Why Tory Tax Announcements Crashed The Pound, Increased Government Borrowing Costs and Increased Mortgage Payments
8th October 2022
If you are still wondering what hit the UK following Kwasi Kwarteng's incredibly inept budget announcements then here are some explanations about taxes that may surprise you. Most people are not interested in the background to taxes but the usual rules were not followed and it pays to know exactly why this whole sorry mess has unfolded costing all of us dearly.
So to the articles from Richard Murhpy's Blog
Prof Andrew Baker of the University of Sheffield and I had a piece in Byline Times yesterday.
The argument in our piece is based on the work we did co-authoring the Global Initiative for Fiscal Transparency (GIFT) principles on tax transparency. These laid out fourteen such principles, which have been backed by the OECD, IMF and World Bank, all of whom are partners of GIFT. As we note:
Even the three most basic of the new principles - the right to information on tax measures, inclusive consultation, and attaching clear objectives and estimations of future revenue to tax measures, were breached in the Kwarteng package. In total, 10 of the new 14 principles relevant to last week's announcement were breached.
Is it any wonder that they failed? We suggest not. Our whole argument is HERE
The proposal is reported to have been subject to a mere two hours of discussion with limited ministerial colleagues. Policy, accompanied by limited data, explanation, and devoid of parliamentary and external scrutiny is, as we have seen, a recipe for market turmoil, economic hardship, international disquiet, while increasing the potential for policy U-turns.
Even the three most basic of the new principles - the right to information on tax measures, inclusive consultation, and attaching clear objectives and estimations of future revenue to tax measures, were breached in the Kwarteng package. In total, 10 of the new 14 principles relevant to last week's announcement were breached.
From Richard Murphy's Blog
Kwarteng made the UK look more like a failing state than a country with a properly functioning tax system
Mini-Budget Opacity Resembled Failing State With Barely Functioning Tax System
Making Tax Work - A Framework for Enhancing Tax Transparency
Pdf 175 pages.
If that is to long just read the introduction and go back to the links above for the shorter explanations.
Finally and belatedly Kwasi Kwarteng and Liz Truss say they have met with the Office of Budget Responsibility (OBR) and we are to get the forecasts finally on 23 November 2022 when Kwasi Kwarteng had his full budget statement. Pity they only want to keep talking about the energy help that for many people will be wiped out by increased interest payments on mortgages, loans and credit cards.
