Heroes: All That Matter is Being in Power 

 

‘Here in my car, I feel safest of all 

I can lock all my doors, it’s the only way to live’ 

Governments are elected by the will of the people, to represent, and serve the people.  
 
As readers will now I regard our Conservative governments policies to be representative of what is important to them. It doesn’t represent the will of the people only their own narrow self-interest, which is ensuring they are in government. 

As a result, matters that are vital to the wellbeing of the country are reduced to political footballs, useful only for them to score points. While they play childish games we suffer. At least Nero has the good grace to fiddle whilst Rome burnt, no one can be sure what Sunak et al are doing. 

A recent report by the credit rating agency Moody’s looked at local government finances after the string of section 114 notices (in effect, declarations of bankruptcy) from Birmingham, Croydon, Slough, Thurrock and Woking and concluded that more authorities will fail ‘as weak governance amplifies the impact of rate cycles’ 

For Sunak this was just too good be true, profligate Labour councils equals profligate Labour government. What he conveniently forgets is that some of the worst blow-ups happened under Tory regimes; and second, that central government is hardly blameless. 

Mike Gove, the Communities Minister could barely contain himself, saying; ‘I think it important for us to recognise that the intervention in Birmingham, and our [previous] interventions in Sandwell and Liverpool, have all been interventions in Labour-led local authorities in which comprehensive mismanagement extended back over years.’  

Gove, who is now little more than a dancing has been, might be forced to eat his own words; Jonathan Carr-West, chief executive of the Local Government Information Unit, said: ‘It is convenient with an election so close to try to use this as a political football. But it is also a political risk. If you say this is about councils making bad decisions, what will you say when a large, ‘well-run’ Tory council like Kent or Suffolk gets into similar difficulties?’ 

According to a recent estimate by the Special Interest Group of Municipal Authorities, a collection of 47 urban councils, at least 26 English councils are at risk of going bankrupt in the next two years. 
 

‘at least 26 English councils are at risk of going bankrupt in the next two years’

 
Several large Conservative-controlled authorities are under pressure, including Kent county council, which auditors say needs to save £86m in the next financial year, and Gove’s own local authority in Surrey Heath, which has borrowed more than 13 times its annual income. 

The backdrop to this crisis is well-known: local authorities’ central funding was another victim of Tory austerity in post-2010. Tony Travers, a professor of government at the London School of Economics, said: ‘Local government spending is on average 10% to 15% lower than it was in 2010. Councils can only survive like that for so long.’ 

As a result many councils took the hint-cum-encouragement to go forth and speculate, which usually meant borrowing to invest in commercial property (Thurrock scorched itself in solar farms). But, critically, local authorities were assisted in the borrowing binge by the Treasury-backed Public Works Loans Board. 

Some of the activity now looks absurdly reckless: Woking council’s total borrowing was 127x its core spending power in 2021, a ratio that dwarfs even Lehman Bros.. Where was the scrutiny? Local authorities were advised to ‘have regard to’ to a prudential framework from 2013 that emphasised sensible things like security and liquidity when borrowing, but ‘they were not legally obliged to do so’, says Moody’s. 

In  November 2020 borrowing rules were tightening, probably because the Treasury was alarmed by the impact of the pandemic on commercial property values and the concentration of lending. Forty-nine local authorities, 14% of the sector, have accounted for 80% of the £7.6bn spent on commercial investments by councils since 2016. 

Whilst, it cannot be denied that the immediate cause of this debacle, is appalling decision-making by individual councils and naive councillors, central government is far from blameless. It starved the councils of funding,  and oversaw loose borrowing rules, and unhealthy combination. 

The next political football is the planet which is conveniently round, therefore ideal for a kickabout. 

Yesterday’s government U-turn on net-zero targets is no more that political pragmatism. The timing of the announcement, only days before the party conference starting 1 October, shows that Sunak feels the need to shore up his position, and credibility. He is aware that a year ago the party membership elected Liz Truss, rather than him. This takes on even greater significance in a week when Truss explicitly opposed the net zero commitments.  
 

‘Yesterday’s government U-turn on net-zero targets is no more that political pragmatism’

 
Suella Braverman , the home secretary, took a day off from  bullying defenceless immigrants, to tell us that Rishi Sunak will not ‘save the planet by bankrupting the British people‘, as she rejected claims that the government was backing away from its net zero commitments. 

Braverman is one of many Tory MPs on the right of the party who fear green policies may cost the party votes at the general election. She said the government’s net zero targets were ‘goals, not straitjackets‘, as she commended the PM for making ‘difficult decisions‘. 

At the sharp end, Ford, alongside other carmakers, has criticised the move. Its UK chair, Lisa Brankin, said: ‘Our business needs three things from the UK government: ambition, commitment and consistency. A relaxation of 2030 would undermine all three.’ 

‘We need the policy focus trained on bolstering the EV [electric vehicle] market in the short term and supporting consumers while headwinds are strong. Infrastructure remains immature, tariffs loom and cost of living is high.’ 

Sunak’s intention is to drive a ‘green wedge’ between Labour and the Conservatives, and, to an extent, he has succeeded. 

Senior Labour MPs, such as Ed Miliband, the shadow energy secretary, were scathing about Sunak’s decisions. Miliband said the PM was ‘rattled, chaotic and out of his depth‘. Another shadow frontbencher said they thought Sunak had ‘lost the plot‘. 

But while shadow ministers attacked the speech on Wednesday, they also admitted they would not completely undo what the prime minister announced. 
 

‘admitted they would not completely undo what the prime minister announced’

 
Steve Reed, the shadow environment secretary, told Times Radio the party’s policy in advance of the next election would be to restore the 2030 deadline for eliminating the sale of new petrol and diesel cars. But it does not plan to bring back the 2026 deadline for beginning the phase-out of all gas boilers. 

‘Labour isn’t going to put people’s bills up,’ Reed said. 

Whilst Labour appreciates that there is widespread public support, not only for the 2050 net zero target, but for the policies designed to help meet it, including the car and boiler targets, they are grimly aware that these policies are less popular among people who voted Conservative in 2019.  

This is the electoral battleground; Labour needs to retake these seats if it is to win the next election, and they fear that reinstating the targets will allow the Conservatives to retain these seats, thus winning the next election, by saying that a Labour government would be more costly for consumers. 

Perhaps, Labour should also be considering ‘blue wall’ seats where voters appear more ready to embrace the pervious targets, meaning that the Tories may struggle to retain these seats. 

Perhaps, we will see the political map redrawn? If so, this will leave the Tories with little support outside of the old, and reactionary. 

Indeed, within the Tory party, Sunak’s U-turn has not been universally well received. Chris Skidmore, the outgoing Tory MP and former minister who wrote a review of the Tories’ net zero approach, warning about the economic consequences and the Tory peer Zac Goldsmith describing the move as a ‘moment of shame‘ for the UK. 
 

‘a ‘moment of shame‘ for the UK’

 
The former Cop26 president Sir Alok Sharma said watering down the commitments would be ‘incredibly damaging for business confidence, for inward investment, if the political consensus that we have forged in our country on the environment and climate action is fractured‘. 

‘And, frankly, I really do not believe that it’s going to help any political party electorally which chooses to go down this path.’ 

Sunak’s decision is the worst kind of political opportunism, and was born out of the opposition they saw to the London Mayor’s extension of the ULEZ, in July’s byelection in Uxbridge,  Boris Johnson’s former seat. 

Opposition to the extension enabled them to cling onto the seat, and has been latched onto as an anti-green wave the Tories could surf. 45% of Tory voters said they voted Tory because of the direct cost ULEZ would impose on them personally. 

Ironically, it was Boris Johnson who introduced ULEZ as his headline policy while Mayor of London. 

This unexpected success energised the Tory right’s rumbling long-term opposition to the government’s net zero targets. 

It clearly isn’t lost on Sunak that he has forthcoming byelections in Mid Bedfordshire and Tamworth on 19 October. Both appear ‘safe’ Tory seats, with a majority > 24,000 in Mid Beds, and > 19,000 in Tamworth. However, both, are now opposition targets, and Sunak’s green retreat is an 11th-hour punt to save these byelections. 

It easy to see why he has taken this view, as they have lost a succession of earlier byelections in seats that had once seemed as safe as these. They remain well adrift of Labour in the national polls. And the two former MPs in the byelection seats, Nadine Dorries and Chris Pincher, both quit amid controversy. The Tories need to attract attention with something new. 
 

‘The green retreat will become the template for British electoral politics in 2024’

 
Should Sunak’s gamble succeed, and the Tories win the byelections, the green retreat will continue to be front and centre of everything the party does, and Sunak will be feted in the same way as Johnson was after his landslide 2019 election victory. 

The green retreat will become the template for British electoral politics in 2024. The Conservatives will believe that they can oust Labour’s Sadiq Khan in the London mayoral contest next year, despite the vengeful regressive politics of their lacklustre Tory candidate, Susan Hall. 

It’s easy to envisage the green retreat taking centre-stage in the next  general election, especially if it is delivering success in other elections along the way. A repositioning that would see the Tories increasingly moving away from the environmentally consensual party of the David Cameron era into a more sceptical party like the Australian Liberals. 

Whatever Sunak tried he can’t hide from the fact that we have had 13-years of Conservative governments, and little has been achieved. Again it’s priorities, which Jacob Rees-Mogg summed up perfectly: ‘taking the burden off taxpayers during an inflationary period is the right thing to do and will prove an election winning strategy.’ 

Everything governments do are based on priorities. Their priority, should of course, be in-line with what is required economically, and to improve society, and the infrastructure required to sustain and improve society. Instead we treat everything as a political opportunity to further the governments’ own ends. 

The excuse we constantly hear is ‘we can’t afford’, or in Braverman terminology ‘….bankrupting the British people‘.  
 

‘This is complete rubbish, we are just playing politics with the planet’

 
This is complete rubbish, we are just playing politics with the planet. As another commentor wrote; ‘for a nation to be taken seriously by financial markets it needs to maintain the Virtuous Sovereign Trinity; a stable currency and sustainable bond markets, held together by competent politics.’ 

The US is a ‘richer’, more prosperous country than the UK. Why? Americans love a success story, whereas we, ridden with petty jealousies, can’t wait to knock it. They think big, we don’t; they are riddled with centuries old class structures that favour breeding over brains. 

The above, along with a forward-thinking president, who understands that spending is required to rejuvenate run-down cities. The Inflation Reduction Act addresses so much; it manages the transition to cleaner, more reliable renewable energy sources, whilst repair and replace failing infrastructure and utilities. As it delivers the US will prosper.  

We could do the same. Similar forward-thinking could improve inadequate social services (including health and education), help to offset rising inequality and perceived injustice, by delivering the necessary growth to maintain and raise living standards.  

Why can the US afford $700bn and we can’t? They had to weather the GFC, at a far higher cost than we did, and they had the pandemic, too.  

What they didn’t do was machine gun themselves in the foot with a Brexit-type debacle. You can add to this a ‘can do’ attitude, and not being scared of debt. 
 

‘we are a small country, with an equivalent mentality’

 
For years economic thinking has been influenced by the thinking of Carmen Reinhard and Kenneth Rogoff., based on the theory that rising debt inevitably leads to weaker growth. As debt/GDP reaches a certain quantum, perhaps 80% debt/GDP, this slows the economy. De facto austerity spending and limited government borrowing is required. 

This was intrinsic to Thatcherism, and her ‘corner shop mentality’, and has become part of right-wing economic thinking, governments must reduce debt levels. 

Free-market thinking is based on the markets knowing best. As we saw with Truss’s unfunded tax cuts the markets temporarily lost faith in the UK. If you refer back to the Virtuous Sovereign Trinity, markets no longer believed that we had ‘competent politics.’ 

Whilst bond markets have fallen in the last 18-months there are no signs of real stress. Markets understand that yields have risen and prices fallen in response to central banks fighting inflation, not because investors fear nations are going bust on too much debt.  

When all is said and done, we are a small country, with an equivalent mentality. Add to this reactionary politics based on austerity and self-interest, and you have a recipe for disaster. 

‘I’m no clown I won’t back down 

I don’t need you to tell me what’s going down’ 

Powerful stuff from Philip at the end of a week in which the starting pistol has been fired on the general election.

Sunak’s watering down of the UK’s ‘pledges’ to achieve net zero could be the decider – one way or another; quite how scrapping plans that have never ever made it off the drawing board works, I’m not sure.

Justifying what to many will see as an abrogation of the country’s moral and legal obligation to tackle climate change because we are so far ahead of the pack seems pretty cock-eyed logic, but that’s what he’s done.

Groups such as Friends of the Earth, Good Law Project and Just Stop Oil are lining up legal challenges, but ignoring the science when nightly news bulletins show cars floating away is either chutzpah or dangerous denial.

So, what was he thinking?

We start with local councils going bankrupt. A major issue, as day-to-day much of what we expect is provided by them

As such you would expect this to be a priority. However, the first thing is prioritising the Tory government. As such this is wonderful news! Birmingham, the spendthrifts, was a Labour council. Lights, camera, action; “Labour can’t manage money, tax and spend, how could they be our next government”?

You could almost hear the cheers of Messrs Sunak and Gove.

But, there are two problems they appear to have overlooked; the next failure might be a Tory council, and austerity caused much of the financial problems in the first place.

Then we have the green U-turn. So much has been said I don’t need to comment.

It’s just politics, and priorities. Fuck the planet, we need a Tory government. Sunak believes in himself, then the party, anything else? Oh, I forgot, his rich friends.

He is the sober face of Tory economic prudence. One that flies around in jets and helicopters for any trip lasting 10-mins plus.

If there was ever a case of a government misusing our money, it was their decision to spend £265k to fund Boris Johnson’s Partygate legal bills.

It now appears that, in their haste, the Cabinet Office failed to follow proper processes. The National Audit Office said the government’s justifications were also “borderline” and not “wholly persuasive.”

In a report that will cause embarrassment inside the Cabinet Office, Gareth Davies, head of the NAO, said its audit team had exerted “significant effort” to investigate whether the spending was “a legitimate use of public money”.

Nothing changes!

Lyrically, we open with Gary Numan’s “Cars” and play out with The Stone Roses “Fools Gold.” Enjoy!

 
@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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