Beginning to See the Light: ‘Now is the winter of our discontent’

 

‘History will repeat itself 

Crisis point we’re near the hour’ 

 
Everyone hopes for a nice summer, warm weather, but, as is always the case, when it happens we run out of water. Why? Well, people like me with irrigation systems do use a lot, but that’s really just an excuse for crippling inefficiency and underinvestment.  

• Fact: since they were privatised in 1989, the water companies failed to commission any new reservoirs 
• Fact: 2.4bn litres a day, on current estimates, of water leaks away. Instead of stopping these leaks, the water companies have pumped the rivers dry. 
• Fact: They have not upgraded their sewage treatment works. The water in the upper reaches of some of our chalk streams now consists of nothing but sewage outflows and road run-off 
• Fact: Since they were privatised in 1989 the water firms have paid £72bn in dividends into the accounts of their shareholders. 
• Conclusion: Privatisation doesn’t work!  

 
In the meantime the government is on holiday, gazing at their navels as they decided which experiment they will bestow upon us. It looks like being wishful Liz, who believes that ‘remoaners’ and doomsters like do the country a disservice.  
 

‘Since they were privatised in 1989 the water firms have paid £72bn in dividends into the accounts of their shareholders’

 
Liz, we don’t need to do it down the evidence is there in plan sight. Wishful Liz, the barroom populist with back-of-a-fag-packet policies will turn us into world beaters, markets leaders, at the swish of her magic wand. 

I have to be honest, I find her truly dislikeable, and a lesson in manners and diplomacy wouldn’t go amiss.  

After dismissing Scottish first minister Nicola Sturgeon as being an ‘attention seeker‘, she has now accused her of being using the ‘entire resources‘ of the Scottish government to ‘run an independence campaign – grossly irresponsible‘. 

Not satisfied with Scotland, she turned her attention to the Welsh first minister Mark Drakeford, calling the Labour politician ‘the low-energy version of Jeremy Corbyn‘. 

Now, offering help to those in needs during the latest crisis (there are so many I couldn’t decide which) is dismissed as ‘Gordon Brown Economics‘. 

Disparaging all and sundry isn’t becoming a prospective PM. 

Moving on, both candidates have referred to the old right-wing Tory handbook,discrediting ‘people on welfare’. The old mantra of the right is that people are poor only because they choose to be.  

When asked how she would help families struggling with rising bills, Truss said she would ‘do things in a Conservative way of lowering the tax burden, not giving out handouts’. Or, put another way, nothing! 

Former leadership candidate Suella Braverman vowed to tackle the ‘stubborn‘ unemployed who ‘refuse’ to get jobs, while Kemi Badenoch blamed ‘family break-ups‘ for housing demand, rather than the lack of social housing. 

For those on benefits, a decade of benefit sanctions and freezes, has left many families in a crisis of insecurity relating to debt and arrears, and worsening physical and mental health. Benefit rates in the UK are at their lowest level in 50 years, £77 a week, the basic rate for those over 25 is 13% of average pay.  

Should wishful Liz triumph, she will inherit an economy out-of-control, specifically, inflation; the governor of the BoE, Andrew Bailey, admitted to MPs in May that he was ‘helpless‘ to stop inflation. As his colleagues testified, what is driving up prices in the UK is the global shortage of key commodities. The effect of Covid on the supply chain should be diminishing, however our reliance on China makes that debatable. The other issue is the war in Ukraine. 

What isn’t to blame is wage rises; according to economists at UBS wealth management, 99% of British workers are getting poorer. 

In truth, the BoE’s rate increa

se are nothing more than posturing, they need to be seen to be doing something. All it will achieve is stagflation as higher interest rates strangle demand, which, in-turn is likely to put firms out of business and sink households into a debt crisis. 

The delayed tax increases offered by Sunak will do nothing positive, but offers little damage. His ideas have been endorsed by two more of Thatcher’s  former cabinet ministers. 

Michael Howard, a former Tory party leader, said Thatcher hated inflation, increased borrowing, unfunded tax cuts, and those who told people what they wanted to hear rather than the truth.. 

Nigel Lawson, Thatcher’s former chancellor, said Ted Heath’s ‘dash for growth‘ policy contributed to inflation escalating out of control in the 1970s and Truss’s pledges were ‘uncomfortably reminiscent of the missteps of the Tory government of 50 years ago’. 

I would agree with Lawson, Truss’s ideas are lethal, her comments that tax increases will reduce inflation are little more than fantasy. 

But fantasy is wishful Liz’s stock-in-trade; she plans to ‘rush through’ £30bn worth of tax cuts 6-months earlier than planned, to ‘tackle the cost of living crisis‘. 

The key here is ‘tackle the cost of living crisis.’ For who? The main beneficiaries will be the upper middle-class families’, while the very poorest, many of whom pay little or no income tax, will see little, or no benefit. Of the proposed £30bn, £19bn of it will go to businesses as she halts the proposed increase in corporation tax. Her plan to scrap the NIC rise also is of greater benefit the wealthiest; 85% of the £8bn cost would go to the top half of earners. 
 

‘99% of British workers are getting poorer‘

 
There is a school of thought that suggest the projected cost of £30bn is incorrect. Analysis prepared for the Guardian found the figure could top £50bn a year, while Labour said the Tory leadership campaign was full of ‘fantasy economics and unfunded announcements‘. 

There are divisions among Tory MPs about ‘Trussonomics’, the plans to spend billions more, risk inflationary tax cuts, and cancel the rise in national insurance that had been earmarked to tackle the NHS backlog and ultimately go towards fixing social care. 

The so-called ‘red wall’ MP’s form an influential group, many are in marginal constituencies, and disagree with proposals that cancel corporation tax rises whilst offering no direct help  to people as the cost-of-living crisis worsens. 

In addition, those in the One Nation wing of the party will likely be disconcerted by the spending promises on tax cuts when all the Treasury’s fiscal headroom may be wiped out.  

In addition to rampant inflation, Truss will have to contend with our historic underperformance as, during the  last 50-years, our economic growth is a tale of woe. Since the 1970’s growth has consistently declined under each new government. (1) 

Furthermore, analysis shows that every extra £1 of real GDP growth between Thatcher and 2008 came with nearly £2 of borrowing by households and government. (1) 

Put simply, for 50-years we have gone backwards. A report entitled ‘Stagnation Nation by The Resolution Foundation found that every worker aged 31 and under ‘has never worked in an economy with sustained average wage rises‘. Numerically that is C.8m people, equivalent to C.25% of the labour force. 

We know from the book wishful Liz co-authored, that she regards British workers as lazy and unproductive, and that she dislikes ‘diclinism.’ This isn’t diclinism, it’s fact.  

Change doesn’t mean the wishful thinking of being a global leader, it means making things fairer, taking more away from those at the very top and sharing it out. 

Contrary to Thatcher, who disliked those who told people what they wanted to hear rather than the truth, that is exactly what the Tory leadership campaign is about. It is based on appealing to C.160,000 people who are out of-touch with reality and the voting public. 

In their desperation to appeal to this minority the debate has moved further to the right on issues such as immigration, equalities and tax cuts, than is representative of the majority of voters. And, in a desire not to miss out, more moderate candidates such as Tom Tugendhat, Penny Mordaunt and Sajid Javid have rushed to jump on-board the Truss bandwagon.  

They do so at their peril; the Conservative party to which wishful Liz appeals sees the world very differently and has very different priorities from these newly converted job seekers. 

A YouGov poll of Conservative members last week showed: 
 

• 67% who think the government is already spending enough on the NHS, 
• 60% want to delay Britain’s commitment to reaching net zero carbon emissions by 2050, 
• 75% support deporting asylum seekers to Rwanda.  

 
In addition, the poll found that 53% do not think Johnson should have been forced to resign, with a majority still seeing him as a better leader than either Truss or Sunak. 
 

‘a majority still seeing him as a better leader than either Truss or Sunak’

 
it all adds up to a very right-of-centre party, with a very right-of-centre agenda, set to elect a very right-of-centre leader. 

Truss’s fag packet policies are a playbook aimed at the tiny minority who will elect the next PM. Grandstanding against the EU plays to their bigoted narrow mindedness; comments such as ‘We’ve learned from history that there is only one thing the EU understands and that is strength’, sound great to ardent Brexiters but will only lead to a fight we can’t win. 

The wider electorate who she will have to face in the future have had their eyes opened in recent years. They now understand that EU workers were good for the economy, and there are numerous vacancies as a result of Brexit.   

Voters are appalled at the naked profiteering of BP and Shell which pours billions into shareholder pocket, and would favour higher business taxes not lower. No one in the Tory part is calling for them to use the bonanza to ease consumer prices or to invest in renewables. 

Climate change is of high concern to voters, including Tory’s, yet Truss backs fracking (unpopular) and would stop land being used for solar farms. Sunak proposes banning onshore windfarms that are the cheapest renewables. 

Just how bad fuel poverty could become will become clear on 26 August, when the energy regulator Ofgem will announce the new price cap due to come into force on 1 October. Recent projections suggest an increase of about 70%, to £3,359 a year – and in January, prices will go up again by an estimated 8%. Late last week, one group of analysts said that Ofgem’s decision to alter the price cap every three months meant that annual bills could exceed £4,200 

Fuel poverty is traditionally defined as  when energy costs exceed 10% of a household’s net income In the financial year 2019-20, just under 20% of UK households were in that category. Research projects that: 
 

• After factoring in the universal £400 rebate, this figure will be > 50% by the start of next year. 
• In Northern Ireland 70% 
• In Scotland, Wales and the north-west of England it will be about 60%. 
• Fuel poverty could soon affect C.90% of single parents with two or more children.  

 
Source: University of York’s Jonathan Bradshaw and Antonia Keung, and published by the Child Poverty Action Group 

The next question is how will this all play out? 

We are already seeing a marked increase in industrial action, with, I suspect, far more to come. In many ways a second ‘winter of discontent’. 

In 1979, C. 30m working days were lost to strikes. There was high inflation and strikers won wage rises that matched or exceeded the rising cost of living. 

The newly elected Margaret Thatcher was determined there would be no repeat, and created a new worker paradigm; employer-dominated, individualistic, often insecure and poorly paid, and disciplined by what Tony Blair described approvingly in 1997 as ‘the most restrictive [union laws] in the western world.‘ 

Unlike the 1970s, which was a generally good period for wages, average pay in Britain has been falling behind inflation for more than a decade.  

The electorate appear to understand this, a fact borne out by data from the polling company Savanta ComRes, which found that 38% of Conservative voters considered the highly disruptive rail strikes to be justified. Younger people were even more supportive, with 72% of under-35s backed the walkouts. 

The big difference between now and 1979 is that the Conservatives, not Labour, are in power, and are therefore at least partly to blame for any problems with strikes. The so-called ‘union barons’ have been beaten, many voters no longer regard union-bashing as necessary, seeing it as a form of bullying. 

Perhaps we should look further back, to the Tory government, led by Edward Heath in 1974. Then, with inflation rising, the economy sinking, the Conservatives divided and Heath’s popularity falling, he tried to turn a strike by the National Union of Mineworkers to his advantage. 

Many among the electorate supported the miners, and in February, Heath called an early election asking voters to choose between his government, which would ‘fight strenuously against inflation’, and ‘one particular group of workers‘. He lost the election.  

None of us can know what the future holds, by I fear this will end badly, perhaps with civil discontent as was the case with hated Poll Tax. 
 

‘if Truss wins, I believe it will cost them the next election’

 
For the Tory’s, if Truss wins, I believe it will cost them the next election. In addition, she could struggle to reconcile policies that pander to the hard-right, with the demands and expectations of the 42 red-wall seats. 

I can foresee a situation where the Tory’s split; ‘red-wall, ‘One Nation’, call them what you will, will enter into some form of coalition with the LibDems, maybe under a new party name.  

The LibDems seem to understand that action is required, that benefits alone won’t be sufficient. This week they proposed an ‘energy furlough scheme’, under which the government would fully absorb the cost of the £36bn price rise. 

That really isn’t the Tory way! 

‘Stranger from another planet welcome to our hole 

Just strap on your guitar and we’ll play some rock ‘n roll’ 

Notes: 

1. Kevin Albertson, a professor of economics at Manchester Metropolitan University 

1. University of York’s Jonathan Bradshaw and Antonia Keung, and published by the Child Poverty Action Group 

  
 
 A pretty damning column from Philip as he assesses the challenges facing PM Truss and her chances of success; ugly stuff.

One thing’s for sure, we are in the mire in almost every way and the additional burden of Brexit is weighing heavily. Social media is awash with ‘why is everything so gloomy’ – type comments, but come next Jan/Feb those folk will be wondering what all the fuss was about.

‘Fuel poverty’ will not just be an arithmetic way to describe a threshold; an awful lot of people will be in dire straits. They’ll wait a long time to see the benefits of compassionate conservatism – the 160,000 old farts will be looking after themselves.

The hustings is surely the most toe-curling series of events in living memory – Sunak mansplaining and whooping his way through to the next u-turn and with Truss’ Garfield-from-behind facial expression, many will be reflecting that ‘actually Maggie wasn’t too bad.’

So, what was Philip thinking?

Another week goes by, the government is on holiday, and we go from crisis to crisis.

The latest is drought. Now empirically the world is getting warmer, that’s a fact. It called “global warming, stupid!” What do our two prospective leaders offer on the subject, nothing. However, Sunak’s children are quite keen to help.

Truss is deeper in la, la, land, and her pledge to halt proposed increases to corporation tax must be music to the ears of the water company’s who will be able to pay even bigger dividends.

Supply-side inflation traditionally is very difficult to deal with. In this instance, much of it is generated by Russia holding-back gas, I do wonder if countries will lose their enthusiasm for sanctions. Will the public care? Put it this way, we all love Ukraine until we’re freezing.   

Quote of the week goes to wishful Liz, who, to beat inflation will, “do things in a Conservative way of lowering the tax burden, not giving out handouts.”

Everyone knows this puts money into the wrong pockets. But then, she doesn’t care.

The more I see and hear the more I dislike her. She is a Johnson “tribute act” with a big chip on her shoulder. I am very tired of hearing about her humble background, no one cares. If Sunak has £3k suits, good luck to him. There is nothing more irritating than a petit bourgeois.

Winning the leadership might well prove to be a poison chalice, everything is dire, and her policies will make matters worse.

This will end badly; people will experience hardships we haven’t seen in many years, and will push back. Some form of protest or civil disobedience must be expected.

This, I believe, will fracture the Tory party. They are too enthral to the hard-right, and I foresee more “liberal” minded MPs switching their allegiance.

Musically, I have returned to this column’s previous name, “We don’t need the fascist groove thing” by Heaven 17, because I think the electorate have woken up to what is happening. We finish with the Stranglers “Grip”, because, quite honestly, someone needs to get a grip on things.

 
Visit @coldwarsteve
 

 
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

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