The period of mourning is over. The Queue (some say it could be seen from space) has finally dwindled to nought. Our beloved Queen is laid to rest, and our new King Charles III starts a job for which he has been an apprentice for 70 years.
Aside from just 2 days of normalcy since Liz Truss kissed the hand of the monarch, we have seen little normal politics since June. After the extended leadership challenge and period of mourning, Parliament heads off next week for the annual conference recess.
This week, we are likely to see a call to come back a week early. More importantly, and, we expect a number of announcements. In what has been billed as trying to jam 7 years of politics into the next two, we start with energy, and the economy.
Kwasi Kwarteng’s debut as chancellor will not disappoint. We have heard a number of leaks ahead of his “Fiscal Event” on Friday (the full budget will be along later this year). But my guess is it will be brave.
Much touted is the removal of the bankers’ bonus cap. For various technical reasons due to international competitiveness and harm to the City from Brexit, it is a good idea. But just 15% of people support this, whilst most hate the idea. It is a brave chancellor who does the right thing in the face of such huge opposition.
Similarly, the economic thrust will be pro-growth. Again, a good idea, but it will be driven by cutting both taxes and regulation. For many, many households this will look like a cruel measure supporting those who need little help. Worse, the idea of trickle-down economics is one that is loathed by many. Increasing liquidity to create opportunity for investment risks being both inflationary and result in increased investment into passive targets, such as buy to let property. This risks further pressure on hard pressed households.
But, Liz Truss’s government is right to look again at our economy. We have seen years of below average productivity growth and poor economic growth. Get this right, and we will enter a new era of opportunity for all. The question is: is this worth the risk?
With the right incentives, this could be good. But the devil is in the detail. So I shall be looking at the announcements for the key details that direct investment into the right places.