Snouts in the Trough

“Britain is open for business” is a mantra the Tories keep proudly repeating. What they mean is that the Government welcomes supposed ‘foreign investors’, believing that money flowing into Britain creates jobs and tax revenues.

There have been some spectacular cases of foreign investors benefiting Britain. Indian Tata’s takeover and turnaround of once struggling Jaguar/Rover has done wonders for creating jobs in Britain. Similarly BMW bought and saved the Mini, turning a failure into a massive success.

But I suspect that my readers are sufficiently worldly wise to know that ‘foreign investors’ don’t always come to Britain because they love us and because they have our best interests at heart. They usually come to take as much of our money from us as they can.

There seem to be two main ways foreign investors plunder Britain – “Buying the Brand” and “Milking the Cash Cow”.

Buying the Brand – American Kraft’s takeover of Cadburys is a perfect example of this. Kraft made an absolute promise to worried MPs that their takeover of Cadburys would not lead to job losses in Britain. But the ink had hardly dried on the takeover deal than Kraft began shutting British factories and firing British workers so they could move production of traditional British products to Eastern Europe where wages are significantly lower than in the UK

Milking the Cash Cow – this is perhaps the most blatant and iniquitous way foreigners fleece us. We see it most clearly in our utility companies – water, gas and electricity suppliers. These companies are wonderfully reliable cash cows – they all have virtual monopolies and produce huge amounts of operating profits every year. So they are hugely attractive to foreigners looking for easy billions.

Thames Water provides an excellent example of how the Goverrnment and our pathetically supine supposed regulators (Ofwat and Ofgem) allow foreigners to fleece us. In 2000, the company was bought by the German RWE for £6.8 billion. Over the six years of its ownership, RWE pocketed around £1 billion in dividends. It then sold Thames to an Australian company for £8 billion. So RWE made around £2.2 billion – about £30 million a month or £1 million a day -from its brief ownership of Thames. Yet during its ownership RWE was allowed to increase water bills well above inflation by claiming it needed the money to invest in reducing leakage. In addition to its exploitative high prices, for years Thames further increased its profits by selling off land and facilities to people like property developers. When asked why it had closed twenty five bulk water storage facilities, Thames explained, ‘all these sites were shut down when they became surplus to operational requirements following upgrades to our network’. At the same time as Thames was saying this, it had imposed a hosepipe ban due to a lack of water.

Then came the new Australian owners, Macquarie, sometimes called the ‘vampire kangaroo’. Under Macquarie the looting of Thames Water’s unfortunate customers really moved up a few gears.

Being pretty smart, Maquarie used Thames Water’s abundant cash flow to borrow money – £11.4bn. Supposedly these billions were for ‘investment in upgrading London’s water system’. In fact, Macquarie used much of this borrowed money to pay itself huge dividends year after year. Moreover, guess who lent these billions to Macquarie. Yup, it was companies owned by Macquarie and based in tax haven Jersey which were the lenders. So, Macquarie loaned itself billions at a very generous rate of interest. This had two benefits. Firstly, the interest payments were tax deductible. So, in the 10 years Macquarie has owned Thames Water, it has paid just £100,000 in corporation tax. Secondly, by loaning itself money at a high interest rate from companies based in a tax haven, Macquarie made much of its profits from owning Thames Water by lending money to itself and these profits were, of course, out of reach of the British tax authorities.

What has happened at Thames Water has been repeated at many other water, gas and electricity suppliers. Fifteen years ago, our water companies had debt levels of 20%. They are now over 80%. And, as with Thames Water, much of this borrowed money has been used, not to invest and create jobs in Britain, but to pay brobdingnanian dividends to rapacious foreign owners.

And now we’re begging the Chinese and French to build nuclear power stations in the UK based on a design that doesn’t work to then sell us electricity at three times the current price.

Britain is definitely open for business. Britain is open for foreign businesses to fleece us.

(Although this video starts by saying it’s not available in the UK, in fact it works. So just ignore the first few seconds)

I normally wouldn’t recommend articles from the useless Global Warming-obsessed, migrant-loving, Europhiliac Guardian. But today I’ve slightly adapted and shortened an article which I think beautifully sums up how the rich have bought British and American democracy while also avoiding making any contribution to paying for the societies in which they live:

At root, the ‘Panama papers’ are not about tax. They’re not even about money. What the Panama Papers really depict is the corruption of our democracy.

The Panama Papers confirm that the super-rich have effectively exited the economic system the rest of us have to live in. Thirty years of runaway incomes for those at the top, and the full armoury of expensive financial sophistication, mean they no longer play by the same rules the rest of us have to follow. Tax havens are simply one reflection of that reality. Nicholas Shaxson, an expert of tax havens and author of the excellent book Treasure Islands describes them as: “You take your money elsewhere, to another country, in order to escape the rules and laws of the society in which you operate.” In so doing, you rob your own society of cash for hospitals, schools, roads…

But those who exited our societies are now also exercising their voice to set the rules by which the rest of us live. The 1% are buying political influence as never before. In the US, the billionaire Koch Brothers and banks like Goldman Sachs and JP Morgan have huge influence on the results of presidential elections. For them someone like Donald Trump, who has his own fortune and is thus not in hock to the business and banking Establishment, is a threat that must be destroyed.

In Britain, the hedge fund and private equity barons, who in 2010 contributed half of all the Conservative Party’s election funds, effectively bought the Tories their first taste of government in 18 years.

 A Berlin-born economist called Albert Hirschman, who died in 2012 at the age of 97, argued that citizens could protest against a system in one of two ways: voice or exit. Fed up with your local school? Then you can exercise your voice and take it up with the headteacher. Alternatively, you can exit and take your child to a private school.

In Britain and in America, the super-rich have broken Hirschman’s law – they are at one and the same time exercising economic exit and political voice. They can have their tax-free cake and eat it.

What the past few days have confirmed is that David Cameron is effectively the Downing Street branch of the super-rich. That he himself is part of the 1% is beyond dispute. His father was worth an estimated £10m which is now being distributed to the Cameron family in a gradual and tax-efficient way with much of it probably still offshore.

What have the super-rich got for their investment in British politics since 2010? Cuts in personal taxes, invitations from George Osborne to advise on overhauling corporation taxes, the security of knowing that their tax havens will be treated with due leniency and sweetheart deals allowing them and their companies to pay little to no tax while HMRC crushes any ordinary people it suspects of not paying sufficient tax.

We are led to believe that Britain is a representative democracy. But we now have an era of un-representative democracy. With a few exceptions, our politicians no longer resemble, nor do they work for us.

Amid a crisis in the rental market, you have a housing minister, Brandon Lewis, who runs a private rental portfolio. You have a former investment banker, Sajid Javid, now claiming to be trying to save the British steel industry while his government has stopped the EU from imposing tariffs on the cheap Chinese steel that is destroying the British steel industry.

And you have a super-rich prime minister who vows he’ll take on tax havens, all the while blocking any serious attempt to do so and also profiting from them all his life.

Readers will know that in his sham ‘negotiations’ with his EU bosses Cameron asked for nothing and got even less than that. So, unable to say anything positive about Britain’s relationship with the German-run EU, Cameron has resorted to “Project Fear” – try to frighten people so much about the supposed ‘dangers’ of leaving the EU that they vote to remain.

The Dutch ruling elites have just tried the same trick. A Eurosceptic group managed to raise more than 300,000 signatures on a demand for a referendum on a new trade deal between the corrupt, rotten EU and corrupt, rotten Ukraine.

Just like lying PR spiv Cameron, the Dutch elites tried to frighten people into voting to support the EU/Ukraine deal by claiming that a ‘No’ vote would encourage Russia’s Putin to invade more East European countries. Having worked in Holland, I’d say that the Dutch electorate are better educated than British voters and amazingly the Dutch voted by a large majority of 61% to 38% to reject the line pushed on them by their Europhiliac rulers .

https://app.nos.nl/datavisualisatie/referendum-2016/

But hold on. The deal the Dutch were voting on was over 2,000 pages long. How many Dutch actually read it? Probably less than ten.

So, what were the Dutch really voting on? Probably they were expressing their loathing of the undemocratic, wasteful, economically-sclerotic, failing European Union and the arrogant, parasitical Europhiliac elites who are all getting rich riding on the EU gravy train.

The Dutch weren’t frightened by their rulers’ “Project Fear”. ‘Dutch courage’ really does exist.

Let’s hope that on June 23 the British can also find sufficient backbone to tell our ruling elites that we’re fed up of their bullying and lies.

I’m rushing round trying to buy a house and sell my home. So, here’s an American commentator writing about the US establishment’s attempts to destroy Donald Trump’s bid to become the next president:

As Wisconsinites head for the polls, our Beltway elites are almost giddy. For they foresee a Badger State bashing for Donald Trump, breaking his momentum toward the Republican nomination.

Should the Donald fall short of the delegates needed to win on the first ballot, 1,237, there is growing certitude that he will be stopped. First by Ted Cruz; then, perhaps, by someone acceptable to the establishment, which always likes to have two of its own in the race.

But this city of self-delusion should realize there is no going back for America. For, whatever his stumbles of the last two weeks, Trump has helped to unleash the mightiest force of the 21st century: nationalism.

Transnationalism and globalism are moribund.

First among the issues on which Trump has triumphed — “We will build the wall — and Mexico will pay for it!” — is border security.

Republican candidates who failed to parrot Trump on illegal immigration were among the first casualties.

For that is where America is, and that is where the West is.

Consider Europe. Four months ago, Angela Merkel was Time’s Person of the Year for throwing open the gates to the “huddled masses” of the Middle and Near East.

Merkel’s Germany is now leading the EU in amassing a huge bribe to the Turks to please take them back, and keep them away from the Greek islands that are now Islam’s Ellis Island into Europe.

Africa’s population will double to 2.5 billion by 2050. With 60 percent of Africans now under 25 years of age, millions will find their way to the Med to cross to the Old Continent where Europeans are aging, shrinking and dying. Look for gunboats in the Med.

If immigration is the first issue where Trump connected with the people, the second is trade.

Republicans are at last learning that trade deficits do matter, that free trade is not free. The cost comes in dead factories, lost jobs, dying towns and the rising rage of an abandoned Middle America whose country this is and whose wages have stagnated for decades.

Economists who swoon over figures on consumption forget what America’s 19th-century meteoric rise to self-sufficiency teaches, and what all four presidents on Mount Rushmore understood.

Production comes before consumption. Who owns the orchard is more essential than who eats the apples. We have exported the economic independence that Hamilton taught was indispensable to our political independence. We have forgotten what made us great.

China, Japan, Germany — the second, third and fourth largest economies on earth — all owe their prosperity to trade surpluses run for decades at the expense of the Americans.

A third casualty of Trumpism is the post-Cold War foreign policy consensus among liberal interventionists and neoconservatives.

Trump subjects U.S. commitments to a cost-benefit analysis, as seen from the standpoint of cold national interest.

What do we get from continuing to carry the largest load of the defense of a rich Europe, against a Russia with one-fourth of Europe’s population?

How does Vladimir Putin, leader of a nation that in the last century lost its European and world empires and a third of its landmass, threaten us?

Why must we take the lead in confronting and containing Putin in Ukraine, Crimea and Georgia? No vital U.S. interest is imperiled there, and Russia’s ties there are older and deeper than ours to Puerto Rico.

Why is it the responsibility of the U.S. Pacific Fleet to defend the claims of Hanoi, Manila, Kuala Lumpur and Brunei, to rocks, reefs and islets in the South China Sea — against the claims of China?

American hawks talk of facing down Beijing in the South and East China Seas while U.S. companies import so much in Chinese-made goods they are fully subsidizing Beijing’s military budget.

Does this make sense?

Patriotism, preserving and protecting the unique character of our nation and people, economic nationalism, America First, staying out of other nation’s wars — these are as much the propellants of Trumpism as is the decline of the American working and middle class.

Trump’s presence in the race has produced the largest turnout ever in the primaries of either party. He has won the most votes, most delegates, most states. Wisconsin aside, he will likely come to Cleveland in that position.

Do they think they can then go back to open borders, amnesty, a path to citizenship, the Trans-Pacific Partnership and nation building?

Whatever happens to Trump, the country has spoken. And if the establishment refuses to heed its voice, and returns to the policies the people have repudiated, it should take heed of John F. Kennedy’s warning:

“Those who make peaceful revolution impossible, make violent revolution inevitable.”