The short-lived Truss government came to power with a mandate to change Britain. She fought her campaign clearly stating her policy. She was lawfully elected according to the rules. Her policy was designed to produce growth. Cutting taxes was a part of the program. The respected US Tax Foundation in its 2020 report on UK tax wrote: "All things being equal, lower marginal tax rates are better for economic growth than higher ones, because they do less to discourage economic activity. Put simply, the less you tax something, the more of it you tend to get, and vice versa."
What went wrong? It seemed odd that Truss rushed into announcing tax policy without the necessary supply side reforms. Help for energy bills could have been provided with the promise of a mini budget at the end of November. We may never know what happened, but I feel she decided to go for a Norman Swartzkopf style 'Shock and Awe' approach in the hope of beating the blob that had been briefing against her.
Getting rid of the Treasuries Permanent Secretary and ignoring the OBR fits this premise. Both are wedded to the old failed methodology. But, the dogs of war had already been unleashed. On September 26 Reuters reported: "In the first half of September bets against sterling posted the biggest two-week rise since 2013, a sign that hedge funds may have ramped up short positions just as Liz Truss became Britain's new Prime Minister."
The blob triumphant kicked up a storm, threatening parity for the pound and interest rates of 15%. Continuing his predecessors anti Brexit policy, Andrew Bailey Governor of the Bank of England acted tardily in respect of inflation. He has made apoplectic statements making the situation worse than need be. The Wall Street Journal observed that "Mr. Bailey's actions in the past month have also politicised the central bank in a new and worrying way." The majority of Tory MPs, furious their choice had been turned down by the membership, let it be known they were prepared to unseat another leader. To my surprise, Truss buckled and resigned. Our great hope died with her and, possible, democracy too. Those opposed to Brexit were at the forefront. On a recent visit to France, Germany and Luxembourg we found fuel was cheaper in the UK. Prices for most food and household products were cheaper in Waitrose than in Discount stores. Unsurprisingly this is not reported by a broadcast media determined only to relay bad news about BREXIT Britain.
Increasingly it seems that who we vote for is irrelevant. It is the self appointed establishment that rules. We are threatened with eye watering tax rises by a PM defeated in a fair election and a chancellor who was rejected twice in leadership contests and is universally considered to have been a second rate health Secretary.
The new blob anointed team is, we are told, financially experienced and for that reason markets have calmed. It is instructive to consider their backgrounds. Hunt read PPE (essential for aspiring politicians) at Oxford and has a BA. His first job was as a consultant with OC&C Strategy Consultants. What advice someone with zero work experience could offer is an interesting question. Subsequently he taught in Japan before founding a PR firm and then went into database publishing. Like Hunt, Sunak read PPE at Oxford and followed up by obtaining an MBA from Stanford. He worked for Goldman Sachs before moving to TCI Hedge Fund where his bosses were Chris Hohn and Patrick Degorce. After five years, he moved to California and joined Theleme Partners a hedge fund founded by Patrick Degorce. Sunak served in Johnson's government as Chief Secretary to the Treasury. Following Sajid Javid's resignation in February 2020, Johnson appointed him Chancellor. He became a voter favourite during the Lockdowns as he sprayed money indiscriminately creating the black hole he now proposes to fill by raising taxes. Early on, he was 'captured' by Treasury orthodoxy. Sunak's anointment as Prime Minister was welcomed by Bankers and Hedge fund operators happy to have one of their own in power.
In the 1990 film Pretty Woman Richard Gere's character Edward Lewis, an asset stripper and hedge fund operator, is questioned by love interest Julia Roberts's character Vivian Ward why he does not make things. He is on the point of a mega deal taking over a ship yard with the intention of breaking up the company. At the finalising meeting he has a change of heart. It is left to Ralph Bellamy's character, James Morse, to announce "Mr. Lewis and I are going to build ships together. Great big ships." Only in Hollywood? Dare we hope that our two financial wizards might, just might, decide to build. To act in the best interests of the country? The signs are not good.
One of Sunak's first acts was to reinstate the ban on fracking. Whether that has anything to do with Chris Hohn's eco crusading (he uses share holdings to force companies into net zero strategies) is a moot point, but after Mrs. Johnson did for fracking under the Johnson administration, nothing would surprise. Sunak's U turn on attending COP27 is a worrying sign.
The British Geological Survey in association with the Oil and Gas Authority (OGA) estimated that the area between Wrexham and Blackpool in the west and Nottingham and Scarborough in the east contained 1,329 trillion cubic feet (tcf) of shale gas compared to the annual consumption of natural gas in the UK of just over 3 tcf. Quite simply, we have enough natural resources to make us energy independent. There is a big enough export potential to cover the Sunak black hole. A minimum of 100,000 jobs would be created in areas that need 'levelling up'. The opponents of fracking are an odd lot. From subsidy drunk renewable operators and landowners to eco fanatics who glue themselves to roads with oil derivatives or climb bridges in synthetic clothes. Why do the tantrums of a minority and the false propaganda of the BBC and their ilk outweigh the good of the country?
Why do the supposedly financially competent consider they can tax our way out of a mess? It has been tried before with catastrophic consequences. Indeed, rationally it is madness to pursue economic policies that have consistently failed for the past 75 years. Although not as badly off as the EU, we do face a challenge to avoid recession. Pre-Budget leaks indicating further raids on dividends and increasing capital gains thresholds in addition to other anti business and personal tax moves seem designed to make a bad situation intolerable.
Post war Economic orthodoxy developed into a policy that destroyed much of UK productivity. In an unlikely alliance with Communist controlled unions they destroyed swathes of industry and weakened what was left. According to New Think - it does not matter who makes a product provided its cost is low. The stupidity of that idea was demonstrated when we had to rely on China to produce simple products like face masks during the pandemic. The Chinese, being capitalist/communists have always understood that production = security = power. Almost all our strategic assets have been sold off. We are now dependent on foreign companies for our utilities. Royal Mail, sold off for less than it was worth, is now under threat of a takeover that could see its profitable arm hived off. That would leave the loss making postal service requiring subsidy or take over at a cost to the taxpayer. Whilst Sunak seems intent on pursuing net zero, a policy unsupported by real science, China and India burn coal. China is the workshop of the world and its manufacturing sector needs cheap coal. We need fracking to extract gas and oil. We need a pragmatic approach that puts our country first. We also need a massive investment in Rolls Royce Small Modular Reactors. What is preventing our government from adopting policies that protect the welfare and security of the British people?
Unfortunately, Sunak and Hunt are followers of the orthodoxy that has created the mess. The unproductive form of capitalism has grown like Topsy to dominate the world. Speculators used to be scorned, now they are heroes. Like a parasite they rely on invading the work of others, invading, cutting up and destroying for profit. To them misery and national pandemics are a commodity to be bought and sold for profit. Major international Banks (who caused the 2008 crash) joined enthusiastically by Hedge Funds joyfully make money out of shorting currencies and stocks. They also support Globalisation. This is not to be confused with the idea of freer world trade. It is a concept promoted by OECD, World Bank, IMF and supported by Klaus Schwab Executive Chairman of the World Economic Forum (WEF).
The WEF annual meeting at Davos is attended by the elite from politics and business across the world. Schwab said in 2017 "I have to say that when I mention our names as Mrs. Merkel and even Vladimir Putin, and so on. They all have been Young Global Leaders of the World Economic Forum. But what we are very proud of right now is the young generation like Prime Minister Trudeau, the President of Argentina and so on, that we penetrate the cabinets". In his welcome address to the 2,500 attendees at this years conference he said "Let us also be clear. The future is not something that just happens. The future is built by us, by a powerful community like you in this room. We have the means to improve the state of the world, but two conditions are necessary. The first is that we all act as stakeholders in larger societies. That we serve not only our own interests but also society. This is what we call stakeholder responsibility. And the second is that we must collaborate. This is the reason why you will find many opportunities here during the meeting to engage in very action-oriented and powerful initiatives, to make progress on issues related to the global agenda."
The global world envisaged by today's elite requires Global Tax Agreements. In so far as possible it requires uniformity. They dream of a digital currency, a project supported by Sunak that will make populations easy to control.
The EU position that they will not tolerate a Singapore on the North Sea is simply restating a view held by those who adhere to a Global world view. Allowing the UK to be successful would seriously, possibly terminally damage the global plan. Truss wanted a high wage low tax economy. Those imposed on us by Tory MPs more worried about their job prospects than their constituents do not share the vision. They may talk the talk, but to walk the walk goes against everything they believe. The UK being stuck in a low productivity world of low wages and high immigration suits their desired world order.
It is received wisdom that our First Past The Post system makes it impossible for a new party to gain seats. Not quite true. The Labour party replaced the Liberals in the last century. If democracy is to be restored we need a new system, new parties. For the truth is that our democracy is broken. Tweedle Dum and Tweedle Dee are in charge. All sides in parliament are equally determined to suppress our potential. We deserve better and if we are to avoid Joseph de Maistre's observation that "Every country has the government it deserves." It is time to alter our future.
We are a great people and it is unconscionable that our fate be determined by people who demonstrably are working against our interests, people determined to overturn our democracy and way of life. It is time for those few MPs who put service and honour before the smell of the gravy train to break away and form a new Party for the UK. We need a government that believes in Britain. A government that will release us from the orthodox straitjacket and allow us to reach our true potential. The potential is there. It is up to each individual to use what is left of democracy to bring it about.
