lpm wrote: ↑Mon Aug 22, 2022 12:42 pm
Horrific. Both Truss and Sunak's plans would worsen inflation and are all set to damage living standards even more. Starmer's plan is even worse, but it seems popular which is what matters to an opposition party.
The following is my economic plan for dealing with this.
1) Increase public sector pay by 10%
2) Increase minimum wage by 10%
3) Increase pension and benefits by 10%
4) Shove interest rates up to 5%+
5) Let energy prices rise freely to wherever they go, fossil fuel burning is still too cheap. Ditch the illusionary "cap".
6) Raise taxes on the top deciles, partly through freezing the 40% band at the £50k mark which captures more and more people, partly through 50% at £80k and 60% at £120k
It's outside govt control, but obviously private sector pay would be driven up by around 10% as well, dependent on sector, union power etc.
There would then be further rounds of pay rise over the next couple of years, in line with whatever happens with inflation. Plus further interest rate rises where necessary. Plus a national campaign called Insulate Britain and a Green New Deal of renewables investment.
The outcome I want in 5 years is:
1) Everyone able to afford food
2) Energy bills permanently higher as a proportion of household spend. Insulated and solar powered homes would have great paybacks. Actual energy usage would be significantly lower
3) Other stuff lower as a proportion of household spend, eventually restoring living standards to 2019 levels
4) Lower house prices in real terms, but higher mortgage costs. This reduces the deposit needed for first time buyers
5) In general, everyone paying more taxes
The outcome I don't want is permanently subsidised fossil fuel burning, which is effectively what Labour & LibDems are proposing, and what Sunak is heading towards.
This problem ultimately is only going to be met by higher pay. Everything else is just temporary shuffling.