Daily Mail, which trashed Sunak for weeks, backs the latest Thatcherite PM

No To Sunak’s Austerity Plan!

Labour should reject calls for benefit cuts and spending squeeze

As PM Rishi Sunak movest towards a big austerity budget I am seeing a lot of media pressure on Labour to roll with it, in the interests of “steadying the markets and displaying fiscal discipline”.

Here’s why Labour should reject austerity.

For certain Labour can play a role — both now, during the coming election and in its first period in office — in restoring UK fiscal credibility. And its budget proposals must demonstrate fiscal discipline — ie avoiding the kind of uncosted moves that brought Truss to disaster.

But the gilt-yield spike that brought down Truss occurred because:

• Lenders feared she wasn’t serous in fighting double-digit inflation;
• She broke with the neoliberal institutions that guarantee central bank dominance over policymaking (OBR/HMT/BoE);
• The fundamentals of the UK economy are weak because there is no clear investment story post-Brexit. Investment has flatlined, trade is falling, wages are falling; sterling is weak;
• Truss/Kwarteng demonstrated no grasp of this reality;
• All G7 yields are rising (except Japan) because of high inflation and the strengthening dollar…