Austerity economics comes directly from EU policy and the Maastricht requirements

Sometimes important things are hidden in plain sight. The contentious requirements of getting the Uk budget deficit down below 3%, and getting state debt to fall as a percentage of GDP which have guided policy since the crash under Labour, Coalition and Conservative governments were made in Brussels. I supported the Labour and Coalition governments from 2009 saying annual borrowing was too high and needed curbing to avoid a crisis of confidence in the UK as a borrower, but have not agreed in recent years with the anti growth stance that the Maastricht state debt rules has encouraged in much Establishment thinking. These rules have been the background to low and no growth in several countries on the continent and to mass unemployment in much of the south and west of the Euro area. In the Euro area countries are threatened with fines if they do not comply.

Once a year the UK has a Parliamentary debate around a Treasury Statement on how we have got on in complying with the Masastricht rules. In the last three years the government has been able to report they are below the annual deficit ceiling, but have not until recently started the bigger task of getting state debt down to 60% of GDP. It is this latter rule which encouraged first Mr Osborne then Mr Hammond to resist tax cuts and spending increases that could have boosted the growth rate and improved our investment in transport or improved performance in education and training . Mr Osborne said he wanted to go further and faster than the outgoing Labour government in meeting the Maastricht requirements from 2010 onwards, inheriting big cuts in spending and tax rises from Labour who were also wedded to the policy. In practice he ended up by 2015 in achieving the extent of deficit reduction Labour were planning. He wisely alleviated the extreme cuts on capital spending Labour put into their forward budgets.

As we leave the EU it is time to rethink our economic guidelines. Of course we need to control annual deficits, but we should be less concerned about the debt as percentage of GDP at current levels, and less concerned about borrowing to invest where the public sector has genuinely worthwhile projects that can earn a decent return. As proof that our economic policy has been dominated by Maastricht, I reproduce below a few sentences from the ONS who have set out at length our dependence on the EU rules and our efforts to meet them.

ONS :
“•General government gross debt was £1,821.3 billion at the end of the financial year ending March 2019, equivalent to 85.2% of gross domestic product (GDP) and 25.2 percentage points above the reference value of 60% set out in the Protocol on the Excessive Deficit Procedure.

•General government gross debt first exceeded the 60% Maastricht reference value at the end of the financial year ending March 2010, when it was 69.6% of GDP.

•General government deficit (or net borrowing) was £25.5 billion in the financial year ending March 2019, equivalent to 1.2% of GDP and 1.8 percentage points below the reference value of 3.0% set out in the Protocol on the Excessive Deficit Procedure.

•This is the third consecutive financial year in which general government deficit has been below the 3.0% Maastricht reference value.  

The EU government debt and deficit statistical bulletin is published quarterly in January, April, July and October each year. This is to coincide with when the UK and other EU member states are required to report on their deficit (or net borrowing) and debt to the European Commission.

Article 126 of the Treaty on the Functioning of the EU obliges member states to avoid excessive budgetary deficits. The Protocol on the Excessive Deficit Procedure, annexed to the Maastricht Treaty, defines two criteria and reference values with which member states’ governments should comply. “

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116 Comments

  1. Posted September 2, 2019 at 5:10 am | Permalink

    If/when we leave?

    • Hope
      Posted September 2, 2019 at 10:03 am | Permalink

      It was never originally stated reducing debt as a percentage of GDP that was introduced because of your govts appalling failure to reduce it after promising to do so. The debt is increasing far longer than promised. That weasel introduction by Osborne was to deflect his failure on his promise.

      Three elections and your govts has failed each time its central economic plank to balance the structural deficit by 2015 and reduce debt on which it was elected.

      Similarly growth was hoped to be achieved by increasing the population through mass immigration while lying to the public t would cut immigration to tens of thousands. This was a deliberate lie. Confirmed by Osborne who stated no one in govt was serious about it!

  2. sm
    Posted September 2, 2019 at 5:10 am | Permalink

    Could anyone advise me on how many EU member states have successfully avoided excessive budgetary deficits please?

    • Mark B
      Posted September 2, 2019 at 6:12 am | Permalink

      Germany, I think.

      • Woody
        Posted September 2, 2019 at 3:45 pm | Permalink

        UK budget deficit 2018 1.5% of GDP, Germany 1.7% .. the rest of the eu much worse.
        2019 UK 1.2% to March.

        • Martin in Cardiff
          Posted September 3, 2019 at 6:23 am | Permalink

          The US deficit is more than twice any of those. Also its national debt is about twenty-two trillion.

          Take a look at the state-by-state figures too.

          The European Union institutions have zero debt on the other hand, because they are not permitted to borrow under the treaties.

          • David
            Posted September 4, 2019 at 3:49 am | Permalink

            The ECB has monetised debt to a point of breaking the bond market. The banks have survived in a zombie status in europe whereas the US used their policy to fix where possible (and saving Europe’s banks through their excess reserves). The ECB can foreseeable end up with enormous losses from their QE requiring fund from god knows where. Italy Spain France etc all cheat the Maastricht treaty and are virtually bankrupt. Where is the benefit of being tied to these people in the long term. Sometimes the rats are best to desert the ship.

    • jerry
      Posted September 2, 2019 at 6:24 am | Permalink

      @sm; More to the point, how many none EZ member states have had to implement “Austerity”, heck not even all the EZ has had to, so “Austerity” is clearly nothing to to with fiscal requirements within EU policy nor the Maastricht treaty – had the latter been the case the John Major govt would have had to implement “Austerity” from Nov. 1993, not stimulated the economy for the forthcoming expected/required GE…

      Now we hear (rumours) that Boris is threatening to remove the whip, thus ensuring de-selection, from any Tory rebels who vote against his ‘diktat’, even though the ERG used exactly the same parliamentary democratic procedures etc. to force changes to UK policy regarding Maastricht treaty, the Euro/ERM, the Lisbon treaty and now Brexit. Hypocrites! What if John Major had done that to our host and others, there would have been no ERG and most likely no Referendum Party or UKIP either as those parties would not have been able to piggy-back off the anti EEC/EU rebel MPs parliamentary exposure.

      The Conservative party is dying, splitting back into Tories and Whigs, but which group will be the rump?…

    • Martin in Cardiff
      Posted September 2, 2019 at 6:49 am | Permalink

      Perhaps you should advise yourself that the US’s debt is about twenty-two trillion dollars. Its deficit to 2018 was about eight hundred billion.

      You might take a look at the state-by-state figures too.

      The European Union’s institutions on the other hand have not debt, because they cannot borrow under the Treaties.

  3. Mark B
    Posted September 2, 2019 at 5:15 am | Permalink

    Good morning

    . . . worthwhile projects that can earn a decent return.

    Name one government project that either has, or will provide a return ?

    Because all I am hearing at the moment from a supposedly Conservative Government is, spend, spend, spend.

    Perhaps our kind host is thinking of, Boris Island ? Or maybe, Boris Bridge ?

    Just let us spend our own money on the things we want. Most of us will either get a return or have some enjoyment before we die.

    • Lifelogic
      Posted September 2, 2019 at 6:16 am | Permalink

      Exactly. People and businesses spend/invest their own money at least twice as efficiently as government do. Much government expenditure actually does real postive harm and no good at all. As does most regulation, red tape and the absurt fiscal complexity. Even the aprenticeship levy scheme is in effect another tax and large inconvenience to businesses.

      Get the suffocating government out of the way and businesses, people, jobs and the economy with thrive. Undo all the damage done by the dire lefties Cameron, Blair, Brown, Cameron, Osborne, May and Hammond.

      I listened to Farage and Lord Adonis on LBC yesterday. Adonis is not only bonkers on his brexit view he is even more pro HS2. Remainers seem to have daft views not just on Brexit but on almost everything else.

      Lets us hope that Hammond, Gauk, Burt, Ken Clark, Letwin and the are indeed kicked out of the party. They have done huge harm to the UK negotiation position and the country.

      • Mark B
        Posted September 2, 2019 at 3:51 pm | Permalink

        LL

        What people fail to understand is that private enterprise is governed by risk and reward. Entrepreneurs way up the two and, based on their own skills and money make decisions. If they get it wrong they could lose the lot. Not so government. Government cannot fail. It cannot run out of money. Therefore it is immune and simply thinks and acts differently. This always leads to bad decisions since those making the decisions are not at risk.

        • Lifelogic
          Posted September 3, 2019 at 1:47 am | Permalink

          Indeed, in government they care not what they spent nor what value they get. Not their money nor they who get any value. Hence things like HS2. No one outside government would dream of putting private money into something so completely idiotic. Not even the great HS2 and EU enthusiast Lord Adonis.

          Enthusiastic to piss more taxpayers money down the drain that is.

    • agricola
      Posted September 2, 2019 at 4:02 pm | Permalink

      Investment in the NHS or Education is money well spent,or can be. Those in need not waiting too long for hip knees and catarach removal are back to work economy enhancing.

      Those who benefit from a good all round education are ready to create wealth for themselves and the nation. With thought they could be doing something they enjoy, an ultimate aim.

      Any project that attracts private investment capital is worth persuing. An internal shuttle bus airline service is one I have always had in mind. It could give rail a run for its public money.

      Lets have some positive thinking in this diary. There is too much negativity if not downright gloom from some contributors.

      • Lifelogic
        Posted September 3, 2019 at 1:55 am | Permalink

        Well investment in education and healthcare can indeed be a good thing. But the healthcare and education are dire state monopolies and a very inefficient. A take it or leave it mate we have your money already so shut up or go away.

        Freedom, competition and choice is needed. 16 days to see a GP and then for only a few minutes and told you can only discuss one complaint. Pets get far better & prompter treatment at vets.

      • Mark B
        Posted September 3, 2019 at 4:54 am | Permalink

        OK. But both you, our kind host and others have failed to answer my question. What government project(s) currently give the UK taxpayer a return.

        The language of ‘investment’ is cover for spending.

        • dixie
          Posted September 3, 2019 at 12:14 pm | Permalink

          it depends on what you mean by “return” but I suggest the Science and Technology Facilities Council and it’s precursors would qualify, funding and facilitating research and development that private companies can’t or won’t do.

          Precursors have been involved in CERN which contributed to delivering the world wide web. Hypertext certainly existed in university labs and some proprietary examples existed in provate enterprise before the web was launched but not at the scale of the web.

  4. Len Grinds
    Posted September 2, 2019 at 5:18 am | Permalink

    This is a pack of lies from start to finish. There are no binding rules imposed on UK spending by the Maastricht treaty, or any other treaty. There are some rules applying to the Eurozone countries, but the UK is not one of the Eurozone countries. Austerity is a British choice, nothing to do with the EU.

    • Denis Cooper
      Posted September 2, 2019 at 7:05 am | Permalink

      Excerpts from a comment published on March 25 2016:

      http://johnredwoodsdiary.com/2016/03/25/my-speech-during-the-debate-on-section-5-of-the-european-communities-amendment-act-1993/#comment-807378

      “I’m looking at Article 4 in the UK’s euro opt-out protocol, Protocol (No 15) attached to the EU treaties, and that says … ”

      “That’s quite complicated insofar as the UK has agreed to be bound by all of the treaty provisions relevant to Economic and Monetary Union other than those from which it has an express exemption, and the exemption from Article 121(2) only extends to those parts which “concern the euro area generally”; and why “generally” rather than “only”?”

      “Is it one aspect of the UK’s “special status” within the “reformed” EU that it’s difficult to decide whether EU institutions should even be including the UK among the “Member States”, and in the “Union”, when they draw up “the broad guidelines of the economic policies of the Member States and of the Union” under Article 121(2)?”

      “Of course when this complex and virtually incomprehensible situation was created through the Maastricht Treaty on European Union – the 1993 Act was to approve that treaty agreed by John Major, “game set and match for Britain”, of course no referendum and rammed through the Commons on a confidence vote, in other words with Tory MPs voting under the threat of an early general election in which many could expect to lose their seats – it was hoped that this would just be a temporary expedient, it wasn’t widely expected that the UK would still be outside the euro more than two decades later.”

      “And nor is it now expected that the UK will always remain outside the euro, if it stays in the EU; when Merkel said “Our goal must be that all EU member States join the euro one day” she made no exception for the UK, or for Denmark.”

    • Woody
      Posted September 2, 2019 at 7:14 am | Permalink

      The UK signed the Maastricht Treaty, thanks to Major, which was created essentially to pave the way for the creation of a single European currency – the euro … no referendum to advise or consult the people. Fortunately we did not take the most damaging leap, to join the euro, but as we signed up to the treaty we were bound by its rules .. hence austerity. Fortunately also we did not join the euro thanks to Brown hating Blair and refusing to do as Blair wished.

    • david price
      Posted September 2, 2019 at 7:49 am | Permalink

      @L Grinds – The “Assessment of the 2017-18 Convergence Programme for the United Kingdom” dated 23 May 2018 is an European Commission Directorate General (Economic and Monetary Affairs) document. In it’s introduction on page 3 it clearly states in the second paragraph;

      The United Kingdom is currently subject to the preventive arm of the the Stability and Growth Pact (SGP) and should ensure sufficient progress towards its Medium-Term Budgetary Objective (MTO). As the debt ratio was 86.7% of GDP in 2016-17 (the year in which the United Kingdom corrected its excessive deficit), exceeding the 60% of GDP reference value, the United Kingdom is also subject to the debt reduction transitional arrangements as regards compliance with the debt reduction benchmark during the three years following the correction of the excessive deficit (transitional debt rule). In this period, it should ensure sufficient progress towards compliance with the debt reduction benchmark. After the three-year period of the debt reduction transitional arrangements, Member States are expected to comply with the debt reduction benchmark.”

      I have highlighted the part that states the stricture on the UK and it is very clear that there is a limit on debt ratio which results from EU dictat and regulation.

      So you are wrong and I strongly suggest you recognise that fact and apologise forthwith.

    • BJC
      Posted September 2, 2019 at 8:17 am | Permalink

      Len

      You will know, of course, that treaties in general are legally binding documents and the basis for sanctions if they’re breached. Are you suggesting we should sign treaties, but only adhere to the parts that are convenient for us?

      Sir John has, of course, provided evidence of the reference document (Maastricht) used by the ONS, so I feel it’s a little disingenuous to accuse him of lying. Indeed, I would argue that a focus on austerity disguises the true “British choice”, which was to sign a legally binding document that shackled us to a fixed framework decided by the EU.

    • Posted September 2, 2019 at 12:27 pm | Permalink

      This is Boris chance to behave like Cromwell, sack all of the Tory Remainers, and then reap the gratitude of those that want him to get us out .

      But I think an Election where we get rid of Globlest Establishment, and get Farage to do a great job for real Democricy.
      Only change will bring us release from the lawless three main parties

  5. David in Kent
    Posted September 2, 2019 at 5:21 am | Permalink

    It’ll be interesting to see how the ONS phrases it’s reports once we have left.

    • nhsgp
      Posted September 2, 2019 at 7:05 am | Permalink

      Very carefully. ie. The state pension is contingent debt.
      The WGA however lets the cat out of the bag.
      Contingent debt/liabilities are debts/liabilities where there is no probability they will be paid.

    • Andy
      Posted September 2, 2019 at 7:53 am | Permalink

      What you actually mean is they you want these reports written by El Presidente’s Ministry of Truth. This way you may approve of what they say.

      Tell me – reports like this are currently actually written by experts. You know, actual people who know what they are actually talking about. But we know in El Presidente’s regime has had enough of experts. Heaven forbid if you lot has your way there would be no actual statisticians because that would require an actual degree and we know you lot don’t do universities.

      • Jiminyjim
        Posted September 2, 2019 at 3:09 pm | Permalink

        You mean like the actual experts who forecast disaster if we dared vote ‘Leave’, Andy? And please lay off the insults about Universities. A great many of us are far better qualified than you are, judging by the complete garbage you spew out daily.

        • Fred H
          Posted September 2, 2019 at 3:19 pm | Permalink

          and the Treasury and Bank Of E who haven’t got close to getting any forecast right in living memory.

        • Andy
          Posted September 2, 2019 at 5:26 pm | Permalink

          You think the Tory car crash process of leaving hasn’t been a disaster?

          Have you been asleep for three years or are you taking drugs?

  6. Garland
    Posted September 2, 2019 at 5:25 am | Permalink

    Sheer nonsense. The UK decides its fiscal and monetary policies, not the EU. Your rants against the EU get ever wilder and more hysterical, but I understand your desperation to distract us from how all the Brexit promises about us holding all the cards have turned to dust

    • formula57
      Posted September 2, 2019 at 6:29 am | Permalink

      @ Garland – did you disregard the words and those following beginning “As proof that our economic policy has been dominated by Maastricht, I reproduce below a few sentences from the ONS…”?

      You state “The UK decides…” and so it does, but it seems the civil service and the governing political class are so wedded to compliance with Evil Empire direction that they obey even when there is no compulsion – a phenomenon we risk seeing endure despite Brexit.

      • formula57
        Posted September 2, 2019 at 6:40 am | Permalink

        There is the stark contrast provided by France, which prefers to disobey even when there is compulsion.

        This approach continues despite President Macron’s wish to reduce the deficit to conform to Eurozone rules. Greece of course has been bullied by the Evil Empire into obeying at vast harm to itself while France blithely carries on unhindered.

      • Mark B
        Posted September 2, 2019 at 3:58 pm | Permalink

        They comply because they need to keep us as closely aligned as possible. Sadly, this will even be the case should we actually Leave.

    • Denis Cooper
      Posted September 2, 2019 at 7:08 am | Permalink

      See above.

    • david price
      Posted September 2, 2019 at 7:52 am | Permalink

      The UK is constrained by the preventitive arm of the EU SGP, see my reply to Len Grinds.

  7. Brenda
    Posted September 2, 2019 at 5:43 am | Permalink

    Do please read Directive 2011/85, which in its Article 8 exempts the UK from the EU’s numerical fiscal rules. Then have the decency to apologise for this false post

    Reply I am quoting the UK government who are following the rules

    • jerry
      Posted September 2, 2019 at 6:37 am | Permalink

      @JR reply; A UK govt who want to blame the EU, not their own policies, that you have been at the forefront of forming an implementing since early 1979.

      • formula57
        Posted September 2, 2019 at 3:56 pm | Permalink

        Ah yes, the 1979 policies that lay the foundation for the Thatcher economic miracle that lasted c. thirty years!

        • jerry
          Posted September 2, 2019 at 9:07 pm | Permalink

          @formula57; You mean policies that lay the foundation for the Thatcher economic mirage that lasted c. thirty years!…

          Not to mention Thatcher signing the UK up the SEA, creating the road map to the Maastricht Treaty, the ERM.

    • hefner
      Posted September 2, 2019 at 7:13 am | Permalink

      Reply to reply: so Sir John you are just, as so often, propagating lies to serve your cause. When will you have the decency/honesty (a big ask from a politician) to let us know what your final objectives are?
      You are “quoting the UK government who are following the rules”. indeed, but where and when have you ever stated the fact that the UK is not bound to follow such rules.
      What are you doing exactly, counting on the bovine credulity of your followers to do what exactly?

      Reply What I say is accurate. Successive governments have submitted reports and talked about how they intend to get debt and deficits down as required. They could have picked a battle with the EU over it and refused to file reports and to take it seriously but they did not.

      • Fred H
        Posted September 2, 2019 at 3:24 pm | Permalink

        hefner… you include yourself on here -ie following.
        I’d have thought you might have noticed a fair amount of contesting Sir John’s view without descending to questioning his decency/honesty…but then

      • steve
        Posted September 2, 2019 at 5:57 pm | Permalink

        hefner

        “so Sir John you are just, as so often, propagating lies”

        John Redwood is not a liar. Please show respect.

    • Ian Wragg
      Posted September 2, 2019 at 7:49 am | Permalink

      Reply to reply. Why do we always follow EU rules. No one else does.
      I hope that changes after we have left.

      • Mark B
        Posted September 2, 2019 at 4:02 pm | Permalink

        Ian

        It won’t. The problem is not the EU.

    • david price
      Posted September 2, 2019 at 7:53 am | Permalink

      The UK is constrained by the preventitive arm of the EU SGP, see my reply to Len Grinds.

    • Woody
      Posted September 2, 2019 at 10:30 am | Permalink

      “This Directive lays down detailed rules concerning the characteristics of the budgetary frameworks of the Member States. These rules are necessary to ensure Member States’ compliance with obligations under the Treaty of Functioning of the European Union regarding the avoidance of excessive government deficits. The Directive lays down rules applicable to specific elements of the budgetary frameworks” .. no mention there that the UK can opt out.

    • Otto
      Posted September 2, 2019 at 11:57 am | Permalink

      Reply I am quoting the UK government who are following the rules.

      Is that all you have to say about it?

      • Robert mcdonald
        Posted September 2, 2019 at 5:38 pm | Permalink

        What more is there to say ?

    • Peter van LEEUWEN
      Posted September 2, 2019 at 6:05 pm | Permalink

      @Brenda: Thank you for providing that factual information.

    • Posted September 3, 2019 at 8:10 am | Permalink

      Sir John many of your readers Nd contributors seem to be unaware that the U.K. is in Phase 1 and phase 2 of the Euro. It’s opt-out is from Phase 23 (the actual introduction of the currency). We are ‘compelled to run our economy for the benefit of the EU and NOT for the benefit of the UK’. That and imposing foreign citizenship on even HM is Maastricht in a nutshell! Vile!

  8. Newmania
    Posted September 2, 2019 at 5:46 am | Permalink

    So austerity (which at the time you denied existed ) was an EU plot, oh come on! More excuses to lie to us with our money.
    The Maastricht Treaty set down convergence guidelines for those countries that wishes to join the Euro-zone. They have not been met, even by Germany, even as the Euro zone was formed. The UK abandoned that project anyway.
    The UK had, prior to 2008 regarded the sort of fiscal discipline involved as absurdly loose and the MP for Wokingham, fought and lost two elections on the grounds that Labour were overspending when Nat Debt was35% of GDP
    Since Brexit ( and more particularly the Brexit Party)you have abandoned Conservative principles. You no longer care about anything but disguising the chilling effect of Brexit and worse still No Deal disaster. If that means stealing from our children risking our homes and jobs then so be it and we all know why.
    Ye gods its like animal farm. I look through the window from Corbyn to Redwood and I cannot tell the difference anymore

    • Denis Cooper
      Posted September 2, 2019 at 7:32 am | Permalink

      Looking at the overall picture, rather than just focusing on some particular case – maybe a small company whose anti-Brexit proprietor is known to the anti-Brexit journalist penning the propaganda article – it still needs a lot of imagination and a lack of scruples to detect any significant “chilling effect of Brexit”, so far.

      If you recall according to George Osborne before the referendum we should have immediately brought about a recession just by voting for Brexit; instead the economy has expanded by over 4% since the referendum and it is only with the latest provisional quarterly GDP figure that there has been any significant deviation from the trend that was running before the referendum:

      https://www.statista.com/statistics/785546/gross-domestic-product-per-quarter-united-kingdom/

      Of course if Brexit is delayed long enough then eventually there will be a recession and it will be possible to wrongly blame that recession on Brexit. And I doubt that anybody in the government could be bothered to contradict that.

    • jerry
      Posted September 2, 2019 at 7:59 am | Permalink

      @Newmania; “I look through the window from Corbyn to Redwood and I cannot tell the difference anymore”

      I can, one still believes in an elected democracy, that Parliament is Sovereign (not the executive), the other appears to believe in Statism autocracy…

      • David Maples
        Posted September 2, 2019 at 3:32 pm | Permalink

        Jerry,

        Parliament is NOT sovereign!

        The Queen in Parliament IS sovereign. The First Lord of the Treasury(the Chancellor of the Exchequer is Second Lord) ie Boris Johnson, is the custodian of 99.9% of the powers of the Royal Prerogative. As PM(a relatively recent appellation), he is effectively King. Parliament has no executive arm, and all the laws it enacts can only be put into effect if the executive(Boris again)allows them. The PM has the right to advise the Queen to not give her [royal]assent, because assenting to a statute becoming law, is an executive decision.

        • jerry
          Posted September 2, 2019 at 9:18 pm | Permalink

          @David Maples; Nonsense, the Queen bestows her powers to the people via the Commons and MPs, that is why the Throne is in the Lords, why the arrival of Black Rod sees the Commons door slammed shut, why the Lords is an amending house, why the HoLs can block the will of the House of Commons.

          • jerry
            Posted September 3, 2019 at 6:31 am | Permalink

            Correction. Oh for a pre moderation edit button!

            “why the HoLs can not block the will of the House of Commons.”

            Also @David Maples, if I’m mistaken then so is our host and his article from a few days ago, A sovereign people delegate to a sovereign Parliament is gobbledygook…

      • Peter van LEEUWEN
        Posted September 2, 2019 at 6:11 pm | Permalink

        @jerry: I see the battle against parliament from overseas, but would you really go that far to state, that the Tories only believe in “Statism autocracy” ?

        • jerry
          Posted September 2, 2019 at 9:24 pm | Permalink

          @PvL; Sorry to say, after the last 5 days or so, yes. 🙁

          What is more, since I wrote the comment you replied to it now appears that Boris is trying to circumvent the Fixed term Parliament Act too, because otherwise a No Confidence vote could see the current govt replaced by a grand coalition.

    • acorn
      Posted September 2, 2019 at 8:01 am | Permalink

      Maastricht never said you should aim for a budget surplus, that is pure Conservative neoliberal ideology. Other parties use a softer version and the EU a stupid version.

      The version of debt and deficit JR quotes is strictly for the manipulation/austerity control of the currency using private sector. Politicians pretend the government’s accounts are the same as a household, even though it issues the currency.

      Have a look at the (nearly) real numbers at https://www.ons.gov.uk/file?uri=/economy/governmentpublicsectorandtaxes/publicsectorfinance/datasets/publicsectorfinancesappendixatables110/current/datdataset1appendixafinal.xls First look at PSA1 row 41 for fiscal year 2009/10. See the difference between columns 4&5 and 11&12. The latter includes the Banks.

      Next, look at PSA8B row 41 for fiscal 2009/10. The Maastricht debt at column 15, is a version used for public policy manipulation and austerity propaganda purposes. Compare that to column 23. Of the £3 trillion gross PS debt, only the £1 trillion in private sector households was to be austeritised. The £2 trillion in the banking sector (column 20) is never mentioned; or, how and where it was created. 😉

    • Fred H
      Posted September 2, 2019 at 3:29 pm | Permalink

      I see the former happy to knock everything down whilst smiling sardonically amongst the ruins. The latter recognising changes are required but wanting to rebuild to a better standard.

  9. Posted September 2, 2019 at 5:51 am | Permalink

    What happened to paying off the debt in good times so we can borrow in times of crisis? What about the massive cost of servicing our debts that earlier administrations have so stressed? Surely government should lead the way in getting rid of large debts when times are good and not living beyond its means in reliance on foreign creditors such as China.

    • nhsgp
      Posted September 2, 2019 at 7:04 am | Permalink

      220 bn a year going on the debts. See the Whole of Government accounts.

      But you won’t find the debt number there.

    • ukretired123
      Posted September 2, 2019 at 8:23 am | Permalink

      George Osborne criticised Gordon Brown for not fixing the roof in good times then proceeded to ignore his own advice and decided to spend before Labour could spend it yet again.
      Showboating Cameron splurging millions in foreign aid was disastrous from 2 angles at least. The aid is counterproductive rarely going to those who need it but to layers of corrupt officials and politicians as I witnessed working overseas.
      It also signals to the world to come here it’s treasure island.
      The EU also knows we are a soft touch and has done all the time we joined, sadly.
      Especially after FCO 1048

  10. Dominic
    Posted September 2, 2019 at 5:57 am | Permalink

    This reads like a Labour party election pamphlet

    It is becoming increasingly clear that you view greater State spending on unreformed State provision rather than tax cuts and reform. In effect, more power to the State and a reduction in private sector freedom. I find that an uncomfortable message coming from a politician with a reputation for encouraging more private, less public.

    Reply Not true. See the budget proposals which include £11bn if tax cuts

    • Posted September 2, 2019 at 6:23 am | Permalink

      JR I note your response but I do think ‘you’ politicians ignore a widely held view that money is spent inefficiently/wasted or are unable to do anything about it.

      Of course we value investment but many of your contributors/the wider public own/run businesses and have to adhere to fiscal efficiency to survive.

      The government seems to ignore it completely or pays lip service.

    • Dominic
      Posted September 2, 2019 at 6:31 am | Permalink

      Reforming Labour’s client state should be the Tory party’s daily mantra. Without this reform the UK, its democracy, its values and its institutions are exposed to fraud and outright abuse.

      Spending more on Labour’s client state increases the Labour party’s power. Does that not make sense? You are inadvertently strengthening the unelected power of the opposition

      I have no philosophical opposition of public sector provision as long as its efficient and apolitical but it isn’t that at all therefore reform is needed which requires conviction and political courage to confront leftist vested interest involving conflict

      After reading yesterday’s FT article about Labour’s economic plans for the UK one can surely see the need to start this reform process now before it’s too late. Corbyn and McDonnell are dangerous, far more dangerous that anything this nation’s ever seen before. Their desire for authoritarian control of all things is chilling

      I simply want the Tories to tell the nation exactly what these Marxist bigots have in store for us and it won’t be pleasant

    • Newmania
      Posted September 2, 2019 at 9:12 am | Permalink

      Dominic

      Whilst Remainers are usually cast as Guardian Reading Liberals I am certainly not ‘left wing” but as a supporter of decent public services it is imperative that they are seen to be value for money
      Nurses teachers and policemen may all do a good job but Nationally organised pay scales, pensions of unreasonable generosity and endless opportunities for “promotion” must be addressed if we are to sustainably support these vital social goods.
      That means taking on the public sector unions a fearsome task for any government .One of the problems with Brexit is that it has consumed every scrap of good will for right of centre thinking leaving us with a haphazard headline driven mess of a government unable to exert any authority

      This awful position will be with us for years…. think of the damage ? Is it really worth it ?

      • steve
        Posted September 2, 2019 at 6:01 pm | Permalink

        Newmania

        “Is it really worth it ?”

        No, we should just roll over and capitulate. We should let the Irish republic make a grab for N.Ireland, let the french plunder our maritime resources, and give every penny we earn to foreigners.

        Satisfied ?

        • Newmania
          Posted September 3, 2019 at 7:53 am | Permalink

          We give ,as you put it, about 1 % of our annual spending to”foreigners” if by that you mean the EU and the Good Friday agreement was commonly held as a great achievement for peace.
          Brexit is such a good thing for the fishing industry that the are currently crying like babies to be exempted form it by being housed in Free Ports.
          In the last few years Western Liberal capitalism has been threatened by fundamentalist religion Fascist Nationalism and extreme left wing populism
          Europe has resisted this barbarian assault, you have capitulated , you are the fifth column, you have betrayed the country and in particular its children and young people to whom you owe care .

          You are a disgrace

    • Leaver
      Posted September 2, 2019 at 9:22 am | Permalink

      I agree 100%.

      This appears to be advocating increased spending when we have only just got the deficit under control. Sounds like the Labour party to me.

      I imagine he will start going on about the Laffer curve soon and explain how you increase the tax take by lowering taxes soon.

      • Leaver
        Posted September 2, 2019 at 9:24 am | Permalink

        Though John appears to have united both leavers and remainers against his spending plans.

        Great to see some unity at last. There has been precious little of it of late.

        I miss the days when politics used to be boring.

    • Hope
      Posted September 2, 2019 at 9:57 am | Permalink

      JR, do not say something is untrue when you are clearly wrong. Dominic is correct. Forty year high on taxation, failure to balance the structural deficit by 2015 etc. Your govt is spending more on public services without any improvement.

      Look at the broken promises for council tax freeze and the last two year hikes of five percent each year! With additions for flood defence and adult social care! Pickles claimed bins would be emptied each week as before. Nine years on still not happening across the country as he promised. No improvement in services whatsoever.

      ONS is not a credible source for any figures. It recently admitted getting immigration figures wrong for nine years! Underestimating by a considerable margin. Time to for the unnecessary quango to go. Treasury used to produce the figures. No need for ONS or OBR.

      I note Blaire got the Queen to veto bills when he was in office. Will Johnson do the same if Remainers in parliament- defying the will of the people- vote to pass legislation to take no deal off the table? (which actually means not leaving the EU).

  11. GilesB
    Posted September 2, 2019 at 6:03 am | Permalink

    If politicians could be trusted, then it makes sense to have more flexibility in public sector borrowing over the course of an economic cycle.

    But politicians cannot be trusted. They increase public borrowing when the economy is weak to boost activity. And when the economy is strong instead of paying back debt they borrow more for pork barrel policies to bribe favoured groups of voters.

    The Maastricht criteria may be crude. But they are about right and are easy to understand.

    The U.K. should adopt them as policy for after Brexit.

    If we ever get politicians we can trust, then they could be relaxed. I’m not holding my breath

  12. Dave Andrews
    Posted September 2, 2019 at 6:25 am | Permalink

    My problem with the Maastricht 60% limit is that it’s too high. I run my household in the black, I run my company in the black, why can’t the government do the same with the country’s finances?
    I have no children, but what would you think of me if, instead of tightening my belt when times were tough, I racked up debts that my children were legally obliged to pay?
    All this government spending has little to do with wise investment, and all to do with bribing the electorate for an imminent election.

    • Anonymous
      Posted September 2, 2019 at 5:02 pm | Permalink

      You have no children. That’s why you’re in the black.

  13. Posted September 2, 2019 at 6:31 am | Permalink

    Brown told us it was the end of BOOM and BUST – but what he meant was an end to Growth.
    It has been deliberate policy of the EU and the UK to keep wages low and increases almost non-existent for the average person.
    Without growth in the economy we stagnate, although this doesn’t stop government, insurance companies and every other service putting up the prices they charge us, making us poorer by the day.
    Inflation is part of the natural economic cycle, and while it should be helped to stay within certain reasonable bounds, it shouldn’t be as constrained as it is is now, which denies us the ability to expand and do better tings.

  14. Everhopeful
    Posted September 2, 2019 at 6:57 am | Permalink

    The Maastricht Treaty put an end to the fiction that the EU was not all about political integration.
    It is what led to Brexit.
    Article 126 lays it out pretty clearly as JR says.
    The wonder is that the political class managed to sign up to it without many voters understanding its implication.

  15. nhsgp
    Posted September 2, 2019 at 7:03 am | Permalink

    So the 220 bn a year you spend on the debts you have created. Where’s does that money come from? Why should we get the austerity because you created the debts?

    The 30% mark on taxes. None going on services. Going on the debts. Why should we be made poorer because you run up the debts?

    Now you have a problem. You can’t tell people about the £450,000 of debt you have run up, that you either default on, or force people to pay. So you want to blame the EU.

    13,000 bn pounds of debts. That’s the true number. That’s the number that is hidden.

  16. tim
    Posted September 2, 2019 at 7:05 am | Permalink

    I completely agree with the 10 comments so far, I think any sane person would.
    SIR JOHN I have been 100% behind you up to this pack of lies!

  17. Alec
    Posted September 2, 2019 at 7:11 am | Permalink

    It genuinely shocks me that even alleged right wing politicians in this country believe that government produces wealth. In reality government steals wealth from the productive and redistributes in the most corrupt, disfunctional way possible. The more government there is, the more wealth is removed. The western world has effectively destroyed itself by relying on past industry and imperial theft to build a massive system of bureaucracy and redistribution that only benefits the insiders. Now our currency is based on nothing and we’re told that devaluing it every single day is good for us. In fact we are poorer than the 1970’s in real terms. Then a married man with a reasonable job could support a family and buy a house on his income alone. How many can do that today? I lay the blame for this squarely and completely at the door of government and all it’s works.

  18. ChrisS
    Posted September 2, 2019 at 7:11 am | Permalink

    I believe there is also a rule that says countries should not run surpluses of more than 3% of GDP but Germany ignores that every single year and is never even remotely criticised for it, let alone punished.

    Very surprising, consider the German trading surplus with the rest of the EU is the cause of most of the problems with the Euro.

  19. Posted September 2, 2019 at 7:12 am | Permalink

    A great deal of what is bad comes from the Maastricht treaty, it put in place the foundations for the political EU, the Euro , and the worst excesses of free movement. Along with his ill fated ERM it could be said that John Major is the grandfather of Brexit, for he put in place everything that drove people to vote to leave the EU.

    • Mark B
      Posted September 2, 2019 at 4:13 pm | Permalink

      Agreed.

  20. The Prangwizard
    Posted September 2, 2019 at 7:24 am | Permalink

    Along with others I am dismayed, to say the least, at this spending spree the government has embarked upon. Much of it is electioneering and as I have been saying it will quickly be forgotten as the results will barely be visible and of course it will never be enough for those who lobby for their special interest.

    If we ever get out of the EU, and genuinely and cleanly, all the savings will be gone in an instant. It will be frittered away such as that we are hearing going on teachers pay. The cry will soon be heard – what was the benefit of leaving, I can’t see it?

    The savings should be put aside, saved that is. £12bn a year for a few years is a great deal of money which could then be allocated for projects people could see.

  21. graham1946
    Posted September 2, 2019 at 7:46 am | Permalink

    A short historical account of the Maastricht Treaty for those not around at the time or unaware of its implications, (and budgetary items are in my opinion the least of it):-

    Who introduced the Maastricht Treaty to turn the EEC into the EU with freedom of movement and all the rest we suffer from today? – one Johnny Major now trying to keep us in the EU. Rees-Mogg (senior) took the government to court to try to stop it, but the judges ruled in favour of it (surprise, surprise) and they are now deciding on the Miller Case and Miller is supported by one Johnny Major.
    Eurosceptic MP’s at the time said the Treaty would give the new EU great powers at the expense of Westminster and predicted it would lead to a fully federalised EU. How right they were!! The Treaty was blocked in Parliament and Major then made it a vote of confidence which was naturally carried and so the Maastricht Treaty was rammed through against the actual wishes of Parliament. Deja Vu. Major says he is a democrat. Make of it what you will.

    • steve
      Posted September 2, 2019 at 6:49 pm | Permalink

      graham1946

      ” but the judges ruled in favour of it (surprise, surprise) and they are now deciding on the Miller Case and Miller is supported by one Johnny Major.”

      Two people whom I feel should shut be made to shut up and be prevented from interfering.

  22. Richard1
    Posted September 2, 2019 at 7:57 am | Permalink

    I’ve got another vote winning idea for the Marxists to go with their plan to expropriate shares and rented properties. When a shopper goes into a shop and fills their trolley they should be able to take 10% of the stuff without paying for it. What could be wrong with that? a simple transfer from ‘big business’ to ‘ordinary people themselves.’

  23. hardlymatters
    Posted September 2, 2019 at 8:02 am | Permalink

    John I saw you last week on TV rocking backwards and forwards on you heels, then that clinch in your jaw showed so I surmised you must be under some pressure- however today’s piece say’s it all- but a little OTT

  24. Fishknife
    Posted September 2, 2019 at 9:06 am | Permalink

    I’m begining to form the opinion that the “Balance of Payments” and the subsequent State Debt to service same is a clever wheeze to extract money from the poor tax payer and pass it to the non tax paying rich, in the same way that Fiscal Easing, or printing money, just benefits the wealthy.
    Dear SJR, please tell me I’m wrong.

    • Fishknife
      Posted September 2, 2019 at 9:36 am | Permalink

      I also fail to understand why, when World debt is now at around 254 trillion dollars in various currencies, the EU would be worried about losing a ‘paltry’ 39 billion from us.
      They seem to be quite capable of printing as many €100 notes as they want.
      So if the money is irrelevant, all Brussels actually wants is Power – more smucks to tax.

  25. Denis Cooper
    Posted September 2, 2019 at 9:11 am | Permalink

    I’ve just seen Tony Blair holding forth against Brexit …

    It should be a plus for our side that these discredited pro-EU figures from the past are speaking out; except that nobody in the government can ever be bothered to exploit that or any other propaganda opportunity, just as they cannot be bothered to rebut any of the nonsense pumped out by the other side day after day.

    Last night Sky had seen some new official government papers about horrendous delays at Dover; when asked “The government declined to comment”, for God’s sake.

    What happened to the “rapid rebuttal unit” promised by Michael Gove weeks ago?

    https://www.telegraph.co.uk/politics/2019/08/10/michael-gove-takes-brexit-fake-news-new-rapid-rebuttal-unit/

    “Michael Gove takes on Brexit fake news with rapid rebuttal unit … ”

    Instead we’ve had him destroying the credibility of every supporter of Brexit by letting it be understood – or misunderstood, deliberately or otherwise – that this government will no longer uphold the rule of law.

  26. BillM
    Posted September 2, 2019 at 9:53 am | Permalink

    The Private Sector continually borrows to invest to provide a bigger and better return. If Government were to do the same that would be a valid reason for some increase in borrowing.
    However, when Government borrows merely to pay off a running debt or to award the Public Sector a pay rise (Sometimes prior to a General election) these are not valid reasons for increased borrowings. In these circumstances they should, like the Private Sector, cut their costs rather than just borrow more to cover up their failings.
    Borrowing to invest is the way business works and it is time Government and the Public Sector adopted their proven methods.
    Both Governments and Public Sector Leaders have a fiscal responsibility to their Taxpayers and they should take that seriously instead of playing us as mere plebs as has sadly been the case over the past decades.
    We voted for change and that is what we expect from you. Or else!

  27. miami.mode
    Posted September 2, 2019 at 10:10 am | Permalink

    The EU seem a bit illiterate on some financial matters.

    As an example they recently banned retailers from charging more for credit card payments rather than debit card payments even though the cost to the retailer for processing is increased substantially.

    This has a twofold effect, encouraging credit and making life difficult for the retailer. The credit card companies are within their rights to withhold payments to retailers whenever they feel like it, which had serious consequences recently for a UK airline where it was reported that the credit card companies were withholding around £50 million. Their reason for doing this was that if anything had gone wrong then they would be liable for financial recompense to their credit card holders. This, of course, magnified any problems the airline had and seriously affected their cash flow, whereas with debit card payments they would probably have had the cash.

  28. Ian!
    Posted September 2, 2019 at 11:07 am | Permalink

    Some one called ‘Blair’ is hitting the MSM this morning saying its a trap there mustn’t be a General Election as Remain would ‘loose’.

    Which when coupled with all the hyper remarks from the Gauke Squad basically stating that abiding by the ‘Will of the People’ is un-democratic.

    It is then not hard to get your head around the concept the greater majority of this over the top nonsense is being organized by Brussels

  29. Sharon Jagger
    Posted September 2, 2019 at 12:24 pm | Permalink

    Off topic for the moment. I am becoming increasingly concerned at the number of Conservative MPs who are saying that they agree that if the backstop is removed, that they then think it would be acceptable to vote for the withdrawal agreement. This idea horrifies me, because there are so many bad points to both the withdrawal agreement and the political declaration.

    Sir John, can you tell me if this the common thinking in parliament of the Brexiteer MPs?

  30. Mick
    Posted September 2, 2019 at 12:28 pm | Permalink

    https://www.express.co.uk/news/politics/1172745/brexit-latest-brexit-news-boris-johnson-brexit-deal-no-deal-vote
    Let’s hope Mr Johnson calls for a General Election with cooperation with the Brexit party Westminster can be purged of all the Eu loving mps, the Labour Party would be forced to put there cards on the table in being a remain party which effectively would wipe them out hopefully north of the Watford gap,

  31. MrVeryAngry
    Posted September 2, 2019 at 1:06 pm | Permalink

    Lots of punk Keynesian claptrappery in that. But hey ho. To be expected.
    e.g. the reason for the continuing unemployment in Latin euro countries is, the euro. Not governement not spending. In nay event government spending does not ‘create employment’. At best it shuffles jobs around. At worst it robs resources for genuine wealth creating private business.

    • Anonymous
      Posted September 2, 2019 at 5:09 pm | Permalink

      Remember that 50% of our kids are at uni and we have NEETs.

  32. Fred H
    Posted September 2, 2019 at 1:49 pm | Permalink

    off topic..

    Is Boris raising GE threat real or stick instead of carrot? Deselection mentioned – should be done anyway!

    • dixie
      Posted September 2, 2019 at 2:50 pm | Permalink

      Agreed, much of Parliament and government needs to be flushed.

  33. Mick
    Posted September 2, 2019 at 2:36 pm | Permalink

    So the Tory rebels want to extend the leaving date till the end of January 2020 talk about kicking the can down the road then that date would come and guess what another kick of the can , come on Mr Johnson call a General Election and let us kick these can kickers out of Westminster and get out of the Eu on October 31st and get on with our lives

    • Oggy
      Posted September 2, 2019 at 4:41 pm | Permalink

      Absolutely Mick, I can’t wait to see all those remoaner heads roll.

    • Fred H
      Posted September 2, 2019 at 5:44 pm | Permalink

      It seems clear that we have at least Heinz 57 varieties of Conservative MP. If Boris is nudged into a GE he has to remove that label and kick those cans down the road and out of his party. Anything else and they will return holding knives to him.

  34. Posted September 2, 2019 at 3:42 pm | Permalink

    As an aside – why is it that commenters like Andy, Hefner, Len, MinC, NM, etc, are always offensive or, at the very least, discourteous? This is not the MSM disseminating so-called ‘opinion’ to the whole country. This is a private blog. You lot (as Andy would say) are not compelled to read it if it offends your fragile and narrow-minded sensibilities. You’d do far better to spend your time informing yourselves, rather than turning cartwheels in your frantic attempts to defend your EU masters.
    Oh, of course – ‘you lot’ don’t ‘do’ research, do you? Just rely on Facebook for your ”information”, or that’s how it sounds to ‘us lot’ reading it.

  35. David Maples
    Posted September 2, 2019 at 4:06 pm | Permalink

    I think some of you are being too hard on Sir John. All he is saying is that Osborne was too accepting of Bundesbank economic rules regarding the 3%/60% ‘debticit’ targets. These numbers are completely artificial and can be ignored by non €uro countries. The single currency is in deep doodoo as everyone knows, and why Osborne felt he had to mimic ECB anti inflation strictures, can only be explained by way of an excuse to squeeze prices and incomes following sub prime, Northern Rock, Lehman Bros and quantitative easing ie he needed a peg to hang his hat on!

  36. Dominic
    Posted September 2, 2019 at 5:51 pm | Permalink

    Hammond. What can we say about this malignant presence that hasn’t already been said?

    Johnson needs to purge the party TODAY. Take no prisoners

  37. Jiminyjim
    Posted September 2, 2019 at 5:55 pm | Permalink

    If there is an election, I would like to see Nigel Farage himself ignoring convention and standing against Speaker Bercow

  38. Posted September 2, 2019 at 6:34 pm | Permalink

    I am watching aghast at the ignorance being displayed by MPs of our constitution and the procedures of Parliament. It is becoming obvious that before anybody qualified to be selected for any party whatsoever, they should pass and examination at Masters level on these subjects. They should also sign up to upholding both. Only then can they be considered as fit to become an MP.

  39. Anonymous
    Posted September 2, 2019 at 6:38 pm | Permalink

    If you’re having any doubts, John it’s still not too late.

    I’m as concerned as many here that we seem to be embarking on Labour policies in order to make Brexit work.

  40. steve
    Posted September 2, 2019 at 7:09 pm | Permalink

    I too would like to see Boris call a general election. ‘IF’ Boris kicks the remainers out of the party then I would certainly cast my vote his way.

    It’s often said the swamp needs draining, hopefully Boris will do what needs to be done.

    Also well done Boris for making your speech today despite the very rude racket of Corbyn’s gobs nearby. If it was down to me I’d set land sharks on the lot of ’em.

    Still, this week we should have full list of all the traitors who wish to see the UK negotiating position weakened.

  41. bookend
    Posted September 2, 2019 at 8:29 pm | Permalink

    We will know all about austerity economics on the 1st November when we’ll have cut ourselves off from the two biggest economic trading blocs in the world – the EU and the US – by then we will have put ourselves in a position where we are totally alone which might last for months maybe years – we’ll see austerity like we’ve not seen it since the late 1940’s early 50’s – for those of us old enough to remember.

    • Edward2
      Posted September 2, 2019 at 9:03 pm | Permalink

      Cut ourselves off…totally alone…austerity…you remainers are so funny.
      You really think all American and European businesses will suddenly say we will not trade ever again with the UK?
      Really?
      Is that what you think will happen?
      Will they refuse customer orders?
      Will they refuse to buy from us?
      Hundreds of millions of people will suddenly stop trading with the UK?
      Hilarious nonsense.

      • Newmania
        Posted September 3, 2019 at 7:36 am | Permalink

        There are various estimates of the extent to which our self imposed protectionism will hurt the economy and incomes. Over 10 years this would reduce the UK’s per-capita income by estimates ranging form between 3/4% at the lower end up to and 10% .
        There is no credible analysis including the ones the government must abide by ie the OBR and treasury, to retain credibly for budgetary constraints, that does not predict painful economic harm
        Expert opinion has frequently underestimated the risks and if we embark on the sort of undeclared war the Brexit Party recommend we will find ourselves a lot worse off than that.
        This also does not include any knock on affect of a loss of confidence in Household spending investment and so on.
        If you compare this loss of growth with that experienced in 2008 it will give you an idea of the seriousness of the situation.
        No Conservative could even think of taking such a course , this is the stuff of extreme Nationalist eccentrics .

        • Edward2
          Posted September 4, 2019 at 6:23 am | Permalink

          You fail to answer the questions I posed NM.
          Instead, going off at a tangent by quoting some predictions of growth for the future if we leave the EU.
          All using the same treasury models with the same fundamental errors and pessimism built in.
          Even so they show improved standards of living and growth of the economy for years ahead.
          The same computer models that predicted various disasters for immediately after the referendum vote and now we can see none of those predictions came true

    • GilesB
      Posted September 2, 2019 at 10:53 pm | Permalink

      Why do you think we’ll be cut off from trading with the US and the EU?

      Nothing changes with respect to the US.

      With the EU there may be some tariff changes, and in a few categories some need to indicate compliance with EU standards as there is with every other export market. But that is hardly ‘cut off from trading’.

  42. Ian Pennell
    Posted September 2, 2019 at 9:23 pm | Permalink

    Dear Sir John Redwood

    I certainly agree with your analysis: The British Government could do so much more if this country were fully outside the European Union. Countries like Italy and – especially – Greece which are also inside the Eurozone have an especially hard time: They cannot even print money to get their economies growing, whilst the EU imposes harsh austerity on any country that gets into financial difficulty. So severe has been the austerity inflicted on the poor Greeks that the Greek economy shrank by a quarter between 2009 and 2015!

    Britain needs looser fiscal and monetary policy as we leave the European Union. There is a case for borrowing another £30 billion annually pro-tem to fund major infrastructure investment and building millions more homes to ease the housing crisis. The savings from no longer paying into the EU, axing HS2 and (pro- tem) suspending Foreign Aid would free up a further £50 billion annually over the next Parliament to boost Public Sector pay, put more police on the streets, increase Defence spending and (yes) radically cut income Taxes for millions.

    The short- term economically- difficult transition implicit in a “No Deal” Brexit justifies such measures to ensure Britain avoids a recession. But – crucially – a pro- growth and popular economic policy platform is vital for the almost- unavoidable Election needed to out-fox Remainer MPs and Jeremy Corbyn so that more pro- Brexit Conservative MPs are returned- MPs who (crucially) will not get in the way of a “No Deal” Brexit on 31st October.

    MONEY- to entice millions of Voters- is CRUCIAL to the Brexit Strategy involving – as it will – an unavoidable General Election: It’s time that you, Sir (or one of your colleagues) explained this to the Prime Minister, Boris Johnson. He will need to do everything to blunt the Left’s Charge that Conservatives are about Cutting Spending/Hurting the Poor!

    Ian Pennell

  • 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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