Beginning to See the Light; what is the point?

 

‘Who is right? Who can tell?

And who gives a damn right now?’

 

To begin this week, we briefly consider COP26, ‘cop out’ might be more accurate.

Boris Johnson told a roundtable of leaders of developing nations: ‘When it comes to tackling climate change, words without action, without deeds are absolutely pointless.’

This was after flying into Glasgow from Rome where he had been attending the G20 of world leaders. Going home, he has decided to take a short internal flight from Glasgow to London, instead of getting the train, which takes about four and a half hours.

Not to be outdone Jeff Bezos’s £48m Gulf Stream led a parade of 400 private jets into COP26 including Prince Albert of Monaco, scores of royals and dozens of ‘green’ CEOs, as huge traffic jam forced empty planes to fly 30 miles to park.

Earlier, Jeff Bezos and girlfriend Lauren Sanchez had flown by private jet to discuss climate change with Prince Charles over a cup of tea on the eve of Cop26. This was days after he and 50 guests flew choppers to Bill Gates’ superyacht birthday.

A recent study in the scientific journal Nature suggests that to stand a 50% chance of avoiding more than 1.5C of global heating, we need to retire 89% of proven coal reserves, 58% of oil reserves and 59% of fossil methane (‘natural gas’) reserves. To improve these odds, we would need to leave almost all of them untouched.

Despite these facts, by 2030, governments are planning to extract 110% more fossil fuels than their Paris agreement pledge (‘limit the temperature increase to 1.5C above pre-industrial levels’) would permit. Even nations that claim to be leading the transition mean to keep drilling:

 

• In the US, Joe Biden promised to pause all new leases for oil and gas on public lands and in offshore waters. His government was sued by 14 Republican states
• Germany has promised to phase out coal production by 2038 but is still developing new deposits.
• In the UK, last year the government offered 113 new licenses to explore offshore reserves, aiming to at least double the amount of fossil fuels that are ready to be exploited.

 

We shouldn’t ignore the banks, either; since the Paris agreement in 2015, the world’s 60 largest banks have poured $3.8tn of funding into fossil fuel companies.

Can anyone tell me we are serious about tackling climate change?

 

Enough of this depressing stuff, Brexit is much more amusing!

 

The French PM’s note to Ursula von der Leyen, president of the European commission, this week, has caused much anger this side of the channel. In our interpretation of Jean Castex’ note he wants to punish us for Brexit, whilst Europeans see Brexit as a repudiation of European solidarity and a bet on the advantages ‘independence’ might bring over membership. Members have an interest in that gamble not paying off.

I will agree that the fishing dispute that started this latest spat is little more than President Macron sabre-rattling for the benefit of his domestic audience ahead of elections next year. However, there is more than this fueling Macrons’ contempt for Johnson.

Anglo – French relations were aggravated by the recent poaching of a lucrative defence contract to build Australian submarines as part of the Aukus security deal with Washington. However, at the bottom of all this is Johnson’s treatment of the Northern Ireland (‘NI’) protocol within the Brexit withdrawal agreement, a treaty he signed with no intention of implementing.

The root cause of all this is Brexit’s sacred principle of sovereignty. A desire to eradicate all traces of the EU, guaranteeing tension at every frontier where previously frictionless trade is now subject to checks, forms, and licenses.

This newfound sovereignty has offered the UK no tangible benefits, only costs. The government can’t admit this, and any Tory MP who did would be ostracised. Instead, they exaggerate and invent fictional benefits,

Last week, in his budget statement, Sunak disingenuously presented cuts to alcohol duty as a Brexit dividend, whereas the reality was that the price drops would have been permitted anyway.

Secondly, all disputes as proof of Brussels’ malevolence, and the economic pain intrinsic to Brexit is a vindictive backlash from the EU and its member states. This is evidenced by the situation in NI, which the EU views as the implementation of a signed agreement, and we denounce it as a blockade.

 

‘at some point people expect to see the fruits of the pains imposed by Brexit’

 

The weakness in Johnson’s strategy is that at some point people expect to see the fruits of the pains imposed by Brexit. This is the usual conundrum of populism; the rash promises must eventually come good. The only way to prolong this is by continuing the ‘war’, the ‘enemy’ must be ever-present. This is the sole reason for Johnson including within the NI dispute the European Court of Justice. Johnson knows full well this is a point the EU can never concede, meaning we have perpetual ‘war’ and an ‘enemy’ for the people.

 Johnson speech at last month’s party conference, where he tried to paint Brexit as a utopia offering a high-wage, high-skill economy based on the absence of migrant labour was a figment of his imagination. The only promise he will ever keep was getting Brexit done, the rest is folly, imagination, and soundbites for bitter ‘little Englanders’.

The recent deal on steel export tariffs between the US and EU highlights the cost of this sovereignty. Johnson may now plead for his own steel agreement, but he is weakened outside the EU, and American lobbyists may oppose this.

Our decision to leave the EU was political, whereas the decision to leave the European single market and free trade area was the personal choice of Johnson to aid his campaign against Theresa May. This was both ill-considered and foolish, the cost of this mistake is being borne by many economic sectors, including transport, builders, hoteliers, and musicians. No wonder there is a widening 10-point gap between those who think Brexit a bad deal for the country against those who still think it good.

The hardships we now facing are not the direct consequence of Brexit, which was solely about leaving the EU, they are attributable to the loss of the single market and customs union. The continental agreements and supply chains that created more than 20 years of close relations with neighbours are not matters of principle, they are a common interest and common sense.

 

From common interest we finish on self-interest.

 

Thirty-three years ago, in Bruges, Margaret Thatcher declared that ‘we have not successfully rolled back the frontiers of the state in Britain, only to see them reimposed at a European level’. This was the Brexit cause; deregulation, tax cuts and a retreat from public spending. Yet, 2-years on from Brexit companies find themselves tied up with red tape at our borders, average taxes have reached their highest levels since the 1950s, and the size of the state has been brought to levels ‘not seen in normal times’ since the early Thatcherite era ⁽¹⁾.  

Rishi Sunak’s budget has been branded a ‘Labour budget’, and ITV’s Robert Preston called Boris Johnson ‘an arch-Keynesian’.  This is as much a misconception, as is the belief that an enlarged state is incompatible with the Tory creed. The discussion should centre on whose interests the state serves, not its size.

This will rarely be a better, or worse, example of this than the £37bn of public funds squandered on test and trace’, which failed to achieve ‘its main objective’ of reducing C-19 transmission levels and helping to end the pandemic. The project did create some winners, including the private consultants paid more than £6,000 a day, while outsourcing giants such as Serco benefitted to the tune of C. £50m a month from the the Department of Health. Other winners during the pandemic include PwC, Deloitte, and the spy tech firm giant Palantir.

Johnson is, of course, totally without ideology, driven by personal self-interest and self-advancement. This is a man unable to exist on his public funded £160,000 p.a., but he will no doubt leverage the time he has spent inflicting pain on us all when he steps-down as PM. Whilst he can’t directly benefit now, it hasn’t stopped others, doing so.

Prior to the pandemic, the government spent £292bn, > a third of all public spending, sourcing goods and services from external suppliers, largely in the private sector. Test and trace was simply an extension of that. Thatcherism didn’t roll back the frontiers of the state it redeployed the state’s resources as endless profits for private companies.

Privatisation was often a con; the privatisation of the railways led to an increase of 200% in direct subsidies to companies running the services. The Rail, Maritime and Transport union calculated last year that rail companies stood to make £500m from Covid bailouts.

Pre-Covid, private companies had long been the beneficiaries of public funds, often with dire results. G4S, whose contracts included testing centres, was last year fined £44m by the Serious Fraud Office after overcharging the Ministry of Justice for the electronic tagging of prisoners, including offenders who were dead, Serco were also found guilty of the same offence.

G4S were also contracted to provide security for the 2012 Olympics, they weren’t up to the task and the army had to step-in. The then Tory defence secretary, Philip Hammond, admitted it had shaken his unquestioning belief in the supremacy of the private sector.

The recent increase in health care spending will undoubtedly be squandered in similar fashion. During the pandemic there was a shortage of PPE, to fix this the Tories turned to their mates, such as Clipper Logistics, whose boss provided £730,000 of party funding. There was Meller Designs, who were awarded a £160m contracts. And, Computacenter, another Tory donor, awarded a £240m deal to supply laptops to vulnerable children.

The Tories defend themselves by saying that central government is wasteful. The truth is that the governments model hands vast amounts of public funds to profit-driven private business, often with disastrous results. When this happens overseas, we gleefully jump on it claiming they are corrupt. The government doesn’t waste public money, it simply ensures that it ends up in the hands of those they intended. Test and trace wasn’t an aberration it was the norm.

As I wrote, what is the point?

 

‘I said you see these two cold fingers

These crooked fingers I show

You’s a way to mean no’

 

Notes:

1. Institute for Fiscal Studies.

 

‘An eventful week as ever. Cop26 is really ‘cop-out’; it’s so boring listening and reading all the claims and promises that are no more than words. They simply don’t get it; they all fly everywhere when they could achieve as little using ‘Zoom’ or ‘Teams’. Many are still mining away, and the banks are pouring trillions into the sector!’.

Philip’s dismissal of COP26 as a sham talking shop would have been bad enough in isolation, but Bloviating Boris couldn’t help but make things just a bit worse.

Having already angered many by choosing the budget in the run up to the conference as the moment to cut APD on domestic flights, he had some of his cheerleaders out on what was presumably meant to be a charm offensive.

Some would have considered Liz Truss’ attempt just offensive – ‘cutting flying is not the answer’ she read from the cue card; those being been greenwashed with the promise of planes powered by unicorns’ breath from 2049 onwards disagreed. 

Then Boris buntered into town with his carefully coiffured urban hobo look and took the conference by storm – ‘one minute to midnight’ ‘no words without action’ – then rather spoiled things by plonking himself down without a mask on next to our 95 year old ‘national treasure’ puffing boozy breath all over him before falling into a deep slumber.

Still, at least he wasn’t as hypocritical as the others with their 400 private jets; well of course he was – ‘significant time constraints’ meant that Boris fought his own steely determination to lead by example but weakened and took a private jet back to London, for an urgent appointment. A piss up, at the Garrick Club with climate denier Charlie Moore.

Come on, you didn’t really think he’s make a fist of it, did you? Just to prove leopards don’t  change their spots, he blundered straight into the row over Owen Patterson with his big flappy feet, whose subsequent resignation can only have made Boris look more of a codpiece. But he stuck with his previous line – DILLIGAF – neatly described by Kevin ‘Bloody’ Wilson in this week’s bonus track below. 

It really does speak volumes when the PM cares so little about what others think when he can’t even be bothered to make a hollow, insincere gesture.

‘Brexit continues to give much amusement; Macron hates us, and with good reason, our behaviour in ignoring the treaty we negotiated is appalling. In addition, he has taken a leaf out of Johnson’s populist playbook, creating a fight to rally round the voters prior to next year’s elections.’

‘There is the distinction between Brexit, which was political and driven by sovereignty, and leaving the free-trade area which was driven by madness.

Finally, there are the low-tax, small state Tory’s, who aren’t that at all. Instead, they take our money and make their mates rich, often on schemes, and follies that don’t work or that offer no discernible benefits other than self-enrichment.’

Two tracks for fun – Joy Divison with ‘Disorder’ and the Libertines and ‘Up the Bracket’. Enjoy.

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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