Sun. Jul 3rd, 2022

Isle of Wight Observer News

The Island's Free Newspaper

HOLMSEY: Winfall for the public?

3 min read

Boris and Rishi have become the Laurel and Hardy of British politics. By now even the most carefree person with zero interest in the news agenda is aware that our economy is teetering on the edge. People are frightened, consumer confidence has virtually collapsed, and the only boom likely is in shoplifting.

Chancellor Rishi was under huge pressure to ‘do the right thing,’ but the trouble is Tory MPs couldn’t agree what that is.

Hearing just one major oil company has been making £100 million profit daily is distressing, even for the most strident free marketeer. Such vast sums are obscene, particularly when we all know it’s the poor who suffer the most from high oil and gas prices.

The opposition’s popular policy is a windfall tax, and yesterday Rishi was finally convinced to go for it. He recognised that the oil and gas companies are making ‘extraordinary profits’ and that it was only fair that they should be taxed fairly.

I recognise it is a finely balanced argument; the danger is that if HMG stings them retrospectively, likely as not, they’ll just move their HQ, and years of future tax revenue will be lost. To grab or not to grab? It’s a tough choice, but not for our MP Bob Seely, who has spoken out against a windfall tax and just last week voted for the energy companies to keep every penny of their astronomically high profits. Hapless Bob usually gets most things wrong; why should this be any different? Will Bob stick to his principals and vote against a windfall tax now that Rishi’s changed his tune? Answers on a postcard please!

You’re usually on safe ground taking the opposing viewpoint to most of Bob’s policy ideas;

Rishi’s obviously sussed that. We all know it’s global markets that determine the value of oil, gas and foodstuffs, the pandemic and ongoing Russian invasion have driven up world prices. They’re unlikely to fall anytime soon I reckon and, coincidentally, last week, I had lunch with a professor of economics. I don’t usually meet such clever people, so I asked him what he believes is likely to happen next? Alarmingly he said we face imminent economic catastrophe, in part caused by the pandemic disrupting the global supply chain. Any shortage of goods pushes up prices, because most people still need to buy energy, raw materials and finished goods, regardless of the cost. When commodities double in price, and some have done more than that, rampant inflation is inevitable. He also reminded me that Boris’s government is heavily over-borrowed and, as interest rates rise, they’ll need more tax revenue to service the eye-watering debt they’ve taken on.

For the record, he didn’t blame Brexit, he said. Germany, France and many other nations are in similarly awful positions. He couldn’t be exactly sure when the economic crash will happen, but it’s fairly imminent. The only positive news was his prediction that London house prices were unlikely to fall by more than 10 per cent – because demand still outstrips supply. Sorry, as it was supposed to be a social occasion and we were in London; I didn’t ask him about Island house prices.

Older readers have seen it all before; previous recessions saw new Island buyers all but vanish, with only the best homes in the best locations being sold. It’s highly likely that wealthy homeowners in Cowes, Seaview, Yarmouth and Bembridge will be safe again this time too.

Our world leaders are up to their necks in cow slurry, and they’re about to drag us all in with them! Until Armageddon comes and goes, life will be grim, so if you have any money, try not to spend it on anything frivolous.