Socialist Sunak not really a conservative Chancellor...

Socialist Sunak not really a conservative Chancellor... but at least he avoided the populist MMT trap

When Rishi Sunak stood at the dispatch box on Wednesday 3rd March, most of what he had to say had already been widely leaked – some of it was even on the BBC News website. There was nothing much of any great interest. When a politician says that he is going to be honest with the electorate, honesty is the last thing to expect.

He had frozen alcohol duty while all the pubs were shut and frozen fuel duty while everyone is driving nowhere. The usual inflation plus two per cent on tobacco is symbolic small change. Economic trifles.

It does not matter whether you are conservative with a small or a capital C as this Budget represented neither. In the last Tory manifesto there were the usual commitments to not raising income taxes and whilst Sunak stuck to the letter of that, he did not really enter into the spirit of it by freezing tax thresholds until 2026. Firstly this will result in more low paid workers being pulled into income tax. That is in effect a tax rise equivalent to inflation; and anybody lucky enough to get a pay rise could get bumped into the top tax bracket. The Institute for Fiscal Studies already estimates that one in six people will be in the top tax bracket by 2026.

A visitor from Mars could be mistaken for thinking that 10 Downing Street was occupied by Jeremy Corbyn and 11 Downing Street was home to John McDonnell. The Chancellor has signalled that his direction of travel is towards the social-democratic almost growth free stagnation that plagues much of Europe with big state intervention. If the Tories have now become big state spending, Labour are finished but personal taxes will have to rise to fund it.

Pandemic measures have seen fiscal responsibility disappear out the windows as billions were spent on paying people to stay at home, an extra £60 billion of health spending; and completely brain dead schemes like the billions on a Track and Trace system that does not actually work and fortunes wasted on Eat Out To Help Out – paying people to spread the plague in restaurants that will go bust anyway. Nobody will be complaining about the government buying vaccines at any price as the EU’s bureaucratic torpor has resulted in insufficient vaccines across the continent. When the numbers are added up at the end of the tax year in April, public spending will have exceeded £1.1 trillion and tax receipts will have plummeted.

There is a theory that Sunak’s increase in corporation tax will see big business look to reduce their tax bill by reinvesting profits into expanding their businesses, creating employment and boosting the economy. The opposing view is that his measures will make capital more expensive, stifling business investment, as he has introduced a two year deduction for capital expenditure. That is just robbing Peter to pay Paul; bringing forward future investment hoping that will ease the inevitable unemployment post Pandemic. Politically, he knows that the only ally of business is the Tories but the economy needs business not politics.

He has also ignored the distinct possibility of high inflation caused by central banks (especially the US Federal Reserve in the Biden Presidency) printing money to try and get themselves out of a debt crisis of their own making.

Even a devoted Conservative economic historian can probably not remember the last time that a Tory Chancellor raised corporation tax. In 1979, Geoffrey Howe slashed it; in 1984, Nigel Lawson took it down by another third; and that 35 per cent rate has fallen ever since with George Osborne the last to cut it. History has shown that lower rates of tax have created more economic growth and thus more tax revenues. Despite having the lowest rate of corporation tax of any major European economy, the Exchequer still raked in more funding from that tax than France or Germany. By 2026, the UK corporation tax rate will be in the middle of the OECD list, making the UK less attractive for business investment; and lower profits will mean lower dividends that will impede pension funds that are already suffering because of low interest rates on bonds.

Since the beginning of Thatcherism, Conservative policy has always been to reduce direct income taxes (allowing people to decide how to spend their money) and increase stealth taxes (pay more tax as you consume). It seems that Sunak has become a fan of big government, inefficiently running everything from the centre. The public sector is the home of low productivity and low wages, so over time the tax burden on the private sector will have to rise to make up the shortfall in expenditure – and pay off some of the trillions of National Debt after a year of uninhibited money printing.

There were those in the thrall of Modern Monetary Theory (the Magic Money Tree) who wanted Sunak to just start spending money, especially if that spending was directed at Boris Johnson’s latest buzz phrase of “levelling up the country” – throwing money at any old infrastructure project North of Watford, such as electrifying the railway between dead-end Post Industrial Liverpool and Kingston upon Hull because slow old trains are holding back the economy. Quantitative Easing has never worked as the miracle cure ultimately kills the patient.

Polling after the Budget showed that the Conservatives now had a 13 per cent lead over Labour; and that 52 per cent approved of it or thought it was ‘fair’. As usual, the public are in favour of tax rises when they think that somebody else is picking up the bill not them. The public at large really are that stupid.

 

You are suggesting that 52% of the public are stupid. That number rings a bell somewhere....

 

Monday morning Gammon rage ^^^^

 

Tory scum put in a diversity hire Indian Billionaire as Chancellor of the exchequer.

Any criticism of him or his policies is racist .

 

Gammonista ^^^^

 

Vote them out.

Anyone championing throttling of freedoms, rising taxes and all the while, we still have the worst CV19 triple whammy in the world of 3rd highest deaths, the worst economic hit and longest/strictest lockdown.

Conservatives need to find a new home because the Conservative Party is not a conservative party.

 

Putting Indian billionaires in charge of the public purse and uppity race grifting Pakistani looking women in charge of our borders Is not such a great plan .

We may as well put a Chinese person as chief of defence next .

 

whinge, whinge, whinge.

Lefty loony gammon racist in turmoil as usual.

Hilarious

 

I'd be confident betting 20p that despite all that has happened in the last year with Covid that the Conservatives will sail through the next election. Any more that 20p and I'd have to sit on the fence because my predictions hit the mark less than Bullseye - Celebrity Blind Special

 

I will agree but that's because the alternative is Labour and their race-baiting, identity politicking.

I have been impressed with Lawrence Fox and would vote for him a London Mayor if I stayed there.

I know his gammon credentials but ultimately, his anti-Lockdown stance should be enshrined in UK law for all eternity.

 

Dr Pete Gammons for London mayor

 

Much more than 52 per cent of them are stupid. In the survey, only 12 per cent thought the Budget was bad.

A different 52 per cent that voted for Brexit are delighted that our government has bought enough vaccines to inoculate the entire nation and has already given nearly a third of them a first jab. The disastrous bureaucratic EU have not bought enough vaccines to inoculate the EU population and most member states have not inoculated ten per cent of their people, while their feeble national leaders continue to show no leadership.

The EU started off by accusing Oxford/AstraZeneca of cutting corners in testing their vaccine, was slow in negotiating a bad deal for insufficient doses; and spent an extremely long time approving the vaccine for use. Emperor Macron then falsely challenged the efficacy of the vaccine on the over 65s simply to cover up French incompetence in getting anyone inoculated. No wonder that a number of Eastern European member states have done deals with Russia and China to obtain vaccines when Mother Europe’s centralised bureaucracy is leaving people to die in the name of solidarity.

Strangely as the EU continues to disappear up its own arse, the Remainers have gone remarkably quiet for the first time in five years. No mad rush to rejoin the sinking ship at the moment. The EU flag is only being flown by incompetent ‘Nationalists’ in Scotland, desperate for Brussels to run the country because Edinburgh clearly cannot.

 

I think the EU are wisely moving slowly with a vaccination programme and waiting to see if inoculated Britain turns into a NWO 5G activated zombie wasteland.

Prudent imho.

 

Brexit's a ****ing shipwreck you plum.

 

Get your China virus shot ?

 

This morning, yeah. Haven't started talking Mandarin yet. Haven't grown any extra nipples.

 

W

Will the jab turn me into a dirty orange bastard then?

 

whinge, whinge, whinge.

Lefty loonies

 

The last time I looked at the polling, the number of people wanting to rejoin the sinking European Union ship was down to 39 per cent. Even hardened Remainers have given up on it after seeing the total fiasco of Brussels allowing people across Europe to die while it bought insufficient vaccine doses to inoculate them. No wonder the Eastern European countries have gone and bought their own supplies from Russia and China – it seems that Russia has more influence East of Berlin than Brussels.

You may not like Boris but he put somebody in charge of vaccine procurement who got the job done and we have enough supplies to do the whole country and give the surplus to other nations.

You obviously missed the details of the EU trade deal with China that was announced on 30th December 2020, the day before we escaped. It is so fantastic that it was done with almost no fanfare and no mention of human rights abuses by the CCP.

That Irish loser Simon Coveney was grumbling yesterday about how there should be a trade deal between the EU, United States, Canada and Great Britain. The spanner has already forgotten that the EU has a deal with Canada – the one that Boris asked for as a Brexit deal and the EU said no. And why would we wait on the 27 EU member states when we can just deal with the USA directly instead of spending years finding a lowest common denominator?

 

Is it awkward putting a top on and were you ill yesterday?