London Daily

Focus on the big picture.
Sunday, Sep 20, 2026

The UK is at a perilous tipping point. But what is Truss planning to do about it?

The UK is at a perilous tipping point. But what is Truss planning to do about it?

Each day brings more news about a spiralling catastrophe – the economy is crying out for major government intervention
The gigantic scale of the oncoming economic shock becomes clearer by the hour. Click – and there’s Goldman Sachs predicting a 22% inflation rise next year. Click again and Bloomberg reports UK energy companies will make £170bn in excess profits over the next two years. If interest rates do hit 4%, banks too will roll in unearned mortgage money, plus shedloads from money loaned to the government. Fine profits will be made from national misery.

Each day dawning reveals how everything, everywhere, is at a perilous tipping point. Martin Lewis warns that lives will be lost from cold and hunger, amplified by Sir Michael Marmot’s warning yesterday of children in grave peril. Lewis is not “catastrophising”, he says: “This is a catastrophe, plain and simple unaffordable.” If only he were to be the new chancellor … carry on with your own Jack Monroe-and-Marcus Rashford dream team.

But next week we face the appointment of a leader with nothing to say that acknowledges the enormity of the calamity ahead, whose defining policy of tax cuts is the perverse opposite of what’s required. In the great crunch of 2008, Gordon Brown and Alistair Darling staved off imminent calamity with policies that had been unimaginable to them only a day earlier: nationalising banks, bailouts and a quantitative easing bonanza. Is anyone confident that Liz Truss and Kwasi Kwarteng will plan on anything like the scale required?

Rishi Sunak pitching to Tory party members in leafy Hertfordshire this week faced not one question – not a single one – concerning the cost of living crisis. From this twilight zone of unreality emerges a leader unfit to grapple with the worst crisis of our lifetime, with a typical 10% fall in disposable income predicted by 2024, according to the Resolution Foundation, which would be worse than during the 1970s oil shock, the worst in a century.

New perils come daily. Corner shops and pubs will close. Libraries and museums can’t be warm hubs for cold people as they shut to save fuel bills. Schools, hospitals, nurseries and colleges can’t pay. Credit card borrowing will soar, and food banks are already running out of food.

Of course people will strike wherever they have unions to organise them: already their demands fall well behind the latest predicted inflation figures. Their immediate employers can’t pay from government-restricted budgets: only government can pay out. “Restraint” is demanded by the Bank of England governor with nothing said about the 39% rise for FTSE 100 CEOs this year, as reported by the High Pay Centre. The wonder is not that unions are “militant” (they’re not) but that they have been so acquiescent over the last austerity decade of falling real wages. Why? It takes exceptional outrage for union members to vote to strike, suffering lost pay with an uncertain outcome. This time the pay cuts are too shocking to tolerate.

Facing this unthinkable catastrophe, the only solutions are things once deemed politically unthinkable. The idea that a £30bn tax cut is the answer defies reason, especially when biased to benefit the best off. Why would cutting corporation tax lead to “growth” when company investment was absent even in better times? When six companies alone made £16bn excess profit during the pandemic, what’s needed is walloping windfalls on profiteers, as Labour urges.

This is a wartime emergency, with the west resolute against Putin’s invasions. In a war paid for by Ukrainians with their lives, we are obliged to pay with our money. But whose? Everyone’s, but the most ought to come from those with the broadest shoulders. In wartime, money is conscripted in the form of war bonds, in a solidarity tax and in property taxes, since that’s where most wealth resides. Public services must survive, public servants can’t pay the price and nor can collapsing small businesses. Massive, Covid-era-style support is a necessity for social survival. The very minimum immediate action requires universal free school meals to stop any child starving, and an instant, inflation-matching rise in already puny universal credit. But far more than that for many more households is essential if we are to prevent Marmot’s worst predictions.

Rowan Williams is among more than 500 clerics proposing a 1% wealth tax on those with £2m or more. Prof Arun Advani of Warwick University says a one-off 1% raid, to be paid over five years, would raise £80bn. Invest that in renewables and insulation to head for energy near-self-sufficiency, so that the country can protect against future energy shocks.

Liz Truss, writing an ineffable stream of balderdash in the Sun yesterday, pledged as “a freedom-loving, tax-cutting Conservative” to “lead the British people through the economic storm with my clear and truly Conservative plan” with “bold action such as tax cuts, decisive reforms and slashing senseless red tape”. How far she strays from voters is hinted at in the Sun’s own oddly zig-zag leader, which warned her: “Tax cuts and growth are vital as a direction of travel for her Tories – but they won’t stop the poorest freezing in December.” And it tells her not to “protect Shell and BP’s billions out of misguided ideology”.

But in her final hustings this week, she pledged no windfalls, no new taxes, no energy rationing (and maybe no speed limits either). No one alive has witnessed an economic cataclysm such as this – and that’s her unthinkable response.
Newsletter

Related Articles

0:00
0:00
Close
Addison Lee Founder Loses £20 Million UK Tax Tribunal Case
BrewDog Creditors Face Losses on About £190 Million of Debt
Harrods Seeks to Recover Abuse Compensation Costs From Mohamed Al Fayed’s Estate
Ed Davey Targets Reform UK as Liberal Democrat Conference Opens
Great Britain Retail Sales Rise 0.5% in August
NHS England Approves Life-Extending Treatment for Incurable Breast Cancer
Proposals to Limit NHS ADHD Diagnoses Draw Criticism From Patient Groups
Resolution Foundation Warns of Housing Cost Crunch for Low-Income UK Families
BBC Cash Reserves Fall to Decade Low as Annual Deficit Reaches £121 Million
Millisecond Software Error Triggered Major UK Air Traffic Control Disruption
Twenty Women Underwent Unnecessary Mastectomies During NHS Cancer Care
Sensitive UK Police Data Found Vulnerable to Access by Foreign Actors
British Steel Faces Renewed Pressure for a Long-Term Financial Plan
MPs Urge Government to End Thames Water Restructuring Talks With U.S. Hedge Funds
Andy Burnham Warns of Difficult UK Budget Choices as Inflation Returns to 3.1%
England Tightens School Food Standards With Restrictions on Deep-Fried and High-Sugar Foods
Oxfordshire Village Votes Symbolically to Leave UK Over Proposed Asylum Centre
Michael Marra Elected Leader of Scottish Labour
BBC Cash Reserves Fall Sharply as Financial Pressures Mount
George Osborne Calls for UK to Rejoin EU Customs Union
UK Explores Joining Canada-Led Global Defence Bank
Thirlwall Inquiry Highlights Management Failures Surrounding Lucy Letby Crimes
Parliamentary Committee Calls for New UK Law to Address AI Risks to Human Rights
UK Considers Giving Regional Mayors Greater Oversight of Water Companies
UK Opposition Presses Burnham for Stronger Response to Russian Security Threats
Reform UK Faces Scrutiny Over £72 Million in Donations as Political Finance Rules Tighten
Millisecond Software Failure Behind UK Air-Traffic Outage That Cancelled More Than 2,000 Flights
Bank of England Holds Interest Rate at 3.75% as Energy Prices Complicate Inflation Outlook
Burnham Warns of Difficult Choices in October Budget as UK Inflation Rises to 3.1%
Addison Lee Founder Loses £20.5 Million Non-Domicile Tax Case
BrewDog Creditors Face Heavy Losses After Collapse
Thirteenth Metropolitan Police Officer Dismissed Over Charing Cross Conduct
Oxfordshire Village Votes Symbolically to Leave UK Over Asylum Accommodation Plan
NHS Approves Life-Extending Treatment for Women With Incurable Breast Cancer
Software Defect Blamed for Major UK Air Traffic Disruption
Twenty Women Underwent Unnecessary Mastectomies at County Durham NHS Trust
British Steel Costs Taxpayers £1.3 Million a Day as MPs Demand Long-Term Plan
UK Parliament Advances Sovereign Grant Reform Setting Royal Funding at £99.9 Million
King Charles Urges Human-Centred Approach to Artificial Intelligence at Scotland Summit
House of Lords Begins Scrutiny of Voting-Age and Political Finance Reforms
UK Labour Market Shows Growing Divide Between Younger and Older Workers
Nearly Seven in 10 UK Small Businesses Delay or Cancel Growth Plans as Costs Rise
Andy Burnham Reaffirms UK Net-Zero Target Amid North Sea Energy Debate
UK Parliament Demands Credible Financial and Decarbonisation Plan for British Steel
MPs Urge Government to Reject Thames Water Rescue Deal and Prepare Special Administration
Bank of England Holds Rate at 3.75% as Energy Shock Raises Inflation Risks
TUC Calls for Social Energy Tariff Funded by Higher Taxes on Bank Profits
UK Parliament Enters Conference Recess After Advancing Sovereign Grant Legislation
King Charles Hosts Artificial Intelligence Leaders at Dumfries House Summit
Nearly Seven in Ten UK Small Businesses Delay or Cancel Growth Plans as Costs Rise
×