Thursday 3 February 2022

Why is Sunak's Energy Support So Stingy?

Topping out another disastrous day for the government, this evening four of Johnson's top aides quit/were fired. Depending on if you believe increasingly desperate Tory MPs or not. But while the chatter exciting Westminster's chatterati will last all the way to tomorrow lunch time, Rishi Sunak's half-arsed measures to deal with soaring energy bills matters most. With the energy price cap soaring to just under two grand a year and the typical bill putting on an extra £700, this is one cost of living crisis the Tories have to pretend to do something about. What costs you could cost them.

At the centre of Super Sunak's rescue plan is an automatic £150 rebate for Council Tax payers across bands A to D, with a £144m discretionary payment fund doled out to local authorities to cover anyone in band E and/or are particularly in need of support. This rebate will be resourced via government grants, though Sunak did not say if it would cover all or some of the rebate burden. The Tories have form on this, like the time when council tax and housing benefit were devolved to local authorities while cutting a fifth from these budgets. Or perhaps they'll expect councils to eat up the cost now and the grant will come later. Again, entirely the Tory thing to do. Aside aside, Sunak announced an interest-free loan scheme of £200 off energy bills to be paid back in five £40 installments . What people are supposed to do if neither goes far enough, Sunak neglected to say. Then again, while Rachel Reeves criticised the fare offered in the Commons Thursday morning, Labour's proposed VAT cut to bills is similarly weak sauce. The problem is structural: energy production is essential infrastructure that remains in private hands, and is heavily dependent on fossil fuels. Effective action requires the socialisation of energy and a swift transition to carbon neutral renewables. Labour aren't interested, of course, and the very notion of radical but necessary would bring the Tories out in a rash.

This begs the question. Why is Sunak's remedial help so meagre? Again, it's not about personal failings (apart from a personal commitment to the narrow politics of privilege) but the politics of the Tory coalition. There's a tiny bit of the ever-reliable divide and rule in Sunak's announcement. 80% of households are getting a tokenistic handout, but more is available for the needy. A set up tailor-made for tabloid exposes and Channel 5 programmes on feckless claimants who use social security money to heat their outdoor pools.

The addition of the loan is slightly more interesting, and there are three ways of thinking about it. With inflation soaring, the tried and trusted Thatcherite measure for combatting it is restricting the money supply. I.e. Pushing down wages. The energy bill loan, goes the thinking, takes the edge off the April price shock and becomes repayable in 2023 when, presumably, things have settled down a bit. The loan means money will be put aside to pay for it and therefore, they hope, won't have inflationary consequences. The second are the disciplinary consequences of debt. It has proven itself an effective method of population management and political pacification by individuating obligation and, from the Tory point of view, inculcating the "virtues" of thrift and living within one's means. If people can't pay back the debt being foisted on us, then that's their fault for not being responsible. Finally, throughout the pandemic the strategy the Tories have been united behind is not to offer too much. Sunak wants to wind the clock back and get politics into a position where there are no expectations on the state at all. This puts the horrors of socialism back into its box, dissolves all thought of a better future in non-neoliberal terms, and the asset economy the Tories depend on can chug along without challenge. At least, that's what they think.

Not that you would get any of this from reading mainstream political comment or the criticisms ventured by opposition politicians. It's all clueless, incompetent, nasty Tories. No scintilla of awareness of their relationship to class and political economy. Nor, most damning of all, any curiosity about why they are what they are either. Unless there is a popular backlash and Sunak's ratings take a tumble independently of the muck Boris Johnson is covering the Tories with, the chancellor will get away with it.

Image Credit


Anonymous said...

What many people don't realize, because they are too stupid, is that households subsidize the energy costs of business. This really began to increase during the Blair years and was a response to the Fuel crisis back then, when haulage companies held the nation to ransom.

Labour, Tory, it doesn't matter, they both believe that households should subsidize the energy costs of business, and while that consensus remains the bills are only going one way.

There will come a point when you can't squeeze any more out of households and business will take a hit. Only at this point will change be forthcoming.

Meanwhile, as Starmer said, people will have to max out on credit cards. This was an opportunist attack on the Tories by Starner, but in reality, he told the whole story, with labour's nudge nudge wink wink compliance.

In power Labour will do nothing to address this, they will scream and shout now for purely political ends, and do the usual trick of hoping people forget. And they will forget given how stupid they are.

It is the perfect scenario for those in power, you increase the fixed costs of the people, making them more obedient and likely to work longer for less, and encourage they max out on credit cards, which will help financialisation.

This is why capitalism is so doggedly persistent, it relies on a mass of people being used and abused, and has all the instruments at its disposal to do it.

The role of people in a capitalist society is to be used and abused at will. And they play that role with gracious obedience.

Blissex said...

«With the energy price cap soaring to just under two grand a year and the typical bill putting on an extra £700»

For a property-owning "aspirational" Con, NuLab or LibDem voters that's just a little sting, dwarfed by property based redistribution from the lower classes: one such voters with just a cheap £500,000 one bedroom flat that has been booming in price by 10% instead just 7% is receiving an extra £15,000 on top of the usual £35,000 annual profit, an extra £700 a year is peanuts to her; higher energy costs are going to be a problem only for property-less sore losers who don't vote Conservative regardless.

Blissex said...

«This is why capitalism is so doggedly persistent, it relies on a mass of people being used and abused [...] And they play that role with gracious obedience.»

The did not in June 2016, so many voted against "Remain" purely to fuck Cameron, Osborne, Blair, and the globalist establishment, and they succeeded in that. Then they got the new boss, same as the old boss, just a different flavour.

The real reason the thatcherite elites are so persistent is that some of them are smart, and they have figured out how to suborn or fool the gullible "leftoids" that are supposed to represent the non-thatcherite proletarians.

An example of fooling that I was mentioning recently in a chat is that some "leftoids" don't just swallow all the distraction stories about Johnson's parties and wallpaper as if they were important, or the wokeist intersectionalism (by which "diversity" is turned into the opposite of "union" as in "labour unions"), but also talking about rigged voting, when the far bigger problem is rigged nominations.

Democracy does not just mean free and fair voting, it also means means free and fair nominations, because voting for candidates nominated by the other side is meaningless. Many people are falling for the distraction tactics of talking about redistricting, postal votes, etc., between Conservatives and New, New Labour, or equally distractive talk about tactical voting between New, New Labour and LibDems, or the expelling of "trot" activists and members from New, New Labour.

But what should matter more to the "left" is that the overwhelming majority of candidates nominated by the 3 major parties are thatcherites. What was the really important change pushed by New, New Labour's leadership election rules? It was the raising of the nomination bar from 5% to 20%, to ensure that non-thatcherite leadership candidates would never be nominated by the PLP, and elected by the "trot" membership, and then whichever thatcherite leader is actually put in office, they can stitch up the nomination of constituency candidates, so the votes of both party members and party voters go overwhelmingly to thatcherites, regardless of the preference of members and voters. Welcome the new boss, much the same as the old boss, whether the name is Margaret, Tony, David, Theresa, Boris.

What matters most to the ruling elites is not so much whether Conservative thatcherites win elections, or it is New Labour thatcherites, or LibDem ones, but that thatcherites win, whatever the color of their rosette, and that being in control of nominations is much easier and cheaper than rigging voting. That's a smart approach, and tried and tested.

It is because of those smarts, and the gullibleness or complicity of the "leftoids" that the thatcherites have been in power for over 40 years, not because of the "gracious obedience" of the voters of the "left", which in fact react by giving up on elections where all candidates are thatcherites (when they should keep voting for protest-vote parties like the Greens).

Anonymous said...

Brexit seems like the prime example of obedience and gullibility to me. The tabloid press have been pushing anti EU sentiment for years, and so too the Tories. You could say the voters called their bluff, expect that a certain section of the ruling class really did want Brexit, but not the the Brexit of the gullible fools. For the gullible fools, Brexit was an honest and earnest feeling. They really did want their country back, as if it was ever theirs, and really did want rid of different alien cultures.

The problem is, these gullible fools think this is why Brexit was done, but Brexit was about deregulation, cutting red tape and making tax avoidance easier. So people were manipulated into Brexit, because manipulation is how relationships are conducted in a capitalist society.

In fact Brexit was such a startling example of how obedient people are that this obedience even overcame the Bill Clinton adage, it’s the economy stupid! In the case of Brexit all you are left with is stupid! People were so manipulated, had become so obedient that even their own economic interests were put aside. That is a watershed moment that seems to have been lost by many commentators.

I agree about all the distractions, but the reason most of the nominees are Thatcherites is because there are no non Thatcherites to nominate! I genuinely believe that when Starmer mentioned maxing out on credit cards in his ‘criticism’ of the government, he was actually planting the seed in people’s minds to go out and max out their credit cards. A Derren Brown form of mind control!

My first prediction is that when New New labour come to power utility prices, local taxes will not reduce and the new level of prices that New New labour are currently attacking will become totally normalised under them.

In Britain today we have the Hobson’s choice between Thatcherites and hardened nationalists. I really don’t see what leftoids have to do with any of this; leftism is so niche that it hardly warrants any attention.

Anonymous said...


Do you think people can simply 'cash in' their property value increase ? Interesting.

Blissex said...

«@blissex Do you think people can simply 'cash in' their property value increase ? Interesting.»

Better informed, millions and millions of affluent property owners are really enjoying every year their fat profits from upward redistribution.

Blissex said...

«don't just swallow all the distraction stories about Johnson's parties and wallpaper as if they were important»

BTW what is purpose the current flood of “distraction stories" whether about Johnson's parties, the russian invasion of Europe, etc. etc.? I guess this:
"While workers in the U.S. are expected to see a wage rise of 3.9% in 2022, the cost of goods and services jumped 6.2% over the past year, according to the latest report from U.S. Bureau of Labor Statistics.
In the U.K. it’s actually worse, with pay rises expected to climb to 3.2% in 2022, according to research by advisory firm Willis Towers Watson, which would count as a pay cut when paired with an inflation rate of 7.25%. [...]
The head of England's central bank caused an uproar Friday after he told workers that, despite skyrocketing energy bills, rising food and goods prices, and a looming payroll tax hike, they shouldn’t ask for a big pay rise because that would just make inflation worse.

It is the usual "wage-price spiral", to be blamed or paid for by "lazy losers", but the BoE boss somehow is not saying much about the "housing-debt spiral", I mean the "booming" property economy that benefits so much "deserving winners":
"Britain’s housing market has made its strongest start to a year since 2005, with annual house price growth rising to 11.2%"

Rejoice! Rejoice!

Blissex said...

"receiving an extra £15,000 on top of the usual £35,000 annual profit, an extra £700 a year is peanuts to her"

«@blissex Do you think people can simply 'cash in' their property value increase ? Interesting.»

This seems to imply that Conservative voters will switch their vote because of that extra £700 per year, because otherwise politically it does not matter.

If someone for whom an extra £700 a year on the bills is a significant problem votes Conservative (or New Labour or LibDem), they deserve what comes their way. Same if someone can't figure out how to make cash out of a massive yearly capital gain. But then I guess they are so dumb that will continue to vote Conservative "because Brexit" or "because tory values" etc.

Also consider the point of view of the other side: most rent contracts in the south-east say that rent will grow by RPI+3% per year, that is 5-6% per year for the past several years. So an extra £700 a year is what renters paying £970-£1,200 per month (that pays for a dingy studio flat to access jobs in the south-east) have to find every year regardless of any increase in energy costs, just to gift nicer and longer cruises and other lifestyle improvements for their landlords; just like someone looking to buy has to cut their spending by £15,000 a year when property price inflation increases from 7% to 10%, to gift the future seller of that £500,000 flat with more luxurious living standards.