Heroes: Broken

 

‘The things I say, you only disagree 

You’ll never understand, that’s what I want to be’ 

 
This weekend marked the return of an unrepentant Liz Truss. 

Writing in the Sunday Telegraph, Truss said: ‘I am not claiming to be blameless in what happened, but fundamentally I was not given a realistic chance to enact my policies by a very powerful economic establishment, coupled with a lack of political support.’ 

Clearly she still doesn’t get it: her political support vanished because her policies were in the process of crashing the economy as markets reacted to her lunacy. Sterling tanked and Gilt rates spiked-up as a wall of money bet against the UK. As John Major found in 1992, you can’t buck the markets. No doubt some of the biggest bets against us were made by Tory sympathising hedge fund managers. It wasn’t politics it was just easy money, it’s what they do. The LDI meltdown came about as a result of the markets reaction.   

Truss’s excuses are, to use her terminology, snowflakey. For someone who trades as anti-woke she seems to view herself as the ultimate injured party.  

The question to be asked is where does the party stand on Trussomics? 

Johnson, another resentful ex-PM echoes her themes, telling Nadine Dorries that cutting tax ‘needs to happen’, helping the ‘Bring back Boris, he did nothing wrong‘ groundswell. Suella Braverman, with her old-school rightist faction, is of the same ilk.  

The Sunday Telegraph clearly supports her ideas: ‘The statist Tory establishment has had its turn and the party is cratering in the polls; the free-marketeers must now speak up.’ The Mail leader says: ‘The ideas she stands for may be due for serious re-examination.’  

These papers speak to and for a segment of the Conservative party which believes that small government and lower taxes creates economy growth. They are the people which backed Truss last summer, and who would bring back Boris Johnson, and maybe would embrace even Suella Braverman, if there is another leadership challenge. 

Another recent Tory leader, Theresa May, in 2002 said about her own party, ‘You know what some people call us — the Nasty Party.’ 

Sighs…somethings never change! Nasty Party, Nazi Party, maybe? 

Last weeks industrial action was closer to a general strike. Despite this the government remain unmoved. Sunak said he’d ‘love to give the nurses’ the money because it would ‘make my life easier. ‘Even if it’s not popular, it’s the right thing for this country to stay the course.’ 

The recession and inflation we are experiencing is driven by supply costs in food and fuel not by demand. A report by the Trades Union Congress states that since 1979, economic policies have seen a ‘doom loop in GDP, and a parallel ‘boom loop’ in wealth‘ (1). The cause of this is governments obsession with ‘fixing’ the public finances by cutting public spending which, in-turn leads to lower demand and lower growth, a doom loop.   
 

‘cutting public spending which, in-turn leads to lower demand and lower growth, a doom loop’

 
What we should be doing is increasing infrastructure spending, as there is a body of evidence which  shows that this pays for itself by generating economic growth. 

The report suggests that this doom loop has seen Britain miss out on £400bn of growth since 2010,  leading to workers suffering the worst pay squeeze for 200 years. The strikes aren’t led by a platoon of mini-Arthur Scargills, but workers who have spent years holding together failing public services, losing a day’s pay to stop themselves sinking further into economic misery. 

Whilst the ‘us’ suffer the ‘them’, the super-rich are lapping it up. Their net worth as a share of GDP in 2020 matched the peak in the 1930s. Today these fortunes are built on houses: 25% of the wealth on the Sunday Times rich list is held by people in finance; 20% by those in property. As much of this income is dividends and capital gains, it faces lower tax rates than income from work.  

The Tories consistently offer a reheated version of Thatcherism. Alongside cutting taxes and shrinking government,  another key policy was dumbing down the power of trade unions and worker’s rights.  

Sunak’s attempts at toughening anti-strike legislation are following a path trodden by their predecessors; when a Tory leader is in trouble, they pass laws to repress unions. John Major did it twice, David Cameron clamped down on the austerity backlash with strike laws more draconian than Thatcher. 

One of Thatcher’s innate skills was ability to understand a situation, and the need for building public support for her policies.. Forty years ago, her cabinet considered a version of the same law being proposed by Sunak. Thatcher realised that banning strikes in essential services was unworkable; ‘the practical difficulties … were immense‘.  

His strike law faces the same fate as Suella Braverman’s one-way tickets to Rwanda: costly challenges in the courts from the TUC and others.  

Prolonging the strikes benefit no one; ministers admit it would have cost less to settle the rail strike. The 18-days of strikes has cost the Royal Mail £200m. Poll after poll shows outright public support for nurses and teachers and postal workers, and at least a willingness to listen to the other sectors.  

The reality is simple; it’s not the strikers who look dogmatic and uncaring. And, as Thatcher found out, what happens when the public and your party finally decide you’re in the wrong, your time is soon up. 
 

‘The reality is simple; it’s not the strikers who look dogmatic and uncaring’

 
Next up from the Nasty Party is immigration. Sunak, in a rather pathetic attempt to appear tough is proposing to stop the cross-channel asylum seekers from appealing against their deportation. It isn’t tough picking-on victims, it’s simply nasty! 

His partner in crime, and fellow immigrant, Suella Braverman, has put forward two options for consideration. 

The first is withdrawing people’s right to appeal against their automatic exclusion from the asylum system. Under the second, people arriving on small boats would only be allowed to lodge an appeal after they had already been deported. 

Currently, all asylum seekers have the right to remain in Britain to have their cases heard. 

A Home Office spokesperson said: ‘We are also going further by introducing legislation which will ensure that those people arriving in the UK illegally are detained and promptly removed either to their home country or a safe third country.’  

The government is understood to be working on draft legislation that would bar asylum seekers from using the European Convention on Human Rights (‘EHCR’) to avoid deportation, a proposal backed by Braverman, during her leadership campaign over the summer. Refugees currently can claim that their right to family life or right to liberty was being breached. 

There appears to be backbench support for this, and a number of ministers want it to form part of the Tory manifesto if it can’t be enacted before the next election. However, a decision to pull the UK out of the ECHR without an electoral mandate is likely to cause deep consternation in parts of the party, and would likely face challenges in the House of Lords. 

Simon Clarke, the former cabinet minister, said it was ‘completely right’ to consider withdrawal. ‘It is a fundamental question of trust and competence that we should very significantly curb illegal immigration into the UK. Plus our actions to defend freedom are the ultimate measure of our values.’ 

Values? What values? They certainly aren’t moral ones. I find it ironic that a PM and Home Secretary who themselves are immigrants should now become nationalistic racists.  
 

‘I find it ironic that a PM and Home Secretary who themselves are immigrants should now become nationalistic racists’

 
Continuing with the theme of nastiness we turn to British Gas.       

‘Elderly ladies make easy pickings. Single parents, the new recruit was told, are also a mainstay of the trade. So harden your heart to their pleading, even if they do have tiny children, because: ‘If every single mum that starts getting a bit teary you’re going to walk away from, you won’t be earning any bonus.’ Just get yourself inside the house and fit that prepayment meter, even though it will cut off their gas if they can’t afford to keep their credit topped up, leaving them to shiver in the dark.! 

This was the advice given to a Times reporter working undercover for a company employed by British Gas (‘BG’) to deal with customers falling behind on their bills. Using court orders debt collectors, such as Arvato Financial Solutions, are breaking into people’s home and force-fitting pre-payment meters 

Among the cases Citizens Advice has dealt with is a single parent who has resorted to warming up milk for her baby at her GP’s surgery, and a woman with a lung condition who can’t charge the breathing machine she needs at home when her power is cut off. 

British Gas said the forced fittings had been suspended and was investigating the ‘deeply concerning‘ revelations. ‘This is not who we are — it’s not how we do business.’  

But this is precisely what they are, they have done this. The issue for them is they have been outed. 

Unfortunately, this is a situation that is escalating. 20% of households are already struggling to pay their water bills. From April, those bills are expected to go up by an average of 7.5% – the biggest rise for two decades. From the end of March, the government is due to start scaling back its help with fuel bills, exposing customers to more painful rises. 

The government seem more concerned in protecting the corporate profits of entities such as BG, ‘the them’, rather than ‘us’. 

Last week Shell reported global profits of £32.2bn, the highest in its 115-year history, a timely reminder of the government’s reluctance to extend windfall taxes.  

Even Shell think it’s necessary; last October the firm’s then chief executive Ben van Beurden told the Energy Intelligence Forum: ‘You cannot have a market that behaves in such a way … that is going to damage a significant part of society … I think we just have to accept as a society – it can be done smartly and not so smartly. There is a discussion to be had about it, but I think it’s inevitable 

This week BP announced record profits of some $28bn, and increased its quarterly dividend pay-out by 10% and spending a further $2.75bn buying back its own shares. BP handed back more than $14bn to shareholders in 2022. 
 

‘BP handed back more than $14bn to shareholders in 2022’

 
News for green campaigners wasn’t so positive; BP announced that carbon emissions from its oil and gas production would fall by between 20% and 30% by 2030, when compared with 2019. The target had been a 35-40%. 

Its oil and gas production is predicted to be C.2m barrels of oil equivalent a day in 2030 – 25% lower than in 2019. The plan had been to cut production by 40%. 

Finally, we turn to Brexit and the continual hollow promise that one day it will deliver some benefits. To date all we have seen is recession, strikes, and political instability. Last week, it was forecast that Britain will be the only G7 economy to shrink in 2023. 

Overseas commentators observations include;  ‘Brexit has cracked Britain’s economic foundations‘, (CNN). ‘Blankets, Food Banks, and Shuttered Pubs: Brexit Has Delivered a Broken Britain‘ (Foreign Policy). 
 

‘Blankets, Food Banks, and Shuttered Pubs: Brexit Has Delivered a Broken Britain‘

 
In truth, Brexit may been the straw that broke the camels’ back, the damage was a long-time in the making. 

The housing market is so distorted that the average first-time buyer in London required a deposit of £150,000 last year. Increasing interest rates simply pass through buy-to-let landlords to tenants. Brexit did not create the need for food banks, the use of which increased >10-fold between 2010 and 2014. Brexit did not weaken the regulators’ hand enabling energy companies to make their largest profits in over a century, and not even be taxed properly for it. Brexit didn’t slash NHS funding. Brexit did not ideologically brainwash Liz Truss so that she, in a matter of days, crashed the economy. 

What Brexit did was heap pressure on a country already struggling with weak public infrastructure and stagnant wages, mainly by limiting the labour market and diminishing volumes of trade. 

Immigration and culture wars have been prevalent for a while and led directly to UKIP and Nigel Farage, who, in-turn, did more to secure the anti-immigrant Brexit vote than the Conservatives ever did.  

It was because Britain was breaking that Brexit happened, it was a placebo offered to those who felt ‘left behind. Brexit hasn’t brought about the country’s decline but is has hastened it 

 Brexit was sold as ‘taking back control‘. Perhaps the question we should be asking is, how? So much is broken, economically the north is still second-best, healthcare is collapsing, housing is fraught with issues, community organisations defunded. Yet, consistently the ‘them’ profit; something is very wrong. 
 

‘Takin’ that ride to nowhere 

We’ll take that ride’ 

 
Notes: 

1. https://www.tuc.org.uk/research-analysis/reports/doom-loop-economy-work-not-wealth#:~:text=Yet%20since%20austerity%20policies%20began,by%20the%20OBR%20in%202010. 

1. https://www.lbc.co.uk/news/british-gas-debt-collectors-break-into-homes/ 

 
This is not the first of Philip’s columns to conclude that everything’s broken, but it does seem the most pursuasive yet in that regard; I don’t think Labour would have to do a particularly acomplished version of D:Ream’s election anthem to be heard, although I’m still not sure who could belt it out.

As well as the compelling case Philip makes for the conclusions he draws for all things political being in the doldrums, there is also the backdrop of events such as David Carrick’s shocking reign of torment and depravity, the baffling case of Nicola Bulley and events at Epsom College to heap on the misery.

So, what was Philip thinking?:

The strikes grind-on, and the government simply shrugs its shoulders. As a member of the public you become immune to it, it’s just, “oh, they are on strike today”.

Behind the scenes the government pursues its own agenda, solving the strikes by making it impossible to go on strike. This is a workers basic right, often it’s the only weapon they have. We are just continuing our descent into a right-wing police state.

The same is true with immigration. Take away any right they might have, and take us out of the European Convention of Human Rights, so there can be no challenges.

What I find so ghastly about their immigration plans is that holders of the highest offices in the land were the immediate beneficiaries of UK immigration:

Sunak (PM) was born to parents of Indian descent who migrated from East Africa in the 1960s

Braverman (Home Sec) parents are both of Indian origin, who emigrated to Britain in the 1960s

Cleverley (Foreign Sec), His mother migrated from Sierra Leone.

Kwarteng (former Chancellor) parents emigrated from Ghana as students in the 1960s.

It seems that what was good enough for them will be denied to others. Perhaps, they see the current migrants as socially inferior?

These immigration issues come at a time when we have labour shortages.

Elsewhere, the “them” and “us” continue as we tread different paths. Energy suppliers are making record profits by doing nothing other than being in the right place at the right time. For those unable to afford the luxury of heating, British Gas are perfectly happy to chase them through the courts, and to send in the bailiffs to force them onto higher cost energy solutions.

When they were outed, it wasn’t them, they didn’t do it; only they did. Not unlike Liz of 49-days, each of which cost us C.£500m, only it wasn’t her fault. We didn’t understand, she needed more time.

This country is so broken, Brexit was just the final nails in the coffin. I doubt it can be fixed for years.

Oh, I almost overlooked the cabinet reshuffle; same dog, different fleas!

Lyrically, we start with a tribute to Liz Truss, the Jesus and Mary Chain with the wonderful “Never Understand”, because she just doesn’t understand. We play-out with Talking Heads “Road to Nowhere” because that’s where we are heading. 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

Click on the link to see all Brexit Bulletins: