The Power of Capitalism: The myth of Swedish socialism

Dr Rainer Zitelmann is a German historian, sociologist and author. His latest book is The Power of Capitalism. In our exclusive series, Zitelmann reveals a compelling body of evidence that capitalism and market economies have lifted billions out of poverty. Today he writes on Sweden. 

According to the 2023 Index of Economic Freedom, Sweden is among the most market-oriented economies worldwide. Overall, it ranks in 10th place, far ahead of the United States (25th) and the UK (28st). But public spending is still high, and while income tax rates have come down considerably from their peak in the 1970s and 1980s, they are still higher than almost anywhere else in the world. 

In other words, despite the ascendance of capitalist elements, Sweden is not entirely free of socialist influences. However, the image of Sweden and other Scandinavian countries as strongholds of socialism harks back to the 1970s and 1980s. During the period of socialist welfare-state expansion from 1970 to 1991, Sweden dropped far behind many of its European competitors. From fourth place in the OECD per-capita GDP ranking in 1970, socialist-era Sweden had dropped to 16th place by 1995.

The socialist agenda damaged the Swedish economy and resulted in prominent entrepreneurs leaving the country in frustration. Ikea founder Ingvar Kamprad was one of them. The marginal income tax rate of 85 per cent was supplemented by a wealth tax on his personal assets, which forced him to borrow money from his own company in order to pay his taxes. To pay back his debt to Ikea, Kamprad wanted to sell one of the small companies he owned to Ikea at a profit. As he was preparing the sale, the government made retroactive changes to tax legislation. In 1974, he moved to Denmark and later to Switzerland, where he spent the next few decades – for a time as the wealthiest man in Europe. 

These socialist policies alienated even those who were sympathetic to the Social Democrats’ project. Astrid Lindgren, the world-famous author of a raft of children’s classics including the Pippi Longstocking series, is just one example.

Her long-standing commitment to the social democratic beliefs espoused by the likeable newspaper editor with a strong sense of justice who is a central character in her Madicken series didn’t stop her from feeling outraged by the 102 per cent marginal tax rate levied on her earnings in 1976. Lindgren vented her anger in a satire on the Swedish tax system titled “Pomperipossa i Monismanien” and published in a leading newspaper. The public was on Lindgren’s side. Eventually, Swedish prime minister Olof Palme took care of the matter himself and admitted on television that Lindgren was right.

Many excesses of the welfare state were equally absurd, including the generous sick pay. As well as statutory payments, most employees in Sweden received additional sickness benefits under both company agreements and collective agreements, which meant that those who took sick leave ended up with a larger paycheck than a healthy person who came to work every day. Unsurprisingly, Sweden held on to the OECD record for the highest rate of non-working adults in the labour force for several decades. 

Pushback against the proponents of socialist ideas increasingly gathered momentum, and by the 1990s there was a comprehensive counter-movement. A major tax reform in 1990/91 introduced a dual tax system which slashed corporate taxes from 57 per cent (including payments into workers’ funds) to 30 per cent. Some incomes from shares were exempted from taxation, and capital gains from shares were also taxed at a lower rate.

The reforms continued over the following years: in 2004, estate and accession taxes of up to 30 per cent were scrapped. The abolition of the wealth tax, which had already been cut, came into effect retroactively as of 1 January 2007. The corporate tax rate of 30 per cent was cut to 26.3 per cent in 2009, today it is 20.4 per cent. Property tax rates were also cut substantially. Subsequent reforms in 2005 gave business owners and self-employed professionals the option to significantly reduce their tax burden by declaring part of their earnings as capital gains rather than income. 

Ever since these reforms were introduced, many successful Swedish entrepreneurs have stayed in Sweden and reinvested capital in new ventures, creating businesses such as Spotify and Klarna. And following the abolition of inheritance and wealth tax, the proportion of billionaires in relation to the population is now 60 per cent higher in Sweden than in the United States.

Although contemporary Sweden remains a traditional welfare state in some respects, successive governments since the early 1990s have consistently chosen more freedom over more equality, more market over more state. Following the obvious failure of the socialist experiment, the balance between capitalism and socialism has shifted towards capitalism.

Rainer Zitelmann’s book is available on the book’s website

The Power of Capitalism: How Venezuela went from rich to poor

Dr Rainer Zitelmann is a German historian, sociologist and author. His latest book is The Power of Capitalism. In our exclusive series, Zitelmann reveals a compelling body of evidence that capitalism and market economies have lifted billions out of poverty. Today, he writes on Venezuela.

In the course of the 20th century, Venezuela went from being one of the poorest countries in Latin America to becoming the richest. In 1970, it ranked among the 20 richest countries in the world with a higher per-capita GDP than Spain, Greece and Israel, and only 13 per cent lower than the UK.

Venezuela’s reversal of economic fortune started in the 1970s. From 1974 onwards, labour market regulations were tightened to a level that was unprecedented almost anywhere else in the world – let alone Latin America. Increasing state interference in the economy and massive over-regulation led to the situation in the once rich country constantly deteriorating. 

But the example of Venezuela shows that when the economic situation worsens, voters may well opt for a supposed solution that makes their situation much worse. Many Venezuelans put their faith in the charismatic socialist leader Hugo Chávez as the saviour who would deliver their country from corruption, poverty and economic decline. 

Chávez, who was elected president in 1998, had plenty of admirers among left-wing intellectuals and parties in Western countries. Jeremy Corbyn, leader of the British Labour Party from 2015 to 2020, praised Chávez, as “an inspiration to all of us fighting back against austerity and neoliberal economics in Europe.” 

Thanks to Venezuela’s oil deposits – the largest in the world – and the oil price explosion that coincided with Chávez’s presidency, filling his government’s coffers to the brim, his large-scale experiment in 21st century socialism got off to a promising start, although it would eventually descend into economic disaster, hyperinflation, hunger and dictatorship.

In 2007, in an attempt to secure a controlling interest of at least 60 per cent in Venezuelan oil ventures for PDVSA, the Chávez government forced foreign oil companies to accept minority stakes or face nationalization. When Chávez first came to power, over 50 per cent of oil production profits went to the government. By the time of his death in 2013, the government take of over 90 per cent was one of the highest in the world.

Following his re-election in 2006, Chávez nationalised an increasing number of industrial enterprises, starting with the iron and steel industries. Government takeovers of the cement and food sectors, power utilities and ports soon followed. Between 2007 and 2010 alone, around 350 businesses were moved from the private to the public sector. In many cases, executive positions in the newly nationalised enterprises were awarded to loyal party members. With one in three workers employed in the public sector by 2008, the government payroll ballooned.

Badly managed public enterprises received generous subsidies, which enabled them to retain more employees than they needed. The payment of oil revenues into a rainy-day fund had already been stopped in 2001, and investment in the oil industry – the very basis of the country’s livelihood – was also sacrificed in favour of ever more ambitious social spending plans. After Chávez’s death in 2013, his successor and former second-in-command Nicolás Maduro accelerated the nationalisation of dairies, coffee producers, supermarkets, manufacturers of fertilisers and shoe factories. 

A 2016 survey by the Central University of Venezuela found that four out of five Venezuelan households lived in poverty. Some 73 per cent of the population experienced weight loss, with the amount lost averaging 8.7 kilogrammes (20 pounds) in 2016. In 2021, 77 per cent of the Venezuelan population lived in extreme poverty.

Chávez had gradually abolished the separation of powers. Under his successor, Nicolás Maduro, the government became increasingly authoritarian. In recent years, Venezuela has increasingly developed into a classic socialist dictatorship: The political elite is corrupt to the core. Freedom of the press and freedom of assembly only exist on paper. Venezuela ranks fourth to last worldwide in Transparency International’s Corruption Perceptions Index.

Several United Nations institutions identified evidence of crimes against humanity by the Maduro regime in 2020 and 2021. According to the UNHCR, more than 7 million people had left Venezuela – equivalent to a quarter of the population. This is not only the largest refugee and migration movement in South America’s recent history, but there is hardly any other region in the world where so many people have left their country.

And how have socialists around the world, who once so euphorically praised Venezuela’s “Socialism for the 21st century”, responded? They react as they have after every failed socialist experiment: They say, “That wasn’t really socialism at all”. But next time, they promise, it will work.

Rainer Zitelmann’s book is available on the book’s website

The Power of Capitalism: Time and again, it’s free markets that deliver for people

In my book The Power of Capitalism I show that people’s lives are much better where there is more economic freedom. The population of South Korea are doing better than their neighbours across the border in North Korea; life was far better in West Germany than it ever was in East Germany; and Chileans are better off than Venezuelans. The expansion of economic freedoms through free-market reforms – in China under Deng Xiaoping, in the UK under Margaret Thatcher and in the U.S. under Ronald Reagan – increased economic prosperity for the majority of citizens in each of these countries.

There are two different ways to approach the question of whether it is more state intervention or greater market freedom that promotes people’s prosperity: you can take a theoretical approach and discuss the advantages and disadvantages of different economic systems. 

Or you can take a more practical approach and determine which system works better in practice. At any given time, a host of social experiments are being conducted all over the world. The result has consistently been the same: a planned economy and heavy-handed state intervention always lead to worse results than a market economy.

This is true not only for the countries described in our series so far but in general, as demonstrated by the Index of Economic Freedom, which has been compiled by the Heritage Foundation every year since 1995.

The index, most recently published in 2023, measures and ranks economic freedom in 176 countries. The Index of Economic Freedom could also be described as an index of capitalism, as the sociologist Erich Weede points out. Even the briefest glance at the index reveals a clear correlation between capitalism and prosperity.

According to the 2023 index, the most economically free countries are Singapore, Switzerland, Ireland, Taiwan, New Zealand, Estonia, Luxembourg, the Netherlands, Denmark and Sweden. The world’s least economically free countries are Zimbabwe, Sudan, Venezuela, Cuba and North Korea.  

Countries that have made very strong gains in the Index of Economic Freedom over the last 25 years have developed particularly well economically and the situation of their citizens has improved massively. In no countries of comparable size has economic freedom increased as much in this period as in Poland and Vietnam.

The Vietnamese initiated a programme of market-economy reforms in 1986, called Doi Moi (in English: “innovation” or “renovation”). A few years later, Poland also decided to implement market economy reforms. In both countries, these reforms led to remarkable economic growth and dramatic improvements in living standards.

How does the Heritage Foundation measure the degree of economic freedom in each country? It is impossible to measure economic freedom on the basis of just two or three indicators. For example, Sweden ranks 10th overall in the 2023 index with a score of 77.5, despite having one of the world’s highest tax burdens. If this were the only criterion used to assess economic freedom, Sweden would rank very low down the ranking with a score of just 45.1. However, in other areas, the country scores highly and comes right near the top of the index. In terms of property rights, Sweden has an extremely high score of 96.6, and for fiscal health the country scores 96.2.

The index uses 12 equally weighted components to determine each country’s level of economic freedom: Property Rights, Judicial Effectiveness, Government Integrity, Tax Burden, Government Spending, Fiscal Health, Business Freedom, Labour Freedom, Monetary Freedom, Trade Freedom, Investment Freedom and Financial Freedom. 

Economies rated “free” or “mostly free” enjoy income levels and economic growth far higher than those in the “mostly unfree” and “repressed” countries. The economically “free” countries have an average GDP per capita of 92,502 US dollars. This far exceeds the average of 8,124 US dollars in the economically “repressed” countries. 

A comparison of the average percentage of the population living in multidimensional poverty for 105 developing countries revealed that 31.2 per cent of the people in the “mostly unfree and repressed countries” were living in extreme poverty, in contrast to just 8.1 per cent in the “mostly free” and “moderately free” countries. 

Even environmental standards – contrary to the claim that capitalism is responsible for environmental degradation – are significantly higher in countries with a higher degree of economic freedom than in countries with little or no economic freedom. 

Rainer Zitelmann’s book is available on the book’s website

Mark Kleinman: Why the City’s bonus cap move may not deliver Brexit bonus

Mark Kleinman is Sky News’ City Editor and writes a weekly column for City A.M., this week on changes to banker pay, what next for Foxtons and job cuts at the City’s mid-cap brokers

Goldman move may not deliver post-Brexit bonus

You have to hand it to Goldman Sachs: it’s not afraid to make decisions which reinforce the ‘giant vampire squid’ trope which has dogged it for the last decade.

So often a front-runner on pay in a literal sense, the investment bank is also setting the pace from a policy-making perspective. As I revealed on Sky News last week, it has decided to lift the bonus cap which restricted bonuses for its material risk-takers in London to a multiple of twice their fixed pay.

The biggest surprise is that it’s taken so long. Kwasi Kwarteng, the briefest of chancellors, announced plans to scrap the cap in the autumn of 2022, arguing that it would boost the City’s post-Brexit competitiveness.

He was eviscerated by the mini-Budget market turmoil soon afterwards, but his ambition endured. Jeremy Hunt, his successor, endorsed the plan, and last October the Financial Conduct Authority and Prudential Regulation Authority confirmed its abolition.

Richard Gnodde, chief executive of Goldman Sachs International, said that removing the cap would give it greater flexibility to manage its fixed cost base. It would also, he said, mitigate the inflationary pressure on salaries not capable of being clawed back in the event of wrongdoing or calamitous risk management failings.

As tempting as it is to place Goldman in the vanguard of banking venality, its arguments make prudential sense.

The shift to a 25-to-one variable-to-fixed pay ratio, is, of course, also a tangible way of reincentivising its top London traders and deal makers: it means a senior employee earning £500,000 in fixed pay can now receive bonuses of £12.5m, rather than the £1m ceiling under the EU cap.

Whether that encourages more of Goldman’s staff to relocate to London is debateable, but it certainly removes one of the potential reasons for leaving the UK.

The rest of the industry will surely follow. Indeed, HSBC won shareholder approval last week to axe the cap with barely a murmur of protest, and banks across the continent – from Deutsche Bank in Germany to Santander in Spain – have lobbied vigorously for its abolition by the EU.

Introduced a decade ago, when the industry was in the thick of contending with the behavioural scandals which emerged after the financial crisis, the cap was a misguided way to rein it in. European lawmakers will almost certainly decide to scrap it altogether. That would make sense, but it would also nullify any competitive advantage that Britain hoped to gain from this post-Brexit arbitrage.

Estate agents rush signals move for Foxtons

Intriguing developments abound across the UK’s estate agency industry, where ‘for sale’ signs seem to be springing up faster than new homes being put on the market.

As I reported yesterday, BNP Paribas’s real estate arm is hunting a buyer for Strutt & Parker, while LDC, the private equity group owned by Lloyds Banking Group, has hired bankers to sell Lomond Group, created from the 2021 merger of Lomond Capital and Linley & Simpson.

Next in the queue? The smart money surely has to be on Foxtons, the London-listed and capital-focused estate agency chain.

For one thing, several investors in the business have been vocal about pushing the company to explore a sale. Led by Guy Gittins, chief executive, it was recently reported to have drafted in bankers from Rothschild to advise it.

Notably, Rothschild also advised on the sale of Leaders Romans Group to Platinum Equity, the buyout firm, last year.

I understand from well-placed sources that in the last three months or so, LRG made an informal approach to Foxtons. Opinions vary about the nature and intensity of the conversations that ensued, although people close to Foxtons insist that a merger was not discussed in detail.

Even if that’s true (and I have my doubts), expect them to be revived. The synergies arising from a tie-up would be considerable, and Foxtons is now in a stronger position to contemplate a deal. 

True, rental growth in London has stalled, and with interest rates likely to remain higher for longer, the next 12 months are unlikely to spell a bonanza for the industry.

Like any homeowner marketing a high-quality asset, though, Foxtons looks well-placed to trade – and LRG is unlikely to tolerate being gazumped.

City brokers’ job cuts mean more mergers on the stocks

Peel Hunt, Liberum, Stifel: the numbers involved may be small, but ongoing job cuts at the City’s mid-market broking firms tells you all you need to know about the near-term outlook for capital markets activity.

It’s important to keep this bloodletting in context – in the case of Peel Hunt and Stifel, only around 25 jobs are being axed between them.

At Panmure Liberum, the latest incarnation of renowned City names, the reduction is greater, but that’s a consequence of the merger which has brought it into being.

I understand that a memo circulated internally at both firms last week announced the intention to commence a consultation process that will entail headcount reductions once the Financial Conduct Authority formally approves the merger of Panmure Gordon and Liberum.

A source close to the latter says that roughly 20 per cent of the two firms’ combined workforce may go, reflecting overlapping functions and other merger synergies.

This won’t be lost on the sector’s other mid-sized players, who risk being orphaned in a market where delistings and an ongoing flow of takeovers is shrinking the client pool for everyone. 

China’s crackdown will do untold damage – Glory to Hong Kong!

The threads between the City of London and Hong Kong are long, occasionally ugly, mostly glorious and now increasingly stretched.

The blame for this lies with the Chinese Communist Party, which has reneged on every agreement it has signed and every public statement of the territory’s independence.

Its increasingly anti-democratic, vicious crackdown on the most basic of civil liberties may, to Beijing, look like an effective tool towards the subjugation of a city that has always thought differently from those on the mainland.

In truth, it will do untold damage to Hong Kong as a financial centre, and in time will we hope to lead once again to the scenes of pro-democracy protestors cocking a snook at the regime and its fear of modernity. 

Selfishly, Britain is benefitting from China’s crackdown. Vast numbers of intelligent, ambitious and driven Hongkongers have made their home here, in effective exile.

It is to the credit of an often difficult-to-credit Conservative government that the attitude to Hongkongers looking to flee China was so charitable, so welcoming, damn the geopolitical consequences.

But it would be better if those Hongkongers building their lives here were doing it through their own choice, rather than their effective banishment from their home.

What China has done to Hong Kong is a tragedy. What does it tell you about a government that it is afraid of a song? Those firms which turn a blind eye to it – or as has been the case for some China-centric banks, leaned into it – will not be judged kindly in the history books.

When they are written when the final chapter is told, it will be the same story as ever in history: in the end, the people win.

Now and evermore, Glory to Hong Kong! 

Will it work? Paying carers more to solve the social care crisis

It’s an election year. Politicians are giving us a barrage of policies. But we often forget to ask the most important question: will they actually work? In this column I take policies on their own terms and asks whether they solve the problem they’re supposed to solve. This week, we’re looking at social care.

Social care has been “in crisis” my entire adult life. At its heart is a simple but seemingly intractable problem: it’s just too expensive. In 2011 the Dilnot Commission recommended a cap on care costs. Every prime minister since has promised to implement this. None has yet done so. So it’s great to see the Liberal Democrats place social care at the heart of their offer for the next election.

What’s the plan?

The Lib Dems propose a package of five measures: free personal care at home; a “more generous means test” for accommodation costs; moving towards “a preventative approach to social care”; raising the minimum wage for care workers and increasing state support for unpaid carers.

Some of these are too vague to evaluate (what is a “preventative approach to social care”?) while some are more concrete. But will they work?

Reasons to get excited

The Lib Dems implemented free personal care in Scotland when they were in a coalition government with Labour. And it’s worked – to an extent. Care home occupancy in Scotland has decreased by 11 per cent since 2012 (compared with a four per cent decline UK-wide). Users report relatively high levels of satisfaction with at-home care.

Increasing the minimum wage for care workers is rational. There are over 165,000 vacancies for care workers (a rate of around ten per cent compared with around three per cent nationally). Politicians tend to act like public sector workers (doctors, for example) should do their jobs out of the goodness of their hearts.

The Lib Dems’ proposal is more realistic: in a capitalist society, you solve a workforce shortage by increasing pay. The private companies (which run the majority of care homes) have relatively little market incentive to raise wages to attract staff. So the state needs to step in. That said, the average hourly rate for care workers is currently £12. The Lib Dems are only proposing to raise it to £12.42. It’s unlikely to persuade enough people to choose (highly demanding) carer jobs over similarly paid occupations.

Cause for concern

Ultimately, the cost of social care is a product of market failure. Care homes effectively enjoy mini monopolies. Most users have little or no option but to seek residential care. Those people are often geographically limited (such as by the need to be near family or inability to travel easily beyond their immediate locale). While there are “competing” providers in theory, the consumer rarely has a meaningful choice. As a result, care homes operate at an average 34 per cent profit margin (compared with the nine per cent UK average). Care is unaffordable because there’s no market incentive to make it affordable. If the Lib Dem plan is to subsidise costs by handing more public money over to private providers, it’s likely the cost of care will just rise further (with the taxpayer picking up ever larger bills).

Rather than address this, governments have relied on unpaid carers to pick up the slack. Yet, they are treated as “economically inactive” and limited to £81 per week “benefits”. This means 5m people are taken out of the official workforce and not fully compensated for the (very real) work they’re doing. The Lib Dem plan goes some way towards addressing this, with a £1,000 p.a. raise in carer’s allowance.

How does it score?

The Lib Dems deserve credit for grasping this nettle. But the plan will, at best, mitigate the symptoms rather than address the underlying issue.

Electoral appeal: 3/5
Value for money: 1/5
Effectiveness: 2/5
Originality: 3/5

Overall: 9/20

Verdict: A valiant effort

Now ‘Glory to Hong Kong’ anthem is banned in latest totalitarian crackdown

A Hong Kong court has banned the pro-democracy anthem Glory to Hong Kong in a further sign of China’s chilling attack on free speech in the once separate territory.

Whilst a court in Hong Kong’s nominally independent legal system last year booted out the attempt to ban the song, citing free speech concerns, three court of appeal judges sided Wednesday with the authorities, according to local reports.

The public rationale for the move was to prevent the song Glory to Hong Kong – used throughout protests against Beijing’s growing influence in the territory – being mixed up at international sporting events with China’s official anthem, March of the Volunteers.

The contentious lines in the anthem – which include “Liberate Hong Kong, revolution of our times” – have become slogans of pro-democracy protestors, many of whom are now living in exile.

We pledge No more tears on our land
In wrath, doubts dispell’d we make our stand
Arise! Ye who would not be slaves again:
For Hong Kong, may Freedom reign!

Though deep is the dread that lies ahead
Yet still, with our faith, on we tread
Let blood rage afield! Our voice grows evermore:
For Hong Kong, may Glory reign!

Stars may fade, as darkness fills the air
Through the mist a solitary trumpet flares:
Now, to arms! For Freedom, we fight, with all might we strike!
With valour, wisdom both, we stride!’

Break now the dawn, liberate our Hong Kong
In common breath: Revolution of our times!
May people reign, proud and free, now and evermore
Glory be to thee, Hong Kong!

The English lyrics to Glory to Hong Kong

That slogan has been ruled, according to local sources, as potentially capable of “inciting secession.”

The latest crackdown on free speech marks another inelegant Chinese advance on the ‘one country, two systems’ approach which was supposed to be Beijing’s ruling mantra in Hong Kong.

The British handed back the territory to the Chinese in 1997.

One country, two systems was supposed to last fifty years but has been all but ripped up in only just over half that.

The crackdown will once again turn the spotlight on those City institutions who continue to do business in Hong Kong.

A number of banks, including HSBC and Standard Chartered, have been criticised for “cheerleading” for the Beijing-backed Hong Kong regime by pro-democracy protestors.

Tim Martin: “Spontaneous breakdancing” in Wetherspoon’s pubs as sales jump

Wetherspoon showed little sign of slowing down in the last quarter with like for like sales up more than 5 per cent through the spring.

The pub chain told markets this morning that equalising for bank holiday dates, like for like sales for the first three months of its financial year to the end of April were up 6 per cent.

The pub company chairman Tim Martin said sales had “continued the steady recovery from the pandemics” and guided investors towards profit in the current financial year to be “towards the top of market expectations.”

In a typically colourful release, the firm said traditional ales, Guinness and a gold-bottled vodka had all done well.

Tim Martin also said “sales of Lavazza coffee are also increasing” with “free refills thought to be responsible for spontaneous exhibitions of breakdancing among retired customers.”

The Spoons boss also said wine was on the comeback trail after questions about its popularity.

“Villa Maria sauvignon blanc, from New Zealand, (has become) popular among Wetherspoon representatives of the chattering classes,” Martin said.

Total sales increased by 3.3 per cent in the quarter and by 6.5 per cent year to date.

The pub company is currently offloading some of its estate, and this morning confirmed it has sold or surrendered 18 pubs in 2024.

“Most of the pubs were smaller and older, or where the company has a second pub in reasonably close proximity,” the firm said. The sales raised £6.8m.

In the same period it has opened two pubs – bringing the trading estate to a total of 809.

Train strikes only serve to hurt the hardest working Londoners

Working from home has changed many things. For one, it’s turned train strikes from a nation-strangling act of economic terrorism into an entertaining monthly diversion for millions of office workers. As such, the unions have responded by upping the ante: more strikes, more often. The workers hurt by this, however, are the very working men and women that unions are supposed to stand in solidarity with. 

ASLEF do not represent the kitchen porters who weren’t asked to come in yesterday, or the waiters who went home tip-less, or the pub staff who got sent home an hour, and twelve quid, early. But surely those union bosses recognise that the very people they are hurting with these strikes are not white collar workers, the class enemy, even the Tories? They’re hurting those who need the cash most, many of whom work in service industries including hospitality. 

There is precious little sympathy for the drivers, whose union has already knocked back an inflation busting pay rise and whose jobs were heavily subsidised by other taxpayers during the pandemic and beyond. They must also realise that no Tory politician has the slightest interest in making life easier for an incoming Labour government by making concessions now. So we are stuck. Train drivers on strike. Office workers at home. And the hardest working Londoners of the lot left to pick up the pieces. Some solidarity, that.

The Notebook: Brexit has been a failure, and politicians can’t ignore it forever

Where the movers and shakers have their say. Today, James Chapman, director of Soho Communications, takes the Notebook pen to talk Brexit, music and PR lessons from Ed Balls

The elephant in the room

My old boss George Osborne (who was against a referendum) recently said of Brexit: “Something happened to my country which I still to this day think was a profound mistake for Britain and its future. I look back on this really with horror.” Whatever your view of the former Chancellor, this is a more honest assessment of our departure from the EU than that of any current frontline politician.

The Conservatives are entirely lashed to the Brexit mast, doomed to go down with the ship as more and more voters conclude the whole project has been a disastrous folly. This means they must constantly declare that black is white and scrabble around for non-existent Brexit ‘benefits’.

Take business secretary Kemi Badenoch, who last week tried to claim the latest trade figures somehow vindicated the Brexit experiment. Cursory examination of her data revealed that export volumes are not, in fact, bigger than ever before and only appeared so because she had failed to adjust for inflation. Goods exports are actually well below their pre-Brexit levels, just as ‘Project Fear’ warned.

Meanwhile, after years of delay, expensive new post-Brexit border checks came into force – final confirmation, if it were needed, that all the promises of ‘frictionless trade’ on the same terms as before were false. Within 24 hours the new computer system for imports had collapsed and food and plants coming in from the EU were being waved through with incorrect paperwork to avoid the humiliating sight of massive queues of lorries.

According to recent economic analysis commissioned by City Hall, as a result of Brexit the average Briton was nearly £2,000 worse off in 2023, while the average Londoner was nearly £3,400 worse off.

Despite all the damage, Labour shows no appetite to relitigate the Brexit argument, avoiding the subject at all costs. Even the Liberal Democrats appear reluctant to make it a defining issue, talking vaguely about a ‘path back to the single market’.

With polls consistently showing that over 60 per cent of voters would now choose to rejoin the EU, this omerta from our main political parties will not last forever. It’s already clear that the 2016 referendum is going to be as unsuccessful as the 1975 one in settling the question of our relationship with our nearest neighbours.

A lesson in PR from Ed Balls

As a study in my current business, PR, there is no better recent example of a rehabilitated public image than that of Ed Balls. The former Cabinet minister and Brownite bully boy became deeply unpopular as an MP, finally losing his seat in the 2015 general election. Mr Balls wore that loss well, leaving wife Yvette Cooper to the politics and deciding to try to show his human side. His appearance on Strictly Come Dancing, the holy grail of Middle England popular culture, endeared him to millions. This was reinforced with cookery books and soft-focus interviews presenting him as a family man. Now a genial host of ITV’s Good Morning Britain, Mr Balls is well on his way to national treasure status.

Spotify’s mood music

As of April 1, Spotify demonetised any track on its platform that receives less than 1,000 streams per year. It’s estimated that around 60 per cent of tracks will not qualify for the new threshold, although Spotify insists these make up less than one per cent of the total number of streams. This new policy will hit small artists hardest – surely those that need most help as they seek to build their careers. Attempts to boost streaming royalties by changing the law so that all artists are paid a minimum of “one cent per stream”, creating a “minimum wage” for musicians, deserve support.

Sunshine revolution

Around 1.2m UK homes have solar panels, representing only four per cent of the total. If installed on every property, solar could provide 60 per cent of all domestic electricity consumption and help meet net zero targets. One simple requirement would be the installation of solar panels on all new build properties. Already, energy saving measures are compulsory, so why not take this further step?

The reign of vanilla artists

When I was growing up in the 90s, female musicians such as Tori Amos, Björk and PJ Harvey were defying expectations and bending genres while still topping the charts. Those who succeed today seem much more vanilla, exemplified by the ubiquitous Taylor Swift. One notable exception is St Vincent, whose new album All Born Screaming is my favourite of the year. It’s no surprise that she regularly swaps ideas with Amos, and cites her brilliant 1998 record From the Choirgirl Hotel as a key influence. I’m looking forward to seeing her for the first time at the Royal Albert Hall next month.