Sigh… it is time for another set of predictions for the year ahead. It may be age but it feels trickier than ever to work out what is likely to happen. The outcome of some events such as the Ukraine war may influence almost everything.

But, first, this blog’s predictions for 2022. Their accuracy will allow you to decide whether to read further.

Well, whilst not a vintage year, five out of seven were correct although one, along with almost all commentators, was spectacularly wrong. Let’s get that out of the way first.

‘Russia will not invade Ukraine’. Umm… This was made on the understanding there was no long-term upside to taking this initiative and it would ultimately uncover the weakness of Putin. The latter point may be correct but not much compensation for the suffering Ukrainians.

Second, in the US, the Democrats would get a pasting in the mid-terms. I am happy to get this wrong particularly as Republicans in the House of Representatives are currently showing their increasing extremism. They have only just elected a Speaker from their own ranks after 15 ballots who is totally in hock to MAGA fanatics.

Time to move to the correct predictions. In the UK, Johnson would survive 2022 only on the proviso no further revelations came out of ‘Partygate’ or another scandal appeared. Well as the blog was completed further scandals from ‘Partygate’ did appear and then another fib from No. 10 caught up with Johnson and he was gone.

Fourth, Johnson’s calculated gamble on relaxing Covid restrictions would succeed. Despite Johnson’s ultimate demise, this was correct. Politics is so unfair!

Internationally, fifth, sixth and seventh were also correct. Macron would win the French Presidential election; Bolsonaro would lose his in Brazil. In the US, despite Biden’s frailties, the future would not lie with Trump but rather a more calculating political, far-right Republican. Cue Ron deSantis, Governor of Florida…

So now to 2023. Here we go…

In UK politics, there will be no election this year (an easy prediction!) but no recovery in the Tories’ fortunes either. The damage of three PMs in 2022, a recession, tax rises, a failing NHS and public sector strikes after 13 years of Tory rule will stick in voters’ minds. Whilst competent, Sunak’s style as yet does not quite resonate but deep down most Tories know the return of Johnson is no solution either, and it will not happen. On the other hand, Starmer will need to stand for something more concrete as the economy will undoubtedly start to recover in the second half of the year.

In the US, subject to health considerations (a big if), Biden will run again. Otherwise look to Buttigeig, Vice-President Harris or one of the Democrat’s successful Senators/Governors such as Amy Klobuchar from Minnesota or Gavin Newsom from California. On the Republican side, if he runs, deSantis will trump Trump.

The Ukraine war will last throughout the year. There can be no escape for Putin, trapped by nationalists on his Right and the West’s surprisingly robust, united opposition. What further drives the West is the fear of China’s threat to Taiwan. After their Covid debacle China won’t invade imminently but the threat is increasing.

There are no significant elections globally except in Turkey where one would expect the wily President Erdogan to win yet again. Although it won’t be easy this time round with all the major cities held by the Opposition.

Lastly, for optimists, in the UK, we have the pomp and ceremony of a Coronation in May and are hosting Eurovision in the same month. This blog comfortably predicts they will be happy events despite the stormy backdrop to both of them and might just help us get through a challenging year.

A happy and successful 2023 to you all.

There was a programme on Radio Four earlier this week concerned about whether media coverage of the cost of living crisis, strikes, NHS meltdown, Ukraine, climate change etc was depressing the nation in its relentless negativity. Was it causing a spiral of misery? Such unprecedented self-awareness!

It certainly feels so. Many I know simply can’t face the news as reported and are turning their back on it. Nobody wants the varnished truth but are we undermining our ability to cope by ignoring some of the positives around us?

Time to smile?

Well I dug around, searching for some good news to finish the year amidst the gloom and there is a surprising amount, some of it in full view. So here we go…

First, an easy one. Protecting the planet. On Monday, at COP15, 23 targets were agreed by 195 counties and the EU to ensure 30% of land, rivers and sea globally are in protected areas by 2030. Harmful farming subsidies will be reformed/phased out, risks of pesticides will be halved, rich countries will transfer US$30 billion to poorer ones for biodiversity protection. If not perfect, it is a huge step forward.

Second. Health. Longevity globally has risen from 53 in 1960 to 73 this year, up a year since 2021 despite Covid. 80% of children by the age of one will have been inoculated against at least one disease. There has been the first significant breakthrough in a search for curing Alzheimer’s and then all that progress on vaccine technology driven by Covid.

Third, closer to home. UK politics. Whatever your views, we have the most competent PM since at least Cameron (pre-Brexit referendum) faced by a viable Opposition. Sunak is economically literate, understanding the need for a solution to the craziness, for example, of having record vacancies whilst 13%, of the workforce is on some form of out-of-work benefits. Inflation will head down towards 3% next year with interest rates following according to most forecasts. Strikes really will get resolved because they have to and, internationally, we are rebuilding relationships with key allies. Come on, things will be better than this year!

We can also talk through the failure of Russia to take Ukraine although at immense cost and a possible Russian retreat/ defeat next year. The West has held its nerve in supporting Ukraine comprehensively despite the pessimists saying otherwise. We are witnessing the almost certain demise of Trump’s malign political influence and, oh yes, in science, a real breakthrough on the way to achieving nuclear fusion.

Lastly, a final point to leave you with. Numerous studies show optimists live considerably longer than pessimists. So turn off the news, stay positive and enjoy the festive break. It’s good for you… apparently…

Merry Christmas 🙂

We are in for a miserable winter. The first decent post Covid run-up to Christmas is being marred by growing industrial strife. If you add all the groups together it feels we are almost in general strike territory.

A winter of strife…

Nurses want 19%, Border Force guards have just announced airport walkouts to support demands for a 10% pay rise. The RMT, having been offered 8% over two years with no compulsory redundancies (but more efficient working practices), announced a slew of Christmas strikes. The Royal Mail are striking, ambulance staff are joining picket lines and teachers have walked out in Scotland. The list goes on. There is talk of the army taking over crucial services to stop potential disasters in essential services.

Christmas party cancellations alone, due to strikes, have almost hit Covid levels wiping £1.5 billion off hospitality revenues.

The Government calculates that to cave in to all these demands would cost north of £28 billion, fuelling further inflation and then further pay demands. It is a legitimate warning as this is exactly how high inflation becomes embedded in economies.

We are, of course, facing an unprecedented cost of living squeeze and many of the pay demands have some legitimacy, being the legacy from over-enthusiastic austerity measures. However, those in the public sector kept their jobs during Covid when many workers in the private sector ultimately lost theirs or took significant pay cuts. Many founders of small businesses, in the hospitality sector for example, lost life savings. Then public sector pensions are often more generous than in the private sector. Comparisons on pay require more detailed analysis than simply average/median salary statistics.

Unsurprisingly, polls show public support for striking nurses but not rail workers any more now the scale of Christmas disruption is apparent. One poll even suggests the public is happy to make transport strikes illegal.

Rishi Sunak talks about legislation to curb strikes in key public services but there is not much detail, and he does appear somewhat enfeebled in such a fractious Tory Party. The Labour Party equivocates and some of their MPs have joined picket lines despite opposition from Starmer.

On balance, all this disruption probably adds to a sense of Tory inspired chaos after a turbulent few months for the Government. The Tories will probably get the blame from voters for a country seemingly heading in the wrong direction. Many voters will feel they should be sorting things out in a spirit of compromise.

However, polls also show industrial unrest is at least galvanising core Tory and some floating voters. Frustratingly, it seems a sad reflection of 12 years of Tory rule that strikes may be the best thing going for the Government at the moment.

A long, long time ago, the 1992 General Election actually, I was a young Conservative Parliamentary Candidate standing in a slightly marginal Labour held seat in SE London. I didn’t actually want to be an MP, just putting a marker down for the future. It seemed a fairly safe bet I wouldn’t be elected. Thatcher had been defenestrated, Major was untested and after 13 years of divisive Tory rule, Labour were riding high.

Well, the Conservative Party against all expectations, won. I lost but not, gulp, by much. Tories, in focusing on the economy and voter concerns about the quality of the Labour leader, Neil Kinnock, were given another turbulent five years.

Fast forward to 1997, and a hopelessly divided Conservative Party, practically ungovernable, was wiped out by the charismatic Tony Blair.

Changing fortunes in the 1990s…

On this spectrum, where are we today? Well, the Tories are ungovernable, divided on everything from Europe (again!) to immigration and house building targets to name but a few issues. If it wasn’t so serious, with almost comic timing, they are on their fifth leader in six years. Sunak is the new competent, technocratic PM, but has little authority over a party riven by factions.

Labour are 25% ahead in the polls and have just walked the Chester by-election. It looks game over for the Tories. Tory MPs have to confirm whether they are standing again by fifth December, and several are voting with their feet and going including some in their 30s and 40s.

And yet, and yet…the Tories have drawn level again on the economy in some polls despite the disaster of Truss’s short reign and doubts still remain about what Keir Starmer stands for.

On balance, it feels more like 1997 than 1992 simply because the Tories have made such a mess of things. Sunak has come along too late to be their saviour and the Conservative Party internally is in a terrible state. The wider front bench of the Labour Party appears competent and Starmer has more gravitas than Kinnock could ever muster.

But doubts still persist about the outcome of the General Election likely to be in 2024. Labour have to win an incredible 124 seats to gain an overall majority. It may come as a surprise to many, but it is not quite game over for the Tories.

Rishi Sunak has brought sanity back to the Tory Party. Confident, competent, technocratic even, he believes in sound money and, internationally, strong relationships with allies including the EU. He has had his hands tied with some of his Cabinet choices, but this will not last for long. His problem, however, is that his premiership has come too late.

Much ammunition to use against the Government

After 12 years of Tory government including five years of severe austerity, this clever, but thoroughly miserable Autumn statement ushers in a ‘back to the future’ moment. More austerity as the economy heads into recession, inflation north of 10% and plenty of cuts. Rightly, the Government cannot give in to excessive public sector pay claims but there will be months of public sector strife with strikes and periods of working to rule. Despite generous uplifts in the minimum wage, pensions and benefits, there will be little to gain politically as voters feel quality of life experiences deteriorating. Living standards are expected to fall by a record 7%.

Admittedly, many of the forces creating economic mayhem are global, notably the legacy of Covid and the impact of the Ukraine war, but that is not sufficient cover.

Starkly, the US economy is 4.2% larger than pre-Covid, the EU zone 2.1% larger, the UK 0.7% smaller. A devastating article in the FT today highlights that the NHS spends a fifth less per capita than similar European countries. Then there is Brexit which has hit trade hard. This week, former Environment Secretary, George Eustace, describes a post-Brexit trade treaty with Australia, for example, as ‘not a very good deal’ despite praising it at the time. According to the Office of Budget Responsibility, trade as a share of GDP has fallen 12 per cent since 2019, two and a half times more than in any other G7 country and it expects the longer-term impact of Brexit to affect trade intensity by some 15%. Only a third of voters now believe Brexit was a good idea.

Finally, an interest rate premium from the fallout of Trussonomics with rising interest rates wiping out many of the gains from subsidising energy bills for those on flexible rate mortgages.

There does not seem much to show from a Tory government in power since 2010 with five different Prime Ministers. A good one at the end is unlikely to erase voters’ memories.

And then to Labour. So much to attack but what is different now is that despite the blandness of Keir Starmer, they have an impressive front bench. First amongst equals is Rachel Reeves, Shadow Chancellor, and she laid into the Government with forensic detail today whether it be weaknesses in energy policy, stealth taxes or the failure of windfall taxes on energy companies due to offset allowances. At the say time, Labour are carefully laying the ground to ensnare Sunak in all the policy choices (mistakes) of the last few years.

It is said Oppositions rarely win General Elections; it is Governments that lose them. It is hard to disagree.

First, the good news. The choice of candidates was not great but at least former President Luiz Inacio Lula da Silva beat incumbent Jair Bolsonaro, in last week’s Brazilian presidential elections. That is a victory of one candidate who had his corruption sentence annulled against another who has his own corruption investigations, as yet untested in court.

However, more importantly, Bolsonaro took a ‘Trumpite’ approach to managing the Covid pandemic with all the terrible consequences that followed; 700,000 Brazilian deaths. Then there is the destruction of the Amazon rainforest. The now former Brazilian President was a pro-development, far-right nationalist who sided with criminal syndicates of illegal ranchers and loggers resulting in record levels of deforestation. An area of rainforest the size of Greater London was cleared in September alone ahead of the elections.

Bolsonaro has questioned the role of democracy and threatened, again like Trump, not to recognise the election result if he lost. Without conceding, he is surely gone and good riddance. But despite his appalling record, Bolsonaro nearly got re-elected with 49% of the vote. Almost a triumph for far-right populism. At Congress level his supporters performed strongly.

‘People over populism’ is not necessarily a winning formula…

In Italy, despairing voters have elected a far-right coalition government led by the Brothers of Italy party with deep roots in a fascist past.

And, adding insult to injury, Netanyahu, another populist right-winger facing corruption charges has made a comeback as Israel ‘s likely next Prime Minister. The price he has paid is an alliance with ultra-nationalist and ultra-Orthodox Jewish allies which is a further challenge to Israel’s delicate democracy and internal stability. Netanyahu’s supporters talk of amending the judicial system to ensure corruption charges are dropped. Shameless and depressing.

Finally, we turn to this week’s mid-term elections in the US. America is more polarised than ever. Despite Biden passing legislation on climate change, gun-control, infrastructure investment and child poverty in the face of narrow majorities in Congress, that is not enough. The Democrats face defeat even as Republicans push to make abortion illegal, give local officials the power to overturn election results at a State level and continue to support Trump in the face of clear evidence he was complicit in supporting an attempted coup on 6th January last year.

The very fabric of democracy in under threat in the US but that doesn’t rank as a priority in comparison to inflation, crime and illegal immigration. Add to this toxic mix the crazy ‘wokeness’ of left-wing Democrats with policies such as defunding the police, and there are grounds for real despair at the future of the US as a stable democracy.

We await the results with trepidation and what it means for the possible return of Trump which seemed relatively unlikely for all his blustering… until now.

Right-wing populism is the Japanese knotweed of politics; deeply embedded with roots that are seemingly impossible to destroy. Despite the public being mostly centrist, if moderates don’t govern competently from a centrist position and deliver, the lurch to the undemocratic Right is always at hand.

As we will probably find out on Tuesday with our most important ally…

For more moderate Tories, the last few days have been the best politically since 2015. Despite being a Brexiteer who has planted himself on the Party’s Right on issues such as immigration, Sunak is about as good as it gets!

Grounds for optimism...?

Truss’s ‘libertarian’ premiership hit a brick wall with significant collateral damage whilst the unedifying attempted return of Johnson ended in humiliation. His cringe worthy statement saying he could have been PM again but, for unity reasons in parliament decided to pull back, was breath taking in its hubris. This really should be it for him.

Never mind. Sunak is PM now and not a moment too soon. To be certain of closing the deal he has had to compromise on ministerial appointments, and it will work for now but probably not for long.

The most notable appointment was Suella Braverman as Home Secretary. Having just resigned a few days ago for sending confidential material from a personal email address, she is back in the same post. The price for her support in the leadership race. Understandable but the cost may be too great in the medium-term. The only saving grace is that if she storms off to the back benches again that will be it for her too!

Otherwise, a more continuity Cabinet than one might have guessed. Hunt is probably not Sunak’s choice for Chancellor. He is his own man and notably, for example, only gave Braverman’s appointment tepid support but ‘he will do for now’ in the midst of an economic crisis. They are sufficiently agreed on what needs to be done and should, will have to work closely together. Maintaining the likes of Cleverly, Coffey and Wallace as Truss/Johnson supporters is just good politics, whilst the return of loyalists such as Raab and Gove makes sense too.

The danger for Sunak is that continuity today may not impress the electorate tomorrow. Same old, same old Tories voters might think. In fact, there is some evidence to suggest they have now tuned out like they did in 1992/93 and nothing can rescue the Tories’ electoral prospects from here.

What is certain is that Sunak will have to stamp his authority on the Cabinet with another reshuffle closer to the General Election. Tensions are running high and if Sunak actually governs as a moderate, that reshuffle may be sooner than expected.

Sunak’s compromises work for now, but the Tories’ addiction to further political drama may be hard to cure…

At the start of the week, it was an easy prediction to make. Liz Truss would be gone in weeks, possibly days. After the chaos of the vote on fracking on Wednesday, it was the latter. A wholly self-inflicted disaster, it is difficult to feel much sympathy for Truss or indeed the Tories as a whole for putting her in the position of PM in the first place.

And now, incredibly, we have a strong possibility of the resurrection of Boris Johnson. Political soap opera at its worst.

Tory Party continues to shrink in esteem…

Let’s just remind ourselves of Johnson’s past reign and why he had to resign. Caught regularly lying on a range of issues, covid parties, taking ‘corrupt’ money for decorating his Downing Street flat, losing ethics advisers, 60 ministers resigning at his behaviour forcing Johnson to quit. The list is endless and that is before his fundamental administrative chaos.

And think what happens if he wins the leadership a second time around? Does Hunt stay around as Chancellor? There is no love lost between them, and Johnson is a profligate spender who privately backed Truss. The talented Sunak will probably leave politics. The Right will remain in the ascendant. Relations with our largest trading partner, Europe, will continue to deteriorate. Several Tory MPs are threatening to quit forcing by-elections.

More chaos as the electorate recoil at another, this time discredited former PM, foisted on the country a second time by a tiny minority of Tory members. Johnson’s one saving grace is that he did have an original mandate from the 2019 GE but when he left office, 69% of the public and a majority of Tory voters wanted him gone.

Of course, Johnson is not Truss and that in itself might lead to a slight recovery in the polls. However, the longer-term answer is some thing like Sunak for PM, Hunt staying on in his role as Chancellor and Penny Mordaunt being made Foreign Secretary. It is not whether but only the scale of Tory electoral defeat being debated at the next GE and Johnson is no solution versus more talented colleagues who can rebuild the Party afterwards.

Common sense should prevail, and Johnson left on the backbenches to rack up millions in speaker fees. Meanwhile Prime Minister Sunak and Chancellor Hunt claw some reputation back for the Tories on the economy.

The problem is what do the Tories most lack collectively? Common sense. It could be a very depressing time for moderate voters as today’s Tory Party is lost to them.

To the almost certain horror of the hard-right, libertarian wing of the Conservative Party, moderates have taken back control. The grown-ups are back in charge for now and the sense of relief is palpable.

Liz Truss’s 38 day experiment comprising unfunded tax cuts and libertarian factionalism prolonged only by the death of the Queen, is over. Truss is a busted flush. Her agenda has gone. This morning, incredibly, Jeremy Hunt reversed nearly all aspects of the mini budget. She now offers nothing, not even able communication skills, and will be gone within weeks, possibly even days.

Jeremy Hunt takes charge…

The beneficiaries? Jeremy Hunt, Rishi Sunak, Penny Mordaunt. Putting Brexit to one side, they are moderates, representing the centre/centre-left of the Party. Believers in sound finances, social liberalism, competent government, any one of them would govern by making appointments from all sides of the Party based on merit.

It is time for the Conservative Party to stop divisively thinking of politics in terms of North versus South, blue versus red walls, establishment versus radicals, experts versus who? It is time for competence over ideology and country before Party.

So far, so good but there are still two very large threats facing the Tories. One potentially self-inflicted, one outside their control.

Taking the first, it is still the same underlying Party as it was, with much of its membership very right-wing, and unpleasant ideologues lurking in the wings. Members were seemingly happy with the chaos which came before Truss under Johnson. And they voted in Truss despite all the warning signs. If, in an inevitable change of leader, another election contest is held (that in itself would finish the Tories) with the drift to the Right reconfirmed or heaven forbid, there is a re-coronation of Johnson, then it is game over. No moderate will want anything to do with them. The Party would finally split and lose the next General Election very, very heavily indeed.

Second, it is probably too late for the Tories, anyway. The public is heartedly sick of their pantomime approach to government. Their arrogance, sense of entitlement, treating government as one big experiment. It has caused real damage to the fabric of society, the institutions they are meant to revere, to international relations.

However dull Starmer is and to whatever extent some extremes still lurk in corners of the Labour Party, it is time for a change. For the health of democracy. For the health of the Tory Party.

Activities in the main hall of the annual Conservative Party conference are the least interesting part. Set speeches from ministers to an often sleepy audience which appreciates slogans rather than anything more in-depth, are best avoided. Outside the weird bubble of such gatherings, they barely register with the public.

Not to everyone’s taste…

Which takes this blog to Liz Truss’s speech in Birmingham last week… The Prime Minister is a weak communicator at the best of times which is a real problem in the worst of times. To be fair, in the face of a disastrous conference, Wednesday’s speech was relatively well delivered but it wouldn’t be to a thinking person’s taste. Best ignored.

Why the obsession with growth? Simple in concept, it is not an end in itself. Politicians who do not (or pretend to not) understand economics see it as nirvana. Nonsense.

It avoids the more subtle concept of low productivity, the curse of the UK’s economy. It ignores a green agenda and immediate quality of life issues. It ignores how wealth is distributed except for the weak tinkling from trickle down economics. It ignores how to achieve it with sound public finances.

And then we turn to the ‘anti-growth coalition’. All the Tory Party’s prejudices inaccurately grouped under one slogan. Even for a party conference, Truss should be ashamed of herself for such cheap jibes.

This week we have had more U-turns. After reversing the abolition of the 45% tax band mid-conference, the date for outlining the government’s financial plans has been brought forward by nearly a month; despite denigrating such expertise we have the appointment of an experienced treasury hand as Permanent Secretary and almost certainly welfare benefits will be indexed to inflation rather than earnings despite initial briefings otherwise. Meanwhile, gilt yields tick up reflecting a continuing lack of confidence in the government’s stewardship of the economy.

If you play strong, you had better be strong. Increasingly, the public’s view of the Truss government is they don’t like its priorities or now its weaknesses and, specifically, if you can’t trust the Conservatives with the economy, what’s the point?

The Labour opinion poll lead is massive and few Tory MPs believe it will be reversed. Truss’s legacy after just a few weeks in power. Quite a feat.