If, through your own actions you were primarily responsible for the virtual bankruptcy of the U.K., how delighted would you be if most people blamed someone else? That’s the position we’re in. The Government may indeed be a ‘kakistocracy’ – government run by the worst, least qualified, or most unscrupulous citizens – but they’re a crafty lot with a particular knack for deflecting blame.
According to a recent YouGov poll, three times more Britons blame the war in Ukraine rather than other factors for the cost of living crisis.
You don’t have to look very far in the media to find stories that lay the blame for the cost-of-living crisis on the rise in energy prices and that, in turn, on Russia’s invasion of Ukraine. But is this true?
Russia invaded Ukraine on February 24th 2022. It came as a surprise and largely caught the world off-guard.
The ‘energy price cap’, a policy stolen from the Labour Party by the Tories after they’d soundly derided it, was first established in January 2019. It wasn’t needed. It represented another encroachment of the supposedly ‘free market’ Tories into a free market. If people were too uninterested to shop around for lower gas and electricity prices, what business was it of the Government? It wasn’t as if lower priced deals were hidden from view – they were widely advertised and switching was easy.
The decision as to the level of the ‘energy price cap’ that would prevail from April 1st 2022 was announced on February 3rd 2022, three weeks prior to the invasion. Consequently, the 54% increase in the energy price cap that came into effect on April 1st 2022, increasing the average household energy bill to £1,971 per year from £1,277, was not directly influenced by the invasion at all.
It wasn’t until the October 1st when the ‘energy price guarantee’ became effective that any direct consequences of the Ukrainian invasion filtered through to residential energy prices. The increase, effective from October 1st, amounted to 6.5%. That’s right, with the headline inflation rate currently at over 10%, the consequences of the invasion has actually been to slightly moderate inflation.
In the absence of the £400 rebate, payable to all households, the average increase would have been 27%, but once the £400 is taken into account the increase reduces to 6.5%.
Of course, there were some secondary consequences affecting the cost of living from the invasion of Ukraine. Commercial gas prices went up and some commodities increased in price, which have contributed to inflationary pressures. But of course the principal driver of inflation has been the orgy of money printing that Rishi Sunak oversaw as Chancellor during the disastrous Covid overreaction.
Gas prices have now fallen back to a position around 25% higher than when the invasion occurred.
Petrol prices are about 10% higher now than they were at the time of the invasion.
Clearly, Russia’s invasion of Ukraine has helped to push up some prices but the impact on the cost of living has, in aggregate, been below the headline rate of inflation.
Let’s just look at what happened to the U.K. inflation rate around the time of Russia’s invasion of Ukraine.
I’ve lifted the chart from the Spectator. It perfectly illustrates that from mid-2021, when the Covid restrictions were finally lifted, inflation had already taken off as people rushed out to spend all the cash the Government had printed paying people to sit at home not working. There wasn’t a flicker in the trajectory of the upwards rise in inflation. Russia wasn’t to blame, Brexit wasn’t to blame, Liz Truss and Kwasi Kwarteng’s budget wasn’t to blame; the primary responsibility lies with Boris Johnson and Rishi Sunak.
In the same way that we can’t lay the blame for our 10%-plus inflation rate at the door of Putin, neither can we blame the WHO, the IMF, the World Bank or even the EU. No, we have to look closer to home – our very own ‘kakistocratic’ Government and the vast majority of our own population who went along with it and whose only complaint was that there weren’t more and harsher restrictions sooner and longer.
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“I was only following orders “said the Fat pig dictator and his simpering sidekick Fishy.
Its what the brown envelopes are all about .
It is largely due to the oil and gas shortages that started to increase energy prices towards the end of ‘21. These were the result of increased demand in the recovery from the pandemic together with reduced supply due to the closure and mothballing of existing sources, together with the suppression of new sources, due to the global ESG agenda.
A wise analysis. The +6.5% rise for gas and electric combined is more or less what my annual payment increase is, so far. I think you’ve identified the culprits, but it’s not just the existence of pots of cash to be spent. The whole affair caused a lot of disruption in all kinds of trade – e.g. the collapse of the “just in time” technique used in manufacture these days. Also, many of us have taken the view that it’s wiser to stock up on things for the same reason.
So the true reason, which the media and politicians chose not to discuss, was not even mentioned by those surveyed. The increase in the quantity of money in the economy is behind it as it always is.
There are several explanations why no one in the political class would discuss this:
1 ignorance
2 willful ignorance
3 poor economics training and they just do not understand and cannot be bothered to look into it, get a briefing or think
4 it would be too embarassing so they want to pretend
5 they welcome it because it dilutes HMT debt values so they can keep spending other peoples’ money without consent and they don’t care about who it hurts
6 they welcome the damage it does to savers because that means only the inflation proof salaries and pensions of the state sector will prosper and the private sector will be progressively damaged
7 they are evil.
Take your pick. I can see no other explanation.
Ok yes, but was it an ‘overreaction’ ? I think you’d need to be pretty naïve to think so. The author is right to highlight the immense cost of paying everyone not to work, but unless we’re talking about why governments chose to do this, this seems to me to be quite superficial analysis.
Agenda 2030 and the push to one world government requires the collapse of our financial system AND with it the impoverishment of the population. In order to achieve this the gov have decided to steal our money.
There will be no solving of financial black holes by Fishy and Chunt, only more national indebtedness. When the country is sufficiently broke we will be auctioned off to the highest bidder / IMF which will ensure national enslavement. That is for those still alive after the kill shots have done what they were built for.
Ukraine didn’t cause the problem, it was the West’s sanctions that caused it, and blowing up the pipeline made sure that the situation couldn’t improve.
Also banning fracking so that we could import expensive American fracked gas instead.
I recently switched my energy supplier involuntarily: The former supplier sold the contract (and hence, sort-of sold me) to a different supplier. My rent contract prohibits me from changing suppliers myself. That’s a rather feudal idea of a free market: Serfs must not leave the land which is only valuable because of the work they have to put into it. But the overlords may sell ‘their’ land freely together with all the serfs attached to it.
That’s the trouble with YouGov polls, they’re heavily skewed to come up with an ‘acceptable’ answer within a limited range. So, it’s always going to be someone else’s fault. Nothing to do with our own corrupt, inept government and its sleazy inhabitants. It’s all nonsense.
Lockdowns destroyed the economy – how sad people have such short memories.
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Anyone with a few functioning brain cells and who isn’t trying to cover their own back (or excuse their own gullibility) knows that it was the lockdowns and massive money printing which effed up the economy.
And that is down to Johnson, Sunak, Gove and Handcock who signed off the lockdowns …. and the rest of the Cabinet and Parliamentary CON Party who did nothing whatsoever to stop them.
I’m glad someone has done the work to present a sound logical argument for what I have believed intuitively for some time. I like the word ‘kakistocracy’. I have long since thought that the quality of our politicians is rock-bottom. Diane Abbot, for heaven’s sake. And don’t get me started on Sturgeon. We have only ourselves to blame. We vote for the clowns.
We haven’t yet seen the effect of Sunak’s increase in Corporation tax and the pending rises in other taxes. Companies operating on low margins will go bust as a result of this and many will leave the UK to find more favourable tax regimes elsewhere. Our corporation tax at 25% is twice that in the Irish Republic at 12.5%, so why would any company invest in the UK? Sunak is a hedge fund skiv and entirely the wrong person to be our prime minister. He now has given another £13 billion of taxpayers money away in reparations for us to lead the improved civilisation following our industrial revolution – why? How much has China, India and the other main polluting countries given away? I think we all know the answer to that. Sunak has been forced upon us undemocratically by an undemocratic Tory party and the globalist powers who are now running our country. He can do a lot of damage in two years, but I hope we all wake up and kick him out as soon as we can.
Kakistocracy is the best description of the government of both the USA and UK.
Indeed, the lockdowns caused the supply-side problems that kept on mounting over time, and the government thought they could just paper over those totally foreseeable problems with…demand-side stimulus. Yes, really. It doesn’t take a rocket scientist to see why that is really not the wisest idea. And they kept doubling down well past the point where it was very obviously dumb and futile to continue doing so.
Kakistocracy is correct, with a side of idiocracy thrown in for good measure!