I’m So Bored With the USA: “Big Business is Very Wise” 

 

“And I have a new goal
I’m changing my ways where money applies” 

 

 

“How did things ever get so far? I don’t know. It was so unfortunate, so unnecessary.” 

 

 

Child poverty is endemic in British society. A fact that, in 2025, should not happen. The reality is that: 

 

• 1-million children sleep without a bed of their own.  

• 2-million households live without cookers, fridges or washing machines, and many are without toothpaste, soap or shampoo. 

• 3-million children go without meals because their families run out of food. 

• Under the government’s official definition, 4.5- million children live in poverty, a figure that is projected to reach 4.8 million by 2029.  

 

Much of this can be blamed on 14-yrs of Tory misgovernment, especially their two-child benefit cap, which made subsequent children into second-class citizens, depriving them of all the income support available to their first and second siblings. 

In 2010, the Trussell Trust ran 35 food banks in the UK, today, along with independent ones, there are 2,800.  

The Conservative party and their adoring media have always cultivated the myth that poverty is the fault of work-shy parents and a culture of dependency. The reality is that 70% of children in poverty live in families where someone is working but on pay too low to make ends meet. Many of the rest are single parents unable to work because they cannot afford childcare or are coping with illness in the family.  

This should be changing, after all we now have a Labour government. Only this isn’t Labour, it isn’t even New Labour. It’s a mutant hybrid with a leadership that has no idea what it is. Something I covered more fully in “Personality Crisis”. As such, not only is it not fit for purpose, it is pointless. 

 

‘70% of children in poverty live in families where someone is working but on pay too low to make ends meet’

 

PM Starmer will stand behind his governments child poverty review, but what is there to review? The numbers speak for themselves, and the solution is obvious; abolishing the two-child rule cost £2bn in 2025-26 and £2.8bn by the end of the parliament. As the Resolution Foundation has shown, almost 500,000 children can be lifted out of poverty by 2029-30 at a total cost of £3.5bn. 

A damning indictment of Starmer’s government is that, since the election, the number of homeless children in temporary accommodation in England has risen by 17,510 to 169,050.  

“We cant afford it” is his governments mantra. If you replace “can’t” with “don’t want to” you uncover the truth. Children aren’t his priority, its rockets and guns. In the Spring Statement 2025, the government announced a £2.2 billion uplift to the Ministry of Defence budget for 2025/26. 

PM Starmer thinks growth is the answer. It might be, except for two reasons; firstly, it will take a miracle well beyond his capabilities to move our moribund economy. Secondly, if by some quirk of fate that was to happen, will the benefits stay at the top, as has happened previously?   

In days of old Labour PMs met the unions, attended their conferences. Today its big businesses turn, and regulators and regulations are to be slashed; regulation is a “boot on the neck” of business. Could this phrase be to the 2020s what “Lunch is for wimps“, was for the 1980s? 

 

‘She looks like a deer in the headlights, lacking a coherent plan. She sounds like a Tory chancellor‘

 

Scarborough and the TUC conference has been replaced by jetting to Davos to court the global elite, and preparing to greenlight airport expansion. 

“She’s fiddling while Rome burns,” said David Blanchflower, a former Bank of England policymaker. “She looks like a deer in the headlights, lacking a coherent plan. She sounds like a Tory chancellor. Where is the alternative?” 

The water industry and its ongoing shenanigans, does much to highlight just how much this government is Torylite, in bed with business. 

They make lots of noise, generate some decent headlines, and nothing. In “Beware Politicians Bearing Gifts”, I talked about how Yorkshire Water brazenly ignore the regulators rules on executive bonuses.  

In March, the company was ordered to pay £40m for the “unacceptable impact” of sewage spills blamed on poor maintenance. It was one of six firms caught by Labour’s new bonus ban for the most serious polluters, passed under the Water (Special Measures) Act earlier this year.  

Basically, the company ignored the ban and paid  its chief executive, Nicola Shaw, an additional £660,000 for “investor-related” work last year – on top of her £689,000 take home pay. 

For their part, Yorkshire Water’s defence is that the money was paid from Kelda Holdings, the firm’s offshore parent. The obvious question is, why does a UK utilities business need an offshore entity? 

The most likely answer is, that it is one-step removed from the regulated business, allowing them to avoid regulation. As a result, “enforcement becomes a matter of interpretation.” 

The government will again make noises, but the environment secretary, Steve Reed, seems unbale to see beyond threats. Perhaps he is another one looking at what opportunities might present themselves when he leaves government? 

Yorkshire aren’t the only miscreant, Southern Water, also under the bonus ban, nearly doubled the pay package awarded to its CEO to £1.4m. What did Steve do? Urged him to turn it down.  

The government appears dazzled, like a rabbit in the headlights, unwilling to react. As the Guardian wrote:  “The logic seems to be that enforcement risks spooking the investors needed to fund long-overdue infrastructure upgrades.” 

The water industry typifies much of what has gone wrong over the last 45-yrs: too much of the country has been financialised to the point of dysfunction. What we now have is quasi-government frightened to realise the structural reforms that are required. 

Another part of our infrastructure that suffer financialisaton is residential property. 

 

‘too much of the country has been financialised to the point of dysfunction’

 

A new report from the thinktank Common Wealth singles out the right to buy policy of Margaret Thatcher as the prime cause. In effect, right to buy was a massive giveaway of public resources, one of the largest privatisations in British history. 

Focused on England, the report’s figures show that since the policy’s introduction in 1980, 1.9m council homes were sold at an average discount to market of 44%. This discount resulted in councils giving up £194bn in equity. Today, more than 40% of the homes sold under the right to buy are now privately rented.  

Before the policy was enacted, social housing of all types made up 31% of overall housing tenure in England. Today it is 16%. As a result, council housing waiting lists and homelessness have surged. 

In addition, right to buy also made building new council housing less viable. As one council officer put it: “It makes us all more cautious about growing our stock.” If councils must sell at a discount any social housing units they build, then doing so becomes a risky venture. 

Rules about spending right-to-buy proceeds have been relaxed, but they still restrict the construction of new public housing. One council has calculated that it would need to sell six homes through the right to buy to generate enough funding to build one new home. The policy amounts to, in the report’s words, a “decision to de facto ban new social housebuilding”. 

You would think, perhaps even hope, that a Labour government, one with such an overwhelming majority, could bring about change and reform. 

Instead we have just been given more of the same. Small wonder that what was the two main parties find themselves trailing behind Reform. 

All to often since 2008 we hear the same mantra…”we can’t afford it”. And, as both main parties are now the party’s of low taxation, tax rates can only go down. 

Today, former chancellor and PM, Gordon Brown, highlighted our gaming industry.  

Excluding the lottery, this was an £11.5bn sector last year that incurred only £2.5bn in tax. Brown believes that up to £3bn extra could be raised from taxing it properly. “Remote gaming duty (effectively the tax on online slots games) is about 35% in the Netherlands, 40% in Austria, 50% in Pennsylvania and 57% in tax haven Delaware, two of the few US states where it is legal. Yet the same activity is taxed at just 21% in the UK, raising only £1bn. Applying a 50% levy – much less than the 80% tax on cigarettes and the 70% tax on whisky – would raise £1.6bn more. Raising the general betting duty on bookmakers’ profits from 15% to 25% could generate an additional £450m, after returning £100m as additional support to boost the horseracing industry.” 

Of course, this is another suggestion that will be poo-poohed. Can’t upset business, they don’t want to pay. 

Over in la-la land, President Trump continues to poke his noise in where it isn’t required. 

This time it was Jaguar Land Rover’s (“JLR”) divisive rebranding strategy, hours after Britain’s largest carmaker announced its new boss. 

 

‘Trump continues to poke his noise in where it isn’t required’

 

Posting on his Truth Social platform, Trump wrote that the auto company, owned by India’s Tata Motors, was “in absolute turmoil” and claimed that the “CEO resigned in disgrace”. 

He continued, describing JLR’s recent much-criticised advert – which showed a diverse group of models in brightly coloured clothing set against a vibrant backdrop and was designed to launch the company’s rebrand – as a “stupid, and seriously WOKE advertisement. Who wants to buy a Jaguar after looking at that disgraceful ad?”   

Looking at the data, it would seem quite a few people in the US do, certainly more than Brits are buying Tesla’s. 

 

‘Trump fiddles, Starmer and Reeves do nothing. It’s hard to know which is worse!’

 

Recent data shows that only 987 new Tesla’s were registered in the UK in July, almost 60% less than the 2,462 registered in July 2024. Tesla’s UK market is now 0.7%, down from 1.67% a year ago. 

Moving on from cars, Trump’s latest wave of country-specific tariffs have come into force. 

Just before midnight, Trump claimed on social media that billions of dollars would start flowing into the US as a result of the tariffs. 

Trump wrote: “The only thing that can stop America’s greatness would be a radical left court that wants to see our country fail”. A reference to ongoing case in the US court of appeals which is considering whether he exceeded his authority in imposing the “reciprocal” tariffs. 

As this column continues to highlight the biggest loser is the US consumer.   

In “Beware Politicians Bearing Gifts”, I quoted Budget Lab at Yale estimates that the impact of Trump’s tariffs to date is a 1.8% rise in US prices: equivalent to an average income loss of $2,400 per US household. 

 

‘the impact of Trump’s tariffs to date is a 1.8% rise in US prices: equivalent to an average income loss of $2,400 per US household’

 

Of course, the impact of this madness will be felt most by those with the least. But, they will be able to console themselves with the thought that their suffering is making Trump and his courtiers richer. 

Trump fiddles, Starmer and Reeves do nothing. It’s hard to know which is worse!  

 

 

“You choose your leaders and place your trust
As their lies wash you down and their promises rust
You’ll see kidney machines replaced by rockets and guns” 

 

 

‘This week we consider Labours’ new found love for big business, as they seek to be more market-friendly than the Tories.

If the 1980’s was the decade of “greed is good”, of “lunch is for wimps”, then this second-half of the 2020s may be remember for “regulation is a “boot on the neck” of business.”

Unfortunately, as with everything else that is plastic about the current iteration of Labour, chancellor Reeves is a very poor replacement for Gordon Geeko.

I have written before about “noise”, previously it was aimed at Reform at the hard-right. But, Labour are little different, good at telling us what’s wrong, doing some hand wringing and enquiries, and either kicking the can down the road, turning a blind eye, or saying “we can’t afford it”.

Enquiries such as the postmasters and haemophiliacs said that billions in compensation was due. Good luck with that, we have rockets and guns to pay for. Not to mention King Donald’s second state visit. How much brownnosing can the PM do? Quite a lot it appear.

Over in la la land, King Donald continues to assure everyone that the economy is great, anyone who differs gets fired; it’s great, OK.

Still, the football season is only days away, and I am sure my team will continue to disappoint. But, before signing off a tribute to Son Heung-min, “Sonny”, a legend on and off the pitch; thank you!

Lyrically, we open with PIL and “This is not a love song”, a fitting tribute to whatever version of Labour we are currently enduring, we finish with the Jam and “Going Underground” from 1980. Ironically, even though it was anti-Thatcher, its lyrics remain relevant today under Margaret Starmer?

Endure!

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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