ALEX BRUMMER: Kwasi Kwarteng presents a real conservative budget that spells the end of the damned Treasury
The boldness and courage of Kwasi Kwarteng’s first Budget is seismic. By giving taxes a hatchet and putting growth at the center of economic policy, the Chancellor has produced a genuinely conservative package putting aside the fiscal conservatism of the Treasury that has held back his predecessors.
The magnitude of the package is breathtaking. Liz Truss and her chancellor have turned their backs on the pessimists of think tanks, public service and the political left to launch a revolution to liberate enterprise, entrepreneurship, effort and productivity.
Over the next two years, the Chancellor’s measures will put more than £58billion in taxes back into the pockets of consumers and businesses, hopefully boosting confidence and triggering increased consumption and investment.
The boldness and courage of Kwasi Kwarteng’s first Budget is seismic. By picking up a hatchet for taxes and putting growth at the center of economic policy, the Chancellor has produced a genuine Tory package
The increase could be even higher as officials are often reluctant to acknowledge changes on the supply side – reductions in tax levels and regulations such as the abolition of VAT for overseas visitors to Britain – can generate billions for the Treasury.
The injection of cash for households and businesses following this mini-budget will also be stimulated by the decision to stabilize the energy market.
Instead of the alarming increases in energy prices we expected, household bills were capped at an average of £2,500 for two winters. There is also a £60billion scheme to help businesses with energy costs over the coming winter.
No one, however, should have their eyes set on the challenge. In seeking to increase its production, Great Britain is engaged in a race against time.
The Truss government has a two-year window to transform the mood of the country and the investment climate. If the plan does not bear fruit before the next election, we could return to the bad old days of high taxes and state spending. In every economy, trust is essential to induce companies to invest and individuals to spend. The fear of rising inflation should be alleviated by plans in this budget to mitigate the impact of the energy crisis.
Liz Truss and her chancellor have turned their backs on catastrophists from think tanks, the civil service and the political left
The Bank of England acknowledged this earlier in the week when it cut forecast price increases from 13.3% to 11%.
Mr. Kwarteng’s approach is nothing if not a pro-business approach. There is no escaping the reality that, since the financial crisis, UK production has lagged behind that of its competitors. And while parts of the economy have thrived – including the city, the creative sector, life sciences and artificial intelligence – large parts of it have not.
There are a number of reasons for this. Britain has been hit harder than its competitors in the financial crisis because we have a huge financial industry, while Brexit and several changes of Prime Ministers have shaken confidence.
But Chancellor Kwarteng is determined to turn things around. He recognizes that infrastructure projects – from broadband broadband to better transport connections and more home electricity – are vital for the future.
The Truss/Kwarteng approach recognizes that the best way to lift the UK out of its lethargy is to strengthen infrastructure and incentivize businesses to build modern factories and digitize operations while increasing opportunities for their workforce. work.
The Truss/Kwarteng approach recognizes that the best way to pull the UK out of its lethargy is to strengthen infrastructure and incentivize businesses to
It is recognized that the damaging strikes against BT, the Royal Mail and the rail network are politically motivated as much as anything else. That is why the Chancellor is seeking to strengthen strike rules and prevent disruptions.
The difficulty for Mr Kwarteng is that much of the change he wants to see will take time. Britain also faces European headwinds caused by the energy crisis, inflation and recession. Opponents are bound to say that Britain’s increased borrowing and debt makes the pound vulnerable. But being hyper-cautious hasn’t worked in the past.
Mr. Kwarteng and Miss Truss have been delivering the shock treatment that has been demanded for years. The question is whether there is enough time before the next election for the nation’s true potential to be realized.