it is inevitable once people start to notice how their pay packet seems to get that bit lighter every month that they too will start to demand a higher salary.

One feature of strikes that I think people don’t get is that they often don’t start for the reasons they are really about. Take the Southern rail strike, officially its over who gets to close the doors on a train, the driver or the conductor. This sounds silly yes, but then again many marriages collapse usually for some very silly reason, such as the colour of a IKEA futon (IKEA is Swedish for “arguments” I assume, I’m sometimes surprised they don’t have marriage counsellors and divorce lawyers in their stores). Its all about trust and a break down in the relationship between workers and their bosses.

For example, another issue that came up in our union was some changes to the employee evaluation process. To cut a long story short, management told the union one version of why they wanted certain changes, which I have to say I thought seemed pretty reasonable. However, when one or two union members, who are also line managers of staff, went on a training course they were told a completely different version of why the management wanted these changes (to promote a more commercial style rank and yank system). Naturally they fed this back to the union who has now rejected these proposed changes.

And I’ve seen this happen in more than a few other occasions, both in the public sector and private. Management come across as two faced, they say one thing to the unions, then another thing to senior staff or the media, failing to understand that word will get back to the unions one way or another (such as by them reading a newspaper!). So you can see how, after being promised that they won’t be put out of a job, the conductors on southern rail assumed the worst when they learnt Southern was buying a load of driver only trains. And so they pushed the panic button.

If you go behind someone’s back and lie to them, they will generally assume the worst. Honesty is the best policy. If management really do want to bring about certain changes, then you need to get buy in from staff first. Trying to steam roller any opposition will just lead to the sort of chaos we’ve been seeing in Southern rail. In fact its worth noting that strikes in Scandinavia and Germany are less common, in part because there’s a much closer working relationship between unions and management, with union rep’s often sitting on company boards.

So a lot of the strikes we’ll be seeing may well start for seemingly silly or trivial reasons, but in many cases they’ll represent the straw that finally broke the camel’s back. And like I said, the bulk of that pile of straw represents the usual “we’re overworked and underpaid”. Pay staff more, hire more staff to take the load off and they’ll put up with a lot more hassle. That’s a big problem for the government (and the private sector) because it would mean them having to push up public sector pay (or hiring more staff). Whatever it costs to fund a hospital or university today, it could be 20% more expensive in five years time. And with falling tax revenue post-brexit those are bills the government can’t pay, nor can those in the private sector, so some union militancy is very likely.

Now the Tory reaction to all of this will no doubt be to look at ways of preventing strikes. For example, they might well ban public sector or workers in industries like power and transport from going on strike. Well let me head off that one, it won’t work. Other countries have similar laws and all that happens is you end up with more wild cat strikes. Keep in mind that all workers need to do is pull a bunch of sickie’s all at once. If management insist on sending in doctors, well its very easy to make yourself unfit for work, just don’t sleep or eat enough. In some safety critical jobs its actually illegal for a worker to attempt to work without getting a certain number of hours sleep first. If you work in the food and beverage industry you are supposed to avoid your place of work if you’ve been exposed to a food borne disease (so just visit a relative with a wee nipper with a tummy bug and you’re off work for 48 hrs!).

Also there’s the option of work to rules. We’ve got one of those running right now in our place and I think long term its probably going to be what forces a compromise from management far more effectively than any strike can. Work to rules can, over a long enough time period be crippling, as often there’s all sorts of things workers are expected to do on a daily basis, which their contract doesn’t even mention. For example a couple of years ago the Irish public transport workers noticed that there was nothing in their contracts that obliged them to collect fares, so rather than going on strike they simply refused to collect fares for a day, meaning the company had to pay for the whole system to run without any revenue coming in!

But perhaps the biggest danger for management is what if staff start leaving, either taking early retirement or immigrating to Europe. If I’m honest, the pay rates in Ireland look awfully tempting right now (thanks to the falls in the value of sterling). If I hadn’t bought a house recently, I’d probably be applying for jobs back home right now. And I’m guessing there’s plenty of junior doctors (who may not have mortgages) thinking the same thing, particularly given how horribly they are being treated by the government recently. The UK risks a brain drain post-brexit as workers move overseas. A situation that would not be helped if immigration is restricted. And this doesn’t just apply to highly skilled labour like doctors or lecturers. Keep in mind that even when it comes to say, train or bus drivers, its not as if a boss can wander down to the job’s centre and recruit a few dozen fully trained and qualified drivers right then and there. It takes time to teach such people and for them to build up enough experience to do their job effectively.

So I think the message is buckle up and get used to the fact we will see more in the way of strikes, work to rules and public serviced stretched. There is a way out (aside from the obvious, halt brexit), but it means management being willing to pay up, hire more staff to relief staffing shortages and increasing pay to match inflation. But that in itself will have a knock effect by making a lot of things much more expensive.

Delayed reaction

One of the problems with Brexit and Trump, is that while both are expected to cause serious economic damage, often to the very people who voted for such policies, but it might be sometime before the full impact of this is realised, as the primary risk is the long term damage.

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Indeed we are already seeing the effects. For example, recent rationing of vegetables in the UK. The supermarkets blame unseasonal weather in Spain. However, relatives I have in Spain, Ireland and Germany and they report that while yes supplies are down and the price of certain vegetables is up, there’s no rationing. The obvious explanation is that the drop in supplies in Spain has pushed up the prices. But with the UK pound having dropped in value by 20% the UK supermarkets are being outbid by their competitors from the rest of Europe who can pay the Spainsh growers in euros.

Similarly brexit has been disruptive to businesses, 58% of firms say so. There’s been many job losses since brexit, the banks are already quietly moving out of London. But employers, aware of how politically sensitive any such claim would be, are going out of their way to avoid saying so, often blaming other factors instead. e.g. we’ve seen a few redundancies in the uni. The official reason is that the research units they worked for didn’t bring in enough money….what they don’t mention is that the main source of research money was from the EU! The UK government has promised to pick up the tab for research, but we’ve certainly not seen any of that money, so now people are losing their jobs.

In another example, we have the recent revelation regarding NHS overcrowding. Well in part this is due to the fact that the NHS has been chronically underfunded since the Tories took office. But brexit has made it increasingly hard for it to recruit. They, like universities (we’ve been unable to fill a number of vacancies since brexit), will find it difficult to recruit staff from abroad to plug staffing shortages, as foreign staff will be fearful of the impact of brexit. The reduced value of the pound makes UK salaries look less attractive (and the rise in racist incidents and xenophobia doesn’t help either!). So the end result, waiting times go up and granny’s reward for voting leave is she’ll be waiting longer for that heart operation.

Politicians are experts at taking credit for something that happens through no action that they have taken (often despite their policy rather than because of it). At the same time, they are also very quick to try and avoid blame for something that is very much their fault. But the problem is that a lot of the time the effects of their term in office don’t show up until after they’ve left office.

Case in point, the Great Recession. The Republicans have tried to blame everyone other than themselves for this, Bill Clinton, Obama, Hilary, working class people, the tooth fairy, etc. The reality is that the two people who have to take the bulk of the blame for the financial crisis are Ronald Reagan and Margaret Thatcher. Their policy of deregulation, neo-liberal turbo capitalism and the rat race “greed is good” attitude it brought with it, set up a massive bubble in the world financial system. A bubble that finally popped in 2007.

And the warning signs were there right from the start. There were numerous scandals, with companies going bust, billions lost and the government forced to step in, cheque book in hand to rescue reckless gamblers. LTCM (Long Term Capital Management), the Junk bonds scandal of the 80’s, Stratton Oakmont (of Wolf of Wall street fame), the Guinness trading fraud, the failure of Barings bank or BCCI, the American savings and loan crisis, ENRON etc.

Indeed, its worth noting that a number of these scandals and failures listed above occurred within the term limit of both Thatcher and Reagan, or their immediate successors. So nobody can plead ignorance and say they didn’t realise the dangers. And it was in this era that the concept of “too big to fail” was established. The lesson many on Wall street took away from these early scandals was that no matter how badly they screwed up, the government would bail them out. Profits had been privatised and risk had been socialised.

This is not to say all other presidents in between escape blame. G. W. Bush was clearly asleep at the wheel in the lead up to the crisis. There was a massive property bubble building and a huge rise in credit. A number of experts were warning that this wasn’t sustainable. He and his advisers should have realised the danger and taken away the punch bowl before the party started to get rowdy.

Bill Clinton often gets blamed for the crisis because he repealed the depression era Glass-Steagall act. However, we have to put this decision in the context that the banks were simply by-passing the act (via overseas subsidaires), in part thanks to legislation passed under Reagan and trading in derivatives had been left unregulated by the Reagan Adm. (which was ultimately the trigger for the financial crisis) Clinton’s options were to do nothing, or get rid of the act and then try to replace it with something that actually worked. So in and effort to get a GOP controlled congress to play ball with him and regulate derivatives, he signed a repeal as a concession (one that had been put on his desk by Republicans, i.e. they initiated the repeal, then pressured Clinton into signing it, not the other way around as its often presented). Of course Republicans being the backstabbing two faced gits that they are, they simply took the repeal and didn’t put in place any new regulations.

To draw an analogy if was Thatcher and Reagan who designed and commissioned the warehouse made of matchwood with no fire exits and crammed full of oil soaked rags built right next to an orphanage. Newly appointed fire safety officer Bill Clinton should have done something about it. But as it was already built and afraid of catching flak from the powerful builders lobby and their Mafia allies, he caved into pressure and just signed off on it without inspecting the building. It was however ultimately nightwatchman Bush, who was asleep on duty in the warehouse when it went up in smoke. And it was likely his habit of smoking indoors and his failure to extinguish his cigarette that caused the fire to start in the first place.

In short, yes it would be unfair to blame Reagan and Thatcher alone for the financial crisis, G. W. Bush, Gordon Brown, Blair, Clinton and anyone who with a credit card who spend money they didn’t have prior to the crash, we all need to take some of the blame. But clearly it was these two who set the world on the road to ruin. But the problem is that the bomb didn’t go off within their terms, hence they didn’t get the blame. Indeed there are (as noted) some Trump voters who blame Obama for the crisis, even thought he wasn’t in office until well after the crisis had started.

So one has to worry that history is about to repeat itself. Trump and Brexit will both have lasting long term impacts on the global economy. Potentially, we might well look back in a few decades time and point the finger at this moment as the point where Western capitalism and democracy failed. But it will take a while for such damage to appear. Indeed, given that Trump’s plan seems to be to cut taxes and increase public spending, we could well see a temporary jump in the economy, even thought he’ll just be starting another unsustainable bubble.

The US has a major problem with its national debt. As I discussed in a prior post, if something isn’t done about it, sooner or later the US government will go bankrupt. And Trump is talking about borrowing anything from $10 trillion to $20 trillion. This could potentially double the debt and push it to levels equivalent to nations like Greece or Italy. At the same time, his racist, xenophobic and anti-science policies will stifle investment. The next generation of investors and entrepreneur’s will bypass America and go elsewhere. Already in fields such as renewables or biotechnology America is falling behind its rivals. Tariffs and protectionism, will just make things worse in the long term.

In short, Trump policy will make it very difficult for the US government to raise tax revenue to pay off its debts. And with the baby boomers retiring the US needs to start raising income just to pay the pensions of those retiring. At some point, it could be a few years time or twenty, the US government won’t be able to raise the cash to pay its obligations, never mind service its debts and it will default. Of course the likelihood is the markets will see this coming and stop to lending any money to the US government, leading to a sovereign default.

Now Trump supporters will say, so what that’s only bad news for China and those pricks on wall street, isn’t it? Well two thirds of America’s debt is internal, that is to say held within the US. And American pension funds are the main holder of US treasury bonds. If the US were to default as Trump has implied, he’d be bankrupting every pensioner and saver in America. Print more money? That will destroy the value of the dollar, which is bad news for billionaires like him or anyone on a fixed income (such as pensioners). In short, there is no way that Trump or any of his successors (whether Democrat or Republican) can dig their way out of this hole without screwing over pensioners and baby boomers, or in other words the very people who put him in office. Trump’s economic policy is essentially the same as Argentina’s prior to the crash in 2001.

In Britain Theresa May has committed the UK to an economic policy that is also unsustainable. Brexit is going to be expensive, perhaps a cost of up to £66 billion just to leave and maybe as much as £25 billion per year to fund all those subsidies she’s promised to those who will lose out (car makers, universities, farmers, etc) as well as the loss of trade. Put quite simply that’s unsustainable. There was something of a stopped clock to Osborne and Cameron’s obsession with deficit reduction. In that they were doing it because they couldn’t bring themselves to spend public money on the poor and the needy (who’d just blow it all on stuff like pasties and rent). But that’s not to say that the UK hasn’t got a big problem here, one that will get worse with time as more and more baby boomers retire.

Digging the UK out of this hole becomes difficult post-brexit. Making it harder for young Polish workers to come in and take over paying the taxes that pay for the pensions of retiring British workers isn’t helping matters. Quite apart from making it harder for companies to recruit (i.e. longer waiting times in hospitals, you won’t be able to get a plumber, train and bus strikes and delays become more common, etc.). Letting the value of the pound slide leads to high inflation, which means pensioners take a hammering and workers start demanding higher wages (anyone paid in sterling reading this has essentially taken a 20% pay cut this year thanks to the falls in the value of sterling).

Cutting public spending? Well the two biggest line items in the budget are the NHS and the welfare bill. And pensions and working tax credits are the main source of welfare spending, not unemployment benefit (tiny by comparison). In short, there is no way the UK can dig itself out of this hole that doesn’t screw over the very pensioners who vote Tory and voted overwhelmingly for brexit. My advice to any pensioner is don’t retire....ever!

In fact here’s a prediction, my guess is that what will finally push the US over the edge will be its greatest ally the UK. You can just see the scenario. The UK, at some difficult to predict future date, goes broke as a result of brexit and defaults on its debts. American banks post huge losses. Worried the US might be next and needing cash in hand to prevent a run on their reserves, they all dump their holdings of US treasury bonds. The US government finds it impossible to obtain credit and defaults as well.

What about the IMF? Well do you think China or the EU is going to be terribly helpful after Trump and Brexit? They’ll rescue themselves and their own banks but that’s it. Keep in mind that some bankers may actually be able to profit handsomely from the crisis, the same way they profited during black Wednesday.

So the real danger with Trump and brexit is the long term lasting impact they will have, not the short term. Its important to realise this and when things do hit the fan, remember how we got here. And also as we go along, remember that while many may be reluctant to admit it (particularly those who voted for these clowns in the first place!), but both are already having an impact on the real economy and on people’s lives.

Blogging catchup

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There are dark clouds on the horizon…..

My travels down south

One of things you need to get used to in Argentina is the crippling bureaucracy, forms stamped in triplicate, checked, queried sent back and then recycled as fire-lighters. They say you have to be patient to be Argentinian. The brits could have stopped any invasion of the Falklands just by getting them to queue and fill out the appropriate paper work (trouble is the argie’s are so used to standing in large queues so they’d out queue the British!).

They do try to cut down the red tape at border control by streaming people into different groups, one for locals, another for those from neighbouring South American countries, another for everyone else and one for Americans (they implement the same harsh checks the Americans implement on Argentinians, so any American going to South America, bring a big book, expect a long wait and to be finger printed, photographed, body cavity searched and asked if your a terrorist/rapist/nazi or here to steal our jobs). Naturally one has to dread what will happen post-brexit if the UK tries to restrict immigration from its neighbours. The queues will be horrendous. As it was it took an hour to work my way through a half empty Buenos Aires airport and about four hours to go through the border into Chile.

Another little incident, on the taxi ride in London, the taxi driver saw a crash in the opposite carriageway. He dialled 999….and got put on hold…..for ten minutes before he had to give up and focus on driving (he was on a hands free btw). He was getting the same fobbing off from the cops as I’d been getting from BA. Imagine you’ve got an axe murderer breaking down your door and you’re on the line to the cops and getting put on hold like that. Britain truly is going to the dogs.

By contrast I lost my wallet. Within twenty minutes, as a result of a call to an non-emergency line (by someone else rather than me) there were two Argentinian cops outside. Granted there wasn’t a lot they could do and let’s face it a tourist losing his wallet is hardly a police priority, but its in stark contrast to what you’d expect in the UK. The fact is UK policing, like so many things in the UK (public transport, hospitals, roads, public housing) is kind of crap and no way near up the standards of those in other countries. We have public services many developing nations would be ashamed of.

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Of course Argentina is at the back end of a major economic crisis. Frankly all those brexiters whinging about how bad they’ve had it the last few years come across as a bunch of spoiled brats compared to what the Argentinians have been through since 2007. Are they voting for brexit from their South American neighbours? Are they blaming migrants from Chile for all their woes? No of course not. Yes the previous government Argentine did labour on about the Falklands (predictably), but the current regime’s gone quiet about that. In short it does tend to suggest Brits lack backbone.

Trump train wreck draws nearer

Trump hasn’t even been inaugurated and he’s already in a crisis. Normally a president gets a honeymoon period from Congress and the press. Even that’s run its course for Trump already. And some of those leading the assault are his fellow Republicans. It doesn’t bode well, particularly given his disastrous press conference. Then there’s him appointing his family members to senior positions and not putting his money in a blind trust fund.

All in all it leads me to the conclusion that Trump will probably be impeached at some point. For the moment the GOP will hang onto him, as they need him. But sooner or later, after a few scandals, after his supporters realise they’ve been had and start jumping on the anti-Trump band wagon, there will be moves to oust him.

Recall how all through the election he went through cycles of being denounced and disowned by his own party. That sort of cycle continues, things will come to a head eventually. And there’s several obvious flash points already, his differing views on healthcare reform, his sucking up to Russia, his dubious appointees, the very real possibility of corruption scandals and conflicts of interest, sex scandals, confrontations with China, etc. And keep in mind it doesn’t require a majority of Republicans, only enough to join with the democrats and swing an impeachment vote.

Tories let their brexit fantasies slip

A brain fart from the chancellor let slip the Tories post-brexit fantasies. He suggested that the UK could “punish” the EU for imposing tariffs on it by lowering its corporation tax. Let’s think about that for one minute. As noted in a prior post, the UK will probably have to in some way subsidise its manufacturing sector post-brexit. The governments overall costs will be up (by tens of billions), tax revenue will be down (no young Poles to pay for the NHS), so cutting taxes is not a long term strategy without some major cuts to public spending.

That means no subsidies to farmers, manufacturing, fishermen or the regions. It means big cuts in NHS spending and cuts to the welfare budget. Keep in mind that working tax credits and pensions are the main source of welfare spending (over 50% of total spending), unemployment benefits are less than 10% of the welfare budget. So any significant cuts to welfare would impact on pensions and working tax credits.

In short one has to ask how popular the idea of a massive tax break to corporations would be while manufacturers get hammered, millions lose their jobs. While those lucky enough to keep their jobs lose their pensions, benefits, tax credits and see big cuts to public services. It doesn’t quite tie in with the Tory mantra of looking after working families. So it is something of an empty threat.

Of course they can only make it thanks to their ally Corbyn. He’s rendered labour so unelectable that the Tories could conceivably get away with such a thing. It also betrays the reality that brexit will be negotiated to benefit only those in the UK who live within the M25. The rest of the country will get screwed.

True GDP

Speaking of London, its commonly stated how the UK is so much better off under the Tories. Actually, that’s not true, it depends on where you live. As the graph below shows, if you live in London or the South East then yes, the GDP in your region has gone up by rather a lot. However, in the rest of the country its a different story. Scotland and the South West has seen a decline and then a recovery (no thanks to the Tories), while the rest of the country has never really recovered from the crash. Northern Ireland has flatlined.

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So when you hear stories about how well the economy is doing, ask for a minute yes and for who?

Corbyn rebranded

Corbyn promised to rebrand himself as a populist firebrand prior to Christmas. To copy the tactics of Trump and co. to push labour to victory. So how is that working out? Predictably, not so well. Indeed, my suspicion is that this was a plot by some Blairite’s in his cabal to push the Corbyn train wreck over the edge.

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For starters what Trump calls “post-truth” the rest of us call “lying. Corbyn goes around promising the sun the moon and the stars and he’s going to be accused of the very thing he berates the likes of Tony Blair for. Recall that what got Tony Blair such a bad name with those on the left, was those lies over Iraq. While Trump and Farage might be able to stir up the laden racist living in some easily deluded fools, I’m doubting Corbyn can use the same tactic with those on the left. They like there “facts” too much.

And we’re ignoring the fact that the media are unlikely to give him a free ride. While they failed to take Trump and the brexiters to task for their numerous lies (perhaps because they were so numerous it was hard to keep up). But they are certainly not going to let Corbyn away with that. He says anything that sounds like a change in policy his flip flopping, he back tracks he’s dithering, he promises anything that’s probably undeliverable they’ll line up experts around the block to denounce him.

Is this fair? No, but its the reality that every left wing leader has had to deal with for some time. Brown, Miliband, Sturgeon have had to put up with the same. If you can’t take the heat, stay out of the kitchen.

And given that there’s two by elections coming up, at least one of which he’s likely to lose, it doesn’t bode well for Corbyn. Losing a byelection to a sitting and unpopular Tory government in a safe labour seat would be unprecedented and just plain bad. Losing one to UKIP would be disastrous and fatal. My guess is that if labour loses these next two byelections, we’ll probably see another leadership challenge shortly there after.

Perhaps more worrying for labour is the reasons for these byelections. Two MP’s simply up and quit. It suggests that many within the labour party are simply admitting defeat. They know Corbyn’s leading the party off a cliff but that they won’t be able to unseat him until its too late. They know he’s essentially allied himself with the Tories on brexit. Any political ambitions they have are about to be dashed. And come the next election a lot of them are about to find themselves unemployed. So yes, some are out looking for work already and if an opportunity comes along (such as to become director of the V&A), they are going to take it. So labour will probably face a dripping away of MP’s as they flee the sinking ship.

Cycle status

Chris Grayling, the transport secretary has shown himself to have some UKIP like views towards cyclists. Firstly he knocks one off his bike getting out of his ministerial car. Secondly he say’s they aren’t proper road users. I’m reminded of the the late (insane and drug fuelled) major of Toronto Rob Ford, who banned cyclists from the cities streets….then left wondering why there were so many new cars on the road.

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Any car driver who dislikes cyclists, just imagine he’s in a car instead. Do you want those tail backs to be even longer? More delays more misery. Cyclists are doing you a public service. And if you want to rant about them not paying road tax, well neither do you, there’s no such thing as road tax, roads are paid for mostly out of general taxation. And as for vehicle tax, cops, the queen and tractors (to name a few) don’t pay that either. Try screaming abuse at them and see what it gets you (about 6 months I’m guessing).

Either way, making Chris Grayling transport secretary is like making Jimmy Savile minster for children.

Brentry

On my travels I read an interesting article in the Economist about Brentry, that is the UK entry into the wider European economy. After the Romans abandoned the UK it had become a continental backwater, invaded and fought over by one group after another. By 1066, the rest of Europe had bounced back from the dark ages, international trade was expanding, new ideas from the east (well actually old ones that had be rediscovered) were being implemented and tried out. Britain however, was still essentially caught up in the dark ages.

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While William the conqueror and his methods were certainly brutal, one has to acknowledge the economic benefits the Normans brought with them. The UK started to trade with the rest of Europe. The Normans brought security as well as new technology and new ideas. They went on a building boom, castles, city walls, restored Roman roads and then later built many of the country’s now famous cathedrals. A sort of medieval Keynesian economics was at play. By the king’s death, Britain was booming. One is reminded of this Monty python sketch.

Indeed the Economist suggests that the Brentry might even explain the North/South divide. Its often forgotten that there were two invasions of Britain in 1066, one by the Normans, but an earlier unsuccessful one by the Danes (well more specifically the Norwegian king), that was beaten off. Much of northern England had been under Danish influence for sometime, so many supported this invasion. Needless to say they weren’t in a mood to bend the knee to a bunch of cheese eating surrender victory monkey’s. So they resisted, the Normans put down the rebellions with their usual brutality, but this put the north a good century behind the rest of the UK in economic development and they’ve been playing catch up ever since.

War of the worlds hysteria

I also came across a release of Orson Welles infamous War of the World’s broadcast. It is often remembered for the supposed national panic in unleashed when it was mistaken for an actual news broadcast. Well in truth this is mostly a fake news myth invented by the media of the era (sound familiar?).

While yes a small number of very silly people did mistake it for actual news, but these were isolated incidents. Most were quickly informed it was just a radio play of a book that had been available for several decades. There’s no evidence of anyone jumping from roof tops or being treated in hospital for shock, or mass evacuations of New York suburbs. The newspapers blew the story way out of all proportion. Why? Because they, in particular those controlled by Randolph Hearst (the Rupert Murdoch of his day) saw radio as a threat to their business. So the exaggerated the level of panic. And let’s face it, it sold lots of papers.

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Indeed, some pointed to how strange it was some getting in a tizzy over aliens from Mars while ignoring the very real threat from Hearst’s buddy Mr Adolf across the pond in Europe.

Nissan deal and humble pie

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I’m increasingly of the view that the fabled Nissan deal struck by Theresa May and Nissan boss Carlos Ghosn is never going to work. There’s clear blue water between what Ghosn is telling his company he got the UK to agree too (i.e that they will compensate Nissan if the UK leaves the single market) and what the government is saying (no payments were promised). Let me illustrate the problem with a thought experiment.

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Let us suppose the UK leaves the single market. While the Tories seem to think they can “have their cake and eat it”, the reality is somewhat different. Any sort of restrictions on immigration and the UK is out of the single market. All the other nations in the EU would have to agree to the UK staying in (or joining later) and there is no way that’s going to happen, not if you’ve been listening to what’s being said in other EU countries. Yes Canada can get such a trade deal, but they are the other side of the Atlantic and aren’t being run by a bunch of racist nutters.

Leaving the EEA trade area would create a whole host of problems. For example we’d still be subject to EU food labelling (contrary to current government claims) as that’s actually controlled by the WTO (a bilateral agreement which lets the EU export food to non-EU countries). We’d need to hire a shit load of vets or go vegan (something to do with the slaughter practice of animals, there’s not enough non-EU vets to monitor this and yes those rules still apply if you want to export food abroad), we’d need to hire a small army of trade negotiators before we can even negotiate a deal with say China (and we have barely enough to negotiate a deal with the Vatican). Oh and btw the Chinese are prevented from dumping steel in the EU thanks to another bilateral agreement which won’t apply to the UK after brexit, raising the risk of an immediate trade war (unless the Tories want to see the recently rescued steel mills shut). The banks will also move some of their operations out of the country and sack tens of thousands of UK staff.

Certainly thought, the UK will forced to revert to WTO rules (if the UK can qualify as a member otherwise its chaos), which would slap tariffs of up to 30% onto all UK trade with the EU. UK cars will be hit by a tariff of 10%. A tariff of that scale on every car coming out of the Nissan plant would mean a government subsidy to the tune of several thousand per car and the plant produces about half a million of them per year. So that’s a billion or two a year to keep one car factory going.

Think about that, Theresa May is proposing to spend a few billion a year to keep 7,000 workers employed. That’s between £100,000-£200,000 per worker per year (depending on the breaks). And this could go on for many years (and it could take a decade to sort out any sort of deal….and there’s no guarantee of success at the other end). It would actually be cheaper for the government to simply buy the factory off Nissan, close it down and hand each worker, say half a million each on their way out the door, telling them to use it to sort their life out (pay off the mortgage, retrain, retire).

Even ignoring such absurdities, what about the other car makers? Do you think JLR, a direct competitor with Nissan in the SUV market is going to be happy with them getting a subsidy? No, they’ll sue the government and demand the same for themselves. Now if every UK car maker got the same deal, and really if one gets it they’ll all be entitled, that’s a subsidy from the government of say £3,000 per car (for some vehicles it will be higher, others it will be lower, this is about what you’d expect at 10% on the average cost of UK vehicles sold). The UK makes 2.5 million cars a year, so that’s a cost to the government of £7.5 billion per year!

Oh, and that assumes the EU doesn’t decide that this subsidy is unfair under WTO rules and doesn’t lodge a dispute with the WTO. That would see putative tariffs imposed by the WTO and the EU at a rate of up to 30%, so it could cost the government three times this amount in such a scenario.

And even this £7.5 billion figure is of course slightly less than the current cost of the UK’s EU membership. Add on the costs of propping up the UK’s R&D and universities post-brexit (up to £8 billion), the farmers (£3 billion), the fishermen, the regions (Cornwall and Wales, both in receipt of billions a year in EU structural funds), and we’re looking at a frighteningly high bill, probably tens of billions a year, certainly many times more than it cost to be in the EU.

And these are not one off payments, these are yearly costs. The one off costs of leaving the EU could be as high as €60 billion, if you listen to what the EU is now saying. And with falling tax revenue and a growing deficit problem, quite simply put, these are cheques Theresa May cannot afford to write. Because the banks who lend the government money (and in future they’ll be doing that from Dublin and Paris) will let those cheques bounce.

The UK cannot buy its way out of brexit. There will have to be some pain. And my guess is Nissan workers are going to be those how have to take some of it. Which begs the question, what class of a moron is Carlos Ghosn? Was he always this stupid or did he have to take lessons? (from Trump university I assume). How do you know a politician is lying too you? His/her lips are moving. And if Mr Ghosn is reading this and think’s I’m not being a bit mean, I’ve some magic beans I could sell him, plus a mate of mine is looking to sell the Forth road bridge, I’m sure we could do a deal…..

…..Or perhaps we need to consider the possibility that Mr Ghosn is a little smarter than the average bear (to be honest, falling for such and obvious con trick is entirely out of character for him). Let us consider the following, he knows he was lied too, but that’s okay. He knows the Sunderland plant might not be viable outside the EEA. He’ll have to undertake massive layoffs or shut it down entirely. Its just he’d rather see the government be the bad guy and explain all of this to the plant’s militant workers, as well as helping to pay for the close out costs if the plant shuts.

So the sequence of events will be, he waits until towards the end of the brexit negotiations and its clear the UK is going to leave the EEA. He pops up waving his little letter from the PM and demands she pays up as promised. Given that she can’t afford to do that (as explained above), she’ll hum and haw and backtrack. He’ll say, you lied to me you lied to the Nissan workers, the deals off, I’ve no choice but to shut the plant down (on the eve of an election) and I’m suing the government for the costs of doing that. The government will make a show of resisting this, but then quietly settle the case out of court (they don’t want to face a scenario where a sitting PM has to testify in court, not least because of the political crisis that would emerge if she perjured herself in the witness box a few months before an election).

And we have to consider that Ghosn might be acting under orders from Paris and Tokyo. Nissan is after all a joint French and Japanese operation, which has close links to both of these governments. They know that if the Nissan deal were to collapse like this in the middle of brexit negotiations, it would be setting off a bomb under the UK economy. There would be a chain reaction of other car makers and companies effected by a potential hard brexit coming forward and warning their work forces of looming mass redundancies.

The Tories would be facing going into an election with falling poll numbers. And there ally Corbyn will be gone. Any significant threat of mass layoffs and his pro-brexit stance means he’ll face a rebellion from the labour party’s union supporters, who will hold another leadership contest and see someone else elected leader. Likely this new leader will come from the hard left of the party as a compromise (Owen Smith, Tom Watson, may be even Ken Livingstone). Naturally said leader can expect an immediate polls bounce and the Tories will be faced with the very real possibility of losing an election to a hard left candidate.

Hence they will come crawling back to the negotiating table and take whatever deal the EU offers that keeps them in the single market. They’d sooner face a backlash from the swivel eyed UKIP loons than see the loss of large chucks of the country and numerous marginal seats to militant and recently unemployed workers and a hard left labour party coming to power.

So the Nissan deal means Theresa May won’t be having her cake and eating it. It means she’ll be getting a double helping of humble pie.

Exit through the wingnut shop

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There’s some brexiters who argue that the UK doesn’t need to trigger article 50, nor spend two years negotiating leaving the EU (and thus its all just a big conspiracy to keep the UK in the EU). We just tell the EU we’re leaving and that’s that. Ah…..no!

To draw an analogy, this would be like quitting your job by just not bothering to showing up for work any more. Okay, so you’ll be leaving without a reference, without your pension contributions, without reimbursement for any outstanding expenses, without your next pay cheque and without the protections afforded by the law. You’d be at risk of your employer suing you for damages (generally your contract of employment will specify an agreed period of grace either side must give before the contract can be terminated) and you’d also not be eligible to claim unemployment benefits. Does any of that sound like a good idea?

The whole point of negotiating is that its a two way street, you reach an accord which gives both sides an acceptable agreement. Perhaps this is the problem of course, the Brexiters think that they can have their cake and eat it and thus the idea that they have to “negotiate” or “compromise” is alien to them. However by refusing to negotiate the UK would essentially be a conceding the field to its opponents. In other words the EU will decide the terms of the UK’s exit, without the UK being consulted.

Naturally the consequences of this could be quite serious. There’s a long list of issues that needs to be resolved and not just with the EU. The UK is doing something that isn’t really governed by existing legislation, so in theory it could leave the country in legal limbo if other nations don’t co-operate. Keep in mind article 50 was originally written by a British lawyer to provide some semblance of an exit mechanism, should it become necessary.

For example that 60 billion the EU says they will charge the UK as its exit fee from the EU. Now I’d consider that at present a negotiating position that they’ll likely horse trade away in exchange for the UK making certain favourable concessions (although the UK will inevitably still face some sort of bill in the end and it will probably be in the tens of billions). However if the UK doesn’t negotiate its exit, then obviously they’ll just slap that bill onto the UK and give the country 30 days to pay, perhaps they’ll even make it higher.

What’s that you say? You’ll refuse to pay? Okay and then the EU starts ceasing UK government assets, freezing bank accounts, imposing punitive taxes on UK companies and businesses or ceasing goods at Calais. Recall that a few years ago, after the Russians reneged on their debts (under Yelstin) it lead to them facing all sorts of sanctions from creditors. At one point a bunch of lawyers showed up at a French air show and tried to impound a group of Russia airforce planes. The Russians actually took off and fled back to Russia to avoid being impounded. That’s the sort of stuff the UK would be facing. The UK’s failure to pay this bill would technically count as a sovereign default, which would mean the UK’s credit rating would be cut to near junk status which would cause a whole host of financial problems.

Ask any lawyer and they will tell you that if someone is suing you in court for money, the worst thing you could possibly do is ignore it. They’ll win by default, the court will appoint a bailiff who’ll come round to your house or place of business and start impounding goods. You can make all the excuses you want at that point, they won’t listen and they don’t have too (they have a county court warrant in their hand). If they are in a good mood they might give you an hour or two to come up with the cash, before then start loading your stuff into their van. And they’ll keep coming back and coming back until you pay up. That’s what the UK would essentially be facing.

And then there’s issues like the WTO. The UK’s membership of the WTO is in a state of limbo. Now in theory so long as nobody kicks up stink it should be easy enough to straighten that out. However, if we’ve left the EU without agreement and are now locked in a trade dispute with them, quite obviously that will have to be resolved first. Without WTO membership the UK will find it quite impossible to trade abroad in any meaningful way.

Then there’s the status of UK citizens in the EU. Without an agreement it will be up to the EU, if not individual EU states, to decide on their fate. My guess is they’ll offer some sort of duel citizenship to the UK citizens they want to keep (i.e. the working age taxpayers living in their countries) while kicking out the pensioners who they want rid of (more precisely, they’d refuse them health care and hit them with a massive punitive tax on their pensions to force them to return to Britain). The French will no doubt withdraw the current border arrangements and simply wave through masses of refugees straight onto Ferries bound for the UK. So we’ll see a drop in east European workers replaced by hordes of pensioners and Syrian migrants.

But we’ll be able to send all them Polish people back right? No! You can’t deport someone to a government whom you don’t have relations with. This is exactly the problem with refugees, they’re in legal limbo and thus can’t be deported back to their country of origin. If the UK left the EU without triggering article 50, then all of the EU citizens would fall into the same category. It would be legally very difficult if not impossible to deport them, or any Syrian refugees for that matter.

And it won’t just be people coming in but goods too. As I’ve pointed out with regard to the post-brexit Irish border, its not people you need to worry about but contraband. Without a bilateral exit agreement from the EU the smugglers will be having a field day. They’ll be shipping in truck loads of tax free booze, cigarettes and petrol, undermining UK businesses and depriving the treasury of valuable tax income. As it is there needs to be some sort of an agreement reached to prevent this becoming a major problem.

And they’ll also be shipping in drugs too. Ireland is already a known transit route for drugs into Europe and in particular shipments into the UK. Our rugged West coast with its countless inlets and bays is virtually impossible to defend and patrol. And the Irish countryside, with its rabbit warren of narrow boreens and remote farm houses, gives smugglers plenty of places to hide stuff. Currently intercepting such shipments is a major focus of attention by customs officials both sides of the border. And its achieved by mutual trust and co-operation. Destroy that agreement and the only winners are the smugglers. In short, leave the EU without triggering article 50 and the only think that will get cheaper in Britain afterwards is the street value of heroin and crack.

So no, the UK can’t leave without triggering article 50. Doing so would be the height of irresponsibility and grossly stupid. Yes article 50 is designed to basically let the EU screw over the country that is leaving. But that’s still better than the alternative, leaving and getting screwed over by the rest of the world permanently.

Tories favour diesel farms over wind farms

Reblogging this from my energy blog….

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There are no sliver bullet solutions to the UK’s current energy problems. Wind power can certainly help, its led to big drops in the UK’s carbon footprint already, but only as part of a balanced energy diet within a grander overall energy strategy. However the Tories are hostile to wind power, preferring instead foreign owned nuclear and fracking, even thought neither is in a position to deliver any significant quantities of energy for some time to come.

This raises the risk of black outs if something isn’t done to plug the gap. So what is the Tory solution to this looming energy gap? Well instead of wind farms they favour diesel farms, clusters of diesel generators in fields up and down the country, subsidised by taxpayers I might add. If you ever want an illustration of everything that’s wrong with UK energy policy this is it, where to start with this one.

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Well for starters, diesel generators, while cheap to install are expensive to run. That’s why they are only ever used for generating electricity where there’s no other alternative (e.g. off grid power generation or backup generators). And with oil prices now on the way back up, those costs will start rising. They aren’t very efficient either. Yes a diesel engine in a car is more efficient than a petrol engine. But for power generation CCGT or IGCC plants have significantly greater efficiency. Potentially up to 55% efficient v’s at best 35% for diesel (and more typically 30% once the BoP is accounted for).

This also means that diesel generators are far more polluting, both in terms of carbon emissions and in terms of all the other gunk that comes out a fossil fuel plant. It beggars belief that someone can object to a wind turbine, yet look the other way to a bunch of these noisy beasts belching out carcinogenic fumes morning, noon and night. And again, if you are a UK resident, your paying for em. Carbon capture and storage is also a lot harder to implement with diesel farms than with the aforementioned gas cycle plants. So we lose that option too.

The irony is that I’ve long favoured the idea of distributed power generation, over centralised power stations. However, my preference is for CHP systems. They can run on a variety of fuels, including biomass or hydrogen (as a long term replacement for natural gas). And as we make use of the heat to meet winter heating demand (which represents a greater proportion of the UK’s energy demand than electricity remember), they are much more energy efficient, up to 85% efficiency is possible (so even running on fossil fuels, they’re 2.5 times better than diesel farms and nearly twice as efficient as a gas turbine plant).

So it would be all too easy to alter this policy slightly and achieve a similar result, just one that promotes renewable energy, cuts emissions, lower energy costs and helps keep homes warm in winter. So why is the government opting for diesel farms over CHP? Because CHP plant would be based in cities were the plebs live. You think home county toffs what money spent on keeping the great unwashed warm in winter! When instead they can earn a nice pot of cash putting a few diesels in some idle corner of their estate. Furthermore CHP might actually work (up to 40% of some European countries installed capacity is CHP), hence they’re will be no need for fracked gas or new nuclear plants. They are picking the worst possible energy option not despite it being so awful, but because it is so awful.

Any semblance of sensible energy policy has long been abandoned by the Tories. I think the UK’s post-brexit motto has to be go sell crazy some place else, we’re all stocked up here!

Richmond park autopsy

Its worth analysing the results of the Richmond park byelection.

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Spot the clown competition

Let us start with the facts, Zac Goldtwit Goldsmith resigned from the Tory party and stood as an independent. This was a direct challenge to the PM. Normal protocol would be for the Tories to field a rival candidate and deny him his seat. However, Theresa May worried that the lib dems might use this as a mini-referendum on brexit, decided she’d rather have Goldsmith sulking in the corner and making noise about Heathrow, than give the anti-brexit forces in parliament a boost. So the Tories didn’t field a candidate, neither did UKIP and they’ve actually been secretly backing him (an unprecedented move for a senior MP who has so publicly defied the party leadership). And yet despite all this the government and Zac Gravedigger Goldsmith still lost, clearly indicating that while the locals are upset about Heathrow, they are more worried about brexit.

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I have to say that I wasn’t convinced this tactic of the lib dems would work. Elections are rarely settled over a single issue, even something as serious as brexit. But clearly even I underestimated the depth of feeling about it. Of course Zac Goldtwat Goldsmith, who fortunately we’ll never have to see again, clearly failed because he was trying to fight an election on a single issue (Heathrow). Ignoring the fact that most of the other candidates were also opposed to Heathrow expansion.

This I suspect will have a pronounced chilling effect on the Tories. Its shown a strategy that the remain camp can apply to halt brexit. Many Tory marginal seats in the south east voted heavily for remain. Its therefore quite possible than any MP who votes for article 50, or if the government somehow wins its appeal and pushes ahead without a vote, then those MP’s will likely lose their seats . And those seats include several minsters. So while the Tories have been trying to put a brave face on it, I suspect there’s some panic going on behind the scenes.

In the event of a brexit vote many MP’s will now have to weight up the consequences if they vote leave yet their district voted remain. Namely the lib dems, the greens and SNP are likely to pick up a good few seats in many urban marginal constituencies across the country as strategic voting is launched to punish the Tories for brexit. While this will probably mean the lib dems & the greens ending up with a vast number more seats (and the SNP turning Scotland a solid shade of yellow) next election, its unlikely they’ll get enough to stop the Tories winning. The Tories you see have a secret weapon, a fifth column within the left  – Jeremy Corbyn.

The real loser in Richmond park was the labour party. Their candidate, who got only 1/3 the votes received in the last election, managed to not only lose his deposit, but he actually got less votes than there are labour party members in this constituencyIf Corbyn can’t even get members of his own party to vote for him, how in blue blazes does he propose to win the next election? What’s his cunning plan? And keep in mind that the greens and the other left wing parties all pulled out of Richmond park to give the lib dems a clear run. The very fact Corbyn didn’t do so should confirm what I’ve been saying for sometime now – labour is a pro-brexit party, they are allies of the Tories.

In a recent interview he made it very clear that he will not veto or vote against brexit, even if it means no protections for workers rights and the environment. Yes the current leader of the labour party is quite willing to sacrifice everything his party has strived for the last 70 years upon the high altar of brexit.

Now if you ask labour why they are adopting this stance no doubt they’ll mumble something about how the majority of the country voted leave and why we’re all brexiters now. I think the response from Richmond park can be summed up as – bollix to that! Firstly, the majority didn’t vote for brexit, only about 37% of the electorate voted for it (a majority would require +50% of the electorate to support the motion, brexiters might want to google the word “majority” sometime). The people who voted leave were Tories, UKIPers and other morons who read too much tabloid newspapers, likely the people frantically googling “what is brexit?” the day after the referendum. None of them will vote for Corbyn just because he’s adopted a pro-brexit stance. There is nothing he can say that will convince them to vote labour….except perhaps “I resign with immediate effect”.

By contrast labour party supporters voted overwhelmingly remain, at between 67-90% (it depends on who we count as “labour supporters”, only party members or anyone whose vaguely supports the party). Richmond park shows the pro-brexit stance of the labour party is likely to lead to a collapse in support come next election. They will be decimated, losing seats left and right to the lib dems, SNP, Greens, Tories and UKIP. Its a bit fanciful for UKIP to claim they can replace labour. But its certainly true that they will take a lot of seats off labour and likely see their voting share increase next election. Not thanks to anything the Tories have done, but thanks to Jeremy Corbyn’s pro-brexit stance, erroding away his own support base. And even Corbyn himself could lose his seat. While he may have secretly voted leave, 70% of his neighbours in London didn’t. And as Richmond park shows, they might well punish him at the polls for that.

However, if labour were to alter its stance, this would change things. An obvious compromise between the “never brexit” wing of the party and the “Muesli brexiters” around Corbyn would be to insist on parliament being involved (and voting on) the brexit negotiating process, with a vote against article 50 if the Tories refuse to do so. And there is no way they can hope to get concessions out of the tories if they don’t indicate they are prepared to push the nuclear button.

In the event of the next election, labour would threaten the Tories with a vow to enter into a strategic voting alliance with the other left wing parties (not fielding candidates in one another’s constituencies) with it agreed that should their coalition win they will hold a 2nd referendum.

This referendum would presumably have three options, A) brexit according to whatever conditions the Tories had already negotiated (or in the event of an early election a pre-specified brexit option that would be the coalition’s negotiated aim, presumably the softer Norway model, with a reverse Greenland option for Scotland and Northern Ireland) B) Brexit, but reject the terms negotiated (or a rejection of the soft brexit option mentioned above, in the event of an early election, so in other words the whole process would have to be renegotiated from a blank sheet of paper). Or C) reversal of the previous referendum result, no further referendums on EU membership for at least 50 years (this last condition is get the EU off the UK’s back, they will not appropriate this will they? Won’t they? going on any longer and might vote to eject the UK from the EU regardless of the outcome).

The scary thing for the Tories is, that’s actually quite a reasonable proposal. And in the first instance if the labour party were to vote against article 50, that’s basically the end of it. Theresa May is now down to a wafer thin margin of just 13 and like I said at least two dozen of her MP’s will probably lose their seats if they vote leave. They may not vote against the government, but they might abstain, swinging the majority back to the remainers. And of course the Lords is largely controlled by labour, so they vote against article 50, that’s a 6 month delay straight away. Add in another 6 months for various left wing filibusters and the government’s brexit plans lie in ruins.

And incidentally the Unionist’s too will likely not back the Tories. They are split on the issue of brexit and given that Northern Ireland voted against it they will have to consider the possibility of a backlash in Northern Ireland. Again, as Richmond park shows, back brexit at your peril if your standing in an area that voted remain. This could split the unionist vote and hand control of the province to the SDLP and Sinn Fein, which would lead to a border poll in the North, a nightmare scenario for the Unionists. Because even I won’t dare speculate on the result. Brexit is the sort of thing that could convenience enough people in both communities to vote to leave the UK. So its a risk the unionists would be fools to take.

The Tories probably won’t call an early election, because such a proposal actually might tempt enough voters to back this left wing alliance. And strategic voting would turn the unfair nature of the UK voting system (which tends to favour larger parties) on its head. It would give this coalition a good chance of putting together enough seats to gain a majority.

More importantly by labour changing their position on brexit it could, ironically, kill of UKIP. In such a scenario UKIP votes would face the dilemma of voting UKIP and thus voting against the pro-brexit Tories, giving the left wing alliance a descent chance of capturing more seats, or voting strategically themselves. While I suspect UKIP will pick up more seats in such a vote (they were unfortunate not to win more last election), their overall voter share will drop.

If there’s a nightmare scenario that has the Tories waking up in a cold sweat its “Jeremy Corbyn UK Prime Minster”. Worse, him as PM in a UK not constrained by EU laws. What they are planning to do to the unions and the migrants with brexit he will unleash payback on them and their non-dom allies. Obviously his coalition partners and the core of the labour party will likely restrain some of the more hard left policies he’s proposed, but certainly I suspect its a gamble the Tories aren’t willing to take.

Hence why I think we can turn the clock back. If Corbyn were to change his stance on brexit, I suspect the Tories will very quickly move to do a deal. They’ll consult with parliament, they’ll give them a vote, they’ll go for a softer brexit options and they’ll likely agree to some sort of referendum or early election to endorse any negotiated deal. So post-Richmond park the ball is now in his court, let’s see if he’ll do anything with it.

If he doesn’t then I would urge anyone who is even vaguely left wing to leave the labour party and make your views known to your local MP that you will vote against them next election or in any subsequent post-Corbyn elections to come.

The populist authoritarian tribe of the demagogue

I came across a piece by the Guardian encouraging its readers to break out of their bubbles and go read the views of those on distinctly republican websites, such as Reason or the American Conservative. While I appreciate the intent, the fact is there’s not much point. Regular readers of this blog will probably notice I occasionally reference these websites myself. The problem is that conservative voters don’t believe in conservatism anymore, Trump proves that.

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One could characterise republicanism as founded on four pillars – religious conservatism, a belief in small government, fiscal conservatism and strong on security. Trump breaks all of these rules. He’s a thrice married sex feint who thinks married women are fair game, fantasises about his own daughter and may have raped multiple women (or so they allege). There’s a big question mark over his religious beliefs, he is certainly not a regular attender at church. One could scarcely think of a worse choice if your a “values voter”.

As for small government, well he wants to impose trade tariffs which will basically jack up the price of many goods and services. By restricting immigration he’s basically dictating to American employers who they should hire. Keep in mind there aren’t many Mexicans in Ohio or the rust belt, they tend to congregate in the states where there are labour shortages. So if they leave or are forced out, who takes up their jobs? In short Trump is more of a central planner than either Obama or Bernie Sanders. As I discuss before, in relation to UKIP, anyone who even remotely considers themselves a libertarian or a believer in small government, you cannot be in favour of strict immigration controls. These two positions are simply incompatible. The American dream, that a migrant could come in and if he worked hard he could make something of himself, well that’s dead now.

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And as for cutting government debt, not only is that going to be abandoned under Trump, the only real question is how high does he push up America’s debt levels, some say $5 trillion, others say closer to $10 trillion, we’ll have to see. But certainly its baffling that any conservative, after all the stick they gave Obama over this issue, that they could then vote for Trump.

And as for security, well let’s just say Trump has a “unique” point of view. He’s clearly a Putin groupie, but the problem is that the US and Russia are rivals and its difficult to change that. Putin is currently installing nuclear missiles in Kallingrad, threatening not just NATO bases but US interests in the region. Putin’s allies include Iran, North Korea, China, Syria, Cuba, Pakistan and numerous others. In short, in almost any potential flash point Putin is either the likely enemy or the one supplying that enemy with weapons.

Historically republicans have believed in “firm diplomacy” of speaking softly and carrying a big stick. The idea, of the president going to Moscow and bowing before Putin and kissing his ass (which seems to be Trump’s plan) is about as far removed from a tradition GOP policy as you can get. I mean imagine if Reagan went to Berlin and instead of demanding that the Russians tear down this wall, instead he say’s actually that’s a very nice wall, can you put me in touch with the builder and does he do work in Arizona?

Campaigners pose on a 'United To Stop Trump' cardboard wall in front of the Brandenburg Gate to urge Americans living abroad to register and vote in Berlin

And already Trump is showing every sign of planning to ignore the constitution and use the presidency as a means of getting uncompetitive advantage and bully special favours from foreign governments to the benefit of his businesses, even thought that’s illegal. He’s showing every sign that he’ll be getting up to African dictator levels of corruption.

All in all if American conservatives were true to their values, they should not have voted for Trump. They could have gone into the polling booth, closed their eyes and literally voted for anyone else and they’d have been voting for a better conservative candidate. Yet the exit polls show they did and they did so not despite his policies but because of them. The fact of the matter is the republican party did not win the election, they lost it, they weren’t even on the ballot. The alt-right won the election.

And here in the UK, the Tories too have abandoned their long held political philosophy, they are no longer the party of small government and prudent financial management. Instead they are now a party of xenophobic central planners, who practice political patronage, lavishing gifts on those who they favour for political reasons (Nissian, Hinkley C), punishing those who they dislike (such as wind farms or solar power). And with the UK’s debt now out of control and inflation rising, the cost of goods in the shops going up, they aren’t even pretending to care about the state of the public finances. They’ll still serve the rich (that was never going to change) but they have essentially abandoned their political philosophy.

In this post-truth world the reality is that so-called conservatives don’t believe in anything anymore. As Adam Curtis discusses in his latest film many will now vote for a candidate who tells the most outrageous lies, even though they know that he lies and he can’t possibly keep his promises. And he knows that they know that he lies and don’t expect him to keep his promises. Its just that they find his lies more comforting that someone else’s facts. Many now subscribe to a form of government that can be best described as “authoritarian populism”, which favours big brash chest thumping strong men over anyone vaguely sensible. That he’s insane and will drive the country over a cliff in the long run does not matter to many so-called conservatives now.

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This is why Hillary and the remainers lost, they played by the rules and came across as the class swots. As this video highlights, we have now fallen for the demagogue trap Socrates and Plato warned us about in the very early days of Greek democracy. They warned that voting is a skill people need to learn. Letting anyone just vote for whoever they like is potentially very dangerous, given how easily people can be manipulated by a charismatic leader……and they were saying this without knowing about the internet or 24 hr rolling news.

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The jocks have now taken over the asylum. For them politics is now a sort of sadistic game, where they’ll cheer the murder of an MP by a racist with 50,000 tweets. For sure they’ll use their former ideology as a stick to hit the democrats with, but ignore it when one of their own tribe does the same or worse. All they care about is their tribe winning and winning by any means, even those that involve lying and cheating.

So ya, you can go visit these conservative websites if you feel like it, but it won’t do any good, republicans stopped believing in these things along time ago.

Brexit review – 5 months on

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Its about 5 months since the referendum, so where are we in terms of brexit? Well, if leaks from Whitehall are to be believed, nowhere. Theresa May claims that she’s come up with a cunning plan, as cunning as a fox who won most cunning in show five times in a row. Only those leaks suggest that five months of work has actually produced…..nothing.

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Like a school kid who constantly refuses to do her chores because she says she’s working on her homework, we’ve now seen inside Theresa May’s schoolbook and there’s nothing there but a few doodles. There is no grand master plan for brexit and their probably never will be. A country of 60 million does not get to dictate terms to a continent of 500 million, we’ll get what we’re offered and we’ll have to take it.

And we can’t even guess what sort of brexit we’re going to get, the government’s apparent position sways between the hardest of hard brexits, the laughably delusional statements of Boris to more recently Theresa May implying to the CBI she’ll go for the softest of soft brexits and may take more than the two years to happen as she’ll try to negotiate a transition deal. In short brexit means brexit seems to mean whatever the Tories reckon will placate whichever audience they are talking too.

About the only certainty we can have about the brexit process is that the Tories will inevitably use it to go after hard won environmental protections and labour laws designed to protect the very “JAM” families they now pretend to be the champions of.

And what are labour up too? Why aren’t they trying to stop the Tories? Well because with Corbyn in charge they are a rudderless ship. Both he and the “muesli” brexiters in labour also want brexit, as they hope they can rebuild their socialist workers paradise on the ashes of the mess the Tories leave behind. Of course they’ll never get the chance to do so given the impossibility of them winning the next election.

Which brings us to the supreme court ruling due next month. Theresa May’s strategy here seems to be that of the typical arrogant Tory, assume you’ll get your way (ya that worked well in the referendum didn’t it!) and then run around in a panic when you don’t and blame others for the mess you waded straight into. Her plan B is to put a three line piece of legislation to parliament. That would be little short of an insult to the democratic process. The most important bill in recent UK history cannot be three lines long. Not least because such a bill would be too opaque and at risk of further court challenges.

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And keep in mind what parliament really wants here is to be consulted about the brexit process. They aren’t comfortable with the idea of turning Theresa May into an all seeing and all knowing dictator for some ill defined period and parliament reduced to that of a debating club. The government says they can’t involve parliament, because that would give away our (entirely non-existent) strategy. Well there’s a simple horse trade there, have a closed session of parliament and tell MP’s what Theresa May’s “bloody good idea” is. Then vote on article 50. Of course they won’t do that (because she doesn’t actually have a plan), and therefore there’s a chance of defeat in the commons. I’m doubtful the lords would endorse such a bill, as it would essentially be a case of the PM trying to cynically get around a court order. If the lords say no, then that puts a delay of at least 6 months to a year onto the process.

And the SNP and Northern Ireland assembly also want it determined if that have some say in the process. If the court says yes then that delays brexit yet further, or at worst kills it stone dead (or at least until after a border poll in Northern Ireland and an 2nd indyref in Scotland, this one called by Westminster).

And what is the state of the public finances? Well the guess is that we’re looking at a £122 billion hole in country’s finances, much of which will have to be borrowed. Its now likely the UK debt will exceed 90% of GDP by the next election (a level unseen since 1964) and likely exceed the symbolically important point of 100% within the next decade. And as former Chancellor Alastair Darling has pointed out this is arguably a hard problem to fix than he faced in the financial crisis . That was a temporary blip, this is an ongoing crisis that can only be stopped by massive public spending cuts or a significant hike in taxes.

And of course there’s the Trump factor. Some Tories were secretly hoping he’d win, as that would make things easy for the UK. But much as I warned, no, the only think we can be sure about trump is that he’s unpredictable. He’s now trying to instruct the Queen as to who she should pick as her Ambassador to the US. And his first instructions to Farage? go sort out those Scottish windfarms. Yes Trump things he’s entitled to dictate the energy policy of Scotland. And this is the great white hope of the brexiters!

Nigel Farage, the interim leader of the United Kingdom Independence Party (UKIP) holds a platter of Ferrero Rocher chocolates during a party in London

You’re ambassador, lord Farage will see you now

Actually my guess is that Trump may not be in power by the time negotiating with the Americans comes up, he’ll likely have been impeached or had a little “accident” before then. I still say there’s an outside chance he won’t even be inaugurated, especially with allegations of voter fraud now swirling. Bottom line, you can’t rely on the Americans to bail you out, they’ve got bigger problems to deal with.

Given all of the above you would question the logic of pushing ahead with the aggressive timetable Theresa May has set. It would make far more sense to now delay the brexit process for at least a year in my view. Trigger it say in 2018 instead. This would give time for the legislative hurdles to be dealt with and for the government to actually come up with a strategy and consult parliament about that process. Also the fact is that 2017 is not a good time to be negotiating such a thing, there’s elections in Germany and France this year and possibly in Italy too. We’re not going to get anything sensible out of the EU because they have no idea who will be in charge of these countries in 6 months time. Waiting a year would give time to resolve this, talks when they do start, will be at a much swifter pace.

Of course the downside to delaying brexit, the whole reason why Theresa May is insisting on her current strategy is that this would mean the 2020 elections would straddle the brexit process. We’ll be voting on the next parliament about the same time brexit talks are winding up. My response is, good that’ sounds like an excellent idea. It gets around calls within her own party and the lib dems for a 2nd vote on the terms of brexit. If you like the deal she’s got, vote Tory, if you don’t vote labour, if you’d rather stay in the EU after all vote lib dem, if you want hard brexit and become airstrip one of the Trump empire vote UKIP.

So if’s that simple you may enquire why is Theresa May going out of her way to avoid this? After all the poll suggest she’ll likely win the next election anyway. Well the answer is very simple, I suspect if we got the PM drunk and asked her that question the response would be BECAUSE YOU MORONS VOTED FOR BREXIT.

Many voted brexit because they feel the government doesn’t listen to them, it was an act of political self harm, a cry for help. However as I warned prior to the referendum the likely outcome wouldn’t be a government that’s more caring and listening. Its one that would be more hostile, authoritarian and much more willing to lie and deceive the public. After all voters have just shown they can’t be trusted with important decisions.

So let us be clear, this is why the PM is so reluctant to trust either the public or even her own MP’s with a vote. Because both have shown themselves to be woefully unqualified to make important decisions anymore. Brexit means chaos and brexit means a UK that is significantly more authoritarian. So congratulations to any brexit voters who voted for this.

Bigoted Britain

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One of the more unsavoury aspects of the brexit vote is how the bigot brigade now feel they can throw their weight about. There’s been a worrying rise in racist and xenophobic incidents, up 14% nationally, but as high as 70% higher in some hot spots. A number of foreigner visitors (some only here as tourists) have reported all manner of stories of random abuse being shouted at them, eggs thrown at them, shop windows smashed or being attacked in a public park. Even Lily Allen has reported how she had abuse shouted at her by a cab driver who refused to accept her fare (she’d said something earlier in the week about how the UK should take in more refugees). And this is on the mild side. We have of course the recent murder of a Polish man (now being investigated as a hate crime) and of course just prior to the referendum, there was the murder of MP Jo Cox by a pro-leave bigot.

Unsurprisingly given that Britain has become a more racist and unwelcoming place, some have had enough and there’s stories of how some Polish people are now moving out of the UK, now no longer feeling welcome. I’ve even heard talk from one or two people I know who are thinking about leaving. We’ve even got the rather embarrassing story of how the descendants of Jewish families who came to Britain to flee the nazi’s, are now fleeing back across the channel and seeking to regain their German citizenship.

The word “Britain is increasingly being seen in international circles as synonymous with the word “bigot. And anyone who voted brexit, let us be clear this one is on your head. Make whatever excuses you want, but by voting leave you made common cause with the sorts of racists and bigots a previous generation of Briton’s died to stop from taking over this country. By voting leave you betrayed every principle the UK was founded on. For shame! History will likely judge your actions very harshly.

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Stateside some Americans might be tempted to take the moral high ground and say how awfully racist the British now are…yet they still can’t explain why so many want to vote for Trump. Maybe I can offer an explanation.

In part it has to do with “the bloc”, that being the GOP voters, who for various reasons (ideology, religion, down right ignorance and stupidity), will always vote GOP no matter what. The GOP could nominate Kim Jung un, he could campaign on a platform of selling them all into slavery and randomly shot into the crowds at his rallies and I guarantee you the GOP would still carry most of the “red states”. Even if the reincarnation of George Washington was the democrat candidate.

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Secondly, Americans, much like the British, need to accept that they are a much more racist country than they have ever realised. Case in point, the Bundy brigade who held up a wild life preserve at gun point, then after a stand off, car chase and shoot out (which left one of their number dead) recently beat the rap and walked out of court without any punishment. By contrast, protesters against an oil pipeline in Dakota have been harassed, suppressed and imprisoned. A reporter, who was filming the protests, now faces 45 years in prison. Edward Snowden would get a “mere” 30 years if he arrived back in the US.

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Spot the terrorist (PS, according to the Trump bigot brigade, its not the guy with a gun)

And in other news missed within the election coverage, a Saudi student was killed in what is believed to have been a racially motivated attack. Plus, as James Comey’s blatantly politically motivated actions have illustrated, parts of the FBI are filled with racist rightwing partisans.

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An African American church burning…in the name of Trump!

One is reminded of the bad old days in the deep south where the Klan would go out and lynch someone, get caught and walk out of court scot free. Meanwhile any black or northern college activists who tried to do something about segregation would be followed around by the cops, get beaten to a pulp while the cops looked on and then get themselves arrested and the book thrown at them for the most minor offences…..then also get lynched and murdered themselves.

The unfortunate reality which this election campaign has exposed, is that racism in the US did not end with the Jim Crow laws. It just went underground, it went dark. The reality many Americans need to accept is that probably about 1/3 of the country, or at least 3/4’s  of “the block”, are racists and bigots. They do not believe that a black person is equal to a white person (some even argue that blacks were better off as slaves!). Nor is a catholic, a Jew or a Muslim equal to a WASP like them. That Hillary is automatically disqualified from being president, not because of her emails or her politics, but because she’s a women and a women can’t be in charge of a man.

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And its obvious the US far right plan to try and intimidate ethnic minority voters during the voting on Tuesday. Already some of them are showing up at polling stations with guns. The irony is their excuse is they fear the election being rigged…..so they plan on basically rigging it themselves! One can only assume that if they win, much like how the brexit brigade were emboldened in the UK, they’ll go on the rampage. We’ll be hearing stories of burning crosses on people’s lawns and ethinc minorities being driven out of white neighbourhoods.

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Again spot the terrorist…hint he’s the guy who isn’t white

Making the West history
And what are the likely consequences of all of this? I mean if foreigners leave it will mean more jobs for British people? Actually no! If one or two of the people I know leave, well yes I suppose a British person could take their job…..if they’ve got a PhD in a particular narrow field of chemistry or engineering and about ten years experience! Oh, and if they leave they take their research grant with them and the half a dozen British technicians who work for them get the sack.

As for lower paid workers, it is often argued they are doing the jobs the British won’t do. That’s not quite true. Often the problem is that these jobs are temporary posts in locations far away from unemployment blackspots. A Polish person will have no problems relocating to Inverness for 6 months to do a minimum wage job over the summer. But a Britain person in Skegness with a house and kids in school often isn’t willing to do so. Remove the option to hire the Polish person just means one of three outcomes, the job will be unfilled, raising the risk of the company shutting up shop or move overseas. The company may increase its wages to tempt a British person to take it (but that pushes up the cost of the services it offers, making it more expensive to UK customers and potentially rendering the company uncompetitive internationally). Or,  the company may seek to eliminate the job by automating it altogether. All in all, the likely outcome of this rise in racism is likely to be less people in employment not more.

As I’ve pointed out before, the UK is not Australia (i.e. a combination mining colony and holiday destination). Running a knowledge based economy in an ageing country without the ability to bring in young minds (and tax payers) and fresh ideas is likely to be a recipe for economic disaster in the long run. The next generation of inventors and innovators will skip Britain (and the US) and head for less racially charged nations. Neil Ferguson pointed out in his series a few years ago, The west, and in particular Britain’s, success in past centuries boiled down to a number of “killer apps”. Competition, Science, rule of law, etc. Now you (like me) may dispute some of this theory here, even perhaps devise your own set of “apps”, but one cannot help but point out that many of these “apps” only work on the implicit assumption that the West remains open to foreigners to coming in and open to new ideas (i.e. none of this anti-science malarkey also on the rise since brexit).

And keep in mind that the UK is at a disadvantage to other Western states because it lacks the natural resources of the US, Canada or Australia. It doesn’t have the high value exports and warm climate of Spain, Italy or France and its got nothing like the high tech industrial base of Germany. Indeed per capita, even Ireland ranks above the UK for industry as a proportion of its GDP (20% in Ireland v’s 10% in the UK).

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So brexit now threatens to undermine the UK’s ability to bring in new talent (such as scientists, doctors, etc.). Indeed the country may now lose the people it has as they seek their fortunes in other parts of the world (as the falling pound means a massive drop in relative salaries). Already quite a few recent engineering graduates are heading for the exits.

Also the other “killer app” of the UK (relative to the rest of the West) has been its relatively free markets and easy access to finance. Given that the banks are on the verge of jumping ship (for better or for worse) that crosses off that one. An orderly evacuation of New York is possible if Trump wins. And the post-brexit UK is now an economy based heavily on government intervention and political patronage, as the Nissan and Hinkley deals make clear. Those who bend’eth the knee before the brexit high sept, will have gifts lavished on them. Those who are seen to be out of favour (e.g. wind farms which have helped cut UK carbon emissions by rather a lot recently and stabilise energy prices in he wake of rising gas prices thanks to brexit) are punished for their success. Keep in mind that its likely the Nissan deal could work out as extremely costly to the UK, and Hinkley C is likely to cost the taxpayer tens of billions (on top of the hundreds of billions bill payers will have to stump up over its 50 year life). And its recently been revealed that the government will have to pick up the tab for the plant’s eventual decommissioning (which generally has worked out more expensive than building the plant in the first place).

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And one cannot help but point out the irony of a brexit won on the back of a lie that we’d get money back of johnny foreigner in Brussels to spend on the NHS….instead the UK is likely to have to pay out billions to foreign multinationals and billionaires, while the NHS is screaming for funding, with dire warnings of possibly collapse in the provision of certain services if something isn’t done quickly. Hardly progress is it! And as a whole the UK government is already facing a £14 billion shortfall due to falling tax revenue.

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And this post brexit bigotry also raises a more serious risk, the breakup of the UK. I would argue that hidden in the small print of the contract that is the UK is the long standing principle that the English, who make up the majority of the UK’s population, will not use their majority position to force English nationalist domination onto the other parts of the country. Brexit and the bigotry it has spawned obviously suggests that this particular contract has been torn up. And if that’s the case, then the UK itself is on borrowed time. I’m not sure if the Indyref2 will go the SNP’s way, we’ll have to see. I will certainly be voting yes, if only to get away from all of this awful xenophobia. But even if its another no vote, I’d still argue a future break up of the UK becomes a matter of “when” and “how” and no longer “if”, unless something is done to kill of this rising tide of bigotry. The lessons of history are not on the UK’s side here.

Recall how the Soviet Union tried to hold things together as the Commonwealth of Independent states after the fall of communism, which very quickly broke down, once the other nations saw a rising tide of Russian nationalism. Similarly Yugoslavia broke up, when the other nations feared domination by the Serb majority. Czechoslovakia split down the middle as well. And the Austro-Hungarian Empire imploded after World War I once it became clear the scale of the mess the Hapsburg’s had dragged the various ethnic groups in the country into. And least we forget Ireland left the UK also thanks to World War I because the view was taken that we could no longer tolerate English interference in Irish affairs, or being dragged into European wars that we wanted nothing to do with.

One of course hopes the future breakup of the UK will be peaceful, but speeches along the lines of how “we came into the EU as one nation and will leave as one”from the brexit brigade sound eerily similar to what was coming out of Slobodan Milosevic’s mouth in the lead up to the Yugoslav civil war. Trying to stonewall the Scots in the event of indyref2 (which seems to be Theresa May’s plan) is a potentially very dangerous tactic.

Equally headlines branding Judges “enemies of the peopleis the sort of thing I’d expect to read in Der Sturmer in the 1930’s, not the UK in the 21st century. And of course one cannot help but put point out the irony of how one of the arguments for brexit is that British judges should make decisions like this….now the British judges have spoken they’ve been vilified. There’s a very real risk that if there is a vote on brexit in parliament, of it being turned into a rerun of the 1933 Enabling law vote in Germany.

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So if brexit means bigotry, then I would argue its a price that is too high. The price is likely to be the future economic prosperity of the UK, if not an end to the UK itself. Thus brexit must be stopped, or failing that it must be set up to screw over the bigot brigade. A soft brexit, with open borders, a relaxed policy on refugees (here’s a thought, the regions which voted the most for brexit should be required to take in a higher proportion of them!) should be a priority.

And there needs to be a change in the law to drive the bigots back into whatever gutter they crawled out of. Fines, prison sentences, a block on claiming benefits or working in a public sector related job, all should be increased to make them think twice before opening their dirty racist pie holes. I’d argue this taxi driver who refused to pick up Lily Allen should be stripped of his cab license for life. Anyone who is convicted of racial hatred, I say treat them like the UKBA treats migrants to the UK. They’d have to go through several years of paying taxes but going without benefits payments or tax credits or voting rights. Then, assuming they behave (else we reset the clock and they have to start all over again), they earn the right to reapply for citizenship to get all of these things back (paying through the nose for it, going through citizenship classes & tests, etc.). That might teach them a bit of respect!