Originally Written on Thursday, September 27, 2012

The last few days have been interesting, politically and economically speaking, in Dear Old Blighty, or Englandshire, for our American friends.

Today, the UK’s Office of National Statistics, ONS, have published the latest report on the state of the economy. Most of it does not make brilliant reading. The ONS has returned to measuring and reporting on GDP, or Gross National Product. GDP is, essentially, how much do we make and sell.

The ONS said the £20.8bn deficit, which includes the UK’s trade balance, as well as the shortfall on overseas investments by UK plc, was the biggest ever for a quarter. The raw GDP figures were slightly less worse than expected, but, broadly speaking are not good.

The Guardian Newspaper, have quite a good review of the ONS report. In summary though, what this is saying, is that the UK is not making enough, and, importantly, selling stuff abroad. We are, consistently, importing more than we a re selling. Imports are more than exports. This is never be good news for any country.

This is on the same day that a marginal Liberal Democrat MP, Sir Nick Harvey, has suggested that ,Trident, Britain’s submarine based nuclear capacity could be, should be, scrapped. Wading in to support the pro Trident view is Labour MP John Woodcock, MP for Barrow in Furness, where any new Vanguard class Sub’s would be made. Vanguard is the submarine that carries Trident.

The anti Trident view is, essentially, two fold. First, Britain should not really carry “weapons of mass destruction” as the Lib Dem’s describe nuclear weapons. The second is that, for £100 billion, for the life time of the submarine and weapons system, we simply can not afford it.

The counter view, expressed by John Woodcock is the Britain is that “We have got to bear in mind as a nation how we continue to have the capacity to build submarines into the long-term.”.Industrial skills that we can not afford to lose, to précis.

The Vanguard Class were made by Vickers Shipbuilding and Engineering, which is now part of the industrial goliath that is BAE Systems Submarine Solutions. Vanguard will be replaced by the ,Astute Class Submarines of submarines..

In June 2010,,following a fairly dismal outing by the massively over paid prima donnas that pass for the England football team, I wrote this piece. In summary, it was a critique of why England lost, found as many excuses as possible and the differences between the English football league set up when compared with one of European neighbours. There were also a parallel offered from a wider view of the “jam today” attitude that often pervades the British view.

In the last week or so, a merger has been proffered by BAE systems of the UK and EADS, the Anglo French and German multinational engineering company. When the merger was first mooted, on the ,12th of September 2012, it was immediately clear that there were going to many hurdles to be crossed before this would be completed. The British and French Governments would have to approve the deal. The Americans, where BAE does a huge amount of business and are the largest foreign defence contractor in America, would also have a say. The Germans, who have a s small share holding through Daimler, the people who own Mercedes Benz, have 29 factories, so would bound to have say. It was never going to be an easy deal.

The French, being the French, are in favour, only if the company remains, essentially, French. It is supposed to be a merger, but the French will see this as a take over. The Germans, perhaps not surprisingly, have questions about the future of their 29 factories, job losses and, ultimately, some sort of control over the future enlarged BAE / EADS group.

Kerstin Andreae, a member of the German parliament’s economic committee, said there were “disagreements” between the German government and the EADS chief executive, Tom Enders, who addressed a German parliamentary committee earlier this week. Andreae said politicians had made it clear to Enders it was not just a question of how the £29bn merger should progress but whether it should be allowed at all.

Again,  The Guardian have a very good report on the matter. Have a read.

What I find interesting about this, given the UK’s current GDP, static unemployment, current flat growth (can growth be flat?) and the desire for the UK to build more Astute class submarines to “protect Britain’s interests” is the statement that British politicians have broadly welcomed the merger. Nick Clegg, the deputy Prime Minister, has said: “I personally have always been in favour, over time, of greater consolidation in the European defence industry.” David Cameron, Britain’s Prime Minister and Vince Cable, the coalition Governments Business Secretary, have also let it be known that they support the deal.

This I find extraordinary. Actually, I find this astonishing. AS we saw with the Phillip Morris / Kraft Foods take over of the glorious Cadbury company, there will be no guarantees, there are no guarantees that there will not be factory closures in Britain. There are no guarantees that there will not be out sourcing of jobs to cheaper locations. There will simply be no guarantees.

I’m not going to go into the discussion of whether the UK’s biggest defence company and, almost by default, the UK’s biggest defence supplier, should be part of a French group. This is supposed to be a merger, but in reality, it will be a take over.

All in all, this is not a great week to be British.

I hope next week bring better news.