“What if there is a run on the pound?” asks Labour in the unlikely event of a Corbyn led government?

It was a moment of honesty from John Mc Donnell reminding us of Labour’s struggle to get elected to government in the 1980s and 1990s. Post war Labour governments in 1945, 1964 and 1974 all suffered badly from market dislike of their high spending high borrowing policies, which led to sterling crises in each case.  It is etched on the memory of older Labour figures that market disciplines have previously prevented socialist policies being followed, and have created political tensions within Labour governments to be followed by loss of office as electors lose confidence in their ability to manage the economy.

The first two Labour governments inherited and kept a system of managed exchange rates. They were forced to devalue the rate. In 1949 Labour devalued the pound by 30% against the dollar, taking it down from $4.03 to $2.80. In 1967 Labour devalued the pound again, from $2.80 to $2.40, a fall of 14%. In 1974 they inherited a floating pound. Over their five years in office they allowed it to float down from $2.30 to $2.08, a fall of 10%. In 1976 there was a sterling and payments crisis leading to a visit to borrow money from the IMF to stabilise the pound and the financial position. This crisis sealed the fate of the Labour government which lost power for a generation. Only the John Major  decision to join the damaging European Exchange Rate Mechanism and its economic impact changed the electoral position back in their favour.

The Blair government came to office in 1997 determined to avoid a fourth devaluation and sterling crisis for post war Labour governments. They adopted Conservative spending and borrowing plans, and spent the first few years moving the accounts into surplus. The economy continued to perform well. Labour then decided to make substantial increases in public spending, to increase public borrowing and to follow a very accommodating money policy which allowed large debt build ups. The end result was a bad  recession and banking crash. Over their time in office with a floating pound there was a modest devaluation of 11%. This crisis is likely to keep Labour out of office for a considerable time period.

In total Labour spent around 30 years in office and presided over the bulk  of the fall of 64% that occurred in the sterling/dollar rate between 1945 and 2015.

In government the Conservatives kept the fixed rate of $2.80 throughout their period in office from 1951 to 1964. In 1970 to 1974 with a floating pound the Conservatives presided over a 4% fall against the dollar. Between 1979 and 1997 with a floating pound there was a 22% decline.  This included the Exchange Rate Mechanism fiasco which damaged the currency value and much else in the economy and led directly to the loss of office by the Conservatives.  It  kept them out of office until Labour presided over a worse economic crisis. Over  the Coalition years 2010-2015 there was no change in the pound. If you average the rate of fall to an annual figure under Conservative governments the devaluation has been at a rate of 0.6% and under Labour at 2.2%. The Conservative devaluation was largely  the result of the ERM disaster. a single policy error not to be repeated.

Floating rate policies are better than fixed rate policies. They give countries a bit more financial leeway. They do not, however, exempt a country from all the disciplines of the market. Mr Mc Donnell is right to worry about the market constraints on policies. The sorry history of Labour devaluations are a reason why I think a Labour win at the next election is unlikely. The constant resort to devaluation to deal with the consequences of the spending and borrowing policies shows the inherent tensions in their policy mix.

I have charted the pound in relation to the dollar as this has been the crucial rate throughout the period, with the devaluations formally expressed in terms of the sterling/dollar rate. The pound has also fallen against the DM and  Swiss franc. Since its creation the Euro has had periods of both strength and weakness against the pound.

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  1. Sir Joe Soap
    Posted January 3, 2018 at 5:35 am | Permalink

    A good potted history but the inflation story and the interest rate story need to be told alongside. The lesson of Labour is equally poor on those, of course. The problem is that the younger generation have no experience of these two; right now they are inconvenienced slightly by higher costs of foreign holidays and some imported products, but the effect is minor.
    Labour borrowing and current account spending will be the harbinger of far higher inflation. BOE independence will be thrown out of the window to keep interest rates low for borrowers, and of course lead to a run on the Pound. That is what McDonnell worries about. They’ll try a number of tricks to avoid a crisis, but a crisis of confidence in Sterling there will be.

    • Lifelogic.
      Posted January 3, 2018 at 9:00 am | Permalink

      Indeed, a crisis of confidence in Stirling and indeed in business and the economy in general. Money will be leaving the country rapidly before Corbyn confiscates it to throw it down the drain.

      The threat of Corbyn is already doing harm, but then so are the daft socialist policies of “tax until the pips squeak” Hammond and May. They after all are essentially Tax borrow and waste, pc, green crap, anti gig economy socialists too. Government expenditure at well over 40% of gdp is way to high and most delivers little of any value. Add to that the damaging over regulation, May PC gender drivel attacks on employment and the litigation culture what chance has business got. Still it seems we will get more absurd wind, PV and the absurd HS2 and Hinkley.

      Meanwhile our sick joke NHS (and dire virtual state monopoly) have been told to delay pre-planned operations and routine outpatient appointments until the end of the month due to severe winter pressures. That should do wonders for UK productivity. The NHS can never work as currently structured and funded. When will someone have the courage to do something sensible?

      • Lifelogic
        Posted January 3, 2018 at 11:47 am | Permalink

        What wonderful value we get for the vast amount of tax we pay in for example the NHS.

        The NHS it seems is closing outpatients clinics for weeks, as well as cancelling around 50,000 planned operations. Just how much pain, misery and damage to the UK productivity does this actually cause? It must be hugely inefficient too. The dire, virtual monopoly NHS, free at the point of non treatment, incompetence and delay. This while destroying most far more efficient competition with free at the point of use.

        The wonders of top down, socialist state controlled monopolies – but no one dares to tackle it so the sick joke continues.

        Crisis what crisis – no crisis here? This seems to be the government and NHS response!

        • Sir Joe Soap
          Posted January 3, 2018 at 7:00 pm | Permalink

          Didn’t you realise, Sir, that you have to pay twice for everything in the UK?
          Up to Secondary Education, pay tax then pay again for non-doctrinal private education
          Health, pay for the NHS then again to get treated
          University, pay once through a loan then again through higher rate tax

          Pensions is the exception. There you pay thrice now. First through NI, then through some stupid NEST scheme which will come to nothing then thirdly through your own proper SIPP, SSAS.

          • Lifelogic
            Posted January 4, 2018 at 2:50 pm | Permalink

            Indeed. Except health is also three times (if you take insurance) with IPT tax now at the absurd 12% level thanks to Hammond.

            The policy should be to encourage more people to go privately, given how overloaded and hopeless the NHS can be.

    • Paul
      Posted January 3, 2018 at 11:12 am | Permalink

      I don’t agree ; given the accuracy of the last two exit polls against expectation, the pound will collapse either at the point of the exit poll showing Labour are going to form the next government (especially if by some freak an overall majority) or at the latest on the first “Sunderland” result.

      Either way, the pound will have collapsed and vast sums left the country by the time the sun comes up.

      If the result looks a “dead cert” as in 1997 (say), then it will be gone long before the election.

  2. Peter Wood
    Posted January 3, 2018 at 6:21 am | Permalink

    Good morning,
    It is self-admitted that a Corbyn/ McDonnell government would mean a return to socialist policies not seen since 1940s/1950s. They have stated they want to carryout large scale re-nationalisations. Corbyn is an old-school communist and clearly knows he has a limited time remaining to fulfill his dream. What then, has he been promising the EU, in these private meetings with Barnier, to help him bring down the May government and to install him at No. 10?

    • Ian Wragg
      Posted January 3, 2018 at 8:43 am | Permalink

      I think Barnier is more likely to prop up May rather than Corbyn.
      Continental investment in the UK is enormous and I’m sure that the likes of RWE and EDF will be lobbying like crazy to keep Corbyn out.
      Corby may be the catalyst for a good deal to ensure a Tory win at the next election.
      Many governments are getting a bit fed up of the EU negotiations and intransigence shown by Barnier and company.

      • Peter Wood
        Posted January 3, 2018 at 10:19 am | Permalink

        I sincerely hope you are correct. You indicate there is a common sense approach to these ‘negotiations’ which up to now appears lacking. Lets hope the new year brings that constructive attitude. Why would we help with the security of our neighbours if they seek to harm us?

      • Lifelogic
        Posted January 3, 2018 at 10:21 am | Permalink

        The Tories just need to move back to being real low tax, small government Tories. Some vision and a leader who has actually worked in private industry and know what the real world of making money is like. Not a Corbyn warm up act like soft socialist May. Or her sidekick Hammond. The pension pot, landlord and tenant, house mover and IHT tax mugger Hammond.

      • stred
        Posted January 3, 2018 at 10:35 am | Permalink

        Barnier sees his job as to keep the UK paying into the EU and not to look after business. He lied about us having to leave Euratom when non- EU countries are part of it and it is not part of the Commission. He lies about any threat he can make up in order to keep us in and collaborates with the British Europhiles in politics and the civil service. He meets with Lord Mandleson, Clarke, Clegg and other collaborators inorder to plan their strategy to reverse the democratic vote. He would not care if the UK went Marxist, providing we pay.

      • NorthbyEast
        Posted January 3, 2018 at 11:02 am | Permalink

        Thing is EU people are getting fed up of the whole thing and will probably be only too happy to pull the plug and cast us adrift in March 2019..after all they have their own lives to get on with as well

        • Roy Grainger
          Posted January 3, 2018 at 5:47 pm | Permalink

          You’ve made that up haven’t you ? I bet you don’t know a single person in any EU country.

      • Northbyeast
        Posted January 3, 2018 at 11:40 am | Permalink

        Ian..the EU set are getting fed up with the whole thing and are likely to cast us adrift in March 2019..so we’ll be outta there gaster than we expect..its whst we voted for..so no need to give Barnier another thought9

  3. formula57
    Posted January 3, 2018 at 6:40 am | Permalink

    A run on the pound is improbable now markets have learnt from Lord Heseltine that a Corbyn government would be good for Britain.

    I query the extent to which voters at the next election will have in mind past devaluations. Near universal dissatisfaction with whatever Brexit arrangements are finally struck is likely to eclipse considerations about past economic policy failures. (Obviously, Mrs. May’s key task now is to remain in office just long enough to take the blame.)

  4. Fedupsoutherner
    Posted January 3, 2018 at 7:29 am | Permalink

    I would not want Labour back in government by choice but if it resulted in what many of us feel is a true Conservative government again then I would welcome it. When Labour are in power it always ends in disaster with the unions having too much say but most damaging for me was the period with that idiot Major. My husband lost his job and we lost our house and eventually our marriage ended. Politicians must think through their economic policies more carefully if they are to avoid ruining lives. Let’s see some true Conservative values once again.

    • Lifelogic.
      Posted January 3, 2018 at 9:12 am | Permalink

      Indeed I agree fully about John Major and his entirely predictable ERM fiasco which caused vast damage all entirely pointlessly. If you appoint people who left school without even a maths O level to be chancellor and PM then what do you expect? The pathetic Man failed even to apologise or change and took over the cliff for many terms. Indeed we have not had a real Tory party since.

      The do not need to think much. We know what help the economy boom just reduce the size of government, lower taxes, deregulate, kill the litigation rackets and get the government out of the damn way.

      • Dennis Zoff
        Posted January 3, 2018 at 10:42 am | Permalink

        Not strictly true. Major did additionally study for three more O levels which included Mathmatics and Economics and with these additional high academic credentials he went on to excel in……I am lost at this point?

        • Lifelogic
          Posted January 4, 2018 at 2:54 pm | Permalink

          Burying the Tory party for many, many terms and talking drivel often on the BBC as one of their tame “experts” (without any sensible questioning of him or his record of course).

          • Dennis Zoff
            Posted January 7, 2018 at 1:20 am | Permalink

            That will do for starters….thank you

    • Paul
      Posted January 3, 2018 at 11:17 am | Permalink

      I know what you mean. The concept of a ‘real socialist’ Labour government is quite tempting, all those smug liberals and lefties who think it will be some sort of panacea because they aren’t old enough to remember what it was actually like (I am, just) and have been brainwashed into blaming everything on Margaret Thatcher.

      The idea of actual austerity hitting them full in the face is quite tempting. At the moment they think ‘austerity’ is not being able to buy the latest iPhone and having to do with last years model.

      The problem is that a Corbyn government could do such a colossal amount of damage even if it only lasted six months ; it might take a vast amount of time to repair the damage,

      • rose
        Posted January 3, 2018 at 11:57 pm | Permalink

        Look at the horrifying damage the Blair/Brown governments did and from which we are still suffering. Once they got in, it was very hard to get them out as they packed all the institutions with their people.

    • Helen Smith
      Posted January 3, 2018 at 3:20 pm | Permalink

      It’s awful that you suffered personal and real loss because of an idealogical policy.

      If I remember rightly some committed suicide such was their despair at the awfulness of their circumstances due entirely to the ERM, and Major’s stubborn, face saving refusal to slash interest rates immediately after we were chucked out.

      How this man has the brass neck to lecture us on the wonders of the EU heaven only knows, and that goes for Clarke, Blair and all the others who claimed a disaster awaited us if we didn’t join the Euro, funnily enough the same disasters they say will await us if we leave the EU/Single Market/Customs Union.

    • rose
      Posted January 4, 2018 at 12:01 am | Permalink

      Our neighbour went bankrupt because of Major and voted Labour next time, never having done it before. I wonder how many others did it for similar reasons.

  5. Mark B
    Posted January 3, 2018 at 7:29 am | Permalink

    Good morning

    I think it is fair to say that a measure of a nations prosperity and standing in the world can be gauged by the value of its currency. As our manufacturing strength and output diminishes so to does the need for world markets need to by and hold Pound’s Sterling. With economic policies set to reduce this further I can see the pound continuing to fall irrespective of who is in power. Even a Conservative government between 1979 – 1997 could not stop it.

    As the pound falls basic things like food and fuel shall become evermore expensive. People will become more and more poorer. This will only play into Labour’s hands as the Socialists look for an ever larger body of people to tap into who are increasingly being disadvantaged through capitalism. I foresee a time when the Conservative party will, just like the Lib Dems become a minority and we have perpetual Labour governments. And this will be within my lifetime.

    • Lifelogic.
      Posted January 3, 2018 at 9:36 am | Permalink

      The government could certainly stop the currency devaluing but they choose not to. It suit them to devalue the currency as, in effect, it is another way to tax people. You just print more money for the government to waste. Also it devalues people’s savings and the large government debt. Devaluation (gradual) of the currency is a clear government policy.

  6. Richard1
    Posted January 3, 2018 at 7:40 am | Permalink

    An excellent summary. The threat of a Corbyn-McDonnell Govt is surely the dark pall hanging over the U.K. economy. Without this – irrespective of Brexit – confidence and investment levels would be much better. I have spoken to numerous EU citizens doing highly paid jobs in London. Generally they don’t like Brexit, but they take a wait and see attitude. But all have said if Corbyn gets in they are off. (note to leftists, who at the time of the 2015 election were saying good riddance to ‘bankers’ who didn’t like the idea of Labour taxes: that means they take their spending power, much of their discretionary investment and of course their taxes elsewhere). This is particularly true of French who have experienced Corbyn type policies under Mitterrand later Hollande.

  7. Roy Grainger
    Posted January 3, 2018 at 7:44 am | Permalink

    You have not mentioned another related policy to control the value of the £ which goes with devaluation and that is exchange controls. I am old enough to remember when you were only allowed a limited amount of foreign currency when you went on holiday abroad and restrictions were applied to all currency exchanges and money transfers by companies too. In the event of a serious run on the pound under a Labour government it is clear they would implement these controls again – this would have a big negative impact on the City financial services industry in particular and our multi-national companies in general. It is strange that Labour profess to be so keen to protect industry from the imagined perils of Brexit as they see them but have policies which would have a major negative impact anyway.

    There also seems to be a dichotomy in the thinking of some Labour and Liberal politicians who on the one hand want unrestricted freedom of movement of people but also want restricted freedom of movement of capital- the two are linked.

    • agricola
      Posted January 3, 2018 at 10:00 am | Permalink

      Last time, exchange controls were a farce. One deceased friend used to fly to a Britsh Overseas territory with as much legal money as he wished. He then went on to the USA to follow the CanAm race season. Equally you could take as much UK currency on a cruise that started and finished in the UK. You then deposited what you might need for future overseas trips in a bank at a port of call. Equally you could buy futures in copper and sell the certificate wherever , leaving the capital in an overseas bank. Such schemes by naïve government only affect the little people going for a week in Benidorm.

    • alan jutson
      Posted January 3, 2018 at 6:16 pm | Permalink


      Yes I remember the Harold Wilson (I think at the time) Government limit of £25 cash each for spending abroad when you went on holiday.
      Problem for the Government was no one was searched, and nowadays you can use a Credit and Debit card, as well as other means !.

  8. Sakara Gold
    Posted January 3, 2018 at 8:05 am | Permalink

    Which just goes to prove that devaluations only provide a short term fix. Simplistic revisionist histories such as this are unhelpful when trying to devise an economic strategy to solve the twin deficits and lift people out of poverty.

    London seems inundated with the homeless – again – why does this always happen under a Conservative administration? Having to step over rough sleepers at Victoria station each morning on the way to the office is so depressing.

    Unless this administration shows a caring side I fear a Marxist government may indeed take office after the next election.

    Reply The government is actively tackling rough sleeper problems, and there were plenty of homeless under Labour.

    • sm
      Posted January 3, 2018 at 8:38 am | Permalink

      There are thousands sleeping on the streets in other major European cities – since they don’t ‘suffer’ from a UK Conservative administration, to what do you attribute the cause?

      • ian wragg
        Posted January 3, 2018 at 10:59 am | Permalink

        Precisely if you have been to Rome or Lisbon recently too name but a couple.
        Gone are the North Africans selling dodgy sunglasses, now it suited and booted local business men doing it. Europe is a mess and every year we go it gets worse. You can’t blame May for that but you can blame Brussels.

        • alan jutson
          Posted January 3, 2018 at 6:21 pm | Permalink


          Just take a look around all of the EU Ports with Direct routes to the UK and you will see tent cities on the outskirts of them all.

          The Jungle in Calais was just the tip of the iceberg.

          If you let thousands of people in with no money or jobs, then what do you expect them to d when housing sin short supply.

          I see it is reported in todays press that the Royal Navy rescued over 16,000 so called “refugees” last year from the high seas, and transported all of them to the nearest EU Port !!!
          Thus encouraging more to try.

          • rose
            Posted January 4, 2018 at 12:06 am | Permalink

            The difference between us and the continent in this respect is that there the newcomers are sleeping in the streets, but here they are housed, while our single young men, including 7,000 soldiers, sleep out. Eastern Europeans, too, sleep on the streets, but not people from other continents. This is one more magnet factor.

    • agricola
      Posted January 3, 2018 at 9:51 am | Permalink

      When talking of rough sleepers can we define it by nationality , occupation, and time spent in the UK. I know there are those ex military and mentally scarred that our social system has let down, but to do anything effective about the problem you first have to know what it is.

    • fedupsoutherner
      Posted January 3, 2018 at 11:09 am | Permalink

      Sakara, of course there are homeless people. Hadn’t you noticed we have a housing problem in this country? Too many people and not enough homes. Where do you suggest putting all these people? You cannot just magic houses out of thin air. How are we to cope with more immigration if we cannot cope now? Somehow the issue of immigration never gets mentioned when talking about the housing crisis but it must surely be a part of the problem. It has nothing to do with which political party is in at the time.

      • rose
        Posted January 4, 2018 at 9:52 pm | Permalink

        Except that when we last had something approaching a real Conservative government, annual immigration was between 10 and 30 thousand. The non-conservative governments which succeeded that one have raised the numbers to getting on for a million a year if you go by the NI numbers given out rather than the unreliable ONS ones. And now they want to fiddle the munbers further by excluding foreign students.

        Looked at realistically rather than politically, that is 40 cities which haven’t been built over my lifetime but should have been if the standard of living were not to go down. And where could they have been built?

  9. Anonymous
    Posted January 3, 2018 at 8:08 am | Permalink

    I wouldn’t bet on a no Jeremy Corbyn government.

    We’ve never had so many students. We’ve never had so many students indoctrinated in Marxism.

    We’ve never had so many people who are tired of voting Tory to keep a worse option out.

    • Anonymous
      Posted January 3, 2018 at 8:09 am | Permalink

      Double-voting students at that.

      • Lifelogic.
        Posted January 3, 2018 at 9:16 am | Permalink

        Voting fraud and postal voting fraud certainly needs sorting out as do the boundaries. But then May threw away her majority with an absurd manifesto and a robotic, high tax, socialist and totally visionless agenda.

      • a-tracy
        Posted January 3, 2018 at 9:25 am | Permalink

        Silly students who had already taken on the tuition fee debt that he wasn’t going to pay off for them who would then have generations of students following them with no 9% graduate tax following them who would then be cheaper to employ. And they call them the intelligent ones!!!

        • Tom
          Posted January 3, 2018 at 5:45 pm | Permalink

          Most of the degrees they are sitting are fairly worthless even about half the Oxbridge and Russell Group ones are highly dubious. The sort of things you could pick up by reading a few book on your commute to and from work for nothing. Or the sort of thinks that are pointless anyway. Certainly most (outside a few STEM and professional subject are worth the £50K of debt ( plus no earning for three + years).

          Surely some students are clever enough to see that.

          • Lifelogic
            Posted January 4, 2018 at 4:18 am | Permalink

            not worth – I meant

          • a-tracy
            Posted January 4, 2018 at 5:38 pm | Permalink

            There are many jobs now that require degrees that aren’t available without this investment.

    • DaveM
      Posted January 3, 2018 at 3:05 pm | Permalink

      And indeed voting for what they think is a Conservative government and ending up with Lib Dems.

    • Helen Smith
      Posted January 3, 2018 at 4:35 pm | Permalink

      We have never had so many students voting twice

    • Dorothea
      Posted January 3, 2018 at 5:10 pm | Permalink

      But the Corbyn youth will be 4 years older and wiser by the election, and might have grasped that they would be voting for the Few ( McClusky, Macdonald and other ideologues) at the expense of the Many. Incidentally – who gains from rail nationalisation? – not the Many up north where most of us don’t use trains from one year to the other, unlike the subsidised commuting Few in the south east.

  10. alan jutson
    Posted January 3, 2018 at 8:15 am | Permalink

    What a diabolical record, no matter who is in office they have usually increased the Nations Debt, and devalued Sterling in comparison to the other Worlds main currencies.

    I understand we needed to borrow to finance Two World wars, but this really does show poor financial management and choices over decades.

    Sounds like you are saying Vote Conservative and your savings and debt will be less than the others.
    Not really a positive message John is it.

    • Rien Huizer
      Posted January 3, 2018 at 8:54 am | Permalink

      You can look it up. Plenty of those around, look at the BoE website.

      • Rien Huizer
        Posted January 3, 2018 at 9:02 am | Permalink

        Reply misplaced, pse disregard.

  11. Ian Russell
    Posted January 3, 2018 at 8:23 am | Permalink

    Are you able to make your GBP V USD chart available or is it an exercise for the reader?

  12. Rien Huizer
    Posted January 3, 2018 at 8:51 am | Permalink

    A “run on the pound” (“ROP”) would only happen if several circumstances combined. Not necessarily if there were a normal roration of governing parties as is essential for a two party system. Otherwise one would have the Japanese situation where real politics would only occur inside the ruling party (The Conservative Party has a bit of that now, despite the fact that they are not a traditional ruling party now),

    It is the task of the independent central bank (in the UK strangely known as the Bank of England, as if the rest did not count) to avoid/manage if unavoidable monetary disorder. A ROP would be disorder, a large, but not uncontrollable fluctuation would not. BoE signals FX ranges that it feels OK with and the current rate is within that rate.

    One must keep in mind that interest rates are very low. Applying the Taylor rule (maybe too technical here) would result in around 5%. Of course such a large gap make one wonder about the relevance of the rule, but the components of the rule signal a much higher rate than applicable today: inflation over 2%, a negative real rate of interest, very small output gap, etc. The UK is not unique in this and in fact, to return to your short essay, moving to , say 5% within a year and announcing that as policy would no doubt create upward pressure on the pound, barring unfavourable expectations over a certain magnitude.

    Would the Bank be able to control a runaway pound in the case of an ultra hard brexit, without transition and with open conflict of the UK’s outstanding obligations, followed by chaotic labour markets as a consequence of the mass emigration of foreign car makers etc plus stress on the housing market if the BoE would be believed to be ready to increase rates rapidly and that again followed by a crisis in confidence leading to a Corbyn government? I do not know and I guess no one knows. It is a situation to be avoided but to scary to present to the general public and of course, “merely a contingency”.

    • Prigger and his dog
      Posted January 4, 2018 at 12:57 am | Permalink

      “”A “run on the pound” (“ROP”) would only happen if several circumstances combined. “”
      Excuse me, but a Corbyn electoral win with his own choice of Cabinet would be ONE thing which would do more than give “a run on the Pound” No-one with a brain would keep his money here.
      “normal rotation of governing parties” is fine if the parties are both relatively sane.
      Yes I know, it is always fashionable to say of the opposing Party “They are not fit to govern”. But Labour actually are not fit to govern with Corbyn at the helm. If 100% of the British electorate thought Corbyn was wonderful, no-one in the world would who had a penny in his pocket and wished to keep it safe. No I’m not really exaggerating. His economic theories are schoolbook marxism. Plain silly.

      • Rien Huizer
        Posted January 4, 2018 at 3:40 pm | Permalink

        There are institutional barriers to crazy policies. I do not believe Labour would be able to ride all those stale hobby horses. And of course the independent BoE would respond as it is supposed to: avoid large demand shocks. Furthermore there is of course the rule of law aspect. And finally, the UK does not live in a vacuum. All in all, I think that the capacity to apply marxist economic ideas is very limited. As the current government is finding out too, incidentally. As to more socially relevant socialist policies, that might be easier. Rahter than nationalizising certain industries (where would the money come from to compensate the current owners? The UK is already heavily indebted at (then over) 90% of GDP (JR does not agree, but that is the figure in accordance with international gvt accounting principles)

        In fact, the brilliance of the current Tory government is that whoever succeeds it (Brexit Ultras or Marxists) is going to find that the place is booby trapped and it will take lots of “undemocratic” measures to undo that.So the gvt is very safe for the time being.

  13. jerry
    Posted January 3, 2018 at 9:07 am | Permalink

    Very strange, but no surprise, that whilst Mr Redwood’s post is full of figures that support his views he has not placed anything into the historical context of the day, for example not once does he mention the early 1970s international oil crisis, and how such events affected the economy, & not just here in the UK, the USA was plunged into a massive recession.

    • Mitchel
      Posted January 3, 2018 at 10:08 am | Permalink

      Didn’t we also enjoy a brief respite from devaluation when sterling became a petrocurrency for a while when North Sea oil came on stream in the late 70s/early 80s?

    • Richard1
      Posted January 3, 2018 at 10:56 am | Permalink

      He has written about how Labour governments always cause sterling weakness due to loss of market confidence at left wing policies. It shouldn’t be a great surprise as we see the same effect wherever and whenever such policies are implemented elsewhere. Venezuela is a good current example. Nothing you have written in any way answers this.

      • jerry
        Posted January 3, 2018 at 5:18 pm | Permalink

        @Richard1 (plus Wragg and Libby); That is an opinion not a historical fact!

        There is always much talk from the right-wing about how the Labour party wrecks the economy but little mention of the 1967 Oil Embargo, the oil crisis of 1973 and then 1979. All that before we consider the effects of the world wide stock market crash of 1973–74, beginning 11 Jan 1973. But some in the UK find it easy to blame everything on UK Labour govts – Even the 2007 UK banking criss has its roots in the deregulation of the 1980s, and I do not remember many in the Conservative party wanting more regulation between 1997 and 2007, most were calling for even less. Hansard being the judge.

        The full effects of the 1973 oil crisis for example, oil price rocketing from $3 to $12 pb by March ’74, were felt in all the affected Western economies during the rest of the decade (one of the reasons why Jimmy Carter replaced an otherwise popular Gerald Ford in the White house in ’77. Nor was it solely about price, availability was an issue, here in the UK surely people such as @libertarian (and our host) remembers when the Heath’s govt. was forced to issue petrol ration books in late 1973 in case the oil crisis deepen further – hardly a nation “not being affected”…

        • Richard1
          Posted January 4, 2018 at 11:04 pm | Permalink

          I’ll just take one point: the crash and great recession had a number of causes, but if you had to put your finger on one thing it was the increase in leverage in the banking system, which in the UK went from c 20x, where it had been for a couple of decades to c 50x under Labour, due to monetary policy, incompetent and muddled regulation, and of course incompetence and negligence by banks’ managements. When the system collapsed the govt was in the position of having a budget deficit of c 5% even at the peak of a credit induced boom (not counting all the off balance sheet stuff). That’s why we have been hit as hard as we have. It wasn’t only Gordon Brown and Labour, but they were certainly a major contributory factor.

          • jerry
            Posted January 5, 2018 at 10:35 pm | Permalink

            @Richard1; What is it about the hard right and historical facts, next you’ll be disputing who the kings and queens of Great Britain were if you thought you could make political capital out of doing so…

            You can not take any single point, I posted the historical facts, nor does anything exist in a vacuum, not even Thatcherism [1]. Sure Gordon Brown and ‘New Labour’ made mistakes, but had the biggest mistake of all not been made -deregulations during the 1980s- it is very unlikely (if not impossible) for the problems that followed to have occurred.

            [1] had the events I outlined not happened we might never have had the IMF crisis, nor the Winter of discontent, meaning that the Conservatives would not have won the 1979 general election.

    • ian wragg
      Posted January 3, 2018 at 11:10 am | Permalink

      I don’t see the relevance Jerry, the oil crisis put the whole world into recession but in some ways it was engineered by the west. We and several more countries were sitting on billions of barrels of oils and gas which required about I think $12 pbbl to extract.
      Saudi oil cost less than $2 pbbl to extract so was profitable at $6 per barrel.
      When the Saudis refused to roll over the petro dollars at a miserly interest and increased the oil price, viola, North Sea oil was viable and the demise of OPEC started.
      As someone who worked in the Middle East for over 20 years it was an education to see Western governments playing the Arabs.

    • libertarian
      Posted January 3, 2018 at 3:11 pm | Permalink


      Well why dont you tell us exactly how the early 1970’s oil crisis ( OPEC embargo) affected the UK economy . The USA did indeed have a massive problem but the UK was almost totally exempted from the embargo

  14. Daniel Chilvers
    Posted January 3, 2018 at 9:36 am | Permalink

    A good summary of British foreign exchange history. I think however John is being complacent in his belief that past economic mismanagement by Labour governments is enough to prevent another socialist government being elected.

    Conservatives need to start making a positive case for sound fiscal policy, free markets and low taxation. Hoping millions voters refer to historic foreign exchange events before casting their vote at the next election is wishful thinking and will, in all possibility lead to a Socialist government.

    • Paul
      Posted January 3, 2018 at 11:23 am | Permalink

      Absolutely. I’m 54. If you are younger than me, you probably won’t remember anything of the last real attempts at socialism ; ten years younger and you won’t remember the miners strike with all the added thuggery.

      These people seem to genuinely think under the Labour governments of the 1970s it was some sort of utopia, and that Mrs T somehow conned her way into government and destroyed a wonderful society out of sheer spite.

      I remember mass strikes and violence and near dead people being dragged into the lobbies to prop the government up, as well as going to the IMF for money.

      • rose
        Posted January 4, 2018 at 12:12 am | Permalink

        I remember pickets on the cancer wards, the dead being left unburied, and rubbish piling up in the streets. I also had to go down several flights of stairs into the street at one point to fetch water from a standpipe, and there were of course the power cuts. How on earth would the Corbynista youth have managed? Candles, and no I phones.

      • Rien Huizer
        Posted January 4, 2018 at 3:43 pm | Permalink

        You are a spring chicken. I remember the 1970s as a time when the international banking community was wondering whether the British isles would still be there next month. Remember the cap in hand? Destructive unions, governments in denial etc.

    • jerry
      Posted January 3, 2018 at 8:02 pm | Permalink

      @Daniel Chilvers; “Conservatives need to start making a positive case for sound fiscal policy, free markets and low taxation.”

      No, what they need to start doing is actually listening to the Plebs, the Mr, Mrs & Ms Averages of A.N.Y. Other Street, they have had (so called) “sound fiscal policy, free markets and low taxation” for at least the last 26 of 39 years -give or take a few months, all they see now is poor public services, high transport costs, and to much indirect taxation and personal debt – if the GE of 2017 told us anything it is that ordinary people are sick and tired of the same-old-same-old, just as they had become tired of the post-war consensus in 1979.

  15. agricola
    Posted January 3, 2018 at 9:41 am | Permalink

    Labour have not yet worked out how to be concerned and act on behalf of disadvantaged citizens. One can only be philanthropic from a position of financial strength. Additionally they attempt to do too much without realising that any political programme can only be carried out via a successful economy. Labour distribute before they create, failing to learn the lessons of the past 70 years. Their excessive philanthropy can be morally debilitating.

    Additionally , among their following is a streak of spite, hypocrisy, and envy. At times they are given good reason for it, but rather than deal with specifics they make the mistake of treating all capitalism as evil and then act to the detriment of the economy. Among socialists are those who are only out for what they can get and go hang the masses they pretend to speak for. Condemning selective education for all but their offspring for instance. We see it in the transition from Tsar to Lenin, in trade union leadership, in selling remain to protect their fat EU pensions. As practiced it is a failed philosophy.

  16. hefner
    Posted January 3, 2018 at 10:08 am | Permalink

    For the relevant curve illustrating JR’s points,
    see miketodd.net. Exchange rate since 1940.

  17. Nig l
    Posted January 3, 2018 at 10:30 am | Permalink

    NHS cancelling all routine appointments because of a shortage of money whilst to elevate their sense of self importance and politicians, who all will go private so only the masses have to suffer, give umpteen billions in overseas aid.

    I was with a 94 year old man in a hospital who subsequently died, who was promised a single room which did not materialise, to ease that journey, by the Consultant who did not pass that message on to the nursing staff and then conveniently disappeared. One doctor over two floors to get medication to ease his discomfort and an open wound from a catheter, blood up his arm and the sheets, which took hours to get cleaned and dressed because of so few nursing staff.

    Worrying about a run on the pound? Smug rubbish!

    • Fedupsoutherner
      Posted January 3, 2018 at 10:47 pm | Permalink

      Its just as bad in Scotland. I was in recently on a surgical ward. There were six beds to the ward and five were taken up with old people who did not need medical care. They only needed care in the community. They needed help feeding and getting dressed but there was no support at home and no care homes for them. Foreign aid should be stopped. Its tax payers money and we can’t even deliver a quality health package for our own people.

  18. Posted January 3, 2018 at 10:37 am | Permalink

    Why is it accepted that the pound must always fall in this country?
    As far as I’m concerned, things won’t be right until we have four dollars to the pound as it was in my childhood. The days when people referred to half-a-crown (12½p) as half a dollar. Why should the US manage to keep a stable dollar which is used in many countries of the world in preference to their local currencies?
    All our politicians seem to have accepted that the pound will continually fall, which is a defeatist attitude.

    • Rien Huizer
      Posted January 3, 2018 at 9:54 pm | Permalink

      Is a strong pound a source of pride for you? Why?

    • rose
      Posted January 4, 2018 at 9:58 pm | Permalink

      If the Germans got their Deutschmark back they wouldn’t be able to do all that successful exporting they do at the moment with the shoddy little euro.

  19. Mike Wilson
    Posted January 3, 2018 at 10:45 am | Permalink

    I think that, on balance, neither the Tory nor Labour parties are much use in government. Would either of them ever get into power if we had a voting system where everyone’s vote actually counted?

  20. Jack snell
    Posted January 3, 2018 at 11:26 am | Permalink

    JR..You’re doing a lot of looking back and charting the dollar vs the pound etc and conflating it with the Labour party’s time in office but as a man of great knowledge of financial matters including the stock market you also know that the past can be no guarantee of future performance. Thing is there are many people in this country, especially young people, who would be very willing to give Labour a chance..and if these upcoming talks with Barnier prove to come to nought or very little, which a lot of us think will happen, then we are certainly going to see some sparks fly.

  21. Prigger
    Posted January 3, 2018 at 11:33 am | Permalink

    Professional politicians have to watch their words.Their attitude in a sense is”the customer is always right”. But the voter isn’t always right. The electorate in fishing ports voted repeatedly for candidates and parties which threw them out of work. Still do.
    Every voter over 65 years of age can well remember nationalised railways. It wasn’t a party-political thing. It was lousy! Far beyond the worst of now. Only a complete idiot would want that back…irrespective of whether you are left-wing, right-wing or a permanently confused and bewildered LibDem or Green person.
    Well I shall not do hard overtime persuading a traditional Labour voter not to twist his leg and foot round his body and bite his toenails. Every generation has to learn for itself. But afterwards they should blame their Grandparents for being neglectful in not explaining the birds and the bees to them…

  22. Denis Cooper
    Posted January 3, 2018 at 12:32 pm | Permalink

    By far my foremost concern is our withdrawal from the quasi-federal international treaty organisation known as the EU and from its restrictive Customs Union and Single Market, and from all those other EU laws and policies which in fact have little or nothing to do with our trade with those countries and merely serve to hamper us not assist us. I hope, and in fact I still expect, that this will all be achieved before I need to consider how to vote in the next general election. Not that I can imagine myself voting Labour, as I recall I have only ever done that once, when I was a callow youth … not that my vote made any difference in that constituency, which was in any case a Labour stronghold.

    • Jonp
      Posted January 3, 2018 at 7:38 pm | Permalink

      Denis..no need to be too concerned we’ll be out of there in a little over a year..march 29th 2019, thats for certain because despite talk about transition periods etc and new deals, thats all it is..just talk..the word from Brussels is the EU want us out ASAP and so all of our wishes will come through as we shall see soon enough with the resumption of talks. Barnier is a sharp guy, he has his orders and is going to walk all over DD and Mrs May, in particular first thing he is going to do is shoot down any talk about a financial services deal for London to be included..out is out..other things will become more clear after that. You will get your wish soon enough.

      • Denis Cooper
        Posted January 4, 2018 at 12:36 pm | Permalink

        Thank you for sharing your inside information from Brussels.

  23. Treacle
    Posted January 3, 2018 at 12:37 pm | Permalink

    But voters under 40 do not remember any of this. Today’s student voters are hazy about what Mrs Thatcher and Tony Blair did, and they have never heard of John Major. The case against socialism has to be made again from scratch every generation. People’s natural assumption is that governments have unlimited free money, and it is only meanness and wickedness that stops the “Tories” from spending it.

  24. Denis Cooper
    Posted January 3, 2018 at 12:50 pm | Permalink

    Here’s a mildly interesting off-topic snippet:


    “Merkel declares Europe top priority for new government”

    “German chancellor Angela Merkel declared Europe a top priority for a new government, when addressing the country in her annual televised new year speech. The “27 states in Europe must be persuaded more strongly than ever to stand united as a community,” she said, adding Germany’s “future is bound indivisibly with the future of Europe.” Berlin hopes to work with French president Emmanuel Macron to future-proof the EU, she said.”

    From her reported language it’s almost as if the UK’s membership of “Europe” has already been forgotten, or is seen as a thing of the distant past … I’m glad of that, the problem now is with those of our own people who still cannot accept that they lost the referendum and we are going to leave the EU and free ourselves from those of its entanglements which we find counter-productive and intolerable.

    It’s now eighteen months since the referendum, and this might be helpful to the minority of our fellow citizens who have been grieving over the result:


    “In general, the death and the person might not constantly be at the forefront of your mind after around 18 months,” says Sarah. This period may be shorter or longer for some people, which is normal.”

    That kind of 18 month period also seems to be significant for the start of recovery after a market has suffered a painful crash.

  25. Andy
    Posted January 3, 2018 at 12:54 pm | Permalink

    As the great Lord Heseltine wisely said, Corbyn will be less bad for Britain the Brexit.

    What he has neglected to say is how bad both Brexit and Corbyn are for the Tories.

    June 2017 was a lesson which you have failed to learn.

    Your supporters are, literally, dying out.

    Young people are not attracted to your hard-right party.

    Young people will not vote for you, bodies in boxes can not vote for you.

    The Tories are dying – and you think a discount railcard will help. Bless.

    Corbyn is all but unelectable. But your party is so bad you barely beat him.

    You have failed to learn from Cameron and Blair. You win from the centre.

    The hard-right has an attraction to pensioners, but few beyond.

    The path your party is on will not end well for you. Stay on it. Give me a laugh.

    • Edward2
      Posted January 3, 2018 at 6:56 pm | Permalink

      Ageism is as bad as any other discrimination against any other part of the whole community.
      Try to be a bit more PC Andy

    • Original Richard
      Posted January 4, 2018 at 9:03 pm | Permalink

      “Your supporters are, literally, dying out.”

      Andy, you make a mistake in assuming that people do not change for whom they vote as they get older and wiser.

  26. Lindsay McDougall
    Posted January 3, 2018 at 1:26 pm | Permalink

    The policy most likely to deliver power to Jeremy Corbyn is Conservative housing policy, driven by the Bank of England’s lunatic monetary policy and the ultra-low base rate. People who want to be owner occupiers and who can’t achieve their goal will not vote Tory.

    The Party is in deep trouble and action is needed NOW. Sack Carney, raise base rate and put a tourniquet on immigration NOW.

    • Chris
      Posted January 3, 2018 at 5:44 pm | Permalink

      Agree Lindsay. There are so many obvious things staring this Conservative government and Party in its face which they apparently refuse to countenance. Theresa May apparently blunders on, protected by a coterie of completely out of touch policy advisers.

    • Rien Huizer
      Posted January 3, 2018 at 9:57 pm | Permalink

      Maybe you should read some BoE publications that would help to understand why the BoE is doing what it does. They are definitely not lunatics.

  27. Denis Cooper
    Posted January 3, 2018 at 1:48 pm | Permalink

    JR, it is time these unpatriotic anti-democratic hypocritical Remoaners were beaten into the ground, humiliated and silenced, and especially before the Bill moves on to the Lords where they have a majority, and while the response from David Davis’s department may be perfectly accurate it is far too weak in dealing with them:


    “Brexit: Starmer to force vote on UK’s adoption of EU charter of rights”

    Just to remind ourselves that back in 2000 the Europe Minister Keith Vaz dismissed that EU charter as legally insignificant, comparable to the Beano or the Sun:


    But now apparently it is of fundamental constitutional importance in protecting the rights of UK citizens which our sovereign Parliament is either unwilling or unable to do:

    “Take, for example, the freestanding right to equality contained within article 21 of the charter,” she said. “There is no equivalent in domestic law. The Equality Act does not have constitutional status … “The government’s analysis doesn’t begin to deal with this acute loss of one of the most foundational rights in our democracy after we leave the EU.”

    If there was no other reason for leaving the EU, the quiet and unchallenged evolution of an EU document which was initially alleged to be worth no more than the Beano into one of the most important parts of our constitution would itself provide a good reason.

    • Denis Cooper
      Posted January 3, 2018 at 2:43 pm | Permalink

      What despicable liars these Remoaners are … somebody says “should”, but that is reported in a headline as “will”, not as “should”:


      and that “will” is then widely and uncritically circulated as if it was what the person actually said … they have zero integrity, the journalist, his editor, those who repeat it knowing full well that it is a lie … all that money spent on their upbringing and their education and they turn out as dregs, if they would clear off and go and live in their beloved EU then no doubt we could bear the loss.

      • Andy
        Posted January 3, 2018 at 6:41 pm | Permalink

        I’m a ‘Remoaner’. I’m not unpatriotic. I love my country. And I despise what you hard-right fools are doing to it.

        I’m also at least 20 years younger than you and know that whatever damage you do, my generation will have the opportunity to undo it when you are in your boxes.

        • Denis Cooper
          Posted January 4, 2018 at 12:08 pm | Permalink

          Which country would that be? The one called “Europe”?

          What a charmer you are. Apart from any other consideration that leads me to doubt that many of your contemporaries will be saying “Ooh, let’s do as Andy says and join the United States of Europe”.

        • Leslie Singleton
          Posted January 4, 2018 at 8:00 pm | Permalink

          Dearest Andy–Your assertions are just that; and though this will be totally lost on you, your reference to boxes is about as tasteless as could possibly be. You need to try harder to realise that there are whole bunches of people, what they call the majority, who totally disagree with you; also that we are not asking much–only to do what, sorry I forget the number (too big), hundreds of other countries do in relation to the EU and get by. Maybe you have an EU girlfriend or wife and want to keep her happy–I think that is par for the course and would at least make sense.

          • Denis Cooper
            Posted January 5, 2018 at 10:49 am | Permalink


      • Rien Huizer
        Posted January 3, 2018 at 10:03 pm | Permalink

        Why so angry about this. Mr Fox has an unenviable job: to promote trade and make new trade firends while no one knows what the future constraints on his activities will be nor when the UK will be ready to conclude those deals. In addition he appears to have few qualifications for this highly technical job.
        Americans have a term for that : “fall guy”

        • Denis Cooper
          Posted January 4, 2018 at 12:10 pm | Permalink

          It’s called “scoping”, and now is the time to do it, and probably Liam Fox is as good a person to do it as any other.

          • rose
            Posted January 4, 2018 at 10:05 pm | Permalink

            He is the right person because he wants to do it; he believes in it. That is rare in the government.

  28. ferdinand
    Posted January 3, 2018 at 2:03 pm | Permalink

    On top of that excellent history is the enormous movement in interest rates.
    Young people today hardly know what interest rates are for let alone the purposes for which they move or decisions reflect.

  29. Dunedin
    Posted January 3, 2018 at 2:56 pm | Permalink

    “the sorry history of Labour”… Unfortunately not a subject that will be taught in schools.
    The young generation are greatly enamoured by Mr Corbyn and his promises of a socialist nirvana. Those of us old enough to remember the Labour governments of the past need to keep reminding younger family members what it was really like in the 1960s and 70s.

    I am disturbed by the idea that some people would consider it worth voting for a Labour government so that a real Conservative government would follow to clear up the mess. This is dangerous thinking – John McDonnell would do a great deal of damage in 5 years, and lowering the voting age to 16 could keep Labour in power for longer than expected.

    • rose
      Posted January 4, 2018 at 10:07 pm | Permalink

      They could change the constitution in as many ways as Blair did, and pack the institutions even more than they already are.

      • rose
        Posted January 4, 2018 at 10:08 pm | Permalink

        And of course, like Blair, import voters by the million.

  30. mancunius
    Posted January 3, 2018 at 3:53 pm | Permalink

    I’m afraid the sorry history of Labour inflations is matched only by the even sorrier history of British electorates, oblivious of the past, imagining that ‘this time it will be different’, and voting in Labour ‘just for a change’.
    That Labour – even under Blair – would not change their spots was clear to me in 1997, and however much I disliked the not-very-Conservative government of Major, I despaired when Brown became Chancellor, and every year of ‘New’ Labour confirmed my suspicion that he was trying to create a massive state army to prop up his own political future.
    Corbyn is trying to push us back to the Dark Ages. And Dunedin’s point that lowering the voting age could guarantee a Labour majority is well-made. A Corbyn government could easily push that through Parliament, supported by ‘the right kind of mass demos’. And that’s even before we factor in the endemic, systematic voting fraud, the Commonwealth citizen vote, and Labour’s refusal to accept the electoral boundary reforms. As long as the mass of non- (also of non-net-) taxpayers are allowed to vote, common sense will fly out of the window.

  31. Right Wing Extremist
    Posted January 3, 2018 at 8:47 pm | Permalink

    Today BBC News news reporter interviewing by video link a journalist sitting in the USA Washington Pot Office
    “Do you believe the people STILL supporting Trump will ….etc”
    Trump has only been in office for one year. The ink is not yet dry on the ballot papers. Everyone is getting a tax reduction in week’s time 🙂
    Trump’s Awards are scheduled for Fake News at 5pm US time on Monday.
    Meanwhile, news media in America along with the Democratic Party are attempting to make the very words “Fake News” illegal.
    What Willy Wonka put the word democratic in the term Democratic Party?

  32. Walter
    Posted January 4, 2018 at 4:06 am | Permalink

    Heres whats going to happen..the EU won’t budge on UK’s insistence to cherry pick. The tory brexiteers won’t allow mrs May to make the concessions necessary that would be needed for agreement. The irish border problem will appear once again but Barnier will stand back. The DUP will crumble and we’re into a genetal election Corbyn will win by a landslide and some deal will be done whereby UK becomes part of the European Economic area..uk will have full access to the EU for goods and services but will have to accept EU rules including ECJ but have no say in their making..immigration into UK will continue as before..and taking back control will become just that..a fudge..the pound will fall against other currencies and that will be the end..at this point the chief brexiteers will take to the hills. Any bets?

    • Edward2
      Posted January 4, 2018 at 7:34 am | Permalink

      I can’t see the DUP refusing to vote with the Conservatives and forcing an election unless the government reneged on its agreement with the DUP. which seems very unlikely.

      As all your other predictions of doom are based on this happening I wouldn’t bet anything.

    • Denis Cooper
      Posted January 4, 2018 at 12:30 pm | Permalink

      “The irish border problem will appear once again … some deal will be done whereby UK becomes part of the European Economic area.”

      The UK is already part of the EEA, so you mean that there will be a deal to keep the UK in the EEA after it has left the EU; but as repeated here ad nauseam that in itself would not solve the Irish border problem as it has been reformulated by the new Irish government, because those EEA members which are not in the EU are not in the EU’s Customs Union, and so for example there are customs checks on goods which cross the border between Norway and Sweden. They are light touch controls away from the actual border, but that would not be good enough for the Irish government which has adopted an extreme, absurd and intransigent position by declaring that there can be nothing whatsoever which would imply that there is a border between north and south.

  33. Original Richard
    Posted January 4, 2018 at 4:08 am | Permalink

    All politicians desire to get into power and remain in power as long as possible.

    Labour say they are the party for the poor, the unemployed and the illiterate.

    So a Labour government will always try to increase their share of the vote and remain in power by increasing poverty, unemployment and illiteracy.

    Once this is understood all Labour policies become transparent.

    For instance, Mr. McDonnell would actually want there to be a run on the pound if he thought that this would make the UK poorer.

    • Denis Cooper
      Posted January 4, 2018 at 12:19 pm | Permalink

      “Once this is understood all Labour policies become transparent.”

      Well, I was delivering leaflets in a “deprived” area of Reading when it suddenly struck me that the poor state of the place was not some accident or inevitable problem, it was what the Labour-run council and the two Labour MPs at that time really wanted to maintain their support base.

      • Original Richard
        Posted January 4, 2018 at 8:58 pm | Permalink

        I first recognised labour’s plan back in the late 1960s when I was living in Wembley and saw an incoming Labour administration demolish roads of well kept detached houses, rather than poor slum housing elsewhere, to replace them with the now infamous Chalkhill Estate and thus guarantee such a large influx of Labour voters that the Conservatives never had a chance ever again in that area.

      • rose
        Posted January 4, 2018 at 10:23 pm | Permalink

        Come and look at Bristol, the Red Citadel of Remainia. It is the Mayor and Council’s policy to shut or run down not very expensive things like libraries, parks, WCs and playgrounds, in order to rile the electorate against the wicked tory cuts. And the state of the pavements and the roads!

        Corbyn visits regularly to cheer the policy on.

  34. Peter Martin
    Posted January 4, 2018 at 8:57 am | Permalink

    ‘The higher the better’ as an exchange rate policy for the pound may be good for UK retirees in Spain but it isn’t good for UK manufacturing industry.

    Incidentally the pound reached an all time low against the dollar of $1.05 in February 1985 when Mrs Thatchers had been in government for six years. It was the right thing to have done. To have gone to the IMF for a loan would have been a mistake. Just as it was a mistake in 1976 when Labour tried to keep it above $2.00.

    Hardly anyone remembers that $1.05 now but they do remember, or have heard of, IMF loans.

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    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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