Cutting the top rate of tax and lifting the cap on bankers bonuses is probably a good thing in my view. I think it probably encourages more big hitters to pay tax and do business here, and helps the UK hire the talent that we need across various sectors - health, technology, engineering etc. - but the optics / timing of it are terrible and it was a gift to Keir Starmer.
Cutting taxes ahead of a recession is also a good thing to do in my opinion. Like Alistair says, they’re not even cutting taxes, they’re just putting them back to where they were under Blair. Taxes were way too high. I suspect even the likes of Starmer broadly agrees with that in principle. He’s smart enough to know that you can’t tax your way out of a recession and that higher taxes rates eventually lead to lower tax revenues.
Saying it’s morally bankrupt is naive in my opinion. They’re cutting taxes because they think that’s the best way to help the poor or lower paid. They’re not doing it because they’re evil and want to help their pals short the pound. Stirring up morons with that type of rhetoric is childish and unhelpful.
The problem they’ve got, and the reason I’d have preferred Sunak, is that they’ve gone big and they’ve gone early and they’ve spooked the markets a bit and lost control of the narrative now. Part of me kind of admires the sheer balls of it, the conviction politics rather than the crowd pleasing gesture politics. Another part of me worries that they’ve underestimated the amount of fear and uncertainty in global financial markets right now given the war etc.
Interest rates were far far too low anyway and house prices needed to fall. So these are good things. The dollar will fall back if the international situation normalises. But Truss and Kwarteng need to play a blinder at the budget and reassure the market that they’ve got a grip or they could be dead in the water.
