UK Awaits the New Crypto Prime Minister – Trustnodes

The United Kingdom will for the first time have an openly crypto friendly Prime Minister this September.

Regardless of wether Rishi Sunak or Liz Truss win the leadership contest, both will back the crypto space.

The former chancellor Sunak, together with John Glen, the former Economic Secretary to the Treasury, were the architects of numerous policies aimed at making the United Kingdom a global crypto hub.

While the Foreign Secretary Liz Truss expressed in 2018 her unequivocal support for crypto, stating:

“We should welcome cryptocurrencies in a way that doesn’t constrain their potential. Liberate free enterprise areas by removing regulations that restrict prosperity.”

This is the first time that is known before hand a crypto friendly candidate will lead Britain, or indeed any other country.

Neither candidate has mentioned crypto during their campaigning however, so far, perhaps because there isn’t much of a difference between them.

They have instead focused on the economy, which is now very much at the top of the agenda following nearly two decades of stagnation in UK.

The differences here are stark. Truss says Sunak wants to raise taxes, breaking a campaign pledge. Sunak says Truss’ tax cuts will cause more inflation and interest rates of 7%. Truss calls that project fear, and then they start talking about cheap earrings for the lady, and very expensive suits for the gentleman.

Yet the matter is serious, with the decision of the conservative party members coming across as very much one of a direction for the country as the two paths appear to be quite different.

Rishi v Liz, Two Paths For Britain

At the opening of this election just a few days ago, we took it for granted that Sunak would obviously be elected to lead the conservative party, and UK.

The debate changed that, at least the ‘for granted’ part, with Truss expressing an ambition. Be bold, she told Sunak, take risks.

“I have a plan to make Britain a high-growth economy over the next ten years through bold supply-side reform,” Truss said at the opening speech for her campaign, before adding:

“We will cut taxes to help businesses invest in their future, tackle the cost of energy, and control government spending.

We will create new low-tax and low-regulation zones to attract investment in communities up and down our country… creating new hubs for innovation and enterprise…

We will turbocharge the rural economy by focusing on farmers growing food and cutting the pointless regulation that gets in their way.”

Truss moreover appears to be advocating a policy we have suggested, which is slightly risky, but might be necessary.

Instead of turning her attention to immediately reduce debt levels, she wants to focus on growth and make that a priority.

She sees the pandemic debt as long term due to it being a once in a generation event, and instead of crippling the economy, she wants to pay it slowly, starting in three years.

The way out is growth, she says: “Now is the time to be bold. We cannot have business-as-usual economic management which has led us to low growth for decade after decade.”

We have previously suggested, before paying any attention to Truss at all, that if the plan is explained well, and if necessary, one can ultimately rely on the patriotic duty of British citizens to buy their own bonds if needed.

Because we have to get out of stagnation, and if you’re raising taxes when the government accounts for 50% of GDP spending, or you’re not investing in infrastructure and innovation, then you might get worse than stagnation.

To grow the economy, one might thus try to lower taxes while increasing investment in infrastructure and innovation, which means some new debt temporarily, but if productivity grows, the economy grows, then growth can pay back the debt.

So Truss is a surprising and appealing candidate, from that perspective, one that at least has the ambition of engaging in needed reforms to return growth.

On the other hand, we like a lot of Sunak’s crypto plans, but considering they are both crypto candidates, it isn’t too relevant to this space who wins.

The conservative party members however have to decide whether they want to take the risk of increasing taxes to tackle inflation, which sounds a bit like the Modern Monetary Theory, or the risk of potentially having to answer the needs of their country if necessary by buying bonds with the potential that both stagnation and debt is then sorted if the plan does work and we come out with good growth at the other end.

They have a month to vote. This space will be happy whoever they choose, but from a wider perspective on the economy, a Truss shakeup may be what is needed.