Mr Brightside: No One Wants to Pay 

 

“This indecision’s bugging me 

If you don’t want me, set me free” 

 

In last weeks “Who Pays the Ferryman”? I considered the reality that , whilst we all want better services, no one wants to pay. This week we are seeing more evidence to support that. 

 
Chancellor Reeves will be addressing the CBI, and is expected to defend her £40bn of tax increases caused by the position Labour inherited from the previous, Conservative government, saying: “I have heard lots of responses to the government’s first budget but I have heard no alternatives,” she is expected to say. “We have asked businesses and the wealthiest to contribute more. I know those choices will have an impact. But I stand by those choices as the right choices for our country: investment to fix the NHS and rebuild Britain, while ensuring working people don’t face higher taxes in their payslips.” 

The increases to employer NICs were the biggest revenue-raiser for the Treasury, and not surprisingly, the CBI’s director-general, Rain Newton-Smith, will use her speech to welcome Reeves’s moves to stabilise the public finances, but also accuse her of jeopardising economic growth by taxing firms more heavily. 

“When you hit profits, you hit competitiveness, you hit investment, you hit growth,” Newton-Smith is expected to say. “Almost two-thirds of firms told us this budget will damage UK investment.” 
 

“When you hit profits, you hit competitiveness, you hit investment, you hit growth”

 
Underlining corporate frustration at the unexpected tax raid, she will say: “Tax rises like this must never again be simply done to business. That’s the road to unintended consequences.” 

A survey of 266 businesses carried out by the CBI to assess the impact of the budget found that half are considering cutting jobs and almost two-thirds are rethinking plans to hire new staff, with nearly half of the firms surveyed saying they were likely to delay, or reduce, pay increases in the coming months. 

The situation is quite simple; to spend more we need to raise more revenue or borrow more. Both options will be rubbished by the Tories and their media as the road to ruin and socialism, therefore shut-up, and accept sub-standard services, including long waits for NHS treatment. 

What they propose is cutting taxes and shrinking the state in the hope that this will enable entrepreneurs to innovate, therefore allowing businesses to grow thus generating more revenue through that growth, to build a better country. 

Sounds great, doesn’t it? But, after 40-yrs of trying this we are in the mess we have today. 
 

‘half are considering cutting jobs and almost two-thirds are rethinking plans to hire new staff’

 
The Institute for Fiscal Studies (“IFS”) found that median incomes grew by just 6% between 2009–10 and 2022–23. Prior to that we could have expected growth of 30% in a 13-year period. As a result, the UK went from one of the fastest growers for working-age incomes pre-2007, to one of the slower performers. While growth slowed across the board internationally, the UK’s growth from 2007 to 2019 (6%) was well below that of the US (12%) and Germany (16%). The UK’s relative performance has not improved since the pandemic. 

The IFS concluded that “raising living standards over the long run means raising productivity – and policy can play a critical role. Reforms to taxes and planning; better education; targeted public investment (and regulation that does not hold up public or private investment); better trade relations with the EU; and political stability would all likely help”. 

Source: https://ifs.org.uk/news/past-15-years-have-been-worst-income-growth-generations 

Earlier this month in “Darklands”, which was written in the immediate aftermath of Trump’s re-election, I considered how the result showed that the traditional measure of economic success, such as the level of stockmarket, and GDP growth, gave a false picture which meant little to Main St. 
 

‘if traditional parties can’t deliver the poor majority will turn to more extremist politicians’

 
What matters to the majority is that they feel well off. Inflation is for them a key indicator, as rising prices impact most on those who have the least. And, as this creates greater inequality, we need to look to the GINI Coefficient, which measures inequality.  

The CBI is just another trade body, and Newton-Smith is their spokesperson, ultimately her concern is her membership. 

Again, as I wrote in “Who Pays the Ferryman”? the employers NIC increase could have been better targeted at the bigger businesses who have “the broadest shoulders”. Equally, the CBI should be savvy enough to understand that perhaps the biggest firms could trim profits and dividends, rather than making Main St worse off, or unemployed. As we are increasingly seeing, if traditional parties can’t deliver the poor majority will turn to more extremist politicians. 

I have no doubt a few of our business leaders might welcome a pound-shop Trump as PM. Low tax and fewer regulations would help juice up their profits, share price and dividends, ensuring they maximise their bonuses. The rich get richer and the rest, well……….   

Along with this neoliberal view of the world there is inherent nationalism. Unfortunately, nationalism often seems a more acceptable term than racism. 
 

“Sadly, it feels like we are going backwards”

 
Racism is on the increase. Last week, an east London bookshop became the latest venue to pull plans to promote Rebel Sounds, a book about the role music plays in the fight against racism and other struggles. This follows the scrapping of similar events at bookshops and pubs over the last few weeks, and the cancellation by the BFI London film festival (LFF) last month of a screening of a documentary about the far right. 

Joe Mulhall, the author of Rebel Sounds and director of research at the anti-racism organisation Hope Not Hate, said: “Sadly, it feels like we are going backwards.” 

Threats have been made by email and in phone calls, while extremists from groups angered by Hope Not Hate’s work have been publishing numbers on social media and urging supporters to call. 

Police were called to a branch of Waterstones in late September when a far-right activist took a seat in the front row and attempted to disrupt the event. 

The acceptable face of the far-right (if there is such a thing) in the UK is Reform. Whilst I would hesitate to accuse them of being racist, their anti-immigration stance attracts many who might be more extreme.    

Reform are very much the elephant in the room, picking-up the pieces left behind as both main parties continue to disappoint. Prior to the election, Reform had C. 40,000 members, today they claims to have almost 100,000, more than the Liberal Democrats, and just 30,000 shy of the diminished post-Boris Johnson Conservative party. 
 

‘Whilst Reform polled higher than the LibDems, they scored only 5-seats compared to the LibDem 72’

 
Whilst Reform polled higher than the LibDems, they scored only 5-seats compared to the LibDem 72, the latter succeeding with their high-intensity, hyperlocal strategy. Reform plan to ape this strategy, blanketing communities in leaflets and winning council seats, paving the way for more Reform MPs in 2029 and potentially a path to Downing Street. Something their leader, Nigel Farage, thinks “may not be probable but it’s certainly possible”. 

There are now Reform branches in more than 300 of the UK’s 650 constituencies, with new ones launching every few weeks. 

A typical example is Wendy Schofield, the branch secretary in Stalybridge: “I’m from a Labour background. My mum and all the family voted Labour. I voted Tony Blair in, I voted Boris Johnson in.” 

She is unhappy about the closures of youth clubs and the local market, and  concerned about who will live in a local housing development. “We need to know who is going in them houses. Them houses should be for the local people. And that’s what concerns me. British people are not being put first, coming bottom of the rung. And that has nothing to do with skin colour. I’m talking about British people. So that’s Asian British, black British. We all feel the same.” 

Wendy’s comments and voting history are typical of the lack of any political consensus and the increased polarisation of the UK political landscape.  
 

“We need to know who is going in them houses. Them houses should be for the local people. And that’s what concerns me”

 
Labour’s own goals have been manna from heaven for the Tories, allowing them to use the old tactic of  telling a lie often enough and it becomes the truth.  

Along with their fawning media, we are being told of the imminent destruction of UK farming. A strategy that is highly emotive, creating a game of destructive, destabilising politics, which the Tories are showing a natural affinity for. 

Even before he was elected I was describing Starmer as “light-blue Kier”, which is likely why he won such a sweeping majority. In response, the Tories rather than challenging again for the crowded centre-ground, are mimicking Trump, redefining themselves as the party of the right which now includes the 4-million, largely working-class votes, Reform won. Much of Labour’s core vote could fall into that bracket, especially the Red Wall. 

Clearly, Labour have made some bad decisions, such as the pensioners winter fuel allowance, and executed others badly, such as employers NIC. But, where they have really let themselves down is with their    relentless doom and gloom. 

As I wrote in the editorial to “New Order”, a noticeable difference between the UK and US, between Trump and Starmer is attitude. America is can-do, positive, we are all self-recriminations and can’t afford it. Starmer needs to cheer-up, if he thinks it‘s all gone to shit what does that mean for the rest of us? 

Prior to the election, there were broad-brush warnings from Messrs Starmer Reeves that a Labour government would have to make unspecified “tough choices” and “unpopular decisions”. Put another way, how would they increase revenue to fund the services that had been allowed to rot through 14-yrs of under-funding.  
 

‘whilst everyone wants a better NHS no one wants to pay for it’

 
As we have seen, whilst everyone wants a better NHS no one wants to pay for it. Not the retailers still bemoaning the increase in NIC, not the pensioners who continue to agitate against the means testing of the winter fuel payment. Or the farmers, who are furious about the reform of IHT, even though the new regime is still much more generous to them than the rules that apply to everyone else. 

Everyone conveniently forgets the good things Labour have delivered, such as renters no longer being threatened by no-fault eviction. Or that the NHS will no longer be crippled by striking junior doctors who are getting a long-deserved pay rise, or the extra funds that will reduce waiting lists. Then there is higher than expected  uplift to the national living wage is higher than was expected, with an especially big boost to the rate for 18- to 20-year-olds, and enhanced protection for workers from unfair dismissal and other bad employment practices. Then there are the parents of primary school age children, who will see a tangible benefit from the Labour government once breakfast clubs are up and running which will help feed the third of children currently living in poverty. 

Little of this is reported in the media, who, like the majority of the population wallow in self-pity. This level of negativity is why we are so unsuccessful, it is all can’t do rather than can do. 
 

‘This level of negativity is why we are so unsuccessful’

 
Labour are a victim of what it takes to win an election, I.E., promising not to increase taxes. The Tory press is quick to berate Labour for not being “more honest” during the election knowing that it was up against a Tory party that was utterly dishonest in its claims about tax and spend. 

Clearly there are some Labour MPs who question whether the sums raised from curbing IHT exemptions or curtailing the winter fuel payment are large enough to justify the cost to the government’s political capital. The reality is simple; if the money doesn’t come from there, it will have to come from somewhere else, and that won’t be popular either. 

Despite this, Labour haven’t been smart with their messaging. Had both the farmers IHT change and the winter fuel allowance been more nuanced, it would have targeted those with “the broadest shoulders.”  
 

‘its not about the economy, stupid, it’s about voters perceptions!’

 
And they need to play smarter. On the questions of farmers IHT and employers NIC , they are facing the most unlikely triumvirate of Messrs Badenoch, Davey and Farage. Labour shouldn’t stand back mumbling justifications and apologies, attack; if they don’t like these tax rises, which other taxes would they be hiking instead? If they don’t like any tax rises, what would they be slashing from public spending? 

Labour aren’t wrong but they are misguided. Attack, be positive, and remember pleasing the rich doesn’t win elections. Look across the Atlantic and learn, its not about the economy, stupid, it’s about voters perceptions!  
 

“Everybody cries
Everybody hurts, sometimes” 

 

‘Somewhat samo, samo, as we continue to look at the seemingly impossible conundrum of funding better services without tax increases. The obvious answer is to borrow more, but then the Tory press and party would dine out royally on that. Mussolini my mother, is already repeating the Daily Mail mantra of “their going to bankrupt the country.

All of this reminds of a sketch in the Good Life; Margot is sitting watching TV with a big box of chocolates. Showing is a programme about the starving in Africa, every time she goes to take a chocolate her conscience gets the better of her. Solution? Simple, she changes channel and her conscience is clear!

Many families are already on the breadline, and that looks set to get worse as tThe average annual energy bill in England, Scotland and Wales will increase to £1,738 from January, heaping further pressure on household finances, as the price cap rises by 1.2%.

The energy regulator Ofgem said its quarterly cap would go up by £21 a year, or about £1.75 a month, for a typical household’s gas and electricity use.

The increase for the January-March cap comes on top of a 10% rise for the October-December period, when it was £1,717 a year.

However, when it’s needed the government always seems to have the odd hundred million down the back of the sofa. Last week it was reported that the coronation of King Charles in May 2023 cost taxpayers at least £72m, official figures have revealed.

The cost of policing the ceremony was £21.7m, with a further £50.3m in costs racked up by the Department for Culture, Media and Sport.

Republic, which campaigns to replace the monarchy with an elected head of state and a more democratic political system, described the coronation as an “obscene” waste of taxpayers’ money.

“I would be very surprised if £72m was the whole cost”, said Republic CEO, Graham Smith.

As well as the Home Office policing and DCMS costs included in the figures, he said the Ministry of Defence, Transport for London, fire brigades and local councils also incurred costs related to the coronation, with other estimates putting the total spend at between £100m and £250m.

Vive la république

Lyrically, we start with the Clash and “Should I Go, or Should I Stay”, and end with “Everybody Hurts” by REM

Enjoy!

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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