How wrong can government forecasts be?

I looked up the forecasts for the revenues from self assessment  Income Tax before my lecture last night.

In June 2010 the Budget forecast for this  tax revenue for 2011-2014 was a very useful £85.9bn.

In the Autumn Statement 2012 the forecast for the same time period was just £66.7bn.

That’s £19.2 bn down, or a loss of 22.3%.

 

They got the growth rate of the economy wrong, and the underestimated the way higher rates depress revenues.

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70 Comments

  1. Stewart Knight
    Posted February 8, 2013 at 9:13 am | Permalink

    In June 2010 they were working on Gordon Brown/Labour estimates and figures….I’m surprised you are surprised…

    • Wilko
      Posted February 8, 2013 at 10:45 am | Permalink

      Doing so might, in part, have been a ploy to nullify opposition criticism.

    • uanime5
      Posted February 8, 2013 at 5:10 pm | Permalink

      Yes back when Labour was in power and the economy was growing at 2%.

      Reply Do you remember the largest post war recession towards the end of Labour’s period in office?

      • Stewart Knight
        Posted February 8, 2013 at 9:35 pm | Permalink

        Yes 2% growth…based on over borrowed money and tax receipts pegged to property taxes that were unsustainable.

        Any (fool-ed) can see growth in the short term if they are willing to engage in criminal incompetence to get it… a la Labour.

  2. Sue
    Posted February 8, 2013 at 9:15 am | Permalink

    Greedy governments end up getting less revenue. Why work overtime for the government? Why declare tax at all if you can get away with it? Taxation is theft, plain and simple.

    • Wilko
      Posted February 8, 2013 at 11:08 am | Permalink

      Tax is good. Waste, excessive inappropriate and inefficient collection and spending, are the faults.

      In some ways, taxpayers enjoy luxury. Solely by paying a fair sum, roads, hospital services and police protection can be provided, without the taxpayer having to fund, organise and resource those things separately. Incompetent govt makes tax hostile.

      Getting away with something is not a good reason to commit offence, even if the govt wasting the tax collected is offensive, as indeed it is.

      • lifelogic
        Posted February 8, 2013 at 12:16 pm | Permalink

        The fair sum for services provided is about £5000 per head so why do some have to pay hundreds of times this sum. At least 50% of what they do is pointless or negative in effect.

        For that they then get starved to death in a hospital Staffordshire and some people to fine them when they put a wheel into a bus lane.

      • Bob
        Posted February 8, 2013 at 1:34 pm | Permalink

        @Wilko
        “the tax collected is offensive”

        excessive is another word that comes to mind.

        On the subject of waste, (refers to someone who had an operation to switch from being a man-ed)
        It occurred to me that the NHS should concentrate on basic medical care and refer people like this to a psychiatrist.

        • lifelogic
          Posted February 8, 2013 at 6:26 pm | Permalink

          They certainly should make people pay for homeopathy, most vanity treatments, virginity reconstructions and similar. But lots of MPs actually push for these “alternative” treatments, Keith Vaz I understand.

          Why should we tax people to pay for treatments that cannot even be shown to work?

        • Electro-Kevin
          Posted February 8, 2013 at 6:56 pm | Permalink

          “On the subject of waste, (refers to someone who had an operation to switch from being a man-ed)”

          Oh I’m sure they didn’t waste it, Mr Redwood. (etc ed)

      • Graham
        Posted February 8, 2013 at 2:40 pm | Permalink

        What you say does not detract from what Sue has said – we are talking about amounts over and above fair here.

        In many ways non taxpayers enjoy luxury too – only they don’t have to work for it eg excessive benefits at home and excessive foreign aid [and at home too].

        As long as people pay tax the gov’t will find ways of spending it wasting a major part of it.

        When politicians play by the rules then so should the general population.

        • A different Simon
          Posted February 8, 2013 at 7:38 pm | Permalink

          Graham

          “As long as people pay tax the gov’t will find ways of spending it wasting a major part of it.”

          If only that was the case .

          For the last 5 years they have been spending £150 billion/year of tax due from taxpayers who have not yet been born .

          • lifelogic
            Posted February 8, 2013 at 9:29 pm | Permalink

            Indeed.

        • Wilko
          Posted February 8, 2013 at 9:21 pm | Permalink

          There are too many wasters, making tax excessive and unfair.

          It is better to pay tax due and eliminate wasting vigorously. Those who evade tax do so at the expense of fellow citizens and their own loss of credibility.

          If politicians are at fault, as many are, taxpayers and others should discipline them appropriately, rather than acting as outlaws themselves.

    • yulwaymartyn
      Posted February 8, 2013 at 2:20 pm | Permalink

      I agree. Can you send me a cheque for £6000.00 to pay for my daughter’s primary school education then.? Thanks. She is aged 7 and is on a school trip today to see Roman ruins at Fishbourne in West Sussex – can you come to the house later with the cheque and also tell her face to face that it will be the last trip as all “taxation is theft.” Thanks Sue. Look forward to it.

      • Jerry
        Posted February 8, 2013 at 5:32 pm | Permalink

        @yulwaymartyn: Indeed. Tax does seem to bring out the selfishness of some, commonly known as the “I’m all-right, sod you” syndrome, they forget that many people do not and can not be expected to earn the sorts of money that would be needed to pay for everything in life – how many would pay £50 for their Starbucks coffee just so that the company can pay their staff £50 to 75k pa.?!

        All tax is not theft, although an excessive rate is, the 90% “super-tax” of the 1970s was plainly theft, anything 50% or below is open for debate

        • yulwaymartyn
          Posted February 8, 2013 at 6:16 pm | Permalink

          Jerry – I was furious when I wrote that – should have paused for breath. I agree with your comments.

        • sjb
          Posted February 8, 2013 at 10:04 pm | Permalink

          The 1970s were well before I started my company, but I remember the high tax rates of that period came up during a conversation with the auditor/accountant. He told me that the rates were not so oppressive as one might think … because HMG was so bad at collecting them :-)

      • lifelogic
        Posted February 8, 2013 at 6:38 pm | Permalink

        If a group of people vote by a majority to pay taxes a certain level of taxes (in order to provide services best provided by the state sector) then that taxation is perhaps not theft. But if we have no real, effective democracy as we go through MPs and political parties and if government then use the money to indoctrinate, lie and buy votes then it is indeed surely just theft.

        yulwaymartyn perhaps if you did not have 23%NI, 20% tax, 20% vat, 60% fuel tax and the rest, then you might have the £6000 yourself and would perhaps get rather better schools, choice and fewer parasitic middlemen taking their cut?

        • Jerry
          Posted February 8, 2013 at 9:58 pm | Permalink

          @Lifelogic: I totally agree with what you say in the first part above, and this is exactly what is wrong with the EU, there are far to many people within the EU who are not subject to any effective democracy – who amongst the European “Plebs” voted for either JMB or HvR and let’s not even think about the Commissioners and eurocrats. :(

          I do have a problem with the second part, you are obviously so out of touch with the realities of so many peoples lives now you are non domicile in the UK – given that £6,000 is just under half of the total annual earning for the lowest paid how would they ever afford to £6,000 on their child’s schooling [1] – the answer is that they would not, meaning that they would either not be able to send their child to school or they would have to rely on charitable schools, we have not seen the likes of either in the UK for close on 100 years.

          [1] what is more, these people pay little tax anyway so they are not going to save anything like the amount you suggest, even if they were be totally exempt of tax

    • Mike Stallard
      Posted February 8, 2013 at 2:45 pm | Permalink

      Taxation should not be theft. We are not (yet) Greeks, although we are in the Secret Vote EU.
      Otherwise, very well said!
      Why should I pay for (name left out) drug addicts?

  3. Brian Tomkinson
    Posted February 8, 2013 at 9:21 am | Permalink

    What confidence can you have in the latest forecast? Regretably, the only forecast they will exceed is the national debt which is now £1.142 trillion and, naturally, still rising.

    • Nicol Sinclair
      Posted February 8, 2013 at 4:20 pm | Permalink

      Brian Tomkinson: National debt of GBP 1,142 trillion? WTF is that in real terms? When I was at skool, 1 million was 1,000,ooo, 1 billion was 1,000,000,ooo,ooo. Now, you are talking in figures that I simply do not understand. Does 1 trillion = 1,ooo,000,ooo,ooo,ooo, or, does it mean 1,ooo,ooo,ooo. There is a difference of a factor of 1,ooo…………………………………………………………….

      Anyway, the number of zeroes are too many for me to comprehend. It all means bad.

  4. oldtimer
    Posted February 8, 2013 at 9:37 am | Permalink

    Clearly it is time for a rethink. The chances of a rethink are, in the context of this coalition and those running it, are very low. On that basis I expect the gap between the forecasts and the outcome to widen still further. Or to put it in other words, the government of the day is still digging the hole it is in deeper and deeper by the day.

  5. Richard1
    Posted February 8, 2013 at 9:44 am | Permalink

    The Labour + Con/LibDem tax hikes in income tax and CGT are proving some of the clearest evidence ever for the truth of the Laffer curve. Leftists are in denial.

    • Bazman
      Posted February 8, 2013 at 4:56 pm | Permalink

      I think we nailed that ‘truth’ Richard as your wishful thinking.

      • Richard1
        Posted February 8, 2013 at 6:27 pm | Permalink

        No you did not, you just said you didn’t accept it. Thats not the same thing. Look at the evidence.

        • Bazman
          Posted February 9, 2013 at 5:49 pm | Permalink

          The evidence of the trickle down effect really happening or the lower the rate the more tax is collected and the higher the revenue? Which is not the Laffer curve theory as much as you would like it to be.

      • Stewart Knight
        Posted February 8, 2013 at 9:38 pm | Permalink

        Laffer curve is an inescapable fact, but Cameron is too weak to enact it, scared as he is and running from anyone willing to accuse him of being a toff. Never has a PM been so scared of the left and their moronic tags.

        • Jerry
          Posted February 9, 2013 at 10:57 am | Permalink

          @Stewart Knight: UKIP don’t seem to be ‘scared’ to say what needs to be done nor to lay-out their rational, I don’t think they mention the Laffer curve in their public documents once, preferring to talk about wanting a “Flat Tax” system – one has to ask why that is even though both are related?

          Thus one can only assume that the Laffer curve is only an ” inescapable fact” to capitalists and those who would benefit the most, just like the need for an 90% super-tax is an inescapable fact for the hard left and those who would benefit the most. Also even if one accepts your premise about the Laffer curve fact remains there is still considerable debate as to were the curve stops rising, it might be 35%, on the other hand it is quite possible to be 60% (or even higher).

  6. Jerry
    Posted February 8, 2013 at 9:57 am | Permalink

    Sorry John but it is a lot simpler, the economy is up a creak without a paddle, nothing to do with tax rates, many who have to use self assessment tax returns are not taxed at these higher rates, it decreasing because peoples incomes are decreasing due to the stagnation in the economy. All the time this government is trying to use tax rates to prove a political point Rome will carry on burning.

  7. lifelogic
    Posted February 8, 2013 at 10:07 am | Permalink

    Indeed total incompetence as usual from the state sector. If you put income tax up to 50% (plus NI), lower thresholds and have corporation tax at the lower 20%-24% then people will work less or incorporate their business, defer salary, pay wives, lovers or children, or form a personal service company, like all those at the BBC did.

    Or, at illegal end, just work cash in hand on the black market.

    What did these highly educated, intelligent “experts” expect? They should have asked you or me. We would have been closer, having given it about ten minutes thought with the back of an envelope and a pencil. Taking into account the anti growth, high tax, more regulation and high energy price policies that Cameron and Osborne have in place too.

    • lifelogic
      Posted February 8, 2013 at 10:58 am | Permalink

      We see a parallel in the relative surge in self employment, given the absurdly restrictive and punitive employment laws and the very high NI (23%? in total I think now for both parts).

      • a-tracy
        Posted February 9, 2013 at 10:05 am | Permalink

        NI is 25.8% over £149 2013/14 tax year but only for PAYE private sector workers.

        The rate for a self employed worker is 11.7% after £7755 annual profits.

      • Bazman
        Posted February 9, 2013 at 4:38 pm | Permalink

        Would that include bogus self employment by companies wishing to deny workers rights and pay?

  8. Wilko
    Posted February 8, 2013 at 10:42 am | Permalink

    Government financial forecasts are fortune telling.

    No govt can predict accuracy with certainty defining what the outcome of millions of individuals’ behaviour will cause. Even the govt’s own behaviour, soon after their forecast, is unknown. Such behaviour causes added effects within the period forecast, but was beyond inclusion within the forecast they made.

  9. Harry Hardup
    Posted February 8, 2013 at 11:05 am | Permalink

    Your silent on the Beef Crisis. Cmon John we need these foreign dodgy european imports banned immediately.

    Im stopping eating all Beef until the safety is assured. Clearly we dont know what in our meat products; it seems any old crap sent for “British Export”….. Ban immediately on safety grounds and ask questions later. Then let Johnny Foriegner get his house in order….

    • Jerry
      Posted February 8, 2013 at 10:22 pm | Permalink

      @Harry Hardup: What a load of hyperbolic over reaction, if I may say so.

      The French would likely just change the label to reflect the true content! Perhaps you don’t realise but horse meat is eaten in some parts of Europe, hence this meat was quite possibly always intended to enter the human food chain rather than being some ill old nag that was intended for pet food.

      As for any health concerns, indeed the possibility of “bute” being present is worrying but the risks are probably very slight (we will have to wait for the tests to be done), whilst this meat (should) have been tested for bacteria etc. before processing into the final product even if it had not been at slaughter, also I suspect that further tests would have been after final processing stage too, once in the distribution chain.

    • a-tracy
      Posted February 9, 2013 at 10:10 am | Permalink

      I read that it is not illegal to sell horse meat in the UK the illegal part is passing it off as something it wasn’t.

      I’m not sure but don’t the UK slaughter horses to export for human consumption in other Countries?

  10. frank salmon
    Posted February 8, 2013 at 11:27 am | Permalink

    Lifelogic – you missed charitable donations. You take your money from the taxman by giving your wages to charity before it becomes income. Ask Becks.

    • lifelogic
      Posted February 8, 2013 at 12:24 pm | Permalink

      Giving to Charity, that is a real charity is one thing, but there are some very interesting “charities” and even arrangements where you somehow get the money back I understand. How on earth can these be legal?

      Mind you if it stops the government wasting it!

    • Bob
      Posted February 8, 2013 at 1:42 pm | Permalink

      @frank salmon

      I imagine Becks will be making a few trips to Qatar in the near future.

  11. lojolondon
    Posted February 8, 2013 at 12:05 pm | Permalink

    They did get the numbers wrong, because the economy is shrinking because tax has gone up instead of down.
    One glimmer of light – our new BOE Chief needs to prove himself, said QE will deliver ‘diminished returns’ and wants to promote stability and a positive environment. I can only hope that he delivers for the Tories just in time, but at least he cannot be as bad as Mervyn King, who co-penned the “letter from 364 economists” to Lady Thatcher in 1981, and never learnt anything about economics from there!

    • lifelogic
      Posted February 8, 2013 at 12:27 pm | Permalink
      • Richard1
        Posted February 8, 2013 at 6:29 pm | Permalink

        Academic economics has never really recovered in the UK from the great 364 debacle of Q2 1981. I wonder whether the same will happen to ‘climate science’ if there still isn’t any global warming a few years hence?

        • lifelogic
          Posted February 8, 2013 at 9:34 pm | Permalink

          One wonders how long the warming religion will survive, how many years of no warming will be needed. Still I suppose many religions have gone on for thousands of years without the need for any evidence what so ever.

          Perhaps the dreadful Mr Huhne with be the beginning of the end. How will the BBC find a fig leave one wonders. I assume they will say they helped solve the non problem and move on to new ones.

    • lifelogic
      Posted February 8, 2013 at 12:33 pm | Permalink

      £800K PA sounds a bargain to me if he does the job well.
      Especially as he may only get to keep half due to Osbornes 50%/45% and NI. One assumes he will be nondom so not taxed on his Worldwide assets so he have have another £30K fee to pay too. Double with a wife perhaps.

      But will he be allowed to do the job by Cameron and Osborne. Can the job even be done with high taxes, over regulation and this endless waste from government.

    • Denis Cooper
      Posted February 8, 2013 at 1:17 pm | Permalink

      Although I’m sure that Carney himself has studied and fully understands the legal position laid down in the Bank of England Act 1998, it seems that most journalists are incapable of understanding it in the first place or having once understood it are incapable of remembering it.

      The law is clear that the Chancellor sets the inflation target for the Governor to meet, and the Governor cannot change that target, and it is equally clear that the primary duty of the Governor to meet the inflation target set by the Chancellor must always take precedence over his secondary duty to support the economic policies defined by the Chancellor.

      Whether we should even have this law is open to question when the Chancellor and MPs know that it is being breached but prefer to turn a blind eye; indeed the same could be said about all other laws when nobody who is in a position to insist that the rule of law must be respected is prepared to do so.

  12. Tad Davison
    Posted February 8, 2013 at 12:22 pm | Permalink

    John posed the question: ‘How wrong can government forecasts be?’

    Could those who got the figures so spectacularly wrong, be the same people who told us the EU would be good for Britain, and we should embrace the opportunities this amalgamation brings?

    The same ones who led us into a costly and protracted war, on the most spurious of grounds?

    The same people who feel it’s in Britain’s interests to ignore the potential of global trade to get us out of the economic mess, and just concentrate on the EU, which is in dire straits, and a diminishing market?

    The same ones who grossly underestimated the number of EU migrants to the UK, that has caused so much concern, and a drain on precious resources as well as the infrastructure – a mistake they look like making all over again, this time next year with people from Bulgaria and elsewhere?

    The same ones who are putting undue pressure on the genuinely sick, to return them to work they simply cannot do, whilst convicted criminals are kept warm, fed, and dry in expensive modern prisons, with games, TV, gymnasium equipment, and all manner of other goodies?

    I think we may deduce, that most forecasts are spectacularly wrong, yet those who pontificate have the arrogance, and the audacity, to insist they are the only ones who should be trusted with taking decisions of the highest import, as they know best!

    Well many of us believe, they aren’t up to the job, and going on past history, not without good reason, so that poses a number of other questions:

    1 Why should we believe them in future?
    2 Why should people who get things so wrong, remain in post?
    3 How can we get rid of them at the earliest opportunity?

    Tad Davison

    Cambridge

    • Electro-Kevin
      Posted February 8, 2013 at 7:17 pm | Permalink

      Mainstream opinion such as this is dismissed as Daily Mail, Tad.

      • Jerry
        Posted February 9, 2013 at 11:07 am | Permalink

        @Electro-Kevin: Please define what you mean by “mainstream”, is it mainstream because it is in the Daily Mail [1] or because those on the Clapham Omnibus talk about it as they go to work – ie. it is a widely held opinion amongst a very wide cross section of society?

        [1] probably better called the “Tabloid Press”

        • Bazman
          Posted February 9, 2013 at 4:47 pm | Permalink

          Mainstream opinion is Daily Mail? Are you serious? Silly right wing propaganda paper. Even I with my limited education can disassemble this paper and the rest of the tabloids. Is the Daily Sport ‘mainstream?

  13. MajorFrustration
    Posted February 8, 2013 at 3:17 pm | Permalink

    Goodbye triple A. Hello more debt.
    Re the “Beef” issue. If this had happened in France there would be an immediate ban on imports. What do we do – let the FSA waffle on. Bonfire of the Quangos bring it on. No stop – Quangos shield the politicians from responsibility.

  14. Gary
    Posted February 8, 2013 at 3:43 pm | Permalink

    The dirty secret is that nobody can consistently predict the economic future. I have to laugh when the grand predictions the govt makes are announced. The difference between govt errors and private errors in forecasting is that private investors protecting their own money get out fast when their predictions are proven wrong, whereas the govt plods along and often loses vast amounts of money over decades. Private investors who get it wrong and don’t get out accordingly usually only lose their own money, the govt always loses our money , they don’t have any of their own. This premise alone should be enough for any sane person to want to scrap govt.

  15. Derek Emery
    Posted February 8, 2013 at 3:57 pm | Permalink

    I’ve always thought it was compulsory for both politicians and bureaucrats to be massively over-optimistic about the UK economy and UK finance generally. Wouldn’t you be seen as negative if you took a realistic position and wouldn’t you lose out in the promotion stakes as a bureaucrat if you weren’t over-optimistic? Over-optimism the economic equivalent equivalent of grade inflation or in Monty Python terms “Always Look On The Bright Side Of Life.”
    There are no rewards for realism. In the private sector there would be an expectation of some proof that results are not being over-egged and there would be no rewards for over-egging the situation. More likely you would be held to account and be at risk of losing your job. There is no equivalent pressure in the public sector for realistic results..

  16. uanime5
    Posted February 8, 2013 at 5:23 pm | Permalink

    Alternatively the forecasts were accurate but because of the poor economic policies of the Chancellor after the 2010 election the economy didn’t grow as much as predicted. Also taxable incomes were reduced due to unemployment, shorter working hours, lower salaries, and an increased personal allowance; all of which have nothing to do with the tax rates.

    • Richard1
      Posted February 8, 2013 at 6:32 pm | Permalink

      There are more people in work – paying tax – than there were in 2010, so unemployment is not an explanation. Perhaps the high taxes & tax rates are one of the things thats depressing growth?

      • Jerry
        Posted February 8, 2013 at 10:45 pm | Permalink

        @Richard1: “There are more people in work – paying tax – than there were in 2010

        Are you sure about that, many people on NMW, especially those who only work part time will be paying no tax – then many of those claimed to be ‘in work’ are nothing of the sort, they are on work programmes that basically making them work for their JSA, again these people will not be paying tax and what is more because they are ‘working’ they have less time to actually look for a real -tax contributing- job!

        • a-tracy
          Posted February 9, 2013 at 10:02 am | Permalink

          Jerry, I thought the success of flexible, part-time working was the Labour parties mission, it was certainly the impression it gave me when it encouraged new legislation and set up tax credits.

          • Jerry
            Posted February 9, 2013 at 3:02 pm | Permalink

            @a-tracy: Sorry but I really don’t know what your point is, although I agree with you that Labour did indeed introduce tax credits (rather than go the hole-hog and raise the level of the NMW to create the so called “living wage”), and yes many on tax credits will not be paying tax – and if they are the money is effectively going around in a circle.

            My point, that you replied to, was more about the true numbers of people who have real jobs and how much real tax income is kept by the exchequer. Headline figures are not always what they seem.

          • Bazman
            Posted February 9, 2013 at 5:55 pm | Permalink

            The purpose of tax credits was to incentivise work and to that extent it does. Paying the poor to work. Don’t wheel out lower taxes as the amount the low paid would save is nowhere near the tax credits allowance.

    • M.A.N
      Posted February 8, 2013 at 7:41 pm | Permalink

      You are without doubt a labour shill, in fact you are not even subtle about it now. Your constant mantra repeated on countless left wing comments pages, that labour left a growing economy is extremely disingenuous, labour printed £200 billion of QE in a very short space of time , between march and November 2009, which by no coincidence covered the £200 billion deficit they needed to fill before the election. This allowed the facade that things hadnt changed much, basically any hard decisions were deferred till after the election. This was no doubt instigated by the civil service, because I’m not sure labour wanted to win the election considering the party was over.

      • Jerry
        Posted February 8, 2013 at 10:59 pm | Permalink

        @M.A.N: “You [uanime5] are without doubt a labour shill

        Is that compared to those who might be “Tory shill’s”?

        Sorry but your comment says far more about you M.A.N than it does anyone else, ‘yes you may have an opinion just so long as it is a Tory one’… You seem to only want sycophantic comments, Mr JR on the other hand seems to welcome a very broad church of opinions, that should tell you something.

        I can’t remember who said them but they were very wise words, you would be wise to remember them (I might be paraphrasing them);
        “I might not agree with what you say but I will fight to my last breath for your right to say them.”

  17. alan jutson
    Posted February 8, 2013 at 10:59 pm | Permalink

    As I have said many times before John.

    Only work the budget on last years known tax take for every year, and if you only plan to spend 80% of that, then you should never be in a situation where you have to borrow, indeed you would have a surplus each year unless tax revenue fell back by 20% or more.

    Why work future expenditure out on a guess of your income ?????????????????????

    • Jerry
      Posted February 9, 2013 at 11:18 am | Permalink

      @alan jutson: “Why work future expenditure out on a guess of your income ?

      Indeed Alan, but how can one then plan for the future. I would assume that you own a house, if so, how did you ever manage to buy it, did you really save up all the money and then buy for ‘cash’ or did you make (calculated) assumptions about your future income to obtain a mortgage?

      But then perhaps you are a multi-millionaire who just simply writes a cheque, or waves the plastic about, for what you want, no financial planing required!

      • alan jutson
        Posted February 9, 2013 at 2:22 pm | Permalink

        Jerry

        No not a multimillionaire.

        Yes we do own our own house (I include my wife in this, as it is a family home not mine).

        Worked hard, earned enough for a good deposit, only borrowed what I could afford to re-pay (worked out on the earnings at that time) not some pie in the sky guess for later years.
        Kept up repayments even though I have been made redundant 4 times in my life, before eventually becoming self employed and then setting up and running my own business.

        I practise what I preach, unlike many politicians, I have also done completely unpaid charitable work (pay my own expenses) for 20 years so really do see both sides of the coin.

        Inside leg measurement for trousers 31-32 inches.

        Any more you would like to know.

        • Jerry
          Posted February 9, 2013 at 9:16 pm | Permalink

          @alan juston: “Worked hard, earned enough for a good deposit, only borrowed what I could afford to re-pay

          Which is what everyone including HMG does [1], the trouble starts when those earnings/income do not match expectations, how ever much you might like to think it couldn’t happen to you, if your income had suddenly unexpectedly dropped well short of your forecast you would have been up the same gum tree as anyone else.

          Don’t get me wrong though, I don’t like people using debt any more than you, I was just pointing that that forward planing can’t be avoided for some things – especially those big ticket items.

          [1] yes 80% to 110% mortgages were stupid and any half decent regulation should have stopped them from ever being offered, but extending home ownership to everyone and the black cat sitting on the fence seems to be have been far more important to those who made the rules. /rant…

          • alan jutson
            Posted February 10, 2013 at 4:32 pm | Permalink

            Jerry

            Sensible budgeting unfortunately is not what everyone does, otherwise we would not have massive debts both personal and National.

            Yes of course the unexpected can happen, indeed having been made redundent 4 times (once whilst an appprentice) before I was 40, I fully understand that,

            The simple point I make is, it is never sensible to commit all of your money (or an amount in excess of your normal earnings) in advance, but to always try to have some spare, for lifes unforseen and unexpected problems.

            If anyone does take the chance and commits to borrowing more than they can afford, then all I ask is that they do not moan about the possible consequenses.

            Completely understand that what I do is not what many think or practice, we are all different, thats what makes the World go round, but then they should not moan about their lot.

            The only real excuse for large debts is unforseen serious illness, or accident, when of course the Benefits system should provide some sort of safety net (its original intent).

            Governments in my view should be excluded from borrowing in the populations name, (as it is us who have to pay for their dreams) unless they are defending the Country in time of War.

            Sound money should automatically be any governments duty, and quite honestly printing money to devalue people savings is akin to treason in my view.

  18. Lindsay McDougall
    Posted February 9, 2013 at 4:41 pm | Permalink

    A third thing they got wrong was failure to predict the surge in low paid and part time jobs, which yield little income tax as the threshold increases towards £10,000.

  19. Bazman
    Posted February 9, 2013 at 5:00 pm | Permalink

    The trick of forecasting is to be stupidly confident and quite happy to be completely wrong. Once I was in a pub and correctly predicted one if the National Lottery balls. The ‘trick’? OK no trick. I supremely and confidently proclaimed that the next ball would be number 46 entirely on the basis that to me, rightly or wrongly forty something seems to come up quite often, and then guessed a number between 40 and 49. The faces of the blokes at the bar when the 46 ball came out was like they had seen a ghost and were spluttering. What was the next one! Go on! Tell us! Of course the next one was wrong and they where very happy..

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  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.
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