FANCY FINANCIAL FOOTWORK

 

Very quickly, amid great national turmoil, Liz Truss has had to get her government together, decide on her priorities and make an impression on financial and political markets.

Truss and Kwarteng (in prudently protective gear!)

 A comprehensive Energy Protection package for businesses of all kinds was announced on 21 September, organized by Jacob Rees-Mogg.. The “fiscal event”, not a budget, was duly unveiled on 23 September by the new Chancellor Kwasi Kwarteng. It was intended to:

(1)    Reinstate some promises Boris and Rishi Sunak had broken (e.g. abolition of the 45% top rate of tax, halting a rise in corporation tax),

(2)    Open up the UK economy from ingrained restrictions, sacrificing some equality for incentives to business and workers (removing the cap on bankers’ bonuses, reforming IR35, easing of planning restrictions, reducing income tax)

(3)    Reassure UK and overseas markets that the UK was an attractive business-friendly place to invest in and make profits.

Although delivered with some aplomb and confidence, the reception of this package was hostile and questioning, the exchange rate nosedived and gilt yields rocketed. Partly this was a revival of historic bad memories – the Tory “dash for growth” by Anthony Barber in 1970 under Heath ended in dust and ashes. Many worried that there were contradictions in the package – how could large tax cuts be made, which would be inflationary, when inflation was already alarmingly high? Where were the revenue rises or spending cuts to pay for it all? Short and long-term issues were being confused.

Unluckily for the government, this brouhaha arose as the Labour Party was ending its annual Conference and every loony Leftie in the land was in insurrectionary Liverpool, hogging the cameras of a compliant media. Keir Starmer put on his responsible face and claimed Liz Truss had “lost control” and he was the man to sort it out. (The world knows that Labour could not run a whelk-stall.) Somehow Conference was persuaded to sing God save the King at the start (unconvincingly) but was much surer when singing The Red Flag at the end. Of course, once a Commie…………

The venal British media joined the noisy chorus. All the doom-mongers, all those with a grudge against Truss, all the residual Remoaners, all the half-baked “experts” crawled from under their stones and spat out their bile. Even my Telegraph descended into incoherence in describing the dilemma of the Bank of England as it rushed to buy long gilts:

The contagion risks of margin calls, caused by higher gilt yields, meant that a reflexive negative feedback loop into falling UK asset prices had become too high, risking a doom loop. (Is this plain English, editor?)

 

Anyhow, I gather this intervention steadied the market on 28 September and the Bank rather than the unrepentant Government blinked first. We do not need dramatics – we want expansionary policies introduced competently. Our political world calls out for bright new ideas, out-of-the-box thinking and above all the courage to face down the dead-beats of the establishment and the leaden weight of the past.

Go to it Liz, Kwasi and Jacob!

 

SMD

28.09.22

Text copyright © Sidney Donald 2022

REASONS TO BE PROUD

 

After the magnificent State Funeral for Queen Elizabeth II, a time for reflection and a time for pride. We were moved and our hearts swelled with pride at the historic rituals, the seamless transition to a new kingdom, and the rich legacy bestowed upon us by a beloved monarch.

Her journey from Balmoral and the looming mountain of Lochnagar made me particularly proud.

Oh! for the crags that are wild and majestic,

⁠The steep, frowning glories of dark Lochnagar

(Byron)

Born and bred in Aberdeen, the heathery villages of Royal Deeside are very familiar to me; Ballater, Aboyne, Banchory, Peterculter, Bieldside and Cults into Aberdeen were the site of many a happy family excursion over two generations, and are forever part of me. Then Her Majesty’s hearse turned South to historic Dundee and Perth, before crossing the Forth Bridge and entering the majestic city of Edinburgh, capital of proud Scotland. A night at Holyrood Palace and then the procession accompanying the hearse up the Royal Mile, through Stuart and Hanoverian Edinburgh. Scottish soldiers and eagle-feathered members of the Company of Archers providing a body-guard to St Giles, the High Kirk of Edinburgh, a heart-warming sight.

The Edinburgh bearer party

Scotland did the late monarch proud and the ceremony heartened the many Scots who attended or watched it. I imagine it has set back the cause of independence for a generation. The royal family have strong connections with their beloved Scotland and those links will not wither. Proud Scotland salutes!

The scene moved to London and the 4-day lying-in-state in Westminster Hall, a place redolent of major events in the history of these islands. Some 250,000 people filed past to pay their respects, many ordinary, modest people who were moved. I was proud of them.

 

There were vigils too by the late Queen’s 3 sons and daughter and a later one by her grandchildren, all moving in their way and evoking our sympathy and common humanity.

Then on the 19^th the late Queen was carried in procession from Westminster Hall to Westminster Abbey, her Grenadier Guards bearer party, young recent recruits receiving general admiration for their precision and bearing. They made us all proud.

 

The Grenadier Guard bearer party

The Abbey looked resplendent, as ever, and was packed full of the great and the good. The funeral service itself was rather bland to my taste and the music somehow lacked zing. Much more engaging was the Committal Service at St George’s Chapel Windsor, a poignant farewell with a reverent atmosphere as the crown, orb and sceptre were removed, the Chamberlain snapped his rod of office, the sonorous words of the Book of Common Prayer and the coffin sank through the floor to the crypt below.

On the journey from London to Windsor we had a glimpse of the Britain left behind – much teeming suburbia, housing a diverse population, some green fields, a rural atmosphere on the road into Windsor, The Queens’ Shetland pony, lines of faithful retainers, some of the spirit of England. Soon a sad but proud day was over.

Our country has its peculiarities and is doubtless not perfect. But it fits most of our people like a glove. There is so much of which we can be joyfully proud, so much to cherish. As the Elizabethan Age ends, let us welcome the promising Age of Charles III.

SMD.

22.9.22

Text copyright © Sidney Donald 2022

CHANGING THE GUARD

 

 

The moment we had all anticipated, but also dreaded, duly came on Thursday 8 September with the passing of H M Queen Elizabeth II at the grand age of 96 at her beloved Scottish home of Balmoral. The great bulk of her UK subjects will feel diminished by the end of her reassuring presence and will be hugely grateful for her dutiful and devoted service as their monarch for 70 years. Her son Charles succeeds as King Charles III and he has the support and goodwill of all the nation.

               

                                                 The Annigoni Portrait from 1955

            

              The final day’s duty: Liz Truss is invited by the Queen to form a government, 6.9.22

We are left with all manner of memories from the last 70 years. I believe the institution of monarchy is strongly entrenched in the sentiments of the people and will endure.

 

A new monarch and a new government have to find their feet. Liz Truss has risen to this extraordinary situation with a competent air. Her Cabinet is remarkably diverse (hopefully not too demoralisingly so for the 87% white majority!) and has a stiff agenda. Ideologically it is on the right wing but I am reminded of St Augustine of Hippo who prayed “to be blessed with Chastity, but not yet!”. For this right-wing government has unveiled a vast “temporary” Socialist programme (to cap energy costs for households and businesses at a cost of 130bn) which will blow a huge hole in the promise of smaller government, will delay the genesis of the free-market Utopia and will test the mettle of the new Chancellor Kwasi Kwarteng, a clever Etonian of Ghanian parentage.

                              Kwasi Kwarteng, Chancellor and key member of the Truss team

The cost-of-living crisis has to be tackled comprehensively; public services must be restored on a viable footing, The financing of the NHS needs remodelling and national educational standards improved. Our commitment to the NATO shield in the West cannot falter. Inevitable obstruction from the Whitehall Blob should be eliminated ruthlessly.

Ordinary people will have to navigate a difficult winter. The worst of potential horrors in terms of price rises seem unlikely to happen. But prices are rising and luxuries will need strict rationing – ham sandwiches rather than elaborate canapés, bitter rather than Prosecco, Marks & Sparks rather than Jermyn Street. No huge hardship but there are many less fortunate than I am. Travelling, a fairly basic activity, is made a misery by widespread strikes, most politically motivated. National morale is low and our leaders need to encourage and inspire – something Boris could do, when the spirit moved him, and before he descended into buffoonery. Michael Gove was also very eloquent before his bright star faded. Step forward, our new Cicero!

It is of course a huge Herculean Labour to get any modern democracy to support a government’s programme. The age of deference and weary acceptance is long gone. Our streets, conventional media and toxic social channels teem with malcontents, anarchists, doom-mongers, anti-vaxxers, nationalist irreconcilables and obsessed maniacs in profuse variety. They must be left to stew and the sensible remainder won over, or at least reconciled. Opinion moves with rapidity these days and government must win the information battle.

 

Our nation is ripe for renewal and we will again climb to great heights of achievement.  God save the King!

 

SMD

12.9.22

Text copyright © Sidney Donald 2022