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 * Weak Tories are taking us back to the seventies, The Daily Telegraph, 30 October 2021

Weak Tories are taking us back to the seventies
High taxes, rotten public services and cowardice in the face of the hard-Left was Labour’s legacy then. This time it will be Boris Johnson’s.

DOUGLAS MURRAY

When Boris Johnson sailed into Downing Street in 2019 it was on a wave of optimism. After a decade of hung Parliaments and weak governments, here was a Conservative who then won a real majority and a real mandate. And not just a Conservative but a Conservative who the country seemed to love, an optimistic figure who promised brighter days. A man who was not just going to do what the electorate told the politicians to do in 2016 but who believed in the British future.

Of course, all politicians end up being the creation of events, but still there is something especially bitter about the fact that Boris Johnson would appear to be leading Britain back to the 1970s. Because it increasingly feels like it is that un-missed decade that the present government is returning us to.

The recent fuel shortages were caused by many things. They are a global issue and have been worsened by a worldwide shortage of heavy goods vehicle drivers. But the sight of cars backed up at petrol stations and drivers swapping rumours of places reported to have fuel supplies are not things that people are likely to forget.

For those old enough to remember the 1970s, they were deeply reminiscent of the shortages which affected the country then. What the present crop of ministers seem to have forgotten is that it was only the genuine Conservatism of Margaret Thatcher’s government in the 1980s that did away with such problems.

Perhaps the greatest change that the Thatcher government enacted was that performed by her revolutionary chancellor of the Exchequer, Nigel Lawson. Before Lawson, the UK had performed the experiment that so many flailing Leftists still try to perform: they believed that the country could become rich by taxing the rich.

It was the insight of Lawson, along with a crucial collection of Right-wing economists, that if you lowered the tax rates not only would the tax pot increase but the fuel of the economy would go into superdrive. So it was. When people know they are working for themselves they work harder. But when a majority or near majority of their earnings goes to the government then a deep stasis beds in, one which affects the individual and then from the individual seeps out across the whole of wider society.

The Conservatives of the 1980s got Britain out of that mire of a high-tax, low-innovation society. Yet it is the Conservative Government of today that seems to be returning us to it.

Naturally, some aspect of this has been out of their hands. During the coronavirus pandemic the whole world was in a situation that proved very far from business as usual. Staring at the options, the Government in this country – as in developed economies across the world – chose basically to buy up the economy for a period of time. They opted to keep whole sectors afloat on borrowed money. That period had to end, but it also had to be paid for. And that is part of the explanation for Rishi Sunak’s budget this week.

The Chancellor has been adept at hiding some of the bad news. Not least by adding complexity to an already complex tax system. But the bottom line is that those who do the most for the economy will be taxed even more. Tax-payers in the highest bracket – that is those earning over £150,000 a year – will be taxed at a figure very nearly nudging 50 per cent. At 45 per cent the Conservatives are getting perilously close to the point at which they make top-rate taxpayers spend more time working for the state than for themselves. They already are, if you include national insurance.

Such taxpayers are not a popular group of people to stand up for. More demagoguery can be achieved by lambasting higher earners than by expressing any sympathy for them. But we have been here before. The politics that thought that higher earners were both the problem and the piggy-bank was the politics that brought us to the economic slump of the 1970s.

Worse is that a Conservative Government should be instituting these tax hikes while all the time showering money on an entirely unreformed public sector. Every part of it exemplifies the lazy big-state problem. On matters grand and pedestrian the behemoth asserts itself in the old familiar way.

For instance, the Civil Service has been unsurprisingly reluctant to return to normal office working patterns. Recent negotiations with them centred on the desire of civil servants to invert their post-Covid working week. Their preferred option appeared to be in favour of going into the office for perhaps a couple of days a week and then having five days at home in the garden to recover from the strain.

With other parts of the public sector it is even worse. The NHS is the reason why this country went into endless lockdowns and stasis during the Covid era. Again and again it was explained to us that we needed to protect the NHS, rather than the NHS protect us. The reality was that a Tory government lived in terror of the health service buckling. All those Labour lies about the Conservatives wanting to destroy the NHS would have run on for several more generations if anything remotely like that had happened, and so they showered the health service not just with love but with cash.

This week, Sunak committed yet more billions to the NHS. The old joke of Britain being an NHS with a nice country attached is coming to look perilously true. The Government behaves as though it is held hostage by the health service, just as the country was held hostage by the coal miners in the 1970s. Even the new money that is being committed is intended to address problems – like patient backlogs – which the NHS itself needs to explain.

But it never does. Instead of accounting for its shortcomings, the NHS just gets another cash injection from a terrified government.

When a government is this scared of making bold moves or is captivated by the arguments of its opponents then it is hardly surprising that the country looks like it is sliding backwards all these decades. Across the country in recent weeks a group of rabid and extremist protesters from Insulate Britain, an offshoot of Extinction Rebellion, have been blocking major roadways, an echo of the disruption ushered in by the strikers of the 1970s.

They are a pest and a menace. Yet these people who have been literally trying to block the economic arteries of our country have been getting away with it. Policemen stand around observing the pandemonium as though they are recording the events for some future purpose. Others negotiate with the occasional road-sitting granny, as though she were a jihadi with a suicide vest ready to blow.

It has been members of the public who have had to do what the police will not do and haul these wretched nuisances out of the roadway. Often, happily, by the scruff of their necks. Why should the public have to do this? Only because this Government lives in fear of telling the police what they need to do. Just as they live in fear of telling the NHS what to do.

So what, if anything, is the agenda of this Government? It appears that the aim is to become greener at all costs – even at the expense of soaring fuel supplies – and otherwise to be a high-spending, high-taxing welfare superstate. We will see what happens as the fuel bills keep coming in. And we will see if the fuel itself even does keep coming. But in the meantime we can say that the route this Government is taking is a route that cannot work. Because we have been here before.

That time the Conservatives came in to save us. How strange it is that this time they are the people who have got us here.

Kwarteng must publish UK economic forecasts by end of October, senior Tory urges

 * here

Chair of Treasury select committee Mel Stride says chancellor must give markets ‘the truth’ over impact of controversial mini-Budget

George Parker 29 September 2022

Kwasi Kwarteng must publish new forecasts for the British economy by the end of October to calm the chaos in the financial markets caused by the UK chancellor’s “mini” Budget, the Tory chair of the Commons Treasury committee has said.

“What markets need is truth,” Mel Stride told the Financial Times. “They really need to know where this is heading,” adding that the chancellor urgently needed to show the markets that he has a credible plan to control debt rather than waiting until late November.

The senior Tory backbencher said Kwarteng had made “a great mistake” by not commissioning forecasts by the Office for Budget Responsibility to publish alongside his controversial tax-cutting fiscal statement last Friday.

In an attempt to demonstrate to markets that the government is taking the OBR’s deliberations seriously, Kwarteng and Liz Truss, prime minister, will meet the body’s chair, Richard Hughes, on Friday to discuss the process.

Kwarteng has promised to publish his plan to control debt in the medium term on November 23 alongside a new OBR forecast, which would deliver a verdict on whether the chancellor’s sums add up.

Richard Hughes, chair of the OBR, confirmed on Thursday in a letter to the SNP leader Ian Blackford that he had offered to write an updated forecast to be published alongside Kwarteng’s fiscal statement on September 23, but the chancellor turned down the offer.

Stride, a key backer of former chancellor Rishi Sunak in the Tory leadership campaign, said Kwarteng had left a “great big void” by failing to have his plan independently verified and has written to him on behalf of the Treasury committee asking for new forecasts by the end of October.

“The markets are in a very difficult position,” he said. Stride argued that the publication of OBR forecasts would be a moment of truth, forcing Kwarteng to make tough decisions to prove to independent economists he can cut debt as a share of GDP within five years.

“I do not expect that any responsible government would put itself in a position where they go to the market and say the OBR doesn’t think our plans are realistic, but we’re going ahead anyway,” he said.

Kwarteng insists that his tax cuts and supply side reforms would boost annual growth to 2.5 per cent, generating the revenues needed to put debt on a downward path in the medium term.

Stride said that if the OBR concluded that this was wishful thinking — as the markets believe — Kwarteng would then have several unpalatable options to convince forecasters he could make his sums add up.

One option would be to reverse some of his £45bn of unfunded tax cuts: a U-turn which has been ruled out by Kwarteng, who insisted again on Thursday that he was sticking to his plan.

A second would be to slash public spending, although Stride noted that public services were already strained and face around £20bn of extra costs linked to higher inflation, which feeds into higher wages and other costs.

The third would be to pursue supply side reforms aggressively to try to convince the OBR that growth could be forced up. He said a big increase in immigration — highly controversial in the Tory party — was one “quick fix”.

“If you’re really prepared to open up immigration in the short term, bring in skilled people and agricultural workers, you might be able to convince the OBR you could have a sustainable surge in growth,” he said.

Stride said the situation was “challenging but not a disaster” but he was critical of Kwarteng for pursuing unfunded tax cuts. He said that controlling inflation and delivering supply side reforms should have come first.

“The problem has been a cart before the horse approach to this, which the markets haven’t bought,” he said.

Treasury insiders insist that the OBR normally needs 10 weeks to conduct a full forecast and that it made sense to publish that in November alongside the new medium-term fiscal plan, which has only just been commissioned.

Meanwhile, bookmakers have made Sunak, who warned prime minister Liz Truss that her economic plans would result in chaos during the leadership contest, the favourite to succeed her as prime minister — less than a month after she defeated him. He will not attend next week’s Tory conference in Birmingham.

Sunak’s allies expect the former chancellor to stay in British politics — he has said he wants to carry on serving his constituents in North Yorkshire — and dismiss speculation that he is eyeing a return to a business career in the US.