Gerard Lyons: Mini-Budget “Has Contributed To a Lot of Problems”

As if last night’s 1922 Committee bruising wasn’t enough, Liz’s former allies are also offering a grim outlook – except unlike most of her agitated MPs, at least one is actually prepared to do it on the record. Gerard Lyons, one of the main proponents of her economics, is warning that the mini-Budget “changed the economic dynamic“, and the government quickly needs to make the sums add up.

Lyons is also warning that while raising corporation tax “into a global downturn should be avoided“, it might end up being a lever Kwasi has to pull. Speaking to the Times last night, he said “[that] is one possibility I would imagine they might want to be considering to plug any hole in the near-term finances while sticking to the commitment of allowing corporation tax to fall a couple of years out.”

This morning he added on Times Radio that while the mini-Budget was not solely responsible, it “clearly has contributed to a lot of problems” in the market. So far the government line is still “nothing has changed”…

UPDATE: Gerard tells Guido:

“The financial market reaction to the mini-Budget has changed the economic, financial and political dynamics. That should be clear to anyone. I still believe raising corporation tax (CT) into a global downturn should be avoided, as I have made clear repeatedly. But the mini-Budget has changed the economic dynamic […] the mini Budget did have an impact. This stance is not a new one… The current challenge for the Government is that it has to show its fiscal sums add up. This will be heavily impacted by the economic assumptions of the OBR. Showing the sums add-up can be achieved by a not too pessimistic growth trajectory from the OBR, along with existing fiscal space, plus outlining that debt to GDP will peak around 2026/27 before clearly trending lower. But if, after this, there is still a budget gap then the markets may demand further action.”

Gerard points out that he has “consistently spoken up for the growth plan that formed an integral part of the mini-Budget – as well as the pro-growth vision. I still stand by that, the challenge of course is if the welcome supply-side reforms can be delivered.” Quite…

mdi-timer 13 October 2022 @ 09:12 13 Oct 2022 @ 09:12 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Spinwatch: BSE’s Boris Brexit Baloney

This morning BSE spinners for the EU claimed a new report by Boris’ economics advisor says Brexit could wipe £210 billion off London’s economy. Yet if you actually read Dr Gerard Lyons’ report, that isn’t what he says at all. The BSE press release arrives at that figure by quoting the section of Lyons’ report about the “best case” scenario of Britain remaining in a reformed EU. They conveniently forget to mention that Lyons concludes the EU has not been reformed by Cameron’s renegotiation.

So what does Lyons actually say? In the scenario of the EU staying unreformed and Britain then deciding to Leave, he predicts London would be £120 billion better off. His personal Twitter account gives a more accurate reflection of his position:

Anyone following the campaigns closely should know Lyons is not a Remainer

mdi-timer 1 March 2016 @ 17:00 1 Mar 2016 @ 17:00 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Top Boris Adviser Hinting Out

Be brave Boris…

mdi-timer 21 February 2016 @ 10:14 21 Feb 2016 @ 10:14 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments