The Order Matters

What is it about Wales, previously the land of Nathan Gill? And what might David Taylor, Matthew Aplin or Steve Jones possibly know that was of any use or interest to the Chinese but which the Chinese did not already know? Yet while Taylor’s one-man company had £70,000 in cash and debtors in 2023, in 2024 it had more than a million. That year, Joani Reid entered Parliament. Her own company then received loans of more than £20,000 from Taylor’s, at no interest and with no repayment plan. On 20 February last year, that fresher had the effrontery to write to Jeremy Corbyn, who had probably never heard of her and even now could probably not pick her out in a lineup, to demand that he, elected as an Independent MP, toe the Labour Party line on Ukraine. How did we get here? Paul Knaggs knows:

Jimmy Reid stood in the Bute Hall of Glasgow University in April 1972 and told a generation to reject the values of the rat race. “A rat race is for rats,” he said. “We’re not rats. We’re human beings.” The New York Times printed the speech in full. It called it the greatest address since Lincoln at Gettysburg. Reid had spent the previous year leading the Upper Clyde Shipbuilders work-in, staring down Edward Heath’s government, and saving six thousand jobs on the Clyde by the simple, radical act of refusing to accept that faceless men in Whitehall had the right to determine the destiny of working people who built ships. 

His granddaughter, Joani Reid, is the Labour MP for East Kilbride and Strathaven. This week, her husband was arrested on suspicion of spying for China.

David Taylor, 39, director of policy and programmes at the London-based Asia House think tank and a former special advisor to the Labour Party, was detained by Metropolitan Police counter-terrorism officers alongside two other men: a 68-year-old arrested in Powys and a 43-year-old in Pontyclun, south Wales. All three are held on suspicion of assisting China’s foreign intelligence service. Searches were carried out at six addresses across London, East Kilbride, and Cardiff.

Joani Reid issued a careful, precise statement. She has never been to China. She has never spoken on China-related matters in the Commons. She is, she says, no admirer of the Chinese Communist Party’s dictatorship. She asked the media to respect her children’s privacy. These are reasonable requests from a woman who, by all available evidence, is not a suspect and has not been treated as one. She deserves to be believed unless evidence emerges to the contrary. But the story that her husband’s arrest opens up is larger than any one family, and it begins not with an intelligence failure but with an economic one.

China has never been Britain’s primary military threat. It is something more patient, and more profitable: it is our manufacturer, our creditor, and now, it appears, our intelligence target. The order matters.

Why China Sends Spies to Britain

Security Minister Dan Jarvis told Parliament this week that there will be “severe consequences” if China is proven to have interfered in UK sovereign affairs. The Conservatives affected outrage. The commentators reached for familiar vocabulary: spies, threats, national security. All of it is real. None of it gets to the heart of the matter.

China does not send intelligence officers to Britain because it wants to invade us, destabilise our government, or steal our nuclear codes. It does not need to. The leverage China seeks is far more mundane, and far more durable, than military threat. It wants to know what we know, influence what we think, and above all, keep things as they are. Because the way things are suits China extremely well.

A Britain that buys Chinese goods, a Britain whose retail sector is structurally dependent on Chinese supply chains, a Britain whose political class is woven into networks of think tanks and advisory roles that touch Chinese-linked institutions, is a Britain that cannot easily pivot. Cannot easily sanction. Cannot easily say no. Chinese intelligence in the United Kingdom is not primarily oriented toward sabotage. It is oriented toward maintenance. The maintenance of a dependency that generates enormous wealth for China and enormous profit for a handful of British retailers, while doing very little for the British worker who spends what remains of a diminished wage on the goods that used to be made down the road.

That is the real intelligence prize. Not secrets. The status quo. And in that arrangement, China does not need to control Britain. It only needs to ensure Britain never remembers how to stand on its own feet.

From the Clyde to the Checkout

To understand why Britain has made itself such a comfortable target, you have to go back to what Britain was before it became what it is. In the 1970s, when Jimmy Reid was organising on the Clyde, Britain still made things. It built ships, made steel, manufactured pottery in Stoke-on-Trent and textiles in the mill towns of Lancashire and Yorkshire, produced cars in the West Midlands, dug coal in England, Scotland and Wales, and exported engineering expertise across the world. The lights stayed on because British miners put them on. The country was not wealthy enough, not efficient enough, not always well-managed. But it was productive. Its workers had something to do that was irreplaceable, something that gave them not merely an income but a stake, a role, a reason to be in the place they were.

Jimmy Reid understood something that the economists of his day and ours have consistently refused to quantify: the dignity of making something. The sense of agency that comes from looking at a ship you helped build, a pot you helped throw, a machine you helped assemble, and knowing that your hands and mind were part of its existence. His fight on the Clyde was not merely a fight for wages. It was a fight for relevance. For the right of working people to be participants in their own society rather than units of consumption shuffled around by the decisions of those who never dirtied their hands.

That fight was lost. Not all at once, and not without resistance. But the trajectory from the late 1970s onward has been consistent. The factories closed. The shipyards fell silent. Stoke-on-Trent, which once supplied the world with ceramics, became a monument to post-industrial melancholy. The mill towns were told to retrain. The steelworkers were offered counselling. The political class, of both parties, offered its sympathy and its insistence that this was the necessary price of progress, that the market knew best, that the future lay in services and finance and the knowledge economy.

The knowledge economy, it turned out, had rather fewer vacancies than advertised. And the services sector, while it expanded, generated nothing like the wages, the security, or the social solidarity that the industries it replaced had once provided.

The Creation of Dependency

The deeper damage is structural. A nation that does not make things forgets how to make things. The skills disappear. The supply chains atrophy. The infrastructure of innovation, the applied research, the machine tools, the technical education, all of it decays.

We are now at the point where a British government cannot procure essential equipment without relying on foreign suppliers. We have lost the capacity to build our own railways, our own energy systems, our own defence platforms. The pandemic exposed this brutally: when the global supply chains faltered, we had no domestic capacity to fall back on. We were shoppers in a world that had temporarily closed its shops.

This is managed decline, but it is decline for maximum profit. The political class has accepted, implicitly or explicitly, that Britain’s role in the global division of labour is to provide financial services, higher education, and luxury property for the global elite, while the rest of the population competes for low-wage service jobs. It is a vision of the country as a theme park with a financial district attached.

The goods were never truly cheap. The savings simply did not go to the people who were told to be grateful for them. They went to the shareholder. They went to the quarterly results. They went to the dividend.

The Globalisation Myth: Who Actually Gets the Cheap Goods 

There is a comforting story that has been told about all of this, and it is told still, in economics columns and government white papers and the speeches of ministers who represent constituencies full of people who no longer believe a word of it. The story runs as follows: cheap imports from Asia have lowered the cost of living for British consumers. Goods that were once expensive are now affordable. The globalisation of supply chains has been, on balance, good for ordinary people.

This is, in large part, a fiction. And the fiction is not subtle once you know where to look for it.

Any entrepreneur who has sat across from the investors on Dragon’s Den and heard Touker Suleyman explain that their British-made product costs too much, that the same item could be sourced from India or China for twenty pence, has encountered the mechanism in its purest form. The investor is not wrong about the arithmetic. The product almost certainly could be made cheaper abroad. What he does not add, what the cameras do not linger on, is what happens to that vast saving. It does not make the product cheaper on the shelf for the British consumer. It makes the margin wider for the retailer. The gap between the cost of manufacture in Guangdong and the shelf price in Gorton is not passed on. It is captured. By the shareholder. By the platform. By the supply chain intermediary. Not by the person standing in the aisle with a basket.

The great supermarkets, the online platforms, the fast fashion empires: they compete, vigorously, on volume and efficiency. They do not compete on sharing their supply chain savings with their customers. The proof is in four decades of data. British retail has been extraordinarily profitable throughout the age of cheap Asian imports. British wages, relative to productivity and to the cost of housing and energy, have not. If the consumer were truly the beneficiary of globalisation, the two lines would not have diverged so completely.

The goods are no cheaper at the point of sale. The goods are cheap to import, for the retailer, because the workers who make them in Guangdong are paid a fraction of what a British worker would require, in conditions that British regulations would not permit, at an environmental cost that British law would not allow. The retailers who source them are rational actors in a system that rewards short-term profit over long-term resilience. They are not villains. They are the logical product of a policy framework that decided the market should be left to its own conclusions, and then spent forty years surprised by the conclusions it reached.

The real cost was never in the price tag. It was in the factories we closed, the skills we abandoned, and the wages we hollowed out. A country that stops making things does not become richer. It becomes dependent. And dependence is the most expensive import of all.

We Taught Them This Trick

There is a bitter irony embedded in Britain’s current position that is almost never acknowledged, perhaps because acknowledging it would require a degree of historical honesty that the political class finds uncomfortable. Britain did not invent espionage, but it refined the art of economic subjugation through trade dependency to something approaching perfection. In India, the East India Company did not primarily conquer with armies. It conquered with contracts, with the systematic destruction of local textile industries, with the construction of a dependency on British manufactured goods that made the subcontinent a captive market. In China, the Opium Wars were, at root, a trade dispute: Britain’s response to a trade deficit was to force a narcotic export on a population whose government had tried to refuse it.

We taught the world that control over another nation’s economic life is the most durable form of power. Military occupation is expensive and generates resistance. Economic dependency is cheap, self-reinforcing, and tends to recruit its own administrators from the subject population, people who find it rational, even advantageous, to maintain the relationship that gives them their position. We did not imagine that the lesson would be learned so thoroughly, or that we would one day find ourselves on the receiving end of it.

China has never needed to occupy Britain. It has something better. It has our supply chains, our retail sector’s structural dependency on its manufacturing base, and a political class so thoroughly invested in the idea of economic engagement that it approved a vast new Chinese embassy in central London in the same week it was sending the Prime Minister to Beijing for trade talks. The embassy is not primarily a diplomatic facility. It is an infrastructure investment, in the same way that a port or a railway is an infrastructure investment. It is the architecture of presence.

The scale of what has already been sold is not a matter of conjecture. It is a matter of record, a record that receives remarkably little attention given what it contains. The China Investment Corporation, a sovereign wealth fund wholly owned by the Chinese state, holds a 10% stake in Heathrow Airport. Li Ka-shing’s investment group owns UK Power Networks, the electricity distribution infrastructure for London, the South East and the East of England, as well as 75% of Northumbrian Water, and the Eversholt Rail group, which owns 27% of Britain’s passenger trains.

The same group controls a gas power station jointly with SSE and owns the Port of Felixstowe, one of Britain’s busiest freight ports, through a subsidiary that has held it since 1994. China General Nuclear Power Group, sanctioned by the United States on security grounds, retains a 27.4% stake in Hinkley Point C in Somerset and a dominant 66.5% share in the proposed Bradwell B nuclear site in Essex. Chinese investors hold a 10.5% stake in the National Grid’s gas distribution network and an 8.7% stake in Thames Water, which serves over a quarter of English households. Total Chinese and Hong Kong interests in British assets are now estimated at over £190 billion.

These are not abstract financial positions. They are stakes in the infrastructure through which this country moves its electricity, its water, its gas, its passengers, and its freight. They were sold, collectively and incrementally, by governments of both parties, each of which assured the public that the investment was purely commercial and that the national interest was fully protected. When the people who distribute your electricity, supply your water, and handle your freight are ultimately answerable to investors in Hong Kong and Beijing, the question of whether a foreign power has leverage over your country has, in a meaningful sense, already been answered.”

The dependency runs through the education system too. British universities, starved of adequate public funding for decades, have quietly built their finances around Chinese student fees, with Chinese nationals now making up more than a quarter of all international applicants. The students themselves are no threat. But an institution that cannot balance its books without a particular country’s custom is an institution whose independence, over time, can be gently shaped by the need to maintain that custom.

What Jimmy Reid Knew That We Have Forgotten

The globalists, to use a word that has become unfairly associated only with the conspiratorial right, have a consistent and coherent vision of the world. It is a vision in which nations are markets, workers are consumers, and the purpose of government is to facilitate the movement of goods and capital with minimum friction. In this vision, it does not much matter where things are made, as long as they are made cheaply enough that people can afford to buy them, and the tax receipts from the retail and logistics sector keep the public finances stable enough to avoid revolt.

Jimmy Reid had a different vision. It was not a vision of economic autarky or nationalist hostility to the outside world. It was a vision of people as participants, not merely purchasers. He understood that the factory was not just a place of production. It was a place of solidarity, of shared purpose, of the social infrastructure that makes a community something more than a collection of individuals making separate economic decisions. When you take the factory away and replace it with a warehouse, a delivery route, a zero-hours contract, you do not simply change the work. You change the nature of the relationship between people and their society.

A nation of shoppers is not a community. It is a market. Markets do not vote. Markets do not organise. Markets do not resist. They consume, until they cannot afford to, and then they collapse, leaving the investors to find another market somewhere else. That is the trajectory we are on. Reduce the income of consumers by eliminating the productive employment that generates wages, and you destroy the customer base for the cheap goods you are importing. The model that has enriched the shareholders of the great retail and logistics companies depends on a workforce with enough disposable income to keep spending. Strip that workforce of well-paid industrial employment, hollow out the towns that housed the industries, and the domestic market contracts. The dependency becomes a trap. You cannot rebuild the industry because you have lost the skills, the supply chains, the institutional knowledge, and the political will. And you cannot sustain the consumer economy because you have destroyed the wages that were its engine.

A nation of shoppers is not a community. It is a market. Markets do not vote. Markets do not organise. Markets do not resist. They consume, until they cannot afford to, and then they collapse.

Security Begins With Building Things

The arrests this week will generate the usual cycle: parliamentary questions, intelligence committee briefings, ministerial statements, stern words about consequences. Some of this will be useful. The National Security Act gives law enforcement genuine tools. The investigation will proceed. If the evidence is there, prosecutions will follow.

But none of that touches the structural vulnerability that made the situation possible. A country that cannot produce its own pharmaceuticals, manufacture its own semiconductors, grow enough of its own food, or build its own advanced defence systems is a country that has voluntarily handed leverage to those who can. That leverage does not have to be exercised dramatically to be effective. It does not require an ultimatum or a crisis. It operates daily, quietly, in the calculations of every minister who considers whether a particular policy might disrupt a particular supply chain, in the hesitation of every official who wonders whether a firm line on Chinese human rights might jeopardise a trade agreement.

If Britain wants security, it needs to begin where security has always begun: with the capacity to sustain itself. An industrial strategy that rebuilds domestic manufacturing in the sectors that matter most: energy, medicine, food, defence. A trade policy that distinguishes between dependency and engagement. An education system that values the making of things as highly as the financing of them. A political culture that is willing to say, plainly, that the cheap goods were never free, that the price was always being paid somewhere, and that the bill has arrived.

China is not Britain’s enemy in any meaningful military sense. It is not massing on any border we share. Its ambitions are commercial and strategic, not martial, at least as far as we are concerned. It wants to keep selling to us, keep us buying from it, and keep the architecture of that dependency intact. The spies, if that is what they are, serve that ambition. Their job is not to steal secrets. Their job is to ensure that nothing disturbs the arrangement.

The arrangement needs disturbing. Not through hostility or decoupling for its own sake, but through the deliberate, patient rebuilding of a country that makes things, grows things, and defends things. A country where the answer to Touker Suleyman’s arithmetic is not just a wider margin, but a different question entirely: what is it worth to have this made here, by people who live here, who spend their wages here, who pay their taxes here, and who do not disappear from the national accounts when the next cheaper option emerges somewhere else?

Jimmy Reid told a generation that the rat race was for rats, not human beings. He was talking about the scramble for individual advantage at the expense of collective dignity. The globalised economy we have built in the decades since is the rat race made systemic, industrialised, and exported.

China did not cause our decline. We managed it ourselves, for maximum profit, and called it progress. The only way out is to start making things again: the goods we use, the food we eat, and the political will to say that a nation which cannot sustain itself cannot, in any serious sense, secure itself.

Britain opened the door. It is past time we learned how to build one.