The markets have been rocked in recent weeks by the tax cuts announced by Prime Minister Liz Truss and Chancellor Kwasi Kwarteng.
The pound fell to its lowest level versus the dollar following the release of the mini-budget, and there were several additional indications that the budget cuts had wreaked havoc.
In an effort to support the tax cuts during yesterday’s PMQs, the prime minister mentioned the assistance the government is giving with energy costs. But soon after, LBC anchor James O’Brien used a fantastic analogy to rip her defence to bits.
He said: “It’s going to be financed by borrowing, but it’s public spending. So that’s spending money and the tax cuts are rejecting money that would have otherwise made its way into the treasury.”
O’Brien went on: “How can she claim when she’s asked questions about the tax cuts, how can she claim or even mention the energy bills help, because the energy bills help costs the treasury money, and the tax cuts cost the treasury money.”
O’Brien used an analogy to clarify his reasoning in a conversation with LBC’s political editor Theo Usherwood.
O’Brien said: “If we were married and I went out and brought a Lamborgini, and you said, ‘how the hell are you going to pay for that Lamborgini?’ and I said, ‘Don’t worry, I’ve bought a Porche as well’.”
Usherwood acknowledged that he would be hesitant about how he would cover the repayments for the Lamborghini, never alone the additional Porsche repayments on top of that.
The similarity was compared to Truss’s tax cuts and government expenditure, and O’Brien referred to her justification—or avoidance—of explaining how we’re going to pay for it all as “crazy”.
You can watch it below:
‘Oh it’s even worse than I thought!’— LBC (@LBC) October 12, 2022
In his immediate reaction to #PMQs James O’Brien delivers a compelling analogy for Liz Truss’ attempt to defend her tax cuts.@mrjamesob | @theousherwood pic.twitter.com/8pOYuGa2wk