London Daily

Focus on the big picture.
Monday, Aug 24, 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
Prime Minister Andy Burnham to Give Ukraine Classified Storm Shadow Blueprints for Domestic Missile Production
UK Graduate Job Vacancies Plunge 45% to Lowest Levels on Record
Government Audit Reveals Pressure on UK Hospitality From Business Rates and Rising Costs
Kindertransport Survivor Prepares to Revisit European Sites Linked to Her Family’s Wartime Separation
Northern England Transport Operators Strengthen Contingency Plans as Travel Demand Rises
New Implant Trials Offer Treatment Prospects for Patients With Refractory Angina
South Wales Reviews Wildfire Response After Exceptionally Dry Summer
UK Treasury Prepares Autumn Fiscal Statement Amid Spending and Defense Pressures
Norfolk Records First Wild Beaver Births in More Than Five Hundred Years
Historic Portrait of Benjamin Disraeli Reported Missing From Parliament’s Art Collection
Five People, Including Police Officers, Killed in A66 Crash as Families Pay Tribute
Most English Secondary Schools Found to Fall Short of National Healthy Food Standards
UK Think Tank Says Productivity Growth May Be Stronger Than Official Data Shows
Reform Party Proposes Lower Social Housing Priority for Foreign-Born UK Citizens
UK Government Plans Business Rate Overhaul to Ease Pressure on Pubs and Hotels
New Daily Diabetes and Weight-Loss Pill Launches Across NHS Pharmacies in England
UK Graduate Job Vacancies Fall to Lowest Level in a Decade
UK Prime Minister Andy Burnham Visits Kyiv to Reaffirm Long-Term Military Support for Ukraine
Iranian Hackers Shut Down British Power Plant for Four Days in Landmark Cyber Attack
Novak Djokovic Reveals Relentless Self-Doubt and Rejects Retirement in New Documentary
Trump Imposes 50% Tariffs on Canadian Goods After Bilateral Trade Talks Collapse
First Bus Bars Unaccompanied Under-Sixteens From Evening Services in Stoke-on-Trent
Lithium-Ion Battery Fires Cost UK Waste Sector About One Billion Pounds a Year
Reform UK Proposes Lower Social Housing Priority for Foreign-Born Naturalised Citizens
UK Government Deploys AI Drones in Crackdown on Illegal Waste Dumping
EU Biometric Border Checks Cause Disruption for British Travellers and Freight Operators
UK Expands Voluntary Drug Treatment Programme for Sex Offenders to Twenty Prisons
CrossCountry Cancels Most Services After Major Power Failure at Control Centre
Met Office Warns El Niño Could Bring Severe Autumn Storms and Higher Food Prices
Resolution Foundation Says UK Productivity Growth May Be Stronger Than Official Data Suggest
Andy Burnham Proposes Giving Regional Mayors Greater Planning Powers
UK Government Overhauls Planning Rules to Accelerate Housing Near Transport Links
Russia Withdraws Ambassador to Britain and Warns of Retaliation Over UK Drone Supplies to Ukraine
Iran-Linked Hackers Blamed for Cyberattack That Shut Down UK Power Plant
Andy Burnham Pledges UK Support for Long-Range Missile Production in Ukraine
Australia Combines Indigenous Fire Knowledge With Satellite Tech to Combat Catastrophic Wildfires
Father and Son Jailed in Scotland Over £900,000 Airport Cannabis Smuggling Operation
UK Fraud Reports Surge Sevenfold as Criminals Exploit QR Codes in Parking Meters and Phishing Emails
Brighton Thrash Aston Villa in Four-Goal Opening Half as Manchester City Trail Bournemouth
Erin Patterson Appeals Triple Murder Convictions After Hotel Mixed Sequestered Jury With Prosecution
Bank of England Maintains Close Watch on Banks Amid Global Economic Uncertainty
Warm Weather and Tourism Support UK High Street Spending During Summer
Westminster Faces Continuing Political and Administrative Fallout From Epstein Files Release
UK Invests in Domestic Defence Drone Manufacturing to Strengthen Military Supply Chains
Around Five Million UK Households Face Higher Mortgage Payments by 2028
Bluetongue Virus Cases Rise Across England, Wales and Scotland
UK Government Holds First National Day for Victims and Survivors of Terrorism
Historic Summer Droughts Threaten UK Harvests and Put Further Pressure on Food Prices
UK Economy Holds Up in Second Quarter Despite Global Energy and Geopolitical Pressures
UK Opens National Artificial Intelligence Safety Testing Facility
×