I write this in the last few days of our annual trip to Hungary visiting my wife’s family. I am also, unsurprisingly, the Chairman of the All Party Parliamentary Group (APPG) for Hungary. It is always interesting to speak to locals here about various aspects of life.
The cost-of-living crisis is being felt markedly more painfully than in the UK with a huge lag between wages, pensions and benefits increases and base inflation. There is the argument to be had that if wage and benefits increases simply mimic or exceed inflation then the inflation expectation simply becomes embedded. That’s a broader discussion point, but it is the reason our government has been resisting unrealistic public sector wage demands.
In years past there was always the feeling, one that we don’t feel so much these days, of things abroad feeling ‘cheap’. Globalisation, imports and international prices of fundamental global commodities like oil and grain works towards purchasing power parity. A large loaf of bread here in Hungary is now £1.50 and a litre of fuel about £1.45. Electricity and gas prices are a little cheaper and a main course in a modest restaurant is typically £10, aided by a lower 5% VAT rate applying to hospitality businesses.
A typical standard old age pension is just £200 per month and so for many life is exceptionally hard. Inflation stands at 20% and interest rates for mortgages are at the horrendous rate of 18%. This has not yet led to a house price collapse but could soon be seen in over-inflated hot-spots like Budapest and around Lake Balaton.
There is a higher level of home ownership than the UK and in small towns and villages a modest house with garden can still be bought for £60k. There is a high level of intergenerational assistance together with family friendly government support mechanisms and a distrust of keeping money in the bank. There is ample housing supply as youngsters move away from quieter areas making things very different and affordable certainly on a UK comparison.
I often write about Debrecen airport after these visits. A small, ex-military airport on the edge of the city. Sound familiar? The similarities to Manston airport are obvious. There are even more logistics companies around the perimeter of this smaller Hungarian airport, gearing up for the full opening of the new £2Bn BMW factory and a new Chinese funded electric battery facility. The foreign investment decisions were made largely because of the local airport. Whether embedding more reliance on the Chinese is sensible remains to be seen but in a country with economic difficulties I suppose the view of taking money wherever it is to be found is persuasive.
It seems that many important issues in the UK are bound up in court action. We still await the outcome of the proceedings of early July which will determine where next in the Manston saga. We await the Supreme Court sitting and determining the lawfulness of the Rwanda policy to deter Channel dinghy crossings. I cannot say the government’s emphasis on ‘Boats week’ was well-founded with numbers reaching the UK by this dangerous route now exceeding 100,000, some significant daily figures, sadly more deaths and problems with the Bibby Stockholm barge.
Belgium, with whom we have no formal agreement and to whom we pay nothing to do what is an international expectation, are proving highly effective in stopping the boats, but France, despite receiving hundreds of £millions from us, still struggle to stop all the beach launchings leading to avoidable deaths. I know this is becoming a make-or-break issue for my Conservative government. I would be infinitely more robust and would implement unilateral returns and so called ‘international law’ can simply swing in the breeze as it increasingly conflicts with the will of Parliament and the public as this issue descends into one of national emergency.
It is good to see national discussion on Net Zero proposals being widely aired, largely on the back of cost and practicality. As I wrote previously, the Mayor of London’s new and expanded ULEZ scheme and the surprising win for us in Uxbridge and South Ruislip has opened a significant can of worms. It is worth noting some of the more ‘loony left’ London Labour Councils are implementing significantly higher diesel and petrol car charges for residents parking,
Low Traffic Neighbourhoods and other aggravations onto residents simply trying to do their best. Thankfully, Thanet District Council is not that far offside as yet, and I aim to maintain good relations with its members.
