Monthly Archives: March 2021

The Divided House of Windsor

It does not matter which side you are on or what is your interpretation of events  either side of the Atlantic. Somehow the House of Windsor has allowed its internal divisions, rows, jealousies and archaic protocols  to erupt into a world class brawl. It has divided opinion all across the world. More especially it has divided opinion within the United Kingdom, which is the opposite of its core mission.

It was Abraham Lincoln who famously declared that a house divided against itself cannot stand. He was of course talking about the USA in the 1850s.  But it is true of most houses and very true of Royal Houses. This is an existential moment for the Windsor dynasty. If it does not in short order get a grip, it will fall. Not now or next week and not while the Queen is alive.

Remember we have had the Saxons, Normans, Plantagenets, Tudors, Stuarts, Hanovers and what became the House of Windsor. The monarchy could certainly survive another transition to a new beginning. Maybe the House of Spencer, in memory of Diana.  William and Kate as the first King and Queen. British, stripped of excess and hangers on, with a clear Constitutional platform as Head of State, with responsibilities, powers and limitations. The rest could scatter to the four winds, like the multitude of other European royals whose time was called.

And Charles? It will be on his head that responsibility for the mess will be poured when his mother is gone. Which is unsurprising, as much, though not all of it, is of his own making. Nobody envies him. For  over seven decades he has been in waiting for the crown which now looks, more than ever, ready to pass him by. All is not lost quite yet, but very nearly.

History in the making for sure. But what sort of history depends on the qualities and perceptions of those making it.

Destructive Rows: The SNP and the Crown

There is a lot happening at the moment. Across the world there are conflicts, famine and suffering. Many countries are either run by despots or militias. Two rivals, China and America, vie to become the world’s first Mega Power, with China looking likely to surpass America. There is a global pandemic disrupting normal life everywhere and climate change remains the greatest threat of all. After centuries of infighting the part of modern civilisation known as the West, has been pretty stable and life, pre-Covid, processed with relatively little drama, through nearly eight decades.

But nothing is certain in our funny old world and this weekend we see in our UK how the silliest things can change the course of events, almost without rhyme or reason. There are two titanic rows now taking place, which are destroying the participants and the dreams they promote.

The first is between Sturgeon and Salmond and their respective camps within the Scottish National party. Both, in their own way, gave bravura performances in a tedious theatrical investigation into who knew what when about Alex Salmond’s sexual advances to female staff, which even he agrees were improper, and the consequent discussions about what kind of prosecution should be brought by whom, with what evidence and where. Or something like that.

None of this has the slightest effect on the hard pressed Covid driven lives of ordinary people in Scotland, whose disquiet is reflected in a drop below 50% of those planning to vote for independence given the chance. Moreover the landslide predicted for the SNP in May is now projected down to a majority of one. Westminster, seeing the enthusiasm for separation from the Union wavering, will refuse the opportunity to offer a vote and even if they grant one, the SNP, like last time, will very likely lose.  Having promoted the bright side of an independent Scotland with such success over the last two decades, the exposure of its dark side will be enough to put key voters off. Institutional catfights can be won side or another. But the institution itself is always the loser.

Now enter Buckingham Palace v Harry and Meghan. The Royal Family, like some never ending TV soap, has engaged in catfights and exclusions of its own like no other, which is why the series telling its story, the Crown, is a world number one must see, season after season. But what Megan and Harry do with their independence from the ossified flunkies who stand guard over an institution of unmatched privilege and entitlement, is a matter for them.

Counter briefing by the flunkies, designed to destroy the credibility of the errant couple, places at risk the very foundations upon which all they guard, stand. Because they rest on the principle that they are above it. Making the Crown and all it represents  part of it, destroys the integrity of its purpose. Without that it becomes expensive, irrelevant and pointless. The old may still remain loyal subjects, but the young, who are independent citizens, have had enough.

Thoughts on the Budget: What Lurks in the Shadows?

Now that the commentators have had time to read all the details it is nether as clever nor as good as the performance of its author delivering it yesterday. There are contradictions in forecasts and gaps in provision. What about social care? There is the inability to grasp what inequality actually is. Why do the poorest in society have to lose most of their additional funding through universal credit, rent support on so on in September of this year, when the wealthiest corporations, have their  the tax hype, modest by G7 standards, deferred to 2023?

But let me offer you these thoughts. Much is made of government debt. I am not sure whether this is to make political points or news headlines, but a sovereign government with its own currency cannot be in debt as one without a currency, ie Greece in the Euro. The UK government owns the B of E and the B of E has printed money to buy in 47% of all UK government debt. Basically the government is printing about half what it borrows and will have to go on doing so.

If you want to stay awake at night, worry about interest rates. I have for years argued that holding these at close to zero for year after year so that they cease to be a factor in consumer financial planning as well as disincentive for saving, has created a misshapen economy, over borrowed and under saved. Assets have inflated way ahead of basic inflation, which is mostly lower than the target 2.5%.

Now lurking in the shadows are three types of inflation, any of which could suddenly break cover, as the economy begins to grow again, many predict quite strongly. Velocity inflation, wage price inflation and demand inflation. All three together and you have hyper inflation. But what if it is just 6% or 8% and interest rates have to go up to say 5%? Quite suddenly? That means mortgages at 7% or more. You can work out the rest.