Inflation usually kills magic money trees. Responsible advanced countries normally tell us there is no magic money tree, knowing as they do that their growth is soon killed off by inflation.
The magic money tree has been renamed Modern Monetary Theory. The idea is the Central Bank creates money in its accounts as only it can do, and buys up government debt with the money. The government can then issue more debt as there is a willing buyer at a low rate of interest. The government can afford more debt because the rate is so low, and because it owns the Central Bank who buys up lots of their debts anyway. Â The state ends up owing lots of money to itself.
Using the Central Bank and government debt is just a complex way of disguising it. They could as well simply instruct the Central Bank to print  the extra  money and give it to them to pay the government bills. Indeed both the Fed and the Bank of England had powers to do this during the pandemic.
If you carry on doing this when the economy is near full capacity it is very inflationary. Government gives itself money to buy goods that others are trying to buy and to hire Labour working for others. Only by bidding up prices and wages does the state grab these  resources . Others who still want them either go without or bid higher again. An inflationary spiral sets in.
Now the U.K. economy is back to pre pandemic levels with low unemployment there is no scope for magic money trees and considerable inflation risk. Inflation is too much money chasing too few goods. Government has to incentivise more production to help bring the price rises down. It needs to change its pro imports policies for energy, high energy using industrial products and food.
January 24, 2022
Sir J. you forgot the follow on; that is recession. With no extra government spending, and little interest in the population to buy because prices are rising, we get recession. So thank you HMG, for creating our next recession. Will it be recession or depression? that’s the only question now.
January 24, 2022
Whatever economic problems the country might have are all made worse by brexit.
But the brexiters – when confronted by the irrefutable arguments to this effect – retreated to “it’s not about money anyway”.
OK, well stop moaning about money then.
January 24, 2022
These are two separate things NHL which you inevitably are trying to conflate because for extreme remainers like yourself every single thing that happens is due to Brexit
Other than positive things that happen which are despite Brexit.
Inflation is occurring due to too much money printing.
It isn’t “moaning” to discuss how to reduce inflation down to the maximum of 2% which is the actual target KPI of the failing Bank of England.
January 24, 2022
What irrefutable arguments?
I t wasn’t about money for many people as polls at the time established, it was that decisions about the UK should be taken in the UK, to regain control over immigration and remaining meant little or no choice about how the EU expanded it’s membership or powers.
It was the remainiacs project fear that kept trying to push trade as the issue despite the majority of commerce being within the UK and there being a huge imbalance of trade with the EU.
January 24, 2022
take your own advice…..this early in the morning – still moaning.
Can’t you get a paper round or something?
January 24, 2022
All good common sense. Why is that the role of Chancellor doesn’t require some demonstrable economic competence?
The BoE printed money for far too long, now the chickens are coming home to roost. A shame that the coop they will occupy will be the average person, trying t be able to afford to switch the lights on – and the heating.
January 24, 2022
These âirrefutable argumentsâ – what are they?
If you cite the fall in exports to the EU in 2020 of 14%, exports to the rest of the world also fell by 14%. In 2020 imports from the Eu fell by 19%, from the rest of the world by 17%.
Hmm, pesky Covid eh? Nothing to do with Brexit at all.
January 25, 2022
Stop moaning about Brexit. I’m sure one of the EU countries would accommodate you if you want to remain in the EU…
January 24, 2022
Good morning.
I am sorry, Sir John but I see the problem a bit differently. The Mythical Pandemic, the blockage of the Suez Canal, IR35 and not enough drivers have all contributed to supply problems. And when you have issues with an imbalance between supply and demand, whichever one is greater, then you either have inflation or deflation.
Due to successive government policies we no longer have a manufacturing base large enough to sell most of what we want to ourselves. Energy being the most glaring example. Vast deposits, but politically a no go. We must also factor in that other countries around the world have a growing middle class. This new middle class is aspirational and desires many things. This means the price of raw materials and manufactured goods rises due to demand. In short, we live in global world and are subject to global influences and whims.
Government needs to look at its own expenditure. It pays State employees who, will be demanding very large pay rises due to high inflation. This must be resisted.
January 24, 2022
@Mark B; “The Mythical Pandemic”
I used to know someone who believed the moon landings were faked too, scientifically impossible he would insist…
“IR35”
Yes disguised employment and thus lower than expected HMRC revenue is a problem that affect the health of the national economy.
“Due to successive government policies we no longer have a manufacturing base large enough to sell most of what we want to ourselves.”
Not successive government policies, just the one our host was first an advisor and then MP and Minister to, by the time John Major became PM, never mind Blair and Cameron et al, the die was cast, the deal done, and production never to return in all likeliness – unless someone like a modern-day Macmillan or Wilson, were to become PM, with their export of die policies that eventually feed into the UK domestic economy.
“We must also factor in that other countries around the world have a growing middle class.”
Indeed, beyond currently very high shipping and energy costs one of the major causes of inflation in the west is the increased wages the ‘middle class’ in the PRC now demand, and with the CNY upon the world expect another hike in costs (CNY being the tradition period in the PRC for employee churn and wage settlement etc).
As for pay and prices here in the UK, we all likely face a period of much lower remuneration, in real terms, not just your usual scapegoat Mark, those employed directly by the State.
January 24, 2022
A small group of international experts are going to take control of the orchard and replant magic money trees.
They will keep most of the fruit though.
January 24, 2022
Peter
A good analogy. Sadly, I think this is being done deliberately, to kill off the middle classes. Rich elite, the rest of us poorâŠ
January 24, 2022
Meanwhile on âConservative Homeâ there is an article by John Redwood about running a successful Policy Unit.
He states speaking to Boris Johnson âI urged him to keep the crucial manifesto headline promises of levelling up, getting Brexit done and not raising the main taxes as central drivers of policy.â
I donât know what levelling up means now. It seems to cover a multitude of possibilities. The other two promises are very clear though and should be kept.
The key issue is whether you think Boris Johnson would have any intention of keeping these promises.
âConservative Homeâ is currently free from David Guake pontification and the Sir John Redwood article is the first one on the list.
January 25, 2022
The key issue indeed and I don’t believe that he does have that intent. Too ready to submit to the globalists.
January 24, 2022
Inflation is baked in this year. Global shortages are not about to end quickly. Capacity to on shore the manufacture of many products that have been off shored does not exist and/or it would take time to create – if it has not already been regulated out of business. Even capacity to produce our own food is being reduced by “rewilding”. The political class, its advisors and lobbyists have left the UK dangerously exposed to system collapse with precious few margins of reserve. They are to blame for this. Printing money is not a solution.
January 24, 2022
Agreed. Mr Redwoodâs posting would have not long ago sounded like a condemnation of central bank and government policy under Labour . No wonder the conservatives no longer mention âthe squeezed middleâ as they continue to destroy the prosperity of their voting base for largely unconservative ideological reasons. The irony is depressing.
January 24, 2022
Capacity to onshore will be actively discouraged by this government as it may add to our CO2 production.
They refused permission for the new French interconnector not for security but the proposed route.
The government is bankrupting us by Importing power, the biggest component in our trade deficit.
January 24, 2022
Wind today only contributing 5% and we’re running open cycle gas turbines and over 2gw of coal fired.
Where is this coming from when the last of the coal fired stations shut down next year.
January 25, 2022
Indeed Ian.
January 24, 2022
Inflation will be worse next year.
It is not a risk to be âconsideredâ or âtaken into accountâ. It is an absolute certainty. All we can do now is to try to limit the damage in 2023 by protecting the most vulnerable industries.
And lay a solid foundation for reducing inflation in 2024 by eliminating non-value generating jobs, increasing self-sufficiency particularly in energy, and increasing interest rates. Otherwise inflation will run away in 2024 – just in time for the next General Election.
January 25, 2022
One can but hope.
January 24, 2022
Inflation?
Russia and Ukraine are the world’s two biggest wheat exporters.I see Russia has cut it’s wheat export quota by 1m tonnes for 2022.If war breaks out,it would be easy for Russia to obliterate Ukraine’s Black Sea grain terminals.Their wheat growing fields could also get churned up.
Also with effect from this month Russia(historically one of the largest exporters) has banned the export of unprocessed timber logs and has already cracked down hard on illegal logging.This move was to stimulate development of indigenous value-added wood processing industries in the Russian Far East.It has already had the desired effect-Japan’s largest timber housebuilder has ,with the Kremlin’s consent,bought a controlling interest in one of the largest logging companies with a view to establishing production facilities in the RFE to supply both the Japanese market and the markets it has been developing in the RFE and Tartarstan.
January 24, 2022
It is a criminal abuse of the trust and confidence the people place in those who are elected into government to act with probity and a degree of adult responsibility. Instead like INFANTS in a sweetshop they run riot in a frenzied burst consuming all that they can in a the short time allotted to them.
The Tories act in such a manner to buy off the ideological enemy (public sector unions, activists and leftist State organisations and international parasitic bodies) and Labour simply because they exist to steal our wealth to finance their client state ambitions. Either way, both the main parties abuse the public purse to fund the ambitions of their respective parties.
The British State is now a privileged vested interest in its own right and that spells danger for those who exist outside the gilded cage of taxpayer funded largesse.
It won’t end well
January 24, 2022
It is a snake that is eating its own tail.
January 24, 2022
+ spot on
Hear! Hear!
January 25, 2022
Huh? The British State has always been a privileged vested interest in its own right.
But I can’t think of any state that doesn’t act in that way.
January 24, 2022
Oh dear!
Will folk still want to come to Treasure Island when the Money Tree withers and produces no more fruit?
Or will the ovine tax payer just keep on coughing up?
Interestingly, the idea of a money tree comes from a Chinese fable. The tree didnât grow money but was so beautiful that everyone wanted to buy one.
AND there seems to be an actual money tree with fruit very much like cocoa.
January 24, 2022
the UK beautiful tree is being dug up to be replaced by a concrete statue of one.
January 24, 2022
Indeed Sunakâs Tax, borrow, print money and piss it all down the drain, bloated government âworkingâ from home agenda, combined with the net zero lunacy and failure to cut red tape (the reverse in fact), has done huge harm – exactly as anyone sensible would have expected it to do. These PPE graduates never seem to grasp even basic economics (but this is perhaps the types of people who aspire to PPE Oxon. and Politics in the main).
Hunt, Hancock, Simon Stevens (all PPE) certainly left the NHS in a dire state and showed no inclination to change the state monopoly system (with some of the worse records measured by outcomes in for the developed world) – Gosport, Shewsbury and Telford, Morcombe Bay, Ely Hospital, Harold Shipman plus all the endless delays for even basic treatmentsâŠthe list is huge. âLessons will be learnedâ they always say but alas they never are. Appalling pandemic planning too. The NHS is envy of no one sensible.
January 24, 2022
Amanda Pritchard does not inspire any confidence either. A Modern History degree and then joined the NHS Management Training Scheme in 1997 (who does the training one wonders and do they have a clue about management or patients need & want). She has worked for the NHS for her entire career it seems and has already shown herself to be innumerate with very basic errors. She is surely never going to sort the system and huge waiting list out nor even seriously try to do so one suspects. A free at the point of use, take it or leave it, rationed and delayed state monopoly is no way to run healthcare, nor indeed education or almost anything else.
January 24, 2022
Spot on.
Also what we would have expected from Corbyn/Starmer had they been elected in, almost to a tee.
January 24, 2022
I don’t think she’s there to sort anything out is she? Isn’t it all about the new religion of diversity/equality etc. etc.
Having experienced several younger members of the family come out of our modern universities with it seems less ability to read across the page than when they went in and a look of sheer terror in the presence of anyone who dare say ‘NO’ to much of today’s state religion, I can’t see much room for improvement.
As also witnessed they leave University and head straight into some state paid machine and then become fully immersed and trained into this religion.
January 24, 2022
+1
January 24, 2022
Indeed correct very often.
January 24, 2022
lifelogic,
Your familiar theme (and personal obsession?) of people forever defined by what they did between the ages of 18 to 22ish.
Ever heard of the school of hard knocks?
Maybe these people had a look at engineering departments then decided that the Oriental students probably had a better chance of work in that field than those seeking work in the U.K.?
January 24, 2022
The NHS was spoilt when the private sector tried to use existing staff to built up their businesses and agencies. They thought that the most qualified could drive around the country, using petrol, dirtying the atmosphere, looking for hours work. The theory was that the new staff from the abroad’s , could not manage to travel around the country so they could stay in house ,taking over our settled secondary care. I have heard this argued by managers in the mid 90’s. The universities also wanted European funds to fill up places. Of course the NHS was run very differently from all other nationalities . We practiced total patient care but this was changed quickly to new management talking about piece work. This was underlined again by Universities specialising and researching in one area only . The theory here was that every cog in the wheel would be specialist and the patient could swap from specialist to specialist according to their needs. Unfortunately the body does not function like this ; it is a poly systemic whole which finely interacts.
Business and structures from other countries did not and does not work. The situation gets worse :. the bad Drs and Nurses , having been trained differently ,spoil things from our past and the present majority of our very caring and loyal staff.
The question is how can one rapidly change things , by asking every one to pay ÂŁ50 month for their insurance? that won’t go down well , so we have to revive the NHS, but big shot management with big fees cannot do this.
January 25, 2022
+1
January 24, 2022
Government has to incentivise more.
A good incentive to the taxpayers would be to see real meaningful addressing of the government waste.
For some it is the elephant in the room. All the government ministers talking about giving billions here and billions there which in reality means nothing.
They don’t have the money in the first place.
Sorry to be a PITA (pain in etc) but can we not go back to sensible management of the economy paying for what we can afford? As the tax revenues increase, then spend our money and give us good value for it. All these vanity and wish list projects just to give the illusion that we are leading the world that will get others to follow doesn’t fool anybody.
Start addressing what’s important to the nation. I can with a lot of others tell them it is not Net Zero, high speed trains and the like. If the party wants to stop imploding as it is at the moment it had better go back to what it use to do well.
January 24, 2022
What a great idea Fiat currency was!
For the central banks.
Total control of the money supply.
No silly old constraints like being backed by a commodity.
And what have they done with all this âmoneyâ?
Ruined the world thatâs what!
January 25, 2022
+1
January 24, 2022
I’m glad that there’s at least one MP who understands this. Perhaps you could now take a look at China’s experience of spending enormous amounts of money on high-speed rail projects.
January 28, 2022
In eleven years (2010-2021), China went from 8,400 to about 40,000 km of high-speed (HSR) connections. According to marcopolo.org such a development costed $1.98 trillion but brought a benefit of $2.36 tn, so a net benefit of $378 bn.
Part of the problem with these figures is that they include a time saving benefit of $1.01 tn , which is much more difficult to justify than some operating cost savings or generated traffic benefits.
So is the whole development a positive or a negative to the country? It might certainly help bring reinforcements much more quickly to places of ⊠disquiet.
January 24, 2022
So, if I may personalise modern monetary theory. I go to the bank as a twenty year old and ask for a loan for my productivity for the next forty years. Then I think, no that is not enough. I HOPE to have two children and want to borrow enough extra to cover their productive lives as well.
Sir John, the advocates of MMT must think we are all as thick as two short planks. They do nothing other than steal from future generations so they can live their socialist dream of living off the backs of people who actually work.
January 24, 2022
I’m afraid it’s worse that that, BOF. The advocates of MMT don’t care what ‘we’ think. In a post-democratic technocracy they don’t have to. You and your children, I and my children, are only of use to their New Normal if we borrow to consume. Elections, if we have them, are a merely a periodic inconvenience to be managed by the opinion-formers they hire to do their bidding.
Somehow we have to find ways of liberating ourselves from their grip if tomorrow is to be better than today.
January 24, 2022
+1
I think that it could mean you take yourself off to the cellar and get out the printer!
Then you lend all the nice damp notes to yourself!
And you pay it back when you think you willâŠ.in old buttons! đ
ANDâŠI suppose..if you can foist it onto the butcher, baker etc you eventually jeopardise their wealth?
January 24, 2022
I earn a lot of money. My wife earns a lot of money.
Most of the money we earned is taken by the Tory Brexit pensioners – who we do not vote for – to pay for pensioners and Brexit.
It is thievery.
I want to keep my money for me rather than spending it fixing whinging grannyâs bunions.
January 24, 2022
Andy
That was the way it was set up originally, so blame the founders of the system if you want to blame anyone, we have all paid for others in our time, just as we do for education, even after our own have been through the system.
January 24, 2022
Sorry kids, mummy and daddy want to selfishly keep more of the money we have ostentatiously/virtue signalled to the world so we have sent grannie and grandpa away. No they wont be coming back.
January 24, 2022
Another message directly from his parent’s spare bedroom on Fantasy Island.
January 24, 2022
Glen, surely you mean from his bedroom, in his parents house, on Fantasy Island?! đ
January 24, 2022
That’s right because had it not been for Brexit we wouldn’t have grannies with bunions would we.
I demand we reverse Brexit and end this tyranny of money grabbing grannies.
At least you are consistent with everything being down to Brexit, I’ll give you that.
January 24, 2022
We already knew you must earn a lot of money because you bought an electric car.
January 24, 2022
Taxes are too high I agree, but itâs sickening the way you think the U.K. should be the only developed country not to provide for old people who donât have private means. But great that you advocate it, I do hope you can persuade whichever leftist party you support to adopt it as a policy, and that Sir John continues to allow your tedious and unpleasant posts.
The way things are going we need all the help we can get to keep a Conservative govt in office.
January 24, 2022
Andy, most civilised countries – notably major European Union ones – have some sort of social, i.e. publicly-funded support mechanism for the elderly who would otherwise have no such means.
We both know that this is essential to any claim on their part to be enlightened societies.
Yes, it can be gratifying to believe that you are annoying people whom you dislike, but rather, you are, I think, offering a repeated open goal to those who wish to discredit by association the good sense that you generally display on other matters.
Many of the brexiter commenters here are not intending to engage properly with reasoned argument at all, but simply to fill as far as possible the internet with the baleful rubbish which has given us brexit, Trump as president, and all the rest.
They also waste the valuable time of effective commenters, who could otherwise be read by far more readers elsewhere.
January 25, 2022
@NLH – As always your lack of self awareness is in a way much more entertaining than the other trolls, particularly the Andy clown.
January 25, 2022
Andy Pandy was much more fun. Parents picked an appropriate name, is it Pandy?
January 25, 2022
Hopefully the next updated version of this blog software will refuse Andy’s scribble ‘you have presented this nnn times already- file 99’.
January 24, 2022
Andy. God help the world if people were all heart like you and your wife. How much do you get paid to write this childish drivel from mummy’s bedroom? I doubt you even have a wife. It would be hard to find a woman that stupid.
January 25, 2022
well she hasn’t much competition in the conservation part of the bargain.
January 25, 2022
oops – typing to fast — s/be conversation of course.
January 24, 2022
Andy doesn’t have a mum or a dad. He never did. He just appeared from nowhere as a foetus and gestated in a box.
I’ve been paying my taxes to support the elderly and expect those behind me to do the same for me.
That’s how it works. If you don’t like it then emigrate.
January 24, 2022
you are clearly so wealthy why not retire? You have been putting into pensions and saving for the time you will be old and want your bunions fixed, haven’t you? – we have.
The tax on your lower income will be smaller and you will be freed from running the Andy and Company.
Move to the chateaux in France, forget UK – Vive la France.
Enjoy living with Macron.
January 24, 2022
Get a moral compass, you are part of society and have responsibilities to society.
January 24, 2022
@Andy; You really do not have a first clue how the State Pension system works do you, those currently working and paying taxes have always paid the pensions of their (grand)parents, it has been so for the last 110 years or so, it is not the fault of Brexiteers, pensioners or otherwise. Your own (grand)children will be paying for your own State pension when the time comes, in another 50 years…
January 24, 2022
Please blame the Liberal Party for introducing a state pension in 1909 even if it is was means tested and you had to be 70+.
The pension payments that so concerns you may well be solved in your lifetime by the CO2 religion where the Chinese led UN world government that Remainers seek will put a limit on the total CO2 that anyone will be allowed to emit.
Unless you are at the very top of the tree I donât think any individual wealth will be allowed as we head for the Marxist Net Zero utopia so I wouldnât worry about trying to keep it.
January 24, 2022
“I earn a lot of money. My wife earns a lot of money”
So you keep telling us Andy, which given some of your other ideas I must admit frankly puzzles me.
Would it be illogical to suggest that state pensions would be paid whether we were in the EU or not?
However, keep on posting Andy – it can only help confirm what many of us already think about the mental capacity of some EU advocates.
January 25, 2022
@Ian T; The rambling comments by “Andy” do not confirm the mental capacity of some EU advocates, they confirm how poor our national education system has become, with considerable blame having to be placed at the feet of Mrs Thatcher, first as Education Secretary in the Heath govt, were she embraced the awful Comprehensive system, and second, as PM were she also embraced the nonsense of the National Curriculum.
January 24, 2022
You must live a very sad and angry life. I know I would if I believed that my taxes were theft and were being used to pay for pensioners who had never paid anything themselves.
You seem to struggle with reality. The reality is, of course, that most people pay taxes all their lives – some of which is spent providing pensions for those older than themselves. Then their turn comes – and they receive a pension. You know this, of course, but you seem to struggle to accept it. As I said, you struggle with reality. I think you should see someone – if you really do earn a lot of money, start seeing a therapist to work through your issues.
You could start with: ‘I think the 17.4 million people who voted to leave the EU were all Tory voting pensioners’.
Once your therapist has removed that nonsense from your head (I fear ECT may be necessary) – they could then move on to your delusions about earning lots of money etc.
January 24, 2022
Loadsamoney!!!!
Recycling the Harry Enfield character from the 1980s?
You also need to sing the praises of Mrs. Thatcher for a really accurate tribute act.
January 24, 2022
Andy, A classic performance. But you are just a bore, utterly predictable. Tucked away in your bedsit, same old fantasy. Come up with some new nonsense, at least.
January 24, 2022
Or simply as they say in Yorkshire: “You don’t get owt for nowt”.
Problem is the hangover always follows the party.
January 24, 2022
Or “If thou ever does out for nowt, do it for thisen”.
January 24, 2022
“Be careful what you wish for” is an old granny saying which is very appropriate for what is happening now within in parliament.
Change can only succeed when it is a complete change and it therefor must also impact on those who assist in delivering it. Too many times speed of change is disrupted by those charged with implementing it.
Whatever decisions are made in stabilising the economy they must ensure that those delegated to control and organise it are totally committed and capable to the task in hand.
The state we find ourselves in at the moment, failure is not an option.
January 24, 2022
Why is it that this government is so slow to act,if it continues they will be punished at the ballot box.
Is it because of lack of ministral experience ,or the civil service jamming up the works?
January 24, 2022
Could it be lack of Ministerial experience failing to stop Civil Service sabotage?
In some ways it might be more reassuring to think that the CS were clever enough to manage events behind the scenes – but the simplest explanation is often the correct one. I suspect that in fact there is no vast CS conspiracy, just high levels of senior management incompetance right across government – compounded by almost complete lack of accountability and an inbuilt sense of entitlement.
January 24, 2022
Yes Minister.
January 24, 2022
Public Health Scotland COVID-19 & Winter Statistical Report
As at 17 January 2022
Publication date: 19 January 2022
Shows Infections are lowest amongst the unvaccinated (see table 14). Deaths are in the unvaccinated are half those with 2 doses. Deaths are lower in booster doses by 20 times than the unvaccinated.
The way I read this data is that vaccines give a huge short term benefit for a few months but in the long run they weaken your immune system and double your chance of dying.
January 24, 2022
â The way I read this data is that vaccines give a huge short term benefit for a few months but in the long run they weaken your immune system and double your chance of dying.â
Exactly! Thatâs what the non-politicised doctors and scientists have been warning for months⊠the vaccine targets only the spike protein, which instructs your system to attack only it, effectively switching off your innate immune system which then allows other viruses and variants to enter your body unheeded!
January 24, 2022
That’s the thing about experiments, Javelin. They’re empirical, so you don’t know in advance how they’re going to turn out. Those who went along with this should have known that. We need to know why the MHRA licensed these vaccines, why they have been recommended to the public as safe and effective, and what risk assessment made it preferable to do so, rather than dealing with Covid in other ways.
January 24, 2022
Could it be that the unvaccinated don’t bother getting tested either ?
Masks could be bad for weakening the immune system too. We have some professor now saying that “Since we have proven that masks reduce flu we should keep them permanently.”
Told you so.
We are surrounded by mask fetishists.
January 24, 2022
the data reads as if Ferguson has produced it.
January 24, 2022
Or you could also conclude that as a very high percentage of all older people are fully vaccinated but that they are also (by a very high percentage) the folk most likely to die (if simply of old age) – whether they test positive with Covid or not.
January 24, 2022
Alan Milburn today in the Telegraph – âThe enormous attainment gap between rich and poor children must be the Governmentâs top priorityâ.
Well why did Labour, the Tories and Thatcher kill off so many good Grammar schools then? What happened to Education, Education, Education under Blair? But of course you get a large earnings gap as firstly brighter parents are likely to be richer and to statistically have brighter children. Plus they are likely motivate them differently and be able to fund them and help them get good jobs and training. Having said that some bright practical manual worker builders, mechanics, plumbers etc, are often far more use than graduate PPE, lawyers, media studies, PPE & social science⊠graduates.
What did Alun Milburn actually achieve as first as Chief Secretary to the Treasury and Secretary of State for Health under Blair or in managing Labour’s 2005 re-election campaign giving us yet more of the dire Blair and Brown to suffer?
January 24, 2022
Yes, completely stupid. Just between my friends and I we must have returned tens of millions to the Treasury from our State Grammar education. Just make schools and universities meritocratic through Grammar schools and Grants.
January 24, 2022
Lifelogic,
When you ask “Why did etc.” I believe that on the part of many it was an attempt to destroy society and create a population of ill educated compliant clones.
The perfect system would be to send pupils to one of our excellent public schools and teach them within their capacity to learn by responding to their god given natural talents. At the end of the process you would end up with healthy, worldly products covering everything from Plato to Plumbing. It would feed the economy with high octane fuel rather than peat. Cost would be about ÂŁ35,000 per annum rather than the current ÂŁ6,000 approx. This is what I would recognise as a true investment that would pay UK LTD handsomely, unlike ÂŁ100 billion plus on HS2.
January 24, 2022
We voted Conservative. We got a Blair/Brown tribute act on steroids….. with Caroline Lucas thrown in for good measure. What could possibly go wrong?
Only everything.
January 24, 2022
Well the Conservatives managed to pick candidates for MPs who are now eating the Party who chose them. The Christian person and now another previously unknown making blue-on-blue accusations.
January 24, 2022
The Greens have turned Brighton into a mess.
January 24, 2022
+1 Covid, Carrie and the CO2 religion have driven Boris mad.
January 24, 2022
When the Brexit Party emerged from the ashes of a UKIP taken over by its headbanging wing, I met the woman – economics graduate, very concentrated – whose letter to Nigel Farage had triggered his re-engagement with the political process. We had a rather intense conversation about the huge National Debts around the world and how governments were going to get rid of it. We settled on two ways: inflation or war.
I see from the news this week that both options are now in play.
January 24, 2022
I have always feared that the Covid crisis (our overreaction to it) would demonstrate our weakness and lead us to war.
January 24, 2022
As the Remain campaigns pointed out, brexit would leave peace in Europe less secure.
It appears that we were right on that too, doesn’t it?
January 24, 2022
NLH : “As the Remain campaigns pointed out, brexit would leave peace in Europe less secure.”
Because the Germans, the French and the Italians are going to invade us again?
January 25, 2022
Well if you expect the French, Spanish and Swedes to step up with a serious military operation, forget it.
January 24, 2022
Perhaps if the Government did not spend so much of its taxation income, then perhaps borrowing could be reduced, they only print money because they cannot raise or get it via any other means.
Borrowing money from yourself, which you do not have, and printing more to cover it, is not a sustainable or sensible policy.
Clearly the lessons of history have not been learn’t.
January 24, 2022
Inflation is – in other words – a lack of trust in your currency. This is what happens when it is debased by government making its own money to pay debt owed to others.
January 25, 2022
+1
January 24, 2022
Just as a side issue, it seems to me that in the past the Government were very foolish to sell so many inflation-linked bonds because now they don’t even get the benefit of “inflating away” their debt.
January 25, 2022
They probably had no choice.Who in their right mind would buy sterling bonds from a government that never pays back it’s debts and has inflated the value of it’s currency away to virtually nothing over the past 100 years.
January 24, 2022
Sir John,
Watching the Gridwatch Templar website this morning is a rather tense process. The Grid frequency has been bouncing around, something I believe is a sign of stress. We are burning coal, using some of the ‘black start’ emergency pumped storage reserves at Dinorig, and the wasteful and astronomically expensive open cycle gas turbines have just come on line.
I have the utmost respect for the Grid engineers who have kept the lights on while frivolous and STEM-illiterate politicians play Russian roulette with our energy supplies,but eventually something is going to break.
A blocking continental high at this time of year comes with little wind and low cloud. Minimal solar and wind turbine output means we are walking a tightrope.
The proposed solution? More of the same with a fallback nuclear choice – unbuildable EPRs with a 9% finance package that will be keeping us poorer until 2065 – that only an administration deaf to the reality of basic physics would accept.
We can’t go on like this.
January 24, 2022
Julian Flood :
I completely agree, as I write wind is generating just 1.4 GW.
Either the Net Zero Strategy is going to collapse or else it will be forced through in the style of the USSRâs collectivization.
January 25, 2022
+1
January 24, 2022
Whether Government borrows printed money from the Bank of England or other lenders, while the government is borrowing that money is being printed and is therefore inflationary.
Time to balance the budget, cuts to benefits now the economy can sustain more jobs and an end to any house price supporting measures, an end to environmental subsidies, fewer bureaucrats, fewer levels of bureaucracy, less spending on white elephants such as HS2 and an end to subsiding illegal immigration – no accommodation other than (speedy) processing centres in low cost environment. Finally, introduce partial charging into the NHS.
January 24, 2022
I see Boris Johnson has launched an inquiry to investigate whether Boris Johnson sacked a Muslim woman for being a Muslim woman.
I suspect Boris Johnsonâs investigation into Boris Johnsonâs behaviour will find that Boris Johnson did nothing wrong.
The Brexitists have turned us into a banana republic – with rampant Brexit inflation to match.
January 25, 2022
She was chosen from a short list of over twenty as the best one to become the prospective Parliamentary candidate for a constituency.
A constituency which isn’t renowned for its diversity.
Yet that traditional set of voters liked her and made her their MP.
The party promoted her a minister within a short time.
January 28, 2022
âThe party promoted her a minister within a short timeâ, in January 2018. And in February 2020 she was reshuffled. She claimed being discriminated because of her faith. An investigation is being held. What about waiting for its conclusions.
January 24, 2022
Economics, economic, eco- words misunderstood just a word a label to many.
Eco is is habitat or environment.
Nomics is derived from the Greek meaning Law.
Fundamentally everyones fortunes rest on these foundations – and the laws of economics which, if broken or ignored, kick in with a vengeance as history has shown but often ignored in fool’s paradise.
We are witnessing a game of musical chairs practiced by political parties trying to outspend each other before the music stops and gives the other a poison chalice legacy.
As SJR notes Debt is the D dirty word no one likes to think about least talk about and it is invisible to most folks. It’s like a big red balloon expensive worth trillions, miles high presently but the natural law of gravity will occur when it is unsustainable. Which is anytime soon. Other politicians will think about minutiae, as Ken Livingstone has observed both Tory and Labour MPs today just want to be famous unaware of the most important fundamentals especially Economics , Economy and Debt.
January 24, 2022
This is something that we as individuals can do nothing about. It is a big wheeze discovered and utilised by governments to get around funding their pet projects. Normal individuals with a pet project work a bit of overtime or sell something they no longer need and then indulge their project or just cancel it. Government believe in have it now and pay for it later, but they do not pay, the taxpayer pays, that is you and me. It is akin to having a spendthrift member of the family, an alchoholic or a drug addict draining assets to feed their habit. Have you ever considered as an MP, voting down a governments finance bill where you consider it to be against the interests of the taxpayer.
January 24, 2022
And could we have your thoughts about the way in which a new anti-motorist /pro-lycra Highway Code seems to have been sprung upon us? I’m confident that this latest eco-lunacy – originating inside No 10, no doubt – will result in MORE pedestrians and cyclists being killed.
January 24, 2022
In other words, Mr Johnson is the new Edward Heath, no doubt to be followed by several years of Labour horror. Let’s hope that somewhere hidden away, there is a new Margaret Thatcher with the strength of mind to put things right after that.
January 24, 2022
The police have given âdamningâ evidence about who was coming and going to Downing Street. Iâm expecting the log to reveal many sleazy lobbyists coming and going as well as breaking lockdown rules.
This Number Ten visitor logbook needs to be public like in the White House visitor logs. If the President of the US can have his visits made public so can the PM.
January 24, 2022
RE our importing energy systems, I found this report:
“the Guardian in 2017: According to GĂ©rard Magnin, a former EDF director, the French company sees Hinkley as âa way to make the British fund the renaissance of nuclear in Franceâ. He added: âWe cannot be sure that in 2060 or 2065, British pensioners, who are currently at school, will not still be paying for the advancement of the nuclear industry in France.â”
 Well, they did it with our aircraft industries so why not nuclear?
It’s not too late to withhold the go-ahead for Sizewell, investing instead in RR SMRs which will come on stream years before the French EPRs, with CCGTs holding the fort until then. If Net Zero matters then going for the obsolescent EPR technology is the wrong choice. If it turns out to be unnecessary then we will have gained a reliable Grid which today looks rather frail.
JF
January 24, 2022
MMT is a socialist idea and therefore it doesn’t work. We have the “progressive” left in the USA demonstrating how not to run a country. We should say thank you to the Biden administration for showing us the mistakes governments can make. I always wondered why the socialists didn’t just print enough money to buy New York and then just rent it out. So thanks, Joe, for showing me why…
It’s too late to stop inflation, the problem was created months ago.
We must hope that the plague, which necessitated the drastic resort, is not sufficient to propel inflation to the dizzy heights of the 1970s. Cut tax, more trade agreements and start fracking! Let the Greenies and Socialists live in their virtuous mud huts while the rest of us crack on. And can the remaoners SFU and stop moaning about the government. Go live in France where you can moan about Macron but are lumbered with the German government reject, van der Leyen until she, too, hits the bottle…
January 24, 2022
I note that we have adopted a very European (???) realignment of traffic priority.
Pedestrians and cyclists first.
All aimed at doing away with cars in towns.
Just watch the âgreensâ take huge advantage of the new rules and make absolutely certain that no cars pass!
And the govt will wring its silly little hands as per.
January 24, 2022
And wonât this give XR complete carte blanche to block any road they chooseâŠforever?
January 25, 2022
just a thought, dangerous I know, but are these XR heroes going to disrupt the roads in the EU.
Perhaps on the Boulevard PĂ©riphĂ©rique, the Brandenburg Gate, the Brussels Congress, Milan’s Corso Vittorio Emanuele II., Madrid’s La Castellana Boulevard..?
Fair targets – then outside the Capitol in DC, the blocks around the White House, Times Sq, and Beijing’s Olympic park?
January 24, 2022
Off topic, later today Liz Truss is going to Brussels for more discussions with MaroĆĄ Ć efÄoviÄ:
https://www.rte.ie/news/world/2022/0124/1275468-ni-protocol/
and I hope she will remember that when it was first raised by the Irish government in 2017 the problem was supposed to be about goods crossing the land border from Northern Ireland into the Irish Republic, which is part of the EU Single Market, not about goods moving within the UK’s internal market from Great Britain to Northern Ireland or indeed the other way, and insist on a rational shift of the focus of the Irish protocol to the flow of goods in which the Irish government and the EU actually have a legitimate interest.
I did send a letter in her direction outlining a unilateral stepwise plan to achieve that transition, assuming that the Irish government and the EU will persist with their absurd extreme and intransigent position:
https://johnredwoodsdiary.com/2022/01/01/2022-message/#comment-1288047
“1. Pass the UK laws to protect the EU Single Market which were adumbrated in paragraphs 43 and 62 of the July Command Paper … ”
And so forth.
January 24, 2022
https://johnredwoodsdiary.com/2018/09/21/the-eu-is-more-preoccupied-with-migration-than-with-brexit/#comment-962198
âBrexit â time to mind our own business?â
A letter in the Irish Times, a long time ago …
January 24, 2022
Agreed Sir John.
However it is interesting to ask to what extent the actions of the Fed and the ECB who are both printing money will dominate things? In the USA there is a definite political push on the left of the Democrat Party (Congresswoman AO Cortez and others) to plant one of the trees and make it grow like Jack in the Beanstalk’s Bean did. This would eventually reduce the Fiat Dollar based world economy to rubble by the resulting Hyperinflation turmoil.
January 24, 2022
Another demonstration against the injection and forced injection outside the BBC in London on Saturday, a few hundred attended according to the BBC’s website, and other unreported demos across the country. Photos in today’s Conservative Woman, now known as TCW Defending Freedom.
January 24, 2022
Iago,
Yes. All kept very hush hush beforehand – unless you signed up to their site in advance.
I might have gone if I had known the location and there were no rail engineering works.
However, I was going to a football match anyway.
January 24, 2022
O/T Help please! Can you address the incoming new Highway Code for cyclists allowed to ride blocking the middle of busy roads as this is already being abused by selfish folk Sir John. As a leisure cyclist myself I find it darn right stupid how many adult cyclists abuse the safe and fair sharing of the road. Only a powerful light seems to make them aware of oncoming traffic.
It could be construed as another deliberate aim to deter private motoring but it also harms the HGV traffic that is vital to keep the economy going. Expect XR to take full advantage of this too. Chaos for RTAs and NHS too dealing with the carnage plus extra Insurance costs all round.
January 24, 2022
UK Retired. I totally agree. Frigging madness. I don’t know what’s got into this party lately. Does anyone have an ounce of common sense?
January 25, 2022
advice from Dutch cycling experts on weed…
January 25, 2022
Double Dutch it certainly is even without weed…..
January 24, 2022
Clearly money and its management is important, but the fundamental weakness of our economy is that we don’t make enough physical things needed here and by businesses owned by us.
Those grave inadequacies must be treated seriously and urgently but our government, filled as it is with people who know nothing about making things, cannot understand the real need. They themselves have plenty of money, they think it is fashionable and harmless to buy from abroad.
Until the leaders leave the fantasy world they inhabit we the people will suffer badly and the country will continue on its downward spiral.
January 24, 2022
Did Lewis Carroll write this? It reads like something from Alice in Wonderland.
January 24, 2022
Sir John, Gridwatch at 1730 shows everything thrown onto the table, demand at 45GW. Wind 1.2GW, coal (!) 3GW. Dinorwic pumped hydro – the black start emergency reserve — being used to keep the Grid working but even so the frequency is low. I hope they know what they are doing.
I think I’ll look out the camping gas light, just in case.
JF
January 24, 2022
Lord Agnew, the Tory Treasury Minister, who resigned dramatically 24th Jan over the inept Government performance for managing Fraud, citing ÂŁ4.3bn Covid monies which went to criminal gangs etc, in all ÂŁ20+bn is lost annually as deliberate fraud, worth a penny on income tax. We are governed very badly imvho.
Anyone who thinks HMG and BoE are going to manage inflation any better will not be surprised when they fail here also….
January 24, 2022
Well guess what? I’m sitting here listening to Farage going on about the important things going on worldwide. Possible war on our doorstep. Bit too close for comfort. No support from France and Germany. Gas supplies threatened to the EU. Lng supplies at a premium. Maybe involvement in a war possibly with power cuts. Fantastic- not. Still going on about Boris and parties. I despair and now cyclists and pedestrians have right of way. Cyclists in the middle of the road nor having to use a CYCLE lane!!!! Have your ministers completely lost the plot? I can’t believe what I am hearing. YOUR LOST HAVE LOST IT. TOTALLY.
January 25, 2022
Cycle lanes will be moved to the middle of roads, and pedestrians will be awarded the often narrow strip of pavement formerly for cycles.
Cars are going to be phased out.
January 25, 2022
Roads in the country here and everywhere are narrow and cyclists here ride aggressively. One example; they ride two abreast and even when there is only one of them, they commonly spread themselves up to the centre line – where there is one – which means, if cars and vans need to overtake leaving 1.5m between themselves and the bikes, they can’t overtake because there isn’t enough road left on the overtaking side.
This country’s leadership appeases every element of ‘green’ threats and pressures and cares nothing about those who lose their rights and freedoms.
January 25, 2022
https://conservativepost.co.uk/uk-exports-at-a-22-month-high-driven-by-trade-to-non-eu-countries/
Interesting report for the extreme remainers on here.
January 25, 2022
P2, interesting indeed, but no need to put a ConservativePost layer of paint on these results: they are available with plenty of others not so astronomically brilliant and without the type of comments that gives you a hard one on ons.gov.uk âUK economy latestâ.
January 25, 2022
What does that actually mean hef?
I just found a site that had these results displayed.
Are you really saying that if they were on a different site, those same figures, that they would somehow be better?
January 25, 2022
The government can afford more debt because the rate is so low, and because it owns the Central Bank who buys up lots of their debts anyway. The state ends up owing lots of money to itself.
…
John, is this implied lunacy? Can you write an article articulating a rational alternative?
January 25, 2022
ÂŁ4.3 bn lost to fraud: where is The Tax Payersâ Alliance Ltd when it is needed?
January 25, 2022
Fighting to expose those losses and make them public.
Would you prefer a brush and a carpet heffy?
January 25, 2022
Funny, I cannot find anything from the TPA and it appears that the ÂŁ4.3 bn might have already disappeared into the bottomless well that taxpayers dutifully refill every year.
Could you please provide a reference to the TPAâs efforts at making these losses public. Thanks a lot in advance.
January 26, 2022
You first
Give us a detailed audited or peer reviewed list of exactly what the ÂŁ4.3 billion fraud comprises of.
January 26, 2022
Odd you couldn’t find anything hef.
So as to be helpful to you:-
Search on “taxpayers alliance and fraud”
Lots of articles and press releases from them on the subject of fraud.
(And other articles on government waste)
January 29, 2022
When I originally posted on 25/01 following Lord Agnewâs resignation on 24/01 there was nothing on the TPA website. It only appeared on their site on 27/01. And what you were quoting on 26/01 was indeed about fraud but not about the lost ÂŁ4.3 (or 4.9) bn Lord Agnew had talked about.
But you must have had your little high, so thatâs the important bit.
January 25, 2022
Inflation reports – I’m confused, the ONS say prices are rising, yet when I checked their prices detailed in the Chronicle.Live they are using very high prices when there are much cheaper items in the UK, many produced in the UK, lots half price i.e. butter, margarine, and other items like t-bags. We know that discount supermarkets are causing a price match promise so why isn’t this being taken into account? Does it suit government to overstate inflation?
Then the trade deficit/surplus – isn’t it a good thing for the UK if the “UK Posts Widest Trade Surplus in 6 Months –
The UK posted a trade surplus of GBP 0.63 billion, above GBP 0.15 billion in the previous month. It was the largest trade surplus since May. Exports surged 4.6 percent to a 22-month high of GBP 57.1 billion, as goods sales advanced 8.5 percent driven by a 15.2 percent jump in exports to non-EU countries. Exports of services were also 0.2 percent higher. Meanwhile, imports rose at a softer 3.8 percent to an 11-month high of GBP 56.4 billion, with goods purchases rising 4.9 percent, boosted by a 4.5 percent increase in purchases from EU countries and a 5.2 percent growth in those from non-EU countries. Imports of services rose 0.4 percent. less – 2022-01-14 source tradingeconomics?
January 27, 2022
Today I read that Jack Monroe a woman I rather admire for getting herself a decent job battling for the poor (anti-poverty campaigns) is asking people for receipts but from just the big four supermarkets for a #VimesBootsIndex?
I am all for a better Index than the ONS one, but seriously what use is that index (call for evidence) if she doesn’t include the big discounters that I know most of my mum’s friends use: Aldi, Lidl, B&M, Home Bargains, Iceland etc. She is only asking for [Asda, Morrisons, Sainsbury and Tesco] – Sainsbury are an expensive store considered a luxury. Why not just ask for everyone’s receipts for their weekly staples from 2012 to 2022 from any store?
January 25, 2022
‘Now the U.K. economy is back to pre pandemic levels with low unemployment there is no scope for magic money trees and considerable inflation risk.’
But why not, at least, use newly created money to pay off the sterling part of the national debt?
The govt issues zero percent national debt bonds and asks the Bank to buy them.
The Bank obliges.
The govt used that money to pay off the sterling part of the national debt.
Not much inflationary risk there I think, as most of the debt is institutional, and its clearance will merely be an item on balance sheets.
Reply Massive inflationary risk as all the bond holders have money to spend.