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Lewis Goodall

@lewis_goodall

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The striking thing about it is seems to want to push the political and economic confines as far as they might go- to will away both the economics of the moment and the politics bequeathed in 2019 away As have said before, will is the defining feature of Truss as a politicianšŸ§µ

On the economics, so keen are they to return to what they think of as core conservative principles, to have an alternative prospectus to what came before, that the gamble is to do it now- at a time when inflation is already high and when sterling is under pressure.

If that gamble fails and gilts continue to skyrocket and sterling continues to fall, the benefits of reduced taxes won't be worth very much given we're all paid in sterling and we'll, in real terms, be getting poorer vs rest of the world and out taxes over long term will be...

...higher given increased borrowing costs. Weaker sterling will itself be inflationary, putting more pressure on the Bank of England. Once again highlights that monetary policy and fiscal policy are not working in concert. Huge questions about what reduced tax take means for...

...public services in the long term. It was also striking there was only one mention of levelling up. Which brings us to the politics- this is confirmation that the Truss govt has no intention of trying to imitate the Johnson strategy of balancing the competing...

...interests of its 2019 coalition. Levelling up is now served by free markets and reworked enterprise zones, which is simply a return to Thatcherism; what the politics and economics of levelling up was predicated against. There could have been a Conservative narrative on tax...

....cuts which had married their new politics, focusing on lower earners. They've chosen to do the opposite. The politics on the higher rate, bankers bonus, corp tax, is obvious. Labour will now lean into their own economic populism, a space never available to them under Johnson.

So they've lost of their trump cards of 2019 and they've also surrendered their long standing best economic card- reputation for conservatism with the public finances-their trump card of 2010/15. The gamble is that we return to growth and it's perceived to work. A v big gamble.

In other words, Truss&Kwarteng want to return to the political spirit & political success of the 80s- to will it into being (as they perceive Thatcher to have done). They may find their problem is that the politics of 2008, 2019 and economics of 2022 just can't be willed away.

Lewis Goodall

@lewis_goodall

Reporter. Analysis and Investigations Editor @global. Presenter: @thenewsagents and @lbc | Formerly of @bbcnewsnight @skynews. DMs open- tell me your stories.

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