Editor: Summer's Over For Everyone Except Sunak and Truss

As unfathomably-high bills arrive on the horizon, many are left feeling that nobody is coming to help. Will the political playbook be adapted?

Ollie Smith 26 August, 2022 | 12:48PM
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Liz Truss

I am very lucky to have such good colleagues. When I asked them just now what their interpretation of UK capital markets’ behaviour (it’s been a good month for the FTSE 100), I was given as snappy a summary as you'll get from anyone:

"It’s not inconceivable that Shell will pay a dividend while we’re sat in our houses freezing."

I had a rude awakening about the cold this year. As war in Ukraine exploded in February, I made a very silly mistake. For its sins, my house at the time ran off an oil tank, which ran out at precisely as prices were surging. Thankfully I had a couple of electric heaters, but Albert the cat and I were confined to two rooms only while I waited for a delivery. I’m thinking of that now as people fret about heating, eating, and their pets.

For anyone at the sharp end (by which I mean anyone not able to afford a) private healthcare b) a full tank of petrol in one go c) a new washing machine when it inevitably breaks d) food, there is every sense the country is malfunctioning. We are rudderless too.

About that…

The choice there is between Rishi Sunak, the hedge fund City slicker who wants to be loved by everyone but simultaneously comes across (to me, at least) as actually quite an angry man, and Liz Truss, the walking embodiment of the Conservative Party’s obsession with Margaret Thatcher.

Forget the promises, there is quite the sense that the weight of problems stacked against them is just a bit too much for quick resolution. And neither has managed to throw off accusations their commitments to fixing a government they were once part of are hollow. They derive all their authority from a project they necessarily imply wasn’t good enough. That’s politics for you. Should we really have to put up with that as a best-case-scenario?

This is history in all the wrong ways. Whether you call it a re-run of the 1970s (at least one economist has said our current malaise is more akin to the 1980s) or not, a new era of British existence has begun, and it’s not pretty. What hurts is it's not progress. 

I won’t be unfair. There are ideas out there. To its credit, British Gas has launched an energy support fund that’s now being fed with profits from the pricing boom still unfolding before us. But something still doesn’t feel right.

For their part, investors will hopefully stay the course and not act in a panicked fashion as they patiently await income. But for others the very word will be a painful tale of the numbers just not adding up. And that’s the thing. Nothing seems to add up anymore.

There’s that saying: when you owe the bank £1,000, that’s your problem. When you owe the bank £1,000,000, that’s the bank’s problem. So it is with energy costs and rising bills. The numbers are already unfathomable. The situation is no longer about clever budgeting.

The political playbook hasn’t caught up with that and, by all accounts, the leadership candidates are reluctant to force it to. No doubt they’re enjoying themselves, and their holiday from the collective responsibility rule adopted by political cabinets. They’re acting like Summer will go on forever, but as far as I'm concerned Summer’s over.

Ollie Smith is UK Editor

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Ollie Smith

Ollie Smith  is editor of Morningstar UK

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