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)

Opinion: The Truss cabinet is filled with the ERG

The European Research Group (ERG) is a group within the Parliamentary Conservative Party that provides research and co-ordinates activity – such as public letters on Brexit and informal organisation – for eurosceptic Conservative MPs. Mark Francois took over as chair in February 2020. Previous chairs include Jacob Rees-Mogg, Steve Baker and Suella Braverman” (UkandEU.ac.uk – ‘What is the European Research Group (ERG)?’, 21.09.2022).

The ERG who was vital part of the hard-Brexit and the ones pushing for a hardline Brexit in consideration to the Brexit. Now has a vital voice in the cabinet of Liz Truss. She has already appointed three former ERG Chairman, which happens to be Suella Braverman, Jacob Rees-Mogg and Chris Heaton-Harris. Truss has also appointed members of ERG like James Cleverly, Therese Coffey, Brandon Lewis, Kit Malthouse and Penny Mordaunt.

One of them is the Secretary of State to Northern Ireland, Chris Heaton-Harris. He will have a say and possible continue the defeating arch of revising the Northern Ireland Protocol. Truss is putting a lot of power into the ERG. If you thought this was bad. It is becoming more worse than this…

The other one is Jacod Rees-Mogg has become the Secretary for State for Business, Energy and Industrial Strategy. After seeing the display and contempt of everything this man have done over the years. Rees-Mogg is surely lucky to be entitled to have yet another ministerial post.

The third is Penny Mordaunt been appointed to the Lord President of the Council and the Leader of the Commons. She will surely have leverage and have power. Not like the Chief whip, but it’s saying something when an ERG get this position too.

The fourth is Brandon Lewis who was appointed to the Lord Chancellor and Secretary of State for Justice. That’s a powerful office and he could certainly sway legislation here. This is most certainly a win for the ERG.

The fifth appointment is Suella Braverman who is appointed to the Secretary of State of the Home Department. This will have a lot of say in regard to migration, refugees and the border control. She will take off where Priti Patel left off. In the mirror of ERG. We know it won’t be anything better.

The sixth appointment is James Cleverly will be the Secretary of State for Foreign, Commonwealth and Development Affairs. We are seeing the ERG is getting vital positions and this is another one.

The ERG has the Home Affairs, Foreign Affairs and Northern Ireland. That is ensuring their will in this Cabinet. Truss has secured and given lots of power to the ERG. In such a manner, that the way legislation and policies will be written. Will be in the hardline and anti-Europe spirit.

This is without looking at all the other re-appointments and other well-known figures, which has circulated over the years the Tories has been in power. That was to be expected, plus a few not accepting a new office. Since they will not serve under others than Boris Johnson. Because, Boris is the epitome of leadership…

Well, Truss are now proving that she will not fight for remain or return to membership in the European Union. That is very obvious with the appointments sine last night. Her cabinet is a bastion of ERG.

So, expect the Eurosceptics to have a huge say and will ensure their ideals will reign supreme. Not that’s it shocking, but it’s certainly saying a lot by doing this. We will know if she appoints more. However, when there is already so many of them as a part of the cabinet. We can just know what sort of days that is ahead. There will be continued red-herrings and further bureaucracy, which will harm industry, movement and whatever, which was some of the benefits of being part of the European Common Market or Shengen. Peace.

Northern Irleand: Sinn Féin and Alliance Party seems like the winners of the polls

Sinn Féin (SF) and Alliance Party are the projected victors of the elections in Northern Ireland. There will be changes in Stormont and this will have affect on the rest of the United Kingdom. The voters has also turned their backs on Traditional Unionist Voice (TUV), Social Democratic and Labour Party (SDLP), Ulster Unionist Party (UUP) and Democratic Unionist Party (DUP). That is blow for the unionist, as the neutrals of the Alliance Party and the ones who wants Northern Ireland to be part of the Republic of Ireland, SF is winning.

That says something. The Unionists and the ones for ties to London has lost seats and in general mandate in Stormont. This should worry not only the ruling party in London, but make you wonder how this will be materialized in Northern Ireland. As there are more friendly representatives of Dublin, than of London.

That’s if the numbers and the forecasts are correctly. The first results and first picks gives a vast majority and makes SF the biggest party. The losers are DUP, UUP and SDLP. While also Alliance Party and TUV have also gained momentum this time around. However. Alliance and SF will be the two parties that matters this time around.

The DUP will possible cause a wreck and chaos, as they will not accept the results and whatnot. We should expect them to this lightly. As the main competitor is having a massive win and a possible landslide. While the neutrals Alliance is also gaining grounds. This is not good look for the DUP or other Unionists. They are losing ground and it’s so obvious that things are backfiring.

Maybe this is a reaction to the Brexit and how it is impacting Northern Ireland. It would maybe be easier to just join the Republic and be part of the European Union. Instead of being the lost province and the lost territory, which the British still have influence over. That will cause friction and possible issues yet again.

A call for a referendum and possibly join the Republic is on the horizon now. Especially, if the SF and Alliance becomes the winners. That will hurt the Unionists and their causes. It wouldn’t be any sort of shocker. There is a generation who is born since the Good Friday Agreement (GFA) and only felt the results of the Brexit. Therefore, they are maybe moving towards Dublin and the European Union. Instead of being part of London and the United Kingdom. However, that is only speculation at this point.

This election isn’t only a result of Brexit and how it has played out in concern of Northern Ireland. Maybe, also many are tired of how the DUP has been politicking. They have seen how they used their majority and wants to try someone else. It is possible that the Unionists aren’t able to sell their cause and the alignment with UK any longer. Since, the UK is out of the EU and the advantages of it has gone in the wind.

When there is such vast changes between two elections. The latter can be caused by many things. Now that we are seeing the trickling in of results. It shows a change and it can have possible ramifications. That can shatter what we have seen before and we cannot turn the tide again. Nevertheless, the full results aren’t on the table and there is more counting tomorrow. The full tally will settle it all. However, SF and the Alliance is the projected winners of this election. That got to hurt plenty of parts of the Northern Ireland. It should also bring hope and inspire people as well.

It is hard to know how this plays out. While there was talks that Brexit could cause Northern Ireland to cede to Ireland. Now it is getting one step closer. Especially, if the SF gets a huge mandate and the Alliance, which is neutral and could co-sponsor a referendum. Peace.

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United Kingdom: Chris Green MP resignation letter to Prime Minister Boris Johnson (13.10.2020)

United Kingdom: First Minister of Wales Mark Drakeford letter to Prime Minister Boris Johnson (13.10.2020)

Brexit: Layla Moran MP letter to Cabinet Secretary Mark Sedwell on the appointment of Dominic Cummings as Senior Advisor to the PM (24.07.2019)

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