SEEN IT ALL BEFORE..THE CIRCLE OF POLITICS!
Seems to me politics in the UK AND SCOTLAND are on a forty year circle of life OR DEATH.
As I look around today I am reminded of the late seventies/ early eighties. Inflation is on the rise, strikes are very common and the cost of living is spiralling.
Despite the similarities, things are very different. The reason they are different is because of what happened all these years ago. Thatcher came to power with the aim of smashing the powers of the Unions. Her plan was carried out over the next decade, initially her plans decimated manufacturing. She rundown the big state owned unionised industries like steel and shipbuilding while turning the economy into a service based economy, all the while boosting huge growth in financial services. Revenues from Scottish oil funded these changes. Unions lost thousands of members and nowadays unions are only strong in the transport and public sectors.
The killer move was privatisation. Breaking up the utilities was key. As energy prices soar we witness today the true impact of losing public control and ownership to privately owned cartels. The SUPPOSED “regulators” in these industries are toothless and have completely failed to stop massive profiteering.
To give a classic example of the lasting impact of privatisation let me spell out what happened with Ravenscraig and Gartcosh. Why? Because it’s the decisions taken at that time that closed down Scottish Steel but also pulled the platform away from British Steel across the entire UK, opening the door to foreign producers who took only a few decades to completely destroy steel production in the entire UK.
All this was accurately forecast at the time. The reason they wanted to close Ravenscraig was that the planned privatisation of steel was early on in their privatisation programme. It was imperative it was successful and oversubscribed.
The plan to achieve this was to reduce the privatised British Steel’s production capacity to way below the demand for steel in the UK. THAT WAY THEY BELIEVED THE PRIVATISED BRITISH STEEL COULD SELL ITS ENTIRE PRODUCTION AND BE VERY PROFITABLE.
It was folly, by reducing BS’s steel making capacity this had no effect on steel product demand in the UK. WHAT IT EFFECTIVELY DID WAS SURRENDER, VOLUNTARILY, A HUGE PORTION OF THE MARKET TO FOREIGN COMPETITION.
Now these competitors did not just restrict their sales operations to the market share BS had surrendered, no they sold across the entire product range, greatly aided in doing so at low cost as the BS surrender of market share allowed them to create effective steel distribution routes without the very expensive costs of only delivering small volumes. Here they were handed an open door for low cost business development with high volume from the start.
The 1980’s was the decade of the Accountants, where good managers who identified problems, found solutions and got the business back on track were replaced by bean counting accountants whose idea of business was to run it all as cost centres. If a cost centre was not profitable, little or no effort was made to find out why, make changes and return it to profit. No much easier to close that bit. This often had a negative knock on impact on other parts of the business reducing product range and once again opening the door to competition. The business “ art” was not to invest in modernisation, the aim was to “maximise” profit for as little investment as possible. Eventually, as such a strategy was always going to do, it resulted in big losses and closures.
It was not just the steel industry where this happened, British Leyland and a host of other manufacturers were effectively destroyed by this thinking and practice. Unemployment rose but the bonus for the Tories was the Unions we’re taking a battering as well.
As you can see from the above it is easy to point out why privatisation was a big mistake but there is a much more serious reason why privatisation was a disaster because it also replaced serious investment in manufacturing across the entire UK economy. Lax tax regulation and the growth of offshore banking led to billions of pounds that might have been reinvested in the UK leaving the economy never to return in the form of traditional manufacturing investment. As a result manufacturing company after manufacturing company became uncompetitive because of a lack of investment in modern production equipment.
The Tories would blame the workers and high wage demands but the truth was it was those who were making a fortune out of privatising virtual state monopoly utilities like gas, electric and telecom and who were investing in these giveaway markets rather than in traditional manufacturing. That is how Germany, Holland, Belgium captured modern manufacturing at the UK’s expense. Just look at the Shipbuilding industry in Norway, they pay wages Scots workers could only dream of but they are very competitive because they have enjoyed substantial investment that keeps their yards at the cutting edge of their industry. That type of investment disappeared in the UK as investors looked for quick giveaway profits as Thatcher flogged off the family silver. Quick guaranteed profit. Non job creation investment.
The money has been there all along, note the rush to invest in the Covid scandal. All it took was someone to answer the phone on the VIP line and new businesses were created overnight and granted contracts worth tens, or even hundreds of millions of pounds. Often granted to offshore companies, sometimes only days or weeks old, more often for goods manufactured outside the UK. THE ONLY THING THAT COULD BE GUARANTEED TO COME TO THE UK WAS THE BILL. THEN WHEN PAYMENT IS MADE THE PROFITS RETURN BACK OFFSHORE.
Putting all the eggs in the service economy and financial services industry basket now leaves the entire UK economy in an ever increasingly vulnerable position. Brexit has been a disaster for the whole of the UK ECONOMY but the hope that financial services would retain their top spot in Europe have already been dashed with Paris now claiming that crown.
With the UK now producing so little, the trade gap between imports and exports continues to grow. The old days when financial services income could be relied upon to close that gap is under sustained challenge from not just Paris but a range of European challengers. Scotland, thanks to our food and drink exports, our oil and gas etc is in better shape but Brexit has had very bad outcomes here as well. Our industry is facing challenges and the desperate actions of Westminster signing badly thought out trade deals does nothing to inspire confidence things will improve, indeed, quite the reverse!
We are paying the cost of allowing a neighbouring country to run our affairs. Our priorities will never be theirs. Their interest extends to what assets and resources can be plundered and our revenues flood their exchequer. Nothing else, they deny us the right to determine our priorities, they take hugely damaging decisions that greatly harm our prosperity and contact with other nations, Brexit being the most recent manifestation.
We really need as a people to waken up to this, generation after generation has suffered under this perverse system of Government where we allow others total control over our lives. So much unnecessary damage has been done, so much opportunity denied. Without change the next forty years will continue the downward spiral.
Yet the opportunity and cure lies in plain sight before us. Will we grasp it this time round?
The content of this article is part of the conversation I used in a three hour television session yesterday for a new BBC TV DOCUMENTARY titled “Union” which will be shown later this year on BBC2. The interview will of course be edited so I cannot guarantee what will be broadcast. Their interest in me was tied to my involvement in the steel campaign and in particular my involvement in putting the 1986 Gartcosh March together.
I am, as always
YOURS FOR SCOTLAND.
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