Truss II

I should have posted this yesterday; however, Liz Truss, in her disastrous interviews on local radio on Thursday, as well as continually ignoring questions on the effects of the tax cut, kept insisting that the energy price cap would reduce inflation by 5% and that no-one would pay more than £2,500.

Let's take a closer look at this assertion.

1. As many have already pointed out, the latter assertion that no-one would pay more than £2,500 is patently wrong, as the cap is on kWh price, not total bill. She's not across her brief. 
2. If electricity and gas bills increased on the 1st Sept, there is no way on this earth that this is a reduction in inflation - it's a very definite increase and to assert it's a decrease is a denial of reality.
3. It could be construed as a decrease in the forecast rate of inflation had there not been an intervention, whereby people are paying less than they could have been paying - that's playing with words.
4. Even then, a reduction of 5% can be interpreted in a number of ways - inflation reducing by 5% from 10.9% to 5.9%, or the 10,9% figure reducing by 5% to 10.355%.
5. Either way, she's being disingenuous, as inflation has just increased. 

Now let's look at her assertion that Kwarteng's tax cuts will create growth.

1. Yes, the literature suggests tax cuts produce growth, but it also suggests that the working man or woman spends the extra money more wisely, and on items that cause growth, than the rich man or woman. Now there are vastly more working people than rich people and thus it's far more effective to target the bulk of tax cuts on working people who will generate far more demand.
2. In these times of pressure on profits, caused by high inflation, and in the absence of cash reserves, the only way of growing is to borrow, but the cost of borrowing has increased as a result of the budget, putting those who wish to expand off doing so.
3. Growth requires people to fill the jobs caused by the growth and, with 1.2m unfilled vacancies, these extra people can't materialise without bringing them from somewhere - i.e. immigration. That's an obvious problem for Brexiteers. They may respond with the view that time-limited visas are the answer, but who in their right mind would accept time-limited jobs, especially after Brexit?

It is believed that the Armed Forces are drawing up a plan to punish Putin by getting Truss and Kwarteng to run the Russian economy. 

As an aside, and apropos of Rupa Huq's comment about Kwarteng being superficially black, could it be argued that he's superficially a Chancellor and Truss is superficially a PM?