One of the things that I am struck by in the months following Brexit is just how bad I am at predicting the consequences. I am not very good at finding articles written by other people who are good at predicting the consequences either. For now I am applying Occam's Razor and assuming that nobody is clever enough to guess what is going to happen next. This was brought home this morning by picking up a report that Nissan are about to announce a big investment in their plant in Sunderland. Losing this kind of investment has been a big worry to me, and others, since the vote. So it is good news that it is going ahead. I don't doubt that the pro-Brexit voices will soon be talking this up as an example of how the UK is going to do better outside the EU than it ever did inside. They may well be right, but as always there is a bit more to the story.
It turns out that Nissan needed a fair bit of coaxing. In fact the Business Secretary Greg Clark went to Japan to talk them into it personally. No doubt he is a charismatic and charming man, but it is unlikely that he won this deal on personality alone. The carmaker had already raised their concerns about tariffs and would have extracted some kind of UK government guarantee to cover any losses that might result from the still to begin negotiations on trade between the EU and the UK.
I would be interested to no the details of what exactly has been promised. I have a feeling it will be a while before they are made public. For now I'll assume that as a taxpayer I am on the hook for making good any losses the carmaker might experience. I don't know if that is a good deal or not. It might well be given the current situation. I don't want Sunderland car workers to lose their jobs. That is bad for them to begin with. It also costs money to have them on the dole. Giving Nissan some money to stay may well be a good deal.
But look at what this whole business tells us about the way Britain will be governed, at least during the transition period while we cope with the change in situation caused by EU withdrawal. Here is a government enthusiastically using public money to pursue an industrial strategy. They don't want to lose manufacturing jobs in the North East and they are taking actions, including putting their hand in their pockets (or our pockets) to make sure they get the desired outcome. Theresa May might look a bit like Mrs Thatcher and have a similar backstory, but she is carrying out policies that are 180º different in direction.
Paying subsidies to foreign investors is very much an affront to free market principles, but it will also get up the noses of our competitors on the continent. You can't have a single market on the continent where national government intervention is a significant factor in the decision making process. People who complain that Tony Blair was even less radical than Harold Wilson forget that Harold Wilson could do things that prime ministers in the EU can't. In fact I think Theresa May's policy platform is beginning to look a lot like Harold Wilson's.
But it isn't impossible it will go even further. A lot of people might reasonably say that if we are using taxpayers' money to underpin private car companies why not go the whole hog and actually nationalise the things. If you aren't going to leave the market to decide on the outcomes you want you can save a lot of time be simply doing it yourself. There is a spectrum between limited government intervention to avoid specific job losses that stretches all the way to Mr Benn's planned siege economy. It seems that Brexit is already driving us in that direction. That certainly seems to have been the thinking by some people on the left, possibly including Jeremy Corbyn, who suggested that leaving the EU was desirable.
It's all too early to be sure of anything. The emergence of Britain as a centrally planned highly controlled economy still seems a bit unlikely. But it is not at all inconceivable. There many millions of Britons to whom the benefits of the financial services sector have yet to trickle who might even find it a rather better place to live in than what they have at the moment. Britain's economy has done pretty well in the EU but the winners have been rather unevenly distributed. A poorer country with a more even distribution of income might be a better place to live.
For ultra free market critics of the EU like Daniel Hannan, the prospect of Brexit leading to a Bennite revolution led by the Conservative Party would be as perplexing as it would be unpalatable. But I am more and more coming round to the idea that biggest problem conservatives in general have is that they don't really understand the way the world works to anything like the extent they think they do. I think I am happier knowing I know nothing.
The only thing I will confidently predict is this. If we do end up with a state owned car company, they won't call it British Leyland.
No comments:
Post a Comment