Cabinet Clash Over Top Rate Tax U-Turn

Cabinet Ministers have not been shy in freelancing on economic policy over the last few days, with Suella Braverman now attacking the Government’s reversal of a cut to the 45p rate of tax. Speaking to Christopher Hope this afternoon, the Home Secretary expressed her “disappointment” at the U-turn, and criticised the rebels who effectively “staged a coup” against the PM. She’s not one to mince her words…

The blue-on-blue fighting didn’t end there, with Levelling Up Secretary Simon Clarke taking to Twitter to support Suella:

Jacob Rees-Mogg was also quick to voice his disappointment at the scrapped cut at a fringe event this afternoon, although he claimed to recognise the politics of the move. This all comes in the context of public cabinet battles over benefits, and Penny Mordaunt’s attacks on government comms. Meanwhile backbench agitators continue briefing out plans to rebel, with some now even claiming they’re holding “crisis” talks about Liz’s leadership. Truss has been PM for 28 days. Not quite the honeymoon period she would’ve hoped for…

mdi-timer 4 October 2022 @ 14:46 4 Oct 2022 @ 14:46 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Liz Commits to 45p Tax Cut But Admits It Was Kwasi’s Decision mdi-timer 2 October 2022 @ 09:50 2 Oct 2022 @ 09:50 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Rachel Reeves Breaks “Fully Funded” Pledge Within Minutes

Rachel Reeves has just concluded her conference speech, which was seemingly greeted with lukewarm enthusiasm from Labour delegates. One line in her speech raised Guido’s eyebrows to new hinterlands, promising that “every line in our manifesto… will be carefully costed and fully funded”. Labour’s already said that their energy bailout and 19p basic tax rate level would be funded by borrowing…

Immediately after the speech, Labour’s press office sent an announcement promising that “Labour will use revenue from the reversal in 45% rate of income tax to fund one of the biggest NHS workforce expansions in history”:

“A Labour government will double the number of medical school places from 7,500 to 15,000 to make sure that everyone who wants to train as a doctor in Britain can.

The move will be funded by reversing the scrapping of the 45% additional rate of income tax which the government announced on Friday.”

There’s just one awkward issue with this policy: Labour’s already said Kwasi’s abolition of the 45%  is uncosted borrowing. Using that borrowed cash towards NHS spending instead of a tax cut is not, as Reeves has just promised, “carefully costed and fully funded” – it’s exactly the same uncosted spending for a different purpose. Inconsistent opposition for opposition’s sake is very tedious…

mdi-timer 26 September 2022 @ 12:54 26 Sep 2022 @ 12:54 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
UK’s Debt Will Still Remain Second Lowest in G7

The gilt market is reacting badly to news that the government will increase the deficit as it cuts taxes across the board. Bond market vigilantes rightly doing what bond market vigilantes do. Important to contextualise that even after Kwasi’s extensive Reaganite package of growth-oriented reforms, the UK’s debt to GDP ratio will remain at the lower end of the G7. It is worth putting this into an international context…

mdi-timer 23 September 2022 @ 12:17 23 Sep 2022 @ 12:17 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
Liz: There’s “No Doubt” Tax Cuts Will Grow Economy

All the usual voices are squawking over Liz and Kwasi’s plan to cut taxes this Friday. This morning The Times reported on the Institute for Public Policy Research’s solemn warnings over cutting corporation tax, just as the blob and its sympathetic commentators sulked over the sacking of Treasury Permanent Secretary Tom Scholar earlier this month. The reversal of the National Insurance hike is already “unfair” on low earners, according to all the same people who attacked the rise in the first place…

Yet rather than kowtowing to the establishment voices who would rather the country staggers on with sclerotic growth and a 70-year high tax burden, Liz has instead doubled down – even warning that “not every measure will be popular”:

“We’re on the side of delivering a higher wage economy. That’s what we need to do. We’ll take every measure. Not every measure will be popular. There are always vested interests, people that oppose measures that increase economic growth. But what is important to me and what is important to the chancellor is that people have more opportunities, there is more investment, and there are jobs with higher wages. We’re prepared to make that argument. […] The number one thing we need to deliver as a government, and in fact as a country, is economic growth. Lower taxes lead to economic growth, there is no doubt in my mind about that.”

Making pro-growth arguments will require shaking off years of groupthink, both in the media and in Whitehall. Truss, like Thatcher, is actually prepared to do that…

mdi-timer 20 September 2022 @ 15:04 20 Sep 2022 @ 15:04 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
750 Takeaway Owners Call for Action to Prevent Mass Closures

Hundreds of independent takeaway owners have written to both Tory leadership candidates today to plead for support in the wake of skyrocketing energy bills and rising costs. In an open letter backed by the British Takeaway Campaign – the body which represents the nation’s independent takeaway industry – more than 750 restaurant and café owners have urged the Government to take immediate action to ensure they’re able to keep their doors open.

The restaurants are calling on the Government to:

  • Cut VAT to reduce the cost of energy and keep food affordable for customers
  • A moratorium on ‘red tape’ which is pilling costs onto the smallest restaurants
  • Provide business rate rebates

Ibrahim Dogus, Chair of the British Takeaway Campaign says:

“The Government has waited until the last moment to act before, but now cannot be one of those times. It must work with the Conservative leadership candidates on a plan to support Britain’s smallest restaurants before it’s too late. Restaurants are going bust every single day, and the hundreds that have signed this letter, and the many more the British Takeaway Campaign represents, don’t want to be another boarded up shop.”

Curry houses, kebab shops, fried chicken joints and chip shops have united in demanding action. Expect a lot more of this as Britain pays the price for the loss of our energy independence driven by misguided green policies …

mdi-timer 29 August 2022 @ 11:28 29 Aug 2022 @ 11:28 mdi-twitter mdi-facebook mdi-whatsapp mdi-telegram mdi-linkedin mdi-email mdi-comment View Comments
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