Brexit and the waning days of the United Kingdom

[Sheilbh]

One for Tamas - Britain's most consistently wrong columnist, after two years, acknowledges he may not have called covid right

Two years ago I said I was taking Covid 'with a pinch of salt' – perhaps I was wrong
Simon Jenkins

"Perhaps"...
https://www.theguardian.com/commentisfree/2022/mar/25/covid-march-2020-prediction-uk-pandemic

[The Larch]

Feel this is another reason any challenge to Johnson will wait until after the May local elections - Sunak's numbers are not looking great:

I saw plenty of snark this week aimed at a Sunak attempt to come up as a man of the people or somesuch, in which he was putting petrol into his own car (which turned out not to be his, but borrowed for the stunt), and then being shown that he didn't know how to pay by contactless card. Was that a desperate attempt at reviving his numbers?

[Sheilbh]

I think that was just standard social media snark

Having said that, you never know what'll stick in people's minds. I'm not shocked that possibly one of the richest politicians ever in British politics (sort of - it's his wife's money) doesn't drive a Kia and I think the card thing was just a fumble with scanning a can of coke and a Twix. But, then, I'm fairly sure Ed Miliband knows how to eat a bacon sandwich but once something sticks

It was the spring statement and he announced a cut on fuel duty for cost of living - so the photo op is the chancellor filling up a car in the petrol station. They'll always do something linked to one of the big announcements for the news repports. So if they announce cuts to alcohol tax they'll do a photo op in a pub, new spending on the NHS a trip to a hospital - George Osborne always went somewhere where he could wear a hard hat and a high-viz.

[Sheilbh]

On Sunak - this article has the most hostile Number 10 and 11 counter-briefing since the New Labour TB-GB days (though nowhere near that bad yet - we don't have Number 10 briefing that the Chancellor has "psychological flaws"). I think there's almost zero chance Johnson has the political capital to move or fire Sunak so that bit from a Johnson ally seemed particularly optimistic.

But I think this is all just ultimately from the central contradiction that the Tories have at the minute. Johnson is a high-spending, socially liberal Tory who made lots of manifesto pledges and built an agenda that requires spending. There is, for may reasons, global inflationary pressures that are going to put pressure on people's purchasing power - particularly in the public sector. And the post-Brexit settlement that will attract most public support (and that Johnson likely backs) involves spending and investment. But he is leading a party that broadly wants real-term cuts in spending (probably just through under inflation increases) and tax cuts. In addition the Chancellor is incredibly Treasury orthodox and wants to get some degree of controlling the deficit and debt after the (necessary) covid splurge.

None of that hangs together, especially as Johnson's in a weaker position politically. I think there is a coherent Johnsonian agenda - but he doesn't have the political capital to pull it off - and it's basically a lot of spending/investment plus a let the economy run hot Chancellor who's more politically aligned and comfortable with growing debt (particularly on the capex investment side). I think there is a coherent traditional Tory agenda - but it's not the PM's. Until they solve that, and I don't see how they can without one side winning, this sort of story is just going to keep recurring.

On a side note it's fascinating how Number 10 of literal Boris Johnson seems quite keen on positioning Sunak as too privileged/rich The details are a little thin given everything about Boris Johnson's lifestyle. I mean Sunak and his wife eat a seeded loaf while his kids have white bread, or an aide wearing a leather jacket (also I think as we move more into a post-office all the time world "just put on a suit" people will look more and more weird - like MacMillan posing as an Edwardian in the 60s) may come across as a little out of touch - but I'm not sure the guy who spent hundreds of thousands of someone else's money on wallpaper is in a position to push that

On the other hand - lots here for Labour to enjoy. They can just keep attacking both but I'd be tempted to rein it in a little and hope the two keep going at it.

Rishi Sunak bruised in the battle with big-spending Boris Johnson next door
In the aftermath of his spring statement the chancellor has found himself under attack on all sides

An ally of Boris Johnson said that the gloss was starting to come off Rishi Sunak, who is married to the billionaire Akshata Murthy
JESSICA TAYLOR/UK PARLIAMENT/REUTERS
Steven Swinford, Political Editor |
Oliver Wright, Policy Editor |
Henry Zeffman, Associate Political Editor |
Chris Smyth, Whitehall Editor
Saturday March 26 2022, 12.00am, The Times

On Thursday morning, the fiscal divisions between Boris Johnson and his chancellor that have raged behind closed doors for months were exposed for all to see.

The chancellor's spring statement was met with savage criticism from all sides, as he was variously accused of doing too little to help address the cost-of-living crisis and by some cabinet ministers of spending too much.

Sunak's response was carefully calibrated to temper expectations. He said he had to be "completely honest" that the government could not offset the impact of runaway inflation.

"They [the measures the government has taken] can't mitigate all the difficulties that high inflation is causing," he said. "No chancellor could do that."

The prime minister took a very different tone. "As we go forward, we need to do more," he said. "The cost of living is the single biggest thing we're having to fix, and we will fix it."

The spring statement on Wednesday — and the criticism levelled at it — was in many ways the product of the fundamentally different economic outlook of the two men, between a prime minister who wants to spend money to secure his legacy and a chancellor who wants to claim the mantle of fiscal responsibility. In its aftermath, the briefing wars between Sunak and Johnson's allies went into overdrive.

Supporters of Sunak said that he viewed the prime minister as "unreliable and unpredictable", something denied by No 11. Despite the criticism they believe the chancellor's hand has been strengthened by the lockdown parties scandal. "No 10 will be loving it but let's see where partygate goes," one said.

Cabinet allies of Johnson said that the gloss is coming off the chancellor and that he is looking increasingly like a "privileged billionaire" rather than someone who is on the side of the people.

One Conservative figure said that Sunak is no longer invincible. Come the summer reshuffle, when Johnson assembles the team he wants to take him into the general election, the chancellor could be moved. "Boris is of the 'spend, spend, spend and it will be all right' mould," they said. "He is a cakeist where Sunak is not. Cut Sunak open and it's like a stick of rock — fiscal responsibility is what he gets up in the morning for.

"You've then got to think what is the strategy for No 10. Do they move him in the summer? It doesn't feel sustainable to me. I think he is thinking about his team and whether people are in the right place."

This was strenuously denied by No 10. "Rishi is not going anywhere. He is the prime minister's most valued colleague," a spokesman said.

The spring statement was Sunak's most challenging financial event to date. On Wednesday morning the chancellor updated cabinet about his plans for the spring statement, deliberately omitting any of the policies — these were deemed too sensitive to be shared — but highlighting the growth forecasts and the broad principles.

Instead of the usual collective support from cabinet colleagues after his address, however, Sunak was challenged. Moments after he finished speaking Kit Malthouse, the policing minister, made a lengthy intervention on the risk of inflation.

With inflation expected to hit a 40-year high of 8.7 per cent at the end of the year, Malthouse argued it was time for more radical medicine: to reopen the spending review and cut public spending.

He was immediately backed by Jacob Rees-Mogg, the Brexit opportunities minister, who argued for tighter public spending to avoid fuelling inflation.

Cabinet ministers said that Sunak appeared taken aback. He acknowledged his colleague's concerns but pointed to the Conservative Party's manifesto commitments, which included significant increases in public spending.

The prime minister — the architect of those spending commitments — was said to have looked awkward. "He was looking down and shuffling his paper for the whole time that Kit was speaking," a cabinet source said. "Eventually he moved it on."

Three hours later Sunak found himself being accused of the opposite: failing to do enough. As he set out his plans in the Commons to cut fuel duty by 5p a litre and increase national insurance thresholds, he was met with shouts from Labour MPs of "is that it?"

There was nothing for those on benefits, nothing new on energy bills and no rise in the defence budget. The national insurance increase to address NHS backlogs and overhaul social care — much hated by many Tory MPs, including Liz Truss, the foreign secretary, and Rees-Mogg — is going ahead next month.

One senior government figure said Downing Street was deeply frustrated.

"The offer on energy is absolutely rubbish," they said. "That was the unanimous view of the political team in No 10. The obvious option was to cut VAT on energy which disproportionately affects the poorest. No-one understands why he hasn't done that."

But this was rejected by Sunak's allies who said he had the "right strategy".

"We can't just spend our way out of this," they said. "What would No 10 do differently? Unlimited spending is not a coherent Conservative economic policy."

The spring statement itself barely appears to have made a dent in public opinion. A YouGov survey for The Times found that eight in ten people believe the measures are not enough, with the fuel duty cut and national insurance rise shifting views on the government's performance by just 1 per cent.

At a meeting of the 1922 Committee of Conservative backbenchers on Wednesday evening some MPs urged Sunak to bring forward tax cuts and spend more on defence.

Afterwards Sunak told gathered reporters that it had been a "good, happy day" but allies said that he was "utterly exhausted". Matters did not improve in the next 48 hours.

A posed photograph of Sunak filling up Kia Rio in a Sainsbury's car park to highlight the 5p cut in fuel duty unravelled after it emerged that the car was not his, although allies said he paid for the cost of the petrol himself.

Asked in an interview about the price of bread, Sunak, 41, said he thought it had gone up by 20p before in a moment of candidness he said: "We have different breads in my house, a degree of healthiness between my wife, myself and my kids."

Sunak's critics, both inside and outside of government, seized on the comments. Sunak, a self-made millionaire who made his fortune in investment banking and as a hedge fund manager, is married to Akshata Murthy, the daughter of one of the richest men in the world.

Last year he applied for planning permission to build a mini leisure complex in the grounds of the family's £2million manor house in Yorkshire, including a swimming pool, gym, shower facilities and tennis courts.

"I don't think that Rishi is everything that his PR people make him out to be," one cabinet minister and ally of Johnson said. "He's a billionaire who's building a gym and a swimming pool. I don't think the public mind someone who is successful but there's a problem when someone seems to be privileged with it. I think Rishi is coming across like that."


Sunak's PR opportunity at a Sainsbury's car park in southeast London backfired
HM TREASURY

Sunak's allies emphatically reject the claim that he comes across as privileged, pointing to the fact his father was a GP and his mother a pharmacist. Sunak himself says he is the product of the hard work and sacrifice of his grandparents, who came to Britain with nothing, and his parents.

However a former cabinet minister suggested the gloss is coming off Sunak's carefully cultivated image. "I think of Rishi like the man from those old Martini adverts where only cool, beautiful people could drink it. Rishi is the Martini man, but the problem is lots of his colleagues aren't. And when I see photos of his adviser wearing a leather jacket in Downing Street I think he's acting like a Martini man too. Just put a suit on, you're doing an important job and you need to respect the office."

Within the Treasury, there is frustration that many of the challenges that Sunak faces stem from a free-spending prime minister with a fundamentally different economic outlook. When Sunak said last year that the thought of higher inflation and its impact on government debt was keeping him up at night, the prime minister claimed fears were "unfounded".

The nadir in their relations was in September, when the prime minister told his chancellor he wanted billions to overhaul social care and address the NHS backlog.

Sunak opposed the move as unnecessary at a time when the economy was still reeling from the effects of a succession of lockdowns. In the end Sunak backed down, but held his ground on the principle that it needed to be fully funded. One ally has said he had effectively been "bullied" into accepting the policy by the prime minister.

When the prime minister suggested that the money could simply be borrowed, the chancellor said that the Government should be honest with the public and raise taxes. After weeks of tense discussions they agreed to a national insurance rise of 1.25 percentage points.

This week's spring statement bore the scars of this difficult compromise as Sunak sought to unravel the impact of a tax rise for public spending he didn't want in the first place.

One ally said: "He's raising the threshold — taking lower earners out of paying national insurance — while simultaneously raising the tax rate. It's not an easy message for people to digest. He tolerates him [Johnson] but it's not an easy relationship. He finds him totally unreliable and unpredictable."

Another senior Conservative said: "The discomfort for the Treasury is the extent to which they've ended up with an economic policy that they don't really believe. It's not really what they would have done and it's not really what the PM would have done. So you get days like Wednesday where you get this weird product and nobody is happy."

They claimed that Johnson himself will have enjoyed the difficult headlines for Sunak. "When Rishi got the bad headlines the person who will have been most happy was the person in No 10. He's always been worried about who is coming next. He was irritated during the height of partygate that he got less than fulsome support from Number 11." No 10 said the claim was "categorically untrue".

Sunak will make another, far bigger fiscal intervention at the autumn budget, when he is expected to bring in new measures to help people cope with soaring energy bills and could also bring forward a 1p cut in income tax.

The bad blood between No 10 and No 11, however, shows no sign of relenting. One minister said: "The Conservative Party and the cabinet need to decide what they believe in, whether they believe in getting borrowing down so that they can cut taxes later.

"It is literally the only way of deciding between the Conservatives and Labour. If they don't believe that they should join a different party."

[Tamas]

One more Hungary-level corruption case that is no doubt going to be dismissed by "lol how stupid and inefficient" because Brits of course don't do corruption: https://www.theguardian.com/politics/2022/mar/27/government-paid-firm-linked-to-tory-peer-122m-for-ppe-bought-for-46m

[Sheilbh]

Gabriel Pogrund has been reporting on this story for the last four years since a woman came forward and alleged that former Tory MP Charlie Elphicke raped her (he has since been sent to prison for sexual assualt - as ever, there were other women). But then Elphicke sued for libel and only withdrew that claim in the last week, costing a fair amount for the Times to defend.

Again we need to fix libel laws - frankly we need to do so much to fix free speech issues in this country that we can put Carter Ruck out of business The times had two defences to the libel claim: that it was true and it was in the public interest.

Also noteworthy the fairly disgraceful role played by his wife who initially condemned him, then became his strongest backer including whipping up some support and character witnesses from his fellow MPs. Some say her line changed because he helped her win selection to replace him as an MP in a by-election. She's currently Tory vice-chair. And the role of Theresa May's whips who apparently restored the whip to Elphicke despite, at the time, the prosecution against him for sexual assault - because May needed every vote she could get to survive internal challenges:

Gabriel Pogrund
@Gabriel_Pogrund
Charlie Elphicke spent four years suing The Sunday Times for revealing a woman accused him of rape

He used British libel law to silence her and prolong her pain after being jailed for sex crimes

Last week he dropped the case. Today we tell the full story
Elphicke was represented by Carter Ruck, the firm of choice for oligarchs, before and after his time in jail

The former MP argued the alleged victim was lying. The onus was on us - and her - to prove she wasn't

She says this prolonged her "torture", was a form of "punishment"
Elphicke was supported throughout by Natalie Elphicke, his ex-wife and the MP for Dover, who was given his seat after he was charged

We can reveal that, just a few weeks ago, she signed a witness statement backing his claim the victim was a liar

She is now Tory party vice chair
Natalie Elphicke argued her husband was punished for being "attractive and attracted" to women

She was later suspended from the Commons for improperly trying to influence judge presiding over his trial

4 other MPs did the same, with one describing Elphicke's crimes as "folly"
Elphicke enjoyed support from other powerful people

Theresa May's whip's office lifted his suspension shortly before a make or break confidence vote

She has never provided any account of why this happened
Thanks to the backing of editors and our chief editorial lawyer Pia Sarma, we defended our report about the rape claim

We spent more than £500,000 doing so

Last week, days after the alleged victim submitted her witness statement, Elphicke withdrew all of his claims

(ends)

[Sheilbh]

FFS - just seen Labour's housing shadow minister do an interview where they explained their view that it's not really a supply issue in the housing market and more building won't actually solve anything. He moans that the government's answer to evertying is "liberalising the planning system [...] and, actually, what it has meant across the country is unconstrained planning development" - which I wish was the case.

Apparently the planning system needs to be changed to focus on "people and placemaking" not developers - which, fine, but we still need someone to build new housing.

A reminder that England has the lowest rate of empty homes in the OECD:


Around 0.9% of homes in England are long-term vacant - we don't have a massive surplus of homes. We build about 200,000 new homes in a good year and on average have net migration of 250,000 (plus natural population growth) - so generally as a country we are have no surplus to sit on, plus more new households/people wanting homes than we build every year. I'm not an economist but that all seems like an issue.

I find Tom Forth's argument that basically we need to, like the French, trust markets a bit more fairly persuasive. In the UK we try using lots of data and algorithm to calculate household count projections into the future and then align housing permissions and supply exactly to those projections. While the ONS is great - they projected that abotu 3.5 million EU citizens were entitled to settled status, in fact six million were; similarly there's huge discrepancies betwen different data sources on vaccine up-take because there's different datasets for government and basically we don't know how many people are in the country and in different age groups - I'm not sure we really can accurately project household growth like that.

The French model is basically that their target is to have a surplus of housing of about 10% as they think that gives wiggle room if the population grows faster etc and also is a cushion that allows for a more flexible housing market (Paris is at 6.5% right now and is aiming to increase it to 8% by 2035). Because of this France builds about 50% more housing per year than England.

This is, incidentally, why I'm not sure housing in Engalnd is a bubble - I think the financial products around it might be and people may have taken on too much debt, but fundamentally we don't have enough housing stock, which is the real problem. Sadly lilterally everyone in politics is a NIMBY - so I'll just never own a home

I really like Labour's economic thinking at the minute with Reeves - especially the energy transition funding - but I feel like they should just go all in on a pro-growth, pro-young people message. They will endorse building new housing (inicluding allowing council housing and ending right to buy), new public transport infrastructure, they'll back the Oxford-Cambridge Arc (optimistic, no doubt, but projected to contribute 3% to GDP), tax wealth and cut taxes on working income/payroll. It won't happen but it'd be nice

[Richard Hakluyt]

They are terrified of the pensioner vote becoming even more Tory. But, most pensioners have children and grandchildren....convince them that your policies will help the younger generations and they might surprise you.

[Josquius]

They are terrified of the pensioner vote becoming even more Tory. But, most pensioners have children and grandchildren....convince them that your policies will help the younger generations and they might surprise you.

On the other hand... See brexit.

[Sheilbh]

They are terrified of the pensioner vote becoming even more Tory. But, most pensioners have children and grandchildren....convince them that your policies will help the younger generations and they might surprise you.

I agree and there's loads of polling that older people worry just as much (if not as intensely) about climate for exactly that reason.

My slight worry around this is I don't think the facts have cut through so there's lots of comforting delusions voters can cling to. We see it in that Labour spokesman's comments - the issue apparently isn't supply, modern developments are generally bad etc. The facts are we have a shortage of housing and need to vastly increase supply - it wouldn't, in my view, impact prices for a long time because I think there's loads of people who have settled for a less ideal home than they could afford/would want.

It's the same with productivity - everyone talks about skills and education and how we need to re-train people. In effect we need to spend more on soft infrastructure - not physical infrastructure But, if you look at international comparisons, we're pretty good at that stuff (in PISA stats better than Germany, France, Italy etc). Where we lag wildly behind is physical infrastructure that links those people with skills so they can work together and innovate. Looking at the growth in East Germany for example compared with Yorkshire over the last three decades - Yorkshire measures very well on soft skills, what it doesn't do well on is the sort of physical infrastructure Germany's built. Instead we have Bradford a ridiculous isolated and disconnected city, but it's the youngest in the country with a population of 500,000 - we should be building entire networks of transport and infrastructure around it. But we won't, though we might spend more (again) on skills (again)

[Josquius]

FFS - just seen Labour's housing shadow minister do an interview where they explained their view that it's not really a supply issue in the housing market and more building won't actually solve anything. He moans that the government's answer to evertying is "liberalising the planning system [...] and, actually, what it has meant across the country is unconstrained planning development" - which I wish was the case.

Apparently the planning system needs to be changed to focus on "people and placemaking" not developers - which, fine, but we still need someone to build new housing.

A reminder that England has the lowest rate of empty homes in the OECD:


Around 0.9% of homes in England are long-term vacant - we don't have a massive surplus of homes. We build about 200,000 new homes in a good year and on average have net migration of 250,000 (plus natural population growth) - so generally as a country we are have no surplus to sit on, plus more new households/people wanting homes than we build every year. I'm not an economist but that all seems like an issue.

I find Tom Forth's argument that basically we need to, like the French, trust markets a bit more fairly persuasive. In the UK we try using lots of data and algorithm to calculate household count projections into the future and then align housing permissions and supply exactly to those projections. While the ONS is great - they projected that abotu 3.5 million EU citizens were entitled to settled status, in fact six million were; similarly there's huge discrepancies betwen different data sources on vaccine up-take because there's different datasets for government and basically we don't know how many people are in the country and in different age groups - I'm not sure we really can accurately project household growth like that.

The French model is basically that their target is to have a surplus of housing of about 10% as they think that gives wiggle room if the population grows faster etc and also is a cushion that allows for a more flexible housing market (Paris is at 6.5% right now and is aiming to increase it to 8% by 2035). Because of this France builds about 50% more housing per year than England.

This is, incidentally, why I'm not sure housing in Engalnd is a bubble - I think the financial products around it might be and people may have taken on too much debt, but fundamentally we don't have enough housing stock, which is the real problem. Sadly lilterally everyone in politics is a NIMBY - so I'll just never own a home

I really like Labour's economic thinking at the minute with Reeves - especially the energy transition funding - but I feel like they should just go all in on a pro-growth, pro-young people message. They will endorse building new housing (inicluding allowing council housing and ending right to buy), new public transport infrastructure, they'll back the Oxford-Cambridge Arc (optimistic, no doubt, but projected to contribute 3% to GDP), tax wealth and cut taxes on working income/payroll. It won't happen but it'd be nice

There is a bit of a spin towards NIMByism from Labour its true. This is definitely pre-planned and...may win them votes but is not a great way to run a country.
However, that housing isn't a supply issue....
eh.... You know I do partially agree there. There are supply issues, not an overall national supply issue but certainly in individual areas supply issues, and especially an issue of supply type not matching demand.
However, its definitely the case that supply isn't the biggest problem. Massively ramp up the number of houses being built and I doubt it would fix too much, you'd just get more people able to afford a second home or a rental property. Those at the bottom, young people in Kendal and the like, will still be stuck.

Were I emperor I'd come down hard on NIMBYs. Not necessarily all of them. But target a few villages with a big fuck you hammer. There's so many small villages with well placed train stations that would be wonderful 21st century new towns...but of course NIMBYs can't be having that.
There is definitely value in letting local people have a say in what goes on but the way its set up now its hard to find this information and those whose point of view is "I don't care. Do it if you want" just are never factored in. Its always the local "Everything must stay just as it is" people.

[Tamas]

Of course it's a supply issue, WTF. Demand is higher than supply so prices go up. Now, arguably, if you decreased demand by skyrocketing interest rates and making people poor, that would resolve the part of decreasing nominal prices but would not make it easier for people to buy homes. Because, you know, there are less available than needed.

[Josquius]

Of course it's a supply issue, WTF. Demand is higher than supply so prices go up. Now, arguably, if you decreased demand by skyrocketing interest rates and making people poor, that would resolve the part of decreasing nominal prices but would not make it easier for people to buy homes. Because, you know, there are less available than needed.

Build 2 million 6 bedroom houses in Glasgow and it'll do nothing for people house hunting in London.
Build enough new homes of a reasonable size and design in the lakes so everyone turning 18 in theory has a house waiting for them...and they still won't be able to get one as wealthy southerners looking for a second home or somewhere to retire to will be able to pay more.
Build a bunch of flats in London and put them out onto the open market and its very likely investors will snap them up before normal people can get a look in.

Just increasing supply is the human wave tactic of approaching the nation's housing shortages.

[Tamas]

What is your solution mr homeowner then?

[Tamas]

Because what I see is I want to visit some insanely overpriced property in Bracknell but in no time there are no more slots available for the open day, and two days after the open day it is marked as sold. How is increased supply NOT going to help that, I can't see.