To be fair though, Sunak was in a position where he didn't have lots of choice in the matter. Taxes had to go up due to a black hole caused by an economic crisis. An avoidable one caused by Truss' idiocy.
Now we could discuss whether he picked the right ones or did it in the right way, but it wasn't his fault he inherited a disaster zone. If he had won the first leadership contest, taxes probably wouldn't have had to go up.
Trouble is that, if you want to cut taxes without blowing things up, you really have to identify bits of government spending to cut as well.
And neither Truss nor Sunak really got beyond the "we'll get back to you on that one, pinky promise" stage.
That's not quite true.
Truss instead wanted to massively increase government spending through the fuel price cap.
An Ed Miliband original, lest we forget...
Wasn't the (insanely expensive) energy bailout largely driven by Moneysaving Martin Lewis?
(Yes, something needed to be done urgently, especially for people at the bottom of the income scale. But most of us shouldn't have had our energy use subsidised like that. And la Liz had campaigned on not chucking everyone a big pile of cash.)
Yes, it was the ‘people’s chancellor’ who led the lobbying on this.
Team Truss initially did not commit to anything but ended up having to, you’re right too, many of us didn’t need the money we didn’t.
She clearly didn’t want to do this knowing the consequences
She was prime minister. She could have spent more than 5 minutes designing a better scheme. People ok here warned about the excess generosity at the time. You'd think someone forever banging in about how there's too much govt spending qould have twigged that dropping tens of billions on paying everyones energy bills might have been a bit excessive
The main problem with what Truss did on energy was it was completely open ended. She set a price for domestic electricity, and then promised the government would make up the shortfall to real prices, no matter how high.
This was stupid on two counts:
1) Price signals are there for a reason. In times of scarcity we want people to respond to them, rather than carry on consuming as normal.
2) The bond markets were well out of their comfort zones with a government making an open ended commitment to price fixing which might have run to hundreds of billions in the worst case scenario.
A far better designed arrangement would have been to let electric prices float free, and give every bill payer a credit equal to the smaller of their annual electricity bill for the previous year, or £1k.
A few hard edge cases to sort (eg what about 1st time bill payers, how would this work for people on prepayment meters), but for the bulk of people this would have achieved a similar level of subsidy to what they actually did, but without destroying the price signal (as using less electricity would save you lots of money - you just got to keep your government subsidy and spend it on something else), without the biggest beneficiaries being rich people heating their swimming pools (hence the £1k cap), and without the cost being open ended and frightening off the bond market.
I suspect that Truss did what she did because politically she had to do something, but she was too focused on the mini-budget planning to realise the peril of such an enormous open-ended commitment to her premiership.
Obviously, after the markets turned, it suited her political opponents to pin it all on some fairly small unfunded tax cuts rather than the stupid policy they'd all been calling for her to carry out.
We've come a very long way from Trump's (dubious) legal justification of presidential power to impose tariffs being founded on the existence of an economic emergency.
Exactly this.
An embarrassingly obvious point, but...
This. Is. Illegal.
If anything like the rule of law were in force, Trump couldn't arbitrarily increase a tariff because he is annoyed.
We've come a very long way from Trump's (dubious) legal justification of presidential power to impose tariffs being founded on the existence of an economic emergency.
Exactly this.
An embarrassingly obvious point, but...
This. Is. Illegal.
If anything like the rule of law were in force, Trump couldn't arbitrarily increase a tariff because he is annoyed.
I do get the sense that there is a lot of arrogance in the legal profession and they could do with brought down a peg or two as the bankers were in 2008. It also draws attention to the fact that the City of London has its own police force. I would like to know why this is deemed to be necessary.
The City is an independent authority governed by a Royal Charter not part of London. So they have CoLP rather than the Met and are rather better off for it
It does say a lot though, nationalists are just like nationalists. There’s a meme I think it was around the time of Obama, but it might have been Biden of a bomber dropping missiles with rainbow flags and BLM stickers on them, whilst Republicans was just doing the same. The notion that Plaid’s nationalism routed in authoritarian left is somehow morally superiors or to that of Reform is preposterous. It’s a mental blindness to think otherwise.
I read the graffiti as more of a playful inversion of Reform's own "go home" rhetoric, TBH. I find it quite amusing.
I doubt the public will be rioting over a mansion tax on properties worth over 2 million pounds.
The Daily Mail moaning that it’s an attack on hard work and aspiration is laughable . There are millions of people who work hard and would never be able to afford a home of that value .
The issue is that it would kill the property market at the top end.
I’ve said in the past that I live in too large of a house for me, but that it doesn’t make sense to move because of the stamp duty cost of getting a smaller, more convenient property (in a better area) that would cost less
If I now had to pay an additional £300,000 or so of capital gains on top of my stamp duty it makes even less sense to move
The result:
- housing capacity is inefficiently allocated - I have unproductive capital tied up that I would otherwise be able to invest - I spent my limited spare time maintaining the property
I’m actually struggling to who benefits from this additional transaction based tax? Unless there is rollover relief it massively grits up the property market.
Far better to have a simply annual charge on properties
Lucy Powell secures an ex-officio seat on the party’s National Executive committee and what she makes of the rest of the role comes down to how much energy and flair she puts into it, and what she is allowed to make of it by a leadership which very obviously preferred Bridget Phillipson. [But] Being projected as the loyalist was not a tonic for her chances, but poison to them.
We know from the campaign [Powell ] fought that she doesn’t think much of the prime minister’s strategy and has no higher opinion of his tactics. One of the more forceful points made in her acceptance speech was that Labour needs to be “bolder” about delivering change and conveying its sense of purpose. Hardcore Starmerites, such as they are, may be tempted to try to marginalise the new deputy. I pick up some cabinet-level snorting that she will be a powerless irrelevance to the big picture. A sneery response is, I think, a mistake and one which can only compound the anxiety in Labour ranks that Number 10 is hunkering down into bunker mode.
The dreadful rout in the Caerphilly byelection has reinforced her message that the party is losing as many votes, if not more, to its left as it is to Reform. Labour people are not wrong to fear that Caerphilly may be the harbinger of evisceration in next May’s elections in England, Scotland and Wales.
Is Sir Keir willing to find a way to live with a woman he unceremoniously sacked? He claims he will be “delighted” to work with her and I’m told the pair had a private conversation after their formal speeches at the results event. She’s indicating that she is willing to bury the hatchet and wants to help the government not destabilise it. He’s been landed with a deputy he didn’t want, but being resentful about that isn’t going to get the prime minister anywhere.
There is peril and opportunity here. The peril is that Number 10 freezes her out, she grows angry and every time she opens her mouth it is gleefully interpreted by the government’s many enemies as an assault on the prime minister. The opportunity is for Labour to deploy her as a punchy advocate of the party’s values and achievements, and the facilitator of a constructively critical conversation about where it is going wrong. She says she wants to “speak truth to power”. Her chances of being heard greatly depend on whether power is willing to listen.
"She says she wants to “speak truth to power”."
Brave assumption that Lucy Powell would know what the truth was.
Katie Lam, the 34 year old shadow home office minister, has been designated by the press as the new Tory “rising star”, presumably due to lack of competition. She’s attracted attention by pushing her party’s policy to deport people with indefinite leave to remain if they earn less that £39k for six months or have ever received benefits, even if they’ve been living here for decades.
Taken literally this would involve mass deportations on a scale never seen in a postwar democracy – potentially up to 5% of the entire population. It is similar to Reform’s policy and both are beyond anything proposed by the BNP in the 2000s. Even if never implemented they are already having a negative effect as highly-skilled people with ILR wonder if it’s safe to remain here.
I was struck by an answer Lam gave, defending this policy, in a recent interview. She was asked why the international system of rights and laws set up in the aftermath of World War Two should no longer apply:
“Put simply, the international rules-based order is based on the idea that everyone would want to be nice to each other post-war. The reality is that’s not true and loads of people will exploit that generosity. If we’re not going to stand up for ourselves, we will lose the most precious things that we have.”
This is obvious nonsense. The UN Refugee Convention and the European Convention on Human Rights did not emerge because everyone assumed people would now be nice to each other. The horrors of the war convinced world leaders that rules were necessary to avoid it happening again. Lam’s assertion that “We don’t owe anybody access to our country other than people that we choose for our own benefit” – was one of the problems the creators of the postwar order were trying to fix. Of course the world looks very different now than it did in 1951, which might be an argument for changing the rules, but not denying their purpose.
Comments
This was stupid on two counts:
1) Price signals are there for a reason. In times of scarcity we want people to respond to them, rather than carry on consuming as normal.
2) The bond markets were well out of their comfort zones with a government making an open ended commitment to price fixing which might have run to hundreds of billions in the worst case scenario.
A far better designed arrangement would have been to let electric prices float free, and give every bill payer a credit equal to the smaller of their annual electricity bill for the previous year, or £1k.
A few hard edge cases to sort (eg what about 1st time bill payers, how would this work for people on prepayment meters), but for the bulk of people this would have achieved a similar level of subsidy to what they actually did, but without destroying the price signal (as using less electricity would save you lots of money - you just got to keep your government subsidy and spend it on something else), without the biggest beneficiaries being rich people heating their swimming pools (hence the £1k cap), and without the cost being open ended and frightening off the bond market.
I suspect that Truss did what she did because politically she had to do something, but she was too focused on the mini-budget planning to realise the peril of such an enormous open-ended commitment to her premiership.
Obviously, after the markets turned, it suited her political opponents to pin it all on some fairly small unfunded tax cuts rather than the stupid policy they'd all been calling for her to carry out.
NEW THREAD
Unless they could impeach Trump, Vance, the whole cabinet and four of the Supreme Court all on one charge.
I’ve said in the past that I live in too large of a house for me, but that it doesn’t make sense to move because of the stamp duty cost of getting a smaller, more convenient property (in a better area) that would cost less
If I now had to pay an additional £300,000 or so of capital gains on top of my stamp duty it makes even less sense to move
The result:
- housing capacity is inefficiently allocated
- I have unproductive capital tied up that I would otherwise be able to invest
- I spent my limited spare time maintaining the property
I’m actually struggling to who benefits from this additional transaction based tax? Unless there is rollover relief it massively grits up the property market.
Far better to have a simply annual charge on properties
Brave assumption that Lucy Powell would know what the truth was.
Katie Lam, the 34 year old shadow home office minister, has been designated by the press as the new Tory “rising star”, presumably due to lack of competition. She’s attracted attention by pushing her party’s policy to deport people with indefinite leave to remain if they earn less that £39k for six months or have ever received benefits, even if they’ve been living here for decades.
Taken literally this would involve mass deportations on a scale never seen in a postwar democracy – potentially up to 5% of the entire population. It is similar to Reform’s policy and both are beyond anything proposed by the BNP in the 2000s. Even if never implemented they are already having a negative effect as highly-skilled people with ILR wonder if it’s safe to remain here.
I was struck by an answer Lam gave, defending this policy, in a recent interview. She was asked why the international system of rights and laws set up in the aftermath of World War Two should no longer apply:
“Put simply, the international rules-based order is based on the idea that everyone would want to be nice to each other post-war. The reality is that’s not true and loads of people will exploit that generosity. If we’re not going to stand up for ourselves, we will lose the most precious things that we have.”
This is obvious nonsense. The UN Refugee Convention and the European Convention on Human Rights did not emerge because everyone assumed people would now be nice to each other. The horrors of the war convinced world leaders that rules were necessary to avoid it happening again. Lam’s assertion that “We don’t owe anybody access to our country other than people that we choose for our own benefit” – was one of the problems the creators of the postwar order were trying to fix. Of course the world looks very different now than it did in 1951, which might be an argument for changing the rules, but not denying their purpose.