The Times They Are A-Changin’: Is Capitalism Serving the Masses? 

 

 

 

“Well, he hands you a nickel, he hands you a dime
He asks you with a grin if you’re havin’ a good time
Then he fines you every time you slam the door” 

 

 

This wasn’t intended to be a follow-on from “Everything Comes as a Price”, but the cost-of-living crisis shows no sign of abating. Previously, I had highlighted central banks failings when trying to deal with the supply-side inflation of 2021-24. There old playbook of monetarism was designed to deal with demand led inflation, as a result the rates increases achieved nothing other than inducing more misery and slowing already mundane growth. 

 

The BoE and the Tory government congratulated themselves when inflation fell back, but that was based on energy prices falling rather than their rate increases. 

The lesson here when dealing with one-off supply side increases is leave interest rates alone, if you need to tamper, lower them. 

The illegal Iran war is now increasing energy prices which, in-turn will hit people hard. This could, if the government grasps the nettle, present an opportunity that would show the electorate that they understand how capitalism, in its present form, only benefits the minority. 

In the previous article is suggested looking at what some analysts are suggesting; to deal with the energy price shocks, suppliers should support and coordinate with the government to implement price caps or controls on energy services and not simply pass on increases to consumers.   

 

‘The illegal Iran war is now increasing energy prices which, in-turn will hit people hard’

  

Of course, I realise that I am talking rubbish, it will never happen. But, for a government facing wipe-out in the forthcoming local elections, such forward thinking might just save them. 

To highlight my thoughts, I decided to look back to the 2021-23 crisis. 

Unsurprisingly, I found that our heating and energy costs between 2020 and 2026, moved from historically low prices to a peak energy crisis in 2022–2023, followed by a gradual, albeit volatile, easing in 2024–2026. Whilst average bills are now decreasing, they remain C.35% higher than pre-2022 crisis levels.  

 

Source: The House of Commons Library 

 

This can be summarised thus: 

2020–2021 (Pre-Crisis): Average annual dual-fuel bills were C.£1,000–£1,200. 

2022–2023 (Crisis Peak):Average bills peaked under the Energy Price Guarantee (EPG) at C.£2,500–£3,000+ per year. 

2024–2025 (Stabilising): Bills fell from the 2023 peak but remained well above pre-crisis levels. 

January 2026: The Ofgem price cap for a typical household was £1,758 per year. 

April 2026: The cap fell to £1,641 per year, a 6.7% reduction, partly due to government action removing some green levies. 

Going forward, the forecast for July is that bills will increase to C.£1,800+ 

 

Next, I wanted to understand how suppliers dealt with this; did they take a hit to profits, or benefit at consumers expense? 

What I found was that heating and energy companies experienced significant profit growth between 2020 and 2026, driven by volatile energy prices, a surge in boiler replacements, and a rapid increase in heat pump installations. Analysis shows the energy sector experienced “excessive” profits, with an average profit margin of 23%, 3x the national average, peaking around 2024.  

 

Source: Unite the Union 

 

In 2024, energy companies made a total of £30 billion in pre-tax profits, with over £125 billion in profits generated by UK operations since the start of the energy crisis in 2020. 

Their profit margins soared to 55% between 2020 and 2024, far exceeding the FTSE 350 average of 14%. British Gas (Centrica), reported a “10-fold” increase in profits in 2023, jumping to £751 million from £72 million in 2022, before seeing profits drop in 2025 due to normalizing market conditions. 

 

‘British Gas (Centrica), reported a “10-fold” increase in profits in 2023, jumping to £751 million from £72 million in 2022’

 

Centrica are a UK business listed on the LSE, whilst other providers have overseas owners: EDF Energy: is 100% owned by the French government-owned utility Électricité de France;  E.ON Next is part of German firm E.ON SE; ScottishPower is owned by Span’s Iberdrola. 

What becomes clear, is that energy providers exacerbated an already bad situation by adding “profit-price” inflation into the mix. Proof that capitalism, in its present format, doesn’t serve the masses. 

This time around the chancellor says that helping people with the cost of living is a priority, and the Competition and Markets Authority will be given new powers to deal with price gouging, as part of “a new anti-profiteering framework.” 

Any implementation of price controls and caps on energy providers could be a vote winner for Labour, helping to return them to the forefront of progressive politics. 

 

Currently, the polls show how disillusioned voters are with them: 

• Labour; -724 

• Conservative; -416 

• LibDems; +196 

• Greens; +308 

• Reform; +751 

Source: https://www.pollcheck.co.uk/locals-2026 

 

Whilst the party might try to explain this as something they have successfully overcome previously, this time, in the new 5-party world, a comeback might be difficult. This time around, the forthcoming local and devolved elections look to be a uniquely negative, in part because Nigel Farage now generates as much ill- feeling across the country as Keir Starmer. 

Whilst Farage’s Reform party appear to have plateaued in the polls, 38% of people now say they would vote against them, an increase of nine points since November 2025. 

The anti-voters are split, some are hoping to teach the government a lesson, while others want to keep Reform UK out of power. It would appear that few are likely to cast their ballots with a positive view of who they support. 

This could become known as the “anyone but Labour” or an “anyone but Reform”, or just the “anyone but” set of elections. 

Luke Tryl, a director of More in Common, said: “It’s rare to hear so much discussion about tactical voting among the public. But across the country more and more people are describing their vote in terms of who they want to stop rather than who they want to win.”  

 

‘This could become known as the “anyone but Labour” or an “anyone but Reform”, or just the “anyone but” set of elections’

 

Reform acknowledge that many centrist and left-leaning voters may vote tactically against them, and explain this as showing that the “mainstream” parties are all the same and only they offers a true alternative. 

In the recent Gorton and Denton byelection, tactical voters were to the fore, with voters believing it was safe to vote Green and still prevent a Reform victory. 

Post this byelection, Labour’s deputy leader, Lucy Powell, said it was clear across both sides of the constituency that the Green vote went far beyond their traditional base of urban liberal voters and that the Greens had successfully convinced voters they were a hopeful choice and the tactical choice to beat Reform. 

What we know see is a clear polarisation between left and right parties and voters. 

On the left, Labour, the Lib Dems and the Greens support has fluctuated between 43% and 47% since January 2025. 

Within this, it should be noted that the Lib Dems appealed to wavering Conservative voters, especially in the south of England, however they remain on the progressive side of politics. 

The right-wing bloc of Conservatives and Reform hovers between 44% and 49%. 

Within this left flank, a report by the non-partisan analysts Persuasion UK, highlights the fact that Labours’ loss of support to the Greens, LibDems, Plaid Cymru and the SNP is both larger and more reversible than its loss of support to Reform UK. The report found that “About 10% of the electorate” is “open” to either returning or switching to Labour from other progressive parties. Whether or not the party secures a substantial proportion of these disaffected voters could make the difference between a general election win and a rout. 

If, as the polls are suggesting, there is no majority party, then Labour needs to consider its coalition possibilities.  

The Lib Dem leader, Ed Davey, has not ruled out a coalition with Labour, which could go some way to reestablishing the party’s credentials after their disastrous involvement in David Cameron’s right-wing government, showing them once again as a genuine centre party. 

The Greens’ leader, Zack Polanski, has said that he “could see the potential to work with” Labour to stop Reform” – and to draw Labour into “conversations about proportional representation, a wealth tax, climate action”. However, his support is conditional, based on Andy Burnham being Labour leader rather than  Starmer. This change remains a challenge whilst Burham isn’t an MP.  

Of course, no 21st century political discourse would be complete without immigration being discussed. 

In “Have we Returned to the 1930s”, I highlighted how WW1 and the economic aftermath led to rampant antisemitism, and, 100-yrs later, how a similar backdrop was fuelling islamophobia. 

Before anyone gets all antsy about the firebombs in north London last weekend, I have no time for anti-anything; live an let live! All I will say, is that constant unrest in the Middle East creates the conditions for breeding terrorism. 

 

‘opportunist leaders took the opportunity presented by economic instability to breed discontent and racism’

 

Recently, we heard from Nick Timothy, the shadow justice secretary, who said that the open iftar held in Trafalgar Square was part of an “Islamist playbook” seeking to replace Christianity. 

In his Telegraph article, Timothy said the Trafalgar Square event should be banned, writing: “A memorial to national independence, Trafalgar Square belongs to us all. To use it as a stage for this act of domination and division is completely wrong, and it should never be allowed to happen again.” 

This has been adopted by Nigel Farage and Kemi Badenoch, who have both sought to suggest that public iftars are an affront to the Christian values of our country.  

Farage said the event, organised by the Ramadan Tent Project and attended by Sadiq Khan, London’s mayor, was “an open, deliberate, wilful attempt, not at the private observance of a different religion, but the attempt to overtake, intimidate and dominate our way of life”. 

The fact this has taken place at Trafalgar Square for the past six years, suggests that this is little more than politics and empty vessels seeking to fuel the fire. 

 

“Those who fail to learn from history are doomed/condemned to repeat it“ 

 

As readers will know, I am not a religious person, however I found the comments of Arun Arora the bishop of Kirkstall to be well founded: 

“Timothy’s suggestion that the public iftar event was part of an “Islamist playbook” seeking to replace Christianity is sufficiently irrational in its fear and scaremongering to make it definitive as an Islamophobic slur masquerading as public policy concern…… The attempts of those on the political right to elide Islamophobia and Christian values stand starkly at odds with true practice of the Christian faith.” 

Another well thought out criticism came from Richard Hermer, the attorney general and prominent Jewish politician, who said:  “Nick Timothy has said mass prayer in public places is an act of ‘domination. But when he and Kemi Badenoch were questioned about his appalling views, they seemed to only have an issue with Muslim events. 

“Timothy and Badenoch’s comments beg the question – would they have a problem if I as a Jewish man, were praying in public? Or is it just Muslim prayer they find offensive, and contrary to ‘British values’? 

Over the past 100+yrs there has always been an ideological divide between left and right. However, there are times when that divide moves from healthy debate to sheer divisiveness we saw in the 1930’s.Then, as with now, opportunist leaders took the opportunity presented by economic instability to breed discontent and racism. 

“Those who fail to learn from history are doomed/condemned to repeat it“ 

 

“Well, when exactly do you mean?
See, I’ve already waited too long
And all my hope is gone” 

 

As the article says this wasn’t intended as a follow-on, but ended up that way.

It is interesting to see how Trump’s excursion into Iran, and its unpopularity is having knock-on effects with all his “Mini-Me’s” in Europe.

In the UK, despite Farage’s best efforts to claim he’s never heard of Trump, Reform seems to be peaking. At the same time the “anyone but Farage” movement is picking up traction.

The climate crisis, which has taken on a new lease of life with the Iran war, could be a defining moment.

I was reading about Boston in Lincs, which appears to be on the frontline of our flood crisis. Experts are now saying that some towns could effectively be abandoned as climate breakdown makes them uninsurable.

The Environment Agency estimates that 91% of buildings in the Boston and Skegness constituency are at some level of flood risk – more than in any other English constituency. This situation is not helped by our winters getting wetter due to climate breakdown, with warmer air holding more water vapour, meaning heavier downpours.

Unfortunately for Boston, their local MP Richard Tice, is one of Reform UK’s most ardent opponents of climate action, describing our efforts to reach net zero as “net stupid”. Just a month after the flooding hit homes in his constituency, Tice told Sky News that the idea of human-made climate change was “garbage”.

This highlights an ongoing voter disconnect for Reform, as a recent survey by Hope Not Hate found that, unlike some of the party’s MPs, more than half of Reform’s would-be voters agree that climate change is caused by human activities.

Alasdair Johnstone, of the Energy and Climate Intelligence Unit (ECIU), says there is a growing tension between the climate-sceptic instincts of Reform and the day-to-day reality of many of its voters and supporters.

Johnstone said: “We are seeing that, as people see first-hand the impacts of climate change on their lives, it does not sit well when they are told this is not happening – there is an obvious tension there.”

Lyrically, we start with “Maggie’s Farm” by Bob Dylan, and end with “How Soon Is Now?” by The Smiths

Seeing Reform struggle makes things like that much more enjoyable!

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

Click on the link to see all Brexit Bulletins: