Liz Truss and the Conservative Party.

[najaB]

I think the choice to fund the energy cap through borrowing shows at least some pushback against the orthodoxy.

Being different, just for the sake of being different isn't necessarily a good thing.

 

[AlterEgo]

Truss has admitted, predictably, that there is no short or medium term prospect of a trade deal with the USA:

Liz Truss admits no US trade deal in 'short to medium term'

Liz Truss is to meet US President Joe Biden for the first time as prime minister, at the UN in New York.

www.bbc.co.uk

 

[Lost property]

Shapps merely continued the precedent set by his predecessor ....useless.

We have a Chancellor whose economic role model is Viv Nicolson and her mantra.

Patel's successor, is, allegedly, even more draconian that she was...

As for Truss, well once the vanity massaging excursion to the US is over, we await her already much criticised economic plans and how she will save the nation starving / freezing to death this winter...which she won't and even more so if we have a proper winter, let alone a few cold periods.

Actually, her inflections are remarkably similar to my junior school headmistress many years ago prior to her indulging in her favourite sociopathic pastime of state sanctioned flagellation of her pupils

 

[nw1]

Shapps merely continued the precedent set by his predecessor ....useless.

We have a Chancellor whose economic role model is Viv Nicolson and her mantra.

I had to look up that name. I was expecting some kind of Ayn Rand figure but got someone very different.

Viv Nicholson - Wikipedia

en.wikipedia.org

 

[Noddy]

'

... and how do we pay the money back, without enduring savage spending cuts in say two or three years' time?

These proposals need to be costed. I'd like to see the global energy mega-corporations contribute something towards the cost, as, I believe, Labour are proposing.

I’m not having a go at the principle but how are Labour going to tax the ‘global energy mega-corporations’? I believe the only one domiciled in the UK is Centrica? (Happy to be wrong on this point).

There was an interesting piece on this on ‘More or Less’ the other week. Basically the ‘right’ is saying remove green tariffs, and the ‘left’ is saying tax the energy firms, but fundamentally doing both will only reduce the bills by far less than 10% and is relatively small fry.

 

[Gloster]

I think that the sacking of Tom Scholar, the Permanent Secretary at the Treasury, being one of the first moves of the incoming Truss government suggests that it does not want to be bothered by what they see as Treasury orthodoxy and others see as considered advice by someone with experience. It is to be presumed that his replacement will be someone who either buys into Trussonomics or is easily malleable, preferably both.

 

[brad465]

I think that the sacking of Tom Scholar, the Permanent Secretary at the Treasury, being one of the first moves of the incoming Truss government suggests that it does not want to be bothered by what they see as Treasury orthodoxy and others see as considered advice by someone with experience. It is to be presumed that his replacement will be someone who either buys into Trussonomics or is easily malleable, preferably both.

Not to mention going against precedent on the OBR providing forecasts with each budget, or in this case "fiscal event".

 

[Bald Rick]

I think the choice to fund the energy cap through borrowing shows at least some pushback against the orthodoxy. We’ll have to see if Kwarteng’s ‘budget’ this week addresses spending or just taxation.

Will be interesting to see what the stock and bond markets do on Friday after his speech. They are clearly jittery …..

 

[Busaholic]

Truss has admitted, predictably, that there is no short or medium term prospect of a trade deal with the USA:

Liz Truss admits no US trade deal in 'short to medium term'

Liz Truss is to meet US President Joe Biden for the first time as prime minister, at the UN in New York.

www.bbc.co.uk

Because Biden's already made public that negotiations can only start when the Northern Ireland Protocol has been 'solved' i.e. to the satisfaction of the U.S. and Irish governments and, presumably, the E.U.

 

[brad465]

Will be interesting to see what the stock and bond markets do on Friday after his speech. They are clearly jittery …..

The Bank of England will be doing their latest MPC meeting the day before (was meant to be last week but postponed for obvious reasons), so I wonder if their decision will be based partly on what's been said by the Government so far?

There is also the issue that if investors are not confident in the UK economy, the Government will struggle to sell bonds, so this borrowing proposal may not be possible without the BoE really trying to sweeten things, which means even higher interest rates.

 

[Nicholas Lewis]

The Bank of England will be doing their latest MPC meeting the day before (was meant to be last week but postponed for obvious reasons), so I wonder if their decision will be based partly on what's been said by the Government so far?

There is also the issue that if investors are not confident in the UK economy, the Government will struggle to sell bonds, so this borrowing proposal may not be possible without the BoE really trying to sweeten things, which means even higher interest rates.

Kwarteng is meeting Bailey twice weekly currently so will be giving him a heads up of what they are planning

https://www.gov.uk/government/news/...ting-with-the-governor-of-the-bank-of-england

So far in Sept they have managed to get 8B of Gilts away at just over 2.4 times subscribed albeit at just over 3% so if the yield is right there are buyers out there.

https://www.dmo.gov.uk/data/pdfdatareport?reportCode=D2.1A

 

[jon0844]

I just hope they sort out banker bonuses as I can't sleep at night thinking of the impact to the economy by these poor people not earning enough and potentially moving abroad to earn a crust.

And when they get bigger bonuses, that money will trickle down to us mere plebs...

 

[najaB]

I just hope they sort out banker bonuses as I can't sleep at night thinking of the impact to the economy by these poor people not earning enough and potentially moving abroad to earn a crust.

Keep in mind that the current limit has them able to take home a measly twice their annual salary in bonus. How they can manage to get by on that I have no idea.

 

[Nicholas Lewis]

I just hope they sort out banker bonuses as I can't sleep at night thinking of the impact to the economy by these poor people not earning enough and potentially moving abroad to earn a crust.

And when they get bigger bonuses, that money will trickle down to us mere plebs...

maybe if you are a salesperson in a Porsche or Ferrari dealership

 

[Gloster]

maybe if you are a salesperson in a Porsche or Ferrari dealership

Exactly. Porsche and Ferrari: well-known British companies employing hundreds of decent, hard-working Brits.

 

[JamesT]

Keep in mind that the current limit has them able to take home a measly twice their annual salary in bonus. How they can manage to get by on that I have no idea.

Though the limit of twice salary says nothing about the actual level of the salary. Given the complaints about rewarding failure through large salaries when companies have large losses, wouldn’t it be better to have a smaller base salary and a larger proportion paid through bonuses based on performance? Bonuses can be deferred or clawed back to promote a longer-term view.

 

[najaB]

Given the complaints about rewarding failure through large salaries when companies have large losses, wouldn’t it be better to have a smaller base salary and a larger proportion paid through bonuses based on performance? Bonuses can be deferred or clawed back to promote a longer-term view.

Bonuses are difficult to claw back when the employee has left the company.

 

[tomuk]

Exactly. Porsche and Ferrari: well-known British companies employing hundreds of decent, hard-working Brits.

They might buy a Land Rover, Bentley or Aston Martin. And I'm fully aware they are all foreign owned but they employ many people in Crewe, Solihull, Halewood, and Gaydon.

 

[alexjames10]

JT above has it right.

There are no circumstances whatsoever that justifiy a 200% (of base salary) bonus for public company execs. Private companies are and should be excepted.

To take a current example, should the CEO of, for example, BP be rewarded with a vast bonus for returning enormous profits. Plainly not, it’s largely down to that psychopath Putin. I appreciate that BP is not a banking sector entity but I make the point for illustrative purposes.

Full disclosure: I’m a BP shareholder.

 

[Yew]

The current PM is stressing 'delivery'; Raab and Patel failed to deliver (they're not alone in that).

Is she going to nationalise Royal Mail?

 

[DynamicSpirit]

Keep in mind that the current limit has them able to take home a measly twice their annual salary in bonus. How they can manage to get by on that I have no idea.

Sure, they probably don't need the money. But I'm not sure what point you're trying to make? Is there something in principle objectionable about people earning money that they don't need?

== Doublepost prevention - post automatically merged: 21 Sep 2022 ==

To take a current example, should the CEO of, for example, BP be rewarded with a vast bonus for returning enormous profits. Plainly not, it’s largely down to that psychopath Putin. I appreciate that BP is not a banking sector entity but I make the point for illustrative purposes.

I'm inclined to agree with you that, in principle, a CEO shouldn't be awarded a vast bonus for something that's largely outside their control. But it's a huge step from 'I think the company shouldn't give them X' to 'we should ban the company from giving them X.' I think if you're going to have regulations banning companies from doing things like paying their employees in whatever ways they wish to, then you probably need a stronger justification than, in my/your opinion they shouldn't be doing that.

 

[najaB]

Sure, they probably don't need the money. But I'm not sure what point you're trying to make? Is there something in principle objectionable about people earning money that they don't need?

Of course not. However, banking and financial services are supposedly regulated industries. It seems to be making a mockery of the concept of regulation to have people in a position of unlimited reward for success and zero punishment for failure. The 2008 economic crisis proved the folly of this model.

 

[jon0844]

They might buy a Land Rover, Bentley or Aston Martin. And I'm fully aware they are all foreign owned but they employ many people in Crewe, Solihull, Halewood, and Gaydon.

In Hatfield, we now have Bentley, McLaren, Lamborghini, Ferrari, Porsche, Jaguar and Land Rover dealerships all on one business park. I am sure the rich bankers will be lining up to spend there (because for the most part it isn't anyone living here), but this still isn't my idea of 'trickle down economics' as that still benefits the huge companies (or in many cases, one single group selling multiple brands) and not the workers on the floor.

== Doublepost prevention - post automatically merged: 21 Sep 2022 ==

Of course not. However, banking and financial services are supposedly regulated industries. It seems to be making a mockery of the concept of regulation to have people in a position of unlimited reward for success and zero punishment for failure. The 2008 economic crisis proved the folly of this model.

[sarcasm]2008 was so long ago now. Maybe it will be different this time?[/sarcasm]

 

[nw1]

JT above has it right.

There are no circumstances whatsoever that justifiy a 200% (of base salary) bonus for public company execs. Private companies are and should be excepted.

To take a current example, should the CEO of, for example, BP be rewarded with a vast bonus for returning enormous profits. Plainly not, it’s largely down to that psychopath Putin.

Maybe BP should question the ethics of getting rich as a result of the war, and while people are struggling with energy bills. It comes across, to my mind, as if they are exploiting the situation for their own ends. Rhetorical question: why should gas and oil from places other than Russia be more expensive, other than because providers are exploiting the lack of availability for their own selfish ends?

I appreciate that's how capitalism works, but it does raise questions on whether the model for fuel production and delivery needs to be changed to something which does not allow corporations to make vast profits at the expense of the consumer during difficult times.

 

[DynamicSpirit]

Of course not. However, banking and financial services are supposedly regulated industries. It seems to be making a mockery of the concept of regulation to have people in a position of unlimited reward for success and zero punishment for failure. The 2008 economic crisis proved the folly of this model.

I'm not sure the logic follows. Industries are not being regulated for the sake of being regulated: They are being regulated in order to achieve certain goals. So saying, 'they are supposedly regulated industries' is not per se a justification for any ad hoc piece of regulation.

All regulations have disadvantages: They restrict people's freedom to act as they think best, they impose costs in terms of industries etc. having to make sure they comply with the rules, plus requiring some Government bureaucracy to enforce them. And very often, they damage competitiveness. So the question to be asked of each piece of regulation is, Do the benefits of this particular rule outweigh the disadvantages? In this case, it doesn't seem very clear what would be the benefits of a rule preventing companies from paying what they think their employees are worth. Maybe there are some benefits, but I've certainly not seen any benefits stated in this thread.

 

[najaB]

In this case, it doesn't seem very clear what would be the benefits of a rule preventing companies from paying what they think their employees are worth. Maybe there are some benefits, but I've certainly not seen any benefits stated in this thread.

I refer you back to the financial crisis of 2008.

The culture of unlimited reward for success and little to no consequence for failure leads to excessive risk taking - we had to bail the banks out last time at a cost of hundreds of billions so it is very much in the public interest to put regulations in place to prevent a recurrence.

 

[DelayRepay]

I refer you back to the financial crisis of 2008.

The culture of unlimited reward for success and little to no consequence for failure leads to excessive risk taking - we had to bail the banks out last time at a cost of hundreds of billions so it is very much in the public interest to put regulations in place to prevent a recurrence.

Regulation can deal with that (and in banking, it does) without necessarily capping bonuses.

Ultimately we are competing in a global market. If UK based firms can only offer mediocre remuneration, they will get mediocre candidates.

 

[Busaholic]

I just hope they sort out banker bonuses as I can't sleep at night thinking of the impact to the economy by these poor people not earning enough and potentially moving abroad to earn a crust.

And when they get bigger bonuses, that money will trickle down to us mere plebs...

Interesting that Biden has shown his contempt for the 'trickle down' theory just as he was about to meet Elizabeth Trump!

 

[DynamicSpirit]

I refer you back to the financial crisis of 2008.

The culture of unlimited reward for success and little to no consequence for failure leads to excessive risk taking - we had to bail the banks out last time at a cost of hundreds of billions so it is very much in the public interest to put regulations in place to prevent a recurrence.

How does capping bonuses help prevent that?

 

[nw1]

Regulation can deal with that (and in banking, it does) without necessarily capping bonuses.

Ultimately we are competing in a global market. If UK based firms can only offer mediocre remuneration, they will get mediocre candidates.

I've never fully understood that oft-made justification for excessive pay.

It assumes that the best people for the job (any job) are the greediest. This isn't necessarily the case.


== Doublepost prevention - post automatically merged: 21 Sep 2022 ==

Interesting that Biden has shown his contempt for the 'trickle down' theory just as he was about to meet Elizabeth Trump!

Elizabeth Trump? Nah, Margaret Trump