Inflation plus greenery – a costly autumn combo on track to destabilise the government

This is Iain Martin’s weekly newsletter for Reaction subscribers. To receive it by email, subscribe to Reaction here.

As we have all been reminded during the pandemic and the race for a vaccine, Britain is replete with terrific scientists. Could one of them not be put to work rewiring the Prime Minister’s brain?

I make this mildly despairing suggestion after thinking about what happened on Boris Johnson’s trip to Scotland this week, when he made a daft, self-destructive joke that needlessly undid good work.

A Prime Minister should visit Scotland and all parts of the United Kingdom more regularly and stay there to work for a few days, so the latest trip was in theory a good idea. Travelling requires sensitivity and manners though. The grievance-hungry Nationalist narrative rests on the misleading idea that anywhere outside England is alien territory, and that a “visit” is somehow an incursion into foreign territory. In this way, Scotland’s First Minister, a welcoming ray of sunshine as ever, sent a snippy open letter to Johnson ahead of his arrival. There is no requirement for a visiting PM to always meet Nicola Sturgeon. Sensibly, he ignored it and went about his British business.

Unfortunately, in the course of this the Tory leader chose to make a bad joke when questioned about climate policy. Why? What was going through his head when he jokingly praised Margaret Thatcher for giving Scotland and Britain a head start by closing lots of coal mines? Did he think it was funny? Possibly. It wasn’t though.

There are many arguments to be had about the complex, rapid, painful process of industrial decline in 1980s Scotland, that was matched elsewhere in the former heartlands of the industrial revolution. In Scotland the crisis began in the 1950s and 1960s when inefficiencies in industry started to be exposed by global competition, the disappearance of empire and the switch in trade patterns. The Labour government of the late 1970s realised very late there was a problem and started to experiment with regional policy. Under the Conservatives after 1979 – trying to accelerate the process of restoring some order to monetary policy and the public finances – there was an enormous and painful upheaval. At the time, Margaret Thatcher’s ministers emphasised new economic development, sponsored by government agencies, as old industries collapsed. Decades on, the fraught process is still remembered and best not joked about. The same applies in the north of England.

So, in circumstances that were propitious for the government this week, with the Nationalists on the back foot having failed to win a majority in May’s devolved elections, the Tory leader somehow managed to gift his opponents a row and depressed Unionists by joking about Margaret Thatcher and coal mines.

What was the point?

It was all so unnecessary. There’s a good story for the government to tell in Scotland right now, with the SNP tired and adrift. There’s a spirit of optimism. Ministers, officials and campaigners have been working diligently for months on cross-border initiatives, showing calmly that the Union delivers.

The UK-wide spending on the pandemic and programmes on “levelling up” are pouring money into Scotland. This contrasts with the SNP that has slashed local government and centralised decisions. Some important institutions in local government and the university sector in Scotland are, tentatively, starting to realise they should not be so afraid of a fading Sturgeon and the tyrannical SNP. The institutions are starting to engage with the UK government. The tide may be turning. There’s stuff to be achieved on science, universities, climate policy, jobs, transport, space.

And what does Boris do? One unthoughtful gag about a sensitive subject creates a needless row and Unionist heads go down.

His carelessness illustrates a bigger problem – how clumsy and vulnerable the government is going into the autumn. Other than the NHS backlog, potentially the biggest challenge – the clattering train coming down the track – is the combination of inflation and increased costs related to the Net Zero push. Right now, government, or the part of it not on holiday, is consumed by preparations for the great COP26 climate bunfight in Glasgow later this year, as though that is going to solve much. All the world’s leading climate change hypocrites will fly in for a few days to emit hot air.

Meanwhile, back on planet earth, energy costs are rising. In the UK this week it was confirmed energy bills are set to rise again as global wholesale energy soar. The typical bill will rise by at least £139 per year, and there are more rises on the way soon. The chances of the public being relaxed about this are low.

The reality is that voters have been lied to by the political class, and particularly by the government. They have been given the impression that Net Zero and nice things can be delivered by other people paying. All we each have to do is ditch plastic water bottles and watch David Attenborough documentaries on TV. The day is coming when the realisation dawns that it’s not for free after all – everyone (the poor particularly) pays and energy costs are going to start soaring if this is the policy programme.

On the wider question of inflation and the cost of living, the Bank of England Monetary Policy Committee pronouncement this week was remarkably sanguine and relaxed about the risks. The QE scheme – the money-printing programme – will start unwinding next year, the MPC indicated. Rates may start rising, normalising, then.

Even the Bank this week admitted that inflation will hit 4%. In addition, petrol prices have now hit their highest level since 2013, it was confirmed this week. The average price of a litre of unleaded is now 135.13p. That’s the highest level since late Autumn 2013. Watch out ministers – fuel prices are coming back as a live issue that the tabloids and mainstream talk radio stations will zero in on within weeks.

The government is moving into deeply dangerous terrain this autumn. In an inflationary atmosphere, post-pandemic the costs will keep piling up to get to Net Zero. To steer a path through this it will take exceptionally skillful and subtle leadership from the occupant of Number 10, levelling with voters and employing resolve, empathy and dexterity.

Anyway…

Reaction podcast returns, and more video

The Reaction podcast is back! We’ve taken time out to work on developing new shows on Youtube, and you can subscribe to our YouTube channel here. With my colleague Tim Montgomerie – what a pleasure it is to have him join the Reaction team – we’ve launched a new show called Press Review, though the name may change as the show finds its feet. The aim is to highlight our pick of good, global journalism. You’ll find all our videos on the Reaction channel. But we’re making them all podcasts too. And in the new weekly “best of” edition, Francesca Peacock from Reaction introduces the highlights of our conversations.

Listen to the Reaction podcast here.

Membership wins

Thank you to those of you who responded “count me in” to last week’s call to action. We’re switching soon from subscription to a membership model. As part of this process we’ve established a small group – think of it as an elite special forces operation, a small strand of our readership – of members who will give the editorial team thoughts on what we should do more of as we grow. If you would still like to take part (perhaps you were away… perhaps even abroad) email editors@reaction.life saying “count me in”. We’re almost at capacity in our group of 50. 

What I’m reading…

I’m just finishing Simon Kuper’s Barca, his account of the development of that extraordinary club, FC Barcelona, in the news this week because of the messy departure of kingpin Lionel Messi. I’m recording an author in conversation interview with Simon next week for the Reaction YouTube channel ahead of the publication of the book on 19 August. Look out for it.

Next up on the pile of books I’m looking forward to, The Bookseller of Florence by Ross King. When this arrived I thought wrongly that Ross King, showbiz journalist of breakfast TV fame, had taken a surprise Renaissance-focussed change of direction. No, it’s a very different Ross King. He’s a respected author living near Oxford with a formidable track record of books on Brunelleschi and more. Launching into his Book Seller of Florence today. It looks promising.