Budget reflections

As we had read in the newspapers, the Office of Budget Responsibility decided to downgrade their forecasts for productivity, which led to a reduction in the growth forecasts. These growth forecasts have been up, down, up and now down a bit over the last two years as various assumptions have been changed. The latest version shows growth at 1.4% in 2018 and at 1.3% in 2019, down from 1.6% and 1.7% in the Spring forecast.  These forecasts relate mainly to the pre Brexit period, with growth rising again in 2021 and 2022 after exit.

Despite this revision the government is still on track to start to cut debt as a proportion of GDP from next year onwards. Public sector borrowing is now estimated at £49.9bn this year compared with the £58.3bn in the Spring forecast, and to fall in  cash terms for every year over the next five years. Revenues have been more buoyant than the forecasters expected.

The OBR may be right to reduce its productivity figure, as all major economies have experienced slower productivity growth than before the banking  crash of 2009. The UK has been particularly successful at creating many more jobs.  This will tend to reduce the average rate of productivity growth.  Productivity is measured by comparing the value of the output sold with the numbers of employees creating it. As an economy increases the share of certain services it will tend to slow the growth of productivity. Faster productivity growth with higher productivity numbers is generated by large investments in oil extraction, chemical plants, automated engineering works and the like where the amount of output per employee is very high reflecting the large amounts of capital equipment put in.

It does seem that the global number crunchers are having difficulty capturing the value and the efficiency of the new digital revolution. The big digital service providers are cutting prices of traditional activities and supplying substantial service free to the individual user. Is this fully captured in the way they calculate the figures?

Meanwhile the official forecasters have struggled by taking too pessimistic a view of Brexit. Their idea that investment and confidence would be hit badly affected their short term forecasts after the vote. Some of this has now been adjusted in the latest forecasts which assume business investment will resume growth from this year onwards after a pause in 2016. They now expect employment to rise each year a little as the economy continues to create extra jobs. They expect good growth in UK exports this year and next, with very little  growth in trade in 2020 and 2021.

Overall the forecasts look more sensible than the pessimistic ones in the summer of 2016. There could be more surprises on the upside, as there were today on the deficit this year and the tax revenues.

 

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196 Comments

  1. Hotel bell person
    Posted November 23, 2017 at 5:35 am | Permalink

    Well worth repeating.
    “The UK has been particularly successful at creating many more jobs. This will tend to reduce the average rate of productivity growth. Productivity is measured by comparing the value of the output sold with the numbers of employees creating it. As an economy increases the share of certain services it will tend to slow the growth of productivity. Faster productivity growth with higher productivity numbers is generated by large investments in oil extraction, chemical plants, automated engineering works and the like where the amount of output per employee is very high reflecting the large amounts of capital equipment put in.”

    Unsure how the OBR even with its famous “models” has a model particular to as yet undecided un-negotiated relations with the EU and the rest of the world. ..or indeed the low-skilled migrants who are said to be going to their own nations states. Since no-one knows how many are here, how do they know how many will return? Well they aint oil workers

    • Hope
      Posted November 23, 2017 at 9:10 am | Permalink

      A Cut in VAT is long overdue. Oh wait Hammond needs the EU permission to do this! 20 percent VAT and it is not all spent in the U.K. Osborne claimed he had no plans to raise it, then he did. So does the govt need permission or is told to raise VAT by the EU?

      Th biggest crisis to ur country is immigration, it affects our security and safety, housing, public services which were central to the budget. Why no mention? May claimed she would reduc to tens of thousands after historic records, yet she plans to extend the UK to stay in the EU for AT LEAST two years under the four pillars including freedom of movement. Is she lying to us, again?

      As the EU reads the budget in advance it would be agreed in advance. Similarly does this not weaken the U.K. Negotiating hand for the EU to know how the govt manages its finances?

      Where are the screams from Grieve, Soubry, Morgan and Clarke about EU oversight? Where are the govt threats to withhold EU payments in retaliation for the EU threat to withhold a rebate?

      • Posted November 23, 2017 at 3:07 pm | Permalink

        Given the amount of food wasted annually, vat should be applied to all retail food sales @ 20%. The revenue raised could be used to raise benefits across the board (by 20% to compensate for the additional food costs) with enough left over for care for pensioners.

        • Hope
          Posted November 23, 2017 at 5:23 pm | Permalink

          Hammond raised NI on high earners! Another fake way to raise tax, another tax from low tax conservatives!, because they might not get a state pension and certainly no social care.

      • Lifelogic
        Posted November 23, 2017 at 4:26 pm | Permalink

        Hammond has just increased the scope of vat by failing to increase the threshold in line with inflation and attacking market places making them jointly liable too. Also he increases the scope of CGT by killing indexation, increased NI for the self employed. Indeed there are tax increases all over the place in the details and a huge increase in complexity (a further tax on people’s time and cost by itself. Once again decreasing productivity.

        Indeed even the £300K first time buyer cut in stamp duty will probably release more chains of property deals and actually raise net tax for the treasury net.

        Tenants renting a £300K property will however have to pay addition rent to cover the landlords £14000 of stamp duty when they purchased it, This plus the double taxation of landlord interest and CGT is due. Very unfair to tenants, What has Philip Hammond got against tenants ( who are usually poorer than people who are buying a home)?

      • Hotel bell person
        Posted November 23, 2017 at 4:30 pm | Permalink

        “The biggest crisis to our country is immigration, it affects our security and safety, housing, public services which were central to the budget. Why no mention? ”
        Quite so. Not mentioning immigration is a leftie-liberal unvoiced sillification of otherwise adult utterances.

        • Hope
          Posted November 23, 2017 at 5:26 pm | Permalink

          How can you plan your finances not knowing how many to cater for? Pretty basic stuff that Hammond failed to address throughout his alleged budget. It puts all his figures in very serious doubt if not fiction.

    • oldtimer
      Posted November 23, 2017 at 1:23 pm | Permalink

      An energy policy that intentionally replaces efficient electricity generation, such as gas fired, with inefficient renewable sources backed up by inefficient diesel powered generation will cause national productivity to fall. That fall can only be reinforced by the Carbon Plan, signed by Cameron, Clegg and Huhne, which pays businesses to shut down their operations when the renewable dependant grid cannot keep up with demand!

      Then there are the billions spent on purposes which do nothing to improve productivity – donations to the EU and foreign aid to name but two. And that is before considering the effect of personal and corporate tax policies which act as disincentives to activities which might be expected to improve productivity.

      • Fedupsoutherner
        Posted November 23, 2017 at 7:01 pm | Permalink

        Old timer. You are so right on the renewables front. I don’t know how they think the country can be truly competitive while we are paying wind farms to switch off and produce nothing.

    • stred
      Posted November 23, 2017 at 3:52 pm | Permalink

      All of the expert comments and forecasts ignore the population increase, which May has planned to carry on past March 2019, and apparently her plans to hand over 38 bn or more as a bribe to trade, at a loss. The population is 65m and 1% is 650k. Annual increase in population is 330k, so this is 0.5 % pa. If these additional workers add to GDP then the revised growth of 1.3% may as well be reduced to o.8%. If the much higher NI figures and illegals are to be believed instead of port surveys asking whether arrivals plan to go home in less than a year, perhaps for Christmas or the visit family, then almost all growth disappears. Mass immigration may be a growth Ponzi.

      But all the think tanks and the Treasury seem to think that we will not manage without increased population and that strawberries will rot in the field etc. How is this when all the pickers are welcome to stay?Do we need the extra pickers for all the extra strawberries? If the growth of 1.3% is expressed per head of population it will be between 0.65 and zero. All the extra housing to be mostly on the Green Belt will be taken up by increased population. If we stopped the increase, then the lower rate of building would lower the pressure on housing and eventually we would have affordable homes while preserving the countryside.

      Don’t tell anyone or you will be called a racist xenophobe by groups funded by big business and others.

    • NickC
      Posted November 23, 2017 at 4:11 pm | Permalink

      The political and economic consequences of Brexit are almost all good, provided we do not appease the EU. We are leaving the institution which is corrupt, dysfunctional and undemocratic. Every major EU policy is a failure: from fisheries to regional policy; from open borders for criminals, to the odious EAW; from German mercantilism to near bankrupt southern European countries; from the Euro to massive unemployment.

      • getahead
        Posted November 23, 2017 at 8:01 pm | Permalink

        Hammond and May are subservient to those businesses that benefit from EU membership. They are quite happy to waste taxpayers money in support of those businesses. Appeasement is the order of the day.

      • Rien Huizer
        Posted November 23, 2017 at 8:46 pm | Permalink

        What do you mean by “appease the EU” Is the EU trying to hurt you? Is the EU perhaps the green eyed monster that crawls from under your bed at night?

        • stred
          Posted November 24, 2017 at 6:29 am | Permalink

          The EU monster is doing its work for big business and the supranational political forces day and night. It insists on free movement and protects the multinationals through regulation. Hammond was in the housebuilding business and knows that big migration figures are good for GDP and that there is not enough land or existing property. May is reported to want to protect the countryside but has quietly gone along with Remainer Phil and extended free movement for the benefit of big business. She probably has a head for personal politics but is able to forget or misunderstand the figures. Meanwhile, older voters can die waiting for a treatment by the NHS and the numbers at the next election will look better for fans of the EU. The monster is in control and their enormous tax- free pensions are safe.

          The South East UK and Holland are the most densely populated areas and you too will have to put up with overpopulation. Yesterday there was traffic jam on all 6 lanes between Amsterdam and Utrecht. Why don’t you go and explain the reason to Dutch drivers.

        • David Price
          Posted November 24, 2017 at 7:22 am | Permalink

          “Is the EU trying to hurt you?”

          Of course it is, it has been for the last 42 years – German and Italian MPs have blown the whistle on the EU’s intent to make the UK regret “breaking ranks” after decades of the EUs arrogance and abusive behaviour.

          “There must be a threat, there must be a risk, there must be a price, otherwise we will be in negotiations that will not end well and, inevitably, will have economic and human consequences,”

        • NickC
          Posted November 24, 2017 at 3:22 pm | Permalink

          Rien, “A green eyed monster”? Seems a bit fanciful, even for a Remain sycophant. But the EU is yet another extreme NW European ideology determined on conquest: this time by stealth, deception, and bureaucracy. But if we manage to escape it, don’t come running to us to save you this time.

    • The Prangwizard
      Posted November 23, 2017 at 5:31 pm | Permalink

      This government won’t listen to reason until a number of bricks have been thrown through a number of windows.

  2. Peter Wood
    Posted November 23, 2017 at 5:47 am | Permalink

    Good Morning,
    It is with much relief that there is now some cash to prepare for Brexit. There should also be someone to take responsibility for this, and to clearly define its purpose. My suggestion is to make WTO trade terms the default arrangement for which this money should be used, to help our companies that do business in the EU prepare in earnest..
    In addition, could not part of the foreign aid budget be applied to establishing now the necessary infrastructure to initiate FTA’s with those countries that we can mostly productively trade with outside the EU, once we are free; Trade not aid?

    • Hope
      Posted November 23, 2017 at 9:15 am | Permalink

      With mass immigration at historic record highs with no end in sight it should feature central in the budget to housing and public services, no mention whatsoever. This is absolute incompetence or deceit. Where was the EU blackmail ransom featured?

      JR, this was a piece of boring theatre of little substance and bearing little to reality.

      NHB. Day before Amber Rudd made a poor excuse why she missed the vote on charter to fundamental rights. It was a right vote. She should be sacked and lose the whip. If it were Boris could you imagine the furor from her!

      • The Prangwizard
        Posted November 23, 2017 at 5:27 pm | Permalink

        She’s a woman too – they can do no wrong.

      • Anonymous
        Posted November 23, 2017 at 8:06 pm | Permalink

        It’s fooling none of the core voters, Hope.

    • hefner
      Posted November 23, 2017 at 1:18 pm | Permalink

      Partly wrong. As specified by the EU, the VAT rate cannot go below the minimum of 15%. So 1/ the Government could have decided to lower it to 15%, 2/ Hope could have done a teeny-weeny bit of research on the topics instead of repeating, brainlessly, what has been pushed by Gove during the referendum campaign.

      • Hope
        Posted November 23, 2017 at 5:30 pm | Permalink

        Partly wrong does not equal brainless. So the government is not free to do as it please even by your own comment, it has scope to move a little, which makes it completely right. You always ask for facts, try implementing your own view.

      • libertarian
        Posted November 24, 2017 at 4:54 pm | Permalink

        hefner

        What does your research tell you about what products and services can be exempted from VAT by the UK in isolation ? What does your research tell you about the EU’s implementation of VAT MOSS , one of the most ludicrous tax regimes ever invented by the EU?

  3. Duncan
    Posted November 23, 2017 at 5:57 am | Permalink

    A number of points to note.

    One. It’s not the number of employees necessarily that determines a company’s productivity but the cost of employing them. This explains why the public sector is a barren wasteland in terms of productivity and the main reason why the private sector has to operate at ever higher levels of productivity simply to keep this nation propped up.

    Two. The state is spending too much of the nation’s income. We expect Labour governments to treat the taxpayer with contempt to consolidate their political grip over the public sector while using the Welfare State as a recruiting tool but I don’t expect to see this destructive use of our money by a Conservative government. Evidently, it seems both sides of the political fence hold the taxpayer in equal contempt

    Three. Official forecasts are meaningless, politically designed trash. They are contrived to achieve a political objective and to manipulate expectations and impact the voters instincts. I resent this use of propaganda

    Four. This government appears to have embraced Keynesian, demand management economic policies. This doesn’t surprise me in the slightest. Politicians, except MT in the 1980’s, have always conspired to spend more of our money. It allows them to expand their political influence and power while at the same time keeping negative headlines from the front-page by buying off problems rather than reforming the problem which would involved conflict

    Five. This government treats the private sector like its skivvy. The private sector is the engine of growth and yet May and this Chancellor bend over backwards to the unions to accommodate their every demand. This policy of government and union cooperation to target companies was seen only recently at a certain retailer. This government is the enemy of the private sector. This PM is anti-free market, an interventionist and union stooge. The country, in time, will pay a heavy price for this naive act of political stupidity

    In conclusion. Can we please have a PM and Chancellor that understands that the taxpayer is sick of financing political decision making and wants its money back? Higher state spending is not a moral good. Lower tax rates is not a moral bad. Higher State spending equals greater political power to the State and a weaker private individual. We need to disperse power among all through lower tax taxes but it appears that more and more power through higher tax take is again gravitating towards the centre.

    Cut state spending as % of annual GDP, reform the public sector, reform the unions, cut taxes and unleash the private sector. Finally get rid of May and let’s have PM who understands the private sector and embraces fiscal sobriety before it’s too late.

    Thanks

  4. Dame Rita Webb
    Posted November 23, 2017 at 6:29 am | Permalink

    Wasn’t that deficit supposed to have been eliminated by 2015? What has turned for the worse since the events of 2007/8 that the Conservatives are still dependent on borrowing to get by? Why are you borrowing to simply then give that money away to countries in the Third World? Isn’t there something significant with the number 300,000? Isn’t that new number of homes to be built to meet the near same net number of people coming into the country? Which are then usually after a tax payer subsidised job which partly explains the UKs productivity problem? When does the run on the £ begin when foreign investors look at this reality of life in the UK?

  5. Freeborn John
    Posted November 23, 2017 at 6:42 am | Permalink

    That was a rubbish budget that will only lead to asset price and consumer inflation. The car tax changes will only lead to more CO2 as more efficient diesel is penalised. It was even worse than last year’s budget and will do nothing to stem the reputation for incompetence associated with the May government. The Channcelor has clearly been neglecting the day-job preferring to spend his time undermining Brexit and tourI guess Europe to encourage Dublin, Berlin and Brussels to pocket the many UK concessions and raise their extortionate demands further. Hammond and the remainer cabal who are messing up Brexit need to go.

    • stred
      Posted November 24, 2017 at 6:51 am | Permalink

      40% of energy use is attributable to transport. The anti-diesel propaganda claims that petrol engines are now almost as efficient. My wife’s new petrol car is supposed to do 67 mpg but does 40. I have the same model with the new E6 diesel engine at zero VED and it is supposed to do 70mpg but does 63 on the same trip as the petrol car. The new test figures will reveal the fiddles, which are an inevitable consequence of daft EU tests. This will leave the EU figures for improvement in CO2 up in the air if the plans to eliminate diesel are completed.
      By the way, Phil’s favourite solution to subsidise electric driverless cars won’t work either unless we build an awful lot of nuclear power stations and double the cost of electricity. Electric cars in the UK now produce as much CO2 at the power station as an average diesel. The new electric black cab subsidised by the taxpayer costs £57k. I haven’t found a cabbie yet who can afford one.

  6. oldtimer
    Posted November 23, 2017 at 7:04 am | Permalink

    These forecasts are whistling in the dark. Their only benefit is they are not produced by the Chancellor. It is better to be cautious than optimistic. It is better to make policy decisions based on what is known (such as the effect of a tax policy) than what might be. In these terms it was a missed opportunity.

    • Lifelogic
      Posted November 23, 2017 at 7:16 pm | Permalink

      It is not always better to be cautious than optimistic at all. Especially if you want people to invest in the UK. Optimism and vision can be usefully infectious – but be realistic too.

      Some positive lower tax, smaller state vision was badly needed, but there was none.

  7. Andy
    Posted November 23, 2017 at 7:26 am | Permalink

    We now have a clearer idea of the cost of Brexit.

    Pathetic growth for at least half a decade.

    £3bn to pay to prepare the extreme Brexit Mr Redwood and chums demand.

    Just £2.8bn for the NHS.

    Here’s the irony.

    Most Brexit voters were pensioners. The biggest group of NHS users are pensioners.

    Brexit means worse healthcare for the people who voted for Brexit.

    Don’t moan Brexiteers when you are in a 6 month delay for treatment.

    Remember YOU VOTED IT.

    Still – one positive thought about Brexit.

    Come the next election, Mr Redwood, your party is toast. You’ll be out of power for decades.

    Even if the ghastly Jeremy Corbyn remains Labour leader.

    Brexit will be delivered by the hard-left. See how much you like that!

    Reply The revision to growth forecasts has nothing to do with Brexit, and they show growth accelerating after we have left. The fall in the forecast is all to do with the lower assumed rate of productivity growth, reflecting a trend which started with the crash of 2008-9.

    • Denis Cooper
      Posted November 23, 2017 at 12:31 pm | Permalink

      https://news.sky.com/story/budget-2017-philip-hammond-denies-spending-more-on-brexit-than-nhs-11139809

      “Philip Hammond has denied allocating more money to Brexit preparations than NHS spending in the Budget.”

      “But Mr Hammond pointed to how an additional £3.5bn of extra capital funding for the NHS means he gave it “significantly more money” on Wednesday than he was committing to Brexit.”

    • Andy
      Posted November 23, 2017 at 12:33 pm | Permalink

      No – it is mostly to do with Brexit.

      Pre-referendum growth forecasts have been slashed because of Brexit. Investment has dried up and good jobs have gone because of Brexit. Growth increase is negligible because of Brexit – and, meanwhile, the EU is powering ahead.

      For 30 years the Tory hard-right has bitched and whined about the EU. Some of your criticisms justified – most not.

      And now we see the truth. What you have demanded for years is not deliverable without huge cost. Not to you of course – you’ll be alright – but to others.

      Let’s list Brexiteers’ failures. Citizens’ rights – no answer. A scandalous failure which affects 4 millions people. The Irish border – no answer. A scandalous failure which risks peace and prosperity. You hadn’t even thought about it. Customs – no answer. A scandalous failure which risks jobs and growth. Open Skies – no answer. Euratom – no answer. EMA – good jobs gone. Red tape – you’re creating more of it.

      This is your catalogue of Brexit failure. This is what the electorate will judge your party on.

      Reply Jobs have continued to expand, unemployment is way below the EU average, investment has continued and inward investment is at high levels.

      • Denis Cooper
        Posted November 23, 2017 at 5:48 pm | Permalink

        Oddly enough I was just going to reproduce a tweet from the Department for Exiting the European Union and suggest that we don’t have to gush quite so much over the EU citizens resident in the UK:

        https://twitter.com/DExEUgov

        “Lord Callanan met Greek foreign minister @gkatr in Athens today and told him we value the 70,000 Greek citizens living in the UK and want them to stay”

        All we ever needed to say was that we would make sure well-behaved EU citizens in the UK were treated fairly for as long as they and their families chose to stay here, and the way we treated them would not depend upon the behaviour of politicians in their home countries.

        It was never necessary to say how wonderful they are – maybe some are, some are not – and how much we love them and want them to stay – they were invited, so they can stay and if they do they’ll be welcome.

        Unfortunately when one of your kind, the eurofederalist Sir Ivan Rogers, gave Theresa May the appalling advice that they should in effect be used as bargaining chips she made the mistake of adopting that position.

      • Richard1
        Posted November 23, 2017 at 7:54 pm | Permalink

        Read Patrick Minford’s report and calm down

      • NickC
        Posted November 23, 2017 at 11:16 pm | Permalink

        Andy, There is no problem for which the EU is the only possible answer. Most of the world is not in the EU, and all those countries get by just fine without it. Worse, almost all the EU’s policies are failures.

    • ian wragg
      Posted November 23, 2017 at 12:54 pm | Permalink

      Every day an anti Brexit rant no doubt from the Brussels propaganda unit.
      No one takes them seriously and let’s not forget, Brexit was about more than a decimal point or so in GDP figures.
      We voted leave to get our country back, WW! and WW2 plus our contribution to the cold war made us poorer but we managed.
      Let’s be gone and no back sliding.

      • Rien Huizer
        Posted November 23, 2017 at 6:01 pm | Permalink

        “Rant”?

    • NickC
      Posted November 23, 2017 at 12:59 pm | Permalink

      Andy, You do know that the rest of the world – all 168 countries that are not in the EU – get by without the guiding hand of your third rate, unelected, corrupt, politicians and bureaucrats in Brussels which you idolise, don’t you?

      • Andy
        Posted November 23, 2017 at 6:02 pm | Permalink

        Sigh.

        MEPs are elected. What’s more they are elected on a proportional basis. UKIP is well represented in Brussels. UKIP voters have a say there. They have ZERO say in Westminster.

        Juncker has as much of a mandate as Theresa May. He is elected by both the EU Council and MEPs – who are elected by us. Mrs May was selected by a couple of hundred Tory MPs and about half the people in Maidenhead. Nobody else had a say.

        Europe works in a different way – a consensual way – which I appreciate is hard for hard-right/hard-left to get their heads around. But to say it is a dictatorship, or unelected, or they they are all bureaucrats – just exposes you as an ignorant bore.

        • NickC
          Posted November 24, 2017 at 9:57 am | Permalink

          Andy, The joke about the EU is that if the EU applied for entry to the EU it would be rejected because it is not democratic enough.

          People had votes in the GDR, just there was no choice. Likewise the EU “parliament” is a figleaf. MEPs have less power than our appointed Lords. But you defend the system of appointing someone like Juncker by trying to say that he is “elected”. The EU is an oligarchy of politicians who are appointed and self appointed, together with politically active appointed Commissioners.

          Democracy is regime change without the civil war. The EU fails every test of democracy: the is no demos, no official opposition, and no possibility of removing the “government” or changing its policies short of major riots or insurrection. A consensus can be wrong, but there is no way of finding out under the EU. You are so ignorant that you don’t know why the opposition in our Parliament is called “Her Majesty’s Loyal Opposition”.

        • Edward2
          Posted November 24, 2017 at 2:45 pm | Permalink

          I didn’t vote for Junkher. Did you Andy?

        • a-tracy
          Posted November 24, 2017 at 5:23 pm | Permalink

          How much of a say did UKIP have in Brussels, how many key positions were they given? How many portfolio leadership positions were they given? The British people thought they had more say than they actually do.
          The main groups in Europe that make the decisions i.e. The Council of Ministers (also called the Council of the European Union) that together with Parliament debates and passes EU laws who elects the 18 members for the UK? If one of our big polling organisation asked the British public to name five of these 18 members the vast majority couldn’t.
          Everyone in the Country had a say on Mrs May Andy, she went to the polls precisely for that reason so she couldn’t be accused of just taking over the crown from Cameron like Brown did from Blair.
          I’d guess most people would presume that the MEPs would elect the European Commissioner for the UK to reflect the views of the public’s choice to represent us in the European Parliament but it’s actually chosen by the Prime Minister again the majority in the UK wouldn’t know that.

      • BartD
        Posted November 23, 2017 at 7:48 pm | Permalink

        NickC..Yeah most of the 168 countries you talk about are all in Africa and the poorer regions of SE Asia, Indonesia and in South and Central America…Is that what you are comparing us with now..is that the future for our international trade hopes? Well I for one am not terribly impressed

        • NickC
          Posted November 24, 2017 at 9:38 am | Permalink

          BartD, I was making no comparison, just stating a fact. However, some of those 168 countries are in the Anglo-sphere so it would make more sense to compare us with them. But then that’s expecting sense from Remain.

        • libertarian
          Posted November 26, 2017 at 7:20 pm | Permalink

          Dear BartD

          Some of those 168 countries are USA, China, Russian, Canada, Australia, New Zealand, Norway, Switzerland, Hong Kong, Singapore, India, I for one aren’t terribly impressed with your analysis , oh our biggest trading partner is the USA by far, followed by China….

          There are 54 countries in Europe ( only 27 of which are in EU)

          There are 54 countries in Africa

          There are 19 countries in South & Central America

          There are 48 countries in Asia

          There are 23 countries in North America

          There are 7 billion people in those 168

          There are 680 million in EU

    • Stephen Berry
      Posted November 23, 2017 at 2:18 pm | Permalink

      The ‘British productivity problem’ is set fair to replace the ‘British balance of payments problem’ of the 1960s. But there is something obviously very fishy about it.

      The 21st century has seen the explosive growth of services linked to the internet. It’s impossible to go far without bumping into someone using their wretched iPhones and iPads. Whether it’s Uber, Airbnb, Amazon, Alibaba, or something to do with Google and Facebook, we all use the internet and much of it is free. John’s blog falls fully into this category. So we have whole new ranges of goods and information being provided free and at the same time we are told that the very generation which is the first to enjoy this largesse is suffering a fall in its standard of living.

      When we talk about a fall in productivity, we really mean that goods are being produced more expensively for consumers. Recently I read an article which cited the example of the production of photographs. Now there are many more photos produced than ever before, but the cost of each photo, the film, the developing, the printing, has become effectively zero. The result of this process can be measured as a decline in GDP as the old developers go out of business, but we all know there has been a rise, not a fall, in productivity.

      • zorro
        Posted November 23, 2017 at 5:51 pm | Permalink

        Absolutely, we can all do things far more productively, quickly and effectively. We can communicate in real time, SKYPE, Facetime, or by message/email and get instant responses and multiple contacts and replies. Research is far quicker with the internet with the sum of the world’s knowledge at your fingertips if you know how to use a computer. I doubt that the effective productivity gains have been properly assessed/communicated. I can certainly be far more effective in what I do than I would have been years ago and can work just a s effectively from home cutting dowm on unnecessary costs/travel time.

        zorro

        • stred
          Posted November 24, 2017 at 9:27 am | Permalink

          Last week I made 35 cups of coffee and 7 dinners, painted a door and fence, mended a roof, tried to mend a car, drove 250 miles and cycled 16 miles did the shopping and spent a lot of time being as unpleasant to politicians as possible on the computer. None of this counts towards GDP, as I am well past retirement age.

          On the other hand, the youthful product of our education blob, paid on PAYE and making coffee and burgers, filing fingernails or tattooing someone’s backside, is counted as productive.

          • Stephen Berry
            Posted November 25, 2017 at 11:12 am | Permalink

            Stred, my congratulations on your continued high productivity though sadly, much of what you did last week would scarcely figure in UK GDP stats. I also think you have got to the nub of the matter – whether you do it yourself or farm it out to someone else.

            It has been pointed out that the difference in wealth between Advanced and Third World economies has been much exaggerated because of this effect. For instance, if you take your washing to the launderette, it goes into the GDP figures but if you take it down to the river it does not. The washing gets done either way. If you commute to work in central London it goes into the GDP but if you walk to the local market town it does not. Yet, most of the people I know would prefer to avoid that commute.

            My suspicion is that one of the results of the digital revolution is that the ability to do things yourself is being much enhanced. I gave the examples of photographs. If you do your own check-out at the supermarket, does that go into the productivity stats somehow?

      • Rien Huizer
        Posted November 23, 2017 at 6:03 pm | Permalink

        Low productivity means poor management and low rates of investment. In general. There may be other explanations but they are rare in developed countries. Economics is a university subject, after all.

        • libertarian
          Posted November 26, 2017 at 7:23 pm | Permalink

          Rien

          Economics is a university subject…lol

          So is gender studies and cake baking ( I’m not kidding)

    • Anonymous
      Posted November 23, 2017 at 4:27 pm | Permalink

      Oh Andy – the more you insult us the more determined we are for Brexit.

      Over your shoulder I see the rise of the far right across Europe.

      Afore you I see a housing (problem at a time of ed) 3 million newcomers and 600,000 a year thereafter and I can’t take you seriously because you ignore it.

      Yet you foment hatred between children and their parents.

    • Denis Cooper
      Posted November 23, 2017 at 4:48 pm | Permalink

      Even I think Patrick Minford is probably going over the top with his projected 7% boost to GDP over the next decade:

      http://brexitcentral.com/economic-heresy-brexit-will-speed-growth/

      “How Brexit will reinvigorate the British economy”

      On the other hand he could well be closer to the truth with his Project Prosperity ideas than the Treasury was with its Project Fear predictions.

    • eeyore
      Posted November 23, 2017 at 5:15 pm | Permalink

      Good to see Andy here now that Newmania has got fed up with preaching to the unconvertible. He shares our absent friend’s conviction that asserting, insulting and shouting is the best way to make your point. I look forward to many more provocative contributions from him.

    • Roy Grainger
      Posted November 23, 2017 at 6:51 pm | Permalink

      “Don’t moan Brexiteers when you are in a 6 month delay for treatment.”

      If we cut the demand side by reducing immigration then NHS waiting lists would fall.

    • Lifelogic
      Posted November 23, 2017 at 7:21 pm | Permalink

      Productivity growth can easily be had. The state sector just needs cheap non green crap energy, a bonfire of red tape, lower simpler taxes,easy hire and fire and less government. But we have May and Hammond in the way.

  8. Nig l
    Posted November 23, 2017 at 7:37 am | Permalink

    Overall I think he did well, seemed to be able to spread a little jam on all the politically valuable areas, the money for Brexit particularly comforting. More talk on productivity and revenue but again you shy away from the public sector as indeed does the Government.

    Someone I know well works bank hours, in other words when she wants to in an NHS trust Her job is to chase money owed by private, (insurance or personal payment) patients. She hasn’t been able to work for about three weeks but in two days this week she has got the Trust back £30k. Part of the reason is inaccurate billing, this has now featured on a board report but the Trust is incapable of performance managing the two people concerned so the problem continues.

    This Trust like them all is strapped for cash and moaning about it, yet say they cannot afford someone full time to chase the aged debtors so if she doesn’t go in, no one does it. I bet this and purchasing inefficiencies, duplication, poor use of the Cloud is replicated across this and the wider Public Sector but ‘you’ do nothing but expect praise and political kudos when you throw more money at it.

  9. Roy Grainger
    Posted November 23, 2017 at 7:45 am | Permalink

    Low productivity is a consequence of being in a low wage economy – importing millions of East European workers on low wages has caused it, in some areas there is simply no incentive to increase productivity (via automation for example) when there is a ready supply of cheap labour. When I used to visit India and China on business it was not unusual to attend meetings with up to fifty people on the opposite side of the table when really two or three would have been sufficient – same problem when labour is cheap, the incentive to increase productivity is lessened.

    • Lifelogic
      Posted November 23, 2017 at 9:47 am | Permalink

      In part perhaps, but the main reasons for the productivity problems is the government straight jacket on the productive:- expensive climate alarmist energy, taxes are far too high and too complex, planning is too restrictive, endless misguided red tape everywhere, government is far too large and oppressive, a lack of real competition in banking, daft restrictive employment laws …. plus second rate services like the rationed (inevitably) NHS and poor schools and the over loaded infrastructure. How can a truck drivers and people on the road be very productive if they are stuck in a slow moving traffic jams?

      • Lifelogic.
        Posted November 23, 2017 at 10:04 am | Permalink
      • Nig l
        Posted November 23, 2017 at 1:10 pm | Permalink

        Can we have some solutions please instead of your interminable lists of what is going wrong and, please make them affordable and most importantly politically achievable. I am not a fan of TM either but she is now 4% ahead in the polls and gets personal ratings well above Corbyn and no one obvious to take over from her. A leadership change/contest would be manna from heaven for Corbyn.

        I fear LifeLogic you would never get elected.

        • Sir Joe Soap
          Posted November 23, 2017 at 5:58 pm | Permalink

          It is fairly obvious though that if you recruit low paid low skilled people from various EU countries as well as our own then your productivity drops. When businesses offloaded the deadwood in the 80s productivity boomed. Now even the deadwood is needed to serve coffee and burgers. Robotisation will eventually solve the problem (again) at the cost of 3 million unemployed.

        • Lifelogic
          Posted November 23, 2017 at 7:25 pm | Permalink

          I am not trying to get elected, just telling people what would work for jobs and the economy if it were actually tried. May & Hammond alas cannot see this.

      • Lifelogic
        Posted November 23, 2017 at 1:12 pm | Permalink

        Hammond and May talk about “the productivity problem” as if the government had nothing to do with it, when there policies are clearly the main cause of it.

        What does T May think her gender pay reporting will do for productivity or all the daft employment laws (she even wants to build on them) preventing employers getting rid of inefficient staff does?

        • billR
          Posted November 23, 2017 at 7:51 pm | Permalink

          how can you improve on productivity when half the population is working in zero contract driveby’s and hamburger joints?

        • Ed Mahony
          Posted November 23, 2017 at 8:19 pm | Permalink

          @Lifelogic,

          ‘preventing employers getting rid of inefficient staff does?’

          Sorry but this is really crude and short-term thinking. The problem is much deeper. There are fundamental problems deep in our economy and society.

          – We rely far too much on the services industry.
          – Not enough focus on the high tech industry which gets relatively high job satisfaction and pays relatively well.
          The government can do a lot to change this although it will take years to see changes.
          – And then the stress the young feels about not owning their homes must play a part. And the fact that we have so many social problems (single parents, broken families, people not taking enough exercise, and so on – all these kinds of things affect performance).

          • Ed Mahony
            Posted November 23, 2017 at 8:26 pm | Permalink

            Psychology shows that people get a lot more satisfaction making things (or being involved in some way with the making of things) and actually seeing the things they make (e.g. computer chips, servers, tablets, and so on) on the one extreme versus just looking at numbers going up and down a screen all day (on the other extreme).

            We rely far too much on services, in particular, financial services (important as they are).

            I’m quietly confident that the main solution to our lack of productivity is that we need to tweak our economy so that it’s much more focused on the high tech industry (and closely related to this, software and digital).

    • Iain Moore
      Posted November 23, 2017 at 10:04 am | Permalink

      All the great and good are scratching their heads about the problem of low productivity , but it all seems pretty obvious. When you flood a market with surplus labour, and easy availability of labour, that has the effect of stagnating wages, then the incentive to invest in productivity is removed. It also creates lots and lots of barista jobs that will never ever make a contribution to the tax base, more like be net consumers of public services. As you say mass immigration has created the conditions for a low wage economy and as it seems so obvious I cannot believe the establishment aren’t aware of this. I can only presume they are fearful of being called names for suggesting that mass immigration isn’t the unqualified good as it is currently described, and not willing to tell business that their short term interests to get some cheap labour isn’t in the long term interests of the country.

      Some months ago they had a Wimbledon strawberry supplier was on Farming Today, who described his prototype strawberry picking machine, its was touch sensitive, could select ripe fruits etc. but was just a prototype . You might have thought that our establishment would be bringing resources together to make these sort of developments happen in order to wean us off our cheap labour addiction, they would in Japan or South Korea etc, but not here, they prefer to throw billions and billions and billions abroad rather than invest some seed capital in our own country, and I just do not understand it.

      • Denis Cooper
        Posted November 23, 2017 at 6:36 pm | Permalink

        Well, just a quick google throws up this from last year:

        https://www.theguardian.com/environment/2016/feb/01/japanese-firm-to-open-worlds-first-robot-run-farm

        “Japanese firm to open world’s first robot-run farm”

        “Spread says it will open the fully automated farm with robots handling almost every step of the process”

        “The seeds will still be planted by humans, but every other step, from the transplanting of young seedlings to larger spaces as they grow to harvesting the lettuces, will be done automatically”

        It’s a bit queer that this should appear in the “Let the whole world come here if they want our economy desperately needs them” Guardian …

    • Rien Huizer
      Posted November 23, 2017 at 6:07 pm | Permalink

      You are on the right track but dig a little deeper. Those supplies of cheap low skilled labour are running out (from the EU). Our friends with a South Asian background who are among the most loyal supporters of the Conservative Party would love to replace those low skilled EUers by South Asian. Even cheaper and more obedient.. The main reason for South Asian support for a hard Brexit.

      • Edward2
        Posted November 24, 2017 at 2:47 pm | Permalink

        Figures show no reductions. Still several hundred thousand new arrivals every year.
        Running out…ridiculous.

        • Rien Huizer
          Posted November 25, 2017 at 10:55 pm | Permalink

          Well, there are of course lots of new entrants. For instance six divisions of the Reichswehr, Half a milliopn Vikings, King William III reincarnated and so on. Who are those hundreds of thousands EU non-student immigrants? Poland is importing labour itself, for instance.

    • libertarian
      Posted November 24, 2017 at 5:04 pm | Permalink

      Roy

      We dont have a low wage economy the average UK wage is £27270 pa which puts those earning it in top 7% of wealth on the planet. Its not low wages thats the problem its that the government takes over 42% of everything we earn and then squanders it.

  10. Narrow Shoulders
    Posted November 23, 2017 at 7:46 am | Permalink

    Good morning Mr Redwood

    I see your chancellor came after higher rate taxpayers with his increase in National insurance upper earnings limit.

    Again, second tax year running.

    It would not be so terrible if there was likely to be a state pension when we get to 65 (will be replaced by workplace pension scheme tax) or social care when we need it in return for the increased taxes we pay.

    • Anonymous
      Posted November 23, 2017 at 9:11 am | Permalink

      It is a worry about the state pension. I have to make larger contributions to my own to mitigate taxation. Therefore my pot will likely see me means tested for my state pension *benefit* (as many politicians have taken to calling it.)

      Were it not for my ability to borrow for a larger mortgage you could not discern between someone on 20k less than me.

      Fingers crossed for redundancy.

      (This is the reason for low productivity in Britain.)

      • Bob
        Posted November 23, 2017 at 1:22 pm | Permalink

        The tax system is more like an obstacle course.
        Have the Tories just given up altogether on the idea of simplifying tax?

        Now we have different stamp duty rates for someone who’s just pitched up to the UK to buy a house vs an existing resident who needs to move for job reasons, creating a cliff edge at £500k.

        add to that a rail card for the 26 – 30 age group.

        Words fail me!

        • lp
          Posted November 24, 2017 at 8:48 am | Permalink

          A railcard for 25 to 65-year old commuters would have been more helpful to the economy.

      • Dame Rita Webb
        Posted November 23, 2017 at 4:16 pm | Permalink

        I dropped out of the workforce a few years ago as it was apparent then that the state pension wouldn’t be worth much at 67, let alone the state being able to pay it in the first place. Remember the state’s accrued pensions liabilities being in excess of 200% of GDP. Along with what I was coming home with after tax and what I was paying out for child minders, gardeners, cleaners etc it made more economic sense to let go of those service providers and do them myself.

  11. Dave , Shinfield
    Posted November 23, 2017 at 7:53 am | Permalink

    I can’t help thinking that the cost of the stamp duty cut would have been better channelled into more social housing -especially if those were earmarked for key workers such as nurses , teachers etc that our public services are struggling to recruit round here in Wokingham and beyond.

    • Hope
      Posted November 23, 2017 at 9:18 am | Permalink

      Migration watch figure showed the enormous scale of housing requirement for immigrants, if his was under control or regulated as claimed by May then of course the demand would not be present it would also reduce the welfare bill.

      Not mentioned by Hammond.

    • Lifelogic
      Posted November 24, 2017 at 5:41 am | Permalink

      There will not be much or indeed any cost new cost to the government. It will probably stimulate other tax paying activity as more houses and house chains complete and change hands many with stamp duty payable. Then money will be spend organising, decorating and furnishing the new houses.

      If you cut tax rates you often get more tax in and grow the golden goose. We need far more of it.

    • Peter Parsons
      Posted November 24, 2017 at 9:16 am | Permalink

      The Resolutiom Foundation are predicting that the rise in house prices caused by the stamp duty policy will be about double the stamp duty saved. The people who will benefit from this policy are not those trying to get on to the housing ladder, but those who wish to sell to them.

    • libertarian
      Posted November 24, 2017 at 5:06 pm | Permalink

      Dave, Shinfield

      There are currently 1,400 empty council/social housing homes in inner city London alone. How about occupying the ones we’ve got first ?

  12. Rien Huizer
    Posted November 23, 2017 at 8:08 am | Permalink

    Fragile, appears to assume the the Brexit adjustments do not hit at once in 2019. Implies a transition period plus staying in the customs union, more or less.

    • Ian Wragg
      Posted November 23, 2017 at 9:31 am | Permalink

      Parliament has just voted against staying in the customs union.
      To stay in would be a total betrayal.

      • Rien Huizer
        Posted November 23, 2017 at 8:52 pm | Permalink

        Betrayal of what? The national interest? Your feelings?

        • Fedupsoutherner
          Posted November 24, 2017 at 6:47 am | Permalink

          Betrayal of a Democratic vote to come OUT.

    • NickC
      Posted November 23, 2017 at 4:20 pm | Permalink

      Rien, Brexit negotiated by Remains using propaganda endorsed by the EU is, unsurprisingly, turning into a disaster.

      • Rien Huizer
        Posted November 23, 2017 at 6:14 pm | Permalink

        “Propaganda used by the EU” is “turning into a disaster” . Pretty heavy stuff maybe but also incomprehensible. What do you mean? EU Propaganda would imply a hostile state “EU” spouting ptopaganda. Where have you been?

  13. Peter
    Posted November 23, 2017 at 8:08 am | Permalink

    Mr.Hammond dodged a bullet and bought the government a little more time.

    He did that by avoiding the sort of budget gaffe that leads to a public outcry.

  14. JJE
    Posted November 23, 2017 at 8:17 am | Permalink

    What is the £3bn on Brexit no deal spending going to be spent on? Or is it just an unconvincing bluff for the negotiations?

    • Denis Cooper
      Posted November 23, 2017 at 9:08 am | Permalink

      To the extent that it needs to be spent, which is still undetermined, it will be spent on anything that needs to be changed as a consequence of Brexit, for example improved customs facilities and upgraded computer systems. Some such things would probably need to be done anyway in due course even if we were not leaving the EU.

    • Hope
      Posted November 23, 2017 at 9:20 am | Permalink

      You would have thought that as Hammond rented in about his cliff edge that he would have put an aresenal aside for Brexit and offered little to the he EU. Instead £40 billion to the EU for nothing and £3 billion for the U.K. In case we might be affected. This is dire planning is it not based on Hammond’s own comments?

    • Lifelogic
      Posted November 23, 2017 at 10:37 am | Permalink

      Do not worry they will surely find some way to waste it.

      Governments and bureaucrats are very good at that but do not expect much of value to emerge. Far better if they gave it as tax cuts to the businesses who have to adapt.

    • Denis Cooper
      Posted November 23, 2017 at 12:11 pm | Permalink

      http://facts4eu.org/news_novb_2017.shtml#ph

      “BREXIT ON THE CHEAP”

      “To put this into context for you, the total 6-years Brexit spending of £3.6bn represents 0.07% of total government spending over those years. If you only look at this year, 2017-18, the percentage is just 0.013%.”

      Although to be completely fair he did say that he stood ready to supply more cash if it turned out that more was needed.

  15. Bob
    Posted November 23, 2017 at 8:19 am | Permalink
    • forthurst
      Posted November 23, 2017 at 1:57 pm | Permalink

      …but only if you signed the Petition:

      “Stop the Common Fisheries Policy being adopted into UK law post-Brexit.”

      I’m sure there are loads of officials in the Environment dept who would like to contineue with the CFP make-work scheme; however, with limited capacity for catching and processing fish as a result of the forty year attack on our fishing industry by the Brussles regime, it would be best to a scrap all quotas for British fishermen (including seaside hobbyists!) which our industry regrows whilst simply monitoring the stocks and sizes of fish higher up the food chain.

      • forthurst
        Posted November 23, 2017 at 1:59 pm | Permalink

        …whilst our industry regrows and…

  16. Cobwatch
    Posted November 23, 2017 at 8:22 am | Permalink

    I listened to Corbyn’s response…went to the window, just to check i wasn’t in Beirut. Hammond did not have much working room but he was especially generous to Scotland, with English money of course. Paying billions to the EU is still a priority though no matter the cost.

    • Hope
      Posted November 23, 2017 at 9:24 am | Permalink

      Scotland is given even more money! England not recognized even as the largest taxpaying nation of the U.K.! Hammond seems to think this is okay! According to May and Hammond yesterday Scotland failed to plan for VAT on police and fire brigade or ignored advice, yet Scotland got more money, who was the stupid ones? Not Sturgeon it appears to me it is May and Hammond. That is £143 million that could be spent in England.

      • a-tracy
        Posted November 23, 2017 at 12:20 pm | Permalink

        I thought English Cities had been allocated the extra spending?

        • Cobwatch
          Posted November 23, 2017 at 7:20 pm | Permalink

          Proportionally Scotland received most, could be as much as £2 billion over the rest of the life of this Parliament.

      • Cobwatch
        Posted November 23, 2017 at 4:17 pm | Permalink

        Sturgeon is consistent…she has just said that the extra money for Scotland “is a con”….ungrateful and grandstanding!

        • Cobwatch
          Posted November 23, 2017 at 7:21 pm | Permalink

          Which country does not have a specific Parliament…

      • JoolsB
        Posted November 23, 2017 at 4:26 pm | Permalink

        Not only the largest taxpaying nation but the only net contributor and yet as always England is nothing more than a milch cow to our anti-English politicians.

      • Rien Huizer
        Posted November 23, 2017 at 6:16 pm | Permalink

        England is merely a province of the UK. Do you like independence?

        • Edward2
          Posted November 24, 2017 at 2:48 pm | Permalink

          Wrong.
          England is a nation.
          It is not a province.

          • Rien Huizer
            Posted November 25, 2017 at 10:57 pm | Permalink

            In Rugby

    • Lifelogic
      Posted November 23, 2017 at 10:41 am | Permalink

      But May and Hammond are just Corbyn light warming the seat for Corbyn real.

      Hammond had lots of working room but he does not understand that lower (& simpler) tax rates, cheaper energy and far less red tape means more tax revenue and a larger cow to milk.

      We still have the absurd 15% stamp duty even! What planet is the man on?

      • Ed Mahony
        Posted November 23, 2017 at 12:25 pm | Permalink

        ‘tax rates, cheaper energy and far less red tape means more tax revenue and a larger cow to milk’

        – Sorry, but this is ideology. It doesn’t reflect pragmatic reality. The reality is that people will work relatively hard for 49% tax and then suddenly the incentive to work drops quickly after 50% (there’s studies to prove this, as far as i recall).

        I want tax as low possible (way below 49%). But you can’t base an economic vision on low taxation. You have really look at your economy and see what bits need investment here and there.

        Red tape isn’t necessarily bad (the Germans love it). If you’re a large tech company you’re going to have lots more red tape than a small start-up. A lot of people in the UK are obsessed by red tape, often stopping small companies grow into big or large ones. Of course there is bad red tape as well. That’s obvious. All agree on that.

        Also, you need a certain amount of regulation. This isn’t rocket science. It’s simply human nature. Because ALL human beings have powerful desires flowing through them – whether for sex, money or power (all of these can be good or bad depending on the context). And if greed isn’t regulated, your economy will suffer all kinds of instabilities as opposed to stable, long-term growth (based, ideally, on work ethic, which includes working hard, not greed).

        • Ed Mahony
          Posted November 23, 2017 at 12:32 pm | Permalink

          ‘cheaper energy’

          – is a short-term solution to long-term problems facing our environment and limited energy resources.

          By using science, we can find solutions, which won’t just protect our environment but will also build up new industries, providing new, decent jobs for the future and replacing the revenues lost by cheap energy.

          So it’s about science + imagination + patience/persistence. This isn’t just a dream. There’s lots of examples of how this is a reality, changing our world for the better, both environmentally and economically.

          • Lifelogic
            Posted November 23, 2017 at 7:30 pm | Permalink

            I have not objection to sensible r&d but rolling out premature, uneconomic technology with tax payer grants is bonkers.

          • Ed Mahony
            Posted November 24, 2017 at 8:30 am | Permalink

            @Lifelogic,

            ‘I have not objection to sensible r&d but rolling’

            – but all your comments on this subject are about cheap energy versus ‘sensible r&d’ etc ..

            ‘out premature, uneconomic technology with tax payer grants is bonkers’ – i completely agree.

            If you go to ‘Silicon Valley – California’ (as i keep banging on about), you’ll find there are a lot of (centre/) right-wing, business people who say the exact same as me because technology is what they do. They understand the amazing things technology can do (as well as bringing great jobs and revenue). But if you’re a New York financier (or property developer!) with no real knowledge of technology in business, then more likely you’re going to on about the ‘cheaper energy’ argument!

        • Lifelogic
          Posted November 23, 2017 at 7:34 pm | Permalink

          Red tape isn’t necessarily bad – true, but it is about 99% of the time. Especially the bonkers red tape in the UK and EU. Easy hire and fire would be a huge boost to jobs, productivity & the economy.

          • Ed Mahony
            Posted November 24, 2017 at 8:39 am | Permalink

            ‘Red tape isn’t necessarily bad – true, but it is about 99% of the time’

            – sorry, but this is a big generalisation. I worked for a big, tech company for many years, and despite the red tape, it was a highly successful company.

            Going on about ‘red tape’ as so many, can just become a meaningless ideology as often the case in the UK, and perhaps an important reason stopping our small tech companies going global (look how the UK sold ARM Holdings to the Japanese when it could have held on to it and gone global being a beacon for the UK tech industry).

            You fail to mention Germany’s love for ‘red tape’ (and they’re much more productive than us).

            ‘Easy hire and fire would be a huge boost to jobs, productivity & the economy’ – something like this isn’t going to change the fundamentals of our productivity and economy. It might work in some instances and fail in others (where you get bosses who ruthlessly manipulate employers for their own short-term profit – which costs the tax-payer more when these workers fall ill, mentally and physically, and even become unemployable as a result).

      • Bob
        Posted November 23, 2017 at 1:34 pm | Permalink

        Our host could have produced a proper budget to get the economy moving and increase tax revenues, rather than all this Osbornomic tinkering.

      • Cobwatch
        Posted November 23, 2017 at 4:24 pm | Permalink

        This was a heroic effort…by Hammond’s standards. Hammond is on a planet called Globalist Treason, the biggest continent is called Pro-EUxia.

  17. Lifelogic
    Posted November 23, 2017 at 8:22 am | Permalink

    Well we could have far, far better growth if only we had some sensible government policies. Cheap reliable energy, a bonfire of red tape, far lower simpler taxes, far less government and far less government waste.

    Hammond’s 2017 budget was still dire. We still have absurd rates of Inheritance Tax and still have up to 15% stamp duty, he did not increase the VAT threshold with inflation (that they were considering reducing the shows just how daft he is). He increased CGT for many and stopped indexation (pushing up rents for tenants yet again). He announced future measure that will decrease inward investment significantly. He increased the minimum wages level to prevent even more people from working. He did nothing to help small businesses and left them with less money to invest in efficiency (due to increase in minimum wages and pensions contributions).

    His only real tax cut was restricted to first time buyers of houses up to £300K (a benefit largely to sellers – trivial but welcome).

    He increase the pensions pot limited by just 30k to £1,030K we used to have non and it was £1.8M quite recently. Pension tax relieve is only deferment anyway in the main. He is still ratting on the £1M IHT threshold each promise made by Osborne many years ago. He also increased NI for the self employed so still continuing his attacks on the gig economy.

    One good point is that the government see to have finally gone cold on their idiotic renewable subsidies – perhaps the only really good point.

    Still no positive vision from Hammond or May. They are clearly both misguided socialist at heart.

  18. JoolsB
    Posted November 23, 2017 at 8:33 am | Permalink

    Obviously when it came to it, Hammond found the magic money tree he ridicules Labour about. Extra billions (bribes) to the nations of Scotland, Wales and NI and selected payments (bribes) to the ‘regions’ (England obviously) – the Northern Power House, the North East and the West Midlands and of course the South East. What about all the ‘regions’ of England he ignored and didn’t give anything to? This is why England needs an English Parliament so England gets it’s fair share of English taxes to distribute fairly how it sees fit and not be subject to the UK Government’s cherry picking of which ‘nations and regions’ they want to bribe. Also John, are these extra billions of extra money going to Scotland, Wales & NI instead of Barnett consequentials or will Barnett consequentials apply as well? Thought so.

    A pathetic budget from a pathetic Government.

    • stred
      Posted November 23, 2017 at 4:06 pm | Permalink

      Few English taxpayers realize that adding the budget for Scotland, Wales and NI together the total is almost half the total education budget, the second highest after the NHS. And they get lower university fees and free prescriptions. We really are being taken for fools and need to pay a visit to our MPs to make it plain what we think of being mugged.
      http://facts4eu.org/news.shtml

  19. Lifelogic
    Posted November 23, 2017 at 8:38 am | Permalink

    Meanwhile Corbyn gave us his usual magic money tree agenda in response – we must invest in this and that, the NHS, Schools …. and pay everyone far more (especially in the state sector unions).

    Corbyn says there is nothing moral in tax avoidance but there here certainly is. It is the only real way to stop government waste and to use the money rather more sensibly than governments do. Is better for the economy, jobs and the country that way. This given the that politicians we have in power are only really interested in more tax, borrow. This while delivering fairly appalling public services.

    What, Mr Corbyn, is “moral” about pretending to have a magic government money tree and pushing the evil politics of envy and confiscation? What is moral about wanting to turn the UK into a basket case like Venezuala? Should there perhaps be an offence of obtaining political power by blatant lies & deception? Hopefully the public and even the youth will see through him.

    • Anonymous
      Posted November 23, 2017 at 9:16 am | Permalink

      16-year-olds believe in magic money trees.

      (Hence the determination to get them the right to vote.)

      • Lifelogic
        Posted November 23, 2017 at 1:23 pm | Permalink

        I do remember a young employee when given his first pay slip asked me what all the deductions were. I explained that they were taxes and NI the government took off him to pay for the costs of government.

        He said oh, I thought the government paid for all that!

        Many do indeed belief in it. BBC favourite “expert” and daft as a brush, Polly Toynbee (on yet again today) seemed to belief in it too.

        • Anonymous
          Posted November 23, 2017 at 8:18 pm | Permalink

          Ha ha ha.

    • Lifelogic
      Posted November 23, 2017 at 9:23 am | Permalink

      Schools will get £600 for every additional student who takes A-level maths it seems. Liz Truss even thought this was a way to increase productivity – well perhaps but rather a slow one.

      Surely it would be far, far more effective to give students who get an A or A* in maths A levels the £600. You can, after all, get all you study it on line for free. There is load of free material and help for this and for the Cambridge Step exams too.

      Though A levels now are about the same level as O levels of the 60’s and 70’s (certainly the Additional O level maths) so perhaps we should have for A or A* in Further Maths A level.

      At the same time cut all the cheap loans for the circa 75% of degrees that are clearly fairly pointless or essentially just hobby subjects. People should pay for their own hobbies.

      Perhaps they are thinking that if they understand maths they will realise what a fraud the Labour agenda is and the climate alarmist one too? But they they might also see that May & Hammond are just Corbyn light in essence.

      • Anonymous
        Posted November 23, 2017 at 4:30 pm | Permalink

        I took and passed A level law in five days for a bet recently.

        • Rien Huizer
          Posted November 23, 2017 at 6:33 pm | Permalink

          Congratulations. In Odessa?

    • Hope
      Posted November 23, 2017 at 9:26 am | Permalink

      You can only take the moral high ground,if you are not lying yourself. If you are the public will lump them altogether as being the same. This is lost on May and Hammond, and the Tories generally. Think back to Cameron and Osborne promises verses delivery. May is copying, idiot.

      • Lifelogic
        Posted November 23, 2017 at 1:26 pm | Permalink

        Exactly a total failure to present the moral case for smaller more efficient government, fewer regulations, freedom of choice, easy hire and fire and lower taxes.

  20. JoolsB
    Posted November 23, 2017 at 8:42 am | Permalink

    This Government has learnt nothing from it’s diabolical young vote figures.

    I thought at the very least Hammond would have addressed the exorbitant 6.1% interest on tuition fees. This out of touch Government haven’t got a clue. They keep spouting they don’t want to saddle our young with debt but then just keep ignoring the millstone of debt England’s young are already starting their working lives with without being ripped off with 6.1 % interest on top by this anti-English UK Government.

    • Hope
      Posted November 23, 2017 at 9:31 am | Permalink

      Ah. It can give Scotland another £143 million when Scots do not pay to go to university, or the EU £40 billion for a chat, £14 billion in overseas aid, introduce dementia tax, but cannot provide public services, adult social care, riddle the young with unnecessary debt, provide unlimited housing for immigrants without regard to our own citizens. I wonder why the public, particularly the young, are fed up with the Tories!

    • Pragmatist
      Posted November 23, 2017 at 9:44 am | Permalink

      It needs saying again…no-one is forced to go to University. Tuition fee debt is being spoken of like other forms of debt like a mortgage or a necessary car to get you to the job. If you don’t wish to get into debt with student loans then don’t do it. Go and get a job!!!!!!

      • Hope
        Posted November 23, 2017 at 5:37 pm | Permalink

        It also needs to be said again, EU students attend some of our best universities and do not pay a penny for tuition! They are then in a more advantageous position, even in our own country, to get a job above our citizens! If we can provid free university education to our EU competitors then we can provide for our own citizens!

        • Tasman
          Posted November 24, 2017 at 6:33 am | Permalink

          Where on earth do you get that from? You are talking rubbish. Everyone has to pay tuition fees – £9000 a year for undergraduates, more for postgraduates

          • stred
            Posted November 24, 2017 at 9:16 am | Permalink

            They borrow to pay the fees and living expenses for 3 years. The EU and foreign students pay back if they can be traced and made to pay when they go home and there is a shortfall. The students taking Mickey Mouse subjects never make the level of salary to start paying back. The successful students who make a higher salary have to pay back at a usurious rate of 6.1% in order to balance the books of the loan company.

            This is why Phil and Theresa prefer to avoid getting involved, as it is another stealth tax on the successful. Just like anyone who works in London and lives in a small flat and goes to a home in the country at weekends, who will now pay more council tax.

          • a-tracy
            Posted November 24, 2017 at 9:29 am | Permalink

            Tasman, not in Scotland they don’t. The Welsh get a contribution from the government for tuition fees, the Scottish don’t pay tuition fees and EU students at the top universities in Scotland pay the same as Scottish students – nothing. Only the English students pay full tuition fees in Scotland.

          • rose
            Posted November 24, 2017 at 12:00 pm | Permalink

            EU students don’t pay in Scotland where English students do. EU students can take out our loans in England and don’t get pursued to pay them back.

          • Edward2
            Posted November 24, 2017 at 2:51 pm | Permalink

            If you were to check Tasman you will find bad debts rapidly mounting for overseas students who cannot be successfully chased for the money.

    • Roy Grainger
      Posted November 23, 2017 at 10:08 am | Permalink

      Yes, and I believe they accrue this usurious interest rate on a monthly basis ? So after their first month at university the repayment amount has already increased.

      The stamp duty cut is useless, I bet house prices in the relevant range have already been marked up to mop up the difference. In fact I think in the detail of the budget this is even admitted.

    • Lifelogic
      Posted November 23, 2017 at 10:42 am | Permalink

      The biggest problem is they are have £50K of debts for largely worthless degrees.

      • Nig l
        Posted November 23, 2017 at 5:12 pm | Permalink

        A degree is never worthless. At a minumum it sends a very clear message to potential employers about the students ability and discipline to challenge, collate and disseminate information, hence so many jobs require graduates.

        • Prigger
          Posted November 23, 2017 at 6:14 pm | Permalink

          “the …. ability and discipline to challenge, collate and disseminate information..” That sounds like a “don’t throw me out of your spaceship into a vacuum” false praise of a Vogon poem. Yuk!

        • Anonymous
          Posted November 23, 2017 at 8:20 pm | Permalink

          So many jobs require degrees because that’s the average standard of education now.

          It’s no longer special to be a graduate and our town as many ‘firsts’ working behind the bars – no, not students but otherwise unemployables.

        • libertarian
          Posted November 24, 2017 at 5:12 pm | Permalink

          Nig 1

          So many jobs DO NOT require a degree which is why so many graduates find it hard to get work and why the data is now clear that apprentices earn MORE than graduates

    • James Doran
      Posted November 23, 2017 at 12:50 pm | Permalink

      The cost of higher education must be borne by somebody. When 5% of the population went to university it was feasible to pay for it from general taxation. These days 45% go to university; the cost should be borne by those who choose to make use of it. Asking someone who leaves school at 16 or 18 to pay for those choosing to start work 5 or more years later is wrong.

  21. Colin Hide
    Posted November 23, 2017 at 8:57 am | Permalink

    Funny isn’t it.

    Now that I have retired I watched the budget live as I had the time. I thought Hammond did a good job. He presented well and made several self depreciating jokes which went down well. Lots of good news for the regions and money for Universal Credit and the NHS.

    Yet driving to Nottingham and listening to the BBC 6pm News you would think he had murdered someones first born. Hardly a good word to say about anything and no mention of the 10bn for the NHS.

    Corbyns reply was dreadful. All shouty. And if his first attack line is the number of homeless sleeping in London then he will get little cut through on that.

    Tories just need to ditch May after BREXIT for someone shiny and new and they may well be home free.

  22. Bert Young
    Posted November 23, 2017 at 8:59 am | Permalink

    My reaction to the budget and to the comments of the “experts ” afterwards was that of a neutral . The assistance to young buyers of property is one thing but the likely rise of property values is another . As the owner of a Golf GTD I was naturally concerned about having to pay more for its VED ( VW “fixed” the emission difficulty some months ago to bring it into line with the required standard ) ; so far I have not got a clear understanding .

    Whether there was the fracas between No.10 and No.11 that was reported to have taken place the evening before the budget , I have no idea ; certainly the “harmony” that was suggested in the HoC yesterday indicated that a compromise had been reached . I don’t trust Hammond one bit in the forthcoming run up to Brexit and I would prefer he was replaced . I want to see our “freedom ” welcomed with an enthusiasm from all and , most importantly , from the policy makers .

  23. David Murfin
    Posted November 23, 2017 at 9:00 am | Permalink

    “The latest version shows growth [of the economy] at 1.4% in 2018 and at 1.3% in 2019,”
    What is the standard error in the measurement of the economy as a whole?

    Reply Good question – as well as these growth figures moving round a lot

    • ian wragg
      Posted November 23, 2017 at 12:58 pm | Permalink

      John, When did the treasury last get growth forecasts correct on 2 consecutive quarters.

    • David Murfin
      Posted November 23, 2017 at 5:35 pm | Permalink

      Thank you for that acknowledgement, but I hoped for a number in answer.
      I was not just making a point.

  24. a-tracy
    Posted November 23, 2017 at 9:14 am | Permalink

    “Productivity is measured by comparing the value of the output sold with the numbers of employees creating it”
    This is not a good measure, how do you know which workers are doing 10 hours and how many are doing 50 hours per week, the Labour government years ago encouraged everyone to ask for flexitime to suit themselves this resulted in more half jobs (part-time jobs) to fill gaps so we have lots more part-time worker numbers so if they’re counted as 1 full-time productivity would look to have fallen when it hasn’t. IDS removal of the retirement age from contracts also encouraged thousands to stay on after their state retirement age but often on reduced hours basis.

  25. a-tracy
    Posted November 23, 2017 at 9:17 am | Permalink

    GDP, when British turnover is calculated, do we exclude foreign enterprises that don’t pay the corporation tax on that turnover in the UK because they’re from the EU, rest of the World or Islands? If we don’t exclude them aren’t we paying into the EU for monies we don’t receive like the ‘made up taxes’ on prostitution, drugs etc. that we don’t charge tax on.

    Just what are the figures broken down? How is an amount allocated to the Public Sector, does each Hospital have a ‘gross turnover’ amount allocated to it, does each school?

    • acorn
      Posted November 23, 2017 at 2:33 pm | Permalink

      Gross domestic product GDP is everything produced from within the UK, regardless of who owns the production units or tax paid. GNP/GNI includes everything we get from the assets we own in foreign lands.

      • a-tracy
        Posted November 23, 2017 at 7:28 pm | Permalink

        How much does the GDP of the U.K. Differ from what figure U.K. Taxes are collected on, do you know?

  26. A.Sedgwick
    Posted November 23, 2017 at 9:39 am | Permalink

    Simon Lambert – Daily Mail on stamp duty states the obvious – it is a bad tax and self defeating, just another way to soak the regular, law abiding tax payer. Whilst giving first time buyers some relief it is more complication and bureaucracy, why not just increase the relief for everyone.

  27. Denis Cooper
    Posted November 23, 2017 at 9:44 am | Permalink

    The mass media are now successfully representing the projected economic growth figures as anything from gloomy to disastrous. It is immaterial that the numbers are positive, they are being treated as though they were negative. It can be forgotten that the last Labour government presided over a deep recession with a 6% loss of GDP in just one year. It is irrelevant that the OBR has a poor record on its economic projections, including growth projections, and in fact has just abandoned its previous growth projections as they now seem to be too optimistic. And it also counts for nothing that the average growth rate of the UK economy has been about 2.5% a year since just after the last war, and although there have been wide excursions on either side of that average, and sometimes it has been argued that there has been a permanent shift in the trend growth rate, that shift has never in fact materialised and there has always been an eventual reversion to the mean:

    http://johnredwoodsdiary.com/2017/11/03/the-bank-of-england-twists-and-turns/#comment-898243

    That is why for what it is worth my own economic growth projection for the next five years is rather more optimistic than those being produced by economists with a much shorter historical perspective, I am more inclined to believe that it will start to recover towards its long term trend rate and may well rise above that.

  28. Anonymous
    Posted November 23, 2017 at 10:30 am | Permalink

    The stamp duty exemption will have the entirely predictable result of driving up house prices further.

    When is the obvious going to be tackled ?

    The demand for Brexit is not going to go away, you know. It has become a battle against Remainers rather than the EU now and their insults have only entrenched us further.

  29. Posted November 23, 2017 at 10:31 am | Permalink

    Whilst a relatively small sum seems to have been allocated to cover preparations for Brexit, there seems no contingency allowance for the huge sums Mrs May is apparently prepared to pay the EU before they will even start talks. Or is this carefully hidden under some other heading?

    • backofanenvelope
      Posted November 23, 2017 at 11:45 am | Permalink

      The discussion is always about how much we are going to pay – never about how we are going to raise the money. How about announcing we will reduce NHS expenditure by the amount we have to bribe the EU?

    • Denis Cooper
      Posted November 23, 2017 at 12:19 pm | Permalink

      Most of it would have been covered by planned expenditure if we had voted to stay in the EU, and it would have been raised in the same way as all the money we have already handed over since 1973, about half a trillion pounds in today’s terms. As I keep saying this cost is a consequence of having joined up in the first place, it is not actually a cost of leaving. Putting that another way, if we hadn’t joined we wouldn’t now be facing a bill for leaving.

  30. Denis Cooper
    Posted November 23, 2017 at 11:11 am | Permalink

    “… the official forecasters have struggled by taking too pessimistic a view of Brexit.”

    Well, anything bad is down to Brexit and anything good is despite Brexit.

    Trends which were running before the referendum was even approved by Parliament let alone scheduled by the government are attributed to our vote to leave the EU, charts are carefully truncated to disguise the truth, and journalists who are well paid to report on events and inform the public deliberately set out to mislead us and promote their own political views, which are in most cases sorely lacking in patriotism.

    I will just say this: it is now seventeen months since we voted, and even with the rate of growth continuing to be below the long term average the increase in GDP since then has been roughly equivalent to the most probable economic losses if we simply left the EU without any special trade deal and just on WTO terms.

    http://johnredwoodsdiary.com/2017/11/19/so-the-eu-budget-rebate-is-ar-risk/#comment-901924

    And that is without taking into account either the factors which could moderate any such losses or the potential positive gains from moving to WTO terms:

    http://brexitcentral.com/philip-hammond-needs-ditch-caution-embrace-benefits-trading-wto-rules/

    “Philip Hammond needs to ditch his caution and embrace the benefits of trading under WTO rules”

    But I’m sceptical about the claimed potential for a rapid 4% boost in GDP, just as I am sceptical about the predictions of catastrophic losses.

    It’s all at the few percent or even a fraction of a per cent level, one way or the other, in the context of a naturally albeit now rather slowly growing economy.

  31. Colin Hart
    Posted November 23, 2017 at 12:58 pm | Permalink

    Trying to measure productivity across an entire national economy is pretty meaningless, particularly if you take total output and divide it by the number of workers. What matters is the total cost of labour and the value of its output. Furthermore, do you include both private and public sectors, where in the latter outputs are hard to measure in monetary terms?

    • a-tracy
      Posted November 23, 2017 at 8:04 pm | Permalink

      Colin, I don’t think it is too hard to measure in monetary terms the public sector, every school, hospital, council has an amount of money allocated to it to function and this very simplistic measure we’re told is used e.g. [turnover:hours worked] every organise can calculate as long as they include all sub-contractors hours billed, all agency workers hours, all employees inc directors hours.

      I’d guess if the average persons annual salary say of £20,000 pa for a full-time 37.5 hour worker (1950-hols 210 = 1740) they should generate a minimum turnover of £60,000. 60,000 / 1740 = £34.48ph so is that productive for the UK or not?

      I think the biggest problem by far in the UK is the cost of mortgages and/or rent, especially in the South and not this incalculable productivity they keep going on about, but give business a clue so they can ‘back of a fag packet’ work out if they’re productive as far as the ONS/OBR is concerned.

  32. Jason Wells
    Posted November 23, 2017 at 1:02 pm | Permalink

    No amount of trying to talk things up can disguise the fact that the economic growth is poor and the economy is set to under-perform. The GDP growth forecast is cut from 2 to 1.5% and more seriously is predicted to slow even more in the years ahead. If we get a hard brexit we’ll be out on our uppers. No amount of talking things up is going to square this reality nor is it going to tackle the huge debt and deficits facing the country.

    Voting for brexit was a mistake, in my opinion, we were dreadfully lied to, an even bigger mistake now is our governments taking such a tough line with europe in all of this while we have nothing else lined up to replace it. Nobody seems to know where we are going and meanwhile there is nothing but dismay in Brussels political circles and throughout europe at the UK government/ tory party antics.

    Things are not looking good either for the next EU/ UK summit in December. So JR my comment today is that despite what you say, it is very hard to see the silver lining.

    Reply The downgrades to the growth figures has nothing to do with Brexit, and we are still in the EU As we have been all the time productivity has stalled or slowed since 2007

    • Denis Cooper
      Posted November 23, 2017 at 6:22 pm | Permalink

      Maybe you’d care to glance at this chart of the annual growth rate quarter by quarter back to January 2015:

      https://tradingeconomics.com/united-kingdom/gdp-growth-annual

      Do you perhaps see a downwards trend starting in early 2015 when the annualised growth rate peaked at 3.3% a year, since when it has been sliding down? Can you see any break in that trend corresponding to the vote in the summer of 2016?

    • Backtoback
      Posted November 23, 2017 at 8:15 pm | Permalink

      Productivity has stalled or slowed in a large part because of a change in working habits way back. With CAP payments to farmers came laziness indifference, the increase importation of natural foodstuffs especially vegetables and then the influx of low paid foreign workers to harvest the fruit etc..and all the while large srctions of our youth whiled away their time by claiming benefits watching tv and movies all night and sleeping half the day..the way i see it..it was our own fault that allowed this..nothing at all to do with the EU..you won’t find young getman workers hanging out and sleeping half the day..so get real

  33. Tad Davison
    Posted November 23, 2017 at 1:20 pm | Permalink

    Just heard a corker of a quote on The Daily Politics Show:

    ‘Economic forecasting exists to make astrology look respectable.’

    It has to be said though, that some economists get it right more times than others. Professor Steve Keen is always worth listening to, whereas some are now quite legitimately figures of ridicule.

    Tad

  34. Atlas
    Posted November 23, 2017 at 3:03 pm | Permalink

    Two points about the budget:

    1) The sums mentioned are dwarfed by the EU (blackmail?) payment.

    2) The joke at the expense of Jeremy Clarkson on driverless vehicles is likely to rebound on Philip Hammond. I have yet to see a driverless vehicle being driven in the dark, when it is raining heavily, down a narrow winding English country lane. All the demonstrations shown on television so far have cars that are on wide, dry, straight American highways in the daylight. I think Clarkson has had more experience in his profession driving vehicles in all sorts of challenging circumstances than the Chancellor, or the PM for that matter. I suspect that they have fallen for all the positive spin issued by companies who have a vested interest in this.

  35. acorn
    Posted November 23, 2017 at 3:11 pm | Permalink

    Hammond told you yesterday! The Housing Corporation debt has been transferred from being government debt to private sector debt. That’s £60 billion.

    If only you brexiteers understood how the magic money tree works, you would then understand why the economy is in the state it is. Alas, electing a neo-liberal government, and continuing to do so, from 2010 – with added Brexit – has sealed the fait of the UK, for the next two decades at least.

    • Ed Mahony
      Posted November 23, 2017 at 10:11 pm | Permalink

      With a large national debt, low productivity, and high house prices, Hard Brexit could lead to the perfect storm of economic turmoil for this country, including a brain drain of the young abroad. And to this, some Hard Brexit Tories want to experiment by TRYING to turn the UK into some kind of European Singapore (important as financial services are) instead of focusing on trying to turn the UK into some kind of Californian Silicon Valley.

      If only we tried to get a good trade deal with the EU, where we can control our borders but at same time have full access to the single market / keep the customs union (we’ll have to pay for that) and then focus on rebuilding our economy. That would then give us some time to prepare for leaving the single market / customs union further down the line if that’s what the majority of the country still want.

      Common, pragmatic, Tory sense surely?

  36. Chris
    Posted November 23, 2017 at 4:38 pm | Permalink

    With regard to the Budget and the money the Chancellor has available, it is worth noting the amount wasted on current energy policy of promoting renewables and closing down fossil fuel sources, especially in the light of a book published today on the history of the global warming story and the IPCC. The book is entitled:

    “Searching for the Catastrophe Signal: The Origins of the Intergovernmental Panel on Climate Change” is published by the Global Warming Policy Foundation.
    The chief finding is that in the history of global warming science the discovery of man-made influence was a POLITICAL DEMAND.

    Press Release: GWPF: London, 23 November: “A new book on the origins of the Intergovernmental Panel on Climate Change (IPCC) and the global warming movement reveals that the 1995 discovery of ‘discernible’ evidence for a man-made influence on climate was a response to demands of politicians keen to regulate energy usage.
    It was only when the IPCC was threatened with alienation from the climate treaty process that it suddenly concluded “a discernible human influence on global climate”. Based on interviews with many of the key participants, author Bernie Lewin shows how climate science never was a driver of the policy movement and then how in 1995 policy demands began to drive the science…”

  37. Denis Cooper
    Posted November 23, 2017 at 5:05 pm | Permalink

    Off-topic, this doesn’t make very nice reading …

    https://www.rte.ie/news/brexit/2017/1123/922191-brexit-embassies/

    “European dismay at UK ‘chaos and confusion’ over Brexit”

    That is an Irish medium, but the ever-so-patriotic Daily Telegraph has chosen to repeat it, even though it could easily weaken the position of our negotiators.

    One thing worth remembering here: David Cameron forbade civil servants from drawing up any contingency plans in case he lost the referendum, and he did not put in the Article 50 notice straight away as he had promised, and nor did he stick around in office to see us out of the EU; therefore a large chunk of the blame for any “chaos and confusion” should be apportioned to him rather than to his successor Theresa May.

    • Rien Huizer
      Posted November 23, 2017 at 6:36 pm | Permalink

      Has there been any day Dennis Cooper did not submit an “Off-topic” Is he maybe JR’ alter ego? Or an avatar? Miracles can happen..

      • Denis Cooper
        Posted November 24, 2017 at 9:04 am | Permalink

        So why should you have a problem with that if the owner of the blog tolerates it? And are all your remarks always strictly on the topic of the article? If you want to know who I am there is always google, but who you may be – indeed what nationality you may be – is a different matter. And you may care to note that my name is precisely as I spell it, if you can’t even get that right when it’s under your nose what can you get right?

    • Roy Grainger
      Posted November 23, 2017 at 7:00 pm | Permalink

      The EU seem to be under the impression that insults are an effective form of negotiating. In my experience they aren’t. Personally I’m pretty dismayed at the chaos and confusion in Germany and the fact that the EU’s paymaster has no government yet, however it would be impolite to mention this.

    • Backtoback
      Posted November 23, 2017 at 8:24 pm | Permalink

      So we’re starting to use the term ‘blame’ more often now..a large chunk of the blame..si we’re at the blame game now..for a start Cameron was responsible for calling the referendum and then for not explaining properly the consequences to the people. May is responsible for everything else that followed afterwards including her disasterous election results..but whatever way you look at it, all of this happened on the Tory watch.

  38. Andy
    Posted November 23, 2017 at 5:16 pm | Permalink

    The IFS verdict on hard-right Tory Brexit Britain is damning.

    Earnings choked off. Wage stagnation ‘astonishing’.

    This is economic disaster you voted for Brexiteers. You have given it to us.

    Project Fear has become Project Fact. Vote Leave is demonstrably Vote Lies.

    Voters will soon get tetchy about this car crash and the Brexit-ultras will have to explain their failure.

    Just like Farage, Gove, Stuart etc deserted the sinking ship immediately after June 16, we’re about to see another mass Brexodus.

    None of the Brexit-ultras will have the balls to admit how badly they screwed up.

    Don’t worry though – my generation will fix the monumental mess you have created.

    Enjoy your retirements.

  39. Ron Olden
    Posted November 23, 2017 at 5:38 pm | Permalink

    The chances that these OBR forecasts are anywhere near right are NIL.

    The only purpose of these numbers is for the Government to make some attempt at estimating its’ tax revenues an outgoings.

    There’s a good case to stop publishing them at all and leave it to anyone who can be bothered with all this, to take our pick out of the hugely varied numbers private forecasters come out with.

    ‘Growth’ forecasts are less accurate than political opinion polls.

    But Remainiacs, Labour, and the BBC, (when the numbers suit them), quote these forecasts as if they are tablets of stone delivered by Moses.

    When it doesn’t suit them of course, they ignore them, and find some other forecast that does, or make one up.

    Remainiac economic ‘forecasters’ told us that if we voted Leave (or even had a referendum at all) we would, owing to ‘uncertainty’, suffer an immediate economic depression and interest rates would shoot up,

    We voted Leave, growth duly accelerated, interest rates fell and Base Rate is only now back up to where it was before the referendum.

    By the end of 2016 the OBR was forecasting 1.4% Economic Growth for 2017.

    Four months later and despite the fact that up to data was showing a slowdown the OBR (for no apparent reason), raised the forecast to 2%.

    Five weeks before the end of 2017, and despite the fact that growth has been accelerating again, it’s now back down 1.5%.

    If they get it so wrong and the forecast gyrates so much at such short range what possible chance is there that it will be right for 2022?

    The actual quarterly figures are far more stable and unchanging than the forecasts. All we ever hear on the News when the numbers come out, is that ‘economists’ are either ‘surprised’ that the number is higher or lower than the thought.

    If ‘economists’ would like to avoid these three monthly ‘shocks’ they’d be better off stopping thinking.

    If the OBR had stuck to the original 1.4% forecast we’d all now be thrilled that it’s coming in at 1.5% (or more likely 1.6%), after all.

    On that basis I’m very pleased that the numbers they are using now are so low, Although goodness knows what they’ll have changed them to by this time next year.

    Their Deficit Forecasting has been even worse.

    Most of the growth data the Office for National Statistics publishes is even wrong, AFTER the period it covers has passed.

    What, in any event, is the point of ‘growth’ at all, if all it amounts to is the addition of small amounts of extra Total National Income arsing from migrants coming here, and if all of it (and more) goes into higher house prices and rents?

    It’s PER CAPITA disposable income, and what we can buy for it that counts.

  40. Miss Brandreth-Jones
    Posted November 23, 2017 at 6:28 pm | Permalink

    Surely businesses which are owned by foreign companies will have their products titred in their countries GDP.

    Some clever people think macroeconomics is far removed from microeconomics and the banks love us beholden to them and welcome a deficit. I am very glad that the deficit is going down and look forward to the time when writing off the debt bites.

  41. Iain Gill
    Posted November 23, 2017 at 6:59 pm | Permalink

    I think the order order site is closer with their article on Amazon shipping in cheap workers from Hungary, just like has been happening in information technology from other countries. No mention of the immigration situation in the budget makes it a sham.

    I reflect that the budget demonstrates how out of touch the political class is. Shame we don’t have a proper opposition reflecting what their core vote worry about.

    • a-tracy
      Posted November 24, 2017 at 9:23 am | Permalink

      We need to make it a lot easier for job centres to have a more recruitment agency set up so they can place unemployed British people into short-term placements and move them off and back on to benefits seamlessly and then this would end this practice.

  42. Student
    Posted November 23, 2017 at 7:58 pm | Permalink

    The EU have today fallen to a new low, proclaiming that despite being European we can’t compete in the European Capital of Culture competition, and they waited until after UK cities spent millions applying to tell us this. This is a reflection of the inward looking policies of the bureaucrats, and another example of why we should leave this nasty, self-obsessed and exclusive group that cares only for its own ideology and, like many zealots, will go to all petty measures possible to put down and bully their critics.

    Such ridiculous acts will only bring the EU closer to collapse as the list of their opponents grows and becomes increasingly united. I only hope that one day the rest of the member states will be governed by more mature and intelligent people who recognise our European heritage and our desire to remain close friends with our continental allies.

    • a-tracy
      Posted November 24, 2017 at 9:22 am | Permalink

      Why did UK Cities spend millions just in an application? Was this an entrance fee to the EU for the competition? Were we invited to tender an application, if so when, if it was after the vote we should sue for our costs?

  43. mike
    Posted November 23, 2017 at 8:29 pm | Permalink

    Question: How would you get four giraffes into a mini?

    Answer: two in the front and two in the back

    Next question: how would you get four elephants into a mini?

    Answer: how the hell do you think you can get four elephants in the mini when there are
    already four giraffes there/

  44. Alison
    Posted November 23, 2017 at 9:19 pm | Permalink

    Dear Dr. Redwood, very stimulating blog post. Re ‘new digital revolution’ (para 4) – re value, productivity, efficiencies – I’m not quite clear about the phrase – not sure whether you mean digital revolution or a new phase of the digital revolution? I’ll lead on to your comment re slowing in productivity after the banking crash 2009, holding back on your question in para 4 (new digital service providers).

    In the mid 2000s in a study we did for the DTI et al, one statistic we quoted: engineers in the engineering/oil industry achieved a 70% increase in productivity, and these enormous gains were built on digital interoperability (which operates at multiple levels). For example, passing work from contractor to employer, phase to phase, information was passed seamlessly, without having to reformat databases (for example). This was achieved after years of industry coordination globally (which costs quite a bit of money). But a massive increase in internal/contract productivity.

    I’ve always thought that a significant part of the slowing in productivity in the 2010s was because a lot of the productivity gains (which were big) entailed in using digital technology/information had been achieved, and the level of further gain levelled off. It’s not just a matter of the banking crisis, possibly masked by it. (Haven’t had time to do look properly into this so far).

    sorry to post so late

  45. Prigger
    Posted November 23, 2017 at 10:23 pm | Permalink

    The Church of Sweden is going to stop referring to God by “Lord” and “Him” and “He” .
    Yes you can guess the reason. There’s nothing ineffable about Sweden nowadays. You have to wonder just how long it will be before the whole of Swedish society just disintegrates into a pillar of salt. There, now you understand what was men..t!!!

  46. Prigger
    Posted November 23, 2017 at 11:50 pm | Permalink

    Secretary of State for business, energy and industrial strategy Greg Clark MP was good on Question Time. So much daftness from the panel and the audience he hardly had time to answer. How we have all go poorer in the last ten years is a mystery to me at least. It must be all the traffic jams of horse-drawn vehicles I should have noticed.

  47. hans chr iversen
    Posted November 24, 2017 at 6:31 am | Permalink

    but all in all very disappointing figures for the UK economy going forward compared to the rest of Europe and still less real wages than before the crash a very low outcome and converning

    • lp
      Posted November 24, 2017 at 8:57 am | Permalink

      Keep printing those euros.

    • libertarian
      Posted November 24, 2017 at 5:21 pm | Permalink

      hans

      They aren’t figures they’re projections or guesses as we normally refer to such things, and so far the people doing the guessing have been consistently wrong. Wages are RISING in the UK, this constant statistical manipulation to confirm political points of view is now a complete nonsense . Average UK weekly wage 2007 £400 average UK weekly wage now £520 , what has caused problems is the cost of government

      • Rien Huizer
        Posted November 27, 2017 at 1:21 pm | Permalink

        Is that nominal or real or are you not sure?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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