The Times They Are A-Changin’: State of the Nation 

 

 

“Don’t wanna hear about it
Every single one’s got a story to tell”  

 

As we enter the Burham era, its time to take stock of where the country is…..moribund! 

 

The state of our water industry highlights the situation: the failure of Thatcherism’s free-market privatisation and the dominance of capital over workers, as the few benefit at the expense of the majority.   

The wettest winter in history, has been followed by hosepipe bans due to water shortages. The real culprit is the industry not maintaining its infrastructure, resulting in C.20% of all water reserves lost to leaks. 

On average, 28% of our bills service their corporate debt, incurred by paying shareholders billions in dividends. 

Public favours renationalisation, with a YouGov survey showing 82% support. 

Despite this, the government procrastinates, insisting the cost could be up to £100bn, a somewhat erroneous number which includes their debt in the overall valuation.  

Professor Ewan McGaughey, professor of Law at King College London and co-author of the People’s Commission argues that the true cost is closer to zero as a more accurate market valuation would account for performance and financial failures. 

 

‘28% of our bills service their corporate debt, incurred by paying shareholders billions in dividends’

 

Finances aside, the water providers are a source of pollution. 

Thames Water have been testing a controversial water recycling scheme that will pump millions of litres of treated sewage into the River Thames during droughts. Tests revealed that levels of a toxic “forever chemical” rose to 13x the legal limit, whereas Thames had said the project  wouldn’t harm the riverine environment. 

In addition, the treated water contained very high levels of iron, which the document states would have a “significant detrimental impact” on the river. 

Turning to the economy, Burnham has inherited the classic catch-22: we need to spend more to satisfy peoples wishes, but he can’t raise taxes, and the debt markets are, according to the right-wing media, in “crisis.” 

Starting with the facts: the UK 30-yr  yields C.5.8%, and the 10-yr C.5.3%, its highest level since June 2008. 

Joel Kruger, market strategist at LMAX Group, says: “The dominant theme as markets open is the renewed escalation between the US and Iran, with attacks on Iranian military and tanker targets raising concerns over further disruption in the Strait of Hormuz”. 

It is Trumpflation that is causing yields to rise. 

 

‘It is Trumpflation that is causing yields to rise’

 

Another issue is the BoE ‘quantitative tightening’ programme, with the Bank due to decide later this month whether to maintain or slow it down. 

The reaction of a hostile right-wing media, serves only to demonstrate their fundamental ignorance. 

Western economies aren’t on the verge of a bond meltdown, what we are seeing is markets returning to “normal”; to real interest rates that reflect the global economy and where nations are.  

Current bond yields are not extreme. They are low by historical standards. 

Talk of defaults due to high debt levels, and bond vigilantes are exaggerated and magnified by politically motivated media. 

Our low growth post-Brexit doesn’t help, but the longer duration of our debt puts us in a better position than most.. 

 

 

Trumpflation is impacting almost everyone, everywhere. 

 

Analysis by the Centre for Economics and Business Research shows that UK households will suffer an average £2,400 financial hit from the Iran war by the end of 2027. 

In total, £70.4bn will be wiped off UK households’ real disposable incomes by the conflict. 

Before the Iran war began, the BoE had been expected to cut interest rates this year. Instead, borrowing costs have been left unchanged, with markets expecting one rate rise by December. 

Last week, the Energy and Climate Intelligence Unit thinktank (ECIU) calculated that higher wholesale oil and gas prices since the start of the US-Iran war, will add an estimated £9.8bn to UK energy and road transport costs. UK gas and electricity users face paying an extra £190m for each week the conflict continues. 

The official opposition, the Tories, have decided a return to former follies, in the shape of “Trussonics”, is the way forward. 

Party leader, Kemi Badenoch, called the PM a “spendthrift” and “people pleaser” who will dodge the tough decisions required to prove Britain’s creditworthiness on international markets. She expects him to yield to Labour MPs’ demands for budget increases, which will then have to be financed with tax rises. 

It would appear that Kemi sees her position as rehabilitating small-state Conservativism, offering strict budget management, being less profligate than Labour and more sober and respectable than Reform. 

Kemi is the latest in a long-line of Tory leaders claiming to be the true descendent of Thatcherism.  

Of course, we cannot let the moment pass without referring to Liz Truss, who, replete with Thatcherite “pussy-bows”, gave us a “mini-budget” that was little more than an experiment in fiscal irresponsibility masquerading as free-market radicalism. 

 

“If Nigel Farage can’t handle difficult questions about his dodgy £5m, then he shouldn’t be a politician”

 

The failure of this experiment hasn’t deterred Kemi who, this week appointed Andrew Griffithas  shadow-chancellor. His resume includes being in Truss’s treasury team, and enthusiastically supporting her plans! 

Reform, whose conference begins today, have been having a tough time recently. 

They were the main losers with the Burnham “bounce”, there was the Clacton byelection fiasco, and donations. 

Reform sells itself as supporters of free-speech, but, as with all strutting totalitarians,  only on their terms. As a result, they have banned at least three journalists from their annual conference, as they don’t approve of their critical reporting, especially after the Guardian broke the story surrounding Reform’s dodgy donations. 

  

Unusually, we leave the last word to Kemi Badenoch who, when asked by Emilio Casalicchio from Politico about these bans appearing to be based on Farage’s £5m donation he didn’t declare, replied: “If you look at Nigel Farage’s attacks on the press, some of them very personal … you look at the things that Zia Yusuf says about journalists constantly, you know what kind of government they would be – authoritarian and using state power to pursue opponents. [That is] what they’ve effectively been threatening. 

 

“If Nigel Farage can’t handle difficult questions about his dodgy £5m, then he shouldn’t be a politician.” 

 

 

“You have the right to free speech
As long as
You’re not dumb enough to actually try it”  

 

In this piece, I have tried to assess the state of the nation in 1,000 words. I suspect, most would use one word: “broken.”

For the vast majority this would ring true.

But, it has taken 40+ yrs to reach this point, and it simply cannot be fixed overnight.

External factors are causing economic havoc, all down to one person: Trump, whose wars and tariffs export inflation around the globe.

We have become addicted to low taxation, and any attempts to increase it will be met with cries of “communism!”

The two-main parties have led is here, and voters have lost the faith. Reform provides an alternative and scapegoats.

Economically, they are full of contradictions. On the one hand, they correctly identify the need to reindustrialize, but on the other, it is all neoliberal, supply-side policies, which, as we have seen, creates inequality.

The type of donors they are attracting tells you all you need to know. Uber rich, they will want regulation and taxes slashed. In conclusion, Reform are Tories on steroids, wearing black shirts.

I have given-up on the majority of the media. They appear to be a horde of revisionist racists imbued with Thatcherism – not pleasant!

Where Burnham goes, I cannot begin to guess. The bottom-line is he needs revenue; where he finds it, I have no idea.

Perhaps, he will end-up like all the others. Maybe he’s just a more smiling, less dithering Kier?

Lyrically, we start with “Seven Nation Army” by The White Stripes, and end with “Know Your Rights” by The Clash

A good w/e to all

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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