Beginning to See the Light: This country deserves better 

 

“I’m yours, you’re mine 

Gimme more of that Jailbird pie” 

 
This week’s article is a deliberate editorial piece woven around a narrative based on this week’s key domestic events which involve the two most senior member of government, the Chancellor, and the PM himself. 

Sunak (the Chancellor) has had an especially bad week, firstly it was his wife utilising tax rules to minimise her tax liabilities, then a fine for “partygate”. 

The latter is indefensible, he parties while the rest of us were locked-in, some whilst their loved ones died alone. 

The tax position is somewhat different; his wife did nothing wrong in using the tax rules to benefit herself. Instead, it highlights inequality and how the super-rich can minimise their tax. It endorses the points raised in last weeks, “Samo, Samo”,  about the US administrations plan to ensure households worth >$100m paid 20% tax p.a. on their gains and income.   

Sunak is dogmatic, a Thatcherite, believing in a small state, low taxes and spending. This, allied to his extreme wealth, makes him totally unsuited to be chancellor during the worst cost-of-living crisis in my memory. 

Johnson, by comparison, is the ultimate pragmatist, he appears to believe in nothing other than himself, saying and doing whatever he deems politically expedient. Within his self-belief is only a passing acquaintance with the truth, he seems perfectly happy to lie if it suits his purpose. When “partygate” was exposed, his excuses went from there were no parties, to I wasn’t there, and finally, I didn’t know they were parties. All of these were said to parliament, and two were clearly lies. 

 

‘the ultimate pragmatist, he appears to believe in nothing other than himself’

 
At this point the Tory party itself needs to step-up. Johnson clearly won’t resign; I still feel that he believes he has done nothing wrong. If the parliamentary party had any moral backbone, it would trigger a vote of no-confidence and rid us of the charlatan. 

Instead, we get lame excuses; he’s doing a good job, really? You can’t change PM during a war. Firstly, we aren’t at war, and secondly there are numerous instances when we have. 

The real issue is that they are accessories to the crime. They knew full well he wasn’t up to being PM but put him there because they knew he could seduce sufficient voters to win. Now they are hedging their bets; few are brave enough to challenge him by submitting their letters, and the rest are waiting on the electorate to decide. I stand-by my original prediction, I.E., the results in the forthcoming local elections in May will be bad enough to see them wield the sword. In summary, they will back him if he appears a winner, and drop him if not. His inability, lies, and bungling being secondary to staying in government. 

When I started this column, I highlighted what I believed to be the two biggest challenges facing us: climate change, and inequality. They are prevalent and consistent, whereas black swan events such as Covid and Ukraine come and go. 

I have rarely gone into depth about climate change, and whenever I study it, I conclude that governments, especially ours, pay lip service to it. A large part of the problem is “big oil”, they have vast financial resources and lobby effectively. Governments, fund managers, and banks ultimately back-down in face of their bullying, or greed takes over when they see the size of the fees. 

In a way this summarises capitalism; money-talks.  

Capitalism is a better option than communist centralised planning and production, but, like anything, it is only as good as the operator. There are certain businesses that provide necessities, such as heat, light, power, and water. These are the basics of life and should be in the hands of the state.  
 

‘climate change…I conclude that governments, especially ours, pay lip service to it’

 
As France has shown with EDF, they have been able to shield the population from increasing energy costs by absorbing it themselves. Secondly, fund managers, who are the primary holders of privatised utility providers, expect a stream of increasing dividends, stripping the balance sheet of cash that could be used for innovation, and investment. 

Privatisation was a central tenet of Thatcherism, shrinking the state and supposedly bringing about efficiency. It has failed with providers strapped of cash with which to repair antiquated infrastructure, and the funds raised squandered on tax cuts. 

Privatisation hasn’t gone away, as the government has announced plans to privatise Channel 4. The sale might raise up to £1bn, which given government budgets is loose change, but it will enable the government to get their own back for criticism the broadcaster makes of them. All of which are justified.  

Even by this governments standard the current culture secretary is stupid, when asked by a commons select committee about the sale she responded by saying it would cut expenditure as the channel was funded by government, when in fact it is self-funding via advertising revenues.    
 

‘Even by this governments standard the current culture secretary is stupid’

 
Another belief underpinning Thatcherism was free markets; “an economic system based on supply and demand with little or no government control, where all voluntary exchanges take place in a given economic environment, characterised by a spontaneous and decentralized order of arrangements through which individuals make economic decisions”. 

As with most things, moderation is key. Many economic “busts” occur when investors lose control, forget the past, and believe the know better. The GFC is an extreme version of this and is at the heart of where the UK started to go badly wrong. 

The public, outraged by the banker’s excesses that led to the crisis, decided that the prudent approach suggested by the Tory leader, David Cameron, was the way to restore public finances ravaged by the cost of bailing out the banks. Prudence meant austerity, and cuts in social benefits and services. This allied to a stagnation in wages for many meant, that in real terms, even 10-yrs later many were worse off than prior to the crash. 

Alongside austerity, the Bank of England, along with most central banks, cut interest rates to record lows, creating an asset bubble that fuelled an already two-tier economy. The few became even wealthier; many others fell into poverty. 

Despite claims that we avoided a recession we fell into a prolonged one with our eyes wide shut. Many blamed globalisation, professional politicians, the establishment, the EU, and immigration for their hardship, becaming electoral fodder for the right. As I have written many times, we saw a rerun of the 1930s, both economically and politically. 
 

‘As I have written many times, we saw a rerun of the 1930s, both economically and politically’

 
In the UK the first clear sign of this was the Brexit referendum of 2016, where a Eurosceptic convert, Boris Johnson, was the public face of “leave”. They ran a “smart” campaign, whilst “remain”, led by the PM David Cameron, was complacent. “Leave” had a short, sharp message, “taking back control”, and a big lie, £350m a week extra for the NHS. 

This was a return to the barroom politics of fascism, whoever shouts loudest for longest, and delivers a scapegoat for the masses to blame. 

This was endorsed when Johnson, now leader, swept to power in 2019, with another simple message, “levelling up”. 

And so out story comes full circle. 

We have a PM who lies consistently even to Parliament, who has been fined whilst in office for breaking his own laws, with no political ideology besides wanting to be in-charge. Elected on a promise to level up, I.E., tackle inequality. 

His chancellor has also been fined for the same misdemeanours and has a fixed political ideology. Unfortunately, his ideology is completely at odds with the cost of levelling-up, at a time when we are experiencing a worst cost-of-living crisis with C.22% of the population living in poverty. 

The chancellor, in his spring statement, seemingly overlooked this fact, and if anything, put forward measures to make matters worse. Last week it was revealed that his wife “tax-planning” enabled her to “avoid” £2m a year in tax whilst many required foodbanks to feed their families. 

The publicity was such that he had to abort a planned Easter trip to their California home, instead they are hiding in their Yorkshire mansion (soon to have a swimming pool and tennis court).  The chancellor is fortunate enough to choose which home to visit, many of us are pleased just to be able to turn the heating on. 

There is nothing new in the wealthy and privileged dominating government, and, as Johnson has proved, not being a man of the people need not be an electoral impediment. However, in times of economic crisis, extreme wealth, and adopting questionable tax arrangements it becomes a liability. 
 

‘YouGov polling shows that Sunak’s popularity fell by 24 points after the spring statement’

 
Even some Tories raised their eyebrows when the Sunak’s donation >£100,000 to his old school, Winchester College, only days after he refused to bring benefit rates in line with inflation to protect children from going hungry.  

Asked recently to name the price of a loaf, he channelled Marie Antoinette when he answered: “We all have different breads in our house.” He’s lucky many get theirs from a food bank. 

As Matthew Parris wrote in last weekend’s Times, “Wealth envy shouldn’t bar Sunak from No 10.” I for one don’t like to see people knocked for doing well, but it comes as no surprise that, in the current climate, YouGov polling shows that Sunak’s popularity fell by 24 points after the spring statement. 

It appears the Sunak’s aren’t alone in their tax planning. Amusingly, the Sunday Times has revealed that the health secretary, Sajid Javid, who had insisting it would be “morally wrong” not to put up taxes to pay for the NHS and social care has been up to similar tricks. He was a non-dom for 6-years while he was earning up to £3m a year as a banker, and that some of his investments were in an offshore trust. 
 

‘He was a non-dom for 6-years while he was earning up to £3m a year as a banker, and that some of his investments were in an offshore trust’

 
To summarise, Johnson broke the life-saving rules that he set whilst others made considerable sacrifices to follow them. 

The Covid-19 Bereaved Families for Justice group observed: “It is still unbelievably painful that Boris Johnson was partying and breaking his own lockdown rules, while we were unable to be at our loved ones’ sides in their dying moments, or in miserable funerals with only a handful of people.” 

Johnson clearly lied when challenged over his behaviour. The ministerial code of conduct is clear: “Ministers who knowingly mislead parliament will be expected to offer their resignation”.  

Through all of this he has treated the public with contempt. 

His position was summed up by Nigel Mills, the Tory MP for Amber Valley in Derbyshire: ‘In all conscience I don’t think a prime minister can survive or should survive breaking the rules he put in place and he was on the TV every few nights, reminding us all that we should observe. We have to have higher standards than that of people at the top. He has been fined, I don’t think his position is tenable, in my view.’ 
 

‘We have to have higher standards than that of people at the top’

 
The Chancellor assured MPs: “I did not attend any parties.” This is the man who wifes tax planning saved C.£2m p.a in tax, and, at the same time withdrew the covid related £20 increase in universal credit that was desperately needed by many struggling with the cost-of-living crisi. 

Restricting the government misdemeanours to “partygate” and tax mitigation misses the point. They, and their brand of Thatcherism, is deeply divisive and out-of-date. Monetarist free market economics have run their race. If we are serious about tackling inequality we need to spend, creating jobs and opportunities in the areas that need help. 

This spending doesn’t require new or additional taxes, it requires everyone to pay their way, just as is proposed in the US. 

To achieve this the Tory’s need to rid themselves of this bloated, egotistical bunch of popularists. Clinging to the flag and divisive culture wars doesn’t feed people, or pay their heat bills, it simply makes the regressive amongst us vote Tory. 

If we are to achieve anything we must look forward, the past is the past. It doesn’t have to be forgotten but we need to stop wallowing in it. As in anything until you identify and admit your failings you never move forward. 

The parliamentary party can either grow a pair, or let the voters decide in the local elections. Treat voters with contempt and you should expect them to respond in kind. 
 

“Come together as one 

Come together as one 

Up and away” 

 
Some depressingly familiar themes from Philip this week – and seemingly a gift that keeps on giving for a political commentator, as today we learned that ‘migrants’ would be given a one-way ticket to Rwanda to be processed.

The fact that they are one-way tickets may not see those recently bobbing around in the Channel off to the airport with unbounded optimism.

According to Boris, the plan is to throw a smokescreen over Partygate (shurely ‘crush the evil people smugglers’?….Ed).

Whether these will be asylum seekers or economic migrants, has not been declared. Quite what the selection criteria will be has not been disclosed, but having dished out almost three visas so far, it would seem a bit churlish to send those fleeing genocide in Ukraine, to somewhere that had its very own genocide just a couple of decades ago, when an estimated 800,000 Tutsis lost their lives.

Philip has long made the connection between the politics of the 1930s and those of Boris’ ‘populism’ but the Home Secretary – ‘Pritler’ as per Twitter – seems to have gone the extra mile in recreating Nazi plans to relocate 1,000,000 Jews to Madagascar. FMOB.

So, what was Philip thinking? : ‘A very different piece this week. As I write in the introduction it is an editorial piece woven around a narrative based on this week’s key domestic events.

The events are Sunak’s tax planning, and the “partygate” fines.

Ironically, I had already written last week’s article which featured Biden’s proposed tax changes for the “super-rich” when news of Sunak’s issue surfaced. It is a classic example of the privileged using the rules to minimise their overall tax rate.

Essentially, both issues are part of a larger picture. The Tory’s are still wedded to Thatcherite principles which are out-of-date and made the situation post-GFC far worse than it needed to be.

This economically and politically mirrored the 1930’s. Farage, and Johnson are populists, a polite term for fascists, from the who shouts loudest for longest playbook. Brexit and the 2019 election result showed how seductive this is to a ready, willing audience given scapegoats such as the EU and immigration.

Simply blaming Johnson for everything, “partygate” included, is too easy. The party is culpable. All we have seen is Johnson being Johnson, they knew this, but turned a blind eye as he could deliver electoral success.

We are left with an out-dated government, corrupt, that lies when necessary. The cost-of-living crisis only serves to highlight their cynicism.

Monetarism, free markets are so last year. To deliver what this country needs requires Keynes’s style spending, and everyone paying their fair share of tax.

The past should be resigned to the past, we need to be inclusive not exclusive, patriotic not nationalistic, and to give everyone in society a chance.

Lyrically, we go with Primal Scream. We open with “Jailbird” which appeals to my sense of humour, and close with “Come Together” because that is what is required.’ Enjoy!

@coldwar_steve

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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