A country with an unsustainable population such as the UK survives by obtaining goods from overseas. It is a fundamental responsibility of government to ensure that the UK balance of payments balances or is in surplus.
The most useful document on the UK balance of trade is the Office of National Statistics Balance of Payments Report.
"In 2010, the current account was in deficit by £36.2 billion (-2.5 per
cent of GDP), compared with a deficit of £23.9 billion in 2009 (-1.7 per
cent of GDP)."
The principle source of Britain's deficit was the £46 billion deficit with the European Union:
"A deficit of £46.6 billion was recorded with the EU in 2010,
compared with a deficit of £14.3 billion in 2009. There was a
surplus of £10.3 billion with non-EU countries in the latest year,
following a deficit of £9.6 billion in the previous year."
This deficit is unsustainable and a responsible government would be thinking in terms of an emergency withdrawal from the EU.
The main problem is that Britain needs to restore a manufacturing industry.
The deficit for trade in finished manufactured goods with the rest of the world was £58.6 billion over the year and the deficit of £15.8 billion in the last quarter of 2010 was the highest on record. Much of this deficit is with the EU, Germany in particular has used the low value of the Euro to plunder our markets, had the Deutsch Mark been in existence German manufactures would be too expensive to buy. German products would also be too expensive if the Germans were the heart of a true Eurozone nation because they would need to fully subsidise the southern europeans. The Germans are getting away with economic warfare and, as is their destiny, they are making the whole world suffer.
Britain is purchasing vast amounts of German and French goods yet makes a net government payment of £9.2 billion to the EU budget. The total imbalance with the EU is about £55 billion. An amount that is literally bankrupting the country.
The finance and service sector in general were £49 billion in surplus with the rest of the world (of which about two thirds was finance). The suggested "Tobin" transaction tax is a direct attack on this sector by Germany. If we are unhappy with the finance industry we should regulate it and place limits on bonuses and salaries, we should not allow the Eurozone to subsidise itself with a tax that would mainly hit the UK - the Tobin Tax would raise 57 billion euros (p.22 of link), of which about 29-40 billion (p.26+London has 66% of European derivatives) would come from the UK, neatly removing the entire contribution of the finance sector to the UK's balance of payments.
If Britain had an £80 billion balance of payments deficit we would soon become one of those "basket case" economies that other countries deign to supply with aid handouts. Tobin taxes would only work if they were implemented globally and rigorously, if the EU goes it alone the US and Hong Kong will simply take over the finance industry and the UK will go broke. Unilateral Tobin Taxers are not sweet and well intentioned, they are thick as two short planks. The Germans are not serious about this, they know that Britain cannot implement the Tobin tax, literally cannot do it, but they also know that post-modern, Machiavellian journalists love a good story - evil British capitalists on one side, poor people on the other.
Now for non-EU outflows of treasure. Outside of the balance of payments losses to the EU there are substantial transfers. The Department for International Development spends £9 billion per annum on aid. The largest recipient of this aid was India, a country that owns Jaguar cars and shipped off the last specialist steel plant in Middlesborough to be used on the sub-continent. Somalia and Pakistan, well known friends of the West are also major recipients.
Remittances abroad by foreign workers in the UK were about £1 billion. A tolerable sum for an economy the size of the UK.
One of the prime sources of the imbalance of payments is government expenditure. All of our wind turbines are purchased abroad, the Ministry of Defence spends at least £3.5 billion overseas and probably far more but is coy about contracts for equipment with foreign countries - added to the EU and development budgets over £20 billion is being spent directly overseas by the UK government for little or no return, this amounts to over half of the annual balance of payments deficit.
See also:
The Eurozone, EU, Cameron and Crisis
Thomas Mun: England's Treasure By Forraign Trade (1664)
Economic policies for recovery
The rebirth of British manufacturing - how to do it
A New Taxation System
Getting richer every day in every way: income and wealth
What is Socialism?
Is Labour any more than the Public Sector Party?
France, the third Axis power - now the cold war is over the Franco-German alliance can be discussed openly.
The most useful document on the UK balance of trade is the Office of National Statistics Balance of Payments Report.
"In 2010, the current account was in deficit by £36.2 billion (-2.5 per
cent of GDP), compared with a deficit of £23.9 billion in 2009 (-1.7 per
cent of GDP)."
The principle source of Britain's deficit was the £46 billion deficit with the European Union:
"A deficit of £46.6 billion was recorded with the EU in 2010,
compared with a deficit of £14.3 billion in 2009. There was a
surplus of £10.3 billion with non-EU countries in the latest year,
following a deficit of £9.6 billion in the previous year."
This deficit is unsustainable and a responsible government would be thinking in terms of an emergency withdrawal from the EU.
The main problem is that Britain needs to restore a manufacturing industry.
The deficit for trade in finished manufactured goods with the rest of the world was £58.6 billion over the year and the deficit of £15.8 billion in the last quarter of 2010 was the highest on record. Much of this deficit is with the EU, Germany in particular has used the low value of the Euro to plunder our markets, had the Deutsch Mark been in existence German manufactures would be too expensive to buy. German products would also be too expensive if the Germans were the heart of a true Eurozone nation because they would need to fully subsidise the southern europeans. The Germans are getting away with economic warfare and, as is their destiny, they are making the whole world suffer.
Britain is purchasing vast amounts of German and French goods yet makes a net government payment of £9.2 billion to the EU budget. The total imbalance with the EU is about £55 billion. An amount that is literally bankrupting the country.
The finance and service sector in general were £49 billion in surplus with the rest of the world (of which about two thirds was finance). The suggested "Tobin" transaction tax is a direct attack on this sector by Germany. If we are unhappy with the finance industry we should regulate it and place limits on bonuses and salaries, we should not allow the Eurozone to subsidise itself with a tax that would mainly hit the UK - the Tobin Tax would raise 57 billion euros (p.22 of link), of which about 29-40 billion (p.26+London has 66% of European derivatives) would come from the UK, neatly removing the entire contribution of the finance sector to the UK's balance of payments.
If Britain had an £80 billion balance of payments deficit we would soon become one of those "basket case" economies that other countries deign to supply with aid handouts. Tobin taxes would only work if they were implemented globally and rigorously, if the EU goes it alone the US and Hong Kong will simply take over the finance industry and the UK will go broke. Unilateral Tobin Taxers are not sweet and well intentioned, they are thick as two short planks. The Germans are not serious about this, they know that Britain cannot implement the Tobin tax, literally cannot do it, but they also know that post-modern, Machiavellian journalists love a good story - evil British capitalists on one side, poor people on the other.
Now for non-EU outflows of treasure. Outside of the balance of payments losses to the EU there are substantial transfers. The Department for International Development spends £9 billion per annum on aid. The largest recipient of this aid was India, a country that owns Jaguar cars and shipped off the last specialist steel plant in Middlesborough to be used on the sub-continent. Somalia and Pakistan, well known friends of the West are also major recipients.
Remittances abroad by foreign workers in the UK were about £1 billion. A tolerable sum for an economy the size of the UK.
One of the prime sources of the imbalance of payments is government expenditure. All of our wind turbines are purchased abroad, the Ministry of Defence spends at least £3.5 billion overseas and probably far more but is coy about contracts for equipment with foreign countries - added to the EU and development budgets over £20 billion is being spent directly overseas by the UK government for little or no return, this amounts to over half of the annual balance of payments deficit.
See also:
The Eurozone, EU, Cameron and Crisis
Thomas Mun: England's Treasure By Forraign Trade (1664)
Economic policies for recovery
The rebirth of British manufacturing - how to do it
A New Taxation System
Getting richer every day in every way: income and wealth
What is Socialism?
Is Labour any more than the Public Sector Party?
France, the third Axis power - now the cold war is over the Franco-German alliance can be discussed openly.
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