With high inflation, low productivity and anaemic growth, Britain’s economy is approaching the eye of the storm.
asserted
economy → approach → storm
And who do we have to steer us to safety?
asserted
we → have → safety
I hope you brought trunks.
asserted
you → hope → trunks
The PM has warned of a ‘challenging’ Budget next month after news that inflation was up 3.1 per cent in August, as the war in Iran rages on and Houthi rebels in Yemen wreak havoc on shipping lanes and pipelines, raising the price of oil and gas.
asserted
rebels → warn → oil
Burnham has branded the development ‘concerning’.
asserted
Burnham → brand → development
If I were the self-styled ‘cost-of-living Prime Minister’, potentially on the verge of calling an election, I would be worried, too.
asserted
I → style → election
Tinkering
The future looks as dreary as the present.
asserted
future → look → present
Energy prices are set to rise by 25 per cent by January, which economists warn could tip inflation over 4 per cent – double the Bank of England target.
uncertain
economists → set → England
Readers might be relieved that the Bank chose to keep the base rate steady at 3.75 per cent yesterday.
uncertain
Bank → choose → cent
But don’t be fooled – markets are already pricing at least four rises in the coming months, making the cost of borrowing vastly more expensive.
asserted
cost → fool → borrowing
Meanwhile, on Tuesday, the yield on ten-year gilts – the mechanism by which the Government borrows money – reached its highest level since 2007, 5.41 per cent.
asserted
Government → borrow → 2007
Borrowing costs on 30-year gilts rose to a daily high of 5.93 per cent, the highest since 1998.
asserted
costs → borrow → 1998
All of this means that the Government is losing fiscal headroom – and fast.
asserted
Government → mean → headroom
Having started off with £23billion to insulate the economy against shocks, Burnham is now left with £5billion to £10billion.
asserted
Burnham → start → 10billion
The Prime Minister will have to raise at least £11billion to maintain his wiggle room.
asserted
Minister → have → room
Joseph Dinnage argues that Britain’s economy is heading into a difficult period and blames the government, particularly Prime Minister Andy Burnham
Dinnage also criticises the Chancellor of the Exchequer John Healey for failing to respond with spending restraint and growth-focused policies.
asserted
Dinnage → argue → restraint
Healey is pictured arriving at Downing Street ahead of a roundtable with business leaders on September 14
What does that mean?
asserted
that → picture → What
You guessed it, tax rises.
asserted
You → guess → rises
Of course, he and Chancellor John Healey could cut public spending to make up the difference.
uncertain
he → cut → difference
Let’s not forget that this is the same Andy Burnham who this month stood at the despatch box and promised that national security – in the most dangerous period in history since the Second World War – ‘cannot come at the expense of social security’.
asserted
who → forget → security
The ex-mayor has been parachuted down from Manchester, and is more interested in tinkering with the cost of a weekly food shop than reckoning with the geopolitical and economic challenges of the day.
asserted
mayor → parachute → day
The former Bank of England chief economist Andy Haldane put it best this week: ‘The market now suspects this is a traditional tax-and-spend socialist government with better TikTok videos.’
asserted
this → put → videos
And he is only the latest of the Prime Minister’s former confidants losing faith in him.
asserted
he → lose → him
Lord (Jim) O’Neill, who advised Burnham on economic affairs in the run-up to the leadership election, has suggested the PM and Healey are failing to control the excesses of public spending.
uncertain
PM → advise → spending
They’re both entirely right.
asserted
They → ’re → ?
Burnham will dislike the comparison, but I haven’t seen this level of hubris since Liz Truss.
asserted
I → dislike → Truss
Our national debt is over £3trillion, taxation is at levels not seen since the days of Clement Attlee and public spending sits at 49.1 per cent of national output or GDP, higher than the average among developed countries.
asserted
spending → see → countries
Rather than confront the problem and take on the most economically harmful influences within his party, Burnham – like Keir Starmer – is sticking to the same dreary socialist formula that has bedevilled Britain since the war (with the happy interlude of Mrs Thatcher).
asserted
that → confront → Thatcher
In fairness to Burnham, the coming inflation is not exclusively his fault.
asserted
inflation → come → Burnham
Regrettably for him, the war in Iran and ensuing jump in oil prices will not be stopped by another rendition of The Smiths by the PM near the Ukrainian frontline.
However, the policies that he has already announced will make life even tougher for British taxpayers.
Take pensions.
asserted
life → ensue → pensions
Figures this week suggest pensioners will have a £488 rise in their state pension in 2027, taking the yearly payment above £13,000 – above the frozen £12,570 tax-free personal allowance.
asserted
pensioners → suggest → allowance
Ministers have exempted those whose sole income is the state pension, but millions of retirees with private pensions will be forced to hand back some of their state pension to the Government.
asserted
millions → exempt → Government
So that sleight of hand known as fiscal drag will generate an even bigger windfall for the Treasury.
asserted
sleight → know → Treasury
Where will the revenue from this stealth raid go?
asserted
revenue → go → raid
To everyone and anyone, it seems: A £2 English ‘bus fare cap’, projected to cost £454million; £340million on a futile attempt to end rough sleeping; billions on Burnham’s planned ‘social housing revolution’.
asserted
it → seem → revolution
Yet more cash will be splurged if he brings Thames Water into public ownership.
asserted
he → splurge → ownership
Not to mention his perpetual game of footsie with the so-called Waspi women – those aged 66 to 76 – whose failure to keep up to date with changes to the pension system Burnham has bizarrely said deserves ‘recompense’.
asserted
Burnham → mention → recompense
Dinnage says that former Prime Minister Keir Starmer failed to keep the goal of delivering economic growth
Dinnage accuses Healey of following the Rachel Reeves (Pictured) playbook, claiming he was unaware of the true scale of Britain’s fiscal woes before taking office
Hubris
And this is just what we know now.
asserted
we → say → what
Healey is obviously preparing us for even more tax rises in next month’s Budget.
asserted
Healey → prepare → Budget
Like his predecessor Rachel Reeves, the Chancellor is crying ignorance, claiming he was unaware of the true scale of Britain’s fiscal malaise before taking the job.
asserted
he → cry → job
…and 15 more, not listed.
The Aporia
