A perfect storm is forming in British society, as a result of a number of factors-the Covid pandemic, the war in the Ukraine and Brexit. Twinned with this is the ongoing crisis in the ruling Tory Party, the lack of appeal of the Labour Party, the oncoming crisis in the British monarchy with the end of Elizabeth’s reign looming and the unpopularity of both Charles and William, rising workplace militancy, and continuing concern about the environment.
Stagflation, where inflation is rising rapidly and economic growth falls is the term that could be used to describe the present economic situation. However, stagflation is usually seen together with high levels of unemployment and the opposite is the case here. Unemployment rates are in fact falling, with more vacancies than unemployed, something that has never happened in the UK before. This lack of personnel is what is fuelling the failure to grow. The Covid pandemic led to a big rise in early retirement, as well as the effects of Long Covid and the number of vacancies caused by Covid deaths. Brexit led to many EU workers returning home, partly because of Brexit itself and the hostile atmosphere, partly because of Covid and partly because the jobs they were working in were badly paid. The recent problems in the travel industry, in particular with air transport, are caused by severe lack of staff. Among baggage handlers, for example, the number of those leaving their jobs is very high, as they seek employment elsewhere. The effect of Brexit has yet to reach its full effects and we should definitely watch that space.
The war in Ukraine has triggered huge energy rises and huge rises in food prices which are projected to only rocket higher over the next year.
During the height of the pandemic, Government funding meant that the economy was on standby. Now employers are having to hire to make up for the two years in suspended animation. Holidays deferred because of lockdown have exacerbated the parlous state of the travel industry.
A large number of vacancies and a falling level of unemployment mean several things. Workers not happy with their jobs have greater power to move to other jobs, or demand better wages and conditions. This partly accounts for the rising level of strikes and other industrial action. The other side of the coin is that in some industries, employers are attempting to claw back their profits by cutting jobs and attacking the conditions of workers, hence the rash of fire and rehire, where wages, conditions and pensions are under attack. This has sparked a number of defensive strikes.
Rising energy bills have pushed the thermometer of inflation, the Consumer Prices Index (CPI) to 9% in April, the highest level seen since 1982.Meanwhile the Office of National Statistics reported that food prices had risen by 6.7% in April, whilst the cost of transport rose by 13.7%. The CPI is expected to again rise by at least another £500 in October and the Bank of England has predicted that inflation could have reached 10% by that point.
This has the worst effects on those at the bottom of the pile. The poorest will suffer an inflation rate of 11% because they spend more of their income on food and energy, whilst benefits only rose by 3.1%. This has caused immense worry among many, and the cost of living crisis is now the major concern of many rather than climate change.
The ongoing strike wave, the projected rail strike, as well as the forthcoming strike ballots in Royal Mail and BT and among civil servants and Royal Mail, point to a level of workplace militancy not seen in a long time. This workplace militancy needs to link up with community organisations mobilising around gentrification, immigration raids and opposition to police brutality and racism, to create a new autonomous movement or cartel of movements, ignoring the Tory-lite Labour Party, and looking to a new future of exciting new social planning and a complete break with the rotting carcase of British society, sweeping aside all the moribund institutions of the police, Parliament and the monarchy.