I feel as if I have spent much of the last year saying to people that now is not the time to raise taxes when those who should have known better have been arguing otherwise.
It is good in that case to see the FT publishing an editorial saying exactly that this morning, to which they add the suggestion that Rishi Sunak's determination to curb borrowing will harm the economy. The latter is a sentiment with which I also entirely agree.
The editorial represents one of those continuing moments when the FT tries to talk sense, without quite being able to hide the conflicts that must fester only just below the drafting of its words.
So it can suggest that the Tories face trilemmas of their own making because it promised before Covid not to deliver austerity, or raise any major tax, whilst now seeking to deliver ‘sound finances'. At the same time it can also suggest that resolving this apparently insoluble problem can be deferred. As it notes:
[T]he Conservative party has yet to decide what its commitment to “sound public finances” actually means in an era of low interest rates; borrowing might be at a record high but debt service costs are still falling.
Nor, come to that, has anyone else, except modern monetary theorists, that is.
What is quite certain though is that there is near unanimity, even amongst the likes of the OECD and IMF, that this is not the moment for cuts or tax increases. And that's simply because the UK, like every other major economy, is in need of government life support at present when the private sector is falling apart as a result of wholly appropriate Covid restrictions.
So will Sunak accept the advice? Right now I doubt it. Sunak can, in straightforward terms, do the right or wrong thing. The right thing is obvious and logical. The wrong thing, in the form of cuts and tax increases, is dogmatic and solely about party politics.
I think we can be sure he will go for dogma and petty politics. It's not for nothing that Sunak is thought to be the most dangerous man in the UK right now, with massively costly policy failures in terms of human lives already to his name. Andy I can't see him changing his spots. We will all pay the price for the tax increases and cuts he is already trailing pre-Budget.
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Of course he won’t do the right thing. You only have to look at the low level of intelligence amongst his Cabinet colleagues to gauge an even lower level of intelligence amongst Conservative party members, the majority of whom are incapable of thinking about anything further than household finances.
That type of name calling doesn’t contribute to debate
There is no shortage of intelligence in the govt. Empathy however is considerably lacking. Benefit cuts and general spending cuts arenot because of a money shortage, but are setting the stage for a massive increase in govt sell-offs of public services. The NHS services are now 20% provided by private providers of one sort or another. And that increases by a few percent each year. The ridiculous end-point of this is that I now am required to travel 120 miles each day, for 30 days, for radiotherapy. And that sort of approach is affecting most hospital services, over the whole of ENGLAND. Hopefully, the EU will recognise England as a tax haven too!
Good luck with that John
That must be very stressful
My commiserations for your situation – but that sounds possibly a consequence of COVID rather than anything else. Though I do agree that more and more of the NHS is now provided by the private sector – wait for the Integrated Care Organisations that are being established with people from private sector companies providing services / wanting to provide services allowed to be on the Boards! They will have a finite budget, and don’t have a remit to provide comprehensive services so my prediction is that gradually more and more services will not be available on the NHS (much like Dentistry) so you will be “encouraged” to take out insurance for the bits not provided – that will expand- or take the financial risk.
As I think Andrew Dickie said so clearly, what we have is a lack of money problem and not a debt problem.
If Sunak does what we hope he does not, then to me this is nothing but an act of deliberate economic aggression and violence against the people of this country. Ignorance of the real practicalities of money creation is not a defence.
Since the Tories have from 2010 cut off all democratic means of recourse for our society, and also, since HM Opposition is basically rendered useless by this Tory out manoeuvring and that its MPs and members cannot work together, there is really only one course of action for the people in my view.
However, our society has been taught very well indeed to blame each other – their neighbours, family members and Europe to name but a few. We have been taught to fight each other over the scraps instead of demanding more from where it can be given (that is what MMT has taught me).
That is where we are in my view.
But this still does not ignore the fact that if Sunak does what we hope he does not, the Tories have dug themselves even deeper into a simply unacceptable way to run a modern, wealthy country – it is inhumane, uncaring and pain-inflicting.
One can only hope that the reason we will have to endure this is to learn lessons that will lead to a better world one day.
But is the price of such an epiphany worth it? I mean, we are talking about children here, the disabled and the poor elderly.
At the end of which, combined with Brexit and quite possibly independence for Scotland and N. Ireland, we will no longer be a wealth country- although there will still be some obscenely wealthy individuals.
You missed out Wales…#YesCymru
I’ve become less and less concerned about what Rishi Sunak does or doesn’t think.
I think events (covid) will dictate what happens next.
The government has been trying to impose it’s will on a situation beyond its control. Covid isn’t playing by the government’s rules.
He can wish all he likes, to “balance the books” but the reality will prevent him from doing so.
I can’t see covid going away any time soon or the economy”opening up”, which means more government support, not less.
Much to the horror of all those “freemarketeers”, the State is going to have to remain front and centre for a while to come.
Covid may have permanently shifted everything, and the role of the State will be visibly seen as being vital.
Just to add.
The proposed “leaked” travel band and shutting of our boarders is an example of the government being forced into a position against it’s will.
I can’t see how we will get on top of the numbers and take the strain off the NHS until we have done the above and keep school closed as well.
It’s what Australia and NZ did and we are all looking over at them with envy at the moment.
Nut shutting boarders comes at a price. It will hit our economy but will drag out the repercussions of covid if we don’t.
I think that even vaccinating the whole UK population is only going to work if the whole world is also vaccinated. Otherwise there is a chance of mutations happening in places with high transmission rates. The boarders would need to stay closed, to prevent them entering the UK. But a long closing of our boarders, would have long lasting impacts on various sectors of the UK economy.
Both actions are disputed by all those back bench Tory MPs.
Covid isn’t behaving how they (or anyone) wants it to.
I had an email from the Telegraph asking me to sign up. One of the ‘interesting articles’ was by Nick Timothy to tell us that Sunak is uniquely placed to rejuvenate Britain after corona virus. I did not take up the offer.
Wise…
Sunak is only following in the footsteps of Osborne and Hammond and is bound by the Tory mantra of no such thing as the money tree, though as an ex banker he should know better. Agree personal abuse does not help the argument, we need just to deal with events (and facts) dear boys and girls.
If only. To do this you would need to ban or at least heavily police social media especially Twitter.
Of much more concern is the ever growing perniciousness of fake news and the ‘diving to win a penalty’ attitude that started within football but is now pervading all walks of life, especially in the UK and the US.
I honestly, and there are people, including my closest friends, who disbelieve me, concur with the maxim that ‘you shouldn’t fight fire with fire’ but when I see manipulation of the vulnerable – well it’s so hard.
In my own head, I’ve decided to separate Conservatives from Tories. The former are the genteel countryfolk who believe in church fetes. Farmers, schoolteachers etc. Decent hard working folk who want the best for their families. The latter are the likes of the current government.
Problem is – if you demonise the former you turn them into the latter.
In the US it’s slightly different. You have the folk who live on the coasts and the folk who live in the ‘flyover states’. If you generalise and demonise the latter, you turn them into Trump supporters
You are right that there is a difference between Conservatives and Tories
The former are misguided but not dangerous, per se
Tories are literally bandits or outlaws, as the derivation of the name implies
“The former are the genteel countryfolk who believe in church fetes. Farmers, schoolteachers etc. Decent hard working folk who want the best for their families”
You are spot on.. and to demonise them by effectively calling them “far right fascists” because they vote conservative or voted for brexit is indeed unfair and dangerous.. unfortunately it is how many so called “progressives” choose to operate
Unfortunately, they associate with those who are now far-right and fascist
And that is a real issue
But to admit it would be to abandon the bankers claim to a special status and power.
It would be like the 1950s again where banking was functional and seen as a bit boring.