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Home / In Brief / In Brief: There is no food shortage, A voluntary payment for fools, Turning point, Hancock hitjob.

In Brief: There is no food shortage, A voluntary payment for fools, Turning point, Hancock hitjob.

There is no food shortage

Media coverage in recent weeks has led to the false impression that Britain has a food shortage.  One reason for this is that much of the establishment media is vehemently opposed to Brexit, and used the absence of certain salad vegetables to play the Brexit get-out-of-jail-free card to cover over the fact that the shortage was largely due to lockdown and sanctions policies for which they were the loudest cheerleaders.

Those of us who grew up in the days before supermarkets were a thing, would not have considered the absence of cucumbers, tomatoes and peppers in February as anything unusual.  Indeed, prior to modern industrial agriculture, February and March were traditionally the “lean weeks,” when winter vegetables had run out but new season crops had yet to be harvested.  In the age of supermarkets though, wider use of air freight allowed out-of-season fruit and veg to be imported from around the world… often taking advantage of cheap labour and fewer regulations in the “global south.”  In response, European agribusinesses – particularly in the Netherlands – developed hi-tech hydroponic farming, making use of cheap North Sea natural gas – for heating (and indirectly, lighting) and less obviously for providing additional carbon dioxide to promote plant growth.  When the North Sea gas fields began to peak at the end of the twentieth century, cheap Russian gas was substituted, and hydroponic growth went from strength to strength – particularly in England’s Lea Valley, where three quarters of Britain’s salad vegetables are usually grown.

Those who resisted the temptation of blaming Brexit, wheeled out climate change.  After all, the supermarkets were blaming cold weather in Spain and extreme flooding in Morocco for the shortage.  This though, is misleading.  The reason why the UK’s supermarkets found themselves exposed to bad weather in Spain and Morocco was because they had entered into hurried contracts with these growers last autumn, after UK hydroponic producers informed them that the cost of energy and fertiliser – made from natural gas – was too high and so there would be no winter crop.

The “shortage” – aka a return to seasonal food – then, is more an early – and frankly very mild – lesson to those who would ban fossil fuels, of what life is going to be like in future.  No natural gas means no out of season vegetables, and no fertiliser means a massive drop – at least in the short term – of agricultural yields in general.

A voluntary payment for fools

A favourite right-wing talking point whenever the BBC is under fire, is the fraudulent claim that the BBC is funded by taxpayers.  Set aside the £1.53 billion which doesn’t come from the “TV licence fee” – which includes millions of pounds from the Gates Foundation – the fact is that the other £3.8 billion is entirely voluntary.

The name “TV licence fee” is misleading, because there is no reason to pay it just to own or use a TV.  Indeed, there are just two circumstances when you must pay the licence fee:

  • Watching or recording live – i.e., as it is being broadcast – TV programmes on any channel or device, and
  • Watching or downloading programmes on BBC iPlayer.

That’s it.  If you want to binge watch Netflix, or watch the catch-up programmes on ITV or More4, you don’t need a licence.  And in the event that one of the paid Capita sales representatives knocks on your door asking to see your licence or check what you are watching, there is no requirement that you let them in.  As with any other door-to-door salesperson, you can politely say “no thank you,” and close the door.

The BBC has come under fire many times for giving the impression that the TV licence is compulsory – and for using threatening behaviour in an attempt to enforce it.  And Tory critics of the BBC make political capital from pretending it is an unfair poll tax… although they never get around to repealing it.  But the TV licence is no more compulsory than participating in the National Lottery… and if you don’t like the content or disagree with the BBC’s long-held neoliberal bias, then exercise your consumer choice, and walk away.  Indeed, at a time when households are forced to choose between heating and eating, that £159 could be put to many better uses.

Turning point

How do we know when a recession starts?  The short answer is that we don’t.  We have the shorthand measure of two quarters of negative GDP growth.  But since GDP figures are backward looking, it can be months after a recession has begun before economists and central bankers agree that we were, indeed, in a recession.  Even then, there may be detractors, for example, those economists who insist that rising rates of bankruptcies and unemployment have to accompany negative GDP before an official recession can be declared.

This sounds esoteric, but it has real-world consequences.  Government tax and spending decisions, for example, will be based upon the perceived strength or weakness of the economy.  Similarly, central bankers will seek to raise or lower the price – and thus volume and velocity – of money (the interest rate) based on their assessment of the health or otherwise of the economy.  And, of course, even we little folk will make or put off purchasing decisions based, in part at least, on how we believe the wider economy is performing.

The problem is compounded by ungrounded models used by central bankers to (fail to) understand the economy, by neoliberal political fallacies about the causes of and cures for inflation, and by the biased economics promoted by the establishment media.  So it is that the talking heads speculate about “soft landings” or even no landing at all, even as global institutional investors are betting the house on a near-term economic calamity.

In October last year, I observed that:

“For the moment though, we are in economic slack water.  Backward-looking official data still looks reasonably good.  Employment is up and unemployment down.  There are still more vacancies than there are people to fill them, even if the number of vacancies is falling.  Wages are still increasing, although at a slower pace than at the beginning of the year.  Redundancies have risen slightly, but are well below the rates recorded during lockdown.  The trouble is that this picture is of the UK economy back in the summer.  They tell us nothing of what has happened since… although the recent bond sale failures suggest that the tide has turned and that we can expect a string of negative data from here on.”

At a macro level, that negative data was already appearing.  Global trade – which is a key measure for an import-dependent economy like the UK – had already declined significantly from its September 2021 high point.  However, a brief post-lockdown increase allowed some policymakers to imagine that we were on the road to recovery.  In September last year though, trade turned down again, and things worsened at the end of the year, as  The United Nations Conference on Trade and Development reported at the end of 2022:

“Global trade should hit a record $32 trillion for 2022, but a slowdown that began in the second half of the year is expected to worsen in 2023 as geopolitical tensions and tight financial conditions persist…

“Economic growth forecasts for 2023 are being revised downwards due to high energy prices, rising interest rates, sustained inflation in many economies, and negative global economic spillovers from the war in Ukraine… ongoing tightening of financial conditions is expected to further heighten pressure on highly indebted governments, amplifying vulnerabilities and negatively affecting investments and international trade flows.”

This suggests that a turning point was reached sometime around November 2022, and that this may eventually come to be known as the start of the recession when an official pronouncement is made.  Nor is macro data of this kind the only indication that “something changed” last autumn.  At a micro level, the Bank of England’s Citizens’ Panels recorded a change in consumer behaviour last autumn too:

“As the year progressed, the picture began to change. A broader range of people told us how they were feeling the effects of higher inflation and had changed their spending habits. Some were cancelling subscription services, eating out less, or delaying (or even cancelling) big spending decisions. Many switched grocery brands to value ranges or other cheaper alternatives. Almost everyone said they were trying to keep energy costs down by, for example, not turning on the central heating for as long as possible.”

The same trend was picked up in credit and debit card spending, as Kevin Peachey at the BBC reports:

“Consumers have developed money-saving shopping habits to help stave off problem debt as the cost of living has soared, according to banks.  People have cut back on non-essential spending on things like clothes and dining out, data from UK debit and credit card transactions suggested.  But those on low-incomes, already under financial stress, often face problems such as falling behind on energy bills…

“Two broad camps have emerged among consumers as prices and bills have soared over the winter, although everyone’s financial situation is different.  Banks say that millions of people had built up a savings buffer during Covid lockdowns and have kept their jobs, which had helped to accommodate the rising cost of living. They have also cut back on various elements of spending to help their situation.  The second group do not have that luxury and, although they may be working, could have already been in financial difficulty.”

When this behaviour change emerged – particularly because it appears to be a worldwide trend which is also reflected in trade figures and, indeed, in shipping costs which have fallen 23% from their lockdown highs – central banks ought to have paused their rate rises.  Not least because the monetary inflation – too much currency – which they think they are fighting, does not exist – no amount of rate rises is going to make global energy and food shortages go away.  Central bankers though, will argue that the change in consumer behaviour is exactly what they intended to generate since, by crushing demand, prices will be forced down.

The very real danger here is that, by the time the central bankers realise that the economy is in freefall, it will also be out of control.  Rather than a soft landing in which the central banks get to gradually lower the interest rate in order to stimulate a new round of growth, we may well see a global deflation which results in so big a U-turn that negative interest rates will have to be attempted.

Hancock hitjob

One of the hardest things to do in politics is to look beyond someone you fundamentally disagree with in order to understand the forces arrayed against them.  I raised this last year, when half of the UK electorate was celebrating the downfall of Dagenham Liz.  There was nothing credible about the microwaved Margaret Thatcher tribute act that Truss and Kwarteng attempted to implement.  And so, the temptation to believe “my enemy’s enemy is my friend,” proved irresistible to most.  But the result was that we went from a barely legitimate administration to an entirely illegitimate one – further empowering the permanent technocracy in the process.

Something similar is happening in the fall and fall saga of former Health Secretary Matt Hancock.  As the leaked WhatsApp messages reveal, Hancock turns out to be precisely the over-promoted and corrupt shitweasel that we thought he was, back when he was put in charge of the response to the pandemic.  This, perhaps, is what should be sounding alarm bells just now.  Because we already knew in broad outline what is now being poured over in fine detail.  Within a few days of the pandemic beginning, it became clear that Hancock was living proof of the Peter Principle.  When reports emerged that Hancock was handing out PPE contracts to his mates, and that he owned shares in the company he contracted to carry out covid testing, we added corruption to incompetence.  But the obvious question was why he remained as Health Secretary until June 2021? – a position would probably have continued to hold through to the end of the pandemic had he not been caught engaging in office-based horizontal jogging when he should have been social distancing.

Well, now we know the answer to that question.  Hancock was being set up – without much effort being needed – as the fall guy in what is known colloquially as “a limited hangout.”  Meanwhile, a whole lot of bad news is being buried.  And in the end, the things they are hiding will prove far more important than the morsels they are allowing us to salivate over.  And while our anger at the revelations of what Hancock did during the pandemic is justified, it is in our better interests to look, as it were, not at the hand the magician is holding up, but at the other hand which is busily picking our pockets.

As you made it to the end…

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