Ever since the Maastricht Treaty the Treasury official advice has been a version of the Treaty controls on EU economies. These were designed for countries in or planning to join the Euro, so they were answering the questionĀ how do we get these economies to converge. They were not designed to optimise the growth/inflation outcomes, and usually entailed the target economies running with considerably higher unemployment than countries on different systems. It was only when covid and lockdown allowed the Euro controllers to undertake large QE schemes creating huge liquidity did the EU abandon the Maastricht criteria, and go for a mixture of much faster inflation and a temporary fall in unemployment from stimulus.
The two controls were to limit the budget deficit to a maximum of 3% with a lower average deficit across the cycle, and to try to get state debt down to 60% of GDP. This became more fanciful as the years rolled on, so the new aim is to get highly indebted states to start reducing debt as a percentage of GDP. The UK followed this with fervour, with an annual debate on progress and full reports to the EU, even though it had no intention of joining the Euro and did not face the same penalties for Treaty breaking on deficits as Euro members did.
Out of the EU the Treasury has reformulated these two controls, but they remain similar. It is now clear that in recent years they have not led to a combination of low inflation with good growth. The official forecasts have tended to be too pessimistic about debt and deficit levels leading to a bias in policy to higher tax rates than needed. There is also the issue of whether some higher tax rates are in themselves self defeating, leading to less activity and lower revenues than a growth based model would produce.
So Treasury orthodoxy at its worst conjured up a National Insurance Tax rise to come in in April 2022, a tax on jobs and a hit to real incomes at exactly the point where high inflation was undermining real incomes anyway. The official view was we needed to raise an extra Ā£12bn and this was a good way to do it. Then they discovered an extra Ā£77bn last year in tax revenues over forecast.
Any sensible economic policy aims to control public spending by concentrating on priorities and seeking good value for money. Excessive borrowing is not a good idea, and a control over how much tax revenue goes on servicing debt is a wise precaution. Good budgets and a strong Treasury value for money based Spending Control department is important. If the aim is to see off a possible recession higher taxes are a very bad idea. If you wish to have a lower deficit then more growth is a good way to achieve that.
August 19, 2022
Good morning.
Parliament gave its consent to the tax rise in the Budget. And I believe that you, along with other Conservative MPās, would have voted it through.
Am I wrong ?
We here have been arguing for a reduction in spending and a greater drive in efficiency. But PMās, Ministersā and MPās are all in favour of spend, spend, spend as they think it makes them popular. Well it may do, like paying people to sit on their backsides, but sooner or later reality has to be faced that you simply cannot carry on like that.
I do not envy whoever will be the next PM, or indeed the one after that. Such is the mess that has been left behind.
Reply Yes you are wrong. I voted and spoke against it as recorded here.
August 19, 2022
Reply to reply
Well I am happy to be wrong. It just so sad that so many in your party and the HoC cannot do the same and change their views and the disastrous direction in which we are heading.
August 19, 2022
Slightly bizarre party at the moment anyway with the membership at odds with the majority of its MPs on both the most suitable PM and therefore also for the need for the NI tax rise. Insufficient commentary here on this. Why are the 160’000 members not able to have the same choice over the few hundred Parliamentary Candidates, then MPs, and get rid of those that don’t follow the manifesto?
August 19, 2022
Because Cameron decided the Party Members were “too Conservative” and he wanted LibCONs in the NuLabour mould …. so he changed the candidate selection processes to get MPs who, in the main, the BBC approved of.
August 19, 2022
More backwards-looking from Sir John, but with the prospect of a Truss premiership informed by cranks such as Minford, who can blame him for not looking forwards?
August 19, 2022
Dreadful to call an economist a crank just because you disagree with his views NHL.
Mental health is a serious subject and your comment is unacceptable.
August 19, 2022
Given the state of the economy, I think it is reasonable to regard most āmainstreamā economists not as cranks but as half-wits. If disagreeing with the mainstream half-wits makes one a crank ,,,
August 19, 2022
The ‘one after that’ will not be a Conservative whether stated or in his/her policies.
August 19, 2022
So to succeed, the next Chancellor will have to have a recognition of the enemy within then.
August 19, 2022
“Who watches the watchmen”?
Democracy should be the ultimate decider, but all of our main political parties sing from (basically) the same hymn sheet, and all have learned how to avoid electoral choice, partly by stealth (as in not giving the electorate a choice eg. HS2, net zero), or, when asking the electorate, give them identical choices which happen to match what our politicians want, eg. mostly pro-EU, eco-loons and lovers of mass immigration.
August 19, 2022
Exactly right as usual.
For a sound economy you want more productive workers, not rigged and unfair markets, money spent only on sensible things & efficiently and very few unproductive and parasitic workers. The bloated UK government delivers the complete opposite. Rigged markets in energy, education, healthcare, housing, planning, banking, transportā¦ with the dire results we see. Endless pointless and damaging jobs in regulation and compliance and ever fewer people producing things of value. Insane religious agendas in wokeness, diversity, the net zero insanity, HS2ā¦ At nearly 50% of GDP the UK state is at least twice the size it should be. Hugely inefficient and totally misdirected too.
August 19, 2022
Totally correct LL. As noted by many, Government is spending other people’s money on a different group of people. A receipe for waste.
The state represents too much of the economy and state debt reduces capacity for future investment + is a cost to future workers.
John Mauldin (US economist/writer) has it right. We are in a bad place and there are no good options to get us out of it. A Mauldin ‘great reset’ is coming – high inflation, debt write offs and currency devaluation. We’re heading for a third world economy.
August 19, 2022
Indeed a recipe for waste and of course for much crony capitalism and even outright corruption. The hosing of tax payers money into private pockets.
August 19, 2022
LL, you will like this, 1123 scientists and notable people against the CO2 cult. And a good representation from Italy:
https://clintel.org/wp-content/uploads/2022/06/WCD-version-06272215121.pdf
August 19, 2022
Indeed my position exactly – thank goodness some sensible scientists and the sensible Nobel Laureate physicists are prepared to tell the truth – are the alarmist BBC covering it? I suspect not.
August 19, 2022
I see more than 80 tons of gold was shipped from Switzerland to China last month.
August 19, 2022
Dr Tim Morgan’s Surplus Energy Economics newsletter #237-“Asking for the Moon-Managing what We Can’t Fix.” 8/8/22:-
“The west in particular has never accepted the idea that material economic expansion has ended and has gone into reverse,instead-and perhaps unknowingly-we have exploited the disconnect between the real and the financial economies to create a delusional simulacrum of “growth”.Creating incremental “claims” on the economy doesn’t increase material wherewithal,anymore than printing a lot more hat checks can create more hats when checks are presented at the end of a function.
Stated in $ converted from other currencies at market rates,global debt at the end of 2021 stood at $236 trn or 245% of GDP.But formal debt hugely understates broader financial commitments which can be estimated at $550 trn or 575% of GDP and which include about $280 trn in the shadow banking system.The ratios in some countries are far worse including Britain (1263% at the end of 2020),The Netherlands(1454%) and Ireland (1509%).
Even these ratios underestimate the true seriousness of the predicament because the GDP denominator has been inflated artificially.”
August 19, 2022
Indeed. Many companies are already saying they will have to close due to high energy prices with the loss of many jobs. Who would have thought it? It would seem the general.public could see where all the net zero and CC crap would take us but those in charge couldn’t. Still it won’t hurt them on their nice fat salaries and big fat cat expenses.
August 19, 2022
Just heard Matt Hancock on Talk Radio trying to promote Sunak. These Sunak supporters really do end up doing an excellent āanyone but Sunakā performance. They usually start with the lie the the cost of living crises is caused entirely by the Putinās war. No mate mainly by the extended lockdowns, Sunakās money printing/currency debasement, the idiotic extended lockdowns, the vast manifesto breaking tax grabs, net zero and the vast and endless government waste like test and trace, HS2, the many pointless degrees, vast over regulationā¦
August 19, 2022
pretty good summary – and without touching on hopeless dependancy on imports, tech and food. Acceptance of reducing working hours, disgusting zero-hours contract, even minmum wage income gets Income Taxed!, Then we need Margaret T to ban these futile strikes. Heard some idiot transport union man saying yesterday that technology was always going to reduce employment , but his members expect to be paid more ‘as a result’ WHAT !
What planet is that luddite on? And we moan about poor output by UK workers.
August 19, 2022
+1
August 19, 2022
95% of the problem is NOT politics. It’s the demise of our Judaeo-Christian values and the best of our Greco-Roman heritage.
When men were men. And women were women.
Men went out and provided for and protected the family.
When women created a warm, happy nest for the husband to come back to and to raise the kids.
Of patriotism.
Of work ethic.
Of taking personal responsibility for yourself.
Of depending on your family instead of the state.
Of interest in high culture and things spiritual – not just physical. We’re not rats (as in rat race). We’re human beings!
August 19, 2022
Conservatism shouldn’t just be about politics. But just importantly about having people with sensible, balanced Conservative views in the Arts, Education, the Media, the churches and so on. Conservatism should be about Culture / Civilisation not just about politics (important as that is, of course).
August 19, 2022
So Margaret Thatcher being PM was terrible then, right? If you believe in your incredibly old fashioned and out dated view of the world then surely you should recognise that it is the Tories that are the enemy of people with your world view. It was the Tories that gave us a woman leader, this inevitably encouraged a decline in traditional values since a woman leading a country was a massive victory for progressive feminist values and a defeat for social conservatives that believe in a patriarchal society. By your definition of conservatism, women should be in the kitchen, the working classes shouldn’t have a vote etc… Conservatism doesn’t mean defending past values come what may whatever. If that was the case then conservatism would have died generations ago. It is about taking a broad and pragmatic approach to society and governing. Plus, conservatism and Conservatism are two different things. You can be on the left in many ways economically and still be a conservative.
August 19, 2022
Mrs Thatcher was horrifeid by the sight of small children being dragged through the streets of Moscow at 6am to their creches. She also thought it a very bad thing for unmarried motherhood to become the norm. It could only be catered for when the exception.
August 20, 2022
I knew a Moscow mother who would have agreed with her. The tales she told of the treatment of her pre-school son were at times horrific.
August 19, 2022
Some good sense in the Telegraph:- The SNP has to be defeated, not appeased
It would be a humiliation if the UK were to be broken up by the Nationalists. It would also be morally wrong
David Frost
also:- Covid wasnāt a catastrophe for young peopleās education. Lockdown was
We are only beginning to understand the damage caused by the panicked rush to close all the schools
Fraser Nelson
Indeed a disaster for the economy too and it damagingly delayed natural covid vaccination of the young (who never at much risk anyway) making the pandemic far more damaging. Natural vaccination that seem to be far safer and more effective than the dangerous commercial & government pushed ones.
August 19, 2022
Does that mean they raked in Ā£77bn in tax more than they thought they would?
Reply YES
August 19, 2022
and yet yesterday the Treasury were saying that any ‘tax cuts’ where unsustainable…even with their Ā£70bn extra
August 19, 2022
forgive me – but don’t we all want spending power? It creates jobs, investment which produces tax, profits get spent, economy goes into demand cycle which creates jobs, which might avoid imports, which boosts the economy which ought to increase productivity and positive outlook ….
August 19, 2022
Reply to reply
Thanks!
Goodnessā¦so maybe they wonāt have 3 day school weeks then?
Or maybe Ā£77bn isnāt all that much in terms of govt. expenditure.
It certainly sounds a lot to have been overlooked!
August 19, 2022
well every year it seems HS2 has over run costs by Ā£25bn, media attention for a day, and all is forgotten.
August 19, 2022
The Treasury is a political organisation like most public sector bodies and therefore sees policy not as a method to enact fiscal and economic policy but to achieve a politically strategic outcome. That is unacceptable.
We need a PM and a Chancellor (both elected politicians) that understand that all the agents of Labour’s State have become a threat to the economic, social, democratic and cultural well-being of this country.
We can type and talk all we like but until the Tories expose filthy Labour and their destructive allies we must assume that they themselves are on the same side as Labour ie on the side of the State unlike Thatcher who recognise the threat the State posed to the people of this nation
We need massive reform of Labour’s authoritarian behemoth. If the Tories don’t want the war with the Left then it will be the people who will have to adjust their behaviour to protect themselves from harm
GB News is slowly beginning to expose the poison at the heart of British politics
August 19, 2022
Indeed especially Mark Stein, Dann Wooton, Farrage, Dewbs and that Brazier, Dolan and that Scottish Coast chap but their catch up facility is not working or remotely up to date annoyingly – get it fixed please GBnews.
August 19, 2022
But then even GBnews has Alastair Stewart MBE just now saying āthe NHS we all know and loveā not me mate, it is a dire, communist, virtual monopoly health care system failing and killing millions. It nearly killed me twice through misdiagnosis, delays and negligence on both my appendix and my gall bladder. Fortunately I could pay and did before they burst.
Needless to say tax to death Socialist Sunak did not support tax breaks and fair competition for private healthcare, as we sensibly had under Thatcher.
August 19, 2022
Then the Socialist dope Sunak confirm he foolishly wants to continue to deter investment in the UK in oil, gas and many other things by promising more absurd windfall taxes!
August 19, 2022
Great to see Michael Portillo is joining GBNews.
I used to love watching him when he was on the Andrew Neil show.
August 19, 2022
+1
August 19, 2022
Oh now that’s good news. GB News really is assembling a fine stable of presenters/commentators.
August 19, 2022
Dom. I’ve given up on that. The Tories ARE on the side of the Labour client state.
August 19, 2022
Agreed, DOM, but see also Shirley’s excellent point:
“all of our main political parties [..] have learned how to avoid electoral choice, partly by stealth (as in not giving the electorate a choice eg. HS2, net zero), or, when asking the electorate, give them identical choices which happen to match what our politicians want, eg. mostly pro-EU, eco-loons and lovers of mass immigration.”
So it’s not just the agents of Labour’s state, but of the Uniparty as a whole.
August 19, 2022
Is it not the real time for the politicians and the very senior members of the treasury sat down and have a full open honest debate on what expectations really are with the 52 cards face up on the table? Because with all these different quangos and NGOs on the fringes it would seem different forces and ideas are at play here and right hands are not coordinating with left hands. The people and the country suffer. It is the perfect situation for waste to thrive and breed. Get on top of that will reduce the real sums required.
That goes for every department of government. The Treasury surely is the best place to start and set an example even if it means possibly big staff changes.
August 19, 2022
Quangos are the Government’s excuse to do nothing.
August 19, 2022
…always somebody else’s fault.
August 19, 2022
The treasury wants us back in the EU and probably in the Euro. Why else would they continue to follow Maastrict rules.
It’s up to the PM to stop this nonesense so that’s why Soonack is not the person.
Oh for some original thinking. Come back Maggie.
August 19, 2022
Hi Ian, Why did you not spell Sunak’s surname correctly? It seems discourteous.
August 19, 2022
The UK and the rest of the EU, suspended the “excessive deficit procedure” (3%/60%) at the start of the pandemic; using the “general escape clause” within the SGP. It remains suspended in the EU and will probably continue for another year or two. The system is just as silly as the US congress recently voting to increase the federal borrowing limit by $2.5 trillion, to allow the government to avoid default until early 2023. (The US Treasury is never going to run out of Dollars. The ECB is never going to run out of EURO.)
Every member state that uses the Euro currency, is effectively using a foreign currency issued by the ECB. Those states have to issue Bonds to get some Euro cash to spend, which the ECB creates and issues in various ways. In the current crisis, the ECB is obliged to fund every states deficit regardless of if it wants to or not.
The UK is opposite. It issues its own currency; it does not need to issue Bonds / Gilts to get some cash. The UK Treasury can fund any Sterling spending directly. Likewise, the UK Treasury will never run out of Pounds. Gilts don’t fund government spending, they are just tradeable savings accounts left over from Gold Standard days.
One day we will have a Chancellor who understands that and will do away with the “full funding rule” remit and most of the staff in the Debt Management Office. Also might understand that the Treasury never has a need to “borrow” its own unique monopoly currency. The Treasury’s so called “debt” is everybody else’s “savings” to the penny.
August 19, 2022
The headline in the Daily Telegraph must be extremely sobering reading for any grouping thinking, virtue signalling person in the country. It tells of a society riven with WrongThink. A 1984 like society. A sick society that sustains itself with virtue.
āLockdown effects feared to be killing more people than Covid. Unexplained excess deaths outstrip those from virus as medics call figures āterrifyingāā
Needless to say I commented on the virus as soon as it appeared way back in Feb 2020. I also commented to let society live and protect the vulnerable when Chinese style authoritarian lockdowns were suggested. Today there are thousands commenting the same thing.
Unless you truly understand the depth of the failure of the globalist cabal you cannot understand that a globalist sickness has infected all the current leaders in the West.
August 19, 2022
Diagnosed, but what’s the cure?
August 19, 2022
1,000 excess deaths per week and one assumes that those five year averages have been pushed up by Covid in 2020 and 2021 so lots of people dying. Yet we are giving the NHS ever more money.
At what point does the lack of treatment available and excess death outcomes lead to a conversation that the “free TO ALL at the point of delivery” model may not provide the service required?
Two years we waited for a simple dental procedure, the staff and treatment was excellent when received, but if the waiting time is indicative then ailments will get worse and people will die. There needs to be less admin and more action as there is n the private sector. I do not believe that private hospitals have as many admin staff as an NHS Trust.
August 19, 2022
Javelin – I warned that this would happen many many times from the outset.
In my own circles I have lost 17 friends (people who were either very close or with whom I’d share a beer) to neglect which took place during lockdown. This includes my brother who committed suicide recently having never recovered from the isolation he had to endure.
I know not one to have died from Covid. It is, of course, possible that Covid could have swept through the population like the Black Death but I believe that the vast majority of us would have been safer without lockdown.
Whatever.
Professor Whitty isn’t bothering to count lockdown deaths and nor is he bothering to show us lockdown infection charts.
There was no balance in the decision to lockdown. There was not a shred of cost to benefit analysis.
We were going for Zero Covid at ALL costs and now we are seeing just what ALL costs actually meant. I include in this Putin’s invasion of Ukraine timed exquisitely to ruin our Covid economic bounce.
Lockdown was a catastrophically bad decision by all nations. Focused shielding would have been much better and far less ruinous.
August 19, 2022
I didnāt agree with the lockdowns. I was also sceptical about the vaccines. Scientists failed to cure the common cold after decades of research yet several pharma companies managed to develop a vaccine in a matter of months. They said it would stop us from catching Covid, but it didnāt. They said we would be less ill, where is the proof? What we now have proof of is a huge increase in non-covid deaths. What is the Government doing to investigate this? Very little. Where is the investigation into the huge numbers of yellow card reports? Itās no wonder conspiracy theories run rampant.
This Government isnāt fit for purpose. Itās done nothing to fix the underlying problems this country faces regarding mass immigration, energy insecurity, cost of living increases, NHS waiting lists, lack of affordable housing, and food insecurity. It continues with its self-destructive net-zero policies when anyone who analyses the policy can see itās just plain bonkers.
August 19, 2022
It was the failure for there to be any debate about the need/anticipated efficacy of lockdowns that angered me. Not one of the main Parties even questioned this destructive policy while tens of thousands of medics, scientists and economists warned us of the effects on society. I don’t feel I can vote for any of them now.
August 19, 2022
We have peak birth years, especially after the war, it follows with increased life expectancy that we will have peak death years with or without a virus. It would be interesting to see the figures of the age groups affected, what % of the increase are the over 80ās.
I would also like to know the increased % of people dying under the age of 71 from heart attacks/severe strokes as this seems to be affecting a lot of very surprised families. Then we need to look if they were smokers, married to smokers, or were normal weights for their heights.
August 19, 2022
Javelin. Is it the lockdown or the vaccines?
August 19, 2022
Does āgrowthā include small businesses?
If it does then surely now is the time to really slash red tape.
Stop with the box ticking and lunatic regulation.
Those twin evils lead to terrible things ( poor baby P for example) and they certainly stifle enterprise.
We need to encourage the costermonger spirit not bury it.
When your government offers to help you..run for the hillsā¦if they havenāt put windmills on them!
August 19, 2022
Is it following EU orthodoxy that gives us all these damaging green policies?
August 19, 2022
The damaging “green” policies come from the UN Agenda 2030 and the WEF.
It isn’t just the EU implementing them; like the British Establishment, they are simply following Orders.
August 19, 2022
Liz Truss promises to overturn Treasury Orthodoxy to boost industry.
She seems quite determined to do battle!
Good and I hope she does.
August 19, 2022
Surely the best way of doing that is by Ms Truss appointing our host NOT as a Treasury adviser (as has been hinted elsewhere) but as the actual bl**dy Chancellor and getting the whole system cleansed and working properly.
August 19, 2022
+1
I believe that a significant number of her supporters want him to become Chancellor.
However nothing logical and sensible ever seems to happen these days!
August 19, 2022
We’ve heard this all before. Cameron, May, Johnson. Every time somebody a bit more “Conservative” in promise, a lot less so in practice. I’m not holding my breath.
August 19, 2022
To succeed, Ms Truss may need a Walsingham. But as he is no longer with us, a Wokingham would be the ticket.
August 19, 2022
@cuibono
So …. Liz Truss seems quite determined to do battle….. with the servants.
Surely, if the servants are determined to do battle with their boss then they are no longer servants ?
What do their contracts of employment say ?
August 19, 2022
That is all clearly understood so it begs the question, why has the protocol not changed? Surely the Treasury has Economists in its employ?
Even given the distraction of the pandemic, why was the Government so timid?
I look forward to a refreshing change on 5th September.
August 19, 2022
As I understand it the UK (Treasury) economic growth policy is to support the housing market whatever happens to generate “income”, import additional service users and customers and to increase government spending mostly through borrowing as the additional people are not contributors just users. Someone else will pay it back.
I didn’t realise there were any limits or controls imposed, I felt it was a free for all. And this under your party’s administration Sir John.
August 19, 2022
More focus needed on reducing the size of the state. A good move by PM Truss would be to announce the cancellation of HS2 in her first days. Itās obviously an absurd waste of money, especially given new working patterns, and does nothing for northern towns. It would give a signal of direction and be a big confidence booster. Another good idea would be to announce 100,000 heads to be taken out of the civil service, starting with all the woke useless quangos. A general purge on public money going on wokery would be another opportunity for saving. If we really want to cut taxes, the state needs to do less.
August 19, 2022
+1 to Richard1
August 19, 2022
Public sector employees were paid Ā£232 billion last year. Where do you think they spent what they didn’t save; in the private sector. Those public sector employees dispersed, to the requirements of current legislation, a further Ā£626 billion for procurement of goods, services, and issued grants and subsidies to the private sector; for the common good of UK citizens. Please tell us how you intend to replace some quarter of the nations GDP that you are going to do away with.
August 19, 2022
Acorn, do you know how much of it they spend on holidays abroad or their 2nd homes outside of the UK? Public sector workers take many more foreign holidays and a lot of the spending slops straight out of the UK.
August 19, 2022
I protest. The UK never followed the Maastricht rules, let alone with fervour. National debt went beyond 60% of GDP right from when the coalition government took over and carried on in an upward trend. Poor Osborne was unjustly criticised for a policy of austerity he never implemented.
As to EU states breaking the Maastricht rules – well just not let them have the gall to criticise the UK for threatening to break international law over the NI protocol. They can’t even keep to their own law.
August 19, 2022
All good stuff here. Liz Truss could give a boost to national morale and business confidence and give us all cause to rejoice by appointing sir John as chancellor. It would also so rile the blob we could have a good laugh also. Whatās not to like?
August 19, 2022
“Any sensible economic policy aims to control public spending by concentrating on priorities and seeking good value for money.”
But to get the Treasury to implement a sensible economic policy you first need to have sensible politicians in Government, who are willing and capable of forcing that control.
And that is where the root of the problem is currently found. As we have seen over the past 2 years of Covid destruction, there is a complete absence of anything remotely approaching common sense in the Government. And since the “talent pool” is so poor, that is unlikely to change any time soon.
I am now firmly on the side of the argument which Neil Oliver so eloquently expressed in his GB News monologue last Saturday; I no longer believe that the British Establishment/Government even tries to work in the interests of the British people (if they ever did).
August 19, 2022
Yet another post proving that Brexit doesnāt change the economic trends we are subject to, it only means we have no voice when the EU takes the big policy decisions which affect the whole continent
August 19, 2022
We never had any voice in the EU anyway. All we could vote for were MEPs (who were either europhiles or europhobes) into that expensive talking shop called the European Parliament. Meanwhile all the decisions were made by the Council and Commission.
August 19, 2022
The real problem across government is that there is no real joined-up thinking.
A typical example is the Buy to Let sector. As the owner of a number of rented properties I have to declare an interest. I would like to point out that we treat our tenants fairly : we have not increased rents for the last three years, through the pandemic, and have lost no tenants in that period.
The news on the BBC this morning is that a large percentage of young renters are now signing tenancy agreements which mean that they are spending 30% of their income on rent. This is said to be a bad thing, although when we bought our first home, mortgage payments (at 8.5%) were 50% of our joint income. But we could just about afford that, because we didn’t each have a PCP contract, Gym membership, expensive contracts for the latest iPhone, or a Netflix subscription !
The responsibility for rents going up rests, of course, entirely with government.
A decade of constant assaults on the buy to let sector by successive Conservative chancellors has let to many landlords leaving the sector and selling properties to owner occupiers. Net immigration is still running at 150-200,000 a year, increasing demand in a smaller market. Rental costs have only gone one way as a result.
Gove was planning even more onerous restrictions and they will make the situation even worse.
This is but one example and there are many others. Let’s hope that Liz Truss puts our host into the Treasury and we can at last look forward to some joined up thinking across government.
August 19, 2022
Clearly can’t think for themselves, and unfortunately when they do, the results are even worse than under the EU scheme. Furlough free money now leading to inflation, and lockdown leading to 1000+ excess deaths from non-virus causes.
It was all so obvious at the time.
August 19, 2022
Treasury orthodoxy = New Labour
Tax everything & Tax it high
August 19, 2022
For context:
https://www.courthousenews.com/wp-content/uploads/2022/08/eurostat-inflation-july2022.pdf
“Annual inflation up to 8.9% in the euro area
Up to 9.8% in the EU”
August 19, 2022
It’s crazy that Sir Tom Scholar is still the Permanent Secretary at HM Treasury.
He was there in 2016 helping Osborne put together Project Fear. Which kind of explains the Treasury’s reluctance to do anything to diverge from or upset the EU.
August 19, 2022
As you have surgically filletted this ridiculous critical key assumption of Treasury dogma that has grown into an out of date unscrutinsed monster over 50 years (unbelievable in the Private fortunes – similar to NHS, BBC and HMRC/ HM Customs and last but not least the Civil Service) it is long overdue for the scrap heap of bureaucratic nonsense costing the country dearly and clearly unfit for purpose.
It reminds me of many projects I came across as a consultant where UK companies wanted a computer system they had seen abroad in USA or Germany and liked aspects of it except that it’s assumptions were not made for this country but foreign. Basic stuff again.
Sometimes it was a powerful Sales director who wanted it, sometimes the IT folks wanted it as it required little maintaining or could be bought off the leg and sometimes the Finance director because it was cheaper and a quick fix. The main problem with the Civil Service is Luddites rule because they hate changing the status quo that they control, a disease endemic in the Public Sector that has only gradually been exposed by the succession of financial disasters we can no longer afford to fund.
August 19, 2022
Kemi Badenoch proposed a breakup of the Treasury if she became PM – it would have been interesting to see her try, not that I expect they would have allowed her to succeed.
Slightly off-topic, I simply can’t understand why Sajid Javid appointed Andrew Bailey to run the BoE. He was a notable failure – mostly through inaction and being asleep at the wheel and being reactive rather than proactive – running the FCA as several official reports into financial scandals have amply demonstrated. Now he’s exhibiting exactly the same failures at the BoE. He had one job which was to keep inflation at 2% and it is 10% and his prediction models are close to useless. Once again, as for Covid, policy (such as it is) is being determined by predictive models which have been proved to be hopelessly wrong time after time and have never been corrected.
August 19, 2022
if you follow Neil Oliver’s thought process, you would be excused from coming to the conclusion that Bailey was appointed BECAUSE he was useless and would fail to do the one job the B of E has.
The WEF wants digital currencies …. and a social credit system. The EU has always advanced through a series of “crises” ….. perhaps The Treasury/Bailey were carrying out a policy of WEF-sponsored “creative destruction.”
Just asking ….
August 19, 2022
Well he was certainly appalling at the FCA with his one size for all 39% overdraft rates!
August 19, 2022
The Governor is supposed to be appointed by the Queen on the PM’s advice. In practice he was appointed by two Treasury officials who told the Chancellor. That particular chancellor had only just been appointed himself.
August 19, 2022
Yesterday, The Daily Sceptic published an article entitled “1,200 Scientists and Professionals declare there is no climate emergency.”
It links to their World Climate Declaration.
“There is no climate emergency, say the authors, who are drawn from across the world and led by the Norwegian physics Nobel Prize laureate Professor Ivar Giaever. Climate science is said to have degenerated into a discussion based on beliefs, not on sound self-critical science. Another lead author of the declaration, Professor Richard Lindzen, has called the current climate narrative āabsurdā, but acknowledged that trillions of dollars and the relentless propaganda from grant-dependent academics and agenda-driven journalists currently says it is not absurd.”
Perhaps when Sir John has finished critiquing The Treasury’s economic failings, he’d like to turn his attention to critiquing the failings of the Climate Change Committee, the Dept for the Environment and the rest of the Climate Propagandists in the Establishment/Government.
August 19, 2022
+1
August 19, 2022
Errors – Private Sector, and off the peg.
PS When computerisation was first heard many people feared for their jobs and many worked against their introduction and actually sabotaged the results. Similar to the railway unions today.
In the private sector we had to go with the flow painful as it was, that’s progress but the parasitic State squandered the benefits of its work and still does today. Time for reality. They need to get out more.
August 19, 2022
VAT is a percentage of a price. If the price rises by a percentage then VAT increases by that percentage. The Government gets a windfall from the VAT. The VAT adds to the inflation of the price and so goes back into the inflation spiral… yet it is not considered to be an inflationary component.
Why ?
Our 80 seat majority government (so called, even when not on holiday) operates a system of blame rather than solutions:
Blame the Treasury. Blame not being out of the EU properly. Blame the quangos. Do NOT blame the profiteers (I am not saying you should btw) and DEFINITELY blame the workers for demanding that their wages are allowed to chase inflation.
Anne Widdecome made a fool of herself against Eddie Dempsey when she was trying to screech about the “Wage price spiral… blah blah blah.”
I am not normally a union supporter but against a Tory party whose only solutions to the cost of living crisis are more tax, wage suppression and giving away yet more handouts to the least deserving as an energy rebate (closing the gap further with the most deserving) it is little wonder that Tories seem terrified of taking on Dempsey and Lynch directly and in public.
Marxist or not their blunt message is cutting through. Uberisation of the workforce is the Tory’s only solution. You purport to want a well paid and well trained workforce but wherever it exists you battle against it and always have.
2024 will be an election fought against a backdrop of (at least) 1970s poverty and hunger but without the good music, without the pubs to retreat to for communal warmth (they’ll all be bankrupt … by tax) and without the ability to light the stove or the fire at home because most houses don’t have them now.
I really don’t want to think about crime either.
13 years of Tory rule and several of those with an 80 seat majority. The problem clearly hasn’t been not-enough-Tory-party.
August 19, 2022
PS, It’s fast becoming a cliche’ but we have spent hundreds of millions in respect of the borders of another country when we can barely protect our own.
August 20, 2022
Not “can’t.” They don’t WANT to. If they did, they would.
August 19, 2022
Well Sir John, I see Aida H Dee (the Storytime Dragqueen) is coming to Wokingham Library.
“Interactive Storytelling” – available free to four year olds (and up) but presumably being paid for out of our rates? I’d be interested to know if this would have been approaved when the Tories were still in charge or can we simply blame the Lib Dems and their fellow travellers?
By the way, I’m all in favour of storytime and I very much enjoy reading to my grandchildren – but why do I feel that there are other agendas at work here?
My sons (& daughter-in-laws) have apparently never read Orwells 1984 which is probably why they don’t understand how sinister much of the ‘woke’ aganda appears to someone who has. They’d maybe better appreciate the process of ‘learning, understanding and acceptance’ – they would also find out the real purpose of Room 101 (which is very different to the TV version).
August 19, 2022
I believe that the Conservative Party has to acknowledge that its governance since the flushing out of Labour has been dire. I believe that only the Conservative Party can govern the United Kingdom. But the principles of socialism are always attractive provided one does not look to closely at what actually happens in practice. Labour and the Lib Dems seem to want to ensure that the Tories can’t be elected. As Nick Clegg discovered, it’s always easy to promise the earth if you don’t have to deliver. Most politicians are only interested in personal power and wealth as can be seen in the defections form Sunak to Ms Truss at the stage when it seems she is the clear favourite. Let’s hope Ms Truss is not one of them because I am certain that the only way to win in 2024 is to got to the country now and get the public’s support for the hard choices coming up. I understand that she risks sacrificing the prime minister role but the alternative is that the socialist cabal will win in 2024 and who knows what legislation they will enact to ensure they stay in power as long as Blair/Brown.
August 19, 2022
John Miller, NO NO NO !!!
Let Liz win and show what SHOULD be done, while the Party has a big majority.
From your suggestion I can only surmise that you want the U.K. to fail.
August 19, 2022
The ONS reports more than 1,000 deaths per week above the average for non-Covid deaths.The Telegraph says the Department of Health has asked for the figures to be looked at over concerns deaths are linked to delays and deferment of treatment for conditions like cancer. As if this is new !! It was anticipated the whole time the Covid epidemic frightened doctors from treating patients.
August 19, 2022
Unless they’re prepared to investigate the causes of the 2,226 post jab fatalities and the 460,500 adverse reactions they’re wasting their time.
6 children now quietly added to the MHRA post jabs deaths. But still the Health Secretary refuses to call a halt to the programme ….. despite the Danes now refusing to jab under 18s because of health risks.
It’s interesting that they are highlighting an increase in heart attacks and strokes amongst the reasons for the excess deaths ….. mortality which is generally caused by blood clots.
August 19, 2022
adverse reaction, but not dead.
August 19, 2022
I’ve decided not to have my autumn jab. I feel I am healthy enough to fight it myself having had Covid a long time after my booster. It wasn’t anywhere nearly as bad as a common cold.
August 20, 2022
+1 I’m not taking any more of this shit in my arm.
I’m fully fit and healthy. There is no quantification whatsoever of lockdown adversities. None WHATSOEVER.
What sort of crap government does not show us the risk to benefit analysis of lockdown since it has happened, so that we may learn for the next ?
Well. The same one that has led us into fuel poverty, food poverty, water poverty and crime poverty.
August 20, 2022
Inscription on a tombstone. ‘I told you Iām fully fit and healthy’.
August 19, 2022
Company research notes are being published as ordered by the US courts in batches. We should soon see policy change , they surely cannot ignore such evidence for too long.
August 19, 2022
I suppose one might say a nasty little Treasury orthodoxy is to think it in order to bug the Chief Secretary in private counsel, stash the tape away, and then pass it to the Guardian five years later.
August 19, 2022
The fifth column communists at the Treasuryās plan is to destroy the economy of the UK through the unilateral implementation of the Net Zero Strategy based upon their CAGW scam.
I see that today 1100 scientists and professionals from all over the World, led by the Norwegian physics Nobel Prize Laureate Professor Ivar Giaever, have signed a declaration that there is no climate emergency :
https://clintel.org/wp-content/uploads/2022/06/WCD-version-06272215121.pdf
August 19, 2022
The Treasuryās orthodoxy is communism and their (ā10,000 days to goā) Net Zero Strategy to transition from cheap, reliable energy and devices to expensive, intermittent energy and impractical electrical devices is akin to communist Stalinās 5 year plans and communist Chinaās āGreat Leap Forwardā both of which led to the deaths of millions of people.
August 19, 2022
Original Richard.
Can’t remember where, but I did read that Gorbachev once commented that the EU were making exactly the same mistakes that had lead to the break up of the U.S.S.R.!
Bear in mind that Gorby could no longer fund the failing economies of the soviet union’s satellite countries because the price of oil, Moscow produced and sold to the rest of the world, had dropped so low.
Makes you think doesn’t it.
August 19, 2022
I just hope Truss appoints Sir John as her Chancellor.
August 19, 2022
So you seem to believe that we are still marching to the beat of the EU Maastricht drum? The question is why? Why didnāt Sunak or his predecessor already make changes?
All we hear in the newspapers is doom and gloom, people are battening down the hatches again because of it, this will result in more failure. Why donāt we hear what you think the Tories have got right in the past 12 years? What fiscal management has got good results for the Country? What are the things you are most proud that the conservatives have achieved in the last decade?
The NMW was Ā£5.93 for adults over 22 in 2010 it was renamed by G Osborne and is now NLW Ā£9.50 for adults over 23. The real living wage is Ā£9.90 and Ā£11.05 for London (a recognised regional difference that the left and unions agree with for everyone but their workforce).
We talk about minimum wage, so a person on the living wage what does the government (treasury) expect that worker to earn for the company per hour of work to be considered productive? Is it 70% more, 50%? This country seems to use productivity for the UK as a whole for an industry, but how do you measure productivity i.e. it is up by the civil service working at home, so how is it measured? If it is such an important point that it is constantly mentioned how are we to measure it? How is it broken down per sector as each sector is very different.
August 20, 2022
The Tories want Uberisation of the work force outside of the State and they haven’t a clue (nor the inclination) to take on the profiteers who are benefiting from privatised industry yet unable to provide key services such as reservoirs or power stations.
The Tories are shit and by 2024 every single person in this country is going to know they are .
August 20, 2022
NLA do you think Labour and the SNP would be better?
People who want to spend more money on large groups of people who donāt want to do anything for themselves and want a government to take over with Universal Benefits for nothing expected in return. There was one woman who had been paid by the government to raise her children as a single mother complaining in the Guardian that her benefits werenāt continuing to the same level after her children left for University, they are never satisfied, there are carer jobs everywhere, she has no excuse not to work, she has experience caring – instead of feeling sorry for her the government should be telling her to work as the rest of us have to.
Do you really want a future where people get allocated a home depending on how much they suck up to the dear leaders, where the only important jobs are those working for the State (we are heading there now and that is with a supposed capitalist government – its a joke). The future will be confiscating properties, taxing gardens its already started with green bin collection tax increases, overtaxing second homes to force their sale, making everyone give up their cars or drive at 20mph, Drakeford would ban booze if he thought he could get away with it. These socialists truly believe they know how to run your life better than you do. They want to take the UK back to operating countries like Romania before the advances theyāve made escaping socialism over the past twenty five years.
I agree the Tories have lost the plot, the trouble is Farage did a runner so the Tories no longer have to listen to their right wing at all, Nigel carping on from the sidelines is pointless and he has no real solutions, Iād put him in charge of the immigration (even if I had to make him a Lord to do it) working within the legal restrictions that Patel has to, he likes to be loathed so let him put action behind his mouth.
August 19, 2022
Here is another OT but important issue. A local roadside garage/fuel supplier is selling petrol at Ā£1.59 pence per litre. They are very busy. All others in the area are priced at either Ā£1.73ppl or Ā£1.78ppl. I fear they may be in danger of detruction by the big sellers, legal or otherwise.
If they can why aren’t the others? Wholesale is clearly falling as they were selling at Ā£1.69ppl a while ago when others were again much higher.
Why do we not get a true picture from everyone, why are we constantly lied to especially by the insane green fanatics such as Boris, who is determinwd to destroy us and claim himself as a hero, and others who are too cowardly to seriously challenge him and the rest?
August 19, 2022
wonderful profiteering – why spoil it?
August 19, 2022
Yes well, we should never have signed the Maastricht Treaty anyway.
But I see your point about them being controls on EU economies and making them all join the euro.
Fortunately we kept out of the euro!
Now we are out of the EU. (Well most of us, in most ways.)
So why on earth is the Treasury still slavishly following these rules?
And why on earth did a certain Chancellor allow that to continue?
More GROWTH should obviously be the aim. That way the deficit will come down.
BUT . . . . .
It is also obvious that the UK can not power more growth from sun and wind alone !! Another can of worms!
Can we really not back track on any of the carbon neutral subsidies and offsets, or whatever they are called?
Can’t they be diverted so that energy companies are rewarded for delivering more energy into the grid from whatever source?
Also, now that we are out of Euratom, what is being done to speed up developing and producing nuclear power?
August 20, 2022
Maastricht begat, in my own experience, the instant appearance of squeegee gangs at traffic lights in London and wailing beggars on the tube. It was almost as if the beggars and windscreen cleaners had been tipped off by our government in advance… their appearance really was that quick, almost like shock troops.
Since that advent I have no doubt to believe that the 80 seat majority Tories actually WANT the boat invasion of the UK.
August 19, 2022
What is the orthodoxy of a Civil Service department which is unwilling to attempt to recoup the Ā£billions lost in fraud from the Covid business loan support and furlough schemes?
August 20, 2022
+ 1
Millionaires (perhaps billionaires) made out of defrauding the taxpayers. I heard that most of the fraud was done through a few London addresses.
Still. The Met Police prefers to target non criminal ‘hate’ incidents.
August 20, 2022
Is it the Civil Service, or maybe some politicians who don’t want it looked at too closely? The man responsible is vying to be PM and even having lost tens of billions to fraud says Liz Truss’s ideas cannot be afforded and would be ‘put on the nation’s credit card’. Perhaps if he put some effort into recovering the fraud losses they may be.