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Mini-Budget 2022: Finance Minister Kwasi Koarting unveils tax cuts as Labor calls them ‘another zigzag on the path to policy failure’ – Mubasher | Policy


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Labor says the mini-budget will be ‘another zigzag on the path to policy failure’

Rachel ReevesShadow Counsellor, will respond to Kwasi Kwarteng in the House of Commons today and at Article in the Financial Times, give a glimpse of what you are likely to say. Reeves says Liz Truss represents “another zigzag on the path to policy failure” rather than an appropriate change. Says:

Liz Truss wants the British public to believe she represents change. She and Kwasi Kwarteng want you to believe they have a new plan. But what they’re suggesting is just another zigzag in the path of tracing policy failures across the last 12 years of the economy.

Just like Boris Johnson before her, the new prime minister and chancellor are long-serving ministers. They are desperate to present themselves as agents of change, so they should decry the growth plans they once backed – there have been six since the Conservatives took power in 2010, and each announced with great fanfare but with little effect. Instead, the only constant throughout a decade of Conservative rule has been low growth.

Reeves is particularly critical of the plan to abandon the planned increase in corporate tax. Says:

Of course we need a competitive system, but UK levels are already lower than France and Germany and will remain so at the planned 25 per cent – yet UK business investment is still the lowest in the G7. Businesses have other priorities: In the latest NSO survey, only 2 percent cited taxes as their main concern.

She also says that Truss is wrong in saying that the growth of the economy is more important than worrying about how its benefits are shared. Reeves says:

Truss says it will end the redistribution priority. But research by the International Monetary Fund has shown that higher income inequality is associated with lower and more fragile growth. It is clear why. Concentrating income among fewer people – those least likely to spend it and move the economy forward – undermines workers’ health and education, the two basic components of a productive workforce.

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From Skis Ed Conway

The British pound fell against the dollar again this morning. Now less than $1.12.
The Bloomberg Trade Index, a weighted index of sterling’s strength, has fallen to an all-time low
Today’s financial statement background… pic.twitter.com/pxArwNgjjd

– Ed Conway (@EdConwaySky) September 23, 2022

Pat McFadden, The shadow treasury secretary also gave interviews this morning. He told BBC Breakfast that the government had been involved in choppy economies. It is to explain:

What it seems today is that the government is taking a huge adventure with public finances by taking a series of measures and putting them all on borrowing, calling it a plan for growth…

This isn’t really a plan for growth, it’s a return to some very old Tory politics based on the belief that if you make the already rich get richer, it will pass on to the rest of us…

This will be the third change in National Insurance in six months. It is the legislative equivalent of digging a hole and refilling it again.

Simon Clark, the settlement secretary, gave a particularly difficult interview on the Today show with Mishaal Hussein. These tweets were prompted by Jonathan Porteza former government economist and professor of economics at King’s College London.

today, Tweet embed I just said that the goal of raising NI is to raise money for public services, and the goal of lowering it is to raise money for public services. Regardless of your opinion of politics, they have completely abandoned any pretense of credibility.

– Jonathan Portes (@jdportes) September 23, 2022

Ian Mulhernhead of the policy department at the Tony Blair Research Institute, was not so impressed.

Lots of doublethink today. advanced lessons from Tweet embed. Tax cuts help fund public services! 💰 Gifts to the rich to help with the settlement!
Fiscal policy will boost growth while the bank controls inflation!

War is peace, freedom is bondage, and ignorance is strength!

– Ian Mulheirn (@ianmulheirn) September 23, 2022

and FT’s Peter Foster He was not satisfied with Clark’s economic analysis either.

Listen to the incomparable Tweet embed @BBCr4today She tries (and fails) to contain her frustration in Tweet embed Compare the current “growth rush” to what worked in the 1980s and 1990s while ignoring the inflation problem in the room. I thought she might actually say “duuuuuuuh”.

– Peter Foster (@pmdfoster) September 23, 2022

Minister for Upgrading Simon Clark says it is ‘nonsense’ to call Truss’s approach to downstream economics

Simon ClarkThe new settlement secretary was doing interviews this morning before the mini-budget. Here are some of the points he raised.

The whole term “going down” is such nonsense and is in itself a wrong, center-left description of what this government means. We need to grow the economy because a more successful economy is good for everyone.

as my colleague Larry Elliott explain over hereWhat Truss says and does fits right in with the usual definition of a tiered economy.

These areas will only happen if there is local approval and we have been very clear about that in our discussions with local authorities and mayors over recent days…

It will only occur when there is a local appetite for it. There will be no top-down imposition of these areas.

The recipe here is that we get better underlying growth that unleashes the tax revenue that will allow us to grow the economy and also to tap into that debt.

Labor says the mini-budget will be ‘another zigzag on the path to policy failure’

Rachel ReevesShadow Counsellor, will respond to Kwasi Kwarteng in the House of Commons today and at Article in the Financial Times, give a glimpse of what you are likely to say. Reeves says Liz Truss represents “another zigzag on the path to policy failure” rather than an appropriate change. Says:

Liz Truss wants the British public to believe she represents change. She and Kwasi Kwarteng want you to believe they have a new plan. But what they’re suggesting is just another zigzag in the path of tracing policy failures across the last 12 years of the economy.

Just like Boris Johnson before her, the new prime minister and chancellor are long-serving ministers. They are desperate to present themselves as agents of change, so they should decry the growth plans they once backed – there have been six since the Conservatives took power in 2010, and each announced with great fanfare but with little effect. Instead, the only constant throughout a decade of Conservative rule has been low growth.

Reeves is particularly critical of the plan to abandon the planned increase in corporate tax. Says:

Of course we need a competitive system, but UK levels are already lower than France and Germany and will remain so at the planned 25 per cent – yet UK business investment is still the lowest in the G7. Businesses have other priorities: In the latest NSO survey, only 2 percent cited taxes as their main concern.

She also says that Truss is wrong in saying that the growth of the economy is more important than worrying about how its benefits are shared. Reeves says:

Truss says it will end the redistribution priority. But research by the International Monetary Fund has shown that higher income inequality is associated with lower and more fragile growth. It is clear why. Concentrating income among fewer people – those least likely to spend it and move the economy forward – undermines workers’ health and education, the two basic components of a productive workforce.

good morning. At The Guardian, like the BBC, for the sake of simplicity, we’ve decided to name today’s event as Mini budget for 2022. This is clearer than describing it as a “financial event”, as in treasury, but it’s not ideal because what we get is not a budget (if it were, it would be accompanied by an OBR economic forecast, probably saying it would have disastrous consequences for inflation and borrowing) And it won’t be small at all. Fiscally speaking, that would be a massive undertaking — the largest package of tax cuts since Nigel Lawson’s 1988 budget, according to economists.

Just as the Lawson budget changed the political consensus on taxes for a decade, Liz Truss and her advisor Kwasi Quarting wanted to break down conventional thinking about borrowing and growth. When David Cameron became prime minister in 2010, the Conservatives defeated Labor by claiming that Gordon Brown had spent too much and lost control of public finances. Confronting Jeremy Corbyn, conservatives claimed that Corbynomics was based on the discovery of some non-existent “magic money tree”. Now Truss and Quarting argue that unfunded tax cuts are wise, because they will boost economic growth, ultimately increasing tax revenue, though Rishi SunakKwarteng’s predecessor, explicitly denied this approach in his lecture miss In February this year. Sunak said:

I am disappointed to hear the reckless claim that “tax cuts always pay themselves”. They do not. Sustainably lowering taxes requires hard work, prioritization, and a willingness to make tough and often unpopular arguments elsewhere. It is difficult to reduce taxes at a time when demands on the state are increasing.

Your age is going to be totally frustrated today.

This may be the defining announcement of the Truss premiership, and it is extraordinarily risky. The political risk is that even if Truss and Quarting can bring about rapid change in the economy, voters won’t start noticing it before the next election. The economic concern is that the strategy will fail, and that they will undermine public finances.

Here’s our overnight news story on what to expect, by Larry Elliott and Jessica Elgot And the Richard Partington. Advisers always want a surprise announcement on Budget Day, and it’s been reported that Kwarten left two rabbits in his hat ready to present to MPs.

At the first edition briefing, Archie Bland It has a good analysis of what’s coming – and most importantly, a guide to what we don’t know about what’s going to happen today.

And the Richard Partingon Contains five charts that explain the background of the mini budget.

Kwarteng is scheduled to make his statement to MPs at 9:30 am, although if the House Speaker is given an urgent question (which is unlikely), that could come later. We’ll cover it right here, and then give you the best feedback and analysis.

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