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AIBU?

Rational behind Kwasi Kwateng’s budget

199 replies

UserOneSquillion · 28/09/2022 15:43

Genuine question, what is the rationale? On paper he is a extremely intelligent man with a background in economics. Was he following Truss’s orders? Is he trying to keep big business in the UK? If so wouldn’t it be better to lower business tax rather than income tax? Absolutely no one seems happy with this.

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Jewel1968 · 28/09/2022 20:34

Do I have to Google supply side reform or will one you kind people explain it in a really simple way. Thanks.

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PestorPeston · 28/09/2022 20:35

sst1234 · 28/09/2022 20:23

Well, how about being a net exporter of energy, like the US. It really works. We should try it sometime.

About 300 million years late for that one. Plus geographically we just didn't have the right sort of mass extinction rate.

Wind, solar, tidal and nuclear; yep we could do it but huge investments required.

Also we could have learnt from Covid what was hard to acquire, set up factories to make chips etc. But we didn't.

We believe in banking, give a smart person in Mumbai a fast internet connection, and UK banking is replaceable. Our politicians need to get a wiggle on and face reality.

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BambinaJAS · 28/09/2022 20:35

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red4321 · 28/09/2022 20:39

Wind, solar, tidal and nuclear; yep we could do it but huge investments required.

I watched Laura Kuenssberg interview Keir Starmer last weekend about his plans for 100% carbon-free energy by 2030 (I think that was the target he mentioned but it was quite early for a Sunday so forgive me if I'm misquoting him).

She pointed out the structural limits of wind and solar energy in terms of them often operating at only 10-20% of their maximum capacity in some weather conditions.

That's not to say they're not a good source of clean energy but I hadn't really given much thought to their inherent limitations before.

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red4321 · 28/09/2022 20:43

Nothing you ever write about finance shows you have any experience in these matters.

You remind me of a perennial 55 year old junior analyst who never advances because he does not have the ability to do the more senior jobs.


Thanks for your insight. I refuse to descend to your level of infantile personal insults. Feel free to keep sending them my way and making yourself look foolish but I'm not going to waste another minute of my life replying to them.

And back to the actual debate which I was enjoying.

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PestorPeston · 28/09/2022 20:45

@red4321 our solar panels charge from a street light 😉
Renewables are not 100%, hence including nuclear.

Put solar panels on new builds not farm land, small scale wind is quite good. Remember water wheels. With a bit of effort, it can be done.

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Tha · 28/09/2022 20:46

They know they're out as soon as the chance arises so they're setting themselves up for a career and comfortable life after.

It's basically a fire sale imho.

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IrisVersicolor · 28/09/2022 20:49

I suppose like Cummings, KK thinks a spell of upheaval is a reasonable price to pay until a new equilibrium is established, the one where us average people are not longer soft & spoilt.

The disaster capitalism delusion bug infects all the ERG loons. Recall Rachel Johnson saying her brother was ‘very in thrall to the disaster capitalists’ while he was teasing us with the prospect of No Deal then pulled Crap Deal out of the hat at the last minute.

It’s not just right wing Brexit ideologues - the left like Corbyn too. He was hoping for revolution, KK is hoping for ££££.

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TheHateIsNotGood · 28/09/2022 20:52

Iris well I think it's going as would be expected - everything immediately tanking and much hysteria and screaming - similar to the passenger cabin if an aircraft was undertaking a planned nosedive.

Most Pilots manage to Pull Up and the aircraft safely lands. I've used creativity as a method to crack practical problems and vice versa.

Once the screaming stops it won't seem so bad.

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IrisVersicolor · 28/09/2022 20:59

TheHateIsNotGood · 28/09/2022 20:52

Iris well I think it's going as would be expected - everything immediately tanking and much hysteria and screaming - similar to the passenger cabin if an aircraft was undertaking a planned nosedive.

Most Pilots manage to Pull Up and the aircraft safely lands. I've used creativity as a method to crack practical problems and vice versa.

Once the screaming stops it won't seem so bad.

But if the pilot put a commercial aircraft into nosedive himself and the control tower had to take remote control of it to save the plan from crashing - do you think he would keep his job? Would that airline ever get passengers again if he didn’t?

What practical benefits would this experience have?

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BambinaJAS · 28/09/2022 21:02

IrisVersicolor · 28/09/2022 20:49

I suppose like Cummings, KK thinks a spell of upheaval is a reasonable price to pay until a new equilibrium is established, the one where us average people are not longer soft & spoilt.

The disaster capitalism delusion bug infects all the ERG loons. Recall Rachel Johnson saying her brother was ‘very in thrall to the disaster capitalists’ while he was teasing us with the prospect of No Deal then pulled Crap Deal out of the hat at the last minute.

It’s not just right wing Brexit ideologues - the left like Corbyn too. He was hoping for revolution, KK is hoping for ££££.

They (Disaster Capitalists (DCs)) are waiting until the UK hits rock bottom.

The reality is that the US will keep hiking their rates over the next 12 months until the real rate (nominal interest rate - inflation rate) turns positive (it is still deeply negative with nominal at 3.5% and inflation at 8%).

That means sustained import inflation for the UK, and massive budgetary deficits (as energy is priced in USD).

As that happens, FX (GBP to USD) will tank further, which will make UK assets cheaper.

Thats when the DCs will start buying up the distressed assets.

At this point that looks like Q1 2023

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PestorPeston · 28/09/2022 21:03

IrisVersicolor · 28/09/2022 20:59

But if the pilot put a commercial aircraft into nosedive himself and the control tower had to take remote control of it to save the plan from crashing - do you think he would keep his job? Would that airline ever get passengers again if he didn’t?

What practical benefits would this experience have?

Mmmm 737 max 🙄

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red4321 · 28/09/2022 21:03

Renewables are not 100%, hence including nuclear.

Put solar panels on new builds not farm land, small scale wind is quite good. Remember water wheels. With a bit of effort, it can be done.


I agree. There's definitely scope to expand this area. Starmer made the valid point that it's better to have an ambitious plan for change, and fall short, than not to try.

I'm not a Labour voter but I think Starmer comes across well on the whole. I used to enjoy seeing him turning to page x-ty-nine of a key report at PMQs and see Boris visibly quiver at the next question coming his way.

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TheHateIsNotGood · 28/09/2022 21:12

Iris - an aircraft would have to be 'sick' for a pilot to consider a planned nosedive otherwise they wouldn't do it. The results are beneficial from undertaking such a manouevre.

The UK Economy is 'sick' and needs some action - so our Govt has chosen to do the 'planned nosedive' - it might well work.

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IrisVersicolor · 28/09/2022 21:17

BambinaJAS · 28/09/2022 21:02

They (Disaster Capitalists (DCs)) are waiting until the UK hits rock bottom.

The reality is that the US will keep hiking their rates over the next 12 months until the real rate (nominal interest rate - inflation rate) turns positive (it is still deeply negative with nominal at 3.5% and inflation at 8%).

That means sustained import inflation for the UK, and massive budgetary deficits (as energy is priced in USD).

As that happens, FX (GBP to USD) will tank further, which will make UK assets cheaper.

Thats when the DCs will start buying up the distressed assets.

At this point that looks like Q1 2023

Interesting. Happy New Year.

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IrisVersicolor · 28/09/2022 21:21

TheHateIsNotGood · 28/09/2022 21:12

Iris - an aircraft would have to be 'sick' for a pilot to consider a planned nosedive otherwise they wouldn't do it. The results are beneficial from undertaking such a manouevre.

The UK Economy is 'sick' and needs some action - so our Govt has chosen to do the 'planned nosedive' - it might well work.

I’m struggling to think of a scenario in which a planned nosedive would be beneficial to a ‘sick’ aircraft any more than a ‘sick’ economy.

If an aircraft stalls it needs to dip its nose to increase the angle of attack and level its wings, not go kamikaze.

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BuckarooBanzai · 28/09/2022 21:42

I'm wondering if he's one of those very, very clever people who just have zero common sense. I really dislike people who have lived their entire lives in an Eton bubble being in charge. I don't want a Chancellor that's never had to worry about having enough to money to pay a bill in their lives. It always turns into a let them eat cake scenario if it goes wrong because they personally are minted they'll be just peachy.

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Elvira2000 · 28/09/2022 22:32

Thanks for all the info. I am shamelessly place marking....I can't contribute, only learn.

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AKKview · 29/09/2022 00:30

NC for this as I knew KK for years. My old phone has his mobile on it (didn’t bother to copy it across to my current one as I was so fed up with him).

I will try to answer your question. My take is fairly similar to that of Rory Stewart who knew him at school and obvs was in Parliament at the same time - if you want to hear his view listen to the Rest is Politics podcast.

First thing to understand is KK is a bit weird. A bit of a loner, not one of the gang. Goes his own way. He never puts himself out to please other people, which is why the conspiracy theories that all this stuff is just trying to make his hedge fund mates rich and happy doesn’t stack up to me at all. At the same time, he always recognised that it you were a total outcast that wasn’t good for your future prospects, so throughout his life he’s always joined lots of all-mens clubs to give him the veneer of belonging - the Pitt at university, then the Carlton, and so we hear, more recently the Garrick and White’s.

Second thing is that he’s not actually all that wealthy - not like Rees Mogg or Rishi or even the entrepreneur types like Hunt and Shapps. Like Boris, KK was a scholarship boy at Eton. He wasn’t in banking long enough to make any serious money, the books he wrote were never bestsellers (we are not talking Jeffrey Archer thrillers here) and he was also on the backbenches for ages which doesn’t pay all that well. He was a shockingly cheap date. But unlike Boris, I have never had the feeling he was personally greedy for money - that is not what motivates him.

What REALLY motivates him is asserting his intellectual superiority. He HAS to be the cleverest person in the room, which is why Tom Scholar had to go. He is a very ideologically driven small state libertarian, who believes that taxes should be cut to make the country more attractive both to HNWs and corporations, which he believes should in turn foster growth. He not only disagrees with people who don’t share these views, but he doesn’t even want to listen to what they have to say, they are just dismissed as irrelevant because they aren’t as clever as him. He was the same about Brexit. Getting into Cabinet, and then into no11, was for him the ultimate opportunity to demonstrate his intellect (as he sees it), almost like a rematch of University Challenge. Right now, he’ll be telling himself that the bond markets and economists don’t really understand the genius of what he’s trying to do because he Kwasi has literally invented a new approach to fixing the economy that nobody else was clever enough to think of, and nobody else was bold enough to try.

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IrisVersicolor · 29/09/2022 00:47

Fascinating, thanks for taking the time to post. Far more insightful than anything I’ve read in the media. I will try Rory’s podcast.

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MintJulia · 29/09/2022 00:59

VickyEadieofThigh · 28/09/2022 16:22

Tories can do anything they like to make themselves and their mega-rich donors even bigger piles of cash - even if it entirely plunges the country into a recession the like of which we cojuld never imagine, with terrifying consequences.

Next election: Almost ALL the press - "Vote Tory!" Significant numbers of people who have been hammered by this goverment: "I'm voting TORY!" Labour: "tranwomen are women!"

Perhaps if Labour cut out the 'Trans-women are women' rubbish and actually focused on the economic needs of the country, they would get elected !

I am genuinely hopeful Starmer is finally getting the message.

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MintJulia · 29/09/2022 01:03

Well, @AKKView, if he was never part of 'the gang', hopefully no-one will have too much hesitation in getting rid of him.

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IrisVersicolor · 29/09/2022 01:09

@AKKview one question - if Karteng fancies himself as a great brain, has he not noticed Truss and Patel aren’t very bright?

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DowningStreetParty · 29/09/2022 01:45

anyone who thinks that cutting higher rate income tax at the moment when we’re about to go into winter with no ambulances or trained staff is basically guilty of murder by recklessness

I’m so disgusted and let down basically since 2010 by these Tories who come in with their egos and power and fucking zero sense of responsibility towards the electorate that they clearly hold in utter contempt. They think they’re Masters of the Universe. We’re all just completely expendable numbers.
Brexit, Truss’ mad energy solution that puts us in debt to energy companies forever, now this mad budget that’s ruining our financial future nationally while not allowing OBR to comment first- it’s all just a game to them.
And with huge personal conflicts of interest involved and absolute real-world inexperience and slavish adherence to dogma plus a lack of any personal financial risk when it inevitably ends in disaster. Honestly can’t the financial conduct authority or courts sanction them in some way for their recklessness?

It’s so off the scale of negligent of the massive responsibility that the job entails, that I wish they could be personally taken to court for such careless governing. It’s absolutely shocking.

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SheSaidHummingbird · 29/09/2022 01:47

Liz has to make good on all those handshakes with the Tory voters. Vote for Lizzie, she'll cut your taxes, get you that bonus and line your pockets. Those poor peasants!

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