The title of this post harks back to an article by Will Hutton in the Observer on the occasion of a previous visit to China by Chancellor of the exchequer George Osborne. The article reflected on the naivety of Osborne’s approach to China.
This week Osborne is back showering the Chinese with more begging and blank cheques for any partner he can sign up in a ‘deal’ – notable amongst them being £2 billion in guarantees for Chinese investment in the Hinckley C nuclear power station. This comes on the heels of the ideologically motivated rejection of the Navitas Bay wind farm which promised significant green energy generation on the South Coast with no apparent downside and in a much shorter time frame with far lower risk.
This infatuation with China seems to make no sense and appears to be motivated by a deep disdain of all things British or European combined with a huge naivety when it comes to dealing with the Chinese. Not, of course, to mention a lack of caution when giving access to crucial infrastructure to a country that has no interest in our welfare, openly flouts international law, has little respect for human rights or intellectual property and openly despises us in its state-controlled press, which is launching an illegal territory grab in the South China sea and seeking to extinguish Tibetan aspiration, while at the same time undergoing a huge military build-up and indulging in regular cyber attacks including UK targets.
This appears to be a theme with Osborne. He appears to be mesmerised by the combination of power and corruption – witness the unseemly incidents involving himself and Peter Mandelson on Oleg Derepaska’s yacht before the 2010 election, or his dangerous failures to correct abuses in the financial system.
Many who have dealt with the Chinese at first hand commercially will tell you it is a risky business. There is, for example, no real recourse to law when trading in China, but anyone dealing there can be subject to draconian laws designed to advantage Chinese interests. Contrast this with the UK where foreign interests often enjoy huge advantages thanks to ruinous trade treaties such as the upcoming TTIP agreement which the Tories are pushing for so aggressively even though much of it is secret.
So what is driving Osborne here? Is he perhaps hoping to emulate his predecessor Nigel Lawson (who today devotes much of his energy using the influence bestowed on him by public office to doing real harm with his mischief-making on climate change)? Under Thatcher many hopes were pinned on a combination of exploiting a fossil-fuel resource along with seeking help from an eastern industrial partner (Japan). This has parallels with today’s headlong rush for fracking for gas and a partnership with China, although it does seem like both these modern prospects seem far more uncertain and risky than their historic counterparts. Ironically the partnership with Japan was only possible because our EU membership meant that Japan could benefit from circumventing EU car quotas. Today where the Tories seemed determined to leave the EU with the help of their UKIP partners, completely misunderstanding the only remaining reason why anyone would want to work with us. Similarly fracking is a far less certain proposition than north sea oil and gas, with huge consequences for both our landscape and climate change.
There are of course similarities . Lawson sold off North Sea oil far too cheaply under pressure from US oil interests he rushed to sell the rights to and failed to get a decent return for the UK or to save for the future as, for example, Norway has done. Part of North Sea revenues were then needed to compensate for the dismantling of UK industry motivated by political dogma, but of course now the oil and gas have gone in less than a generation and we have no industry. Contrast this with Denmark which had no oil or gas but now has warm homes, a strong industrial base and thriving renewables. Similarly Osborne has rushed to sell off mineral rights cheaply while painting himself into a corner by trashing renewables for ideological reasons. This means that frackers can extract pretty much any concession they want including weakening already weak regulation under threat of dragging their feet. Both chancellors, by placing blind faith in the market over proper long-term strategic planning have or will have squandered a large part of the asset to get a short-term boost to the budget and consequently their reputation.
The relationship with Japan arguably brought in some much-needed production expertise but failed to halt the demise of our manufacturing base with just about all our manufacturing companies in auto and other industries sold off – Land Rover is now Tata, BP is now at least 50% American, Cadburys is part of Kraft with the classic recipes already quietly being made nastier and cheaper, our railways are now mainly foreign owned – many by European state enterprises.
There are many things to deplore about this latest Osborne wheeze. One irony is that while touting this one-sided relationship Osborne and his government as busy tearing down much that might be saleable about Britain. Assets such as the NHS, the BBC and our top universities are being belittled and stripped of investment ready to be privatized and consumed by rapacious foreign interests at bargain-basement prices to cut the deficit by a few million pounds while robbing the country of the ability to benefit from our investment in these unique institutions. It is of course a nonsense for a major partner to be so far away – the air miles alone will clock up massive carbon emissions. And of course our business community, while probably not being as ignorant of Osborne of Chinese language and culture, is hugely disadvantaged in any such partnership by being completely open on our side and completely closed on the Chinese side. Simply on the subject of the nuclear power deal – why isn’t this fantastically profitable deal being offered to UK taxpayers first?
China quite justifiably doesn’t think it owes the UK anything for sure given our history. One wonders if Chinese leaders tasked with devising a plan to economically dominate and ruin Britain they would change a thing in Osborne’s plans.
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