We do not Truss you

Jim reflects on the spectacular economic implosion of the new Truss government and reports on the level of interest from business in the Labour Party that he noted at their Liverpool conference.

Jim Hancock

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SPECIAL FINANCIAL OPERATION

A political party pressing the self-destruct button twice is a rare sight indeed. After choosing Johnson, who destroyed this country’s international reputation for probity, we now have Liz Truss and her arrogant Chancellor, nearly destroying the pensions of millions of people in their spectacularly mishandled dash for growth.

There are many features of this botched budget which are wrong, but what has most spooked the markets is the lack of scrutiny by the Office for Budget Responsibility (OBR). It looks sneaky. As Shadow Chancellor Rachel Reeves said, “What have you got to hide?” To get round the need for an OBR assessment, Kwasi Kwarteng, called his statement “a fiscal event.” This has led to comparisons with Russian obfuscation calling the war on Ukraine “a special military operation” while this is a “special financial operation.”

It is not wrong for the government to aspire to improve our growth and productivity levels. They are right to say we are often too focused on how to slice the existing cake, rather than enlarging it. But the approach has been hasty and reckless and surely has done as much damage to the party’s reputation for sound money as the Lamont financial crisis exactly thirty years ago.

GHOST OF ALTRINCHAM

Antony Barber had been the MP for Altrincham for 5 years when Ted Heath’s Tories came to power in June 1970. He wasn’t given a leading post in the Cabinet but was made Chancellor of the Exchequer when the towering figure of Iain Macleod died just a month later.

It is doubtful if Macleod would have unleashed the very temporary boom that Barber initiated with slashing tax cuts in 1972, now rivalled by Kwarteng. Roaring inflation followed and the Tories were out two years later.

LABOUR READY FOR BUSINESS

The suits were back at the Labour conference in Liverpool. Wandering around the halls one was struck by the return of business people and lobbyists. Labour is being taken seriously again.

The events where the Shadow Cabinet met business were rammed.

We saw it in the mid nineties as New Labour surged towards power and interest in John Major’s Tories drained away.

That’s not to say a Labour victory is certain. There is a significant majority to overcome, their former Scottish seats are held by the Nationalists and their attitude to the Chancellor’s “special financial operation” is confused as is their position on attending picket lines. Why not be honest and say they are not giving the Daily Mail pictures of the Shadow Cabinet standing over braziers and be done with it?

The Corbyn Left are marginalised but still a force. I attended a fringe where left wing unions warned of mass strike action and appeared to welcome unrestricted immigration. Greater Manchester mayor Andy Burnham, on manoeuvres to the left, opposes the reduction in basic rate income tax.

Nevertheless, Labour left Liverpool with a healthy opinion poll lead and every prospect of a thumping victory in the West Lancashire by election where Skelmersdale postie and Lancashire County councillor Julie Gibson is tipped for the party’s candidature.

Now it’s on to Birmingham and a conference that will be full of people who backed Liz Truss and ignored the warnings of Rishi Sunak. What was set to be a celebration of the new regime could turn into a bitter inquest into the “special financial operation.”

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