UK News

Insights from the UK and beyond

from John Lloyd:

Russell Brand’s socialist revolution

Russell Brand, the British comedian, used a guest editorship of the 100-plus-year-old leftist magazine New Statesman last month to call for a “total revolution of consciousness and our entire social, political and economic system.” Capitalism, and the ideology that sustains it -- “100 percent corrupt” -- must be overthrown. He also doesn’t think people should vote, as partaking in democracy would further the illusion that a rotten system could change. It was a call, albeit chaotically phrased, for a socialist revolution.

Born into the middle class, Brand’s childhood was disturbed: his photographer father left when he was six months old, his mother developed cancer when he was eight (but survived), he left home in his mid-teens and took to drugs. He later became a star, delighted in promiscuity, married the singer Katy Perry for a year and a half and grew modestly (by star standards) rich, with an estimated net worth of $15 million and a lovely new Hollywood millionaire bachelor’s pad.

None of this disqualifies him from speaking and writing seriously about politics, nor from calling for a socialist revolution. Marx was born into the upper-middle class, Lenin was a minor aristocrat by birth, Stalin studied to be a priest and Mao was the son of a wealthy farmer. Even Pol Pot came from a peasant family considered relatively wealthy by the standards of the times. All of these people called for, or launched, revolutions. No reason, then, to believe that a demand for a 21st century socialist revolution could not be launched from the Hollywood Hills, or from a BBC studio.

It’s interesting to speculate what such a revolution would look like. But Brand won’t play along: his article in the New Statesman and a subsequent Newsnight interview was long on florid rhetoric and denunciation, and wholly devoid of detail. Perhaps that’s best. Because let us not forget that the socialist revolutions of the 20th century were horrors, claiming more victims than Nazism -- who were shot, starved, frozen and tortured to death.

from Hugo Dixon:

The City has huge scope to expand

Finance has rightly been in the sin bin for the last six years. And the cleanup job isn’t finished. But Mark Carney, the new Bank of England governor, is correct to stress how a large and expanding City of London is good for Britain, Europe and the world – provided it is properly organised.

Carney’s comments, in a speech last week, will seem heretical to many – maybe even to his predecessor, Mervyn King, who showed a barely disguised disdain for financiers. Would it really be healthy, for example, for the balance sheets of British banks to reach nine times GDP, double the current ratio – as Carney projected they could by 2050?

from Breakingviews:

Blueprint for new BoE could start with rebrand

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By Dominic Elliott and Christopher Hughes
The authors are Reuters Breakingviews columnists. The opinions expressed are his own.


Bank of England Governor Mark Carney has hired McKinsey and Deloitte to advise on strategy. Breakingviews imagines what the consultancies might recommend.

from Hugo Dixon:

Brexit process would be messy

Imagine the British people vote to quit the European Union in the referendum David Cameron has promised to hold by 2017. What happens next? What, if any, special relationship would the UK seek to retain with the EU? Would it be able to negotiate what it wanted? And how would the economic damage unleashed by years of uncertainty be kept to the minimum?

These questions aren’t just troubling British businesses, the vast majority of which want to stay in the EU so they can enjoy full access to its single market. They are also worrying some eurosceptics who are concerned that, even if it would be good for Britain to quit the EU, the process of getting from A to B could be messy.

from Breakingviews:

Britain can gain from China’s empire builders

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By John Foley

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Britain once had nothing to offer China but silver and opium. Now it has holidays, banks and building sites. George Osborne, the UK Chancellor of the Exchequer, and London’s mayor Boris Johnson are using visits to Beijing to say just how welcoming the UK is likely to be. It’s a triumph of openness, and provided the UK chooses its partners carefully and the Chinese are tactful, both sides will benefit.

from Anatole Kaletsky:

Learning budget lessons from Japan and Britain

While the world is transfixed by the U.S. budget paralysis, fiscal policies have been moving in several other countries, most notably in Japan and Britain, with lessons for Washington and for other governments all over the world.

Let's start with the bad news: Shinzo Abe’s decision to increase consumption taxes from 5 to 8 percent next April. This massive tax hike, to be followed by another increase in 2015, threatens to strangle Japan’s consumer-led growth from next year onwards, since Abe looks unlikely to offset this massive fiscal tightening with stimulative measures that would maintain consumers’ spending power. Even if Abe delivers on his vague promise to compensate with business tax reductions, these will only aggravate the over-investment and corporate cash hoarding that have long distorted the Japanese economy. Meanwhile, the government’s willingness to risk economic recovery in the cause of fiscal discipline implies that those of us who believed Abe was making an unconditional commitment to do whatever it takes to achieve economic recovery were simply wrong. Now that the forces of budgetary austerity have reasserted themselves, Japan’s probability of ending its decades of stagnation is much reduced.

from John Lloyd:

Goodbye to all that centrism

How much longer will the political center hold in Europe? Its erosion, years in the making, is only picking up speed. In Italy, the latest political crisis presages the collapse of the centrist left-right coalition. In Austria, a recent election barely gave a similar coalition enough votes to continue governing. The European Union nations are hurtling toward elections next spring for the European parliament, which will bring real debate and divide to what has been a largely consensual assembly. Not far separated from the yolk of the financial crisis, nationalism is the politics of the times.

While Europe’s economy is making a slow, small improvement (with exceptions in the south), its politics are becoming much more fragile. Most economists say that the crisis can only be fully remedied by taking more powers into a powerful Euro-center, one that’s fiscal, financial, macro-economic, and thus political. Brussels believes it must be done: but no national government, even Germany’s, believes it could deliver popular approval for the move. The crisis is already forcing integration, yet causing citizens to recoil from the EU. That’s the central contradiction of Europe, stark and grim.

from Breakingviews:

UK’s politicians race to the bottom on policies

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By Ian Campbell

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The next UK general election is in 2015, and the country’s politicians are already engaged in a classic pre-electoral sport: the race to the bottom. They are desperate for policies which please voters and the competition is fierce. Popularity is the aim, populism is the method. None of it is going to do the economy any good.

from The Great Debate:

China’s commitment to growth will drive the global economy

From outside China, the Bo Xilai trial looks like the Chinese news event of the year, one of the preoccupations of Western media, along with corporate corruption and the clampdown on American and European companies. Yet these issues are no more than sideshows to the most important economic event of recent times, the unveiling and ratification of a major program for reforms for the next decade, which will occur at the Chinese government’s third plenum in November. The reforms promise to bring another great leap forward in China's dramatic ascent.

Chinese officials will reveal how long China will need to make the transition from an investment-led, middle-income country to an innovative, consumer-driven, high-income one -- and thus when it will become the world's largest economy. Can China circumvent what we know as "the middle-income trap" that has for decades denied high-income status for Latin America and Asian countries like Malaysia and Thailand?

from The Great Debate UK:

UK recovery, but not on the high street

It was only a few days ago that George Osborne declared victory on economic malaise saying that the UK economy has turned a corner. The economic data has improved dramatically in the last six months, which gave Osborne a battering ram to launch a political attack on the Labour Party. Osborne used his moment in the sun to prove Ed Balls and all on the other side of the political bench wrong, saying that his austerity programme is right for Britain.

However, a little over 24 hours after Osborne’s speech a report from the Local Data Company made for uncomfortable reading as it detailed grim conditions on the UK’s high streets. High Street vacancy rates remain stubbornly high; out of 650 town centres in the UK the average vacancy rate is 14.1 percent, which is basically unchanged since February.

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