Nothing seems to be working in the UK The Economist
Britain is currently facing the worst inflation in western Europe. Pay has plunged at a record rate and job vacancies are declining for the first time since 2020.
The Telegraph warns its readers of the;
coming collapse of basketcase Britain.
The threat of a tripling in the cost of energy by the end of the year has the ruling class of Britain in a panic. Even the Bank of England, in what must be some attempt to psychologically prepare people for the complete chaos to come, has been issuing dire warnings about the state of the economy.
They wouldn’t be doing this if this crisis wasn’t going to be staggering and unmissable to the wider sheepish population at large.
Keith Anderson, chief executive of Scottish Power said;
Come October, [the situation is] going to get horrific, truly horrific...so many people are really going to struggle.
The UK government introduced an energy price cap in 2019 but most households at that time had bills below the cap. Now the cap is the price you have to pay. It rose 54% in April which saw about 18 million homes had an increase from average of £693 up to £ 1,971 a year. Any customers who are still on fixed rates will see even larger increases as they come off those rates.
In October, however, as we head into winter, the bills look set to increase again this time by 30%. Warnings that another rise may come by the end of winter.
Public Domain
In an article today John Harris in The Guardian gets to the heart of Britain’s particular malaise.
As he states it, the UK is being confronted with huge problems it can no longer wish away. He singles out:
skyrocketing bills, crisis-plagued railways, a drought worsened by our decaying water infrastructure and an NHS once again on the brink of collapse.
Does his article show that indeed;
there suddenly seems to be a dawning understanding that the era of Covid-19, Brexit, the war in Ukraine and the overarching climate emergency have exposed fundamental failures that have been festering for decades.
I think this author gets straight to the heart of the problem;
the deep and enduring problem of British underinvestment, and a national mindset innately averse to thinking about the future.
This complete and utter failure to invest in it’s own people is a story that has been playing out my entire life.
The fate of England’s water is a particularly vivid example. Pipes, reservoirs and treatment works were once owned and run by local councils, but are now in the possession of a mind-boggling mess of interests that includes a Malaysian conglomerate called the YTL corporation, Norway’s state-owned bank and JP Morgan Asset Management. The consequences have been as mad as that suggests: between 1991 and 2019, such shareholders were paid £57bn in dividends – nearly half what the water companies spent on maintaining and improving their infrastructure.
Given all the money printing that the Bank of England has done – where is the investment in the UK? Years of politically driven austerity tampered down public projects, meanwhile libraries and community centres closed across the country. Meanwhile the UK has been investing in China’s development and the One Belt One Road Initiative.
The Guardian article concludes by calling where the UK is currently now “an impasse”. Two party representative democracy, the profit motive and the centralised state are all regarded as reasons for the impasse.
Regarding this as a political failure rather than a systemic one?
Currently the focus of the energy crisis has been on households. However, this massive increase will also affect businesses. Not only are they faced with higher input costs – energy, transport, rent – they will be faced with reduced demand from squeezed consumers. The French energy giant EDF says vulnerable customers in Britain will go from spending £1 for every £12 they earn on their energy to £1 for every £6 they earn this year.
This sort of depression of consumer demand hasn’t happened before in a consumer-led economy. The only solution on the table at the moment is helicopter money. The initial round was certainly spent into the economy, likely making the GDP figure not as bad as otherwise. The October round of helicopter money though is set to be sent direct to the energy companies towards the bill. The opposition want a windfall tax on excessive profits to freeze bills. The Institute for Fiscal Studies has “warned” the plan will cost £60bn a year to implement.
Facing this prospect a campaign has been launched called Don’t Pay UK. It’s plan is to gather a million people to pledge not to pay if there is another massive price hike in October. Mass non-payment has been used before in the UK to defeat the Poll Tax. Even just cancelling your direct debit will create serious issues for the energy companies if enough people do it at once.
Visit their site here at Don’tPayUK
