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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.

OP posts:
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Am I being unreasonable?

127 votes. Final results.

POLL
You are being unreasonable
13%
You are NOT being unreasonable
87%
inheritanceshiteagain · 30/09/2022 09:44

There is not rationale that can explain borrowing money to pay richer people more money

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Notonthestairs · 30/09/2022 09:49

It's pretty obvious that an OBR forecast must have been predicted to be dreadful otherwise they'd have loved to have had that as ammunition to prove their policies.

I do hope this mornings meeting with the OBR isn't used to put the thumbscrews on them.

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FloydPepper · 30/09/2022 10:21

@AKKview thanks for your posts on this thread. Make a change from the usual “they’re all stupid” or “they’re all greedy”

I agree that ideology plays a large part in driving what they’re doing at the moment, and what you say about perceived intellectual superiority is really interesting. And plausible.

im not an economist, just reasonably numerate and not thick. I think I can see what they’re trying to do, but I think it’s badly timed, ideology driven and badly implemented.

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Blossomtoes · 30/09/2022 10:54

GasPanic · 30/09/2022 09:29

You have just described Jeremy Corbyn in a nutshell.

Which probably explains exactly why we are where we are now.

Ffs. Jeremy Corbyn? Have you been under a stone for the last 2.5 years?

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AKKview · 30/09/2022 11:33

Blossomtoes · 30/09/2022 10:54

Ffs. Jeremy Corbyn? Have you been under a stone for the last 2.5 years?

Not so fast - @GasPanic has a point.

A credible Labour candidate could have beaten Johnson - or if not, certainly wouldn’t have given him a massive majority to do what the hell he wanted. And things would have panned out very differently from then on.
Corbyn however was utterly unelectable. Everyone except a tiny minority of activists in the Labour Party knew it. Like everyone except a handful of Tory activists knew Truss wasn’t up to the job.

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Cornettoninja · 30/09/2022 11:37

How far do you want to go back @AKKview ? I would put Cameron at the epicentre of where we are today but regardless, we are where we are. Harking back to a candidate that hasn’t been relevant for a couple of years and whose party rejected isn’t constructive, certainly not at a point where massive issues are reality.

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BambinaJAS · 30/09/2022 11:42

AKKview · 30/09/2022 11:33

Not so fast - @GasPanic has a point.

A credible Labour candidate could have beaten Johnson - or if not, certainly wouldn’t have given him a massive majority to do what the hell he wanted. And things would have panned out very differently from then on.
Corbyn however was utterly unelectable. Everyone except a tiny minority of activists in the Labour Party knew it. Like everyone except a handful of Tory activists knew Truss wasn’t up to the job.

GasPanic is deflecting.

Its a common strategy of people that want to deflect blame from the shitshow they elected

Don't fall for it. This is 100% on them.

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AKKview · 30/09/2022 12:41

History is all about looking back to understand not just what happened but why. And the big stuff is very rarely down to one or two individuals being greedy or lazy or incompetent.

Is Corbyn personally to blame for Brexit, the energy crisis and global inflation? No.
Is Truss personally to blame? No.

Would it have been better to have had less extremist and polarising leaders globally over the last 15-20 years? Yes.

Why do these leaders get the support they do?
Because we vote for them.

Why do we vote for them?
Good question….that’s what historians in 50 or 100 years time will be interested in.

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red4321 · 30/09/2022 12:44

Why do we vote for them?
Good question….that’s what historians in 50 or 100 years time will be interested in.


Interesting comments. Answering personally, because I believe we should exercise our right to vote and I vote for the party that best fits my political views.

Though it's far from perfect and I'd like a wider choice but our political system doesn't easily cater for 'new' parties.

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Blossomtoes · 30/09/2022 12:55

Why do we vote for them?

People vote in their own best interests on the whole. In 2019 it was a mixture of “Boris is a jolly good chap”, Get Brexit Done fever and the assumption that only Tory governments can be trusted with the economy, they were seen as the low tax option that was “best for my family”. I think the 2019 landslide will be seen as a political aberration but Cameron definitely sowed the seeds of it by allowing the ERG its destructive referendum.

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Sirius3030 · 30/09/2022 12:58

View this on a BIG computer screen:
www.kamikwasi.tax

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IrisVersicolor · 30/09/2022 13:10

AKKview · 29/09/2022 23:10

Not the case: in other careers, you don’t need to get to the top of a single very pointy pyramid to make money. There are more pyramids and they are much bigger. In much of the private sector, someone who is mid level, four or five layers down from the top, can earn six figures, more even than the PM.

As for the vast majority of politicians, you are very very very wrong.
Being an ex-politician does not carry the kudos you think it does. In fact many really struggle once they leave politics because there’s no obvious career progression from being a backbench MP: it is a job quite unlike any other, and once you are out, you have no status or influence. The luckier ones had careers before they entered politics which they can resume - being a farmer or doctor or lawyer or whatever - in which case politics wasn’t a material advantage at all as they probably took a pay cut and a career break to do it. A few of the older and more respected ones get part time jobs as NEDs or go off to run charities - but these roles are few and far between and mostly not all that lucrative. Some do random things - Portillo the railway enthusiast, Virginia Bottomley the headhunter. A few go into public affairs or lobbying firms because it’s the only thing they know. And why not?

I am not sure what you are expecting here. Are we really saying that the only acceptable thing for MPs to do, once they step down or lose their seats, is go on the dole or down the mines? They have a right to a career and to provide for their families the same as anyone else.

What there is no evidence of in this country is people going into politics to get rich. Unlike China, newly where appointed officials suddenly start sporting Omegas and Rolexes, the people who end up rich are the ones who were rich anyway before politics. I can only think of one who has only become seriously more wealthy as direct result of his political career, and that’s Blair. He probably would have done OK if he’d stayed at the Bar and not gone into politics, but he’d never have been a multi millionaire with a vast property portfolio including a double sized mansion in Connaught Square. But I don’t think even he went into politics expressly to get rich. (His wife I am not sure… always very keen to cash in after they left no10…)

What you mean by ‘you’re very very wrong’ is you don’t agree and that’s fine. I feel I know sufficient numbers of politicians of my generation up to my parents’ personally to say that, even those who have not had particularly stellar careers, have done well out of it.

It’s true that some MPs are voted out without a by your leave, but many if not most have careers to go back to, and many have had further work if not related to their political experience, certainly work they wouldn’t have offered without it.

I just don’t think it’s as black and white as you’re painting it.

Either way, the original line was not - going into politics to get rich but to ‘feather their own nest’ which can be interpreted in various ways and is not really the same thing. So this is a bit of a tangent.

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Felixfeather223 · 30/09/2022 13:23

AKKview · 30/09/2022 12:41

History is all about looking back to understand not just what happened but why. And the big stuff is very rarely down to one or two individuals being greedy or lazy or incompetent.

Is Corbyn personally to blame for Brexit, the energy crisis and global inflation? No.
Is Truss personally to blame? No.

Would it have been better to have had less extremist and polarising leaders globally over the last 15-20 years? Yes.

Why do these leaders get the support they do?
Because we vote for them.

Why do we vote for them?
Good question….that’s what historians in 50 or 100 years time will be interested in.

@AKKview no, I’m sorry but there is just no evidence that Corbyn would be anywhere near as destructive as Cameron, May, Johnson or Truss.

Cameron initiated the Brexit process without any solid campaign plan to ensure his side won, people blame Corbyn- fine, but it was Cameron’s mess and Corbyn possibly calculated that wading in too strong on either side would damage labours chances of gaining power next election. May was intensely antagonistic to the EU negotiation partners and was determined to prove her bona fides by trying to deliver a hard Brexit for no better reason than a double dare from the hard right of her party. Johnson? Did not get Brexit done, at all, presided over one of the worst pandemic responses in the developed world despite having one of the best developed public health systems in the world, and managed to transfer 100 billion of the country’s wealth to a variety of conservative friends and well wishers, with SFA return on investment.

You may disagree with Corbyn, you might think his opinions are extreme, but he is a democrat, he is a decent human being of principle, he took the views of others onboard, He follows the rules, his manifesto was even very popular. He just didn’t cut the figure of a shiny leader, he was a bit stayed and to the centre right of his party he was unimpressive. However, by the point Corbyn came to power in the Labour Party, Blairite centrism was toxic among voters, and most of the party members- perhaps wrongly you could argue but around that time the Conservatives had a choice between Blairesque grandee Jeremy Hunt and Johnson, and even the conservatives went for the far more populist non-neoliberal figure.

Unelectable? I mean sure, but demonstrably no less electable than any other Labour leader apart from Blair, and only Blair, in more than 40 years it would seem.Even Keir Starmer who is riding high now was looking deeply unpromising and arguably has only risen to comparative glory as a direct result of Truss driving the economy into the ground like a dart and objectively costing a huge chunk of the Tory voter base 1000s more in mortgage repayments over the next year, within days of taking office. Not to mention the near tanking pension funds. The conservatives have been having far too easy a time from the press for years now, and we know that wouldn’t have happened for Corbyn, he would never have pulled a move like this because he knew he would be hanged for it. In fact, there’s a fair chance he wouldn’t be leader by this stage and Keir would be in anyway. They wouldn’t have had to drag Corbyn out either like they did with Johnson.

Of course it’s all a matter of counterfactuals, who can say what would have happened for certain, but having a democrat in charge who wasn’t tempted to play to the gallery would likely have made a world of difference.

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IrisVersicolor · 30/09/2022 13:28

Blossomtoes · 30/09/2022 12:55

Why do we vote for them?

People vote in their own best interests on the whole. In 2019 it was a mixture of “Boris is a jolly good chap”, Get Brexit Done fever and the assumption that only Tory governments can be trusted with the economy, they were seen as the low tax option that was “best for my family”. I think the 2019 landslide will be seen as a political aberration but Cameron definitely sowed the seeds of it by allowing the ERG its destructive referendum.

I think it will justly be seen as a result of Brexit which has tricked the imaginations of left and moderate right and emboldened the hard right.

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Redqueenheart · 30/09/2022 13:29

The only 2 explanations are:

  • he is an incompetent, arrogant fool
  • he crashed the pound on purpose to help a few dodgy mates make a lot of money


Either way, the man is a disgrace.
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Cornettoninja · 30/09/2022 13:49

AKKview · 30/09/2022 12:41

History is all about looking back to understand not just what happened but why. And the big stuff is very rarely down to one or two individuals being greedy or lazy or incompetent.

Is Corbyn personally to blame for Brexit, the energy crisis and global inflation? No.
Is Truss personally to blame? No.

Would it have been better to have had less extremist and polarising leaders globally over the last 15-20 years? Yes.

Why do these leaders get the support they do?
Because we vote for them.

Why do we vote for them?
Good question….that’s what historians in 50 or 100 years time will be interested in.

I don’t disagree about history, we are living in very interesting times; however recent history is still very messy and I’m not entirely sure, in general, people are distanced enough to make sense of it iyswim. X led to Y doesn’t necessarily have a clear consensus.

On questions like the original post posed discussion follows and becomes a mix of current and past events. The context of bringing up Corbyn can be either a historical analysis of the (set in stone) events that led to where we are or a current political stance designed to rally support. It will be responded to in both ways.

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BrightYellowDaffodil · 30/09/2022 14:06

@AKKview thank you for your posts, it’s nice to see some rational discussion beyond the “They’re just in it to make their mates richer” hyperbole.

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Felixfeather223 · 30/09/2022 14:15

@UserOneSquillion whatever the rationale I think this whole situation is so deeply worrying that it would be even be worth having a general election as soon as possible to get another government in.

It would be massively disruptive, but Truss will be the 3rd leader in a row to be pushed out by her own party, the credible conservatives seem to hold no power at all. I recommend people sign this petition if they haven’t already, at the very least it could send a signal to the rest that they need to engage in some serious and aggressive damage limitation:

petition.parliament.uk/petitions/619781

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Redqueenheart · 30/09/2022 14:17

@BrightYellowDaffodil
''@AKKview thank you for your posts, it’s nice to see some rational discussion beyond the “They’re just in it to make their mates richer” hyperbole''

Hyperbole? surely you can see that this is simply a fact.

The single purpose of the Johnson and Truss' government have been to make a a few Tory donors and their close mates richer. There is nothing else to it.

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GasPanic · 30/09/2022 14:52

Felixfeather223 · 30/09/2022 13:23

@AKKview no, I’m sorry but there is just no evidence that Corbyn would be anywhere near as destructive as Cameron, May, Johnson or Truss.

Cameron initiated the Brexit process without any solid campaign plan to ensure his side won, people blame Corbyn- fine, but it was Cameron’s mess and Corbyn possibly calculated that wading in too strong on either side would damage labours chances of gaining power next election. May was intensely antagonistic to the EU negotiation partners and was determined to prove her bona fides by trying to deliver a hard Brexit for no better reason than a double dare from the hard right of her party. Johnson? Did not get Brexit done, at all, presided over one of the worst pandemic responses in the developed world despite having one of the best developed public health systems in the world, and managed to transfer 100 billion of the country’s wealth to a variety of conservative friends and well wishers, with SFA return on investment.

You may disagree with Corbyn, you might think his opinions are extreme, but he is a democrat, he is a decent human being of principle, he took the views of others onboard, He follows the rules, his manifesto was even very popular. He just didn’t cut the figure of a shiny leader, he was a bit stayed and to the centre right of his party he was unimpressive. However, by the point Corbyn came to power in the Labour Party, Blairite centrism was toxic among voters, and most of the party members- perhaps wrongly you could argue but around that time the Conservatives had a choice between Blairesque grandee Jeremy Hunt and Johnson, and even the conservatives went for the far more populist non-neoliberal figure.

Unelectable? I mean sure, but demonstrably no less electable than any other Labour leader apart from Blair, and only Blair, in more than 40 years it would seem.Even Keir Starmer who is riding high now was looking deeply unpromising and arguably has only risen to comparative glory as a direct result of Truss driving the economy into the ground like a dart and objectively costing a huge chunk of the Tory voter base 1000s more in mortgage repayments over the next year, within days of taking office. Not to mention the near tanking pension funds. The conservatives have been having far too easy a time from the press for years now, and we know that wouldn’t have happened for Corbyn, he would never have pulled a move like this because he knew he would be hanged for it. In fact, there’s a fair chance he wouldn’t be leader by this stage and Keir would be in anyway. They wouldn’t have had to drag Corbyn out either like they did with Johnson.

Of course it’s all a matter of counterfactuals, who can say what would have happened for certain, but having a democrat in charge who wasn’t tempted to play to the gallery would likely have made a world of difference.

It's an interesting discussion.

I was quite taken with Corbyn, who actually had some quite radical ideas. With him being something of an idealist there was some possibility that these ideas would be enacted. However, he proposed a couple of things that were absolutely batshit.

The first was significant tax raises on the self employed, which immediately alienated a massive chunk of the population (6-7 million IIRC).

The second was the sheer size of his budget, which was 2x Johnsons. Now I know the argument is that Johnson has actually spent about as much as Corbyn proposed, but the difference is that Johnson did it in response to an emergency (covid) and when every other country was doing it, whereas Corbyn proposed high spending levels before Covid and before the cost of living crisis and independently of everywhere else.

Just imagine where we would be if we had had Corbyns high budget spending, followed by Covid spending and then the cost of living crisis. It would have been absolutely disasterous (where as at the moment it is merely really really bad) !

I'm a Keynesian at heart which means I believe the government should spend during times of economic hardship. Unfortunately most people forget the flip side of this, which is that the government should reduce spending when things are looking OK. Corbyn was proposing a massive spend, right at the time when things were looking OK. I think if he had got in vs. Johnson we would have been less worse off, because he wouldn't have been able to ramp up spending in time before Covid hit. But if he had got in against May then we really would be seriously up shit creek now with an absolutely enormous debt:GDP.

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MarshaBradyo · 30/09/2022 14:59

GasPanic · 30/09/2022 14:52

It's an interesting discussion.

I was quite taken with Corbyn, who actually had some quite radical ideas. With him being something of an idealist there was some possibility that these ideas would be enacted. However, he proposed a couple of things that were absolutely batshit.

The first was significant tax raises on the self employed, which immediately alienated a massive chunk of the population (6-7 million IIRC).

The second was the sheer size of his budget, which was 2x Johnsons. Now I know the argument is that Johnson has actually spent about as much as Corbyn proposed, but the difference is that Johnson did it in response to an emergency (covid) and when every other country was doing it, whereas Corbyn proposed high spending levels before Covid and before the cost of living crisis and independently of everywhere else.

Just imagine where we would be if we had had Corbyns high budget spending, followed by Covid spending and then the cost of living crisis. It would have been absolutely disasterous (where as at the moment it is merely really really bad) !

I'm a Keynesian at heart which means I believe the government should spend during times of economic hardship. Unfortunately most people forget the flip side of this, which is that the government should reduce spending when things are looking OK. Corbyn was proposing a massive spend, right at the time when things were looking OK. I think if he had got in vs. Johnson we would have been less worse off, because he wouldn't have been able to ramp up spending in time before Covid hit. But if he had got in against May then we really would be seriously up shit creek now with an absolutely enormous debt:GDP.

Yes this makes sense

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AKKview · 30/09/2022 15:20

@IrisVersicolor

If “feathering your own nest” doesn’t mean deliberately profiting financially (although the context strongly suggested that it did) then what does it mean?

Again I am really not sure what you expect from MPs. I don’t know about you but I think most of us hope for some level of career progression in our lives. We take what we know from
one job and apply it to our next. If that means more responsibility and a pay rise, no one would criticise us. Why should it be different for MPs? If they can legitimately and usefully apply their experience gathered as an MP in their next role, why shouldn’t they? Unless we force them onto the dole or into gulags at the end of their term, what would you have them do instead?

I know a lot of MPs and ex-MPs, including current ministers. Some are really good, some of them are as much use as a chocolate teapot. However, it will not help improve the quality of our MPs if we say to potential candidates: completely quit your previous profession, take a pay cut, accept near total loss of privacy and job security - oh and by the way, make sure for the rest of your life you never a) earn more than you were paid as an MP and b) never draw on any of the experience you gained in your role as an MP.

Honestly, it’s no wonder we don’t like the politicians we elect under these circumstances. It is increasingly only the mad or the stupid willing to put themselves forward.

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GasPanic · 30/09/2022 15:32

MarshaBradyo · 30/09/2022 14:59

Yes this makes sense

You can of course take it a step further than that and ask the question where we would be now if the Tories hadn't done a decade of "austerity" (I use quotes because it is arguable whether it was austerity or not) before the current mushrooming in covid/cost of living spending, although I fear trying to square the circle on that one would make some peoples brains burst.

If a 65 billion spend is enough to send the markets into a tailspin what effect would an entire decade of high spending prior to that have ?

Of course, if the Tories hadn't done the "austerity" there is absolutely no way that Corbyn would have been able to get away with his budget if voted in, so the question is largely academic.

But the important point of all this is that the trajectory is set years, if not a decade previously prior to where we are now.

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BrightYellowDaffodil · 30/09/2022 15:43

Redqueenheart · 30/09/2022 14:17

@BrightYellowDaffodil
''@AKKview thank you for your posts, it’s nice to see some rational discussion beyond the “They’re just in it to make their mates richer” hyperbole''

Hyperbole? surely you can see that this is simply a fact.

The single purpose of the Johnson and Truss' government have been to make a a few Tory donors and their close mates richer. There is nothing else to it.

No, it’s not a fact. I’m no Tory voter but that’s just a biased opinion.

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AKKview · 30/09/2022 16:03

Redqueenheart · 30/09/2022 14:17

@BrightYellowDaffodil
''@AKKview thank you for your posts, it’s nice to see some rational discussion beyond the “They’re just in it to make their mates richer” hyperbole''

Hyperbole? surely you can see that this is simply a fact.

The single purpose of the Johnson and Truss' government have been to make a a few Tory donors and their close mates richer. There is nothing else to it.

The only fact is that something happened (a mini budget that virtually no one likes)

We don’t know, may never know, exactly why it happened. History will be the judge. My theory is that KK is a true believer in economic libertarianism in all circumstances and Truss didn’t have a better plan of her own in what are epically challenging times for all governments. In the Netherlands, inflation has just hit 17%. The Germans have just borrowed €200 billion to fund an energy cap. Etc.

There are winners and losers from every decision that governments take - some deliberate, some inadvertent, some obvious in the short term, some it takes longer to see. (Viz Labour’s decision to open borders early to the ten new EU states in 2004 - literally everyone said hey great idea at the time, but it became widely seen as a disastrous decision, helping sow the seeds of Brexit. But did they do it because they wanted a Brexit? Very unlikely. Were Blair and Blunkett secretly on the take from the Romanians? Very unlikely.)

None of this is of immediate use to those of us who are angry and worried about our finances and livelihoods and those of others. But giving conspiracy theories the status of facts at this early stage is probably not massively helpful either.

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