Brave New World Redux

“Don’t stop thinking about tomorrow Don’t stop, it’ll soon be here” (1)

Before the Burnham takeover, there was an acceptance within government that certain problems were too big to solve. Now, things appear different, as his plans to deal with the unacceptable problem of people sleeping rough shows: “This is something a government can fix if it chooses to, and today, on day one, I’m choosing to.”

What also needs to change is our attitude to spending; investments that create change, can, in the future, save money.

Analysis for the charity “Crisis” in 2018, estimated that permanently ending homelessness would cost £9.9bn over 10 years. But, it would save £26.4bn by reducing pressures on the NHS, criminal justice system and benefits. Source: https://www.crisis.org.uk/about-us/crisis-blog/why-are-we-spending-billions-on-sustaining-homelessness-when-we-have-the-tools-to-end-it-altogether

A large part of this orthodoxy is centred around, “How will he pay for that?” Within hours of Burnham announcing on Monday that he will take on social care, Reform and the Tories had said they would oppose any plans that involved a tax rise.

This acceptance that something are too big to change possibly explains why 60% of the respondents to a recent Ipsos survey have no confidence that any of the major national political parties have a plan for changing Britain.

They are, however, impatient for progress: 83% of British adults want significant reform to tackle cost of living pressures, with 51% saying that radical change is necessary. Source: https://www.ipsos.com/en-uk/six-ten-britons-not-confident-any-major-political-party-has-good-plan-changing-britain

The problem of funding initiatives is very real, and something I considered as far back as 2023 in “Priorities Deal Boy, Priorities”. There is also the logical problem that additional spending is likely to require tax increase as departmental budgets have squeezed to death since the first bout of austerity in 2010, something we considered in “No One Wants to Pay”

A potential solution was suggested in “The real question is, who governs”?, highlighting the fact that the CBI wanted the chancellor to persuade pension funds to invest more in British businesses, which was something our previous chancellor, Ravel Reeves, was also pushing for.

‘investments that create change, can, in the future, save money’

Helping this, is the ongoing amalgamation of UK local authority pension funds, which has reduced the number from C.100 to six, giving the clout of a quasi “sovereign wealth funds”. This is not dissimilar to the “Maple 8” Canadian pension funds and Australian “Supers” who have become major providers of private capital for infrastructure funding.

The largest of the six, “Border to Coast”, represents the employees of 18 local government pension schemes from Cumbria across the North to the Tyne, and down the East Coast to Sussex.

The CEO, Racheal Ewell, has £120bn to invest, and is targeting local and global infrastructure projects.

This support comes at a time when the UK stock market looks increasingly irrelevant.

Ten years ago, UK pension funds held 50% of UK listed stocks, today it less than 4%.

In addition, over the last 20-years, the size of the UK listed sector has fallen from 3,000 to 1,500 listed firms, and the share of UK stocks within the global equity market has fallen from 10% to 3%.

‘Ten years ago, UK pension funds held 50% of UK listed stocks, today it less than 4%’

Increasing numbers of firms are falling to private equity and overseas predators, E.G., Segro, the warehouse landlord, sold to a bigger US rival for £14bn. The broker Peel Hunt calculated 154 bids for UK companies with a market value of more than £100m, equating to £165bn of stock market capitalisation, since the start of 2023.

One area that Burnham should be championing is our green economy, and it should be an easy sell. This should be prioritised over defense. Primarily, because I don’t see who we will be fighting.

Also, if the US arms expenditure in Iran shows how they are fighting yesterday’s war. There is a new world in which the Ukrainians are showing the way with considerable success using advanced machines, which are cheap compared with the expensive hardware we are likely trying to budget for.

‘One area that Burnham should be championing is our green economy, and it should be an easy sell’

The wars in Ukraine and Iran have highlighted our need for energy independence and renewables, as prices exacerbate the cost-of-living.

There is also the planet and global warming. If people can’t understand the problem now, its likely they never will.

France and Spain are ablaze, with hundreds of thousands of people being evacuated as fires threaten both Bordeaux and Madrid. In North America, there has been thousands of wildfires in Canada. At one point this let to Toronto suffering the worst air quality on the planet and reached across to Americas’ eastern seaboard.

The heat dome in Europe has caused over 10,000 excess deaths during in the late-June heatwave alone. Specific mortality monitoring and research groups estimating that total figures across the worst-hit countries reached at least 14,000. Source: https://www.reuters.com/business/environment/europe-recorded-10000-excess-deaths-during-late-june-heatwave-data-show-2026-07-12/

In 2012 a UN report from their climate project, forecast growing incidents of extreme weather, extreme heatwaves, storms, flooding, and by implication, at least, wildfires.

Whilst the report was remarkable accurate , it has fallen foul powerful vested interests especially fossil fuel firms who have enormous influence with the current US administration.

In the UK, David Whitehouse, the chief executive of industry body Offshore Energies UK (OEUK) said there is an “overwhelming” case for the controversial Jackdaw and Rosebank oil and gas projects to go ahead.

‘If people can’t understand the problem now, its likely they never will’

He described this as “powerful reset for the sector that shows that the Burnham Government is supporting British industry”.

Whitehouse is no more than a lobbyist, doing his best to represent his clients. Given this, the truth sometimes gets skewed. As I highlighted in “Missed Opportunities”, these projects are outdated, costly, and offer little in the way of employment when compared to the green economy.

As for hard pressed consumers, the gas and oil is sold on the international markets at the prevailing price, meaning they gain nothing. Unlike the shareholder….nice try, Dave!

Of course, he will also tell us that heat dome we are experiencing has nothing to do with his clients.

‘Trump’s foolishness continues to make life more difficult for everyone’

Finally, there is the issue of Trump and his latest tariffs of between 10% and 12.5% on dozens of countries, including the UK, Mexico, Canada, Australia, India, China and the 27 EU member states. These replace the blanket 10% tariff that Trump imposed in February after the supreme court declared many of his earlier tariffs were illegal.

These new levies fall under section 301 of the Trade Act of 1974, which is aimed against countries that engage in forced labor. Trump had said his administration would investigate unfair trading practices to impose permanent tariffs as soon as the February supreme court decision was announced.

A Harris Poll survey, conducted exclusively for the Guardian, showed that 70% of Americans said they paid higher prices because of Trump’s tariffs, and 72% of voters believe the tariffs have had a negative rather than a positive impact on consumers.

Even Republican voters agreed, with 64% saying that tariffs had led to higher prices, and 60% said tariffs had had a negative impact.

As a result, these latest tariffs and surging energy prices will cause more inflationary pressure, is likely to increase, meaning interest rate increases adding further to the woes of families and businesses.

Trump’s foolishness continues to make life more difficult for everyone.

“Move on up and keep on wishing Remember your dream is your only scheme so keep on pushing”

Notes:

1. “Don’t Stop” by Fleetwood Mac

2. “Move On Up” by Curtis Mayfield

@coldwarsteve

Philip Gilbert is a city-based corporate financier, and former investment banker.

Philip is a great believer in meritocracy, and in the belief that if you want something enough you can make it happen. These beliefs were formed in his formative years, of the late 1970s and 80s

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