Scotland Times

Friday, Mar 29, 2024

Rivals to succeed Boris Johnson blasted for 'fantasy' economic plans

Rivals to succeed Boris Johnson blasted for 'fantasy' economic plans

Britain's leading politicians have been accused of coming up with "pure fantasy" solutions to the country's problems, amid the worst cost-of-living crisis in decades.

At the same time, the government has been denounced as "missing in action", distracted by the Conservative Party's leadership race to determine who will replace Boris Johnson.

The outgoing prime minister's office confirmed on Monday that he had begun a week's holiday, his second break in a fortnight. Downing Street said last week that it would be up to "the future prime minister" to take new measures.

Liz Truss and Rishi Sunak, the two remaining contenders to succeed Johnson, have been concentrating on winning over party members who are voting this month for the new leader.

It comes at a time when the economy is facing a prolonged recession and UK inflation is the highest in the G7, hitting a 40-year high this summer. In July it rose to 9.4%, and the Bank of England expects it to hit double figures come October when household energy bills are due to rise again.

Paul Johnson, Director of the Institute for Fiscal Studies, is unimpressed with the economic plans of both Tory leadership rivals, as well as those of the Labour opposition.

"We (economists) tend to look at difficult things like costs and benefits, trade-offs, pros and cons. Our political leaders seem less and less willing to acknowledge that such trade-offs even exist. Apparently, we can have our cake and eat it," he wrote in an article published on Monday.

Truss, the foreign secretary, has said she prefers tax cuts to "handouts", and has not committed to increasing direct payments to consumers.

Sunak, the former chancellor (finance minister), has backed "urgent help" to enable people to pay bills, without giving specifics. "Failure to do this would push millions, including many pensioners, into a state of destitution," he said on Saturday.

Earlier this year he approved a £400 (€475) payment to offset fuel bills that all households will get this autumn. He opposes immediate tax cuts but has vowed to slash the basic rate of income tax by 20% by 2029.

"We’ve had a shower of cakeism recently. Both the 2019 Labour and Conservative manifestos were stuffed full of it," said Paul Johnson of the IFS. "Both Conservative leadership contenders are guilty of it. They seem to think they can promise tax cuts without any hint that this might matter for the quality of public services or the level of borrowing and debt."


Paul Johnson also criticised Britain's opposition Labour leader, after he called on Monday for the energy price cap to be frozen.

"Keir Starmer has now suggested that we “suspend” the energy price cap. In other words, find £30 billion-plus (€35.6 billion) to subsidise energy bills," he wrote.

"The fact remains that if we want to buy gas on the world market then we will have to pay a lot more for it than we have been used to. We are competing for that gas in a world in which demand is rising faster than supply. That’s why the price is rising."

However, Johnson acknowledged that "Labour has gone much further than Conservative leadership contenders" in giving details of how to pay for its plans. Starmer said his party, if in power, would extend a windfall tax on oil and gas companies in the North Sea to raise £8.1 billion (€9.6 billion).

Analysts Cornwall Insight have predicted that a typical annual household energy bill could reach the equivalent of €5,000 in January. The energy consultancy Auxilione has suggested that the figure could approach €6,000 in the first half of 2023.

Early last week, Scotland's First Minister Nicola Sturgeon, called for a meeting of the UK's four nations' leaders to develop an urgent plan. "The current Westminster paralysis can’t go on," she tweeted.

Martin Lewis, a consumer champion who runs the popular Money Saving Expert website, warned that "we are facing a potential national financial cataclysm", with millions unable to heat their homes this winter.

Meanwhile the UK's former Labour Prime Minister Gordon Brown, who was in power during the 2008 global financial crisis, called for Boris Johnson, Truss and Sunak to get together and draw up an emergency budget in preparation for a “financial time bomb” in October.

“It’s not just that they’re asleep at the wheel — there’s nobody at the wheel at the moment,” he told broadcaster ITV.

Last Thursday Boris Johnson and senior ministers held inconclusive talks with energy companies amid mounting pressure to help consumers.

Afterwards, the outgoing leader insisted that "significant fiscal decisions" must be left to his successor. Later, he sought to ease concern.

"What we're doing in addition is trying to make sure that by October, by January, there is further support and what the government will be doing, whoever is the prime minister, is making sure there is extra cash to help people," he said.

The winner of the Conservative leadership race — who will also become the next prime minister — is due to be announced on September 5.

Newsletter

Related Articles

Scotland Times
0:00
0:00
Close
UK Island Orkney council to look at proposals to become territory of Norway
Woman Awarded Over £100,000 After Being Fired for Transgender Tweet
A provocative study suggests: Left-Wing Extremism and its Unsettling Connection to Psychopathy and Narcissism
A Real woman
Brand new security footage has just been released to the public showing the Active shooter Audrey Elizabeth Hale drove to Covenant Church School in her Honda Fit this morning, parked, and shot her way into the building
China's foreign ministry branch in Hong Kong urges British gov't to stop the biased and double standards Hong Kong report
Double standards: UK lawmakers attack EU chief over Ireland claims
Democracy? Not for UK. UK PM rejects Scottish independence referendum, cancel democracy in BVI
UK urged to brace for economic storm
Women's own body dissatisfaction appears to influence their judgment of other women's body sizes
Prince William To Move Family Into Cottage Near Queen Elizabeth II
BOOOOOOS: Tony Blair receives royal honour
Captured Britons sentenced to death in Ukraine
Barbados PM Mia A. Mottley among Time Magazine’s 100 Most Influential People
Today's headlines
"Just One Of the Boys In School:" Years That Shaped Prince Charles
BVI Premier Rubbishes Claim Of Causing COI Delay
Comments on "Human Intelligence in a Digital Age" - A brilliant Speech by MI6 Chief Richard Moore, and the elephants neglected in the room
Bitcoin: BoE Deputy Gov wants to cancel democracy and protect the banks with regulations which infringe on people’s freedom, independence and benefits they get from their own money.
What are the Pandora Papers?
Taiwan-China relations at their 'worst in 40 years'
The attempt to hold Epik.com accountable for the content of its clients' websites is like blaming Gutenberg for the NYT's fake news that dragged the US into the pointless war against the nuclear weapons Iraq never had
×