Those of us who can recall, even vaguely, the 1970’s or who have spoken to those who were taxpaying workers during that time know that although the 70’s was time of great cultural creativity it was also a time of economic failure. Mismanagement of the economy and industrial strife had made Britain into the economic sick man of Europe. Attempts to control wages and prices failed and the country was still in the grips of oil price shocks created by oil producing nations many of whom were Middle Eastern Islamic ones who were attempting to punish the West following the Yom Kippur War.
This is why for some of us talk about Britain returning to the 1970’s economically scares us. We’ve seen, experienced and heard about the dire state of Britain and its economy back then. It was a time when neither the Conservatives nor the Labour Party could make Britain work economically and Britain became extremely vulnerable to external shocks such as the 1973 Arab Oil Embargo.
Alistair Heath has written a pretty good piece in the Telegraph outlining how bad things are for today’s British economy with its massive debts and equally massive welfare spending. In his piece he said that he believes that Britain’s debts are now too huge even for a bailout by the International Monetary Fund which is what happened in the 1970’s and that the markets will panic about Britain’s economy which will lead to massive public sector cuts with benefits and pensions obligations being unable to be honoured. There could, Mr Heath said, be a need for an emergency general election in 2027 which will destroy Labour and boost the Reform Party but will also, as economic problems often do, boost Corbyn’s Your Party/’Jezbollah’ vehicle. As a worst case scenario Mr Heath said:
“The worst-case scenario feels more likely, and it would begin by an abrupt loss of confidence in the credit-worthiness of the British government. We need to borrow obscenely large amounts of money from the financial markets every month, thanks to Reeves’ lack of fiscal discipline, and yet our creditors are becoming increasingly jittery. They worry that our deficit is growing, not shrinking, that the economy is barely growing and that Labour backbenchers are vetoing all cuts. They are already charging us a “moron premium” to compensate for the growing risk that we default or inflate away our debt, and these higher borrowing costs automatically mean even greater deficits, and thus even more borrowing. It’s a vicious circle. The 30-year gilt yield recently hit 5.6 per cent, its highest since 1998; another substantial increase would surely topple the Chancellor.
There would need to be a trigger for another jump in borrowing costs: perhaps the equally mismanaged French government will be ousted next month, causing contagion, or a UK statistical release will show that the deficit is increasing. The Budget may unravel. Any of this could trigger panic, and a self-fulfilling doom loop that sends rates rocketing. Mortgages and private loans would also shoot up, destroying families and firm”*
You can read the entirety of Mr Heath’s piece, which appears not to be behind a paywall, via the link below:
https://www.telegraph.co.uk/gift/81a695a87c65542a
Personally I can see things being worse than the 1970’s to be quite frank. Back in the 1970’s despite the economic problems we were still a reasonably unified nation. Things were shit but there was enough social capital to enable things to function. Today however things are not the same. It is likely that not only are Britons going to be faced with enormous politician created economic problems but we are also going to face additional problems from societal breakdown, sectarianism, the results of the disastrous net zero project and much more. Britain is much more of a powder keg than it was in the 1970’s even taking into account major issues such as the Irish Troubles that were a factor back in the 70’s but which are less of an issue today. I don’t envy any politician who is sensible and who tries to sort out Britain’s economic and social woes as they are clearly much more serious than any of the problems that the Thatcher government had to deal with when they came to power in 1979.
Britain and Britons are in for a terrible time and it won’t be just be having to use candles to give us light due to coal miners strikes affecting electricity generation. It will be all that plus ethnic and religious conflict, currency devaluation, inflation and social breakdown. Britain is a ship holed below the waterline and its heading at rapid speed towards some very dangerous rocks.