Monday, 4 February 2019

Brexit is a much needed wrecking ball


One thing I get so very tired of is lamo hacks on the left trying to explain Brexit through the prism of "austerity". At some point all the Guardian staffers have rolled that one out. I don't buy it. Lefties generally aren't interested in either Brexit or the causes of it. Everything in politics can be explained by the simplistic mantra of "tory cuts".

Even now they're at it, claiming cuts to youth work and after school clubs and cuts to the police is responsible for the epidemic of knife crime. I'm sure that's part of it but that's not the whole story because it never is.

Much like Brexit, if you have an easily explainable narrative and a quick fix, the chances are you haven't understood the problem. It's always going to be more complicated than it appears - and it goes without saying that if you open up the doors to the third world then sooner or later you are going to have third world problems for which we are not equipped legally or politically to handle.

The reason I don't buy the austerity narrative is that the majority of the cuts are a transformation of government because society itself is transforming. For fairly obvious reasons local library visits have declined by 30% over a decade, and though they still serve a function, councils have, according to their own calculations, bigger priorities. This is as councils are set to spend more than 40% of their budgets on adult social care.

Here we can trot out all the usual explanations; that we have an ageing population and care service costs are spiralling due to privatisation. A lot of that is true, and private care companies are making it worse by cutting corners, while often employing illegal immigrants on sub-minimum wage. The problem with that analysis is there is little chance it would be any cheaper or better were it all brought back under local authority control.

The basic problem is spiralling demand - and this is part of a deeper cultural malaise as well as hidden fallout from the banking crisis. Pensions have long been dysfunctional and the housing market is broken so what people who be saving by owning a home is likely to be spent on rent. People are living longer too. All of the norms British society took for granted postwar are exponentially disintegrating. It's not surprising that the postwar model of government is failing.

This is partly because democracy as we know it doesn't work. every government is faced with the dilemma of either doing the right thing or getting re-elected. Seldom can they do both. What's needed is a radical overhaul of the state, not least the NHS, but no government could ever do this openly and expect to stay in power. This is why they do what few reforms they can get away with by stealth. But it's not enough.

Moreover, the thing that terrifies government is that the problems are getting worse, they are completely out of ideas and they are doing everything they can to stop the whole thing imploding. As much as the state is slowly imploding, so is our industrial model. The boom preceding the banking crash was entirely phony, built on borrowed money with unemployment masked by bloating the state and warehousing young people in hollowed out universities - leaving them to rack up debts - knowing full well the jobs simply aren't there for the types of graduates we churn out.

Much is said of the crown jewels of our industrial renaissance, particularly Nissan in Sunderland which has had £450m in loans from the European Investment Bank, and £347m in grants and other public funding, from the UK and EU. This part French owned company is in receipt of hundreds of millions in subsidy and soft loans while demand is propped up by the deeply corrupt Motability scheme.

Just last year MPs called for return of Motability funds after it emerged they were holding on to £2.4bn after decades of underspending by £200m a year. In 2017 they sold 232,500 cars, contributing to a revenue of £4.2bn and profit after tax of £212.7m.

In 2009, at the height of the financial crash, £1,733 million was spent on 185,000 new cars for Motability customers. This was 10% of total number of new cars sold in UK. Even during the 2008 and 2009 global recession, which hit the global car manufacturing industry particularly hard relative to other sectors, the Motability Car Scheme has continued to provide steady and predictable source of purchases for the UK and global car industry. Of the total spend, £291 million (or 17%) was spent on cars made at manufacturing plants in the UK. Most (53%) was spent on UK-made Nissan cars.

This expenditure generates jobs, GDP and notionally tax receipts in the UK. Politically it's all very convenient but to do it, the eligibility for Motability was expanded so that conditions little more severe than an ingrowing toenail would entitle you to a swanky new motor. The Tories have, to a point, reformed it, but it's still an economic prop. When you add in Nissan's tax avoidance and what it makes from the scrappage subsidy, it does quite nicely from the UK taxpayer.

Once you start adding up the "green deal" nonjobbery attached to renewable energy and other narcissistic boondoggles, it shows that for all the Daily Mail indignation about Stella swigging benefit monkeys, there can be few more subsidised people in the world than lower middle class British people. And of course everybody likes to complain about dishonest politicians but were any politician to be up front about this and read a few facts of life to middle England, they could very well be strung from the lampposts. After all, who is going to tell Sunderland that their showcase car factory is a life sucking subsidy junkie?

Meanwhile, the big "oh shit" for politicians looming on the horizon when they have to put their foot down on universal pension entitlements and the full range of healthcare we've become accustomed to. There is no way to deflate the problem gradually, especially with so many other brushfires on the go. 

We also have difficult questions to address over the matter of housing benefit which is creeping up to £30bn a year which has been far beyond sustainable for a long time and morally questionable when so much of it goes to landlords running welfare farms for personal enrichment. I still fail to see why we're paying upward of £784pcm for Londoners. The basic problem is that we are paying more or less 50p in every pound to the government where it controls the allocation of money according to the immediate political need rather than any long term strategy.

The bottom line is that Brits expect the state to provide everything and is outraged that it does it badly. This is not something our politics can address which is why the public are increasingly angered. The left have no solutions. They cynically exploit the dysfunction in the system to make the case for more taxation and more spending and piping yet more money into their egocentric fantasies. 

And for sure, we could remedy the situation somewhat the same way we have done for the last thirty years - by pruning essential services. Politically people would rather have their rent paid than have properly funded legal aid and local courts. They'd rather have their generous state pension than drug rehabilitation officers. All the while we gut our armed services.

That's all well and good. After all, it's a sweet deal having a society where the big things in life are paid for by someone else. Whos going to rock the boat? But then, of course, people are starting to notice that the plod don't investigate burglaries and the park litter patrol isn't done. They start to notice that the legal system is collapsing and they can't get justice unless they can afford it. They start to notice that libraries are disappearing and schools are failing. They will notice. They will complain. But they won't vote for anything that disturbs their lavish stack of entitlements. 

Except maybe this time, in voting for Brexit, they have. It's the one and only thing that can force reform and topple our zombie economy. Unlike many I do not predict immediate shortages in medicines but I do expect rampant inflation and the cost of medicines to rise. No government is going to withhold lifesaving diabetes medicine so it's the everyday procedures that will have to be marketised. Those who can afford it will be expected to pay for their own nonessential treatment. 

As to how Brexit hits the housing market, we are already seeing signs of a correction. One way or another, the market will change because it has to change and government will have to act. This is really why politicians are scared witless by Brexit. It sets off a chain of events that is beyond their capacity to control. This is the end of our command and control economy and they don't get to control electorates by buying off voters. 

The British people have long known something more fundamental was wrong than just maladministration by this party or that. It's why general elections have not enthused the public in quite the same way the referendum did. Everybody who voted leave knows that something big has to change in the way we go about it, and the obsolete socialist ideas of the left really have nothing to offer us. Corbyn's Labour wants to wind back the clock to a model of socialism that sort of worked for its time, but we are no longer that country and the grown ups know it even if the hipsterjugend do not.

Very often a remainer will demand of me that I outline how Brexit will make them better off. that in itself is telling. They are all too used to politicians retailing facts and figures (despite them nearly always being lies) - and used to the idea that politicians can and should control where the money goes. This is the faulty assumption underpinning our society and it's why virtually everything is gradually breaking down. As to the answer, I have no answer to give. It's just that I would sooner trust this revolution to reallocate resources than this crop of idiots. If we left it to pure chance it could do no worse.

In respect of that, though I would rather leave the EU with a deal than without, worn down by the intense tedium of it all, I no longer care how we leave just so long as we do. If the politicians can't manage a deal it's because there's no coherence among them which is yet another indicator that politically we are spent and there is no way politics as we know it can bring remedy to any of the stack of problems creeping up on us. Without political renewal there can be no economic renewal. Brexit, has already made that abundantly clear, and now the public will have to pick up the slack - and finish what they started.  

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