Saturday, April 09, 2022

WEEKENDER: Sunak's Shine Has Come Off, by Wiggia

Rishi Sunak has gone from distributor of a bottomless pit of money to someone who has had the sunshine taken away all in the matter of a couple of weeks.

Is it all his fault? It depends were you are coming from: no chancellor can go on doshing out billions like he has forever. How much of that was his personal decision we are unlikely to be told, but some sort of cabinet decision on the matter was likely.

The whys and wherefores of the good that money did or not as the case may be will be debated long into the future. The fact that the undeserving managed to get their hands on so much and the fraud that went on are different matters and that part of it should be dealt with in a transparent way now; not that this or any other government is likely to be transparent if it reveals major shortcomings in their administration in these matters, they simply don’t do that any more nor resign.

Sunak was looking like a likely candidate for Boris’s job should Partygate bring him down, but again Boris has been lucky that war has sidelined any immediate action or even longer term penalty for what was in effect just sticking two fingers up at the general population who had just been told how they must act in the face of a killer disease, or not as it transpired; perhaps they all knew and the whole thing was one big con.

The Chancellor was brought down to earth when he realised or was forced to change tack and tax all and everything to claw back the huge sums of money he had thrown at various aspects of defeating the virus. His handling of that is questionable and probably would be with any chancellor faced with the same problems; where he went wrong was to be so obvious with his jam tomorrow scenario just before the next election.

It is difficult to believe an intelligent man would go down a path that anyone who has been around a generation or two has seen so many times before. Bribing the population to vote for you only works if things are normal, not if the country is in deep do-do and needs help right now; that is such a cynical move it is hard to believe all ministers were behind it, or is it that governments in this country have not had to make big decisions very often whilst under the EU governance?

On top of that he has had to contend with an energy crisis, so Boris gets lucky with a war and Sunak has the chair kicked away from under him; add to that the sudden ‘discovery’ of his wife’s wealth and how she should be taxed to the hilt despite not even being a British national, and suddenly all and sundry are piling in on him.

The truth is whatever he does the country and much of Europe is stuffed. Our shortcomings on so many fronts over so many years have all contrived to burst the bubble at the same time. Our energy crisis is mostly of our own making, not just going the so called green route, but as I said in a previous piece our infrastructure on nearly all fronts has been ignored and kicked down the road for as long as I can remember.

Boris has backtracked on energy production and has said we will have seven new nuclear plants up and running by 2030; quite simply it won't happen: if one is ten years into being built and no commissioning date yet, why should we believe that seven will magically appear? The cost of all these at the same time, however long it takes, will be enormous.

A public already under a cost of living attack from inflationary prices and energy shortages and energy itself roughly doubling in price in twelve months and no sign that the end is in sight, will hardly be in a position to fund the nuclear project.

And what do we do in the meantime, burn furniture? Some energy industry experts are talking about rationing in the not too distant future, this is where smart meters will become compulsory and rationing plus peak pricing on top of the huge rises currently will just about finish many marginal families off.

Sunak has no real answers to all of this as the cupboard is bare unless the BoE starts printing money again. Cheap money is no longer an option as it relies on almost zero interest rates yet higher interest rates are virtually the only weapon against inflation; for years this cheap money option has impoverished savers, and now they can’t put the brakes on as the national debt becomes unaffordable with higher interest rates - just a one percent rise costs the exchequer 22 billion in extra interest payments. The thought of a return to normal interest rates at around five to six percent must mean certain people in the ministry of finance having apoplexy.

Do they even care? It’s a fair question: the recent debate over MPs wage rise, a modest one in the scheme of their salaries is taken out of context; MPs have now got an obscene expenses limit, far in excess of the one that the scandal was created from; it even has a built in energy allowance for their second homes as well as travel allowances, eating etc. On top of this two thirds of MPs are on committees, have various ministerial roles and the same for the opposition parties, all of which add to their basic salaries. The salary as a pointer to MPs' earnings is not by any means the full picture; giving your pay rise to a charity is just virtue signalling as it is a drop in the ocean for most MPs.

So no they haven’t a clue what the man in the street is suffering at the hands of their decisions, and at the current time there is little they can do about it. It is all too late: decades of neglect on several fronts have brought us to this point, the virus and subsequent energy crisis has just pushed us over the edge.

This week alone there have several pointers or feelers put out to our future restricted way of life. Those of a green persuasion actually think this is good, but it comes at a huge cost to the nation and an ongoing drop in living standards. Some of the measures envisaged are already being trialled: the sudden appearance on supermarket shelves of endless vegan meals can only be triggered by the lobbying to eradicate meat eating, as there are never that amount of people ready to jump ship on meat eating at any one time.

Road pricing has raised its head again as the end game is to limit private car ownership by cost of vehicles. The recent price rises are way above what is warranted and many believe they are there to make EVs seem cheaper than they are.

“Reports have said that the Chancellor of the Exchequer, Rishi Sunak, is interested in bringing back the pay as you go system to try and fill the £40 billion void left by car tax.”

The RAC has revealed that the IEA is proposing, on the back of energy shortages, measures to reduce car driving; that includes adding to the already banned vehicles in cities with a car-free Sunday as well as reductions in speed limits to save fuel usage.

Being cynical, I see this fits in well with those in the green ranks who only want us to have public transport to use.

Air travel is a bit more difficult: the desire after two years of confinement to travel to sunny climes is a built in factor for many, and any attempt to curb that at the moment would involve a nasty backlash on any one thinking aloud on those lines, yet it will come. The whole largely unnecessary saga of getting on a plane is enough to put anyone off flying, ‘turn up and go’ is so last year.

It appears inevitable that the inflationary price rises the public are now suffering will put a damper on discretionary spending even for those above the poverty line. That in turn means less taxes for the chancellor as people pull their horns in on spending and an effect on those producing goods that fewer people can afford. VW made an interesting statement this week as to future models when they said they are getting out of the volume as in cheaper high production number models’ and planning for more up market models with a bigger profit margin; good luck with that if things continue as they have been doing. Car production is down considerably, partly because the manufacturers have had difficulty getting semi conductors, another case of all eggs in one basket, and also because many people having lost jobs or not being able to work have simply not had the funds for new cars. Will it improve? Who knows; perhaps it will never get back to how it was.

House prices are still rising, and although two properties for different reasons went on sale next to me and sold in two and four weeks, in the current circumstances is this sustainable? Logically no: the housing market often seems to be a law to itself, it still needs people with money to buy though like any other commodity and the cheaper mortgages are drying up making it more difficult to get one and more expensive. This must start to put a brake on the market soon or am I wrong again on this one? Yet it makes no sense to still be rising.

One can add to all this the 5.7 million public servants who thanks to taxpayers' money are mainly ring-fenced from the hardships in the private sector. Strong unions still abound here and pensions are a much better buffer than outside the sector in the current financial climate. This sector views life from within a protected lifestyle; that doesn’t bode well either for productivity or useful analysis when nothing outside affects you.

Which brings me back to Sunak. His and the government's decision to drop the triple lock on pensions that are the lowest in Europe is more than shameful with what is going on. Not affordable? Please, everything else is: that complete waste of time HS2 is going north of £100 billion and no wavering there for so little gain.

Hand wringers believe we treat those coming here in dinghies appallingly; for people that have never contributed a single penny to this country I think bed and board in a four star hotel and a little spending money plus seeing a doctor on arrival is if you break it down actually better than a base level pensioner who has to pay for his food and energy if he can as well as rent etc. etc.. The cost to the country of that is running into billions if you include all the other illegal arrivals here.

'While their asylum claims are being processed they are provided free housing accommodation, free access to the National Health Service (NHS), free dental and eyesight care, education for their children, and a weekly allowance £37.75 to £39.60 per week, all at taxpayer expense.’

So shiny Richi has had the gloss removed from his post. He becomes yet another cog in a rather lacklustre HoC. I am not going to repeat what I think of the majority of the incumbents in the HoC: it speaks for itself; the future does not look good.

Oh, and why does Boris keep appearing in stage managed hospital visits? In the last one he was wandering around with his tie tucked in and his sleeves rolled up; why not give him a white coat and stethoscope and be done with it? The thought of playing doctors and nurses obviously appeals to him, why else does he keep going back? It certainly has no effect on the efficiency of the NHS.

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