When the chips are down

I recently visited a National Trust property with a Victorian kitchen and was surprised to see how labour intensive the world was back then, especially in the clothes washing department of a major household. What a difference a modern washing machine makes to our wardrobe in keeping our clothes clean and colour fast and a modern oven or microwave delivers to the way in which we cook our food. Can you imagine a world without these modern conveniences?

Strangely and believe it or not it is quite a possibility.

The World is changing fast around us, and it is quite alarming how noticeable, small but hugely important changes are taking place. Could you ever believe that second hand cars are worth more today than say three years ago? The availability of computer chips is adversely affecting the supply of new vehicles and car dealers are desperately searching for low mileage, 3-year-old used cars to fill the gap in supply, caused by a very constrained supply of semiconductors and this is also influencing modern household appliances.

The concern with supplies has troubled the USA so greatly that on July 28, 2022, the House passed the “Creating Helpful Incentives to Produce Semiconductors (CHIPS)” Act, clearing the way for the President’s signature. The Bill authorises more than $200 billion in federal funding to promote domestic semiconductor production. However, of the $200 billion authorised, only $53.7 billion will be immediately appropriated, with the remaining funds requiring further congressional action. Another key aspect of the Act, to provide the incentive for domestic production, is the further creation of a 25 per cent tax credit for investments in semiconductor manufacturing. The CHIPS Act is a clear undertaking to tackle the shortage of semiconductors in recognition of their importance to society.

I am old enough to remember the OPEC imposed oil crisis of the 1970’s and the troubles created by the soaring cost of petrol, witnessing petrol filling station queues and rapidly rising costs and a government at the time stating that they would never again be held to ransom in this way. Yet here we are once more, playing the piper to the Putin tune whilst he wages war with an independent country at the same time as benefiting from the rapidly rising cost of natural gas, something that Russia has in great abundance.

Whether it is semiconductors or natural gas the world had clearly grown very comfortable with trade across the globe, and it is not that long ago that gas pipelines from Russia and low-cost semiconductors from China were welcomed, but the changing geopolitics and level of inter-continental trust, seem to be making it clear that our world is not as safe as we all once thought.

It is time for our government to take responsibility for key aspects of modern-day life and not simply devolve the cost for global irresponsibility to the people. As Boris Johnson has recently quite rightly stated the war in Ukraine involves the rest of the World, as we suffer the pain of increased energy costs immediately and the imposition of restrictions upon our freedoms.

Just as much as Covid, a battle with infection created the circumstances for Furlough, disturbances in essential supplies rest with central government to resolve and recognise as significant to the society we cherish today, and it absolutely remains the government’s central responsibility to smooth out the bumps in the road ahead. Labour leader Sir Keir Starmer seems to recognise this responsibility with his proposal that the Government takes responsibility for the full cost of the energy price cap, whilst Tory leader candidates and a consequent future Prime Minister, tiptoe around the subject in the margins.

When the Chips are down, bold actions across the world are required.