‘You keep talking, talking everyday
First you’re telling stories
Then you’re telling lies…’ 1

Yes, yet another cheap slogan with which to tease and placate the masses. Now we have ‘got it done’ and ‘taken back control’, its time to ‘level up’.

The phrase appears no fewer than 11 times in the unusually short 2019 Populist, sorry, Tory manifesto, mostly in reference to spreading wealth to regions other than London, but also to improving education and healthcare.

In true populist style it is long on slogans and short on detail, such as what will be improved, by how much, etc. These are hollow words, cynically aimed at avoiding responsibility for the painful legacies of former Conservative policies such as deindustrialisation and austerity.

This column last article we reported that, only eight weeks after the election, it’s clear that ‘levelling up’ is at odds with the government’s planned reallocation of council funding.

‘it’s clear that ‘levelling up’ is at odds with the government’s planned reallocation of council funding’

One which could redirect millions of pounds away from the north of England, rerouting it into traditional Conservative heartlands in the south, away from the regions the government has promised to ‘level up’.

Following on from last week when this column reviewed Brexit int-terms of the questions asked in the very first article back in 2016, ‘Brexit, the never-ending story’, this week we look why people in towns such as Workington voted ‘Leave’ in the referendum, and then broke the habit of a lifetime in voting for populism (AKA, Tory!)

 

In order to understand why they voted ‘Leave’; I will reference two previous articles;

 

  1. Hunting for yield in the recession that supposedly never happened’, published on muckle.online, and
  2. Brexit Bulletin: Parliament and the country hopelessly divided’, published on DIY Investor on 11 January 2019

 

The start point is the Global Financial Crisis (‘GFC’) of 2008 which almost brought the banking system down and was the worst crisis of its type since 1929.

‘Those with the assets to enjoy the bubble have fared extremely well, in short, the rich got richer whilst the poor get poorer!’

There was, however, one major difference between them, the latter wasn’t followed by a prolonged recession.

The authorities, in the shape of the central banks, were able to avoid this by pumping huge amounts of liquidity into financial systems, at the expense of creating perhaps the greatest asset bubble of all time.

Those with the assets to enjoy the bubble have fared extremely well, in short, the rich got richer whilst the poor get poorer!

The following data is from the BBC Business article, UK wage growth picks up to 11-year high, published on the 13 August 2019. Ostensibly it makes great reading, e.g.:

 

  • Wage growth in the UK reached an 11-year high,
  • The employment rate was its joint highest since 1971,
  • A record high of 32.81 million people were in employment,

 

The sting in the tail come from ‘Matt Hughes, the ONS deputy head of labour market statistics, who said: ‘Excluding bonuses, real wages are growing at their fastest in nearly four years, but pay levels still have not returned to their pre-downturn peak.’

Or, put simply, 11-yrs on from the GFC and people are still worse off than they were in 2008!

In addition to the wealth gap being further exacerbated by the GFC, there is the North–South divide which is especially prevalent in terms of jobs:

‘In early 2019 the North East of England had the highest unemployment rate of any region in the United Kingdom at 5.4 percent, while for the country as a whole, the unemployment rate was 3.8 percent. Although London had an unemployment rate higher than the national average at 4.4 percent, the South East, and South West regions of England were both lower at 3.2 and 2.4 percent respectively.’ (1)

 

‘Said they’d give you anything you ever wanted…’ 2

 

Referring back to the second article, ‘Parliament and the country hopelessly divided’; I wrote that whilst 73% of voters concerned about immigration voted ‘Leave’, I believed that their real discontent stemmed from the GFC, and the policy of austerity enforced by consecutive Tory governments leading to a prolonged and stealthy recession.

‘their real discontent stemmed from the GFC, and the policy of austerity’

This, I believe firmly establishes why the majority of voters supported ‘Leave’, the minority being Queen and country died in the wool Tories such as Bill Cash, and dissident right-wingers such as Nigel Farage.

The question now is; will the results of Brexit deliver what the silent majority are hoping for?

Johnson has made his electoral pledges to these people and has been rewarded with an 80-seat majority.

Whilst he has already delivered the only thing most people will remember from his election manifesto, I.E. we have left the European Union, his record shows that he has no fear of being caught in a blatant lie, indeed his supporters’ seem to expect no less of him.

Populism has the political beauty of having no fixed ideology, ideal for people such as Johnson whose sole belief seems to be his entitlement to rule.

For him to deliver ‘Level Up’ he needs to address geographic issues, building infrastructure to rehabilitate depressed regions, breaking with the Thatcherite method of letting them sink.

For example, bailing out Flybe, the failing regional airline, and it is taking privately run rail franchises into public ownership.

His weakness is the Faustian bargain he struck to deliver a hard Brexit to become leader of the Tory party. It is expected that any economic bounce this year will be short-lived as both inward direct investment and UK business investment dry up when access to the EU single market and customs union ceases.

‘His weakness is the Faustian bargain he struck to deliver a hard Brexit to become leader of the Tory party’

Johnsons much hyped ‘Brexit Bounce’ will be short lived, and our already large trade deficit in goods will widen as overseas exporters take advantage of zero tariffs, while services, our great strength, will be crippled by being denied their former EU markets, perhaps leading to recession and renewed austerity.

Johnson and his Brexit cabinet, supported by our Europhobic right-wing press, will immediately blame dastardly Europeans for the crisis.

The real issue for Johnson, and therefore for all of us, is that he cannot convert to a soft Brexit, as the afore-mentioned Faustian pact that led to him becoming leader leaves him at the mercy of the European Research Group.

If that wasn’t enough, there is still Nigel Farage, who recently told Andrew Marr that he was going nowhere: his Brexit party is here to stay, with a new Brexit Watch ‘insurance policy’ ready to ‘ring the alarm’ at any sign of Johnson backtracking.

Avoiding a hard-Brexit looks questionable. Days after proclaiming we would leave with peace, prosperity and friendship, Johnson turned on those he called our friends and neighbours, fighting them on our fisheries, on aviation, and their regulations.

This rejection of any alignment with any EU regulations risks creating a series of red lines that will block his freedom to manoeuvre, much in the same way as Theresa May did in her disastrous Lancaster house speech.

‘a series of red lines that will block his freedom to manoeuvre, much in the same way as Theresa May did’

The EU’s position remains unchanged: the more level playing field rules Britain accepts, the fewer the trade barriers. No alignment, no deal – and fair play must be fairly adjudicated by the European court. That was written into the political agreement Johnson signed.

Now to the silent majority this may be irrelevant, many may think that the less we have to do with the EU the better it will be. But it isn’t that simple.

To deliver on his pledge to Level Up’ he needs money, lots of it, and perhaps the Treasury pockets aren’t deep enough to support his overblown rhetoric on ending austerity. Added to this, the Bank of England predicts a miserly 1.1% growth for the next three years: a bad Brexit may drag GDP 7.7% lower, meaning even less revenue for the government to work with.

Indeed, the chancellor has warned every cabinet minister to find a huge 5% savings from departments that are overstretched, and by refusing to raise taxes, austerity is ‘baked in’, says the Institute for Fiscal Studies.

Johnson’s promises to splash cash on capital projects sounds compelling but the amount required to achieve real levelling up for the north are huge. For example, his £500m to reopen Beeching lines sounds wonderful, but that only buys 25 miles of railway.

This really leads to a simple conclusion; do we have the money required to ‘Level Up’? If we cannot, or will not, raise taxes, we need the economy to grow at a rate that allows us to realise greater revenue with which to deliver the necessary improvements required to ‘Level up’. If so, a hard-Brexit isn’t the way to go about it.

‘This really leads to a simple conclusion; do we have the money required to ‘Level Up’?’

This inevitably leads to next question; does Johnson really mean what he says about ‘Level Up’, or is it just another cheap slogan created by the increasingly Machiavellian Cummings aimed at buying votes?

When they fail to deliver ‘Level up’ they will, in true populist fashion, create a scapegoat; those dastardly Europeans forcing the country into a hard-Brexit, and stopping us fulfilling our destiny. It could be Germany and the 1919 Treaty of Versailles all over again’.

 

‘Your European son is gone
You’d better say so long
Your clown’s bid you goodbye’ 3

 

Therefore ‘getting it done’, ‘taking back control’, and ‘level up’ are no more than hollow promises dreamed up by Machiavellian PR genius, and spoken repeatedly by an egotist convinced only of his right to rule.

‘no more than hollow promises dreamed up by Machiavellian PR genius’

He speaks of the establishment, when he is the very embodiment of it. Educated at Eton College, reading Classics at Balliol College, Oxford, where he was elected President of the Oxford Union in 1986, not exactly ‘Che’ Guevara is he!

All the issues that lead to the masses voting for Brexit are nothing to do with Brexit or being an EU member, any government could have fixed them had they wanted to.

Only a few years ago, asked to list the countries problems most would have named the wealth gap, ailing NHS, north-south imbalance, crime, terrorism, austerity, housing crisis etc.

Only a few within the Tory party and the one-eyed cronies in UKIP would have said the EU. These few have been fighting this fight for decades.

The referendum dragged us all into the fight, and the masses allowed themselves to be cynically manipulated to deliver the nationalistic dreams of the few

The injustices and issues quoted above do not come from being members of the EU. Brussels didn’t insist that we neglect the post-industrial towns of the Midlands and the north, or demand that we let wages stagnate, or permit multimillion handouts to the CEOs of failing companies, or prefer shareholder value over the social good, or run our health service, social care and Sure Start into the ground, close 600 police stations and let state schools decay.

‘This decay and spread of inequality came about because of the Tories marriage to free-market economics’

This decay and spread of inequality came about because of the Tories marriage to free-market economics, when that failed us in 2008, they forced austerity on the masses to benefit the few.

They hide behind cheap slogans supported by claims such as ‘the people have spoken’. Nothing will change for those who are supposed to benefit from ‘Level up’, and the inheritance we leave our children is bleaker still.

Populists beware, the big battle is yet to be fought, you and the old are providing the ammunition for the real revolution, one led by youngsters such as Greta Thunberg, disheartened by your actions.

 

‘There’s a battle outside
And it is ragin’.
It’ll soon shake your windows…’ 4

 

Notes:

  1. Source: https://www.statista.com/statistics/297167/unemployment-rate-in-great-britain-by-region/

 

OK lyric spotters an unexpected but very welcome surprise this week as Philip decided to once again dip his quill, as ‘inspired by last week’s effort I realised that I hadn’t finished the job, and I wanted to revisit other thoughts and articles I had previously penned’.

Here Philip revisits the Global Financial Crisis and ‘why the masses voted leave and then Populist, sorry, Tory’!

Noting that even I troubled the scorer, in terms of the lyrics ‘we move away from last week’s “greatest hits” as that was obviously too easy!’ – he’s come up with some brutes, but some cracking tracks that are new to me.

Even though we’ve ‘got it done’, entries should be made in the time-worn fashion and standard network charges will be applied to all bar concessions.

First off the rank 1 is a new group on me, and boy is it fast and furious – be transported back to somewhere loud and sweaty by the extremely angry Minor Threat and 3 pts for ‘I Don’t Want to Hear it’

Next, 2 ‘all you favourite bands, Stooges, Velvet Underground, Sex Pistols, Ramones, rolled into one’; they’ve not really been on my radar, but certainly deserve attention – great track, 3 pts for The Strokes and ‘Is This it?’

3 Gets quite a billing – ‘Perhaps the greatest band ever and from their debut which is, perhaps, the most influential album ever’; which makes me feel slightly ashamed to say I didn’t get there, but 1 point if you got Velvet Underground and 3 pts for ‘European Son’ – and some spiteful bass.

4 ‘For, perhaps, the ultimate protest song there is only one person to turn-to, only 1 point, sorry’; I feel I’ve been put back in my place this week, but will gratefully accept my point – Bob Dylan and ‘The Times They are a-Changin’. Of course it is – enjoy!

Click on the link below to view previous Brexit Bulletins and see just how accurate Philip’s commentary has been over the past four years – which, depending upon your particular perspective, may not bode well for the next 11 months and beyond. 

 

 

 

Philip Gilbert 2Philip 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:

 

brexit fc

 





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