May
2024
Heroes: Election Special #1
DIY Investor
28 May 2024
“London is full of Arabs (Is full of Arabs)
We could be in Palestine
Overrun by the Chinese line
With the boys from the Mersey and the Thames and the Tyne”
As you will all be aware the general election has been called, D-day is the 4th July. “Heroes” will now go into election mode and will provide commentary of events in the campaign, alongside other relevant events.
As I will be away from 14-06 to 11-07 coverage will be impacted. However, there is rather neat symmetry to events as I will be in Ischia as the results are announced, just as I was in 2016 with the Brexit referendum, which gave birth to this column.
“Heroes” will now go into election mode
We start with inflation, which as we heard last week, the PM thinks he has beaten. For the record inflation is still in the economy, prices are still increasing, albeit at a slower rate.
There are two observations here. Firstly, I cannot think of one thing the government did to bring down inflation. The BoE raised interest rates to squeeze the economy, and the energy price spike cured itself once markets had adjusted to show caused by Russia’s invasion or Ukraine.
What should be of concern is the fear that bad weather, too hot in Europe, too wet in the UK, leads to poor harvests, meaning that there could be further food price inflation. Certainly the lack of interest rate cuts from both the Fed and BoE suggests that they fear inflation will stick around.
As a result this left Sunak with an economy that, would be at best a neutral factor in the election, and at worst a stick for Labour to beat the government with.
‘I cannot think of one thing the government did to bring down inflation’
Crucial to this economic outlook were relatively gloomy reports from IMF and the Organisation for Economic Cooperation and Development (OECD), the latter especially pessimistic suggesting that annual growth this year would be just 0.4%. The IMF pitched in with a slightly higher increase of 0.7%.
Official figures published after these reports showed that in the first three months of the year the economy grew by 0.6%, but economists suggest this could be revised down, and that with the Conservatives still in charge, growth would not climb above 1% for 2024.
In addition, the IMF’s assessment of the public finances predict a £30bn gap between what the government expected to spend and its forecast revenues over the next 5-years.
Whilst, the IMF said that, to be certain of stabilising debt by 2029-30, the government would need to increase borrowing, raise taxes or make savings equivalent to 1% of GDP – roughly £30bn.
‘The millions of people barely able to cope with shop prices 20% higher than they were in 2021 will also need a more substantial recovery before they can smile again’
With data such as this the Tories are in no position to criticise Labour, however, last week Sunak alleged a Labour government would cost every household an extra £2,000 a year, based on an analysis published by the Conservatives suggesting a £10bn gap in Labour’s spending plans by 2028-29.
Deficit figures from the Office for National Statistics supported this view, showing that the government was off to a poor start in April, the first month of the financial year.
As a result, going early gives Sunak the best chance of bragging about an recovery. However, this is unlikely to sway an electorate battered by waves of unnecessary economic shocks, from Boris Johnson’s hard Brexit to Liz Truss’s mini-budget fiasco. The millions of people barely able to cope with shop prices 20% higher than they were in 2021 will also need a more substantial recovery before they can smile again.
The economy aside, the general news doesn’t help the government. Recently there has been a great deal of coverage of how the DWP has failed carers, and worse, has pushed many onto debt.
‘the DWP has failed carers, and worse, has pushed many onto debt’
The latest outrage concerns 85-year-old Sia Kasparis, a grandmother-of-five, who has been bedbound for the last 2-years due to a collapsed vertebra and a range of other health problems, including vascular dementia, heart failure and kidney disease.
Sia relies on round-the-clock care from her son Andrew Kasparis, 66, who lives with her and has been her full-time carer since December 2019, which is when he began receiving about £50 a week from the DWP to look after her, known as the carer’s element of universal credit.
At this point, the rules state, Kasparis should have notified the DWP that her son was receiving this small weekly allowance as it meant she was no longer eligible for the severe disability premium of pension credit she had been receiving.
Her failure to do so, has resulted in the DWP forcing her to pay back almost £13,000 in overpayments which their failings allowed to build for nearly 4-years.
Sia speaks limited English, had no idea about this requirement for her to contact the DWP because of her serious health conditions, of which the department was aware.
On 14 March, the DWP sent two officers to Kasparis’s ground-floor flat in Islington, north London, to hand-deliver the demand to repay £12,919.29.
Andrew said the two “burly” officers told him they were only there to ensure his mother received the repayment notice – “like bailiffs” – and they could not answer any questions about it.
“This is what they do to vulnerable people,” he said. “They knew they were visiting an 85-year-old woman with dementia. I just felt it was quite intimidating.”
“They knew they were visiting an 85-year-old woman with dementia. I just felt it was quite intimidating”
Examples such as this are now becoming the norm, which leads to wonder what actually do the Tories care about?
Well, yesterday I found out, it’s security!
And how is drippy Rishi going to deal with this, simples; he is proposing to introduce mandatory national service for teenagers.
It would appear that Sunak’s aides believe they can pull off the apparently impossible, overturning a 20-point poll deficit, by running a campaign that forces voters to look seriously at their two main rivals: Labour and Reform UK.
By focussing on security, the Tories hope to make voters – particularly Reform voters – nervous about the prospect of major change under a Labour government.
“Everything in the campaign falls under the ‘security’ banner”
“Everything in the campaign falls under the ‘security’ banner,” said one senior Conservative official. “That will mostly be about the economy, but also security of borders, safety on the streets at home and global risks that affect your economic security.”
A YouGov poll carried out after the election was called put Labour on 44%, the Conservatives second on 22% and Reform UK third on 14%. By shaving some points off Reform’s share, the Tories hope to start narrowing Labour’s lead in the first weeks of the campaign.
‘the failure of Rishi’s Rwanda wheeze, has played into the hands of the anti-immigration party Reform UK, which is threatening to peel millions of votes away from the Tories’
Embedded in their security message is immigration, although quite how mystifies me.
We have wasted months and hundreds of millions of pounds trying to deport asylum seekers to Rwanda. As yet not one plane has taken off.
Apparently there message will be “….flights [taking] off with us, flights grounded and an amnesty for illegal immigrants under Starmer.”
Unfortunately, the failure of Rishi’s Rwanda wheeze, has played into the hands of the anti-immigration party Reform UK, which is threatening to peel millions of votes away from the Tories.
Richard Tice, Reform’s leader, was keen on Thursday to talk about the prime minister’s admission. “We know the Tories have lied to us,” he said. Nigel Farage told Sky News on Sunday that any vote for the Conservatives or Labour party was a vote for “mass immigration”.
Actually, all of this fiasco is quite revealing. Sunak, as with all Tory leaders since 2010 is terrified of Nigel Farage, in whatever current incarnation he assumes.
Farage is their nemesis, the puppet-master to who’s tune they dance. Should, as appears likely that they loose badly in July, it would appears the future of the party is for Farage to decide.
‘Farage is their nemesis, the puppet-master to who’s tune they dance’
Do hard-right Tories defect to Reform, or do Reform merge with a hard-right Tory party? We will ether be left with whatever is left of One Nation Tories, or will they defect to Labour or the Lib Dems.
Farage is a divisive racist and nationalist, but that holds appeal for some voters.
Nigel Farage has come under fire for using his first election interview to “spout Islamophobia, hatred and divisive comments” after he said a growing number of Muslims do not share British values.
Reflecting on his decision not to stand at this election, Farage told GB News: “I’ve chosen I want to be part of the national debate, not just in a constituency, and I will be that, and believe you me, I’m going to do my best to expose some of the absolute nonsense that are being discussed over immigration and economics.”
‘populists deal in utopia, they sell a vision, and serve up scapegoats not solutions’
Speaking on Sky News’, the former Ukip leader said: “We have a growing number of young people in this country who do not subscribe to British values, [who] in fact loathe much of what we stand for.”
When asked if he was talking about Muslims, Farage responded, “We are. … And I’m afraid I found some of the recent surveys saying that 46% of British Muslims support Hamas – support a terrorist organisation that is proscribed in this country.”
Both Reform and the current incarnation of the Tory party are populists, which is reflected in words and actions; it’s a sea of negativity but with no solutions offered. The reason is simple populists deal in utopia, they sell a vision, and serve up scapegoats not solutions.
A Labour source summed this up perfectly; the Conservatives and the Reform party were “two sides of the same broken coin, ramping up the rhetoric without offering any real solutions”.
Farage’s big policy was Brexit. He got it in spades, a hard Brexit, which as been shown to be a total failure on all accounts. After that how anyone can pay any attention to anything he says?
By comparison Labour have been quiet, perhaps it their version of Ali’s “rope a dope”. There are, after all, a surfeit of dopes in the Tory party.
‘There will be no return to austerity under a Labour government,’ says Rachel Reeves
Shadow chancellor Rachel Reeves said there will be “no return to austerity under a Labour government”.
Speaking to the BBC’s Sunday with Laura Kuenssberg, Reeves said Labour plans for an immediate injection of cash into frontline public services would see an extra 40,000 NHS appointments a week, and an additional 6,500 teachers in state schools and 13,000 police and community support officers.
The funding would come from plans including tightening up rules on non doms, cracking down on tax avoidance and windfall tax on energy companies.
Reeves was challenged by Kuenssberg that that the measures were “tiny” compared to the overall budget, and asked if Labour would stick with the Conservatives spending plans which implied a big squeeze on public services.
“just another desperate gimmick” with “no viable means of funding it”
Rachel Reeves, the shadow chancellor, dismissed the national service plans as “just another desperate gimmick” with “no viable means of funding it.”
Her “No 1 commitment is to bring stability back to the economy. There is not going to be a return to austerity under a Labour government”.
She added: “But we have got that immediate injection of cash into our frontline public services. That’s a down payment on the changes we want to make, but in the end we have to grow the economy.”
Ahh, yes, that old chestnut growth. Perhaps it time for a new measure? I propose the Gini coefficient, which measures the inequality among the values of a frequency distribution, such as levels of income.
“Living on borrowed time and borrowed money
Sleepin’ on the street there ain’t a damn thing funny
Hand me down food and hand me down clothes”
And they’re off; it feels as though we’ve been building to this moment for months if not years, and there is going to be fireworks.
Rishi’s start to the campaign has been characteristically error strewn, and just as an early gift to Philip, he’s flipped him ‘National Service, er Community Service…’ to be despatched over the bleachers.
Philip sets the scene far better than I could and is going to bring together all the threads that have featured so regularly:
We are now approaching the end-game and the lame duck limps no more.
Come 4th July, barring a miracle, or nightmare, depending on your viewpoint, 14-yrs of Tory mis-government will come to an end.
It started with a coalition government with the LibDems, who became more Tory than the Tories. It will be remembered for Nick Clegg, the LibDem leader changing his mind on tuition fees, and the austerity of Messrs Cameron and Osborne, or Dumb and Dumber. The latter doing more to shape the next 14-yrs than anything else, and leaving a whole generation in relative poverty.
We then had the first Tory majority, which saw the continuation of austerity, presumably to make sure it delivered as much misery as possible. Then there was Cameron’s panicked rash foolishness, the promised Brexit referendum.
Post the vote to “Leave” Cameron resigned, and Tory’s played pass the parcel with the role of PM. The baton was initially passed to Theresa May. She was much maligned, and led a merry dance by her own parties European Reform Group, who behaved like self-obsessed hooligans.
May didn’t last but then who could have done. It was clear that we were heading for a hard-Brexit, so it was no surprise when the clown and liar-in-chief, Boris Johnson, became PM. His first action was to prorogue, close, parliament, lying to the Queen in the process.
Covid aside, Johnson’s lies, and his complete self-obsession was always going to cause his downfall.
This is when the Tories really began to excel. First up was the deluded and dangerous Liz Truss, whose premiership was outlasted by a lettuce and cost the country C. £1bn per day.
Last-up was Sunak, the runt of the litter. The gilded prince replete with billionaire wife, and the least political acumen of any PM in living memory.
This is a story of failures and failure, but it isn’t that simple. For the past 12-yrs the narrative has been controlled not by the government, but by an unelected rabble rouser, Nigel Farage. The Tories are so terrified of him that they have become his alter-ego.
There was no need for a Brexit referendum, but Cameron lost his bottle. That’s if he ever had any.
Farage then demanded a hard-Brexit which we duly got. His electoral pact with the Tories handed Johnson his sweeping majority in 2019.
Even today, Sunak and his horde are terrified of Reform, the name of Farage’s latest mob, and Farage isn’t even standing for election.
I now find the Tories simply pathetic, beneath contempt. Summed-up by national service…..
In tribute to that mind-numbingly ridiculous idea we start with “Oliver’s Army” by Elvis Costello. In tribute to all the misery caused by unnecessary austerity we end with “Johnny Ryall” by the Beastie Boys. 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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