And then there were two. Liz Truss and Rishi Sunak will slug it out for the Conservative Leadership and one will become Prime Minister on Monday September 5th. But the leadership race did bring up some good ideas from candidates, like, for example, allowing rent payments to count towards your credit score for a mortgage. I’ve long thought this to be a good idea, as long as it can be proven beyond doubt that rent payments have indeed been paid, then why shouldn’t this be taken into account? Some renters are paying far more than they would be if they had a mortgage, so, if they have an unblemished payment record for, say, two years, this should prove that they are serious about paying for a home of their own. Generally, banks and building societies are taking very little risk when lending for a house purchase, so, a modest deposit should be acceptable to get these people onto the housing ladder.
Very few of the candidates understood what poor folk in this country are going through. Those on fixed incomes, benefits or pensions, are struggling to contend with the current raging inflation. Measured by the Retail Prices Index, inflation is currently 11.7% and that hurts. It’s now estimated that an average car, costs over £100 to fill up at the pump. One idea mooted was to cut VAT on fuel by 50%, which would knock £10 off the price of that tankful. That’s a good idea, simply because it’s deflationary and the Treasury has made a lot more than it budgeted for due to these inflationary rises, and every little really does help when money doesn’t go as far as it used to.
Reference was made to the National Insurance rises when Liz Truss had a go at Rishi Sunak on the ITV live debate. It is true that you don’t raise taxes in a slow moving economy as this is likely to tip over into recession. It is also true that the UK now has the highest taxes in 70 years and that is all down to Sunak. So, we need to reverse those tax rises and quickly too, but I doubt Sunak will allow that if he is made PM. He is focused on paying UK’s debts down as fast as possible, when he should be focused on growing the economy.
One subject that wasn’t mentioned in the leadership contest was the price of electricity. Thousands of businesses are struggling to survive due to the massive rises in electricity prices. There is no cap on electricity for business, but there is VAT and there are “green levies” as on domestic power. I think this is the single most inflationary pressure in the UK at the moment. None of the candidates indicated a willingness to remove green levies or VAT, but, this is what is needed right now. A 30% reduction in the price of a KWh would go a long way to easing the pressure on household and business finances. Something must be done about this. It is useless to point to a nuclear power station which will take ten years to build and say “that is the solution”. It obviously isn’t.