It’s been a while since the last post here. Turns out infants are time consuming, who knew. There is an increased respect for single parents. As I have sat awake feeding, changing nappies or soothing at 4am I have found myself with more time to ponder. The sleep deprivation has also made me more… cantankerous? Treat this as a trigger warning. Brexit and sustainability rant ahead.
It feels like the next twelve months could see a lot of chickens coming home to roost. Metaphorical chickens mind. Chickens for dinner are going to get harder to come by and more expensive (1). Food prices have fallen over the past 20 years, off the back of competition, cheap labour, EU market imports and large-scale agribusinesses (or so says the Chicken King) (1). That is set to end. The cost of energy and supplies like fertiliser has gone up, for a variety of reasons. Cheap labour isn’t coming from Europe anymore, and Brits won’t do it (2). There were those stories of food rotting in the fields because the farms couldn’t get staff to pick them (3). Here’s a good Twitter thread on the labour shortages:
Anyone with half an ear to the farming community knew this would happen. I know quite a few farming families, many voted for Brexit, and as far as I can work out they thought they would still be receiving subsidies from the government, and the lack of EU legislation would mean they could go gung-ho for currently banned fertilisers/ pesticides, while still selling into and receiving labour from the EU market. There was a lot of goose that laid the golden egg promises. The Government appears to have viewed the opportunity to set it’s own subsidies as a way to pivot towards sustainable practices (4). Which is great for the planet, but not so good if you’re an agri-business. The upshot is a lot of farmers are going to lose a lot (maybe half) of subsidies (5). If you’ve watched Clarkson’s Farm you know how precarious a lot of farming when you don’t have fame and public buffoonery to fall back on. Farmers are going to go bankrupt.
So, food is getting more expensive. Our monthly food bill has gone up. I’ve mitigated by always buying meat from a local vertically integrated butcher, and seasonal veg from a co-operative organic growing scheme (doncha know). Some people can’t afford that. We get our milk through a milkman who pays the farmer a fair price direct. Talking over the fence to a neighbour they said “oh that sounds too expensive”. I hope the population will start to see the sense in buying very local, very seasonal food, because it’s cheaper. It used to be if you were poor you ate cheap cuts of meat. I worry that people are used to £3 chicken.
And that’s before we get onto gas prices.
Energy bills are going to keep going up for the next 18 months (6). It’s going to put millions into fuel poverty (7). Most people will be £1000s worse off due to the combination of inflation, stagnant or falling wages/ benefits, and increased household bills (8). We may not see the government inflation figures rise much, but we will definitely feel it, and I’ve seen unofficial figures at 4-5%. Not that savings or interest rates will go there. If they did thousands would default on mortgages and loans. Plenty of new energy businesses have gone bust, the competition that was supposed to drive the prices down from the big boys not able to weather the storm (9). The big six remain the most complained about (10). Much like in the water industry, where the big boys keep failing, and suck up the fines as a cost rather than actually fixing the problems (11).
How do you combat the current setup? I quite like the idea of local energy production. Again, in the old days every town and city had it’s own power station. Now with the grid and massive power stations for maximum efficiency we’re reliant on a few providers and a few sites; hence the issue with the Kent interconnector fire (12). There’s a push back as part of sustainability drives to local energy production through Community Energy groups (13). Local investors buy bonds in small projects to supply cheaper energy to the local area. Maybe this could happen with the return of local stock exchanges, where you could buy into local businesses (14). Probably a bit revolutionary. At least in Wales the Government and Community Interest Companies are pushing forward with local energy sustainable energy production (15, 16). Wind and wave power may yet see the Welsh valleys reborn (17, 18). Neither will be cheap.
Taken together, things are going to get more expensive. Brexit and macro-economics seems to be pushing things more locally – “onshoring”. The global labour/ supply chain and just-in-time deliveries have made things cheaper. How would you feel if food returned to costing a third of the average household income (19,20)? Food, energy and basic household items are going to get more expensive, so time to tighten the belts.
September 2021 Dashboard
These are taken, as always, from my Beast Budget spreadsheet. I saved just under 20% of my salary, as I move to cover 90% of our household bills with MrsShrink off on maternity leave. This months S&S ISA money again went into Vanguard’s ex-UK Dev World Acc Fund. More churn in my Freetrade account, buying back into GME and some other hyped nonsense, and out of sensible dividend and environment stocks. If you fancy a free share, sign up to Freetrade with this link (I also get one).
- Groceries – Budget £200, spent £260.03, last month £196.58 – On holiday at the start of this month, with spending correspondingly inflated
- Entertainment – Budget £100, spent £95, last month £113.55 – Making the most of the few warm days with babysitters
- Transport – Budget £250, spent £210.35, last month £163.98
- Holiday – £150, spent £274.65, last month £0
- Personal – £100/ £0/ £73.85
- Loans/ Credit – £50/ £188/ £159
- Misc – £50/ £334.25/ £69 – Made a will, paid some nursery fees
- Fees – £300 /£134.57/ £149.57
In the garden:
I love this time of year, reaping rewards of planting. At the same time I’m tinged with melancholy, knowing that my growing season is coming to an end. Mowing the lawn, tidying hedges, sowing winter seed. Lots of pickling of things like tomatoes, beetroot, french beans and gherkins. Soon it’ll be cold again, and it’s time to relish those few last warm days. Just a shame there weren’t many!
Happy October everyone!