Carry on borrowing? Mr Davis of the BBC fails to question the IMF


           Yesterday the Today programme ran an interview with an IMF spokeswoman who told us cutting a deficit at the wrong time could be self defeating. She  was asked by Mr Davis if we cut £1 of deficit how much economic output would fall. She said it could do 6-10 times as much damage. He pressed her to give actual percentage figures. She said if the deficit was cut by 1% output might fall by 0.5% in a good case, but could fall as much as 2% in a bad case if the economy was already weak.

           At this point the interview should have become interesting. Surely sharp Mr Davis would ask why she had scaled her 6-10 times back to four times  with just one additional  question? Would he ask what evidence she was using? Which deficit reduction programmes had they examined?  Had she examined the cuts in deficit and spending plans  in the early 1980s and early 1990s in the UK, both of which led to good recoveries? Could she explain why Sweden had grown so well since the 1990 cuts? Why did the new Scandinavian model where growth is faster  rely on much lower public deficits than the UK or Greece?  Why do all IMF programmes demand cuts in spending and tax rises, if they now think this cuts national income? Why did they impose such cuts on Greece at a time when its economy was clearly in free fall, if they now think this will make it worse?

          Instead he let her go on to assert that cutting people’s benefits and pensions would be much better than cutting other types of public spending. He might have asked her how cutting people’s spending and general demand would help, where cutting civil service salaries would not, but failed to do so.

          No-one was invited on to debate with her, no-one was interviewed to provide balance. Surely if the BBC regards such a person as an expert they should be asked tougher questions about their research, what numbers they have produced, and why they think it is right? The interview was remarkable for giving us no actual figures or any country experience.

          Meanwhile the UK state debt goes on up and up. Are there no limits to taking on debt? Why is borrowing an extra £10 bn a month an insufficient deficit? Why does it lead to the economy declining? How would borrowing say £15 bn a month provide growth?

           Labour inherited a state debt of £290.3 billion (outstanding gilts) in 1997.  This rose to £355.5 bn by 2005, an increase of 22.5%.  By March  2008 it was up to £478.8 bn (before the Credit Crunch crisis hit fully), an increase of 65% from 1997. By March 2010, just before Labour left office, it was at £913.5bn. This took Labour’s increase in the state debt to £623bn over 13 years, or an increase of 214.7%. I am excluding all the PFI/PPP and bank debts also incurred.

           The Coalition debt reached £1163.8bn by March 2012, a further increase of £250.3 bn over 2 years, or 27.4% on their inherited base.  This means the debt to GDP ratio (just taking money borrowed via the gilt market) has reached around 77% of GDP.

            However, the Bank of England has bought in £375 bn of this debt, or almost one third of it. If the government simply cancelled this debt, and the Treasury loan to the Bank financing it, UK state debt on this number would fall to £788 bn or around 52% of GDP, a more modest proportion by modern government standards.

            The government  is not rushing to cancel this debt. No doubt it is worried how such a course of action would be perceived by the markets and media. It has four options for its quantitative easing programme:

1. Carry on with more of it. It keeps the rate of interest on government debt at very low levels, making the government’s excess spending seem affordable.  

2. Stop new quantitative easing, but leave the purchased bonds with the Bank of England. As individual bonds are paid back, the Bank would reinvest the money in other gilts from the market, keeping the QE amounts intact.

3. Allow the repayments of gilts that occur to reduce the amount of gilt edged stock owned by the Bank over time, gradually working it out of the system.

4. Sell the Bank’s gilts back to the market, to recoup the created money from the system.

Memo:   Between 1992-3 and 1999-2000 Cyclically adjusted UK net government borrowing was slashed from 5.5% of national output to -1.1%, a turnround of 6.6%, and the economy expanded by around 3% per annum

Between 1980-81 and 1982-3  Cyclically adjusted net borrowing was cut from 3.4% of GDP to -1.4%, a reversal of 4.5%. The economy started to grow As the programme was completed and grew continuously until the ERM disaster at the start of the next decade.


Conversely, large increases in the Cyclically adjusted net borrowing occurred piror to the mid 1970s slump and IMF visit, and prior to the Credit Crunch of 2008-9.

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  1. Posted August 25, 2012 at 6:00 am | Permalink

    Could this be Evan Davis, yet another PPE graduate, I read. That course has very much to answer for. BBC interviewers, when on the subject of the economy, the EU, the green issue, social housing, landlord and tenant issues, employments laws, the EURO, regulation, health and safely, feminism and many other issues are quite simply absurd. They hold religious, PC, “BBC think” type beliefs which are all quite wrong, but simply assumed and never even questioned.

    Savage cuts in the state sector and “too much to quickly leading to a double dip” being typical of this. The endless incorrect assumption that electric cars, buses and walking are better on carbon emissions and that wind farms and PV is environmentally good. Non seem to have a clue about the basic science and the practicalities of energy production.

    The other day they just wanted the government to borrow more money and build more subsidised social housing (mainly occupied by people not working at all) and to do so “at a profit”. Quite a clever trick to pull off.

    Their ignorance of the economics and science of energy production systems in particular and the green issue in general is an outrage. As is the assumption that catastrophic global warming is a given. Particularly as the real measurements and solid science are destroying the absurd computer scare projections almost every day.

    Are there no limits to taking on debt? I assume when they can find no one to lend them any more or we finally get a sensible government that stops the current endless “tax borrow and waste”.

    Does the BBC employ any real scientists – other than in the department that runs their technical equipment? You rarely see them in front of the Camera on any of these big issues.

    • Posted August 25, 2012 at 6:46 am | Permalink

      Reported in the Telegraph:
      Grant Shapps signals support for a third runway at Heathrow.

      Good, one at Gatwick too please and a HS, 15 minute train link. One hub airport with 5 runways is about right. Unfortunately it will probably not go ahead as the Tories will not be in power anyway after 2015 and the LibDem never do anything sensible.

      • Posted August 25, 2012 at 9:26 am | Permalink

        Stansted would be a better place to expand capacity, as it is nearer to the rest of the country and has a rail link easier to Eurostar. The population is less and could be financially compensated to get a quick start. A new terminal could also be provided quickly, by building a repeat of the brilliant Foster design. This would be much more economical than doing another Terminal %, taking 15 years. Rail links to the north could be improved on existing lines. Heathrow is already a mess and expansion would take a very long time, annoying a large nearby population.

        • Posted August 25, 2012 at 9:27 am | Permalink


        • Posted August 26, 2012 at 12:56 am | Permalink

          Stred ,

          I take your point about Stansted but wonder whether you or I take it far enough .

          London has again confirmed itself as the money laundering capital of the World ahead of Monaco , Montenegro , Cayman Islands, Bermuda, Jersey .

          It doesn’t matter who you have killed or how many children you have raped so long as you have money London welcomes you .

          For those of us not involved in that side of things there is a price to pay for becoming saturated by dirty money .

          Surely it’s overdue that Parliament was moved away from that sess pit to Birmingham or maybe even Rhyll when the nice weather comes along ?

      • Posted August 25, 2012 at 9:29 am | Permalink

        Why not do something imaginative? Second runways at Gatwick and Stanstead plus an upgrade at Southend. Build a high speed link circling London, connecting all 4 airports. Perhaps a spur to Luton. The link would not be a George Stephenson type railway, but something more suited to the mid-21st century.

        • Posted August 25, 2012 at 8:22 pm | Permalink

          What is really needed in order to compete, is a connection hub with lots of runways, five at least, preferably close to London and the main, centre of gravity, of the UK population.

      • Posted August 25, 2012 at 2:11 pm | Permalink

        Grant Shapps’ constituency of Welwyn/Hatfield is rather close to Luton and Stansted, which are alternative locations for an additional runway. Perhaps that’s why he’s keen on Heathrow?

      • Posted August 25, 2012 at 2:54 pm | Permalink

        Dear Lifelogic,
        The Conservative Manifesto, the LibDem Manifesto and the Coalition Agreement of May 2010 all say, in almost identical terms, that they would cancel the (Labour-supported) third runway at Heathrow and refuse permission for second runways at Gatwick or Stansted. This pledge was most probably critical in several marginal seats (eg Putney, Richmond Park and Brentford & Isleworth). The arguments pro and con have not changed in the ensuing 2 years, nor have those who want expansion and those who don’t. The change in policy would therefore be the most cynical betrayal of promises you can imagine.
        Those pledges can be deleted for the 2015 election and electors can decide. Otherwise, you should be encouraging people to vote Labour.
        There are places where people would like, or might be persuaded to back, economically useful airport expansion. Perhaps Birmingham and Manston. Possibly regional jets and an HS exchange at Northolt. So far as I know, none of these would need a village to be demolished.

        Do you think any of these considerations matter?

        • Posted August 25, 2012 at 8:11 pm | Permalink

          Progressive countries don’t build airports with flightpaths over built up land any more. They put them out to sea or in estuaries.

          • Posted August 28, 2012 at 7:40 am | Permalink

            Progressive is a weasel word if ever their was one.

            What is “progressive” about building airports in the wrong place rather than where the demand is and then travelling further by car, train, bus to connect – often rather less efficiently and more slowly than by plane.

        • Posted August 25, 2012 at 8:26 pm | Permalink

          I am just saying what I think is the best sensible economic development to do. Politicians will say anything to get elected, were there not some cast iron guarantees and something about £1M IHT tax thresholds and cutting the deficit too as I recall?

    • Posted August 25, 2012 at 2:30 pm | Permalink

      Absolutely right, lifelogic. The Beebs treatment of manmade climate change, and science in general is appalling. As is its constant reference to government spending cuts, when every sensible person is aware that government spending continues to increase. Bias has become the norm and should be tackled, bearing in mind the corporation is publicly funded. But unfortunately we must remember that David Cameron “loves the BBC.”

      • Posted August 25, 2012 at 8:28 pm | Permalink

        Loves the BBC, “BBC think” and even allowed Lord Patten to be head of the trustees!

    • Posted August 26, 2012 at 10:15 am | Permalink

      Evan Davies hates the tories and loves labour. He believes in the magic money tree, that the EU is a wondrous thing, that immigration is always good, that austerity is evil and that tories eat babies.

      Every sneer, giggle and interruption is intended to further his personal views. You would need to be deaf not to realise this.

      • Posted September 2, 2012 at 4:52 pm | Permalink

        I tend to agree in general though I quite like him nevertheless, he also often fails to follow fully discussions involving maths or science, rather like Baron Melvyn Bragg does (and he is even chosen by the BBC to present science discussions or rather get in the way of them).

        Rather like me doing a program on Jane Austen or something based on my limited and now forgotten GCSE level knowledge.

  2. Posted August 25, 2012 at 6:31 am | Permalink

    I am interested in this sentence of your posting “The government is not rushing to cancel this debt. No doubt it is worried how such a course of action would be perceived by the markets and media.”

    I am wondering if you believe that such is the only fear preventing such a course and if so what you consider the consequences of a mass worldwide cancellation of Western debt, which would tend to neutralise market and media adverse reactions, and whether that is not perhaps where the present direction of travel is leading at least the Euro, Dollar Pound and Yen?

    Reply: I think states might decide to cancel debt they have bought in, or at least abandon any notion of selling it back any time soon. Greece, of course, has shown that stressed Euro states may have to cancel debt they have n ot b ought in, which is altogether more serious.

  3. Posted August 25, 2012 at 6:53 am | Permalink

    So much for the slashing cuts………

    If the government doesnt do something about this fairly soon, they will let Labour in.

    • Posted August 25, 2012 at 8:54 am | Permalink

      @Mike Stallard: More likely the IMF…

    • Posted August 25, 2012 at 9:05 am | Permalink

      I think that is a given. Unless there is a game changer like in/out EU referendum. Cameron has entered the world of Mr Clegg where no one believes a word he says- quite right too.

      How many U turns, how many failed promises does it take? Lifelogic is spot on with his view. Even the claimed number one priority is a complete shambles and Mr Redwood has,once again, highlighted another failing. There is no strategy the Tory led Coalition is bumbling along on focus group issues that are irrelevant to the national interest or the majority of sensible hard working people.

      Memo to Mr Willetts/Cable: Cancel PPE course at Oxbridge in the national interest and close the door when you both leave.

    • Posted August 25, 2012 at 9:39 am | Permalink

      Surely too late.

      • Posted August 26, 2012 at 10:39 am | Permalink

        When you consider an has-been like Steve Hilton writes a hatchet job about Boris in Conservative Home it confirms Cameron is worried about his position. This is the same Steve Hilton who clearly turned his back on his job for the Tories and ran to the US. Is there anyone who would believe a word he says either??

        The papers reported Cameron dispatched Hague to counter the threat of Boris becoming leader- change of assassin? There has been no change from Labour’s stupid economic policy and the Tories do not deserve a second chance based on their dismal performance. Clearly there is a token “we must stand behind Dave” from his MPs. Wake up, the game is over you are out at the next GE unless there is a game changer.

    • Posted August 25, 2012 at 12:05 pm | Permalink

      Since we are already pursuing ‘continuity Brown’ economic policies, what will the difference be if Labour get back in?

    • Posted August 25, 2012 at 7:04 pm | Permalink

      I think you’ll find that Labour have already won the 2015 election without any further effort by LieCons over the next 2 years. Swathes of former tory voters that I know are moving to UKIP

      • Posted August 26, 2012 at 1:01 am | Permalink

        Outsider ,

        There is a danger of deciding policy to try to win elections at the margins .

        We need politicians to do what is right not what their focus groups say .

    • Posted August 26, 2012 at 1:07 am | Permalink

      We can all see now that a Conservative minority Govt would have been a massive disappointment but less so than the Coalition .

      Imagine how much worse a situation the country would be in if Cameron had have been PM before 2010 instead of Brown .

      So long as it’s Ed M rather than Ed B or David M it will be an improvement on what we have now .

      If Labour credibly promise a referendum on Europe then I think most people on this board will be voting for them .

      Quite a few Tory MP’s will defect too .

  4. Posted August 25, 2012 at 6:54 am | Permalink

    The UK is in the crushing grip of endless and unstoppable State expansion that replaces and takes over more and more of the daily economic activity of it’s citizens. The motivation is the bottomless entitlement culture that sees its finest expression in EU ‘jobs ‘where MEPs get £300,ooo per annum tax free, plus expenses, benefits, school fees and pensions. Every bureaucrat and state employee has learned to aspire to a comfortable life with minimal affort at the expense of others. The only way to break the grip of the evil blood-sucking squid clamped to the face of the nation is to kill it. That means total bankruptcy of the state, which will be the inevitable outcome of this collective fiscal insanity.

    • Posted August 25, 2012 at 7:24 am | Permalink

      And that means those that suck at the state’s teat are the ones who get hit hardest because they will lose their pensions.

    • Posted August 25, 2012 at 9:06 am | Permalink

      Well said.

    • Posted August 25, 2012 at 11:42 am | Permalink

      Indeed they are being bought, with taxpayers money to, to encourage them to remove any remaining democracy from these very same taxpayers. It is working very well I see Cameron seems to approve of it.

  5. Posted August 25, 2012 at 7:21 am | Permalink

    I see this morning that Martin Weale of the MPC is proposing to cut base rates further rather than engage in any more QE. Since the Bank of England has effectively lost control of commercial interest rates (e.g. you can get 3% return on a 1 year deposit, plus try getting a loan at anything near the base rate, ha ha) I fail to see what benefit cutting base rates from 0.5% to 0.25% or even 0.1% will bring. As we used to say in the oil industry, it’s just p*ssing in the margins. It may help reduce the yield on gilts even further, beggaring yet more pensioners and saving the government a few million quid in interest payments, but it won’t help the economy one jot. Surely Mr. Weale knows this, so I wonder why this sudden change of approach from him? Does he also know something about the limits of QE that he has not yet told us?

    • Posted August 25, 2012 at 11:39 am | Permalink

      Indeed and I read that the BoE has oddly claimed that their QE policy has not hurt pensions. Well it has not hurt the large, inflation protected state sector pensions but it has hugely robbed the private sector – when they are forced into buying duff annuities.

    • Posted August 26, 2012 at 10:57 am | Permalink

      Does the BoE or Mervyn King have any credibility left?? Would anyone in the private sector be allowed to stay in post and retire with a handsome pension (that was changed to include more index linked gilts) after such an abysmal performance??

      Lifelogic, if any sector needs their pensions independently examined it is the BoE, FSA and closely followed by MPs who still receive RPI. Were these people not responsible for the environment, regulation and laws that created the inevitable financial mess? Yet they are rewarded for failure, allowed to have second jobs etc and have the absolute cheek to condemn other people’s behaviour, pay, pensions and titles.

      • Posted August 28, 2012 at 7:42 am | Permalink


  6. Posted August 25, 2012 at 7:23 am | Permalink

    Labour inherited a state debt of £290.3 billion (outstanding gilts) in 1997.


    Nothing like still denying that there are massive other debts.

    What does it matter if the debt is Gilts or that debts are obligations to pay pensions unless you plan on defaulting on the pensions?

    However, the Bank of England has bought in £375 bn of this debt, or almost one third of it.

    Not true. Not all of QE has gone on Gilts. See the debt managment office for the true figures.

    Now for one of the options. Pay it back.

    How the hell is the government going to get 375 bn out of the tax payers in order to pay back QE when you can’t even get the deficit down?

    Look at the number of Gilts bought by the government with QE cash, and the issuance over the same period. It’s pretty much the same.

    That means there are no buyers of Gilts. That needs to sink in. No one is lending to you unless they are forced to.

    You have to use force to borrow money.

    Reply I have been one of the people exposing the other debts, not seeking to deny them!

  7. Posted August 25, 2012 at 7:34 am | Permalink


    As I have said many times before most of the interviewers and reporters in the media, and certainly on BBC in particular, are simply PRESENTERS, they have no in depth knowledge of anything much (not their fault, their main task is to be presentable), as they have to cover a wide range of tasks.

    So called bought in experts (to give opinions) do exactly that, they give opinions, their own and whilst they may have significant knowledge of their subject, all we get are opinion based views, invariably socialist and to the left.

    IE :It is very often selective.

    Those presenters who interview experts lack the detailed knowledge of a particular subject, and thus do not drill down for further information because they do not know what they are looking for, or even trying to uncover, thus if they get an answer which is out of line with what was thought would be the response, they are often lost.

    The art of forensic interviewing has I am afraid been almost completely lost.

    The other governing factor in all of this are time constraints, how many times are you just reaching an interesting point, when they say thank you, we are running out of time.

    The only chance of getting real opinions and debate is now on the specialist financial channels, but I am afraid to 99% of the population this is of absolutely no interest.

    Thank you for continuing to outline your thoughts and reasoning, its way above my pay scale, but I just about follow it thanks to your simple way of presentation !

    • Posted August 25, 2012 at 8:19 am | Permalink

      There are few decent ones now. Andrew Neil is good as is Jeff Randall. At least they attempt to question or challenge the approved orthodoxy.


      • Posted August 25, 2012 at 9:11 am | Permalink

        The biggest problem is not who presents, the BBC or Sky could employ real experts but they would not currently be allowed to get as deep into an issue as they need, what is needed is the broadcast media to return to the principle that audience needs to be taken out of their comfort zone and thus start educating them, not just inform them. If the audience doesn’t understand what is being talked about then the answer is further education, not dumbing the content down to make it “accessible”…

      • Posted August 25, 2012 at 9:18 am | Permalink

        I agree. They are the only ones who have a clue.

        The main BBC reports are so stuck in the Labour machine, its laughable if it wasn’t causing damage.

        One reason why the BBC needs to be sold off and exposed to commercial reality. Plus the money will fund the megalomaniacs for a couple of days.

        Meanwhile, notice the agenda set by John Redwood. No mention of pension debts when he talks about debts.

        The obvious conclusion is that they won’t pay out the obligations because they can’t.

        So if you deny owing pensions, then you can’t be defaulting when you don’t pay them. That’s the agenda, the spin.

        Reply: We have talked about the pension debts before. The state scheme remains pay as you go, and future payments depend as always on future votes in elections and future votes in the Commons.

      • Posted August 25, 2012 at 9:40 am | Permalink

        Just Andrew Neil that I see no one else seems to ask anything sensible very often on the BBC.

    • Posted August 25, 2012 at 8:46 am | Permalink


      The “presenter” model does not work.

      It even fails when the current affairs programme includes a contribution from their specialist editor or correspondnet, who one would have thought was capable of making a meaningful and comprehensible contribution unaided. But no, even here the specialist has to be interviewed by the non-specialist, and with the inevitable mish-mash of wasted broadcasting time.

  8. Posted August 25, 2012 at 7:48 am | Permalink

    Wasn’t the reason given for the introduction of QE (printing money) to stop the threat of deflation? There never was any deflation but much inflation. Many of us suspected that the reason given was untruthful and that the government, through their agents at the BoE, has a policy of tax and spend, monetise the deficit and attempt to inflate away the debt. If states are going to just create money to buy their gilts (should that be guilts?) and then subsequently cancel them, what confidence can any of us have in the future of money, freedom and democracy?

    • Posted August 25, 2012 at 8:16 am | Permalink

      The one universal sublime truth is that governments deceive the public….


      • Posted August 25, 2012 at 8:31 pm | Permalink

        Indeed and using the public’s own money to pay for the deception.

    • Posted August 25, 2012 at 8:17 am | Permalink

      Slow, soft inflationary default using QE has been their only policy….


    • Posted August 25, 2012 at 12:03 pm | Permalink

      The crucial importance of preventing a deflationary spiral was part of the story when QE was started in early 2009, and it had some plausibility at that time.

      But I remember asking some months later how further QE could be justified on the grounds of warding off deflation, when it was becoming clear from the rising inflation figures that here was little immediate threat of deflation.

      Given that the government was not willing to admit that the true purpose of QE was not to ward off deflation, nor to “stimulate the economy”, but to rig the gilts market so that it could carry on spending £4 for every £3 of revenues, borrowing the missing £1, and so avoid having to cut public spending or increase taxes in the year leading up to the general election.

      Unfortunately for all of us, even though Osborne almost certainly understood this he never lowered himself to explain it in a way that the general public could easily grasp, probably because he anticipated that if he became Chancellor after the general election then he might want to do the same thing himself.

      In my view Osborne’s decision not to hammer home to the voters the truth about the government’s dire financial position, and the truth about the primary purpose of QE as it was being practised, was the greatest single reason why the Labour party was able to avoid welll-deserved annihilation at the election, why the Tory party was unable to win an overall Commons majority, and why the coalition government is now being blamed for the sins of its predecessor.

      • Posted August 26, 2012 at 8:39 am | Permalink

        Did Mervin King move his own pension fund into inflation proof securities because he feared deflation?

        • Posted August 26, 2012 at 12:13 pm | Permalink

          Mervyn King is not directly involved in the management of the Bank of England pension fund, so you need to rephrase that question.

          • Posted August 26, 2012 at 7:51 pm | Permalink

            @Denis Cooper

            Were the BOE pension funds moved into index-linked, inflation protected securities because the trustees don’t bother to talk to Mervin King about such issues, or is it that they just don’t agree with him?

    • Posted August 25, 2012 at 12:34 pm | Permalink

      Quite. Fiat currency is dying. We could have local currencies and 500 kingdoms in the UK within a few decades…unless the Chinese buy us up

      • Posted August 26, 2012 at 11:35 pm | Permalink

        An interesting idea, considered by Martin Shubik in this paper:

        He concludes:

        As soon as the rules are changed in
        a way that enables all legal persons to issue their own currency it is possible to design an abstract economy and a formal experimental game which achieves efficient trade using individual IOU notes as currency. The modeling requirements are so stringent that although logically feasible the information, privacy, accounting and enforcement conditions rule it out at this time.

        The central bank as the creator of money appears to be the least bad of all current alternatives. But with this assignment of power goes public need for transparency and safeguards.

    • Posted August 25, 2012 at 4:00 pm | Permalink


      When the broad money supply is rocketing, banl balance sheets expanding and house prices booming, the proper measure of inflation is the dubious CPI.

      However, when broad money and bank balance sheets are contracting and house prices are falling, they measure ‘deflation’ using the broad money (or M4) statistics.

      It’s a scam basically. All of the players, the MP’s, senior civil servants, technocrats and bankers have substantial interests in high end London property and interest rates. They do not have to declare this as a ‘conflict of interest’ like they would if they owned equities in a company affected by their decisions.

      I’d imagine that all they really care about is inflation in the London/commuter belt property market, as that is where all their money is invested. Hence in the clicky ‘PC’ circles they operate in only those who support the south east house price inflation agenda are given the influencial jobs.

  9. Posted August 25, 2012 at 7:49 am | Permalink

    I heard that cringeworthy interview. Complete failure on Evan Davis’s part.

    “Dr. Keynes’s Snake Oil: Cures economic crises immediately – truly miraculous: the more you spend, the more you earn! – As recommended by Radio 4”

    • Posted August 25, 2012 at 11:44 am | Permalink

      Typical of Evan Davis and indeed almost BBC staff on “BBC think” selected issues.

      • Posted August 25, 2012 at 7:04 pm | Permalink

        Fox News. Is that unbiased and accurate? Is that what you would like to see? I suspect it is.

        • Posted August 25, 2012 at 8:09 pm | Permalink

          Bazman, no Fox News is not unbiased, but then it doesn’t really pretend to be so (even though the station does use the “Fair and Balanced” tag-line, only the clueless would actually believe it though), in the USA the requirement for broadcasters to have political impartiality was done away with about 25 years ago.

          • Posted August 26, 2012 at 3:06 pm | Permalink

            The point I made is that lifelogic and many others like him would see no problem with a right wing bias on all TV channels.

          • Posted August 26, 2012 at 6:55 pm | Permalink

            @Bazman: Just as you, I suspect, would see no problem if there was a (hard) left station. One man’s freedom fighter i8s another’s terrorist and all that… If broadcasters were allowed to show their underlying allegiances then what is the problem?

          • Posted August 26, 2012 at 8:31 pm | Permalink

            I’m against propaganda left or right. Many on this site have no answers to the problems their religious based right wing ideas would cause and see anyone questioning their ideas as wrong to do so. They often have no reply to my posts as you can see if you look back. Middle aged middle class retards whose tactic is to ignore any point they do not like hoping that this in some way will make it go away. Lifelogic is routinely pointed out the fallacy of his views, but in no way wishes to change them, but has the audacity to talk of religious claptrap.
            Paul Danon openly says that the left or ideas he does not agree with in fact, should be censored. The problem for Paul is that he can ram it. Paul. Ram it.

          • Posted August 27, 2012 at 9:30 am | Permalink

            Bazman, most people see Fox News (to carry on using that channel as an example) for what it is, just as most people see “The Socialist Worker” for what it is (was). By making the media hide behind a thin veneer of regulation you are actually helping the very thing you (and I) detest as people start wondering if it is fact or fiction propaganda.

            Also, please don’t insult those with real mental disorders,just because someone has a different political opinion doesn’t mean that they are mentally ill – never mind that someone might stoop to your level and reflect the insult back on you and your political beliefs…

          • Posted August 27, 2012 at 3:28 pm | Permalink

            They are political retards who see their small mean minded views reflected in serious right wing newspapers and articles as well as crackpot websites that they are unable to differentiate from. The thing that irks me the most is that these pasty po faced micro managers would not last five minutes without their helpers above. A chain of arse kissing leading to the idle rich.
            The BBC has a number of faults, but many left wing supporters see it as right wing. Your idea of having no regulation would see the likes of FOX becoming the TV channel of truth and I suspect many right wingers know this. Like the death penalty. If it were put to the public vote would go through. Do try to insult my political beliefs. I look forward to it.

  10. Posted August 25, 2012 at 8:11 am | Permalink

    I missed the prog’ yesterday but was she talking about “Sacrifice Ratios” (Google it). It’s the in thing sweetie at the moment, especially among the younger IMFers. Sacrifice ratios are getting bigger for various reasons; it’s the % drop in GDP per % drop in inflation. Depending which GDP and Inflation metrics you use can give answers anywhere between 0 and 10%. Basically it is a brick throwing exercise at Central Banks that target inflation as a monetary policy measure.

    Not wishing to get my links ejected today, I will tread carefully and suggest that you Google:- “The British government has more than demonstrated its incompetence”. If any body asks, you didn’t get that from me, OK. 😉 . Stay strong JR and switch off moderation for this post.

    • Posted August 25, 2012 at 9:09 am | Permalink

      I thought sacrifice ratios were relevant when growth is slowed to control inflation. I’d have thought with the known threshold relationships between inflation and growth, that what we have seen in uk for past 3 to 5 years is the reverse, that inflation above an upper threshold has slowed real growth.

    • Posted August 25, 2012 at 11:08 am | Permalink

      If the government simply cancelled this debt, and the Treasury loan to the Bank financing it, UK state debt on this number would fall to £788 bn or around 52% of GDP.

      Not sure what you mean by “Treasury loan to the Bank”; is it not the other way around? .

      • Posted August 26, 2012 at 12:25 pm | Permalink

        Yes, it is the other way around, as detailed in a comment on the earlier thread; and the problem I see is that the state cannot also cancel the new money issued by the Bank to fund the purchase of the gilts from private investors; so if the gilts were simply cancelled and the Treasury did not honour its original promise to indemnify the APF and its owner the Bank against losses, then not only would the APF definitely be bankrupted but the Bank itself would probably also be bankrupted when a £350 billion hole suddenly appeared in its balance sheet.

  11. Posted August 25, 2012 at 8:23 am | Permalink

    They probably won’t cancel the debt, because it would spoil their ‘deflationary’ narrative and make their initial reason for undertaking QE seem even more ridiculous.


    • Posted August 25, 2012 at 8:25 am | Permalink

      As you probably now (and I have been predicting) the option 1 you mention will be the most highly likely one.


    • Posted August 25, 2012 at 12:49 pm | Permalink

      The problem I see it that the state could cancel the gilts held by the Bank, but the state could not cancel the new money issued when the gilts were bought.

      Therefore just cancelling the gilts would create a huge hole in the Bank’s balance sheet, with the additional money issued still there as part of the Bank’s liabilities but no longer matched by the gilts as assets.

      If the Treasury had the legal power to do so it could order that the Bank would continue to operate as normal even with negative net assets, and if the Treasury did not already have that legal power then Parliament could legislate to provide it with that power.

      But Parliament could not pass effective legislation to force private individuals and companies and other organisations, and other central banks and government bodies all around the world, to still have the same level of confidence in a Bank of England which according to its published balance sheet was bust, lacking sufficient assets to back up the currency it was issuing.

  12. Posted August 25, 2012 at 8:32 am | Permalink

    I offer two possible explanations for the failure of Evan Davis to ask the follow up questions you, rightly, believe he should have asked:
    (1) Mr Davis is not the sharpest knife in the box or
    (2) Mr Davis knew exactly what he was doing by failing to ask these questions.

    I tend to think that the second is the more likely explanation. It is yet another example of the BBC agenda in action. He is seeking to frame the debate by getting someone else to put a BBC-approved point of view (an authority figure like the IMF) and then not challenging it. The same technique is seen again and again over “global warming” and “climate change” questions.

    • Posted August 25, 2012 at 8:54 am | Permalink

      Will the real Mr. Davis please stand up!

      It seems to me he is a different person since joining the Today Programme. I offer a third possibility for your list; he is puppet-like, being controlled by the editorial voice in his ear.

    • Posted August 25, 2012 at 9:46 am | Permalink

      Possibly a bit of both. It’s the Guardian mindset. Not that bright or willing to challenge the the facts, as the cosy system allows them to keep their overpaid, secure jobs and pensions. They dominate all state paid institutions and quietly control the direction of the State, ignoring any politician with different opinions.

  13. Posted August 25, 2012 at 8:33 am | Permalink

    Colleagues here are too gentle on the BBC. Its people can ask incisive questions when they want to. I suspect the corporation sees itself as a state-funded pressure-group which is there to ensure continued state-funding. It will always behave like that for as long as there is a licence or any other form of tax-based funding. A Conservative government should announce an end to state-money for broadcasting, arts, health, education and welfare.

    • Posted August 25, 2012 at 8:57 am | Permalink

      What the government should do is make the BBC Trust responsible for setting the licence fee and make Membership of the Trust open to all and subject to election by the licence fee payers.

      • Posted August 25, 2012 at 8:46 pm | Permalink

        Sorry Alan but the last thing we need is the BBC run by a mash-up committee of elected people, most people who have a TVL wouldn’t understand what the Trust’s job is nor what skills are needed to do the job, they would end up voting for the best looking face, best rant or their own personal (political) agenda.

        • Posted August 27, 2012 at 8:22 am | Permalink

          All the disadvantages you identify can be avoided. A full explanation as to how it would work successfully is too lengthy for a blog format; I hoped people would see the concept could work and there by recognise a better alternative is possible.

          As to who get elected, obviously there would be a competitive hustings broadcast on the BBC. I think there is a far better chance of the electors getting what they want than in many elections.

          Oh, and all meetings of the Trust would be broadcast live and available on iPlayer in perpetuity. Members who do not live up to their manifesto on which they were elected could be subject to dismissal if enough of the electorate force and then win a “no confidence” vote.

          All rather democratic, don’t you think?

          • Posted August 27, 2012 at 9:38 am | Permalink

            So would you suggest that all private and Plc. companies are run like this, with all consumers who buy the product having a say in who the directors are and what the company makes etc. – if not, why not?

            Anyway, the problem is not in the BBC Trust (or the board of Governors before), it is in the Director General and what the BBC does. What you suggest is a bit like sacking the school governors and PTA if the headmaster fails to control his staff. As I’ve said elsewhere, the BBC needs slimming down (to its core PSB credentials and nothing else), not surgically rebuilding into a totally different beast.

    • Posted August 25, 2012 at 9:43 am | Permalink

      A state-funded pressure-group – for green anti science tosh, the EU, ever more government, ever more regulation and daft employments laws, ever more taxes and more state sector and enforced “equality of outcome” for all.

      • Posted August 25, 2012 at 8:56 pm | Permalink

        For how many times lifelogic, will you please stop suggesting that the BBC is “state funded”, it is not. Whilst it is true that the TVL equates to a tax it even then it is a voluntary tax much like VED is, don’t use a car then you don’t pay the VED tax and like living without a car it is quite possible to live without a TV…

        • Posted August 26, 2012 at 8:42 am | Permalink

          Why can’t I be allowed to watch ITV or Sky without being forced into paying for the BBC?

          • Posted August 26, 2012 at 10:54 am | Permalink

            That is a bit like asking why you can’t use the M6 toll road without paying VED… But yes Bob, you do make a valid point.

            The problem is not funding the BBC via a licence fee (although it is probably now set to high), it is what the BBC does with that funding, I agree that it is high time that the BBC returned to a pure Public Service Broadcasting organisation, providing what the commercial and subscription services don’t or can’t provide due to their need to be populist and thus attract advertising or subscriptions. The BBC is now simply to large, to diverse and far to ‘commercial’ in its outlook.

          • Posted August 26, 2012 at 8:02 pm | Permalink


            “That is a bit like asking why you can’t use the M6 toll road without paying VED… “

            Two wrongs don’t make a right.

          • Posted August 27, 2012 at 9:42 am | Permalink

            @Bob: I notice that you totally missed my wider point…

          • Posted August 27, 2012 at 5:18 pm | Permalink

            “I notice that you totally missed my wider point…”

            No I didn’t.

          • Posted August 27, 2012 at 7:18 pm | Permalink

            @Bob: Then care to tell us how you would fund PSB television in the UK (assuming that you understand the term PSB) and who would have to provide such programming? Oh and don’t cop-out and say that PSB TV isn’t required as even in the USA the regulators say that it is.

          • Posted August 28, 2012 at 9:30 am | Permalink


            Care to tell us what aspect of the BBC’s 3.5 billion pounds worth of output do you think is providing an essential public service?

            If you can think of something, I’m guessing it can be provided without the BBC.

          • Posted August 28, 2012 at 12:58 pm | Permalink

            Bob, if read all my comments in this blog you will see that I am not defending the current BBC, it needs to change, what I do not want is to throw the PSB baby out with the bathwater.

            I also note that you have yet again ignored the question I put to you, is that you are ignorant to what PSB is or that you simple don’t have an answer?…

          • Posted August 28, 2012 at 6:26 pm | Permalink


            This may come as a shock to you Jerry, but PSB can be provided through commercial broadcasters.

            It could be paid for from public coffers, or it could be provided as a condition of the broadcasters licence.

        • Posted August 27, 2012 at 12:33 pm | Permalink

          If the state passed a law to say everyone who lived in a house with windows had to pay me personally £150 a year for a window licence tax would I be state funded or not? Is there any difference in reality between that and state funding from a licence tax being paid direct to government, and then passed over?

          • Posted August 27, 2012 at 5:20 pm | Permalink

            Don’t go giving Continuity Brown any ideas.

    • Posted August 25, 2012 at 2:36 pm | Permalink

      “A Conservative government should announce an end to state-money for broadcasting, arts, health, education and welfare.”

      I tend to agree, in general, but when are we ever going to get a Conservative government? Propaganda is so much a part of “Government”. Using taxpayers own money to deceive them, through the BBC and many other tentacles of the state.

      • Posted August 25, 2012 at 8:58 pm | Permalink

        @lifelogic: “I tend to agree, in general, but when are we ever going to get a Conservative government?

        With policies like that, never…

      • Posted August 26, 2012 at 8:49 am | Permalink

        @lifelogic “I tend to agree, in general, but when are we ever going to get a Conservative government?”

        When conservative voters stop voting for the Tories and start voting for the real conservative party (aka UKIP).

        The voters surely must by now have realised that the Tory Party has been hijacked in the same way that the BBC was hijacked by Fabian fifth columnists.

        • Posted August 26, 2012 at 10:59 am | Permalink

          Have you actually read the UKIP manifesto Bob, I suspect not, if you want the sort of policies you and others suggest then I suspect you will be highly disappointed once you get your UKIP government – more middle of the road than radical right wing, except for their views on the EU.

          • Posted August 26, 2012 at 8:05 pm | Permalink


            I have read it. That’s why I became a member.

            Can you tell me what policies you think I shouldn’t like?

          • Posted August 27, 2012 at 3:20 pm | Permalink

            Judging from your comments on Mr Redwood’s blog I’m surprised that you found anything other than their wish to leave the EU acceptable, you come over as quite right-wing yet the UKIP have taken quite a lot of effort to occupy the centre ground, hence why they have had some success in appealing to (one-time) Labour supporters. Perhaps you are not as ‘politically-right’ as your writing style suggests?

    • Posted August 25, 2012 at 7:07 pm | Permalink

      We are still waiting for your funny right wing comedians Paul? Can’t think of a single one? Ha! Ha! These organisations to be replaced with what? Nothing, pay for use or insurance in your fantasy.

      • Posted August 25, 2012 at 8:34 pm | Permalink

        Jackie Mason perhaps.

      • Posted August 27, 2012 at 12:10 pm | Permalink

        If William Hague isn’t to your taste, then perhaps Disraeli is. Churchill too had his moments. Or you could go all the way back to Jonathan Swift, probably the funniest man there has ever been. Mind you, Tories in the first half of the 18th century were not the same as modern Tories.

        • Posted August 27, 2012 at 3:35 pm | Permalink

          As I say we are still waiting. I met Lembit Öpik once who fancies himself as a comedian. Knob he is. Funny he is not, and pretended I thought he was seeing both of the Cheeky girls at the same time. He pointed out that was not and I said that he should put some more work in, in that case. He didn’t laugh…

  14. Posted August 25, 2012 at 9:18 am | Permalink

    Unfortunately you can’t go on relying on QE to finance endless budget deficits, any more than you could rely on official intervention to support £1=DM3. Eventually, the whole market becomes a panic seller of gilts to the Bank – the buyer of last resort. When no-one is willing to hold gilts because they lack credibility, we will look much as Greece did with its soaring yields, and we will have hyperinflation soon after.

  15. Posted August 25, 2012 at 9:30 am | Permalink

    I don’t pay for a TV licence.

    I would be happy to pay for one if the proceeds were used for some useful purpose, like providing living quarters which were equivalent to what is provided for indolent NEETs.

    I refuse to fund collectivist propaganda.

    Reply: I trust you fdo not have a tv, as paying a licence fee is a legal requirement if you have a tv.

    • Posted August 25, 2012 at 9:31 am | Permalink

      Correction “…living quarters for our armed services…”

    • Posted August 25, 2012 at 8:36 pm | Permalink

      I think only if you watch “live” tv so you can use iplayer not live – I believe.

    • Posted August 25, 2012 at 9:39 pm | Permalink

      @ JR Reply: John, I think you will find that is wrong it is only illegal to receive television programmes via over the air broadcasts (thus this includes using VHS, DVD and PVR type video recorders) or watch a nominally over the air broadcast by another means in, or near, real-time [1] (but according to the back of my TVL catch-up services do not require a TVL…). Thus one can still have a TV installed and use it to watch pre-recorded content such as commercially released DVD’s etc. – it is also technically possible to receive the BBC’s radio broadcasts via Freeview or satellite. That said, if you have a TV installed complete with a aerial/satellite connection and the TVLA calls you really are asking for a pain in the neck even if you are not breaking the law.

      Of course, as the TVLA makes its profit from people paying the TVLA (or the fines otherwise) it is in their interest to perpetuate the the myth that a TVL is required for mere ownership of a TV or receiver. Time we did away with this sort of profit making Agencies, especially when they are to all intent and purpose investigator, Judge and Jury -unless one takes your case to a real court of course, many if not most people will give in at the bullying stage though…

      [1] cable or live streaming via the BBC’s iPlayer for example

      • Posted August 26, 2012 at 11:05 am | Permalink

        Sorry, not sure what when wrong with the formatting of the above comment, a filter seems to have removed a commonly used abbreviation (for stating that the poster is not a lawyer) and taken a html closing tag with it…

      • Posted August 26, 2012 at 7:30 pm | Permalink

        Umnm surprised an ethernet hardrive box manufacturer & ISP & screen manufacturer (optional plugin dtv/aerial card?) havent got together to provide a comprehensive service which avoids the TV Licence fee. Its probably possible.

        1) ISP records the live broadcast to an archive or gains access to a similar archives.
        2) As soon as the show has stopped broadcasting live, enable the online downloads or online streaming. The local box being programmed to hold all the (overnight) downloads on the channels or programs selected.

        That should do for the BBC in its current form.

        • Posted August 27, 2012 at 9:35 am | Permalink


        • Posted August 27, 2012 at 9:59 am | Permalink

          @sm: They would get taken down faster than “Megeruploads” and “The Pirate ship” or what ever they were called, try reading up on the copyright laws…

          As it is, an IP connection, browser, games console or IPTV capable DVD/STB more or less allows what you suggest from the BBC’s iPlayer own servers.

          • Posted September 2, 2012 at 9:03 pm | Permalink

            Why would the free to air commercial stations object to the material going out via an archive? Particularly if they are driving the joint venture with other media partners?

            I am sure they can see the commercial opportunity if you cant? It will probably still contain ads.

          • Posted September 8, 2012 at 6:13 pm | Permalink

            Maybe the iplayer is ran only as a spoiling tactic to potentially reduce any commercial return from a privately led operation and or influence rather than inform? I smell self preservation.

            Otherwise why FOC via on demand streaming and not via live broadcast or live streaming?

    • Posted August 26, 2012 at 7:45 am | Permalink

      Re reply.

      A common misconception. The licence is required to watch broadcast programmes, not to have a TV.

    • Posted August 26, 2012 at 8:53 am | Permalink

      Reply to reply:

      Mr Redwood, I am surprised that you believe that to be the case.
      May I suggest that you re-check the regulations and report back in a new blog article and tell your readers the truth?

  16. Posted August 25, 2012 at 9:35 am | Permalink

    I suspect that the BBC is in the government’s pocket. The government says it is cutting public expenditure, but Mr Redwood shows us that it isn’t. The BBC is following the government line. They are in cahoots!

  17. Posted August 25, 2012 at 9:45 am | Permalink

    The inadequacy and relentless left-wing bias of almost all the main BBC interviewers on economic issues (Andrew Neil stands out as an exception) is a national scandal, given its funded by a poll tax. It is not possible to force the BBC to be ‘neutral’, as almost all its key people are on the political left. But Conservatives should be able to demand balance. Meaning, in a disgraceful and inadequate interview like the one above, the BBC is forced to give air-time to an opposing view. Objection should also be made when an interview or debate is set up to be biased. A few weeks ago a debate was introduced on the Today Programme on poverty between someone from the ‘highly respected’ (ie left-wing) Kings Fund and the ‘free-market think tank’ (ie baddies) Adam Smith institute. Why has Lord Leveson not investigated links between key BBC figures – eg Stephanie Flanders, Robert Peston etc – and certain politicians?

    Reply BBC journalists have to have links with key politicians to stay informed. The BBC journalists do also give left of centre politicians a hard time from time to time when the news warrants it.

    • Posted August 25, 2012 at 8:41 pm | Permalink

      The BBC journalists are all, almost without exception, slightly dim, innumerate, Guardian think, lefty arts/humanities graduates – usually with rather a chip on their shoulders of some sort or other and often from Scotland or Wales it seems.

      But that is perhaps, just my impression.

      Reply. There are some intelligent and well educated BBC journalists. Mr Davis is both intelligent and well read in economics.

      • Posted August 26, 2012 at 9:03 am | Permalink

        “Reply. There are some intelligent and well educated BBC journalists. Mr Davis is both intelligent and well read in economics.”

        In which case it indicates deliberate bias!

        • Posted August 26, 2012 at 7:01 pm | Permalink

          In which case it indicates deliberate bias!

          No it doesn’t, it indicated he can be the “Devils Advocate”.

        • Posted August 27, 2012 at 12:40 pm | Permalink

          Evan Davis is (alas) rather better than most on the BBC, but he clearly suffers from BBC think, Oxford PPE think, political correctness, money grows on trees think and perhaps not being scientist too, when it comes to anything scientific.

      • Posted August 27, 2012 at 7:13 am | Permalink

        Evan Davis is a good presenter – he does some excellent programmes both on TV and radio. But I do not think his talents are best employed on the Today programme. His interviewing is much better elsewhere.

  18. Posted August 25, 2012 at 9:58 am | Permalink

    Are contributors really that surprised about the behaviour of the BBC and its interviewers?! The BBC is state funded and we on this side of the fence know that the BBC is pro EU, anti Conservative etc., and they would obviously respond by saying that they are always impartial and fair minded etc. Their hidden agenda is to get a socialist government back into power as soon as possible and they will use every known state media trick in the book to do so, one of the reasons why it should be privatised.

    • Posted August 25, 2012 at 9:43 pm | Permalink

      merlin, please point out were the state funding is?…

      • Posted August 26, 2012 at 9:10 am | Permalink


        If the state forces households using a TV to pay a fee to fund the BBC, then I would call that state funded.

        The state could use that money to fund something else if it so wished, like reducing the deficit.

        • Posted August 26, 2012 at 11:15 am | Permalink

          Bob, the state doesn’t force you to watch TV, so the state doesn’t force you to pay the TVL fee. In fact the BBC was set up with funding via the license fee expressly to remove the BBC to at least arms length from the state (government), it would have been all to easy for the BBC to have been funded via the tax system and exchequer.

          In any case, it is quite possible (shock, horror) to live without watching broadcast TV if you really do object to funding the BBC.

          • Posted August 26, 2012 at 7:35 pm | Permalink

            The state restricts the use of live broadcast technology unless you pay the BBC a tax. It is therefore imho an inhibitor of free speech.(it being the dominant media for now)

          • Posted August 26, 2012 at 8:13 pm | Permalink


            The Licence fee was introduced at a time when there was no other broadcasters and before digital decoders were invented.
            That situation is no longer the case.

            To paraphrase you and Paxman, the state doesn’t force me to wash my clothes, but should I pay the makers of Persil a licence fee because I own a washing machine?

          • Posted August 27, 2012 at 3:29 pm | Permalink

            @Bob, to continue your analogy, if there was a washing machine tax you would be quite at liberty to wash your cloths by hand and thus avoid paying the tax. Now if you really want an example of something that is all but a tax but is called a charge (and very difficult to avoid) then start thinking about your waste water bills were you are forced to pay for acts of God – but of course those charges are to your beloved free market companies so not a squeak from you I expect…

          • Posted August 27, 2012 at 5:35 pm | Permalink


            As I said before, two wrongs don’t make a right, but if the water utilities start promoting Marxist propaganda then maybe I’ll get exercised about them too.

          • Posted August 27, 2012 at 7:43 pm | Permalink

            @Bob: No, those “two wrongs” (as you call them) prove you wrong…

            Oh, and with regards to the utilities, what if they started to promote (what some considered) far right political opinions, would you complain or cheer?

          • Posted August 28, 2012 at 9:32 am | Permalink

            You’re clutching straws now.

          • Posted August 28, 2012 at 1:04 pm | Permalink

            I think those still; reading this blog can judge who is actually clutching at strews and who is conducting a rational argument about the need for PSB in the UK.

            I see that you once again failed to answer the question asked…

          • Posted August 28, 2012 at 6:37 pm | Permalink

            I didn’t answer because it’s a silly question.

    • Posted August 26, 2012 at 7:57 am | Permalink

      By “privatised” you mean commercialised; funded by advertising. The evidence seems to be there is hardly enough advertising money to fund the existing commercial channels, let alone a whole load more. And in any event two different funding stream are of themselves good for competition.

      Also you take no account of the majority of BBC output which is not politics and current affairs, and which includes some excellent programmes.

      Where there is bias the corrective action is to remove the bias. To bring down the whole edifice because part is sub-standard is plain daft.

      The heart of the problem is the Trust, who are supposed to represent the licence fee payer, and that is where change is needed – see my earlier post.

      • Posted August 26, 2012 at 9:56 am | Permalink

        @Alan Wheatley

        Privatised just means self funding rather than funded by government coercion which often results in people being imprisoned for non payment.

        It could be a subscription based model so that the users pay, rather than charging all TV users, some of whom may not want to view or fund the BBC. And if the programming is as good as some people think it is, it shouldn’t have a problem funding it’s propaganda output.

        • Posted August 27, 2012 at 8:32 am | Permalink

          That is one way of doing things, but what you would get is not anything like BBC as we have known it.

          For instance, “inform” and “educate” would not get a look in, and nor would minority interests.

          I have a long list of things the BBC should be doing, should not be doing or could do better, but none are because there is a licence fee.

          The licence fee is too high and the BBC should be doing less, leaving more space for commercial broadcasters. But the BBC should still be there as a licence fee broadcaster as an alternative business model by which each can be compared and judged.

          • Posted August 27, 2012 at 9:46 am | Permalink

            @Alan Wheatley
            Well it would be nice to think it could be done, but I fear that the commie infestation has gone too far.

            One possible solution would be to give some of the licence fee money to the Biased BBC blog, to enable them to scale up and create a watchdog with the power to enforce the Trust terms.

            Also, Chris Patten would need to be replaced by a more objective person like Andrew Neil for example.

    • Posted August 27, 2012 at 12:21 pm | Permalink

      Would it be so unreasonable, in these hard times, to force the BBC to carry a few minutes of advertising once an hour? That would reduce the licence fee.

  19. Posted August 25, 2012 at 10:20 am | Permalink

    The BBC has demonstrated repeatedly that it will tell any lie (or invite any usual suspect on to tell the lie for them without question) and censor any fact (censoring appearance by anybody who might disagree with such spending threats) in the cause of (WORD LEFT OUT-ED) big government.

    It has lied and lied and lied and broadcast wholly dishonest obscenities about global warming sceptics (refusing to either produce any evidence for the obscenities or to withdraw them).

    While heavily reporting the Houla massacre in Syria, censoring only the vital fact that the victims were Assad’s allies not his enemies, they have, continuosly, censoerf any mention of far worse massacres (carried out in former Yugoslavia-ed)Having more than 70% of broadcast news coming from state owned stations (BBC & C4), which is the legal definition of a monopoly, is clearly incompatible with any suggestion that we are a free democracy, even that we can approach the level of democracy of Russia or Iran.

    etc etc

  20. Posted August 25, 2012 at 10:30 am | Permalink

    Cutting the deficit is a rationale for rebalancing the economy away from waste by government on itself and on those who prefer to depend on the hospitality of others and towards self-sufficiency and encentives to work.
    Is it not the adoption of a healthier lifestyle, the key to curing the patient, not simply excising his adipose tissue or how that is done?

    This goverment is a total disgrace; their multiculturalisation agenda which absolutely no one in this country apart from a (words left out-ed) minority wishes for and which Caste Iron, himself, says has failed, proceeds as usual by encouraging people to come to live here, offering lifestyles that the majority cannot afford and others to put our people on the dole. They continue to offer NHS as a free global resource; they waste money on themselves and their over-remunerated jobsworths and spray it arbitarily over the rest of the globe. They adopt an energy policy which has been designed for the sole purpose of stymieing our economy whilst enriching banksters. They have made no effort to rein back the City casino operators, to prosecute the multi-billion frauds which are public knowledge, or to recreate a proper banking sector to support the real economy. Meanwhile, Mr Hague is running round in circles doing his best to humiliate this country for the benefit of neocon lowlifes, promoting policies which provide cost and risk and no benefit to us at all.

    The BBC should be packaged up and sold off before it loses its value through technological change, which has already removed its raison d’etre. We don’t need a state broadcaster that spews government lies and propaganda as well as its own and charges us for the privilege. The BBC is a microcosm of government, filled with ineffectual jobsworths, massaging their egos and pension pots, self-perpetuating and inward looking. The licence fee must end.

    • Posted August 25, 2012 at 9:57 pm | Permalink

      The BBC certainly needs to be slimmed down, perhaps even removed from the providing news (if there is effective regulation of both commercial and subscription TV so they (carry on) provide a free-to-air news service available to all), for many other genres there are many that the commercial and subscription broadcasters do not want to or can’t provide that still need to be made available, this is where the BBC should be – that said, it should not be in direct competition with the commercial or subscription services with programming like EastEnders or channels such as BBC1 and BBC THREE.

      • Posted August 26, 2012 at 1:29 pm | Permalink

        “for many other genres there are many that the commercial and subscription broadcasters do not want to or can’t provide that still need to be made available, this is where the BBC should be”

        Sky has almost a monopoly of sport, so presumably you are refering to their arts coverage:–thats-despite-employing-highly-paid-creative-director-Alan-Yentob.html

        • Posted August 27, 2012 at 10:18 am | Permalink

          Sky has an almost monopoly of subscription TV in the UK [1], perhaps that needs to be broken up first before anything is done about the BBC and TVL fee – people should be able to subscribe to only the channels they wish to receive?

          How is the BBC’s funding method any different to someone who is being forced to subscribe to the minimum BSkyB ‘package’ before they can pay extra to receive what they really want, such as Sky Sports (and then why the need to subscribe to all four), ESPN or specialist channels like Ciné Moi.

          [1] satellite being the most widely available method of reception

          • Posted August 27, 2012 at 5:45 pm | Permalink


            “How is the BBC’s funding method any different to someone who is being forced to subscribe to the minimum BSkyB ‘package’ “

            No one is forced to subscribe to Sky.
            And Sky don’t demand money under threat of prison from people who watch Freeview, unlike the BBC/TVL setup.

          • Posted August 27, 2012 at 7:49 pm | Permalink

            Bob, you are a BSkyB shareholder and I claim my £5…

          • Posted August 27, 2012 at 7:53 pm | Permalink

            Oh and Bob, if I was to hack a BSkyB STB so that I could watch any or all their subscription channels for free I suspect that I might just face imprisonment (or at least a steep fine), stealing intellectual property is a crime you know…

          • Posted August 28, 2012 at 9:36 am | Permalink

            Not sure I follow your gist.
            Are you suggesting that someone watching ITV or the QVC shopping channel without a TV licence is akin to stealing intellectual property?

    • Posted August 26, 2012 at 8:04 am | Permalink

      I do not know what “technological change” you are thinking about.

      The BBC gives you HD sound (via the Radio 3 web site) which as far as I know is unique for a UK broadcaster. They are also starting to broadcast some HD programmes in 3D; part of the Olympics, for instance, which was brilliant.

      If you are thinking that TV broadcast technology is soon going to be superseded by internet technology then you obviously do not understand the technology.

      • Posted August 26, 2012 at 1:34 pm | Permalink

        The BBC can upgrade their techology as much as they like; that does not alter the fact that there are increasing amounts of media in all formats available online which competes for people’s time.

        • Posted August 26, 2012 at 7:25 pm | Permalink

          What about those who don’t have computers, what about those who don’t have a fast enough internet connection for the content you suggest they everyone is watching, sorry but over the air broadcasting is going to be the main distribution method for many years to come.

          • Posted August 27, 2012 at 5:50 pm | Permalink


            Once we catch up with South Korea’s broadband standard the internet will be effectively free cable tv.

            The younger generation already use it as such, which is why the BBC are so desperate to try to appeal to them with BBC3.

  21. Posted August 25, 2012 at 10:32 am | Permalink

    Those in public life, whether they are politicians, authors, large company directors, actors musicians etc rely on good relations with our dominant media organisation, the BBC. That is why the coverage is so lop-sided.

    Even journalists outside the BBC are influenced as they have an eye on the only news outlet with money to employ them in the future. The influence on us is scary.

    If I was a large supplier and I was given a platform to speak at a trade event, I would naturally heap praise on my largest customer. Yesterday the BBC declared in large headlines that Elisabeth Murdoch supported the BBC licence fee. She also happens to head up a supplier from whom the BBC is a major customer.

    This kind of coverage (has a possible conflict of interest-ed).

    The sad thing is that nothing can be done while those in public life are either excluded from the BBC stage or are unwilling to risk their careers by speaking out.

    Those that do criticise the BBC are left on the margins and I am sad to say that John Redwood is one of them. The damage reverberates and costs us £billions as government after government does all the wrong things in order to please the propagandists and their extremist friends.

    • Posted August 25, 2012 at 7:09 pm | Permalink

      I take it you all have the same problems with other TV channels such as SKY and channel 4. If so what do you propose to do about these channels sending the wrong messages?

      • Posted August 25, 2012 at 10:05 pm | Permalink

        Good question Bazman, how about removing the requirement for broadcasters to be impartial, let them nail their colours firmly to the channel idents, that way people will be able to make up their own minds what to believe, the problem at the moment is people assume what they are being told are facts when much of the time it is either speculation, opinion or simple lies dressed up as facts – as you say, all the broadcasters do it, and not just in news and current affairs, many documentaries are more fiction that fact.

        • Posted August 26, 2012 at 4:44 pm | Permalink

          Given that they removed the impartiality requirement in the USA but people still think they’re being told facts it’s clear that this is the wrong thing to do.

          • Posted August 26, 2012 at 7:29 pm | Permalink

            @uanime5: More likely they are just watching channels that broadcast what they believe, just as people in the UK read the newspaper that prints what they believe. Few who believe in communism would choose to read the Daily Mail or Telegraph for example.

    • Posted August 25, 2012 at 8:45 pm | Permalink

      Indeed would we have had Majors ERM disaster without the BBC, I suspect not. Indeed would we have had to suffer the fool, John Major as PM at all without the BBC?

      • Posted August 26, 2012 at 11:27 am | Permalink

        Wow, lifelogic your hatred for the BBC now suggests that the BBC controls the Tory backbench – from were, if I recall correctly, the first moves to unseat Mrs Thatcher started.

        The only thing the BBC did ‘wrong’ was to broadcast the political thriller mini series “House of Cards” just as this unrest came out into the open – indeed under Michael Checkland, the BBC was considered very friendly towards Thatcher.

  22. Posted August 25, 2012 at 10:32 am | Permalink

    And this surprises anyone? I gave up on the BBC ages ago. We cannot depend upon them to be impartial. I exclude local radio from that assertion, because I have no trouble putting a right and properly considered view via the various programmes broadcast throughout the week, but BBC national radio and television is surely the mouthpiece of the liberal left. And it goes on and on without anyone doing anything about it.

    I absolutely resent having to pay for it via the licence fee. Maybe we ought to go on a licence fee strike.

    Tad Davison


    • Posted August 26, 2012 at 8:21 am | Permalink

      Tad, do you resent paying the licence fee for the all the BBC programmes that are not politics and current affairs?

      When I look through the programme guide of an evening for some broadcast entertainment I usually find at least one BBC programme I particularly want to watch, or listen to, that is nothing to do with politics or current affairs, and so in no danger of being tainted by the bias we both dislike.

      When I look at the commercial broadcasters their combined offerings are less likely to have something of equal or greater interest. So I do not want to bring down the BBC funded by the licence fee because of a failing of just one part.

      Bias should be removed by attacking the bias, not the whole organisation. The heart of the problem is the Trust, which is supposed to represent the licence fee payer. The solution is to make membership of the Trust open to all by election; the elected members then choose the Chairman from among themselves, and they set the licence fee.

      • Posted August 26, 2012 at 10:23 am | Permalink

        @Alan Wheatley
        The propaganda is not just in news and current affairs.
        It runs through their so called comedy, drama and children’s programs.

        The BBC person who stands head and shoulders above the rest as a true professional is Andrew Neil.

        • Posted August 26, 2012 at 7:33 pm | Permalink

          Indeed Bob, the BBC are just like Hollywood was in the 1950s, a Red under every bed….

          Untrue then and untrue today.

      • Posted August 26, 2012 at 12:33 pm | Permalink

        I’m not very demanding. Just get rid of Paul Mason, who pretends to be unbiased on the economy, on the Euro and on UK/EU affairs …………………. words fail me. He could esasily pass for an Ed Balls speech writer. Then there is the other BBC economist, who is an ex-girlfriend of Ed Balls.

        • Posted August 26, 2012 at 7:36 pm | Permalink

          @Lindsay McDougall: Who would you replace him with, one of Mrs Thatchers ex-speech writers by any chance?…

          • Posted August 27, 2012 at 2:21 am | Permalink

            It’s difficult. Milton Friedman and Alan Walters are dead and Nigel Lawson is elderly. (Time passes.)

            Of the modern crop of journalists, Liam Halligan is my favourite prophet of doom, in an era which very much needs one.

            The trouble with most economists is that they are “deficit deniers” in the way that David Irving was a “holocaust denier.” They have absolutely no street cred.

    • Posted August 26, 2012 at 8:23 pm | Permalink


      “I absolutely resent having to pay for it via the licence fee. Maybe we ought to go on a licence fee strike.”

      We stopped paying the licence fee some time ago, and it’s be much easier than we expected. We make more productive use of our time now, and on the odd occasion that there is something worth watching, we use the catch up services. Give it a try.

  23. Posted August 25, 2012 at 10:34 am | Permalink

    The BBC used to champion the British tradition of adversarial debate and interviewers saw their role as Devil’s Advocate testing the interviewees position and by doing so allowing the viewer to decide.
    Over the last 10 years the BBC has changed its output because I think the editors and directors see their role as informing the public responsibly. The BBC believes that allowing non mainstream views to be aired is dangerously irresponsible. When this is taken to its conclusion we are presented with interviees as advocates given a platform to expound an authodoxy. Look out for the next time a presenter asks “How important do you think … is? ”
    Sadly, I think Evan Davis genuinely thinks he is doing the right thing.

    The principle of presenting competing views is more important than any single cause.

    • Posted August 25, 2012 at 8:56 pm | Permalink

      “The BBC believes that allowing non mainstream views to be aired is dangerously irresponsible.”

      So the MSM should not broadcast views that it does not broadcast? Presumably to prevent them becoming mainstream?

      “I think the editors and directors see their role as informing the public responsibly.”

      I had no idea that ‘informing…reponsibly’ was synonymous with ‘grooming’.

      By bending so far over backwards to fair to the BBC, you are in danger of toppling. They really don’t deserve the benefit of the doubt. Their behaviour is simply not that ambiguous.

  24. Posted August 25, 2012 at 10:53 am | Permalink

    As a householder, I have no debts.
    I used to have, when the interest rate on my mortgage shot up to 15%. My lender, strangely enough, would not allow me to borrow anymore to cover the extra interest payment but my Father did and it was he who bailed us out.

    Therefore, it is mind boggling for me to watch as the BoE creates money from air to lend out as a loan to the Banks who, themselves are deeply in debt from home mortgage defaults to dodgy EU loans. They are merely using the cheap money to cover their losses. They are not helping the economy. Borrowing for investment is one thing, borrowing to cover outstanding debt, is another and much more sinister. Deflation and Depression will be the result.

  25. Posted August 25, 2012 at 11:02 am | Permalink

    Sometimes Mr Cameron must wonder why government spending today, after accounting for inflation, is about 50% greater than it was ten years ago.

    Back then public services didn’t seem so bad.

  26. Posted August 25, 2012 at 11:39 am | Permalink

    Growth. What is “growth”? Is it depicted by a rise in GDP? Isn’t GDP a measure of purchases rather than products manufactured and sold? And aren’t the Public Sector purchases included within the GDP? So, that being the case, I can see where this woman is coming from. If the Government stops borrowing to spend and cuts back on its existing spending programme, GDP is bound to fall. However, it it maintains its spending programme and borrows more to spend more, GDP will rise. Hallelujah! Problem solved by the IMF.

    Isn’t it time we dumped GDP and replaced it with an index based on the P/L of GB plc? Clearly, GDP is a tool that Governments can manipulate for their own ends and therefore, is not providing us with a true picture of the finances of the nation.

  27. Posted August 25, 2012 at 12:20 pm | Permalink

    Cancelling the debt or not, is smoke and mirrors. Who do you think it will fool?

    QE and government debt cant be talked about without looking at exchange rates and trade imbalances.

    The change in the value of the fiat currency is the price paid! Anyone notice.

    Power companies have announced price increases ( as we are still fossil fuel dependent in a global price setting world). Meanwhile gold is being used more to fund trade deals.

    It seems we are trying to walk a tightrope between high inflation and GDP contraction. Meanwhile some undeserving win and some have to pay, in this rigged manipulated tbtf ‘FIRE’ economy.

    Of course the impacts of the policy are never voted on, can you imagine the debate over a £50 bn tax increase or giveaway to sectional interests. (That could help fund the abolition of NI)

    Anyway what happens when HMG owns all of the gilt market, is it a market? would we not be better moving to full reserve banking and cut out, the erm err the so called private sector banks and associates from the cookie jar.

    The compulsory TV tax should be removed. Any public sector broadcasting should be funded by central tax (with regular tendering) or by voluntary subscription.

    £3.5 bn a year that could probably fund 2 * 1000 mw of nuclear power existing uranium technology or even research into Thorium reactors or even renewables and storage technology, or be just left with people to spend as they choose as other taxes like inflation bite.

    • Posted August 26, 2012 at 8:29 am | Permalink

      The licence fee should not be removed because it has many advantages.

      It is probably too high because the BBC is doing too much, but that is a different argument.

      It should also be spent on more minority interests, and less duplicating what commercial broadcasters can do well, for if a licence fee funded broadcaster is not to support minorities then who on earth will?

      • Posted August 26, 2012 at 10:27 am | Permalink

        @Alan Wheatley

        “for if a licence fee funded broadcaster is not to support minorities then who on earth will?”

        They don’t promote minority political parties, they actively ignore them!

        • Posted August 26, 2012 at 7:41 pm | Permalink

          They [the BBC] don’t promote minority political parties, they actively ignore them!

          I’m sure Arthur Scargill and his Socialist Labour Party comrades would agree whole heartedly with you Bob…

          PS, sorry for swearing on your blog John, I bet I’m the first to mention that political party on here?!

      • Posted September 2, 2012 at 9:33 pm | Permalink

        Advantages for whom?

        I think i would prefer cheaper electricity or more pointedly the money spent as consumers choose….and a multiplicity of free to view channels.

        I would like to watch Max Keiser on Russia Today via Freeview, but i instead use download non live service, because of the restrictions on live broadcasts.

        This is probably a suboptimal use of bandwidth as it is technically constrained at present. Freeing up the broadcast spectrum from arbitary taxes would allow for more innovation.

        The BBC could encrypt and continue to charge but they dont have the what it takes!

  28. Posted August 25, 2012 at 12:23 pm | Permalink

    ‘Why do all IMF programmes demand cuts in spending and tax rises, if they now think this cuts national income? Why did they impose such cuts on Greece at a time when its economy was clearly in free fall, if they now think this will make it worse?’…….A very pertinent point….Could the IMF and its medicine actually be bad for a nation’s economic prospects but good for its creditors?


    • Posted August 25, 2012 at 7:12 pm | Permalink

      What do you propose for Greece? Tax cuts? We have seen how tax avoidance by the very rich and overspending in Greece has put them in the position they are in now.

    • Posted August 26, 2012 at 8:30 am | Permalink

      Policy may well be targeted at helping selected creditors.

    • Posted August 26, 2012 at 7:49 pm | Permalink

      But Zorro, isn’t that the point, if the creditors don’t matter then why not just let Greece (and the other PIIGS) default?

      • Posted August 26, 2012 at 9:46 pm | Permalink

        ‘The IMF promotes international monetary cooperation and exchange rate stability, facilitates the balanced growth of international trade, and provides resources to help members in balance of payments difficulties or to assist with poverty reduction….’…….Jerry, not according to its stated purpose on its website, struggling to see creditors mentioned there…..


        • Posted August 27, 2012 at 10:25 am | Permalink

          Zorro, not in so many words but what you quoted seems to do just what you suggest, just in many more words than necessary – read between the lines…

  29. Posted August 25, 2012 at 1:15 pm | Permalink

    I have briefly read your report on borrowing, sorry I speed read and miss a lot out, I am a poor educated person, but borrowing to make profit needs a plan first and not an agreed funding shit or bust attitude that doesn’t work when you run a business, but if we don’t know what the plan is to make a reply and only get the answers to the plan we knew nothing of, how can we reply?-Far too much money is going thru Gov’t/Ministers hands from people like myself that continue to send them cash via VAT and income tax returns, personally I feel we shud get a percentage of the take for feeding this insane MONSTER?

  30. Posted August 25, 2012 at 1:20 pm | Permalink

    I’m not an economist but I can see that if any entity was involved in getting on for half of the money transactions in a country then it couldn’t suddenly chop an average of a quarter off all the payments it made without that having a severely adverse, and probably catastrophic, knock-on effect throughout the whole economy.

    That would be true whether the entity was the UK government, or some huge private conglomerate which was so badly managed that it got itself into the position where the money it was getting in from sales covered only three quarters of its costs.

    On the other hand, if the UK government was very much smaller, and its spending was equivalent to say only 5% of GDP, then it could suddenly cut its spending by a quarter without that having a disastrous impact on the other 95% of the economy.

    Those were the twin problems faced by the Labour government in early 2009: it had got itself into the position where its public spending was well over 40% of GDP, but it was now having to borrow a quarter of all the money it was spending, and if it tried to balance its books by ruthlessly chopping a quarter off its spending then in itself that would have been equivalent to more than 10% of GDP, with the probability that it would have triggered a further widespread economic collapse and the final economic contraction would have been much greater.

    • Posted August 25, 2012 at 9:46 pm | Permalink

      The household sector had also been borrowing about 10% of GDP per annum from 2001 – 2007. Then they had to stop suddenly because the credit/land price bubble burst.

      It’s a mess, and they are choosing the follow the ‘Japan’ blueprint in response. 200%+ GPD debt and several ‘lost decades’ in next to no GDP growth here we come, if we are lucky.

      • Posted August 26, 2012 at 12:54 pm | Permalink

        But households weren’t borrowing 10% of GDP per annum to fund their immediate outgoings. If families could no longer borrow the money to buy bigger or better houses then they didn’t buy them, and the effects of the fall in the quantity of borrowed money being put into the house market would gradually work their way through the market and eventually trickle out into the wider economy in a diluted form. In contrast if the government could no longer borrow the money to cover its outgoings then the effects would be more immediate and undiluted. I don’t know what contingency reserves the Treasury may have as a buffer but I guess that it would be weeks rather than months before it had to tell all government departments that the money was running out and they had cut their outgoings by a quarter.

  31. Posted August 25, 2012 at 1:32 pm | Permalink

    Thanks for this blog. Interesting comments.

    There are two reasons for not asking these questions. First, in having regard for the audience one doesn’t want to get too technical or bogged down. There is a published IMF working paper that answers most of these questions but the typical audience member would probably not be interested in reading it, or in detailed scrutiny of the quality of the research. They just need to know such a study has been done and that it is regarded by some experts as credible (which it is given its IMF pedigree). Secondly, in the three minutes of radio we had, it would have been hard to do justice to any of the points you mention. In that kind of duration it’s sometimes better to let an interviewee spell out their their case so we understand what they are saying properly before jumping on them and challenging their view after 60 seconds.

    As it happens, I think the audience are aware that there is a lively debate about austerity and they hear views from both sides (sometimes challenged and sometimes not). I do think many of them they might be interested to know how far opinion at the IMF is changing.

    Reply: Thank you for coming back on this matter. I agree the pedigree makes the viewpoint interesting, which I felt required more time and questions to tease out if this is a major change of view. Is it based on studies of countries that have been through these differing policy approaches, and does it means the IMF is now going to change its austerity programmes?

    • Posted August 25, 2012 at 6:56 pm | Permalink

      Reply to Evan Davis,
      I don’t think you would have been interested if opinion at the IMF had changed towards requiring more austerity.
      I didn’t hear this interview but it must be a rarity as you Today presenters normally interrupt interviewees ad nauseam.

    • Posted August 25, 2012 at 8:11 pm | Permalink

      “…in the three minutes of radio we had, it would have been hard to do justice to any of the points you mention”

      Probably the most important issue of the day. Ought not the time have been created to do justice to those points, Mr Davis ?

      • Posted August 26, 2012 at 7:59 pm | Permalink

        He probably agrees (as I do) but as has already been pointed out, Mr Davis is only the presenter and has an editor/producer talking into his other ear at the same time as he is interviewing – live on air is not the time to argue with your production team, not if you want to keep your job.

        I don’t now routinely listen to Today any more, I have to agree that the current style of presentation leaves a lot to be desired, everything now seems to be reduced to sound bites. 🙁

    • Posted August 25, 2012 at 8:59 pm | Permalink

      “there is a lively debate about austerity and they hear views from both sides”

      The only lively debate they hear on the BBC is are the “cuts” too savage and too fast risking a double dip – not the real debate – are we actually making any state sector cuts at all – we clearly are not and would such cut help the productive sector – as they clearly would.

      When does the BBC point out that the state sector are nearly 50% better paid (including pensions) or that the state sector pensions are now nearly 9 times the size of the average private one? Or that one single persons over large pension, at the BBC, might cost perhaps 100,000 poor peoples TV licence fees to pay it?

    • Posted August 25, 2012 at 9:59 pm | Permalink

      What’s so ‘credible’ about the IMF? Since when did they spot the global credit / land price bubble and bust coming? People that did warn about it were derided, ignored or (in my case) simply denounced by those around them as ‘jealous because they don’t own a house’.

      I remember it well, and it was on obscure weblogs that people made the most accurate predictions and provided the best commentry. The ‘experts’ were left looking like fools.

    • Posted August 25, 2012 at 10:54 pm | Permalink

      Well Euan, you may as well have just stated at the beginning of that “interview” …and now a completely unchallenged statement by a member of the IMF.
      The BBC often preceeds a programme by warning ..the following programme contains swearing or violence etc
      Perhaps its time for the BBC to warn viewers that the next item is a partial view of a current political controversy which we will not be cross examining as we dont have time.

    • Posted August 26, 2012 at 7:21 am | Permalink

      To Evan.You admit that the BBC believes that the R4 audience is incapable of understanding anything ‘technical’ . This is the reason for the dumbing of so many programmes, even on the station which is supposed to serve an intelligent audience. You should ignore your managers. They come from a media/arts background and are too dumb to understand. The audience, or most of them are willing.

      • Posted August 26, 2012 at 8:36 am | Permalink


    • Posted August 26, 2012 at 8:46 am | Permalink

      Don’t blame there being only three minutes available! It is the broadcaster’s choice as to how much time to allocate to a subject. The subject should be given the time it warrants: superficial analysis is worse than no analysis at all as the audience gains no or erroneous understanding. If the decision is that there is insufficient time available for the necessary analysis then limit the coverage to a factual news report.

      As for the audience, if what you broadcast is aimed at those who do not want to get too technical, then that is the audience you will get. Others will give up in despair and go elsewhere.

    • Posted August 26, 2012 at 12:56 pm | Permalink

      “a lively debate about austerity”

      If you want to know about “austerity” you’d do better to look at Greece, because in comparison there has not yet been any “austerity” in the UK.

    • Posted August 26, 2012 at 11:23 pm | Permalink

      The idea that Nanny knows best is too prevalent in modern life. There is certainly a case for suggesting that one of the key requirements for certain positions seems to be an ability to hold a Nelsonian telescope up in public in the face of all the available evidence in the belief that not to do so would bring into consideration “unthinkable” policy alternatives.

      This trend can be spotted for such positions as Governor of the Bank of England, as well as many politicians and BBC journalists, and includes such topics as monetary reform, climate change (where the real longer run threat is competition for resources leading to conflict – a recurring theme in human history), immigration, and aid spending. It is odd that there seem to be more politicians willing to lift a corner of the can of worms than BBC journalists. Where are the modern day incisive yet polite Brian Waldens?

  32. Posted August 25, 2012 at 3:33 pm | Permalink

    Dear Mr Redwood,

    Thank you for this very helpful and illuminating post about debt.

    One clarification: It is perfectly true that the Asset Puchase Facility was set up with Treasury cash/loans. But if may lift a quote from the BoE website:

    “When the APF is used for monetary policy purposes, purchases of assets are financed by the creation of central bank reserves. In line with the MPC’s most recent decision in relation to the asset purchase programme, the APF is authorised to purchase £375 billion of assets by the creation of central bank reserves.”

    This is only a technicality but it would, I think, make it easier to sell to the markets a cancellation of debt held by the Treasury. That assumes that the Treasury buys the off-balance-sheet holding company, which retains neither profits nor losses, for a nominal sum.
    Of course, that would not wash if the Bank set up a new company and continued more QE financed by creating money. Given that vital assurance, however, cancelling the debt should boost confidence in our financial position.

    PS: I am glad that I do not have to listen to the Today programme. I used to admire Evan Davis in his days as Economics correspondent but he seems, to put it mildly, to have been fully absorbed in/by the Today programme ethos. A bit Faustian perhaps.

    • Posted August 26, 2012 at 1:08 pm | Permalink

      The APF is owned by the Bank, and if the Treasury bought the APF from the Bank as a going concern then it would be buying not only its assets but also its liabilities, principally its debt to the Bank which provided £350 billion of new money to the APF to fund its purchases of previously issued gilts from private investors, and if the purchase price paid by the Treasury to the Bank for the APF was just a nominal £1 then the Bank would take a ca £350 billion hit on its balance sheet and it would probably then be bust. Alternatively if the APF sold its stock of gilts to the Treasury for just £1 then the APF would be bust, left with no assets but still owing ca £350 billion to the Bank, and because the APF could not repay the Bank probably the Bank would then also be bust.

      • Posted August 27, 2012 at 5:45 pm | Permalink

        Sorry Mr Cooper, have only just noticed your reply. Maybe we shall have to differ. Any revenue profits in the company after admin costs go straight through to HMT. Of course there can be capital profits or losses, also attributable to HMT. If HMT buys the company and cancels the debt, any such losses would automatically disappear. The only exception is if the Bank/company had bought gilts at above par. Have not checked this but it would be very foolish.
        The Bank’s loans to the company come from it simply creating reserves for itself (ie it said let their be – fiat – money). So if the company disappears, the Bank simply says “let there not be this money” and the Bank’s balance sheet shrinks by the same amount on both sides, being the amount it created in the first place.
        In economic terms, this is dodgy, but then QE always was (except in the unlikely case of it being fully unwound). In accounting terms, it is simple.

        • Posted August 28, 2012 at 12:01 pm | Permalink

          But even if the Bank says “let there not be this money”, that money has been issued and it remains in existence and in circulation as claims against the Bank; mainly it will be in private hands in this country and across the world, with some in the hands of public bodies here and abroad. That would be clearer if it was actually in the form of printed banknotes rather than in electronic form; the Bank could announce to the world that all its banknotes with serial numbers in a certain range, corresponding to the QE money it had printed, were now null and void, but the world would not take kindly to that and would not trust the Bank in the future. That I think is the central point: the gilts owned by the Bank could indeed be cancelled by some internal agreement between different arms of the UK state, but the QE money which has been issued by the Bank can’t simply be cancelled in the same way because it is not owned by any arm of the UK state, and therefore it would have to be recovered through taxation or some other means such as asset sales.

        • Posted August 28, 2012 at 1:02 pm | Permalink

          To enlarge on this: suppose the Bank had actually printed £1 million in £50 notes, with the intention of using that new money to buy previously issued gilts from a certain private investor.

          While that money remained within the Bank, it would be open to the Bank to decide not to buy the gilts, and so not to issue the notes, but instead to cancel them – deface them, pulp them, put them in the furnace – and nobody could complain that they’d been robbed by that money being cancelled.

          But once that attache case of crisp new banknotes had been taken along to the offices of the private investor and handed over in exchange for the gilts certificates that would no longer be the case, and if the Bank subsequently declared that the money it had used to buy the gilts was no longer valid money then whoever was holding those notes at the time would certainly have cause for complaint.

          Which mostly would not still be the private gilts investor who got them first, because not long after he got them he had used most of them to buy new gilts from the Treasury, and the Treasury had then used the new banknotes when paying the government’s bills, and so they were very widely spread.

          Of course it wouldn’t be practical to do large scale QE by printing £50 notes – it works out that a £100 billion in £50 notes would more or less fill an Olympic size swimming pool – but the principle must be the same, that the Bank cannot arbitrarily cancel money that it has issued and put into circulation.

          • Posted September 2, 2012 at 9:52 pm | Permalink

            @DC .. sorry if im pointing out the obvious, the value of the fiat £ is elastic and it is paper backed by promise to pay the bearer stamped at the front.

            It would therefore ceterus paribus fall in value if as more is out in wild in private circulation.

            If a private holder of a security wanted to be repaid , HMG would just give them multiple of bits of paper called £5 pound notes. ie a bond with immediate maturity or longer and cancel the others.

            I think you need to take a Bernanke helicopter view.

  33. Posted August 25, 2012 at 4:29 pm | Permalink

    All very interesting. And John – brilliant figures and explanations. There comes a times, does there not, when one has to finally stand up and say ‘enough is enough’. No more todying to Cameron or the EU. Lets fight to get out of Europe, take on the problem we inherited, and, if necessary, vote/join UKIP – at least we’ll be true to ourselves as the boat sinks beneath us.

  34. Posted August 25, 2012 at 5:03 pm | Permalink

    The BBC’s control of the message stream is probably our biggest obstacle. It sets the political range. Mr Davis guided the debate to suit an agenda – or else he’s not very sharp.

    Murdoch and the tabloids come under fire for brainwashing the public but their work has to respond to a free and fickle market and fails economically when it doesn’t.

    BBC influence pervades every aspect of radio and television scheduling – including children’s TV, drama and soap operas. Those are the areas where the real manipulation is going on.

    In fact one needs to be of independent mind to spend 20 minutes reading something as ‘radical’ as the Daily Mail after 2 hours of the BBC’s subliminal messaging via radio and TV every day.

    • Posted August 25, 2012 at 8:15 pm | Permalink

      BBC doesn’t just have an across the board bias within itself. It has infected other broadcasters all over the place with the same ideas. There is no escape by listening to Sky or Classic FM – except whe the music is playing.

    • Posted August 25, 2012 at 8:48 pm | Permalink

      That’s been put across very well Kevin – I like the description ‘political range’, this is what I feel is a tory problem at the moment hence the stick thrown at Cameron. It seems to me they have been wedged in by treaties/debt/social problems left behind as though they were roadside bombs by the likes of Blair/Brown but have no idea how to deal with them.

      The Tories have simply had no one with the required class since Thatcher to lead them and do what needs to be done – this is what I think s their problem. They should never have failed to get a big majority against (word left out) broon and no one should even be listening to Milliband and his poison tribe – it just shows how far UK politics has sunk.

      On JRs point, several countries have gone through financial re organizations (Canada wasn’t mentioned) and come out the other end which is strange coming from someone in the IMF.

    • Posted August 25, 2012 at 9:54 pm | Permalink

      This study shows the dominance of the BBC as a purveyor of news in the UK:

      The only encouraging feature is that the younger generation are less dependent on the BBC.

    • Posted August 26, 2012 at 7:51 am | Permalink

      Electro. It worries me that my son, who is at good university seems to have absorbed the BBC/Guardian/lecturers agenda. He is open minded fortunately, but underneath he thinks people like you and I are reactionary loons.

  35. Posted August 25, 2012 at 10:16 pm | Permalink

    I agree that the BBC has a very poor record on presenting all the facts related to the Economic Crisis.

    You have four options regarding QE, but you still need to consider the route cause of our current predicament. DEBT Money create by Banks.

    Back in the 1980s, the amount of Government created money was around 12% compared to todays 2.6%. You still need to factor that into your arguments.

    • Posted August 26, 2012 at 11:00 pm | Permalink

      A Correction to the percentage for Government Created money in the 1980s:

      In 1982 Government Created money was 8.64%
      In 1970 it was 15.28%, there was a sharp drop in 1971 down to 13.84%.

      In 1961 it was 20.54%. The percentage value ranged from 15.36% to 20.98% from 1870 to 1970.

      99.1% of Financial Transcations (in value) are now carried out using Private Bank created digital credit (I.O.Us).

      The Private Banking Community now chooses the music that the rest of us must dance to. When you consider that the boardrooms of the Five biggest banks are controlled by just a few men, the decisions that they make control the Economy. The Bank of England usually follows behind.

      The BBC still think that the Bank of England creates all the money and are happy to put the blame on the Government for inflation. The BBC still fails to accept that the Private Banking sector (The money creating sector) creates our money and not the Government. Until they do, there’s very little point in listening to what the key Economics and Business Editors have to say about the subject.

      The IMF have recently produced a Document about Full Reserve Banking (as a research paper only unfortunately) but in this report they state four big advantages of Full Reserve Banking. Those being – bank bailouts would not be necessary, Government debt would drastically reduce, Private Debt would reduce and the Business Cycle would become inherently stable.

      The BBC do not like good News so we didn’t hear about this IMF Report. They are too busy reporting on “News” from Syria which will probably turn out to be another false flag event to ease the way to a No Fly Zone over Syria, resulting in another Middle Eastern Country being bombed back to the Stone Age.

      • Posted August 27, 2012 at 12:07 pm | Permalink

        Would JR care to comment on the City of London and how its unique status within the UK effects our democratic institutions and promulgation of economic and monetary policy?

        I would like to know how more about how the UK and its parliament maintains its independence and exercises control and regulates the City of London in all our interests?

        There doesn’t appear to be a lot of information around?

        • Posted September 2, 2012 at 9:27 pm | Permalink

          I guess not. Most Politicians who want to continue to be Politicians steer well clear of the City of London problem.

  36. Posted August 26, 2012 at 3:19 am | Permalink

    The trouble is that the BBC is like a dinner party where everyone wants to seem nice. It’s socially unacceptable not to be. One of our problems as a country is that niceness has been translated into policy at every level. This includes being frightfully nice to politicians in other European countries, especially when they say nice things about one another. I have so many friends who are pro-EU and blind to BBC bias because they are nice and want to be even nicer. Women in particular, who 50 years ago were natural conservatives, have wobbled. People feel morally obliged to vote in such a way as to make them feel good about themselves. N Clegg is their godfather. The truth, as I think Gladstone with his liberal instincts saw, is that you cannot allow a polity to be run on such principles and expect it to thrive or even survive.

  37. Posted August 26, 2012 at 9:24 am | Permalink

    You’re right John, it would be nice to see what evidence the IMF is using. You fail to grasp that economic models have different scenarios which mean that the two answers given, which you appear to assert are inconsistent, could be consistent.

    But more to the point John, you wax on, and on, and on, about one single observation in the IMF’s dataset. The UK will be one single observation, and for sure an interesting one.

    But the IMF won’t decide it’s policy based on an economic model of just one country. It will look at all countries in its dataset and run a panel analysis (at least I hope it will since that’s what any sensible data-aware economist would do).

    Then they might reach conclusions which are different to yours John because yours are based on (a) one country, and (b) your own selective interpretation of the evidence which has a lack of real figures, and lack of recognition of the impact changes in economic growth have on government spending.
    Reply. My blog refers to several countries, and I have studied various country recoveries before reaching conclusions

    • Posted August 29, 2012 at 12:36 am | Permalink

      There is one thing about the IMF that is undeniable. The incumbent CEO Christine Lagarde has set herself the task of helping to save the Euro. The IMF is meant to rescue countries, not currencies, so she is way outside her remit. The UK would be within its rights to withhold contributions to the IMF until that changes.

      • Posted August 30, 2012 at 4:23 pm | Permalink

        I Agree with what you say, but believe we could shorten the last sentance to:

        “The UK would be within its rights to withhold contributions” – full stop.

  38. Posted August 26, 2012 at 10:24 am | Permalink

    Is this the Davis that chaired a presentation “Should we leave the EU”? the question could have been “Why should we stay in the EU?” or “Can we leave the EU” etc. Its important to frame the question so that a negative or positive bias is not going to affect the outcome. The electoral commission are very experienced in this as they know it can affect yes/no outcomes.
    On a different topic Cameron faced a very long and uphill battle to deal with all the financial issues that faced a government with no money, and stuffed with debt. I had no money when I married, my wife had no money, we started life off scratch. We worked hard and never borrowed, never asked for a loan off anyone. Slowly we were able to do more than just exist. The trouble is Cameron and gang did’nt take our countries situation personally they were and are featherbedded by familial wealth. Surrounded by dreams of more they have blissfully continued to commit the rest of us to penury. Our situation is now worse than ever, more debt, the deficit outweighed by more borrowing and the government is easily pulled of course by media adventures and side shows which given spin are posed as “very important”. Come the election we will show what is important, but will the damage be irrepairable, will we have built our house/wealth and our family and our lives stronger and safer with the Tories?

  39. Posted August 26, 2012 at 12:18 pm | Permalink

    How do we know what the cyclically adjusted borrowing requirement is when we don’t know what the economic cycle is? Pre WW1, the boom – slump – boom cycle was about 7 years. I don’t know what it was during those troubled times between the two world wars. During the post WW2 period, for 20 years the economic cycles lasted about 4 years, driven by repeated sterling crises under the Bretton Woods fixed exchange rate regime, culminating in devaluation followed by floating exchange rates.

    From the Thatcher recession of 1981 to the Major recession of 1991 was 10 years. From the Major recession to the crisis of 2008 was 17 years.

    Isn’t is simpler not to bother trying to adjust the borrowing requirement to fit an economic cycle that may not exist, and simply use the raw data? The borrowing requirement in 2011/12 was £126 billion and a non-inflationary borrowing requirement is of the order of £30 million (to finance GDP growth of 2% pa – assuming you can get it).

    We should be getting rid of artificially low interest rates and QE, which benefit spendthrift govrnments and people who borrowed to buy overvalued property (the “foolish virgins”) and nobody else. It’s a failed experiment. Why not just admit it?

  40. Posted August 26, 2012 at 1:22 pm | Permalink

    We have a target for ever-increasing public debt/GDP ratio to maintain. See The long term target is to not exceed 300% by 2040 (see page 10).

  41. Posted August 26, 2012 at 2:29 pm | Permalink

    Sweden with their healthy living faced the costs of an ageing population far earlier and was in their minds when they made their cuts.

    These costs start for us in a few years time, annually they are in the 10s of billions extra even if we try to keep a lid on it.

    Who goes into retirement thinking that it would be a good idea to take on losts more debt? Well a large part of the country is about to do just that and they are going to cost a fortune over and above what we currently spend. Massively increasing our debt for a tiny short term 0.1%? addition to the growth is madness.

    It begs the question whether its such a good idea to pay so much on gastric bypasses and tax smokers so much to put them off when we won’t have the money for retirement bill as its going on interest payments to fund the lifestyle of the current.

One Trackback

  • By Week of Aug 21 – Aug 27 | US Daily Review on August 25, 2012 at 4:09 pm

    […] Carry on borrowing? Mr Davis of the BBC fails to question the IMF Yesterday the Today programme ran an interview with an IMF spokeswoman who told us cutting a deficit at the wrong time could be self defeating. She  was asked by Mr Davis if we cut £1 of deficit how much economic output would fall. She said it could do 6-10 times as much damage. […]

  • About John Redwood

    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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