Business & Economy
Report: Stopping the walls from closing in…
November 3, 2022
If a week is a long time in politics, then what of the last two months, following the disastrous impact of the Government’s mini-budget? Here, Steven Hugill picks through recent events, assessing the chaos and confusion, and why latest Prime Minister Rishi Sunak needs to hit the ground running.
To bastardise that well-known Churchillian refrain, never was so much damage caused by so few, in so little time.
We know the Tories like a bit of wartime chat and patriotic embellishment – remember the ‘Blitz Spirit’ fetishized by some MPs during the pandemic, and the game of spot the Union flag during their interviews?
But even they took the idea too far with the mini-budget.
Talking about battles metaphorically is one thing, but knifing your original second-in-command after he’s set a howitzer on the financial markets under your orders, all while digging a bloody great trench down the middle of your party, is quite the other.
Given the ridiculousness of Boris Johnson’s tenure, the country was crying out for stability.
Yet, in an astonishing few weeks in charge, Liz Truss not only maintained the chaos, but increased it, with a mini-budget that shot warning flares across the skies.
Her Chancellor’s mini-budget was supposed to be a watershed moment, a wiping of the slate to provide the UK with a foothold to begin the long climb from base camp towards growth.
Instead, it caused an avalanche, which buried the pound, largely froze the mortgage market and forced the Bank of England into Sherpa mode to stabilise prices and stop pension funds from disappearing over a glacier edge.
And then we had the U-turns.
After Kwasi Kwarteng was sent packing, the growing shitstorm was handed to former Health Secretary Jeremy Hunt – somewhat ironic, given his involvement in a £44,000, taxpayer-funded office toilet and bathroom row a few years ago.
Flushing away many of his short-lived predecessor’s plans, he laid the ground for public spending slashes and a cut to the household energy bill cap, ready for Rishi Sunak to take command.
Figures from the Institute of Fiscal Studies’ latest Green Budget, which warn it will take £62 billion of spending cuts or tax increases to stabilise or lower national debt, paints a picture of the financial landscape he’s taken over.
And its numbers like the one above that make the Government’s initial mini-budget all the more incredible.
Still facing the consequences of Brexit and coronavirus, and faced with countless warnings about rising inflation and the ever-growing impact of the cost of living crisis on a huge swathe of society, the original blueprint was extraordinary for its lack of sentiment alone.
And the fall-out has plenty worried.
They include John McCabe, chief executive of the North East England Chamber of Commerce, who says the time has come for the “chaos at the top to stop.”
He added: “We all want to see growth, but we need to achieve stability first and the Government’s actions in the last few weeks have not helped.
“Businesses and households are facing uncertainty on energy price support, and we’re very concerned about cuts to essential public services.
“It is crucial Mr Sunak and his ministerial team listen to business concerns in the North East, and that his appointment marks the start of real action to deal with the significant economic pressures facing businesses and households in the region.
“Investment in the North East remains vitally important and there must be a renewed emphasis on greater devolution for the region and ‘levelling-up’.”
Councillor James Jamieson, chair of the Local Government Association, added: “Councils are working hard to support residents.
“However, without certainty of adequate funding, councils will have no choice but to implement significant reductions to services.
“The Government, therefore, needs to ensure councils have the funding to meet ongoing pressures and protect the services that will be vital to achieve its ambitions for growth, a more balanced economy, level up communities and help residents through this cost of living crisis.”
With markets flinching at the slightest move and confidence shattered, rise it must.
With Sunak, the Tories have pushed the wooden blocks around the war room plotting map again.
And for the country’s future, it needs
them to line up.
Because if they don’t, the walls – after the utter chaos of recent weeks – will come tumbling down.