Maxi Mini-Budget

(Budget box of William Gladstone, who was Chancellor of the Exchequer 1852-1882. National Archives UK.)

It’s important not to simply swallow the news the way it is presented to us, even from reliable sources. If we don’t consider whether the language we’re hearing fits, we can be suckered into going down a false path.

Somebody wins the contest to choose the terminology that will be used to describe what’s happening. Even hardnosed journalists can find themselves needing to use that language. If they don’t, they seem out of step and nobody reads them. It’s hard to look beyond the words when they come at you from every angle, including from “the good guys.” But if we don’t, we are practically asking to be hoodwinked.

New Government

As of two days before the Queen’s death, the UK has a new government, headed by a Prime Minister who was chosen by about 81,000 mostly white, older, affluent men the majority of whom live in the southeast of England. Most of her own party’s MPs wanted someone else. Yes, it’s a peculiar system. I can tell you what it does but I still don’t fully understand why.

Most of the country held its breath for weeks while the Tory party ousted Boris Johnson and plodded through the procedures that put Liz Truss into 10 Downing Street instead. A few challenges are afoot here. Everybody wondered what the new government might do about them. The NHS on its knees. An official rate of inflation that has just come down from above 10% to barely below that level. (Tell that to a poor person. They’ll probably say “10% my ****.” A bargain block of butter has gone from £1.10 to £1.99…) Energy prices going up by orders of magnitude for households and bigger orders of magnitude for businesses. Labor shortages. Housing shortages. Supply chain disruptions. Climate change, which tends to have a magnified effect at high latitudes like ours.

With many voices calling for a full-blown budget announcement from the new Chancellor Kwasi Kwarteng, the government didn’t want to go that far. A full budget so quickly could be seen as an admission that our crises are big and scary. Instead, Kwarteng’s package was deemed a financial event. In the news, it’s commonly called a mini-budget, a term that downplays its scope and impact.

Mini?

Kwarteng and the rest of government keep repeating their stance that it’s all about accelerating economic growth. It isn’t, but to realize that, we have to put our fingers in our ears to block out their repetition of what they want us to believe. We have to think about what’s being done on its own merit, separate from the slogan.

Financial people thought about it that way. The pound sterling fell to a 37-year low against the dollar on Friday, under $1.10, then last night reached an all-time low of $1.03. It’s easy to remember when it was worth $1.99. Although the dollar has been strong against other currencies recently, the timing and size of sterling’s fall plus the fact that it’s also falling against other currencies made it clear the dollar was not the reason.

The basic rate of income tax is to be reduced to 19%, which will be worth about £170 a year to 31 million people, somewhat less than half the population. April’s rise of 1.25 percentage points in the National Insurance rate is to be reversed. Planned increases in duties on alcoholic beverages are cancelled. Added up, these cuts are worth around £500/year to a household in the middle of the economy. People who are on Universal Credit benefits and work less than 15 hours a week will be pressured to work more and make more income, or have their benefits cut. Labor unions will have bigger hurdles to clear for calling a strike.

Some of the response to energy prices is still unclear so I won’t go into it, although so far it looks like the industry will get taxpayers to fund its profits through pretty much the scheme it wanted. I’ve listened to government spokespeople saying they’ll “save” businesses about 1/3 of the cost of their energy, not mentioning this saving is on a price that has gone up by a factor of 3 or 6 or sometimes even more, so even with the “saving” the businesses may go under. The dust hasn’t settled there yet.

What about the other end of the scale?

The highest tax bracket is to be abolished. Kwarteng said this tax cut would be worth more than £55,000 each year to anyone who gets paid £1m a year. The cap on bankers’ bonuses is being abolished too. A planned increase in tax on corporations is scrapped.

According to the Resolution Foundation’s calculations, 45% of the gains from tax cuts will go to the wealthiest 5% in the country.

Maxi!

There is more, much more, but you get the picture. Very little about Kwarteng’s announcement is the way the terminology tries to paint it. This mini-budget is not mini at all. It isn’t an agenda for economic growth. It’s an agenda to make the wealthy more wealthy at the expense of everyone else. I’m only one of many people who recognize policy footprints from the 1980s. Trickle-down economics by any other name is still a gimmick to move money from people at lower levels up to the top.

Just an Example

Truss’ government has announced other policies with language meant to obscure their actual effects, but I’ve only used the new fanfares as an example.

Such things happen all the time and can be about anything.

Carbon emissions aren’t all we’ve done as a species to warp global climate, but climate is so complex that this is the part we’re all focused on. Anyone can get monkeypox, not only gay men. Catching COVID after being jabbed doesn’t produce “hybrid immunity” that will make us safe from serious effects of COVID thereafter; broader antibodies are more than counterbalanced by damage to T-cells and B-cells in our immune systems, giving everything an opportunity to make us sicker than it did before. A recent study found that people who work from home are 13% more productive, on average, than counterparts who go to an office to work. The management opinion that people who work from home are less productive is what tends to dominate in the news instead of the study’s data.

Personally, I will benefit from at least one of the new government’s policy announcements. It will reduce some regulations that have always been an annoyance and complication for me. I’ve never been on benefits here, so government will not be twisting my arm to make me work harder. I’m not hungry or unable to afford to turn on the stove or facing hypothermia inside my home this winter.

But I’m not a fat cat either, and I don’t have the delusion that what happens to other people won’t matter to me. Even when one of these new policies doesn’t directly affect me, it affects people around me, people I care about personally and people I don’t know who are part of my community. I want my social circles and my community to be healthy and comfortable. It isn’t enough if I am but they aren’t.

If we only listen to what we’re told without thinking about it, it’s easy to believe what we keep hearing over and over. That’s why it’s important to make a habit of looking more closely at something we’re hearing repeatedly. Is it based on facts? Does it make sense? Does it only sound good, perhaps seem convenient or easy, until a closer look pierces a false veneer? If it’s being talked about with misleading language, why?

What will it do to the society I live in? If the answer to that is bad, then I should speak up about it somehow, or do something about it, or both.

I will only know to do that if I try to pay attention and don’t just swallow everything thrown at me… such as the nonsense around the so-called mini-budget.