The Autumn Statement in perspective

I was asked to write a response to the Autumn Statement by a leading national newspaper. I dropped everything on Friday morning and wrote the required number of words to their deadline, but they did not publish it, so I am now sharing it with you:

I like a bit of Robin Hood magic. One of the main tasks of modern government is to take from the rich to give to the poor. All the main parties buy into that ever popular idea from the UK’s favourite outlaw.

The Autumn Statement does a lot of it. Many of us had asked for some relief to the planned cuts to tax credits. The Chancellor stopped them. This was made possible because the Office of Budget Responsibility decided there was going to be much more tax revenue coming in. The Chancellor was free to play Father Christmas early this year as a result. We need to ask, how reliable are the forecasts of revenue? Will tax income be a massive £177 billion more in 2019-2 compared to last year? That’s each adult paying on average £3,500 more.

The task of redistribution is made easier if there are enough rich people living in our society, and if they are made to pay more of the taxes we seek to impose. Rich people have more financial options than the rest of us who depend on a UK wage. They can choose where to live, choose whether to work, where and when to invest and how much income and capital gains to take in any given year. Taxing them successfully requires keeping an eye on where else they can go and what else they can do to avoid paying taxes in our country.

The first change I would make to the Autumn Statement proposals is to tax the rich more. To do so we need to look at what is happening to taxes that the rich mainly pay. Capital GainsTax receipts are forecast to fall by 6.5% compared to the March forecast, amidst the bonanza of rising revenues. 28% is a rate too high, so people simply don’t sell their assets sitting on large gains, and legally avoid the tax altogether. 20% would bring in more revenue.

The same is happening to Stamp duty revenues. Now there are very high duties on dearer homes, the forecasts have had to be cut because rich people are simply not prepared to sell and buy a new home at the new rates.

Government has to mainly tax the rich because they have the money. They should not wish to do so as some kind of moral punishment for success. It should do so out of necessity, and in ways which allow them to remain financially successful. We want them to invest here, create jobs here and spend money here.

Before the last election the government set out the need to control public spending in order to get the large amount of borrowing we do each year down to more sensible levels. Every pound we borrow as a nation means future interest charges, and the need to repay at some point in the future. We spend now for our children to pay the bills later. The Chancellor memorably said he needed to fix the roof when the sun is shining.

The sun is visibly out now if we believe these latest forecasts of more growth, more jobs and more tax revenue. The Conservative Manifesto said it would cut real spending by 1% in each of the first two years of a new government. This week the Chancellor decided that was no longer necessary. He has instead proposed a large cash increase in public spending over the lifetime of this Parliament. The total spending in 2019-20 will be £821 billion. That’s £24 billion higher than the March budget forecast, or an increase of 3%. Is it right to spend tax revenue increases we do not yet have?

During the election I spoke out for prosperity, not austerity. I wrote that I did not expect the government to make any overall cut in public spending this Parliament. They had, after all, not made any overall cut in public spending in the previous Parliament, despite all the press and opposition talk of cuts. So I am not surprised .

This means running a bit more risk. There is always the danger that the revenue forecasts will prove to be too optimistic. Taxes are very sensitive to employment levels and consumer confidence. These can be hit by external forces with weak world trade, a Chinese slowdown and a latin American recession already with us.

I would be happier if the government did take something off total public spending as they promised to do in the election. This would leave a bit more margin for error. My preference would be to remove the EU contribution we make each year. This has been going up all too quickly. £11 billion of what we send them is spent on rich EU countries on the continent. This seems to me to be far too high a price to pay for membership of this difficult club. If we vote to leave the will be an immediate boost of £11 billion to our finances each year.

The government is rightly looking at ways it can use the overseas aid money more productively and help keep total public spending down. The BBC Overseas service should properly be a cost to the overseas aid budget. So should the full cost of activities undertaken by our military to help in failed states or to intervene with public health and other humanitarian crises.

This should be the year of thorough reform of parts of the public sector that cost us a lot and deliver too little. For years Housing Associations have been getting large capital grants on top of making big profits out of the rents they charge which are largely financed from Housing benefit. It is time to ask them to do more or to pay them less. They are asset rich and cash rich. If they wish to be independent charities then we should leave well alone. If they want to continue with more public support they need to accept some government imposed financial discipline and help meet government targets.

The same is true of Network Rail. That badly run unaccountable body has been eating up the public cash in recent years. Network Rail has large amounts of land with development potential close to the centres of towns and cities. They could help modernise our towns and free some cash by developing more of it. They could raise their efficiency considerably by hitting the standards of the better continental railways. They need to discipline their financial management of their huge investment programme, where all too many projects overrun in cost or are allowed big upward changes to budgets. Maybe the best answer for them will be to re unite track and trains, introducing private capital with railway companies organised around particular routes and parts of the country.

This is the year to take action to control costs and to build in some leeway in case the tax surge does not materialise in the way the OBR now suggest. It is great news that there are so many more people in work, and great news that real wages are now rising.A lower tax UK will be a richer and more productive one. The right lower tax rates will bring in more revenue. Better revenue forecasts should not exempt inefficient parts of the public sector from reform.

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97 Comments

  1. JJE
    Posted November 30, 2015 at 6:24 am | Permalink

    Don’t worry, if you didn’t like this Budget Mr. Osborne will be along with another one in a few months.

  2. Lifelogic
    Posted November 30, 2015 at 6:57 am | Permalink

    I agree with very much of that.

    Capital Gains at 20% and (only after an allowance for inflation) is quite high enough. What lefty chancellors like Osborne always forget is that the tax base will be far larger if he stop trying to kill it with high rates and absurd levels of complexity. The rich, hard working and successful have many choices and options on where to live and invest and will use them. If you leave more money with the rich they will invest and spend it far better than the state does and the tax base of the nation will grow. In addition money will be attracted in.

    Osborne’s attack on non doms we fooling and need replacing with some attractive new scheme. His bizarre hatred of tenants and the private rented sector is completely mad. Why should renters have to pay more due to higher taxes than owner occupiers? Why should landlord pay taxes on “profits” they have not even made? His four tax changes will mean more that 10% uplift in rents and a smaller supply of properties available.

    The stamp duty rates are absurdly high, turnover taxes are usually a bad idea. A these rates they deter people people from moving and cause huge damage.

    It was a misguided, socialist, over complex, over taxing, anti tenant, anti rich budget. Rather optimistically trusting the OBR when their historical record is so poor. He will regret his failure to cut the vast waste in government and sort out the appalling quality of public services.

    • Lifelogic
      Posted November 30, 2015 at 7:16 am | Permalink

      Booker was good in the Telegraph yesterday on Tim Yeo, the bizarre behaviour of social services, Global warming & Prince Charles.

      http://www.telegraph.co.uk/comment/columnists/christopherbooker/

      BBC and Roger Harrabin in over complete drive with endless daft propaganda for the global warming beanfest in Paris and the global warming (huge exaggeration of) religion in general. What drives the absurd what the BBC always cover this issue. Still no warming for 17 years how many more do they need.

      The real catastrophe is the vast sum of money wasted on reducing Carbon (and often not even reducing carbon) that could have been spent on clean water, medical care, better nutrition, sorting out malaria, inoculations and other thing we know work.

      Endless ignoring all the abundant evidence that there is no catastrophe round the corner at all and that the little warming we have has has been a net positive, as has the slightly higher co2 concentration on crop and plant growth.

      • Denis Cooper
        Posted November 30, 2015 at 9:16 am | Permalink

        “The real catastrophe is the vast sum of money wasted … that could have been spent on clean water, medical care, better nutrition, sorting out malaria, inoculations and other thing we know work.”

        I’m in favour of all those things, but only when they are accompanied by sustained and effective programmes to reduce population growth where that is excessive. Which is in almost all of the poorer countries, and not by any coincidence. And I’m not talking about war as a crude means to limit the growth of the population; there are now other, better, proven, cheap, humane, modern methods readily available.

        This is why I gave up donating to Oxfam and other charities which have been encouraging unsustainable population growth in poor countries and so making their problems, and in some cases our problems, worse.

        • hefner
          Posted December 1, 2015 at 9:26 am | Permalink

          Ever had a thought that (in a somewhat democratic environment) increasing the wealth of the overall (and I insist, overall, not that of the tiny fraction of “leaders”)) population has been shown again and again as the best way to decrease the growth rate of that population?

          In that respect, I cannot see what wrong is being done by charities dedicated to improving the overall quality of life of people, and I find rather curious your comment about Oxfam’s encouraging unsustainable population growth in poor countries. How many years since you have read any report from Oxfam or more generally from DfID.

          Obtuseness is what seems to characterise the type of “shoot-from-the-hip” comments on this blog?
          Obviously if one’s vision is limited to the DT’s, Express’s and never goes to some of the original reports …

      • fedupsoutherner
        Posted November 30, 2015 at 4:29 pm | Permalink

        Looks like we are not the only ones fed up with the vast sums of money spent on this crap Lifelogic.

        See link.

        http://www.express.co.uk/news/science/622910/Global-warming-farce-majority-Britons-climate-change-fake-UN-summit

        The Scottish government is throwing money at wave power when two companies have already gone bust using millions of taxpayers money for the privilege.

        • stred
          Posted December 1, 2015 at 5:50 pm | Permalink

          This will make you even more fedup fedup. From Without the Hot Air by MacKay, ex chief technical advisor to DECC, with an international reputation for analysis, P 74 Wave. -Using the numbers given by Pelamis (made in Scotland) for power ‘the power delivered by 500km of wave farm (along the Atlantic coast) is reduced to 1.2kWh per day per person( for the whole country). While wave power may be useful for small communities on remote islands,I suspect it can’t play a significant role…. From the chart showing the possible contribution of all non carbon energy excluding nuclear, wave could at best produce 4kW/day a out of 110.’

          And for the remote island, ‘What about the weight of Pelamis and how much steel does it contain? ( steel is high CO2)- 350 tons.That’s a weight to power ratio of 500kg/ kW(peak). We can compare this ..with offshore wind… That’s a weight to power ratio of about 170kg/kW , one third of the wave machine’s.’ So the islanders would be greener putting a windmill on a rock. Both would need backup.

          • stred
            Posted December 1, 2015 at 6:08 pm | Permalink

            To make fedup even more alarmed, Euan Mearns blog has a link to a report by JP Morgan in his The Wind in Spain 30.11.15.

            They analyse the possibility of doing what our SNP greens want to do and only use electricity made by wind and solar with 100% gas backup for Germany. This is possible but electricity would cost twice as much, but (p2) this excludes the cost of the grid. According to the blog, this would have to be doubled and would have to be underground.

            Seven thousand wind turbines would be necessary,which would have to be serviced and replaced every 20 years. While the gas stations efficiency would reduce from 55% to 47%.

            It is also interesting that on p8 of the Morgan report they have…. hydrogen..is not used for storage owing to its high cost and low round trip efficiency of 40%. Hydrogen is proposed as smart storage in the smart grid diagram by Decc and Ofgem.

      • turbo terrier
        Posted November 30, 2015 at 8:31 pm | Permalink

        LifeLogic.

        Do you not ever find it strange that when all the world leaders and even our own HRH talk about man made climate change they always seem to be talking about solutions? They do not seem to have the savvy to identify the problem.

        If and it is a big if, Climate Change is man made, controlling the populations by encouraging and practicing good birth control will impact far quicker in the long run than all the twaddle being bounded about in Paris.

        It is all pretty basic really but all the 128 odd leaders seem to have signed up as fully paid up disciples to the religion of Global Warming.

        With the Pope supporting them can you really blame them?

        • stred
          Posted December 1, 2015 at 6:11 pm | Permalink

          The Pope isn’t there. He’s in Africa handing out holy advice in his very holy voice, but not holy condoms.

          • Lifelogic
            Posted December 2, 2015 at 12:21 pm | Permalink

            No but he is clearly a fellow traveller in this warming imminent catastrophe new religion. At least the public no longer seem to be falling for it.

            Even this lefty government are ( too) slowly killing the insane grants.

    • Lifelogic
      Posted November 30, 2015 at 7:20 am | Permalink

      I predict Osborne will come to regret his total failure to cut the size of the largely parasitic, over paid, bloated and largely inept state sector. It does so much harm to the UK’s competitivity, killing so many jobs and so much investment and growth.

      Killing the tax base he feed off too.

    • stred
      Posted November 30, 2015 at 8:03 am | Permalink

      I think Gideon’s idea is as follows. Push up house prices as far as possible and encourage people, with crap overtaxed pensions invested in government bonds, to invest their savings in BTL. Then tax and regulate them until they have to sell, as the tenants will not be able to pay the high rents, necessary to pay the mortgage on expensive property, having had their HB and tax credits reduced- still going ahead but postponed. Then the Treasury will get its hands on 28%of the capital gain, while the ex- landlords will keep the rest and spend it on things which will also be highly taxed. The houses will be sold to young people with huge mortgages, who will then be on the housing ladder and so grateful that they will vote for Gideon next time. By which time he will have lots to spend on his Northern Powerhouses and ex- Labour northern voters and also the ‘brilliant’ £2bn Stonehenge tunnel- which will bring in the Druid vote.

      • oldtimer
        Posted November 30, 2015 at 9:31 am | Permalink

        This sounds very plausible to me. Coincidentally I was looking at house prices yesterday evening in areas I am familiar with and sensed that prices had already eased from about three to six months ago – especially those in price brackets which probably appealed to the buy to let market.

      • Lifelogic
        Posted November 30, 2015 at 10:35 am | Permalink

        Could be some truth in that. He gets tax in when they cash in their pensions, then more tax when they buy or have to sell their buy to lets (CGT and huge Stamp duty). Plus double tax on the interest once on the landord and one on the bank.

        A shame he will just piss it all down the drain on green crap, damaging wars, payments to augment the feckless, pointless degrees, the dysfunction NHS, pointless train lines and other damaging lunacy.

        But why pick on private tenants and push their rents up so much with his 4 point attack on their landlords. Stampduty +3%, CGT on non gains, non allowance of letting costs depreciation and interest, plus paying CGT earlier too. What is driving this lunacy does he want no private landlords at all?

        • Peter Parsons
          Posted December 2, 2015 at 11:25 am | Permalink

          Osborne does want landlords, just bigger corporate ones who will be exempt from changes in the autumn statement. One wonders why, if there is a desire to tax a particular sector, he only taxes one part of it, thus resulting in an unlevel playing field (or is there some sort of correlation of this decision with levels of contributions to party funds…).

    • Lifelogic
      Posted November 30, 2015 at 8:51 am | Permalink

      Osborne’s attack on non doms was very foolish indeed and need replacing with some attractive new scheme.

      That was what I intended to type, my phone or fingers seem to have had other ideas.

      Without this many of the rich will just leave. The best option would be to abolish Inheritance Tax for everyone or at least reduce the rate from 40% to 20%. Osborne has not even remotely kept his pledge for the £1M threshold each many about 7 years ago. Osborne think government and he knows best how to spend money they are completely wrong.

    • Leslie Singleton
      Posted November 30, 2015 at 10:56 am | Permalink

      Completely wrongfooted the Opposition though, apparently the major goal–even the slightest relation to the recent Manifesto or to anything that could be remotely described as Conservative was there none. A disgraceful travesty if you ask me. Apart from all else I never realised that budgets (for this was a budget) should or even could sensibly be based only on optimism, and optimism not likely to last very long (especially as regards the crucial interest rates) at that.

    • Dame Rita Webb
      Posted November 30, 2015 at 11:19 am | Permalink

      Buttonwood in this weeks “Economist” has a good piece on how accurate the OBR is and how “forecasting” in general, as J K Galbraith put it, makes astrology look respectable. Nobody should believe that Osborne does not offer more of the old failed borrow, tax and spend medicine.

      • Lifelogic
        Posted December 2, 2015 at 12:24 pm | Permalink

        Indeed almost making climate soothsayer respectable too.

  3. stred
    Posted November 30, 2015 at 7:14 am | Permalink

    Why would a newspaper ask you to write an article and then not publish it? The piece is obviously well written and thought challenging, though perhaps contaminated with a paragraph of anti EU nastiness.Did you really have to mention the £11,000,000,000 we have to pay to let them sell us more stuff than we sell them?

    It reminded me of Hugh Fearnley- Watsit’s programme a few weeks ago where some poor farmers were giving up their business because they had grown the crops ordered by the supermarket, only to have the order cancelled at the last minute. At least you could recycle your product and put it on your other outlet, unlike the carrot farmer, who had to plough them into the ground. Did they pay you for abortive work?

    • Robert Christopher
      Posted November 30, 2015 at 10:23 am | Permalink

      “Why would a newspaper ask you to write an article and then not publish it?”

      It complies with a basic understanding of Economics
      It allows the Market to rectify, or at at least alleviate, some of our current problems
      It is what a compassionate business owner might do, if it was his business
      It has a Conservative theme 🙂
      It is much too sensible by half
      AND, it won’t keep us in the EU.

    • Lifelogic
      Posted November 30, 2015 at 1:25 pm | Permalink

      Hopefully JR was paid anyway. It was all sensible stuff. Rather too restrained in its criticism of the poor direction being taken though, for obvious reasons of split loyalties.

  4. stred
    Posted November 30, 2015 at 7:37 am | Permalink

    Off subject. As there will be a vote in the HoC on whether we should allow our few Tornados to let go their accurate £100k missiles which can’t actually kill ISIS top nasties in their bunkers, amid the hundreds of cheaper bombs being dropped by the Russians on the ISOIL operation, electrical generators and civilians.

    There are some politicians who seem to sound sensible when they speak, but really talk the most amazing nonesense. Michael Fallon seems to be excelling himself. Yesterday he was up against Andrew Marr, who at least asked a few awkward questions. One was whether the British missiles would penetrate into the enemy bunkers. Fallon avoided answering. He seemed to think the army taking on ISIS would be the ‘moderates’, or at least some of them in between the non-moderates. It is surprising that a defence minister has not caught on to the idea the Russians have of blasting anyone not willing to reinstate the Assad clan and their allies are Hisbollards and Iranians, who are already fighting so hard that they have lost some leading generals.

    Are you planning to have a discussion before the vote?

    Reply I have written three times on this site about Syria in the last few days and will probably speak today in the Commons.

    • stred
      Posted November 30, 2015 at 9:05 am | Permalink

      Towards the end of WW2 we had a bomb which was used to penetrate and finish the long distance shelling bunkers near Calais. These are very deep. Presumably, it would be possible to make some more. They were carried on Lancasters and there are still some of these aircraft flying. Tornados would not be big enough. There is also a Vulcan being refurbished somewhere.

    • Lifelogic
      Posted November 30, 2015 at 10:40 am | Permalink

      Let us hope Jeremy Corbyn whips his MPs and can still prevent this totally counter productive bombing. He might as well stand down his MPs now as defer. Surely it is him moral duty to do all he can to stop it. If he believes (as I do) that the bombing will be counter productive, thousands will clearly die pointlessly and terrorism with increase.

    • Lifelogic
      Posted November 30, 2015 at 10:42 am | Permalink

      I agree fully on Fallon.

    • Dame Rita Webb
      Posted November 30, 2015 at 11:15 am | Permalink

      Watch this space once Cameron gets his vote to go chasing after Islamic State Landcruisers in the desert. You can bet your last 50p that a load of mission creep will take place afterwards. We are going to war not because of Paris, your personal safety on the streets of London or IS’s atrocities against the locals. We going to war to shore up America in their powerplays against China and Russia. We have our Turkish proxy and they have theirs in Iran. Cameron is just as economical with the actualite here, as Blair was with his dossier or Reid was with his claim that not one shot would be fired in Helmand.

  5. Ian wragg
    Posted November 30, 2015 at 7:44 am | Permalink

    Remind me again which party you support John. A truly socialist statement. …We need to tax the rich more. No No Again NO. We need to stop Pissing money down the drain and tax everyone less
    I suppose Daves pantomime in Paris will increase green taxes thus losing more industry. Why is it that only the UK polices the crazy EU carbon credits system and adds its own surcharge.
    Now we have 75 million Muslim Turks being fast tracked to the UK ‘ S benefits system. Is there no end to Europes stupidity.

    • majorfrustration
      Posted November 30, 2015 at 9:15 am | Permalink

      The Westminster idiots don’t seem to get it.

    • Denis Cooper
      Posted November 30, 2015 at 9:25 am | Permalink

      Now we have 75 million Muslim Turks being fast tracked to the UK’s benefits system and the crafty Hague made sure there would be no legal requirement to ask the UK electorate about that in a referendum, any more than we were asked whether we wanted 4 million Croats to be accorded that privilege and others.

    • libertarian
      Posted November 30, 2015 at 10:23 am | Permalink

      Ian Wragg

      Did you just not read JR’s article? Or what part of lowering tax rates confused you?

    • Lifelogic
      Posted November 30, 2015 at 1:33 pm | Permalink

      If they cut tax rates, cut regulation and simplify taxes then they will raise productivity hugely and raise more revenue too. This as a far larger tax base will develop. Rather than just chasing the money out of the country as currently.

      The UK state should ideally never be more than about 25-30% of GDP, but that would be 25-30% of a very much larger GDP. It should largely get out of health and education other than as a safety net, This as it causes such damage, delivers such dross and causes so many needless deaths every day.

  6. Richard1
    Posted November 30, 2015 at 8:12 am | Permalink

    Good article, I’m sure would like to know which paper turned it down so we can see whether the altenative coverage was better…but I doubt you can tell us.

    The data on CGT receipts are extraordinary. Tax rate up from 18% to 28% and receipts down. How can it be happening – time for leftists to acknowledge the Laffer Curve effect?

    • Lifelogic
      Posted November 30, 2015 at 1:35 pm | Permalink

      The people in the treasury are clearly complete and utter donkeys. Why this vicious attack on tenants pushing up all their rents?

      • petermartin2001
        Posted December 1, 2015 at 2:06 pm | Permalink

        I think you might have typed the word ‘tenant’ when you meant ‘landlord’ ?

        Anyone who is batting on the side of the tenants would be arguing for a German type system. That must be good for the tenant as it is quite normal in Germany, for even affluent middle class families to rent. There is a good balance of protection between tenant and landlord there. Tenants knows they can’t be evicted providing they behave responsibly and don’t fall into arrears. The possibility of being asked to move on, from a rental property, at short notice is a major disincentive for anyone who has a choice of rental or purchase in the UK market.

        • Lifelogic
          Posted December 2, 2015 at 12:27 pm | Permalink

          Attack landlords you kill supply and thus push up rents.

          Attacks on bank are attacks on bank customers too.

    • petermartin2001
      Posted November 30, 2015 at 6:18 pm | Permalink

      I’m not sure if I can speak for all on the left but The Laffer effect is real enough in its way. For example if we tax alcohol or cigarettes very highly then the tax revenue will fall as smokers and drinkers either reduce their consumption or acquire their needs from illegal sources.

      So yes there will be an optimum tax level for one particular tax. But we need to look at the effect of displacement too. If we optimise the receipts from CGT does that have no effect on receipts of income tax? Or will clever accountants simply choose to switch income into a captital gain?

      • Richard1
        Posted November 30, 2015 at 11:26 pm | Permalink

        The evidence seems to be quite conclusive that a rate of CGT of c. 18-20% would raise more than the current rate. Clearly with a marginal rate of 45% on income that’s an invitation to tax avoidance, the cure for which is to bring it down to levels seen in the most prosperous and high growth countries. Totemic high rates of tax are damaging both because they lead to lower receipts and because they symbolise an anti-business, anti-investment mindset which is profoundly off putting.

        • petermartin2001
          Posted December 1, 2015 at 11:44 pm | Permalink

          For once I do agree with you. Taxes generally are too high and need to be reduced. Just what taxes need reducing and by how much is largely a matter of political opinion.

          Of course all politicians would say they would like to reduce taxes but also say they can’t do that because “the govt needs the money”.

          That’s the wrong way of looking at it. It gives the wrong answer. If the Govt spends £100 million into the economy what will happen to it? It will either come back as taxes or it will be saved. There are no other possibilities.

          If taxes are high it will come back after fewer transactions than if it were low, but the difference between what the government spends into the economy and what it gets back is what is saved either domestically or internationally by the big exporters.

          So the question, is if reducing the deficit is a key consideration, will cutting taxes help reduce that tendency to save or increase it?

          I can’t say for certain, but I’d say we can afford to do some experiments when inflation is as low as it is.

          • Edward2
            Posted December 2, 2015 at 7:49 am | Permalink

            You ignore the misallocation of resources Peter.
            To you the £100 million “spent into the economy” by the State always has a great and good effect on us.
            The more the merrier.

            To me I would prefer individuals and business to be left with that money to spend as they think fit.
            Like the £3 million they gave to that charity which closed down a few weeks later.
            I know a few companies that would have spent that £3 million to better effect.

          • petermartin2001
            Posted December 2, 2015 at 7:19 pm | Permalink

            It’s the same thing.

            All pounds are the creation of the UK govt. Similarly all dollars are the creation of the US government (except the Australians and Canadians have their own different dollars of course). So all money has to come from Govt initially. There’s no getting around that.

            If there is insufficient activity in the economy leading to recession and less than optimum levels of wealth creation there are several ways of increasing that activity.

            The left would possibly tend towards more govt spending. The right would possibly tend towards lower taxation to keep the money spent by govt in the economy for longer. I’d favour a bit of both.

          • Edward2
            Posted December 3, 2015 at 8:57 am | Permalink

            Sorry I forgot you do not believe individual citizens can create wealth by themselves.
            You believe they need the State to create money for them, otherwise they would starve.

          • petermartin2001
            Posted December 4, 2015 at 7:21 am | Permalink

            Edward2,

            The citizens create the wealth the State creates the money.

            If the Govt didn’t create ££ the economy could still function (well enough to avoid mass starvation) using the euro or the US$ but it wouldn’t function as well as it would with the £ as our currency under the control of the UK govt.

            I would have thought you’d be in favour of keeping the pound? I certainly do. It gives the govt extra policy space to ensure the economy is functioning close to its maximum potential. If it doesn’t use that policy space it may as well use the euro.

          • Edward2
            Posted December 4, 2015 at 2:37 pm | Permalink

            Still confusing money supply management with the current craze for magic money via QE and debt increasing money printing.

  7. Richard1
    Posted November 30, 2015 at 8:16 am | Permalink

    We are being asked in breathless tones on the BBC what has changed since the Copenhagen and Paris climate change conferences. Well one thing that hasn’t changed is the climate – we aren’t seeing the warming which was forecast, Antarctic ice seems to be increasing not reducing and the planet is benefitting from greening of the biosphere due to increased CO2. But I guess these inconvenient facts won’t be aired in Paris.

    • Lifelogic
      Posted November 30, 2015 at 9:08 am | Permalink

      The whole tone on the BBC is appalling. There is the constant assumption that “catastrophic run away warming” is proven solid science rather than computer projections (so far proved totally wrong) and combined with a new firery hell religion.

      Often there is a pathetic BBC attempt to link “climate realists” to “deniers of evolution”. It is the climate alarmists who are totally unscientific. The less people know about science and engineering the more they seem to be believe in the green religion and “renewables”.

      Roger Harrabin the leader of the BBC propaganda pack is a Catz, Cambridge English graduate for example.

      Thank goodness for the sane voices of the Matt Ridley types and the other lukewarmers as they now seem to be called.

      • stred
        Posted December 1, 2015 at 6:38 pm | Permalink

        BBC News at lunchtime was quite appalling nonesense. They went to a south sea island where a village built 1m above sea level which had been flooded; the locals were planning to move it up the hill to a safer level. As it was mainly built with wood and corrugated iron or straw, this would not be too difficult. Even the UN helper on the radio had said the problem was not sea level rising but the big storms. IPCC says these are not more frequent but may be about 5% more energetic.

        But BBC TV news tells us its all down to the sea level rise, which is caused by greenhouse gases. Tidal markers all over show that sea level has only been rising at the same rate of 3mm/pa, as it has for ages, but they confuse what alarmists are saying might happen in the future with what anyone else knows has happened, even before CO2 levels increased.

        Then they had a Dutch ultra green alarmist on who predicted a 1.5m sea level rise this century- and that’s if we do nothing! This is an five fold increase and based on the upper end of estimates based on models proved wrong so far, and not even claimed by the IPCC.

        The worst aspect of all this misinformation, also spouted by Charles the Green, is that a lot of younger people have been brainwashed into believing it and they never read the technical debate, or understand it.

      • petermartin2001
        Posted December 2, 2015 at 7:46 pm | Permalink

        We may all have our criticisms of the BBC but the the idea they have whipped up a “new firery (sic) hell religion” is nonsense.

        You say “the climate alarmists who are totally unscientific.” Are they? Every world scientific body like the UK’s Royal Society and the USA’s very well respected NASA, every university department which is engaged in teaching and researching climate is of the opinion that rising levels of GH gas emissions (CO2, NH4 ) in the atmosphere should be cause for ‘alarm’.

        There are no exceptions. Or if there are, maybe you could let us know?

        • Edward2
          Posted December 3, 2015 at 8:59 am | Permalink

          Revisit Al Gores film and see the climate alarmists last load of predictions which never came true.

          • petermartin2001
            Posted December 4, 2015 at 3:09 pm | Permalink

            The prediction of 3 degs warming will only occur over a matter of a couple of hundred years if CO2 levels double from their pre-industrial level by the end of this century.

            The heat capacity of the oceans will mean that they have to warm before the Earth warms, and then as we know a chunk of ice doesn’t melt as soon as warmer water is poured on it.

            It all takes time. So it’s a bit soon to say the predictions are wrong.

          • Edward2
            Posted December 5, 2015 at 12:49 pm | Permalink

            Two examples of predictions made in Al Gores film a fe decades ago were that islands in the Pacific would be under water by now and that from 2000 there would be rapidly increasing temperatures.
            Neither have come true.
            Yet the very same computer models are being used to make further future predictions of doom to come.

    • Ted Monbiot
      Posted November 30, 2015 at 11:02 am | Permalink

      The real agenda of the Paris climate jamboree is to facilitate the transferring of large sums of money from rich to poorer nations.

      We can only afford to burn coal and wood they tell us, so unless Western “climate imperialist” give us hundreds of billions we cannot change.

    • bigneil
      Posted November 30, 2015 at 11:03 am | Permalink

      A lot of rich buddies of the elite want to be even richer and taxing the poor yet again is the obvious answer. If you tax them into poverty they won’t be able to afford a car or heating in the home, less CO2 produced -problem solved
      -So how are all these “concerned about greenhouse gases” leaders going to get to the meeting? Bet it won’t be by solar powered car. Why can’t these people meet/talk by Skype? – – can’t claim expenses for talking on a computer? don’t get expensive food for talking on a computer? – -don’t get to stay in a posh hotel for talking on a computer? Don’t get another taxpayer funded jolly? I would call them hypocrites – but it wouldn’t even begin to describe them.

      and an off-topic John – I have been diagnosed as diabetic very recently. In the booklet given to me from the Doctors it says I need to stay warm – 18C – – fat chance of that as I’m worth nothing from the DWP after 45 yr of paying in – – will be lucky if it reaches 6-8C in here over winter – just like last year. Still – the (migrant ed)on £20k benefits per yr should be nice and warm. At least when I drop dead someone from abroad will have a house to move into – and that’s the main thing in Cameron’s eyes.

    • forthurst
      Posted November 30, 2015 at 12:12 pm | Permalink

      “Narendra Modi writes in Monday’s Financial Times that advanced countries that “powered their way to prosperity on fossil fuel” must continue to shoulder the greatest burden. “Anything else would be morally wrong,” he says. – Financial Times”

      India has benefited hugely from the Global Warming Hoax at our expense and would like to continue to do so whilst themselves burning every last ounce of coal they can lay their hands on. European politicians: ignorant and stupid and not fit for purpose.

  8. Bob
    Posted November 30, 2015 at 8:32 am | Permalink

    This reminds me of the reason most conservatives give for joining ukip, they say “I have always been conservative, I never left the Conservative Party, they left me!”.

    Now I watch as the Tory Blairites join forces with the Labour Blairites to wage war on Syria and expect to see more conservatives tearing up their membership cards.

    • Lifelogic
      Posted November 30, 2015 at 8:54 am | Permalink

      Let us hope Mr J Corbyn can still manage to pull Cameron back from his foolish, counter productive and terrorist incubating bombings.

      • Chris
        Posted December 1, 2015 at 2:52 pm | Permalink

        Agree with your sentiments, LL. The former UK ambassador to Syria has spoken out very strongly against Cameron’s proposed action apparently feeling that Cameron demonstrates a fundamental lack of understanding of the complex situation in Syria and the Middle East, and UK bombing is not the answer. What is hugely worrying is that I have tried to post on this website several times about this very serious concern expressed by Peter Ford, an expert in the Syria arena, but have not been permitted. Hopefully this will get through.

    • petermartin2001
      Posted December 1, 2015 at 1:17 pm | Permalink

      Just wondering when this ideal Conservative Party of yours ever existed?

  9. Iain Gill
    Posted November 30, 2015 at 8:38 am | Permalink

    What about taxing corporations here instead of letting them use tax havens?

    Why take with one hand and give with another its just extra administration and money wasted on administration.

    Why remove more power from the individual leaving them dependant on state allocation?

    Why rip off the middle earners so much?

    Why flood the country with immigration?

    Why fail to protect our best intellectual property? It’s our meal ticket.

    • formula57
      Posted November 30, 2015 at 11:44 pm | Permalink

      Indeed so with regard to corporate use of tax havens – and what about taxing people here instead of letting them use “non-domiciled” status?

      • Iain Gill
        Posted December 1, 2015 at 4:37 pm | Permalink

        They should ban use of trust funds as used to protect houses from being sold to pay for old age care. If it’s good enough for my mother to have her house wasted by the public sector its good enough for others.

  10. David
    Posted November 30, 2015 at 8:43 am | Permalink

    ” Many of us had asked for some relief to the planned cuts to tax credits. The Chancellor stopped them.”
    Why? You sh0uld be in favour of changing tax credits. It is a system that means that part time work can pay better than full time.

    • fedupsoutherner
      Posted December 1, 2015 at 8:19 am | Permalink

      I’m with you on that David! My husband is 69 and still works as a self employed plumber most weeks for around 60 hours. He is just waiting for his tax bill to come in while our next door neighbours who are much younger only work 15 hours a week and bring in not much less than we do because of tax credits. What makes me laugh is that they don’t pay tax in the first place! There are many people working full time hours next to part time workers who are earning more than they are. It is wrong and Osborne should not have backed down.

  11. Antisthenes
    Posted November 30, 2015 at 8:47 am | Permalink

    There is always a case for redistribution of wealth as society must look after it’s own not necessarily for compassionate reasons but practical ones. The cohesion of a society depends upon it it will fall apart if it’s citizens have no faith that there fellows will look after them during bad times.

    However when the practical reasons are subsumed by compassionate ones and redistribution is more than is necessary then the stability of society is threaten as much as if it does not do it enough.

    In the UK and elsewhere in the world we have or are reaching redistribution levels that are affecting whole societies cultural thinking that is dangerous. Whole populations are becoming reliant on government/taxpayers largess to the extent that self-reliance and personal responsibility hardly exists Worse the populations believe that it is right that they do not.

    The people fail to see that this largess gives the state greater control over them and their own abilities to travel through life’s many difficulties successfully are seriously undermined. The state’s largess is not a reliable commodity and sustainable levels will fluctuate considerably especially when that largess has grown to a level that was not prudent and is more counter productive than productive. Not doing that for which it is designed which is to give basic help to those in genuine need.

    Redistribution wealth in the minds of the recipients becomes misguidedly a hard fought for right and privileged and anybody who attempts to take that away from them woe betide them.

    The left having done the damage by creating a wealth redistribution on it’s current scale (often not for the sake of it’s citizens but to enhance it’s own power) has given the Conservatives a momentous task to bring that distribution down to a level and design for which it was intended. A thankless task at that and I salute their bravery for attempting it. If successful however the country will in the end be better for it and it’s citizens may come around to thanking the Conservatives for it. Although the latter I doubt very much.

  12. Brian Tomkinson
    Posted November 30, 2015 at 9:04 am | Permalink

    JR: “The first change I would make to the Autumn Statement proposals is to tax the rich more.”
    Just about sums up Cameron’s Conservative party. Osborne has morphed into Brown/Balls and even you are singing from the new Labour songsheet. No wonder the ‘real’ Labour party has swung even further left as you move ever closer to them. Cameron, as he told us, is truly the heir to Blair.

    • Ken Moore
      Posted November 30, 2015 at 11:03 pm | Permalink

      I don’t agree that calling for competitive tax rates that benefit everyone is ‘singing from the new labour songsheet’ ..although the majority of Dr Redwood’s party clearly are. JR is now in the New New Labour party with it’s reckless spending,recreational bombing and absolute adherence to the doctrine of political correctness.

      It’s troubling that common sense views now have to be pre-faced with the obligatory sop to political correctness. Listen to me I’m not a right wing zealot that only cares for the rich..’I want to tax the rich more’ . No need to play the left’s game…

      It’s a bit like those wanting to sensibly limit migration always feel the need to mention that the NHS couldn’t manage without migrants etc. just so everyone is crystal clear they aren’t a swivel eyed racist. What idiotic times we live in.

      Reply I wish to tax them more by cutting the rates, so they do and earn more and pay more. What’s not to like?

  13. Bert Young
    Posted November 30, 2015 at 9:21 am | Permalink

    The Autumn Statement was nothing more than a popularity seeking objective for Osborne . He let the Conservatives badly down by not sticking to his previous statements on attacking debt . He is meekly following in the other young boys’ footsteps of wanting to stay in the EU ; £11bn to him means nothing – he doesn’t view the long term seriously otherwise he would see the wisdom of Brexit .

    The country demands and needs wisdom and experience from the MPs who represent them ; young boys whose feet are not on the ground and have little experience of the trials of life , are the last ones who ought to sit in Westminster . The Party selection system is at fault and needs urgent correction .

    I am not surprised that your article was not published ; if it did not suit the taste of the readers – who probably welcomed the stupid “giveaways”, it would be disregarded . This week there are few MPs who experienced war or who served in the Armed Forces who will be voting on Syria ; when they do so I hope they will consider the longer term aspects of their decision and not simply that of dropping a few bombs .

  14. rick hamilton
    Posted November 30, 2015 at 9:23 am | Permalink

    As far as I can see Osborne only controls one of the variables in his forecasts – government expenditure.

    The BoE is supposed to be independent and they fix the interest rate. Osborne cannot control demand, output, wages, prices, exchange rates, global economic shocks, wars or natural disasters. Not to mention cost of immigration and arbitrary EU demands. He cannot stop for example the coming debt default in the USA caused by overvalued junk bonds, uncollectable student loans and subprime auto loans, which potentially could impact global economies as badly as 2008.

    So his forecasts are almost as spuriously accurate as climate change figures, except that he doesn’t claim to see forward 85 years like the AGW fanatics. The prudent way is to fix an absolute limit on state expenditure and punish bureaucrats in the wallet if they exceed it. Will never happen of course. It’s all Other Peoples’ Money.

  15. oldtimer
    Posted November 30, 2015 at 9:40 am | Permalink

    Clearly your article did not fit the narrative the newspaper was seeking to promote. They might even have thought it politically incorrect.

    But it seems you are not alone, judging by some of the articles I have read – all critical of the approach taken by Mr Osborne. Politics has trumped common sense and fiscal rectitude. Someone pointed out that we shall be spending more on foreign aid than on the Home Office. Based on their statements and policies I do sometimes think that Cameron and Osborne are financially and economically illiterate – or that the electorate is so stupid that it believes what they say.

  16. oldtimer
    Posted November 30, 2015 at 9:54 am | Permalink

    OT: I think you will be interested in this article by John Hulsman
    http://www.cityam.com/229843/cameron-s-case-going-war-syria-built-sand

  17. Denis Cooper
    Posted November 30, 2015 at 10:11 am | Permalink

    I think that you may have to put the words “up to” before the £11 billion, JR, because the UK government would still have to do some of things which are presently being done through the EU and I don’t think we can predict exactly how much would be saved.

    However on the matter of money being handed over to the EU I note that the EU is now handing €3 billion to Turkey, either to help the Turks with the costs of looking after large numbers of illegal immigrants or as a bribe to the Turks to persuade them to behave as good neighbours and stop allowing and helping large numbers of illegal immigrants to pass through Turkey on their way to the EU, depending on how you look at it.

    https://euobserver.com/foreign/131307

    “The EU-Turkey summit agreed the EU will pay Ankara an “initial” sum of €3 billion to help take care of refugees in return for stricter border controls with Greece.”

    Am I right to presume that this money will be coming out of the EU budget to which the UK has contributed? If so, is the government demanding that our part be rebated?

    Because officially we have a treaty opt-out from all aspects of the EU’s immigration and asylum policy, and under Article 5 in the protocol, No 21:

    http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:12012M/TXT

    “A Member State which is not bound by a measure adopted pursuant to Title V of Part Three of the Treaty on the Functioning of the European Union shall bear no financial consequences of that measure other than administrative costs entailed for the institutions, unless all members of the Council, acting unanimously after consulting the European Parliament, decide otherwise.”

    It is a simple enough question:

    “Will taxpayers in the UK be helping to pay for the immediate consequences of the EU’s insane immigration and asylum policy as dictated by Angela Merkel?”

    And she is still dictating that policy now, without the slightest remorse for what she has done, as can be seen from that article:

    “Merkel said the idea is to “replace illegal migration with legal migration … it’s an uphill struggle, but it’s well worth the effort.””

  18. brian
    Posted November 30, 2015 at 10:12 am | Permalink

    How rude of the “leading national newspaper”. I hope that you were paid for your efforts.

  19. Atlas
    Posted November 30, 2015 at 10:41 am | Permalink

    Quote: “Maybe the best answer for them will be to re unite track and trains, introducing private capital with railway companies organised around particular routes and parts of the country.”

    Agreed !

  20. Denis Cooper
    Posted November 30, 2015 at 10:51 am | Permalink

    I see the Telegraph has an editorial with the headline:

    “Strategy against Isil needs to be clearer”

    Without comparing Cameron with Churchill, it is perhaps worth recalling what the latter said in his first Commons speech after he became Prime Minister in May 1940:

    “You ask, what is our policy? I will say: It is to wage war, by sea, land and air, with all our might and with all the strength that God can give us; to wage war against a monstrous tyranny, never surpassed in the dark and lamentable catalogue of human crime. That is our policy. You ask, what is our aim? I can answer in one word: victory; victory at all costs, victory in spite of all terror, victory, however long and hard the road may be; for without victory, there is no survival.”

    I suppose now we would have MPs demurring on the grounds that they wanted a clear plan for what would happen after that victory had been achieved.

  21. Kenneth
    Posted November 30, 2015 at 11:11 am | Permalink

    It’s odd that the BBC and other left wing organisations saw the previously apparent eagerness of the Chancellor to reduce tax credits as career-threatening and was harvesting dissenting Conservatives voices to push their point, yet hardly a murmur about the breaking of the pledge to reduce public spending.

    Why?

  22. MikeP
    Posted November 30, 2015 at 11:23 am | Permalink

    I took some flak yesterday from Lifelogic over my statement of “closing the gap between rich and poor”. I meant it more in perception and lifestyle terms. I’m not comfortable that a compassionate and wealthy country like the UK finds it within its power to gift multi-million £ pension pots to Whitehall pen-pushers, or multi-million £ pay-offs to failed top brass in Councils and the NHS, and in many other ways waste billions of our hard-earned tax, but can’t feed and house its citizens, even the feckless and workshy somehow, but particularly those who need a leg-up in hard times. Of course it would help if we didn’t have 300,000 net inward migrants taking a sizeable chunk of the 400,000 new homes that are going to be built (supposedly?)

    We need to continue the process of incentivising work to reduce the need for top-up in-work benefits. Lower taxes help drive this trend and bring in more tax (particularly from the rich as you say who keep more of the larger incomes they generate). But too many employers still pay the minimum wage as a matter of policy and the workforces aren’t yet sufficiently mobile to vote with their feet to go elsewhere for better pay – so we all end up topping up low pay through our taxes instead of the employers – how ridiculous!

    Furthermore, are we doing all that we can and should to make absent fathers support their offspring? So many of those struggling to make ends meet, endlessly trotted out by the BBC, seem to be single mothers juggling child care and the school run with 12-16 hours work. Those of us who have held down our jobs and our relationships know how hard it can be sometimes to bring up a family and rent or buy a house on two incomes let alone one. Where are the absent fathers’ contributions in all of this ?

    For me the Autumn Statement was all smoke and mirrors. The hand-wringing over Tax Credits has only been kicked down the road for it to re-surface over Universal Credit, whose implementation is massively behind schedule.

  23. Ken Moore
    Posted November 30, 2015 at 11:23 am | Permalink

    Quite near the bone and said a lot of true but un-popular things. Mr Osborne’s mad spending of forecasted revenues taken as gospel – perhaps Dr Redwood could stand up in the house of commons and let Gidders and Mr Cameron know a large proportion of the country are quietly fuming about the climb down on tax credits and the return to reckless spending . Come on JR you have nothing to lose – your wasting your time trying to find common ground with these people.
    Was there any explanation given why this was not published ?.
    Perhaps it would have made too uncomfortable reading for Mr Cameron and his fellow followers of fashionable opinions ?.

  24. acorn
    Posted November 30, 2015 at 11:32 am | Permalink

    ‘Putting Lipstick on a Pig’ again JR? Don’t forget Network Rail is now classified as a central government body, its a Quango for all intents and purposes. (Added £35 billion to the national debt.) HCA registered housing associations are now classified a public non-financial corporations. (Added £60 billion to the public debt.) Basically, which bit of “you own them, you fix them” does this government not understand.

    The tone of your post today JR has got a leftist tinge, which is good; but, alas, the para’ that starts “Before the last election …” includes the “borrowing” word and is just plain wrong. There is a misunderstanding of what taxes are meant to do. The current tax structure is based on old Gold standard thinking. …………..
    In the latter post, Wray mentions Henry George who was big on value capture for the little people; he came up with Land Value Taxation. If only London had adopted LVT three decades back, the rise of the property-owning plutocracy, could have been abated, or at least shared out with what has now become generation rent.

  25. CHRISTOPHER HOUSTON
    Posted November 30, 2015 at 11:50 am | Permalink

    OK, firstly I’ll get rid of the irresistible desire of making a Robin Hood joke.—-: Robin Hood was of course awaiting the return of Richard the Lionheart who along with other members of Christendom ( EU ) was trying his level best without any genuine help by countries in the region to give democracy and freedom to people who amazingly did not wish it . This of course leading to his being embroiled in wars across the whole of the Middle East right up to his coif.

    To the point: The Labour Party runs its local and national election campaigns/ leafleting tapping into the fear that their welfare and in-work benefits will be withdrawn should they not get into power. Local Labour politicians and activists being more loose-mouthed than their MPs readily confess and are indeed triumphalist about making “them”..(their potential voters who they despise more than the Tories) economically dependent on they and their version of the Labour Party being in power. Their Robin Hoodesque “giving to the poor” they admit to being a bribe and a blackmail.

    Any Opposition Party or indeed sensible people within the ranks of the Labour Party can find little way via the electoral process to end or decrease the debt and deficit.

    Easier said than done, but Governments of all hues if they genuinely wish a semblance of unfettered representative democracy and a sound stable economy should buy-out of what you describe JR as the ” Robin Hood magic. ”

    Mr Osborne, seems to be of a mind of late, that a national election is closer than we might think and is doing a Robin Hood. He should be made aware that in the times of Robin,- Sherwood Forest stretched further north than Leeds in Yorkshire; that much of it was deciduous, providing no cover in Autumn, Winter and little in Spring. Also that articulated plate armour had not then been invented so his stuffed shirt will not protect him from Tory Party back-stabbers and Labour Party footpads.

  26. nigel
    Posted November 30, 2015 at 11:53 am | Permalink

    JR: I find your comment about redistribution of wealth most disappointing. It reminded me of a comment made many years ago by Roy Hattersley who said roughly: “We are not about equality of opportunity, we are about equality of outcome”.
    You once said to me, at a local Party dinner words to the effect that the Labout Party wants to take your money, pass it through a very expensive filter, and redistribute it to everyone. Your policy appears to have changed radically since then.

    reply No, I am still arguing for lower tax rates!

    • petermartin2001
      Posted December 1, 2015 at 2:15 pm | Permalink

      So why not lower taxes now when inflation is 0%?

      Cut taxes, stimulate the economy, increase overall tax revenue, create new jobs, increase the GDP, reduce the deficit and reduce the national debt to GDP ratio!

      What can go wrong besides a bit of inflation which we need to hit the 2% target anyway?

      • Edward2
        Posted December 2, 2015 at 6:10 pm | Permalink

        A bit of inflation does no harm, you say.
        It is like saying someone is just a bit pregnant or just a bit addicted to Class A drugs.
        Both have serious long term consequences.

        The closer to zero the better.

  27. margaret
    Posted November 30, 2015 at 11:54 am | Permalink

    Thank you for your Newspaper article. It is typical of the climate where those capable of carrying out tasks , insights into problems and solutions are asked to undertake the work and are pushed down out of sight and sound for others to come out with the self same solution at a later date, which is often, because of the time lapse, out of context.
    I would disagree though with the Father Christmas coming early allusion as one cannot call a Christmas present something which some one already had and was being spared of the embarrassment of taking that Christmas present away, because of unpopularity and money coming in from elsewhere.

  28. Roy Grainger
    Posted November 30, 2015 at 11:55 am | Permalink

    Reading between the lines I suspect you don’t believe the OBR’s new optimistic forecasts. No-one else does either, not even them I expect. Their forecasting record is one of abject failure, even worse than the Met Office. Planning on the basis of those forecasts is folly.

    • Ken Moore
      Posted November 30, 2015 at 11:16 pm | Permalink

      Just a question for Dr Redwood – what safeguards are in place to ensure the OBR’s work is both independent (in more than just name) and that it is competently managed.?
      Who decides whom is appointed…and is this process free of political interference?

      Why aren’t Mp’s asking the relevant questions when the office has shown a clear bias towards heroic optimism in it’s forecasting ?. What scrutiny and oversight has parliament over the offices work ?

      Are appointees made on the basis they can be guaranteed to come up with the right result?. I’m amazed that the media hasn’t picked up on the hopeless track record on forecasting accuracy?

  29. forthurst
    Posted November 30, 2015 at 11:58 am | Permalink

    Recently a tenant of a local flat suffered serious injuries falling from a defective balcony; it later transpired that the flat was owned by a property company registered in the British Virgin Islands.

    Rather than increasing taxes or reducing taxes to invite more to partake in the scheme, why not compel those that are the beneficial owners of property here to pay their taxes here?

  30. Chris
    Posted November 30, 2015 at 12:36 pm | Permalink

    Cameron has just committed the UK to giving Turkey another £275 million of UK money in response to the Member States voting yesterday to give Turkey 2.2 billion euros aid. Regarding your statement, Mr Redwood:
    “..This is the year to take action to control costs and to build in some leeway in case the tax surge does not materialise in the way the OBR now suggest…”
    How can you possibly hope to do this with our ever growing commitment to send money to the bottomless pit that is the EU, whenever it demands we do so? How can we afford it and how can we plan for our own economy if things are sprung on us e.g. with regard to the migrant crisis and Angela Merkel’s apparently spur of the moment decisions. The latest demand is in connection with the EU fast tracking Turkey’s membership of the EU and Member States voting yesterday for i) Turkey to be allowed to join the Schengen zone of visa free travel and ii) the EU to give Turkey 2.2 billion euros to encourage them to control their borders more effectively, of which the UK contribution will be £275 million.

    Reply That’s one of the reasons why I wish to leave the EU

  31. CHRISTOPHER HOUSTON
    Posted November 30, 2015 at 1:13 pm | Permalink

    Off Topic:
    Would the powers-that-be immediately stop the anti-sugar/anti-diabetes/anti-obesity irritating campaigns at least until they have done some basic proper research.

    Whatever statistics may indicate, the fact remains as we are said to say in Yorkshire “Wen ar worra lad ” ( When I was a lad ), there were no “diet” sugar-free drinks available. Sugar was thought to be good. The first non-sugar sweeteners were not popular as they left a bitter aftertaste and their sweetening was noticeably artificial. They were also too expensive relative to sugar to use in food manufacturing. It was common in the locality in which I lived for Mothers if they were short, literally, of a penny or two, to fold up a piece of newspaper and pour in sugar and give to their children so they could walk along the street dipping their wet fingers in the sugar, and sucking, making other kids jealous as they did not have any rainbow kaylie, not even a pen’oth.
    Nowadays major well-known firms which we associate with sugar production and distribution have in fact years ago sold or discontinued their sugar interests, as artificial sweeteners are much cheaper…much cheaper.

    May I suggest the medical authorities not look for simplistic and popularist answers for the massive diabetes, obesity problems which do not make much sense when one looks at human consumption of sugar historically ( not as statistics but in real-life experiences ) and most certainly, even statistically, do not hold water globally with varying degrees of sugar consumption between countries and within various internal groupings.
    The money devoted to anti-sugar campaigns where activists’ anti-sugar propaganda has already been widely accepted ( rightly or wrongly ), would be better spent on a proper research of the causes of diabetes and obesity.

  32. behindthefrogs
    Posted November 30, 2015 at 3:16 pm | Permalink

    We should be introducing two higher bands of council tax. This would reduce the pressure on many councils and if partly set against government grants would also help the deficit.

    The government should be lot keener on introducing life adjusting taxes. For example the introduction of a tax on sugary drinks should be implemented immediately. Similarly I don’t understand the reluctance to introduce minimum alcohol prices that would have led to an increase in VAT receipts if it failed reduce alcohol consumption. Both of these should contribute to the cost of running the NHS.

    The tax paid by the rich could also be increased by adjusting upwards the thresholds of individual NICs. Perhaps at the same time it should be revised to be a single flat rate calculated to raise about the same amount of revenue.

  33. petermartin2001
    Posted November 30, 2015 at 4:30 pm | Permalink

    Government has to mainly tax the rich because they have the money. They should not wish to do so as some kind of moral punishment for success.

    It doesn’t fit easily into my political view to say this, but just to show that it is possible to decouple an economic view from a political view, I should say this is not true. There is no pressing economic need for extra taxes on the rich right now.

    That would only be the case if the rich were wanting to spend large sums of money and that spending was having an inflationary effect on the economy. But they aren’t. In fact there is an opposite problem. They aren’t spending or investing they are just sitting on their piles of cash.

    Of course, inflation control isn’t the only motivation for taxation. We impose taxes on smoking to discourage that. We impose excess taxes on the rich to try to prevent growing social inequality. If that is what the Government wants to do, then that’s fine by me!

    Should I address George Osborne as comrade now? 🙂

  34. Mike Wilson
    Posted November 30, 2015 at 4:46 pm | Permalink

    Local government is excellent, (really, really good) at wasting money and spending budgets that don’t need to be spent. Why not spend a month at Wokingham Borough Council looking at the accounts and suggesting to them how they could cut spending by 20% without affecting services. That way they could avoid another 2% rise in council tax to go on top of last year’s. Funny how council tax NEVER goes down. Surely there must be some years where budgets can be lower?

    reply. We elect 54 Councillors to obtain value for money and they do not want MPs telling them how to do their job.

  35. petermartin2001
    Posted November 30, 2015 at 4:51 pm | Permalink

    ” ………. There is always the danger that the revenue forecasts will prove to be too optimistic. Taxes are very sensitive to employment levels and consumer confidence.”

    It’s more than a danger. It’s a virtual certainty that in 2-3 years time you will be posting on your blog to the effect that though the government has kept its spending plans under control the revenue will not have been received as planned, and therefore the deficit has not closed as expected.

    The fact is that, even if trade were exactly balanced, the government can not get back in taxes more than it spends into the economy without everyone either having to borrow more or get poorer from paying those taxes. Extra borrowing and poorer spenders is just the opposite of what the government needs in the economy presently.

    Add in that trade is not at all balanced, that there was a net outflow of money to the extent of 5% of GDP last year (£90 billion according to my calc) and we can see the extra difficulty.

    So if the government wants extra revenue then it could get it by spending more. The deficit may even decrease if extra confidence leads to more domestic production in the economy and a greater willingness to spend rather than save.

    • petermartin2001
      Posted November 30, 2015 at 4:54 pm | Permalink

      PS “…then it could get it by spending more.”

      Or taxing less of course. Not because of any theories of Arthur Laffer, but simply because a more active economy will generate more tax revenue.

  36. Jon
    Posted November 30, 2015 at 9:00 pm | Permalink

    ‘The Chancellor memorably said he needed to fix the roof when the sun is shining.’

    Yes and why that news paper walked away from that potential headline I don’t know! Probably they didn’t read it.

    I was disappointed by the Autumn statement because it totally ignored the need to reform some of the in work benefits if not all.

    Up till now I was happy with the Chancellorship. What does this person believe in? I assume the shackles have come off from Cameron now not contesting another term and George Osborn has free reign. Will wait and see

    • Iain Gill
      Posted December 1, 2015 at 8:31 am | Permalink

      Not just benefits, no reform of public sector just handed their biggest failures more money. And taken away more power from citizens and given it to the state. Disgusted.

  37. Ken Moore
    Posted November 30, 2015 at 11:51 pm | Permalink

    JR – ‘I like a bit of Robin Hood magic’.

    Pffft was this a canny way for Dr Redwood to keep on side a few wavering Labour voters in Wokingham ?. If JR feels he needs to turn left with his party we really are in trouble.

    I would guess more Conservative voters would be turned off than labour voters turned on by this.
    It’s the Austin Maestro school of politics – a car that attempted to be all things to all men and spectacularly failed.

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    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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