The Politics Behind the Cost of Living Crisis

By Edward Ferrin- Deputy & Politics Editor

“It takes an extra special talent to make an economy contract”. Source: The Guardian

A political nerd will probably have seen the witty answers with which former Australian Prime Minister Paul Keating was able to bat away criticism for his political decisions. In 1989, Keating serving as Treasurer in Bob Hawke’s Labour government and chastised the opposition’s record on the economy ahead of his unveiling of the budget. He remarked to Shadow Treasurer John Hewson that “it takes an extra special talent to make an economy contract.” These past few weeks have made us wonder if this has been said yet in light of blunders in government since Liz Truss’ arrival to power.

Paul Keating served as Prime Minister of Australia between 1991 and 1996

In the month that was September, students have seen their return to somewhat normality with arrival in student digs again for another beginning to another academic year at Queen’s.

In the world of politics, a lot has happened recently with the arrival of a new Prime Minister after the removal of another, a “fiscal event” and a week of party conferences which highlighted the now all too familiar gulf between the Conservatives and Labour parties vying for power.

What does the new Prime Minister’s speech at the Conservative Party conference mean for students in the immediate future? Liz Truss began her charm offensive with an insider’s look at her early life – ‘I grew up in Paisley and Leeds in the 1980s. I know what it’s like to see boarded-up shops and low growth.’

Margaret Thatcher at the 1981 Conservative Party Conference in Blackpool. Source: The Conversation

It seems quite a start to highlight the ills of a young girl growing up under a Labour government that let poverty and high taxes for working people rip. Only problem is that Liz Truss referred to these boarded-up shops and low growth while her idol, Margaret Thatcher was Prime Minister. Throughout her entire leadership push, Liz Truss set her policies upon Thatcherite ideas and a whiff of non-compromising resolve to push through dramatic changes to policy.

Further to that veiled criticism of her very own political idol in Thatcher, Liz Truss further quoted word-for-word former President Ronald Reagan in accusing her Labour opponents of having never seen a tax “they don’t like.” Without attributing this to Dutch, she demonstrates a keen interest in adding in quotations of successful conservatives before her audience while neglecting a full understanding of what exactly the shift towards a market economy will mean for public services and debt.

Margaret Thatcher’s first inclination to her philosophical crusade over government was marked at the 1981 party conference when “the lady’s not for turning.” Within only a few weeks of Liz Truss’ arrival at Downing Street, she stood up at her first party conference and laid down the law for her crusade with the words “I get it and I have listened.” In other words, she has bit the bullet and has “u-turned” on her pledge to cut the 45p rate on the highest rate of income tax bands.

President Ronal Reagan modelled his public tax and spend policies on what is known as “trickle-down economics” Source: CNN

“We need to be internationally competitive – Britain is open for business.”

We have seen the dramatic rises in interest rates on first-time buyer mortgages for young people, with groups like Virgin Money dropping mortgage packages and plans that may have helped young people, like graduates looking to own a home a chance to make it on the housing ladder. On top of student debt repayments, the financial burdens with rising energy costs and food prices are pinching money from the pockets of young people.

As she continued, she spoke of the Conservatives as the party of low taxes – a move to upgrade her party’s popularity among the workers across the north-east of England. It is a far cry from Boris Johnson’s decision to increase the amount of people’s salaries for national insurance contributions or the refusal of the new government to introduce a “windfall tax” on the increasing profits of energy companies such as Shell or BP.

The Verdict:

“Status quo is not an option.”

Students will see little change to their personal earnings – student grants and loans shall not rise in line with inflation like social welfare and the energy costs for students around campus remain on a grim rise this year. Liz Truss’ arrival into the seat of power hasn’t made much change or look bright for students at Queen’s or across the UK for the moment.

Liz Truss has already made some important decisions – her “fiscal event” alongside the Chancellor of the Exchequer Kwasi Kwarteng and her duties throughout the death of Queen Elizabeth II are a few that come to mind. If she is to take a leaf out of the book of Margaret Thatcher’s first term in office, the statistics of her impact on taxes should be taken note of. In 1978-79, the overall burden of taxes was about 34%. Yet by the end of Thatcher’s first term, the burden stood at 40%.

If indirect taxes like VAT and small business rates are not maintained, students may feel the pressure on their budgets beginning to pinch. For, I might add, pretty essential things in the student world; inflating food prices, eating out, buying new books or paying for gas and electricity may cost a lot more than Liz Truss’ government has anticipated.

If Truss is determined to avoid the same statistics as her political mentor, she must tread very carefully as to how she will make the cost of living more affordable for young students both living at home and living on campus in Belfast.

Published by The Gown Queen's University Belfast

The Gown has provided respected, quality and independent student journalism from Queen's University, Belfast since its 1955 foundation, by Dr. Richard Herman. Having had an illustrious line of journalists and writers for almost 70 years, that proud history is extremely important to us. The Gown is consistent in its quest to seek and develop the talents of aspiring student writers.

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