The British pound collapsed like a plum candy. And it looks like Liz Truss doesn’t have an answer for that anytime soon. Truss wants to regulate the economy through tax cuts, but only the rich benefit from that.
The UK was already dealing with a sharp rise in inflation and a falling pound. Add to this the recent economic plans of new Prime Minister Liz Truss.
Not a good start for gears
The average Brit is angry, says reporter Leah Van Beethoven. Historic tax cuts announced of at least 45 billion euros have been heavily criticized. “That amount was not accounted for,” says van Beekhoven. “So it is not known how this money will be recovered.”
The richest 5 percent of the population will benefit from this new scheme, says van Beekhoven. The rich are now getting richer and the poor are getting poorer. The rich, says former writer and reporter Peter de Ward, mainly hold hands with money. “They just spend it on stocks.”
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plan from the eighties
So Truss wants to save the economy with tax cuts. “In doing so, it is moving away from the idea that the economy should be distributed as fairly as possible. Truss fears that the benefits that the very rich get, those five percent, are flowing too slowly to the rest of the world,” says Van Bechhoven. “This is a plan from the 1980s and has not been investigated. whether this actually leaked.”
Yesterday, the Bank of England decided to buy British government bonds “temporarily” to cut high interest rates. This puts the new government in an even bigger bind.
Charles on the banknote
“I expect: if a portrait of King Charles III appears on the banknote, sterling may no longer be worth a dollar or a euro,” says former reporter De Ward.
“When Elizabeth was crowned, Great Britain was still in control of the waves and a pound sterling was made up of 20 shillings of 12 pence each. In the Netherlands, one pound sterling cost over 10 guilders. In the United States, a pound sterling cost $2.80.”
Brexit?
In the UK itself, of course, people will notice the crisis. And while we will feel the crisis there in the Netherlands less than before due to Brexit, de Ward thinks we will notice something. “Dutch produce has become very expensive in Great Britain. For example, a lot of vegetables come from Holland,” says de Ward.
“If I may speculate, my expectation is that if the Truss continues to make such a mess and is voted in, her successor might want to join the EU. They also wanted to join in the 1970s when things went wrong,” de Ward says. . “We then hope that Ursula von der Leyen and Frans Timmermans will make it clear to the British that they should join the waiting list after Turkey, Moldova and Ukraine.”
Peter de Ward and Leah van Bechoeven on the economic devastation of Great Britain
