Sir, – Sinn Féin’s economic gurus might reasonably be of opinion that they have little to learn from Liz Truss and Kwasi Kwarteng. But, as the great Con Houlihan liked to write, read on.
Liz Truss won the Tory leadership election on the strength of a promise to a tiny electorate to borrow to finance £45 billion a year in tax cuts. As I write, her new chancellor of the exchequer has reversed £32 billion of these cuts. The short-lived economic experiment of Ms Truss and Kwasi Kwarteng did not survive contact with the real world. Those who were expected to finance the experiment by buying UK government paper sent a clear message: even if you manage to borrow to finance this giveaway, it will cost you.
On a per capita basis, the planned £45 billion hole in the United Kingdom’s tax revenues is the equivalent of about €4 billion here. Earlier this month, Minister for Finance Paschal Donohoe estimated that more than twice that amount, about €8 billion to €10 billion of our corporation tax receipts, are “vulnerable to a shock” and that the exclusion of this “windfall” would cause a significant deficit in the public finances.
All future Irish governments – whether or not led by Sinn Féin – would do well to remember that while we seem to have hit a sweet spot on tax revenues, a very large share of our exchequer receipts is accounted for by a small number of companies and a relatively small number of high earners. Future governments will mess around with them at their peril. – Yours, etc,
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PAT O’BRIEN,
Rathmines,
Dublin 6.
Sir, – Now that our neighbours in the UK have climbed down from energy price capping and decided to follow the model used by Ireland that encourages lower usage, will Sinn Féin and the other Opposition parties here now climb down from demanding that we follow the discredited policies of Liz Truss? – Yours, etc,
RORY J WHELAN,
Drogheda,
Co Meath.
Sir, – Perhaps that iconic Downing Street black door with No 10 on it should be replaced with a revolving one. – Yours, etc,
DAVID CURRAN,
Knocknacarra,
Galway.
Sir, – Goodbye crisis. Hello recession. – Yours, etc,
MARY BYRNE,
Dublin 8.