Mr Brightside: You Can’t Please All of the People All of the Time 

 

“But if you try sometime you’ll find 

You get what you need” 

 

Somewhat ironically this title perfectly fits the reaction to Chancellor Reeves first budget. Even she isn’t pleased with it! 

 
Whilst considerable amounts of the budget had been leaked before yesterday, the one I found most interesting was from former Chancellor Hunt, who has asked the cabinet secretary, Simon Case, to prevent the release of a review by the Office for Budget Responsibility (“OBR”) into his spending plans, which is scheduled to be released yesterday. 

Government sources have briefed that the review may give Reeves proof that there was a £22bn “black hole” in spending this year, something that Hunt has been scathing comments about. 

The budget itself was akin to revisiting the 1970s, with the chancellors’ tax changes marking the biggest shift since Margaret Thatcher slammed Labour for its “genuine socialist” fiscal policy in 1975. Today’s economic turmoil is  driven by different factors, war-induced inflation and 14-yrs of government induced destruction of social services. The key difference today is the chancellor opting to spend her way out of the current crisis in public services. 
 

‘The budget itself was akin to revisiting the 1970s’

 
The budget itself delivered C. £20bn a year in tax increases on businesses and the rich. In addition, the chancellor plans to raise borrowing by the same amount annually. This allows for an increase in spending of 2% of GDP to prevent real cuts in some departmental current budgets and to stop investment from falling as a share of national income. Clearly, this is or, at least should, be seen as a step in the right direction after the economic mayhem of the previous 14-yrs, although, the right-wing press will clearly see it as a communist plot. 

Everyone should be pleased with the allocation of C.£14bn to compensation schemes, with the majority rightly directed to victims of the contaminated blood scandal, alongside £23bn for departmental spending this year. The NHS will be receiving the bulk of additional funds, with departments such as the Home Office and transport facing real-terms reductions. 

Loosening the fiscal constraints she previously imposed on herself makes a great deal of sense, and means that state spending remains 5% of GDP above pre-pandemic levels, strengthening the potential for a more proactive state. Investment-fuelled growth may take longer than expected to materialise, but then perhaps the focus needs to be wider than simply growth, with consideration given to social welfare and wellbeing. 

The International Monetary Fund has welcomed the measures announced in yesterday’s budget, saying her tax increases would boost growth “sustainably”, and backed the increase in investment and extra spending to ease the financial pressure on public services and boost growth. 
 

‘new budget rules showed the government was committed to bringing down the UK’s debts over the longer term’

 
A spokesperson for the fund said new budget rules showed the government was committed to bringing down the UK’s debts over the longer term. 

“We support the envisaged reduction in the deficit over the medium term, including by sustainably raising revenue,” they said, adding that the IMF approved of the government’s “focus on boosting growth through a needed increase in public investment while addressing urgent pressures on public services”. 

The Office for Budget Responsibility response was quite so favourable, with them concluding that while the budget would probably improve public services and give public investment a boost, it would do little to lift economic growth over the next 5-years. 

The chancellor had claimed before the budget that her measures would give the economy a boost, however the OBR found that the increase in business taxes would limit the economy’s expansion to 1.5% in the final year of the parliament, down from 2% next year. Reeves said in her speech to parliament that the OBR had agreed that her plans would improve the UK’s growth prospects by 1.5% over the longer term. 
 

‘while the budget would probably improve public services and give public investment a boost, it would do little to lift economic growth over the next 5-years’

 
Given the current levels of inequality which is a key driver of poverty, it was both surprising and disappointing that the latter was mentioned only once, with both The Resolution Foundation and the Joseph Rowntree Foundation (“JRF”) saying that the budget missed an opportunity to alleviate hardship for many in need. If there is a need to highlight inequality it is the fact that FTSE executives have seen their pay soar to record levels, with median remuneration now at £4.19m a year. 

Clearly the relationship between labour and capital is broken. By October 2029, the JRF says families will be £770 poorer in real terms, with 100,000 more children in poverty, which is politically, economically and morally untenable.  

The Resolution Foundation in their assessment of said the chancellor had made a “decisive shift from the planned cuts set out by the last government, with better-funded public services and greater public investment coming from higher taxes and more borrowing”. 

It said the rise in public investment, reversing planned cuts set out by the previous Tory administration, meant spending on public infrastructure would be maintained at about 2.6% of annual national income in each of the next 5-years: “This would be the highest five-year average in the UK since 1980-81, and bring the country close to the OECD average”. 

However, it warned that Labour’s spending spree to inject £70bn a year into the economy from increases in day-to-day and investment spending had “not yet delivered a decisive shift away from Britain’s record as a stagnation nation”. 
 

“not yet delivered a decisive shift away from Britain’s record as a stagnation nation”

 
It is likely that in the spring spending review we will see the chancellor pursue a more welfare-driven, redistributive agenda. Unlike the 1970s, which set the stage for the triumph of globalised market liberalism, the second half of the 2020s will look very different. 

We turn from Labour’s first budget in 15-yrs to the US election, which could impact the world for considerably longer. However, before doing so I wanted to visit our two right-wing parties.  

Robert Jenrick, who, by the time you read this might be the Tory party leader, this week said that Britain’s former colonies should be thankful for the legacy of empire, not demanding reparations. 

In article for the Daily Mail (who else!), Jenrick said that countries that were part of the empire “owe us a debt of gratitude for the inheritance we left them” in the form of legal and democratic institutions. 

The comments were a push back against the growing momentum to provide reparations and justice to countries and people affected by transatlantic slavery. 

Jenrick claimed that the debate about reparations had “seeped into our national debate through universities overrun by leftists peddling pseudo-Marxist gibberish to impressionable undergraduates”. 

He said: “The territories colonised by our empire were not advanced democracies. Many had been cruel, slave-trading powers. Some had never been independent. The British empire broke the long chain of violent tyranny as we came to introduce – gradually and imperfectly – Christian values.” 
 

“deeply offensive and an obnoxious distortion of history”

 
Bell Ribeiro-Addy, the chair of the all-party parliamentary group for Afrikan reparations, which has organised Britain’s second national conference on reparations, taking place on Sunday, described Jenrick’s comments as “deeply offensive and an obnoxious distortion of history”. 

Of course, when it comes to history the right have always had their own version of that, one which suits their own narrative. 

It would seem that law and order can also be distorted should the narrative require it. 

The Reform party MP Richard Tice, who, when Just Stop Oil protesters peacefully blocked the M25 were handed prison sentences, posted “GREAT NEWS” in jubilant capitals, followed by two clapping emojis, adding his wish that “they serve full 4 and 5 year jail terms”.  
 

“cultural attitudes completely incompatible with British values”

 
And, when riots broke out in Leeds in July after Roma children were taken into care, Tice demanded “the full force of the law must be applied” with British citizens “punished” and non-Britons “deported never to be allowed to return”.  

However, as the narrative was to his liking, during August’s far-right insurgency, Tice, who was careful to condemn “the riots and violence”, demanded the mayhem should trigger a debate on “mass immigration and two tier policing”. 

And, in another twisting of the truth, the then-home secretary, Suella Braverman, penned a Mail on Sunday column that portrayed grooming gangs as a phenomenon specific to British-Pakistani men because of “cultural attitudes completely incompatible with British values”. This was clearly completely untrue as Home Office research shows child sexual abuse gangs are mostly white.  

However, the award for the greatest twisting of the truth must go to Donald Trump who has succeeded in convincing 40%+ of the US electorate that he is on their side.  

The US, of all the OECD countries is the most unequal; 45-yrs of neoliberalism has seen the value generated by the middle and working classes go into the pockets of the uber rich.  

Trump is living proof that capitalism, as it is practised today, has failed the majority of the population, it has laid the foundations for the greed, the lies, and rip-offs.  
 

‘Trump is living proof that capitalism, as it is practised today, has failed the majority of the population’

 
If elected, Trumps cabinet will look to create what they refer to as “Project 2025”. Last time around Trump’s attempt to destroy the Affordable Care Act failed. This time around, the plan is to rip-up the already threadbare public protections for the middle and working classes, such as social security and Medicare. Head Start, which provides childcare and preschool education, offering at least a prospect of opportunity for all, will be erased: if you are born poor, you will be even more likely to remain poor. 

When it comes to the climate crisis, his policies will only exacerbate the situation. He will, instead, favour fossil fuel extractors, mining and ranching companies, and construction firms.  

If anyone doubts his Neroesque tendencies, his callous and chaotic response to the pandemic helped cause the death of 350,000 Americans in 2020.  

Trump serves only himself, it’s the ultimate a zero-sum game. The few that might gain from his return as president, will only at the expense of others. It is some reminiscent of Hitler’s Germany; friends may rise, but only as enemies fall. And the nature of the enemy will constantly evolve. 
 

‘Trump serves only himself, it’s the ultimate a zero-sum game’

 
Already, he is setting the scene, making it clear that people who don’t originate from “nice countries” – he listed Denmark, Switzerland and Norway – are “poisoning the blood” of the US. Your blood, in his worldview, becomes no less “poisonous” over time. Already, he has lined up Jews as the scapegoats if he loses the election; sounds familiar doesn’t it. 

How long will it be before gay, disabled, even the long-term sick are deemed to be “poisoning the blood” of the country? Trump has already got the Supreme Court under his control, which isn’t helping women who will be further reduced to second-class citizens whose primary purpose is to serve men.  

In addition, Trump is now empowered by almost full-spectrum immunity, there will be nothing anyone can do to stop him. As a result, the rest of the establishment, the less extreme media, the professions, government officials and legislators will either fall into line out of fear and favour, and face the consequences.  

Nothing will be beyond his reach. I found an interest example in how this might work on modern-day, AfD Germany. 
 

‘Trump is now empowered by almost full-spectrum immunity, there will be nothing anyone can do to stop him’

 
In 1933, the Nazis brutally crushed the Bauhaus school, one of Germany’s most important contributions to modern art and architecture . They saw its internationalist outlook and its many foreign and Jewish members as “un-German”; leftwingers were particularly attracted to the movement’s radical rejection of local tradition in favour of universal styles.  

Whilst the Nazis persecuted the Bauhaus, they failed to stop the design revolution it had unleashed. Their minimalist and functional principles have found their way into our lives, inspiring everything from Ikea furniture to prefabricated housebuilding.  

However, this part of the underlying culture war survives in the eastern German state of Saxony-Anhalt, where the Bauhaus settled in 1925. Plans to celebrate the centenary of its connection to the movement next year, have fallen foul of the local AfD, who have listed a motion in the state parliament in Magdeburg entitled “The Aberration of Modernity”, slamming the plans as a “one-sided glorification” of the Bauhaus legacy and demanding a “critical analysis” instead.  

The hard-right just has to be defeated. 
 

“The bats have left the bell tower 

The victims have been bled” 

 

‘The budget that no one wanted, even the chancellor said it wasn’t the budget she wanted to deliver.

The most interesting point for me was former chancellor Hunt’s attempt to have the OBRs review of his spending plans released. His comment that it was merely politics, or as he said, “policing” shames him. It was simply an attempt to bury the truth, he was a shambles that left the country far worse off than was necessary.  

Despite the fact that this mess was Tory induced I don’t feel Labour addressed some of the things that needed to be. The decision to impose a 6.7% rise in the minimum wage is necessary, but the increase in employers’ NIC is destructive for low earners.

It seems especially shortsighted when you consider that the gig economy came away unscathed. Within this sector of the economy are businesses with substantial turnover and profits who will be exempted from this increase in NIC as they technically employ no one.

IFS director Paul Johnson described the chancellors’ claim that employer NICs did not hit ‘working people’ was a ‘pretence‘.

These are the very people who, if once again disappointed by mainstream parties, will turn to the hard-right.

The great irony is that it is the failure of the rights‘economic policies of the last 45-yrs, neoliberalism, that has allowed the hard-right to proliferate.

As more and more middle-class and working-class people are left worse off by the policies of neoliberalism, they are turning to the hard-right for solutions. Instead, they are offered scapegoats, victims, someone to blame, whilst the uber rich gorge themselves and buy political influence, that allows them to further their goals. In return, they are given to two things vital to their continuing evolution; less regulation and lower taxes.

Hopefully, the US can escape the clutches of a vengeful Trump. In the UK, Labour, if they can use their mandate well, can also see off the hard-right here.   

There is much to gain, but so much more to lose!

Lyrically, we start with the Stones and “You Can’t Always Get What You Want”, and finish with Bauhaus and “Bela Lugosi is Dead”.

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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