The political world is characterised by ups and downs. I won’t beat about the bush – the Conservative Party has had a bruising couple of weeks. I remember only too well the near wipe out in our support when, due to the chaotic Parliamentary shenanigans during the Brexit wars, we unexpectedly had to run European Parliamentary elections.
We received a paltry 9% of the vote and then went on just 9 months later to receive 44% and a landslide majority of 80 at the December 2019 general election. Few things are set in stone in the fast moving world of political fortunes.
Many have tried to blame the turmoil in financial markets and the rise in interest rates on the mini-budget of just a couple of weeks ago. Putting the economy to sleep for the best part of two years and the Bank of England maintaining money printing and ultra-low interest rates for an extended period was always going to create an inflationary bubble of the old sort. Add to that the massive increase in fuel prices and commodities on the back of Putin’s illegal war in Ukraine and we have a heady mix that few could have foreseen.
The primary measure in the mini-budget was the huge subsidy to every household and business to cap the unit price for energy. There were few other options available; the alternative would have been true misery for all and extensive business failures. The scale of that support is what upset the markets because there is no potential upside limit on the cost – that will depend on the ongoing wholesale price of energy.
It is strange that every MP across the House no matter what political leaning were calling for support. That support came and many now sit both in judgement and bewilderment at the effect. I wasn’t bewildered at all. The measure which caused more than its fair share of heat was the reduction in the highest rate of personal tax from 45% to 40%. I still maintain this to be sensible even though this has been reversed. It cannot be right that the UK is such an outlier in personal income tax with the US having a top rate of 37%, Singapore 22%. Hungary, a country I know well, took the bold move some years ago in introducing a flat rate of income tax of 16%. High tax rates suppress innovation and growth. We need growth.
With US interest rates likely to reach 4.4%, a rise in rates around the world was inevitable. It is US Dollar strength that is another market mover. At times of international stress, most certainly so with Putin threatening, idly or otherwise, to use nuclear weapons, a rush to the Dollar always happens, doubly so when such good returns in interest are on offer.
UK interest rates at 2.25% are still historically low but I am not one to advocate further large increases. The Bank of England upon being given independence in 1998 has just one lever – that of interest rates to try to keep inflation in check. I am not sure that blunt instrument is the correct one today. This inflation is different – it is not ‘frothy money’ inflation, this is energy and commodity driven inflation. Raising interest rates to high levels might stop the purchase of a new TV but won’t stop high gas prices. The pain to mortgage holders is obvious but likely to be welcomed by savers.
On local growth I maintain as I always have that a re-opened Manston airport will bring huge local opportunities. Whether a group of residents are successful in bringing a successful Judicial Review to stop it remains to be seen. What people do with their money is entirely up to them but I do object to any of my money, via the precept that we pay to Ramsgate Town Council,, being used to add to the funding to stop such a significant project. If you feel the same do consider signing a petition that I will be presenting to Parliament.
This government has significant work to do in a short time. We need to stop the illegal channel crossings, causing local problems at the Manston clearing centre, a shortage of hotel rooms in some towns and undoubtedly nationwide housing pressures. We need to get more people into work: there are jobs unfilled. We need to deliver better healthcare measured in results not simply the amount of money thrown at the NHS. We need to show that ours is a plan for growth. Big asks but I know we can do it.
Statement issued by the Chair of Ramsgate Town Council, Cllr Steve Albon,
This statement is in response to the petition to Parliament to “request that the House of Commons urges Ramsgate Town Council to accept the decision of the Parliamentary Under Secretary of State for Transport, work constructively with the Government, RSP, Thanet MPs and other local authorities and elected representatives towards the re-opening of the airport, and to refrain from spending more public money on further legal challenges”.
“On behalf of Ramsgate Town Council please may I take the opportunity to respond to our MP’s extremely churlish behaviour, we find it very disappointing that Mr Mackinlay is willing to stoop to attacking a democratically elected local council for political gains.
“The MP knows that Parliament has no power to intervene in parish council matters, which would go against the Government principles on localism. The petition is a waste of Parliamentary time and the electorate’s time.
“The MP is of course entitled to his opinion, but he has no evidence to back-up his assertion of wrongdoing by the Town Council. Mr Mackinlay is welcome to contact me if ever wants to discuss matters or seek clarification on the activities of Ramsgate Town Council, which he has never attempted to do.
“Until such time, we remain disappointed that our own MP continues to use his position of power to undermine and discredit the hard work that this Council puts into promoting Ramsgate and supporting our community and residents in ways that our larger councils are not able to meet.”