Britannia Unhinged

This post has been written for the newcoldwar.org site published in Canada.

It used to be a truth universally acknowledged in the UK that instability in government was something that other countries with less sang froid and stiff upper lips were prone to, but not us. “I have been in negotiation with one of the French governments” was a joke from the 1950s Goon Show that sums this up. Until relatively recently it could be taken for granted that UK governments were, if not strong, at least stolid, and if not stable, at least able to stumble along with a somnambulist inertia that everyone could live with. Not anymore.

We have now had four Chancellors of the Exchequer in as many months and will probably be on our third Prime Minster of the year by Xmas. Kwasi Kwarteng was sacked on Friday afternoon by increasingly isolated new PM Liz Truss “because”, as one BBC commentator pithily put it, “he agreed with her”. Boris Johnson resigned in July. There was already a definite fight on economic policy between himself and his Chancellor Rishi Sunak, whose resignation started a flood of Cabinet members jumping ship and making his position untenable.

There was then a leadership contest in which Sunak won a majority of MPs, but Liz Truss won the backing of Conservative Party members – who tend to be older, whiter, better off, more Southern and rural than most – for her attempt to defy gravity. Running alongside Truss in a sort of three-legged race, was Kwazi Kwarteng. Both Truss and Kwarteng were joint authors of “Britannia Unchained” a wild neo liberal tract from 2012, aiming to slash and burn the state and allow the private sector to rejuvenate the economy in one mighty bound, if given enough “incentives”. Having won the race and promised to “deliver and deliver and deliver”, Truss and Kwarteng went for broke, sacking the chief Treasury civil servant and announcing a “mini budget” without a financial forecast from the Office for Budget responsibility to give it some cover.

This announced £54 billion worth of tax cuts to benefit the wealthy and corporations, which would have to be covered by borrowing, on the presumption that this would stimulate “growth”. This was at the same time that government Ministers were still solemnly intoning that pay claims by workers were unaffordable and “inflationary”. At the same time, they announced a subsidy for energy bills, again to be paid for by borrowing £150 billion over two years while refusing to put a tax on the windfall profits of UK based energy producers (projected to be £170 billion over the same period). As the Daily Mail put it “AT LAST! A TRUE TORY BUDGET”.

As the Chancellor was speaking, the pound collapsed ten cents against the dollar and the interest rates on UK Government bonds started rising sharply as investors started to demand what one of them called a “moron premium”. The knock-on effect of this was that the Bank of England had to intervene in the bond markets to buy government stocks to prevent a run on pension funds that could have seen them collapse; and raise interest rates to stop a collapse in the currency – which had a devastating effect on mortgage rates, with lenders withdrawing 40% of the schemes previously on offer. A young woman on the BBC Question Time programme caused a horrified sharp intake of breath the following week when she said that her previous mortgage offer of 4.5% had gone up to 10.5% as a result. That intake of breath was the sound of the air coming out of the Conservative Party’s support across the country. One sort of growth that Truss has definitely delivered has been a staggering increase in the Labour opinion poll lead, which is now around 30%.

By Ralbegen – Own visualisation of polling data collated on w:Opinion polling for the next United Kingdom general election. Sources for individual data points can be found on that page., CC BY-SA 4.0, https://commons.wikimedia.org/w/index.php?curid=90612156

This is meltdown territory. Extrapolations from these polls have projected a collapse of the Tory Parliamentary Party to fifty something MPs at best, and 3, or 0, at worst. Unless they can pull something miraculous out of the fire, it’s possible that future historians will be writing books entitled “The Strange Death of Conservative England”. This is much worse than1992, after the pound was forced out of the European Exchange Rate Mechanism on “Black Wednesday” and the stuffing was knocked out of the previous long period of Tory governmental dominance. This lot have had black Friday, Saturday, Sunday, Monday, Tuesday, Wednesday, Thursday…

If you want to see what this looks like, check out the faces on the Tory benches at Prime Minister’s Questions last week, and look at Truss’s face too. The great baying, roaring monster that is the usual face of the Parliamentary Conservative Party at PMQs is weirdly shell shocked. Even the cabinet, with the single exception of Truss’s overpromoted understrapper Therese Coffey, although sitting alongside Truss on the front bench, seem in another world. Visibly plotting.

As in the Book of Revelations, we now are seeing “a great wailing and a gnashing of teeth”. Party discipline is in disarray. Frantic efforts by demoralised and angry Tory MPs to steady the ship are combining with comments, some off and some on the record, that whatever they do now they’ve blown any reputation they had for economic competence and the attempt to find a new course may lead to a split. This last is possibly overstating things, but nemesis looms one way or another. Jeremy Hunt as Chancellor has little support in his own Parliamentary Party – getting less than 30 endorsements when he stood for leader – and was a deeply unpopular Secretary of State for Health, when he presided over the long and bitter Junior Doctors strike.

The underlying problem that Truss tried to solve with an act of will is that the underlying fundamentals of the UK economy are shaky. Investment is low and therefore so is productivity. In Britannia Unchained, Truss attributed this to workers in the UK being “the worst idlers in the world” and needing to “graft” more. Clearly a woman with a popular touch. The attempt to break with long slow managed decline by leaving the EU after the referendum in 2016, a piece of faith healing on a par with “throw aside thy stick and walk”, has compounded the long term British disease of weak investment from the private sector with a collapse in exports to the EU. There is now a balance of payments crisis of historic proportions. A running deficit of 8% according to Torsten Bell of the Resolution Foundation. This is very thin ice to be jumping up and down on in the way that Truss has tried to do. Sacking Kwarteng and replacing him with Jeremy Hunt was supposed to be reassuring; but an extraordinarily wooden press conference by Truss, simply left everyone speculating how long she had left. The Bank of England has now said that it will stop buying government bonds on Monday. So, probably not long. This very short press conference makes painful viewing. After attempting to describe the complete wreck of her economic policy as decisive action by her that somehow left it intact, she took just three questions, from the BBC, ITN and Murdoch’s flagship tabloid, the Sun, to take the key indicators of the media temperature, eyes desperately looking around the room for sympathy in an awful icy silence, finding none and fleeing at the end to calls of “are you going to apologise?” As she spoke, the interest rates on UK government bonds went up and up and up.

The basis for Johnson’s sleight of hand, that Brexit would unleash the animal spirits of Great British entrepreneurism, supposedly stifled by the dead hand of Brussels bureaucracy, allowing “left behind” regions to “level up” has gone up in smoke. Cakeism is as dead as the Queen, and all the Kings Horses and all the Kings men can’t put it back together again. When Truss went for her weekly audience with Charles III he is reported to have said, “You’re back again. Dear, oh dear”. Ouch.

At the same time, inflation is hitting living standards hard. One in four children are now living in poverty. The effect of tax breaks for the rich and a wages squeeze on the rest of us is a redistribution of wealth from worst off to best off. As a result, we have seen a wave of local and national strikes by Rail Workers and Communication Workers which have rolled on all summer. Barristers just won a 15% increase in fees after an all out strike. Large settlements have been won in local disputes. Nurses and Teachers unions are balloting and getting record turn outs, flooding over the government’s thresholds of 50% turnout and a majority of all those eligible voting yes to be lawful. More significantly, although these strikes are being bitterly resisted by employers, with the government backing them up, there is no sign of support for them flagging among the workers involved, they have very strong popular support and arguments about wages versus profits have now been aired on mainstream media, whose beautifully coiffed attack dogs have been exposed as the tawdry hacks they are by a set of trade union leaders, like the RMTs Mick Lynch, who stand their ground and tell their truths and strike a popular resonance. Rallies for the union led Enough is Enough campaign have regenerated the sort of enthusiastic support and political ferment we saw in the early period of Jeremy Corbyn’s leadership of the Labour Party.

Meanwhile, Truss’s government has had to make u turn after u turn as it collides with reality. They have conceded that onshore windfarms might be a good thing after opposing them as matter of principle all summer. Truss still has an irrational antagonism to solar farms, even though they are only allowed on marginal land and cover less acreage than golf courses; but even here she has run into a row with the unlikely figure of her Business Secretary, Jacob Rees Mogg, who, although he flirts with climate denial, knows a cheap energy source when he sees it. They have also told Friends of the Earth and Client Earth that they will not appeal against the High Court Judgement that their climate plan for 2050 is unlawful; so, they will have to come up with one that is by the end of March 2023.

At the same time, noises from previously belligerent Brexiteers put into the Northern Ireland Office have become positively apologetic towards the Republic of Ireland and, whisper it softly, the EU itself, to try to resolve the row over the Northern Ireland Protocol, which put them at odds with Ireland, the EU and the United States. A deal on this may not be enough to prevent Irish unity in the relatively near future however, as there is now a strong current of Unionist opinion that is open to it and seeking to explore it, Sinn Fein is the largest Party in the Northern Irish Assembly, and is leading in opinion polls for the next General Election in the Republic. Truss’s gauche attempt to dismiss SNP leader and Scottish First Minster Nicola Sturgeon as an “attention seeker” who she would “ignore” have won her no friends North of the Border and compounded the pressure for a new independence referendum there.

In what might be one of her last significant moves, Truss looks set to announce that China will be officially classified as a “Threat” rather than “strategic competitor” as now. If this goes ahead, this will be another act of spectacular self harm by the UK, as the Office for National Statistics points out

  • In 2021, China was the UK’s largest import partner and sixth-largest export partner for goods.
  • The UK imported £63.6 billion of goods from China in 2021 (13.3% of all goods imports to the UK) and exported £18.8 billion of goods (5.8% of all goods exports from the UK)…
  • China is one of the UK’s largest trading partners, accounting for £93.0 billion (7.3%) of the UK’s total trade in 2021.

There are also 143,000 Chinese students studying at UK Universities, a quarter of the international student intake that pay the exorbitant fees that keep the higher education sector going. Combine this with taking an axe to joint research and development projects between UK and Chinese Universities and you have a formula for serious damage to one of the few world class sectors the UK still has.

Combine this with Truss’s intention to double military spending to £100 billion a year by 2030 and you have a situation in which the rest of public spending will be squeezed at home, after ten years of austerity have already cut them to the bone, and the country will be gearing up for war abroad. The UK already spends more on its military than any other country in the world other than the USA, China and India, and is in direct alliance, through NATO and AUKUS, with countries responsible for two thirds of global military spending. Inside the country it’s possible to pass this off as “defence”. People overseas, given the UK’s consistent history of military interventions, will understand it better.

Opposition to this is hampered by the bipartisan policies of the current Labour leadership on these issues, and a motion calling for increased military spending proposed by the GMB union was passed at Party Conference in September. This was posed as defence of unionised manufacturing jobs. It must be very reassuring for a woman in Yemen who has seen her family blown to bloody rags by a BAE systems missile fired from a Saudi jet, whose pilot was trained by the RAF, to know that the workers who built it were trade union members with decent terms and conditions. The only delegate who spoke against support for the Ukraine war at Conference was suspended the following day. Labour MPs have been banned from criticising NATO, with the dozen or so from the Socialist Campaign Group who had signed a Stop the War statement told to take their names off if they didn’t want to be expelled from the Parliamentary Labour Party. A similar motion, also proposed by the GMB, is going to the TUC this week and the scale of the vote against it will indicate where the ground the Labour leadership is standing on will begin to shift.

Opposition to increased arms spending is much wider than support for a peace deal in Ukraine, as the phrase “Putin’s war” for the war that NATO provoked is repeated like a mantra across a wide political spectrum, from Boris Johnson to Owen Jones. But, as the crisis bites harder over the winter, the struggle over the cost of living deepens and widens, the government stumbles from crisis to crisis and desperately tries to improvise itself out of the hole it has dug, clarification can’t help but spread through the ferment.

Mourning in Late Britain

Living in the UK is a bit like living in a museum, in which popular culture is encouraged to steep in nostalgia for lost status. This can be quite bitter, rather like an over stewed pot of tea.

An aspect of early industrialisation and former global dominance here is the survival by inertia of archaic forms of governance mostly abandoned or overthrown elsewhere. Our Head of State has just changed, not by election and not on any political timetable, but because of biology. The former Queen was 96 and as healthy as anyone could be expected to be at that age; but died last week just two days after seeing Boris Johnson off, and Liz Truss in, as Prime Minister.

This is probably entirely coincidental. But we now have a new Head of State and new Prime Minister in the same week, in a bizarre two for one offer. From Elizabeth II and Boris Johnson to Charles III and Liz Truss. “Oh, brave new world that hath such people in it!”

As a result, we are now in a strange pause of “national mourning” in which almost everything is on hold. While they haven’t gone so far as to stop all the clocks, strikes by Rail and Postal workers have been suspended, the TUC postponed, no Party meetings or campaigning is taking place, Parliament has shut down, the media is wall to wall black suits mobilising a tsunami of deference for the old monarch and the new: even the football is cancelled for a week of Sundays, the last two Proms have been scrapped “out of respect” and the music on the Radio has a definite decaffeinated quality. Charles III declaring that this mourning period will extend to 7 days beyond the funeral is probably his first mistake. People will be grumbling.

More to the point, while everyone catches a breath, the underlying crises of what might be called “Late Britain” are building beyond a point that they can all be peacefully contained. In his first address to the nation, Charles III intoned gravely that “our values have remained, and must remain, constant.”

Fat chance of that.

The 2008 crash shattered the notion that things might go on relatively well or relatively badly, but it was all, ultimately, manageable. This went out the door with the boxes carried by the sacked employees of Lehman Brothers. Politics in the UK became more intense, and the unthinkable thought. Much of it fantasy.

This was writ large with Brexit – the notion that with one mighty bound, the UK could free itself from the shackles of EU restrictions holding back its natural market genius and long lost ubermench status, and go sailing off into the wider world, striking “easy” trade deals on favourable terms, especially with countries in the Global South; an approach openly referred to as “Empire 2” in some parts of Whitehall. Wishful thinking as policy.

This has not worked. Levels of private investment and private sector R&D – never high in the UK – have sunk to historic lows. So has growth. Poverty, particularly child poverty, has increased. Wage levels have stagnated or sunk. People in work are having to use food banks in ever increasing numbers. Life expectancy in poorer areas is dropping. People are having fewer children. The future no longer looks like a promise, more like a threat. And that’s leaving aside climate breakdown – which is exactly what they are now trying to do.

Since Brexit, the Tories are now on their third Prime Minister. Each replacement has been a move further right, with wider still and wider Brexit as goal and talisman. In the leadership election campaign over the summer, both candidates were agreed on the aims of deepening Brexit – decoupling the UK from the EU’s environmental and labour standards so the UK becomes more like the USA – but disagreed on the pace of it.

Liz Truss represents a minority of her Parliamentary Party – most of whom supported her rival, Rishi Sunak. Truss’s cabinet rests solely on her own faction – most of whom have essence of Ayn Rand on a drip feed into what passes for their souls – and promises war on all fronts. Stalling on climate action. War drive against Russia and China. Confrontation with the EU – and USA – over the Northern Ireland Protocol. Confrontation with the SNP. Redistribution of wealth up to those who don’t need it from those who do. Attacks on the right to strike and organise. Privatisation of the Health Service. Tearing up all remaining alignment with EU standards on labour and environment standards. War on woke (ie equalities). It’s hard to imagine that this will go well.

Her speech in Downing Street spelled out three priorities and challenges.

She did not mention climate breakdown, which makes everything else she said a form of displacement activity while we are waiting to die. Her list of infrastructure to invest in did not mention insulation but had roads in first place. Truss is backed by the Net Zero Scrutiny Group and Lord Frost, who opined during the week local temperatures exceeded 40C that he saw “no evidence” of a climate crisis, has appointed Jacob “2050 is a long way away” Rees Mogg to energy, plans to open up 130 new gas and oil fields in the North Sea and remove the ban on fracking, opposes onshore wind and rural solar farms. This is proclaimed as a way of increasing domestic energy supply in the face of rising prices, with the implication that this will ease the pressure on bills. It won’t. The quickest sources of low cost additional energy is onshore wind and solar, which she opposes. New North Sea gas and oil fields take 28 years to come into production on average. So, approval now will see them on stream in 2050 which, as Rees Mogg might remark “is a long way away”. It is also the point at which we need to have closed down fossil fuel production almost entirely if we want a planet we can live on. This is a kind of madness and a sign that these people are incapable of rising to the actual challenge of our time and, if left in power, will instead lead us to disaster.

Of the three, her first aim was to “get Britain working again”. This is curious, because employment levels are high, albeit often poorly paid, part time, insecure. Her “bold plan” is to make tax cuts and “reform”. Reform means greater insecurity for workers, greater “flexibility” for employers. Tax cuts benefit people with higher incomes most; which Truss formulates as a reward for “hard work”. In her book, people on low incomes don’t work hard and therefore deserve everything they get. Her presumption is that increased disposable incomes for the better off will lead to greater demand and therefore spark “business led” investment. But increased demand without investment, which is what we’ll get, will just fuel inflation, as it did in the US and beyond, with Joe Biden’s stimulus package. At best, this will be a clumsily inequitable way to try to partially counteract the recessionary impact of higher prices for necessities and increased interest rates leading to reduced demand across the board but seems guaranteed to entrench inflation into stagnation. It serves a political purpose of trying to keep the better off on board with the Conservatives, pulling the ladder up beneath them, consolidating a core vote and preventing total political meltdown. It may not be enough, even for that.

Her second is to “deal with the energy crisis”. The rise in fossil fuel prices started long before the Ukraine war and is now structured into the global economy, but the upward twist the war gave it could be resolved by a push for peace negotiations. As the Financial Times put it, “This coming winter will bring a reckoning. Western governments must either invite economic misery on a scale that would test the fabric of democratic politics in any country, or face the fact that energy supply constrains the means by which Ukraine can be defended.” As it is, Truss sabre rattles in faraway countries of which she knows little, and sometimes can’t pronounce, is pressing for a sharp increase in military spending to 3% of GDP, will try to ride out the economic misery, and will try to tear “the fabric of democratic politics” to do so.

She is standing on thin ice. But she will jump up and down on it all the same.

With UK based fossil fuel companies scheduled to make £170 billion in excess profits in the next two years, she has chosen not to impose a windfall tax on any of it. Shell, her former employer, paid £0 in UK tax in 2021, and she obviously thinks this is the way to go. Instead, the state will borrow up to £150 billion this year alone to subsidise energy costs at £2500 per household per year for the next two years (until the next General Election). Though the details of exactly how this scheme will work are still unclear, this heads off an immediate meltdown, as prices were projected to go up to over £5,000 by January, putting more than half of the population into fuel poverty. But this is still a rise of £600 on current levels, which are already pushing a lot of people into arrears (and this is during the Summer in which most people have their heating off and are just using their boilers to heat water, so this will still be a grim winter on this front and vulnerable elderly people are expected to die).

This is just one aspect of a general inflationary crisis, with prices rising at 13% a year (and projected to rise to 18% next year) while wages are falling well behind. Employers who are offering any rises at all are trying to lock workers into two or three year deals at below the current inflation rate while also proposing “modernisation” (a euphemism to cover cuts in holiday entitlement, pensions, safety measures, extra payments for unsocial hours etc). This is sparking a revival of trade union struggle, support and membership. Rail workers and Post Office workers and Barristers (!) are already engaged in a prolonged series of strikes and these, despite frantic efforts in the media to demonise and divide and rule, are very popular with the public, because everyone is under the cosh in the same way. Union leaders like RMT General Secretary Mick Lynch have become media stars and gained a lot of resonance putting straightforward common sense arguments that workers shouldn’t be expected to carry the can for the crisis when private companies are making massive profits, opening up a space in the mainstream for broadly socialist ideas for the first time since the defeat of Jeremy Corbyn in 2019.

Smaller scale and hard fought local or sectional disputes have often won substantial gains for the striking workers, so in the national disputes there has been a clear line from the government to the companies involved not to make any concessions at all, for fear that these struggles will become contagious. Truss aims to pass legislation to make strike action almost impossible to carry out legally, by imposing high ballot thresholds, while imposing “minimum service levels” if strikes do take place. If passed, in conditions of continued economic pressure, this will lead to what used to be called “wildcat” actions and, at the very least “quiet working” as the norm as resentful people struggle with an unfair day’s pay for a fair day’s work. The coordination of a prolonged series of one day stoppages in the existing disputes would provide a political focus both for the demands of the strikes and opposition to these measures that will spread far beyond them.

Her third priority is to “put our health service on a firm footing”. In her book, that means privatisation. US style labour and environment standards also imply US style health care. Needless to say, this is not popular, even among conservative supporters. When Boris Johnson put his big lie, that leaving the EU would save the UK £350 million a week” on the side of his campaign bus in 2016, the strap line was “let’s spend it on our NHS”. The “our” in that slogan is heartfelt across the country. Anyone who tries to break it up for private insurers to leach off will be well and truly loathed.

Truss could be an easy magnet for that. Trying very hard to be a two dimensional cardboard replica of Margaret Thatcher, she has the brass neck that comes as standard with Tory MPs, but also seems to have had a charisma and empathy bypass operation. It used to be said of Johnson that he was Teflon. Nothing stuck to him. It took a while, but it did in the end. That has never been said of Truss. Excruciating mash ups of her most embarrassing moments are doing the rounds on social media. Just google “Truss cheese speech” for an example. With Johnson’s calculated buffoonery it was possible to believe that, as the old Habsburg joke had it, “the condition of the realm might be terminal, but it’s not serious”. Truss doesn’t do humour, except unintentionally. And she has a gift for dropping unnecessarily antagonistic remarks which exacerbate crises that need emollience, like her comment that SNP leader and Scottish First Minister is an “attention seeker” who should be “ignored” or that workers in the UK are “the worst idlers in the world” who should “graft” more: which won’t exactly endear her to them.

As the polls turn south, the pound sinks slowly in the West, possibly dropping below parity with the dollar for the first time ever, and the nemesis of the 2024 General Election approaches for Tory MPs, expect trouble in Parliament as they fight like ferrets in a sack to keep their jobs. It has been reported that 12 of them have already written letters of no confidence, all ready to go. Some honeymoon period.

Nevertheless, I suspect that the calculation is that whatever they do, the Conservatives will probably be out at the next election in 2024, so they might as well go for broke in the meantime; in full confidence that an incoming Labour government led by Keir Starmer will reverse none of it. The task in the labour movement is to generate such a mobilisation against Truss’s measures that the momentum has to be carried over into government.