Mr Brightside: Broken Britain 

 

“You hear laughter
Cracking through the walls” 

 

Whilst he may have been his usual doom and gloom self, PM Starmer, when questioned about the criminal justice system, said; “the system was broken, like everything else the Tories touched.” 

 
Prior to June, the Tories had been in government for 14-yrs, and for 27 of the last 40-yrs. During their time in government, especially the last 14-yrs, they have broken the country. Stamer’s labour government has been in power for 5-months, and people are complaining that the devastation isn’t fixed. 

Even the new Tory leader, Kemi Badenoch, recognises this, telling the House during PMQs: “Everything is broken”. 

Of all the Tory legacies, I find poverty the most worrying. The following is from the Rowntree Foundation (https://www.jrf.org.uk/uk-poverty-2024-the-essential-guide-to-understanding-poverty-in-the-uk). 

“Before 1979, levels of poverty had been broadly flat at around 14%. In the 1980s, under the Conservative Government of Margaret Thatcher, there was then an unprecedented rise in poverty even at a time of high income growth, due to very unequal income growth over this period. This has not been reversed, meaning current levels of poverty are around 50% higher than they were in the 1970s”. 

There is the debacle that is, or perhaps, was Vauxhall; The proposed closure of their Luton plant is due to the EV targets imposed by Tory governments, and the result of Brexit. 
 

“Everything is broken”

 
Now we have a petition started by a Shropshire publican – likely a drunk Reform voter –  demanding another election. Needless to say the Lex Luther of the hard-right, Elon Musk, is chipping in with his two-pennies worth. Perhaps he should be reminded to f**k off and concentrate on ruining America.   

Musk seems to have dubious ideas and bedfellows, questioning why the far-right Tommy Robinson is in prison for 18 months. For the record he is locked-up because he wouldn’t stop repeating false claims about a refugee teenager. This isn’t the first time he’s been in prison for contempt of court, the last time it was for trying to collapse a grooming trial, which would have put multiple female victims through the horror of having to testify twice. But, neither Robinson nor Elon like woman, therefore why would they care.  

Another high profile supporter of the petition is Richard Tice. Yes, the very same Richard Tice who, when people questioned the Brexit referendum and wanted a rerun, said “the people had spoken”, and described the People’s Vote campaign as a “losers’ vote”. 

Not to be outdone the woefully inadequate Badenoch, demanded that PM Starmer accept the results of the petition. Interestingly, in 2019, when shown a petition demanding the Brexit referendum be overturned, she had declared that the country was run through elections. 

Really, this whole saga is nothing more than populists deciding what part of democratic process suits them. 
 

‘Perhaps he should be reminded to f**k off and concentrate on ruining America’

 
Just how badly broken the country is was highlighted when the National Audit Office (“NAO”) said it was impossible to sign off the government’s latest public spending figures as accurate because of the unreliability of financial data relating to hundreds of councils and police and fire authorities. 

The NAO said the government’s entire public sector financial accounts are not fit for purpose, after the collapse of the “red flag” system that scrutinises billions of pounds of spending in local government. This comes amid warnings that the chronic inadequacy of the council audit system – seen as an “early warning” indicator of financial failure or wrongdoing – could result in more councils going bust. 

Only 10% of local authorities submitted reliable formal accounts of their spending in 2022-23. Of the remainder, half failed to submit any financial data at all and half submitted accounts that had not been audited.  

The 129 English councils which hadn’t submitted any accounts for the last two financial years include Woking borough council, and Spelthorne. Birmingham was among 58 further councils failed to submit data for 2022-23. 

Spelthorne council in Surrey, which borrowed >£1bn to invest in commercial property, has also failed to submit five or more years of financial data. When Woking council went bust in 2023 with £2bn of debts after a wild borrowing spree it emerged it had failed to submit audit figures for four years. 

The roots of the audit crisis date back to the former local government secretary Eric Pickles’s 2015 abolition of the Audit Commission, which provided oversight of council finances and audit, and create a private market in auditing local authority accounts. 

Adding to local problems this week was Storm Burt, which is reported as being the result of climate change. Burt is just the latest example of  the intensification of rainfall in the UK over the past 60 years, and decades of warnings from climate scientists that unrestrained fossil fuel emissions would bring exactly these sorts of torrential downpours to the UK, the government has done remarkably little to prepare and provide communities with the resources they need to adapt. 
 

‘Burt is just the latest example of  the intensification of rainfall in the UK over the past 60 years’

 
In their latest progress report on climate adaptation, the Climate Change Committee concluded starkly that the UK is “not adequately prepared” for our new and more dangerous climate, and that government plans “fall far short” of what is required. The committee’s chair, Lady Brown, went so far as to say that the “UK’s current approach to adaptation is not working.” The decision of successive governments to not give these matters the priority they deserve means they have abandoned communities like mine to bear the brunt of the climate crisis.  

All of this highlights why the Conservatives and Reform aren’t fit to govern. Their climate change policies are just another example of them being pound-shop Trump’s; “drill baby, drill.” 

In “No One Wants to Pay”, I mentioned this week’s CBI conference and their desire to see, what they view as the status quo, of the last 40-yrs continue. Shrinking regulation, low taxes and the diminution of workers rights. All of which equals increasing profits, rising share prices, increasing dividends, a beano for rentiers. As for the working majority, well, they are just slackers holding us back. 
 

‘today’s version of capitalism serves the few at the expense of the majority’

 
Yet more proof that today’s version of capitalism serves the few at the expense of the majority. The latter doesn’t give a damn about the FTSE, they are more focused on keeping warm and putting food on the table.    

Interesting, it appears that Badenoch has also told the CBI that she would not reverse Labour’s national insurance hike on employers. 

CBI chair, Rupert Soames, has accused the government of treating employers as a “cash cow” as he urged ministers to water down plans for workers’ rights, saying: “It’s been tough on business. In the budget, business has been the cash cow and it’s been milked. Don’t go and whack it”. 

The government published its employment bill last month, which included policies aimed at boosting workers’ rights. Soames criticised aspects of the plans, including enhanced obligations on firms to consult on proposed redundancies, and an obligation on employers to offer full workplace rights after a short probation period, instead of the current two years. 

Ever since the union busting days of Thatcher there has been an increasing focus on profit at the expense of workers. This has largely come about as union membership and legislation has continually neutered unions ability to represent their members. 
 

‘Ever since the union busting days of Thatcher there has been an increasing focus on profit at the expense of workers’

 
The latest example of this is the forthcoming closure of the Smithfield meat market and Billingsgate fish market.  

A market has existed around the Smithfield site for more than 800 years. The corporation was given the right to run it and other wholesale food markets in 1327 by Edward III, and the current market site was built in the 1860s and opened in 1868. Billingsgate, the UK’s largest inland fish market was moved to its current site in Canary Wharf in 1982. 

The authority is said to want to turn the Smithfield site into a mixed-use cultural development alongside the London Museum, which is in the process of relocating to part of the Smithfield site where the poultry market was. There are proposals to transform the land of the current Billingsgate site for a mixed-use housing scheme. 

We finish by taking a look at trade and tariffs, which, after the phoney war have come to the fore, with president-elect Trump announcing that he intends to impose 25% tariffs on Canada and Mexico, and an extra 10% on China, in a crackdown on immigration and drugs. 

Trade experts fear that Trump could spark a global trade war, if other countries retaliate with their own tariffs in response. 
 

‘Trump could spark a global trade war’

 
Keith Rockwell, a former director at the World Trade Organization, explained: “The United States exports hundreds of billions of dollars’ worth of goods to these countries. Anyone who expects that they will stand pat and not retaliate has not been paying attention.” 

Collectively, these countries are America’s three largest trading partners, with whom it runs a $500bn trade deficit. Since 2016, both Mr Trump and Mr Biden have departed from established norms in international trade. 

It will be interesting to observe whether the tariffs are simply policies, or whether they are a calculated means of gaining leverage. By threatening to impose them, Trump is signalling a desire to negotiate, but on his terms. 

Trade involves sacrifices to achieve gains. Cheaper consumer goods might lead to fewer domestic jobs or lower wages in certain industries. Increased imports can mean a reduction in local manufacturing. Running a trade deficit, whilst not necessarily harmful, requires an activist policy to ensure that the pain is not geographically concentrated.  

For decades, the neoliberal economic order championed a vision of a borderless world, where goods and services flowed freely with minimal barriers. This ideal dominated global trade policy and corporate strategy, rendering “protectionism” taboo in mainstream debate.  

However, since the GFC scepticism about globalisation has steadily grown, with an increasing focus on justice, sustainability and better working conditions reshaping trade priorities worldwide. There has also been a growing trend towards producing goods closer to home, either through increased domestic manufacturing or by developing nearby supply chains.  
 

‘since the GFC scepticism about globalisation has steadily grown, with an increasing focus on justice, sustainability and better working conditions’

 
Unfortunately, wealthy nations, led by the US, have consistently resisted granting poorer countries the flexibility to modernise, while claiming exceptions to rules they enforce on others. During the pandemic, the US prioritised its pharmaceutical industry profits over global vaccine access, blocking life-saving doses for developing countries. 

Trump’s protectionist policies the decline of globalisation rather than initiating it. A retreat that will likely continue, fuelled by geopolitical tensions, post-pandemic supply chain restructuring, and rising demands for equitable trade.  

Trump’s proposals will make an uncertain world even more volatile. His suspicion of win-win deals will make it harder for policymakers around the world who seek to balance their national interests with the need for global cooperation. 

Given that are no-longer part of the EU, the world’s largest free-trade block, any uncertainty and volatility to trade is likely to negatively impact the UK. This was the basis of comments from Clare Lombardelli, a deputy governor at the BoE, has warned that the president-elect’s proposed trade tariff would pose a risk to economic growth in the short term, while long-term productivity also suffers from increased trade frictions. 

“I don’t want to speculate on the specifics but we know barriers to trade are not a good thing, whether they are tariffs or regulatory or others. 

“Whether you are an economic historian, an economic theorist or a data-driven economist, the impact is clear in terms of its direction. In terms of its size, that depends on the circumstances”. 

If a trade deal on anything like equitable terms with the US isn’t possible. And, if it is it will likely to be detrimental to our relationship with Europe. Might this mean renegotiating to enter the EU free-trade zone? Or, do we look east to China? 

Isolation was another gift from the Tory right.   
 

“Still so dark all over Europe 

And the rainbow rises here 

In the western sky” 

 

‘Today we consider how broken the country is after 40-yrs of predominantly Tory governments.

The whole neoliberal, small state experiment looks to have run its race. Unfortunately, Labour don’t appear to have the balls to try something different.

Their diagnosis is correct; the country is broken, and they were left with a shocking mess. To rectify it will cost money, everyone wants the benefits bit no one wants to pay.

For a few the last 40-yrs have been financially enormously beneficial. These are the people who are able to mitigate their taxes, be that income tax, CGT, or IHT. “Normal” people can’t do that, even the majority of people in London/SE don’t have the opportunity or financial wherewithal to do this. The majority just take it on the chin because there is no option.

Tax increases are necessary, but they must be targeted. This is where both the employer’s NIC increases and the imposition of IHT on famers misses the point. The changes are across-the-board, rather than falling on “the broadest shoulders”, as we were promised.  

I haven’t been very kind to farmers in recent weeks, but I do recognise that levying the same changes on “normal” farmers and the uber rich ones is a mistake.

There was a very interesting article by a “normal” farmer in this week’s Guardian which is well worth reading:

https://www.theguardian.com/commentisfree/2024/nov/27/britain-farming-family-farm-inheritance-tax

It is interesting to see that the IHT change is only the latest issue for many farmers: “But farmers didn’t march on London only for inheritance tax. This policy was more like the last straw. Farmers’ incomes and standard of living have been falling rapidly since Brexit.”

Clearly, the majority of farmers are little different to the majority of workers, let down by 40-yrs of a discredited and failed economic experiment, that has seen the few get fat whilst the rest just get by.

Lyrically, I decided to follow the relentless doom and gloom of the news and government comments. Therefore, we look to those black clad doomsters of the 1980s, the goths. We start with “Spellbound” by Siouxie and the Banshees, and finish with “Black Planet” by The Sisters of Mercy.

Enjoy!

Philip.’

 
@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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