Silly forecasts

The IFS claimed this will be the worst decade for real incomes. They did not stress what their figures showed, that there was a big hit to real incomes and living standards thanks to the banking collapse and the Great recession, which extended into the first couple of years of this decade, to be followed by some recovery. Nor did it go along with the OBR and stress that on their figures, which are pretty gloomy still, real incomes are estimated to rise every year from here for the full forecast period.

 

There was no reminder to the public that the October retail figures showed stonking growth at 7.1% more volume than in October the previous year. Nor did they pause to ask why retail prices were still lower this October than last October, given the substantial decline in the pound that has occurred over that time period, with much of it taking place well before the referendum. The current fashionable pessimistic forecasts say that family incomes will be squeezed by rising prices next year and the year after. This will lead to a drop in consumer spending, presumably to lower retail sales, and to a decline in economic activity. The lesser version expects a squeeze which slows the economy but which still allows some growth overall and in retail activity.

 

These forecasts usually come from  people who confidently forecast a recession this winter on the back of any vote to leave. Now they say what matters is the sending of the letter to leave, rather than the decision itself. Doubtless if and when the economy does not shrink when the letter is sent, they will shift their ground to saying it will shrink when we do actually leave.

There were two surprises in the OBR figures which suggests a few second thoughts about the alleged damage of Brexit. First, they now expect a stronger performance from the UK economy in 2016 than before the vote. Second, they expect 2.1% growth in the year they think we will leave, 2019, which is the same gr0wth rate as they forecast well before the referendum. I agree with those two forecasts.

 

The government is pledged to raise living standards, especially for the lower paid. To do so it will take more people out of Income Tax altogether, introduce universal credit which makes it more worthwhile working than the system it replaces, and boost the living wage.

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68 Comments

  1. Lifelogic
    Posted November 27, 2016 at 7:05 am | Permalink

    Living standards should of course be improving hugely as technology improvement increase productivity hugely in technology, communications, food production, manufacturing, medical advances and nearly every single other area. In electronics the price of many components (memory for example) can be less that 1/1,000,000,000 of what they used to be just forty years back. Cars used to cost perhaps 5 years of average wages and can now cost just 1/8 of one years and are better more efficient and more reliable too.

    So where has the benefit of all these improvement gone? It has largely be taken by the state sector getting more and more bloated and wasteful, more and more red tape has damaged productivity hugely, over complex and daft tax systems create loads of essentially non productive jobs for bureaucrats, lawyer and accountants. Many people in the state sector actually get paid for doing positive harm to the economy and efficiency. Mrs May who seems to be following Milliband’s idiotic agenda of workers on boards, gender pay gap reporting and the likes will do further huge harm.

    In addition we have areas where a lack of real competition has achieve little increase in efficiency. Protected area’s like banking, government, the BBC, the NHS, much of education and the legal professions have got away with squandering the wealth created largely by others. The planning system also pushes up house prices hugely, as does the OTT building regulations.

    Low skilled immigration is a net cost to the country as they clearly cost more in benefits and services than they contribute.

    Electricity in the UK is about three times what it should cost thanks to government rigging the market with greencrap and moronic projects like Hinkley, HS2, Lagoons and the likes. These all kill productivity, damages living standards, waste billions and exports jobs.

    The government is the problem. T May and P Hammond seem not to realise this and seem set to even make it worse, with yet more taxes, more waste and more bonkers regulations.
    All they need to do is cut the size of government and reduce red tape.

    More power to shareholders to effectively control executive pay would however be welcome.

    • Lifelogic
      Posted November 27, 2016 at 7:09 am | Permalink

      In short business and technology gets more and more efficient, but instead of living standards rising much the government (and some over protected sectors) steal most of this extra wealth and pisses it down the drain.

      Living standards thus rise far less than they would have done.

  2. Lifelogic
    Posted November 27, 2016 at 7:31 am | Permalink

    Project such as this “lagoon” are the things that kill living UK standards. Spending £1.3 billion to produce the same energy as could be produced by a mere £25 million gas powered plant. But the government seems to like all this greencrap lunacy.

    http://www.telegraph.co.uk/news/2016/11/26/crazy-swansea-bay-tidal-scheme-has-re-emerged-deep/

  3. Dame Rita Webb
    Posted November 27, 2016 at 7:35 am | Permalink

    “The only function of economic forecasting is to make astrology look respectable.”
    John Kenneth Galbraith
    Keynesian economist (1908 – 2006)

  4. Richard1
    Posted November 27, 2016 at 7:44 am | Permalink

    The hyperbolic language of the IFS was very odd and out of character. As you say the impression given was highly misleading, as of course was the reporting on the BBC which implied it was all the doing of the Conservatives which is grinding down the poor etc. The Conservatives will never have the support of such organisations nor any sympathetic or even balanced reporting from the BBC whilst pursuing Brexit. That being the case, the Govt may as well be as radical as it can and go for serious supply side reforms to boost competitiveness and make the UK as attractive as possible for investment. Let’s hope the budget brings something bolder than did the autumn statement.

  5. Jerry
    Posted November 27, 2016 at 7:57 am | Permalink

    So as a rebuff to those forecasters he believes wrong, our host makes his own ‘silly’ (never mind highly partisan) forecasts, seemingly based upon nothing more than the fact that there has only been a “phoney Brexit” thus far and wishful thinking that there will be no economic down-side to Brexit…

    Those October retail figures showing “stonking growth at 7.1%” could simply be people spending now in the expectation of higher prices to come.

    The government is pledged to raise living standards, especially for the lower paid. To do so it will take more people out of Income Tax altogether”

    For the lowest paid that is a hollow promise, they already pay no Income Tax!

    “introduce universal credit which makes it more worthwhile working than the system it replaces, and boost the living wage.”

    Such people do not want government ‘charity’, with many of the same social and red tape problems as older types of benefits do, such as claimants getting ‘dumped’ upon by HMRC/DWP when a computer or official on the fourth floor decides that someone is no longer entitled to payments they have come to rely on, or worse, being told that there has been an over payment -that they should have been aware of- and thus money will be recovered… If the government truly wants to help the lower paid, unwaged, or (accessible) ‘cash poor’ post Brexit then perhaps the Treasury should be looking at VAT levels rather than the smoke and mirrors of the Income Tax/Benefits system, what is more, lower or zero rated VAT levels will also entice retail spending among those who have higher incomes.

  6. bigneil
    Posted November 27, 2016 at 8:47 am | Permalink

    “Stonking growth?” – -Really John – that was a hell pf a language shock from you, first thing on a Sunday morning.

  7. Lifelogic
    Posted November 27, 2016 at 8:49 am | Permalink

    http://www.telegraph.co.uk/opinion/2016/11/27/theresa-may-must-stop-stealing-ed-milibands-policies/

    Indeed she must do this because nearly all of Ed’s proposed policies were completely idiotic and economically very damaging too. Tombstone Ed even wanted to thieve the assets of landlords to (fail) to buy votes and thus destroy the property rental market.

    Furthermore this lunacy was soundly rejected by the rather more sound voters.

    Theresa says she is in favour of “free markets”, but she clearly is not at all. What is she playing at? She seems to be yet another lefty dope in the Cameron, Heath and Major disaster mode. Has May learned nothing from recent history and the abject failures of Cameron, Heath and Major? Thatcher won three elections (and really four with Major as her chosen man). Then everyone worked out what Major really was and he buried the Tories for 3+ terms.

    Why do these lefties not just join the Labour or Libdim parties where they belong?

  8. JJE
    Posted November 27, 2016 at 8:56 am | Permalink

    As one of the MPs who voted for the Investigatory Powers Act, will you be warning your readers that their entire internet browsing history including every visit to this site will now be made available to the following bodies as listed in Schedule 4 of the Act?

    Metropolitan police force

    City of London police force

    Police forces maintained under section 2 of the Police Act 1996

    Police Service of Scotland

    Police Service of Northern Ireland

    British Transport Police

    Ministry of Defence Police

    Royal Navy Police

    Royal Military Police

    Royal Air Force Police

    Security Service

    Secret Intelligence Service

    GCHQ

    Ministry of Defence

    Department of Health

    Home Office

    Ministry of Justice

    National Crime Agency

    HM Revenue & Customs

    Department for Transport

    Department for Work and Pensions

    NHS trusts and foundation trusts in England that provide ambulance services

    Common Services Agency for the Scottish Health Service

    Competition and Markets Authority

    Criminal Cases Review Commission

    Department for Communities in Northern Ireland

    Department for the Economy in Northern Ireland

    Department of Justice in Northern Ireland

    Financial Conduct Authority

    Fire and rescue authorities under the Fire and Rescue Services Act 2004

    Food Standards Agency

    Food Standards Scotland

    Gambling Commission

    Gangmasters and Labour Abuse Authority

    Health and Safety Executive

    Independent Police Complaints Commissioner

    Information Commissioner

    NHS Business Services Authority

    Northern Ireland Ambulance Service Health and Social Care Trust

    Northern Ireland Fire and Rescue Service Board

    Northern Ireland Health and Social Care Regional Business Services Organisation

    Office of Communications

    Office of the Police Ombudsman for Northern Ireland

    Police Investigations and Review Commissioner

    Scottish Ambulance Service Board

    Scottish Criminal Cases Review Commission

    Serious Fraud Office

    Welsh Ambulance Services National Health Service Trust

    • hefner
      Posted November 27, 2016 at 4:36 pm | Permalink

      Didn’t you know? It is for your security, for them to see whether you are not acquainted with dangerous agitators.

    • Guess
      Posted November 27, 2016 at 6:09 pm | Permalink

      My browsing history should keep them all distracted. Terrorists never think of that.

    • Non-community person
      Posted November 27, 2016 at 6:38 pm | Permalink

      The trouble is when you invite foreigners into your country.Allow and encourage them to form separate identities and communities within our own community and simultaneously have laws making sure thy get jobs in ALL communities then some of the very persons monitoring…having access to terrorists internet browsing histories are themselves terrorists , potential terrorists or providing information to terrorists about the organisations’ monitoring and the persons internet histories who they monitor. As Blackadder says “A Cunning Plan”. Trust the British to work a flanker on themselves. Took them 200 years to get an Empire and the time one boils an egg to lose it. Wack-heads!

  9. Dame Rita Webb
    Posted November 27, 2016 at 9:14 am | Permalink

    JR perhaps you are insulated from it being in Westminster however you have missed one vital piece from your analysis. The ever increasing level of personal debt. Many of the punters out there are sustaining “a middle class” lifestyle by virtue of the credit card and the unsecured loan. That cannot be sustained in the long run and those of us who have their heads screwed on the right way know what happens next.

  10. Mark B
    Posted November 27, 2016 at 9:16 am | Permalink

    Good morning.

    These are ‘forecasts’ based on previous information / model data. Like climate change, if the model data is skewed to give the answers that they want to see in order to fit with a certain narrative, it will end up looking that way.

    The only certainty, like weather reporting, Mystic Meg, the BBC and the MSM and, of course the pollsters, when you keep getting this so consistently wrong the, crying wolf syndrome kicks in.

    Pity they did not forecast the effects of the ERM, the EURO and the financial markets debt bubbles.

    Oh well.

  11. Lifelogic
    Posted November 27, 2016 at 9:18 am | Permalink

    Is this true, I rather suspect it is. Why is Carney (with his absurd Brexit threats) still in his job? He has done the job very badly indeed, also there are plenty of sound people who could do a far better job for about 20% of his remuneration package.

    http://www.thetimes.co.uk/article/carney-plots-to-stay-in-single-market-till-2021-p88q2lrdq

    • Leslie Singleton
      Posted November 27, 2016 at 4:39 pm | Permalink

      Dear Lifelogic–Not to mention that he doesn’t have much to do on any basis–hundreds of people working for him from whose efforts he can just pick and choose what to say.

  12. Evan
    Posted November 27, 2016 at 9:25 am | Permalink

    The publication of misinformation with the intention of talking the country down should be a criminal offence.

  13. T Southwell
    Posted November 27, 2016 at 9:30 am | Permalink

    IFS are part funded by EU, so no guesses as to what their answers will be.

  14. Fred
    Posted November 27, 2016 at 9:31 am | Permalink

    Living standards have continuously declined since the 1970s. If you measure wages against gold they have gone down by 75%. This is disguised by excessive credit and the large decrease in prices (measured against gold). Also the change in the products available make it very difficult for most people to compare current living standards with four decades ago but I do remember my mother being able to buy a 3 bedroom house in the south of England and being able to afford the mortgage and a child on a single salary. Try doing that now. All the BS we hear about how much better off we are is just propaganda. We are worse off in many ways and that is because of government meddling and money printing.

    • Lifelogic
      Posted November 27, 2016 at 4:16 pm | Permalink

      Gold is not a very good measuring stick, as it is just one commodity and is one on which there is considerable speculation and much volatility.

      Living standards also declined because mass low skilled & low paid immigration depresses wages and clearly costs the government far more than the tax and benefit they contribute.

      • Mitchel
        Posted November 28, 2016 at 10:11 am | Permalink

        Over the longer term I would disagree;gold is practically the only thing you can measure the long term effects of inflation/currency debasement by.

    • Anonymous
      Posted November 27, 2016 at 6:42 pm | Permalink

      Correct.

  15. SM
    Posted November 27, 2016 at 9:32 am | Permalink

    I was interested to read this week that Andy Haldane, Chief Economist to the BoE, believes that economists are too detached from the real world, and use mathematical models which do not reflect reality. This comes from a foreword he has written to a new book ” The Econocracy: the perils of leaving economics to the experts”.

    He also writes that economists need to focus on reviewing thier models and accepting a diversity of thought rather than one solid orthodoxy (from a report in The Times).

    Does the Chief Economist at the BoE have any influence at the Treasury or with Mr Chote?

    • hefner
      Posted November 27, 2016 at 4:55 pm | Permalink

      SM, Are you saying that economists should use what are called “heterodox” models? i.e., models which might not take as the Gospel that markets always coordinate more efficiently than any public intervention, that can get something different from a general equilibrium, and where the heterogeneous set of individual actors(beloved by the neo-classicals) are not represented by “representative agents” assumed to behave like individuals.
      You are getting onto a very slippery slope, and I am afraid you might lose 99% of the commentators of this blog, maybe even including JR.

  16. Edward2
    Posted November 27, 2016 at 9:34 am | Permalink

    It is part of Project Fear which still lingers.
    Those that wish to remain are doing their level best to achieve that aim.
    Not embarrassed by their gloomy predictions which did not come true for immediately after the vote if we dared to vote leave, they now weakly say, ahh but we haven’t left yet. Wait until we do.
    Yet those same experts warned us that Brexit could take years.
    Every piece of good news is brushed aside whilst every piece of bad news is ascribed to the vote to leave.
    The establishment is all gloomy, whilst out here, away from the London media bubble, we carry on as usual with our lives.

  17. CHRISTOPHER HOUSTON
    Posted November 27, 2016 at 9:44 am | Permalink

    Oh the IFS are just part of the hyper-ventilating clamour still, still, trying to justify itself in their embarrassingly getting it so comprehensively and much repeatedly wrong pre-Referendum. They still exist as “institutions”. If they had a moat, ramparts, a drawbridge, a few sets of medieval armour we could open them up to American tourists and derive some profit from their continued existence.

  18. Antisthenes
    Posted November 27, 2016 at 10:01 am | Permalink

    Cause and effect are difficult to establish especially when incomplete or biased by ideology or convention research and calculation are employed in their understanding. Economic and climate change forecasts and many more all suffer from these handicaps. The prognoses is usually wrong because not enough variables are included and the models used to calculate are based on flawed theories. Exacerbated by the fact that society has become so complex and the store of knowledge so extensive that the intellect is now lagging behind the intent.

    These days predictions are so unreliable that basing our actions on them is a dangerous exercise. The evidence is compelling that proves that fact. We cannot even get our opinion polls to forecast with any degree of accuracy. Which proves that the only experts are those it effect not the ones who sit in splendid isolation in their offices of state, academia, think tanks and media buildings .

    That is not say that all forecasts are wrong. Many will be completely, some will be partially and a very few almost not at all. It depends on ones predilections which forecast in which of those three categories it is chosen to be believed. The most optimistic is a good guide when choosing as history since the 18th century tells us that they are invariable correct. Also that they emanate from those whose, research, theory and modelling is of the political right schools of thinking. As they tend to be realistic, rational and derived from good understanding of the human condition.

  19. Dave Andrews
    Posted November 27, 2016 at 10:13 am | Permalink

    If all this means that government will reign in spending, I’m glad for the relief of the national debt.
    Meanwhile, those of us in manufacturing exports will benefit from the exchange rate happy days and invest in and grow our businesses.

  20. agricola
    Posted November 27, 2016 at 10:20 am | Permalink

    This seems to be a rather fruitless argument of saying my figures are better than your figures. I sometimes think the perpetrators pray for some form of catastrophe as a get out of jail clause. I further think that we should not accept economics and the forecasting it generates as an exact science. Putting aside the obvious politically motivated figures that many remainers produced in the run up to Brexit, I can accept that most economists will take the information they have and come to an honest conclusion, wrong though it may be. It is somewhat akin to meteorology in the UK, there are too many variables to be confident for more than four days ahead. Were meteorologists and economists working at the centre of the Sahara they might be more credible.
    Marr to his credit today allowed a balance between the continuation of the remainers argument on the single market and the common external tariff by Thornbury, and that of Michael Gove that belonging to either would negate what we voted for at Brexit and our ability to negotiate free trade deals around the World. I do wish he were a bit more inquisitorial, as he rarely questions the nonsense that some talk.
    As a topical aside, I believe the time has come to cease praying at the overseas aid altar, reduce it drastically and create adequate social care for the elderly and post operative patients. If nothing else it would dramatically improve the productivity of the NHS in line with the Chancellor’s mantra.

  21. E.S Tablishment
    Posted November 27, 2016 at 10:35 am | Permalink

    But how can the IFS predict? How, now, can anyone actually predict?With the best will in the world, who knows the political landscape 2017 onwards? Who and what regimes will be in power? Even if you get the names right, no-one knows how those names will perform. A Trump administration..composed of whom…managing by negotiation internally and externally to do what? Russia, China, India. Commodities? So will China use less steel or more steel? Will she continue with what the West calls a Consumerist society instead of the previous grandiose infrastructure building?
    Then there are the likes of Tony Blair.Says he’s coming back perhaps fancying himself as King Arthur returning from Avalon. That would require a military coup. But our Generals Admirals, and Air Commodores would not relish fighting Trump’s Fifth and Sixth fleets around our coastline preventing cargo and military ships in and out of our island. The Mother of Blockades.So Blair will not return from Avalon nor the cold lake the real King Arthur was likely dumped in unceremoniously stripping him of trinkets and weapons.
    Parliament is now dealing in fantasies and the OBR are getting paid to toss runes determining the future like a modern day Merlin.
    A General Election would clear the air and hopefully bring a strong leader to power. Get a Chairman instead of a Mr Speaker for Parliament! Conduct Business meetings in Parliament: not provide the kindling for a new Gilbert and Sullivan comic operetta. Grow up as a nation, at last!

  22. michael
    Posted November 27, 2016 at 10:48 am | Permalink

    There was a time when elite forecasters could greatly influence the performance of the economy. This is much less true today. The great British public do as they choose; spend and save when they want to and not in accordance with predictions.

    But it is bad that Government action keeps on being based on incorrect forecasts

  23. Giles ( Farmer )
    Posted November 27, 2016 at 10:55 am | Permalink

    “Silly forecasts” Yes, I think most people have stopped listening to them. This double negative… they being OTT and people not listening anymore is quite politically stabilising.
    The vast majority are convinced the compost heap of politics has matured after great turnings and is now useful manure.

  24. English Pensioner
    Posted November 27, 2016 at 11:12 am | Permalink

    The report suggested that income was worse than it was 70 years ago.
    I remember 1946, maybe we did have more income than today by their calculations, but we managed to buy a lot less with it. Few households had many things that are considered quite normal now, we had no phone, nor the usual household ‘white goods’ such as washing machines, fridges, etc which were the preserve of the wealthy. Certainly no television, when they did come they were priced at what was probably several months wages for the average person. Not many people had one car in the family, let alone one per adult as now is frequently the case.
    I assume that these economists were talking about the UK not some central African state. Clearly, I was right to ignore their predictions when I voted for Brexit.

    • Anonymous
      Posted November 27, 2016 at 6:44 pm | Permalink

      But you were able to buy or rent a house on one wage and mum could stay at home and raise the kids.

      That is considered luxury these days.

      • libertarian
        Posted November 27, 2016 at 9:56 pm | Permalink

        Anon

        “But you were able to buy or rent a house on one wage and mum could stay at home and raise the kids.”

        You could do that now too if like then you chose NOT to buy 2 cars, white goods, mobile/internet/skycontracts,central heating go on foreign holidays etc etc

    • James Matthews
      Posted November 27, 2016 at 8:53 pm | Permalink

      You could add to that ice on the inside of bedroom and bathroom windows in the winter, only two rooms heated (kitchen and sitting room) – if you were lucky, hot water on tap all the time only for the wealthy and not at all for the very poor, clothes handed down from older to younger children and much, much more.

      Perhaps they are really talking about income inequality. If not they clearly live in a parallel universe.

    • Richard1
      Posted November 27, 2016 at 10:58 pm | Permalink

      Thanks. I wasn’t around in 1946 but this comment by the IFS strikes me as absurd – you only need to look at pictures of 1946 to see its bunkum, even before looking at statistics on availability of basic needs and surplus and luxury goods. Economists should stick to examining facts in a rigorous way and trying to draw a sensible conclusion, not grandstand for media headlines as the IFS has, bizarrely, sought to do.

  25. Ian Wragg
    Posted November 27, 2016 at 11:14 am | Permalink

    Project fear proceeds unhindered. We now have the almighty Bliar joining the fray together with arch Europhile Minor in tow.
    What happens after the government loses the Supreme Court judgement. Do we appeal to the ECJ.
    Will the judges spell out the process for the government which of course is non of their business.
    Will the whole process be bogged down in legalise until we are defeated.
    Just what are the government going to do John.
    Smelling many rats.

  26. Bert Young
    Posted November 27, 2016 at 11:15 am | Permalink

    The IFS and the OBR are linked with the same politically minded individuals who are determined to unseat the democracy of this country ; the same goes for Major , Blair , Heseltine and others . Why they are given publicity is down to the media bias they are associated with . It is relationships like this that has caused the public to resent and rock the establishment .

    I am not a lover of alternative aggressive personalities but , if they can stop all this undermining gloomongering nonsense , then I give them my backing . Diplomacy and tact in the affairs of Government have always played a useful and respected role in the past and ought to do in the future , however , if the traditional approach no longer achieves the will of the people , then the people must drive their views in a more forceful manner . The Trumps of this world are needed .

  27. Anonymous
    Posted November 27, 2016 at 11:40 am | Permalink

    Burried at the back of the OBR report is confirmation that the slogan on the Leave campaign bus was accurate.

  28. Remington Norman
    Posted November 27, 2016 at 12:07 pm | Permalink

    John,

    You, and others who have made similar comments, make a powerful point. Unfortunately, the BBC and much of the mainstream media dedicated to Remain are not interested in factual balance. They selectively pick what suits their case and ignore what does not.

    This imbalance urgently needs addressing if prophecies of doom are not to become self-fulfilling. If the media are not prepared to give fair air-time to you and others of similar mind, it is difficult to see how this can be overcome.

  29. Hope
    Posted November 27, 2016 at 12:11 pm | Permalink

    This is part of the side show to subvert the will of the people and to closely align the U.K. to the EU as possible. All these organizations were singing from the same deceitful hymn sheet before the referendum. Their predictions and forcsasts utterly wrong. The BoE still allowed with May’s blessing to continue the same sad song. They forget the people did not trust them then and they do not trust them now. The language used by Blaire and Major clearly subversive in tone and style and that of extremists. What appeared to be the clandestine meeting of remainers including a former head of M16 should worry everyone etc ed

  30. Ed Mahony
    Posted November 27, 2016 at 12:28 pm | Permalink

    Let’ stop talking about Brexit now and just get on with it. Looks like we have to proceed with Hard Brexit (or whatever one should or shouldn’t call it).
    And then see what happens. If experts think the economics of Brexit was based on over-confidence and hubris, and our economy sinks and there is call for us to return to the EU, then so be it. And if Brexit works out, all well and good.
    At end of day, there are strong arguments for both. But i think we all need to UNITE. And the time for talking has to stop. We just need to get on with it now.

  31. Democratforreal
    Posted November 27, 2016 at 12:46 pm | Permalink

    Perhaps it was always thus that people disbelieved all forecasts, all democratic decisions. But apart from the weather forecast which everyone disbelieved, there appeared to be a consensus of belief about financial expert advice and democracy. Not now. Senior politicians, grandees have no qualms at all about undermining a basic belief in democracy by trying for a “Second Referendum”..very destructive people!

    Across the Atlantic too,the Democrats whilst proclaiming openly they accept the US Election result are now actively financing legal challenges to the democratic vote to de-elect Trump, if possible. So the destructive anti-democrats here in the UK and across the Pond act in perhaps coincidental sync.

    It is always difficult for a democracy which, in the case of the UK has nearly overthrown a veritable dictatorship of the elite,… what should be done with the deposed elite who try even now to undermine and circumvent democracy? Do you allow them to continue..after all it is democratic? Yet by so doing you are allowing forces to democratically elect, who when gaining power will cement themselves in power as before with economic entanglements such as the EU membership.

    In former Eastern Bloc countries when the communist parties were defeated, they had the same problem . At least a certain percentage of the population continued to support those dictatorial communist Parties even after democracy was restored. In some countries, the old Communist Party with certain reforms was allowed to continue to exist and went into democratic dialogue. In one or two others they were not. Their crimes adjudged too great.

    So what do we do about the House of Lords and grandees? What should we do not with Remainers but continual active remoaners, backtrackers and backstabbers. The Undemocratic ones.?

  32. Neil Jackson
    Posted November 27, 2016 at 12:59 pm | Permalink

    John, I know you are ‘speaking for England’ but there are other parts of the UK that don’t agree with your analysis or outlook- some of us, like here in Northern Ireland, think that the Brexit move is nothing short of disastrous. Disastrous for trade for commerce, for relationships, for the future of our young people. What you are talking about is the same rhetoric that Sinn Fein ‘ourselves alone’ spouts and that is what it has come to – England is now talking the same language as Sinn Fein ‘ourselves alone’.

    I have no idea as to how we are going to pull back from this abyss but some clear thinking is urgently called for to bring us back to reality- otherwise?

    • ian wragg
      Posted November 27, 2016 at 4:35 pm | Permalink

      That is the problem when you are addicted to welfare. We over in England who pay the bills are under no such illusion about the EU.
      When we have left the EU finally, then we will have pulled back from the abyss. The undemocratic, unaccountable and downright corrupt EU IS THE ABYSS.

    • rose
      Posted November 28, 2016 at 12:30 am | Permalink

      There is no comparison with Sinn Fein. The United Kingdom was an independent country in the lifetime of most of us and could be again. That independence is about 1,000 years old.

      Try to think of what happens next in the EU and whether you want to risk the next generation’s future by staying in. You weren’t voting for the status quo in voting remain. The best thing for all of us in Europe is for the nation states to get back their independence before they lose their identities and cultures, and in some cases before they lose all their best people. European civilization is a unique and precious thing and should not be sacrificed to EU extremism.

      As to the difference between England and the other parts of the UK, I would say the main one is uncontrolled mass immigration into the English cities and towns which hasn’t been experienced in the other parts of the UK. There is serious and tangible overpopulation. People are living in cellars and under pavements; people are living in sheds; people are living 12 to a room. Native British people are living in tents and squatting in churches. Their children will not put up with this – or do you want them to have to? We have been told we need to build 25 new cities just to keep up with immigration. They won’t be built on the green and pleasant land of Northern Ireland. This is not of course the main reason for leaving but it is a symptom of losing our independence as nation.

  33. Pragmatist
    Posted November 27, 2016 at 1:14 pm | Permalink

    Bribe them to tell the truth! It sometimes works in advanced democracies as well as every where else in the world except Vatican City where, a spanking new bright orange Mithras-type hat usually does the trick.

  34. Denis Cooper
    Posted November 27, 2016 at 1:16 pm | Permalink

    The Remain side continues to lie. But in fact it is not even necessary to tell outright lies to present a grossly distorted picture which can then be uncritically propagated by the mass media, often with a few embellishments. If challenged, the originators of the distorted picture can say that unfortunately their original statement was rather misrepresented in some sections of the media, which was not their responsibility.

    Strictly speaking the IFS may not have explicitly stated that Brexit would cause an almost unprecedented stagnation of real wages, technically they may be in the clear about that, but as they probably knew it would be enough for their spokesman to shout loudly about just one aspect of the overall picture and then allow the anti-Brexit media to produce the headlines making that almost entirely false association:

    https://www.theguardian.com/business/2016/nov/24/ifs-warnsf-biggest-squeeze-on-pay-for-70-years-autumn-statement

    “IFS warns of biggest squeeze on pay for 70 years over Brexit”

    “Respected thinktank says UK’s withdrawal from EU will stoke inflation and peg back wages to below their 2008 level in 2021”

    Of course the IFS could have chosen to put a very different spin on it, they could have chosen to say:

    “Thanks to the severity of the financial crash, and possibly also to depression of wages by continued mass immigration, we had expected that it would take all of twelve years up to 2019 – 2020 for real wages to recover to their pre-crash levels. However if the recent OBR forecasts about the effects of Brexit are correct we now estimate that full recovery of real wages could take even longer than we previously thought, by two or three years.”

    Which could be seen to be the reality by anyone who chose to look beyond the Guardian headlines to the chart actually reproduced in the article; instead of a previously projected period of twelve years for recovery of real wages from the economic disaster visited upon the country by the last Labour government it could be fourteen to fifteen years, if the pessimistic forecasts of the OBR turn out to be correct.

  35. Sir Joe Soap
    Posted November 27, 2016 at 1:23 pm | Permalink

    The problem is of course the second order effects of using daft figures. I believe these are basically twofold-the first is that low figures create lower confidence, hence are to some extent self-fulfilling. On the other hand, the government/BOE measures to counteract the effects of the low figures over-compensate because they are low.
    I guess we end up with a stagflation type scenario-low investment but higher money supply, and higher consumption most likely than had forecasts been accurate.

  36. Sir Joe Soap
    Posted November 27, 2016 at 1:26 pm | Permalink

    By the way, I think “real” businesses aren’t taking much notice. When asked by my employees the effect of a possible Brexit, both before and after the vote, I said, “nothing for at least two years, then you might have to apply for citizenship if you’ve been here for five years, or make a choice between a visa or citizenship for the future if you haven’t”.
    I still hold by that view.

  37. The Left Stands Up
    Posted November 27, 2016 at 1:37 pm | Permalink

    Our lefty-liberal media are really burning a path to bless-ed Eternity in their condemnation of Fidel Castro. It seems he got married then…got divorced…and if that were not enough..got married to someone else! And, had a child by the first. And the second marriage too, ( so a politically motivated opponent alleged )

  38. Denis Cooper
    Posted November 27, 2016 at 1:55 pm | Permalink

    Off-topic:

    http://www.telegraph.co.uk/business/2016/11/27/mark-carney-plans-keep-britain-eu-single-market-2021/

    “Mark Carney ‘plans to keep Britain in EU single market until 2021’, putting Bank of England on collision course with Theresa May over Brexit terms”

    I don’t see why it should put the two on a collision course, provided that his proposal took the form of clearly defined and time-limited transitional provisions written into a treaty which terminated our EU membership at the instant it came into force, but with some of the present arrangements continuing for a few years to allow enough time for all the necessary legal and practical preparations to be made.

    As mentioned before, the 1957 Treaty of Rome said that the common market would be established over a period of twelve years after the treaty had come into force.

  39. ian
    Posted November 27, 2016 at 2:08 pm | Permalink

    Yes i agree with you john, all good as long as 3 to 4 hundred thousand people keep coming in a year for the next 4 years and the parliament continues to buy it own growth, mind you growth in this country has always been between 1.9 and 2.8 percent a year for last 25 years or so, you have hit 3 plus percent about three or four times but quickly slipped back after one or two quarters, as you all know take off speed is about 3.25 percent and has to be held above that for three years for real recovery to take place and as you do not now takeaway inflation from the growth number but if you did with inflation set to run at 3 to 4 percent you would be minus growth for next year, i think last year and this year was the only years that inflation has not eroded all of the growth, still you need inflation to eroded the massive debt country now has because that the only way of paying it off, so it a case of 2% plus inflation and 2% plus growth, i do not think you will get 3.25 growth and above while you have poor company management only worried about tax and how to avoid it with politicians helping them out and still in the EU, the only way to do that would be to borrow more money to give to companies to buy more growth or bigger cuts into people services and benefits or ramping up the amount of people into the country to 500,000 a year. CATCH 22 one way out.

  40. Jack
    Posted November 27, 2016 at 2:39 pm | Permalink

    Real wages have collapsed, and mainly because of totally idiotic and self-harming austerity; especially the VAT tax hike to 20% which directly fed into inflation at a time when commodity prices were already high and the pound weak.

    The 2008/09 collapse and subsequent great recession was completely avoidable, once you realise how simple the problem and solution was/is. It happened because the government deficit, not just here but in countries around the world, got too small to sustain the private credit structure and it all came crashing down.

    The solution was simply to offset the massive loss in aggregate demand due to the collapse in private sector deficit spending (credit creation) by creating an equally large fiscal adjustment through tax cuts or spending increases, or both.

    And there is nothing dangerous or “unsustainable” about this – the private sector had been running deficits of ~7% of GDP in many areas, and private sector debt is “real debt” unlike the government who actually issue the currency! For the government, the only limit on deficit spending should be the real resources (inflation) / productive capacity of the economy, not(!) phony financial constraints like keeping the deficit below some economically illiterate number like 3%, like the EU does.

  41. ian
    Posted November 27, 2016 at 2:44 pm | Permalink

    Looking at the EU, i would say that you will be one of the only country left in the EU as the years go by, it will be bankers, CEO, lords, politician dream come true as this was the first country to have voted for out.

    Like i always said the EU is none subject for me, it was only after the vote that i start to write about the EU and that because i would like to see democracy take place in this country for the first time, you only have to look at europe to see that it is going nowhere, no jobs, growth nothing, even germany started on the downward path and even with the uk buying as much stuff from them as it can like trains windmill and cars it will not help.

    China will try to buy as much of europe as it can on printed money so it can boss the people and the country of europe around, part of the chinese empire.

    • Ed Mahony
      Posted November 27, 2016 at 10:56 pm | Permalink

      ‘you only have to look at europe to see that it is going nowhere’

      – And similar decline in US and Japan.

      Europe isn’t holding us back. What’s holding us back is that like most Europeans, Americans and Japanese, we’re simply not prepared to work our guts out as hard as the Chinese.

      Now that we’re leaving the EU, we’re going to have to be careful about the Chinese because without EU trade barriers, the Chinese will be in the UK even more – not using the UK as a bridge into the EU, but simply buying things up here in the UK and siphoning off profits, intellectual rights and more back to China.

      • Ed Mahony
        Posted November 27, 2016 at 11:03 pm | Permalink

        ‘US and Japan’

        – although perhaps the Americans and Japanese still prepared to worker harder than people here in the UK (and in other parts of Europe). I mean 95% + of people I know would not be prepared, in normal circumstance, just to take 2 weeks holiday a year (that is the average in the US i think). Like most Europeans, we want at least 4 weeks (and the rest). Personally, i think that’s a good thing, but if we want our GDP to be significantly higher (as Brexiteers want and expect), then we’re going to have to work much harder along the lines of just 2 weeks holiday per year. Something like that. That’s the reality.

  42. UK's Robinson Crusoe
    Posted November 27, 2016 at 7:26 pm | Permalink

    A bizarre forecast.

    I think children should have been sent to some peaceful and sensible place as in the war whilst their parents battle over Brexit and Trump.

    The BBC is very adept at losing news footage. Much of the about-Brexit and about-Trump will be bleached clean. It will vanish to save face for people, those expressing illogical nonsenses . Just like so much of the original texts of pre-war novels. Shove the evidence of wholly unbalanced minds under the carpet. Pretend we are not all completely insane and in mass hysterical bouts whenever our cages as a nation are rattled.
    Well Brexit and Trump should not have upset our amygdalae so much. It has. Affected MPs too, some. Are they sure it is really flu? Best they think that. Cannot afford to upset them even more. Cough on Corbyn and May. It’s just a chill.

  43. Personal Vacuum
    Posted November 27, 2016 at 7:57 pm | Permalink

    When you get a British ex-Ambassador to America who comes on TV at various times , always with bright red socks..well it’s a talking point. Also very bizarre indeed. Like a BBC “journalist” who I last saw in the flesh on a Moscow to Heathrow flight at Christmas/ New Year time after being an as-and-when-required Ambassador in the Embassy in Moscow. Odd.
    Odd comments on the economy. Bizarre comments on Trump here and in America. Thousands with minds gone walkabout. No leadership at all from Number 10. Oh she does not sleep at night. That settles everyone. Such leadership. Such strength.
    “Is there a Man in the House’!?! “

  44. margaret
    Posted November 27, 2016 at 8:31 pm | Permalink

    It is silly to give pessimistic forecasts persae . What good do they do?

  45. Anonymous
    Posted November 27, 2016 at 10:28 pm | Permalink

    Off topic.

    State pensions.

    Hearing that our due date is to be deferred yet again. Though expected it is *really* hard to take.

    We pay our NI doggedly and there should be a pot waiting for us at the end.

    Instead the government fritter our money away. The least they should do is be up front that we are not getting pensions and whilst our youth can’t get trades, we can’t retire.

    I expect it will all be blamed on Brexit.

  46. Jack
    Posted November 28, 2016 at 2:07 am | Permalink

    In the OBR’s November 2016 Economic and fiscal outlook report, under Chart 3.36 (Sectoral net lending), it shows the Household sector moving into deficit of 2% of GDP in 2017 and then forecasts that to last until the end of the forecast period (2021).

    This is a larger household deficit than in 2008! All to fund a pointless and dangerous reduction in the government’s budget deficit…. insanity.

    Even the OBR points this out:

    The persistence of a household deficit of the magnitude implied by our forecast would be unprecedented in the latest available historical data, which extend back to 1987. Other datasets extending back to 1963 also suggest little evidence of large and persistent household deficits, with the household surplus negative in only one year between 1963 and 1987.

    Never forget: Government Deficits – Net Imports = Net Private Saving!!! By reducing the government deficit your government is forcing people to drain their savings and/or take on ever-higher unsustainable private debt.

    • Jack
      Posted November 28, 2016 at 2:11 am | Permalink

      In other words, John Redwood’s government is actively creating the conditions for at worst another recession, or at best stagnant growth of around 2% annually (unless the depreciation in GBP gives a temporary boost to GDP which is entirely possible).

      • James Matthews
        Posted November 29, 2016 at 8:31 pm | Permalink

        Two per cent annual growth represents stagnation. Well I never.

  47. a-tracy
    Posted November 30, 2016 at 4:02 pm | Permalink

    I welcomed the news today that Hunt has created apprenticeships in hospitals leading to five year study degrees for more hospital workers. I’d have gone a stage further and changed the name to something like Medician apprentice (lose the word nurse) and aim to have 50% men and women in the new training schemes. Do Polish nurses that we hear we rely on so much now in our NHS all do University three-year degrees, is this is necessary requirement for our full-time nurse vacancies?

    I was wondering today, when I read the news from PMQ at lunch time, why are we struggling to pay for the extra 1 million over 65’s since 2010, when in the same time period we have taken in around 2 million net immigrants that we have been told are all working and contributing to the system coming here mainly for work.

    What % of our over 65’s are requiring social care and how does that compare to 2010? How many more people over 65 are working now compared to in 2010? I see my own parents still working at 70 because my Mum took a career break and has a tiny state pension off my Dads contributions (insufficient to live on). Governments are expecting people of my age group to continue working until they’re 68 going on 70 before they can get their state pension, this decision will cost me personally about £56k at today’s money because when I started work at 16 I was told I would pay NI and be able to retire on a state pension at 60 after 44 years and as long as I had 39 years full NI payments in I would get a full state pension. My colleague had her retirement age move up from 60 to 64 she can finally get her state pension next year this will cost her around £28,000 so how come we have no money in the NI pot to pay for health and social care?

    We are always hearing how much less of our GDP we spend on Health compared to other Countries so what are we spending the difference on that they don’t spend – Defence? Welfare? These are the forecasts I’d like to hear about before we’re being told we will have to work till 80 oh and social care doesn’t exist any more!

  • 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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