Liz Truss’s new Chancellor – old Health Secretary Germy C- er, Jeremy Hunt – announced in his very first media interview that he will be imposing further austerity on the UK in order to balance the books after the unforced errors of Kwasi Kwarteng.
Wow.
More austerity, of course, means the rich get richer and the poor get poorer. Let’s have some analysis:
We all know this isn’t the first u-turn of the Truss administration.
But do you know the full extent of her dithering?
Here’s a clip that lays out the situation for you:
She has created a huge problem for herself, electorally, with this.
We know that she has thrown away Boris Johnson’s 2019 manifesto; most of the plans in that document won’t materialise now (and that’s a good thing, by and large).
But by announcing policies on the hoof – and then u-turning on them – Truss is leaving the electorate in limbo.
What does she stand for? Does even she know?
Well, if she doesn’t work it out soon, she’ll self-destruct because the public won’t support a politician with no policies.
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Tweedledum and Tweedledumber: Rishi Sunak wants to cut Covid-19-related spending before the pandemic is over. He’ll cause another huge recession – and more deaths – and Boris Johnson will let it happen because he is too stupid, or too greedy, to care about the harm it will do.
This is worrying from Richard Murphy at Tax Research UK.
He reckons Tory Chancellor Rishi Sunak is either so stupid that he wants to kill off even more of us with Covid-19 for the sake of a few extra coppers in cash…
… or he’s so stupid that he thinks the economy will get a huge boost if he puts it into another disastrous recession – possibly even a depression (which is worse).
All the noises Sunak is making at the moment are about stopping Covid-19-related government spending – indicating that he’s putting the Treasury into “full austerity mode”, as Mr Murphy puts it.
He wasn’t calling for a relaxation of Covid-related travel regulations because he thinks the pandemic is over – it clearly isn’t. But he’s indicating that he thinks he is because he wants to stop spending money on it…
… even though all the money he spent on it was specifically created for that purpose and hasn’t done any harm at all as it has washed through the country.
What a strange man.
Mr Murphy continues:
Sunak wants furlough to end, even though he knows this will significantly increase unemployment.
He goes on to say that this is about maintaining ‘The Treasury View’ as put forward by Winston Churchill in 1929 – a false argument that there is only a limited amount of money and if the state uses any of it, then investment – and growth – by the private sector cannot take place.
It is a completely false view to take:
Churchill spoke when we were on the gold standard. But now we have a fiat currency, and the only constraint on the money supply is full employment at a living wage, which we are very far from achieving.
What is more, there is not a shred of evidence that there is any shortage of capital available to business right now. All business is absent of is ideas.
And to suggest the state does not add value in this era is an insult.
Churchill was economically incompetent.
His decision to follow ‘The Treasury View’ drove the UK into the Great Depression of the early 1930s.
Now Sunak wants his own great recession, whether working for Johnson or in his own account, given that his ambitions are so obvious.
And it seems clear that Boris Johnson is going to do everything he can to help. Already travel restrictions are being lifted.
Not only will the economy bomb, but Tweedledum and Tweedledumber are literally inviting more Covid-19 variants through the UK’s front door, and thousands upon thousands of us may suffer and die as a result.
Rishi Sunak looking nervous: is he being honest with us? Does he even know?
There were no surprises in the announcements that formed Chancellor Rishi Sunak’s spending review – but it did mark a major change.
Sunak has abandoned the failed “starve the beast” economic model that was favoured by George Osborne and that caused such economic havoc between 2010 and 2015.
Instead of forcing austerity on the UK by cutting investment, thereby restricting the amount of money passing through the UK economy and shrinking it, creating a spiral of steadily decreasing funds, Sunak has reverted to a tried, tested and effective model.
He has elected to borrow money and use it to pump fresh blood into the economic veins of the country. The question is: can a Tory ever put enough cash into the system?
This Writer was on Twitter during the Chancellor’s speech, and provided my own commentary throughout. I reproduce it here, along with other comments I’ve picked up:
#SpendingReview – Sunak starts by saying he'll protect lives and livelihoods. By freezing public sector pay while taking at least a 4% pay rise to MPs? Whose livelihoods is he protecting, exactly? #PoliticsLive
and nothing for poorer people: 2 children cap still in force, people on old style benefits had no 20 pounds increase, Statutory sick pack 90 pounds per week. I am wondering what role plays that he was born in USA and the UK is not his country.
— Diana 🕷️ #FBPE #IStandWithJeremyCorbyn (@Diana38261174) November 25, 2020
Economic forecast is that the economy will contract by 11.3% – largest fall in output for more than 300 years. Recovery to follow but the government will provide stimulus. That's Keynesianism, isn't it? #SpendingReview#PoliticsLive
Yes, there has been an increase in borrowing. UK borrowing is £394BN this year – the highest amount in peacetime history. That's Sunak's doing. Why does he want US to pay for it? #SpendingReview#PoliticsLive
For context, when the Conservatives (and Lib Dems) came to power in 2010, the deficit was £144bn – a figure considered so astronomical that it dominated British politics for much of the past decade. Today, the figure is expected to be more than double that. https://t.co/zvIe2DOpc4
Underlying debt to rise to 97.5% of GDP. Remember when George Osborne said the debt must never be allowed to rise about 90%? Tories say whatever they feel like saying. #SpendingReview#PoliticsLive
Yes, Tory investment has kept businesses and jobs going. Keynesianism, as I said before. Money for a jobs restart programme is also Keynesian pump-priming. So much for Tory neoliberalism that doesn't work at all in a situation like this. #SpendingReview#PoliticsLive
Oh, Sunak is using a fall in private sector wages as an excuse to freeze public sector wages! But won't private wages rise again starting next year, according to his own predictions? #SpendingReview#PoliticsLive
Nurses and doctors to receive pay rise – would that be part of the ongoing deal that was devised several years ago and isn't enough? #SpendingReview#PoliticsLive
And a #livingwage should be enough for you to live on without claiming benefit. Otherwise it's just poverty wages paid by unscrupulous employers and subsidised by the tax payer
Government spending to rise next year by the largest amount in many years – but this is necessary to counteract the harmful effects of #Covid19 and is just more Keynesianism. #SpendingReview#PoliticsLive
Listening to these announcements, it seems the Tory government is trying to be more socialist than @UKLabour under @Keir_Starmer – that's an indictment of Starmer and Labour, not an endorsement of Sunak, Johnson and the Tories. #SpendingReview#PoliticsLive
True. Are we cumulatively up to 120 hospitals yet? Doesn't this remind one of the old USSR's annual 5-year plan announcement of vast productivity increases by the Volgagrad Tractor Workers Factory?
A cut in the proportion of UK national income – from 0.7% to 0.5% – going to foreign aid. That's shaming because the proportion was a point of pride for the Tories. #SpendingReview#PoliticsLive
"We're making this country a scientific superpower" – that's a big claim, considering the huge failures in the #Covid19 crisis. #SpendingReview#PoliticsLive
New immigration system. What a shame Sunak has to end his statement by trying to big up something that is worse than what it replaces – and on the day the EHRC condemned the Windrush scandal. #SpendingReview#PoliticsLive
Good point: spending power is going down so the economy will suffer because the Tories are restricting the amount of money passing through the economy. #SpendingReview#PoliticsLive
Why not just call it criminal money-laundering from the public tax purse on a massive scale – and my bank gets all suspicious if I ask try to transfer £500 of my own money to a friend🤮
Dodds is right to highlight Tory waste and mismanagement. The Tories claim to be the party of financial responsibility yet they spaffed billions on their friends and the nation had nothing in return. Nothing! #SpendingReview#PoliticsLive
The "levelling-up" fund is about begging ministers for cash rather than change coming from communities themselves. Good point? #SpendingReview#PoliticsLive
True that. If our economic emergency has only just begun, as Sunak said, then he has condemned people who've been unemployed since March to a desolate future. #SpendingReview#PoliticsLive
Sunak didn't focus on the climate crisis and it's a good point that he needed to incorporate measures to tackle it into all the other parts of his #SpendingReview#PoliticsLive
Dodds highlights the lack of interest in #Brexit – as I mentioned in a previous tweet. Is Sunak trying to hide the economic crisis that we're facing from January 1, 2021? #SpendingReview#PoliticsLive
"We needed ambitious action today" says Dodds, and she's right. Personally, I'm amazed that a Tory has announced the amount of funding that he has. #SpendingReview#PoliticsLive
We should all remember that announcements mean nothing; Labour has announced that it will implement all the recommendations of an EHRC review of the way the party handles anti-Semitism complaints but it seems this is because it won’t make any difference to what the party does.
So we need to watch what the Tories do, and check not only the amounts of money they hand out – but who gets it.
The so-called “chumocracy” has had far too much of our money lately and This Writer, for one, fears that they haven’t finished slurping up the blood that keeps our economy alive, vampires that they are.
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It seems Rishi Sunak has announced spending worth £640 billion in his Budget speech on Tuesday – to rapturous applause from the Tory-supporting media.
That’s £140 billion more than the £500 billion offered by Jeremy Corbyn and John McDonnell in their Labour election manifesto last year – that the same media voices ridiculed in a (successful) bid to get more people to vote for the Tories.
What has changed in less than four months, to make the Tory offer praiseworthy when Labour’s was dangerously reckless?
And where’s the money coming from, that wasn’t available before?
That’s what they’re asking on the social media:
Jeremy Corbyn and John McDonnell promised £500bn of infrastructure spending, prompting eyes to pop all over Westminster and Whitehall. Rishi Sunak today promised £640bn.
And doesn’t this announcement prove the truth of this comment?
BUDGET. Massive borrowing. Final proof Tory Austerity failed. 10 wasted years. Millions of wasted lives. I should be happy but I'm not, I'm angry. Angry that the Tories persevered with their austerity experiment knowing that it was failing the country and failing us the people.
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Sajid Javid: Would you trust him with your money? Really?
The Tories are spinning so hard on their spending plans, it must be making them dizzy.
The reason?
They are lying to you again. Labour’s proposals are sustainable but theirs are not.
That’s the verdict from Oxford University economist Simon Wren-Lewis, quoting the Institute for Fiscal Studies (IFS) and the Resolution Foundation (amongst others) in support.
Both parties are proposing extra spending, and the Tories are trying to scare you with the scale of Labour’s plan:
Jeremy Corbyn and John McDonnell would leave our country staring down the barrel of bankruptcy – and we know from last time what that means:
👩💻👨🔧❌ job losses 💷⬆️ tax hikes 📈 our deficit spiralling out of control
But they have miscalculated, basing their figures on false assumptions.
Let’s do the facts first:
The Tories’ spending increases are unsustainable because they are saying they will not increase tax.
Labour’s increases – large though they may be – are more sustainable than those of the Tories because Labour has said it will increase taxes – we know from the 2017 manifesto that Corporation Tax will go up, and taxes on high earners. This means Labour will stay within the rules it has set for itself; the Tories will not.
More damningly, though, the Tories cannot sustain their spending plans within the Brexit framework that they have negotiated.
The hard Tory Brexit that takes us out of the Single Market and the Customs Union means greater damage to the economy, along with lower earnings and therefore a lower tax take.
Labour will either negotiate a softer Brexit or cancel it altogether – depending on what the people decide. That means less economic damage, higher incomes, higher taxation… and therefore higher spending.
That is the conclusion of Professor Wren-Lewis, using evidence from those other organisations in support.
He also suggests that the economy – and public spending – is one area in which the Tories will most definitely not want to say this is a “Brexit” election.
They won’t want to mention Brexit at all. Because “once you factor in Brexit, the Tories extra spending is unlikely to be sustainable. They willl be forced to raise taxes or cut spending to keep to their current balance target. It will be even worse if Johnson throws in some last minute tax cuts in a desparate attempt to ensure he gets a majority. The OBR might have shown all this in its budget forecast, but the budget was conveniently postponed.”
(Isn’t it interesting how anything that might reflect badly on the Tories gets postponed? The budget, the report on Russian interference in UK democracy, the inquiry into Tory Islamophobia, the investigation into whether Boris Johnson gave undue support to Jennifer Arcuri – all are on hold, so the Tories don’t look completely corrupt and incompetent, it seems to This Writer.)
And this is what we have seen on the Sunday politics TV shows.
Sajid Javid appeared on the Marr show, spouting a load of unsupported nonsense – and when Andrew Marr called him out on it, he threw his toys out of his pram:
Ouch!! BBC give the Tories both barrels. Your smears against Labour are "bogus numbers & dodgy accounting". That has to hurt. pic.twitter.com/v44jxP24EA
“These are eye-watering levels of spending,” says the Chancellor representing the party that has saddled the UK with a much larger amount of debt.
Then he whines, “It will leave this country with an economic crises within months. Not years – within months.” What a big baby. Professor Wren-Lewis’s figures show it is his spending that will cause any crisis.
And I hope the fact check websites are already investigating this “costofcorbyn.com” website. It’s clearly a Tory site and it seems clear that it is fake news.
Meanwhile, Kwasi Kwarteng appeared on Sky’s Sophie Ridge on Sunday where he admitted that his own party couldn’t provide any numbers to justify its own spending plans.
It takes a special kind of arrogance to agree to appear on a TV show so knowingly underprepared https://t.co/zN5tyis2Ee
“I’m not going to bandy around figures,” said clueless Mr Kwarteng. But that was exactly what he was doing. He doesn’t have Labour’s figures because his party’s claims are based on unfounded assumptions – and he didn’t have his own party’s figures because… well, why didn’t he have them?
Because they show that the Tories are the party of financial irresponsibility? And they are afraid to admit it?
Let’s face it – that’s the only conclusion to draw.
Tory lies on Labour’s plans show they are quaking in their £500 pair of Crockett & Jones brogues. The overreach is quite something. Even the Times newspaper has suggested as much!
If the Conservative Party was truly putting peoples interests first, they would be telling us how they plan to make lives better. Instead, all they do is attack Labour & incompetently at that. They act like petulant children, it's time for some grown ups. #GE2019#VoteLabour2019
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Valueless: Oscar Wilde said a cynic knows the price of everything and the value of nothing. Boris Johnson doesn’t even know the price of anything. Perhaps that is why he is spaffing your money up the wall like a fool.
Listen to this:
At a moment of national crisis this Government poses a threat to its own people and the economy they rely upon. pic.twitter.com/vWUiI3BNIq
John McDonnell was referring to a report by the respected Institute of Fiscal Studies (IFS), stating that the UK will be £110 billion better-off under a Labour government than with Tory rule, by 2022.
The IFS stated that the outlook for the public finances has “worsened dramatically” since the spring and will deteriorate further if the UK leaves the European Union without a deal.
There can be few clearer statements that Boris Johnson’s leadership is a threat to the United Kingdom and everyone in it.
The report stated that the government’s current spending plans, including a £13.4 billion increase to meet Mr Johnson’s promises on police and schools (but not – notice – the NHS) mean the budget deficit was likely to be £52.3bn in 2020-21, more than double the £21bn forecast by the OBR in March.
But Mr Johnson also promised huge tax giveaways for the rich in his leadership campaign including cuts to Income Tax and National Insurance. If he goes ahead with these, he will harm the national finances even more brutally.
No doubt Mr Johnson – and his chancellor Sajid Javid – will come out with some mealy-mouthed excuse to pacify us all. It will probably involve another claim that the Conservatives are the “party of financial responsibility” and “Labour will bankrupt the country”. But it’s a funny thing – if they think Labour’s fiscal plans are so harmful, why has IFS director Paul Johnson claimed that their own current ideas are almost identical to Labour’s from 2017?
Most tellingly, of course, we know that Boris Johnson is a liar.
You cannot trust him when he says he’ll fund the police. You cannot trust him when he says he’ll fund schools. You cannot trust him when he says he’ll fund our NHS. You cannot trust him when he says he’ll cut tax. And you absolutely cannot trust him when he says the UK will be better-off after his Brexit.
He thinks you’ll vote for him in an election likely to happen before Christmas. Just remember this:
If you vote for a liar, you will only get broken promises.
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Westminster’s shame: Theresa May promised a ‘shared prosperity fund’ to replace EU grants – but it seems she wasn’t going to share it with anyone who wasn’t already rich. None of the Tory leadership candidates have said a word about it.
While the candidates in the Tory leadership contest try to bribe their voters with castle-in-the-air promises, they are all plotting to take funding away from areas of genuine need and give it to the richest.
It is shocking, but it is also exactly what we should expect from a government that is little more than a gang of bandits.
A study by a coalition of community leaders and charities called Communities in Charge has shown that Tory plans for post-Brexit Britain would withdraw huge amounts of funding from the poorest areas, including Wales, the southwest and northeast of England.
The money would be used in rich areas – London and the southeast.
This means, according to The Independent: “That would see Wales stripped of £2.3bn over the six years from 2021, with other big losses in the southwest (£1bn), the northeast (£480m), Northern Ireland (£230m) and the West Midlands (£225m).
“In stark contrast, London would gain a staggering £19bn over six years, with the southeast (£1.2bn), Scotland (£795m) and the east of England (£583m) also set to benefit.”
The change has been likened to taking £700 from every single human being in Wales, in order to give £200 to every Londoner.
It makes a mockery of Theresa May’s promise of a “shared prosperity fund” to replace the EU structural funds that will be lost post-Brexit.
The Conservative government claimed in January that it was making great progress on the fund.
Five months later, we may conclude that this fund will only share prosperity among rich Tories.
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MPs, election candidates and party officials will be able to break election spending limits with impunity if the Tories pass a new proposed law.
The intention is to create a new “test of authorisation” – a buffer between candidates and the current law that would stop them being accountable for funds donated by outside bodies such as national parties.
This would, of course, also let Nigel Farage’s Brexit Party off the hook over the funds it may be receiving from foreign organisations intent on perverting the course of UK elections.
But the Tories won’t care about that.
They reckon they can still count on receiving more money in donations from their rich cronies than any other party, and apparently want to use that money – so electoral law must be subverted.
In This Writer’s opinion, it is utterly corrupt. What do you think?
Conservative ministers are drawing up a law to protect MPs and party officials from prosecution if their national parties overspend during elections, leaked documents have shown.
The move follows the conviction in January of Marion Little, a Tory party organiser from head office, and the acquittal of the MP Craig Mackinlay after they were accused of breaking electoral law as the party fought off a challenge from Nigel Farage in Thanet South.
In an email sent three weeks ago to Theresa May and the cabinet secretary, Mark Sedwill, the government outlined plans for a new “test of authorisation” so MPs and election agents were no longer held automatically responsible for resources donated by outside bodies, such as national parties.
Transparency campaigners have said they believe the move is an attempt to avoid future prosecutions and would overturn a ruling by the supreme court.
Alexandra Runswick, the director of Unlock Democracy, said a “test of authorisation” would give candidates and party officials another level of defence from prosecution. “Such a move would not appear to be about reinforcing and strengthening electoral law. This would instead protect party candidates and open up the possibility of outspending rivals.”
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This is self-explanatory, from the ever-brilliant Peter Stefanovic:
Seriously embarrassing for Theresa May & Damian Hinds. Official figures show Spending per pupil has fallen 7.5% in Theresa May’s Maidenhead constituency & 5.7% in Education Secretary Damian Hind’s East Hampshire constituency! BBC1 forgot to mention it pic.twitter.com/2EIS8PntEi
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The Leave campaign infamously claimed Brexit would result in a £350m a week dividend for the UK.
This is not news.
We’ve been saying this ever since the stupid ‘Brexit bus’, with its lie that £350 million per week would become available for the NHS, was first rolled out.
And the Institute for Fiscal Studies made it clear that there is no ‘Brexit dividend’, exactly one month ago – as reported by This Site here.
It isn’t even news that known liar Theresa May has used the Leave campaign’s lying ‘Brexit dividend’ claim to lie to the country again. What else are we to expect from a liar?
The Government’s official and independent spending watchdog has confirmed that there will be no “brexit dividend” for the UK, despite the claims of ministers.
Theresa May said last month that the extra £20bn a year pledged to fund the health service would be partially paid for by UK money no longer being sent to the European Union.
That claim was universally slammed by economists as grossly misleading, since the Government’s own projections suggest Brexit is already weakening the public finances, rather than strengthening them and that any fiscal gains from zero EU payments will be wiped out by feebler tax revenues.
The Government has also already earmarked much of those net £13.3bn a year EU budget payments for other major spending items such as support for farmers and science.
And on Tuesday the Office for Budget Responsibility, established in 2010 to provide authoritative and independent fiscal forecasts for the Government, confirmed that no Brexit boost for the public finances is expected.
“Our provisional analysis suggests Brexit is more likely to weaken than strengthen the public finances overall,” the OBR said in its latest Fiscal Sustainability Report.
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