ACoBA (Advisory Committee on Business Appointments) Chair Lord Pickles has written to Kwasi Kwarteng over his potential new role at green energy company FFI, warning the former Chancellor that his appointment as a paid ‘senior adviser’ poses “real and perceived risks” that it might “provide an unfair advantage” to the firm. Kwarteng met with FFI leaders while still in Ministerial office, although the Committee have decided his ability to offer an unfair advantage is limited… provided he accepts the following conditions:
Read the full letter below:
Keir Starmer has had a good start to the month, after enjoying all expenses-paid tickets to a Coldplay concert, at the cost of £700, he then enjoyed a day at the races. Of course, it’s nothing short of the best prawn cocktails for the Labour leader, who enjoyed hospitality in a private box worth £3,716. Not bad for the son of a tool-maker, from a pebbledash semi…
Sir Keir isn’t the only Party Leader enjoying the high life – Rishi spent a further £6,618 of donor money on private air travel. Meanwhile, Theresa May has again been lapping up the California sun whilst touring the speaker circuit – this time she took home £71,000 from her travels. Kwasi Kwarteng got £27,000 for a speech of his own whilst his ideological soulmate, Liz Truss, registered (unpaid) trips to Taiwan and Denmark worth £12,000.
Lefty MPs are also partial to their fair share of jet-setting. Imran Hussain, Tahir Ali and Yasin Mohammed enjoyed visits to Islamabad – where homosexuality is a criminal act – worth £5,400, courtesy of the Pakistani government. Jeremy Corbyn went on a jolly to Hungary and Rushanara Ali took a £7,100 trip to Qatar. Just don’t tell Sir Keir…
Remember when gilt rates spiked and Rishi and the media said Truss and Kwasi had crashed the economy? Two-year gilt yields rose 0.18% to 4.81% this morning, compared with their peak of 4.64% in the aftermath of the “mini” Budget in late September. Yields on gilts with longer maturities are also approaching last autumn’s levels. The two-year gilt rate off which typical two-year fixed-rate mortgages are priced are higher today and nobody seems bothered; no headlines, no apocalyptic pronouncements in the FT. Last night the Chancellor promised tax cuts are coming, and nobody said it was reckless this morning!
Above is a chart of the policy rates of the G7 nations. Canada and the US have higher interest rates than Britain, the Eurozone and Japan have lower. Britain’s rates are middle of the table for our G7 peers. Despite the lower rates, you really do not want to have Japan’s long-term economic problems.
Kwasi and Liz’s upsetting of the UK gilt market back in October last year does not factor into the ongoing rate-setting decisions of the Bank of England. That temporary aberration, as jarring as it was short-term, is not a factor. The bond market vigilantes and the IFS have now been appeased. This, however, will not stop Keir conflating that sorry episode with the necessity for rate rises in the medium term to counter inflation. Keir will be repeating the whopper until the day of the election that “the Tories put your mortgage up”. It is not true, it is politics.
Central Banks set rates according to their mandate. Their mandate is price stability and the fight against inflation before full employment or GDP growth. If Rachel Reeves gets into Number 11, she will be held in the same tax and spend constraints as Jeremy Hunt. Liz and Kwasi trying to break out of the IFS/OBR balance-the-books paradigm did not go well. Reeves says she too will be obeisant to the IFS/OBR. Interest rates will still be set by an independent Bank of England to counter inflation. Mortgage rates will go up or down on that basis regardless of whomever you vote for…
Former Chancellor Kwasi Kwarteng shows some humility and tells Camilla Tominey that Jeremy Hunt “has done a good job” with the budget. Worth watching for his take on what happened to him and what went wrong last October.
The TaxPayers’ Alliance dynamic tax model suggests the planned 6% increase in corporation tax from the current rate of 19% to 25% could cost £30.2 billion of lost GDP after a decade. Investment would be £11.9 billion higher after ten years if the rise was cancelled, highlighted by AstraZeneca’s announcement of a new manufacturing plant in low-tax Ireland rather than the UK.
The founder of the Conservative Growth Group of MPs, Ranil Jayawardena, says the modelling shows that scrapping the rise would “create jobs, encourage investment and help pay for itself.” Even more surprising are reports that former chancellors George Osborne, Philip Hammond and Kwasi Kwarteng all think the hike proposed for a little over a month’s time is a mistake.
Ahead of Jeremy Hunt’s first Spring Budget on March 15, the three former chancellors have separately chimed in. Hammond told the Telegraph “My view on corporation tax is always that it’s better to have lower than higher. I am quite disappointed that we will be increasing it to 25%.”
George Osborne highlighted the AstraZeneca decision when he told the BBC:
“The reason I reduced business taxes was to attract investment and attract research and attract companies like AstraZeneca, and if you put up taxes then you will potentially have the opposite effect. I reduced business tax because I thought that was a way of bringing investment in. That creates the revenues that allow you to fund your public services. That’s the approach I took and would be the approach I would take again.”
Kwasi Kwarteng says increasing corporation tax “doesn’t help our competitiveness”, adding: “We have got to look at ways to improve our attractiveness to foreign investors.”
The OBR’s forecast coming in as out by £30 billion versus the real world data released last week means there is room to reverse the corporation tax hike. Sunak and Hunt have no mandate to raise taxes and they are being rhetorically outflanked by Labour on tax-cutting. A ridiculous situation for Conservatives who claim to be low tax Tories…