Money for nothing – and your kicks for free?

In his latest blog, Frank McKenna defends some of the new PM and Chancellor’s economic messages – but doubts that the British public are ready to listen.

Frank McKenna

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Nobody would pretend that the Kwasi Kwarteng ‘Mini Budget’ was anything other than a disaster. He and his Prime Minister did a belated U-turn on their 45% tax rate announcement during the Tory Party conference this week, further diminishing their credibility. Oh, and the OBR report will be published this month now as well. Labour, without having to do much more than look competent in truth, have stormed into a poll lead of around 20%.

However, if you take away the appalling optics of the crass presentation of the new government growth strategy, the underlying argument that Liz Truss and the Chancellor are attempting to articulate is, at the very least, worth a hearing.

Such has been the ‘Jam today’ offer of our politicians in recent times, that the fiscal realities appear to now be lost on the great British public.

Firstly, we voted for Brexit on the premise that it would make us better off. British jobs for British workers, in a high-waged, high-growth new Jerusalem.

How did we expect that to happen, when every independent analysis showed a 4% year-on-year dip in our GDP performance, as we cut ties with the biggest trading bloc in the world?

During the pandemic, those of us who were waving red flags about the continuous rush to lockdowns, warning of the inevitable, devastating medium and long-term consequences to our general health, our mental health, our kid’s education, and the economy, were considered swivel-eyed loons.

The scrutiny and the economic impact assessments that ought to have taken place before such draconian measures were imposed upon us were never demanded, largely because the majority of working people were being paid their salaries by the government. Quite honestly, so long as we were being paid to stay at home, we had neither the desire nor the inclination to challenge our politicians.

Poorly administered business loans, the ludicrous ‘eat out to help out’ initiative, panic buying of PPE kit, and the absurdity of the stop-start, lockdown, open-up, approach to the economy has left UK Plc with a pandemic hangover north of £600billion. Our health service is on its knees, and many of our children are way behind where they should be educationally.

The war in Ukraine, again a long time coming given the placidity with which the West met Putin’s aggression in other parts of Eastern Europe, has added salt to an already gaping wound.

Truss and Kwarteng are trying to remind us that there are no magic money trees. That to succeed in life, the minimum requirement for those who are able to is to work hard, and that taxing your way out of a recession is not likely to work. But against the backdrop of Brexit promises, furlough, and Boris Boosterism, the electorate is in no mood to listen.

At some point, we will all have to wake up and smell the coffee. ‘Cake-ism’ was a fantasy objective that Boris blundered through his short premiership on, but it could never last.

We now have some difficult choices to make. We can pretend that we can continue to throw additional cash at the NHS, which is already costing us more than it has ever done – or we can reform it.

We can continue to prioritise the three ‘R’s and allow our education and skills agenda to be cataclysmically mismanaged from Whitehall – or we can devolve it.

We can accept that some of our key sectors, hospitality, health, and construction to name a few, will struggle to have capacity within their workforce – or we can relax our immigration rules and do a sensible deal with the EU.

We can demand more housing, better infrastructure, energy security, and clean air – but we must accept the need to urgently review the current bureaucracies, regulations, and red tape that get in the way of allowing us to deliver those agendas and challenge the NIMBY brigade.

We can even buy the Corbynista line that if only we taxed the ‘rich’ more, the sunlit uplands would be reached – but that is a fantasy bordering on Brexit proportions.

Truss is right that tough choices lie ahead. Money does not grow on trees. Debts must be repaid. Whether she or her new administration are the right administration to shape that message remains to be seen. But, unless someone does – and quick – the UK will fall into an inevitable period of managed decline.

Money isn’t for nothing. And kicks are seldom free.

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