Beginning to See the Light: Government isn’t working

 

‘It’s getting faster, moving faster now

It’s getting out of hand’

 
In my initial piece, ‘Brexit; the never-ending story’, I summarised by saying I feared a return to the London I grew up in during the 1970s. To refresh our memory let’s remind ourselves of that decade:
 

• Inflation and stagflation
• Power cuts and 3-day weeks
• Refuse not collected
• Low/falling standards of living for the many
• A booming property market papering over the cracks on the real economy

 
Sound familiar? Any of these could be headlines from today. In 1978 Tory posters told us ‘Labour isn’t working’, 43-years on it’s the Tories turn.

The difference this time is Brexit, a self-inflicted wound that was wholly avoidable. It was born on a lie (£350m per week for the NHS) and was little more than the sad dreams of little Englanders living in a bygone era.

I am tired of the ‘it’s all down to Covid’ excuse. Yes, Covid was a black swan event, but it was one made worse by 10-yrs of Tory mismanagement leaving the NHS/Care sector starved of funding and relying on the miracles their workers managed to provide.

Covid, as a black swan event is little different to GFC of 2008. Then Labour did the only thing possible, bailing out the banks, but still paid the price electorally as the Tories successfully laid the blame for the crisis at their door. Covid, therefore, should be no different.

This highlights the fact that free-market principles count for little in times of crisis. As with the banks in 2008 energy companies are failing, requiring the state to find other suppliers to take on their customers who require financial incentives to make it worth their while. Price caps, loan guarantees, subsidies: this is the most interventionist Tory administration since Heath’s. The steel industry is next in line for a bailout.
 

‘free-market principles count for little in times of crisis’

 
As in the early 1970s, the structural problems of the economy are being disguised by a property boom. A combination of historically low mortgage rates and government tax breaks has meant house prices have risen by £31,000 in the past year – equivalent to the annual wage of the average worker. Over the past half-century, Britain’s economic recoveries have relied on property-owning consumers embarking on spending sprees with money extracted from the rising value of their homes, and this is no exception.
 

‘Now is the winter of our discontent..’

 
The UK is in the grip of a nationwide rubbish collection crisis, triggered by a shortage of the HGV drivers necessary to operate recycling and refuse lorries. This month, it was reported that at least 18 councils have delayed bin collections due to a lack of drivers, with virtually all areas of the UK affected.

Across the country, effluence oozes from bloated sacks, rats rummage in recycling bins, and foxes enjoy nightly feasts of epicurean proportions. Meanwhile, council inboxes and Twitter feeds overflow with angry messages and unsightly images of uncollected rubbish.

Tempers are fraying, too, on the hyperlocal app Nextdoor. ‘What are we paying council tax for?’ one south London resident writes. ‘I’ll dump my refuse at the town hall!’ In response to an overwhelming volume of complaints, local authorities plead for understanding, explaining that an unprecedented set of circumstances beyond their control is to blame for the mounting rubbish on our streets.

First, and most significant, is Brexit. EU HGV drivers are no longer able to obtain visas to work in the UK. The Road Haulage Association (RHA) estimates that nearly 20,000 European HGV drivers returned to EU countries in 2020.
 

‘effluence oozes from bloated sacks, rats rummage in recycling bins, and foxes enjoy nightly feasts of epicurean proportions’

 
Then there’s the pandemic, which has caused many HGV drivers to reassess their priorities. ‘Covid has made a lot of drivers think about their quality of life,’ says Richard Burnett of the RHA. ‘How would you feel about starting a shift at 2am and driving for 12 hours, only to collapse, fall asleep and do it all over again the following day?’ The average age of a HGV driver is 56, so many have taken early retirement to spend more time with their families.

Other, Covid-related challenges include the DVLA having been operating at limited capacity, due to staffing pressures, meaning fewer HGV licences have been issued. And the ‘pingdemic’ knocked entire crews off the road for much of the summer, although such staffing shortages have abated recently.

To make matters worse, this year the government closed the IR35 tax loophole, which had allowed some HGV drivers to reduce their tax contributions. ‘Agency drivers withdrew their labour and said that if agencies weren’t prepared to pay the difference, they wouldn’t keep driving,’ says Burnett.

As a result of all this, drivers find themselves in unprecedented demand and salaries have soared. Pre-Brexit and Covid, the average HGV driver would have earned about £35,000; now, Waitrose is reportedly offering £53,780 as a starting salary, while Gist, which supplies drivers for Tesco and M&S, is offering £56,674, plus a £5,000 bonus. Yet despite this largesse, bare shelves have become a routine sight at many supermarkets.

Local authorities are hemorrhaging drivers like never before, because they can’t afford to match these salaries. ‘What we’ve got at the minute is a perfect storm,’ says Beth Whittaker, human resources officer at the outsourcing giant Veolia, which handles refuse for 7m households across the country. Veolia currently has 80 vacancies for HGV drivers.
 

‘What we’ve got at the minute is a perfect storm’

 
A refuse collector interviewed in a national paper said. ‘A guy just left here and he’s gone up to £44,000. All he does is drive from Didcot to Exeter.’ The man in question is paid £24,000 a year. ‘That’s quite a sad salary. Isn’t it?’

This month, Torbay, Teignbridge and North Devon councils wrote to the home secretary, asking her to allow EU HGV drivers back into the country for the two years it will take to train a new generation of British drivers.  As a council representative said, ‘We need that two-year visa waiver from Priti Patel so that we can take the pressure off the supermarkets. They’ll stop poaching our drivers, and people can start getting their bins collected more.’

So far, Patel has done nothing leaving us in our own filth. Ironically, there council representative voted ‘Remain’, and is frustrated to receive so many irate emails from his constituents, given that 67% of Torbay voted to ‘Leave.’

To retain drivers, Torbay council recently put up their salary by 61p to £11.49 an hour, plus £60 for every full week worked. This has cost the council £200,000, but it is not enough. The average cost of a HGV driver locally is currently £15 an hour, but to pay that would cost the council and extra £500,000 which it doesn’t have. It is estimated that for every pound the council used to get from central government it now gets 15p, every bit of extra money paid to drivers means less money to spend on schools or social care.

From mountains of rubbish and no HGC drivers, we turn to another favoured Tory policy, privatisation. Specifically, the rapidly unfolding gas crisis.

Wholesale gas prices are now more than five-times their level of 2-years ago, raising the prospect that household bills will rise by 12% next month. Shoppers could face empty supermarket shelves as it becomes unprofitable to produce the dry ice and carbon dioxide needed to store meat products. If the energy crunch continues, industry warns, a 1970s-style three-day week might have to be introduced.

The UK will be hit harder hit than other countries because our energy policy in the last 6-years has been an unmitigated disaster; fewer homes have been insulated and measures for diversifying the UK away from overdependence on gas needlessly stalled. Within the last 18-months alone, the Conservatives have launched, mismanaged, and then scrapped a Green Home Grant scheme; their flagship policy to help people cut their heating bills failed totally, and hasn’t been replaced.

From 2010-2015 the LibDems, as part of a coalition government, helped wean the UK off both coal and gas, E.G., we almost quadrupled our renewable energy sector during this period. Investment in onshore and offshore wind and solar, new standards for zero-carbon housing, and tough regulations on energy firms to force them to promote home insulation to cut customers’ heating bills and tackle fuel poverty. From promoting district heat networks to pushing National Grid and Norway’s StattNet to build the world’s longest subsea cable to link the UK to cheap hydropower, the UK was developing a low-carbon energy infrastructure to tackle climate change and improve our energy security.

Most of that stopped under the Conservatives after 2015

Now we are seeing a typical crisis response from the government: deny the problem, deflect responsibility for failure, and delay acting. Crises are often about perceptions; if something feels like a crisis, it is effectively a crisis.
 

‘energy policy in the last 6-years has been an unmitigated disaster’

 
Kwasi Kwarteng, the business secretary, says there is ‘no question of the lights going out, of people being unable to heat their homes’. But what if people cannot afford the energy costs to heat and light their homes? About 85% of the UK’s domestic heating comes from natural gas. A 12% increase in heating bills added to cuts in universal credit and the increase in NIC will force some to sit, shivering in the dark.

Whilst Mr Kwarteng has made it clear he did not favour the emergence of a state-backed energy company, this may be the inevitable consequence of a ‘supplier of last resort’ that the government is setting up to help customers left stranded by the collapse of energy suppliers.

Labour has consistently criticised privatisation, especially of key utilities. As recently as 2017 Ed Miliband pointed this out. Now he lost no time in reminding MPs that when the privatised giant Centrica closed Britain’s largest gas storage site in 2017 it left the country more dependent on imports and exposed to price shocks.

This was typical Tory mantra; the market knows best’. Now, unlike our European neighbours, we have limited buffer stocks to stabilise volatile prices.

In an attempt to find solutions, Johnson has reshuffled the ‘pack’ (cabinet), but to quote Gordon Gekko it’s ‘a dog with different fleas.’ Policies are unchanged, aimed at appeasing Tory voters to ensure they retain power. Johnson has replaced the most damaged on his ‘shields’ with other willing obedients.
 

‘deny the problem, deflect responsibility for failure, and delay acting’

 
Whoever is in the cabinet is irrelevant, they are all peas from the same pod; small-staters, Europhobes, and poverty-deniers, trapped in a big-state crisis.  Johnson has an ambitious chancellor who tries to restrain his childish whims for tunnels and bridges and must hope he doesn’t suffer the same fate as many of his Tory predecessors, a palace coup.

The new cabinet will continue to target the low paid, slashing support and raising taxes. The cut to universal credit alone will put an estimated more than 800,000 people into poverty. Many of whom will be the frontline workers who sacrificed so much during the pandemic to keep the country going.

As an example, a NHS healthcare assistant is likely to be on universal credit, the combined impact of the cut and NI rise will mean a £940 hit to their income, more than enough to wipe out the 3% pay rise announced earlier this year.

On top of this there is inflation which last month registered a 3% year-on-year increase. Alongside rising inflation, the recovery is stalling raising the prospect of a return to the 1970s stagflation.

Given all this, it’s no surprise that some of the electorate is tired of the Tories taking people for granted; their failure to tackle the cost-of-living crisis is just the latest example. In the Chesham and Amersham byelection, many lifelong Conservative voters fed up with Johnson’s incompetence and lack of decency voted LibDem.

This showed that electorally the LibDems were a real alternative to the Tory’s and led to Johnson using his reshuffle to send Michael Gove to fix the mess they are in over planning and housebuilding. Gove’s first action was to freeze changes to the planning regime.

The LibDems are now focussing on making gains in the blue wall of Tory constituencies, mostly in southern England, where they are the primary challenger. Of the 91 seats where the Lib Dems are second, 80 are held by Conservative MPs.

Based on their experience in Chesham and Amersham they have identified the types of voters who are biddable away from the Conservatives to the Lib Dems:
 

1. ‘Liberal, tolerant, internationalist-minded Tories who largely supported Remain.’ People tired of their bombastic, nationalistic rhetoric, their cuts to the international aid budget, and anything Priti Patel suggests.
2. One Nation Conservatives who fear that the Johnson government is tearing the UK apart and dislike the government’s priorities. In recognition of this, the Lib Dems have launched a campaign pointing out that NHS workers face a cut to their incomes of nearly £1,000 because of the increase in NIC and the cut to universal credit.
3. The PM himself; many are tired of his lies. One Lib Dem who knocked on many doors during the Chesham byelection said she kept coming across people saying things like, ‘I can’t bear voting for that overgrown schoolboy.’

 
Johnson reshuffle will also further alienate many voters as he has replaced the duds with more abrasively populists. E.G.:
 

• Liz Truss may delight activist with ideological fervour and manic boosterism, but her zealotry and relentless self-promotion could offend more centrist voters.
• Nadine Dorries, the culture secretary, a ferocious culture warrior with a back catalogue of incendiary remarks almost in-line with Johnson’s. Whilst she views the BBC as ‘a biased left-wing organisation’, many more genteel Tory’s who enjoys the likes of The Antiques Roadshow and trust the BBC’s news over the that of right-wing tabloids, will not agree.

 
To date Sir Keir Starmer hasn’t carved out his own niche as Labour leader, but unlike his predecessor, Jeremy Corbyn, he is someone the LibDems ‘can do business with.’ Sir Ed Davey, the LibDem leader, says his party is now resolutely ‘anti-Tory’, however both he and Labour realise the difficulties in creating an anti-Tory ‘progressive alliance’. Pacts such as this are difficult to maintain, and voters can be resistant to being herded around like sheep.

In the alliance place we might see more ‘subtle forms of collaboration. For example, Labour soft-peddled in Chesham and Amersham allowing the LibDems to present themselves as the only option to the Conservatives. At the Batley and Spen in July, the quiet Lib Dem effort concentrated on moderate Tories helping Labour win the Yorkshire seat.

This co-operation is like that between Paddy Ashdown and Tony Blair in the 1997 election. Neither stood down candidates, instead they laid off each other, focussing the energies of their respective parties where they were best placed to unseat Tories. This resulted in the LibDems more than doubled their number of MPs to 46 and Labour got an enormous 418.

To progress the country needs a government that represents the majority rather than an idealistic minority. We need politicians who can understand peoples’ problems. Can a chancellor reputed to be building a swimming pool and tennis court for his own home understand what the loss of £20 a week means to others?

65% of the reshuffled cabinet went to private schools, which is hugely out of kilter with the country. Before anyone complains my son went to private school, mercifully he is balanced enough to understand haves and have nots.

Finally, we need a fair and representative media. No government minister could dismantle social security without the backing, and outright support of the right-wing dominated press. This relationship has long allowed the Conservatives to define the dominant narrative around benefits, preaching that the sick or low-paid could afford the bills if only they put the effort in.

For now, we are heading back to the dark days of the 1970s, only this time there is no David Bowie to brighten my days!
 

‘But expected nothing less

Than a few reassuring words

And the sound of bitter resentment in your voice’

 
A bonus for all of we fans of his work as Philip follows up his article on drug use from earlier in the week with a ‘return to business as usual’; in another very hard hitting piece he says ‘this weeks’ culmination of events has finally proved my worst fears could come true, a return to the London I grew up in during the 1970’s’.

For those too young to remember, that was a time that featured ‘inflation/stagflation, food shortages, energy crisis, property boom, incompetent government’. It’s difficult not to draw parallels with what we see around us today – and its a fast moving story; who knew that Christmas dinner relied so heavily on CO2 and that the price of producing it is matched only by the money being spent eliminating it ahead of the most important climate summit in human history.

School children were forced to study by candlelight back in the winter of ’73/’74 as the Conservative government introduced a three-day week to conserve electricity; this time around Mr Kwateng has reassured us that there is ‘no question of the lights going out this winter’ but that might not be the case as our elderly and most vulnerable self-regulate to the point of putting themselves in harm’s way.

Inequality is a well-trodden path in Philip’s column, but as those that can least afford it face the loss of the uplift in universal credit, and a hike in NIC, how can it possibly be fair that your granny pays VAT on her sky-rocketing energy bills, whilst those heading to the airports for the holidays they ‘deserve’ attract no fuel duty due to an agreement reached at the Chicago Convention on Aviation in 1944. Pardon?   

Philip eschews the opportunity to say ‘I told you so’, but many of the warnings he has issued over the last five years have come to fruition and even the most ardent Brexiteer would surely blanche at piles of moldering rubbish and queues around the block for petrol.

Grant ‘Two Planes’ Shapps would have us believe that the shortage of HGV drivers is not a Brexit ‘thing’ but maybe it is only when a tipping point is reached that the other underlying gripes of low wages, insufficient sanitary facilities, job insecurity, long hours etc become intolerable; it’s all very well mounting an exercise to distribute Yorkies to would be migrants in Calais, but if what they have to look forward to is Mrs May’s ‘hostile environment’ they may decide to ply their trade elsewhere.

For all of Pitbull Patel’s promises to come down hard, ultimately the ‘crisis’ in the Channel will be solved immediately when the quality of life here is worse than where the migrants came from.

Someone who has just experienced first hand this government’s determination to clamp down on climate ‘activists’ is two time paralympic champion James Brown who has just been handed a 12 month prison sentence for supergluing himself to the roof of a BA flight at City Airport as part of a protest against the government’s lack of affirmative action to tackle climate change.

As presented, Philip’s evidence suggests that Mr Brown’s chagrin was justified as government has seemingly been in reverse in terms of the adoption of renewable energy since 2015; whilst he may not ‘feel good’ right now, expect much mileage to be made about the message this decision sends out ahead of COP26.

Two tracks again – ‘lyrically I looked to the dark days of 1978/79. Firstly, we have Joy Division’s ‘Disorder’ from a debut album that captured the bleak industrial wasteland of Manchester perfectly. Little different is ‘Expect Nothing’ by Cabaret Voltaire as we pay tribute to the late Richard H Kirk who pioneered industrial and electronic music from the equally bleak Sheffield’.

‘Enjoy hardly seems appropriate’. Quite.
 

 

Philip 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

Click on the link to see all Brexit Bulletins: