inequality‘The wind howls through the empty block lookin’ for a home
I run through the empty stone ’cause I’m all alone’

In the lead-up to this week’s budget speech much has been made of which direction will it take; will it be Sunaks’ traditional orthodox Toryism, i.e., fiscal and spending prudence, or Johnson’s take on socialism spending to achieve his electoral promise of ‘levelling up’?

As is well chronicled, Johnson owes much of his majority to the new Tory voters in the so-called ‘red wall’, who were supposed to have voted for his pledge to ‘level up’ the economy. This need to level up is based on the so-called prosperity enjoyed by those in London / SE, whereas those in the red wall are all living in abject poverty.

Contributing more than 20% of national income, the capital has an image of prosperity compared with the ‘red wall’ towns of the north and Midlands, where the Tories have focused much of their political capital.

Whereas, in reality London / SE suffers from income inequality as much as the red wall, where a good number own their own properties which has left them sitting on a healthy profit, and enjoy good pensions. Their gripe was change; they are old, miserable, little Englanders wishing for yesteryear.

The impact of C-19 was greater in London; by February 2021, the number of jobs – as measured by Pay As You Earn (PAYE) data – had fallen by 5%, or 209,000 in London since February 2020, taking the number of pay-rolled jobs in the capital back to a level last seen in October 2016. (1)

This compares to a fall of 1.9% for the rest of England over the same period. (1)

In the six months to September 2020, food banks run by members of the Trussell Trust network in London distributed 210,000 food packages to people in the capital, a 128% increase compared to the same period in 2019. The increase in the rest of England was 56%, demonstrating the severe financial pressures being placed on families in the capital. (1)

‘They are old, miserable, little Englanders wishing for yesteryear’

Even leafy Richmond isn’t what it seems.  Whilst unemployment in the borough has remained at just 3.5%, claims for universal credit tripled last spring, according to Liberal Democrat council leader, Gareth Roberts.

In East Ham unemployment rose > 9% during the pandemic, and experienced one of the highest rates of furlough in the country before the scheme closed at the end of September, leaving many residents high and dry. Their Labour MP, Stephen Timms, says the area had struggled with poverty for decades before Covid struck, whilst many people had jobs in the City, much of it was low-paid and precarious.

Rokhsana Fiaz, the directly elected Labour mayor of Newham, which encompasses East Ham, said additional government funding was needed to help residents back into work, including for training programmes. ‘It’s going to be really hard. How can you sustain a sense of resilience or even hope? Even before the pandemic we had large numbers of people in poverty,’

How Johnson governs was summed up by this soundbite at the recent Tory conference; a ‘high-wage, high-skill, high-productivity’. Platitudes lapped up by the faithful in attendance. A more accurate assessment came from the right- wing Adam Smith Institute who called the plan ‘bombastic, vacuous and economically illiterate.’  The CBI warned it’s a ‘fragile moment’ and how empty ambitions and promises on wages and productivity will lead simply to higher prices.

This what markets can see through, the absence of a discernible joined-up strategy to address the UK’s new post-pandemic, post-Brexit economic reality.

The reality is crisis after crisis: supply chain fractures, diminished opportunities and social mobility, Brexit, Europe, a dearth of innovation and entrepreneurship, rising real and relative poverty, insufficient wages in unattractive jobs, decaying infrastructure, crushing bureaucracy, a dysfunctional housing market, and unfit-for-purpose public services.

There is a lack of real initiatives such as creating economic growth through fiscal boost and regional policy to create jobs, growth, and build infrastructure. Solving skills shortages by paying doctors, nurses, engineers, and HGV drivers to train, rather than charging them. ‘Helicopter money’ has been shown to work in crisis. Markets accept the QE money creation trick.

Yesterday’s budget and spending plans were about politics not economics, designed to frame the arguments in the run-up to an election rather than dealing in a substantial way with a post-Covid, post-Brexit, transition to a net zero economy. To provide voters with a break from the recent past the chancellor sought to insulate the government from politically toxic claims it is enacting austerity, by spending money to reduce waiting times for NHS patients and bringing up per-pupil education spending in England to levels last seen under a Labour government.

‘Yesterday’s budget and spending plans were about politics not economics’

The chancellor said he wanted to build a new economy coming out of this crisis and today he had that chance. However, unlike Joe Biden in the US who created a £70bn p.a. stimulus to create 800,000 jobs, he opted to slash fuel passenger duty on domestic flights which is at odds with a transition to net zero. He has missed the opportunity to bolster an economy that the Office for Budget Responsibility projects will be 2% below its pre-pandemic path in 2024.

His promise to finally restore the UK overseas aid budget to 0.7% of GDP, was merely a reflection of the need to deal with this issue before going to the polls. MPs in LibDem/Tory marginals have suggested it could hurt them in an election.

The hidden economics of the budget can be found in the small print: most of the extra money for public services disappears in two years’ time.

Staying with finance, this week the Office for Budget Responsibility (OBR) said the impact of Brexit on the UK economy will be worse than that caused by the pandemic,

Richard Hughes, of the OBR, said their assumptions showed that leaving the EU would ‘reduce our long run GDP by around 4%’. ‘We think that the effect of the pandemic will reduce that (GDP) output by a further 2%.’

In response to yesterday’s budget, he warned that they expected inflation to reach 4.4% while warning it could hit ‘the highest rate seen in the UK for three decades’.

Of course, from the government perspective Brexit is a gift that keeps on giving, providing an on-going series of disputes and arguments, all designed to give the masses an enemy. Time and time again, Johnson and his mob, shrug their shoulders, look innocent, and pretend they are trying to be good neighbours.

‘the impact of Brexit on the UK economy will be worse than that caused by the pandemic’

Only recently Lord Frost, Johnson’s Brexit hatchet-man demanded that the EU rewrite completely the Northern Ireland protocol of the withdrawal treaty. The very one that Johnson hailed in October 2019 as a ‘fantastic deal for all of the UK’.

On-going conflict is ideal to keep the masses believing. Unfortunately, Northern Ireland the scene of this chaos is only too familiar with the misery of chaos. It is a place held together by one of those documents that Johnson and his government now hold in such contempt: an international treaty, the Belfast agreement of 1998.

As I wrote last week, proposals unveiled by the EU gave civic and business leaders in Northern Ireland much of what they had asked for to make the new arrangements work smoothly.

As proof of my argument that Johnson is simply triggering fights with the EU to play the blame game, the concessions from the EU weren’t sufficient. Their new argument is genius, a problem they know full well to be insoluble, the role of the European court of justice (ECJ) in any potential disputes about the interpretation of EU law.

The role of the ECJ in relation to the NI protocol is so vital that Frost and Johnson forgot about it for 21 months! The alleged concern about the ECJ emerged suddenly in the ‘command paper’ published by Frost on 21 July this year. On Thursday, the Irish taoiseach, Micheál Martin, confirmed that Johnson had never once raised it in their discussions about the protocol.

The only reason for dragging the ECJ into the arena now is that it is one issue on which the EU cannot ultimately yield. There are many layers of dispute resolution mechanisms already available within the withdrawal agreement. But the EU is held together by its laws, and the ECJ is the institution that underpins them. That cannot change.

All Frost and Johnson are doing is making an impossible demand so that they can blame the EU for rejecting it.

The only consolation for Ireland and the rest of the EU is that they are not being singled out for high-handed contempt. When Johnson’s former chief adviser, Dominic Cummings, tweeted on Wednesday that the intention was always to dishonour the protocol because ‘cheating foreigners is a core part of the job’, he showed how far this mob are prepared to stoop.

‘the intention was always to dishonour the protocol because ‘cheating foreigners is a core part of the job’’


Johnson does all of this is the name of ‘sovereignty’. The question we should be asking is, who/what is sovereign? Obviously not parliament, who overwhelmingly voted in favour of the withdrawal agreement he now wants to tear up. Neither is it  the electorate who gave Johnson his overwhelming majority based on his oven-ready deal. Who/ what is sovereign is whatever suits Johnson to do or say at any given time.

Once being a Tory meant something, now Brexit and mantra of ‘freedom’ from the EU, has led them to discard adherence to both national and international law and licensed a unilateral declaration of open mendacity.

Thy don’t care about NI, it serves only as a pressure point to be squeezed whenever Johnson feels like it. The next question to ask is does he care about us?  Or do they now have such a low opinion of us that they are happy for it to be governed arbitrarily, by people who dishonour not just international treaties but their own parliament and electorate?

The answer, I suspect, is as polarised as the overall debate about Brexit. A recent survey showed that 90% of leave and remain voters would vote the same way again. However, there was evidence of a shift among those who had not participated. More than twice as many (43%) in this group said they would now vote remain rather than back leave (18%).

Our departure from the EU pushed overall public trust and confidence in government to its highest level for more than a decade. However, this increase in support for the UK political system came almost entirely from ‘Leave’ voters, ‘Remainers’ are still as disillusioned as they were previously.

As Sir John Curtice (2), the co-author of the report wrote, ‘as a result, Britain is left divided between one half of the country who now feel better about how they are being governed and another half who, relatively at least, are as unhappy as they have ever been.’

Trust in government had been in decline for decades; in 1987, 47% of respondents said they trusted government to put the needs of the nation above party interests ‘most of the time’. This slid to a 15% low in 2019 amid parliamentary wrangling over the UK’s exit from Europe, before recovering to 23% in 2020.

This recovery, however, was largely on the back of leave voters, 31% of whom expressed trust in government, up from 12% in 2019. Remain voters largely distrusted government in 2019 (14%) and this view had changed little (17%) a year later.

Getting Brexit ‘done’ marginally reinvigorated overall trust levels in the UK political system, which had hit a record low in 2019. But this mainly reflected a major shift in the attitudes of Eurosceptics, who were for the first time more likely than remainers to agree that ‘governments put the nation’s needs before party interests’.

‘Restoring the trust and confidence of remain voters looks as though it is still very much a work in progress.’

The reversal of some of the damage to trust in government caused by Brexit deadlock ‘might be regarded as a development to be welcomed’ if democracy was to function effectively, the survey said, though it added: ‘Restoring the trust and confidence of remain voters looks as though it is still very much a work in progress.’

The survey found that the pandemic pushed public concern over inequality to its highest level since 1998, as well as raising support for welfare benefits and public spending, but it concluded there was little evidence so far that Covid had proved a ‘reset’ moment that indicated widespread desire for radical social or political change.

The rise in support for progressive views on these issues was an extension of existing changes over several years rather than an abrupt shift in attitudes caused by Covid. ‘These trends do not signify a new direction in the public mood. Rather, in many ways the pandemic has reinforced opinions and attitudes that had already become increasingly common in Britain in recent years,’ said Curtice.

Nonetheless, there was a sharp rise in 2020 in the proportion of 18- to 44-year-olds who thought Britain was unequal and favoured the rich. Younger adults were also more likely than older cohorts to agree that the government should redistribute income from the better-off to the less well-off – and this could have lasting effects.

‘It may be that the exposure [young people] have had during the pandemic to relatively high levels of precarity in their early adult years will prove a formative experience that leaves a legacy of a more egalitarian generation – only future survey research will affirm whether or not that proves to be the case,’ it concluded.

‘There was a sharp rise in 2020 in the proportion of 18- to 44-year-olds who thought Britain was unequal and favoured the rich’

The debates around inequality sparked off by the pandemic caused a small shift in public attitudes. Nearly two-thirds (64%) agreed that ‘ordinary working people do not get their fair share of the nation’s wealth’ – seen as a proxy for levels of concern over inequality. This was up from 57% in 2019, and the highest level since 1998.

However, this was not accompanied by markedly increased support for the redistribution of wealth from rich to poor. The survey found that 46% agreed with redistribution – up from 39% in 2019 – but the number disagreeing increased too, from 27% in 2019 to 30%.

In conclusion, Brexit is an open wound that shows no sign of abating, leaving the country as polarised as ever on this subject. This, for populist dictators such as Johnson is manna from heaven, giving him an ongoing enemy to keep his troops enraged.

This only serves to highlight further divisions, old and young, progressive and regressive, haves and have nots.

This is a government that seeks to stoke these fires, those that don’t support them don’t count, all that matters is that they retain power.

How long can a government pay at divide and rule? Can this government be deemed representative when London / SE, the country’s engine of growth, is so against them?

‘Ready or not here we come
Gettin’ down on the one which we believe in
Here’s my chance to dance my way
Out of my constrictions’



Budget time this week, and I sense that Philip knew what to expect – ‘Budget week isn’t what it used to be. Now it’s all leaks before the event aimed at getting their retaliation in first. Spin, spin, and spin again’.

One thing’s for sure, it lived up to many of Philip’s expectations for a budget from a populist government with an eye on a general election – ‘let ’em keep driving and bung ’em some cheap booze’.

Any doubts the the Tories don’t give a stuff about the environment should be dispelled by the fact that in the week before COP26 Mr Sunak lifted a central digit to the planet by slashing APD on domestic flights. With the backdrop that France, Austria and Spain are looking to ban flights that can reasonably done by train, no doubt under pressure from the likes of ‘Two Planes’ Shapps, ‘Guilt Free Flying’ Johnson and ‘Quicker, Quieter, Cleaner’ Courts, Rishi swam against the tide.

‘Boris, I know you’re not going to stop people flying, but this looks really bad’.

‘Ah, blasted crusties – tell them that 400,000 flights will create fewer emissions.’

‘But that’s bollocks’.

‘And your point is?’

Philip has long said: ‘Populism thrives on negativity, which is why there is a constant need for enemies, real or imagined’ and in Brexit, and in particularly NI, there are spats aplenty; ‘nasty party’? Peerless!

Inequality is a well-trodden path, but it is difficult to see how some very real rifts in this country can ever be healed; Philip’s belief has long been that Little Englanders, unable or unwilling to embrace change will become less influential by becoming more dead.

It’s a reasonably gloomy conclusion, but given the current state of our politics, and the general level of trust in politicians, it does seem to have some legs.

With inflation almost certain to bubble up, we are told that the hit to our economy from Brexit will eclipse that of Covid; that seems likely to be totally obliterated by the climate emergency, but has any administration, let alone a populist one, got the minerals to impose the taxes and the restrictions that are required if we are to restrict warming to 2.7 degrees C let alone 1.5.

The evidence of the threat is there for all to see – those hoping to take the west coast line to Glasgow have been thwarted because extreme flooding has washed bridges away; and maybe this week we saw part of the problem – my lad was going to visit his friend in Leeds, and Trainline quoted £82 for an off-peak, flexible return. When he went to book it half an hour later it was £197; flights were on offer for £39 return.

No Stranglers this week, but Something Better Change. Meantime, two tracks, just for fun – The Clash and ‘London’s Burnin’ and George Clinton and Funkadelic with ‘One Nation Under a Groove’.

Philip Gilbert 2Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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