“Chancellor Kwasi Kwarteng will struggle to hit his target of boosting annual UK economic growth to 2.5%” writes the FT’s Chris Giles in an article that is representative of much of the broadsheet commentary since Friday, with the honourable exception of the Telegraph. Starmer is, at the time of this going to pixel, not planning to reverse Kwasi’s tax cuts or the now cancelled tax rises he’d already opposed, with the result that the Labour Party is quibbling with very little of the changes. It boils down primarily to their rejection of the abolition of the 45% rate bringing the top rate of income tax down to 42.5% (including NI). Labour have accepted two thirds of the personal income tax cuts. They are only rejecting one cut, the top rate cut…
So the the dividing line between the parties is: Will “new era” economics work and crank growth up to 2.5% before the next election?
Not a chance say Rachel Reeves and the assembled hardline-centrists of the broadsheet punditry, plus all the orthodox economists from the IFS, Institute for Big Government and gloomy Torsten Bell with his distribution charts. Kwasi and Liz say it will work. It won’t surprise co-conspirators that Guido thinks it is less of a gamble than the BBC’s Faisal Islam reckons. Barring oil going to $300 or some other catastrophe, it is far more likely to work than the doomsters would have you believe. If Kwasi and Liz fail to hit the 2.5% target they have set for themselves, they will deservedly lose the next election. The choice now is pull out all the stops and go for growth, or go into opposition…
On the Daily Politics today the Daily Telegraph’s Christopher Hope quoted an MP saying fishing was a small part of its economy “Harrods, the shop, has a bigger turnover than fish in terms of value for this country”. This is something Guido has heard before and read in the FT. Is it true?
According to government statistics, in 2019, the UK imported 721 thousand tonnes of sea fish, with a value of £3,457 million. It exported 452 thousand tonnes with a value of £2,004 million. Harrods turned over £869 million in the same year. So no, it is not true.
The Financial Times has truly outdone itself with this unintentionally hilarious article from Economics Editor Chris Giles complaining that the British economy has actually been doing too well since the referendum. Which is an interesting position for supposedly the world’s leading financial newspaper to take…
Not content with just being mystified by the fact that people failed to do as they were told in the referendum, the FT is now bemused as to why the markets haven’t done as the FT wants either. Giles bemoans the fact that “relatively benign economics has emboldened politicians to harden their Brexit demands and refuse to compromise” and declares that “it is now too late for markets or the UK economy to exercise much discipline on Britain’s politics before the scheduled exit date of March 29”. Translation: it’s too late for a financial or economic crash to scare people into doing what the FT says they they should do…
Giles says that since the referendum “economic performance has been tolerable while the employment rate has reached record levels.” Which is a bit of an understatement given the UK is currently the fastest-growing European country in the G7 while Italy and Germany slide towards recession. Rather than complaining that Project Fear hasn’t come true – despite the FT’s best attempts to talk it up – maybe they should have a little quiet reflection on why they got their predictions so wrong instead…
