HS2

So, unsurprisingly, Boris Johnson has decided to go ahead with HS2 between London and Birmingham.  The fact, that no decision on the section between Birmingham and Scotland has been made, simply emphasises what the real purpose of HS2 is, which is to funnel cheap labour into London from a wider periphery.  No commitment on providing HS3 or 4, has been made, either, which indicates the extent to which the Tories are already prepared to stiff those who voted for them in the so called "Red Wall" constituencies.

There are other reasons for the HS2 decision.  First, these kinds of large-scale prestige projects are a favourite amongst Bonapartist and populist regimes.  They reflect a narcissistic desire by the particular Bonaparte figure to make their mark on history.  Johnson engage din similar adventures as Mayor of London, and they pretty much all turned out disastrous wastes of money, incompetently managed.  With HS2 having already skyrocketed from the original estimate of £56 billion, to now over £106 billion, there is every indication that it will be different only to the extent of being even more incompetently managed, even more expensive, and even more of a white elephant.  As even the leg o Birmingham is not due to be completed for another 20 years, who would be brave enough to bet that by then the cost will not have at least doubled again.

The other reason that the Tories wanted to announce this vanity project is to distract from the fact that Brexit has not yet been done as they promised.  In fact, the reality is that the Brexit negotiations have not even begun, although the EU have made it quite clear that the have cake and eat it proposals that Johnson and the Brextremists promised will be a non-starter.  Already, the promises made over fishing are being challenged, and its almost certain that Johnson will capitulate quickly over fishing rights, in just the same way that he capitulated over his promise to die in a ditch rather than ask for an extension of Article 50, and just as he had to capitulate even as far as going back to the deal that Theresa may had rejected, which carves Northern Ireland out of the UK, and puts a border down the Irish Sea.

The reality of Brexit is that there is now a majority in Scotland for independence, Gibraltar has asked to be able to join Shengen, Northern Ireland has been economically incorporated into the Irish Republic, and with Sinn Fein having been given a massive boost, the likelihood of a Border Poll to create a United Ireland has been brought one large step closer.  The Irish and the Scots must only  regret that Boris's bridge had already been built, so that their two countries could be brought together for trade as more easily as independent states within the EU, protecting them from the decline of Brexit Britain.  

The Tories needed a distraction from the fact that they have not got Brexit done, and, in fact, Britain now is left having to toe the EU line, whilst having no say in the decision making of the EU, for at least the next year.  In fact, unless Johnson capitulates further again, quickly, and agrees to a treaty ensuring that Britain abides by EU Customs and Single Market rules, its inevitable that Britain would have to seek an extension of the transition period, irrespective of any legislation that the government has put in to the contrary.  Otherwise, Britain would face a catastrophic crash-out from the EU in less than six months, which would devastate the economy, and threaten to throw the Tories out of government despite their 80 seat majority.

Already, even the remote prospect of such a crash-out has had the Pound beginning its slow descent, once more, against the Dollar and the Euro.  And, even though Britain still has the benefit of actually still being inside the protection of the EU Single Market and Customs Union, the threat of Brexit has again been having its effect on the economy itself, which has once more flatlined.

In 2010, when the Tories came into government, they inherited an economy that was growing strongly due to the measures that Labour had previously introduced.  The Liberal-Tories quickly sent that into reverse, with periods of negative growth alternating with stagnation.  After 2014, the economy began to grow again more rapidly, dragged along by a more rapidly growing global economy, and by a reversal of some of the austerity measures that the Liberal-Tories had introduced in relation to capital spending.  After 2016, and the Brexit vote, the Pound dropped by 20%, and the economy slowed.  It was only a growing conviction that Brexit might not happen, or that only a soft Brexit might happen that prevented the economy declining more rapidly.

Last year, as the prospect of a Johnson government loomed, and even the remote prospect that he might box himself into a corner of having to implement a crash out, by accident, appeared, the economy began to slow significantly.  In the second quarter, it shrank by around 0.1%.  It bounced back, slightly, in the third quarter, as some stockpiling ahead of a potential crash out in October occurred, but in the final quarter the economy failed to grow at all.  When revised figures are released in a few weeks, we may even see that the economy shrank once again.  In the last year, UK GDP grew by just 1.1%.  That compares with 2.5% in the US, and around 5% in Ireland.  That growth in Ireland is significantly don from the 10-12% growth it had experienced in 2018, but gives an indication of which economy has the greatest dynamism, and ability to deal with the consequences of Brexit.

HS2 is a diversion from the fact that even though the Tories have not got Brexit done as promised, its effects are already being felt, and they are unequivocally negative, both in terms of leading towards a break-up of the United Kingdom, and in terms of the effects on the UK economy itself.  The HS2 announcement is a one off, whilst the negative effects of Brexit will coninue to manifest themselves day after day after day.