The Finance Director of UK PLC sends out the annual figures

Dear Shareholder,

I am delighted to report our most successful year ever. We made more progress to achieving our twin goals of increasing our losses and building up our levels of debt than ever before. Indeed, I am especially proud to be able to announce that in just two years we will be able to borrow more than all the previous managements of UK PLC and its predecessor companies over 1000 years. I think you will agree with me that this is a magnificent result.

As I can reveal in the formal papers attached to my announcement, the gross borrowing for the year just ended worked out at an impressive £181,600,000,000 – well above the £78,000,000,000 some mistakenly had been using as a forecast. Next year we can promise at least £237,000,000,000, an all time record which warms true hearts behind our strategy. We reveal this on page 246 of our famous Red book ( called this year Budget 2009), on the principle that we leave the best to the end.

That is £419,000,000,000 of gross borrowings in just two years. I trust people making their living out of selling government debt will be overjoyed at this big increase in what they have to do. If they will not buy it, then we will instruct the Bank of England and the nationalised banks to buy more. We have already asked them to buy substantial quantities to make the project feasible.

We could not have done it without the huge energy and commitment of our outstanding CEO. The whole Board have also played their part in finding so many ways to expand the workforce, dream up non jobs to advertise in the Guardian, hire consultants, send out glossy brochures, add red tape and complexity, put through over the top legislation, increase top public sector pay, pensions and expenses, and write uneconomic contracts. It has been a herculean labour to waste so much and spend so much in such a relatively short time. I would like to thank them all on your behalf.

I know some of you are concerned about the proposal to put prices up for the rich using our services. Might this not damage the build up of lossees and debt you ask? I can reassure you. This will only bring in 0.5% of the running deficit next year, and remains tiny thereafter. We have more than offset this increase in revenue by big increases in announced spending, so the deficit will go up, not down, compared to the previous forecast. It was however, a necessary decision to deal with our competitiors in the political marketplace. It will be warmly welcomed by our hard core of shareholder supporters who are worried that the company might face unwelcome management change despite all the success in implementing our agreed strategy.

What can I do for an encore, you might ask? Well you will be reassured to know that the apparent reductions in the deficit in future years is based upon optimstic forecasting of growth rates. Many think that these will not be achieved, so we can continue with the high borrowing path that has been our hallmark in recent years.

We do have to report the loss of one of our Shareholder relations specialists, Mr Mc Bride. I would like to confirm that his importance was exaggerated by some when he departed. It will be business as usual, as we have many more Shareholder Communications specialists who can help me with these letters and with our 7 x 24 briefing of the media. The house style of using company announcements to attack competitors will continue, as my Statement made clear yesterday.

Yours in debt

Finance Director

Click here to read John’s budget speech in the House of Commons yesterday.

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28 Comments

  1. Paul Cohen
    Posted April 23, 2009 at 7:47 am | Permalink

    Yes, little depressing isn’t it ?

    I watched Mr Brown just after the Chancellor’s statement.
    Mr Cameron stood up to respond and Brown just turned away, smirking and chatting to his neighbour. pretending to be oblivious to the spirited response.

    I think the man a contemptible oaf, and the sooner he leaves the stage the better for us all.

  2. Posted April 23, 2009 at 8:25 am | Permalink

    Magnificently done but, for the first time, I find myself strangely unable to laugh….

  3. Brian Tomkinson
    Posted April 23, 2009 at 8:34 am | Permalink

    Dear Finance Director,

    As a long suffering shareholder, I found this latest annual report totally unacceptable and the final insult after twelve years of squandering our funds. You have brought this organisation to the verge of bankruptcy. Shareholders will be forced to pay for your mismanagement for decades. Consequently, I am calling for an emergency general meeting at the earliest opportunity at which I confidently expect a vote of no confidence in you, your doltish Chief Executive and the whole incompetent Board to be passed.

    P.S. There will be no severance payments or special pension arrangements to compensate the Board members for loss of office. As your Chief Executive has frequently opined “there can be no reward for failure”.

    Yours angrily,

    An impoverished shareholder

  4. Posted April 23, 2009 at 8:49 am | Permalink

    It would be very difficult to improve on that. The only thing I can add is that the Chancellors performance reminds me vividly of Riley The Builder in “Fawlty Towers”, and I suggest that the best description is therefore Sybil Fawlty’s immortal lines describing his condition. As for the 50%, there is the Martha Stewart Law Of Revenue “Only the little people pay tax.” The real rich are all long gone, and there may be some better off left, but only those who have been unable to remove their incomes or capital to tax havens.

  5. Posted April 23, 2009 at 8:51 am | Permalink

    When I was driving along the M20 yesterday there were far more trucks from the Balkan states than there were from the UK. What does that tell us about trade flows?

  6. Rare Breed
    Posted April 23, 2009 at 8:53 am | Permalink

    Yep we’re heading for national debt above 100% of GDP – How much more will it cost to borrow/payback after that??????

  7. A. Sedgwick
    Posted April 23, 2009 at 9:10 am | Permalink

    The figures, still sanitised and massaged, are as little as the Government felt they could get away with. The reality is any growth will be substantially lower, inflation higher, government borrowing much more expensive and tax take lower. The most depressing part of the day was the timid and wet response of Ken Clarke and Philip Hammond on C4 and Newsnight . Vince Cable stole the show with clear areas for serious reductions in state pending. Brown in PMQs again was very patient with Clegg as he knows a hung parliament is his best chance of survival, and VC is a star politician and is a genuine threat to a Conservative victory. Wake up Tory front bench tell it as it is, stop sitting on the fence over the needed cuts in the bloated, unaffordable state.

    • Posted April 23, 2009 at 9:54 am | Permalink

      I agree. Whilst watching Newsnight it seemed to me that Vince Cable and Philip Hammond had somehow managed to swap their scripts.

    • SJB
      Posted April 23, 2009 at 11:27 am | Permalink

      I can’t see the Liberals supporting a defeated government (see Feb 1974, for example).

      Cameron has been glad-handing the Ulster Unionists perhaps as a contingency in case he has no overall majority. The risk there is that their support will come at a price: e.g. a “cheap energy pipeline” for Ulster.

  8. Posted April 23, 2009 at 9:12 am | Permalink

    Subdued anger mildly assuaged by irony and good manners. Not so at my place. It does carry a warning, though.
    Now Dizzy poses an excellent question as to the quiet acceptance of all this terrible news. My take is that the (anger-ed) will only flare up after their scorched earth policies burn The Nation’s fingers under a new Government faced with the aftermath of a financial holocaust. So part of Brown’s strategy is to marshal McBride’s (forces-ed, then words left out) to spoil any chance of recovery under a sensible Government. To sweep back into power on a wave of awful (anger-ed), lies and deceit. Pretty much how they have clung to power via economic madness described in your essay.
    The gullible client state and thick electorate may just accept it.

  9. James
    Posted April 23, 2009 at 9:18 am | Permalink

    I really appreciated and enjoyed your powerful speech in the Commons yesterday. Thank you. I do wish that your front bench would now stop using the hackneyed cliché about fixing the roof, and stop challenging the PM to admit boom and bust. It’s Punch and Judy, boring and counter-productive. Instead, please persuade your colleagues to adopt and proclaim all the measures to reduce regulation and public spending that you have consistently proposed in the last few years.

  10. Posted April 23, 2009 at 9:58 am | Permalink

    John

    As an individual what can I do to scupper the governments sale of debt?

    If they ain’t got it, they can’t spend it.

    I refuse to pay towards browns debt – if necessary I will work offshore or become financially inactive – but I won’t pay a penny towards a national debt created by an incompetent.

  11. Acorn
    Posted April 23, 2009 at 10:19 am | Permalink

    I am suffering from post budget outrage fatigue. I am clearing out my bookmarks on this computer to celebrate St George’s day. Cry God for Harry, England and Windows XP Professional.

    Hence, here is a page for amusement only. Though not insignificant after yesterday’s budget I suggest.

    http://www.newleftreview.org/?page=article&view=536

  12. Paul
    Posted April 23, 2009 at 10:31 am | Permalink

    John,

    Slightly off topic I know but I wondered if you had read Hannan and Cresswell’s book The Plan. If you have what are your thoughts?

  13. Paul
    Posted April 23, 2009 at 10:32 am | Permalink

    Oops sorry mean’t Carswell obviously

  14. FloTom
    Posted April 23, 2009 at 10:36 am | Permalink

    This Budget (though that is an incongruous name for it) is the best argument I have ever heard for an Independent English Parliament.

    http://www.thecep.org.uk/wordpress/

  15. alan jutson
    Posted April 23, 2009 at 10:38 am | Permalink

    Yes excellent results, pleased you are now showing them in number form, they look much bigger.
    Just a thought is there any merit in going to the supermarkets and asking for cash back.
    Perhaps this is an area that could help in the short term.
    Good speech yesterday, thankyou.
    One of the few comments worth listening to which sort of summed it all up.

  16. james barr
    Posted April 23, 2009 at 11:05 am | Permalink

    Good post John. Coherent and intelligent. This government are quite wretched. Not one of the cabinet could hold down a Director’s position in a private or public company. They are incompetent, mendacious and supremely arrogant. Labour does have some politicians with something interesting to say. The admirable Frank Field comes immediately to mind. But anyone who has “gone off message” (what utter drivel) is stabbed between the shoulders by (unflattering adjectives removed-ed ) like Whelan, McBride and Campbell. Isn’t it strange how Mr Blair has gone terribly quiet. I think history will judge the New Labour project very harshly. It has been nothing more than smoke and mirrors. Now the “Third Way” finds itself in a dead-end, Labour revert to type, a party built on tax and spend. The sooner we have an election the better. Hopefully a Cameron administration will rebuild a degree of trust with the electorate, creating an environment where serious political debate assumes precedence over the “spin factory” built by Labour.

  17. martin
    Posted April 23, 2009 at 11:13 am | Permalink

    I liked your speech yesterday.

    Your comments about Local Government salaries are a step in the right direction. Most of these council jobs should be limited at half the prime ministers pay. Also the “Deputy Dog” council jobs should be axed. In the private sector when someone is on holiday their boss and other colleagues share out the workload.

    On Europe you let your Euro-sceptic views permit you to be too kind to the government. Maybe the reasons that Mr Brown’s famous five tests for joining the Euro were failed was 1) Out of control money supply [credit] 2)Out of control government spending. This is known in “Brown-speak” as “none convergence”. It is known as bad financial management to rest of us.

  18. Posted April 23, 2009 at 11:14 am | Permalink

    Dear Finance Director,
    Can I have your assurance that our inflation target stands and this will not be adjusted as a tool to manage the level of national debt as measured against the GDP? Perhaps it would be wise to use deflation as a tool to encourage the value of our debt to rise even further?

  19. Posted April 23, 2009 at 11:17 am | Permalink

    Bravo! Your speech was a tour de force.

    Labour’s tax hike on higher earners is unfortunately an indication of the general delusions about taxation that we suffer.

    If a producer or service provider is taxed do we think that the price we pay as consumers is unaffected? If the employees of those producers or service providers have to pay tax, do we again think that consumer prices will be unaffected? If not at once, certainly eventually. Every tax on production is mirrored as an additional expense to consumers whether or not that is the official slant. Having collected our net disposable income, we have to recognise that we start paying all those taxes when we spend it. Before that we are involuntary tax collectors, passing on money to government that can only come from consumers’ purchases of our work in the supply chain. Taxation is already effectively a consumption (sales) tax system, in all but name, but it pretends to be otherwise for political reasons. If we abolished all other taxation except VAT we could have such a tremendous boost of entrepreneurial activity and steal a march on all our foreign competitors.

    We would reduce the huge costs of compliance and tax collection. We would eliminate the personal intrusion and increase public trust in the fairness of taxation in which the more we spend the more we contribute.

  20. brian kelly
    Posted April 23, 2009 at 12:01 pm | Permalink

    I stayed on to watch to the end the budget debate on the BBC’s ‘Parliament’ channel yesterday and very rewarding it was, too. It showed Parliament at its best with reasoned, intelligent, good natured debate with about 35 or so MP’s present [the majority were conservatives, I would say]. Your speech was forensically first class all delivered without one reference to a note as far as I could see. And on the whole the conservatives impressed the most. But virtually all speakers from the parties impressed, I thought.

  21. B Griffiths
    Posted April 23, 2009 at 12:45 pm | Permalink

    As a carer I am upset that the government has ignored us once again. We save the country billions but have to struggle on carers allowance and income support. I will never, ever vote Labour again.

  22. Ian Jones
    Posted April 23, 2009 at 12:52 pm | Permalink

    Its good to see the poison pill strategy has been employed just in case the company is being looked over by some competitors!

    Should the competitors manage to get hold of a majority shareholding, the poison pill will make sure their share price collapses and can be re-bought by the current management team in a few years time!

    Drinks all round!

  23. Posted April 23, 2009 at 3:54 pm | Permalink

    I smiled wanly when I read the report above. Beautifully written – but oh dear! So true!

    PS Isn’t the trap about seeing how the Tories react to seeing their top hatted, fox hunting friends taxed till the pips squeak brilliant?
    Damned if they do and damned if they don’t! Cool!
    Labour goes Fourth!!!!

  24. TomTom
    Posted April 23, 2009 at 4:05 pm | Permalink

    So we have moved from Nigel Lawson’s flawed concept of taxing capital gains at marginal rates of income tax to making capital gains much more attractive than paying tax on income yet retaining gambling as the one form of tax-free windfall

  25. Brian E.
    Posted April 23, 2009 at 8:55 pm | Permalink

    Dear Finance Director,
    Having just read your report, I have to advise you that two of your younger shareholders, who happen to be my daughters and who have recently qualified at good universities and are thus about to become responsible for part of your debt, are seriously considering disposing of their shares in the company and acquiring those of other companies, which, whilst in some financial difficulties, seem to have somewhat better management. Indeed my younger daughter has received a very attractive opportunity in respect of the California subsidiary of USA inc, whilst my elder daughter is considering the possibility of obtaining an interest in the Victoria subsidiary of Australia pty.
    Unfortunately, as a pensioner of your company, I am obliged to continue to hold shares in the company in order to ensure that my pension, small that it is, continues to be paid.
    Yours faithfully,
    A very disgruntled shareholder.

  26. Posted April 23, 2009 at 10:35 pm | Permalink

    “Absolutely totally brilliant!”

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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