Tories utterly obsessed with tax cut sound bites - you have to have a good standard of living in the first place for a tax cut to make sense.
I think in Truss’s tiny mind that’s exactly what it will be aimed at. She’s on record as saying she prefers to let people and businesses keep their money through lower taxes rather than giving them it back in the form of handouts.
Let's face it there is so much speculative reporting of stuff not actually announced yet - that nothing makes any sense until it does. And then it probably still won't.
Let’s face it there is so much speculative reporting of stuff not actually announced yet
Yup, but everything Truss has said over the past two months suggests that she's planning radical tax cuts, and that fits exactly with the wet dreams of the ERG nutters who want something like flat rate taxes. Not that I agree with him on his wish to cause a massive 1981 style recession, but Sunak is at least right on the inflationary effect of tax cuts, especially if in form of VAT cuts.
But yes, I agree it will cause a consumer spending surge, just at the time when businesses will struggle to meet the demand, the result being turbo-charged inflation combined with mass business failures. For people worrying about QE causing runaway inflation, they should instead be worrying about VAT cuts.
Reluctant as I am to give him much credit as his proposals aren't that much better, but isn't this pretty much exactly what Sunak has been trying to tell an audience that clearly doesn't want to listen?
The VAT cut does nothing for most small businesses.
Their customers might be encouraged to spend a little more but that's about it.
However, as most people will need to save their money to pay for food and fuel it will make no difference.
Also a massive pain in the arse for some, the Mrs will have to re-price all the stuff in her shop.
Next bombshell.
https://twitter.com/D_Blanchflower/status/1564590476740771840?s=20&t=V52tM1-2fxF4sNF_rH7V6g
Blanchflower used to be on the MPC and was always pushing for rates cut when others weren't.
The VAT cut does nothing for most small businesses.
Their customers might be encouraged to spend a little more but that’s about it.
However, as most people will need to save their money to pay for food and fuel it will make no difference.
Also a massive pain in the arse for some, the Mrs will have to re-price all the stuff in her shop.
If you're not registered for VAT buying things is cheaper.
(I'm not defending a potential VAT cut - I'm just offering ideas, as a business owner myself.)
I think VAT like lots of taxes became over-complex and moved away from it's original concept.
the credit card thing is fairly unsurprising. RPI (which most credit card spend is linked to) is currently 12.3%, credit card borrowing is up 13%. I'd argue that's pretty much flat with a bit of noise
but isn’t this pretty much exactly what Sunak has been trying to tell an audience that clearly doesn’t want to listen?
It is, and he's right. But he's wrong on the need for a 80s style contraction. Alongside the correct analysis that fuelling demand will cause inflation, he's wrong that current inflation is caused by too much money in the economy. Along with Andrew Bailey he thinks we need to reduce the size of the economy to bring demand down to meet supply. Energy bills are going to do that and a lot more, so higher interest rates and further fiscal tightening will only make that much worse. Both Sunak and Truss will make the situation worse but in very different ways. The only solution is to prevent or roll back these catastrophic energy price rises for everyone, not just households. No one is talking about though.
Edit: That was a long winded way to say that the risk with Truss is runaway inflation, whereas Sunak offers deflation and depression. Quite a choice!
Alongside the correct analysis that fuelling demand will cause inflation, he’s wrong that current inflation is caused by too much money in the economy.
I don't know how they can put that along side negative or no growth GDP and keep a straight face.
They want to limit inflation driven by too much money LOL - start with the top wages. Stop them hoarding money and resources!
There are many issues with the economy - since the pandemic, some were showing up before the pandemic (Feb/Mar 20 growth was already slowing.) Poor productivity too.
So one target of Tax cut - or hard energy cap is simply not going to cut it. We have several black-swan events and a dying economic model with conflicting issues. There isn't one mechanism to fix things.
The whole thing needs fixing from bottom up. We also have short-term and long-term issues which are getting overlapped.
Good luck to whoever sorts this out. Neither Labour or the Tories are up to the job.
If you’re not registered for VAT buying things is cheaper.
True. But the vast majority of small business that are not VAT registered, are sole traders who don't employ anyone and by the size of their business they are going to pretty skink anyway, so won't be buying much anyway.
True. But the vast majority of small business that are not VAT registered, are sole traders who don’t employ anyone and by the size of their business they are going to pretty skink anyway, so won’t be buying much anyway.
If i've got a choice between 20% VAT rates and 15% I will take it though, on top of anything else.
Less VAT on fuel at the pumps would also fall under this.
Then we’ll see a run on sterling as no one will want to invest in a collapsing economy.
But Rone kept telling us that none of us understand how money actually worked and the Govt could just create more, yet this is pretty much the scenario I put to him.
How do we, as a country, buy what we need if Sterling collapses?
Andy Burnham, from what I’ve seen, needs to convince me that he’s not the Blairite I think he may be
He is a weather vane politician without an orginal thought in his head and disgustingly played the race card in his mayoral campaign. A total lightweight who will say anything to be elected.
Aha... TJ's standard Andy Burnham copy and paste
And once again I'll ask you to supply some evidence of him 'playing the race card' in his mayoral campaign, and once again you won't supply any because there isn't any, because it only exists in your head.
But Rone kept telling us that none of us understand how money actually worked and the Govt could just create more
?? The govt can create more, they are the currency issuer.
If I remember right you and others have been arguing the oft-repeated trope that the use of QE would result in devaluation of the currency. Myself, Rone and others have pointed out that didn't happen after 2008 and 2020, and that fiat currency valuation is a result of multiple complex factors and not just the result of how much money the govt creates (and where it then spends it).
My comment about a run on the currency was that it would be much more likely in a hyper-inflationary or deflationary scenario which are the likely outcomes of tory candidate's economic policies, as opposed to the much safer solution of using QE to prevent the increase in energy prices (by whatever means is necessary, bailouts, nationalisation etc) and resultant economic collapse.
The danger of a run on the currency is much lower with an energy bailout than it is with Truss's tax cuts or Sunak's austerity.
And once again I’ll ask you to supply some evidence of him ‘playing the race card’ in his mayoral campaign, and once again you won’t supply any because there isn’t any, because it only exists in your head.
Why are you dragging labour into this thread? 😀
Again... not guilty
Uncle Jezza started it 😛
Lets get back on topic..
I have quoted his playing of the race card before. Bunners ageed with me at the time and later retracted that agreement. Burnhams playing the race card is inexcusable
He made a series of anti immigration remarks basically pandering to racists he needed votes from
Im trying to find the quotes but have poor signal
Bezt i can find
I was flabbergasted that a labour politician would do this.
https://hulmegreenparty.blogspot.com/2016/12/a-mugs-game-andy-burnham-and-immigration.html?m=1
Sunak would rather take the stairs than be in a lift with Nicola Sturgeon or Kier Starmer , I’d rather he took the stairs so I turf the **** back down them
Oh Christ… we’re off down a TJ wormhole due to a 6 year old blog post/piece of gibberish by a Green Party member from Hulme 🙄
Reading that twoddle, it’s not even worth dignifying with a response
Anyway… back on topic, I see Liz’s genius idea to solve the energy crisis, as explained by brainbox John Redwood on Radio 4 just now, is to grant some more North Sea drilling licenses.
Without even getting into the whole climate change issue, it was pointed out that the timescale between a drilling licence being granted and the first gas being extracted is twenty odd years
Cutting vat would effectively have the opposite effect to raising interest rates. Which would mean to achieve the desired result they'll need to be raised even further. Bit odd if that's the path
Cutting vat would effectively have the opposite effect to raising interest rates. Which would mean to achieve the desired result they’ll need to be raised even further. Bit odd if that’s the path
Well that's because the BoE shouldn't be raising rates.
Anyway… back on topic, I see Liz’s genius idea to solve the energy crisis, as explained by brainbox John Redwood on Radio 4 just now, is to grant some more North Sea drilling licenses.
Without even getting into the whole climate change issue, it was pointed out that the timescale between a drilling licence being granted and the first gas being extracted is twenty odd years
Ohh, it gets worse.
Once a company has those licences they don't even have to drill to make money. Just sit on them for a while, then when the government u-turns on it they can claim not just the cost of those licences, but the future profits they would have generated under the Energy Charter Treaty.
Disgusted and worried by a short exposure to LBC just now
A) Grant Shapps; It’s Putin fault and and fortunately this is the price of freedom that we all need to pay. Change to LEDs, and don’t worry we are trying to cap bus fares at £2. What a ****er.
B) A global industry expert - this issue will not be resolved before 3-5 years if Putin stopped his war and reopened gas supplies today. The emergency will go away. But the demand issue and high prices will mirror over that period what we are seeing for fuel, a slow trickle down to a higher base. Holy crap.
Basically, whichever right wing **** gets picked, we’re screwed anyway. And I’m not entirely sure that things would be much better if Labour magically got in, as Sir K S has refused to consider closer ties with Europe. Not that I’m entirely certain that rebuilding a relationship with Europe would help much, but it would go some way to relieving some issues.
The same Europe / EU that are in process of agreeing a unilateral cap on Gas pricing for personal use and for electricity generation for all member states?
We're about to be the mugs of the world... again.
We’re about to be the mugs of the world… again.
Possibly not as the wholesale gas prices are currently falling as a result of the EU action. We may benefit from our neighbours concerted action. Source
20%! Thats good news - if it gets passed on.
This BBC video shows how detached from reality some of the Tory members are. Not one mention of the energy, cost of living or climate crises.. or Ukraine
https://www.bbc.co.uk/news/av/uk-politics-62731003
Is there a chance here that Joris is cementing his legacy by doing an Alex Ferguson? AKA a Terry Leahy.
By choosing a successor who has few cards to play, and who may be considered something of a lame duck, he suddenly seems so much... better.
Where might that lead? Well, Winston Churchill got re-elected after being ousted, so maybe he's got half a braincell focused on that.
Or as Rory Stewart more accurately referred to it at the weekend 'Doing a Berlesconi'. Someone he's repeatedly compared him to in the past
You have to admit that he's played a blinder on that score if that's his plan. And you just know that as he stews and sulks at a Chequers, indulging his Churchill delusions and manufactured grievances that it probably is
He used Brexit to purge the Tory party of anyone remotely sane, leaving only rabid right-wing fruit loops on the backbenches and thick-as-mince nodding dogs in cabinet.
Everyone knows Sunak (probably as sane as you can be in BlueKIP) had no chance and Truss, out of her depth on a wet pavement, is going to be an absolute disaster as she's totally devoid of ideas, intelligence, empathy and so much more.
Matthew Parris was probably fairly accurate in the Times today...
"An over inflated bubble of misplaced confidence and ambition balancing on a pin head of intelligence and self awareness."
https://twitter.com/algy04/status/1560915782963535872?s=20&t=48ewQLfdqpTklfFE8CkIlw
Yup poor Liz truss will have to go to country she was just heaping shit onto it's democratically elected leader as her first job.
Too trolling I salute you my queen.
@Binners - Did you go to Manchester last night and if you did, how was it?
It was a very interesting evening. It was packed and they had to broadcast it on screens outside to thousands of people, which was encouraging
I think what was refreshing was the mix of speakers. A few union leaders who would be considered to the left of the party, then Andy Burnham and a couple of others who would be considered centrists. All vocalising that they understand what's coming, which is a lot more than we've had from our hopeless government
So I live in hope that the upcoming crisis may be of a big enough magnitude to unify the Labour Party and get both sides to unite in opposition to the real enemy...
The Judean Peoples Front!! bloody Tory's!
😀
If you want to sign up for info, they're here
It was a very interesting evening. It was packed and they had to broadcast it on screens outside to thousands of people, which was encouraging
So I live in hope that the upcoming crisis may be of a big enough magnitude to unify the Labour Party and get both sides to unite in opposition to the real enemy…
It's interesting that it didn't make it on the BBC Manchester news page!
I only heard about it on Twitter.
It’s interesting that it didn’t make it on the BBC Manchester news page!
The BBC only ever reports protests and demonstrations if they turn into riots. Then they get on their high horse and do the whole 'violent lefty/anarchist mob, enemy of the people blah blah' thing. Something tells me they're going to be busy in the next few months.
Something tells me they’re going to be busy in the next few months.
Can you share your plans with us? Or is it too early?
If it doesnt kick off soon it wont happen until next summer, people dont riot when its cold and wet.
If it doesnt kick off soon it wont happen until next summer, people dont riot when its cold and wet.
Depends, if your house is cold then I imagine some flaming torches and pitchfork's looks like an appealing activity.
Someone on Radio4 earlier said that working at home was going to cost a lot more than commuting, so go to the office this winter. It's cheaper than heating your own house
Someone on Radio4 earlier said that working at home was going to cost a lot more than commuting, so go to the office this winter. It’s cheaper than heating your own house
Dont you think employers will catch onto this premise of them footing an increasing bill and doing something about it? I can foresee so arguments about offices closure vs WFH vs “I want a WfH allowance if Im told I can’t come to the office”
Oh wow, suddenly I can see the 4d chess game being played!
Let all the small/local independent takeaways, cafes and coffee shops fail due to energy bills.
At the same time make it more appealing to go into office more often to reduce energy bills, back into the grasping hands of all the remaining Prets, Greggs and McD's still standing.
The local takeaways in our village (technically 'toon' 😎) are barely open 5 days a week as it is, soon I'll be commuting in just because I fancy a chippy!
