The Long and Winding Road

This track needs no introduction as one of the Beatles classics.?It was written in 1970 by Paul McCartney on his farm and was inspired by the growing tension amongst the Beatles. Wind forward 42 years and there are tensions of a different nature globally but notably domestically.

?I have learnt over recent years not to be backward in coming forward with an opinion and given current events, both economic and political, now is probably the time to deliver a few home truths.?However, before I set off on my quest, which may not be well received by everyone, ?it is quite clear that we have been governed from all quarters over the last decade by dignitaries who have been economical with the truth and they are very good at doing the talk but they are much less capable of achieving the walk.?It's a polite way of saying that the populous has been over-promised and with poor levels of communication and, arguably, false promises.

?The UK electorate was clearly seduced in 2019 by the fantasy and recitals from our elected leaders who have been keen to tell us what they would like to us to hear but they have been less clear about telling us what is really happening and what we really need to know.?So when they fail to deliver their policies and come under attack they simply look for excuses that were not of their making.?When you are in control of the purse strings, it is crucial that the policies are realistic and you don't promise the earth.?Unfortunately they have been good at spinning Hans Christian Anderson Style Fairy Tales but they have been very uncomfortable at dealing with humility when they have been found out; all they can do is apply further spin to save face in the short term to try and avoid any backlash.?

?However, it looks like we have come to the end of that Long and Winding Road because our Governors have now reached a cross-roads where we need to have some accountability, explanation and re-assurance that all is no longer rosy in the economic garden and that it hasn't been for some time.?The electorate is not dumb and I think you will agree with me that some of our Governors defensive comments over recent weeks and months are a tad offensive to their paymasters but, just like General Custer, they are now on their last line of defence.?The worm has definitely turned, especially in Downing Street, and the forthcoming debate over who will be our new Prime Minister will probably highlight the problems to which I have?already alluded.?Be under no illusion, the US and Europe are also in the same rocky state which is hardly good news but when the going gets tough the focus will always be on the domestically sensitive issues.?The Media would not have it any other way.

?Our deposed Prime Minister has been tremendous at talking the talk with Levelling Up, BREXIT and its transparent benefits for the NHS, thus persuading the electorate to give him the biggest mandate since Margaret Thatcher and Tory Blair, but that was December 2019.?One could say that the Pandemic and Ukraine have driven a coach and horses through economic policy ?but the stark facts are that he hasn't been able to properly deliver on any of his key policies.?However, rather than tell the electorate some of his policies simply had to be parked and put on the back burner, he preferred to engage in a full scale row with his Chancellor, the prime catalyst that has finally driven him from office. ?The bottom line is that finances in this country are in a parlous state so Pied Piper Boris, the electorate pleaser, could not continue with his open cheque book mentality to fund the war with Putin and to encourage the Chancellor to reverse his quasi austere Budget.?On the contrary, this time around, he who plays the piper doesn't call the tune.

?Leaders need to deliver bad news as well as good news but it was left with Rishi Sunak to take the rap.?If only the Cabinet ?collectively had half the understanding of economics and economic policy as the Chancellor, but sadly I?am convinced that some of Boris Johnson's inner circle have a poor command of economics and sound finances because, like Johnson, they have been elected and cloned to broker good news; but this is what you would expect when you surround yourself with a bunch of yes-men and yes-women.?Rishi Sunak appears to be the lone voice for common sense policies in the Cabinet.

?The bottom line is that we have left the European Union but this does not mean that BREXIT?is complete and has been a success.?On the contrary, there is still the small issue of a negotiated Northern Ireland trade deal to resolve, an unlikely achievement without legal consequences from our EU neighbours.?Green policies have been turned on their head by war in the Ukraine rendering the Glasgow Summit a superfluous exercise in the short term.?At least we still have nuclear facilities, unlike Germany who closed its nuclear plants and invested in an expensive gas pipeline with Russia courtesy of Angela Merkel; but we should never have abandoned a key carbon storage project and mothballed a lucrative coal project in Cumbria producing high quality coking coal.?Green policies are not always a good idea. I am not aware that our NHS is yet on a sound financial footing and delivering the promised service to our populous post BREXIT.?Meantime the alleged misappropriation of funds that were paid out in contracts to deliver PPE and running into billions of pounds is still unresolved and is unlikely to be resolved this parliament. ?HS2 was going to be the panacea to Levelling Up - but I doubt it will - and the spiralling costs of this project are conveniently not hitting the?headlines.?If it were 'On Budget' we would probably have been told.?Cross Rail?has brought a significant benefit to Londoners but was finally ￡4bn over budget.?My message to our Governor's is just don't take the electorate for mugs.

?I have been careful to refer to our Governors rather than Government because my last comment is reserved for the Governor of the Bank of England and not the Prime Minister.?Andrew Bailey probably thinks he is doing a good job but many would disagree and it's an open secret that he is someone else who could also do with improving his communication skills.?Since December last year short rates have risen 100 basis points to ?a staggering 1.25% - I am of course joking - which he may consider to be a significant tightening of monetary policy- even though RPI is currently running above 11%??-?but his efforts to tighten year-to-date have been unwound by sterling weakness against the US Dollar, which is also inflationary.?So it's back to the starting line for the Governor and all he can say ?is don't ask for a big pay rise because that will make inflation worse.?At least he has abandoned his transient stance on inflation but all?he can now tell us is that inflation is going to get a lot worse before it peaks. Thanks Governor for these profound words, you have failed in spades and perhaps his destiny will follow Boris Johnson.?As I said in a previous article the best solution towards controlling inflation is an economic recession but I appreciate that turkeys don't vote for Christmas so unless there is a desire to do a deal with Putin which would get fossil fuel prices lower, we probably don't need the luxury of an ineffective Monetary Policy Committee who seem like Coleridge's Ancient Mariner.?Inflation, Inflation everywhere and all wage packets did shrink, Inflation, Inflation everywhere and not a drop to drink.

?I am sure life will get a lot easier once we are through the latest phase of events but it would be brave to put a time-table on when this is likely to be.?Meantime the engine room of the economy that provides the Government with the much needed productivity and profitability to support tax cuts will continue to splutter and malfunction.?However this probably won't stop the less productive Public Sector employees, many on unfunded gilt-edged defined benefit pension packages that are linked to RPI, from demanding more from a shrinking cake.?Perhaps our own MP's and Andrew Bailey who come in this category should look to reforming their own defined benefit packages which, in reality, are another economic time bomb waiting to explode.

In summary we all need to have a better?understanding of how the global economy and our own economy functions but we should also expect our Governors to lead by example and using the appropriate communication channels and just tell us what we need to know.?There will be many who are looking down a Long and Winding Road hoping that it will lead them to their door.?The problem is that nobody can tell them how long that long and winding this road is and before they find their door, ?I doubt they are going to get a lot of help from our Governors.

Rishi Sunak is the obvious choice for PM.?In the words of Paul McCartney - Show Him To Their Door.?The populous always wants tax cuts but the current budget where he is a lone voice, should not be meddled with.?He probably faces a barrage of abuse for being a traitor, from Boris Johnson loyalists but I see that as a positive and he probably has the best command of the nation's finances.?Most of the other candidates seem to want to reverse his fiscal tightening which, in my opinion, would be a huge mistake.??There are of course other ways of implementing tax cuts?- one is to slash Public Spending?- shock horror.?The message I am trying to get across is yet again one of realism over false promises from the other candidates.?The only other viable candidate for PM, in my opinion, was Ben Wallace but he has now withdrawn his name.?Jeremy Hunt is still pro EU .?The lively outsider is Penny Mordaunt.?As regards the remainder in the best words of Francis Urquhart, I couldn't possibly comment.?

Until there is clear water between Labour and Conservative Policies perhaps the next General Election may be the one to swerve but that thought could take us down another Long and Winding Road.