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Liz Truss trying to 'avoid scrutiny' over plan to hold budget without official forecast


Silver
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Posted (edited)

Who needs "experts", when you have a vision?

Liz Truss has been accused of trying to "avoid independent scrutiny" as she prepares to hold a budget next month without an official economic forecast, despite one being ready should she ask.

Having an emergency budget in September - in which she will make long-term funding pledges - has been a key part of the frontrunner's campaign to get into Number 10.

The move has been branded "worrying" by an economist and expert in government finance, while the team behind Conservative leadership rival Rishi Sunak accused Ms Truss of wanting "to avoid independent scrutiny".

Rishi Sunak accuses Liz Truss of trying to 'avoid scrutiny' over plan to hold budget without official forecast | Politics News | Sky News

Edited by Silver
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Posted (edited)

Liz Truss' plan to focus on tax cuts to tackle the cost of living - rather than targeted support for low income households - could see people end up on the streets, according to one of her rival's backers.

Tory MP Kevin Hollinrake, who is supporting Rishi Sunak in the race to become the next prime minister, claimed the foreign secretary needed to stop offering "the magic money tree" to her supporters and instead look at how to help those most in need.

Liz Truss' cost of living plans could put people on the streets, claims Rishi Sunak backer | Politics News | Sky News

Edited by Silver
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7 hours ago, Silver said:

Interesting that the OBR say they already have a financial assessment before any tax and spend plans have even been announced. ;)

 

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5 minutes ago, L.A.T.1961 said:

Interesting that the OBR say they already have a financial assessment before any tax and spend plans have even been announced. ;)

 

Hardly "interesting", as that is their job: The OBR provides forecasts for all budgets as part of the founding law of the body, enacted in 2010, and despite being funded by the Treasury, it is fully independent.

While the OBR is ready to provide an analysis for Ms Truss if she asks for it, the former Treasury minister - who counts the chancellor and chief secretary to the Treasury among her supporters - wants to go ahead without it.

I would be very surprised if they didn't have templates they can use with whatever figures a politician proposes, and can get the forecast out quickly.

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1 minute ago, Silver said:

Hardly "interesting", as that is their job: The OBR provides forecasts for all budgets as part of the founding law of the body, enacted in 2010, and despite being funded by the Treasury, it is fully independent.

While the OBR is ready to provide an analysis for Ms Truss if she asks for it, the former Treasury minister - who counts the chancellor and chief secretary to the Treasury among her supporters - wants to go ahead without it.

I would be very surprised if they didn't have templates they can use with whatever figures a politician proposes, and can get the forecast out quickly.

Ultimately the tax spend balance is the responsibility of the elected government and the government are not obliged to modify a budget based on information from OBR.

Which seems to be the suggestion here. 

Its not as if the OBR figures can be relied upon.

Four times the OBR has been wrong.

 "In March 2014, the OBR hiked its forecasts across the board, revealing that the economy was growing far more strongly than it previously anticipated.

Britain would grow by 2.7pc in 2014, the analysts said, well above the 1.8pc figure predicted a year earlier and the sharpest upgrade in decades. In fact, even that was too low - GDP jumped by 3.1pc over the course of the year.

Consumer spending grew faster than the OBR had predicted, while business investment was also picking up and unemployment was crashing.

It was not only the OBR which was surprised. Mark Carney joined the Bank of England in mid-2013, predicting it would take several years for unemployment to fall below 7pc and for the Bank to start contemplating rate rises.

In fact it took only six months for joblessness to dive below that level as the economy took off. 

https://www.telegraph.co.uk/business/2016/11/24/four-times-obr-has-wrong/

 

So suggesting the OBR should be consulted at all times before a budget does overstate their usefulness and Rishi must know that. 

 

 

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Well, at least we know the economy is in safe hands with the Tories, whoever is PM. I think we are all a bit wealthier now than we were a few years ago.

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21 hours ago, Silver said:

Well, at least we know the economy is in safe hands with the Tories, whoever is PM. I think we are all a bit wealthier now than we were a few years ago.

That's the spirit, look on the bright side.  ;) :lol: 

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Posted (edited)
38 minutes ago, L.A.T.1961 said:

That's the spirit, look on the bright side.  ;) :lol: 

Liz is trying to aoid scrutiny of her bonkers fiscal plans by saying she will have a 'fiscal event' rather than a 'Budget'- but the Treasury are on to her (her tax cutting plans are designed to benefit the wealthy, rather than those most in need, designed to appeal to Tory Party voters) :

The Tory MP – who is a supporter of Truss’s opponent, Rishi Sunak – said the absence of fiscal forecasts would mean the new prime minister would be “flying blind” without the public being able to see an independent assessment of the government’s balance sheet.

“OBR forecasts provide transparency and reassurance to the markets on the health of the nation’s finances,” he said. “As a committee, we expect the Treasury to be supporting and enabling the OBR to publish an independent forecast at the time of any significant fiscal event, especially where, unlike other recent fiscal interventions, this might include significant permanent tax cuts.

“Whether such an event is actually called a budget or not is immaterial. 

New PM’s spending plans must face scrutiny, says Treasury committee chair | Conservatives | The Guardian

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17 minutes ago, Silver said:

Liz is trying to aoid scrutiny of her bonkers fiscal plans by saying she will have a 'fiscal event' rather than a 'Budget'- but the Treasury are on to her (her tax cutting plans are designed to benefit the wealthy, rather than those most in need, designed to appeal to Tory Party voters) :

The Tory MP – who is a supporter of Truss’s opponent, Rishi Sunak – said the absence of fiscal forecasts would mean the new prime minister would be “flying blind” without the public being able to see an independent assessment of the government’s balance sheet.

“OBR forecasts provide transparency and reassurance to the markets on the health of the nation’s finances,” he said. “As a committee, we expect the Treasury to be supporting and enabling the OBR to publish an independent forecast at the time of any significant fiscal event, especially where, unlike other recent fiscal interventions, this might include significant permanent tax cuts.

“Whether such an event is actually called a budget or not is immaterial. 

New PM’s spending plans must face scrutiny, says Treasury committee chair | Conservatives | The Guardian

I am sure the OBR will produce an assessment of the effects on the economy after the budget is made public. 

Whether its forecast, based on the new budget, is accurate enough to be a guide to what happens economically is up for debate. ;)

But there will be a desire to emphasize the predicted problems and ignore the rest. 

And if Rishi could get this out into the open before the final vote on leader he might be able to show that the OBR supports his new economic plan and derail Liz.

But she is one step ahead and anticipated Rishi using OBR as the cavalry. 

Hopefully she will use the same level of cunning when PM, as she will need it.

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On 8/22/2022 at 8:38 AM, Silver said:

Liz Truss' plan to focus on tax cuts to tackle the cost of living - rather than targeted support for low income households - could see people end up on the streets, according to one of her rival's backers.

Tory MP Kevin Hollinrake, who is supporting Rishi Sunak in the race to become the next prime minister, claimed the foreign secretary needed to stop offering "the magic money tree" to her supporters and instead look at how to help those most in need.

Liz Truss' cost of living plans could put people on the streets, claims Rishi Sunak backer | Politics News | Sky News

Neither can fix it, because the only way to fix it is to end sanctions on Russia.

With Truss going for tax cuts that will increase demand, and inflation. With Sunak planning to give low income households support, that will increase demand, and inflation.

The correct solution (and its not one people want to hear) is to put taxes up, freeze benefits, give no handouts, and raise interest rates. The inflation is being driven by a lack of supply, in essence there isn`t enough to meet demand, so we take steps to reduce the demand so there is enough. Products cannot be magicked out of thin air, so we have to accept there isn`t enough to go around.

Even better send NATO into Ukraine, right up to the Russians, establish a ceasefire, sign a peace, end the sanctions, and the inflation will quickly evaporate away.

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  • 1 month later...

Pound falls against every currency in the world after hitting all-time dollar low

Sterling tumbled almost 5pc to as low as $1.0327 in overnight trading, taking it below its 1985 low to the weakest since decimalisation in 1971.

It clawed back some ground to about $1.05, but the sharp decline has fuelled fears it could slump to parity by the end of the year.

Highlighting the dire outlook, the pound fell against every single other currency in the world, from the Albanian lek to the Zambian kwacha.

The latest fall makes sterling the worst-performing G10 currency in the year so far.

UK Telegraph via MSN

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The pound’s plunge to a record low against the US dollar has sparked speculation that the Bank of England may be forced to hike interest rates in an emergency move to stem the run on sterling.

Financial markets were awash with speculation that the Bank may need to increase rates less than a week after it last pushed the button on a rate rise to 2.25% and before its next scheduled meeting in November.

Market experts said the Bank may need to increase rates by as much as one percentage point – to 3.25% – to steady the plunging pound as it hurtles towards parity with the US dollar following the Chancellor’s mini-budget tax cut announcements.

PA Media via MSN

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Britain's opposition Labour party has surged to a 33-point lead over the ruling Conservatives, according to a YouGov poll on Thursday, after days of chaos in financial markets triggered by the government's planned tax cuts.

The lead was a record high share for Labour in any YouGov poll as well as the highest figure the party has ever recorded in any published survey since the late 1990s, YouGov said.

https://www.reuters.com/world/uk/uks-opposition-labour-party-surges-33-point-lead-over-conservatives-yougov-poll-2022-09-29/

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A government has to apply fiscal policy correctly, even if unpopular.

Inflation is being driven by high demand (so demand needs to be cut) and a lack of supply (so supply needs to be increased).

You do not reduce demand with tax cuts, you do it by raising taxes. You can also cut state spending which is in the UK news today as she is going to implement more austerity. 

To raise the supply of food is easy, the west has plenty of viable land for farming. Where the problem exists is that it`s not easy to suddenly build oil and gas rigs. They are mega construction projects taking years to build. So, the only solution to correct this side of inflation is to end sanctions.

Truss has made one mistake so far and that is giving out cost of living handouts. That amounts to an increase in state spending raising demand and making inflation worse. As I have previously stated she needs to stop that and run a national campaign instead to get everyone buying some thick jumpers for winter, rather than use their gas. £100 worth of Primark jumpers for the family is a lot better than £1,000 extra on utilities.

She needs to resist the OBR telling her to cut taxes, it will make inflation worse. To offset the unpopular decision, I would suggest suspending foreign aid. Put it into making some new oil and gas rigs for the North Sea and framing it as making sure this problem never happens again.

She needs to cull a large chunk of the state sector. Corona lockdowns are over, there is no need for the state sector to have so many employees. That will put a large dent in inflation to help.

I would suggest the Ukrainian conflict needs to be ended as soon as possible. Either send NATO in or force Ukraine to accept a peace.

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Can we have Boris back yet?

Today`s Sky News interview with Truss was painful to watch, it looked like she was going to cry at one point lol.

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Pound weakens and government borrowing costs rise again after Truss speech

The pound has wiped out its gains from earlier in the day, falling in value against the US dollar following the Prime Minister’s speech at the Conservative Party conference.

https://www.gbnews.uk/news/pound-weakens-and-government-borrowing-costs-rise-again-after-truss-speech/373587

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3 hours ago, Eldorado said:

Pound weakens and government borrowing costs rise again after Truss speech

The pound has wiped out its gains from earlier in the day, falling in value against the US dollar following the Prime Minister’s speech at the Conservative Party conference.

https://www.gbnews.uk/news/pound-weakens-and-government-borrowing-costs-rise-again-after-truss-speech/373587

I think she is already on her way out.

I give her to Xmas and she will be gone.

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Kwasi Kwarteng has confirmed that he has been sacked by Liz Truss.

The now former chancellor said in a letter that he has sent to the Prime Minister: "You have asked me to stand aside as your Chancellor. I have accepted."

It came as the Prime Minister prepares to announce that she is ripping up her mini-Budget at a press conference this afternoon.

UK Telegraph via MSN

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53 minutes ago, Eldorado said:

Kwasi Kwarteng has confirmed that he has been sacked by Liz Truss.

The now former chancellor said in a letter that he has sent to the Prime Minister: "You have asked me to stand aside as your Chancellor. I have accepted."

It came as the Prime Minister prepares to announce that she is ripping up her mini-Budget at a press conference this afternoon.

UK Telegraph via MSN

From the publics perspective Boris was removed due to partying during lockdown.

Inside the party he was removed from not being Conservative enough with his economic policies. So, Truss won their support by saying yes, I`ll give you the economic policies that you want.

Did she pick a Chancellor to do that out of political inexperience? Or was it a Machiavellian move? A move to give them a Chancellor they really want, knowing that she would then have to sack him, and say to the party we need to tone down our desired economic policies? Then implement something saner with a Chancellor who is in the centre.

I`m leaning towards political inexperience. She seemed unprepared for what happened and stressed by it.

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1 hour ago, Eldorado said:

Kwasi Kwarteng has confirmed that he has been sacked by Liz Truss.

The now former chancellor said in a letter that he has sent to the Prime Minister: "You have asked me to stand aside as your Chancellor. I have accepted."

It came as the Prime Minister prepares to announce that she is ripping up her mini-Budget at a press conference this afternoon.

UK Telegraph via MSN

Presumably he was part of the "anti-growth" coalition- good job she found out in time! She is well rid!

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8 minutes ago, Cookie Monster said:

From the publics perspective Boris was removed due to partying during lockdown.

Inside the party he was removed from not being Conservative enough with his economic policies. So, Truss won their support by saying yes, I`ll give you the economic policies that you want.

Did she pick a Chancellor to do that out of political inexperience? Or was it a Machiavellian move? A move to give them a Chancellor they really want, knowing that she would then have to sack him, and say to the party we need to tone down our desired economic policies? Then implement something saner with a Chancellor who is in the center.

I`m leaning towards political inexperience. She seemed unprepared for what happened and stressed by it.

In the meantime Germany, recently, announced a 200 billion support budget for their economy. Yet no commentary by the same individuals on its prudence. 

The UK, forced to back away from a tax cutting budget, might look like switching direction now was exactly the wrong thing to do in 6/12 months.

And the naysayers will have vanished like the morning mist. ;) 

While Germany reap the rewards of a borrowing and spend, uncosted, approach and applauded for their foresight. 

 

Germany to mobilise €200bn economic ‘shield’ to field energy crisis

Berlin announced a massive government aid programme, fueled by new debt, to get Germany through the energy crisis, resulting in broad acclaim from industry.

https://www.euractiv.com/section/energy/news/germany-to-mobilise-e200bn-economic-shield-to-get-through-energy-crisis/

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Oh well, looks like we will never know how Trussonomics would have panned out. Still, Liz and Kwarzi can console themsleves that they are record breakers- shortest time in office for either of them.

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