PANIC STATIONS

Truss and KwasiIt’s fair to say the Commons chamber hasn’t been quite the same since the departure of Dennis Skinner. The Beast of Bolsover lost his seat in the Red Wall wipe-out of 2019, just a few months short of completing a remarkable half-century as an MP. His comical quips – particularly at the State Opening of Parliament – became, for many, the main reason to sit through the interminable ritual of the occasion, providing some much-needed light relief from the ceremonial pantomime. Perhaps one of his most memorable digs at the Tories came during the Con-Dem Coalition years, when he referenced a Cabinet reshuffle brought on by some cock-up characteristic of appointing mediocrities to positions of power. Skinner aimed his barb at David Cameron and George Osborne, accusing them of being true to character by doing what toffs always do – they ‘blame it on the servants’. The political partnerships, of which the Cameron/Osborne double act was an example in the Blair/Brown mould, no longer seem to be the currency in Westminster. Power appears to be increasingly centralised in the person of an isolated individual like Theresa May or Boris…or Liz Truss. And has our incumbent PM blamed it on a servant by abruptly dismissing her Chancellor?

At least Kwasi Kwarteng has secured himself a place in history by being sacked after just 38 days – the shortest-ever run as Chancellor of the Exchequer that wasn’t caused by the holder of the office dropping dead, as happened to the unfortunate Ian Macleod within 30 days of Ted Heath’s General Election victory of 1970. Truss’s brainwave of handing posts to close friends, allies and those who publicly backed her during the leadership contest – regardless of their competency for the job at hand – spectacularly backfired with Kwarteng, who has become the patsy for the disastrous mini-budget earmarked as the PM’s first major act once the post-Brenda dust had settled. News broke of the swift sacking just before Truss held an emergency press conference at which she was expected to prove the lady’s for turning after all. The press conference spanned a mere eight minutes, during which she avoided questions over her own perilous position and speedily exited without responding to a request to ‘apologise for trashing the Tories’ reputation’. To be fair, that reputation was trashed long before Liz Truss grabbed the poisoned chalice, but she’s seemingly done her best to keep up the good work begun by her predecessor.

There’s no doubt the MSM is having fun speculating on who will replace Truss – surely a record time-span for such speculation to begin appearing? – and pressure on the Prime Minister to go when she’s barely had the chance to start work is akin to the new manager of a football club finding the fans on his back by opening his account with three defeats in a row. But Truss still being in the top job means she can fire the assistant manager, essentially ‘blaming it on the servant’ and lumbering him with carrying a can that nonetheless has her name on it by virtue of her own poor judgement in appointing Kwarteng in the first place. Rumour has it a divergence of opinion between the PM and her Chancellor on how to reverse the economic master-plan that provoked such panic in the markets and sent ripples through the Tory backbenches has been brewing for days, but Truss being in the senior position enabled her – in the legendary words of Jeremy Thorpe – to lay down her friends for her life. Whatever the dubious right of the far-from saintly City to intervene in the democratic process and reject Government policy, the PM evidently had to do something to calm the situation, and sacking Kwarteng was deemed the best option.

The ex-Chancellor himself will obviously reserve his true feelings for his future memoirs; the bland statement he issued was typically, uncritically sober. ‘You have asked me to stand aside as Chancellor,’ he tweeted. ‘I have accepted…I deeply respect the decision you have taken today. You have put the national interest first.’ Well, she certainly put the interests of Liz Truss first, but Kwarteng went on to try and defend the mini-budget as well as he could by claiming ‘following the status quo was simply not an option’ before adding ‘the economic situation has changed rapidly since we set out the growth plan on 23 September. In response, together with the Bank of England and excellent officials at the Treasury, we have responded to those events and I commend my officials for their dedication.’ On the positive side – for Mr Kwarteng – he’ll probably receive more from being paid-off (i.e. three months’ salary) than he pocketed from his month as Chancellor. Swings and roundabouts, eh? That’s undoubtedly true for the man who has eagerly stepped into Kwarteng’s shoes, none other than the former Foreign Secretary, Health Secretary and serial failed leadership contender, Jeremy Hunt. Stranded on the backbenches since 2019, Hunt is back in business, probably provoking palpitations in political presenters across the MSM as they attempt to stop their tongues slipping. Where’s James Naughtie when you need him?

If one were to count Rishi Sunak’s last few weeks at No.11 and include Nadhim Zahawi in his brief stint as ‘caretaker’, we’ve had four Chancellors in the space of three months. If ever evidence were required as to what a bloody shambles this shower of a governing party has descended into, look no further. I always thought only Italy ever had such unstable government, yet if the media and large swathes of the Conservative Party get their way and oust Truss, she herself will be in competition with George Canning as the shortest-serving Prime Minister in UK history. Canning held the top job for a mere 119 days between April and August 1827, though his term of office was inconveniently curtailed by his death. Canning, who had already been Foreign Secretary and Chancellor, was 57 when he became PM; he’d famously had a duel with fellow Minister Lord Castlereagh several years before, and his selection as Prime Minister by George IV deprived him of the talents of the Duke of Wellington and Sir Robert Peel (neither of whom would serve under him). If the talent available to Liz Truss seems so threadbare as to warrant the recall of Jeremy Hunt, Canning himself struggled to recruit Tories and resorted to Whigs, so severe was the split in Tory ranks at the time. Yes, we have been here before.

Canning died of consumption on 8 August 1827, four days short of just four months in office. Liz Truss’s physical health appears to be an improvement on that of her distant Tory predecessor; her mental health is another issue altogether – though maybe it’s not the done thing to mock the stupid these days. The same lame and meaningless buzzwords lifted from the politicians’ book of vapid platitudes tumbled out of her mouth during her brief post-Kwarteng press conference as she managed the admirable achievement of saying nothing for eight minutes. The PM ‘answered’ an impressive four questions, declaring she remains determined to deliver on all the pledges she made during the leadership campaign whilst refusing to say sorry for the chaos she’s presided over in the last few weeks. ‘I am absolutely determined to see through what I have promised,’ she said, ‘to deliver a higher growth, more prosperous United Kingdom, to see us through the storm we face.’ And then she was gone, presumably in a determined fashion – for that would seem to be her favourite word.

If one considers that the first fortnight of her tenure at No.10 was placed on ice by the national mourning for the Queen, and was then followed by the holiday that is the Conference season, Liz Truss has probably only been at work for not much more than a couple of weeks. In one respect, she’s achieved a hell of a lot in an extremely short space of time; few imagined anyone could surpass Boris in terms of uselessness, but you can’t argue she’s given it her best shot. Naturally, opposition parties are having a field day over this Tory meltdown, but I couldn’t care less what Keir Starmer or Ed Davey have to say; if Dennis Skinner was still in the Commons, mind…

© The Editor

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THE BLACK MARKET

City GentsA rare visit to the house I grew up in over the weekend was crystallised in the wee small hours of Sunday morning by me accessing buried treasure and rifling through yellowing copies of the first ever comic I purchased week in-week out half-a-century ago, ‘The Mighty World of Marvel’ (from October 1972 onwards). This inaugural outing for the British branch of the Marvel Corporation was an exciting introduction to that now-overexposed universe for a kid eager for visual stimulation 50 years ago; the fantastic imaginations of Stan Lee, Jack Kirby and Steve Ditko were exactly what I needed then, however much the thought of their creations as rendered by Hollywood fills me with indifference today. Anyway, the familiar sensation of turning childhood pages and re-encountering images permanently burned onto the memory banks of the half-formed mind was added to by a retrospective awareness of wider events that barely gatecrashed my infant consciousness at the time.

I noticed a comic that was priced at 5p from its launch in the autumn of ’72 abruptly shot up to 6p at the height of the Three-Day Week in January 1974 and then increased to 7p less than six months later; by the conclusion of the year it had risen to 8p, and once I’d reached the end of the pile (1977), the cover price was 10p. I appreciate that sounds like peanuts by today’s standards, but one has to take into account price comparisons between the cost of living then and now; indeed, ‘The Mighty World of Marvel’ was probably an expensive addition to the newsagents’ shelf and its bi-annual price increase from 1974 onwards evidently reflected the soaring inflation of the mid-70s, something that only impinged on me when I was informed my weekly stimulation needed to be cut back. Related searches through my numerous preserved files of vintage TV from the era revealed a report from ‘John Craven’s Newsround’ explaining the perilous position of the pound in relation to the dollar from October 1976; this served as a reminder of how current headlines surrounding similar issues are nothing new. We have been here before, even if many of us who lived through the last time we were here imagined we’d never be here again.

Forty-six years ago, John Craven and his team reported that the pound in 1972 had been worth $2 57₵; four years later, as the pound plunged to its then-lowest-ever level, this had dropped a dollar to $1 57₵. Alas, the news that the pound of 2022 has plummeted to a record low against the US dollar in the wake of new Chancellor Kwasi Kwarteng announcing his tax cuts fuelled by further borrowing has unfortunately added to the tiresome ‘Back to the 70s’ narrative that the MSM is currently indulging in. Threatened public sector strikes and the prospect of a candlelit winter hardly help matters, but the largest programme of tax cuts since Ted Heath tried (and failed) to repair the economic malaise of his own premiership have resulted in the weakest performance of the pound Vs the dollar since decimalisation in 1971. The Chancellor is clearly fixated on the mantra of ‘economic growth’ by arresting the rise in National Insurance Contributions, axing the additional rate of income tax and cutting stamp duty, but I would imagine the majority of this country’s workforce is now being confronted by diminishing returns for their hard work, something not aided by the prospect of the rich receiving further benefits courtesy of last week’s mini-budget.

The 1976 low of the pound – despite then-Chancellor Denis Healey going cap-in-hand to the IMF (leading to a defiant albeit bad hair day speech from the floor at that year’s Labour Party Conference) – was superseded in 1985, but the latest figures have exceeded even that; overnight trading by Monday morning saw sterling falling 5%, reduced to $1.0327. It’s worth remembering the devaluation of the pound by Harold Wilson in 1967 was greeted as a national calamity on a par with Dunkirk (and cost Chancellor Jim Callaghan his job), yet even though one could argue it led directly to Labour’s defeat at the 1970 General Election, it seems like a storm in a teacup when stood alongside the problems facing the new PM. Okay, so I know if you’re a layman like me, ‘the markets’ may as well be written in a foreign language; but the current climate has provoked an increased interest in something normally reserved for readers of the Financial Times; and Liz Truss herself has already come under criticism from within her own Party for her emergency economic measures, with one unnamed member of her predecessor’s Cabinet declaring, ‘Liz is f***ed. She’s taking on markets and the Bank of England’, adding the new PM and Treasury Ministers were ‘playing A-Level economics with people’s lives’.

This is the kind of story that used to bore the pants off my generation as children, perhaps because most of us imagined it was one of those headlines specific to time and place, not regarding it as one that would have any relevance in the future. Little did we know we’d eventually come full circle. The same anonymous Minister in Boris’s cabal added by concluding ‘Government fiscal policy is opposite to the Bank of England monetary policy – so they are fighting each other. What Kwasi gives, the Bank takes away…you cannot have monetary policy and fiscal policy at loggerheads’. In harmony with this mystery man is a senior investment analyst name of Susannah Streeter, whose opinion of the situation is that ‘the pound has been on a fast downwards track of a rollercoaster, plunging to record lows…as confidence in the Government’s economic management continues to evaporate. The fresh bout of panic appears to have been brought on by rumours that the Bank of England may step in with an emergency rate hike to try and shore up support’; referring to Kwasi Kwarteng threatening further tax cuts, Streeter added, ‘The worry is that not only will borrowing balloon to eye-watering levels, but that the fires of inflation will be fanned further by this tax giveaway, which offers higher earners the bigger tax break’.

Fears that Liz Truss will crash the economy have stoked the backbenches into action on the eve of the PM’s first speech as leader at the Conservative Party Conference. Chair of the Treasury Select Committee, Tory MP Mel Stride said, ‘One thing is for sure – it would be wise to take stock of how through time the markets weigh up recent economic announcements rather than immediately signalling more of the same in the near term’. However, rumours abound that Truss and her Chancellor will not stop here; the borrowing is set to extend into 2023 and Kwarteng has promised more is to come. Stories of further tax cuts for the rich even resulted in Gideon himself – George Osborne – criticising the ‘schizophrenic’ notion of cutting taxes along with more borrowing, and also prompted ye olde Hush Puppy-wearing, cigar-smoking, Ronnie Scott-loving Chancellor of a different era Ken Clarke to comment, ‘I’m afraid that’s the kind of thing that’s usually tried in Latin American countries without success’. The fact polls show Labour now has its largest lead over the Tories since 2001 suggests the incumbent Chancellor hasn’t made a great start.

It goes without saying that even those of us not in possession of a brain boasting an implant with a degree in advanced mathematics could see this coming when industry was plunged into mothballs during lockdown, so it’s no great surprise that our governing party of 12 years is confronted by an economic meltdown of unprecedented proportions. And the majority who tend not to follow the FT Index are now faced with the realities of it all when they venture down supermarket aisles and notice how much more expensive certain items are today than they were this time last year. Yes, a recent reunion with some of my childhood reading material may have reminded me that we’ve been here before, but I guess that’s not much comfort for those who weren’t forking out pocket money for ‘The Mighty World of Marvel’ in 1972.

© The Editor

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