Whitesince63 wrote:Sluffy, whilst I do agree with you on Lusty, I do wish he would drop the myopic Tory view but I disagree with you on both Truss and the mini budget solely being responsible for the damage caused. For a start, I 100% agree with what she’s attempting (badly) to achieve and further, I actually believe that the vast majority of the public would too if only it had been explained correctly. The energy cap, NI rise cancellation and Corporation Tax level had been well flagged beforehand and weren’t an issue. Where they went wrong in my opinion was in removing the 45% tax rate and bringing forward the Income Tax reduction without a clear explanation first of how they would pay for it without borrowing. This was exacerbated by the abysmal, performance of the BofE to react much earlier to interest rate rises, which both the US and others had recognised was necessary and applied and the comments that they were selling the bonds purchased through Quantitive Easing. The timing of both of those was what spooked the market and the further recent comments from them about this Friday make things even worse and prove not the governments alone but also their incompetence.
As I say, I’m fully behind what Liz is trying to do and so should all Tory’s and right minded people but the way it’s been done and been delivered is appalling, I do agree. Surely, if you were going to make such drastic changes, which we always knew she intended, the budget should have been accompanied by both a statement as to the reasons for it and it’s advantages to the ordinary person in the street, however tough it might feel and also exactly how it would be paid for, including any borrowing. Had this been done the panic could have been avoided. We are not alone in having to make tough decisions but other governments by and large did explain around them and it was our failure to do so which resulted in the lack of confidence which arose.
Nobody can dismiss the costly and negative effects of the Covic Pandemic and the Ukraine war, especially coming on top of Brexit, so any government would have had serious issues to deal with. In fairness to Truss, she only has two years to effect her changes and so there was no time to delay and apply later. I can’t argue that it was rushed through without proper thought and that several of the cuts were unnecessary, nor do I think she is the most charismatic politician to carry them out but we are where we are and backtracking on them now would be a disaster. In fact I’m coming round to the thought that now would actually be the best time for the Tory’s to call for an election because I don’t see any way, whoever was Tory PM, that things can be corrected within the time left. As hard and destructive as it may be, I’d be inclined to give Labour the opportunity to prove just how completely incompetent they are and at least guarantee a Tory return afterwards when we can start rebuilding for another 15 to 20 year reign once the young who have never experienced a Labour government finally realise the error of their ways!!
63 mate, I know you are enamoured with Truss (you voted for her after all) but the fact is the mini budget has led to a major loss of world confidence in the UK economy - even the IMF gave a warning about it!
You can disagree with me as much as you want about Truss but the simple truth is that NO ONE is buying UK gilts (which in simple terms no one wants to lend to the UK because they don't think they will get their money back) and this is a DIRECT cause of that mini budget.
Please don't fall for the Tory spin that better communication/preparing the ground would have made things better - that's just bullshit for (with the greatest respect) people like you to swallow.
The issue is really simple to follow - the budget is intending to give away shortly £43 billion - but where is the £43 billion to be funded from - it isn't cuts in services (Truss has been forced to admit that) and she's stated she's not increasing borrowing - so how do they fill this £43 billion black hole.
Truss is expecting to sell £43 billion of guilts and pay that back (plus interest) in 5 years time. She claims the tax cuts to the rich will 'trickle down' by those rich people spending this money on creating new jobs.
The thing is though 'trickle down has been shown not to work.
So Truss and Kwarty are on the hook for £43 billion that can't be funded - and that has what has spooked the market and nobody is touching any government guilts let alone just this particular £43 billion.
I can't see the £43 billion tax cuts surviving, there has to be a U-turn otherwise the economy is going to go into melt down.
This isn't me saying all this, it is the the world's financial money markets saying this!
It was all a crazy idea to start with - God knows what they were thinking because it is just sheer financial madness what they are committed to.