Rishi Sunak is a strange guy. Does he even know what he stands for anymore? He is absolutely desperate to get into No. 10, because he will then be able to re-write history about his disasterous time as Chancellor of the Exchequer. So, he starts his campaign by shouting down Liz Truss as she talks about tax cuts. It’s a “fairy tale” he states condescendingly, only to later change tack to suit the mood of the Conservative Party Membership. He now advocates “VAT cuts” and “income tax cuts”, but only in ways that are “responsible”. Mmm?
But, Sunak hasn’t a clue when it comes to the economy. He borrowed £450 billion at the Bank of England base rate of 0.1%. The base rate is now 12.5 times higher and it will rise again on the 4th August when the Bank of England meet again to review interest rates. This is a serious problem for the UK now. In June, Rishi Sunak was forced to borrow £23 billion to pay £19 in debt interest, a record for a single month. The estimated debt interest for 22/23 is now £104 billion. That’s debt INTEREST, not deficit borrowing. Sunak could have insured the QE debt, raised for the pandemic, to cut interest payments, but, he didn’t. Maybe he forgot to do it. Who knows?
Another thing that Sunak didn’t deal with during his time as Chancellor was how to plug the £26 billion hole that will appear once the move to electric vehicles is completed. Fuel duty from petrol and diesel sales brings in £26 billion a year, yet there is no plan on how this will be replaced. And what about the small matter of 50p per KWh that will be charged for electricity from October? A rise of 77%. That’ll be the price paid by domestic consumers, but, small businesses have no capped rate, and, it is becoming common for small businesses to report they’re being offered fixed rate deals of 60p per KWh together with a £3 per day standing charge. As I type, thousands of small business owners are considering throwing the towel in. How will that affect the UK economy when small businesses employ 60% of the workforce?
Sunak conveniently ignores the fact that millions of workers will be on strike for higher pay in Autumn and Winter 22/23. The former Chancellor sincerely believes that there is no problem with this, because, all he has to do is enact laws against strikes and all will be well. That, is how deluded this man actually is. We are heading for a recession, the likes of which we’ve never seen before, yet Sunak is promising a cut in income tax of 4 pence in the pound? He is confident, I’ll give him that, but, it would be a definite stretch to say that he is competent. While Chancellor, he approved a £10 billion bailout of the energy companies, which, a lot of people, believe is funded by a windfall tax. It isn’t. It’s funded by borrowing. The windfall tax will raise £5 billion, but the “assistance” will cost £15 billion. And it is morally wrong, considering those energy companies are profitable, but necessary as millions will not be able to pay their energy bills this Winter.
Sunak’s ill thought out “schemes” have cost the taxpayer billions in losses, from wastage and fraud. His failure to insure against rate rises has cost, and will go on costing, billions of pounds more. The fact is that, by the time we get to 2028, I doubt we’ll be in a position to cut 4 pence off the basic tax rate of 20%, to be honest, I think we’ll be more likely to be headed to the IMF, cap in hand, for a multi-billion pound bailout, and that will all be down to, Rishi Sunak, economic genius.