Beginning to See the Light: ‘Where’s it all gone?’ ‘Is this the biggest bribe in history?

 

‘You wanted everything you needed

Everything you wanted

Everything you needed..’

 

We start this week with the Batley and Spen byelection (‘the byelection’)

‘It is a start. Labour is back. Labour is coming home,’ Starmer told cheering activists, standing next to Kim Leadbeater, who beat the Conservatives by just 323 votes. He condemned the abuse she had faced during the campaign, saying others had ‘poisoned it with hatred, division, disinformation, lies, harassment, threats and intimidation’.  A sentiment was echoed by Leadbeater, who also thanked the police, whom she said ‘sadly I have needed more than ever’ during the campaign, which she said had highlighted how much work there was to do in the constituency.

The result allows the Labour leader breathing room, a second defeat following on from that in Hartlepool would have likely seen a leadership challenge from Angela Rayner and the more left-wing party members.

Moreover, it shows there is still some sensitivity left in the northern electorate. Prior to this it appeared they had developed herd impunity to governments blunders and misrule. Only a week ago Matt Hancock resigned as health secretary after being photographed breaking his own the rules , whilst the PMs status as liar-in-chief was once more confirmed after he falsely claimed to have fired Hancock.

 

‘Prior to this it appeared they had developed herd impunity to governments blunders and misrule’

 

Nonetheless, the byelection still saw a 2.9% swing from Labour to the Conservatives who, after 11 years in power are still gaining support, despite the twin distinction of ‘being the European country with the most fatalities and the biggest economic hit’.

However, this defeat, allied to that in Amersham, suggests their pitch to the electorate, one dominated by their contemptible culture wars is wearing thin. Their attempts to distract for their inept handing of the pandemic have included picking fights with anti-racist campaigners about statues, with student societies about their common rooms, and with the BBC over lyrics at the Proms did little in Chesham their supposed heartland.

Whilst in Batley the encouragement the government offers extremism was highlighted by Galloway running a campaign even more toxic and divisive, did the Tory candidate no favours.

I will make little mention of the odious George Galloway who’s campaign, amongst other misdemeanours, featured allegations about Leadbetter’s sexuality while he advertised himself as ‘a straight white male with six children’. How he has found any woman that wanted to marry him, let alone two, mystifies me!

Post-Brexit, thugs, including the afore mentioned Galloway, are becoming more prominent. On Saturday evening a Jewish man was verbally abused in two separate incidents. The first was on a bus, the second, which was caught on video, shows him walking down an escalator at Oxford Circus tube station, where he was subjected to further antisemitic abuse.

In the video, one man can be heard chanting ‘fucking hate you Jew’, while another says’ ‘we’ve got a Jew behind us’ and another says’ ‘there’s about nine Jews’, before the words ‘fucking hate you Jew’ are chanted again.

 

‘Post-Brexit, thugs, including the afore mentioned Galloway, are becoming more prominent’

 

Some of the males filmed were wearing England shirts while others wore the flag of St George draped around their shoulders.

Whilst any victory will be welcomed by Starmer, Labour won with a tiny majority in what was once a safe seat. Structurally Labour’s coalition of voters is broken, Scotland, once their heartland, now favours the SNP, whilst in northern England and the Midlands the populist politics of the Tory’s is stealing once safe seats.

To move forward Starmer must clarify who he is, what he stands for and what he stands against, along with core themes which he can repeat ad nauseum until the public respond. He needs to take a leaf from Joe Biden’s playbook and expose the gap between Tory rhetoric on ‘levelling up’ and the reality.

If a progressive alliance is required to defeat Johnson’s hordes, Labour must accept they are no longer a credible opposition, and any alliance should be one of equals.

Whilst the Lib Dems and Greens, the other two potential members of a progressive alliance, have a clear and cogent policy on Brexit, i.e., it was a mistake, Labour seem to prefer closing their eyes and hoping it goes away.

Last week there was much crowing that Brexit Britain had secured a £1bn electric vehicle hub in Sunderland, where Nissan will produce a new all-electric car model and its partner Envision will build a battery factory, whilst glossing over the fact that the units built will be tailored to rules set by Brussels.

Additionally, there was no mention of what inducements were offered to attract the investment. However, now we are outside the EU the inducements offered may have been greater as leaving gave Nissan the upper hand in negotiations. Losing the project would have made it clear that as a non-member we are less desirable, and left ministers open to accusations of betraying ‘red wall’ voters.

As positive as the Nissan deal is, financial services, which comprise 7% of the country’s GDP, has seen opportunities disappear as a result of leaving. It is now easier to sell many financial products to the EU from Sydney than London, a situation made worse as, on the same day as the Nissan deal was announced, it became clear that the Chancellors’ attempt for the EU to grant ‘equivalence’ (the ability to operate on an equal footing with local European firms) for City businesses had stalled.

Now firms wanting to trade and clear securities in the EU will have to move their operations to the continent. Before Brexit, more than half the trade in EU equities was in London; now it’s less than 20%.

 

‘Many in the ‘red wall’ might enjoy seeing London suffer, and the economy more reliant on industry’s that make something’

 

Many in the ‘red wall’ might enjoy seeing London suffer, and the economy more reliant on industry’s that make something. If so, it’s a foolish, short-sighted view; financial services employ C. 6-times as many people as the motor industry, and, if this is a rebalancing, it is one that is being forced upon us rather than created by policy.

Another way to seduce ‘red wall’ voters that levelling-up is by focussing grandiose projects, such as HS2.

‘Infrastructure improves everyday life,’ said the chancellor, Rishi Sunak, in March. ‘This is why I created the levelling-up fund … to invest £4.8bn in high-value local infrastructure.’ Such investment, said the fund’s prospectus, was about ‘giving people pride in their local communities; bringing more places across the UK closer to opportunity; and demonstrating that government can visibly deliver’.

Whilst this sounds politically neutral, it is anything but; where it’s sited, who benefits, what is considered an acceptable cost, are intensely political considerations. For Johnsons’ mob and their new friends in the north and Midlands, projects such as this are crucial to demonstrating their populist brand of Conservatism.

Johnson loves a grandiose project, there was the garden bridge across the Thames, a new airport on an artificial island off the Kent coast, a bridge or tunnel to Northern Ireland, none have been built.

As I wrote last week, there will come a time when voters realised that Johnson is naked and not wearing new clothes, fantasies only satiate voters for a time, then comes the reality, where is the delivery?

As the Guardian wrote last week, projects can flatter to deceive. The Humber Bridge was conceived in 1966, but not opened until 1981. 40-years on, what the Queen called ‘a splendid advertisement for British engineering’, has delivered little, e.g., Hull has one of the highest unemployment rates in the country.

We can be described as centralised, and conservative, making it difficult to lure people and companies can be hard to lure away from their accustomed locations, making the impact of new infrastructure in previously overlooked places hard to predict and assess. In addition, the overall scale of change means that it can take a long time for voters to accept, if they ever do, that the cost of these projects hasn’t bought about tangible change or benefits.

Previous Conservative governments have used the NE, in particular, as a stage for displays of economic ingenuity and social concern.

In 1987, Thatcher performed a pensive, highly publicised walkabout on a former industrial site on Teesside, which, shortly after, led to the creation of a development corporation there soon.

David Cameron announced a Humber enterprise zone in 2011. This spring, the government announced a Humber freeport. One way of summarising the Tories efforts in the region is that, until recent electoral success, their efforts haven’t been appreciated, or, perhaps the schemes were seen as token gestures delivering little material benefits.

From grandiose projects we turn to the most grandiose electoral bribe in history. When future generations asks where all the money has gone, the response a la Steve Jones of the Sex Pistols will be, ‘We fuckin’ spent it ain’t we?’

 

‘When future generations asks where all the money has gone, the response a la Steve Jones of the Sex Pistols will be, ‘We fuckin’ spent it ain’t we?’’

 

Once again, the older generation will benefit whilst younger workers get nothing. Why? Oldies votes Tory, the young don’t.

To better explain, this week employers start picking up the furlough bill, previously paid by the government, and many, with their businesses still recovering, will let staff go.

Most of those losing jobs will be young people in the low-paid hospitality, arts, entertainment, and tourism sectors, who, warns the Resolution Foundation, will struggle to find work. Reports of worker shortages ‘have been overplayed’, and so have reports of steep pay rises. But those artificial pay-rise figures are about to deliver a bonanza for pensioners.

Whatever a prudent Chancellor might think about spending plans, Tory MPs live and die by the manifesto pledge to keep the pension triple-lock in perpetuity. ⁽¹⁾

The triple-lock is based on the highest of three measures, and, by a freak of the pandemic, wages appear to have risen by 5.6%, and later this month some economists predict a rise to 8%. Few, if any, workers have received this rise:

 

• the measure compares artificially low pay at the height of the first wave, when about 10 million furloughed workers lost 20% of their pay, with now.
• Low earners losing their jobs altogether takes them out of the figures,

 

Maintaining the pledged triple-lock is estimated at C. £4bn+. It is estimated that in the decade long existence of this ‘bribe’ the cost is C.£37bn. Even, last year, when earnings growth was negligible pensioners still got their 2.5% increase.

The UK’s 12 million pensioners are already the group least likely to be poor:

 

• Labour’s post-war social policies lifted many above the poverty threshold.
• The baby boomer generation have never-to-be-repeated, or afforded, final salary private pensions,
• 75% of pensioners are homeowners, who bought their houses ‘cheaply’ and have seen their value rise > 300% in the last 3-decades.

 

However, it is estimated that C. 2.1m, mainly the oldest, still need financial help. Labour introduced pension credit to top up pensions of those with virtually no other income, however:

 

• almost 1- million are not claiming an already too-low pension credit, losing on average £32 a week,
• 200,000 pensioner households fail to claim an average £62 in housing benefit,
• more than £2bn sits in the Treasury unclaimed every year.

 

The Department for Work and Pensions knows exactly where these non-claiming poor pensioners are yet does nothing to help them claim. Ironically, now the over-75s are starting to have to pay for their TV licences, the only exception being if they draw pension credit, it is anticipated that there will be a slew of new pension credit claims.

Pension credit and the triple-lock are two vastly different beasts, one helps those genuinely in need, the other helps the rich to get richer. This is simply another example of the Tory’s desperation to cling onto power at all, and any cost. It is both pathetic and contemptible.

Levelling-up applies to those who vote Tory, their new northern friends. The levelling up that is necessary is between generations. The Resolution Foundation describes how the jobs and careers prospects of the young is causing a mental health crisis, many will never own their own home. Bell says the UK has far greater wealth than any EU country, though it sits there in bricks and mortar, out of reach for most young people.

It is an oft-made complaint that the young have found it too easy to attend university, in fact, only 50% of the UK of the population has a degree, compared with an OECD average of 70% ⁽²⁾.

We finish with some data that shows the government is committing us to pensions we cannot sustain:

 

• Government pension liabilities were £6.4 trillion in 2018, an increase of 21% compared with 2015. Of this figure, state pension liabilities represented £4.8 trillion ⁽³⁾, or 224 per cent of GDP ⁽⁴⁾
• The cost of funding the state pension rose by £700bn over the 3-year period ⁽³⁾

 

This is exacerbated by the fact that we have an ageing population, meaning that fewer people are contributing towards this increased funding requirement:

 

• In 1950, 10.8% of the total UK population was aged 65 and over,
• In 2018 this had increased to 18%,
• By 2050 this is predicted to rise to 24.8%

 

The cost of keeping this mob in power is bankrupting us!

 

They meant ‘Let’s make a lots of money

And worry about it later’

 

Notes:

1. The ‘triple lock’ introduced by Chancellor Osborne in 2010, was a Conservative manifesto pledge in 2019. This ensures pensions rise annually by whichever is the highest of average earnings growth, inflation, or 2.5 per cent.
2. Prof Bobby Duffy’s forthcoming book, Generations: Does When You’re Born Shape Who You Are?
3. https://www.ons.gov.uk/economy/nationalaccounts/uksectoraccounts/articles/pensionsinthenationalaccountsafullerpictureoftheuksfundedandunfundedpensionobligations/2018
4. https://www.ftadviser.com/pensions/2021/02/09/uk-govt-pension-liabilities-surge-1-3trn-in-3-years/#:~:text=State%20pension%20liabilities%20amounted%20to,19%20per%20cent%20of%20GDP.

 

Some familiar themes from Philip this week, with deep divisions coming ever more to the fore, and put into sharp relief in one of the ugliest byelections for some considerable time.

Predictably the Tory line was that it had not ‘lost’ the seat, rather that Labour had retained it; however they want to spin it, the odious George Galloway narrowly missed out on delivering a coupe de grace to Keir Starmer.

Want to see two worlds collide? Think Boris and Angela Rayner at PMQs.

Odd that nobody really seemed to labour the point that had Mr Handcock not been surreptitiously filmed canoodling with a handful of spad, maybe the Tories could have poached Batley and Spen; it remains to be seen whether their future prospects will be further harmed when Mr Gove is forced to ‘fess up, or is ratted on. Oh, Michael, you didn’t really, did you?

Meanwhile Boris Southgate can do no wrong; bring it home, give Engerland’s finest a bank holiday because they’re not going in on Monday anyway and flip the NHS workers a gong; ‘just a loaf thank you – do you take the George Cross?’  ‘That’ll do nicely m’am’.   

England’s run in the Euros has added even more fuel to a certain type of jingoistic Brexiteer, and it can only be hoped that victory in the final does not leave things the wrong side of ugly; with Wembley resembling a 67,000 strong Bad Manners tribute act, one can only question the safety of allowing such a large and lagered crowd in – particularly as there are stories of screen shots of negative covid tests being shared around. If you’ll permit the chagrin, our tickets for the Premiership Final at Twickenham were cancelled and when the Canadian national anthem is played on Saturday, we won’t be booing.

With undeniable signs of cracks emerging we can expect plenty of rhetoric about ‘levelling’ up and ‘infrastructure improving everyday life’, but that may be little comfort if you can’t get a lettuce because there’s nobody to pick them.

The main thrust of this week’s article centres on the ‘triple lock’ that could see pensions rise by 8% – something that looks anomalous given the post-covid hole that we are all staring into.

And what a dilemma. Boris has announced the end of the £20 increase to tax credit against the advice of many Tory back-benchers, but to renege on the triple lock would see the ‘twirlies’ incandescent with rage.

Boris may have enjoyed considerable success in attracting the disaffected in the north, and indeed with the whole populist agenda; take the TV license and triple lock away at your peril.

Choose to let it continue and the generational divide between the richest generation ever and the one with terrible employment prospects and little chance of ever getting on the housing ladder and you have a tinder box. Add the fact that the older generations are now able to jet off on their hols and you may be wondering why Philip didn’t select ‘I Predict a Riot’ as one of this week’s lyrics.

However, what we do have is a track with very few words, but lots of attitude Fugazi with ‘Greed’ and The Clash with ‘Complete Control’. 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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