Mini-Budget goes down with all hands…

The inevitable abandonment of the “Kamikwazi” budget by Jeremy Hunt has been greeted by the derision one might expect, even if there was no easy alternative. No cut in the basic rate of income tax, the withdrawal of IR35 changes and the withdrawal of guaranteed support for energy costs beyond April, none of this will win votes, even as it placates the markets.

Responding to Jeremy Hunt’s mini-budget statement, Leader of the Liberal Democrats Ed Davey said:

So much damage has already been done by these Conservatives and they will force millions of struggling families and pensioners to pay for it.

The Conservative government has already trashed the British economy and put hundreds of pounds on people’s mortgages. Now they are going to inflict even more pain by putting up energy bills, raising taxes and slashing crucial public services, while still protecting oil and gas giants from a proper windfall tax and still cutting taxes for the big banks.

It is not just Liz Truss or Kwasi Kwarteng. The whole Conservative Party is out of touch and does not care. That is why we need a General Election, to take them out of power and end this crisis.

And as for the Prime Minister, as our newly returned colleague, Paul Walter, comments;

At the moment, Liz Truss just seems to be providing them with an excuse to keep the central heating on in the Downing Street flat.

As for the proposed abolition of the Health and Social Care Levy, that requires the passing of legislation which, intriguingly, has its Second Reading (and all remaining stages!) in the House of Lords today. Might there yet be another twist to this Government’s agonies?

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  • >As for the proposed abolition of the Health and Social Care Levy, that requires the passing of legislation which, intriguingly, has its Second Reading (and all remaining stages!) in the House of Lords today.

    Lets hope the LibDem’s and other sensible members of the HoL vote against the adoption of this abolition bill…
    The laugh is, this action can be sold to Tories as honouring the value “that people should keep more of the money they earn” – the NHS being cheaper etc. than a US style system…

  • I wonder if Truss will attend the HoC to answer Labour’s UQ? My guess is that she’ll creep in afterwards for Hunt’s statement..

  • Chris Haigh 17th Oct '22 - 2:33pm

    Jeremy Hunt needs to restore the people that Johnson kicked out of the party and get Philip Hammond back in the cabinet at the expense of the Rees Mogg types.

  • James Fowler 18th Oct '22 - 8:54am

    This episode is worse than Black Wednesday – for the Tories it’s more akin to Heath’s defeat by the miners in 1972.

    However, a closer parallel is with Callaghan in 1978-79 when the Unions turned on their own. The destruction of the mini budget designed on the assumptions of the free market by the market itself is a pivotal moment.

    But while the Conservatives many opponents cheer, what has happened carries a very serious health warning. Most place their faith in the power of the state to achieve their aims, but it’s confidence in that same instrument that’s been severely damaged by these events. Be careful what you wish for.

  • Martin Gray 18th Oct '22 - 9:09am

    James – if you don’t want the markets to respond to govt policy , then don’t borrow from them ….

  • Ianto Stevens 18th Oct '22 - 9:28am

    Ever since Brexit and the takeover of the two largest UK parties by extremists and egomaniacs, UK politics has lost its sense of direction. There is a lack of that combination of idealism, charisma, vision and common sense that leadership at the top requires. Huge problems circle like vultures – pandemic, aggressive war, autocracy in the ascendent almost everywhere, catastrophic loss of biodiversity, shortage of natural resources, aging population etc etc.
    Facing these challenges require public and private investment, much of which will only become profitable in years and in decades. It is not all going to be paid for by a windfall tax and by ending a few perks enjoyed by the richest of us. Sure, the richest should pay MUCH more, but even people of average and somewhat below average wealth need to contribute. Growth is only a ridiculous slogan. It does should mean consuming less and using the proceeds to make Britain sustainable, and less dependent on financial manipulation. The Brexit slogan was ‘take back control’ the last few weeks have shown us all that we are NOT in control. It’s frightening to believe that nobody is.

  • James Fowler 18th Oct '22 - 4:04pm

    @Martin – yes, very much so. Debtors and creditors may be symbiotic, but creditors make the rules.

    The point of my post was to look at parallels where governments had been destroyed by the institutions and ideas they espoused rather than by their opposites, and to offer a caution about the wider consequences of what has happened.

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