PM Truss

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YouGov poll among Tory Party members show she's smashing Sunak 62% to 38%

I despair......I really do. 🤦‍♀️

She’s not wrong though about importing apples and pears… it’s a bit of a disgrace how much food we actually do import. Especially the ones which are easily grown here.

Shes the stupidest person I've ever seen in the HoP, and that includes Mark Francois. She thought the Baltic countries were by the Black sea.

Well Sunak thought Darlington (a few miles fro his constituency) is in Scotland so there’s not much to choose between them on that measurement!

Why do people just make these same idiotic choices again and again? The same thing happened with brexit, and boris johnson. People are told again and again this is a terrible idea, they are incompetent, but still the members vote them in then act stunned when they turn out to be incompetent. I just cant see why they cant see the obvious.

she actually sounded nearly normal as a lib dem . I think it's the Thatcher voice training that makes her sound like shes got concussion.

The Torys know Sunak will raise interest rates , which will be a vote loser, Truss will drop interest rates a vote winner, despite it overall raising inflation

The Bank of England's Monetary Policy Committee decide interest rates, not government. Government set a 'target inflation rate' of 2% which the Bank of England is meant to try to hit.

When the Bank of England Increases the interest rate, that usually eventually reduces inflation. It works by reducing how much money people have to buy things, which can be useful to curb over-confident, excessive spending. However during a cost-of-living crisis, it obviously risks really hurting people who can no longer afford even necessities. It also makes it harder for companies to invest (which they do in order to produce more long term) which shrinks the economy, leaving even less money in tax revenues for the government to spend on hospitals, schools, unemployment etc. So it's quite a balancing act.

Did you mean that Sunak will raise tax and Liz Truss will drop it? I posted above how I don't believe that will directly lead to inflation. It does risk us having to either print money (which does cause inflation) or borrow money (which costs lots long term) if we want to keep the same level of social spending. Cutting services is the other option, but nobody wants to do that.

The only 'get out of jail free' card in this situation is for the economy to grow because if companies produce more, then the same % tax of a bigger amount of profit is a bigger total amount which the government can spend on hospitals, schools, unemployment etc.

That's why taxing companies is also a balancing act - if you tax companies too much, it discourages investment and the company will produce less. So the tax revenue is a bigger % of a smaller profit, which ends up being less money. (The smaller company is also provides fewer jobs. )

That's why most of the candidates are suggesting lowering taxes on companies as well - to try to encourage investment in companies (who are also hit by rising prices and customers having less money - so profits already down). Again, this is nothing to do with inflation, and just about how to get more money into the government, which can then be spent on schools, hospitals, unemployment benefit etc.

I have read LTs proposals. These involve most prominently a tax cut. There is no logic as to where the cash will come from- enhanced growth and public sector efficiencies are mentioned- worryingly, driving a bulldozer through bureaucracy was mentioned. Whenever politicians talk about driving such changes IME it means they have no idea where the cash will come from. The impact, as always, will be felt by the poorest as they suffer to feed their families and heat their homes and then by all of us in an increasingly underfunded NHS and ambulance waits which will be ridiculously long amongst many other issues.

Rishi is a bit better on Tax, but not much. Either way to me feels grim.

The right wing press want her as PM because she’s so weak willed and malleable that she’ll do whatever they ask.

A truly gutless, unprincipled, empty-headed, charisma-vacuum of a human being.

Absolutely this. Just like BJ she will do what she thinks will make her popular, not what she believes in or what is for the best. A government under her will continue with a policy-making process that is based on leaking ideas to the Daily Mail first. I don't like Sunak either but at least I believe he has some ideas that he might be willing to stick to.

The main problem with reducing tax on companies is that you are reducing tax revenue now in the hope of much more tax revenue later.

People accuse governments of not thinking long-term - but cutting company taxes is exactly that.

But the increased tax revenue is delayed and uncertain, and that's why even different Conservatives (who all believe in this strategy) still disagree on whether/when/how much to increase/decrease company tax.

The problem is Thatcher looms over that party like some kind of god. If a woman in the party can resemble her they get a huge halo.

Thatcher was an evil sociopath but she was also an ideologue with strong convictions and a steely determination. Truss was a former Lib Dem and Remainer. She's as big a fraud as Johnson without his charisma. But the right wing media and ERG are backing her because she'll do what they tell her.

We get the leaders we deserve. This country deserves Truss as PM the state it's in.

Im absolutely counting on this, it’s all we’ve got to cling onto.

if you tax companies too much, it discourages investment and the company will produce less

How does that work when investment is offset against tax? It actually offers a bigger reward for investment when tax is higher.

Blossom

High company tax prevents investment in the company by reducing the return on the investment - which means that people rationally choose to invest elsewhere, possibly abroad.

Eg improving automation in a factory might require 10M investment, but you expect it to increase output which will increase profit by 1M/year. Taxed at 20%, that gives you 8% per year return on the 10M investment. Taxed at 30% that only gives you 7% return on that investment.

If you can get 7.5% return on your investment elsewhere, maybe in a different country, you'll choose to do that instead. And our government doesn't get even the 200k/year tax we would have got if we'd made investing here attractive.

Now it's not just a fight to the bottom for tax between countries. There are other reasons you might choose to invest in the UK: you trust the government won't nationalise your factory; secure rule of law means no mafia; educated workforce; good transport links for your supply chain; sensible monetary policy means your return on investment won't disappear into inflation (maybe...).

But once you've taken all those things into account, you'll decide whether to invest your money in the factory or elsewhere based on where will give you the best return on investment.

I've framed it as an external investor deciding where to invest, but it's exactly the same principle for a company investing in itself. Why would a board spend 10M on improving a company for a poor return? That would be irresponsible, and they should give the money to the shareholders as profit to invest somewhere better.

Note that this isn't just greedy individuals: the biggest investors are pension funds. I'm sure you want your pension to grow. And even if you feel altruistic, poorly performing pension funds increase the social spending liability for the government in 30 years time.

(Note - I also mentioned that high interest rates prevent investment. That's subtly different, although the same principle. When the cost of borrowing is higher, then it's only worth borrowing to invest when the eventual return is higher. )

I think it’s due to this and she’ll just be a puppet.

i also think it’s good on a way as the Tory party imploding should make due an easy Labour win, if they can just keep their heads down.

Actually, the numbers would be different for internal investment, due to writing off the investment - but these are just example numbers. The principle still holds: will work a different example later when I have time.

Thank you for that explanation. I genuinely really appreciate it when someone patiently explains something so clearly to me.

This!

You're welcome Blossom. I'm glad I managed to be clear

FFS