The hidden costs of Chinese money.
The Chinese state visit is about getting their cash to pay for infrastructure investment in the UK. Forget the moral issue about ignoring human right abuse to get that cash, after all it’s not the first time that the UK have conveniently overlooked such issues to get a trade deal.
But business is business, many will say. To be picky about who the country trades with would disadvantage UK Ltd. Needs must.
But it’s not sensible business. The agreement reached so that the Chinese put their cash into finance in part a nuclear power plant at Hinkley point is bad economics.
The official price for building it is £18 billion. Although most nuclear experts have said it will be much higher £24 billion is what they estimate. Whatever the figure what we do know is that the Chinese will get a guaranteed price of £92.50 per megawatt hour – double the usual price. This will be reflected in our energy bills until 2060.
What is being proposed dwarfs every previous PFI scheme. And like every other PFI scheme it’s an expensive way to finance any scheme. Generations will literally be paying the costs for years down the line.
Yet a much smaller subsidy of £9 per-annum on wind and solar power is deemed too much for the poor consumer. It makes little sense.
The same amount that is to be spent on the nuclear project put into developing sustainable energy technology would make the country world leaders in the field. But no it’s not to be.
Even if you agree nuclear energy is needed as part of the country’s future this deal is wrong on so many levels. At a time when we have the lowest interest rates ever why are we putting ourselves in hock to the Chinese and French states.
Even the security services are worried about letting a foreign power build and run such a potentially dangerous industry.
If Volkswagen can put hidden software in cars to cheat emission targets what hidden capabilities could the Chinese build into the nuclear plants’ software?
Our future security is at risk because the Chancellor cannot see the difference between borrowing for revenue and borrowing for investment. He’s quite prepared to sell us all down the river to a foreign power just to satisfy some dubious fiscal targets. Madness.
Let the Tories never again question Corbyn’s patriotism.
Change of heart not wrong
An embarrassing u-turn by John McDonnell, the shadow chancellor, on Osborne’s fiscal charter was clumsy politics but good economics.
It made good headlines in the Tory press and upset some of his own party’s right wing some of whom defied the Labour whip and abstained.
Certainly a sign that Corbyn’s hold on his party is fragile indeed. In organizational terms he has got to get a grip, if he’s to succeed as leader.
McDonnell’s own goal became the story and not the successful outing Corbyn had in Prime Ministers Question where he again wrong footed Cameron and many thought he bested him.
McDonnell was wrong to agree to back Osborne in the first place, he is now right and eventually the Parliamentary Labour party will see that its economic policy has now more coherence.
An Alice in Wonder charter
What the House of Commons passed was a law that enshrines another period of severe austerity in the short term and then future governments are committed to a crazy fiscal rule.
Labour will eventually bless McDonnell’s change of heart.
The gimmick, and political gimmick it is, of a Fiscal charter will hurt many. It’s the reason the government will make substantial cuts to tax credits for millions of poorer working people, making their already difficult lives substantially harder.
The fiscal policy and fiscal rules it introduces are a nonsense. You’d think that when labour and borrowing is cheap that would be the very time to make public investment.
No, dear me no. In this Mad Hatter Charter that sensible approach is stopped. Despite it being a near universal view among economists that now is the time for higher public investment.
If the Charter passes into law it will bring debt down ridiculously fast. Resulting in the current working generation been heavily penalized. Fiscal austerity when interest rates are very low is never a good idea.
Media obsessed by bubble rather than people
But none of this was reported on in either the written or broadcasting press. They spend most of its time talking about U-turn. No mention of the complete lack of economic support for this charter.
Millions are going to be hurt because of the policy and all the media report is one man changing his mind. Is Labour’s embarrassment more important than the millions of ordinary people that loose out on their tax credits? It would appear so.
Health was centre stage of Welsh Tory leaders speech to conference.
A referendum on the NHS in Wales. According to Andrew RT Davies, Welsh Conservative leader that’s what next year’s assembly election will be about.
He told his party conference that a Welsh Conservative government would “invest in more paramedics, in better access to cancer treatments, in more accountability and in better patient choice”.
Under an Andrew RT Davies Tory government, conference was told, access to the Welsh NHS and investment in the service will increase.
Then he went on to say ”Next year’s election, then, will be a referendum on the future of the Welsh National Health Service.
More of the same with Labour. Or better access, more investment, and a brighter future with Welsh Conservatives.”
In a blow against Plaid Cymru he told his party “we’re the only Party that won’t prop up another five more years of Labour rule. And only the Welsh Conservatives can stop Carwyn Jones becoming First Minister again. It’s me. Or him.”
Crabb accuses Labour of being “stuffy”
Earlier, Welsh Secretary Stephen Crabb said Wales had “had enough” of the “stuffy Welsh Labour establishment taking their communities and their voters for granted”.
He said new Labour leader Jeremy Corbyn may think he is “coming home to ‘Real Labour’ when he visits Wales …. But he will also see that Wales is letting go of Labour…. as people across Wales say ‘enough is enough.’”