Government plans to spend £46 bn more this Parliament

Most commentators are going on about the £23bn extra spending the Chancellor has proposed based on the spin lines out of the OBR and Treasury.

I look at the actual figures in the Green book compared to the March Budget figures.  These show that total managed expenditure will be £46.1bn higher over the  rest of this Parliament on the new numbers.  The figures are

 

Total Managed Spending     2016-17  plus £6.9bn

2017-18  plus £12.4bn

2018-19    plus £13.5bn

2019-20    plus £13.3bn

 

The largest part of this is increased capital spending. In 2019-20 for example total capital spending is up by £8.3bn.

I see I am not the only one who thinks the 2017 forecast for growth is too low. The question for the OBR is why do they think consumption and output are going to decelerate next year, after a strong performance this year which surprised them and forced them and the Bank to increase their estimates?

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142 Comments

  1. Mark B
    Posted November 24, 2016 at 7:24 am | Permalink

    Good morning.
    What worries me is, where is all this money coming from and, what is it going to be spent on ?

    With the foreign aid / subsidy budget and the EU contributions / protection money going ever higher, how can government ever control its expenditure ?

    All this money seems rather a lot for people who all we ask them to do, is make laws for us. Instead they act like the UK is a PLC and they are running the company for we the shareholders. Not so ! Real shareholders cannot be dragged into court for non-payment of monies owed to the company they invest in. They can sell their share capital and invest elsewhere. Not so for the humble tax payer who is seen as nothing more than captive cash cow.

    Enough of this profligacy !

    • Denis Cooper
      Posted November 24, 2016 at 9:18 am | Permalink

      According to the post-referendum QE plan £60 billion of it will come from the Bank of England, via the gilts market as with the preceding £375 billion, to be recovered by the Bank in one way or another over future decades:

      Hammond letter to Carney, August 4th 2016:

      http://www.bankofengland.co.uk/monetarypolicy/Documents/pdf/chancellorletter040816apf.pdf

      “I am therefore writing to authorise an increase of £70 billion in the amount of
      assets that the APF is authorised to purchase financed through the issuance of central bank reserves, of which £10 billion can be eligible private sector assets.”

      But also:

      “I note your expectation that the value of this lending would increase in line with the amount outstanding in the Term Funding Scheme, which will in turn be determined by usage of the scheme, and could reach around £100 billion. I therefore authorise an increase in the total size of the APF of £170 billion. This will bring the maximum total size of the APF to £545 billion.”

      Finally:

      “I confirm that the government will continue to indemnify the Bank and the APF from any losses arising out of or in connection with the facility.”

      While that government pledge is maintained the gilts held by the Bank cannot simply be cancelled without the Treasury having to stump up a vast amount to compensate the Bank and the APF for its losses.

      • Hope
        Posted November 24, 2016 at 10:54 am | Permalink

        Where wa the announcements on savings that could be made by cutting quangos? Why is overseas aid such a panacea to waste our taxes? HS2 announced by Labour in 2008 still being pursued. Dire performce, dire strategic planning and woeful forecasts based on a finger pointed in the air and that an ill wind might blow leaving the EU. I would prefer to rely on witch craft than Hammond and the Treasury- who incidentally got it all wrong before the referendum based on the figures quoted yesterday.

      • acorn
        Posted November 24, 2016 at 6:20 pm | Permalink

        Wrong again Denis. The BoE will swap the Gilts back into the “reserves” (previous government spending into the private sector) that bought the Gilts in the first instance. No net increase occurs in the net financial assets in the economy. Cash deposits replace interest bearing Treasury savings certificates (Gilts); that does reduce new fiscal assets (the interest payments), going into the private sector.

        The Treasury financial accounts (WGA), net out all the QE obtained Gilts held by the BoE. The reality is that once the BoE holds the Gilts, it is the same as if the Treasury DMO had never issued those Gilts in the first instance; the Treasury having left its spending in the form of “reserves” at the BoE Those “reserves”, mirrored by exact equivalent value cash deposits, in customers account at commercial banks, who’s balance sheets have to balance.

        Worth having a read of the bank’s “Money creation in the modern
        economy”. See if you can figure out what “non-money” is in Fig 1.

        • Denis Cooper
          Posted November 27, 2016 at 12:12 pm | Permalink

          You’re missing the wood for the trees, again.

          Hammond expects that he will have to borrow more than previously planned, and he will indirectly borrow some or all of it from the Bank of England rather than from the usual private gilts investors. At the end of which the Bank will own £60 billion more gilts, all of which will say that the Treasury owes the Bank money.

    • nigel seymour
      Posted November 24, 2016 at 1:30 pm | Permalink

      Don’t panic, don’t panic everybody!! Trump and Farage will come to the UK’s rescue (the winds of change are upon us) Seriously folks, I shudder to think what a Labour gov would come up with! Can anyone forecast where they will be in the polls, pre a possible snap election, after the courts once again go against the will of 17.4m people?

      • King Canute
        Posted November 24, 2016 at 7:32 pm | Permalink

        There is some evidence that an extremely strong person with tremendous presence is required in this period in time, whoever it is.

  2. Dame Rita Webb
    Posted November 24, 2016 at 7:32 am | Permalink

    What else can you expect from a MkIV “unimproved new” Labour govt? A bunch of dinosaurs completely insensate to the world around them.

    • Pedantinthecommunity
      Posted November 24, 2016 at 7:28 pm | Permalink

      Insensate is a good word.
      Insensate,( periodically with sparking,short-circuiting synapses plus a thing about having beards and bicycles ) But insensate will do.

  3. Richard1
    Posted November 24, 2016 at 7:38 am | Permalink

    I think it has to do mainly with an expectation of reduced corporate investment in the absence of clarity as to what trading arrangements with the EU will look like post Brexit. For example the other day AIG said they would probably go ahead and relocate their European HQ, as at some point they need to make a decision. The Government should therefore be less complacent than it seems to be and look more urgently at radical supply side measures to ensure the UK is obviously the most attractive location for investment in Europe.

  4. Lifelogic
    Posted November 24, 2016 at 7:41 am | Permalink

    “The question for the OBR is why do they think consumption and output are going to decelerate next year, after a strong performance this year?”

    Perhaps due to the dire lack of vision, direction and the continues endless waste on government lunacies from T May and P Hammond?

    • Lifelogic
      Posted November 24, 2016 at 7:47 am | Permalink

      As Allister Heath puts it today in the Telegraph.

      “A woeful failure to seize the historic moment is becoming the hallmark of this Government.”

      Where is the vision the belief in free trade and getting the state out of the damn way? May says she believes in Free Markets, but clearly does not even understand the concept.

      • Deborah
        Posted November 24, 2016 at 9:14 am | Permalink

        Exactly. Compare and contrast our Government post Brexit with the Trump administration – they’re not even in office yet, but they are moving, and fast. May and her cronies have the power but behave like rabbits stuck in the headlights. All they seem to do is make fatuous statements and shuffle paper.

        • Mitchel
          Posted November 24, 2016 at 10:27 am | Permalink

          Perhaps that’s because they don’t really have the power or perhaps the ability and confidence to act decisively and wield power has atrophied through lack of use.We are effectively governed by a bunch of parish councillors don’t forget.

          Plus there are all the prescriptive legal constraints that mean judges effectively decide what and how power can be wielded.

        • Hope
          Posted November 24, 2016 at 11:01 am | Permalink

          The delay is deliberate to help project fear to keep the U.K. Aligned to the EU as close as possible. All the court cases and such not her fault etc.

          • Chris
            Posted November 24, 2016 at 12:44 pm | Permalink

            May seems to be a ditherer/indecisive who achieves little. Her record on immigration at the Home Office was dismal.
            She is a Remainer still, I believe, surrounded by Remainers amongst her MPs and the civil service. A fudge will result, I fear, which will represent a huge betrayal of the British people who voted for Brexit. A catastrophe for democracy I would say, and wholly unnecessary

          • Lifelogic
            Posted November 24, 2016 at 1:37 pm | Permalink

            Well clearly most of the blame lies with the Cameron government who did not ensure that the referendum bill was clear and legally water tight. This so that a Brexit vote mean exactly that triggered the day after the vote as he promised to do).

          • Lifelogic
            Posted November 24, 2016 at 1:40 pm | Permalink

            No but the tedious, self contradictory and vacuous speeches she gives are.

            She say she believes in free trade but she clearly does not at all. She is yet another tax, borrow & waste, interventionist, ex(?) remainer, libdim alas. She is no more of a real Tory than Cameron and Osborne were.

        • Jerry
          Posted November 25, 2016 at 6:53 am | Permalink

          @Deborah; “Compare and contrast our Government post Brexit with the Trump administration”

          Err no, that is not how the US system works, Obama and Democrats are still in charge, still making policies decision. Mr Trump has done nothing yet, no appointees have been made, just nominees, nor has any policies been made, just announcements as to what he will/might do once he takes office in January.

          “like rabbits stuck in the headlights.”

          Well what do you expect, when it is clear that those wanting Brexit had no detailed Brexit/A50 plan prepared. In parliamentary terms what Vote Leave (and others) did was a bit like presenting a Bill for second reading without having done anything more than that required for a first reading – now Brexiteers and europhobes are getting upset because the civil service is having to run around like headless chickens in an attempt to formulate the Bill. Which is likely the real reason why the Government wished to appeal the HC decision, allowing more time for governbment and the civil service to do what Vote Leave should have done.

          When people, myself included, on the morning of June 24th suggested that A50 be triggered that day or the following Monday it was the Brexiteers who said things like “What’s the rush”, now the same people bleat and accuse the PM of “dithering” – come off it, europhobes were happy to dither themselves when they thought they would get their own choice of PM, or at least a eurosceptic. I strongly suspect had a Vote Leave campaigner been elevated to the the position of PM but was following the same time-line as Mrs May is those full of criticisms currently would be full of praise, calling it a strategy rather than ‘dithering’.

      • Qubus
        Posted November 24, 2016 at 10:47 pm | Permalink

        Is Philip Hammond the wrong man for the job?

        • Lifelogic
          Posted November 25, 2016 at 3:07 pm | Permalink

          Yes we need someone to low and simplify taxes and cut out all the government waste. He seems to wants to make things even worst than the dire Osborne left them.

    • Lifelogic
      Posted November 24, 2016 at 8:57 am | Permalink

      Where was the visionary leadership? Nothing sensible from the man at all. The most notable thing was his pathetic & misguided intervention in letting businesses. He clearly thinks he know more about running them that the owners and directors do.

      So they now have to pay (by law) the higher minimum wages but also by law they cannot actually charge any fees to tenants to cover the cost of their credit searches, references, inventories ……. more and more damaging red tape for the silly Oxford PPE man.

      Killing productivity and disrupting their business models.

      What about the excessive stamp duty and the absurd fiscal & lending attacks on landlords and tenants. Government & people like Hammond are the problem, not the solution.

      No vision at all, not even a sensible sense of future direction, tedious too, the statement was absolutely pathetic. Not even any move on the inheritance tax promise of eight years back or the even absurd SDLT rates, no more on the pensions Osborne and Brown, nothing on the 45% rates or the 28% CGT rates. Yet more taxes on private medical and other insurance. All totally misguided.

      Lower tax rates would grow the economy, create jobs and raise more tax not less.

      http://www.telegraph.co.uk/business/2016/11/23/brexit-britain-needed-radical-vision-timid-hammond-played-safe/

  5. alan jutson
    Posted November 24, 2016 at 7:57 am | Permalink

    Are we still hearing anything about austerity from anyone in the media, given all of this increased planned spending ?

    Why do we still try to guess what will happen in the future, why not base our spending on a percentage of the actual tax revenue received from past years, then at least we would have one known fact to work around.

    Seems such a simple and logical solution.

    • a-tracy
      Posted November 24, 2016 at 9:07 am | Permalink

      Don’t you wish Alan that things were kept more simple? I just don’t believe anything I hear from all the anacronym organisations.

      Just on the NHS alone. How much does it cost per annum to run the National Health Service, how much does the Government bring in from half of the National Insurance premium that is billed to workers and employers and the self-employed? How much is billed to the EU for treating EU workers, how much of the fund went out to the EU to treat UK emigrants? How much is billed to the rest of the world treated in the system.

      I really don’t see what the big problem is checking people’s entitlement to be treated by our NHS hospitals, you can’t book yourself into an NHS hospital for treatment you have to be referred by a GP, the GP should register you by checking your entitlement to be on their panel, like employers have to check to hire a worker, a simple look at their passport, id, most people are born within an NHS hospital have an NHS number allocated at birth and are now in the Spine. Checking people not entitled to NHS have medical insurance, you know like we have to have when travelling and like the proof we have to provide when we’re abroad isn’t difficult. NHS hospitals should be able to keep the extra money they generate from health tourism to spend on their own needs, extra staff, beds etc.

      • stred
        Posted November 24, 2016 at 7:28 pm | Permalink

        In order to obtain treatments in the EU governments require a NI card number and ID with address for a few years. If we can organise this for holidays,why not for treatment by the NHS? Note that the BMA spokesman disagrees with using passports. Perhaps it would cut demand. every other country in Europe and most of the world requires ID and proof to pay. But, for some reason, the UK finds it a problem.

        • hefner
          Posted November 25, 2016 at 10:51 am | Permalink

          “The UK finds it a problem”: do you remember how much the usual ones were shouting when some years ago a Government had had initial talks about introducing an identity card? An attack on “democracy”, Big Brother will be watching us, it would be money pissed down the drain, … bla bla bla …

          Once more the UK authorities have very little grip on who is in the country, who is entitled to this or that.
          What a laugh!

    • alan jutson
      Posted November 24, 2016 at 2:36 pm | Permalink

      AH yes, the BBC as usual this very lunchtime talking about austerity, salary and benefit levels.

      Amazing they want the deficit eliminated, debt cut, but they also want further spending on the NHS, increased Benefit levels, increased spending on the infrastructure, housing etc, but do not like borrowing.

      Not a single clue given as to how all this can happen, as they did not even mention increased taxation..

      I wonder who is watering all the money trees.

      • Edward2
        Posted November 24, 2016 at 9:00 pm | Permalink

        Quite agree Alan,
        The BBC have their money given them.
        So they always call for more.
        Without ever thinking where it comes from.
        Same with their attitudes towards the larger national economy, as you correctly say.

  6. Nig l
    Posted November 24, 2016 at 8:17 am | Permalink

    Conveniently you ignore the fact that since Gordon Brown and by 2020 you will have doubled the debt to £2 trillion with still no hope of getting the current account into balance. There also seems to be collective amnesia about the economic cycle which many people believe will down turn. So much for fixing the roof when the sun is shining. The figures suggest you are as incompetent as the previous Labour administration, indeed if not more, as they at least had the fallout of the 2008 crash to deal with.

    • Lifelogic
      Posted November 24, 2016 at 9:01 am | Permalink

      Anyone who goes ahead with HS2, Hinkley, greencrap grants, gender pay reporting, workers on boards and Welsh lagoons is clearly incompetent, innumerate and extremely foolish (or perhaps even corrupt).

      What other reasons are there?

      • Hope
        Posted November 24, 2016 at 11:07 am | Permalink

        Nig1 is correct. Look at Osbornes comments, Tory Treasury tweets and it is clear the Tories have been more incompetent. The excuse of the Libdumbs was used for the first five years, Claire Perry, formerly of the Treasury to Osborne, wanted to blame Labour earlier this week! Pitiful. JR and so many others always want to revert to the Tory manifesto when it is convenient, why is the manifesto pledges not being highlighted now? Does last years manifesto still hold any credibility? If not May should have the honour to call an election and set out what she stands for and we, the public, decide if they honoured what they pledged. Media and May type politicians were quick to poor scorn on Trump, but he won the election and was voted in by the public!

    • Denis Cooper
      Posted November 24, 2016 at 9:44 am | Permalink

      Bear in mind that we are still living with the dire consequences of Brown.

      • Hope
        Posted November 24, 2016 at 11:10 am | Permalink

        In fairness, Dennis, Osborne in opposition pledged to match his public spending! He also ridiculed him for funny money which you previously pointed out was mirrored by the Tories once in office. There is no excuse to abandon the Tory manifesto pledge, reiterated time and again to balance the structural deficit. They even tried to make the progress to their aim sound better than it was by introducing the slight reduction as a proportion of GDP which was never the original pledge.

        • ian wragg
          Posted November 24, 2016 at 5:30 pm | Permalink

          Hope, the mantra was “share the proceeds of growth” this was endlessly repeated by Cameron and Gideon and then we had an almighty crash.
          The government still believes in the magic money tree and the fact that Hammond states there will be a £60 billion shortfall over the next 5 years whilst at the same time giving £80 billion in foreign aid is beyond parody.

          • Denis Cooper
            Posted November 24, 2016 at 6:33 pm | Permalink

            We did have an almighty crash, and one consequence of that is shown in the chart here:

            https://twitter.com/TheIFS/status/801788323073314816/photo/1

            Average wages going down in real terms for five successive years after the bubble peak in 2007 – 8, a total drop of 9%, and it will still take a long time to get back up to the previous high. And even longer now, post-referendum, of course, as every journalist is duty bound to emphasise. But then it’s arguable that wages shouldn’t have risen quite as high as they did before the crash, they got ahead of the economic fundamentals and it was unsustainable.

          • Mitchel
            Posted November 25, 2016 at 10:06 am | Permalink

            Never forget the Aid industry provides a good living for many of “their sort of people”;they are not going to strike at their own.

  7. Jerry
    Posted November 24, 2016 at 8:20 am | Permalink

    “The question for the OBR is why do they think consumption and output are going to decelerate next year, after a strong performance this year which surprised them and forced them and the Bank to increase their estimates?”

    Because Brexit will actually start happing for real, rather than the phony Brexit we have had so far (and according to some worried Brexiteers, still might not happen) perhaps? All the true spin is not from the Chancellor, the Treasury or OBR etc. but from Brexiteers like you John who just can’t bring yourself to admit that for all the hyperbolic talk about wild roller-coaster rides before the referendum vote it wasn’t our continued membership of the EU, as wild as that might have been, but Brexit that will bring the wildest ride as no one knows if the design of what ever Brexit we have is economically sound.

    Reply So why does the OBR think growth in 2019, the year of our possible exit, will be back up at 2.1%, their pre vote forecast?

    • Deborah
      Posted November 24, 2016 at 9:15 am | Permalink

      Because Robert Chote is in charge of the OBR?

    • Jerry
      Posted November 25, 2016 at 7:07 am | Permalink

      @JR reply; But have they have not actually said that, everything seems to have had to prefixed with the word “Might“, because no one can forecast in any detail as the government would/could not tell the OBR what their (hoped for) Brexit A50 goals are.

      Also it seems to most (beyond this site and suchlike) that what you want everyone to believe is that a dozen or so highly partisan Tory (Brexit) MPs are correct and every other fiscal institute or official body/agency is wrong when it comes to (post Brexit) economic forecasts…

      Reply As we have been so far!

      • Jerry
        Posted November 25, 2016 at 8:44 am | Permalink

        @JR reply; In your, highly partisan opinions…

      • Edward2
        Posted November 25, 2016 at 9:19 am | Permalink

        Pedantic as usual Jerry
        All predictions can be labelled with the word “might”
        We all realise they are predicting the future as best they can.
        You don’t need to tell us this obvious fact.

        It is about looking back at their previous predictions and seeing if they were right.

        • Jerry
          Posted November 25, 2016 at 5:14 pm | Permalink

          @Edward2; Missing the point again, as usual Eddie…

          Why predict, what ever side you’re on, unless you’re trying to spin the truth to suit your own arguments.

          • Edward2
            Posted November 25, 2016 at 9:56 pm | Permalink

            So tell is what your point is Jerry.
            Keep it simple for me so I can read it carefully

          • Jerry
            Posted November 26, 2016 at 1:07 pm | Permalink

            @Edward2; My point: Let’s just wait until we have actual Brexit (or at least Article 50 has been triggered) before anyone claims that they “have been right” or someone else is oh so wrong, that way the facts do the talking and not the political spin-doctors!

            Simple enough for you Eddie?

          • Edward2
            Posted November 26, 2016 at 5:34 pm | Permalink

            Thanks Jerra
            Just about.
            So I take it from your post that your own posts on this topic will now stop until after Article 50 is triggered.

          • Jerry
            Posted November 26, 2016 at 6:47 pm | Permalink

            @Edward2; I note that you still do not seen to understand my point… By all means debate the issues, just hold off on the “post Brexit” congratulation/blame until we have actually had Brexit!

          • Edward2
            Posted November 27, 2016 at 12:52 am | Permalink

            You must be unable to understand what you write and what I write.
            You are the one posting doom and gloom about Brexit
            You are the one sneering at anyone who points out that previous predictions of doom have been wrong.
            Yet it is a fact.
            And these very same experts are continuing their gloomy predictions only dofference is they have moved the date forward.
            I repeat Jerry
            They said immediately after Brexit there would be a recession.
            And it has not happened

      • Jerry
        Posted November 25, 2016 at 2:14 pm | Permalink

        @JR reply; Even if you have, what does it proved about Brexit or A50 being triggered when neither have happened yet.

        The up-beat economy you keep claiming as your own could indeed be due to the prospect of a successful Brexit but could just as well be the lull before a Force 11 economic storm, or even be due to the fact that the polls say that a Corbyn lead government is very unlikely all the time the PLP is more intent on opposing the Labour party membership will rather than the governments!

        • Edward2
          Posted November 25, 2016 at 5:13 pm | Permalink

          Is there no end your pedantic negativity Jerry.

          If you continually say, tomorrow there will be a dreadful storm, one day you will be proved right.
          That doesn’t make you right.

          Here the point is being made that experts warned us that immediately after the vote to Leave there would be a dreadful storm.
          There wasn’t a storm.
          Now these experts are saying there will be a dreadful storm in the future.
          So excuse us for getting a bit tired and disbelievin of all this Project Fear

          • Jerry
            Posted November 26, 2016 at 1:24 pm | Permalink

            Edward2; Is there no end your facts-less pedantic positivity Eddie?! 🙁

            So everything will be good just because you want to believe everything will be good and dandy… You are the Brexit equivalent to those foolish people who though that the UK did not need to re-arm in 1937/8, or that the UK has had no need for a nuclear deterrent from the late 1950s onwards.

            I have no idea who is correct, in relation to the economic effect of Brexit, but if we all go around thinking like you (and indeed our host, it seems, at least in public) and thus do not plan for any possible post Brexit down-turn, any such problems will be even worse, on the other hand any ‘war chest’ will be a bonus if our host is correct in his predictions.

            As one economic commentator said on Wednesday after the Autumn statement, if there is no ill-effect from Brexit then the Chancellor will have a nice ‘war chest’ to spend just before the 2020 General Election…

          • Edward2
            Posted November 26, 2016 at 5:43 pm | Permalink

            I opened with a fact.
            The doom laden predictions for immediately after the vote to leave did not happen. For example:-
            Prediction recession
            Fact..no recession in fact record G7 growth
            Prediction.. increased unemployment.
            Fact reduction in unemployment with record numbers in work.
            Prediction, punishment budget with increased taxes
            Fact never happened
            I’m just looking at the same experts who made these incorrect gloomy predictions now carrying on using the same input data into their computer models now saying it will still happen but sometime in the future.

          • Jerry
            Posted November 26, 2016 at 6:57 pm | Permalink

            Edward2; “I opened with a fact.”

            No you did not, no one can judge the effects of either Brexit or the triggering of Article 50 because neither has yet happened, those “doom laden predictions for immediately after the vote to leave” you talk of were predictions based on the assumption that A50 would be triggered on or just after June 24th, not Q1. 2017… Come back and either gloat or hold your head in shame once A50 has actually been triggered at least!

          • Edward2
            Posted November 27, 2016 at 12:56 am | Permalink

            The fact is that the experts you trust predicted a recession immediately after the vote

            It was the effect of voting leave they said would cause an economic shock

            Nothing to do with actually leaving.

  8. Bob
    Posted November 24, 2016 at 8:29 am | Permalink

    So George Osborne has received £320,000 in speaking fees over a two month period from investment bankers.

    I’ll just leave that with you.

    • Lifelogic
      Posted November 24, 2016 at 9:06 am | Permalink

      Was he telling them how to get the job of Chancellor completely wrong? How to mug and destroy private pension pots, thieve of tenants and landlords and rat on you IHT promises. This while taxing, borrowing and pissing money down the drain, and also destroying jobs with damaging wage controls.

      Or perhaps how to get a top job in government without any ability, understanding of economics, being numerate or having any reason or logical abilities?

      • APL
        Posted November 24, 2016 at 10:33 am | Permalink

        Lifelogic: “Was he telling them how to get the job of Chancellor completely wrong?”

        No, no. He was reporting back to his *actual* paymasters.

      • Lifelogic
        Posted November 24, 2016 at 11:36 am | Permalink

        They even bizarrly claimed to be “repaying the debt” while doing all this.

        • Mitchel
          Posted November 24, 2016 at 2:07 pm | Permalink

          I think he used the term “paying down”.An expression designed to deceive and one which doesn’t seem to be used anymore.

      • Deborah
        Posted November 24, 2016 at 1:22 pm | Permalink

        Or was it for his loyalty to the greater good?

    • BobaJob
      Posted November 24, 2016 at 1:25 pm | Permalink

      Not much of an investment paying anyone £320,000 for a speech. In fact a total waste of money. Just what piece of new information covering £320,000 did Gideon impart…some camels have more than one hump? And camels don’t really turn into trains when aligned?

      • Bob
        Posted November 24, 2016 at 2:20 pm | Permalink

        @Bobajob
        They must be pretty smart, or they wouldn’t be able to pay ex Chancellors so much.

        Follow the money.

  9. David Edwards
    Posted November 24, 2016 at 8:33 am | Permalink

    Of the five key judgements for the economic forecast at part 1.18 of the Executive Summary of the OBR report, four are negative with respect to Brexit and only one is a guarded positive (fall in sterling). Obviously these judgements would lead to a more pessimistic forecast on the economy than perhaps is likely to prevail.

  10. Newmania
    Posted November 24, 2016 at 8:35 am | Permalink

    National Debt blasting over 90 % ( and who knows where it goes form there if truth be known)
    Ed Millibands foolhardy Economic Policy from Hammond
    Your big mate Trump cancelling Free trade deals across the globe – excellent
    The OBR clearly now a political arm of Brexit given how much more optimistic they are than anyone else

    It is building towards a perfect storm and the blame is going to be land right in your lap .

    I would stock your bunker with tinned food and small arms if I were you

    Reply What a silly comment. Debt unlikely to rise as OBR say. UK will negotiate more free trade deals

    • Mark Watson
      Posted November 24, 2016 at 9:10 am | Permalink

      Newmania- the EU has given us £1.8 trillion of debt,a massive trade deficit and ever decreasing control over our own affairs.Why would anyone want more of the same?

    • Anonymous
      Posted November 24, 2016 at 9:26 am | Permalink

      Is Newmania stocking on tinned food and small arms ? Has he sold his house while it’s still worth something and invested the money abroad ?

      Thought not.

      Some cognitive distortions going on chez Newmania.

      • Alan Bell
        Posted November 24, 2016 at 10:04 am | Permalink

        dunno about Newmania, but my house is up on rightmove at the moment so that I can get the money out and invest it abroad. Probably going to leave at the end of the school year. Everyone has to make their own decision, maybe staying will be viable, maybe I will move somewhere that also turns out to be bad. I thought I would live here forever, I have a nice 4 bed detached family house, but right now my assessment of the risks is that I have to sell and move my family while we can.

        • libertarian
          Posted November 24, 2016 at 7:21 pm | Permalink

          Alan Bell

          Really? You are going to sell your house and invest the money abroad? I assume you mean invest it in a property abroad. Your risk assessment has identified which country as a sound risk investment for the future of your family?

          I’m intrigued as to what risk to your house you have spotted should Brexit not work ( whatever that means) , enlighten us maybe?

          • Alan Bell
            Posted November 25, 2016 at 3:00 pm | Permalink

            yes, really. We have a decent amount of equity at the moment, I hope I can sell before article 50 is invoked and the house price and currency crash but things are a bit slow in the run up to Christmas anyway. I am not waiting until prices crash, mortgage rates go up, taxes go up and I lose my freedom of movement to get out of here. I am planning to convert the bulk of the equity to Euro and rent in the UK for a while and then relocate, which will be disruptive to my childrens education in the short term, but the risks of staying and not being able to get out are not ones I am prepared to take. There has been no reassurance that this process can be safely undertaken and if it can then the end result is simply not the country I grew up in. There are a lot of people who are going to leave, you will have a period of net emigration I should think, which will delight many. I will do my best to stop it happening up to the point that Article 50 is invoked, then I will do my best to make it work. Then I will do my best to not be affected by the consequences.
            In terms of making it work, perhaps someone could help me understand where any transitional arrangements would be written? Don’t worry about the content for the moment, that would be just words and lots of numbers. What goes on the front cover of the transitional arrangements document? Is it a new treaty? – I think it can’t be because we won’t have a new treaty at that point, if we did we would move straight to it. Is it an amendment to the Lisbon treaty? – I think it can’t be because we won’t be a party to that at the end of the process. Who would be a party to the transitional arrangements? Would it be recognised by third parties like Chili who have a treaty with the EU which we are currently a party to but wouldn’t in the transition. Your government has failed to reveal anything useful about such questions. They have no idea if this is even possible and they are plowing on anyway, and there is utterly no point in the whole endeavour.

        • stred
          Posted November 24, 2016 at 7:33 pm | Permalink

          Bye.

        • Anonymous
          Posted November 24, 2016 at 10:37 pm | Permalink

          Instead you should both have faith in the British people, as do so many who wish to live with us from abroad. Newmania needs to drop his prejudices and get stuck in making this country work to the will of the worthy majority. Otherwise he can step aside and give his job to a younger person more willing. Pay is pay after all.

          • Anonymous
            Posted November 24, 2016 at 10:41 pm | Permalink

            “Pay is pay after all.”

            Meaning that Newmania has to undergo changing work practices and “oh my, years of my work has been wasted !” So what ? He did it for pay and can now re-orientate his boss’s buisiness for pay.

        • Mitchel
          Posted November 25, 2016 at 10:23 am | Permalink

          I think you are behind the curve.The time to have taken your money out of the UK/sterling was 18-24 months ago when sterling was obviously overvalued.I moved my liquid assets out variously into gold,Russian equities,bombed out emerging market bonds,oil and oil-linked minor currencies(I was always an adventurous investor!)Post the Referendum result,apart from a small amount of gold,I’ve sold the lot and have moved back into sterling where I’m staying for the time being not because I think there’s no further downside but because everything appears risky at the moment.

          • Alan Bell
            Posted November 25, 2016 at 8:32 pm | Permalink

            yeah, I am behind the curve, but 18 months ago I wanted to live here forever. I don’t have liquid assets because I am apparently “just about managing” which is the new term for muddling along just fine.

    • Leslie Singleton
      Posted November 24, 2016 at 12:18 pm | Permalink

      Dear John–Agreed the downbeat Growth Forecast for next year is hard to swallow, the more so given we know that this year’s is coming along strong; but don’t worry about the new Debt, which I read the Government will invest to produce Revenue to pay down the Debt. The mind boggles. And there is the negative effect of the doom and gloom Forecasts themselves on the actualite, which nobody seems to want to talk about. Thank God they are on our side. No reason at all to follow the OBR so slavishly–Hammond could have said overtly that the Government were more optimistic and nobody (apart from a knee-jerk from Labour) would have batted an eyelid, especially as Hammond also said, as is the truth, that the OBR’s effort was not a Government Forecast. Jolly poor show all round.

  11. MikeP
    Posted November 24, 2016 at 8:44 am | Permalink

    Remainers are savouring the moment, talking Britain down, saying “I told you so”, blaming everything on the Referendum vote. But the only material impact so far has been the fall in sterling which, going by recent trade figures, has had little if any impact on our economy. Exporters see it as an opportunity not to be missed.

    While politicians and the Guardian talk us down, bemoan our fate and do their utmost to overturn the vote, business (as it has to, to survive) is getting on with the job, continuing to grow and earn respectable profits. To be fair to the OBR, they are caught between a rock and a hard place as their forecasts are bound to be wrong, one way or another, so they’ve opted for caution and pessimism, shame they can see nothing positive.

    • Denis Cooper
      Posted November 24, 2016 at 11:33 am | Permalink

      But the OBR’s pessimism is being greatly exaggerated by the anti-Brexit media.

      I don’t see it as a disaster that leaving the EU might add a few tens of billions more to a national debt which is already at £1.7 trillion and still rising whether we stay in the EU or leave the EU. And then again, it might add less, or not add anything, or help to bring in down a bit – in the bigger picture it’s all pretty marginal, really, because the overall economic effects of our EU membership are themselves pretty marginal.

      • ian wragg
        Posted November 24, 2016 at 5:34 pm | Permalink

        I believe the growth forecasts are better than France, Germany and Italy. Brexit must be hitting them pretty hard,

    • rose
      Posted November 24, 2016 at 5:21 pm | Permalink

      And Stephanie Flanders made a disgraceful remark on radio 4: she said pensioners would have to take a reduction. She didn’t say this was because there were too many of them; she didn’t say we couldn’t afford the pensions; she said it was because of “the generational nature of Brexit”. In other words pensioners must be punished because they didn’t vote as Ms Flanders thinks they should have done.

      Can you imagine another demographic group being picked out and punished for the way they are deemed to have voted and Ms Flanders and her friends in the media allowing it to go unchecked?

      • Anonymous
        Posted November 24, 2016 at 10:45 pm | Permalink

        Ditto BBC breakfast news where they found a very rare regretful pensioner.

      • Qubus
        Posted November 24, 2016 at 10:54 pm | Permalink

        Anyone who takes notice of Ms Flanders need their head examine.

        • Lifelogic
          Posted November 25, 2016 at 10:43 am | Permalink

          Indeed or any of the other BBC or ex BBC lefty dopes or hangers on.

          I particularly dislike the drivel we endlessly get from Roger Harrabin. The BBC’s climate alarmist. A Catz English Graduate and apparently the BBC’s Environment “Analyst”.

          He seems to have no understanding of science, physics, economics, climate or energy engineering at all.

  12. Patrick
    Posted November 24, 2016 at 9:05 am | Permalink

    Dear John,

    The referendum was clearly going to have some kind of impact on the general economy, as will the eventual exit from the EU.

    On balance, the extreme impact warnings by our institutions (either generally in favour of remaining or toeing the government line) came across as insincere. In the short term, the predictions were wildly out.

    Moving forwards, the difficulty in making economic predictions is hardly improved by the absence of information on the details of the brexit plan. Most economic forcasting frameworks are worryingly crude and only cope with stable systems. They rely internally on simple models of metric interactions in combination with ceteris paribus assumptions.

    I am certain that the range of outcomes around the delivered mean value is huge, especially if the forecasters have attempted to build a serious model of the possible range of impacts.

    (Perhaps a good piece of legislation would be to oblige the Chancellor to state variance figures as well the mean estimate in parliament?)

    The assumption that consumption and output are going to decelerate next year may not be unreasonable.

    While there was a big wobble this summer, the Euro-GBP rate is not far off it’s five year average of 1GBP=1.2EUR, but the dollar has risen substantially. This will have a direct impact on logistics and goods dependent on dollar exchange (e.g. grain and electronics). The Euro has fallen against the dollar in parallel with the GBP, but Euroland producers that have dollar dependency that sell to the UK may be obliged to pass on price increases and vice vesa, potentially decelerating both consumption and output.

    A lower currency should stimulate the export from existing manufacturing infrastructure if the dependency on expensive imports can handle the international price increases. It may take some time for new production infrastructure to install itself, if at all, if the low currency conditions are viewed as temporary.

    Fundamentally, if the GBP exchange rates remain on the low side, and long enough for futures contracts to expire and require renewal, inflation will kick in and statistically reduce consumption. The five year average USD-GBP rate was around 1.6:1 until mid 2015, when it started to fall. This is long enough for some futures contracts to have expired and require renegotiation this year. The future uncertainty as a result of the referendum (as well as the interest rate) has sunk the GBP relative to the USD and this is a bad time to renegotiate futures contracts.

    Even the impact of capital expenditure may be difficult to measure if these capital projects rely on dollar imports (almost everything has a dependency on the USD somewhere in the pipeline). Some major government projects are highly dependent on foreign exchange: the Royal Fleet Auxiliaries are built now in Korea.

    Fundamentally, we have to move on to resolve the Brexit matter as soon as possible. Only this certainty will allow for currency levels to stabilise at whatever level markets deep realistic and allow for meaningful, longterm investment.

    P

    • Antisthenes
      Posted November 24, 2016 at 10:27 am | Permalink

      Devaluation gives economies a boost. That is why countries devalue at times of economic crisis. Coupled with the fact that we have had internal devaluation (low wage inflation) we now have the recipe for strong economic growth. We need look no further than Germany who have a weak currency the euro and went through a period of internal devaluation. They have done very well out of it. George Osborne and now Phillip Hammond are making the UK an attractive place to do business because of the reductions in business taxes. So the outlook for the the future barring the unforeseen looks good. “Despite Brexit”. In fact it may be possible if my vision of the future is correct it will be partly because of Brexit. Other factors have had a bearing. The financial crisis and EU free movement of labour which will no doubt not please Brexiteers hearing that.

    • Anonymous
      Posted November 24, 2016 at 12:11 pm | Permalink

      Thank you Patrick.

      I have long argued that the Leave side should not deny that there will be economic upheavels because of Brexit but that there are also upheavels to come if we Remain and that they are already taking tangible form in the overcrowding of this island.

      There are economic shocks and instabilities yet to come from the Eurozone.

      • ian wragg
        Posted November 24, 2016 at 5:36 pm | Permalink

        The overcrowding is going to continue. Hammond says the downturn will be affected by reduced immigration.
        They haven’t that doubling the population doesn’t double GDP.

    • margaret
      Posted November 24, 2016 at 4:01 pm | Permalink

      P seems to have covered many scenarios , which demonstrates purely the uncertainty of forecasts . I cannot see why it is a bad time to negotiate contracts; good times and bad times , poor exchange rates or not , contracts still need to be negotiated and tweeked where necessary.

    • stred
      Posted November 24, 2016 at 7:43 pm | Permalink

      Please keep advising here. Very informative.

  13. Bert Young
    Posted November 24, 2016 at 9:08 am | Permalink

    Yesterday I commented that the Jury was out on Hammond ; today I find him guilty as charged . He has betrayed his true feelings on Brexit and added fodder to the gloom mongerers . No enthusiasm and nothing really positive about our immediate future . Theresa must be livid and now must offer strong leadership in the way members of her cabinet are performing ; if she fails to do this , she must also face the consequences .

    • Money
      Posted November 24, 2016 at 11:23 am | Permalink

      Yes he is a bit like the Grim Reaper but with a rather diminshed scythe

      • Anonymous
        Posted November 24, 2016 at 12:12 pm | Permalink

        Rather like the Grim Reaper but not nearly so cheery.

        • Anonymous
          Posted November 24, 2016 at 12:13 pm | Permalink

          Bert – I do not think Ms May wants Brexit. I think she is here to kick cans and to deliver something which is called Brexit but which isn’t Brexit.

  14. michael
    Posted November 24, 2016 at 9:44 am | Permalink

    Sky News is giving a distorted picture of the UK’s economic prospects. A total focus on the downside.

    • Noticed
      Posted November 24, 2016 at 11:20 am | Permalink

      Sky News probably thinks the economy is somehow male or wears trousers.

  15. Alan Bell
    Posted November 24, 2016 at 9:52 am | Permalink

    With the big budget switcheroo we get two budgets and two finance bills next year. Ostensibly because everyone was really suffering having a budget in March for implementation of changes in May – which has been complained about by nobody ever. The change is manifestly in order to get two budgets next year because your government is expecting more economic chaos than they are letting on. We are going to get our credit rating cut again, perhaps a couple of times next year, which will increase bond yields, or in other words make borrowing more expensive because we are an escalating risk. This means we won’t be buying BMWs anyway and the German car industry isn’t going to rescue your plans because we are going to be taxed to bits to service the national debt, whilst we try to service the debt on our mortgages as interest rates rise.
    There is going to be no money for the NHS, the chances of that staying a nationalised service is pretty slim (about the only thing we have left to sell).
    None of this is inevitable, we don’t have to do the stupid thing that the liars told us to do. We may have voted to put our collective knackers in the vice, but turning the handle is still optional.

    • libertarian
      Posted November 24, 2016 at 7:24 pm | Permalink

      Alan Bell

      Time for bed said Zebedee

    • Anonymous
      Posted November 25, 2016 at 4:17 pm | Permalink

      Alan Bell – The biggest lie is the one where they tell us we live in a democracy.

      Clearly at least fifty percent of our population have a deep seated unease and unhappiness about the EU.

      Is there no changing the EU, not even a bit ? Is there no appeasement to these feelings at all ?

      From where I sit on the Leave side all I have directed at me is threat and smear.

      I feel as though I am being made an enemy in my own country.

      • Alan Bell
        Posted November 25, 2016 at 8:44 pm | Permalink

        I am sorry you feel bad. You won, you get the country, you get to kick me out. I know 52% of people didn’t feel particularly European. This is fine, totally respectable feeling and it is important. It is more important than me having the same freedom of movement as my children for example.
        As for the democracy thing, the EU is a big complicated mess, like every democratic system ever. You know what is simple? Dictatorships. The EU has MEPs who we the people elect in voting regions with a messy mix of single transferrable votes and D’hondt proportional representation in voting regions. In the UK lots of people don’t care very much, and lots vote in useless wreakers, just for a laugh. Things would be better if we took it seriously. The commission is made of 28 people, each one appointed by the elected government of a member state. You vote your government in, that elected government puts forward a commissioner. The president of the commission is elected by the parliament and confirmed by the commission. There is also the council, which is all of the member state prime ministers. All of these have a more democratic legitimacy than the House of Lords and a Lot more legitimacy than the Lords Spiritual – which makes us in part a theocracy.
        Anyhow, I am sure that the 52% know all that anyway and still have bad feels about the democracy of the situation, so I am very sorry about those bad feelings and hope they get better soon.

  16. Nigel
    Posted November 24, 2016 at 9:52 am | Permalink

    This appears to follow the tactics of Robert Mugabe, who blames everything that turns out badly on the past colonial era.

    Hammond and the schoolboy analysts playing with their financial modelling numbers in The Treasury (?) have copied the same methodology.

    They have messed around with their boys’ own guide to national forecasts, decided to hit the button called ‘ negative outcomes’ and blame the result on Brexit. They are creating a ‘get out of jail’ all purpose excuse so that whatever the bad outcome……blame it on Brexit!
    Economists are pretty much on a par with Pollsters.
    Their track record of accurate forecasting is pretty much 100% wrong.
    Why do we taxpayers have to pay for this nonsense?
    We don’t need them to tell us what happened, after the event, and their forecasting can have the nasty effect of creating self fulfilling prophesies if we let them loose.
    This would be the ideal area for some government cost cutting.
    It was Economists who created the Eurozone.

  17. formula57
    Posted November 24, 2016 at 10:05 am | Permalink

    “The largest part of this is increased capital spending.” People’s QE!

    #Nous sommos Corybinistas!

  18. Stephen Berry
    Posted November 24, 2016 at 10:15 am | Permalink

    People are getting worked up about the OBR forecast this year. Why only this year? The OBR is just a group of clever young men who are paid to get it (independently) wrong each year. Economic forecasts are inherently unreliable by their nature. Before a battle, a Roman admiral would scatter grain on the deck of his galley. If his geese ate the grain, he would give battle, otherwise not. Economic forecasts are no better than this.

    I have a suggestion. The government should just assume trend growth of around two per cent. If it is somewhat higher, then put the tax receipts aside or even pay off the national debt. If growth is somewhat lower then use a previous surplus or do a little pruning the next year. If there is a recession, which we know they will not have forecast anyway, then have an emergency budget. After all, that’s what they do anyway! In this way, clever young men working in organisations like the OBR, IMF, World Bank etc. can then be put to much more productive work.

  19. CHRISTOPHER HOUSTON
    Posted November 24, 2016 at 10:19 am | Permalink

    We will just have to wait and see what happens. In recent years Christmastime has always thrown up unexpected figures.The fortune tellers of ballots and economic activity seem uniformly wrong. Reason unknown.
    A guess at their excuses for a prosperous Christmas this year:-

    1/The weather was cold…more people bought warm clothing
    2/ The weather was warm…more people went shopping
    3/ People borrowed money to buy things
    4/ People thought they would spend more before price increases
    5/ Figures actually were for a month earlier.
    6/ Not all sales figures have been collected
    7/ Figures are artificially high because of Christmas temporary jobs
    8/ Foreign tourists did most of the buying because of depressed Pound
    9/ Many people were spending their redundancy money
    10/The figures were massaged so as not to admit commercial failure to rivals
    11/ Mainly, Mr Trump rowed back on his most controversial proposals

  20. Edward.
    Posted November 24, 2016 at 10:37 am | Permalink

    Mr. Redwood,

    Kicking the can and humming hey ho, same old, same old.

    That, Mr. Hammond did next to nothing but only will do more of the same – borrowing in stupid numbers. I’m aghast, saddened, of boggled mind but then, the other side to that coin is the cynic in me, waxing rhetorically “what did you expect?” and to that I can only reply

    “so, no sort of any surprise there then”.

    Robbing Peter to pay John, Tom and Jan and all on the credit card…………….But to what end?

    Indeed, there was no, nor any sort of vision ‘our children’s future’ is usually the crie de coeur and to which, certainly there is no hope of a good outcome – maybe.
    But most on here – we all know that, there is a better way, it’s just that Westminster and therein the whole shebang ‘the administration’ will never vote to cut the hessian – cloth according to necessity, budget and make it proportionate to: income.

    Then that other ‘thing’ most probably anathema to a quiet man such as Mr. Hammond. We have to try the other way; to cut taxes on incomes and business rates, slash red tape and gamble, no actually not a gamble but a policy which would see the UK boom. As my adage goes, ‘in order to accumulate, in the first place you must reform the supply side’.

  21. stred
    Posted November 24, 2016 at 10:41 am | Permalink

    The investment in HS2 will be spread over many years. Of more immediate concern may be the doubling of offshore wind capacity. Almost all of these large schemes are being built by foreign firms, using foreign equipment, and they are being encouraged to invest by our Green Investment Bank.Their publication shows how many are about to start. The one off Sussex has started and the bases are now being built. It will be the length of the Isle of Wight.

    Page 23 show the proportion of finance and some is from the bank. The price offered per MWh is over £140 plus inflation from 2012. These costs are double those recently obtained by the Dutch and danish governments afterthey had the brilliant idea of putting the permission and commission out to tender. Much of the cost will be added to electricity bills, along with the cost of building additional gas and diesel generators to back up the winfarms up, as theywill generate only 40% of capacity.

    Just how much of the extra investment money is going towards these expensive projects? And how is this affecting the balance of payments and value of the pound?

    http://www.greeninvestmentbank.com/media/44638/osw-pitchbook_ukti_june-2015.pdf

    • stred
      Posted November 24, 2016 at 10:56 am | Permalink

      Note page 24. The investor is protected against unforseen events and force majeure. In other words if it is all blown away, conks out or they can’t manage to build it, we still pay. Applies to Hinkley Point too.

      • stred
        Posted November 25, 2016 at 9:56 am | Permalink

        Also page 15 shows the eventual aim is to more than quadruple offshore wind capacity to 24GW. The cost is currently agreed at about 4x gas generation and all of the 24GW will have to be backed up by gas, diesel or american wood when the wind is not blowing for 60%+ of the time. Nuclear is difficult to ramp up and down and the present stations are ageing fast. The interconnectors to the continent will not have enough capacity.

  22. Antisthenes
    Posted November 24, 2016 at 10:48 am | Permalink

    I believe lack of capital investment in both the private and public sector has been a drag on our economy for a very long time. The private sector has been doing something about it but have still more to do. Make do and mend is still the mind think of too many. The public sector has an awful lot to do to catch up. Left wing especially Green and environmental(terrible planning rules one example) mind set is a considerable obstacle which has hampered much of it. They will continue to be so (against fracking etc.,). We need to ignore them. This new initiative is to be welcomed unfortunately the benefits of which will take some time to be felt. If not for Labour I suspect we would not now be lagging so far behind.

  23. ian
    Posted November 24, 2016 at 10:57 am | Permalink

    The people of england have been sold out.

  24. Denis Cooper
    Posted November 24, 2016 at 11:08 am | Permalink

    I’m looking at this OBR Table 1.4 reproduced by Ed Conway at Sky News:

    https://pbs.twimg.com/media/Cx9FdzqWgAEk1R6.jpg

    on which he makes the comment:

    “That OBR chart suggests that had there not been a referendum @George_Osborne would indeed have hit his surplus target in 2019/20”

    But the “November counterfactual” where Osborne would have had a £1.1 billion surplus in that fiscal year includes a positive contribution of £4.4 billion attributed to “Higher migration and GDP growth”, while the new projection has the same £4.4 billion added to the deficit due to “Lower migration”. Without that £4.4 billion contribution Osborne would not have achieved a budget surplus in 2019 -20, and nor indeed would he have achieved a budget surplus in 2020 – 21 without the projected £5.9 billion contribution attributable to high immigration.

    In fact in total up to then Osborne would have been relying on £17 billion of positive contributions attributable to the government’s chronic failure to meet its stated target of reducing net immigration to the tens of thousands, a Tory manifesto target which greatly assisted it in two general elections because most people do want immigration drastically reduced and the government’s demographic Ponzi scheme brought to a halt.

    I also notice that rather strangely the OBR table has an item “Cyclical slowdown” as one of the “Changes related to the referendum result and exiting the EU”, rather than one of the “Changes unrelated to the referendum result and exiting the EU”.

    I don’t see how our withdrawal from the EU is likely to induce a “Cyclical slowdown” which would not have occurred if we had decided to stay in the EU.

    I can see how it could at least be argued that our withdrawal from the EU will result in another of the OBR’s negative items, “Lower trend productivity growth”, even if that is not actually true, but I don’t see how it could produce a “Cyclical slowdown”.

    I find that overall of the £59 billion that the OBR projects will be added to the national debt as a result of leaving the EU about £26 billion is attributable to that unconnected “Cyclical slowdown”, and about £16 billion is attributable to the government keeping its longstanding promise and reducing net immigration, if only to some lower level and not necessarily down to the tens of thousands, which doesn’t actually leave much scope, just £17 billion, for the anticipated dire consequences of disrupted trade.

  25. Mick
    Posted November 24, 2016 at 11:15 am | Permalink

    OBR, BBC,Tim what’s his name, are now onto mark 2 Brexit fear,
    Don’t these idiots understand what would happen to this country if they don’t listen to the 17.4 million and get us out of the eu with NO back door deals because we will not stand for it,
    LEAVE must mean LEAVE and don’t try and fob us off

  26. bigneil
    Posted November 24, 2016 at 11:21 am | Permalink

    An endless amount for a train line for the rich to play on. Endless supply of money to provide free lives for non-contributing foreigners who walk in to demand a house, cash and NHS – -and what for the rest of us? – -Oh Joy – -we get to pay for it all. I would wish a Merry xmas but I know it offends loads of our non-contributing “imports” – and as the old saying goes – -“don’t offend the *******” – -even when they expect us to pay for them all while doing nothing.

  27. Iain Gill
    Posted November 24, 2016 at 11:30 am | Permalink

    Hardly fiscal common sense.

    Just because no other party was electable at the last election doesn’t mean this is acceptable.

    Here I sit watching the countries money get wasted left right and centre, and the government wants us to be happy? no chance

    Get on with Brexit, get a control on immigration, stop wasting money on “aid” when many of our own people are in desperate need, stop wasting money on silly train sets, subsidies to the arts, and get a bloomin grip on the out of control state industries like health and education which burn money regardless of how rubbish the service is

    Give more power to the individual citizen and take it away from the state, not the other way around as is happening again now

  28. Money
    Posted November 24, 2016 at 11:44 am | Permalink

    China and Russia are often accused of internet spying on economic targets. Needless to say we are the goodies despite our superiority technically. You’ll find it is western computer experts busily travelling to Moscow and Beijing sorting their glitches out and not he other way round ( I know one, she gets a chauffeured limo from hotel to wherever and back..and anywhere else, free, at any time. Free airfare of course.

    So, how come our financial experts at the OBR and the Treasury are able to make predictions, economic forecasts, when Big powers are so tight-lipped? Half the world’s data missing plus the Americans are not always as forthcoming as they could be about the real nature of their economy.
    Answer: Crystal balls and prayer mats plus their figures retrospectively altered by the likes of Sky News and the BBC to make them look half acceptable.

  29. Denis Cooper
    Posted November 24, 2016 at 12:16 pm | Permalink

    Some may think that I’m often a bit casual about the potential economic effects of leaving the EU; but in fact I’m not at all “casual”, the correct word is “sanguine”; and the reason that I am “sanguine” about it is because (almost) everything that I’ve read over the years points towards the overall economic effects of our EU membership being marginal, and especially when seen in the context of an economy which has had a trend natural growth rate of about 2.5% a year going back to the 1950’s, before we joined the EEC.

    So, for example, here is a report carefully produced by Open Europe in March 2015:

    http://openeurope.org.uk/intelligence/britain-and-the-eu/what-if-there-were-a-brexit/

    “According to Open Europe’s comprehensive Brexit report, UK GDP could be 2.2% lower in 2030 if Britain leaves the EU and fails to strike a deal with the EU or reverts into protectionism. In a best case scenario, under which the UK manages to enter into liberal trade arrangements with the EU and the rest of the world, whilst pursuing large-scale deregulation at home, Britain could be better off by 1.6% of GDP in 2030. However, a far more realistic range is between a 0.8% permanent loss to GDP in 2030 and a 0.6% permanent gain in GDP in 2030, in scenarios where Britain mixes policy approaches.”

    At the trend rate of growth of 2.5% a year for fifteen years by 2030 the UK economy will be 44.8% larger than when that report was written. Or perhaps if we leave the EU on the worst case scenario it might be only 41.6% larger, and it will be necessary to wait a year until 2031 for it to expand to be 45.2% larger than in 2015. Then again, on the best case scenario it might hit that plus 44.8% level seven months earlier than it would have done if we had stayed in the EU.

    Really, who is going to even know that in 2030, let alone care about it?

  30. The Prangwizard
    Posted November 24, 2016 at 12:40 pm | Permalink

    Mrs May was on the box this am. A different PM but saying the same things in the same way as before. Parotting the words fed to her. Not the words of a real person. The words of the government machine, the political elite. A talking head for the media which they fear. It’s as if all ministers have a brain transplant when they assume office. Certain words and phrases are removed from them. They relinquish their humanity. Only one person has resisted, Mr Farage and that’s why the Elites can’t bear him and will do everthing to humiliate him.

    • Up North
      Posted November 24, 2016 at 2:15 pm | Permalink

      You may have something there.
      These little mini journalist conferences they have on TV are annoying. You get obviously fantastically intelligent and educated scribblers with exaggerated regional accents from up and down the UK .They have lived in London for years in posh areas, mix with poets and writers. It’s so patronising. Eeee bar gum ant wi glad them cummin darn to arr levil, ant wi. ShOwin uz arr to speeak in t’ demarrkratik weighhha. Playin Deviliz adOcut, cos wi ave trubble t’ thinK an’ seeah bO-th sardes et argUment. Sky News does it. But it’s beautifully cooked.

    • Actor
      Posted November 24, 2016 at 2:32 pm | Permalink

      Farage plays himself. Openly admits his former dealing in commodities. Says more or less those were the cards he was dealt with in some ways from birth. Well that’s fair enough!
      Often speaks without sifting his words through a pc/unreal /mustn’t be heard to say this Filter.
      Top politicians need to know we’ve a pretty good idea they all need to use a toilet from time to time.

    • Chris
      Posted November 24, 2016 at 5:51 pm | Permalink

      You are right, PW. I find I am increasingly irritated by all the carefully crafted spin, which is meaningless, and which we are expected to swallow. I have had more than enough of this. I believe the eurosceptics who are trying to uphold the Referendum result have got to be jolted out of their apparent acquiescence with what is going on. I have already expressed my views that May will come up with a fudge, but something also to be acknowledged and fought against,fiercely and forthwith, by the Eurosceptic MPs is the arrival of T Blair on the scene with Branson et al. This is not something to be dismissed lightly, as Blair has seen that he can effect change by unconventional ways (he has learned the lesson from Farage – see article in online D Telegraph by Kirkup) and he plans to do that. It matters not one jot that many voters cannot stand Blair, as he will assume a behind the scenes role. He is dangerous, I believe, and I think the Eurosceptic MPs do not realise the extent of the support that Blair will get, and particularly from the Conservatives. Kirkup goes on to state that the real battle will be between Farage and Blair, with May, a weak player in the middle. Why, oh why, do the Conservative MPs who respect democracy and who are working to ensure the Referendum vote is upheld, not make use of Nigel Farage? Bury the hatchet and get on with things, before it is too late. (See also Asa Bennett in D Tel online on Farage and the Brexit revolution worldwide. He at least seems to be getting the message?).

  31. Oliver Bennett
    Posted November 24, 2016 at 2:02 pm | Permalink

    I note that the subtitle of your blog is “Speaking for England”. This, however, is a misrepresentation. You speak only for some of the people in England, broadly those who favour Brexit. Despite the 37% of the electorate who voted for Brexit on 23 June, it is clearly now a diminishing minority holding on to a goal of leaving the EU at any cost, which, the facts are bearing out, is not in England’s, and the UK’s, economic and social interests. You are misguided, and the facts will unfortunately prove your position is the least prudent for England. So you are speaking for England, if that means to undermine it with misrepresentation and delusion.

    • CHRISTOPHER HOUSTON
      Posted November 24, 2016 at 4:56 pm | Permalink

      I understand the title of the blog in a few ways, irrespective in some ways of what the writer intended , that is JR intended,.”talk” and “speak”in my region are words rather more interchangeable perhaps than elsewhere. So it means rather than “can” means also “talk for England” ( the idiom ). Also it means Speak up for and talk up for England; stand up for England. Also “speaking, FOR England ( that is a place where England ( personified and, by individual Commentors can speak their minds in their own way for England. Also Speaking: FOR ENGLAND! That is a battle cry: For England!”. Also it means the particular language (tongue-speaking-type ) for our country. “Old English specan, variant of sprecan “to speak, utter words; make a speech; hold discourse (with others)” . We speak with others on this blog and through this blog.
      But what’s in a word, Oliver, my dear 🙂

    • Leslie Singleton
      Posted November 24, 2016 at 5:46 pm | Permalink

      Dear Oliver–Yes many of us detest the EU and everything to do with it so much that we do indeed want to get out from under preferably immediately; and, as you say, at any cost. Even if there is a cliff to slide down, once we have a chance to build our own trade relationships, which we are forbidden even from being able to start to do as things stand for reasons I don’t understand apart from the obvious hobbling effect on us, we would be able to carry on as a normal (in fact very superior) country beyond the reach of the ghastly five unelected presidents, the myriad of high-paid and pensioned bureaucrats, the two parliaments and the rest.

    • Anonymous
      Posted November 24, 2016 at 6:14 pm | Permalink

      Oliver Bennet – Oh let’s just ignore election/referendum results then.

      ‘Clearly diminishing minority’.

      An opinion without proof.

    • Edward2
      Posted November 25, 2016 at 9:25 am | Permalink

      By your maths if 37% voted leave then only 24% voted to remain.

  32. Denis Cooper
    Posted November 24, 2016 at 2:05 pm | Permalink

    It cannot be right that Robert Peston is allowed to exaggerate tenfold with:

    http://www.itv.com/news/2016-11-23/the-220-billion-cost-of-brexit/

    “The £220 billion cost of Brexit”

    when the corrected number from the OBR would be £17 billion.

    • zorro
      Posted November 24, 2016 at 5:47 pm | Permalink

      Indeed, his behaviour for a supposedly educated journalist is becoming more detached from reality as each day goes by….. (e.g. his appearance on ITV news yesterday in their hatchet job on the Autumn statement and nonsense about the supposed cost of Brexit)….

      zorro

  33. ferdinand
    Posted November 24, 2016 at 2:09 pm | Permalink

    Understate the upside and overstate the downside = surprisingly good results.
    Understate the downside and overstay the upside = surprisingly bad results. You take your pick.

  34. Trumpeter
    Posted November 24, 2016 at 3:36 pm | Permalink

    On Twitter
    “Donald J. Trump ‏@realDonaldTrump 19m minutes ago
    I am working hard, even on Thanksgiving, trying to get Carrier A.C. Company to stay in the U.S. (Indiana). MAKING PROGRESS – Will know soon!”

    So, he’s not waiting for a Supreme Court judgement. He’s not waiting until the end of March 2017 and then negotiate for two years. He’s not got a shed full of Remainers moaning and bleating and littering the networks with !”Well show us your plan..cry…weep..stampy feet feet”
    Wish we could borrow Trump for a week to take the place of Mrs May.

    • zorro
      Posted November 24, 2016 at 5:48 pm | Permalink

      Indeed, all my worst fears about May are becoming clearer day by day….

      zorro

    • forthurst
      Posted November 24, 2016 at 7:21 pm | Permalink

      “Wish we could borrow Trump for a week to take the place of Mrs May.”

      We would undoubtedly benefit from his expertise in hydraulic engineering.

  35. margaret
    Posted November 24, 2016 at 3:46 pm | Permalink

    What is unmanaged spending?

    • Lifelogic
      Posted November 24, 2016 at 5:39 pm | Permalink

      In the state sector it is nearly all “unmanaged”. It is not their money so they care not what it costs nor what, if any, value they get for it.

      So long as they get paid, a nice pension a pleasant office and plenty of time off what do they care.

    • ian wragg
      Posted November 24, 2016 at 5:40 pm | Permalink

      Waste.

      • Mitchel
        Posted November 25, 2016 at 10:29 am | Permalink

        It’s not waste for those who benefit from it!And it all adds to GDP(and -the bit they like to ignore-debt)

  36. Richard Butler
    Posted November 24, 2016 at 6:15 pm | Permalink

    I’m usually up-beat but feel a little fullorn after hearing caller after caller into LBC this evening, all self framing victims demanding an array of spending to make thier life better, everything from student debt alieviation, to more to fund longer care visits in the home, it just went on and on.

    Most seemed blissfully unaware that all these demands must be paid for somehow.

    An American economist once said “if you pay citizens for being victims, each will look to see how needy he is”.

    I think we’ve become a nation of whinging entitlement drones.

  37. Eh?
    Posted November 24, 2016 at 6:37 pm | Permalink

    If Mrs May had one ounce of compassion within her soul she would champion a Counselling service for person who have totally lost equilibrium.
    http://www.bbc.co.uk/news/business-38090977

  38. Chaos and confusion
    Posted November 24, 2016 at 8:32 pm | Permalink

    The BBC News tonight is speaking of there having been no pay rises. Only three days ago they were basing their propaganda that pay rises were too big..ranging from 2.9% to 3.5% and this was a problem,- it was leading to unnatural retail sales. There’s a problem OK.

    We can all look forward or most people except moi and one or two others to sightings of UFOs. or ghosts…. something strange on the visual level, prior to that or in tandem with it disturbances in some people’s olefactory systems. They’ve already gone through the usual rapid speech/ high tones of voice and loss of near-memory of certain events in detail.
    This is what comes of an external authoritarian system , the EU, backed by vested interests suddenly smacked in the vitals leaving a vacuum of authority ( and other pseudo-intellectual , been to a local college explanations as opposed to people merely being crybaby undemocratic Remoaners. )

    Time for Mrs May to put her foot down, for the Cabinet to look for all intents and purposes as though they are afraid of her. ( I’m sure Boris is ) Corbyn and Diane Abbott can continue rabbiting on… they sound weak anyway, pathetically weak

  39. James Munroe
    Posted November 24, 2016 at 9:13 pm | Permalink

    If the UK was in good financial shape and our debt was low, you can guarantee that the Remainers would have said that was because we are part of the EU.

    The fact is, massive debt has been accumulated, while we have been members of the EU.

    Not a great selling point for EU membership.

    Yes, the UK’s problems have been compounded by successive UK Governments’ policies, but all under the umbrella of the EU.

    How much damage, has the failure of the EU to agree new World trade deals etc, contributed to the UK’s problems?

  40. Going West
    Posted November 24, 2016 at 9:32 pm | Permalink

    If the audience at tonight’s BBC Question Time are all wearing thick winter coats in a hot studio because they all feel strangely unusually chilly, I’ve personally seen this movie ( yes, really ), then I shall break open my piggy bank and head for the wilds of some place where people are still level headed.Wyoming State got the highest Republican vote …66%. It’ll be my luck that Yogi and Boo-boo in their Yellowstone Park are both Democrats. Probably free hot water though.
    Liz Cheney is the Republican strong woman boss of the State.God Bless America. I shall just need to avoid one in three Wyomingians who voted Democrat. They should be easy to spot, they’ll have the glazed staring eyes of Corbynistas

  41. scottspeig
    Posted November 25, 2016 at 1:46 pm | Permalink

    So, as I understand it, Conservatives are now as bad as Labour at controlling the budget…

    God help us all!

  42. Jack
    Posted November 25, 2016 at 5:52 pm | Permalink

    £46bn more is not enough, if we want Chinese GDP growth rates of 15% annually, which we are perfectly capable of, if you break out of the phony financial constraints and look at our real resource capacity.

  43. Jack
    Posted November 25, 2016 at 6:12 pm | Permalink

    Maybe the depreciation in GBP will provide enough foreign aggregate demand to boost growth temporarily over the next year or so, but if we want sustainable and high GDP growth, and full employment, we need a much larger government deficit to provide that domestic demand – it doesn’t look like the private sector is going to deficit spend enough (even though credit growth has picked up mildly over last year).

    My proposal to instantly create an unprecedented economic boom would be to implement an immediate and huge payroll tax cut. After all, without those who are working for a living, there’d be nothing to consume. It’s an approach that will benefit from the bottom-up, and surely no-one will oppose it because surely the workers themselves should be able to consume more of the output they produce!

    That’s not to say pensioners should have their benefits cut or anything. It’s not a zero-sum game, especially when the budget deficit is already far too small. So keep that kind of spending and maybe add to other areas of government spending, like the NHS which we all want more money spent on.

  44. Richard
    Posted November 26, 2016 at 8:55 pm | Permalink
  • About John Redwood


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

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