Yves here. With Trump news consuming the air supply, it seemed useful to look at some of the wobbles among what passes for leadership across the pond. Pretty much no one expected Starmer to last very long. However, my impression from this remove is that Starmer has managed to underperform the weak expectations for him. This is not just his lame political conduct, like failing to address a growing hunger crisis in the UK and instead running to Ukraine to enter into a 100 year pact. The economy is going into stagflation as Starmer is in deer-in-the-headlights mode.
UK readers are encouraged to opine.
By Richard Murphy, part-time Professor of Accounting Practice at Sheffield University Management School, director of the Corporate Accountability Network, member of Finance for the Future LLP, and director of Tax Research LLP. Originally published at Fund the Future
Keir Starmer really does not understand what he is doing. It must be that statements issued by his own team informed these comments in the FT this morning concerning an extended Cabinet meeting held yesterday afternoon and evening:
Sir Keir Starmer has launched another attempt to reboot his ailing UK government at a six-hour cabinet meeting, held against a bleak economic backdrop and crumbling public support.
The prime minister admitted his administration had been too slow, too cautious and risked being left behind by world events, telling ministers at a special meeting on Friday in Lancaster House: “We can either be the disrupters or the disrupted.”
The FT added:
At the end of a week which saw the Bank of England halve its growth forecasts for 2025 and the populist Reform UK party overtake Labour in a YouGov poll, Starmer’s allies said he had made “a passionate call to increase the pace of change”.
There are four things he very obviously does not get.
The first is that however hard he calls for it, growth is not going to happen in a world as chaotic as that we are now living in. When every signal being sent out into the world from Trump says that chaos is imminent, the world is going to be in precautionary mode. People and companies are not going to spend. They are not going to invest. They are going to save. That is what always happens when people are afraid, and they are rightly afraid right now. Telling people to do otherwise is going to have no impact. They are not going to listen to him. His whole plan is utterly hopeless in a world where growth is not on the cards.
Secondly, it really is time he gave up on growth anyway, for two reasons. One is that most people know that the benefits of growth only go to the wealthy. They are not interested in any more of that happening. And, unless he says what he wants to grow and why, then they will be alienated because, by itself, the word has become meaningless. He could talk about growth in the one thing he can control, which is the state sector, and people might listen. But, since he will not talk about, or even countenance that, any discussion of growth is now a political turn-off.
Thirdly, it should have dawned on him by now that the word ‘change’ is also seen as meaningless unless explained. Unless the change from ‘something’ to something else’ is explained, with reasons for the change being given and potential benefits being laid out for all to appraise, then people are now as alienated by this word as they are by growth. People might be desperate for radical change in our political system so that it might function for them, but when Starmer has turned his back on everything from proportional representation onwards that might really deliver change, they do not trust him with the word.
And, fourthly, for a man who makes the average conveyancing lawyer in a small market town look exciting, the claim to be a disrupter is ludicrous. That is most especially so when nothing Labour is offering appears to change anything that really matters in any of the biggest areas of concern, from healthcare to education and onwards. In fact, all labour seems to be doing is maintaining the status quo.
Starmer can say these words. No one will, however, believe a word he says. Only actions matter now, and he does not believe in the state, reform of the state, or in what a state liberated by proper macroeconomic thinking can do. Unless he changes – and that seems unlikely – those at yesterday’s meeting must realise that they are doomed to failure. It’s just going to be torture whilst the path to Starmer’s painful demise is rolled out.
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Starmer seems to be a double fool. If he said nothing, people might suspect him to be a fool. But with all the stuff that he comes out with has confirmed in people’s eyes that he is a fool. He is obsessed with Project Ukraine but signing an agreement to give that financial black hole £3 billion ($3.6bn) a year in military aid ‘for as long as it takes’ while the UK’s finances swirls around the toilet bowel is plain nuts. Not that he is that different to leaders like Macron or Trudeau or Scholz. What is worse is that the Tories don’t have much to offer either that could win back voters. I mean, how bad can it be when British voters look at Labour and the Tories and think that somebody like Nigel Farage might be a reasonable choice to make instead. To make it worse, Starmer has surrounded himself with more fools. For example, the UK’s Foreign Minister Lammy made a speech the other day and said, I kid you not, ‘Kievan princesses married British princes a thousand years ago, our partnership is about hundreds and thousands of years old.’ Russia’s Maria Zakharova had a field day with that one and asked ‘Why not older? [Ukrainians and Britons] also hunted Brontosaurus together.’
Thank you, Rev.
It turns out that in the past year, Lammy has received £70k from Zionist lobbyists.
.” Not that he is that different to leaders like Macron or Trudeau or Scholz.”
And the rest. Could it be that they are all from the same factory? If Ukraine and the West Asia situation have been several years in the planning then Starmer had to replace Corbyn
The USAID/NED factory?
I lived in the UK for 4 years but find myself these days thinking how just the idea of visiting gets me nervous. The UK feels from outside as a police state, authoritarian and vengeful.
As for Starmer… we all know from life people who are subservient to power, who rose above their merit purely based on being disgusting slimy boot lickers, who have no honour and happily betray anyone that they see as in their way. And we all recognise Starmer as such a person. I don’t think I have ever felt such disgust. And I don’t know anyone, his masters, fellow labourites or anyone else who has an ounce of respect for the guy.
Add to that that the guy looks utterly lost and clueless beyond doubling down in what he thinks his masters want him to do.
The way a former human rights lawyer tried to justify war crimes, how he stabbed Corbyn in the back, etc, etc. Vile.
He makes the game too obvious, he has become a liability.
I echo your sentiments fully. As a British citizen long gone from the UK, I also feel nervous about even setting foot in the country – afraid that the UK Stasi will have me on record as a troublemaker who posts dissenting views on news and social media platforms, and decide to interrogate me at the airport!
As for Starmer, I cannot believe he ever actually supported anyone’s human rights in the past – he just doesn’t come across as a person who cares about people at all. His obsession with Ukraine alone makes him a huge liability, giving domestically much needed money to a lost cause. His choice of Foreign Secretary, Lammy, is more proof of his utter incompetence.
Lammy is so far down into the pit of stupidity and ignorance, that no sane person could ever take him seriously. Starmer could safely pick a person randomly off the street who would outperform Lammy with ease.
Even if Starmer is replaced, what does Labour have to offer – absolutely nothing of value or use to the British people.
Sounds like it’s time for the UK to start looking for it’s future ex-Prime Minister.
Thank you, Yves.
I will try to write more later, but just want to add that in addition to the hunger crisis, there’s a growing personal debt crisis and, in the provinces, noticeable rise in homelessness.
Labour is just not interested and desperate for Big Finance to bail out UK, Inc. That
desperation extends to wining and dining US giants at Downing Street and pointedly excluding their UK peers, e.g. appointing someone from Amazon to be trust buster. BlackRock may as well relocate from the City to Whitehall, if only that would make it easier for Angela Rayner to get handsy with Larry Fink.
My parents, both 80 last November and in Blighty since May 1964, and I are planning to leave in the next couple of years. A year ago, we thought of selling up in Mauritius, but have flipped 180 degrees since the summer and some racist attacks in mid-Buckinghamshire and one at York on the son of a friend and his girlfriend last July.
The rate of decline appears to be accelerating. I would also add there’s a noticeable public loss of faith and signs of mental and physical stress.
There’s quiet quitting and talk of it from not just immigrants and the children of immigrants, but Britons with no overseas connections.
It makes sense for immigrants and their offspring to pack up. Just before Christmas, the FT featured Labour’s record since the election and some score settling by the Starmer back room team led by Cork born and raised and Fine Gael, so Irish Tory, hatchet man Morgan McSweeney. Not everything said was published as the FT is anxious not to burn bridges.
One of the FT team is a friend. The friend’s spouse is of Indo-Mauritian immigrant parentage. The pair would like to start a family. The friend was alarmed to hear that Labour will not be outflanked from the right by Farage’s Reform and looks forward to and even relishes fighting on Reform’s turf. Labour plans to capitalise on Starmer’s record as chief prosecutor and highlight cases where criminals of immigrant origin were prosecuted. McSweeney sees Europe and the US swinging to the right, Germany this month, France in 2027 and Vance winning in 2028. McSweeney, the brains behind Starmer, would like his sock puppet to make common cause with Meloni, Merz and Weidel, Le Pen and Vance.
I won’t waste your time by commenting on the British left.
Knowing England only via British friends and visits long ago I would argue Germany is not GB if it comes to racism. The elections now are a ballgame of its own and have hardly anything to do with real people or real life. Immigration camps went up into flames in Germany ever since 1990. In fact more in the past decades. Racism against immigrants was there since the 1950s. And there have always been parties with Nazi affiliations. In fact worse ones than now. I don´t know England, but media reality through the lense of party politics on Germany is quite distorting. By now 25% of German people are of immigrant background. That does change structural thinking. But: does not eclipse racism. Older Turks, Eastern Europeans etc. who were subject to racism are now anti-immigrant themselves after they have lived in gold old West Germany for 40+ years. They are disappointed over what they think the country has become. Blaming immigration is a major part of that. Btw immigration used to be an issue less re: Global South but much more re: Eastern Europe. After all weakening labour was managed through that channel with the EU expanding East. Interesting to see that over the influx from the Middle East and Africa this has been totally forgotten in the past 10 years. Racist jokes were made about Poles not so long ago. Now them Poles joke about people from Northern Africa.
That’s true, and also true for their children – though certainly not for everyone.
divide et impera?
btw: the immigrants brought their own racism with them, and kept it alive ever since.
The most radical anti-gypsy comment i ever heard came from an hungarian, who lived in germany since he was one or two years old. The worst anti-jewish comment i’ve read in the last ten years was written by an older greek living i germany since about forever.
Regards, Uwe
Curious about your decision making process re: where to live. Why were the UK and Mauritius the only options? Were your primary concerns having a solid network of strong ties with family, friends, and community? (I would think that’s a very good reason.) Would you have made the same choice if you didn’t already have significant savings?
Expatriation is a subject a lot of NC commenters are considering. Maybe you could do a guest post.
Thank you, Joe.
As a family, we did not consider other locations, although I thought of France, Switzerland and even Dubai, but as short term. We briefly toyed with the idea of getting French passports through dad’s grandparents.
Yes, with regard to Mauritius, we have ties. I’m reasonably plugged into the local and fast expanding and diversifying business community, domestically and regionally.
Good question with regard to moving if we didn’t have savings. You’re probably right.
Can Mauritius grow enough food for its population if needed? Is there good medical care for your aged parents?
All questions for these times?
Thank you.
The island is net food importer.
My parents and I own a small holding and have our own water supply.
The sugar industry is diversifying, too.
Healthcare is good and free at the point of delivery. There are private hospitals, too. If local hospitals can’t help, the government contributes to treatment in South Africa, India and Reunion.
From time to time, the government flies in specialists from overseas.
No one will go bankrupt due to ill health in Mauritius.
Thanks Colonel. It may or may not be connected, but just yesterday the Bank of Ireland announced a cut on bonuses for staff, citing exposure to UK car loans (via a subsidiary) as a key reason. I’ve always suspected that car loans are the canary in the coal mine for the UK economy, they are astonishingly easy to get.
On your comments on immigrants – I know a few HKers who left after the crack down there to move their entire families (even extended families) to the UK. They seem to be very downbeat and many are actively moving to elsewhere in the EU or trying to move to the US/Australia. How much is economic, how much is the general decline in civility/tone with a rise in racism, so hard for me to say. But I’ll never forget being told by the daughter of a friend in London – white, but with a distant Portuguese relative who bequeathed her some lovely olive skin – that on the day after the vote a guy on the tube came up to her and said (to paraphrase), ‘you lot can all F-off home now’. She said it was the sole time in her life anyone made any sort of a racist comment to her.
Now I have to say that on my occasional trips back to England things generally seem very nice – no doubt because I’m usually visiting pretty villages in the north of England, Birmingham (where its been spruced up since I lived there in the 1990’s) and London. There are of course grim places to visit, but even back in the 1980’s and 90’s I recall being quite shocked at the poverty I saw in some parts of England and Manchester on my first visits. The one very obvious thing is that there are far more homeless on the streets than there used to be.
But there is I think a strong sense that the UK has been running down its savings (sometimes quite literally) for several decades, and people who know how to read deeply into the national accounts are extremely worried. Labour seem to have grabbed the ‘growth’ idea as a somewhat desperate attempt to pretend that the figures don’t add up anymore. Which sort of makes them like Uber now that I come to think of it.
Thank you, PK.
You’re right about car loans. Lloyd’s has taken similar steps.
My EU bank employer is closing its small business arm, but it’s doing that in Germany, France and at home, too.
I’ve heard of smaller banks reconsidering their City presence and larger ones scaling back.
My employer is soft pedalling on plans to expand. HQ refuses to be specific about what UK sectors to target and staff to be seconded from home to host.
PK, a related question to the fate of the UK is that of Ireland? What is your take on the future for Ireland?
Irish GDP is c. €100k per capita but GNP is basically the same as the UK at c. $45k per capita. Ireland’s effective tax base is basically double because US foreign earnings are routed through it. I don’t see this as sustainable under Trump. Plus there are endless attempts to push Ireland out of neutrality and into NATO or EU-ersatz-NATO structures. Picking the Trumpian US economic pocket and rejecting its military embrace is a doubly difficult position to strike…
Do you see Ireland keeping its economic miracle, which is built on equally fictitious capital as the City? Do you see it keeping its neutrality?
And do you see a border poll succeeding? I fear that we may be at the high point for a border poll and that in five years’ time, continued decay in the north and new found austerity in the south will make it politically impossible (the south would refuse to subsidise the north like the UK does and the unionist and centrist north would stick with the devil it knows if the deal did not stuff explicitly their mouths with gold).
Oh, those are big questions!
I’m uncharacteritically optimistic about the Irish economy for a number of reasons. For one, the Central Bank here has been far stricter than in the UK and elsewhere – while property prices seem ridiculous, in terms of affordability on international measures they are fairly modest. Consumer debt is also reasonably low by international standards. So there aren’t any domestic booby traps waiting for the moment to blow so far as I can see. At the moment, Ireland has a ‘sweet spot’ in terms of having an economy with a fairly fine balance between the US and EU, so is not too dependent on any one sector or region. Growth (real growth, subtracting the dubious tax flows), has been consistently stronger than the rest of Europe. The relative weakness of the Euro has been beneficial so far. For a wide variety of reasons, there is still a lot of FDI coming in – to an extent it’s become self reinforcing – to give one example, domestic engineering companies are now cleaning up in Europe building data centres as they are seen as more experienced than German, Dutch or French consultants. In general Irish services have benefited greatly from Brexit as they are picking up a lot of former British business. Demographics are very strong too (although there is a crisis in the availability of accommodation, with is the main cap on growth). The government here consistently gets housing and infrastructure badly wrong, and the newly elected government is packed with short termist ‘stroke’ politicians.
Trumps tarrifs are of course what everyone is scared of, but from my understanding of Brad Setsers obsession with US Pharma in the US, Trump appears to have misjudged the best way to stop those loopholes. Plus they are very tightly embedded in law, so it would not be easy to unravel them. Plus of course if there are problems with getting base chemicals from China, the US will suddenly find that Ireland is actually a key source (mostly secondary products). So there are a number of firewalls there.
As for a united Ireland and border poll – well, that’s on hold for a moment. The latest Irish Times poll shows that a border poll would be rejected (although support for a united Ireland is steadily increasing), plus Sinn Fein took a major beating in the last election. The current PM (Michael Martin) hates SF with a passion and won’t do anything that will boost them and basically just wishes NI would go away. I think SF have little choice but to wait for another electoral cycle on both sides – they will be hoping for an economic crisis in the UK (especially a weakening currency) to make a united Ireland look a lot more attractive. Ironically, Irish Republicans have always preferred a Tory government to a Labour one, as they know the Tories would dump Unionists in a second if they felt it was in their interest, while Labour have always been more ideologically attached to the United Kingdom, despite appearances and the occasional Corbyn.
Sorry for the big questions, PK! The trajectories of Ireland and the UK are on my mind for family reasons and because Ireland is our most likely destination if we leave the UK, specifically to somewhere on the beach in Donegal, if you’ll have us – I’m learning Irish to increase our chances :-).
Yours is a very interesting response – frankly a confounding one! I hadn’t expected such confidence that the FDI + tax arbitrage model can survive the USA pulling imperial capital back home and pulling the rug out from the UK and Europe in the process. I hope you are right although if I read your response correctly, it is not that you are confident the model would survive hostility by Trump but you are confident that Trump will not be able to find effective measures to overturn it.
I’m not so sanguine: there is talk of Scott Bessent’s plan being to bring the budget into balance by cutting Federal expenditure by 3.6% of GDP, to “fund” tax cuts, which would mean he could cut corporation tax to Irish levels and offering an amnesty on redomestication….
I’d be interested to hear more about how Ireland has good demographics because I understood its fertility rate to be similar to the UK’s. Are you expecting immigration to take up the slack and is this EU-accession type immigration or Irish ancestry remigration? Ireland has historically sided with other post-colonial countries and welcomed immigrants but the “riots” last year in Dublin and Belfast about refugees and immigration suggest that there is a Reform-type constituency. Perhaps it is much smaller than the noise suggests but if FF and FG continue to fail to provide housing (I see they are abolishing the rent pressure zones and the latest data on housebuiing show their electoral claims were all bogus, not one of thousands of permitted apartments has been completed in one region).
Of course the biggest influx of labour for the Irish economy if it continues to grow would come from reunification (1.5m people, many economically under-employed) and here I’m really surprised by your answer that a border poll would fail. There was a recent survey that showed continuing 64% favour in the south for reunion and, more encouragingly, also a sharp drop in irredentism in the north, i.e. there’s still no unionist majority in favour but the number who would accept it has increased hugely and the number who would actively oppose it afterwards has collapsed.
https://www.reddit.com/r/northernireland/comments/1ijqcm1/trends_show_rise_in_support_for_irish_unity_among/
It was specifically this poll and the latest figures on Irish per capita GDP/GNP disparity that got me thinking about the trajectories of Ireland and the UK and the Good Friday Agreement. There’s no other country pairing in the world where the population can essentially call for a referendum on the relative economic and geopolitical trajectories of the countries! It is (forgive the ill-omened comparison) a genuinely democratic Maidan / regime change operation. So I think it will be fascinating to watch the border poll sentiment as a gauge of the pressures that Ireland and the UK are under (Trump tariffs and capital repatriation and joining NATO/EU warmongering for Ireland; EU trade and surrender of “Great Power” status and regional investment vs London/City rentier economics for the UK; immigration and net zero for them both)
What was ominous to me about that survey was that, on both sides of the border, the date that respondents felt a poll should be undertaken has moved further into the future – which is a classic way of virtue signalling yes to the pollster in theory but no in practice. I fear therefore we are at the sweet spot for a border poll: Ireland has never been more successful and if a poll does not happen soon, it is not going to happen at all because it is more likely than not that the shine will come off the Irish model in future and there will be less generosity to the north whereas the UK will be forced to focus more on regional development and be more generous to the north.
I think the FDI tax thing is somewhat exaggerated in terms of its importance to Ireland, not least because the government is reluctant to use the money, so its mostly used to pay down the national debt, which is now down to fairly manageable proportions.
The legal technicalities are a little beyond my paygrade, but a few people I follow and talk to are pretty confident that the companies are very locked in to Ireland, so even if there is a major change in US law, they will not be able to withdraw as much as they’d like. Even Setzer has acknowledged this. And contrary to general belief, there is substance behind the HQ’s – there are a lot of high value pharm plants around the country – one of the big attractions is consistent water supply, believe it or not – its a major concern for the industry with climate change. In many cases the Irish plants are a ‘hedge’ by the pharm/health industry against problems with their western US infrastructure. Ireland was hit very badly in the 1980’s by screwdriver plants arriving, then packing up within a few years for somewhere cheaper – this led to policies aimed at ensuring that transplanted companies were firmly rooted before they got access to various grants and tax schemes. Its much more than the tax dodges that are well known – there are numerous examples of ‘on the ground’ incentives (cosy land deals, guarantees of graduate links to local schools, etc), which are a major attraction to many companies.
And there is simply the momentum effect of the companies being very comfortable with being in an English speaking country with Common Law and access to the EU.
With demographics, its partially a matter of the demographic drop being later (there is still a ‘bulge’ working its way through the system’, but also the highly elastic nature of the Irish labour force. There are lots of Irish people in the UK, Canada, Australia, etc., who are essentially ‘available’ if there is an uptick in demand, while likewise they reverse direction in the event of a downturn (similarly with incomers). Its one reason why the last crash wasn’t as catastrophic as it might have been in terms of unemployment (Ireland never suffered the huge youth unemployment problem of Spain/Italy), and one reason why the current growth isn’t creating too much of a labour supply problem. And its also related to the very strong growth in native Irish service companies. Just to elaborate on the example I gave above – I know a small engineering company which is currently expanding very rapidly (mostly hiring non-Irish staff) based on their history of building data centres for two of the ‘big name’ server providers. They are now designing data centres in the Netherlands and Germany, despite bidding high. They simply have more experience and have built up a record with those companies which has allowed them to expand at a rapid rate, despite high costs.
As for your other comment below – on the ‘brain drain’, I was thinking less in terms of numbers (as it was in past decades). Its anecdotal I know, but while the US and Canada are not exactly wonderful for academics, they still seem to be able to attract the very highest level of talent. An ex Oxford (MA) and Cambridge (PhD) family member told me that the very best of his contemporaries in physics and computational biology are mostly now in the US. He is quite unusual in basing his new company in London.
And as for dairy – it is hugely damaging (the extreme intensification of dairy cattle is very damaging – even farming friends despair about it – as one sheep/beef farming friend said to me pointing out a neighbours field ‘there isn’t a worm alive in that 5 acres’. I just get the impression that the full implosion hasn’t happened yet. I’ve heard rumours about quite a few major processing centres getting shut down.
Thanks. That all makes sense. I have driven past various pharma / medtech plants in unlikely place (Donegal Town) and wondered how sticky they are in the past. The water supply makes sense as does the stickiness of FDA-approved GMP plants generally: some biopharma processes are black magic and although the standard operating procedure has been written down for the FDA, it literally cannot be established in another site!
Famously there is an important protein drug which can crystallise in various forms and one day the conformer changed to a much less active variety. It cost tens of millions to restablish the process and persuade it to crystallise the old way (I seem to remember it never really went back to the old way, they just found an acceptable new normal). There’s an account of this on Derek’s Lowe’s in the Pipeline site but I cannot remember enough of the detail to retrieve it!
There’s no barrier to setting up a company in the UK. Yves wrote in passing the other day about somebody complaining it takes too long but actually the usual complaint is that Companies House is too quick to issue registrations. Even registering with HMRC is quick, once you get through the badly designed government gateway ID process.
I haven’t noticed a shortage of technical talent for our fund’s start-ups, either. What would stop me setting up in the UK is the sheer cost of everything and everybody because of high energy and land prices, expensive professional services and the evil IR35 rules around contractors versus employees which make flexible hiring so difficult.
I find it quite odd, and maybe its a countercyclical indicator that I’m optimistic about Irelands economy, but its only really in comparison to most other countries. As a small open economy which has just elected a bunch of gobshites to take charge, there are a lot of things that can go wrong. But I do think that the conventional pessimist view of Ireland is based on a false reading of how the economy, specifically the FDI side of it, works.
Ireland had the advantage of being a pioneer of mixing FDI with domestic industrial policy – initially making huge mistakes – but generally learned from them (just as, somewhat belatedly, the financial system has learned a lot from the Celtic Tiger crash). For the moment, the underlying ‘system’ is still quite competent when it comes to macro issues (but don’t get me started on the widespread incompetence of most Irish local governments – as a regular visitor to Donegal, the most inept of them all, you no doubt know what I mean).
The UK still has a lot of strengths – whenever I’m in Asia there is still a very strong and positive perception of the UK as a place to invest and do business (although its noticeably weakened since Brexit). On every visit to London I still find myself gawping at the visible wealth on display everywhere, not to mention the cost of buying even a half decent lunch. And its not just London. I’m reminded of a few years ago when an economist interrupted someone saying that Ireland was now as wealthy as Britain. He said ‘Ireland is now a high income country – but that’s not the same as being a rich country like Britain’. And he had a point. But of course the direction of travel is clear.
Richard Murphy’s article is rather slight, as has been noted, but the discussion here is valuable.
I apologise but I have a long contribution to make. Part 1 here is about the several pennies that are dropping in the UK right now. Part 2 is a personal response to the situation.
Domestically, the wheels are coming off the Thatcherite economic consensus, in which:
– rentier capital is cosseted with high returns (regulated private monopolies, public-private partnerships, artificially high land prices) and low taxes (low capital gains taxes plus acceptance of UK profits being routed to UK tax havens);
– which is politically mitigated with easy credit and with the dissipation of one-time capital (North Sea oil and gas profits and public assets generally) and the creation of fictitious capital to balance the books (those City finance profits, which turned put to be losses in the GFC).
– the price being paid by the general public in poor public services, malinvestment, high labour taxes and an astronomical cost of living
Why is the model suddenly failing now? Three other trends have made it unsustainable:
– first, the Copenhagen climate consensus, which has resulted in the self-harm of the UK’s net zero policies, which have been a political consensus between Tories and Labour since David Cameron went to hug some huskies and detoxify the Tories on green issues. It would be hard to design worse policies. They basically embody all the rentier economy principles above (by paying all generators the marginal market price and charging this cost to consumers; by subsidising boondoggles like carbon capture and, in the case of Drax, paying power station billions to burn old growth Canadian forests as biomass!) but add to this underinvestment and malinvestment, so the energy mix is going to be incapable of delivering a reliable transition to an all-electric economy (failure to pursue nuclear energy, over reliance on undispatchable renewables and peak-operation gas turbines). UK housing and commercial property stock is not being upgraded with a rational programme of public investment, it is simply being removed from the market unless it complies with arbitrary and fault energy performance certificates. The result is another transfer of wealth because property that cannot be rented will be bought cheaply by the wealthy. There needs to be a public debate whether the rational UK response to climate change is decarbonisation (unproven, collective action problem given we are <1% global population) or local mitigation of the effects. Instead we are likely to have the worst of both worlds, failed investments and stranded net zero assets and premature destruction of the carbon economy before the replacement is paid for or proved to be viable….
– second, the collapse of the Blairite enhancement to the Thatcherite model, which was to turbocharged the rentier economy by running a high immigration economy, without the commensurate investment in public goods. This was just another route to boost GDP and land values and thus absolute profits that accrue to the 1% while diluting both wages and per capita wealth for the general population. Same number of doctors, more patients…. This model worked well enough using EU labour from the Eastern European accession countries: the middle class found their house prices increased and the price and quality of construction and personal services (nannies, cleaners, beauticians) fell and the new Britons were comparatively inconspicuous (white, largely Christian). We had never had it so good. Then the GFC threw it into reverse and the political consequence of austerity was Brexit, which made EU immigration untenable – so Boris Johnson threw the gates open even wider to non-EU immigration. It is now no longer denied, even on MSM, that high economic migration is hurting average UK citizens and this, coupled with racism and Islamophobia, is driving the rise of Reform.
– third, the general destruction of Europe's terms of trade because of the US proxy war on Russia, which has led to sanctions on Russian energy and more generally the new normal of the looting of US vassals' economies through expensive US energy and defence exports and through outright capture of energy intensive industries from Europe to the US. US industrial energy is multiples cheaper than European energy. You might call this the collapse of the Washington consensus: making the world safe for American capital no longer equals making the world safe for European capital. It is now US first: free trade is out and national preference is in.
Labour and Tories just cannot conceive that their post 1972 world is over. Starner will keep trying desperate versions of the same magic tricks: deregulate, build houses, stroke the City, import economic immigrants while bullying asylum seekers, but none of it will work because too few of the people have enough claims to the country's wealth and income for there to be sustainable investment in growth.
One can only look in disbelief at the succession of inept UK Prime Ministers ever since Cameron was at the helm. This, however, seems a general trend: Macron was preceded by Hollande and Sarkozy, for instance.
Also striking is that the current political system exhibits a surprisingly strong aversion to letting competent individuals take on the leadership. And once somebody has demonstrated skill, initiative, and brilliance in defining and implementing policies at the highest level — these policies being exactly in the spirit of the prevalent ideology — they are immediately replaced by mediocrities without any drive instead of worthy successors:
1) Jacques Delors as the president of the EU Commission — preceded by utterly forgotten figures such as Thorn or Jenkins, and followed by corrupt, execrable Santer and Barroso, or the drunkard Juncker. Delors’ policies were thoroughly neo-liberal and they set the EU onto a path to an economic dead-end, but one must recognize that he was damn efficient and dynamic in his role.
2) Draghi at the ECB — preceded by the lacklustre Trichet and Duisenberg (whose policy just seemed to have been “do what the Bundesbank does”), followed by the run-of-the-mill-policy adept Lagarde. Draghi’s role was to avoid a complete collapse of the financial system, save the banks at whatever cost, and prevent the financial doldrums of countries such as Greece, Ireland, or Spain to sink the Euro. He creatively interpreted the mandate of the ECB, stretched the rules, and figured out a number of ways to achieve the goals — to the fury of many who, in Germany, launched constitutional complaints against his “innovations”.
3) Gerhard Schröder implemented a series of wide-range reforms that veered Germany onto a firm neo-liberal economic and social direction (screwing the SPD political base in the process), and (with Joschka Fischer) onto a staunch NATO-aligned course (but rejecting the stupidity of the Iraq war). Merkel’s long reign was marked by stagnation — she moved only when shoved by events (e.g. the refugee crisis). Scholz? What can we say?
Tony Blair would also be a similar case, brilliantly redirecting Labour to the “third way” and therefore forfeiting any possibility to correct the neo-liberal policies of his predecessors.
Notice that all the aforementioned politicians did what was expected / hoped / seeked / required of them, and I do not regret them. But somehow, they were considered too successful and too competent since after them the choice always fell on distinctly inferior candidates.
Perhaps this is a sign of overall decay of institutions and societies. Perhaps it is a sign that the hegemonic (plutocratic) class driving the selection of those political leaders is itself deeply degenerate, following he dictum that “First-rate leaders select first-rate subordinates, second-rate leaders select third-rate subordinates”.
Thank you, Vao.
Your comment about degenerate plutocrats in more on the money than you perhaps realise.
As chief prosecutor, Starmer was known as a micro manager, liberal with expenses and obsessed with courting the US war machine, little to do with his day job. He refused to prosecute several cases involving well connected paedophiles, but now denies these cases ever landed on his desk.
Starmer was never the competent bureaucrat the media portrayed.
I am not sure that the plutocrats are that inept because the fools that they promote in the EU area do deliver – merciless crappification of life at all levels.
Having competent leadership in place would threaten the status quo, which would include the power and wealth of the current elite; this is why the rise of competent, never mind good or excellent, leaders is not happening as anyone competent would push for some reforms.
It is also why the police state is getting so powerful because while the government is not allowed to deal with various crises it has created, it is allowed to increase its short term ability to stay in power for the benefit of the wealthy.
Having competent leadership in place would threaten the status quo
This touches precisely the issue I raise: people like Delors, Draghi, Schröder or Blair were very competent at delivering what the “system” requires (i.e. neo-liberal policies and institutions favouring plutocrats). They were definitely not going against the system — on the contrary: all their reforms reinforced or promoted neo-liberalism.
However, for some mysterious (to me) reasons, instead of going:
“Wow, those guys were fantastically effective and made things really happen. It was incredibly profitable for us. Let us find successors who can keep up the good work at the same level of excellence”,
TPTB went
“Let us put in place those dull, inept plodders, tainted by corruption, incompetence, or academic plagiarism, and incapable of a strong performance.”
And that is what I do not understand.
Aurelien explained in a later comment, the latest politicians don’t remember or understand why the current system was set up.
Also, I am having to remind people that not only did things work decades ago, I have to remind them that the destruction of the old system was deliberate as is the dysfunction of the current system. Too many people are truly ignorant of how the past was and how the current system came to be, which makes them too ignorant to solve our problems.
It is not that they are stupid although many are, but that ignorance has been imposed on them, which makes them functionally stupid.
People in general like to win. This goes double for people choosing to participate in electoral politics.
People who become prime ministers or presidents in a time of economic decline has the choice of going down in history as a failure – and maybe a footnote – or try something radical. Someone who is competent might realise that and go for some radical changes. Anyone who doesn’t want radical changes would not want that.
I think the image isn’t complete without also noting that the neoliberal reforms brought declining state capacity. No matter the personal qualities in leaders, the ability to enact change in society hinges on a competent bureaucracy. A structurally overworked and underbudgetet bureaucracy is going to produce policy failures no matter personal qualities in leaders or bureaucrats.
Perhaps, vao, those who enjoy the benefits of the neoliberal system at the expense of everyone else have arrived at what they feel are the optimum arrangements, so they make sure that nobody capable of changing them (or in Corbyn’s case, even capable of articulating the desperate need for change) is ever allowed to emerge.
Ted Hughes’ poem “Hawk Roosting” comes to mind …
https://allpoetry.com/hawk-roosting
I have increasing problems with Richard Murphy’s daily contributions to UK politics, as he has transmuted into a full blown polemicist post retirement.
I feel this has diluted his past excellent and well posited critiques on tax and government accounting.
His message has been lost as his personal animosity merely marginalises his very welcome contribution to tax discussions and the balance between fiscal and monetary policy in the UK.
Prem Sikka is a far better commentator and actually argues his position through frequent use of relevant data, rather than mere assertion, as Murphy tends to do.
Murphy is also a semi-detached member of the UK’s very small MMT grouping. He’s semi-detached as he disavows Kelton, Mosler and Mitchell’s commitments to the jobs guarantee, and has actually slagged out Bill Mitchell personally on several occasions on his blog, which is unhelpful.
This is hardly a considered piece. It is rushed. Murphy despises both Starmer and Reeves and has progressively reduced the quality of his blog comments to blind polemic.
The line “a man who makes the average conveyancing lawyer in a small market town look exciting” is a little bit rich for someone who spent most of his career as an accountant in a small market town in rural East Anglia.
Given his own status with the previous Labour Corbyn regime a decade ago as an expert tax adviser, until he fell out with the leadership and McDonnell, and total alienation from the party under Starmer, then his own credibility has to be questioned.
He’s articulating nothing new, and nothing that the left of centre in the UK has not observed in the five years since the rise of Starmer.
Anyone with an interest in Starmer is recommended to read Eagleton’s “The Starmer Project” as a guide, rather than the more recent biography which verges on hagiography.
The problems with Starmer are his utter mediocrity, poor public persona and communication skills, and machine politician MO. He offers a huge target to everyone on the left, on personality grounds as well as in his very limited political agenda. He is to the right of most of his own parliamentary party and he and his praetorian guard have been ruthless in suppressing dissent within the party. His pro-Israeli line over the last year and a half, starting with his comments justifying the IDF use of starvation and cutting water supplies as tactics, post the Hamas atrocity, have further isolated him from the left, for whom justice for Palestine is a crucial issue.
The resurgence of Blairites – basically Clintonesque corporate liberals – like McSweeney, Mandelson and Milburn (a known NHS privatiser on the US model), have highlighted a takeover of the party by the centre right. There was nothing in the last budget in both fiscal and monetary policy that could not be supported by Tory grandees such as Ken Clarke, himself a fairly ruthless Chancellor under Thatcher, and who was enthusiastic about Labour’s approach.
The PR campaign this week by Kendall against those receiving disability benefits, making a saving of £1.3bn in the Reeves budget, has illustrated how far to the right Labour has moved.
Criticising benefit recipients and stigmatising them as “taking the mickey” was Tory policy for 15 years, and they reduced pretty much all benefits in real terms, through austerity, but also their innate social Darwinist dogma. Now we have more of the same, but with disability benefits already at a low base, personal hardships are inevitable.
This is a disgrace to anyone with a social conscience, so basically the entire UK left and centre left.
Protection of those needing the social safety net has always been a priority for Labour and the left whose target has been reducing tax avoidance and fiddling, and a much bigger fiscal target. Not any more. The absence of any measures to rebalance tax and wealth, and support for Labour’s traditional working class base has been conspicuous by its omission.
Where this leaves us, is in danger of a slide into fascism in the UK. Just as France and Germany have seen a resurgence of the far right, with the failure of their feeble centrist neoliberal governments, then Mouffe’s analysis looks like it is about to result in the Reform party having an opportunity to either take power or at least significantly extend its influence in the UK.
Reform are very much a 21stC revisitation of the 1930s British Union of Fascists, predicated on prejudice and funded by very wealthy plutocrats, fronted by a far right populist neo-nazi.
Mouffe suggests that inaction by left and centre left parties in liberal democracies, in terms of social and economic policy, through slavish following of neoliberal dogma, creates disaffection amongst their core working class support, abandoning them by failing to remedy inequalities, and leaves a void then occupied by populists, mostly on the right.
People on the left, and within the political commentariat, are already anticipating that the legacy of a Starmer Labour (in name only) government might well be the rise of the far right in the UK, almost exactly a century after its last manifestation.
That this is even a possibility as being Starmer’s legacy, is a condemnation of both the man and his politics, and of massive proportions…… and he is only six months or so in….
Excellent set of observations, TiPi. Thank you.
This blog from Murphy was particularly weak. Only the first of his “4 things” is something Starmer doesn’t understand, the rest are just expressions of Murphy’s distaste. And he failed to explain the structural reasons why negative growth is baked in regardless of Trump-induced instability.
During Bojo’s PMship it was clear the Conservative Party was circling the drain and, thinking ahead about what could replace it, things didn’t look good. Starmer’s Israel-backed authoritarian takeover of the party and his promise to voters to change no policy from the Conservatives but to be competent and less cartoonish was so unappealing to voters that they could muster only 34%. Labour’s huge parliamentary majority is the result of first-part-the-post and Conservative splitting the right wing vote with Reform.
So he started governing with both a legitimacy crisis and a shrinking economy. It was clear from the start that it was going to be a disaster. The UK faces big problems that no neo-liberal yes-man in any party, let alone Starmer, can do anything about.
That he turned from center-right to hard-right since becoming PM is disappointing. He’s a law and order man and showed it in his party years ago so I guess it should have been unsurprising.
With the SNP similarly avowed atlantist and neo-liberal, seeing their future in selling out to foreign investors (reminding me of Zelensky), I see no sign of a competent popular leftish politics emerging. The only thing to pin hope on is that Brit fascism has always been incompetent in both policy and organizing.
Just making an equivalence with the fascist right of a century ago with the right rising today is simply wrong. Yes, there are some things in common but the right, at least in the USA, is against globalism (as I am from a left-perspective), against censorship and political correctness (that has destroyed for a generation the real left), and against a totalitarianism that seems to attract the PMC class to use identity politics as their chief tool towards the emergent fascism, and also, we on the left used to be against imperialism and permanent war. The “left” has turned into the right and the right has become inchoate.
In the USA and, it seems, in the UK there is not real left other than the so-called populist right. The fake left uses fictions like Russiagate, racism (using tales from the remote past to justify hating the South), and the endless nihilistic materialism that makes that, ironically, ignores reality. Starmer and his obsession with Ukraine, the (by far) most corrupt society in Europe is not just stupid and morally wrong but totally insane–what is wrong with ou Brits? Ultimately, societies that are democracies have governments that directly capture the mood and essence of culture. I’ve noticed, largely from the outside, that the UK and most of Europe are, as cultures, degenerate at best. It’s much easier for the USA to reinvent itself and even defy the central government as we are doing and will do even more as time passes.
Am ambivalent about Murphy. I think his voice is a worthwhile one, but as I see it he has always been a polemicist (and what is a ‘professor of practice’ exactly?). That’s fine by me, but what I find difficult about him is his prickliness and the often unnecessary way in which he treats anyone who doesn’t agree precisely with him. Frances Coppola was quite similar, although operating on a rather higher plane. I have myself been dealt with pretty savagely by him on one occasion, despite having written a comment which was actually very deferential and strongly in agreement with him – apparently I hadn’t adduced evidence (actually I had), hadn’t taken into account a number of factors which were not actually relevant to the point I had made, and ‘evidently’ didn’t know about things I actually knew very well all along but did not consider material to my case. I was ‘enjoined’ not to come back, and I haven’t.
However, I agree with Murphy’s initial comment: Starmer really doesn’t know what he is doing, has no worthwhile ideas, is essentially a rather dim empty vessel with the vapid and highly authoritarian tendencies of a stereotypical British securocrat. Thin-skinned, he is also easily manipulated by the neo-Blairite ghouls with whom he has surrounded himself. Some of his own aides hold him in such esteem that they have apparently declared that he has been put in the ‘driver’s’ seat on the Docklands Light Railway: https://www.penguin.co.uk/books/463746/get-in-by-pogrund-patrick-maguire-and-gabriel/9781847928375 (NB, the DLR has no drivers). He is the bland exemplar of a feckless and fatuous generation of Western centrists who aspire to emulate both Brüning and von Papen.
The book about Morgan McSweeney and Starmer being his creation is fascinating and deserves much more exposure. It has clearly out the wind up the less robotic commentators at the Guardian….
https://www.theguardian.com/commentisfree/2025/feb/09/keir-starmer-politics-labour-growth-reform-uk
https://www.theguardian.com/books/2025/feb/09/get-in-by-patrick-maguire-and-gabriel-pogrund-review-inside-story-of-labour-under-keir-starmer-morgan-mcsweeney
https://www.theguardian.com/commentisfree/2025/feb/09/the-surge-in-support-for-reform-is-making-labour-nervous-now-it-needs-a-plan
JACOBIN
Reversing Class Dealignment in Britain
By Jon Trickett
“I didn’t leave Labour. Labour left us,” is a common sentiment in working-class communities across Britain. Member of Parliament Jon Trickett discusses what might be done to win back workers.
https://jacobin.com/2025/02/mp-jon-trickett-labour-party-dealignment
Let me offer an interpretation with a little historical perspective.
The Labour Party of the 1970s was in a bad way, trapped between an archaic management and organisation dominated by the Trades Unions, and a population that no longer remembered the bad old days and was increasingly mobile and aspirational. The tensions between conservatively-minded trades unionists, the Trotskyist infiltrators from the Militant Tendency who were taking over local parties, and the increasingly middle-class party leadership, were containable until the 1979 election defeat, which was one of those things that could have been avoided, or at least minimised, with better political judgement. But the trauma of the defeat led to an orgy of blood-letting, the defection of large numbers of right-wing MPs to form a new party, and a strengthening of the Trotskyists. These combined to produce the disastrous defeat of 1983, at a time when the country was recoiling from the effects of Thatcherism, and where a competent party of the Left would have walked back into power.
Many veteran MPs left politics in the 1980s and 90s, sickened by the infighting and the constant defeats as the Tories profited from the split in the Left. But many new MPs–one AE Blair for example–joined at a point where conventional wisdom said that the political mood of the country had shifted so much, that traditional Labour policies were now impossible, and all that Labour could do was to return to power by aping the Tories. (Opinion polls said the opposite, but this was the generation of politicians brought up on New Left doctrines of contempt for the working class prevalent when they were at university.) When Labour was resoundingly returned to power in 1997, Blair presented this victory as the result of Labour becoming “respectable,” ie like the Tories. In reality, of course, the victory was all about Get the Bastards Out.
The result was the growth of an entirely value-free politics, empty of political beliefs in the traditional sense, and making up the gap with middle-class liberal prejudices and obsessions. To the question “what is the Labour Party for?” the ruling elites roared back “to be in power.” That was more than twenty-five years ago, and an even newer generation of politicians that has never known anything else has joined the Party to achieve power and make money, mastering the skills of what are effectively a one-party state: climbing, crawling, back-stabbing, and treading on the weak. They remind me of the politicians of any one-party state, suddenly required to look for popular support and work in a democratic fashion. Starmer is a symptom as much as anything else: a machine politician produced by a machine whose inventors can’t now remember what the purpose was.
Chalk up another explanatory triumph for Aurelien.
Excellent analysis. Though I think you underestimate the defection of David Owen and other Labour right wingers, which lost a general election Labour would otherwise have won. This was not a reaction to Trotskyites; it was a coordinated operation which denied
Labour a victory, reeked of the spooks and was enthusiastically supported by the BBC and MSM.
My parents were Gang of Four supporters from the start, SDP members and campaigners and officers, remaining loyal through their lives. At the time I was so young I didn’t understand much of anything except home computers. But I remember there was great dissatisfaction over what they saw as the excess power of the TUC. Idk if the SDP was a spook effort, it’s possible, but the potential for schism was there anyway.
When I got to Edinburgh Uni a couple of years later it was fashionable for bourgeois kids to play-pretend at being communists with about a dozen different warring communist and socialist clubs in the student union. Idk how much role these types had in the schism but there was a lot of them they surely contributed to its potential.
Thinking back I have conflicting ideas about it. It’s easy to point at the SDP as the spoiler for Labor that led to Blair and I don’t really disagree. But I also see the neo-liberal turn as almost inevitable. If you can use policy to turn a significant chunk of Labor and swing voters into people who care about capital gains and daily stock market indices …
Sadly, Thatcher’s dismal poll ratings in 1981-2 were heavily boosted by her playing the Falkland’s War patriotism card, along with a minor economic recovery from her disastrous monetarism experiment.
I don’t believe Labour could have won that election. But it could have been close.
Absolutely agree that the New Left had increasing disregard and even contempt for the working class from the mid 80s onwards. Yes, it was lazy thinking.
I had an encounter with the Tory chairman of the Darlington constituency party in 1987, a local farmer, who told me he was very impressed indeed with the neighbouring Sedgfield constituency Labour MP, having met him at some event, and that he could certainly see himself voting for Blair. …. “One of us”….
Rather than being totally value free I think the easy route for centre left politicians at that time was to become sidetracked into culture politics issues, of marginal relevance to many core working class constituents left behind after the Miners’ strike, when regeneration proved to be a chimera across so much of the North. .
Blair’s own commitment was pragmatic, to ‘what works’, and so highly managerial.
It just so happened that neoliberalism had become entrenched by 1997, and Tony was a huge fanboy of Clinton whose 3rd way was relentless corporate liberalism with bit of social policy thrown in as compensation.
The status quo now seems to confirm the Gramscian theory of dominance with neoliberalism as the ingrained hegemonic dogma.
SKS is definitely no boat rocker.
Indeed, Aurelien plays Basil Fawlty as in “Don’t mention the War “. Any discussion of the 1983 election had to include Maggie’s win in the Falkland War.
I was in uni and work during the 70s and 80. My life was continually increasing prosperity.
Politically, the War, the miners strike , the greenham common protests, the Ireland hunger strike deaths were the big events in the early 80s. For me.
I didn’t mention the War because my recollection is that its political effect was quite limited, and because I think it was used as an alibi for the 1983 defeat, which itself was unambiguously a result of the split in the Party. Yes, Labour had already taken a neoliberal turn in 1976, but the future was much more open in, say, 1983 than it was a decade later, and a great deal of pain and suffering could have been avoided if the Labour Party, probably under Denis Healey, could have fought the 1983 election against the Tories, without having to fight the SDP as well.
During the years before and after the Falklands War, I had friends and trustworthy aquaintances in both the Tory and Labour parties extending from party agents and union officers to the Houses of Parliament and, prior to the Falklands, was facinated by the infighting taking place in both parties. I expected from those conversations that Thatcher would be replaced by Prior or Pym (most likely Jim Prior) to lead a more moderate to left leaning Tory party in the next general election. The Falklands adventure saved Thatcher and enabled her to continue to tear away at the country’s social fabric using Scotland’s oil wealth to cut taxes and subsidise the unemployed.
I was also involved in private focus groups in some 20 English seats after the Gang of Four Gaitkellite splitters quit the Labour party, and the SDP’s support (and, subsequently, that of the Alliance) had very little depth amongst Labour voters, and full time party agents felt their ground game would overpower the SDP (which it did) because the SDP didn’t have the time or the density, constituency by constituency, to develop an effective ground game in more than a dozen seats. In fact, in Mitcham, the Tory Angela Rumbold defeated the one SDP quitter who had the decency (and stupidity) to stand down. In that election, which took place on my doorstep, Labour’s plan was to defeat the SDP and the Tories ruthlessly fought to win and pulled in highly experienced and well disciplined volunteers from the rest of Greater London and beyond.
My own wish was for Michael to allow Denis Healy, his deputy leader, to become acting leader immediately after the Falklands but, if Thatcher were to wait until May 1984 to go to the country, the Labour party would most likely have gone through an acrimonious battle for the leadership between Healy and Tony Benn, and that put the block on that.
My assessment then and now is that Thatcher really became a Prime Minister in control of her party, cabinet and the civil service when the victory against a group of Argentinian conscripts somewhere out there in nowheresville was publicly announced and it because a symbol of her ability to govern to the long term detriment of our country.
Excellent analysis
My question is does a party like the UK Green Party, or BSW in Germany have any hope of growing into a legitimate opposition. Oh, and of course the French Left.
Sorry to interfere, but BSW – I´d very much hope so – but no.
Germany will only change forceably due to its economic decline caused by incompetence and corruption by the elites now, and rise of BRICS and US going rogue aka becoming “honest”. The country might wake up, but if so too late, and too little would happen. Since BSW is very young the current elections could threaten its existence if outcome won´t correspond at least in part with its true electoral potential which would actually be huge.
Last week it was spread – I haven´t checked if its true or not – that Wagenknecht pointed at an end of her career if they won´t make it into BT. The other parties and MSM are doing everything to tear the party apart. Seams at some parts go off. Some conflicts between local BSW and the party leadership, this week an EU-parliamentarian announced he would leave the party. Normal things in any party but extremely magnified as a huge “crisis” by media which is supposed to sow doubt among voters.
So far however it´s still a fantastic effort. Which is why I hope for decent weather on election day…Its not lost yet. But 10% – for an optimistic outcome – won´t change anything. Remember, some saw the party 20+% in the first half of 2024. In how far the media muted that or people really abandoned the hope is impossible to judge. But the immense dissatisfaction and desparation by the bottom 50% is really there and will grow.
Really hope she does not retire. She has been such a breath of fresh air.
No way. The old left is totally dead in the US and UK. If it exists at all it is with the populist right. Why? Because the US/UK intel agencies have been running the mainstream media for decades so no one knows what the left was other that the BS left with its identity politics, political correctness and radical militarism.
Hi,
seen from France, no, none of the current “French Lefts” can be relied on to become legitimate opposition. Sad, terrible, but all these people got to go and be replaced.
“Starmer is a symptom as much as anything else: a machine politician produced by a machine whose inventors can’t now remember what the purpose was.”
Magnificent.
I however don´t understand the structural changes which do not change with a single election. They must be brought about by huge chunks of the country. Setting the oil-tanker´s course.
New Labour like New SPD was the “post-change” party idea. Leave the real work undone and focus on the easy things. But that status quo must have been shaped somehow before. And where is all the money?
In Germany I assume I have an imagination at least. But Britain? After ruling the globe for 250 years? Lost in land lease in WWII?
Do we actually have any major country as an example where multi-party systems proved strong enough to change economic and financial development in a meaningful way i.e. redistribution?
I question one point in Aurelian’s analysis and add a second.
First, the anticipated election of 1983 0r 1984 would have been Michael Foot’s to lose despite a media that was deadset against him taking office. The Howe summer budget of 1979 hit ordinary working people hard and was the preface to rapidly increased unemployment, and the engineering strike of that year followed by the steele strike of 1980, heightened the generalised sense of the Thatcher government deliberately creating uncontrolled chaos. Her election victory of 1983 was the product of the Falkland’s war, an unhinged adventure with a high probability of failure, which resulted in a much hawked British victory regaining territory the British government planned to withdraw from because of cost cosiderations.
Second, from at least one informant inside Conserative Central Office, trades unions and MPs were informed that the Tories had been unable to fully prepare for an autumn election in 1978 and many Tories accepted electoral loss as the price for unseating Thatcher as Leader. Callaghan was expected to announce an autumn election in Brighton during his speech to the 1978 TUC Conference. In fact, the union leaders who were present at a dinner with Callaghan as guest earlier that week came away with the clear view that he was going to use his TUC speech to announce that there would be an election in 3 or 4 weeks. The union machines and constituency parties and Labour HQ were revved up and ready to go. But, for whatever reason, or none, and to my utter disbelief, Callaghan decided to go into musical hall mode in his speech and sang (literally), “There was I waiting at the church” making it clear that there was to be no autumn election. Thereafter, because of the Labour government’s very real loss of influence over limiting trade union members wage claims and striking in support of their demands, we entered the “Winter of Discontent”, and suddenly, much to the chagrin of many mainstream Tories, the election was Thatcher’s to lose.
And everthing else, the economic pain, the growth in poverty, the loss of local authority housing stock and the cut price privatisation of public assets followed from that.
I agree absolutely with your last point. I was as stunned as anyone when Callaghan decided not to go the country in October 1978. I’m on record as saying that it was the greatest political blunder of postwar British politics. As I suggested above, I don’t think the Falklands was decisive in Thatcher’s 1983 victory, and for that matter even if Labour had not won a 1978 election, the Tory majority would have been so small that the government might well have fallen when the Falklands were invaded.
Oh, the Falklands War really was the absolute turning point in Thatcher’s political career and the crucial event that saved her leadership.
It stifled the criticisms from the ‘Wets’, and allowed her to play the strong patriotic leader card and reportedly “added 10 points to her poll rating”.
The general election figures don’t show any evidence of Thatcher getting an extra 10 points on her poll rating. The Tory vote went down in 1983 by 685,000, giving the Conservatives 42.4% of the vote, compared with 43.9% in 1979. Labour’s vote went down by 3 million, with its vote share dropping by over 9%. The Liberal/SDP Alliance, which didn’t exist in 1979, increased the third party vote by almost 3.5 million, a 25.4% share of the vote compared to the Liberal Party share of 13.8% in 1979. Because of the way the Alliance vote was distributed it didn’t gain many seats, but gave victory to the Tories by eating up the Labour vote.
This is from a Guardian piece and as I suspected refers to her personal poll rating, not party support, as confirmed by an IPSOS commentary “after the invasion her approval ratings rose from 41% in April and to 56% in May”
Remember, she was under considerable threat from within her own party 81-82 as unemployment had hit 2m+, down to her failed monetarist experiment, and the “wets” would have certainly mounted a challenge had she not “won” in the Falklands. So a 10% rise (actually recorded as 15% by IPSOS) in her personal popularity was probably instrumental in her survival.
Even if, as some research had suggested, the Tories gained only 2-3% points from the Fallands factor, that alone would have retained many marginals under FPTP, especially given the split vote for the centre and soft left.
Many thanks. Were the trade union leaders especially ‘conservative’? Some were, but a good many weren’t. Even as head of the Yorkshire NUM, Arthur Scargill had effectively overshadowed Joe Gormley by 1973-74. Hugh Scanlon and Jack Jones (the ‘terrible twins’) were definitely not conservative, nor were Richard Briginshawe, Ernie Roberts, etc.
The trauma within the Labour party in the period between 1979 and c. 1986 was arguably a reaction against the events of 1976. In the period 1974-76 Labour under Wilson endeavoured to achieve ‘social peace’ after the industrial strife of 1971-74 by doing deals with the unions (based partly on generous pay awards like that brokered by Richard Wilberforce for the NUM), but this produced cost-push inflation on top of the existing inflation which resulted from OPEC 1, the shift to floating, the World food crisis, and the costs of EC accession (i.e., the replacement of a cheap food policy with a dear food policy and the substitution of the old purchase tax levied on a small range of luxuries with VAT levied at 10% on a wide range of goods and services). This realisation of social peace amounted to a temporary abrogation of the Social Contract negotiated by Wilson and Vic Feather in 1973. In addition, the Treasury under Healey and Wass was determined to maintain demand in the economy (and in the World economy) in order to forestall a slide into depression, but this was based on dud forecasting. The result was inflation of >24% by 1975.
The government was faced with a dilemma. The Wilson/Feather Social Contract imposed wage restraint on the unions, but the quid pro quo for the resulting heavy cut in real wages was increased spending on social services. However, with confidence in the exchange rate imperilled improved social spending was not something which the government could afford. Therefore, the Social Contract risked fracturing. One wing of the party led by Benn (and advised by Stuart Holland) advocated the Alternative Economic Strategy, which entailed a shift to a siege economy. This frightened the Centre and Right of the party who used the sterling crisis of 1976 as a pretext for a counter-attack. The IMF settlement was used as camouflage to impose heavy cuts on public spending on top of the existing policy of wage restraint. In other words, the spectre of Bill Simon – Ford’s Treasury Secretary whom Healey described as being ‘to the right of Genghis Khan’ – was used to deflect attention from the government’s de facto repudiation of the promise made by Wilson to the TUC in 1973, and as a ramp for the deregulatory agenda which the late Peter Jay – Callaghan’s son-in-law – and other monetarists (who were infiltrating the Treasury and Bank of England, notably Charles Goodhart) were pressing upon the government. Indeed, the liberalisation of capital/exchange controls commenced in 1977. However, by late 1978, and with inflation running above 8% the unions had had enough of Phase IV (i.e., the 5% cap on pay increases) and struck. In essence, they had got wise to the government’s sleight of hand in 1976. There were cries of ‘betrayal’, and the labour movement descended into civil war.
The AES was not only ‘socialism in one country’, but was also intended to preserve what David Edgerton has characterised as the ‘national British’ economy which had emerged after 1931-32, even as it was fast being overwhelmed by the Eurocurrency markets and ever greater international currency flows through the City. It should not necessarily be thought of as being a solution of the ‘Left’ (though it was to some extent); indeed, whilst some of those who contributed to it (whether directly or by extension) such as Bob Rowthorn and Andrew Glyn were Marxists, others – such as Wynne Godley or Francis Cripps – were not.
Callaghan, Healey and Wass were therefore faced with a stark choice in 1976: should they retreat into autarky before the North Sea oil started to flow, or should they accept the inevitability of the UK being an open economy with all that would result from it (which they would attempt to mitigate if and when circumstances permitted)? They decided firmly on the second course. And some of those who decided in favour of the latter course were very far from being middle class (such as Roy Mason, Fred Mulley or Stan Orme, and Callaghan himself).
Yet deciding upon that second course effectively turned Labour into a neoliberal party, and Labour has become ever more intellectually flaccid and inconsequential in lockstep with the increasing inadequacies of the whole neoliberal project. The Blairite agenda was effectively a continuation of the Callaghan/Healey prospectus: of mitigating the worst effects of neoliberalism. But that meant tapping City profits which, in turn, meant propitiating the City in order to generate those profits. What, then, was to happen once the City spigot ran dry or indeed if the City was to turn into a vast liability, as it did during the GFC? All that would be left would be the neoliberalism without even the promise of mitigation which, in turn, has meant an increasing reliance on empty slogans and mood music to divert the attention of an increasingly frustrated Labour base. The hopeless inadequacy of the hapless Starmer is perhaps the logical conclusion of the brutal decision which the markets imposed upon the Labour government of 1976, and which was used so opportunistically by Callaghan and Healey in order to preserve the established ‘system’ in preference to what was then perceived as being a leap of faith into the unknown.
The matter from my perspective is quite simple. The British have not made an economic transition from being a colonialist economy. Simply look to the astonishingly low saving rate, low investment rate and understand there is no more exploiting, say, an India for the sake of life at Mansfield Park:
https://www.nytimes.com/books/99/10/03/specials/said-culture.html
February 28, 1993
Who Paid the Bills at Mansfield Park?
By MICHAEL GORRA
CULTURE AND IMPERIALISM
By Edward W. Said
https://www.imf.org/en/Publications/WEO/weo-database/2024/October/weo-report?c=112,&s=NGDP_RPCH,PPPGDP,PPPPC,NID_NGDP,NGSD_NGDP,PCPIPCH,GGXWDG_NGDP,BCA_NGDPD,&sy=2017&ey=2024&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
October 15, 2024
United Kingdom, 2017-2024
Real GDP, percent change
Investment, percent of GDP
Savings, percent of GDP
Inflation rate, percent change
General government gross debt, percent of GDP
Current account balance, percent of GDP
Managed decline since the end of the period of “imperial preference” …
You are more correct than you understand, CA.
Britain is a colonial economy but it is the colony, not the coloniser.
Empire and industry brought great wealth to Scotland, Wales and NE England (heavy industry), Northern England (textiles and heavy industry) and the Midlands (fine engineering, electrical engineering, automotive engineering). The profits were, like all other wealth in the Empire, remitted to London and SE England and the City. Most of Britain has always been an internal colony of Westminster. The most literal case was Ireland, which was the first British territory to emancipate itself (and where Britain kept the wealthier industrial north with its linen and shipbuilding and aviation industry around Belfast through sectarian machinations).
But during the long retreat from Empire after WW2, the rich retreated from Britain itself. British subjects were free to settle through the Commonwealth and historically had also settled on the Continent. “Remittance men” were found all along the Côte d’Azur (see endless English lords and ladies and their villas and gardens) and the Cinque Terra (see for example Guy Crouchback, hero of Waugh’s Sword of Honour trilogy, who at the start of WW2 is living in tax exile in an Utakuan castello by the sea). They were found in the hill stations of India and Malaya. They were found in Hong Kong and Singapore. They were found in the White Mischief of Happy Valley in Kenya and on the Cape in South Africa. They were found in the Caribbean and in the Channel Islands. The more dissolute were found in Tangier.
If you read 20th century fiction, this cosmopolitan backdrop is taken for granted. Somerset Maugham, Graham Greene, Evelyn Waugh, Anthony Burgess, light comic films with Terry-Thomas etc. But why were they there? Tax!
Until the capital transfer tax regime of 1974, there were no meaningful exit charges on wealth. Punitive income taxes and death duties could be sidestepped by moving abroad. Even the Rolling Stones did on (on the advice of Prince Rupert Lowenstein, their financial adviser), recording an album in the South of France for tax reasons.
So, as another commenter asked, where is Britain’s wealth, it was not all dissipated in WW2 but it was substantially redistributed. The government had a huge public debt which, as we know from sectoral balances, was simultaneously the wealth of the private sector. It was not the wealth of the common man, however: he laboured under rationing until the mid 1950’s with inadequate housing etc to service the debt. It was the wealth of the rentier class. And that liquid wealth and the ownership of the great landed estates just moved offshore.
And there it remains. It reinvests its money into the UK from Jersey and Guernsey etc to continue extracting profits from the wider UK economy. And the UK economy looks like a colony because it is: since the end of the social market economy in tje 1979’s, there is no pretence of domestic capital formation, just capital extraction.
The game is nearly up though because fifty years of parasitism have sucked the host dry. There is not enough profit being left to accrue to labour economy and the capital stock is bring run down below the level consistent with an advanced economy. The British imperial class is doing fine but, apart from their favoured spots in central London and the Home Counties for doing the Season, they are finally discarding the old country to a fate like 19th century Portugal and Spain….
“The government had a huge public debt which, as we know from sectoral balances, was simultaneously the wealth of the private sector.”
Yes, although about 16% of the UK’s debt in 1945 was owed to foreigners, the debt to GDP ratio then being 270%. By way of comparison, during the Paris Peace Conference negotiations the Allies had wanted Germany to pay an amount equivalent to 250% of German GDP, which was widely thought to be outrageous. The foreign portion of the debt would have been very much larger had the UK not liquidated its assets in the US and Canada, or arranged for their liquidation following the war (such as the 1947 debt-for-railway swap agreed by the UK and Argentina).
Now foreigners hold about 28% of UK debt, compared with – say – 50% of the French debt. However, the 28% flatters to deceive, given that nearly 58% of the UK stock market is now in the hands of foreigners: this is the price paid for the UK running persistent current account deficits. On this basis you are exactly right to characterise the UK as a colonial economy in which multiple domestic revenue streams are diverted overseas: it is one of the great ironies of contemporary history.
“Britain is a colonial economy but it is the colony, not the coloniser…”
What a fascinating and important argument.
There is a relative lack of UK investment and saving, year after year. The relative lack of investment becomes more pronounced when residential investment is separated from nonresidential:
https://www.imf.org/en/Publications/WEO/weo-database/2024/October/weo-report?c=924,134,158,542,112,&s=NID_NGDP,NGSD_NGDP,&sy=2000&ey=2024&ssm=0&scsm=1&scc=0&ssd=1&ssc=0&sic=0&sort=country&ds=.&br=1
October 15, 2024
Total Investment & Gross National Savings as a percent of GDP for China, Germany, Japan, Korea and United Kingdom, 2000-2024
Utakuan should read Italian, LOL. It’s not some Balkan country I just invented (Utakua, founded by Byzantium, seized by Venice, swapped with the Ottomans, coveted by the Greeks, the farthest north in Europe that camels can be reared, principal exports spies and mystics).
That response is a tour de force, Revenant!
After all, the British do not even have Hong Kong any longer:
https://fred.stlouisfed.org/graph/?g=1pOZz
August 4, 2014
Real per capita Gross Domestic Product for China and United Kingdom, 1977-2023
(Indexed to 1977)
“After all, the British do not even have Hong Kong any longer.” This remark was not meant as sarcasm, but to reflect the value of Hong Kong as a colony to Britain. Think then what India was worth.
As Chris Cosmos accurately notes in his above comment, “In the USA and it seems in the UK there is no real left other than the so-called populist right.”
What any remaining tendencies of the Left in both countries must now understand is that the populist right, in order to increase its depth, needs its input.
Forget your knee-jerk disdain, moral superiority and purity– instead think of the creation of a powerful working class coalition built on an exciting paradox of seemingly irreconcilable sentiments.
I find myself in complete agreement with Gulag.
.” Not that he is that different to leaders like Macron or Trudeau or Scholz.”
And the rest. Could it be that they are all from the same factory? If Ukraine and the West Asia situation have been several years in the planning then Starmer had to replace Corbyn
Part 2 – a personal view of the UK
Bluntly, it feels like we are finished and the imperative if you have any capital is to get out, like the clever rentiers did before us.
The next four years of Labour will raise taxes ever higher to defend a broken economic model of public disinvestment and debt-fear. Any government after them will have to do the same, for a long period, even if they break with the model, before things turn around and the economy begins to grow healthily again. And nobody foreign is going to form new capital in the UK although they may buy its assets to sweat them a while longer.
In particular, the government is coming for the visible and immobile upper middle class. They are not coming after the oligarchs, with land value taxes and changes to offshore vehicles, because these are their donors.
Instead taxes are high and increasing on:
– on-shore capital gains
– house purchase (stamp duty is now 5% of sale price on a good house in Southern England, 10% if it is a second property – that’s an amazing deadweght on labour mobility and property market dynamism)
– local property taxes: to stop local councils being bankrupted by their legal obligations to provide education and social care and child protection etc when the central government grant has been frozen, the government is allowing them to raise property taxes in excess of caps. But these taxes are set according to forty year old valuations and the result is that £mm penthouses in Mayfair pay less tax than average houses in Nottingham.
– income and payroll taxes: payroll taxes increased hugely to fund Labour pay settlements with its union backers (I don’t begrudge the unions, I resent Labour’s hypocrisy about “public investment”, where is the expenditure on the rest of the public realm to give all a fair wage and access to services?)
– VAT: now imposed on private schooling, which is disproportionately the origin of the UK’s successful industries (journalists, lawyers, judges, artists, musicians, sportsmen, scientists: at least half, sometimes 80% of these roles are filled by the 10% attending private schools). And Brighton city council has now announced a plan to start allocating children to schools by deprivation and not proximity, I.e. a US style bussing scheme, so the middle class parents who bought higher priced houses near good state schools rather than pay school fees are also going to get shafted.
– inheritance tax. Private business and farmland, two very illiquid assets, have been brought into.tax and there is no attempt to ensure the offshore rentiers pay these taxes. If you are the 1%, you can rearrange your affairs to avoid them. If you are a family farm, you cannot and will have to.sell it to pay death duties
– hidden taxes through market structure decisions, e.g. net zero levies on energy companies
– pensions and savings. Our parents were encouraged to save into pension schemes with uncapped tax relief and the right to.withdraw 25% tax free at retirement (to pay off mortgage). Now contributions are capped, lifetime saving is capped and the tax free lump.sum is capped and is about to be reduced. If you pay money into a UK pension, the rules of which are set by the government and open to change at any time, you are a fool. The tax relief is simply not worth the illiquidity for your working life and the political risk risk your pocket will have been picked when you reach retirement….
So taxes are going up and the cost of living is going up (expensive land, energy and payroll taxes on labour). But public services are being cut. So the amount you need to save for retirement or ill health is increasing.
I know I represent a very privileged stratum of UK society: I have my grandmother’s milking stool that she made at Roedean in the 1920’s, how Marie Antoinette is that? We are what Lambert calls “local gentry” in US terms. I have the benefit of private school, Oxbridge, the Bar and working in venture capital. My brothers in law run hedge funds, my sisters in law are hospital consultants and advertising execs, my spouse is a senior civil servant. But future life in the UK looks exceptionally bleak, especially by the standard of whether we will be able to reproduce our class for our children and whether the wider public realm will even resemble an advanced economy….
My private school was cheap, my spouse and in laws all went to free grammar schools in Northern Ireland, none of us paid tuition fees at University and some of us got grants for living expenses. None of that exists now (except NI grammar schools), private schooling is an expensive positional good, fees are up at least 3x in my life, and University costs £30-40k in tuition and the same again in living. My spouse just went to a 50th birthday staying with 12 other spouses in a rented house. All professionals (doctors, lawyers, teachers) or entrepreneurs. None of them are sleeping because of money worries. How to afford school fees, pay mortgage etc. One (a two doctor couple) has three mortgages on their house and is considering a fourth. Another was told by their spouse at breakfast recently that their house was on the market because the spouse had woken up in a cold sweat at 4am and listed it online there and then!
Our own response to this slow-mo collapse in living standards is now in motion:
– After a thousand years of family farming, we are selling our farm. We cannot justify holding a £mm asset that is a sitting duck for taxation and has a yield of 1%. We hope to get out before the industry realises how bad things are and prices crater but I worry we are too late (there is credible think tank talk of Labour doing a New Zealand and abolishing all farm subsidies and sending the industry cold Turkey). Even residential housing looks very fragile, at high interest rates only immigration and planning restrictions are keeping the price up.
– We are going to pay off the various farm and family mortgages and put the rest in the bank and use the interest to pay school fees. Ironically, given school fees have gone up, we now plan to send our children to a more expensive school (the current local one now represents poor value for money compared with the education and connections from an internationally famous establishment…) because it is the best thing we can do for them.
– once the kids are at University (5-10 years), we are leaving. While the grandparents are still alive, to somewhere nearby: possibly to Ireland, possibly Switzerland, possibly the Channel Islands. Maybe even some of the time-limited retirement deals in Italy or Portugal because we will be close to retiring then and sunshine would be nice. Once those ties are gone, who knows, maybe Thailand or Singapore or New Zealand….
– ironically the changes to the non-dom regime have enabled us to do this. Previously the rules made it very hard for British natives to leave its tax net. Now, in an effort to fake a Potemkin tightening of the regime for billionaire non-doms, they have accidentally liberalised the exit route for the upper middle classes. I think there will be an unprecedented level of bourgeois capital flight from the UK over the next decade. Unless they introduce exit taxes – so the quicker we leave, the better. That would really be a white flag of surrender about UK PLC’s prospects, if they impose exit taxes….
I never imagined planning to leave my country. But its flat-footedness in response to a radically changed world means that it seems finished absent a political miracle producing a government that zeroes economic migration, taxes profit extraction, reduces the cost of energy and land (land value tax), raises median living standards through public investment and triangulates between US and Brics – and stays away from the drowning man that is Europe!
I can see Reform dealing with immigration and net zero and Europe but the profit extraction will continue….
Thanks for the fantastic, if somewhat depressing, overview.
To add one more to the list of things that has gone wrong with the UK, it has a long history of brain drains. Over the weekend I was talking online to a friend in the US who is an investor in various AI adjacent industries – unlike most, she’s been following this for a decade or more. She was listing a few of the academics who built the intellectual foundations of AI, and I found it striking how many were British born and educated, but now largely based in Canada and the US. The strength of Oxbridge does bring in a lot of smart people from abroad to the UK, and historically many have stayed, but anecdotally I think this becoming less and less common. British Universities (and boarding schools) still have a lot of prestige internationally, but it is slowly but surely being overtaken by competitors in Europe and elsewhere. Anecdotally, there seems to be a lot of interest among Asian students in smaller European countries as they are realising that they can offer a very high quality degree at a much lower cost than the traditional prestige destinations such as the UK and US. And some, like Sweden, offer permanent work visas for PhDs.
One point about agriculture – I don’t think its as widely recognised as it should be, but the dairy industry is IMO heading for serious trouble. Countries like the UK, Ireland and NZ bet big on Chinese consumers taking up a huge surplus of milk products (especially baby formula). They didn’t count on a big dip in the birth rate which will I suspect lead to a huge glut in the coming years which will put a lot of farmers who went into debt to build up dairy herds in some trouble. Unless you have very good quality land (or a solar farm), in the coastal mid-latitudes there is nothing that can match the profitability of milk. This would well be yet another blow to UK farming. At least Ireland has Kerrygold (the masters of up-branding dairy).
On the subject of going expat, I think the future for a lot of people is international mobility well into old age. Personally, as soon as I retire I intend to ‘lilypad’ around a few Asian countries (with a stop off or two in France and Portugal) for a few years (staying as long as visas allow) while trying to finally master a few of those languages. I’m fortunate that at least for now, my home (an apartment in the city centre) is highly rentable, so that will for a certain amount of time fund me. I think selecting the ‘right’ country to live in long term is a bit of a mugs game. Climate change is just too unpredictable, and that’s before even considering political changes and potential wars.
I worry about UK Universities. Entirely selfishly: I want my children to have the Oxbridge experience I had, it was both fantastic and formative.
The Universities have bet the farm on high fees from foreign students and if either the education they offer or the UK as a destination lose lustre, their business plans will fail. Our local university is about to build a huge expansion of student accommodation (thousands of student rooms in 10-12 storey blocks) by redeveloping a low rise section of the campus full of small houses and apartment buildings for married graduates. Yet at the same time its peers in the Russell Group are cutting courses (e.g. Cardiff). The UK has removed the right to stay on and work after study and as a result numbers are down among the Chinese students who are the mainstay of our local institution (so many East Asians attending that the city now has some really excellent eating options, including two Japanese restaurants, several Thai, a new Korean place and many Chinese restaurants, including one that serves bullfrog and chips!). There was a hope that the government would raise fees on domestic students but the token amount will not cover the gap (foreign students are paying £30k-£40k to study a one year masters whereas undergraduates are paying £10k-£12k per annum).
There’s a local boarding school that was always for the sons of rich farmers – good rugby team, no academic standing – but in the past thirty years it has oriented itself very successfully to the Chinese market, offering a peaceful rural setting with no distractions and crime for worried parents (ironically shattered with a high profile pupil-on-pupil attempted murder case recently…). The fees are astonishing, given its local market is farmers: they are on a par with minor public schools with far more standing, like Rugby or Uppingham, if not yet at the Eton or Marlborough level. Again, you have to wonder how long this can continue, when the host country is on its economic uppers compared with China….
The Brain Drain was a great worry when I was a school child – always articles in the New Scientist about scientists going to the US – but it vanished when I went to University. The tuition fee-led expansion of the Universities and the tech economy and University research spin-out culture must have helped. Plus the US has consistently been reducing the working conditions of assistant professors and post-grads so perhaps the US became less attractive. Even the academic friends what went abroad to the US have come back to the UK. More of them have been lost to the City or Silicon Valley than to foreign research institutions. But the discussion of the brain drain has come roaring back lately, which bodes ill….
As for dairy, it has been hard to make money in dairy in the UK for some time as a family farm. As an illustration, our unmodernised farm has a cowshed with stalls for 6-8 cows and that was an acceptable dairy component of a mixed farm in the 1950’s! Our cousins specialised in dairy and were running a herd of about 200 milking cows and 200 others on about 600 acres of grass (over half rented, including a big chunk from us). They were one of the last dairy farms left in the area, everybody else had gone over to beef and sheep because the capital costs are too high to continually expand. It was very profitable but they gave up too a couple of years ago when they could not renew the lease on their milking parlour (it was rented on a very long-term arrangement that was suddenly ended) and they could not justify investing in a completely new one because of some uncertain family dynamics around succession. The trend is get big or get out, though: another local dairy farmer has retired but his daughter has married into a dairy farm in Cornwall where they operate two very large dairy farms and the latest milking parlour cost £2m….
From what I have seen in and around Fermanagh (Monaghan, Cavan, Leitrim, Sligo, Donegal, Tyrone), the dairy sector in Ireland is already much more highly industrialised. The land is heavily fertilised to get three cuts a year, the grass is all cut and silaged, the animals are being kept indoors 24/7 (you rarely see a cow grazing in a field) and the slurry run-off is a major, major environmental problem and is killing the major water bodies like Lough Neagh and Lough Erne.
At the moment, that kind of farming is essentially against DEFRA policy in England so the extent to which it is being adopted is slow among in our family farming area (farms of 100-300 acres). It is more prevalent in areas like Cheshire, where large dairy businesses are based. However, if DEFRA abandons the “public money for public goods” environmental subsidies and tells farmers to get profitable or get out, we will see it all around us too. I cannot bear to farm like that, which is another reason to get out….
Thank you for your usual intelligent and interesting comments, Revenant. Thanks also to other contributors for a very interesting set of comments.
To demur on one point, however, I do not think triangulating between BRICS and the US works. You would have to choose one or the other. The US will not allow you to play both sides. I may be showing my own prejudices but I think the US is now showing itself agreement-incapable and I have always considered it to be too predatory a society in any event, so not worth cosying up to. As for BRICS, with the R being Russia and the C China, I think that there are too many ties to the West for that to be a viable alternative. I am sorry, but I think the UK is royally f***ed. The only way in the foreseeable future is down. There is a high chance we get a Farage government next but I have it on good authority that he is useless at anything other than criticising other people’s endeavours. Give him real responsibility and he will run a mile and blame everyone else. He might be a useful puppet for Musk but that is most unlikely to benefit the UK.
@Revenant.
I also live in the UK and am of retirement age, though not retired because I don’t want to. Nor can I afford it.
I have a different perspective on some of your points, however I agree that the UK, or possibly just England and Wales (if Scotland and the North of Ireland do the sensible thing) is on a slide to becoming the first Third World deindustrialised neofeudal nation, thus completing its arc from industrialisation. It is inevitable given the nature of energy resources: the constant growth needed the energy from cheap fossil fuels (and looting the colonies). Neither of which is possible any more.
The incompetence of the entire Political and Managerial Class/Caste is also to blame.
I have spent time in Thailand and Malta over the past few years. It is perfectly possible to live there and you can get visas for long term stays quite easily. Though I am open to other locations. Asia is the coming place and the quality of life is far better than here.
I am quite sad that we (the Boomer generation) have failed our young people.
I didn’t really address the incompetence of the political class. It is thoroughly depressing. They are not even a managerial caste because they know only how to manage the narrative. But, like the bodysnatchers, they are everywhere, not just in Parliament; the NHS, the Universities, the local councils, the civil service, the charities and quangos, the large corporations and probably the armed forces.
You meet professional excellence in the front line personnel and then you meet the equivalent of the staff officers and there is just a blinkered, righteous complacency. In every field of human endeavour, the people in charge in the UK seem to be “charting the patient to death”, as medical students are warned against: following the process without exercising judgment or responsibility.
The whole bloody country is turning into a cargo cult of industrial prosperity.
Something else I forgot to say so I may as well say it here is that, despite having being a couple of two high earners (but not City-type salaries), we have nothing in the bank at the end of the month. Worse, every time we eat out at the moment, we are shocked at the cost. We have largely stopped eating out as a family as a result. If we have a treat, it is to get a takeaway, which are better value for money because you are not paying for the venue or waiting staff….
However, I often have to take one son or the other for a light supper in whatever chain cafe is handy because they need to eat between school and various after-school sports clubs. Sometimes Waitrose supermarket cafe, sometimes M&S cafe, sometimes Sainsbury’s, sometimes Costa Coffee (a coffee chain) and sometimes the sports club we belong: nowhere extravagant is the point! For the last year, every time I buy say a pot of tea and a bacon sandwich for two, it costs the best part of £20! We used to be able to eat out for four at that price in 2022. I cannot get used to the price, it is a shock everytime. And the cafes all shut at 5pm rather than stay open on their old hours to 7pm.
We’ve had to eat at KFC once or twice and we all agreed that it cost even more for worse food so we have not been back!
Casual eating out that would once have been second nature has now become a deliberate budgeting decision. My parents-in-law had to raise four children on one and a half teacher’s salaries and always packed sandwiches and a thermos wherever they went: it feels like we are going back to that world. It’s just one example how, in the same way Europe’s terms of trade have been destroyed, so the economic terms of the lifestyle of the established middle class are also being annihilated.