Continuation General UK Politics III - Dumb and Dumber

[The Don]

Unsurprisingly, the mini-budget will make the very rich even richer and increase the national debt even further.

Quote:

The chancellor also announced in his mini-budget that he would abolish the UK's 45% highest tax band for people who earn more than £150,000 per year.

https://www.bbc.co.uk/news/business-63007219

Voodoo economic madness.


edited to add.....

And he's looking to further stoke the insane UK housing market by reducing stamp duty.

If they were trying to stoke inflation and blow up the debt they're doing an almost perfect job

[Matthew Best]

My MP wants to know how the Foreign Office managed to spend £4,333.30 on two trips to the hairdresser.

https://twitter.com/EmilyThornberry/...82460614586370

And I wonder if Liz Truss, noted supporter of Norwich City Football Club, has any idea how £1,841 was spent at the Norwich City FC online store?

[jeremyp]

Originally Posted by The Don

Unsurprisingly, the mini-budget will make the very rich even richer and increase the national debt even further.



https://www.bbc.co.uk/news/business-63007219

Voodoo economic madness.


edited to add.....

And he's looking to further stoke the insane UK housing market by reducing stamp duty.

If they were trying to stoke inflation and blow up the debt they're doing an almost perfect job

They're panicking because they are going to lose the next general election.

[GlennB]

Originally Posted by The Don

Unsurprisingly, the mini-budget will make the very rich even richer and increase the national debt even further.

https://www.bbc.co.uk/news/business-63007219

Voodoo economic madness.

edited to add.....

And he's looking to further stoke the insane UK housing market by reducing stamp duty.

If they were trying to stoke inflation and blow up the debt they're doing an almost perfect job

Yep. Even right wing commentators are aghast. wtf are they aiming to do? Deliberately wreck the economy? Unvelievable stuff.

[GlennB]

Originally Posted by jeremyp

They're panicking because they are going to lose the next general election.

A total cynic might say, knowing they're doomed in '24, that they're aiming to lumber Labour with such a mess that the Tories will clean up at the election after next.

[Darat]

Originally Posted by GlennB

A total cynic might say, knowing they're doomed in '24, that they're aiming to lumber Labour with such a mess that the Tories will clean up at the election after next.

I doubt any of them are capable of such strategic thinking. They are what they seem to be - which is completely out of their depth.

[Vixen]

I was interested to note the huge increase in levels of government borrowing. So the yield in gilts and bonds has shot up. I have a sizeable investment in these (as being long-term low risk) so had a peek at my portfolio to see how they are doing. I wish I hadn't looked. The figures are shocking. <sfx Status Quo: Down Down>

My impression of the mini-budget? I agree with the MP from Rhonda Valley, totally irresponsible for all of those families on low and middle incomes who aren't bankers looking for bonuses but people struggling to pay inflated energy bills and food prices.

Kwarteng says he is aiming for growth, setting up 'investment zones' (the first step towards so-called 'Chartered Cities'...?). Well Cameron had a similar idea with Enterprise Zones with generous tax allowances for start up companies with IT start ups not needing to pay Company Tax for four years. However, it didn't really take off. It didn't really drive growth, since a lot of these companies went bust quite quickly and the effect on the economy is minimal.

I wonder if the ERG, he and Truss have a grip on elementary economics. Anyone who has had a loan and then took out extra loans to pay off the original loan and then a further loan to offset the previous loans will know it is a futile cycle. Far better to cut up the credit cards and STOP BORROWING.

IMV Sunak's plan of cautious tax cuts but not until the future was more prudent.

Here in the nordic countries we have high taxation but a fantastic welfare state, hardly any homelessness, great education (and free) and it doesn't necessarily equate to 'socialism' as Kwarteng sneeringly calls it. In fact the main right wing party is 100% pro-welfare state with 30% of the state in this sector.

ISTM the ERG-led Tory government is guiding the UK into a US-style health service because there will need to be swingeing cuts on the public sector. Enter Big Pharma. However, if we look to the USA, there are people literally being made bankrupt as they cannot afford the medical bills; kids live at home with their parents as they cannot afford to move out; people can't afford to have babies or basic health care unless they are lucky enough to have an employer that provides a decent health care plan.

IMV what is needed is an increased welfare state and that does not ipso facto mean 'socialism' (in its derogatory sense of the word), not a reduces and battered one, that only the rich can afford.

[The Don]

All the UK Government cares about is enriching themselves and their mates - and generating positive headlines to distract the masses.

You don't need any understanding of economics to do that.

[GlennB]

Originally Posted by The Don

All the UK Government cares about is enriching themselves and their mates - and generating positive headlines to distract the masses.

You don't need any understanding of economics to do that.

I can't see any positive headlines here. Tax cuts for the wealthy, colossal levels of borrowing, £ plummeting ... all in plain view for 'the masses' to see.

[The Don]

Another vote of confidence on the UK Government from the currency markets.

Quote:

The pound has fallen to a fresh 37-year low against the dollar as markets react to the chancellor's mini-budget announcement.

UK stocks also slid after Kwasi Kwarteng outlined a series of tax cuts and economic measures in a massive shake-up of the country's finances.

The pound dropped by nearly 2% against the dollar, putting it close to $1.10.

https://www.bbc.co.uk/news/business-63009173

Heaping disaster on disaster.


edited to add.....

More from that article:

Quote:

A £12bn corporation tax cut, a £17bn National Insurance cut, a £5bn basic rate income tax cut, and a £2bn cut to the 45p rate. Put together the biggest tax cutting moment for a half a century.

And while it should initially soothe some of the recession we are already likely in, the similarly huge borrowing has sent markets reeling.

It has been one of the worst days for UK Government bonds in decades, with some of biggest one-day hikes in the cost of borrowing since the 1990s.

Quote:

Interest rates charged for British debt hit 4%, having been 3.1% earlier this week, and 1.8% at the beginning of the leadership contest with Rishi Sunak.

[Carrot Flower King]

Originally Posted by GlennB

A total cynic might say, knowing they're doomed in '24, that they're aiming to lumber Labour with such a mess that the Tories will clean up at the election after next.

Two cynics in this household came up with that idea quite a while back, while BlowJob was still PM, and have been even more convinced of it with Truss' "ascension" and the leap to ******* trickle down nonsense.

[Carrot Flower King]

Why the NHS is screwed part 74: our next door neighbour (very well off and proud of a degree they have never used, 'cos they've hardly ever worked) just informed Carrot Flower Queen (ex-NHS payroll and IT bod, married to this retired senior MH nurse) that the reason the NHS is in difficulties is not to do with Tory cuts, but because clinicians set (yup, clinicians, NOT politicians) such ludicrous targets...And don't want to deal with issues such as someone going to A&E with problems an optician should deal with (yup, drove a 30 mile round trip to our nearest A&E with an eye problem)...

CFQ did not let this lie...And jumped very hard on assertions that NHS staff don't pay tax nor NI and don't contribute to pensions. Seriously, where the actual **** do folk get the idea that we don't/didn't pay the same tax and NI as everyone else and that NHS pensions are non-contributory?

[Lothian]

Originally Posted by The Don

All the UK Government cares about is enriching themselves and their mates - and generating positive headlines to distract the masses.

You don't need any understanding of economics to do that.

Huge loans to give
Massive tax cuts to the rich
Windfall profits to energy cos
A few pence to the poor
To be paid for by future tax rises.Who pays them is yet to be decided.

[Darat]

Originally Posted by Lothian

Huge loans to give
Massive tax cuts to the rich
Windfall profits to energy cos
A few pence to the poor
To be paid for by future tax rises.Who pays them is yet to be decided.

Oh I think it has: not them!

[Darat]

Originally Posted by GlennB

I can't see any positive headlines here. Tax cuts for the wealthy, colossal levels of borrowing, £ plummeting ... all in plain view for 'the masses' to see.

Front pages of Daily Express and Daily Mail say otherwise - I was at the supermarket and can never resist looking at the frontpages no matter the effect on my blood pressure.

Be interesting to see tomorrows.

[The Don]

Originally Posted by Darat

Front pages of Daily Express and Daily Mail say otherwise - I was at the supermarket and can never resist looking at the frontpages no matter the effect on my blood pressure.

Be interesting to see tomorrows.

Doubtless singing the praises of a government lowering taxes for the wealthy again.

[wobs]

Originally Posted by Darat

Front pages of Daily Express and Daily Mail say otherwise - I was at the supermarket and can never resist looking at the frontpages no matter the effect on my blood pressure.

Be interesting to see tomorrows.

What, your blood pressure?

Try moving copies of New European in front of them said rags. Purely for health reasons you understand.

[Lothian]

Trickle down economics' is the government giving £10 grand to someone who gives a tin of beans to the local food bank and books an extra week skiing in the Alps over Christmas.

[Mojo]

Originally Posted by Carrot Flower King

Why the NHS is screwed part 74: our next door neighbour (very well off and proud of a degree they have never used, 'cos they've hardly ever worked) just informed Carrot Flower Queen (ex-NHS payroll and IT bod, married to this retired senior MH nurse) that the reason the NHS is in difficulties is not to do with Tory cuts, but because clinicians set (yup, clinicians, NOT politicians) such ludicrous targets...And don't want to deal with issues such as someone going to A&E with problems an optician should deal with (yup, drove a 30 mile round trip to our nearest A&E with an eye problem)...

CFQ did not let this lie...And jumped very hard on assertions that NHS staff don't pay tax nor NI and don't contribute to pensions. Seriously, where the actual **** do folk get the idea that we don't/didn't pay the same tax and NI as everyone else and that NHS pensions are non-contributory?

Originally Posted by Darat

Front pages of Daily Express and Daily Mail say otherwise - I was at the supermarket and can never resist looking at the frontpages no matter the effect on my blood pressure.

Be interesting to see tomorrows.

[Filippo Lippi]

No, they they think about giving a tin of beans whilst taking that extra week's skiing, but then forget about it because they're planning a trip to top up the tan

[Nessie]

I will support trickle down economics, when the wealthy accept their income being reduced to a mere trickle.

[Carrot Flower King]

Latest peeve with Beeb interviewers allowing Tories to get away with whatever nonsense they want to spout: Evan Davies on PM last night interviewing some Tory treasury Truss-ite apparatchik, who claimed that it was unfair to start judging them as they'd only been in power for less than a fortnight and Davies just let that pass.

Now, remind me how long the Tories have been in power lately? And remind me which individual has spent more time in Cabinet than any other in that time?

Why the **** they are being allowed to run this "Oh, we are actually a new government!" bollocks?

[Carrot Flower King]

Originally Posted by Nessie

I will support trickle down economics, when the wealthy accept their income being reduced to a mere trickle.

Politics of envy! How very dare you!

[Darat]

Originally Posted by Carrot Flower King

Latest peeve with Beeb interviewers allowing Tories to get away with whatever nonsense they want to spout: Evan Davies on PM last night interviewing some Tory treasury Truss-ite apparatchik, who claimed that it was unfair to start judging them as they'd only been in power for less than a fortnight and Davies just let that pass.

Now, remind me how long the Tories have been in power lately? And remind me which individual has spent more time in Cabinet than any other in that time?

Why the **** they are being allowed to run this "Oh, we are actually a new government!" bollocks?

That had me clenching my jaw as well, how or rather why on earth did he let that go?

[Vixen]

The budget regarding energy bills is quite disgraceful. Whilst householders will be helped for now, the energy firms will still get all of their profits. That means somewhere down the line, the public will need to refund the public purse out of which it is coming. Kwarteng could easily have applied a windfall tax on the energy providers' profit instead.

[Gulliver Foyle]

Originally Posted by Carrot Flower King

Latest peeve with Beeb interviewers allowing Tories to get away with whatever nonsense they want to spout: Evan Davies on PM last night interviewing some Tory treasury Truss-ite apparatchik, who claimed that it was unfair to start judging them as they'd only been in power for less than a fortnight and Davies just let that pass.

Now, remind me how long the Tories have been in power lately? And remind me which individual has spent more time in Cabinet than any other in that time?

Why the **** they are being allowed to run this "Oh, we are actually a new government!" bollocks?

Even the Graun are at it at the moment, spewing out numerous articles stating that Truss has decisively broken with previous Tory government policy.

[The Don]

Originally Posted by Vixen

The budget regarding energy bills is quite disgraceful. Whilst householders will be helped for now, the energy firms will still get all of their profits. That means somewhere down the line, the public will need to refund the public purse out of which it is coming. Kwarteng could easily have applied a windfall tax on the energy providers' profit instead.

Not only that, but we will repay those profits with interest.

It's a scandal, public money used to underpin energy company super-profits but the right wing press will tell us to be grateful.

[Vixen]

The Royal Society for Protection of Birds (RSPB) and the National Trust are furious at the 'Investment Zone' plans as it gives 'investors' carte blanche to lay down infrastructure that disrupts wild life that has enjoyed protection under EU regulations. As you know, all EU laws will be 'sunset' in Dec 2022, keeping only those that don't get in the way of hedge fund profiteers and Tory donors need for profit. Oh, and heaven help you if you protest. Russian-style militia coming your way.

[catsmate]

Originally Posted by The Don

Unsurprisingly, the mini-budget will make the very rich even richer and increase the national debt even further.



https://www.bbc.co.uk/news/business-63007219

Voodoo economic madness.


edited to add.....

And he's looking to further stoke the insane UK housing market by reducing stamp duty.

If they were trying to stoke inflation and blow up the debt they're doing an almost perfect job

It's popular with the Mail, Telegraph, Farage and IEA....

[The Don]

The international currency markets once again express their view w.r.t. the UK Government's newly announced tax policy:

Quote:

The pound has fallen to a record low against the dollar as markets react to the UK's biggest tax cuts in 50 years.

In early Asia trade, sterling dropped to $1.03 before regaining some ground to stand at about $1.06on Monday morning, UK time.

https://www.bbc.co.uk/news/business-63030208

A significant factor in this is the strength of the dollar, but still the pound is very weak and getting weaker - which causes its own problems.

One thing which wasn't covered a couple of days ago is that tax thresholds have not been increased in line with inflation which means that for most people, any savings from the 1p drop in the headline rate of income tax will be more than offset by the "creep" on tax thresholds.

The only people really getting a significant tax cut are those earning £150K or more - levelling up indeed.

[Matthew Best]

When I wrote this, I didn't honestly think it would be less than a month.

[The Don]

Originally Posted by Matthew Best

When I wrote this, I didn't honestly think it would be less than a month.

It's all perfectly fine, Kwasi Kwarteng will not be swung by anything as trivial as an economic policy-induced currency collapse - because he doesn't look at the markets.

What with this, stagflation, a shortage of labour, real wage reductions and all, the UK economy is poised to rise like a phoenix.

[Darat]

Originally Posted by The Don

It's all perfectly fine, Kwasi Kwarteng will not be swung by anything as trivial as an economic policy-induced currency collapse - because he doesn't look at the markets.

What with this, stagflation, a shortage of labour, real wage reductions and all, the UK economy is poised to rise like a phoenix.

Well we've got the fires burning and we'll soon be down to the ashes so part 1 of the plan is working....

[The Don]

Originally Posted by Darat

Well we've got the fires burning and we'll soon be down to the ashes so part 1 of the plan is working....

But of course we have to give them the benefit of the doubt because this Prime Minister and her government have only been in place for a couple of weeks.

[Darat]

Is anyone else thinking that our chancellor is probably at his local newsagents frantically scratching the foil off a stack of scratch cards he's bought on his ministry credit card?

[The Don]

Originally Posted by Darat

Is anyone else thinking that our chancellor is probably at his local newsagents frantically scratching the foil off a stack of scratch cards he's bought on his ministry credit card?

I'm not sure that he realises how perilous the situation is - and as far as those who back the ERG are concerned, maybe it isn't.

For those with plenty of foreign currency, UK assets are suddenly significantly cheaper and can be picked up at fire-sale prices. Who cares what happens to the "little people" so long as the "great and good" can retain more of their money (thanks to tax cuts) and buy UK assets for a song ?

Maybe if the ERG and their backers get spooked, the Chancellor might get a little prod to change policy but if that isn't forthcoming then we will continue on the same path.

Eventually the Bank of England will have to make a crisis decision to raise interest rates very significantly to try to put a lid on all the inflationary pressures in the economy (and as a result try to stabilise the currency). This will hit borrowers very hard in the pockets but then the Government can put all the blame for the next round of cost of living crises on the Bank of England and suggest that it's working against the government and against the interests of the UK.


edited to add...

There are claims that Truss supporters have made an absolute packet shorting the pound.

https://www.thenational.scot/news/22...report-claims/

Same old, same old.

[Vixen]

If the Bank of England pushes up its interest rates, as is very likely, to stablise the economy, ordinary Brits will discover that the cost of living just got harder. Fixed rate remortgages are likely to rise by circa £500pcm on a £200K mortgage currently repaying £750 pcm. As for variable rate mortgage holders (about 25% of the total) - don't even go there! Presumably, variable was chosen because the 1% interest rate was wonderfully low and that is all they could afford. I can recall SWAPS crashing sometime after 2010 or so (this is a form of hedge against variable interest rates being higher than fixed rates; you have the option of 'swapping' for the better rate, but of course, you have to pay for this gamble).so it is interesting they appear to be back in favour.

Clearly Truss and Kwarteng have no idea of bust and boom, thinking low taxes will stimulate spending. However, inflation - the cost of your food basket, petrol and energy bills - is still higher than your tax 'saving', it is bad money being thrown after good. Some cynically believe that the economics advisor, Paul Scholar was sacked so that they didn't have to listen to his expert advice, thus enabling Truss and her chums at Shell (her old employer, plus her sister still works there) and Kwarteng's old employer at Odey Richey can short the pound (i.e., foresaw in advance the rapid drop in the pound, which would be the obvious result of the 'mini (haha) budget' and thus cashed in). Well, insider trading is still illegal so we know they would not have done that.

[Vixen]

Originally Posted by The Don

I'm not sure that he realises how perilous the situation is - and as far as those who back the ERG are concerned, maybe it isn't.

For those with plenty of foreign currency, UK assets are suddenly significantly cheaper and can be picked up at fire-sale prices. Who cares what happens to the "little people" so long as the "great and good" can retain more of their money (thanks to tax cuts) and buy UK assets for a song ?

Maybe if the ERG and their backers get spooked, the Chancellor might get a little prod to change policy but if that isn't forthcoming then we will continue on the same path.

Eventually the Bank of England will have to make a crisis decision to raise interest rates very significantly to try to put a lid on all the inflationary pressures in the economy (and as a result try to stabilise the currency). This will hit borrowers very hard in the pockets but then the Government can put all the blame for the next round of cost of living crises on the Bank of England and suggest that it's working against the government and against the interests of the UK.


edited to add...

There are claims that Truss supporters have made an absolute packet shorting the pound.

https://www.thenational.scot/news/22...report-claims/

Same old, same old.

Kwarteng is obviously not stupid. However, Liz Truss was heavily backed by the ERG 'think tanks' who do have an agenda, as they did with Brexit (i.e., getting rich for themselves) and that is whose tune they are playing.

With the majority of Tory MP's more in favour of Sunak pre-election of new Tory prime minister, the government is now quite divided. There was no banging of seats or cheering, as is usual when a chancellor presents a budget, so the disquiet will see Truss out by March, I reckon and perhaps a General Election, as it all goes pear-shaped.

In the interim, all the 55 Tufton Street mob (ERG) will have made a killing so it won't care. Let Labour sort it out <shrug>.

[Wudang]

Originally Posted by Carrot Flower King

Why the **** they are being allowed to run this "Oh, we are actually a new government!" bollocks?

The Coen brothers knew better.
"I’ll reform you, you soft-headed Sonofabitch! How we gonna run reform when we’re the damn incumbent!"

[Lothian]

Originally Posted by The Don

But of course we have to give them the benefit of the doubt because this Prime Minister and her government have only been in place for a couple of weeks.

I think it is time for a no confidence vote