Today was one of those best described as frustrating because we knew that a visit from an engineer to examine our BioDisk was due today and we were anxious not to be away from the house when the engineer was due to call. But the frustration increased throughout the day when, despite staying in on what was quite a beautiful morning, the planned visit from the engineer did not materialise. I made a lightning visit down into town by car to collect our newspaper and some much needed supplies fom Waitrose but after that we knew that today was going to be a day of political announcements and debate so we were not unhappy to park ourselves in front of the TV to see what transpired. As we were waking up this morning, the newly appointed Chancellor of the Exchequeur was busy hitting the airways to bring to the nation (and to the markets) some advance announcements about the rapid deconstruction of the disastrous ‘mini budget’ for which Liz Truss was responsible. I was slightly reassured to learn that the Chancellor had sought the permission of Mr. Speaker to make some announcements in advance of his statement to the House of Commons scheduled for 2.30 this afternoon. The results of the early morning announcements followed by a more formal 5 minute statement delivered at about 11am were one of the most startling ‘U’ turns in the whole of our economic history. The most incredible announcement today was the planned 1p cut in income tax was not just delayed but parked ‘for ever’ so the abandonment of the 45% tax rate cut, the rescinding of the corporation tax cut and abandoning some of the more egregious income tax avoiding measures for the self employed meant a a truly comprehensive dismantling of the previous mini-budget. Even more surprising was the fact that the ‘bed rock’ of Liz Truss’s policies which was the energy support package designed to last for two years was now going to cease in April. Incidentally, this now aligns with the Labour party policy. What happens after April depends upon a Treasury review but it is probable that universal help will cease and that a more targeted approach will be used after April.
The House of Commons this afternoon provided a most entertaining spectacle. Keir Starmer had put down an ‘Urgent Question’ for the Prime Minister to come to the House of Commons to answer and this was to give an account of the reasons that lay behind the sacking of her previous Chancellor. But Liz Truss found that there other unspecified reasons that detained her in No 10 and prevented her appearance in the House of Commons. So the Urgent Question was answered by Penny Mordaunt who is the new Leader of the House of Commons. Given a terrible brief she battled on gamely to attempt to answer the questions from all parts of the House following the Urgent Question and indicate that there were ‘very important reasons’ why Liz Truss could not attend the House of Commons but was not at liberty to discuss what these were. To all intents and purposes, it looked as though Liz Truss was too afraid to come to the House of Commons and was actually hiding away. As soon as the Urgent Questions session had ended, it was time for the scheduled statement of Jeremy Hunt to make as the new Chancellor of the Exchequeur. At this point, Liz Truss did appear and sat through her new Chancellor’s statement with a sort of fixed grin and she then disappeared again, immediately the statement was over.
In terms of raw politics, it has become increasingly evident that the present Conservative party is beset by many competing factions and although there is a recognition that the days of Liz Truss are numbered, it is by no means clear how she might be dislodged and even more unclear who might succeed her. Having said all that, Jeremy Hunt seems to have played quite a canny political game and his actions seems to have restored a degree of credibility and brought some stability to the febrile markets. But whilst a lot of the unfunded tax cuts have now ‘gone’ there is still quite a chunk – £30 billion? – that still remains and has got to be funded somehow. Public sector ‘cuts’ are not the evident answer as all of the ‘low hanging fruit’ was already addressed in Austerity Mark I when Osborne was Chancellor so how much remains to be cut now? It is increasingly being said that Liz Truss is ‘in office but not in power’ and some Labour MPs were asking in the Commons what was the point of having the present Prime Minister when all of her flagship economic policies had been both discredited and then dismantled. Jeremy Hunt’s stock has risen as that of Liz Truss has fallen but how many Conservative MP’s would see him as a future leader is open to question, given his poor showing in the early rounds of the elections for Tory Leader. But one has to concede that his touch so far has been deft and one suspects that his political potential may be open to reassessment.