The Tories Declare Class War 145

The “cap” on bankers bonuses that the Tories have just removed had been set at double their annual salary. Yes, double their annual salary. So a banker on £320,000 a year could only get an annual bonus of £640,000. That has now been lifted so they will be able to get annual bonuses of millions again.

On each million of which they will also benefit from a new £55,000 tax cut.

The greatest irony of this is that the first multimillion pound bankers’ bonuses will be going this Christmas to bankers who shorted the pound before Kwasi Kwarteng’s “mini-budget”.

The cap on bankers’ bonuses was largely a sop to the public who had bailed out the bankers with public money borrowed – with trillions in interest – from the very bankers we were bailing out. In effect Gordon Brown created sterling and gave it free to the bankers who caused the collapse, so they could lend it to the public purse and we could pay it back over two decades of public austerity.

The idea of the cap on bankers’ bonuses was to remove the perverse incentive whereby a banker got a bonus of ten years salary by creating “assets” of bad loans, with no care whether those loans collapsed or not two years later, as he already had his ten years’ bonus. The Tories have just brought back that perverse incentive.

Krug all round in the City!! It’s a bonanza for lap dance club owners and cocaine dealers. It’s a disaster for us.

This perverse incentive will be needed to keep any money flowing into UK mortgages. With the Bank rate sure to exceed 5% in the next few months and inflation continuing, mortgage rates will be in double digits by this time next year, and we are only a couple of years away from mass default and repossession.

The wealthy will of course be able to use some of their tax cut money to take advantage of the stamp duty cut and snap up the repossessed properties as buy to let. That is what the Tories call growing the economy.

Over 50% of the money from the tax cuts will benefit the top 5% of earners. If wealth inequality were the primary driver of economic growth – and that is the basis of Kwarteng’s economic theory – then how do you explain that the UK already has the second highest wealth inequality in the G7, behind only the USA, yet the lowest economic growth? Wealth inequality has been increasing in the UK for decades. Kwarteng’s contention that excessive redistribution is the UK’s economic problem, is risible.

The Tories have declared class war by simply giving more money to rich people. This is based on two contentions:

1) Rich people will invest their money as capital in productive UK enterprises
2) Rich people will boost the economy by buying goods and services in the UK

The problem is, the days of the manufacturing entrepreneur in the UK are long gone. Rich people invest their money in the overheated housing market, or invest it overseas. Given Kwarteng’s borrowing spectacular is crashing the pound, the chances of any significant proportion of the money he has just given the wealthy being invested in UK assets is virtually nil.

The second proposition is manifestly untrue. Poor people have a far higher propensity to spend any extra money locally than rich people. They seldom have much choice. If you want to boost the UK economy, give money to the poor.

We should not forget that not only do we have this huge tax giveaway to the rich, we have the decision to tackle the energy crisis by yet more taxpayer borrowing, so the war profiteering of the energy companies will be paid for by ordinary people through yet more years of austerity and cuts to public services.

The notion of borrowing to boost public spending and demand during a recession is time-honoured. But borrowing to subsidise the super-profits of energy companies and to fund tax cuts for the rich is simply class warfare, an undisguised transfer of wealth from the poor to the rich. I have used the word “poor” throughout this article – as we become a helot society, that term encompasses much of the working population.

There will be a part two of this class warfare – the attack on workers’ rights, on the right to strike, on paid holiday, on maximum working hours, on the minimum wage, on sick pay and many more.

A couple of weeks ago I explained that I believed we were approaching a crisis of capitalism. I must confess it did not occur to me that it would be the Tories who start the class war.

I want to finish with one hopeful thought. The Tory media have of course been delighted with this extreme right wing agenda. The Daily Mail, as you might imagine, was crowing like crazy.

But there is a limit to how far you can fleece even Tory voters without their noticing. There was a fundamental adverse reaction from the Daily Mail’s online readers. These were the “best-rated” comments.

And these were the “worst-rated” comments

Even the Mail’s readers gave the worst rating by far to a comment that said “at last, a proper Tory government”, and uprated the negative comments by a ration of ten to one. The Tories have lost their own room. Once you are significantly too right wing for Mail readers, you are way out there. These comments also put the BBC’s carefully selected, Tory supporting “vox-pops” into stark contrast.

It is a great tragedy that just as the Tory party commits electoral suicide, the Labour Party reaches a climax of support for neo-liberalism and private sector, for profit provision of public services. There is simply no functioning democracy in the UK that offers voters any genuine choice of political direction. I remain convinced the only solution is to destroy the UK as a political unit.


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145 thoughts on “The Tories Declare Class War

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    • Laguerre

      This is going to be be a big one, I think. The Americans have failed properly to cover their traces. Their claims of Russian responsibility are really not believable. They would have done better to give this one a miss, as it was obviously planned to damage Germany, not Russia. I should think most German politicians have figured out what was going on and they are not going to be happy.

      • Tatyana

        Interesting that the gas pipeline going across Ukraine never stopped, not a single day. There’s even a case in the court underway, between Ukrainian Naftogazz and Russian Gazzprom, on money. Rich people gonna decide who owes what to whom. But the pipeline is OK.
        No less interesting that Poland has just opened their Baltik Pipe going from Avedøre to Ploty, the pipeline crosses the NordStream on the halfway from Greifswald to Bornholm island. If I were Poles, I’d suggest connecting their pipeline with the what stays of NordStream, as soon as some repair must be done now.

      • Stevie Boy

        Whoever did it (IMO the USA, or UK) is declaring that they really don’t care if people know or not – since it can only be sabotage. So, the implication is that Russia is being taunted and dared to do something about it – someone really wants a hot war.
        The fact that Truss has gone missing is entirely coincidental.

        • Geoffrey

          Let us hope the UK is not involved in this. Though with Truss I fear we may be involved. Maybe she will start boasting soon.
          This act presumably puts all LNG carriers at risk, if one of those is blown up……
          Truss are you involved ?

          • Tatyana

            I currently have no access to Twitter, so I’m just sharing the link
            Back in January there was news about London inviting Ukraine and Poland to form a trilateral union. Ms. Truss made a speech on that at Lowy Institute, Australia.
            She also said something on supporting their Baltic friends across the Black sea, or, sort of, I recall. That was some silly statement showing poor knowlege of Geography.

            Honestly, I expect the Crimean Bridge will be blown up too. Pretty soon. This bridge, Ukraine and Poland make a big deal of its existence, like it’s a symbol.
            There is also some scary news on the US embassy urging their citizens to leave Russia while it is still possible. The same warnings from Bulgaria and Poland. And, a Russian pharma company announcing tender for potassium iodide supply.

          • Laguerre

            They’ve been threatening for ever to blow the Crimean bridge. But they haven’t done it. I wonder why. Perhaps because they see it as not so important.

          • Bramble

            Given that Johnson helped spike the negotiations back in March, I think the UK government has been complicit all along. Truss is fully signed up and so acceptable to the forces driving this conflict.

        • Tatyana

          Stevie Boy
          it is civilian infrastructure, so it must be called terrorism, not sabotage. I understand why Blinken denies involvement. Strange that Sikorsky was so quick to thank the US, if you want an example of sabotage – the gratitude expresssed by a high official on a supposedly covert terrorist attack – is that.

    • Fred Dagg

      The only possible “logic” behind Putin giving the word to destroy the pipelines would be that he feels his political power is seriously threatened and doesn’t want any successor to “wimp out” and start supplying gas to Europe again. Likelihood? 1%.

      Otherwise, it’s a major Western infrastructure attack. Looking forward to the Russians replying in kind by severing deep-sea telecommunications cables in the Atlantic and Pacific.

  • Laguerre

    I had to listen to a speech on Saturday by the warden of Merton College, Oxford, where Truss studied. I had expected her to be over the moon about the first prime minister that college has ever had, but no, it was very cool, and she was mainly mentioned in relation to achievements of women there. To me that was a definite thumbs down, and the audience, which included one former minister of Johnson’s, seemed to agree. And we’re not even out of the honeymoon period yet.

  • Pigeon English

    I am the last person to defend Conservatives but reactions of the “markets” is overboard. Tax cuts to 1% by 5% points allegedly costing “unfunded” 45 billions but no reactions to 145 Billions for so called energy crises (after NS 1 & 2 out of function real energy crises) and most of the money going to multinationals. After discussing money creation, MMT, and other opinions, the whole Financial system is a sham based on demagogy and arbitrary rules never empirically tested but followed as gospel.
    Joke! Of course it was Russia. They invested about 8 Billion in NS 2 and decided to blow it. I am not having it nor should you.
    We don’t want Russian gas so Why is it a problem? Someone blew up non-functioning gaslines. There are some in Poland and Ukraine, but Russians will have to pay for transit instead saving billions a year.

    • Tatyana

      Why blow it up when we can just not open the tap, but save the pipeline itself in case it is still needed in the future?
      Looks like very important people earn on transit via Ukraine and Poland, perhaps Hunter Biden, my guess.

          • Pigeon English

            Allegedly total of LNG capacity is 40% of EU need. Even if we can get through this winter with all reserves which are nearly full from 30 40 50 % this spring next spring we will to have fill up from 0

          • mark cutts

            It sounds a bit like The Russians bombing themselves at the Nuclear Power Plant to me.

            The BBC and the media in general are uncritical and unquestioning – similar to the Skripals.

            Truss was under the impression that she would get an easyish ride via the BBC but even the presenters don’t like being taken the piss out of either.

            The thing is – is that Covid ushered in a version of a Southern Recession and the energy crisis is being followed by a credit/interest rate crisis within the Tories ‘ safe seats’ and their MPs are terrified about what will happen to them.

            Many BBC presenters may have relative to salary size mortgages and instead of patronising poor people on sofas on a daily basis they are now considering their own personal fincial positions.

            Hence the change in tone.

            This neo -neo liberal nonsense can’t stand and the blessed Markets will get their way.

            Truss is about to find out what happens when Ayn Rand ‘ Disruptor ‘ theory meets with harsh material reality.

            I note that Starmer ruled out working with the SNP in a future elction.

            He will do what is called a ‘ Reverse Ferret ‘ on that stupid decision otherwise he is a bigger fool than I thought he was originally.

            We shall see as always.

      • Republicofscotland

        “Why blow it up when we can just not open the tap, but save the pipeline itself in case it is still needed in the future?”


        According to Helmer, the Polish relished in blowing up the pipelines because it would also badly weaken the German economy, apparently old grudges die-hard.

        Poland and Denmark are looking to receive gas from Norway, it supposedly has a pipeline in the Baltic Sea. Though it doesn’t have the same size capacity of the Russian pipelines.

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