Opinion: Kwarteng’s change of heart…

What I am looking at is the growth plan and delivering what is a radical plan to drive growth in this country, to reduce taxes, to put more money that people earn in their pockets” (…) “No, we talked together, I said this is what I was minded to do and we decided together, we were in agreement that we wouldn’t proceed with the abolition of the rate” (…) “We can always have a debate about when we could’ve made the decision, but the important thing is we’ve made the decision and we can now move forward with making the push for the growth plan” – Chancellor Kwasi Kwarteng on BBC Breakfast (03.10.2022).

The Biscotti Mini-Budget launch of tax-cuts for the wealthy and the richest of the Kingdom has backfired. This has been seen with how it has destroyed the confidence in the Pound Stirling and the trouble it caused on the gilt market or in the mortgages market.

It doesn’t help that after the effect it, the Chancellor says: “We get it”. Well, the self-destruction and the losses are already been seen over the last few days. The Bank of England had to come in and salvage the gilt market. Because, the Chancellor and Prime Minister Liz Truss clearly didn’t get what they were doing.

The BDO United Kingdom analyst even wrote this about the Chancellor: “Kwasi Kwarteng is a strong ally of Truss’, and is broadly aligned with her stated economic policies, including on windfall taxes, raising income tax thresholds and reductions in Capital Gains Tax. As Chancellor, Kwasi Kwarteng will be taking on a Treasury under immense pressure, with Truss’ proposed sweeping tax cuts leaving large holes in the public finances. Historically he has been a proponent of low taxation and free markets, but when confronted with the growing calls for direct government intervention to support businesses and households through the current energy crisis, these leanings will be put to the test” (John Hickman – ‘What to expect from the new Prime Minister – Liz Truss’ 01.10.2022).

These words are the most true as they can be today. The Chancellor and Prime Minister did test the market, but that already has a huge cost. The implications of holding on and trying to give tax-cuts to the riches. Could either end up in a quick rebellion in the Tories party itself. The Tories MP could easily have sent enough letters to the 1922 Committee and end Truss reign quickly. That’s why they are backtracking now…

The policies are what these two actually believe in. Truss and Kwarteng did really think it was legit and was reasonable to do all of it. That’s why they held on and pushed the “growth plan” which was a short-trip to recession and a faster downturn. There are already ramifications for several of home-owners and companies holding on to the pensions. This will linger on and will not be settled by the change today.

The Tories are really at a cross-roads, because they will push for austerity, but also more perks for the wealthy. While the Tories will take away benefits and ensure less deficit in the budgets ahead. The Tories can act like this was one off, but we know it easily could come more like this.

Kwarteng and Truss has just showed what they are willing to do and risk. They risked the financial market, the mortgage industry and people’s pensions, just so the wealthy could get more in their pockets.

No one can trust these two, neither have confidence in their decisions or choices. Because, they just trying to cover the richest people and give them leeway, while the poor have to struggle even more. Peace.

Opinion: Truss and Kwarteng’s self-inflicted crisis…

Government policy has nothing to do with common sense” – Sir Humphrey Appleby (Yes, Minister).

I wrote earlier in the year that Truss could be the albatross, which the Collins Dictionary describes like this: “If you describe something or someone as an albatross around your neck, you mean that they cause you great problems from which you cannot escape, or they prevent you from doing what you want to do” (Collins Dictionary – ‘Albatross’). In the months time I wouldn’t consider to be proven right, but especially not in this way.

Liz Truss and her appointed Chancellor Kwasi Kwarteng has just within a weeks time announcing their biscotti mini-budget been able to destroy the value of the Pound Stirling, making mortgages expensive, getting the Bank of England to save pensions and gilts. The whole financial market turned into distress and uncertainty, which haven’t been at these levels in forever. Not even the COVID-19 Pandemic or the downturn of Brexit was as dire. Not like the United Kingdom or City of London was running smooth now. However, the latest moves of the Tories and the tax-cuts are hurting the economy. In such a manner, that the Prime Minister and Chancellor are doing this to themselves.

These two could do better, but they are pursuing it. They seemed not very concerned with the fall of value of the Pound Stirling, neither the actions of the Bank of England. The distress and uncertainties creating are being put on the consumer and the citizens. Their mortgages and pensions are in jeopardy. The rising payments in addition to the more cost of living, rising inflation and now destruction of the financial market is a horrific cocktail created by the Tories. It is all culminating because of the biscotti mini-budget.

That’s why this little treat is self-destructive. The Tories and the ones in-charge is clearly not caring or acting in accordances to the harm they are creating. They are the albatross and they don’t mind being so. Truss and Kwarteng is doing it, but willing playing along. Thinking this will boil over and it will make sense in November. However, the public will pay the price on the mortgages and the Bank of England is bailing out the government.

Truss and Kwarteng can gamble everything on the biscotti. They are willing to go on the limb and die on the hill of the rich. These two are willing to risk the financial markets so the rich gets more wealthy. Those two are now willing to risk the companies carrying the pensions, creating a possible housing crisis and that in addition to the inflation or affects created by the Brexit itself. There is already a downturn with austerity for 12 years, but not forgetting the financial market reaction to the Brexit too. Therefore, these two knew things wasn’t perfect or running smoothly. Even knowing that… they still are pushing tax-cuts for the rich and cutting benefits for the poor. They are doing the opposite of Robin Hood and hopes for glory. It is just disgusting… and should be called out for.

London is falling, the City is falling and no one is in-charge is ensuring a safe landing. It is really disgraceful the attitude and the acts of the Prime Minister and Chancellor. They are just showing arrogance and ignorance of the plights of the people. When they are ensuring more wealth for the wealthy and planning to cut more for the poorest. That is just how despicable these leaders are. While the prices are souring, inflation is growing and the pound is losing value making all imports more expensive.

Truss and Kwarteng are two albatrosses now. They are a problem and they are allowing themselves to be it too. That’s the role they are playing and they are not letting go. Peace.

Opinion: Is London falling?

Chancellor Kwasi Kwarteng met with members of the financial services sector. He reiterated the government’s commitment to fiscal sustainability & how the Medium-Term Fiscal plan, to be published 23 Nov, will set out a fully costed plan to get debt falling in the medium-term” (HM Treasury, 28.09.2022). .

We know that Brexit would have effects and change the liquidity and ability to get the financial markets connected to the City of London. The Tories has had power for the last twelve years. If anyone would know how things works and what matters. It is the Tories and their Ministers should know as much. However, the newest Prime Minister Liz Truss and Chancellor Kwasi Kwarteng seems unaware of a key component for the financial markets, which is “trust” and “stability”.

The Biscotti Mini-Budget is apparently ruining everything. The Bank of England has to buy bonds and gilts, saving businesses and the owners of pensions. If the Bank of England hadn’t stepped in they could have gone bust and things would have been even worse.

The Bank of England is even stating it like this: “As the Governor said in his statement on Monday, the Bank is monitoring developments in financial markets very closely in light of the significant repricing of UK and global financial assets. This repricing has become more significant in the past day – and it is particularly affecting long-dated UK government debt. Were dysfunction in this market to continue or worsen, there would be a material risk to UK financial stability. This would lead to an unwarranted tightening of financing conditions and a reduction of the flow of credit to the real economy. In line with its financial stability objective, the Bank of England stands ready to restore market functioning and reduce any risks from contagion to credit conditions for UK households and businesses” (Bank of England – ‘Bank of England announces gilt market operation’ 28.09.2022).

These aren’t the words of stability or trust. This is bailing out the government and the actions of the new Truss cabinet. The PM and Chancellor has in 22 days been able to get parts of the financial markets to its knees. Just imagine how quickly the new government under Truss has been able to not only loose the value of the British Pound, but also make pension funds insolvent. That’s done in the short time of three weeks. This is actually impressive and depressing.

It is about this time the Tories should be worried. Truss and Kwarteng is only starting their reign and they are already wrecking the economy. Not like the economy or the financial markets was in a good place to begin with. The City of London and financial market has been hit by the Brexit, COVID-19 Pandemic and the austerity over the years. It isn’t like they had a strong market or inherited a rising economy. The Tories had already slowly destroyed it, but the recent acts is their “Hail Mary”.

It doesn’t help that International Monetary Fund (IMF) says this: “IMF Statement on the UK (September 27, 2022) “We are closely monitoring recent economic developments in the UK and are engaged with the authorities. We understand that the sizable fiscal package announced aims at helping families and businesses deal with the energy shock and at boosting growth via tax cuts and supply measures. However, given elevated inflation pressures in many countries, including the UK, we do not recommend large and untargeted fiscal packages at this juncture, as it is important that fiscal policy does not work at cross purposes to monetary policy. Furthermore, the nature of the UK measures will likely increase inequality. The November 23 budget will present an early opportunity for the UK government to consider ways to provide support that is more targeted and reevaluate the tax measures, especially those that benefit high income earners.”” (IMF, 27.09.2022).

When the IMF writes this and the Bank of England is bailing you out. The Chancellor and the Prime Minister should act. Not only pursuit the biscotti and thinks this is just a fluke. It is certainly a reaction to the tax-cuts, the additional decrease in domestic revenue and the possible “bulls-market” which it’s already creating.

The Tories should take this serious. This is a self-destructive and all to feed the rich. It is to give more incentives and add more personal wealth to the already wealthy. The Chancellor isn’t ensuring more capital drive or ensuring safety of the financial markets. No, his just giving the market more stress and concerns. You know your overboard and out of touch. When the Central Bank and the IMF has to take action. That’s compelling and say everything about the losses. This isn’t fun and games, but a dire reality, which seems over the heads of the current leadership.

Truss and Kwarteng has certainly a lot of work ahead of them. They have to initiate things fast and not wait to November. They cannot think the Bank of England will be their saviour or the IMF will be their buddy. No, this weight has to be carried by them and them alone. The Tories are the ones initiating the biscotti mini-budget and got to take the hit for it. Instead of creating more trust and stability. They are creating instability and insecurity in a fragile market, which wasn’t necessary, but that’s what they did. Peace.

United Kingdom: Eurostar CEO Jacques Damas letter to Chair of the Transport Select Committee Huw Merriman (26.09.2022)

Opinion: A biscotti is causing a lot damage

small, hard Italian biscuits containing almonds (= a type of nut)” (Cambridge Dictionary – ‘Biscotti’).

Just mere days in the stint of Prime Minister Liz Truss. Her appointed Chancellor Kwasi Kwarteng has proposed a “mini-budget” or a biscotti of sorts. That little treat for the 1% and the big-business is hurting the trust in the system. The manner of which the new cabinet and the newly appointed cabinet secretaries are revealing new financial policies are hurting it.

Truss and Kwarteng was supposed to bring confidence back. They was supposed to be there and steady the ship. Instead they are sinking it and doing it fast. It has possibly ensured a new rising inflation and lack of trust in the financial policies of the state. The Chancellor only needed about three weeks in office to wreck it.

The little treat of tax-cuts to the wealthy and a proposed “growth plan”. Only follows 12 years of austerity and other measures, which haven’t created a better economy. The United Kingdom is already hit hard by the global pandemic and the downturn of the Brexit.

It doesn’t help that the Bank of England is talking of Emergency Measures and acts in defiance of the Chancellor. Those things just shows how dire the financial policies are. Truss appointed Kwarteng and his surely not oozing confidence. There is already letters of “No Confidence” sent to the 1922 Committee. It didn’t take long before the knives was out.

This sort of commentary piece says it all about what they are doing: “The chancellor has put his tax changes at the heart of his plans to boost growth. As previous Institute work has highlighted, the tax system has many flaws which act as a block to growth. Kwarteng promised to deliver ‘tax reforms’ to improve the supply side of the economy, but what he announced so far was disappointing for those hoping he might look to grasp the nettle and tackle longstanding tax problems. His version of tax reform is a series of cuts to headline rates that leave the structure of the system – and therefore any existing flaws – in place. He announced cuts to income tax, national insurance and corporation tax, but apart from small changes to capital allowances there was little that would constitute ‘reform’. The evidence suggests that cuts to headline rates alone are unlikely to drive big increases in growth, especially in the current environment where the Bank of England is raising interest rates, and they will certainly not pay for themselves. Kwarteng would do better by addressing longstanding distortions in the tax system, for example the bias towards self-employment and against employees. Changes like this would not need to cost nearly as much as the tax cuts announced and yet could be more effective at delivering growth” (Thomas Pope – ‘Kwasi Kwarteng’s new era of economic policy is a major gamble’ 23.09.2022, Institute for Government).

The commentary puts the weight where it matters. Tax-cuts takes away revenue for the government. Yes, the ones getting the tax-cuts gets to pay less taxes, but nothing is saying that these funds get used for creating new businesses or develop society. Instead, these funds gets taken out of the budgets and out of public revenue. Meaning the government gets poorer and cannot carry the government expenditure. Especially, when the Chancellor only wants to give tax-cuts, but has no direct plan of finding new revenue, because there is possibly deficit with these sorts of tax-cuts.

This is giving the wealthy and the rich a hand. While the nation is furthering into an energy, financial and rising inflation. The United Kingdom isn’t a prosperous nation at this very moment. Instead, it is a nation hurting of the choices of the Tory government for 12 years.

The era of Liz Truss has just started, an a biscotti is destroying it. The Truss cabinet don’t even get an ease or an easy period. Usually, there would be relief and given time after a disastrous reign under Boris Johnson. They have done within no time to destroy the government bonds and the value of the Pound Sterling. These two didn’t even need a whole month or a year. No, they just needed about three weeks and that’s it.

Now people are not only expecting a recession, but a total implosion. The financial markets most valuable asset is trust. Trust and confidence is always needed… right now the Chancellor and Prime Minister is causing more harm. Apparently, the uncapped bankers’ bonuses wasn’t the silver bullet to change the economy, but instead drain it. The same is with the tax-cuts. All of these is only serving one purpose, enriching the rich and given them a handout. However, it isn’t helping the economy and the Chancellor should know this.

That’s why the Pound Stirling is diving. The cost of living will rise even more. The inflation and the recession is now upon the nation. That’s because of how the Tories has handled it all over the years. Not only the last appointees and under PM Truss. No, this is a long time coming with help of Cameron, May and Johnson too. All of them has given way to this, but only the latest comrades who has crashed it totally.

The Chancellor and Prime Minister should reflect on the biscotti. That little treat can be their downfall. The little biscuit can destroy them and be their grand finale. Just because they dared and did so.

Not the wisest move, but what they did anyway. Peace.

United Kingdom: Ian Blackford MP letter to Prime Minister Liz Truss (24.09.2022)

Brexit: The HGV driver shortage was warned about years ago…

The driver shortage has resulted in a dependence on agency and particularly foreign drivers that goes beyond what is needed to cope with seasonal variations and is now necessary to sustain normal operation. The dependence on agency staff means that operators in the sector are probably not investing enough in their staff. We think this creates two risks that need to be managed. First, if the UK becomes relatively less attractive as a place for foreign drivers to work, as it may do as the consequences of Brexit play out, the shortage could become much more acute, possibly quite rapidly. Second, the longer-term sustainability of the UK’s road haulage sector could be undermined if there is not a steady stream of people through the sector gaining the skills and experience that they need to become transport managers and operators” (…) “Both the industry and Government have taken steps to address the shortage. None of these are on a scale likely to deliver the number of drivers needed. The road haulage sector, supported by the Government, needs to take further steps to:

meet any shortage and reduce dependence on foreign drivers (about 60,000 drivers);

meet any predicted growth in demand; and

deal with the demographic time-bomb (about 75,000 drivers by 2020)” (Parliament.uk – ‘Skills and workforce planning in the road haulage sector’ 27.07.2016).

Sometimes you wonder if the Tories and the Cabinet Secretaries are so forgetful. You can wonder, if they care about warnings and red signs. The Brexit referendum would clearly target the haulage industry. As it is dependent on European Union citizens with license and ability to drive heavy-goods driver (HGV).

The Tories have offered a three month visa parley to everyone they sent packing after the Brexit was issued. The European Union Haulage Unions have dismissed this offer. They are saying they can easily be used, but sent straight back without any consideration for work. Therefore, the EU HGV drivers will not return to save Christmas in the United Kingdom.

Yes, the government gave this “amnesty” or ability during the weekend. At the same time it has put in regulations that all vehicles and lorries who is going into EU from the UK has to take-off their stickers with GB and change that to UK. That is actually something they have done. Just like changing colour on the passport. It is symbolic changes, but not what industries need in these dire times.

The Tories and the Downing Street needs to focus on. They are not securing the livelihoods of the HGV drivers. Neither has it made efforts or done anything for the foreseeable future. They are instead trying to patch up the hurt without any real reform for the transport sector. Which is needed to cope with the lack of trained personnel, salaries or even long-term prospects to work in the haulage industry.

The UK needs the EU HGV drivers to be able to cope. That is why we are seeing again the possibility of the army to do logistics in the Kingdom. Since, the Tories haven’t secured or made it possible for others to cover needs, which is clearly there. The Tories cannot even come with sound judgement or policies, which will make it feasible for the grandstanding departure of previous drivers to return. These will not return when they are getting pennies on the pound and working in crappy conditions while staying in UK. It is not like Boris Johnson or any of his cadre will humiliate themselves in the same regard. No, they rather spend vacations in Caribbean and hope someone else fixes the problems they created.

The Tories haven’t secure the basics. That’s why the supermarkets lacks produce and commodities, why farmers lack’s personnel to pick and secure their produce to market and finally lack of drivers to deliver the needed things across the Kingdom. The Tories haven’t given incentives or prospects for anyone then themselves.

The lack of drivers isn’t only the fault of Brexit alone. It is a systemic fault of a incompetent government. Who is all about publicity, but not about proper policies. This is why it is happening. The fuel-shortage and the empty shelves in the supermarkets says it all. It is not the fault of the public, but the politicians that promised heaven. However, they haven’t delivered the golden gates, but instead showed a little piece of hell.

Kudos to the Tories for failing in such a manner. They will blame anyone else and even say it’s the public own faults for buying petrol. The Tories will go after the companies itself, than look into own misgivings. Because that’s what they do.

What is extra tragic here is that they knew this could be amplified and gotten worse by the efforts of Brexit. However, the state didn’t act upon or take in-consideration the needs of the haulage industry. Therefore, the Tories who was in power the whole time could have made things possible, but clearly they never did. Peace.

Opinion: Brexit was bound to fail [and the results are now coming in]

The referendum of withdrawal from the European Union (EU) of 2016 settled the score and made it possible for the Conservative Party (Tories) to launch their campaign and gain majority of the Parliament. In such a manner, that they have had two Prime Ministers and had a long hurdle to come to terms with the EU on how to leave.

After long negotiations and plenty of delay. The final “Brexit Day” was enforced on the 31st January 2020. So, with the months that has gone and with the implementation of the Withdrawal Agreement in combination with the talks between London and Brussels. There is no end to this and the effects of the matter is no obvious for everyone to see.

The ones that was Remainer and was on the side to stay in the Union is now vindicated. As it is more “red-tape” and the Brexit Agreement isn’t making things easier. There been conflict over fishing rights with France. Fish and Sea-Food have rotted in port, instead of being exported to the mainland Europe from Scotland. Imports has slowed down, hauliers stopping deliveries to the UK and foreign workers to many fields are lacking. With all of this in mind. It is not a success, but a brutal and self-inflicted suffering.

Brexit was bound fail. The utter total failure was anticipated by plenty and it’s now evident. The Brexiteers should also reflect on it. They should man-up and see the results as they are. The possible use of army to get food delivered across the Kingdom. That should say it all. As the importers are not getting their products in time and neither able to secure the delivery from the exports to Britain.

UK becoming a ‘Third County’ isn’t giving it vast freedoms. Yes, the UK could make trade-deals with Australia and Kenya. However, the major trading partners with the EU and near proximity is harden. Not like there been any good industrial news or set-up of factories. Neither, hasn’t there been news of exceptional growth.

The supply-chains have been like this for one simple reason. The UK is out of the Single-Market and there is added bureaucracy and checks on goods passing through the borders. There is need for more documents and hurdles before passing has hurt the Kingdom. That is easy reasons to see why supermarkets run out of goods. Restaurant-chains are running out of main products and cannot serve customers. Other type of goods are lacking too and if that is with the imports. How dire is the situation for the exporters?

We knew earlier in the year that the exports was hit hard. They we’re not able to send produce, sea-food and others on time. The companies was losing money and their assets was rotting in ports. With this knowledge, the same hardship is now hitting home. Not only that the British Sea-Shells and other sea-food isn’t served in Paris anymore. At least not at the scale or in such a manner, which it was in the past.

The ones pledging for this and had their way. Should stand astute and bravely say: “We were wrong and crippled our economy. We fought for freedom, but instead being left alone. Brexit was supposed to give us new profitable terms, but it hasn’t and we lost. That’s why we have to see, if we can negotiate or find new ways of getting into the Single-Market and the Customs Union. As we are now a third country with little to no say. We have to change this and we are sorry for promising the world and not even giving you chicken at Nando’s”. Peace.

Brexit: “Operation Yellowhammer” is in full effect with the Army drive for the supermarkets

Certainly, some should feel a bit vindicated these days. Especially the Remainers who campaigned for “Project Fear” which was so scrutinized and called a blame-game of a worse scenario. The last few weeks has really shown the consequences of the Brexit. A Brexit that the Conservative and Tories promised to be easy and without any real costs.

However, everyone in their right mind knows that a divorce on this scale would cost. The marriage had to end and the transactions after this would be made more difficult. The Tories haven’t made things smooth or better. The rules and regulations between the United Kingdom and European Union is hectic. Several of companies and hauliers have stopped trading with the UK. This is now costing and showing results in the supermarkets across the Kingdom. That is not shocking, but was inevitable.

The Project Yellowhammer and Worst Case Scenario of August 2019 is now playing out. Where there was talks and projected to have disruptions of food supplies and across the supply chain. That was described there and clearly it is evident now.

The recent news says it all:

The Army has been put on standby to deliver supplies to supermarkets as Britain faces a shortage of 100,000 truck drivers. Around 2,000 personnel who are qualified HGV drivers are believed to be on a five-day notice to help distribute food and essentials including medicine. The Government is set to make a formal plea to the military for help ‘imminently’, with members of the Royal Logistics Corps and other regiments expected to be called upon by the end of September” (Siba Jackson – ‘Army ‘on standby’ to deliver food amid shortage of lorry drivers’ 08.08.2021, Metro.co.uk).

You know Brexit is a lose-lose enterprise when the businesses and the supermarkets needs the army to salvage the supply chain. The Tories and the government have failed the businesses and the consumers i.e. the citizens. They have told stories which wasn’t true.

All of the promises of a easy and simple transition is clearly out of the window. The reality is here now and the UK has to face it. The Tories got to find measures, means and possible way out of it. The soldiers and the ones who conscript to the army shouldn’t drive produce to Tesco or pick up lorries in Dover. That is just a failure if there ever was one.

This is just proving the pointers of the Remainers ahead of the referendum. The Brexiteers who promised so blatantly and wrongly that this would be a neat process. They should all take the mantle and configure this out. Since they are the ones who made it happen and ensure everyone that the basics are in order. Because, when the supermarkets and the convenient stores are running out of goods. You know you are in trouble.

There was plenty of folks who knew the Brexit and the new bureaucratic hurdles would cost, take time and stifle the logistics from Europe to the United Kingdom. The ones who has to import or export is paying the price. There has already been fish rotting in the ports and not getting through the system before they are expired. Therefore, the Brexit has destroyed businesses and ensured many are harder daily life.

The Tories especially, the wing of the Brexiteers has to take accountability. They need to fix this and not just settle with the army on standby. That is a show of weakness and that they totally failed. The Brexit isn’t a success, but a abomination of a government policy. It is a train-wreck and an insult to citizens. They sold a story of gold, but not everything that is shimmering is that. The Brexiteers sold fools-gold and a small majority believed it.

Now, everyone has to pay the price for it and surely nobody wants to hear it. Since it is visible and the HM Government haven’t got the qualified or the ability to figure this one out. The inept and corrupt government will not have the skills or the mindset to fix this. They will only make another circus and hope no-one see the real problems. Peace.

%d bloggers like this: