The government’s market socialism is worsening the cost of living crisis

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What is the Government’s plan to tackle the cost of living crisis? It has yet to detail a credible set of policies, including genuine deregulation, pro-growth tax reform and higher quality skills, to boost productivity and wages across the board.

It seems content with the Bank of England’s performance, despite the fact that extreme monetary laxity has helped push up consumer prices and sent asset prices skyrocketing. Its agriculture policy is less about a new Corn Laws abolition moment, and more about remodelling the countryside for environmental reasons. The tax burden is rising disastrously, turning us into a continental-style economy, all to feed the appetite of an unreformed, wasteful state that tries to do too much but is now once again beloved of this Macmillan-style government.

The Government’s energy policy is particularly dire: it remains wedded to the imbecilic price cap, it continues to discourage investment in UK gas, there is no hope for shale and nuclear is insufficiently exploited. Cheap renewables are great, and not just in theory, but the wind does not always blow and there needs to be a back-up plan. According to the TaxPayers’ Alliance, this year the green tax burden is forecast to be the highest on record: £12.5 billion, a rise of £11.6 billion since 2001. Most of the increase – £10.3 billion – has occurred since the Conservative Party took office in 2010.

Infuriatingly, it now seems that blaming energy companies will be part of the Government’s strategy. It is true that smaller companies gambled on offering unrealistically low deals to consumers that, when wholesale costs jumped and prices remained fixed, destroyed their margins. But it is the state that set up this rigged, capped, fake market in a series of reforms over the past 10-15 years that were condemned by all of the free-market economists who had backed our once enviable, competitive marketplace.

That original system now lies destroyed, replaced by an ersatz, ultra-regulated market where prices and sources of energy are dictated centrally and where taxpayer bailouts appear to be the new normal. Market socialism never works.

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