31 PUT THE BLAME ON ME

Right now the unwritten British Constitution is not worth the paper it is not written on.  Pfeffel is a convicted lawbreaker and he may have lied to the House of Commons about parties taking place in Number Ten but whatever the conventions he is not falling on his sword.  For some time we Brits have been force fed the notion that convention was the glue that held together British democracy.  Our political masters observed and, depending on which textbook you read, even honoured tradition.  So much for all that cricket nonsense.  It looks like someone has run out of the glue.  The karaoke machine at one of the parties was supplied by Helen McNamara the then Director General for Propriety and Ethics.  And, yes, she also received a paltry £50 fine.  Pfeffel may be a drunken and lecherous fool and an over promoted Falstaff that should never have been let out of the Boar’s Head but, if he survives for another two years, his presence in government is not the greatest political tragedy in history.   He has not bombed Cambodia on the quiet or at least we do not think so.  

Of more concern than his admittedly scandalous behaviour in Number Ten is the not so mysterious disappearance of British glue that was supposed to keep everything and everyone in check.  If the stuff has been awfully thin for a long time and the original formula was hardly a niche product then it appears to have disappeared completely following the unprincipled campaigns for Brexit and against Jeremy Corbyn.  They may have bigger bottles over the pond but there was a significant shortage of glue in the USA when Donald Trump lost the Presidential election.  Rather than resign and concede victory to Biden as every other Presidential candidate had done in the past, Trump encouraged an insurrection.  The word encourage might be an example of British understatement.  CNN preferred the word incite.   No wonder Trump wears a heavy overcoat.  Pfeffel treating the Ministerial Code with contempt is not quite as subversive as inviting people to storm Congress but the behaviour of Pfeffel has nurtured paranoia in more than one British political commentator.  Happy to waive the right to protest and ignore laws that in daily press conferences it urged the British people to follow, this is a government or set of rogues that cannot be trusted.   Falstaff may have been good company for Prince Hal but the plump oaf was also willing to set up a robbery. 

Left to their own devices these people are dangerous enough but they also have on call the Wizard of Oz, Lytton Crosby.  No one punches lower than Crosby.  His mere presence as an advisor to the Prime Minister is worrying.  Crosby runs a powerful lobbying company that has been accused more than once of having an undue influence on governments.   The plural is important for this Crosby global outfit.  And here he is, the head honcho at the heart of the British government and being consulted on an almost daily basis.  Partygate may not have historical importance, a scoundrel is only a scoundrel after all but there is context.  Vomiting, people sitting on laps, wine on the walls of Number Ten, karaoke, abuse of domestic and security staff, or what Pfeffel thinks of as the lower orders, and emails that made surreptitious arrangements to deceive the rest of us are worth remembering.   These celebrations all occurred while this government was funnelling billions to mates rather than making a serious attempt to manage the Covid epidemic.   Deadbeats became rich and people died when they should not have and this crass crew were celebrating at discos dominated by the music of Abba.   The tasteless villains should have borrowed the music from the soundtrack of Goodfellas.

Pfeffel, of course, has his rivals and they are just as shifty and unscrupulous as him.  Rishi Sunak is a devotee of Adam Smith or at least the parts of The Wealth of Nations that suit his vested interests.  Sunak is worth £750,000,000 and probably more.   Not one million pounds of his fortune has ever caused him to doubt neoliberalism and his belief in the invisible hand of the market that provides the best possible outcomes.  That may be a sense of entitlement that many find repulsive but it is rooted in a belief that Sunak would prefer to describe as a principle.   Like the Tory MPs that just seven days previously voted against a windfall tax, he has argued for months that a windfall tax would prejudice investment.   Forced to react to energy bills of £2800 and do something about a cost of living crisis and possible social unrest, Sunak relented.  Although the man that has paid £1000 to a public relations company to improve his image hates the idea of a government wasting money on people he regards as inferior he took the opportunity to go beyond the proposals of the Labour Party.  Sunak has decided to spend even more of the money that he was opposed to spending.   Politics and dirty tricks prevailed over neoliberal economics, and Sunak held his breath and crossed himself before the altar of the invisible hand.   The money will be used to mitigate energy bills that are three times what they were last year.   The initiative from Sunak has been described as too little money too late.  It will reduce the degree of poverty for some, and this is to be welcomed, but it will not prevent the increase in the numbers of the families that are impoverished.   Times may be tough but this is political and social failure.  

All this began with anything but stable energy prices.   The rise in profits for the energy companies is usually described in the Press as something that happens to the balance sheets of helpless energy suppliers when there is a shortage of oil and the rest.   True, the potential for prices to rise is affected by various factors such as supply, demand and production costs.  Potential to happen, though, is different from actually happening.  A better word than potential is opportunity.  The price of energy can only rise when and if the energy companies decide to alter the price.   These companies are taking advantage of a changing market.  Despite what we read and are told the energy companies are not without agency.  The last initiative from Sunak was meant to take five pence off a litre of petrol but the oil companies managed to slip a penny of that into their own pockets.  Maybe the word opportunity should be replaced with greed.  

To help pay for the energy rebates that will mitigate the increase in prices for consumers the government will take £5bn from the energy companies. Energy profits, though, have increased by £13bn.  These extra billions have been described as excess profit but excess of what?  They are exceptional and above average but previous profits might have also been excessive.  Energy companies may want us to believe that they live and die by their profits but there is no invisible hand for them.  They have always received government assistance, tax easements and subsidies. The £5bn windfall tax will be introduced at the same time as the government will improve existing subsidies to the energy companies.  The government will provide a 91% subsidy for any investment made by the energy companies.  Invisible hand it is not but there are hands moving around faster than a magician doing card tricks.  It all begs the question why not take away all the subsidies, apply equitable tax rates and use the saved government money to relieve the economic hardship being experienced by British families.  Perhaps we should ask Lytton Crosby.  He does lobby on behalf of oil companies.

Sunak was able to score a schoolboy point against the Labour front bench in Parliament, my windfall tax is bigger than your windfall tax, he boasted. The chancellor might not be laughing in the months ahead,  He began the week preaching against the dangers of inflation.   The inflation in prices being experienced in Britain have been caused by supply shortages and not excessive demand.  Because of his giveaways, which will also include a scheduled pension increase that will match the high inflation, Sunak will be boosting economic or aggregate demand.  This is different to wage rises negotiated by trade unions.  They are not only reactive but have an element of Peter, the workers, taking from Paul, the employers, who often will react by looking for ways to improve productivity and maintain their profits.   It is not a coincidence that the rate of productivity increase has fallen since trade unions became less effective in negotiating pay rises.  The giveaways of Sunak are only partially funded by the £5bn windfall tax, and that will be compensated through the 91% subsidy on energy investment.   Rather than grants that are inadequate but also inflationary the better solution is to impose price controls and to restrict the energy companies to profits that they made in previous years.  That initiative, though, would mean that more of the impact of the cost of living crisis would be felt by the wealthy.   And as a man worth £750m understands, go down that road and who knows where it will all end.

Partygate is best understood in the context of Covid but we also need additional perspective on how this government manages a modern economy.   Supposedly a Treasury official argued that public sector workers should have wage increases that compensate them for the cost of living crisis, especially as the Civil Service, because of a previous and long lasting wage freezes now has a recruitment problem.   That would be inflationary, responded Pfeffel.  What about the huge increases being paid out to CEOs and employees of banks and finance companies? said the brave Treasury official.  That’s the private sector, said Pfeffel.  And that was the end of the argument.   This invisible hand business sounded simple when Adam Smith explained it but in the 300 years since it has become awfully complicated.   Of course, Smith also warned his readers about the unscrupulous behaviour of the rich and why that behaviour needed to be regulated.  Getting themselves to behave in parties would be a start but there is a long, long road ahead. 

Howard Jackson has had thirteen books published by Red Rattle Books including novels, short stories, travel books and collections of film criticism.  His latest book Long After This is now available here.