With ASKAR SHEIBANI
CEO, Comtek Network Systems UK and chair, DBF
The recent market response to the former Prime Minister’s disastrous mini-budget highlighted a serious global fact that the UK is an integral part of the international market. The UK cannot easily run an independent fiscal policy without following global market rules.
The real economic power has now decisively shifted from the individual democratically elected governments to international corporates, such as Goldman Sachs Investment Bank (worth $1.2trillion) and individuals such as Elon Musk (owner of Twitter and CEO of Tesla), and Jeff Bezos (owner of Amazon).
This undemocratic shift is leading to social inequality, discontent, and corruption. The UK on its own, even with a change in government from Conservative to Labour, would be unable to roll out any radical economic and social solutions to suddenly turn the clock back to periods when the country would have been able to tackle its economic challenges independently.
The key reason for the UK’s interdependency with the global financial market is mainly because it must borrow money to maintain the economy.
The UK’s general government gross debt is about £2.5trillion, which costs the nation about £50billion to maintain.
Another major problem is that the UK’s debt keeps increasing and leading further to its vulnerability and interdependency as an individual lone country.
The only way the UK can challenge the global market influence is to team up with other democratic nations as a club or syndicate creating a much more powerful economic group.
One of the main reasons for the establishment of the European Economic Community was precisely to strengthen the individual county’s economic security against undemocratic external market influences.
Unfortunately, as the UK has left the European economic block, it has thrown itself into serious vulnerability. Now financial power has shifted away from individual democratic governments to the external undemocratic market.
The only way the UK can mitigate its interdependency is either to re-join the EU or be part of a new economic block with friendly countries such as the USA, Canada, New Zealand, and Australia.
The other alternative for the UK to gain its financial policy-making independence would be to radically reduce its debt, which would be a colossal task. Successive governments carried on irresponsibly piling up debt to a level that is impossible to pay back and is now costing the country about £50billion just to service this debt.
I, therefore, believe it would be impossible for any government, Labour, Conservative or coalition, to fundamentally impact the UK’s economic and social challenges independently without accepting the rules of the external global financial market.
Regrettably, large corporates and hugely wealthy individuals will continue to enjoy their dominance and influence on individual democratic counties creating more inequality and social challenges.