Blain’s Morning Porridge – Jan 23rd 2023: Don’t worry about the UK – I’ve got an idea…
“My old man said be a Tottenham fan..….”
This morning: Gosh… The Rest of the World wonders how the UK has suddenly become a corruption-raddled third world kleptocracy. The optics are terrible. Even the Russians are moving out! Fortunately, there may be a solution: let’s be British about it, and show everyone we can do political knavery better than anyone else!
When the only positive thing to say about the UK is how wonderfully well Arsenal are playing… then… we must be in serious trouble.
Around the globe fears of recession are receding. Even the IMF now thinks Europe might avoid a recession – bless. The UK will not. When it comes to world class solids-hitting-the-fan, the UK is looking unbeatable these days. Our tales of political shenanigans make American politics look competent… It’s got massive implications for perceptions of UK markets and growth.
After another weekend of scandalous news, I would love to say I don’t believe it… but, sadly I do. Nothing can possibly surprise me about accelerating Decline and Fall of Downing Street. Who would have thought it was all so simple.. All I had to do was put Boris in touch with a distantly related loan shark, and I could have been chairman of the BBC! And who could possibly have guessed short-lived Chancellor Nadhim Zahawi was less than transparent or lilywhite about how he’s been dodging taxes? Quelle Surprise…
I know most UK politicians are decent people. But the institution they serve is tarnished by the few. They have made the unacceptable acceptable. These things become cumulative and self-accelerating. The UK is approaching a political crisis of distrust.
Why is no one asking the right questions. Like what kind politicians we have? Why do they behave the way they have? How do they get away with it? Why we ran the risk of appointing a Prime Minister who needed £800,000 to pay for his multiple children – when the average UK family income is less than £40k, pre-tax? Why we think incredible wealth is ok for politicians while the rest of us struggle to pay bills?
A few months ago I got an inking into what may be the problem. The immensely well paid CEO of a major UK firm told me he considered himself underpaid, virtually poor. I was shocked – he is looking to move to the US. I am told a number of Tory ministers aren’t worried – they expect to saunter into highly paid private sector jobs immediately after the next election. After a decade of public service, surely it’s their right? Not when they failed!
The reality is £5mm per annum doesn’t cut it as rich when the Global 1% own 66% of global wealth and assets. The greedy, the empowered, the entitled, the greasy pole climbers – they all want their share and seek to use power and patronage to obtain it. In reality, they are just scrabbling for the crumbs left by the super-rich.
While our politicians aspire to wealth – the terrible state of the UK shows just how they have left the hoi polloi to struggle on zero-hours contracts, devoid of hope, prospects or services, with the tax-man breathing down their necks threatening penury for being a day late. New graduates leave universities saddled with debt for worthless courses. 1% of the 1%’s massive wealth could fix everything – but it will never happen…. Unless…
Yet… I know a good number of folk who will vote Tory come what may.. They are quite confident these things are not happening. Just because the last 13 years of Tory administration had been a bit of an omnishambles means nothing. (US readers: sophisticated sarcasm warning.. By “a bit” (inferring something insignificant), I was wielding “understatement” as a sledgehammer. I meant a completely massive jumbo sized clusterf*ck troughing of monumental proportions, but let’s not get ahead of ourselves.)
The current Tory argument makes for irrefutable sense: just because Tories are bad doesn’t mean Labour are any good. These people will believe what they wish to believe.. basically its better to definitely drown in the sinking Tory ship, than risk to possibility of maybe drowning later if the Labour ship sinks sometime in the future.
I wonder what the reality means for markets? It can’t possibly be good.
The UK became the world’s political laughing stock last year. Liz Truss… despite the fact she was absolutely right that all the matters is Growth and Productivity, she was, regrettably,utterly clueless how to get there. Slogans and tax cuts proved unwise substitutes for an actual though-out, considered, costed and agreed plan conceived with adults in the room..
This week Rishi Sunak will be dragged into the Chairmanship for Loan farrago. The Goldman guy is his former boss. Sadly…. the UK is no longer a political joke – we have reached the next level: political embarrassment. What about gilts, stocks and sterling and ask yourself why… Britvolt? maybe not….
Our kids think the UK is headed into the third world – where confidence in our political system is shattered, corruption is endemic, greed is a virtue, while our national institutions are consumed by hopeless bureaucracy and inefficiencies, and our big decision on election day will be choosing the least bad candidate.
But… all is not lost…
Desperate times require desperate measures.. and thankfully I have a plan… I am going to write it up between calls this morning and send Rishi Sunak and Chancellor-this-month Jeremy Hunt a short strategic analysis of how to save the nation.
I call it Doubling Up:
- The problem is the UK is broke, rudderless, and directionless and can’t fix anything.
- The solution is glaringly obvious: solve both problems simultaneously by making corruption official govt policy! (Oh, it already is?)
My doubling up plan is brilliant. Sunak should announce a massive new government funding programme that will pay for new railways, hospitals, schools, tanks and everything else by selling “indulgences” to rich entrepreneurs and dodgy businessmen.
Let me cite a few examples:
- £15 bln gets you HMRC – The UK tax man – avoiding any further unpleasantness around unpaid tax and offshore accounts. It will enable the holder to make dodgy payments or receipts go away – for a fee, or maybe finesse a govt bailout for the Issa brothers to fund their dodgy petrol forecourt leverage takeover of UK retail. (Clue.. it’s a story that’s breaking… when I get calls from bankers telling me they can easily refund their £7 bn debt pile, it must means they are struggling to do so. If the Sunday Times knows it – so does everyone else!)
- £10 Billion gets you a monopoly of running privatised Health Care units on the NHS – that gives you the right to either run it into the ground, or run it at a massive profit – I cite an example below.
- £8 bln buys a seat in the big room at CHHQ with a two-eyes intelligence sharing arrangement with the intelligence services – again you can decide whether to recoup your investment betraying the UK to all and sundry, or to invest wisely off the back of it.
- £7 bln wins the position of running UK defence procurement – offering massive opportunities to charge the govt for tanks that don’t tank, and pay Wagner to run defence with the profits. Or you could actually re-equip the entire Royal Navy, Royal Airforce and Army with stuff that works for a fraction of the procurement budget and keep the chump change.
- Or, £1 bln gets you a desk actually in the minster of your choice’s office – and the right to a 50/50 share on all bribes. Any smart businessman will immediately see that encouraging bribery is efficient and as long as there are good reasons for entrepreneurs to want to do business with govt, there is good money to be made.. Simples… This is very good for UK as it ensures ministries become profit rather spending centres..
- What’s not to like? Oh… most of it?
In the first year I reckon Sunak gets a least an extra £75 bln to build a new Eden Project in every single vulnerable seat…. Imagine it: Eden North, Eden North North West, and Eden Slightly to the Right of Centre somewhere near Meriden in the Midlands.. That will keep in power, if not forever, till the end of next month.
As for Health, I stumbled on one privatisation Scam this weekend up in Wales. An elderly friend urgently needs a hip replacement, but the Welsh NHS has about a 200-year waiting list to even see the consultant. Yet, the same consultant can do the operation next month over the border in England – but it will cost my chum £160 for a phone consultation and about £20,000 more for the actual op, done privately because Wales can’t pay England. And what do you mean he can’t afford it – he can take out equity release on his home.. after all by what right should his children expect an inheritance?
Nice.. pay taxes over a career to fund the NHS, and suddenly it’s not there.. Don’t worry.. there are lots of very rich Conservative suppliers out there who have probably been more truthful about their taxes than Zahawi. Ask Baroness Bra – oh, she’s on holiday..
Of course no one was more surprised than myself that Nadhim Zahawi made a multiple million pound plus mistake filling in his tax returns. The very day he stepped into the Chancellor’s office after Sunak resigned I pointed out in the Porridge he was:
- Second richest MP, after Rishi Sunak.
- A former advisor to dodgy failed oil company Afren.
- Head of the All Party Group for Kurdistan and former Chief Strategy Officer for Gulf Keystone Petroleum – extracting Kurdish oil but not actually paying the Kurds. He pocketed over £1.3 mm from Gulf Keystone, including a £285k “settlement payment” before becoming a minister.
- Used a parliamentary joint consultancy loophole with his wife to avoid full disclosure of his extracurricular earnings.
- Involved in some dodgy property deals in Ashford ahead of Brexit deal discussions he was leading.
- Supporting Greensill obtain govt loans for Gupta – earning a thankyou from former Prime Minister and Greensill lobbyist David Cameron. (And this morning it turns out he’s guilty of deleting What’s App messages from Cameron on his phone – don’t we extradite trader to Guantanamo Bay for less?
But, I never knew he was also a tax dodger. Heaven forbid…
Go check out Porridge – Blain’s Morning Porridge – July 6h 2022: The UK? Who would want to be Chancellor now, and what did Boris promise him?
Rant over… Normal service will resume tomorrow….
Five Things To Read This Morning
BBerg Millionaires Continued to Flee Post-Brexit Britain in 2022
FT Sunak accused of burdening UK economy with legislative chaos
Thunderer Asda tycoons line up £12bln merger with Petrol Stations
WSJ Janet Yellen Dismisses Minting $1 Trillion Coin to Avoid Default
FT Eurozone set to avoid recession this year as economists’ gloom lifts
Out of time, and back to the day job down the mines…
Strategist – Shard Capital
Sadly all too near the mark!
I truly despair. I can only hope for widespread French-style protests and go-slows in the face of the anti-protest and anti-union bills. With any luck, the House of Lords will do their job and squash them.
Instead of being adults with a steady hand, the current government are stripping our freedoms and selling them to the highest bidder. Like you, I’m a certified idiot who has voted Tory, and I can’t see myself ever voting Tory again.
How am I not surprised by Zahawi. The only thing more surprising is that my GBP futures puts remain underwater
Rant no – reality will be harder to believe……. or understand!
A few weeks ago an article appeared in The Torygraph titled Britain is a poor country pretending to be a rich one – and there it was. A perfect summation of the times.
Poor countries are permanently broke and their systems are in complete and constant disarray.
I agree with your children – Britain is already third world. Hopefully the only way to go from here is up. Fingers crossed.
I don’t know too much of the details of British politics/scandals. I do know, however, that global easy money, which made money very plentiful and growing much faster than actual production of goods and services, has made it such that the tail is wagging the dog. Money is everywhere and it makes it even more important (and easier) for bribes and corruption to exist. A few people have so much money that they basically buy policy to keep/grow their wealth and take/leech the productivity of others. It appears that this will continue until the entire house of cards collapses (i.e. the parasite kills the host). A few years ago I had hopes that the host could rid itself of the parasite but it is too entrenched. It is going to be a calamitous end.
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