Liz Truss has had her honeymoon period and she blew it. The fact that it lasted as much as 2 weeks is all down to 10 days of mourning for the Queen, when all political debate was suspended. I had caught a chill after work on Tuesday and kept indoors in my pyjamas for a couple of days so I only caught up with the papers on the Friday when Truss and Kwazi Kwarteng dropped their bombshell. I can accept their cancellation of the national insurance rate increase, though it still left open the question of who pays the additional health and social security spending that the original increase was supposed to cover. But the combination of drop in VAT spending, in corporation tax, and in the highest rate of income tax, and the removal of a cap on city banking salaries, have the making of an ideological statement that the rich must get richer to let the economy grow.
It is either reckless madness or a courageous gamble. However, by failing to ask the Office for Budget Responsibility for a forecast prior to making their announcement was not an act of courage, but cowardice. If you take these measures at the same time as their decision to fund their levered up cap freeze at £2500 per year for an average annual energy bill, which was to be sourced purely from borrowing on the open market, and therefore placing that cost and the resulting interest fairly and squarely on the shoulders of a tired taxpayer, is frankly a statement of class warfare. No attempt to raise universal credit, no attempt to raise some revenue from other sources, such as the utility companies' vast profits, no attempt to increase the threshold for paying taxes at a time when some wages are being increased to meet the current inflation. Those on benefits are already stuffed, but middle income families without financial reserves are also stuffed. More and more will find themselves in poverty. The inflation will only be encouraged by these measures, sterling will fall, imported goods become more expensive. Confidence in the UK economy in the currency markets has been lower than ever since Brexit, and this true not only in Europe and U.S., but in the Asian markets too. What is more we are now also faced with the possibility of a trade war with the the European Union over the Northern Ireland Protocol. The only good news about inflation is that gas prices have eased a little on the world market. For the average British household it will be hell, as there will there will be cutbacks in heating and food and smaller businesses will go to the wall. I dread the agony many of my friends and colleagues will go through, and the coming rows between Albina and me about heating the flat over the winter.
There is a Labour Party conference at the moment in Liverpool. Instead of joining the picket lines of the Liverpool dockers, Keir Starmer has got the conference to sing God save the King. He is placing the ball opposite the open goal that Liz Truss has left him and will kick when he makes his speech as leader today. He is promising net zero in carbon emissions by 2030, reintroducing the highest rate of income tax, a tax on the energy companies. Actually, he can safely call for more to clinch the deal, including public control of rail, water, gas and broadband and a change in the parliamentary voting system to end the first past the post nonsense. Also time to promise better relations with the EU, including even a customs agreement, which ostensibly makes us a member of the customs union in all but name. Courage, Keir, courage!
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