Britain rudderless and in crisis

Two-digit inflation for the first time in forty years, the drop in real wages to its worst level in decades, and transport strikes are some of the symptoms of widespread discontent. The National Health System is on the verge of collapse, the drought due to a summer of high temperatures left large areas of the country without water, energy prices are going to double in October and labor unrest has skyrocketed. Even the criminal lawyers have just announced a strike.

At times it seems that there is no sector in Britain that works at all. Prime Minister Boris Johnson resigned in June and his replacement will not be announced until September 5. The ship of this G7 country is damaged, adrift and with no one in charge.

tragic decline

In the conservative media they have turned on the alarm signal for a long time. “Virtually nothing works in the UK,” says the conservative weekly “The Economist.” “The country is creaking”, diagnoses another pillar of the establishment, the “Financial Times”. One of the most lapidary diagnoses belongs to a star columnist for the ultraconservative morning newspaper “Daily Telegraph.” “Our astonishingly rapid decline is tragic and yet not surprising. We are close to the denouement, the end point, of a quarter-century of political, intellectual, and moral failure to which most of our political class is complicit,” writes Allister Heath.

The problems go beyond the pandemic or the war with Ukraine. “There is a sudden awareness that the era of covid-19, Brexit, the war in Ukraine and the climate emergency are exposing fundamental flaws that have been festering for decades,” says columnist John Harris in The Guardian. .

Who invests?

The mantra of the Conservative government that took office in 2010 after the global financial crash was that the problem lay in the fiscal deficit and the solution was to lower spending and stimulate private investment by cutting taxes on the rich and corporations.

In the 1980s, Margaret Thatcher turned this formula into dogma. The conservatives of the 21st century did not change their discourse: the results were the same as with the “Iron Lady”.

Despite having one of the lowest tax rates, the UK is at the bottom of the table for private and public investment of the G7 countries. “This lack of investment comes from decades. An obsession with spending efficiency has meant that instead of maintaining and improving infrastructure, it has been allowed to collapse. In the United Kingdom much more work is done than in Germany and France but we are far behind in terms of productivity because we invest much less in key areas including technology, training and research, “says the economic editor of The Guardian Larry Elliot.

Two examples

The drought in this sultry summer made it clear that the corporations that manage the water supply, privatized in the 1980s, have not built any new reservoirs despite a population increase of ten million people in recent decades. The same carelessness is seen in the maintenance of a system that, in large part, dates back to the Victorian era. The result is that some thirty million people today face restricted use of the water and that in much of the English south coast, from Cornwall to Devon, it is prohibited to go into the sea due to the pollution of the waters.

Like the rest of the corporate sector, taxes on responsible companies have been lowered from 26 percent in 2010 to 19. But rather than stimulate investment, the profits were used to pay dividends to shareholders: the equivalent of more than seventy billion dollars (57 billion pounds) in the last thirty years. The executives of the companies in the sector have not missed the party either. In the last two years, in the midst of the pandemic, bonds for more than 35 million dollars were awarded. By comparison Scottish Water, which remained in state hands, invested about 35 per cent in infrastructure per household in the same period.

The energy sector, which posted windfall profits from the war, is raising prices like a charm. This Friday an eighty percent increase in rates was confirmed, which will take effect from October 1, the eve of the harsh English winter. Shareholders and executives, happy: the public not so much. Even in traditionally conservative areas like Surrey in the south of the country, voters are disillusioned with the privatized system and willing to switch parties. “I have almost always voted Conservative, but I am not going to do it again. The profits being made by the water and energy companies are a scandal. They would have to go to jail instead of earning million-dollar bonuses,” says retiree Mary Barnby.

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A patched up country

At the public sector level, the freezing and reduction of investment since 2010 meant that the National Health System (NHS) today has one of the lowest numbers of hospital beds per person in a developed country, something that was noted during the pandemic. . The virtual wage freeze since 2010 led to an exodus of nurses and doctors, an exodus only partially offset by the hiring of professionals from developing countries. NHS staff are becoming more like the UN in their mix of nationalities, yet one in ten nursing posts remain vacant.

While in Germany, Spain or Estonia the states invest in the railway sector to get it out of the crisis it had as a result of the pandemic, the British government announced cuts equivalent to more than 2.5 billion dollars. Since June 21 there have been eight strikes that have semi-paralyzed the rail network.

The general secretary of RMT, the railway union, Mick Lynch, has warned that the current discontent may end in a de facto general strike (the last was in 1927). “It is something that will be decided by the workers’ union. But what we are going to see in education, health, transportation and the private sector is synchronized strike action.” In the last two months there have been clear signs of this labor unrest: the cancellation of thousands of flights in the middle of the summer season, forceful measures in the port of Felixstowe through which 48 percent of the container trade passes, strikes in oil companies, factories and even on Amazon.

In August, the inflation index for the previous twelve months exceeded ten percent. With the practical doubling of energy rates from October, the Bank of England anticipates a thirteen percent for the coming months. The calculation is that some fifteen million people will fall into what is called “energy poverty” (they allocate ten percent of their income to pay for gas and electricity). In the food banks for the most disadvantaged sectors, many do not buy potatoes because of the expense they will incur when cooking them: in the British winter, the dilemma for many will be to light the stove or eat.

More of the same

Added to this crisis is a virtual acephaly since Boris Johnson resigned in June and remained in office without depriving himself of marrying and taking vacations in a headless government. In more than half of the ministries decisions are not made until there is a substitute: in the press they baptize it the “Zombie government”

The problem is that the two candidates to replace him offer more of the same. The favourite, Chancellor Liz Truss, promises a 27 billion pound tax cut that will favor companies and billionaires to stimulate investment in a country that is still dealing with the fiscal hole left by the pandemic and Brexit. Her rival, former finance minister Rishi Sunak, is a bit more cautious and says that is a goal to be achieved later. But deprived of that imposing mantra, his program contains little or nothing.

A poll last weekend gave Labor an eight-point lead over the Conservatives and put their diffident leader Keir Starmer ahead of him as a better prime minister than Johnson, Truss or Sunak.

What’s coming?

The consensus is that the new prime minister will enjoy very little legitimacy: he will be elected by some 200,000 members of the Conservative Party, most of them over 60 or 70 years of age who live in rural areas. The rest of the Kingdom, which faces strong separatist, social and generational tensions, will play the guest of stone, an untenable situation in the midst of a crisis. Despite all this, despite the fact that Truss and Sunak are tainted by their involvement in Johnson’s cabinet, it is possible that they will have the brief honeymoon that awaits the new governments. In some media it is speculated that whoever wins will try to take advantage of this resurgence of expectations to improvise a massive aid package for the cost of living and call early elections.

With so little legitimacy and so many economic and social holes, it is difficult for the government to reach December 2024, more so in a country that has a long tradition of early elections. But beyond the political and electoral ups and downs, the underlying problems will not go away with a new face, regardless of the party.

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