Are we heading for a global and national economic downturn?

According to the Guardian, the International Monetary Fund’s World Economic Outlook is ‘sobering’. It predicts a fall in growth, rising inflation, and increasing inequality. As you might expect, some of this is down to the war in Ukraine:

“The war has disrupted the supply of corn, gas, metals, oil and wheat, as well as pushing up the price of critical inputs such as fertiliser (which is made from natural gas). These developments have prompted warnings of a looming global food crisis and a severe increase in world hunger.”

It’s also the case that Covid has disrupted global supply chains, and some economists have been predicting the end of globalisation. What the article doesn’t mention is that, since the 2008 global crash, the world economy has been propped up by central banks creating billions of dollars to bail out banks and corporations. And while many would welcome an end to growth and a move to a steady-state economy to counter the climate crisis, this can only happen in a managed way to avoid detriment to workers and the vulnerable. As things stand, the global economy is managed for the benefit of the banks, corporations and the 1%.

But what about the UK economy? We are familiar with the queues of lorries at Dover and empty shelves in supermarkets due to Covid and Brexit, but the cost of living crisis, caused by an outrageous increase in energy bills and rising inflation, is threatening to push us into a recession. Tax justice campaigner Richard Murphy and economist Danny Blanchflower raised concerns about this in a recent article in the Daily Mirror:

“Politicians are talking about a cost of living crisis. But, with major energy suppliers fearing that 4 in 10 households will not be able to afford to properly heat their homes this winter, it is much more than a cost of living crisis.

It is a poverty crisis, which is creating the risk of recession. Worryingly, none of the major economic forecasters – even the International Monetary Fund, which predicts that by 2023 the UK will be the slowest growing country in the G7, (with growth at 1.2%) – seem to understand the UK faces a major risk of a recession.”

They propose 7 steps to deal with this crisis: First, the government has to acknowledge it; second, cut bank interest rates; third, cut taxes – Rishi Sunak has raised taxes so that he can lower them before the next general election; fourth, raise benefits and pensions to match inflation; fifth, spend on jobs – a massive investment in green energy, greener transport, and home insulation; sixth, align our trade rules with the EU, reducing costs to business, and finally pay for it by raising taxes on the wealthy and quantitative easing (QE).

Given our situation, all of this makes perfect sense. We can deal with the coming recession, help tackle the climate crisis by creating meaningful jobs and help those most in need. But there is a big problem, we have a conservative government that has no interest in doing any of these things. Its current focus is saving the necks of the PM and Chancellor and looking after its wealthy donors. How hard will this crisis bite? Very hard if nothing is done, especially when fuel costs rise again in the autumn. No amount of QE was spared to bail out the banks in 2008. Why can’t QE be used to bail out our economy to the benefit of all? Do we have to ask who is our government working really for? Whoever they work for, it isn’t us.

As soon as I finish this piece what is the first thing I see on Twitter? A headline from the Independent that reads – Sunak says no new money for cost of living plans demanded by prime minister!

This article was first published on 27 April in Critical Mass Magazine.

Boris Johnson: The Liar In Chief Has To Go!

There are liars, damned liars, and Tory politicians. And then there is Boris Johnson. And we know with Boris Johnson it's not just his honesty that is the problem. He regards himself as immune to any system of rules, he exists on a plane far above the rest of us. In 1982, one of his teachers at Eton sent a school report to his father:

The report, from classics master Martin Hammond to Stanley Johnson in 1982, criticised the 17-year-old for thinking he should be free of the “network of obligation that binds everyone”.

The teacher also said Johnson "believes it is churlish of us not to regard him as an exception".

Johnson's exceptionalism has been evident for the whole of his apparently effortless career. He has been sacked twice for lying. In 1998 he was sacked from the Times for making up quotes on a front page news story. This, of course, didn’t prevent him from becoming an MP and, in 2004, just three years later, he was sacked by party leader Michael Howard for lying about an affair. Of course Johnson has been responsible for other whoppers including the famous £350 million on the Brexit bus: 

“When an ITV reporter told him it wasn’t true, he repeatedly said it was.

According to the UK Statistics Authority, this figure should be £289m a week and, more importantly, it doesn’t include what the EU gives the UK.

Nevertheless, Johnson continued to repeat the lie at least until 2017. The chair of the UK statistics authority wrote a public letter to him accusing him of a “clear misuse of official statistics”.”

So who could have guessed that Johnson would have lied about #Partygate? After all, the rules have never applied to him. The fact that he received a fixed penalty notice for breaking Covid lockdown rules in No. 10 ought to have been enough for him to resign. The fact that he’s lied to parliament about breaking Covid rules on a number of occasions ought to be enough to get him pushed. But no.

This isn’t just about a lying narcissist; the problem we have goes far wider and deeper than that. Firstly, we live in a country that has been dominated for centuries by privileged elites who regard themselves as being above the people and the law. Secondly, these people have contrived to saddle us with a second-rate democracy with no written constitution to provide us with real democratic safeguards against our dishonest and corrupt rulers. Both Conservative and Labour governments have been complicit in this.

The latest YouGov poll of senior politicians shows that 69% of those polled had an unfavourable view of Boris Johnson. None of the senior politicians in the poll fared very well:

YouGov Net favourability of senior politicians (13-14 April)

Keir Starmer: -22

Sajid Javid: -29

Rishi Sunak: -44

Boris Johnson: -45

Priti Patel: -58

This is where we are now. There is very little respect for most politicians, and the fact that the Speaker, Lindsay Hoyle, has ’allowed’ a vote on Thursday for Johnson’s conduct to be referred to the Privileges Committee is a sticking plaster on a gaping wound. Boris Johnson today has predictably repeated his ’heartfelt apology’ and tried to deflect from his deceit and lawbreaking with the war in Ukraine. His defence is that he is stupid, not dishonest. Even if the Tories get a drubbing at the May local elections will Johnson go? Don’t hold your breath.

New nuclear? - No Thanks

As the UK grapples with the energy 'crisis' - a crisis caused by speculators and suppliers and not the Ukraine war - and with increases in costs for consumers of 54%, attention has turned to improving our energy security. Of course, generating as much of our energy as possible makes perfect sense, and ensuring that energy generation doesn't contribute further to the climate crisis is essential. So what do we hear from the Tory government? Their response is to say they will build seven new nuclear power stations in the UK. 

You don't have to be an expert in energy supply to see there is a major problem here. Firstly, nuclear power is eye wateringly expensive, and the plants take many years to build. Hinkley Point C, the new nuclear power station under construction in Somerset, is not expected to open when planned and is now expected to cost £500 million more than previously thought, at a cost of £22.5 billion. The original cost, predicted in 2016, was £18 billion. Not only that, but nuclear power construction contractors have been unwilling to build new nuclear power stations because of the costs and risks. 

Then there is the price of electricity generated. It's very expensive, and the operators have to be guaranteed high prices in order to build and run the plants. So, with the nuclear option, we have years of delay, rising costs, and expensive electricity. Then there is the elephant in the room - how do we deal with the nuclear waste generated by the plants? Despite decommissioning a number of reactors, most famously Sellafield in Cumbria, there is still no long-term solution in the UK for nuclear waste. 

If only there was a quicker, cheaper, and safer alternative. Well, of course, there is. It's called renewable energy. Solar, hydro, and particularly wind power can be used to generate large amounts of energy. According to Wikipedia:

"The United Kingdom is one of the best locations for wind power in the world and is considered to be the best in Europe. By the beginning of March 2022, the UK had 11,091 wind turbines with a total installed capacity of over 24.6 gigawatts (GW): 14.1 GW of onshore capacity and 10.4 GW of offshore capacity, the sixth-largest capacity of any country in 2019. Wind power contributed 24.8% of UK electricity supplied in 2020, having surpassed coal in 2016 and nuclear in 2018."

Wind, solar and hydro can make an even more significant contribution to the UK energy supply, and this will be enhanced with improved larger scale battery storage. Battery storage will keep the lights on, even at times of low wind. The National Grid states:

"The UK government estimates technologies like battery storage systems – supporting the integration of more low-carbon power, heat and transport technologies – could save the UK energy system up to £40 billion by 2050, ultimately reducing people’s energy bills."

Although the government has stated that they do intend to invest in more wind power, they still have a problem with land-based wind turbines because their supporters in the shires don't want their views from the manor spoilt. I can't imagine a nuclear power station would enhance the view. Fortunately, there are signs they may do a U-turn on this. Let's hope they have the sense to U-turn on the nuclear as well. When it comes to energy supply, as a famous Tory once said, 'there is no alternative' - to renewables.