Heroes: Disarray and No Options 

 

‘Money is like us in time 

It lies, but can’t stand up 

Down for you is up’ 

 
What I find most depressing about the mess we are in, is the fact that the opposition, Labour, aren’t a true alternative, more a less hard-right version of the current shambles. 

Before getting onto that, lets start with the 2019 election. 

Johnson had just had his own ‘night of the long-knives’, withdrawing the whip from 21 Tory MP’s, after he had illegally attempted to prorogue parliament. 

Within weeks of this he created the opportunity for an election. Labour, under Corbyn, went at it full tilt with a left-wing manifesto. The Tories produced the slimmest manifesto yet, giving Labour nothing to attack, whilst they terrified the electorate with the threats of ‘reds under the bed’. 

Johnson promised to ‘get it (Brexit) done’, and to ‘level-up’ the country, and won a landslide majority. 

Ah, yes, ‘levelling-up’; whatever happened to that? Precisely nothing. 

We saw another example of this non-existent policy last week, with GCSE results showing that more than 28% of entries by pupils in London were awarded grades 7 or higher, equivalent to an A or A*, compared with just under 18% of entries by pupils in the NE. This was the largest gap on record, prompting warnings of a ‘continuing widening‘ in the north-south education divide. 

School leaders in the NE accused the government of ‘London-centric’ policies, while Labour said it showed that ‘levelling up is dead and buried’. 

Chris Zarraga, the director of Schools North East, said: ‘It is clear that significant challenges remain, with education recovery policies too London-centric. If policy continues to be ‘one-size-fits-all’, we risk a continuing widening of the gap between the north-east and London. Recognition of the perennial contextual challenges, and the impact of the pandemic on more than just those students that had exams cancelled, is long overdue.’ 

What does the PM think? He appears to be looking to his future tilt at being US president having donated $3m to Claremont McKenna college in California. 

From schools we move to university, more precisely university accommodation. 

Regular readers will recollect that I have long been a critic of residential property becoming an asset class, and student accommodation should be no different. 

This is why I find the reports that globally large financial investors are increasingly buying up purpose-built student housing for their next big win so disturbing. 

In the UK, average student housing prices now outstrip the maximum government-offered student loans. In Canadian cities like Toronto and Calgary, where student residences are full and rents are soaring, some have little choice but to sleep in their cars or in homeless shelters. Last year, dozens of Erasmus exchange students in Italy, unable to secure housing, were forced to sleep on the streets. 

A 2022 survey from Scotland found that 12% of students had been homeless at some point since the beginning of their studies. In Turkey, students, many homeless, organised a protest movement called ‘We Can’t Shelter’ to force the government to take action. The lack of affordable housing for students in California has universities scrambling to find other options, some resorting to the use of hotels as well as considering the possibility of using offshore barges. 

For the record, research shows a strong correlation between academic achievement and a student’s housing situation. 

Purpose-built student accommodation (‘PBSA’) has become one of the hottest asset classes in real estate, with forecasters predicting ‘enormous returns‘ on investment – all at the expense of students and their paying parents. 

In 2022, Europe saw a 130% increase in investment in PBSA from the year prior. The UK, home to one of the most mature corporate-driven student housing sectors, also saw a record investment of £7.2bn – a 69% rise on the previous year. 

The crisis of unaffordable housing for university students sits firmly within the broader housing crisis, with the cost of housing relative to income rising in cities across the globe. 

As this column has written previously, housing is a basic human right. Government policy should focus on this rather than allowing it to become just another asset class designed to enrich the wealthy. 

Housing is clearly in the government sights, as Michael Gove is planning to rip up water pollution rules that builders have blamed for exacerbating England’s housing crisis but which environmental groups say are essential for protecting the country’s rivers. 

Political advisers say water pollution has already become a major political issue in coastal areas, and has the potential to cost the Conservatives important seats at the next election. 

However, it will please major developers, who say the rules are being applied so strictly that they are being prevented from building new homes in large parts of England. Building industry projections say housebuilding in England is forecast soon to fall below levels not seen since WW2. 

Doug Parr, policy director at Greenpeace UK, said: ‘Instead of allowing housebuilders to cut corners, the Sunak administration should make sure we have the right infrastructure to handle our sewage so we can build new homes without sacrificing our rivers’ health. But that would require them to do what they’ve spectacularly failed to do so far – forcing water firms and housebuilders to invest their profits in upgrading treatment plants and pipes to a standard that a modern, functional country would expect.’ 

There is an added bonus for the government in so much as the rules in question surrounding nutrient neutrality were put in place in 2017 when the UK was still a member of the EU. As Gove said, ‘the repeal of the rules is a ‘Brexit bonus’. 

As to the opposition, or what there is of one; Labour more resembles a Tory tribute act. As a result it has provided a fascinating situation; we have the Tories so desperate to hang-on to power that they are creating conflict and discord wherever possible, whilst Labour are so desperate to attain power that they are losing sight of what they are supposed to be. 

In recent weeks we have focussed on priorities, what government chooses to do, or, as they prefer to describe it ‘tough choices‘. 

In recent years their priority appears to have been keeping the poor poor, by freezing their pay and cutting the service many rely on. Labour tried to explain away their decision to retain the Tories poverty inducing two-child benefit cap, as a tough decision. The opposite of a tough decision is the easy way out, for example, avoiding taxing the wealthy, which is usually met with coordinated hysteria from Tory politicians, right-wing media outlets and wealthy interests. 

When shadow chancellor, Rachel Reeves, rules out a wealth tax, or other means of asking the well-to-do to contribute more, she is defeating the raison d’etre of the Labour party. The party is so desperate to court business, and to expunge any vestige of Corbynism that it is becoming pointless. 

Given the remarkable mess the Tories 13-yrs of mis-government has created, Reeves comment that we don’t need a wealth tax because she doesn’t ‘have any spending plans that require us to raise £12bn worth of money’, leads me to ask if she if she has lost her touch with reality. We have record NHS waiting lists and an unprecedented squeeze in living standards to crumbling infrastructure and an ever-escalating housing crisis. £120bn might be more necessary that £12bn!. 

But wait, Labour has a magic potion, the highest sustained economic growth in the G7, something we haven’t achieved for so long its embarrassing to research it! 

More recently, a lady called Liz Truss, aided and abetted by her chancellor, ‘crazy’ Kwarteng, promised the very same; neo-Liberalism, ‘trickle-down economics’, raising living standards through economic growth without any meaningful redistribution. Or, as Starmer said at the time, a ‘piss take.’ 

Jim O’Neill, an economist and former Tory Treasury minister who has advised Reeves, argues, ‘it seems reasonably obvious that without much stronger investment, spending and productivity growth, the UK will not improve its growth performance‘. 

Kier, it seems, has a convenient habit of forgetting what he has said and promised. Aside from deciding that maybe neo-liberalism isn’t a piss take after all, when he stood for leader he promised to increase taxes on the rich. This was a key part of his abandoned ’10 pledges’. Now, he tells us the circumstances are different, when, in reality the case for raising revenue is far stronger now than it was in 2020.  

Our overall tax take is significantly lower than better-performing economies, and the rich are better off than ever. In addition, with an ageing population the tax burden will fall on a diminishing workforce. It is non-sensical to think that the minority can fund the majority, in which case there has to be some form of wealth tax. 

Labour don’t seem to grasp that the Tories will do everything and anything to retain power. The economy, cost-of-living crisis, and housing are people’s priorities. Whilst even I wouldn’t be so unreasonable to claim this has all been created by Tory mis-government, the way they have dealt with it, primarily by closing their eyes and hoping it will go away, is appalling. Flagship policies such as Brexit, levelling-up, and immigration are, as best, failures. As such, Labour should be pushing at an open-door, instead they seem to be ushering the Tories through. 

If had to vote today, hand-on-heart, I question the point of voting Labour. We need innovation not imitation, we need original thoughts not yesterdays in drag! 

‘One day it’s fine and next it’s black 

So if you want me off your back’ 

 

Today we look at the two parties.

The Tories failed policies such as levelling-up. This week’s casualty is education, firstly the GCSE results which serve only to highlight the north-south divide. Followed by student accommodation which, in the last few years, has become an investment asset as the wealthy cast their eyes around for yet more ways to line their pockets.

Labour, oh dear, now we don’t need a wealth tax because the chancellor has nothing to spend it on. Instead, it’s a dash for growth which will achieve that heady mix of making us all better off and not upsetting the wealthy. I wrote that Liz Truss was dangerous and deluded, Labour are disappointing and plain daft!

Elsewhere, we have William driving Andrew to church, a sign seen as the beginning of his reintegration into public life. The inference seems to be that this is at Charles’ behest to support his brother. If so, he is on the way to being seen as a “bad king” supportive of over-indulged siblings with no moral compass.

 Suella Braverman has said the government will “do whatever it takes” if its plan to send asylum seekers to Rwanda is “thwarted in Strasbourg”, and confirmed the government is considering fitting some migrants with electronic tags. Personally, outside of the racist minority I don’t think anyone cares.

We finish with Nadine Dorries, who has joined that Tory graveyard on Nazi GB News, and, at long last, resigned as an MP. Her resignation letter was a wonder…

She accused Sunak of putting her personal safety at risk by “whipping a public frenzy against her” and disclosed that police had visited her home last week, warning her about a threat to her security. Come on, Nadine, no one gives a f***.

My personal favourite was; ““Bewildered, we look in vain for the grand political vision for the people of this great country to hold on to, that would make all this disruption and subsequent inertia worthwhile, and we find absolutely nothing.” Errrr, what?

Lyrically, we start with the Velvet Underground’s quite wonderful “Pale Blue Eyes”, and end with the Clash and “Should I Stay or Should I Go”, dedicated to what was the Labour party. 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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