From time to time I watch old episodes of Yes Minister, The thick of It, or House of Cards. All brilliant, humorous caricatures of political life. I watched a couple recently, and they seemed rather mundane. The truth of it is politics is now more bizarre than fiction.
The catastrophic mini budget is now all but abandoned. I have argued on these pages that it was probably the right thing at the wrong time and I still stand by that. The ambition of growth is a good one and the reforms to how government delivers regulations is good at any time. But cutting taxes with funding in place, pushing fiscal loosening at a time of monetary tightening, hoping that markets will be benign – all these were the desires of someone who hasn’t a clue about economics.
That is now over, and the Chancellor has been replaced by a grown up. The PM has admitted she made a colossal mistake and is contrite. We move to the next stage of this extraordinary drama.
What is next?
We have the budget statement coming up in a couple of weeks. I will be looking for how we are to help those struggling. Of course, this starts with poorer households and those whose incomes are permanently fixed – pensioners. How are we proposing to help them? We need a reassuring solution.
But this also applies to businesses. It’s no good protecting only households if businesses start going bust and unemployment (the lowest, indecently, for decades) starts rising. The problem only spins out of control. And I know that businesses are struggling with energy bills and borrowing costs.
A lot of the issues challenging us are global in nature. We are coming out of global period of low interest rates. We’ve seen global quantitative easing. The war in Ukraine is affecting global energy prices and grain prices. That is an undisputable truth. But it also an undisputable truth that Liz Truss and Kwasi Kwarteng’s experiment with trickle down economics has amplified, to an as yet unknown extent, the problems here in the UK.
That experiment is now firmly over, and Jeremy Hunt is deploying his skills to not challenge the Treasury orthodoxy, to listen to advice from a wide range of very talented and experienced individuals and organisations, and to tackle these problems in a way that brings the swiftest of resolutions that are under his control. I am pleased it is him in charge of the Treasury.