Day 1 as lab rats: some views of the Budget

We knew yesterday’s budget was coming. Most of its measures had been trailed. Gone are the days when MPs find out what the Government is doing actually in the Chamber, even though that is what is supposed to happen.

The reality still came as a shock, though. You would expect me as a good old fashioned tax and spend liberal to be horrified by a reckless spending spree that made the rich richer and some of the poor very much poorer. I lived through the 80s when the last iteration of trickle down economics failed miserably. Mary Reid looked at the theory yesterday and found no evidence that it has ever worked.

This budget is exactly the last thing you want to see when we are on the precipice of recession. I believe in a state that uses its power to ensure that everyone’s basic needs to shelter, food, healthcare at the very least are met. We should not be tolerating hunger and poverty in this day and age and the measures announced yesterday will make life much harder for those on low incomes, particularly if they are working part time and are on Universal Credit.

But don’t just take my word for it. The way the markets tumbled and the pound crashed to its lowest level against the dollar for nearly three decades showed that they had no confidence in this either. The Guardian reports Paul Johnson from the Institute of Fiscal Studies as saying that the Chancellor was betting the house:

Today, the chancellor announced the biggest package of tax cuts in 50 years without even a semblance of an effort to make the public finance numbers add up. Instead, the plan seems to be to borrow large sums at increasingly expensive rates, put government debt on an unsustainable rising path and hope that we get better growth.

Former Cabinet Secretary Gus O’Donnell, who first joined the Treasury in 1979 said the budget was “not ideal.”

And Conservative columnist Tim Montgomerie welcomed us to our new lives as lab rats:

Because exactly what you need when the country is facing multiple economic firestorms is to try something that we know doesn’t work. I am more worried, though, that it is part of a wider longer term agenda to radically shrink the size of the state and privatise many of our public services. The Government after this is going to have an economic and fiscal nightmare to sort out.

It’s worth noting that this Government is doubling down on Boris Johnson’s habit of avoiding scrutiny. They refused to allow the Office of Budget Responsibility to release forecasts for the “mini budget.”

Already, Conservative MPs are bleating to the Guardian that they are not happy.

“I completely despair, because I’m a member of a party that stands up for the squeezed middle not the very rich. This will be politically toxic and economically dubious,” said another MP present for the statement.

What a shame that there is nothing else that they can do, apart from defy the whip and vote against it of course. Rishi Sunak had 137 votes from Conservative MPs. Truss has a majority of 80. Don’t hold your breath…

Marina Hyde never disappoints with her brutal commentary and she has excelled herself here. The paragraph that actually broke my ribs from laughing is

Lowlights of the week? Jacob Rees-Mogg accused opponents of fracking of “sheer ludditery”, which means so much more from a man whose Fitbit is a carriage clock, and who makes his secretary type on a spinning jenny. The presence of Rees-Mogg in the key quad of Truss’s ministers really is something, given all his gaffes, given the fact he has never “delivered” in any previous job at all, and given he has to be lowered into a priest hole for the duration of every election campaign the Conservatives actually want to win.

Here are a couple of the other highlights:

The PM keeps explaining she’s going to do everything differently, and her economic policy possibly makes best sense as a defence policy. She is casting the UK as a country too mad to nuke. It’s not classical game theory, is it? But maybe we’re just playing Buckaroo…

…As for the overwhelming import of the new chancellor’s outsize mini-budget: if you are very rich, you are now richer. If you are poor, it’s time to ask yourself the pertinent question: had you thought of simply being rich instead?

 

Do read the whole thing. You need the endorphins in these troubled times. You will of course eventually remember that it isn’t dystopian satire, though, and come back to earth with a bit of a jolt.

I would strongly advise against thinking that the Conservative Party can’t get much worse. We have been wrong on that since 2016. Heaven knows what they will come up with next.

* Caron Lindsay is Editor of Liberal Democrat Voice and blogs at Caron's Musings

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3 Comments

  • George Thomas 24th Sep '22 - 12:11pm

    John Stone, Independent, yesterday quipped:

    “when money was free and interest rates were basically zero, the UK destroyed its public services in the pursuit of balanced budgets. Now money is expensive the UK going to borrow lots of it to spend on cutting taxes for rich people”

    I don’t think he was suggesting Tories started to dismantle public services in 2016. Liz Truss is pressing x32 fast forward on ensuring many, many more need to access foodbanks but it was Cameron and Osbourne who started the fast-forwarding process (this might be unfair, it might have been before them) which means so many people are already in a weak position before Brexit, before cost-of-living crisis, before Tories sat on their hands for 5 weeks (plus unfortunate political wide extra pause for Queen), before Liz Truss’ Tea Party experiment started in earnest.

  • The sheer folly of this unelected new government puts Johnson’s antics in the shade. This is the Brexit that Rees -Mogg wanted. The ERG group is now in full control of the country.

  • James Fowler 24th Sep '22 - 1:07pm

    Yes, this budget is very redolent of the Maudling ‘dash for growth’ and the Barber and Lawson booms. All followed predictable, inflationary paths to bust. The absurd tax cuts for the wealthy paid for by borrowing betray the influence of donors. I guess the next election campaign has had to be paid for upfront.

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