The British Pawnshop: This is no way to run the British Economy

Quantitative Easing or QE became a buzzword when governments wanted to increase cashflows to keep the economy going. The Covid Pandemic was one of those periods. QE was not meant to be a permanent way of dealing with circulation but, I am afraid, it keeps going on. But there is another factor. At one point, the British government decided to recover public bonds by buying them back to reduce the wait of public debt. This should be the most normal thing to do. What happened now? Imagine buying something by paying 100 Pounds for it and soonafter selling it for 50 Pound. Selling bonds of public debt at discounted prices means selling bonds making losses. Why should the British government want to do that? Well, interest rates payed for bonds are rising and many investors are not so interested in buying public blonds without getting higher returns. So I guess that lowering prices of bonds is a way to incentivise investors to take bonds of public debt. But what does this mean for the Treasury and the Bank of England?

In a few days time, the Chancellor of the Exchequer will have to produce the Autumn Budget and he will be doing so at a time when variables are changing so fast that by the time the Autumn Budget is printed most of the calculations in it will have to be remade. I do not khow how much will the Government be able to keep to deal with emergency adjustments, but given the nature of the British budget there will have to be substantial amounts kept as reserves to deal with emergencies. In March 2025, Wes Streeting made statements confirming that Health was going to be substantially supported in the budget as one of the number one priorities. I do suppose that Wes Streeting, now in charge of Defense will be expecting important increments of the Defense Budget. Isn´t it that the now Chancellor of the Exchequer John Healey went as far as resigning his post because the then Chancellor of the Exchequer Rachel Reeves did not allocate enoughs funds for Defense? Some talking about increasing the amounts from Defense up to 3.5% of the national budget, or even up to 5% of the national budget.

Ed Davey, Liberal Democrat Leader, said that the Liberal Democrats are preparing themselves for a snap election. Before Andy Burnham become Prime Minister there was talk about a snap election as a way to give Andy Burnham a national mandate even at the expense of coming back to the House of Commons with a lesser number of Labour MPs. Why? Because given the measures that the Prime Minister will have to implement, having a big majority can be a liability and could lead to internal wrangglings. Imaging having to tell your own MPs that austerity policies that they so much hate will have to implemented.

Under Keir Starmer, the man that won a historical majority for the Labour Party, there was a series of upheavals. I lost count of the many times the Labour Cabinet had to re-reshuffled. Ultimately, the Prime Minister himself had to go and so he did by leading to a by-election to choose a new Member of Parliament. Labour avoid a leadership by getting Andy Burnham onboard when he won a by-election in Makerfield to be able to apply to be the Labour Party Leader and become Labour Prime Minister, something that he managed to do without any challengers. The Labour Party was desperate to show the country an image of unity. Unfortunately, that could happen only before the announcment and implementation of real policies, something that is bound to open wounds in the Labour Party.

So will Andy Burnham call a snap Parliamentary Election to cement his leadership even at the expense of having less MPs in the House of Commons? Many say that he will not take such a risk. Others says that if he has to confront the Trade Unions and party members with very unpopular policies, he will have to be stronger as a leader. Any rebellions, any upheavals, any confrontation with trade unions, could led him to face the same challenges his predecessor Keir Starmer had to face and that ultimately led to Keir Starmer´s political demise.

Some in the Labour Party have said that Andy Burnham is the Labour Party´s last opportunity to keep the hope of winning the next General Election. What they do not mention is how difficult it will be for a Labour Leader to please all segments of the Labour Party. 

The approval of the so called Made in Europe legislation could prove to be very negative for the British Economy. Made in Europe is designed to counter Chinese competition that is creating massive job losses in the European Union. It is not meant to damage British interests, but it isnot meant to promote British interest either. The fight for markets is intensifying. War in Europe and in Middle East does not benefit Britain either. The volatility of energy prices is costing Britain dear. Everything will have to be taken into account when writing the new Autumn Budget.

All eyes on John Healey: Government advised to slow down or to halt sale of bonds of public debt

 

UK Government advised to slow down or to halt sale of bonds of public debt

The latest reports indicate that economists have stated that to prevent an acceleration in terms of the growth of British public debt, selling less bonds of public debt or stopping sales altogether would be the safe thing to do.

This would leave the Chancellor of the Exchequer with two options: more taxes or budget cuts or both options at the same time.

This is a dangerous time for the British economy because as inflation rises, more resources will be needed. Every time inflation rises, salaries are devalued and the currency is naturally devalued. You can buy less and less with the monies that you have in your pocket or the monies that you are bound to receive. This can mean, once again, industrial action.

Whether the Chancellor of the Exchequer decides to slow down or to halt the sale of bonds of public debt, the fact remains that Britain needs money to pay for its budget. The news that the European Union could be about to implement legislation designated as Made in Europe to deal with Chinese increasing competition that could lead to the lost of more than 300,000 jobs across the European Union is not good news for Britain as this could restrict British investments in the European Union.

Things are not becoming any easier for branches of the public sector like the National Health Service that are asked to create redundancies to ease out the pressure on the budgets run by NHS Trusts. Local and regional authorities have been dealing with deficits in their public finances as asking for more financial support from the Treasury as a way not to raise local and regional taxes that could put families that are already under pressure due to rising taxes and rising inflation. The official rate of inflation that was 2.9% (0.9%) is now thought to be 3.1 per cent and could go as high as 4%. Why is this important? Because much of public debt is indexed - linked to inflation rates. So when inflation rates go up, public debt goes up.

Today, the Bank of England will have to decide if it keeps the present official interest rate. This can have a direct impact on how much the financial sector - especially the banking sector - can charge for loans and mortgages. Under pressure, asking prices for sale of properties are falling in an effort to find new buyers. As much of the British economy depends on the capacity of banks to lend and on the capacity of buyers to acquire loans and mortgages, there is financial uncertainty. Financial institutions borrow to lend to potential buyers. If at any point buyers cannot make payments, leading to defaults, then the full weight of having to pay back credits falls on the banks shoulders. Some years ago, the British government had to rescue the banking sector and used government reserves to that end. For the British government to be able to do the same, once again, there would be not enough reserves available.

The British government wants to invest more in Defense, but this means taking resources away from other areas of the public administration. With limited sources of income and facing the prospect of having to pay more to keep public services as they are, there is very little or no room to maneuver.

There is always the danger of increasing industrial unrest and rising unemployment that automatically increases pressure on the so called Welfare State that needs to support those who are unemployed. Already, about 60% of those aged between 18 and 25% have little chances of finding a job to pay the bills and a growing number depend on parental financial support.

All eyes on John Healey: As Chancellor of the Exchequer, he is the Gatekeeper

 

John Healey is the Gatekeeper. All eyes now focused on the Chancellor of the Exchequer who has to decide who gets what

The honeymoon over, Labour must now focus on delivering what was promised. This is a time when national politics and geopolitics could not be more closely linked. The former Secretary for Defense that resigned when the now former Chancellor of the Exchequer Rachel Reeves did not deliver the monies that he needed to beef up Defense. Now, he has his hands on the public purse and resigning is not a viable option.

As always, the promise was 3% for Defense, but what is the timetable and how is it going to be achieved. Prime Minister Andy Burnham has stated that health and other vital public services will not have to suffer budget cuts and he was adamant about it. Words like Austerity, according to Labour thinkers, can only be found n the Conservative Lexicon.

Financial institutions ie Banking sector are already getting in touch with the economics team, afraid of taxes imposed on the banking sector. Lets remember than some years ago the Treasury had to intervene to save the financial sector, including the banking sector, from total destruction. Thanks to that intervention, the financial institutions that survived and did not go the way of Northern Rock, did somehow prospered. Now, it is the State´s time to survive more borrowing at higher interest rates, with less economic activity and rising unemployment. Even the Armed Forces that an inyection of cash should beef up are told to "limit training activities to what is absolutely essential because we need to save money". How is the now mythical 3% going to be spend, if it ever reached? 

And there is the issue of the Welfare State. For a myriad of reasons, local and regional authorities have been forced to pay for uncontrolled migration that includes asylum seekers. The burden is pretty obvious with local and regional authorities dealing with people as if they were pingpong balls, simply because there are not enough resources. Because of immigration with migrants often put at the top of the list for accommodation, waiting lists get longer and longer and Britons complain about the fact that they are often unable to have access to social accommodation "because migrants and refugees are given priority".

There are not enough jobs, there is not enough accommodation, and public services are being squeezed, but due to budget shortages people are not able to work because there is not enough money to fill up vacancies. Even outsourced services are being cut off with contracts that are not renewed. For all the talk about apprenticeships, none other than the BBC had to tell apprentices that there would not be jobs at the end of the line. So you might be training for a job that will not exist when you finish your training. The buzzword when it comes to real jobs that pay real money is "layoffs". Companies are laying off workers to deal with balancesheets.

So the Chancellor of the Exchequer has to deal with the biggest balancesheets. October is just round the corner and this is the time when all will be revealed. 

United Kingdom: bills keep piling up with prices that are rising almost on a monthly basis

For many people, the way rates of inflation are calculated is an absolute mystery that bears no relationship with the their cost of living. The cost of utilities and the cost of the shopping basket (itens that you need to buy or buy because you could not possible be without) is rising and often by 100%. 

No sooner you are trying to digest the cost of recent increases you get another letter informing you about additional costs to be introduced next month. In my mind, this amounts to devaluation. You are getting less for your monies. Your pounds are worth less and less and less and there is end in sight.

Another issue that should have more and more people worried is the fact that house prices are dropping and for those who have mortgages and loans used to acquire the property that live this means the certainty of having to deal with negative equity - when the value of the assets is less than the financial commitments you signed for in order to acquire the said assets.

You could have a mortgage for 1,000,000 Pound when in fact your property value is now 700,000 Pound. Even if you sell your property you will still owe the lender the amount of 300,000 Pound. No property left. Just debts. Those who have been faced with negative equity can tell you that it is not a nice experience.

For you is a very bad experience. For the financial system it could be even more catastrophic. Northern Rock was bankrupted. Many of the big banks had to be rescued with taxpayers monies. When Gordon Brown made the decision to rescue the banks, he did it because the alternative was financial paralysis.

If peoples incomes go down because of additional taxation, rising cost of borrowing and inflation, it is to be expected that disposable income will go down dramatically thus affecting consumption. Less consumption, more unemployment and more support needed to keep the unemployed and those do not earn enough alive.

We have not seen the nex budget being prepared by the Chancellor of the Exchequer John Healey. The Prime Minister says that increases in defense expenditure will not happen at the expense of welfare and of vital services. The cost of public debt is rising and the country is left with unsavoury alternatives - more borrowing, tax increases and budget cuts.

UK Prime Minister Andy Burnham: calming the markets....?

 

The Guardian, the London newspaper talks about Prime Minister Andy Burnham trying to calm bond market, as more and more investors are getting rid of bonds of public debt. It must be said that it is not just Britain that might be losing its capacity to borrow billions of US Dollars (althougn bonds might be valued in Pounds) to paid a public debt that amounts to trillions US Dollars.

Any budget must be based on reliable data, but nowadays data has a habit of changing even before any budget is formulated. So by the time the Chancellor of the Exchequer John Healey (former Secretary for Defense) rises in the House of Commons to deliver the so called Autumn Budget all numbers in it might be totally outdated. Without the capacity to borrow more then taxing more and budget cuts could be the only way left to adjust public expenditure. Both options are deeply unpopular because they both go for one word: Austerity.

For a Labour Prime Minister having to start by imposing new taxes and cutting budgets because there is no money to go around is not what was promised during the first short campaign for an election that never happened. When the amount of monies available is significantly reduced, the impact of increasing defense expenditure makes cuts in other areas of the public administration even more painful. As Paul Samuelson, the American Economist stated, it is butter or cannons. You cannot have them both in equal measure. Something has to go. Will it be welfare payments? Whatever the previous Prime Minister did that was considered to be done against Labour values will be nothing compared with the limitations the new Prime Minister will have to impose.

Suddenly, recent electoral successes in Makerfield and Manchester will feel like a pyhrric victory. The joy and celebratons might turn into a funeral. More taxes will certainly means less buying power in the pockets of already suffering taxpayers. Budget cuts will mean more unemployment. But in actual fact both measures can accelerate the rise of unemployment. If you raise taxes, you cut private investment and consumption. Taxes will be higher but the amount of monies collected will be reduced due to less economic activity. Keir Starmer´s exit from Parliament will help him distance himself from then nightmare that is coming and Andy Burnham´s time as Prime Minister could be cut short.

Right after Andy Burnham was appointed, there were rumours that he would go to the country, that he intended to have his own Parliamentary majority, even by losing many of the seats that Labour managed to win in 2024. Going to the country, having a General Election preceded by a whole bunch of bad news does not look, sound and feel like a good idea. Labour MPs that did not want Keir Starmer as Leader and Prime Minister made the choice to remain under Keir Starmer not to risk losing their seats.

When Andy Burnham threw his hat on the right they could have rocket the boat and go for internal elections in the Labour Party. Instead, they chose to have Andy Burnham appointed without any contest. The idea was pure and simple. No contest to challenge Andy Burnham would show the Labour Party as something that the Labour Party is not: a united Party. When the new budget is presented in the House of Commons, factional rivalries will reappear. 

Having a majority in Parliament might look like a blessing, but having too many MPs might be inconvenient. A majority that cannot be controlled becomes a liability.

At a distance, Labour MPs that are no longer Cabinet Members could have been disappointed, hurt because they were no longer at the forefront of the Labour government. Now, many of them like Rachel Reeves might be congratulating themselves because they do not have to face the mess the new government will have to deal with. She was being forced to calculate and recalculate budgets before they were even presented in Parliament. Now the man who complained and even resigned as Secretary for Defense because he was not getting enough money for defense will have to face reality. Now, it is John Healey´s time to face the music.

Sue Gray did not last long as Chief of Staff under Keir Starmer. She said that she felt that she was being spied on, that her private conversations were being recorded and leaked to the mass media. Has the political environment inside the Labour government changed overnight? As pressure mounts, one can expect that internal tensions will rise. As the expression goes "keep your friends close, but keep your enemies closer". 

 

  

British Default: As things go, a British Default is becoming more likely by the day

A British default is becoming more likely by the day. A country that owes trillions of US Dollars, pays billions on a monthly basis and has little to show for a real economy looks increasingly as a ship heading towards the rocks.

John Healey, former Secretary for Defense and now Chancellor of the Exchequer, has very little to be happy about and so do millons of Britons whose lives are turning into a nightmare. Prices that used to be relatively stable are now rising monthly or weekly.

By the time you finish doing your budget, you have to start all over again. If the Chancellor of the Exchequer has even less money to distribute then the risks of job losses and welfare cuts are all too obvious. If this comes together with loss of trust regarding the Pound then the ugly face of Devaluation is all too visible. It is also obvious that is the economy goes drastically downhill then investors trust will evaporate. Investors are already asking for higher and higher returns for public debt.

Reserves? What reserves? When Prime Minister Gordon Brown, former Chancellor of the Exchequer, was in charge then Britain had reserves to deal with the consecuences of an American financial upheaval. He could keep the banking system afloat, but there were many casualties. This time there are no reserves. The ship is going down and there are no lifeboats.

 

Rachel Reeves: trying to make numbers fit in is proving to be an impossible task

 

While Prime Minister Keir Starmer, Secretary for Defense John Healey, and other members of the British government can go around making all sorts of promises that they might not be able to deliver, it is up to Rachel Reeves to do all sorts of malabarismos to make numbers add up.

When she talked about pension reforms, she thought that would get more than 160 billion Pound to spend, but recent calculations show that the amount the Chancellor of the Exchequer will have available is less than 11 billion. 

In the meantime, John Healey, Secretary for Defense, has spoken publicly about building 6 munition factories, 12 nuclear submarines and so forth. More than 10 billion Pound are going to be paid to Mauritius for the transfer of the Chagos Islands. Billions of Pound are going to out to support military efforts in Ukraine, including training and sending of more than 100,000 drones (such is the number promised by Prime Minister Keir Starmer when he spoke about a tenfold increase. But there is a lot more. 

In the meantime, there is constant talk about budget cuts affecting Education, the NHS, the benefits system, the Civil Service, the BBC and so forth, on top of cuts for the elderly, the disabled and for those who look after the elderly and the disabled. But the list is a lot longer than that.

The Chancellor of the Exchequer is sitting around the table on a daily basis, including Sundays, negotiating with interested parties that are not happy with salary increases and cuts being proposed. So being Chancellor of the Exchequer in these circumstances is not the best post in the British Cabinet. When the Home Office, the Secretary for Defense, the local and regional authorities and whoever else asks for money, she is the one on the spot. The question is how long Rachel Reeves will endure the present state of affairs, before she herself decides that it is an impossible task.

UK Elections: Not since the days when Labour replaced Liberal Party as the other party has anything similar happened in Elections

In a Parliamentary By-Election fought due to the resignation of a Labour MP, the Labour Party in government lost a seat to Reform Party, a newly formed political party led by Nigel Farage MP who became Member of Parliament in July 2024. But not only that. In local elections, the Reform Party managed to win control of 10 Local Councils and turned the remaining Local Authorities to No Overall Control. Massive losses for both the Conservative Party in Opposition and for the Labour Party in government.

As reported by the BBC, the number of seats allocated to each political party, of the 1637 seats being up for election, was as follows:

Her Majesty´s Opposition, the Conservative Party, lost 674 seats. Her Majesty´s Government, the Labour Party, managed to retain barely 98 seats. The main issue is this elections was Immigration, although lack of trust and opposition to policies implemented since July 2024 played a very important role. To sum up, neither of the two main parties - Conservative Party and Labour Party inspire trust. There are conflicts within both major political parties. Keir Starmer, as Prime Minister and Labour Party Leader is facing increasing rejection from his own party. Kemi Badenoch, as newly elected leader of the Conservative Party, has not managed to make voters forget about 14 years of a Conservative Party that saw a succession of party leaders and Prime Ministers, due to internal upheaval. From Theresa May, Boris Johnson, Liz Truss and Rishi Sunak to Kemi Badenoch, the Conservative Party had to go through an election in which it was left with little more than 100 MPs, many of which do not see eye to eye. The local elections and Mayoral Elections and a Parliamentary By-Election were supposed to be litmus test for both major political parties.

There might be soon yet another Parliamentary By Election due to troubles affecting the Labour Party in Government. The Labour Party still holds a majority of more than 400 Members of Parliament but due to internal disagreement regarding policies being implemented by the Labour Cabinet, 2025 is bound to be a critical year. Industrial unrest could be on the cards, affecting the Civil Service, the National Health Service and Education. If Labour supporters choose to vote for other political parties - i.e. in a by-Election in Lambeth, Labour voters decided to support the Green Party that got a handsome majority with 48%, leaving the Labour Party in second place with 39% - or to abstein then the leadership of Keir Starmer will be increasingly challenged. The fundamental question to ask is "If there was a General Eleciton, would the Labour Party lose the General Election?"  

Geopolitics or Magnified National Politics: The effects are already strongly felt

This is more than Ukraine. This is an earthquake and the waves are spreading. In the United Kingdom, Keir Starmer had to turn around and deal with foreign aid, in the very same way President Trump decided to deal with foreign aid. This is a new world, Keir Starmer said.

Well, Keir Starmer should stop criticizing President Trump and listen and act accordingly. If you want to invest in defense, you must deal with budgets and waste. The Health Secretary is himself dealing with waste and cutting down redundant expenses in the National Health Service and pretty soon every cabinet minister will be asked to do exactly the same. Budgets will be cut in other areas to ensure that there are enough resources to invest in defense.

In France, in Germany and in every country associated with the North Atlantic Treaty Organisation will be doing the same and political parties will struggle to deal with financial stress with dramatic political consequences. Butter or Cannons, stated Paul Samuelson. That has not changed. 

Like or not, Environmentalists will be put aside. Those seeking improvements in Health, Education, Transport and other vital areas will be put aside. The emphasis is now on Defense. What are the resources for war? Those are the resources that are going to become crucially important. Societal changes will occur to reverse what has been happening for decades. Woke will be dead and replaced with traditional realism. It will be a no nonsense approach.

Here came the budget: Main target NHS and Second target the economy and particularly interest rates and growth.

The general thinking is that the Labour government will inflict pain earlier with the hope that near the next General Election the numbers will be much better to produce good feelings amongst voters. But this is a gamble by a government that publicly stated that if they had not inherited interest rates that were already going down the present announcements about borrowing could not have been made. 

Everything is based on the presumption that the economy will improve, that interest rates will go down and that repaying the borrowing will become easier. Another factor is promised improvements of the NHS. If the economy does not improve and if improvements promised regarding the NHS are not delivered then this would be a double political wammy that could bring down the present government at the next General Election.

The hope is that no crise like the Covid Pandemic or the energy crise generated by sanctions implemented against the Russian Federation or anything of the sort happens from now until the next General Election. Anything that would require much more borrowing and generate emergency conditions, negatively affecting. the economy, is not welcome. 

Et ceteris paribus? All other things being equal? Expecting that nothing will happen along the way that could change or derail present plans is a very negligent attitude. Things are bound to change. There are crucial ongoing conflicts and the seeds for more conflicts are being planted.

Now, lets have a look at potential trading partners. What is the situation in Europe? What is the situation in the Americas? What is the situation in Africa and Oceania? What is the situation regarding new players that are rising and increasing mutual cooperation?

The belief that new global associations will remain focused on the East and will not spread towards the West is extremely naive. We now live not in a bipolar world. We live in a multipolar world. In which direction the Americas, Africa, and Oceania will go is not a given. But present trends indicate that BRICS is making inroads. Those joining BRICS happen to be the most populous countries in the world. They also happen to be those which tend to have more resources in terms of raw materials. 

Founding countries? Russian Federation, China, India and Brazil. While the main Western countries have been involved in a rising number of conflicts, China has been spreading financially and economically across key regions of the world. The impopularity of the Western approach when dealing with conflicts is spreading and such impopularity does not benefit Western countries. China has not been involved in any major conflict. In fact, it is gathering more and more influence in countries that are far away from China.

Wednesday, October 30th, 2024 - Budget Day

 

This is personal, stated the Chancellor of the Exchequer, Rachel Reeves. She refers to realities of the 1980s and 1990s. The Chancellor's efforts to gather capital will drag hundreds of thousands more people into paying tax and even more into higher rates as their pay rises, indicates none other than The Guardian.

Could a personal crusade turn into a nightmare? Changing fiscal rules to disguise debt making it appear as something else does not change the fact that it will still be borrowing. So more taxes and more borrowing that will be increased for public interest, according to the Chancellor.

Ordinary folk and many business were badly hit by the Covid Pandemic and the measures implemented to deal with the Covid Pandemic. After that, people and many business were hit by the energy crise generated by the conflict in Ukraine and the measures adopted against the Russian Federation. 

Now, they stand to be hit again by taxation and potentially higher prices of utilities, housing and daily shopping.

But the Chancellor of the Exchequer still says that she will implement the budget in a way that she will 'protect the living standards of working people'. 

Well, in an interview made in Washington, USA, Rachel Reeves - perhaps inadvertently - made promises that she will have to deliver. If she does not deliver and if the measures implemented by the Labour government become a de facto nightmare, then this will create a widely open door for another Conservative government.

Starting on Wednesday, October 30th, 2024, the government will have to deliver and with every failure, and every new crise, there will be many by-elections along the way in which people will express their discontent.

She talks about building schools and hospitals. Well, what will she do about nurses salaries that are not enough to rent a one bedroom flat? If living costs keep rising, this will be a de facto devaluation of salaries and a worsening of living standards. Before she goes around building schools and hospitals, she will have to look carefully at salaries actually paid to teachers and NHS staff. 

Even with the triple lock, state pensions are not enough to rent a one bedroom flat. State pensions are totally insufficient. Taxing state pensions and private pensions can only worsen an already bad situation. And this is going to do nothing to 'protect living standards'.  

Rachel Reeves: Do you increase salaries across the public sector without raising taxes?

 

Just hours ago the Labour Party launched an attack against Conservative policies regarding National Service and possibly concription because of the cost of such policies. But after that, Labour Shadow Chancellor of the Exchequer Rachel Reeves stated that a Labour government would increase salaries across the public sector. Well, how much will it cost to increase salaries across the public sector. I reckon that it would be a lot more than National Service or Conscription.

Right before an election the mountain of contradictions rises on a daily basis. Just before Rachel Reeves spoke about salary increases in the public sector, Keir Starmer said that he would not get rid of the two children cap when it comes to Children Benefits in spite of the fact that he would want to do so. I guess the Labor Leader was thinking about cost of getting rid of the two children cap.

Services are necessary, but services cost monies that need to be paid with higher taxes at a time when interest paid on public borrowing is extraordinarily high. Labour says that it will not implement austerity, but you cannot promise to pay high interest on public borrowing and raise salaries without increasing taxes. And if you start increasing taxes, you can guarantee that companies that pay higher taxes are going to turn those higher tax payments into higher prices to balance the books. There is also the danger that higher taxes will lower consumption thus affecting the monies that the state can collect as taxes. Higher rates and lower amount of monies coming to the Treasury. And what about companies that are struggling to make ends meet? Less customers coming through the doors and higher taxes pushing up prices are not a recipe for success.

This is the way it works. If you collect 100 Pound as taxes and suddenly prices go up, then you will collect 100 Pound as taxes but only nominally. You are going to be able to buy less with your 100 Pound. State employees will be getting salaries that are worth less money in spite of nominal increases.

If you are paying 2500 for rent and suddenly the cost of renting goes up to 3500 then your salary has actually been devalued. Nominal increases will make things a lot worse.

Conservative Party: 40,000 teachers left the profession. NHS is bleeding professionals that are leaving even for other countries

Conservative Party is in a crisis with MPs no longer willing to stand for re-election and even members of the Cabinet announcing that they will not be standing for re-election. In the meantime, problems are being piled up at all levels. 

In education, more than 40,000 teachers are no longer teaching. They have had more than enough. When asked, a school teacher said 'I could not take it any more. It was not just about 35 pupils in the classroom. It was also about dealing with children with mental health issues that made teaching impossible.' It is not about remuneration. It is about working conditions. Teacher are supposed to teach. They are not supposed to deal with psychiatric problems thrown in the classroom.

What has changed about the operation of Police stations in the UK. Politicians including Prime Minister Rishi Sunak make promises in the House of Commons that he really and truly knows that cannot be delivered. Police stations are not even receiving reports regarding property stolen, let alone theft of mobile phones. They are understaff and they don't have the resources to deal with that kind of crime.

How much times does a consultant in the NHS have to deal with patients? Not much. There are not enough consultants and not enough specialised staff. There is so much that can be done with lack of human resources and with lack of equipment.

And what happens in Job Centres? Unqualified staff and insufficient staff are leading to DWP staff quitting their jobs because they cannot deal with the workload they are forced to deal with. 

And what happens at the Home Office? Not enough staff to deal with mountains of applications and the natural consequence is that everything gets delayed and this has social consequences. A rising number of people are wandering around in limbo and more often than not local authorities, schools and social services have to deal with the outcome having to find non existing accommodation for families with children, many of which are facing mental health problems and situations of abuse including domestic violence.

This is a tale of massive government incompetence. Government secretaries of state and ministers spend an awful amount of time making political statements and seem absolutely oblivious to reality. What is the point of spending millions of Pound every ten years to carry out Censuses? Save the money spent on Censuses and spend it to really try to solve the myriad of problems Britain is facing. Whatever data can be gathered in censuses are completely unreliable.

You will never be able to keep up with inflation when trying to support families via the welfare state. Look at the cost of buying and look at the cost of renting. Private renting is a total waste of resources. The private market is not supposed to meet the needs of those in need. Private letting is a business. What is needed is the sort of letting that can be controlled by the state. If you have social housing, the monies can be kept by the state and re-invested in social services. Private renting should be left for those who can afford to rent without state support. The state should be both landlord and service provider.

Do you know what happens to families with children that are forced to be constantly on the move from one area to another, from one city to another? Do you know what happens when it comes to education, health, work, family cohesion and mental health? Instability, uncertainty, mental health problems, domestic violence, constant financial struggle and dependency and the list goes on.

 

ULEZ: London ULEZ has national repercussions

With London being the capital city and with millions of people coming to London for all sorts of reasons, the impact of ULEZ will be felt nationwide. People from far across the United Kingdom will be impacted and this has severe connotations for all involved.

Think about commercial transportation and this includes food supplies coming to London. If transport companies have to pay for every single vehicle that comes to London every single day then the cost will reach consumers with the speed of light. People have been complaining that food prices in shops and supermarkets are going skyhigh.. Well, from the day ULEZ is implemented those prices are going to go up, making London a very expensive city to live in. This is actual inflation. The pint of milk that farmers get very little from is going to be more pricey. Distributors will not lose any money. They will just pass the cost onto customers.

If driving electric vehicles is going to be charged by the mile then, yet again, costs will go up. And then you add up all additional costs. Parking spaces, parking permits, commercial permits for companies working in London. If you come from Surrey or anywhere else in the UK and you come to work in London, you will have to pay all additional costs. The loft conversion or refurbishment that you have been saving for will be a lot more expensive. What about gas, electricity, water, telephones and Internet? If service companies have to pay to move around London, they are going to pass the costs to you. Energy costs migth be going down, but as taxes go up the savings of lower energy costs will be lost several times - and especially because bringing fuel into London will cost more. Fuel is transported with tankers and if driving a tanker into London costs more then the cost will be added to you fuel bill. If electricity prices go up, then driving your vehicle is going to be more expensive.

Wherever we look at, there is a multiplier effect. How much in terms of salary rises will people need to have to afford to live in London? And even if you don't live in London, but you need to come to London, then you will have to be able to afford it.

What about key staff that commute? What about hospital restaurants? If transportation goes go up, the National Health Service will have to charge extra to feed its own staff that the moment eat with subsidized prices. 

The impact impact of ULEZ is massive and it goes well beyond London boundaries.

 

Working our way around strikes

In the end, we come to accept strikes as part of the food and parcel of everyday life in the United Kingdom. So, what do we do? We try to work our way around them and move on. Once again, waiting lists at the NHS and missed schooling days will happen not because of the lockdown measures impelemented during the pandemic but because of strikes of very crucial segments of the economy. NHS strikes? Patients without treatment. School strikes?

Students falling behind in their studies. Most British education centres were downgraded this year. No surprise there. It was bound to happen after what has been happening since 2020 and there is more to expect in terms of lack of schooling. Children at home or wandering around getting into trouble, parents struggling to manage between work and caring after their children and, if this wasn't enough, all those jobs prospects for their children getting farther and farther away because lack of schooling means lack of qualifications to have acces to job opportunities.

There is no leveling up if people don't have what it takes to get better jobs and it could well be said that strikes ensure that the new generations will miss opportunities in the medium term and long term. If somebody is making less than 20,000 Pound a year, we can understand that they need more to get by, but when somebody is getting 59,000 on average there is no justification to keep asking for more when the country is struggling with public debt out of control. Trade Union representatives said it themselves: trains drivers are getting 59,000 Pound a year on average. They are thinking merely about themselves and they are forgetting the hundreds of thousands that are not so lucky, the ones who are going to be harshly hit by transport strikes. No transport, no work when people need transport to go to work and especially when a day out of work means no income whatsoever. They say that politicians are out of touch with the rest of society. Well, high earning train drivers are equally out of touch with the rest of society and because of it society as a whole stands to pay a very high price for it.

Strikes hit the have-nots harder. Billions of pounds will be lost, taxes will not be collected, and social misery will spread faster than ever. With every year turning the Goodwill Season into a confrontation season the feel good factor evaporates. 

The expression Capitalism creates wealth and Socialism spreads misery is truer than ever before. Of course we must support decent incomes for all, but we must reject opportunists driven by greed that hide their greed behind legitimate concers to justify the unjustifiable. 

Strikes: winners and losers

 

Strikes: winners and losers

The coming months will see more strikes in Britain and this will include not only transport but also state administration, National Health Service, Education and other segments of the British economy. The idea is that workers want better deals to lose less of the value of their incomes being eroded by the inflationary process created by sanctions against the Russian Federation.

One of the outcomes has been the downgrading of the education system with most education centres having gone done in terms of education standards and there is more to come when teachers go on strike. To the damage caused by the Covid Pandemic will be added the damage caused by absenteism from classrooms caused by strikes. This is going to be also a difficult time for working families and many will face the dilemma of going to work, leaving their children alone outside schools or staying home to look after their families. This will also pose serious social risks. Having children without education and without adult supervision roaming around with little to do is certainly a recipe for disaster. 

We cannot entirely blame workers concerned about their incomes, but the very shortsighted approach of administrations that completely underestimated the impact of geopolitical decisions. Everybody with a grain of common sense could foresee that economic warfare would have repercussions not only for the British economy, but for the world's economy as a whole.  Even France with its nuclear power advantage is in dire straits as the vast majority of French nuclear reactors are not operational and this led to a direct confrontation between the French authorities and energy providers when French authorities tried to force energy providers to provide electricity at below operational margins. Similar situations occur across continental Europe and Winter has not even arrived. As temperatures fall, the true extent of the energy crisis will be felt and words like rationing and blackouts. Those who remember the early 1970's in Britain will know fairly well what it means. At one point, Britain was working three days a week. In Britain, temporary aid has been provided to help both ordinary consumers and companies deal with the brunt of energy prices but, unless such schemes are intended to be a permanent feature, sooner than later the real costs of energy will be felt across the board.

So what do strikes achieve? To begin with, those who are going to bear the brunt of strikes are going to be the most vulnerable and especially those who are part of the Zero Hour Contract economy and the black economy. With reduced economic activity, they are going to struggle to survive. Recession could soon be followed by Depression and we also what Depression means. In a recession, economic activity is severely affected but continues. In a Depression, the ultimate consequence is massive levels of unemployment. The hospitality industries - for example, were critically affected by lockdown measures during the pandemic. After that, they have had to deal with higher energy prices and many businesses came to an abrupt end. If now they to have to deal with higher energy prices and margins that do not cover their operational costs, for a vast number of businesses this will be the end game.

Any temporary gains will be followed by gigantic losses. In an economy with skyrocketting levels of borrowing, any salary increases will be swallowed by inflation.

Rishi Sunak must be in UK: With no financial resources there cannot be a consistent environmental policy

 

The matters of government to deal with the energy crisis are more important than attending a talking shop and posing for pictures.

No sooner than Rishi Sunak was appointed Prime Minister, the usual culprits accused the Prime Minister for not attending an international gathering. Well, there are more urgent priorities to deal with at home to prevent a catastrophe.

At this very minute, 350,000 NHS staff are being balloted for strike. Why does Labour and others think that this is about? The strike if it happens should take place sometime in November so the authorities have some time to articulate a consistent response. Where should the Prime Minister be? At some talking shop about the environment or dealing with the National Health Service? No country can deal with environment when its economy is in a dangerous situation and therefore the priority is to deal with the economy now.

Regarding energy, the Green Party might celebrate the fact the Rishi Sunak has once again ban fracking, but funnily enough the Green Party has no immediate solutions to solve the energy crisis that is affecting Britain and coincidentally is the source of a financial, social and political crisis also on the Continent. It can take 40 years to build some of the alternatives and we need energy now. One way or another we are going to depend on fossil fuels because we need fossil fuels to build the alternatives proposed. Wind turbines are not made with wind power and nuclear plants are not made with wind power. The amounts of energy needed vastly surpass any amount of energy that can be produced with wind power. Electric vehicles are build with energy produced with fossil fuels.

Poland might enjoy the pleasures of 17th Century life-styles without electricity in the very near future, but do we want that in Britain in 2022. The possibility of having to deal with blackouts is very real. Can we have a digital economy with blackouts? Will lack of lighting make our lives better and safer? When our cities are plunged into the dark, it will be Christmas time for all kinds of criminals wanting to operate with impunity. 

10 Downing Street: If you talk the language of war, you need to prepare for war

 

Inconsistencies when dealing with geopolitical situations will get an unnecessary number of people killed simply because of complaisancy.

We heard harsh words coming out of the lips of Western European politicians including British politicians, but they do not reflect reality. It is absolutely shambolic.

Britain is open. It cannot even control the number of illegal immigrants entering the country. It has an NHS that almost collapsed under the weight of a Covid pandemic. None other than the Metropolitan Police Service is now run under special measures because of systemic failures that led, among other things, to the resignation of its chief commander Cressida Dick. Police officers are more interested in kneeling down and in joining every single cranky demonstration of political correctness than in doing their work properly.

For many years, both Labour and Conservative governments neglected the Armed Forces to the point when they were found wanting more than once and forced to play second fiddle. Pomp and Circumstance and posturing will not protect Britain let alone win any wars. 

We are now in an impasse. The country does not have a Prime Minister and does not have a government. We cannot call Prime Minister a man that has been backstabbed by his own political party and a government in which members of the goverment don't see eye to eye. Boris Johnson himself has said that no fundamental piece of legislation will be put forward until there is a clear definition of who is actually in control of the British government and there is a return to a debate of all issues that were already decided. This is like fighting a war on several fronts or to put it in very straightforward manner it is a recipe for disaster. In times of danger, politicians are simply driven by their own fatal habits and nothing good can come out of it.

A country facing war should not be divided. Nicola Sturgeon cares more about her own agenda than she cares about the survival of Britain. In fact, she does not give a damn about the survival of Britain and she is playing right into the hands of the enemies of Britain. The Americans, as usual, are poking their noses in internal matters of other countries and creating a mess. Northern Ireland, once again, does not have a working Assembly and at a time when 10 Downing Street is a mess and Parliament is a mess, short of having direct rule in Northern Ireland, the people of Northern Ireland are stranded with a non working Assembly and a British Parliament that is not just limited by Devolution. We are travelling on a rudderless ship. All Devolution has achieved is the creation of platforms to destroy the United Kingdom: a Northern Ireland without governance, a Wales controlled by the Labour Party, a Scotland controlled by SNP, a Westminster Parliament that has become a political circus and a Prime Minister defeated by his own political party.  

 

RMT: if blood circulation stops or blood doesn't flow as fast as it should...

 

What do the transport strikes actually mean? 

Transport and communications are the blood of Britain. Without blood circulation the body stops, comes to an end, and this is exactly what is happening right now. After more than 24 months of economic and social activity in lockdown, lack of normal transport is another form of lockdown, but it has even more implications.

For ages, we have heard about protecting the environment by reducing CO2 levels. Well, if people are forced to used their own means of transportation including motor vehicles that consume fossil fuels, will there be more or less CO2? As the number of vehicles on the streets increases, traffic jams increase leading to delays and engines stuck on the streets, going nowhere and producing ever more CO2.

If you say that waiting lists in hospitals are too long, then transport strikes and the direct consequences of transport strikes are going to be ever longer with people having to cancel hospital appointments, delayed medical treatments leading to increase health risks and so forth.

Prices at the shops are rising and will rise even more if transportation costs increase affecting directly distribution of goods across the country.

In conclusion, this is not merely about the jobs and/or salaries of tranport workers. Every single family in the country will be affected by transport strikes in one way or another. The levels of debt are going to go up both in terms of private debt and public debt. Energy must be paid for. Time losses must be paid for and for many the outcome will be lost revenues.

The discusion regarding working conditions and working pensions is reaching the point when working conditions for workers will get worse and everybody will suffer. If the Mayor of London pushed by strikes has to divert funding used to maintain a bus network in the capital city, then working pensions might be protected but bus services will be lost affecting millions of peoples across the capital city. We have already reduced bus services across the capital city and any further reductions of the budget dedicated to bus services will mean loss of services. When future strikes of workers delivering undergound transport services and trains occur, people are going to have even less alternatives to meet their transport needs and the whole city would struggle not to come to a halt.

The London Authority was created to better manage developments in the capital city, added to the authorities that already manage 33 areas of the capital city, being in charge of fundamental projects to improve living conditions in the capital city, but no organisation can function without proper funding and this is what is missing. The added problem is that London is not just a city for Londoners. London is a key element in the economy of the entire country as the Southeast is the region of the United Kingdom that has the most powerful drive in terms of economics. If London comes to a halt, the country will suffer major consequences.

Unemployment in the United Kingdom has been falling steadily. Working conditions have improved although there are certainly some areas that need special attention to prevent economic exploitation that generates serious social problems. The slowdown of economic and social activity will mostly affect the most vulnerable in society. Strikes cannot be a long term solution. If the economy suffers, there will be even less funding for transport, more working hours will be lost, and most probably unemployment will start rising again debilitating the country as a whole. 

Covid-19: Walk. Don't run. We do need a health MOT.

The fact that people are being vaccinated and that more than 15 million people living in the United Kingdom have received the first doses of several vaccines used doesn't change the fact that the NHS is still working over-capacity with many thousands of patients that require special treatment to keep those seriously affected by Covid-19 alive.

We should not be overly pessimistic, but we shouldn't be overly optimistic either. I am fully aware of the damage done to the economy and of the negative repercussions of the quarantine measures put in place to prevent the spread of the disease. Other diseases have gone untreated. The number of those suffering from some form of mental illness has skyrocketted. 

The idea of implementing better coordination of different services within the so called Welfare State could be one of the best ideas being considered. NHS, Social Services, the services that care of old and the disabled, and every other branch of the Welfare State need to work together.

For a very long time, we have cared more about the transit of animals, plants and minerals in and out of the country than about the transit of human beings that can carry diseases with them. For many years, animals brought into the country have gone into quarantine to ensure that they were healthy enough to be allowed in. For far too long, any human being coming from abroad could enter the country freely without any health checks to protect public health. What Covid-19 has done is to prove how foolish we have been. A virus coming from China has killed more than 100,000 people in the United Kingdom. Cars have MOT. Why shouldn't human beings have some form of health MOT to prove that they do not constitute a risk for the rest of the population?

Covid-19 didn't exist in the United Kingdom. It was brought in via ports of entry (Airports, Harbours, Railway Stations). There should have been sanitary controls at each port of entry. The sanitary controls established because of Covid-19 should become the norm and be enforced to prevent any future catastrophe.