Kingdom without a compass: Great Britain is lost

British government is on an austerity course

Rishi Sunak (l), Prime Minister of Great Britain, and Jeremy Hunt, Treasury Secretary of Great Britain, in the British House of Commons. (archive photo)

(Photo: dpa)

London You usually don’t get a second chance to correct a first impression. But that is exactly what the new British government is trying to do with its financial plan, which Chancellor of the Exchequer Jeremy Hunt presented in London on Thursday. Hunt and Prime Minister Rishi Sunak want to use a mix of tax increases and spending cuts to regain the confidence in the financial markets that Sunak’s predecessor, Liz Truss, massively damaged during her 50 days at 10 Downing Street.

“Our reputation has taken a hit,” the British prime minister freely admitted at the G20 meeting in Bali, looking back on the days of chaos in London. Truss’ kamikaze policy was just another attempt to get the kingdom, which has been drifting aimlessly since the 2016 Brexit referendum, on a clear economic policy course.

In this respect, Sunak’s new financial plan is not the second, but the fourth attempt, after the failed efforts of his predecessors Theresa May, Boris Johnson and Liz Truss, to correct the devastating impression that Britain has lost its bearings after leaving the EU.

Even Hunt and Sunak cannot fill this leadership vacuum with their austerity program. They are primarily concerned with damage limitation. Above all, there is a lack of money for a new start, but there are also no ideas as to where to go.

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Great Britain is not only stuck in a stagflation dilemma like other countries, which limits the scope for economic start-up aid. The British have to save even harder than others to show international investors that they can be trusted with capital again.

On the barricades instead of “Keep calm and carry on”

“We will weather the storm,” Treasury Secretary Hunt promised in response to global headwinds. The price for this and for the failed “trussonomics” is considerable: the new government in London wants to save around 55 billion pounds or a little more than two percent of annual economic output, of which around 30 billion pounds are to come from cuts in public services and the rest from tax increases in London come to the treasury.

London crawling


billion pounds

is what the new government in London wants to save, which corresponds to more than two percent of Great Britain’s annual economic output.

The math for Britons is as simple as it is staggering: taxes are rising, public services are getting worse and consumer prices are rising at an annual rate of 11 percent.

In the past, the British reacted to similar crises according to the motto: “Keep calm and carry on.” Today, many of the workers who are striking for their real wages in particular say: Enough is enough. After the 2008 financial crisis, Brexit in 2016, and the 2020 pandemic, the current misery is the fourth economic earthquake in 14 years.

Many public services have not yet recovered from the harsh austerity program of 2010. Now they are threatened with the next wave of savings. The fact that even hospitals and the secret service are collecting food for employees shows how great the need is.

Anyone who speaks to companies and workers in Great Britain hears one question above all: what is the way out of the misery, what direction does the government want to take? Sunak and Hunt’s austerity plan provides no answer. Austerity may prevent worse from happening, but it does not offer a recipe for sustainable growth.

Perhaps that is all Brits can hope for after Brexit and the other failures of their political leadership. At the latest before the next parliamentary elections in two years, the conservative government and the opposition Labor party will have to answer the question: where do you want to lead the country, which has been drained by many crises?

More: UK inflation hits highest in 41 years as workers revolt

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