The libertarians who support Brexit currently control our fates for at least the next two years, and the magnitude of the threat they pose to our well-being and security is becoming clear. Liz Truss, the Prime Minister, may have swallowed her own words from just one month ago when she stated that she was against “handouts” in order to launch the largest handout in our history; however, this was done to buy her and her supporters the political breathing space needed to launch their programs. The energy price cap may have appeared to be a stunning U-turn at the time, but it served a more sinister purpose.
He was fired from his position as permanent secretary to the Treasury in a hasty and unexplained manner by chancellor Kwasi Kwarteng. This action revealed the true intention. Kwarteng’s thought process became clear when he blamed “the same old economic managerialism” for leaving Britain with a “stagnating economy and anemic growth.”
Cutting taxes, putting money back into people’s pockets, and relieving our businesses of burdensome taxes and unsuitable regulations are all examples of “bold action,” which he argued was necessary to alleviate this “toxic combination.” Only in this way would investment and growth be possible. He went on to say that it was preferable to “bury our heads in a redistributive fight over what is left.”
It is ideological faith triumphing over evidence and reason, which is nonsense that cannot be proven. Scholar, a purported prime example of old economic managerialism, was expendable in light of these considerations. We are currently being led on an amusement park ride by economic fairies and fools.
Of course, the two-year price cap of £2,500 is greatly appreciated
Millions of people will be relieved of the terrifying prospect of having to choose between staying warm and eating. Furthermore, it will reduce the peak inflation rate by up to four percentage points, which will reduce the amount of money required to service the debt over a full year by approximately twenty billion pounds; one-quarter of our national debt is represented by inflation-indexed bonds. It will also help to reduce the risk of a potentially disastrous upward spiral in wages and prices. However, it was for these very reasons that Labour first advocated for a price cap. The libertarians did not change course until they realized that continuing to oppose and adhere to their preferred response of tax cuts and minimal rebates put them at risk of being politically outgunned.
The business community will take precautions to ensure that the proposed increase in the corporation tax has no negative impact on investment
However, silly libertarianism does not lead to military victory or economic recovery. Europe and Russia have effectively entered a state of war over the situation in Ukraine as a result of Europe’s threat to impose a price cap on gas imported from Russia. In Vladivostok, Putin responded to the question by saying that once Russia reaches its limit, it will no longer export anything to Europe, including gas, oil, and food. Although this conflict is being fought on the economic front rather than the battlefield, it is still considered war. The United Kingdom’s energy policy is not only irresponsible, but it also betrays the cause.
Energy policy in a time of potentially prolonged supply disruption must be long-term; it must protect businesses as well as consumers; it must be financially sustainable; and, most importantly, it must avoid the risk of blackouts. The government’s proposed plan is ineffective in every way.
Above all, it is not financially sustainable
The Russians always point out that Britain has the lowest national debt of the G7 countries, with the exception of Germany, implying that there is room to borrow more money. The US dollar, Japanese yen, and Euro, on the other hand, are the world’s reserve currencies, and Canada maintains a positive balance of payments.
Britain stands alone, outside of all of the major trade blocs, with a fragile economy based on legacy industries and a persistent trade deficit. Without risking further declines in the value of the pound or a forced increase in interest rates, the government cannot sell at least £100 billion in additional public debt each year to protect living standards rather than increase investment.
The issue of long-term financial viability could have been approached from a number of perspectives. It would have been possible to impose a windfall tax on the exceptional profits made in the energy sector. Furthermore, for the duration of the conflict in Ukraine, all gas and oil extracted from British fields should be required to be sold to the government at cost-plus rather than at market prices. It was possible that consumers would have been advised to cut back on their spending, with ministers taking the lead and, if necessary, instituting a rationing system. Along with an expedited program for home insulation, a state-led rush program for the construction of onshore and offshore wind farms should be implemented. This would be the most efficient and cost-effective way of increasing energy supplies.
Every single one of these policies is deeply repugnant to libertarians
As a result, they propose untargeted, albeit generous, assistance for households; however, because they, too, are aware of the nearly limitless costs, they have limited the assistance provided to businesses to a six-month period. Businesses will hunker down in fear of what lies ahead, ensuring that Kwarteng’s decision to scrap the proposed increase in corporation tax has no effect on investment. It is also aware that power outages may occur this winter, which will be exacerbated by the uncertain prospect of fracking gas coming online in ten years.
When the UK was a member of the EU, it was linked to the grids of Ireland, the Netherlands, France, and Belgium via subsea interconnectors
When the United Kingdom was still a member of the single market, its grid was linked to those of Ireland, the Netherlands, France, and Belgium via subsea interconnectors. Furthermore, as part of a separate agreement, the United Kingdom’s grid was linked to Norway’s. The price was set in a single market, and there were no restrictions on the flow of electricity, despite the fact that capacity varied greatly between networks.
Now comes Brexit
Instead, Britain has developed a cumbersome and costly auction system, which has resulted in an increase in electricity costs and leaves us vulnerable to supply shocks. Furthermore, Jennifer Granholm, the United States Secretary of Energy, has directed that any refineries in the United States that are currently exporting gasoline, diesel, or distillates cease doing so and instead focus on stockpiling reserves in preparation for the switch-off with Russia. This poses yet another threat to the supply.
Prior to these challenges, the EU had been working to increase its gas reserves, a process in which we should have participated. Centrica, on the other hand, did not receive permission to reopen its Rough gas storage facility in the North Sea until the end of August, and the facility can only be reopened one step at a time at this point. Regarding this winter, it will be of limited utility.
As a result, libertarians are in charge of dealing with energy crises and fighting wars. It is illegal to plan, use state power, tax, regulate, accumulate reserves, or collaborate with other Europeans. A tax cut “fiscal event” will occur in the latter part of this month, further inflating our national debt for no reason. The same philosophy that leads nowhere will inform this event. Growth is not the result of making so-called “wealth creators” richer through tax cuts; rather, growth is the result of well-managed and imaginatively directed investment by both the public and private sector cooperating in an interdependent relationship.
The entire project is doomed to failure. The tragedy is that, regardless of the damage done to the Conservative Party, the rest of us are doomed to suffer the same fate.