Either he backflips so bad he's paralysed, or he resigns to stand by the principle his disastrous Budget was, in the face of all the evidence, brilliant. Choices, choices.
Either way the international speaking circuit will be able to get him for a bargain price.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Not clear but arguable even so, as so many things are in economics. Would things and growth in particular have been even worse without the cuts? Who knows?
What is clear is that we had a very large deficit and had a government that was promising to write a blank cheque on energy costs without any confidence about what it might ultimately cost. Who have fiscal budgets that were stretched before inflation and had grossly insufficient provision for the current inflation in them resulting in either massive cuts or, more likely, serious overspends. And they wanted to cut taxes at the same time. Jeez.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
The absolute worst case scenario would be another 3 month leadership election. The current cabinet cannot allow that to happen.
The current cabinet are a significant part of the problem, as they consist largely of Truss loyalists.
That they represent of clique of the Conservative party which isn't even a majority of the party, let alone enjoys the support of more than a small fraction of the electorate, doesn't seem to bother their defenders.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
I’m just embarrassed for her now. I think she must and will go, but god how mortifying. Hope she has a good support network because this is the sort of stuff that would utterly break a person.
I feel sorry for her on a personal level but it is a terrible idea to keep someone on as Prime Minister based on feelings of pity. Too much harm has been done already, and there is far too much at stake.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
I don't see how Sunak gets the leadership by coronation, which is the only way he can get it. The ERG MPs are bound to put up Braverman or Badenoch or even Boris again against him and then Sunak would likely lose the membership vote again.
The ONLY viable candidate is one who both most Tory MPs AND most Tory members can support. For me that remains Defence Secretary Ben Wallace, who is popular in Tory membership polls, backed Truss but is otherwise a competent and safe pair of hands. In a similar vein that was why IDS' Shadow Chancellor, Michael Howard, was the only viable candidate to replace IDS when he lost the VONC of his MPs in 2003, not Ken Clarke for instance.
It should also be noted that the reason Tory members picked Truss and Labour members picked Corbyn is if you join a political party you don't just want to win every general election, you also want one who shifts the country in a more right or leftwing direction respectively. That does not mean members never pick electable leaders though, they do if out of power long enough and they want to win, as Tories did when they picked Cameron in 2005 or Labour members did when they picked Starmer in 2020
Very good points here, and I think you've got a better handle on how Tory members think than most on here.
If it is Ben Wallace somehow, does that mean he fights next election? I feel like a viable candidate maybe has to be someone who stands down before next general election?
Yes, if it is Wallace he definitely fights the next general election, they can't change leader again.
He could be a Douglas Home figure, who let us not forget only lost to Wilson in 1964 very narrowly
Nor was he the worst PM to take office in my lifetime (that's Atlee onwards since you ask.)
🚨 PM Liz Truss to give a press conference this afternoon.
Sources telling @SamCoatesSky that it looks like a deal on the u-turn has been done. Corporation tax - one of the cornerstones of Liz Truss's leadership campaign - likely to be ditched.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
Excellent example.
Google in Ireland was supposed to pay 12.5%. Instead they used the Double Irish Dutch Sandwich to pay just 2.4% in Ireland by aggressively moving revenue to Bermuda and other tax havens.
How does this u-turn actually change anything? Do they somehow miraculously think the public will forgive them and the polling numbers will improve?
Just seems so chaotic. She has lost all credibility
Bond yields are back to 4%. It was the main market shock news since everything else (Bar 1 year b/f of income tax cut) was pre-known. So it will satisfy the markets as it doesn't create an ongoing revenue hole.
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
You think running a corporate tax haven similar to Ireland is a sustainable strategy for a country with well over ten times the population ? And even if it were, which it isn't, you 'd need first to rejoin the EU.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
Excellent example.
Google in Ireland was supposed to pay 12.5%. Instead they used the Double Irish Dutch Sandwich to pay just 2.4% in Ireland by aggressively moving revenue to Bermuda and other tax havens.
Sure, but there they are. Ireland doesn't seem in a hurry to increase its levels of Corporation Tax.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
Being Ukrainian actually in the topic of StarLinks, I want to tell you some based facts re starlinks in Ukraine...
... I admire the actions of SpaceX of enabling StarLink service in Ukraine. It is a true game changer for Ukrainian army in the open fields of no cellular, and long distances not suitable for radios, given the situation is changing quick on the battlefield.
It’s a game-changer....
...Despite that, I have not seen ANY StarLink which was bought by the governments, or by SpaceX. All the Starlinks I have seen / used - were bought either by volunteers like myself, or soldiers put their personal money in.
The subscription price is also paid out of the pocket...
While all of the above is probably true, it's likely that the current retail prices in Europe do not begin to reflect the actual cost of providing the service (and would do so only if the number of subscribers were an order of magnitude larger).
The US government/DOD needs to step in and sort out this spat, as the service is absolutely vital to the Ukraine war effort.
Not seen billion abbreviated to bln rather than bn before.
Caused me a bit of a comprehension/reading fail - I thought, if he does need a $30 bin to keep starlink in orbit why doesn't he just send one of his flunkies out to a shop to buy one?
How does this u-turn actually change anything? Do they somehow miraculously think the public will forgive them and the polling numbers will improve?
Just seems so chaotic. She has lost all credibility
Bond yields are back to 4%. It was the main market shock news since everything else (Bar 1 year b/f of income tax cut) was pre-known. So it will satisfy the markets as it doesn't create an ongoing revenue hole.
I don’t think it matters - it looks like to me she quite clearly gambled, messed up, and as a result has 0 grip or authority on matters. A worse position to be in as everything she campaigned on - being tough, prepared to be unpopular, project fear - has been proven to be utter tosh
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
It's part of the overall picture, along with allowances, simplicity, transparency, and above all stability. Sunak was right that there is room to increase the 19% without doing any significant damage. I wouldn't personally have gone all the way up to 25%, but even that figure is not out of line with competitive jurisdictions (although of course we do have Brexit making the UK less attractive than competitive jurisdictions).
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
Ireland was a massive outlier: a country offering a 15% tax rate, when almost everyone in Europe was 35+%.
If I was the collective consciousness of Tory MPs this is what I would do.
1. Beg Cameron and Osborne to return as PM and Chancellor in the Lords. I think the loss of economic confidence is large enough that it justifies such an abnormal response, and they have the credibility to steady the ship. Also, since neither are MPs this would be explicitly a temporary measure until the next election. 2. Announce that the next election will happen on Thursday 2nd May 2024 - time enough for the new boundaries, but not so desperate as pushing the election all the way to Jan 2025. 3. Use that time to reform the method for Tory leadership elections, perhaps as part of a major overhaul of Tory party membership. 4. After reforming the leadership election rules, kick off a new leadership contest, with the aim to have a new leadership team in place to contest the 2024GE.
The pressure for an early GE would be strong, but I think they really need to separate a caretaker unity leader from choosing who fights the next election, because they're too divided to identify one person to fulfill both roles. Ennobling Cameron and Osborne enables them to do that.
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
I can echo this. Obviously I think people would 'prefer' it to be lower than higher, but you're going to be making generally the same decisions.
How does this u-turn actually change anything? Do they somehow miraculously think the public will forgive them and the polling numbers will improve?
Just seems so chaotic. She has lost all credibility
Bond yields are back to 4%. It was the main market shock news since everything else (Bar 1 year b/f of income tax cut) was pre-known. So it will satisfy the markets as it doesn't create an ongoing revenue hole.
We do have an ongoing revenue hole. In fact we have 2. We have the existing deficit, which is only going to go up as wage claims are settled through the public sector and we have a blank cheque for gas. Correcting the aggravations of the mini-budget does nothing to fix this.
Being Ukrainian actually in the topic of StarLinks, I want to tell you some based facts re starlinks in Ukraine...
... I admire the actions of SpaceX of enabling StarLink service in Ukraine. It is a true game changer for Ukrainian army in the open fields of no cellular, and long distances not suitable for radios, given the situation is changing quick on the battlefield.
It’s a game-changer....
...Despite that, I have not seen ANY StarLink which was bought by the governments, or by SpaceX. All the Starlinks I have seen / used - were bought either by volunteers like myself, or soldiers put their personal money in.
The subscription price is also paid out of the pocket...
While all of the above is probably true, it's likely that the current retail prices in Europe do not begin to reflect the actual cost of providing the service (and would do so only if the number of subscribers were an order of magnitude larger).
The US government/DOD needs to step in and sort out this spat, as the service is absolutely vital to the Ukraine war effort.
According to someone I know who has personal knowledge of the situation - the service in Ukraine requires extra work from the Starlink company. This is to do with protecting the system from ongoing attacks which are heavy and sustained. The geo-locking of the system to territory that Ukraine actually controls is part of this.
If his entire not-a-budget is gutted, does he resign? Does he get sacked? Can he possibly carry on if nobody believes or respects him?
In normal times he would go. No choice in the matter. Authority in the toilet. If Truss were wise she would recognise that and let him resign and appoint someone market friendly.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
You think running a corporate tax haven similar to Ireland is a sustainable strategy for a country with well over ten times the population ? And even if it were, which it isn't, you 'd need first to rejoin the EU.
That's not what I'm saying; I am simply using it as an argument, if any were needed, that lower corporation tax means a territory is more attractive to inward-investment, all other things being equal. RCS's table is interesting, but ultimately not an argument, because there are huge amounts of other factors in economical growth. The only logical conclusion is that the economies he sights have lost ground for other reasons, and that reducing their levels of corporation tax has been beneficial but not beneficial enough.
Being Ukrainian actually in the topic of StarLinks, I want to tell you some based facts re starlinks in Ukraine...
... I admire the actions of SpaceX of enabling StarLink service in Ukraine. It is a true game changer for Ukrainian army in the open fields of no cellular, and long distances not suitable for radios, given the situation is changing quick on the battlefield.
It’s a game-changer....
...Despite that, I have not seen ANY StarLink which was bought by the governments, or by SpaceX. All the Starlinks I have seen / used - were bought either by volunteers like myself, or soldiers put their personal money in.
The subscription price is also paid out of the pocket...
While all of the above is probably true, it's likely that the current retail prices in Europe do not begin to reflect the actual cost of providing the service (and would do so only if the number of subscribers were an order of magnitude larger).
The US government/DOD needs to step in and sort out this spat, as the service is absolutely vital to the Ukraine war effort.
Not seen billion abbreviated to bln rather than bn before.
Caused me a bit of a comprehension/reading fail - I thought, if he does need a $30 bin to keep starlink in orbit why doesn't he just send one of his flunkies out to a shop to buy one?
A further point - given the tidal wave of money that is being thrown at defence contractors, maybe Musk is wondering why he shouldn't recover costs?
If his entire not-a-budget is gutted, does he resign? Does he get sacked? Can he possibly carry on if nobody believes or respects him?
What makes the situation even worse is the dogmatic language they have used to describe the budget and every aspect of it. There was no alternative They were critical to drive growth Anyone opposed was the anti-growth coalition
So how do KT spin this? It wasn't essential and they were lying to us? It IS essential and the markets/IMF/OBR/WB are wrong? It is essential but less so than stability so we'll just have to accept staying poorer?
A stupid policy. Amplified to ELE-levels by massive arrogance rarely seen in combination with total incompetence.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
Very selective selection.
G7 plus Spain. You can argue to take Spain out, in which case you're looking at a sharper % decrease, of course.
You think the G7 isn't selective?
I think any selection is by definition selective. One that picked a number of obscure countries to make the point would be suspect. One that is using a recognised group of large economies (plus one other which doesn't really change the message) is not.
What should we do, an RCT with countries randomised to different corporation tax levels?
On balance I expect Truss to survive on the grounds it'd be a farce too far otherwise. But I thought Johnson would survive too (wrong) and I'm the bloke with Labour majority laid @ 6 (ouch) so I'm no longer quite the perpetual winning machine that everyone has grown used to watching. I've gone a bit "off". Can you smell it? Bet you can. Yuck.
Fwiw though - which I hope still hovers above zero - if they do decide to go for it I can certainly see it being Sunak. Ok, he was rejected by the members but so what? By ditching Truss and skipping a contest they are in any case saying to that bunch of venerables, "sorry but you screwed up royally and we don't trust you now, we want the best person for the job and that's X. Like it or lump it".
In this event X surely has to be an experienced heavyweight (or as close to it as this denuded party can manage) with proven competence in high office who will govern pragmatically rather than ideologically, who can communicate well to the public, and who won't be anathema either to the One Nation or the ERG wing of the party. Also, and oh god I suppose it still has to be said, if X supported Brexit that is all the better.
Does anybody tick those boxes as well as Sunak does? - I can't think of anybody.
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
If the choice is between two countries which are absolutely identical, and one has a 40% corporate tax rate, and the other a 12.5% one, you choose the country with the 12.5% one.
But it's never just on tax rate.
What is the overall business environment like? The labour pool and wages? The social taxes? The airport? The ease of getting visas for temporary staff? The legal system?
There are lots of ways to make your country attractive to business investment apart from tax rate.
What is the point of her? Totally useless. Tory perceived economic competence damaged. Ugh
As long as she was sticking to what her party elected her for, there was a point, no matter who disagreed with her. She wasn't elected to put up taxes.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
What is the point of her? Totally useless. Tory perceived economic competence damaged. Ugh
Yes.
A sensible policy, would have been to put the tax up. With large allowances for investment in productivity (see Rishi) and training (high quality). If you want to pay 0% Corp Tax - invest like crazy in machinery and people.
I'm sure that someone would whine that this is unfair on the hedge fund style companies that outsource everyone and everything to China et al.
But as the chap said, sometime you have to say "Fuck business".
If his entire not-a-budget is gutted, does he resign? Does he get sacked? Can he possibly carry on if nobody believes or respects him?
What makes the situation even worse is the dogmatic language they have used to describe the budget and every aspect of it. There was no alternative They were critical to drive growth Anyone opposed was the anti-growth coalition
So how do KT spin this? It wasn't essential and they were lying to us? It IS essential and the markets/IMF/OBR/WB are wrong? It is essential but less so than stability so we'll just have to accept staying poorer?
A stupid policy. Amplified to ELE-levels by massive arrogance rarely seen in combination with total incompetence.
I would guess it will be delayed until affordable rather than cancelled. Due to global market conditions.
Just about enough to hold up a 90 second soundbite interview.
On the original post - I'm with Mike on the lack of ability of party members to successfully choose a leader. They're (collectively) too blinkered, and see it as their opportunity to impose what they want rather than giving enough weight to electability.
This is doubly the case with the current Tory party, which is in power off the back of an unholy alliance of its usual support and working class Brexiteers. Although they probably abhor "handouts" and high taxes for themselves, I suspect many are far more comfortable with Johnson's levelling up agenda and generally Keynesian economic vibes*. As the polling clearly shows, their support is distinctly soft. Yet the Truss/Kwarteng agenda is very much aimed at the 80 thousand who elected her.
What is the point of her? Totally useless. Tory perceived economic competence damaged. Ugh
Yes.
A sensible policy, would have been to put the tax up. With large allowances for investment in productivity (see Rishi) and training (high quality). If you want to pay 0% Corp Tax - invest like crazy in machinery and people.
I'm sure that someone would whine that this is unfair on the hedge fund style companies that outsource everyone and everything to China et al.
But as the chap said, sometime you have to say "Fuck business".
I have three priorities: growth, growth, growth. Except when I u-turn, u-turn, u-turn? Why would businesses choose to invest in the UK if they can't trust a word the PM says?
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
Very selective selection.
It's the G7 + Spain.
That doesn't sound very selective to me.
it is indeed selective - since it eliminates small tax havens which appear to be @Luckyguy1983 's favoured model for economic policy.
Also the headline rates can be very deceptive. Only a clown, without access to vaguely competent lawyer and accountant, pays anything like the full US rate, for example.
If I was the collective consciousness of Tory MPs this is what I would do.
1. Beg Cameron and Osborne to return as PM and Chancellor in the Lords. I think the loss of economic confidence is large enough that it justifies such an abnormal response, and they have the credibility to steady the ship. Also, since neither are MPs this would be explicitly a temporary measure until the next election. 2. Announce that the next election will happen on Thursday 2nd May 2024 - time enough for the new boundaries, but not so desperate as pushing the election all the way to Jan 2025. 3. Use that time to reform the method for Tory leadership elections, perhaps as part of a major overhaul of Tory party membership. 4. After reforming the leadership election rules, kick off a new leadership contest, with the aim to have a new leadership team in place to contest the 2024GE.
The pressure for an early GE would be strong, but I think they really need to separate a caretaker unity leader from choosing who fights the next election, because they're too divided to identify one person to fulfill both roles. Ennobling Cameron and Osborne enables them to do that.
It can't happen. 1. Both the PM and CoEx need to be able to answer questions in the House of Commons - it's all to do with democratic accountability 2. That date clashes with the Coronation. Government, the police, council workers etc will be working flat out already. 3. That sounds like the old gag about abolishing the people and creating a new one. Tory members are Tory members, and that's either a strength or a weakness depending on your point of view. 4. Frankly, I think the Great British Public has lost patience with the Conservative Party's internal machinations, and it will not be given time to sort itself out.
I don't see how Sunak gets the leadership by coronation, which is the only way he can get it. The ERG MPs are bound to put up Braverman or Badenoch or even Boris again against him and then Sunak would likely lose the membership vote again.
The ONLY viable candidate is one who both most Tory MPs AND most Tory members can support. For me that remains Defence Secretary Ben Wallace, who is popular in Tory membership polls, backed Truss but is otherwise a competent and safe pair of hands. In a similar vein that was why IDS' Shadow Chancellor, Michael Howard, was the only viable candidate to replace IDS when he lost the VONC of his MPs in 2003, not Ken Clarke for instance.
It should also be noted that the reason most Tory members picked Truss and most Labour members picked Corbyn is if you join a political party you don't just want to win every general election, most members also want a leader who shifts the country in a more right or leftwing direction respectively. That does not mean members never pick electable leaders though, they do if out of power long enough and they want to win, as Tory members did when they picked Cameron in 2005 or Labour members did when they picked Starmer in 2020
That's very well put, and also a good analysis of the Labour membership and why we picked Corbyn but then eventually went for Starmer.
I was selfishly hoping Truss and Kwarteng would hang on long enough to see through the repeal of the Osborne/Hammond/Javid/Sunak IR35 reform (yes, it's such a popular measure it took four Chancellors to get it onto the books), but it's not worth it now. This is a farce, their time is up, they have to go.
Being Ukrainian actually in the topic of StarLinks, I want to tell you some based facts re starlinks in Ukraine...
... I admire the actions of SpaceX of enabling StarLink service in Ukraine. It is a true game changer for Ukrainian army in the open fields of no cellular, and long distances not suitable for radios, given the situation is changing quick on the battlefield.
It’s a game-changer....
...Despite that, I have not seen ANY StarLink which was bought by the governments, or by SpaceX. All the Starlinks I have seen / used - were bought either by volunteers like myself, or soldiers put their personal money in.
The subscription price is also paid out of the pocket...
While all of the above is probably true, it's likely that the current retail prices in Europe do not begin to reflect the actual cost of providing the service (and would do so only if the number of subscribers were an order of magnitude larger).
The US government/DOD needs to step in and sort out this spat, as the service is absolutely vital to the Ukraine war effort.
Not seen billion abbreviated to bln rather than bn before.
Caused me a bit of a comprehension/reading fail - I thought, if he does need a $30 bin to keep starlink in orbit why doesn't he just send one of his flunkies out to a shop to buy one?
LOL. The finances are somewhat obscure, since Starlink is still essentially in startup mode. It only becomes profitable when they achieve much greater scale. But it's probably true that it's quite costly (and something of a commercial distraction) for them to supply Ukraine at essentially consumer rates.
SpaceX is not asking to recoup past expenses, but also cannot fund the existing system indefinitely *and* send several thousand more terminals that have data usage up to 100X greater than typical households. This is unreasonable. https://twitter.com/elonmusk/status/1580802376973230080
The more significant point it that the system is absolutely essential to the Ukraine war effort, and the amount of money in dispute is a rounding error in what the west is spending in Ukraine.
U-turn on no u-turn coming at a press conference with the PM this afternoon. Could calm the economic chaos, but what about the political fallout? One MP told me this week without tax cuts, “what does she stand for?”. https://twitter.com/steven_swinford/status/1580858992443949058
If I was the collective consciousness of Tory MPs this is what I would do.
1. Beg Cameron and Osborne to return as PM and Chancellor in the Lords. I think the loss of economic confidence is large enough that it justifies such an abnormal response, and they have the credibility to steady the ship. Also, since neither are MPs this would be explicitly a temporary measure until the next election. 2. Announce that the next election will happen on Thursday 2nd May 2024 - time enough for the new boundaries, but not so desperate as pushing the election all the way to Jan 2025. 3. Use that time to reform the method for Tory leadership elections, perhaps as part of a major overhaul of Tory party membership. 4. After reforming the leadership election rules, kick off a new leadership contest, with the aim to have a new leadership team in place to contest the 2024GE.
The pressure for an early GE would be strong, but I think they really need to separate a caretaker unity leader from choosing who fights the next election, because they're too divided to identify one person to fulfill both roles. Ennobling Cameron and Osborne enables them to do that.
It can't happen. 1. Both the PM and CoEx need to be able to answer questions in the House of Commons - it's all to do with democratic accountability 2. That date clashes with the Coronation. Government, the police, council workers etc will be working flat out already. 3. That sounds like the old gag about abolishing the people and creating a new one. Tory members are Tory members, and that's either a strength or a weakness depending on your point of view. 4. Frankly, I think the Great British Public has lost patience with the Conservative Party's internal machinations, and it will not be given time to sort itself out.
Andrew Lilico @andrew_lilico · 22m 10 days ago it was supposed to be that cancelling the 45p rate abolition would make everything suddenly OK in financial mkts - & when they reacted for a day or so, folk said that proved it was so. Now folk say raising corporation tax will do it. When that doesn't work, what then?
If I was the collective consciousness of Tory MPs this is what I would do.
1. Beg Cameron and Osborne to return as PM and Chancellor in the Lords. I think the loss of economic confidence is large enough that it justifies such an abnormal response, and they have the credibility to steady the ship. Also, since neither are MPs this would be explicitly a temporary measure until the next election. 2. Announce that the next election will happen on Thursday 2nd May 2024 - time enough for the new boundaries, but not so desperate as pushing the election all the way to Jan 2025. 3. Use that time to reform the method for Tory leadership elections, perhaps as part of a major overhaul of Tory party membership. 4. After reforming the leadership election rules, kick off a new leadership contest, with the aim to have a new leadership team in place to contest the 2024GE.
The pressure for an early GE would be strong, but I think they really need to separate a caretaker unity leader from choosing who fights the next election, because they're too divided to identify one person to fulfill both roles. Ennobling Cameron and Osborne enables them to do that.
It can't happen. 1. Both the PM and CoEx need to be able to answer questions in the House of Commons - it's all to do with democratic accountability 2. That date clashes with the Coronation. Government, the police, council workers etc will be working flat out already. 3. That sounds like the old gag about abolishing the people and creating a new one. Tory members are Tory members, and that's either a strength or a weakness depending on your point of view. 4. Frankly, I think the Great British Public has lost patience with the Conservative Party's internal machinations, and it will not be given time to sort itself out.
Isn't the coronation in 2023?
Sorry, my mistake - but in that case, my point 4 is even stronger!
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
Ireland was a massive outlier: a country offering a 15% tax rate, when almost everyone in Europe was 35+%.
We're going back quite a bit here, Robert, but my recollection is that the EU allowed Ireland's anomolous psoition to exist for a while because it wanted to help its economic development programme. Now that it is in less need of help, the relative differential is quite small so no need to bring it back into line.
I don't see how Sunak gets the leadership by coronation, which is the only way he can get it. The ERG MPs are bound to put up Braverman or Badenoch or even Boris again against him and then Sunak would likely lose the membership vote again.
The ONLY viable candidate is one who both most Tory MPs AND most Tory members can support. For me that remains Defence Secretary Ben Wallace, who is popular in Tory membership polls, backed Truss but is otherwise a competent and safe pair of hands. In a similar vein that was why IDS' Shadow Chancellor, Michael Howard, was the only viable candidate to replace IDS when he lost the VONC of his MPs in 2003, not Ken Clarke for instance.
It should also be noted that the reason most Tory members picked Truss and most Labour members picked Corbyn is if you join a political party you don't just want to win every general election, most members also want a leader who shifts the country in a more right or leftwing direction respectively. That does not mean members never pick electable leaders though, they do if out of power long enough and they want to win, as Tory members did when they picked Cameron in 2005 or Labour members did when they picked Starmer in 2020
16 is a good price for Wallace then. Why would ERG types prefer him so much to Sunak iyo?
That is awful. Utterly shamelessly shite. The budget was all hers and she should be the one falling. Her entire leadership bid was based on Kwarteng's budget ideas.
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
If the choice is between two countries which are absolutely identical, and one has a 40% corporate tax rate, and the other a 12.5% one, you choose the country with the 12.5% one.
But it's never just on tax rate.
What is the overall business environment like? The labour pool and wages? The social taxes? The airport? The ease of getting visas for temporary staff? The legal system?
There are lots of ways to make your country attractive to business investment apart from tax rate.
Like having a close and friendly trading relationship with your biggest export market for example? Oh wait.
LOL. The finances are somewhat obscure, since Starlink is still essentially in startup mode. It only becomes profitable when they achieve much greater scale. But it's probably true that it's quite costly (and something of a commercial distraction) for them to supply Ukraine at essentially consumer rates.
SpaceX is not asking to recoup past expenses, but also cannot fund the existing system indefinitely *and* send several thousand more terminals that have data usage up to 100X greater than typical households. This is unreasonable. https://twitter.com/elonmusk/status/1580802376973230080
The more significant point it that the system is absolutely essential to the Ukraine war effort, and the amount of money in dispute is a rounding error in what the west is spending in Ukraine.
It needs sorting out asap.
If the history of these sort of services is a guide it will only become profitable when it goes bust and someone else gets the assets for a song.
"The think tanks and forecasters who want taxes up tell us the deficit will otherwise be too big. If they have their way they will put us into a longer and deeper downturn which will mean a higher deficit, not a lower.
Over the last 2 years the OBR has massively over forecast the budget deficit and used these wrong forecasts to push a Chancellor into higher taxes. More accurate forecasting would conclude now that a lower business tax rate would be better for growth and for total tax revenue."
The last two decades has seen corporate tax rates slashed around the world. It has also seen the slowest GDP growth in the post WW2 era.
It is by no means clear that there is any correlation between corporate tax rates and growth.
Here you go...
There will be the odd company who relocates for tax reasons.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
Ireland would like a word.
Excellent example.
Google in Ireland was supposed to pay 12.5%. Instead they used the Double Irish Dutch Sandwich to pay just 2.4% in Ireland by aggressively moving revenue to Bermuda and other tax havens.
Apple pay just 0.4%, competing with Ireland's tax rates will just impoverish us all and allow companies to not pay their fair share. What we should do is stop treating with these parasite economies and make it impossible for UK profits to be offshored and taxed elsewhere.
I can only speak from personal experience, but the rate of corporation tax never made a blind bit of difference to us when we were building our business and making investment decisions.
If the choice is between two countries which are absolutely identical, and one has a 40% corporate tax rate, and the other a 12.5% one, you choose the country with the 12.5% one.
But it's never just on tax rate.
What is the overall business environment like? The labour pool and wages? The social taxes? The airport? The ease of getting visas for temporary staff? The legal system?
There are lots of ways to make your country attractive to business investment apart from tax rate.
Also, the vast majority of start-ups don't get a choice of country. If you want to build an entrepreneurial, disruptive bedrock of companies, then as long as your Corporation Tax is not punitive, you should be focusing on a lot of other stuff instead.
That is pathetic. I am sacking my chancellor for delivering the budget that I have shouted from the rooftops as being a fantastic new direction for my government and integral to our growth plans.
Comments
Either way the international speaking circuit will be able to get him for a bargain price.
https://twitter.com/fleetstreetfox/status/1580860523503288320
What is clear is that we had a very large deficit and had a government that was promising to write a blank cheque on energy costs without any confidence about what it might ultimately cost. Who have fiscal budgets that were stretched before inflation and had grossly insufficient provision for the current inflation in them resulting in either massive cuts or, more likely, serious overspends. And they wanted to cut taxes at the same time. Jeez.
Idiots, the lot of them in the Lobby.
They will tend to be companies who would then just as quickly relocate again if someone else offers a better deal. Whilst here they will take aggressive tax minimisation and accounting strategies, use aggressive contracts with workers, suppliers, customers and governments. Who will exploit any weaknesses they can find.
Basically the type of companies who add little value to society. Whatever they add won't offset the taxes paid by the far more numerous decent and profitable businesses who are already here.
That they represent of clique of the Conservative party which isn't even a majority of the party, let alone enjoys the support of more than a small fraction of the electorate, doesn't seem to bother their defenders.
Sources telling @SamCoatesSky that it looks like a deal on the u-turn has been done. Corporation tax - one of the cornerstones of Liz Truss's leadership campaign - likely to be ditched.
Just seems so chaotic. She has lost all credibility
Google in Ireland was supposed to pay 12.5%. Instead they used the Double Irish Dutch Sandwich to pay just 2.4% in Ireland by aggressively moving revenue to Bermuda and other tax havens.
So it will satisfy the markets as it doesn't create an ongoing revenue hole.
And even if it were, which it isn't, you 'd need first to rejoin the EU.
https://twitter.com/robpowellnews/status/1580862953389428736
That doesn't sound very selective to me.
Caused me a bit of a comprehension/reading fail - I thought, if he does need a $30 bin to keep starlink in orbit why doesn't he just send one of his flunkies out to a shop to buy one?
https://twitter.com/KevinASchofield/status/1580809279069884416
If his entire not-a-budget is gutted, does he resign? Does he get sacked? Can he possibly carry on if nobody believes or respects him?
Now half the countries in Europe are at 20% or less, so your ability to differentiate yourself based on your tax rate is smaller.
A huge climb down. Sticking to Rishi Sunak’s original plan. Removes central plank of her leadership bid. More here: https://www.telegraph.co.uk/politics/2022/10/14/politics-latest-news-kwasi-kwarteng-latest-liz-truss-mini-budget/
1. Beg Cameron and Osborne to return as PM and Chancellor in the Lords. I think the loss of economic confidence is large enough that it justifies such an abnormal response, and they have the credibility to steady the ship. Also, since neither are MPs this would be explicitly a temporary measure until the next election.
2. Announce that the next election will happen on Thursday 2nd May 2024 - time enough for the new boundaries, but not so desperate as pushing the election all the way to Jan 2025.
3. Use that time to reform the method for Tory leadership elections, perhaps as part of a major overhaul of Tory party membership.
4. After reforming the leadership election rules, kick off a new leadership contest, with the aim to have a new leadership team in place to contest the 2024GE.
The pressure for an early GE would be strong, but I think they really need to separate a caretaker unity leader from choosing who fights the next election, because they're too divided to identify one person to fulfill both roles. Ennobling Cameron and Osborne enables them to do that.
https://twitter.com/dailystar/status/1580830837331087361?s=46&t=eb7sly2C2DAxUJRY1_Ua5w
You do have to give it to the Daily Star for creativity
So he will stay
There was no alternative
They were critical to drive growth
Anyone opposed was the anti-growth coalition
So how do KT spin this?
It wasn't essential and they were lying to us?
It IS essential and the markets/IMF/OBR/WB are wrong?
It is essential but less so than stability so we'll just have to accept staying poorer?
A stupid policy. Amplified to ELE-levels by massive arrogance rarely seen in combination with total incompetence.
What should we do, an RCT with countries randomised to different corporation tax levels?
Fwiw though - which I hope still hovers above zero - if they do decide to go for it I can certainly see it being Sunak. Ok, he was rejected by the members but so what? By ditching Truss and skipping a contest they are in any case saying to that bunch of venerables, "sorry but you screwed up royally and we don't trust you now, we want the best person for the job and that's X. Like it or lump it".
In this event X surely has to be an experienced heavyweight (or as close to it as this denuded party can manage) with proven competence in high office who will govern pragmatically rather than ideologically, who can communicate well to the public, and who won't be anathema either to the One Nation or the ERG wing of the party. Also, and oh god I suppose it still has to be said, if X supported Brexit that is all the better.
Does anybody tick those boxes as well as Sunak does? - I can't think of anybody.
I can't support that, or her.
But it's never just on tax rate.
What is the overall business environment like? The labour pool and wages? The social taxes? The airport? The ease of getting visas for temporary staff? The legal system?
There are lots of ways to make your country attractive to business investment apart from tax rate.
A sensible policy, would have been to put the tax up. With large allowances for investment in productivity (see Rishi) and training (high quality). If you want to pay 0% Corp Tax - invest like crazy in machinery and people.
I'm sure that someone would whine that this is unfair on the hedge fund style companies that outsource everyone and everything to China et al.
But as the chap said, sometime you have to say "Fuck business".
This suggests to me that the Conservative Party is about to do something sensible.
How can Chancellor Kwasi Kwarteng survive this?
More at @jrmaidment's live blog: https://www.telegraph.co.uk/politics/2022/10/14/politics-latest-news-kwasi-kwarteng-latest-liz-truss-mini-budget/
Why should they?
Just about enough to hold up a 90 second soundbite interview.
https://twitter.com/hugorifkind/status/1580866700001411073
This is doubly the case with the current Tory party, which is in power off the back of an unholy alliance of its usual support and working class Brexiteers. Although they probably abhor "handouts" and high taxes for themselves, I suspect many are far more comfortable with Johnson's levelling up agenda and generally Keynesian economic vibes*. As the polling clearly shows, their support is distinctly soft. Yet the Truss/Kwarteng agenda is very much aimed at the 80 thousand who elected her.
(*however homeopathic)
I have three priorities: growth, growth, growth.
Except when I u-turn, u-turn, u-turn?
Why would businesses choose to invest in the UK if they can't trust a word the PM says?
https://twitter.com/IsabelOakeshott/status/1580866686055780353
1. Both the PM and CoEx need to be able to answer questions in the House of Commons - it's all to do with democratic accountability
2. That date clashes with the Coronation. Government, the police, council workers etc will be working flat out already.
3. That sounds like the old gag about abolishing the people and creating a new one. Tory members are Tory members, and that's either a strength or a weakness depending on your point of view.
4. Frankly, I think the Great British Public has lost patience with the Conservative Party's internal machinations, and it will not be given time to sort itself out.
Senior minister tells me she & Kwarteng “have got one shot to satisfy the markets, with a full u-turn.
“But my sense is it’s too late for her… she’s introduced herself to the country in the worst way imaginable”
https://twitter.com/tamcohen/status/1580866871707848704
The finances are somewhat obscure, since Starlink is still essentially in startup mode. It only becomes profitable when they achieve much greater scale.
But it's probably true that it's quite costly (and something of a commercial distraction) for them to supply Ukraine at essentially consumer rates.
SpaceX is not asking to recoup past expenses, but also cannot fund the existing system indefinitely *and* send several thousand more terminals that have data usage up to 100X greater than typical households. This is unreasonable.
https://twitter.com/elonmusk/status/1580802376973230080
The more significant point it that the system is absolutely essential to the Ukraine war effort, and the amount of money in dispute is a rounding error in what the west is spending in Ukraine.
It needs sorting out asap.
@andrew_lilico
·
22m
10 days ago it was supposed to be that cancelling the 45p rate abolition would make everything suddenly OK in financial mkts - & when they reacted for a day or so, folk said that proved it was so. Now folk say raising corporation tax will do it. When that doesn't work, what then?
https://twitter.com/andrew_lilico/status/1580862918736089088
Anyone verify?
I'm told that Kwasi Kwarteng is being sacked as Chancellor as Liz Truss prepares to reverse the mini-Budget
Not clear who will be replacing him
Events moving very, very quickly this morning
No 10 not commenting
https://www.thetimes.co.uk/article/politics-latest-truss-and-kwarteng-set-to-ditch-corporation-tax-cut-b2zcgtcd2
https://www.bbc.co.uk/programmes/p0d3hwl1
What it felt like to live through the collapse of communism and democracy. A series of films by Adam Curtis.
The issue now is 'where do they go from here'?
If their policies have been ridiculed and are in tattered, what does that say about ant principles and any mandate.
What can they do now?
Isn't that how it all happened?
We need a GE now. Get rid of these people.
(probably not!).
Now the anger will be from her backbenchers and the true believers. She'll be hated by them, and everyone will think shes weak and not up to it.
Not including any emergency stop gap chancellors
That is pathetic. I am sacking my chancellor for delivering the budget that I have shouted from the rooftops as being a fantastic new direction for my government and integral to our growth plans.