Britain's Senseless Pursuit of Disaster Capitalism

Looking further afield, in the US the Inflation Reduction Act will pump hundreds of billions of government money into low-carbon transition and healthcare, including slashing the cost of prescriptions and cancelling $10,000 of student loans for millions of graduates. This is part of an attempt to, as the White House christened the proposals from which the legislation was born, 'build back better' - with president Joe Biden telling Congress, "trickle-down economics has never worked. It's time to grow the economy from the bottom and the middle out".

In Brazil, the day before Kwarteng gave his speech, the left-wing former president, Lula De Silva, who ran on promises to scrap the government's spending cap and invest in infrastructure, nudged ahead of far-Right incumbent Jair Bolsonaro in the first round of the country's presidential election, the most significant vote of 2022. While Lula isn't yet over the line, he is the clear favourite.

Across the Western world, state-led investment is back. Limping out of a pandemic and into a European war, looking ahead to increasing climate chaos and back at a decade of stagnant wages and soaring billionaire wealth, most governments, most citizens, can see that a 40-year experiment with radically free markets was a disaster. Most can see the need to pull together, that collective action is required to navigate the current omnicrisis.

But in Britain, we've got a return to tax cuts for the rich and austerity for the rest. Rather than putting money into the pockets of ordinary people, Kwarteng is cutting corporation tax by PS19bn, promoting a free-for-all on bankers' bonuses and launching what Gordon Brown has called a "tax avoiders' charter", slashing tax for employees who are able to declare themselves self-employed.

Two decades ago, Kwarteng's ideas were wrong, but they were at least in vogue. Now, Brexit Britain stands alone.

In his speech yesterday, Kwarteng said he had abandoned his cut in income tax for the richest because it was distracting from his broader plans. But it's precisely his broader plans that are the problem.

As well as slashing tax for the rich, he wants to get rid of regulations for the rich, promising to "review, replace or repeal retained EU law holding our country back".

Much of the rhetoric was the vague nonsense of wilting neoliberal ideologues, but he did give some specifics.

"On childcare, agriculture, immigration, planning, energy, broadband, business, financial services," he said, "Sensible, economic reforms to produce more of the products and services we need to drive down costs."

What this means in reality is a massive attack on safety and standards. Proposals to abolish Ofsted accreditation for childminders don't do anything to solve the problems faced by parents who desperately need better-funded childcare, but will make it harder for parents to know their child is being well cared for, and easier for profiteering agencies.

The reference to agriculture seems to be a nod to the chaos around England's attempts to replace the EU's Common Agriculture Policy. Under Boris Johnson, with Michael Gove as environment secretary, there were some genuine attempts to ensure that farmers' subsidies were given in exchange for environmental goods, via a policy known as the Environmental Land Management Scheme. This could have gone some of the way towards slowing the biodiversity crisis in the UK - one of the most nature-depleted countries on earth.

But it looks like Liz Truss and her environment secretary, Ranil Jayawardena, are scrapping all of this namby-pamby 'not killing the planet' nonsense, and restoring lump sum payments to agribusinesses based on how much land they have - the richer they are, the more they get.

Or perhaps Kwarteng was talking about Britain's new-found power to decide which pesticides agribusinesses should be allowed to spray on our land and leach into our water - various poisons banned across the EU are already allowed in Britain.

As my colleague and housing economics expert Laurie Macfarlane has argued, Tory attempts to reform planning laws in recent years have represented "a ferocious attack on democracy", stripping power from elected representatives and handing it to developers. Without proper planning, cities become suburban sprawl, with lengthy commutes, traffic jams and deep economic inefficiencies. Thriving cities require thoughtful consideration from authorities with a broad view of different needs, resulting in communities joined up with public transport, schools and doctors' surgeries, not endless mazes of cul de sacs and traffic jams.