Blain’s Morning Porridge 13^th December, 2023: Migration has become the big distraction that could end the West – but it’s not the problem!

“Never interrupt your enemy while he is making a mistake.”

Nations succeed because they are ruthless in pursuit of their goals; good and bad. Western politicians have decided the big issue is illegal migration – making it conditional and a priority in front of the really important challenges around growth, stability, geopolitics and avoiding conflict. Its Political Failure of the Worst Kind.

 You have to laugh at loud at Thames Water. The privatised UK Water Utility will likely default on a £190mm loan in April. According to the CEO it’s broke because the Government won’t let it impose 40% price hikes on customers to pay the massive infrastructure investments its failed to make during its decades as a private company. So – nothing whatsoever with all the dividends its paid to its owners instead? (US Readers: Sarcasm alert.) Or the fact its utterly failed to invest in water infrastructure, because it was allowed to pump untreated waste into our rivers. What I find remarkable is it’s not front- page news, and we aren’t putting the whole board or the regulators on trial for their lives.

The sordid tale of Thames Water is a herald of what is to come. The fact no one is yet in jail highlights just how utterly out of kilter the priorities of the West are at present.

In the US, in Europe, and the UK the one issue political leaders are focused on is immigration – to the apparent exclusion of all else. Migration is naked populist politics and of little real import – it’s an issue because people are scared of people who are different – when really we aren’t! There is a bigger real picture. Politicians are missing the opportunity for the West to seize the moment, to thrive on the back of new renewable power, AI and multiple other emerging Bio, health and robotics industries. With effective leadership, the West could redirect our economies and overcome the multiple geopolitical challenges and threats.

Instead, they seem determined repeat the multiple mistakes of the past – particularly the 1930s. Never was this more clearly demonstrated than yesterday in Washington and London.

In Moscow, Tzar Putin will be reminding his court of Napoleon’s maxim – this morning’s quote up above. In the West we would do well to remember one of Churchill’s: “An appeaser is one who feeds the crocodile, hoping it will eat him last. “ (Thanks Jim S. for that.)

Just one year ago Democrats and Republicans were cheering Ukraine President Volodymyr Zelensky as he addressed both chambers in Washington. Yesterday many Republicans turned their backs on him. Maybe it’s because his exhausted army didn’t deliver the knockout blow they think the US paid for? It’s the Ukrainian people paying in blood to fight a war that has blunted and diminished the Russian Threat, achieving multiple Western goals without a drop of NATO blood spilt.

Let’s not forget how good the war has been for the US economy and other defence stocks – most of the contracts to replenish ammunition, war stocks and replacing equipment given to Ukraine have gone to US companies. This is a great war for the US military-industrial complex: lots of orders, and no US body bags. (Sorry to be so blunt.. but that’s the actuality.)

The Republicans say further money for Ukraine should be conditional –  tied to President Biden accepting their demands on domestic issues. The main issue boils down to their demand Biden should build Trump’s Wall to show just what a genius Statesman Trump was/is. This is where the West is failing – there is no link between the Mexico border and Ukraine, except that Putin correctly plays it as a chance to muddy, confuse and distract the US.

Modern conflict is not conditional on anything – except winning. It’s a matter of strategic direction and the resolution to see it through.

The Republicans last night demanded a quid-pro-quo for the independence of the free people of Ukraine of stopping immigration on the Southern Border – the populist political flag the Trump legions are flying to rally their voters. Every single Republican jumping on the bandwagon has lost their sense of strategic reality in a display of naked sycophancy. I suspect they are fearful of the inevitable night of the long knives that is coming for any “disloyal” Republicans the day after the 2024 election.

Republicans also bring up the multiple what-about-isms of runaway federal debt, high interest rates, inflation, tech companies with too much power, and leftish agendas in overly woke schools.. but ignore the reality the US is clearly the richest, vibrant and resilient global economy. To be blunt, in Economic terms, the US is top of the world today. But if they are willing to sacrifice Ukraine, lose NATO and Europe and further dimmish the US in the eyes of the world to score political points off Biden, then the plot will have been missed.

There is no equivalency about US borders and aid for Ukraine – there should be nothing conditional about the West clearly demonstrating its going to triumph over Putin.  But the Republicans will push it – and give Putin hope.

Meanwhile, while the UK screams for solutions, ideas, and policies to solve the multiple issues of rising poverty, a failing welfare stare, a health service threatening to consume the patient, crumbling national infrastructure, armed forces crying out for new weapons, the only things in abundance are rising inequality and injustice. Rather than address these big issues, the government is high-fiving itself because it narrowly won a vote last night about how to rearrange the deckchairs on the Titanic, even as the icy waters lap around them.

Again, Illegal immigration is the issue. The government has whipped itself into a frenzy, utterly determined to do the wrong thing, whatever the cost. It won’t work. The government probably knows that – they will claim a success if boat crossings across the English Channel fall by 10%.

The numbers of illegal migrants are already down 33% from last year – serious illegal economic migrants are losing interest in the dangers of crossing deserts and oceans to starve beneath the grey sodden skies of Broken Britain… Jacob Rees-Mogg will be furious that I’ve spotted his plan! He correctly perceives the only way to restore the grandeur of 17^th Century England will be to reduce our GDP to around the same level.. Wow.. brilliant. Why hasn’t anyone else spotted it?

Seriously… does anyone outside Westminster truly believe for one moment the policy to dump illegal migrants in Rwanda will ever work? It will face multiple challenges as the flat-earthers and pancake-earthers of the Conservative party squabble it’s too soft or too hard. It won’t survive the inevitable election loss in the next 12 months. Is it worth the distaste many UK Citizens feel towards it? Is it worth the damage it’s doing to UK’s Soft Power and our reputation for decency and fair play?

Does it make any financial sense? The government has squandered over a quarter of a billion pounds, with more to be spent and not one single illegal immigrant has been moved. No wonder the Rwandans role out the red carpet every time a new Home Secretary arrives with another bucketful of dosh.

The Tories know solving immigration will allow them to retain the votes of their most loyal voters – as long as these same voters don’t figure out illegal migrants made up less than 5% of total immigration in 2023. For all the government question the success of multiculturalism, promise fewer foreigners and claim to stopping the boats, total immigration has tripled in the past 13 years! Migration is top of Tory voters priority list. Other parties are available. Other voters want a stronger economy, better paid jobs, rent reductions, home affordability, a working health service, fixed infrastructure, etc, etc…

If you want to solve illegal immigration, then different but equally strong measures are required, including the use of identity cards, surveillance and cracking down on the criminal gangs hard. Stop the plethora of money laundering Turkish Barbershops, Albanian carwashes and fake candy stores, crack down on gangs… there are ways..

Unfortunately, the rest of the world no longer bothers with the UK. They just shake their heads and ask if we’d like to change the subject. The last few years have not shown us at our best – David Cameron’s Brexit referendum, Teresa May’s strong and stable wobbling, Boris, The Trussterf*ck and now Rishi Sunak. Without King Charles, our Soft Power would be a negative number…

But, don’t give up on us yet.  The UK is a country of tremendous promise. We have unbeatable form in Noble Prizes! We’ve been almost everywhere. Our language dominates commerce. We spawn successive generations of great thinkers, literary giants, fantastic engineers, top notch financiers, inventive computer geeks and brilliant scientists. We know that because universities and companies across the USA are full of them! What would possibly make them want to remain here in Blighty?

That’s another big problem for Labour solve… how to retain talent to rebuild and grow our economy!

Out of time, up in London, and off to meetings…

Bill Blain

Market Strategist, Author of the Morning Porridge