Spare us the fibs

We are going to hear two constant refrains in what passes for economic debate in the UK. We will be told that our exports to the EU are crucial to our economy, and will be at risk in some unspecified way if we dare to demand a renegotiation of our position or a referendum. We will be told that the the UK economy is not growing quickly, owing to the cuts.

The EU lies are the easiest to rebut. There is not the slightest shred of evidence that if the UK seeks to better deal or a referendum on membership of the EU it will damage our trade with the EU. The trade is guaranteed by WTO rules. As the rest of the EU sells us a lot more than we sell them, they will not want to disrupt it in any way. They have more to lose than we do.

EU goods trade probably accounts for around Ā£120 billion of our output. (EU exports adjusted for the entrepot factor) That’s around 8% of our total National Income. It’s important, but not nearly as important as the 92% that is not dependent on selling things on the continent. Since 2008 the government figures show that our exports to the rest of the EU have anyway fallen by 6%, whilst our exports to the rest of the world have risen by 4%. So the trend has been going against the EU before the crisis. Slowdown in the EU and collapse in the weaker EU economies will accelerate this process.

On the radio yesterday Lord Skidelsky was kicking off the ridiculous argument that the Uk economy has slowed down owing to large cuts in public spending. The interviewer and the other participant failed to point that that public spending is up in real terms according to the govenment’s own figures since 2010. No-one mentioned the planned borrowing of at least Ā£122 billion this year, or the additional borrowing and spending announced in the March 2011 budget.

Why on earth do they want to debate something around a completely wrong version of the facts? The question they should have asked Lord S is “Why has the UK economy slowed when real public spending is up, and public borrowing remains at near record levels?”. Why can’t any of these commentators bother to read the numbers? Why does the BBC insist on suppressing the true numbers, so there can be no debate about what is going on as opposed to what is being spun?

Neo Keynsians love high levels of public spending and borrowing, and say they stimulate the economy. They need to be asked why public spending at nearly 50% of GDP, and borrowing of more than Ā£10 billion a month, is not stimulus enough. They should be asked how much more borrowing would it take to get faster growth, and would anyone lend us the money? Could it be that spending more in a wasteful or less productive way, and borrowing more than the country can afford, could be a road to ruin rather than a welcome shot in the arm?

150 Comments

  1. Mike Stallard
    November 12, 2011

    Public spending:
    Our local comprehensive school (pass rate at Bacc: 1%) has recently had a PFI for well over Ā£25,000,000. It now looks exactly like Nestle Purina just down the road.
    While it was being put up, by lots of operatives in the building trades, they had money to spend in the local hostelry and shops. So it looked, for a few weeks, as if the economy was getting better.
    But, of course, the Ā£25,000,000 was actually borrowed wasn’t it. And someone has, over the next few years, to repay the Ā£25,000,000 with interest.
    In the local paper, the Minister for Schools arrived in his best suit for the photo op. The littlest kiddies (bless!) were all given little yellow jackets and white builders’ hats. (Sweet!)

    And JM Keynes smiled down from his heaven just above the M1 motorway.

  2. stred
    November 12, 2011

    The BBC does not like to mention the true figures because the have Naughty salaries themselves, and their own mis-spending rivals Whitehall’s.

    1. lifelogic
      November 12, 2011

      Absurd salaries and pensions at the BBC and this in an industry where virtually every job advertised is hugely oversubscribed with countless good applicants desperate to get into the industry who would work for nothing.

      The true market rate is about 1/10 of many of the salary/pension packages being paid. Also almost to a man, or woman, the ones front of screen seem such lefty, lovey, right-on dopes. I have never every heard for example Jonathon Ross say anything funny or remotely interesting. Why would anyone pay him anything at all?

      Every question in any BBC political interviews comes from someone clearly ingrained in lefty, greeny, big state, pro EU, BBC think.

      1. APL
        November 13, 2011

        lifelogic: “Absurd salaries and pensions at the BBC ”

        It’s the unique way the BBC is funded. The Robin Hood funding model, take from the poor to make themselves rich.

        1. lifelogic
          November 13, 2011

          A single top member of staff can need perhaps 100,000 poor peoples licence fees just to pay their wages and pensions.

          1. lifelogic
            November 13, 2011

            Over their working life and pension I mean.

        2. Bazman
          November 14, 2011

          Since when have you been bothered by this business model and state model?

  3. lifelogic
    November 12, 2011

    Indeed Neo Keynsians live is some sort of dream world (rather like the sustainable energy people) where the government picks money off the money trees and uses to pay people to dig holes and fill them in again. Stopping just to hit someone from the private sector with the spade ever hour or so for good measure.

    It is the logic or trying to lift yourself of the floor by pulling on your shoe laces. Or snatching money off people doing useful things and giving it to ones doing nothing useful like HS2, support for the PIGIS, pointless wars, green bling and pushing lots of pointless paper around.

    If the government could actually run something profitable and sensible it might make sense but they can not. The cannot even pay out the the riot victims efficiently as promised – or the Equitable life victims (well over ten years now). My elderly parents are still waiting – will it arrive in time for them I wonder. They cannot even get an indication of timescale or what they will receive – a complete joke as usual.

    Needless to say the BBC seems to have a large cupboard of these Neo Keynsians to pullout and say something daft when ever needed just as they hold a cupboard or sustainable green loons.

    The BBC do however allow Philip Stott (Emeritus Professor of Biogeography University of London) he seems to the only person ever on the BBC who speaks sense on the global warming issue. I do not know how he managed to get under the wire.

    See the excellent “Intelligence Squared” global warming debate (available on the net) as a good example of him. The AGW side of the debate do not have a single sensible argument to put beyond basic appeals childish to emotion.

    1. lifelogic
      November 12, 2011

      Just Ā£3,584 of the circa Ā£250 Million riot damage claimed has been paid out and Iain Dunken Smith. did not even seem to realise this.

    2. lifelogic
      November 12, 2011

      You ask: Why on earth do they (the BBC) want to debate something around a completely wrong version of the facts?

      Well this is standard at the BBC. They start with the BBC religions:- pro EU, pro big government, pro the green religion, pro central control of everything, pro trains and bikes, anti car, pro Keynes, pro “equality of outcome” and just distort the facts to fit in with this BBC think religious beliefs.

      If you have been saying the cuts are “too much too fast for months on end” it is a bit difficult for the BBC to admit the true spending (rather wasting) figures.

      1. lifelogic
        November 12, 2011

        Why would the BBC let simple facts – like the earth going round the sun, government expenditure figures or absence of sensible evidence on the man made global warming exaggerations get in the way of a convenient religion or nice little earner. Bishops and Popes never have.

        After all books with titles like “Eat all you like and loose weight” usually sell very well. Hence the continued popularity of Keynesianism.

      2. uanime5
        November 12, 2011

        How is Sky News any different?

        1. lifelogic
          November 12, 2011

          I do not have to pay for Sky and do not know what they say anyway.

          1. Bazman
            November 14, 2011

            You pay for sky indirectly due to their monopoly and collusion with BT. If SKY are saying the same thing as the BBC when they report the news what does that tell you? You do not watch other news channes because you will not be then able to blame the BBC for ‘lies’. I suspect.

        2. Bob
          November 12, 2011

          Sky news is a business.

          1. Bazman
            November 14, 2011

            And people just volunteer up to a hundred pounds per month plus because SKY is such a good business? You seriously believe that?

    3. lifelogic
      November 12, 2011

      On “Any questions” just now:

      Secretary of state for international development Andrew Mitchell said “Everything we are doing is dedicated to promote growth” Is he really so stupid as to think that?

      Well no – in fact the Coalition have done very much but in totally the wrong direction and very little in the right direction after a year and a half.

      You have not got the banks, even the ones you own, to lend to good UK businesses.
      You have done nothing about absurd employment laws and all regulations.
      You have introduced absurd no retirement rules.
      You have not got rid fully of hip packs (energy nonsense remains).
      You still have OTT planning and building reg restrictions.
      You have Vince Cable in a post as an anti “Business” secretary.
      You have Chris Huhne pushing energy costs up and creating (then killing) pointless green bling industries with absurd subsidies.
      You have the HS2 waste of money.
      You have the absurd green deal.
      You have the 50% tax rates still in place.
      You have not kept your promise on Inheritance Taxes.
      You have not cut pay and numbers in the state sector.
      You have not got a sensible energy policy.
      You have accepted the EU agency workers directives.
      You have wasted money or Greece and Ireland with more to come.
      You have agreed to more money for the EU.
      You have not encouraged the EU to organise a “sustainable” real solution the EURO problems.
      You have accepted to gender neutral insurance absurdity.
      You have increased VAT and taxes and regulations in general.
      You have not created a pro business vision.
      You have not given the impression you will win the next election.
      You give the appearance of being concerned with trivia and photo ops rather
      real issues. (things like succession and poppies on football shirts and the number of tory Women MP’s floating around (did any vote the right way on the EU recently?)
      You still have the absurd landlord deposit/licencing rules & restrictions and similar.
      You have done nothing at the dis-functional NHS or Schools you are not even making the right noises.
      You are pushing the banks and the rich overseas.
      You have increased the non dom tax to push them too away.
      You have not yet sorted out the no win no fee racket.
      You have yet got rid of or discouraged the something for nothing benefit culture.
      You still have parasitic industries in health and safely and over regulation all over the place.
      You have not relaxed pension fund rules to all more flexible investment.
      You have suppressed what remains of UK democracy.
      You have absurd tram schemes.
      You will not allow new runways at Heathrow and Gatwick
      Above all you have no positive real vision.

      I could go on.

      1. Bazman
        November 14, 2011

        This is ‘sensible’? Most of this is a charter for regressive pollution and exploitation of the working classes. I still await your one absurd employment regulation. As they are all absurd you must be able to name one.

        1. lifelogic
          November 17, 2011

          The main problem is that you cannot selectively get rid of people who are not doing their jobs properly without a risk and high cost.

    4. uanime5
      November 12, 2011

      “Indeed Neo Keynsians live is some sort of dream world (rather like the sustainable energy people) where the government picks money off the money trees and uses to pay people to dig holes and fill them in again.”

      Well the Bank of England does have a license to print money.

      Also anything not peer reviewed by scientists shouldn’t be considered accurate in any way.

      1. lifelogic
        November 12, 2011

        Yes they can print money but that is in effect just a tax on others through inflation and leads to worse problems in the long run.

        I have no problem with things being peer reviewed so long as it is done by sensibly physicists or similar not astrologists in the “climate science business”.

        Statement such as we cannot know the climate in 100 years time with any real accuracy are just self evidently true. Just as we cannot predict the lottery balls a much simpler problem. No sensible scientists would disagree as we clearly do not know many of the variables needed and anyway it is a complex and chaotic system with endless feedbacks.

      2. Mark
        November 13, 2011

        Ever heard of Lysenko?

      3. cosmic
        November 13, 2011

        “Also anything not peer reviewed by scientists shouldnā€™t be considered accurate in any way.”

        Come on.

        All peer review amounted to was that a paper in a particular field had been assessed by people active in the field, the work appeared to have been done properly, the analysis had no obvious flaws and it represented something new, interesting and worthy of attention. It was potentially a new contribution to the state of knowledge in the field. Potentially.

        A safeguard for journals so they didn’t publish preposterous rubbish too easily.

        It was not and never has been a stamp of authoritative truth, which is the way some sections have attempted to have it regarded in recent years. Loads of published peer reviewed findings have been overturned by the fact that the work couldn’t be replicated or the analysis was shown to be flawed despite the peer review.

        1. lifelogic
          November 15, 2011

          Indeed peer review has been used as a way of limiting the field to “Climate Science Specialists”. Rather than the more sensible opinions of physicists other scientist and engineers.

          It is a bit like discussing a religion that believes in fairies at the bottom of the garden. Then advocates saying that no one has a valid opinions as their work has not been peer reviewed by “expert priest/scientists in the “fairies at the bottom of the garden field”.

          How does one become an expert in “the fairies at the bottom of the garden field”

    5. Bazman
      November 14, 2011

      Putting millions on the dole is an expensive way of doing things too. What do you propose? No benefits. See how far that would go. Should a person working for a state or private company just accept this in your right wing fantasy world. Would you?

  4. David Whitley
    November 12, 2011

    When I contacted my MP (Don Foster, Bath) about the EU referendum vote he sent me a letter in which (inter alia) he listed the benefits of being in the EU: eg 3.5m British jobs are dependent on the EU single market.
    We need to have the counter arguments ready to deal with these specious points. If and when we have a real debate or referendum these sort of points will be trotted out by the BBC and others and presented as “facts”. It will be vital to have some good and easily-understood rejections on hand.
    Mr Redwood I am sure that you can help with that.

    Reply: That’s what this does. What about the 25m jobs that do not depend on EU trade?

    1. Mazz
      November 12, 2011

      I also received a letter from my Labour MP in reply to me asking her to vote yes for a referendum; knowing full well that she was dead against one, with the same statistic … ‘it is estimated that 3,5 million jobs in the UK are linked to EU trade. … she also said, … ‘the European market is the prime destination for 8 of the UK’s 10 biggest exports and that it accounts for 50% of all exports.

      I wonder if John would like a copy of the letter? If that’s not out of order, of course.

      Reply: Thanks, but it is a common lie put around by many pro EU advocates

      1. Mazz
        November 12, 2011

        Reply to Reply:

        Thank you, John!

      2. Mike Stallard
        November 12, 2011

        And warmly repeated, I notice this morning on Any Questions, followed by a long lusty round of applause.

      3. dan
        November 12, 2011

        but even though we know its all bollocks, Mr Redwood wants to ‘renegotiate’ to remain within this costly club which does nothing for the UK.
        …and he touts himself as a Eurosceptic…Dont make me laugh

        Reply: Try reading what I want. I want a referendum so the people can decide – Parliament has just blocked that. I now propose a renegotiation to secure our trade and cross b roder interests, followed by a referendum. What is your issue with that? My aim is you should have your chance to vote out completely, but I also judge that a majoirty of UK people want to try renegotiation.

    2. Chris
      November 12, 2011

      Have you seen the Civitas booklet on leaving the EU “Time to say No”, by Ian Milne, published October 2011.(I think it may provide some of the counter arguments you are looking for). Link to Press Release below with excerpt:
      http://www.civitas.org.uk/press/recent.php
      “EU holds back UK economic recovery:
      Britain must plan exit strategy from failing EU, but should keep trade links.
      As Europe’s leaders gamble their nations’ finances on saving the Euro, a new Civitas report reveals that the European Union is damaging Britain’s economic recovery and sapping job growth. Time to Say No, by Ian Milne, shows that a break with the EU need not represent a drastic break with Europe itself. Instead, it will permit a pragmatic reform of trade and immigration relations. Existing international institutions can achieve this without the current burdens of bureaucracy in the EU. It will also revive democracy at home”.

    3. Disaffected
      November 12, 2011

      David, if it helps my Lib Dem MP wrote the same specious rubbish to me and I wrote back told him so. The fact is these fanatical MPs will write such things whatever the facts or truth in the matter. Look at Huhne’s defence of wind farms this week and how the actual economic lunacy of what he says makes no difference to him. Shockingly Cameron is letting this happen. Allowing Clegg and Cable to use language of fear of what might happen if the UK left the EU- no substance, they know it, but they want to achieve their aim of a pan European state and will be happy to con the public to achieve this.

      I have sadly come to realise that the Tories are not up to the job. They have not followed through on making the changes they pledged or I expected. They do not have the mettle to stand up to a junior partner- if they were ever actually going to do so. Voting for them leaves me realising that I wasted my vote. Therefore my conscience will be appeased to vote UKIP at the next election. I hear what John says about UKIP, but I am sick to the teeth of false promises and there is not any difference to what the three main parties have to offer.

      In fact the Libe Dems came a very poor third at the last election- fewer votes fewer MPs. Considering the people’s contempt for Brown it says a lot about the lack of appeal for the Lib Dems, and yet Cameron has let them have a disproportionate say on government policy. What could the Lib Dems do if he ignored them? Call an election where they would become extinct! Cameron needs to go.

    4. Bob
      November 12, 2011

      @David Whitley
      Iain Duncan Smith didn’t even bother to reply to my letters about the EU referendum debate. I guess he finds it difficult to try to justify doing something he knows was wrong without admitting he did it under duress.

      As for the BBC, Dave’s Tories seem reluctant to tackle them head on after the nasty naughtie naughty “Freudian slip” name calling which followed the freeze on the licence fee by Jeremy Hunt.

      The quickest way to deal with the BBC’s culture of misinformation would be to stop paying them, and that power lies in our hands.

      Finally, on government borrowing, suggest this government educate people including (especially) Ed Balls on the difference between spending and investment and legislate to make it illegal to borrow to support current account expenditure, apart from emergencies e.g. defence.

      1. lifelogic
        November 12, 2011

        Indeed – as I understand it you only need to pay the licence tax if you watch live TV so just watch it later on the computer and save your licence fee. You can then skip all the boring bits too and pause when the phone rings.

      2. uanime5
        November 12, 2011

        If only there was a rival news channel owned by Rupert Murdoch that could be use to reveal any flaws in the BBC’s reporting. Oh wait there is such a channel but it can’t find any flaws.

      3. Alan Wheatley
        November 12, 2011

        Bob, as to borrowing to support current account expenditure, my recollection is that such a thing was disallowed by Gordon (prudence) Brown at the start of the first Blair government. What could possibly have gone wrong!!!!!!!

      4. Bazman
        November 14, 2011

        What do you propose to do about other channels not controlled by the British state broadcasting this ‘misinformation’. How will you stop them agreeing with the BBC’s take on a news story or event?
        The red herring of the TV licence is just that.

        1. Carps
          December 5, 2011

          I probably speak for most of us here when I say we won’t actually propose anything as we presuppose we must. If other sources happen to agree with the BBC then that’s fine. In matters of politics, however, there is no definitive truth. because one person finds something to be ‘sustainable’ doesn’t preclude alternative viewpoints existing.

          The point is that we can/should be able to pick and choose where we get our information, whether or not we agree with it and ultimately whether or not to pay for it.

          The trouble is that we have no say in what the BBC says or how it presents an argument, because we are held under force of law to pay for it – even if we withdraw our patronage by not watching/listening.

    5. lifelogic
      November 12, 2011

      What about the extra millions of jobs we could have but for all the barmy EU regulations, the expensive green energy, CAP, the mad fishing regulations, The EU fees, the EU employment laws, the restrictions on free trade, the absurd legal judgments (e.g. on gender and insurance) and the rest of the insanity that pours out every day.

      1. Bazman
        November 14, 2011

        Who needs a job that pays less than six quid an hour with no rights? The worker? The state? Not even the employer. Why would any reputable business need such desperadoes. That is what you are proposing. How absurd. You really do need to answer this question even if it is only to yourself. This line you push of no rights minimal wages is indefensible and quite obviously you cannot defend this stance so why continue with these beliefs? No job like this for yourself though. Yes it is personal. Middle class people in cushy jobs pontificating on self sufficiency need taking down.

  5. John Bracewell
    November 12, 2011

    ‘Could it be that spending too more in a wasteful or less productive way, and borrowing more than the country can afford, could be a road to ruin rather than a welcome shot in the arm? ‘
    Surely, we have seen the ultimate example of this truth in Greece recently. A large Public sector with people being paid pensions at early ages, government spending through the roof as witnessed by the enormous debt to GDP ratio, bond rates at ridiculous levels which Greece cannot afford to repay, hence the 50% default on their debt, all these things point the way down the road to ruin and the only shot in the arm Greece has had recently is to effectively borrow more Euros which of course it has no chance of repaying. Why do some of our politicians and BBC interviewers think that spending more, incurring more debt, thereby paying higher interest on that debt is a recipe for anything other than ruination?

    1. backofanenvelope
      November 12, 2011

      I think the Greeks are going to solve our problems for us. They have an unelected Prime Minister who is going to try to make them work harder, work longer and pay more taxes. Why should they? And when he tries to make them do all these things – the proverbial will hit the fan.

  6. Paul Danon
    November 12, 2011

    The BBC’s false line that the government is cutting spending could be a matter for a complaint to the trust.

    1. lifelogic
      November 12, 2011

      Head of Trustees Lord Patton, alas, is very on message with “BBC think” strange he seems to have learned so little in Hong Kong.

      1. lifelogic
        November 12, 2011

        Sorry Lord Patten or rather:-

        Christopher Francis Patten, Baron Patten of Barnes, CH, PC

        I see at least he admits to being PC but then I suppose he would have to be at the BBC.

  7. Rodney Dawkins
    November 12, 2011

    We shouldn’t be naive, and assume that the leftists are stupid. Not all of them are, anyway. What if the ‘ruin’ that they seek is actually deliberate and the excuse they need for a bolshevik style revolution? Many of Labour’s supporters have nothing to lose, the logic is that once everything is turned upside down, they may well end up with more than they had before.

    1. lifelogic
      November 12, 2011

      Are leftists are stupid? Well clearly they are are wrong. I personally think is in their genes at birth (like a cuckoo or a spider) they can be very intelligent and knowledgeable in many ways even quite fun – but they lack a sort of rational, scientific thought process and an understanding of human nature and understanding of economics, compound interest and risk and rewards.

      They have certain religious gut feeling that cannot be moved by rational argument.

      1. Steven Whitfield
        November 13, 2011

        The ‘leftist’ also has an uncanny ability to resist all attempts at rational debate.

        This is a defense mechanism that has evolved because the leftist politician has no proper concept of the rational use of facts, knowledge and history to add substance to their arguments.

        Anthony Blair and David Cameron are prime examples.

        Armed only with a menu of prejudices born of political correctness, they make arbitrary judgements about the world around them – that often confound the generally rational thinking public.
        Whether you are a white man, or a black women, rich or poor all effect the validity of your argument.

        Usually the 1st firewall they put up is to quote some statistic that is usually wrong or misleading. For example ‘3 million jobs will be lost if we left the EU’ etc.

        Then when this firewall is breached the ‘leftist’ will tend to resort to The character attack or the 2nd firewall. It’s not enough for the left winger to disagree with you – they must suggest you are mad or driven by greed, xenophobia or racism.

        The 3rd firewall involves ignoring the debate completely or taking steps to close it by legal or other means. This is only done in emergencies.
        That explains why the coalition was so rattled by the EU referendum – firewalls 1 & 2 had been knocked over by the E petitition and the forcefullness of the debate led by a group of euro sceptic Mp’s.

        The covert nature of left wing activity probably explains why it has been so succesful in infiltrating all the main political parties, the BBC and many other organisations.

      2. Bazman
        November 14, 2011

        It has been noticed that the debate on a decent standard of living for the average person is consistently ignored by many right wingers on this site. The default position being work or starve and work to you drop. The fact that it is impossible to be a peasant living on the land in Britain is also consistently ignored. The default position is that they are given to much and should be happy with less. As if anyone is. That somehow desperate people should be made more desperate in order to help them. More often than not coming from middle class people in cushy lives not there by their own wit or intelligence.

        1. Carps
          December 5, 2011

          Actually, the argument that you persistently and wilfully miss is that by making the country more flexible and competitive greater wealth will be generated for all on aggregate, even if under such a system inequality may increase between individuals.

          By the lights of your logic, we should set a minimum income level for a citizen so all will live at a certain standard.

          If you can demonstrate a society where this has been enacted successfully and where economic growth has been achieved and sustained then please tell me and I’ll dig out my passport.

    2. Steven Whitfield
      November 12, 2011

      I have no doubt that the ‘end game’ is a federal EU superstate that most ordinary Europeans would be hostile to. The right has to stop assuming the leftists are just misinformed or stupid and expose them as the audacious revolutionaries they are.

      For too long the right has underestimated it’s opponents – too much effort has been spent attacking the symptoms of EU federalism – overspending, silly interfering laws, and not the underlying ideology.
      We make jokes about political correctness but it is a deadly serious weapon that is being deployed by the elite to squash resistance and shut down critical debates.

      The Euro is collapsing because this hate filled ideology has been put before reason and logic. I think we have a right to know if David Cameron, Nickolas Clegg or Oliver Leftwing hold marxist sympathies or think it desireable we are more closely integrated with Europe. If they believe that British interests are best served by being at ‘the heart of Europe’ they should come out and say so.

      “ā€œAll nations have a cross to bear, and none more so than Germany with its memories of Nazism. But the British cross is more insidious still. A misplaced sense of superiority, sustained by delusions of grandeur and a tenacious obsession with the last war, is much harder to shake off.ā€

      “We need to be put back in our place”

      To initiate a broader debate perhaps Mr Redwood could read these words to Nick Clegg at PMQ and ask him “are you a marxist revolutionary” ..or “is a man that hates his own country so much a fit and proper person to be deputy PM”.Something of that kind would get the ball rolling.

      Before the federalist goal can be achieved individual nations will need to be broken up and put under more direct centralised control – we are seeing this happening in Greece and Italy. Even if we give the benefit of the doubt and assume the currect economic situation wasn’t engineered completely, it is certain that the elites are using it to further what they ominously describe as ‘the EU project’. Time is running out.

  8. Ralph Musgrave
    November 12, 2011

    Re JRā€™s last paragraph above, neo-Keynsians certainly SHOULDNā€™T advocate ā€œhigh levels of public spendingā€, and Iā€™m not sure that a high proportion of them do. The proportion of GDP taken by public spending is a strictly political question which people should not express a view on when wearing their economist hat.

    What Keynsians DO favour is deficits during a recession. The stimulus from a deficit amounting to say 2% of GDP when public spending takes 50% of GDP is the same as a 2% deficit when public spending is say 20% of GDP.

    Also, re the suggestion in JRā€™s last paragraph that a country needs to borrow to fund a deficit, this isnā€™t true. Both Keynes and Milton Friedman said that a deficit can perfectly well accumulate as extra monetary base rather than extra debt. Indeed, this to a significant extent is how our deficit over the last two years or so has actually accumulated as a result of QE. For Keynes and Friedman see respectively:

    2nd half of 5th para here: http://www.scribd.com/doc/33886843/Keynes-NYT-Dec-31-1933

    p.250 here: http://nb.vse.cz/~BARTONP/mae911/friedman.pdf

    1. stred
      November 12, 2011

      Are you justifying the printing of money to eliminate government deficits, thereby making savers pay for instead?? .

      1. Ralph Musgrave
        November 14, 2011

        Stred, I should have said above that I was referring (as were Keynes and Friedman) to deficits that arise out of an attempt to impart stimulus. The latter are a bit different to the part of the deficit that is ā€œstructuralā€.

        When you say ā€œmaking savers payā€ presumably you are suggesting that excess inflation would arise from money printing. My answer to that is that given a recession, there is scope for more demand, and if that extra demand comes from money printing, the effect will not be inflationary as long as excess demand does not ensue.

        David Hume made this point 250 years ago in his essay ā€œOf Moneyā€

        See para starting ā€œIt is also evidentā€¦ā€ here: http://socserv.mcmaster.ca/~econ/ugcm/3ll3/hume/money.txt

    2. forthurst
      November 12, 2011

      “The proportion of GDP taken by public spending is a strictly political question which people should not express a view on when wearing their economist hat.”

      How are you proposing to pay for imports? Borrow?

  9. Peter van Leeuwen
    November 12, 2011

    Obviously ā€œnowā€ (euro troubles, EU-FTT, new budget etc.) is not such a bad time for at least starting to talk with EU partners about some a la carte arrangement for the UK. All you have to do is agree with your government partner first. The opportunity will still be there in the coming years though.

    Anti EUROpean arguments are also easy to refute, as demomstrated in this week BBC’s ā€œthe record europeā€ in which Mr. Watson wipes the floor with Mr. Farage, who, for the occasion, metamorphosed into a damp rag. The most sensible arguments of course coming from the Swedes, long live the Swedes.

    1. ian wragg
      November 12, 2011

      Are you a member of the EUSSR Commission?

    2. Tad Davison
      November 12, 2011

      I wish I had seen it Peter. Following your post, I went straight to the Parliamentary channel website, but could only get the last show, which was broadcast on the 5th November 2011. None of the participants you mentioned were on that particular programme.

      I am intrigued. You’ll have to enlighten us about these strong arguments the pro-Europeans seem so resolute about, so we can have a proper debate.

      They surely can’t refute our claims bout democracy, because countries are having leaders parachuted-in, rather than elected by the people.

      They can’t surely refute our condemnation of the EU’s poor financial management, because the EU is in a state of predictable melt-down.

      They can’t surely refute our criticism that the EU isn’t creating jobs, because as a consequence of profligacy and massive borrowing, people are losing theirs all over the place.

      They can’t surely refute our criticism of the EU’s agricultural or fishing policies, because both have proven to be unworkable and prohibitively expensive, and in the case of the latter, an environmental disaster!

      They can’t surely refute our criticism about pro-Europeans not telling the truth, because the pro-Europeans have consistently lied to us in the UK, ever since we had a referendum on Britain belonging to a trading bloc, and no more!

      And I doubt if they’d refute our warnings about a break-down of peace in Europe, because Frau Merkel herself has warned that widespread civil unrest might follow in the wake of the austerity measures now being centrally-imposed.

      There doesn’t seem to be an awful lot left for the pro-Europeans to refute!

      Tad Davison

      Cambridge

      1. lifelogic
        November 13, 2011

        It is there now on the BBC site now issue of 12/11.

        Nigel Fararge clearly was the only one talking sense as far as I could see.

      2. Peter van Leeuwen
        November 13, 2011

        @Tad Davison: 5+7=12 November, you’re not too late Tad.
        You’re welcome to your own insights and opinions, let me just take one issue: “killing democracy”
        Of course Nigel Farage is a a very nice man and an excellent debater, but:
        This representative of the Zero-MP-Party doesn’t even exist outside the proportional representation of EU democracy. A soap-box in Hyde park, that is as much as UK democracy would grant Nigel Farage.
        Whereas your non-elected, lifelong hereditary Queen may in exceptional circumstances exercise discretion in appointing a prime-minister, who then still has to be pushed through a by-election of a safe-seat, as happened in 1963 (Douglas Home), e.g. Italy has a directly elected president which exercises discretion in exceptional circumstances by appointing Mr. Monti as senator and gives him a chance to form a government. As a by-election in a safe seat is unrelated to country-wide popular support, in terms of democracy it is obviously 1-0 to Italy. In all cases (Italy, Greece, UK) a government derives its democratic mandate from a majority in parliament, in proportional democracies that implies a majority of popular support at the ballot box. In the UK this majority popular support is only by chance the case this time (due to coalition), so in terms of democracy it is more likely 2-0 for Italy.

        1. Winston Smith
          November 14, 2011

          Did I just read that correctly? An elected leader ,facing 3 criminal trials, chooses an EU bureaucrat (who then selects some of his mates) to run the country, and then resigns. You believe that is democracy? Of course, the position of the Queen does not stand well against a theoretical examination of democracy. However, you must know that it is tied deeply to the historical and cultural identity and traditions of this nation.

          When I read you posts I detect an increasing irritation at the criticisms of the EU on this blog. I guess it could be your misinterpretation of these criticisms as attacks on Europeans. If it is, instead, due to your faith in the EU project, please offer some counter arguments to the points made.

          1. Peter van Leeuwen
            November 14, 2011

            @Winston Smith: If you believe that President Giorgio Napolitano faces 3 criminal trials and will now resign, you don’t seem particularly well informed Winston. Should I engage in discussion with people who are this well informed?
            I expect criticism about the EU in this blog, and some are quite worthwhile, why else would I read this blog? If I take an occasional swipe at the amiable Nigel Farage, that doesn’t imply irritation, just a bit of entertainment.

  10. English Pensioner
    November 12, 2011

    I read the other day that some economists have suggested that the break up of the Euro could be to our advantage. The currencies in France and Germany would probably rise in value, making their goods less competitive and thus helping our industry, whilst the currency in countries like Spain, and others from whom we buy food would fall, making their goods cheaper. It all seemed quite logical to me, but we rarely hear other than the Treasury view that any break-up of the Euro will be a disaster.

    1. uanime5
      November 12, 2011

      Unfortunately if the currency falls in Spain this will make our good less competitive. Also if the currencies of France and Germany rise then they’ll have much more purchasing power. The break-up of the Euro isn’t going to be entirely for the benefit of the UK.

      1. stred
        November 12, 2011

        To Euan 5..So the Spanish can sell more to us and we can sell more to the Germans. This is the whole point of a free market. Why do some educated people find this hard to understand?

  11. John Nelson
    November 12, 2011

    How can you make these facts and the truth of the situation available to a wider audience? I find this one side of the coin propaganda most disturbing.

  12. James Reade
    November 12, 2011

    How many times do I have to make the same point on here that the actual fiscal balance does not dictate fiscal stance, nor its impact on the economy?

    You believe that the exchange rate is influenced by expectations six months ahead of something that has not even been thought about, yet expectations don’t impact anything else, like investment and consumption?

    Get real, John.

    1. James Reade
      November 12, 2011

      To carry on, somewhat pointlessly since John now simply ignores me because I disagree with him, you’re the one peddling fibs here John, and big time.

      Where shall we start, other than the fib you present (always) about the fiscal stance. As said, expectations of the public based on government announcements must be powerful in enacting real change in the economy – you, yourself know this since you assert continually (without evidence again) that the weak pound is all due to QE. So the fiscal stance can be tight even if there is still a large deficit because we are in a depressed economy with millions out of work.

      Actually, every bit of misleading stuff you write in this article is based on your complete misunderstanding of the fiscal situation. In a deep recession, running a deficit is not stimulatory. If you go back to those old Economics Principles textbooks you must have read, you’ll find there’s something called “automatic stabilisers”, i.e. things that make the budget deficit worse in a recession, and better in boom times, meaning that when we have 2.5 million unemployed that’s a lot fewer people paying income tax, buying things so paying VAT, a lot fewer firms earning profits hence paying corporation tax, and a lot more people claiming benefits as they are out of work.

      That is the extent of the budget deficit right now, it’s not some Keynesian stimulus, and even if it was the continual talk of austerity and cuts dampens that out through the expectations channel that you continually laud when it suits you, and forget when it doesn’t.

      I’m fully aware you’ll not bother to reply to this as well John, but it’s my duty to point out where time and time again, repeatedly, continually, you mislead. You present this idea that you actually know a thing or two about economics, when the reality is you use it to back up your prior prejudices. Until that changes, I’ll be a happy carper on here.

      Reply: Try understanding the difference between the cyclical and the structural deficit – the present government is trying to cut the structural deficit, which is still large. The UK economy this year has not been in recession.

      1. James Reade
        November 14, 2011

        Priceless – you’re telling me to make the distinction you’re failing to make!! This is what I’ve been telling you to do throughout John. You’ve been the one telling the fibs by failing to make this distinction. Absolutely priceless. Now that you have made it, will you also accept that the fiscal stance is not, then, the fiscal balance? Didn’t think so.

        “The UK economy this year has not been in recession” – what, by some statistical definition, based on some number that supposedly sums up the output of every productive activity in the UK? Even if we trust that number, it’s grown a whopping 0.5% or so over the year, and unemployment certainly is not down by any measure.

        1. Winston Smith
          November 14, 2011

          I’ve read your posts and its not clear what points you are making and what policies you are advocating. All I read is rants against JR because you don’t agree with him. If you are participating in a debate, you cannot win people over by countering an opponent, who has presented a reasoned approach with supported evidence, with the response “liar”. No matter how many times you repeat it.

          1. James Reade
            November 15, 2011

            Please go back and link up to exactly where I’ve called John a liar. I’ve said that the way he uses arguments borders on the deceptive, that’s true.

            I would have thought the points I’m making are very clear indeed – that John’s use of economics is disingenuous. He doesn’t use it to learn more about the world around us, he uses it to back up his prior prejudice, which is dangerous.

            You may not like it because you agree with John, but the least you can do is start engaging with my points. Not you or John or anybody else has managed yet to actually bother to engage with them.

            It strongly suggests to me that you, too, use economics to back up your prior prejudices, rather than to learn about the world and try and improve the situation.

    2. stred
      November 12, 2011

      Exchange rates and investments have to be guessed. Consumption follows. I am not an academic economist but can see this. Do you have to research the obvious? How many Treasury officials can’t understand human nature?

      1. James Reade
        November 14, 2011

        Do you have to research the obvious? Er, yes. It may be obvious to you before you even begin to look at actual, genuine, economic data (have you?). Once you do that, you may find it’s a little bit more complicated than you previously thought.

        And even if it’s obvious to you, it probably isn’t to others, and so yes, you do have to do the research to convince those that don’t agree with you.

        As I keep on saying on here, if you all produced the evidence, the research by more impartial minds (than Tory “thinktanks”), then we would start getting somewhere.

        But all you ever do is assert things are obvious when they are anything but. Then, as John’s adeptly shown, subtly switch your position when it becomes untenable and hope nobody notices…

  13. waramess
    November 12, 2011

    It is all about vested interests; so many are now dependent on Keynesian ideas for their daily bread and they are able to influence ministers from both the Treasury or from the Bank of England.

    So many vested interests in the Foreign office and in the Treasury keen to impose their pro EU visions upon ministers which will provide them with the opportunity of highly paid jobs in the future.

    No vested interests on the right however except to retain their party’s support at the next election. They debate honestly but without fevour because being financed by a party of Keynesians and Europhiles they need constantly to layer their intense beliefs with caution, lest sanctions that will diminish yet further their position within the party, are imposed.

    I am no UKIP supporter but this is certainly the view I get: rock the boat by all means but not too hard, whilst the Keynesians and the Europhiles are happy to trade their dishonest arguments with vigour in order to win the battle.

    There is only one way forward and that is for the Eurosceptics and those to the right of the Conservative party to break away and start a new movement. Remember, fortune favours the brave; not always, but a movement seen by the electorate as having credibility and substance, which UKIP I’m afraid has not, would succeed, and more importantly be in a position to argue its position robustly and without fear from the party machinery.

    As the mess created by the Keynesians and the Europhiles comes to its bitter end with both Sovereigns and Banks falling there will be only one alternative, so lets hope it does not come too late.

    1. James Reade
      November 12, 2011

      It’s all about the Keynesians isn’t it? Vested interests would never have existed had this Keynes chap never came along, right?

      Vested interests existed before Keynes, still do, and always will. To paint any other idea is to present a fib, to use John’s title.

      Blaming “Keynesianism” for everything you don’t agree with that is left of centre is pretty weak arguing at best. To suggest there are no vested interests on the right is hilarious beyond words. Take off the blue tinted glasses. The vested interests on the right are the owners of companies, regulated or otherwise, those being taxed at 50%, and so on.

      Vested interests are everywhere and the right response is to ask how best policy can be designed to limit their influence from both sides of the spectrum. It isn’t to laughably claim it’s all a “Keynesianist” thing, or a leftist thing.

  14. Rebecca Hanson
    November 12, 2011

    “Neo Keynsians love high levels of public spending and borrowing, and say they stimulate the economy.”

    Well there’s a bit more to it than that isn’t there John?

    Would you agree that Keynsian economics led to the view that it is better to have people in subsidised employment where they are doing constructive things for this country, developing their skills and where they remain part of a productive working culture rather than to pay them to be on the dole?

    Now, of course, whether or not this line of thinking leads to high levels of public spending and borrowing depends on the extent to which it is used, the quality of the political oversight of it and the way in which it is balanced against other theories.

    Obviously by the 70s it had run completely and disastrously out of control and in that time and context Keynsian thinking needed to be strongly attacked. But that does not mean that it is always wiser or more economically efficient to immediately shut down any business which is struggling to be profitable in the short term not that it is wise to put all contracts out to the lowest bid rather than to properly value established skills bases.

    Don’t create for yourself a Neo Keynsian straw man John. In the 70s we were stuck in a rut because of the strength of the unions. That’s not the case now. Well at least it wasn’t – but of course this government seems to be determined to change that by systematically lying about and spinning reality and refusing to negotiate in ways which understand reality.

    Reply: I think Keynes himself gave us many important insights . I helped Maragret Thatcher write a speech on Unemployment which began with praise for some Keynes insights. The objects of my attack are the punk Keynsians who seem to think whatever your current level of public spending and borrowing more of both is always a stimulus. This is not what Keynes himself wrote, and he was right.

    1. Steven Whitfield
      November 12, 2011

      Rebecca,

      It doesn’t matter if it’s 70’s Union power, or special interest groups, or politicians making arbitrary definitions about ‘poverty’ , they are all means to justify unaffordable levels of public spending. The result is the same – national bankruptcy.

      Total public spending as a proportion of GDP is creeping up to the 45 – 50% of the 1970’s – on the basis of a much larger economy. Only during times of warfare and when we had to be bailed out by the IMF (in 1976) has it been higher (48%). Dennis Healey, following Neo Keynesian thinking was a disaster for Britain – but we seem slow to learn from past mistakes.

      Currently the amount of waste and non-productive jobs is on a different scale to that seen in the 1970’s – we have shared the proceeds of growth with the non -productive sector and it has led us down a path to destruction. If the Neo Keynsians were right, we should be doing much better than we are.

      1. James Reade
        November 12, 2011

        So much claim, opinion, no facts. No evidence.

        This, of course, is the biggest problem with an observational discipline line economics. You can always, with some effort, put the spin you want on any chain of events.

        As I keep mentioning on here (but am ignored by John – perhaps I’m a punk Keynesian because I disagree with him), current levels of spending are not unaffordable unless you bring some other metric or prior prejudice into the equation.

        What I don’t understand is why vested interests on the part of labour (left) are an unmitigated bad thing, yet vested interests of those that employ labour (right) getting their way is an unmitigated good thing. It’s all opinion, assertion, with no supporting facts though, sadly.

        1. APL
          November 13, 2011

          James Reade: “What I donā€™t understand is why vested interests on the part of labour (left) are an unmitigated bad thing, ”

          Could it be because the vested interests on the left tend to graduate towards extreme totalitarianism.

          I don’t suppose that a socialist starts out with a blue print for the gulag in his or her pocket. But when things don’t work out according to their existing plan, the urge to whip those stubborn lazy workers into line, is an all too alluring response. Leading to ever more authoritarian measures, because the plan isn’t wrong, it’s the workers behavior that needs to be modified.

          1. James Reade
            November 14, 2011

            Oh, really? All on the left are just on a slippery slope to the Gulag? Can you then explain why all on the right aren’t on a slippery slope to Naziism, if we’re going for crude generalisations that have not a shred of logic nor evidence to support then?

            Vested interests on either side are a bad thing, and the solution is not to say that those on the other side are worse but instead to think about how we might design a political system that could nullify their influence.

          2. APL
            November 14, 2011

            James Reade: “Can you then explain why all on the right arenā€™t on a slippery slope to Naziism, ”

            Naziism == National SOCIALISM

            A fact not often mentioned in the Guardian nor much dwelt on by the BBC.

            But yes, there are totalitarians at both extremes, which is why I prefer the middle – Small State, regardless of its political complexion (in conventional parlance, Right or Left) , with a few well defined and strictly limited powers and functions. Ideally it would not spend more than 10% of GDP.

          3. James Reade
            November 15, 2011

            Hahahaha, I love how those on the right try and disown themselves from Naziism by trying to claim it was leftist because of the word Socialist in the name National Socialist. Have you studied history much, and the Nazi regime for that matter, and thought about how left-wing it was? You may be surprised to find it wasn’t particularly leftie – amongst other things it railed against socialism in its more classic form in the communist parties popular at the time.

            Probably good to get beyond the contradition in the name alone – nationalist parties by and large are not socialist.

            I’m not sure the middle means a small state necessarily. I’m not entirely sure what it means exactly, but I’m also intrigued as to how you get to 10%. Are you privatising the NHS to get there (I’m not using that as a brick to beat you with – I’m just wondering how you arrive at 10% that’s all)?

          4. APL
            November 15, 2011

            James Reade: “You may be surprised to find it wasnā€™t particularly leftie ”

            Oh sure, it was just one strand of Totalitarianism. If you are in the Gulag or Concentration camp, does it really make a huge difference to you that you were put there by an extreme left or extreme right regime?

            The extreme left, extreme right dichotomy is an irrelevance. Both are totalitarian, both repress the individual and elevate the party above everything, both systems cultivate the cult of the leader, viz Stalin, Maio, Hitler, Che Guevara et al.

            In most respects they more resemble each other than differ, even in economics they both adopt a command economic model.

            There is no possibility of free markets in either a Communist nor Fascist regime, because a free market demands people making decisions of their own free volition, clearly that cannot happen under a totalitarian regime.

            James Reade: ” .. amongst other things it railed against socialism in its more classic form in the communist parties popular at the time.”

            Well of course they did, they were competing for power against the established communist groups, which prewar were quite possibly financed at least in part by Soviet Russia. The Soviets were internationalist the Nazis Nationalists. It didn’t stop Hitler treating with Stalin prior to the Barbarossa offensive.

            James Reade: “.. nationalist parties by and large are not socialist.”

            Which is a convenient assertion from a leftie, but an empty assertion is all that it is. If I might paraphrase you, Hahahaha, I love how those on the left try and disown themselves from Naziism by trying to claim its form of repression and totalitarianism is different from the Communist form of repression and totalitarianism … .

            By the way, how would you categorize the Scottish Nationalist parties? None of them are remotely conservative.

          5. James Reade
            November 18, 2011

            By nationalist I mean in the more traditional sense of the BNP, National Front, etc., rather than the anomaly that would appear to be the SNP.

            I’m glad you agree that totalitarian on either side is bad, left or right. My essential point was this – either you previously, or someone else made the point that somehow anything towards the left was bad, a slippery slope towards totalitarianism, but nothing on the right was. It seems we agree there!

            On Hitler treating Stalin well while it suited him – I think you know as well as anyone that that relationship wasn’t based on ideology in the slightest, just expediency.

          6. APL
            November 19, 2011

            James Reade: “By nationalist I mean in the more traditional sense of the BNP, National Front, etc.,”

            Well you would wouldn’t you, its a convenient assertion for lefties.

            But it remains the case that the SNP are Scots Nationalists who are so far as I can make out Socialist. Plaid Cymru are Welsh Nationalists and I doubt anyone would contradict me, Socialist to0. I don’t believe many would claim Sinn Fein are to the right politically, definitely Nationalist and its military wing couldn’t be called Conservative or of the right.

            The three domestic nationalist movements cited refute your assertion that largely all Nationalist movements are Right wing.

            So that leaves you with two names, actually I think one name because the National Front has morphed into the BNP.

            So, the score is three nationalist Socialist parties, one Nationalist not obviously Socialist party.

            Your assertion ‘.. nationalist parties by and large are not socialist.ā€ is thereby adequately refuted.

          7. James Reade
            November 22, 2011

            Adequately refuted, at least in your mind, which is good. We could, of course, go on talking past each other. If you do think nationalists are lefty, I’ll leave you thinking that, based on your exhaustive sample (I haven’t got time to go listing all the various right wing nationalist groups the world over). As we’ve established, everyone on all sides wants to disassociate themselves from the Nazis. The one thing I’ll leave you with on this point is this: Which would you describe as the more nationalistic vessel, the Daily Mail, or the Guardian. Which side of the political spectrum would you put them on? As I said, I wouldn’t bother replying to that point – you’re not going to convince me, and I’m not going to convince you either.

            I can’t even remember what the point is any more…

    2. Rebecca Hanson
      November 12, 2011

      Many thanks for this reply John.

      I wonder if the rally which went past the Conservative party conference looked like a punk Keynsian rally? I recognise some of the speeches may have sounded that way, but down there on the streets I spoke to may people who were keen to balance the books but were concerned that the figures (or in some cases the total lack of figures) the government were presenting were not going to produce this end and were trying to protest that there are better ways of achieving those goals which will not have so many of the negative economic impacts this government doesn’t appear to see.

      It’s important this government try ties to build bridges with those protesters who are presenting concerns which are financially well grounded and works hard to command their respect by engaging them with intelligent and convincing arguments. I am concerned that if it appears either you or this government look like are trying to put them in a ‘punk Keynsian box’ further damage will be done to the relationship between this government and the people who will have to deal with the consequences of these cuts.

      Cuts were not pushed through in the 80s with spin and superficial arguments. They were pushed through with extremely hard work on the part of intelligent individuals and negotiators who understood and could interact coherently with the concerns and arguments presented to them.

  15. John Maynard
    November 12, 2011

    “Why does the BBC insist on suppressing the numbers” ?

    Probably because they regard the Balls-line, as “the settled science”.
    Like the hefty majority of our “media”.

  16. George Stewart
    November 12, 2011

    Dear John;

    You are indeed a Blessing to the People of Britain and to the Conservative Party though I am sure some at CCHQ may disagree.

    Thank you for putting this so succinctly and clearly. Does anyone in the Party pay any attention?

    If I may make one addition to the EU trade comment. If The EU decided to impose tariffs on UK imports, disregarding WTO, that would simply mean that domestic UK producers would sell more in the UK as there would be reciprocity on tariffs coming to the UK! Instead of buying a BMW built in Munich, you will buy a Land Rover built in Solihull being better value.

    So actually, as I have told others, in theory we would be better off in a trade war with the EU as they have more to lose than we do.

    Also, why then does it appear to be government policy to remain so intwined with the EU trade and otherwise when they have so many problems?

    The UK needs economic diversification away from the EU towards growing regions!!

    This bunch wants us locked into a declining region, smell the roses, the EU is in decline economically!

    1. James Reade
      November 15, 2011

      In theory we would be better off in a trade war with the EU than inside it?! No. Just no.

      Any trade war involving any tariffs involves a move away from the most efficient, lowest cost producer towards inefficient domestic producers. You’d pay more for your Land Rover but it’s a substandard product. Why shouldn’t instead we allow Germany to produce cars (they seem to do a good job about it) and get on with finding other things we do better without resorting to government protectionist measures.

      And actually, I’m not entirely sure you understand what you mean by a trade war. The EU would not put in place some kind of export tariff to make cars produced in the UK cheaper, it would be the UK government doing that.

      Reply: Your assertions get more and more absurd. Land Rover produce a great range of vehicles which are highly competitive with German vehicles.

      1. James Reade
        November 18, 2011

        Ah, you reply to this one, but not all the numerous other ones where I ask questions.

        As an assertion, the suggestion that German cars are better than British ones is a preference, so I don’t think you can really call it absurd. If the majority share that preference, than as absurd as you may think it, it’s problematic for the producers of British cars.

  17. NickW
    November 12, 2011

    The EU and its defendants are behaving exactly like a poisonous spouse determined to keep the other half chained to a destructive and unpleasant marriage; paying all the bills, doing all the house work or whatever. You can write the script for yourself, and watch Barrosso, Rompuy, Clegg, Cameron, or whoever trotting out all the cliches.

    “If you leave me you’ll always be a failure”

    “If you leave me you’ll never be happy”.

    “If you leave me I’ll take all your money and destroy you”.

    When you hear someone using these phrases, it means that if you don’t leave them you will be doomed to spending the rest of your life in an abusive and exploitative relationship, which will get worse and worse with time.

    What exactly does Merkel mean when she threatens Europe with war if the Euro breaks up?

    Is she saying that as a threat, now that German dominance of Europe has been achieved, that war will result if anyone tries to change that state of affairs?

    I do not believe for one moment that the German people are behind her in that.

    1. Bob
      November 12, 2011

      I thought Germany had been disarmed.
      Don’t tell me they’ve rearmed?

    2. forthurst
      November 12, 2011

      “What exactly does Merkel mean when she threatens Europe with war if the Euro breaks up?”

      She is a Manchurian candidate groomed by the USSR. People can’t necessarily slough off the brainwashing they received in youth, even if they would be able to reject it logically. For instance, I find it hard to accept that England is now (poor and degraded-ed) whose any claim to be more than a source of mercenaries, free at the point of use, for the benefit of (neocons-ed) is preposterous.

  18. George Stewart
    November 12, 2011

    John;

    A couple more questions.

    1.) How can this Government justify sending any money to the IMF to prop up Germany, because the truth of the matter is that Germany IS the Euro?

    2.) I support the welfare reforms of IDS but frankly, how can this Government with a straight face support reducing benefits and then hand the money to the EU? In my mind and many others in the North the two are linked.

    3.) How can this Government support democracy with the Arab Spring yet support an EU that has shown itself this last week as being non democratic with persons in power who are neither accountable to nor have been elected by the people?

    Reply: Good questions. That is why I voted against IMF money.

  19. Optingout
    November 12, 2011

    The biggest lies are the ones UK politicians tell us. I’m still waiting for you to make good on your promise prior to the election on that matter.

    1. How much debt does the UK have? Pensions included. Present value. Still waiting. I’ll give you a hint. About 7,000 bn.

    2. Growth will fix it.

    No it won’t. The government doesn’t earn money. If there is growth, that is the workers money. When you say growth, you really mean growth in tax revenues, but politicians never say that.

    It’s the same as taxes. When have you ever heard a politician say thank you to the people who pay lots of tax?

    Well, they have decided not to be milked any more. The cow isn’t playing ball. So tax revenues are going down.

    Reply: You should stop lying about me. The government has published figures showing around 2.4tn of debt including banks and PFI, and Ā£1.3 tn of unfunded public sector pension. This is in line with the figures I puboished before the election as estimates, when we were told government debt was under Ā£1 tn. Please look back at my past postings on this. You could also ascribe a liability value to the basic state retirement pension, but this was never a funded scheme and was always pay as you go – and even you do not ascribe a liability value to future education or health spending.

  20. Oldrightie
    November 12, 2011

    I suggest that the “we need Europe” mantra is a softening up process prior to our being given a “Technocrat” PM who will take us meekly into the euro. Could be Clegg or even Mandleson! There again, maybe he’s already in situ!

  21. NickW
    November 12, 2011

    Here is an online petition.

    “We demand a public enquiry into left wing bias at the BBC”

    https://submissions.epetitions.direct.gov.uk/petitions/265

    It is not my petition, but I agree with it; have signed it, and hope that others will sign it and publicise it.

    1. Tad Davison
      November 12, 2011

      Reddit, dunnit

      Tad Davison

      Cambridge

  22. Atlas Shrugged
    November 12, 2011

    It is at least a little heartening to see the Eurosceptic MPs in action in the Conservative Party. After the disaster of Edward Heath and his slavish desire to get us into a cartel of producers and to turn our back on the Commonwealth (who also happen to have the raw materials), then there is a glimmer of hope.

    The real problem is to get ‘Call me Dave’ to live upto his promises.

    Since Rememberance Sunday is nearly upon us it is also salutary to remember all those who died in Two World Wars to stop us being enslaved by Europe. And there were many from the Commonwealth who died – which makes Heath’s actions even more reprehensible.

    1. Tad Davison
      November 12, 2011

      Amen to both points!

      Tad Davison

      Cambridge

    2. APL
      November 15, 2011

      Atlas Shrugged: “The real problem is to get ā€˜Call me Daveā€™ to live upto his promises.”

      You have no chance, the man makes a virtue out of deception. He just isn’t as good at it as Blair.

      Did you see him at the European Summit the other day, Blairesque in his shirt sleeves, what a prat!

      The best thing the Tory party could do now is get rid of Cameron.

  23. Disaffected
    November 12, 2011

    The real question John is why the Coalition are happy to allow the inaccurate lines to be spun? It means they will be forced to show they are not cutting as much and therefore continue with more borrowing. It is contrary to what they are saying they were going to do or are doing- why would they do this?

    It strikes me the Coalition are continuing with the same policies as the previous Labour Government. Are the ministers not aware what their civil servants are doing, do they just enjoy the kudos of their position without upsetting the apple cart of the civil service?

    Todays announcement of more military personnel being made redundant shows me that the UK will not be able to defend itself or its interests- more reliance on the EU coming together??

    I have to say that the change of Government 18months ago has been a complete waste of time. A lot of hot air and spin but no real substantive changes. It must be becoming clear to the newly elected Conservative MPs that unless they have a change of leadership they will be out of a job in 3 years. I suggest you and others start lobbying for a change in leader before it is too late for your party and the country is consumed by the EU dictatorship. Coalition definitely does not work.

    1. Alan Wheatley
      November 12, 2011

      If the sentiments oft expressed by correspondents to this blog were repeated throughout the country, after the next general election the Conservative’s coalition partner could be UKIP.

  24. John Bowman
    November 12, 2011

    Public Sector spending and economic stimulation: this is equivalent to topping up the level of bathwater by taking a cup and scooping water from one end of the bath and emptying it into the other end, spilling some on the floor as you do so.

  25. Neil Craig
    November 12, 2011

    ” Why does the BBC insist on suppressing the true numbers, so there can be no debate about what is going on as opposed to what is being spun? ”

    One answer would be because the BBC, while pretending to be a news disseminator, is actually a wholly corrupt, propaganda orgasnisation devoted to telling absolutely any lie and censoring absolutely any fact to promote Big State fascism.

    If there is another possible answer no doubt somebody here will be able to give it. I’m sure somebody at the BBC monotors this blog to see what is being said so at the very least they will be able to – IF there is any other possible answer.

    1. uanime5
      November 12, 2011

      If only we had another form of media, such as newspapers or another news channel, to expose the BBC. Oh wait we have both of these yet they’ve never been able to find any evidence of the things you claim. I wonder why.

      1. Alan Wheatley
        November 12, 2011

        There is always Russia Today – Freeview Channel 85.

        1. Neil Craig
          November 13, 2011

          I like Russia Today too, but it is hardly much competition for the BBC. C4 is also state funded and ITN heavily regulated so that leaves the news coverage by Channel 5 šŸ™‚

          Some of the papers are a bit better – see any mention on the BBC of the Daily Mail, accompanied by the waving of crucifixes. When it looked like Murdoch was going to expand Sky the main news on the BBC led off, daily, with a story about hacking which omitted any mention of the fact that such hacking was done by (other parts-ed) of the press too, including the sainted Guardian. That is how nearly monopoly media control is maintained.

    2. Tad Davison
      November 12, 2011

      Neil, I sincerely hope so! Which is why I always use my real name and location.

      Tad Davison

      Cambridge

  26. Kenneth
    November 12, 2011

    The BBC cannot hide from this as the truth can be arrived at on a calculator.

    I am a great believer in the wisdom of the People and I cherish democracy. However, if we are given the wrong information then democracy is perverted. In fact, it is not democracy at all, it is a cheat.

    Of course Helen Boaden and Mark Thompson should be sacked for this. However who will sack them?

  27. Steven Whitfield
    November 12, 2011

    My understanding is that power from the EU commision is implemented in a ratchet like fashion. It is embedded in the Acquis Commmunautaire, that once powers have been handed to the centre they can never be given back.

    Mr Redwood – is it really possible to renegotiate our position as Mr Hague seems to believe ?

    Reply: Yes, we could negotiate a new deal if we have the political will to do so. Mr Hague, of course, does not agree with me that we need to do this now, and that we need a referendum.

    1. Steven Whitfield
      November 15, 2011

      Thanks for your reply Mr Redwood. It would be nice to think that David Cameron’s recent speech signalled a change of policy – a last minute recognition that he needs to listen to a broader range of views in his party.

      But I fear (yet again) there won’t be any action to back up his words. It just seems like every word he speaks has been delivered by a focus group or his media advisor.

      I’m not sure what Mr Hague believes in anymore . I suspect he is suffering from a condition called Portillo-ism. I have observed this distressing (to tradional Conservative’s) condition amongst several Conservative Mp’s and made a record of the main symptoms :-

      – Wearing unsuitably clothing such as pink shirts, in a vain attempt to appear fresh and modern . I fear Mr Hague appearing in public wearing a baseball cap and drinking from a pineapple was an indicator of the early onset of this condition.

      – Before onset of the condition, the patient seems to suffer from a period characterised by a sense of defeatism. They eventually emerge from their inner turmoil , seemingly renewed with a a ‘if you can’t beat em, join em spirit’.

      – replacement of all higher principle with one – popularity and career above all else.

      – A suddenly and un-characteristic willingness to endorse only Liberal leaning views.

      – Extreme sensitivity to any action or thought that might be considered ‘right wing’ ,career damaging or unacceptable to Polly Toynbee.

      – Agitation when questioned about previously held beliefs. They are usually casually brushed aside, side stepped or denied completely

      Reply: Mr Hague has always believed in staying in the EU, and would not rule out joining the Euro in 1997, so I see nothing very different in his approach as Foreign Secretary.

      1. Steven Whitfield
        November 17, 2011

        I think Mr Hague made it very clear when he called for a ‘last chance to save the pound day’ and when he described the Euro as ‘the ERM you can’t get out of’ his thoughts on the EURO currency.

        Now when a rationale voice on European affairs is needed to oppose concensus politics more than ever , Hague seems to have been cowed into submission. I think he has let himself and his country down.

        I haven’t yet heard a satisfactory explanation of why, if Mr Hague thinks the EURO is so bad for Britain, why should he be in favour of Germany, Greece and Spain staying in at all costs ?. Why is the EURO good for all these diverse nations but singularly not for Britain ?

        Mr Redwood, I except what you say but I feel many will believe that Mr Hague has become a prisoner of the back-slapping and shared liberal world view mindset of Messrs Clegg and Cameron.

        I think Stewart Jackson, the parliamentary secretary made the point very well in his speech on the referendum debate.

        “The Foreign Secretary once described the EU as a ‘burning building with no exits’,” he said, “But now the foreign secretary is putting mortice locks on the windows and the doors.

        Reply: Mr Hague in 1997 stood for leader ona ticket which said we might join the Euro later. He has always said we must belong to the EU.

  28. RDM
    November 12, 2011

    Well Said! I totally agree!

    I would go farther; If the BBC & co are not willing to be balanced, based on facts, surely its time to cut the BBC down to size? Surely their existence is predicated on providing News that is balanced, based on facts, and comments from all sides?

    Just think how much we would gain from cutting the BBC; Freeing up the Bandwidth, reduced TV licence, and more focus on the development of a cheaper, and better, alternative! Internet based TV and live feeds direct to our TV’s!

    1. Tad Davison
      November 12, 2011

      You should have seen one BBC news reader recently, sucking up to Maguire from the Daily Mirror as if besotted with him. It didn’t matter a toss, that what Maguire was spouting was absolute biased, pro-EU bilge – that went totally unchallenged!

      Tad Davison

      Cambridge

  29. nicol sinclair
    November 12, 2011

    “We will be told that our exports to the EU are crucial to our economy,”

    Yes, & this tired, old chestnut was repeated (yet) again on Any Questions tonight Nepal time – last night your time. I forget who was the person responsible for this “Terminal Inexactitude” (Churchill).

    Unfortunately we are constantly served up with these half truths and lies.

    Glad that you were to attend the Remembrance Day Services. I, too, would be had there been anywhere to attend…

  30. nicol sinclair
    November 12, 2011

    “Why does the BBC insist on suppressing the true numbers, so there can be no debate about what is going on as opposed to what is being spun?”

    Because the BBC has become so far left as to be out of sight. Time for a root & branch clear out of senior managers/producers…

    1. uanime5
      November 12, 2011

      Sky news is also suppressing this information. Should they be purged as well?

      1. Tad Davison
        November 12, 2011

        We can get Sky News for free. The BBC, we’re forced to pay for by law. Both need to up their game, but we have to look at vested interests. With the latter, it’s the persuance of a warped political left-wing ideology, that doesn’t bear close srutiny. Both singularly fail to notice the massive majority of public opinion, and their antithesis towards the EU. They BBC regard us as eccentric, and somehow lunatic-fringe, yet we have consistently been proven right. There’s nowt so queer as folk, but none so dangerous as those who use their unassailable positions to push their own agendas, and think we won’t notice.

        Tad Davison

        Cambridge

  31. Martin
    November 12, 2011

    If the country/government really wants/is moving to more far away trade then guess what we need more of? Airports.

    No treaties need re-negotiating, just the Nimbys to sort out!

  32. Pick a winner?
    November 12, 2011

    I suppose it does make sense to borrow at say 6% if you can invest it such that it gives a return of say 10%. The problem is how to choose from many possibilities that ‘wise’ investment… Not something that governments are terribly good at.

    The economist F. Hayek gives a good justification for governments not being the ones to make such choices.

  33. Richard
    November 12, 2011

    Lord Keynes, who is much misrepresented and misused by those on the political left, wanted Governments to smooth the peaks and troughs of the trade cycle by building up their reserves in the boom years and then use that money to stimulate the economy as the economy became depressed, “prime the pump” was his famous phrase.
    He suggested a schemes of public works, building of houses, schools, libraries, bridges, roads, railways, new towns etc
    He never suggested permanently high spending paid for by high borrowing to fund a non productive, non asset creating salariat which has led to the need for high general taxation of the poplulation which further depress growth.

    1. waramess
      November 12, 2011

      Lord Keynee was obsessed by the notion that the Government had the capacity to do a lot of things. What he failed to grasp is that the Government have only a proxy to do things on behalf of and with the resources of others.

      In failing to grasp this he fails to understand that Government intervention in the market place takes the power away from wealth creators and places it in the hands of politicians who then distort what would otherwise be a market driven correction .

      No wonder Keynes has such a powerful following amongst the political classes

    2. zorro
      November 12, 2011

      Absolutely correct. To give Keynes his due, he would be turning in his grave if he knew how Balls and Brown mangled his theories in practice. ‘Prudence’ Brown was never very good at balancing budgets….public spending always had to increase even by 0%…..He could never run a surplus.

      zorro

  34. uanime5
    November 12, 2011

    John the reason why everyone thinks that spending cuts have already begun is that the Government has lied about spending so much that the lies have become true. Had the Government been honest and stated that they were going to reduce the rate at which borrowing was increasing, then reduce the amount they borrowed it would be obvious what they were doing. Unfortunately the Government decided to reduce the rate at which borrowing was increasing while acting like they were reducing the amount they were borrowing. Unless a senior Minister is willing to explain what the Government is doing then expect this misunderstanding to continue.

    1. stred
      November 12, 2011

      Even Clegg has explained the situation as it is , but the BBC and other simplistic journalism repeats the lie day an day out.

  35. Quietzaple
    November 12, 2011

    The former public servants Inc NHS workers who are on the dole would welcome a bit of truth from this LiarGovernment.

    I doubt their expenditures have risen.

    Tax cuts for those who would tend to spend such cuts viz VAT still looks best.

    Ed Balls is quite right that Britain needs Internationally agreed growth measures. Difference between Brown, most likely Ed Milliband on the one hand and Camewrong and Osborne on the other. The latter look to “rebalance” Britain jin the favour of the super rich and a depression won’t make that more difficult.

    The biggest lie is that the crisis is one of debt: it is one for want of Growth and the debts will be there after it is overcome.

  36. Ferdinand
    November 12, 2011

    Keynes never said how much, he only said MORE.

  37. Robert Pay
    November 12, 2011

    I just listened to Any Questions…the audience booed any commentator in favour of the non-existent cuts or adjustment to the unsustainable public sector pensions. I am coming to the conclusion that debate is very difficult against a mindset that says that money is limitless or that we can get the money from the rich bankers…who are moving back to New York where I live in droves…The fiancial situation has hard numbers.

    How much more difficult to deal with the lies about the EU (created peace in Europe) or that it would stop selling us stuff where we not members…I fully expect the BBC to say that their upper management may be banned from their Chiantishire villas to defend the Euro and the EU. I wish both well but what to limit my suffering.

  38. zorro
    November 12, 2011

    John,
    You are quite right about the ‘entrepot’ factor. Unfortunately, people still drone on that 40-50% of our trade depends on the EU which is utter nonsense as you point out.
    Our exports were increasing outside of the EU and declining within the EU, but this is only in line with trends in world trade anyway, as the European market declines in global terms.
    The little Europeans need to smell the coffee! No more plum jobs in Brussels for Europhiles! I wonder if Mr C realises that he might have to change his future career plans now….

    zorro

    1. Mark
      November 14, 2011

      The recent decline in our exports (and especially to Europe) has been the consequence of rapidly falling production from the North Sea. It has much less to do with trade economics, and quite a bit to do with Osborne’s extra taxes and lower allowances on North Sea production.

      In Q3 2011, our oil trade was in deficit by Ā£4.1bn, compared with a deficit of Ā£1.9bn a year earlier and just Ā£0.8bn in Q3 2009. Add in gas and coal, and the deficit has risen from Ā£3.3bn in Q3 2010 to Ā£6.3bn this year.

      We will next see the consequences of lower oil production in lower than “expected” tax revenues for October – a month when large quarterly payments are normally collected from North Sea producers.

  39. BobE
    November 12, 2011

    My hope is that the Greek people will reject having a member of the Forth Richt imposed upon them. Rebellion followed by default and exit. (Please).

  40. Tad Davison
    November 12, 2011

    On the issue of truth, I have added a piece below, that was taken directly from an e-mail sent to me by my local MP, Julian Huppert, and dated 11th August 2011.

    ‘Personally, I would describe myself pro-Europe, but I feel it is right
    that as a country we have an open debate and public vote on the issue.
    The European Union has evolved significantly since the last public
    vote on membership over thirty years ago. The issue of Britainā€™s
    place in Europe has poisoned British politics for too long and needs
    to be settled. The EU is also often misrepresented in the media, which
    neglects the positive work it does, and a referendum would be a good
    opportunity to highlight this.’

    When the opportunity subsequently arose to allow the public their say in a referendum, he voted against it. Needless to say, I didn’t waste any time in letting the good people of Cambridge know what a duplicitous man he is, and that paragraph was published in the Cambridge Evening News last week together with my own comments, but isn’t that the kind of thing we’ve come to expect from the Europhiles?

    On the BBC, I have always felt there’s something of soviet socialism in the way it is funded by a compulsory licence fee. ‘You WILL pay the fee, even if you don’t watch the BBC, and you WON’T be allowed to change it, no matter how much you protest!’ I like choice and accountability, and the sooner the BBC is subscription-funded, the better it will be.

    On Newsnight recently, the programme’s presenter, Kirsty Wark, tried to hold a BBC executive to account about the level of waste. She cited one job that had been advertised, and the successful candidate’s responsibilities were given as, ‘Supporting a manager in their decisions.’ The remuneration, was a staggering Ā£63,000 per annum! I can see them sitting next to their manager, nodding away in agreement, and thinking of what next to spend their wages on!

    Tad Davison

    Cambridge

  41. lola
    November 12, 2011

    All true. But do the words ‘wind’ and ‘peeing into’ ever cross your mind?

  42. forthurst
    November 12, 2011

    The BBC is the Ministry of Propaganda of a one party fascist state. Of course there is not another point of view.

  43. NickW
    November 12, 2011

    Will higher taxes and more austerity rescue the Greek economy?

    Greeks are refusing to pay all taxes in response.

    This Der Spiegel article was written in September, since when things have substantially worsened.

    http://www.spiegel.de/international/europe/0,1518,787847,00.html

    The Greek Communist party is becoming more active.

    The chance of present policies rescuing the Greek economy are zero; the longer they are maintained, the worse the situation will get.

    Why can’t the Eurotrash in Brussels see that?

    1. NickW
      November 12, 2011

      A recipe for disaster.

      It’s going wrong because the Generals in Brussels are a Continent away from the front line in Greece.

      As with the Soviet Union, the placemen out on the periphery tell the centre what it wants to hear, so that policy eventually becomes based on a completely fictional reality.

      They must be unbelievably thick in Brussels; authoritarian Empires always have the same failings and always go wrong for the same reasons.

    2. backofanenvelope
      November 13, 2011

      I think we can be pretty sure that the EU plan will not work. The Greeks will retreat into sullen non-cooperation with occasional riots. The Italian mess has an additional factor that the EU cabal doesn’t seem to understand. Berlusconi is a billionaire who owns most of the commercial TV in Italy. He also remains leader of a major political party. He looks in good physical shape and probably has plenty of energy to make things difficult all round. And he must hate Sarkozy, Merkel and the rest.

  44. Bernard Otway
    November 13, 2011

    The likes of James Reade,uanime5 and Rebecca Hanson and their thinking and responses
    Make me think of Catch 22,and Jack Nicholson in One flew over the cuckoos nest,I was only surprised we all weren’t given links to the lady’s latest Pyramid internet debating tools,as for Mr Reade his economics do not come from the same books I did my economics degree from,as for the other person he reminds me of my former son in law who my daughter hated me taking the rise out of [so easy] until she divorced him and then egged me on to belittle the ingrate,and the poor sap got ripped legally to pieces by her in the divorce seeing as she was a professor of law in the USA and had passed the new york bar exam with a mark of 87%,I told him to accept the offer,but do you think he would listen,he even later on tried to sue her for money after her mother [my ex] remarried a man worth
    Ā£500 million who in the prenup settled on her Ā£50 million and she gave our two kids Ā£5 million each [7 years after the divorce] silly fool lost fees again!!,no sympathy from me though I have NO TIME for fools of any kind especially POLITICIANS.

  45. stred
    November 13, 2011

    A one sentence novel. Is this a first? Brilliant!

  46. F.Cunctator
    November 13, 2011

    The whole financial argument is being skewed by interested parties discussing austerity.
    There is no need for an onset of austerity; just need to end profligacy. if we must have a debate and form policy at least we might try to have the right argument. Cutting waste and overspending in both public and private sectors is not austerity it is reducing profligacy. Less debasement of language and discussion, please!

  47. sm
    November 13, 2011

    I will believe in democracy when fractional reserve banking is on the curriculum right next to democracy and the role of parliament,MP’s and parties, binding manifestos, and the a greater role of binding public referenda to control wayward elites.

    As for the BBC actually having journalists able to identify, report facts then probe with intelligent questions apparently is no longer required. Particularly if the viewpoints disagreed with are not to be allowed in a democracy .Words deemed so harmful to the cause self censorship is dominant. Humans are complex most views can be influenced by rational factual debate.

    It is sad but the electorate (Greek and others soon) are beginning to realise the hidden problems, they find they are emasculated having been cleverly managed away.

    Mr Osborne should ponder that democracy is the solution to Europes problems first and foremost, not anti democratic – quick fixes.

  48. brian kelly
    November 13, 2011

    I have long said – as have many others – that the way the BBC conducts interviews on specialist subjects is woeful. Their interviewers have a very shallow and sketchy knowledge of politics and finance and are no match for those they interview. Many opportunities are lost to unveil the truth and to challenge the M P’s and specialists. It is extremely frustrating to hear those being interviewed getting away with the most outrageous inaccuracies and bias. And there is not the slightest doubt that the dominance of the BBC of ‘serious news’ radio has to be curtailed and more independent radio stations encouraged.

    1. Mark
      November 14, 2011

      I’ve seen a couple of stories on energy topics recently that have made my toes curl. Take this one, on admittedly a somewhat arcane topic:

      http://www.bbc.co.uk/news/uk-scotland-scotland-business-15711200

      Plans being considered by the industry regulator could undermine the prospect of new UK nuclear power plants.

      The cost of feeding the north of Scotland’s renewable energy into the national power grid could fall by 80% under the proposals…

      It suggested the access charge for wind and marine power from the north of Scotland would fall from Ā£24 per kilowatt to less than Ā£5.

      Firstly, the charge is per kW of generating capacity per year – something they don’t explain anywhere at all. A little maths says for a 25% average load factor windmill the cost of this charge is 2400/(0.25x24x365) or 1.1 p/kWh generated. The story goes on to explain that the charge was estimated to increase to Ā£60 per kW (omitted: per year) as a result of the extra transmission lines that would have to be built to carry the electricity from nearby John O’Groats to the South.

      It fails to explain that the proposal is to subsidise this cost heavily, and thereby increase the cost to consumers by a) requiring more investment in transmission lines, and b) increase the amount of uneconomic wind power in the generating mix that depends on subsidy, while actually going backwards on total GHGs when comparing the life cycle carbon footprints of windmills and extra transmission lines with nuclear plants, while continuing to ignore the potential for cheap shale gas fuelled CCGT capacity. No, we are told that instead of increasing costs, it reduces them by 80%!

      BBC magic.

  49. javelin
    November 14, 2011

    Meanwhile back at the hapless EFSF – it turns out they had to BUY THEIR OWN BONDS to get enough to bail out Ireland. So much for leveraging a few million Euros into a trillion. Oh dear.

    http://www.telegraph.co.uk/finance/financialcrisis/8886380/Eurozone-bail-out-fund-has-to-resort-to-buying-its-own-debt.html

    “Europe’s ā‚¬1 trillion (Ā£854bn) rescue fund has been forced to buy its own debt as outside investors become increasingly concerned about the worsening eurozone sovereign debt crisis. “

  50. Richard1
    November 14, 2011

    I heard that interview & it was very frustrating, Lord Skidelsky extremely smug and totally unchallenged in his absurd assertions. I think it must be a BBC trick to ensure that when left-leaning statist economists (Joseph Stiglitz & David Blanchflower are other examples) are interviewed, they are either presented as ‘independent’ experts and not challenged at all or some very inadequate opposing voice is put up, as happened on this occasion. Another good question for these supposed Keynesians (inc our welcome lefty Mr Reade above) would be: why did Keynes think that a tax/GDP ratio > 25% was likely to introduce distortions and disincentives? That bit we dont hear about. Lets hear more from the likes of Mr Jin, head of China’s sovereign wealth fund: hes worried about investing in Europe as the state is too big, taxes are too high and labour and other regulations are a disincentive to work. Good to hear thats where a Communist has got to – time for the ‘Keynesians’ to get real as well.

    1. James Reade
      November 18, 2011

      Thanks again for being the latest commenter on here to penhole me incorrectly. I’m not a Keynesian, and I’m also not a lefty. I’m just not as far to the right as you, and hence I guess that means logically, despite being in the centre, I’m to the left of you.

      I get a little weary of right wingers moaning about bias at the BBC. Just don’t listen to the thing! Switch it off, and go and grab a copy of the Daily Mail, or some other media vessel that appeals to your particular prejudices.

      In the meantime, please do set out why the assertions of numerous high profile economists are absurd. I’m interested, particularly, regarding Stiglitz. You’ll be aware that as a microeconomist, he’s done a lot of pioneering research into how markets work, in particular relating to the information that each side in a market has, providing support for many of the situations were “adverse selection” occurs; the market does not ensure that resources end up at their most productive uses.

      Do, please, provide me with a detailed critique of said work. It’s based on mathematical models and reasonable assumptions, and not prejudice, and hence is radically different to most of the stuff I read on here.

  51. Steven Whitfield
    November 14, 2011

    On the subject of fibs, Ed Balls was on the BBC Politics show again on Sunday. I don’t know how he managed to repeat the ‘it’s too far, too fast’ line with a straight face.
    It seems like we live in an increasingly dumbed down country when the debate is reduced to wicked Tory cuts versus Labour investment. Absolutely pathetic.
    This fake and dishonest style of political debate , so irrelevant and boring that it must switch off many voters. Perhaps that is part of the plan.

    Why can’t John Redwood’s views on the economy be featured to give the public a much needed break from the Westminister/media group think position?. As a leading advocate for the No to the Euro campaign, I find it staggering that his views haven’t been more widely sought and reported by the BBC. Blatant bias and a failure of duty by the BBC.

    Mr Redwood,perhaps some kind of official complaint to the BBC would help this cause ?. All we ever hear are left of centre opinions from Cameron,Osborne,Major and Polly Toynbee.

    Andrew Marr seems like a bright and experienced journalist – i find it very odd that he didn’t point out to Ed Balls (or any other politician I can recall) that overall public spending is still rising but growth is still flat. And why not ask Ed Balls, if he believes in true Keynesian economics, why didn’t Labour put more money aside in the good times for the bad ?. Or is the truth that Labour chooses to cherry pick parts of Keynes philosophy when it suits them ?

    I suppose it’s too much to expect a senior journalist to check facts, seek views beyond those of the Guardian and Daily Mirror, look beyond the spin, be impartial, ask awkward question..

  52. Seamus Whitehurst
    January 10, 2012

    A round of applause for your article.Really thank you! Cool.

Comments are closed.