Thanks to the weak position the UK is in thanks to a decade of austerity and half-cocked Coronavirus relief measures, Universal Credit claims have surged as a combination of the virus and egregious mismanagement of the economy have destroyed jobs. Earlier in the year, our friend "Dishy Rishi" uprated Universal Credit by £1,000 in recognition of tough times. Now as then the most stingy social security settlement in Western Europe, this is due for a review in March. Is the rise going to be reversed? Clearly, Sunak's instincts would be to scrap it given how grudging he's been, and how he's responsible for the late implementation of the second lockdown and the last minute extension of the furlough scheme at the end of October. The downside for the Tories is being seen taking money from hard-pressed people. In the deserving/undeserving frame the Conservative imaginary applies to the poor and, particularly, social security recipients, they can - and for years did - get away with hammering the most vulnerable thanks to their framing getting amplified by print and broadcast media, and (disgracefully) the Labour Party itself. With growing unemployment and the obviousness of too few vacancies to go around, cutting payments by £20/week is a politically risky proposition.
The danger Sunak represents depends on the state of Covid-19, which isn't good thanks to the spread of the variant, and sounds even worse when the government's plans are considered. According to "leaks" to the Mail on Boxing Day, news the Oxford/AstraZeneca vaccine is up for imminent approval for the vaccination programme is good news. What isn't is the government's desire to get this rolled out so restrictions can be lifted in February. This, plainly put, is reckless and psychopathic. For one, lifting restrictions means exposing working age people with health conditions to significant risks from infection. Second, even among healthy people while the risk of death is low the chances of acquiring long Covid are still unknown. This in and of itself should give any responsible politician pause. But now we have the added risks. Thanks to Tory incompetence and stupidity in letting the virus spread as it pleases, the inevitable has happened and a new, more infectious strain has emerged. Relaxing restrictions even after 11 million older people have had their vaccinations is a recipe for a public health catastrophe. And because it's happened before, it can happen again. How does a more virulent, deadly strain sound? Or perhaps one the present set of vaccines can't handle? Boris Johnson and friends are well on the road to bringing this grim eventuality about.
Mainstream politics believes the government's first responsibility is the protection of its citizens. The Tories are not only flunking this test, an outside observer could be forgiven for thinking they're pushing for even more suffering, even more deaths. And right at the heart of this push we see the chancellor who, incredibly, thinks surging infections, overcrowded hospitals, more people dying and many millions in mourning are conducive to economic growth. By some distance, this makes Rishi Sunak the most dangerous man in Britain.
I will say here and now that in the second half of the year the economic problem facing the UK will be inflation. that will be followed by a surge in the pound and manufacturers complaining loudly.
ReplyDeleteThe economy, post Covid and post Brexit, is going to boom. The problem will be labour, as the government will be politically unable to allow mass immigration to meet the need. This will push wages up, creating inflation. BoE will raise rates, causing a rush into the pound.
And all you lefties will complain about people's wages going up.
Dipper, inflation is no longer a national economy problem. Low inflation is now primarily a factor of the global economy: secular stagnation, expanded labour markets & the savings glut.
DeleteThere will be a post-Covid bounce in consumption, but in the case of the UK that is likely to disproportionately boost imports, leading to balance of payments pressure & a fall in the pound. There will be no discernible Brexit bonus (a US trade deal is years away), though equally the drag on manufacturing exports will take a long time to show (& will be offset for a while by the pound's decline).
UK wages are unlikely to rise in 2021 because there is already plenty of slack in the labour market, i.e. underemployment rather than unemployment. Wages won't rise until productivity does, & that looks a long way off at the moment.
The Tories will cut the extra £20. You can be certain of that. They have already restarted the capping of payments and that is a much much bigger financial hit for those who are having to rely on UC. Sanctions are back big time too.
ReplyDeleteStarmer's Labour to,,, er... abstain. You know they will!
Indeed. We must demand that there is a independent investigation. Over 70 thousand dead now. What did Germany do at the start of the pandemic?
ReplyDeleteOkay waiting for all the wages to go up. Quite soon you say?
ReplyDeleteThere are 15 million people either over 65 or clinically vunerable.
ReplyDeleteEven if the target of a million vaccinations a week is achieved and only one dose is given as opposed to the two for which the approval was made, this would take until mid April.
The denial of this reality that talk of February involves is spectacular even by the statndards of the Tories we have had to endure during this year.
It is "unfortunate" that there are people like "David Timoney" and "Graham" who have realistic insights in the situation, it would be so nice to be able to wear rose tinted spectacles...
ReplyDelete@ David Timoney.
ReplyDeleteThe pre-Covid economy grew through immigration, adding extra hands to an economy static in productivity. My view is that gets stopped. So to meet demand either imports increase as you say, or firms increase productivity. some evidence of that was starting to occur as firms prepared for immigration controls by investing in machinery.
Anyway, les make a note to return in Q3/4 and see how the post-Covid/Brexit boom is unfolding.
«The pre-Covid economy grew through immigration, adding extra hands to an economy static in productivity. My view is that gets stopped.»
ReplyDeleteThe UK supranational state has free movement, and nothing prevents northern immigrants from flooding the job markets of the south-east and depressing wages there. Perhaps the workers of the Home Counties should take control of their borders by exiting the UK to prevent the northeners from stealing their jobs thanks to free movement.
But the level of wages and immigration depends on who has the most power, employers or native workers, rather than on being part or not of a free movement area, whether it be the UK+Eire or the EU.
Indeed since June 2016 the total net immigration to the UK supranational state has sliogthtly increased, as while EU immigration has fallen, third world immigration has surged. Once outside "fortress EU" the UK business and property rentiers will be able to import a lot more a lot cheaper ex-Commonwealth workers on indentured servitude contracts:
https://www.ibtimes.co.uk/buyout-boss-says-brexit-will-be-good-his-business-will-mean-30-cut-uk-wages-1602631
“One of the biggest names in European private equity said that Brexit will be good for his business, but will mean a 30% wage reduction for UK workers. [...] He added that EU immigration will be replaced with workers from the Indian subcontinent and Africa, willing to accept "substantially" lower pay.”
Dipper,
ReplyDeleteAye, that'll be right. Is the chocolate ration going to be increased and all? It'll be milk and honey in Brexitopia, under a Tory government with no effective opposition!
Back in the real world, Britain continues to circle the drain...
The Tories should be designated as a terrorist organisation and are the biggest threat to the British population now and maybe ever.
ReplyDeleteIn the last 10 years they have certainly murdered more Brits than every state sanctioned terrorist organisation put together in their entire histories.
Any one supporting the Tories should be considered a terrorist sympathiser and those rotten elements should be identified and reradicalised.
Maybe its time to prevent women from wearing expensive jewelry and maybe blue jackets? I am sure they are being forced to do this by men anyway.