Our economy is staggering on - and it can't be described as anything more than staggering. Financial services are in a mess and not likely to get much better anytime soon - we still have to pay a lot of bonuses. The £ sterling has collapsed 20% in value and normally, in the past, we would have been able to rely on this to give a boost to exports and overcome balance of payments problems. This time it is not working. Our exports have not gone up and since we have to import so much our import costs are rising. And this is stoking up inflation. The Governor of the Bank of England has said that he does not expect to get the inflation figure below the 2% figure for some time. I am sure he is right. There are several reasons for our present difficulties. First, so many western economies are in straitened circumstances that they are not buying unless they have to. Second, we have so decimated our manufacturing base that now we hardly manufacture anything that people will ever want to buy. Third, some of our manufacturing costs are too high. Fourth, our technology is starting to lag behind in many fields because of a lack of investment.
Various governments have presided over the manufacturing decline, happy to let tin bashing go to SE Asia. Of course, most of the experts who allowed this to happen - indeed, in some circumstances, encouraged it - did not have the foggiest idea of what was involved. Now all parties have suddenly realised that we need to have a strong manufacturing base. But is it too late to stop our decline into oblivion? We do not re-build our manufacturing in a couple of months.
It may not be too late but if we are to recover, whatever government is in power has to support home-grown industry. This government talks but, in practice, it hastens the decline. Last year they gave a contract for re-equipping the West Coat Main Line of the railways to a Japanese group. Worth about £4 billion, that loss was a humiliation for the country that supplied railways to the world. Geoff Hoon told us - it was a simple lie - that giving the order to Japan would safeguard 12,000 jobs. The only jobs safeguarded were maintenance jobs that would exist whoever built the trains. The Japanese told us that only about 300 jobs would be created in the UK.
Now, this abysmal government is to do it again - and this time their failure is even more serious. They are about to place an order for 600 tanks with General Dynamics who will manufacture in Spain and Austria and the MOD will ignore the BAE Systems CV90 vehicle [above] which is apparently superior. BAE have spent five years developing this tank and if they lose this contract to General Dynamics, tank building in the UK will end. That will destroy thousands of jobs and make us unable in the future to equip ourselves except with hardware bought abroad. This would never, never, never be allowed to happen in the USA - nor most other countries in the west. It is an absolutely staggering decision. It seems that the only thing that will matter is that the General Dynamics tank is a bit cheaper. Ignore all the knock-on effects and the increase in our balance of payments deficit, when the situation is already desperate. Yet again, the government reveals itself as possessing incompetence as its prime asset for running the country. Surely, even at this late stage, there is someone who will stop them?
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