Better guidelines for growth

(written for the Telegraph)
I thought Liz Truss was right to want to break out of low growth and looming recession . I sent her some less expensive proposals for tax cuts and an energy package than she adopted along with some spending reductions and measures to boost our energy, food, transport and basic industrial capacities. I  watched in horror as events unfolded as she tried to change economic policy in the face of a hostile establishment. 
Monday 18th  September saw the start of a fateful week for the  government in the run up to the mini budget. UK ten year government borrowing rates usually  of interest only to market specialists  stood unremarked at 3.3%. US ten year rates were a bit higher at 3.5%. On the Wednesday  the Bank of England  hiked bank rate by 0.5% and the US Fed by 0.75% and sent bonds down. Just to make sure UK bonds tumbled the Bank of England announced a big reduction in its holdings by £80 bn including proposed sales of bonds at falling prices into an unhappy market. The ten year rate rose to 3.8% by the Friday in the UK and to nearly 4% in the USA. 
Both the Bank of England and the Fed had made big errors in their money policy in 2021, keeping rates too low and pushing bonds to unsustainable prices by buying too many of them. This helped bring  on a big inflation which started well before Putin’s invasion of Ukraine. They were now fighting to control it by belated and fierce interest rate rises, triggering  falls in the prices of the bonds they had previously  paid too much for. Their language was tough because they wanted bond prices down. 
So when the Chancellor stood up to announce tax cuts and a much larger energy package of support to business and households the bond market was already falling from Bank actions. It went down a bit more on his announcement with adverse comment on the extra borrowing needed to pay the energy subsidies and to cover any net tax revenue loss.
Things got out of hand in the UK government bond market on the following Monday and Tuesday, thanks to many large  pension funds owning government bonds they had not  paid for through funds that bought lots of claims on bonds. This was a problem specific to the UK   They wanted to own several times  the amount of bonds they could afford by just paying a margin and owning contracts to buy the rest. They now had to  pay cash for  more of the costs of these bonds as prices fell, forcing them to sell bonds in a market where no one wanted to buy. As  they  raised the money  to pay for the calls for extra  cash under the contracts the market dried up and fell sharply. 
  Belatedly on the following Wednesday the Bank of England announced it wanted bond prices higher and was even prepared to reverse its sales and drive them up with purchases if necessary. The market flipped upwards with the ten year rate falling from 4.6% to 4.1% and the thirty year from 5% to 4%. The Bank showed it did control the market and could stop the higher rates it had wanted a week earlier when that threatened to get out of hand. The Bank’s own pension fund was a big holder of the levered funds and must have been sitting on big losses. 
It suits many to spin all this as proof that some tax cuts to promote growth destabilised markets and were ill judged. This is a very partial and inaccurate account of the problems. To the extent that extra  borrowing worried the markets that was far more down to a generous energy subsidy policy than to tax cuts which would have produced more extra  revenue from extra  activity than official economic models allow for. It ignores the fact that the big falls on the Monday and Tuesday were  dominated by worries about  the pension funds in LDI geared bond funds, as the subsequent Bank actions and statements on the Wednesday made clear. It also ignores the way the Bank and the Fed deliberately drove bonds down prior to the Statement as they grappled with out of control inflation they had helped create. 
It is good news that late in the day the Bank did what it took to sure up the very vulnerable LDI fund bond markets. They did not need to buy many bonds and were able to resell them at a profit a bit later . Just talking the market up would also have worked if they had done that earlier. Since then both the Fed and Bank have scrambled bank rates higher as they needed to do whilst allowing the longer rates to drift down again, with UK 10 year rates back to 3% and US to 3.5%. It looks as if they have now done enough to bring inflation down, which is reassuring markets. 
It would be wrong looking at the state and forecasts for the UK economy to conclude from all this we need higher taxes. The growth rate is too low and the economy is very short of many  types of capacity from energy to food production, from roadspace to water, from steel to chemicals. Expansion of capacity is needed to ease longer term inflationary  pressures and to improve national security of supply. This needs more competitive business taxes and individual tax regimes on investment and income  that encourage entrepreneurs and savers. 
We cannot afford tax rises. They lower growth, stifle investment and in some cases even reduce tax revenues. We cannot afford to deter inward investment and home grown investment with higher business tax rates. We need to relax taxation on the self employed and small businesses, the potential source of  much contemporary innovation, drive and good service. I hope the Chancellor learns the right lessons from last September and delivers a unifying growth budget for enterprise and success.


  1. mickc
    February 9, 2023

    Sunak and Hunt, and the Bo E, are totally clueless as to how to achieve growth.
    Truss was right.
    The Conservatives need time in Opposition to reflect on their ill judged attempt to become the Blairite party.

    1. Ashley
      February 9, 2023

      Sunak was a disaster as Chancellor – with lockdowns, endless waste, money printing, currency debasement. Hunt was a disaster with his five years as Health Sec. Both posh school then PPE graduates so perhaps rather out of touch with the real world and no science so both have fallen for the net zero religion. Still no investigation into the causes excess deaths and full figures breakdown data is still being hidden. At least they have reduced somewhat in the latest figures.

    2. Mary M.
      February 9, 2023

      A guest article today in by economist Julian Jessop:

      Did the Truss-Kwarteng mini-Budget really cost the UK £74 bn?

      1. Gabe
        February 9, 2023

        Indeed, answer no it did not Sunak as chancellor for two years was the disaster.

        The interview by Nick Dixon of Andrew Bridgen on Nick’s substack (when will the whip be restored and apologies made by Suank, Handcock… ?). Also Farage on Triggernomity, all Dr John Campbell’s recent videos and the weekly sceptic podcast are all good.

      2. Shirley M
        February 9, 2023

        Agreed. Mary. I would like to see a breakdown of how they arrived at that figure and, if correct, who was REALLY responsible for the losses.

    3. Peter
      February 9, 2023


      May spent all her term trying to avoid Brexit.

      Johnson then became Prime Minister on false promises. In office, he ruthlessly pursued the globalist politics that we have today. Truss bucked the trend so she was promptly forced out by an insider coup.

      1. Mickey Taking
        February 9, 2023

        and in that short time one has declared earnings of £2.5m, and the other £5m.
        It pays to be a failure, but better still a rejected one!

    4. British Patriot
      February 9, 2023

      Today’s Times reports (“Punishing tax rate stopped us investing in Britain, says AstraZeneca chief Sir Pascal Soriot”) that AstraZeneca is moving plans to build a £300 million manufacturing plant from Britain to Ireland, specifically because of the high tax rate here. So Stupid Sunak and his tax increase is going to cost the UK this plant and all the revenues associated with it. That is the problem with his tax increases in a nutshell. And what are Tory backbenchers doing about this? NOTHING. They are COMPLICIT in this betrayal of UK interests.

  2. Mark B
    February 9, 2023

    Good morning.

    We’ve been here before, Sir John. In fact, we have been here numerous times and, apart from last years mini-budget, nothing has happened. So what are the chances this time ? Well I think it is fair to say that this is the last roll of the dice for the Tory Party.

    You’ve had a good run. Just a shame you have so little to show for it.

    1. PeteB
      February 9, 2023

      Agreed Mark, there comes a point where it’s best to stand aside and watch the pendulum swing from Right to Left. It’s currently well into that swing anyway.
      Interestingly Sir J didn’t note the BoE emergency gilt purchases in September are now showing a paper profit as yields have fallen. Such is the nature of the current economic wonderland.

      1. formula57
        February 9, 2023

        @ PeteB “…Sir J didn’t note the BoE emergency gilt purchases in September are now showing a paper profit..” – although Sir John did hint at that, did he not, through stating “They did not need to buy many bonds and were able to resell them at a profit a bit later . “

      2. Your comment is awaiting moderation
        February 9, 2023

        The pendulum is not swinging right to left
        its swinging left to far left.

        1. Mickey Taking
          February 9, 2023

          and will surely break, given time?

    2. Gabe
      February 9, 2023

      Also a shame top (or rather a total disaster) that they will be replaced by Labour/SNP/Libdems/Plaid/Green all of whom have even worse policies.

      “We cannot afford tax rises. They lower growth, stifle investment and in some cases even reduce tax revenues” from the current vastly over taxed position almost all tax rises will reduce overall tax revenue, jobs, investment and growth.

    3. Cuibono
      February 9, 2023

      I reckon it’s the last roll of the dice for the country.
      And Labour (aka a higher power) will be shuffling the cards.
      Really, when Boris won I would never have dreamed this….

  3. Will
    February 9, 2023

    Considering the current incumbents of Nos 10 and 11, I fear that your hopes for a growth orientated budget are doomed to disappointment. As Chancellor, Rishi was hardly a visible supporter of low tax growth oriented thinking, and Hunt on current form is exactly the wrong person to be overseeing the budget, mired as he is in big state madness.

    1. Bloke
      February 9, 2023

      Hunt & Sunak dump cement on the UK’s freedom.
      The triple A battery in their electric concrete truck lacks power of support.
      They are dead weight we need to shed to move forward.

      1. Ian B
        February 9, 2023

        @Will & @Bloke +1

    2. formula57
      February 9, 2023

      + 1

  4. Mike Wilson
    February 9, 2023

    You are a lone voice in the wilderness. Where is the rest of the ERG. If more than one MP (you) were saying the same thing it might percolate into the thick heads of those in the media and politics who say the opposite and who are completely wrong. It’s like living in a madhouse.

    1. Cuibono
      February 9, 2023

      They are probably all off doing virtue signalling.
      Like wearing “menopause jackets” to commune with over-hot old ladies.

    2. Ashley
      February 9, 2023

      Indeed at best circa 50 sensible Tory MPs. Most MPs totally deluded on the economy and a sensible size for the state. Deluded too on the net zero rip off unreliable energy and climate alarmist lunacy and the net harm vaccines, masks and the long pointless lockdown too.

      1. mickc
        February 9, 2023

        As many as fifty?

        1. Mickey Taking
          February 9, 2023

          might be another Neil Ferguson wild claim.

  5. DOM
    February 9, 2023

    ‘We cannot afford tax rises’

    There is no ‘we’. There is only the State. It’s called Socialism and it’s a power-mad strategy that John’s party and scum Labour have been embracing now since 2010.

    The people are now mere rats in the State’s ideological game being played off against each other to stoke tension and create faux victims and faux oppressors. We’ve seen this filth politics before, many years ago and it’s back with a concerned and pious smirk on its face

    The State’s enslavement of people and its dependency strategy is costly and as such demands ever higher levels of taxation to fund

    When will people wake up and stop voting for the vile, deceitful main parties it will be too late.

    John finds himself in a bind. He wants people to vote for his party but he knows his party is responsible for much of this vileness that we now see

    1. Ashley
      February 9, 2023

      Also with FPTP voting the next government will be led by Labour perhaps with SNP/Libdem help or the Tories perhaps a 20% chance at best. A catch 22% socialist incompetents or socialist incompetents light.

      1. Ian B
        February 9, 2023

        @Ashley FPTP is not anywhere close to the problem, the alternative means minority activists get into coalitions and give us minority rule. FPTP is the best system going when the selection process is equal and not manipulated.

        The bit that doesn’t work is the selection of candidates. At the moment a Party is placed before serving the people you are to represent, thats is at odds with being democraticaly represented.

        Or put it another way when we had MEP’s they were not voted for they were appointed. It was highlighted by Daniel Hannan when he said (to paraphrase) ‘People wonder why I am not canvassing in the election. I don’t have to – I am your MEP’

      2. Mike Wilson
        February 9, 2023

        It will be a Labour landslide that will make 1997 look like a narrow victory.

      3. Ashley
        February 9, 2023

        Rather like a new coke company overtaking Coke and Pepsi.
        Even Virgin Cola failed. You need the party brands, the boots on the ground, financial support (which comes only with the brand and a chance of winning). Too many always have always will vote Labour or Tory to overcome FPTP. So the Tories get away with their appalling socialism and gross incompetence.

    2. Ian B
      February 9, 2023

      @DOM +1

    3. Your comment is awaiting moderation
      February 9, 2023

      Their manifesto is clear and bold
      on the WEF website.
      CBDC is on the way, programmable money.
      Legal documents such as title deeds will also be digitised and linked to your CBDC account enabling you to borrow extra money when needed to pay for the spiralling cost of living. The loans will be secured on your home and eventually the government will own it. You will own nothing.

    4. Sir Joe Soap
      February 9, 2023

      Well AZ just voted leave the UK. From Telegraph
      AstraZeneca has overlooked Britain for a new $400m (£320m) drug factory because of “discouraging” taxes here, chief executive Pascal Soriot has said.

      The drug giant has chosen Ireland over the UK for its new plant amid growing frustration among pharmaceutical companies about soaring NHS levies on the industry.

      Chief executive Pascal Soriot said AstraZeneca had wanted to open a new state-of-the-art plant near its existing manufacturing sites in the North West of England, but instead switched to Ireland because of rising tax charges in Britain.

      He said: “We really have invested a lot [in the UK] and the country was making a lot of progress in building a life sciences sector. But, I have to say in the recent past.

    5. a-tracy
      February 10, 2023

      John, still thinks he can influence the top table, but the 25% tax rate with Ireland on our doorstep with a corp tax rate much lower!

      It means Southern Ireland increasing its 12.5% rate to 15% for firms with a turnover of more than €750m (£636m). Smaller businesses will still be taxed at the 12.5% rate.
      7 Oct 2021
      Where is the sovereign UK’s smaller business lower tax rate? Why can’t you persuade the majority of your so-called ‘conservative’ colleagues to fix this before April! You party is going to push the NMW/now called NLW.
      23-year-olds and over (National Living Wage): from £9.50 to £10.42 an hour (>9.6%).
      21–22-year-olds: from £9.18 to £10.18 an hour.
      18-20-year-olds: from £6.83 to £7.49 an hour.

      How are you expecting SMEs to pay for all this when wage differential demands shoot up from April 2023? Plus, the loss of one extra day’s turnover, following two days lost turnover in 2022, with all the same costs against £0 earnings?

  6. Gary Megson
    February 9, 2023

    Poor Ms Truss, brought down by what you call “a hostile establishment”. The Marxist hedge funds, the lefty international money markets, the woke IMF …. As with Brexit, so with Truss’s failure: you blame everyone except yourself

    1. R.Grange
      February 9, 2023

      You misunderstand what was at stake, Gary. The conflict wasn’t between the traditional left and right, Marxist vs capitalist. It was between a government that wanted to prioritise economic growth for the good of this country, versus globalist ideologues who do not want economic growth per se, but a Reset towards a new ‘Green’ economy. If in doubt, you could check what former BoE chief Mark Carney said a couple of years ago about allowing investment only in sectors of the economy that are on board with that agenda.

      1. Fedupsouthener
        February 9, 2023

        Grange. Correct. My neighbour is in the city in banking and he said all investments now are in the ‘green’ industry. It cannot be stopped as there is too much money being thrown at it.

        1. glen cullen
          February 9, 2023

          I’d suggest it isn’t where all the investment is, but rather where all the government linked subsidy is

        2. Mickey Taking
          February 9, 2023

          and it will soon become an exhausted gold mine – take profits before its dug to shifting sand.

      2. glen cullen
        February 9, 2023


      3. Gary Megson
        February 10, 2023

        “Globalist ideologues” is a strange way to describe capitalist invetsors. Buy carry on, have a tantrum because the world thinks the UK is run by clowns, I’m sure it will work well

    2. Sir Joe Soap
      February 9, 2023

      Timing is everything

    3. Dave Andrews
      February 9, 2023

      The country isn’t suffering because the government is following JR’s policies, so he isn’t to blame.
      If you want to blame anyone, blame the electorate for voting the usual clueless shower into office.

      1. Shirley M
        February 9, 2023

        How are the electorate to know the manifesto was a dishonest document used only for the purpose of gaining votes by fraud? That is something you can only learn by experience, and I reckon we have learned not to believe anything this government says.
        Until politicians (and governments) are kicked out for dishonesty and deliberately deceiving their constituents/electorate, there can never be any ‘real’ democracy. We will be defrauded over and over again by many dishonest politicians.

        1. Your comment is awaiting moderation
          February 10, 2023


      2. Lifelogic
        February 9, 2023

        Unfair to blame those who voted Tory as they only have a choice between two or three candidate and so vote for the least bad option which is usually Tory. It is the Tory party and most Tory MPs who have failed to even attempt to deliver what they promised. Now we have the globalist coup under Sunak and Hunt. But Starmer/SNP is even worse still.

        The few sensible Tories have no power with a Starmer “opposition” that is almost the same as Sunak’s tax to death, net zero, big state agenda.

        1. Mickey Taking
          February 9, 2023

          If you are the original Lifelogic, welcome back. I’ve not been aware of postings from you for a while.

        2. glen cullen
          February 9, 2023

          The good, the bad and the ugly ….but which ones which

      3. Mark B
        February 9, 2023


      4. Lynn Atkinson
        February 9, 2023

        Don’t blame the electorate who have Hobson’s Choice presented by the political party machines. Left to the Constituencies there would be 50 or more Tory MPs of JRs calibre. As it is he is alone. The rest simply don’t have the wherewithal.

    4. Richard1
      February 9, 2023

      Read the piece again, the sequence of events is quite clear.

  7. Berkshire Alan
    February 9, 2023

    Thanks for the explanation JR.
    I just wonder how many more of our Mp’s and Ministers actually understand how the financial markets work, and what trips them into action.
    I see that you suggest the Pension funds are once again purchasing bonds on a part payment basis, perhaps on a “gamble” that they will make more money if the market goes in the correct direction, before they actually need to stump up the final payment,
    I just wonder how safe those £ Billions which are held in Pension funds really are ?

    1. Shirley M
      February 9, 2023

      Alan: It sounds just like VAT carousel fraud, doesn’t it? The government could (very) easily prevent both, but I don’t expect they will.

      1. Berkshire Alan
        February 9, 2023

        Shirley, I think they call it creative accounting nowadays, in the old days it was simply fiddling the figures to suit whatever you wanted !

  8. Jude
    February 9, 2023

    Concerning times John.
    When the BoE basically shows its mismanagement of funds. Conservatives pushing high taxes & supporting expensive Net Zero policies.
    Plus not incentivising millions back to work to reduce our huge welfare costs.
    While wasting billions on importing illegal criminals who are definitely not enriching our country.
    It does appear we are witnessing the inmates running the asylum!

  9. Cuibono
    February 9, 2023

    Meanwhile, having fussed about a few measly tax cuts the govt. sends £billions to fight an increasingly devastating and pointless war …and apparently now a certain ex PM wants to send what’s left of our forces.
    I read that a new Ukrainian (very young) recruit ( no doubt forced) lasts 3 days on the front.
    What things our hubristic politicians dive into!

    1. Peter
      February 9, 2023


      Yes, Ukraine gets as much support from the UK as it wants. Money no object. Send them all our armaments and planes says Johnson! Presumably he thinks he can get away with all this provided British troops do not get sent there.

      Johnson, a man who has made millions since being turfed out as Prime Minister, yet still gets rent-free accommodation worth a small fortune from his pals.

      U.K. has no strategic interest in the Ukraine. Russia and Ukraine could have patched things up if Johnson had not interfered to prevent that happening. Great for arms manufacturers and Cold War politicians. No good for Ukrainian troops and civilians, or Russian troops either. Two extremely corrupt regimes – but the Ukrainian corruption is never mentioned.

      1. Cuibono
        February 9, 2023


  10. Cuibono
    February 9, 2023

    Once I advised ( when begged for advice) someone to use caustic soda for a drain blockage.
    I said to be absolutely certain to dilute it as per instructions on packet.
    Not having the patience for that and maybe being a little headstrong/malicious they poured the entire dry contents down the sink.
    Mayhem and catastrophe ensued! (And expense).
    “She/he/they told me to do it!”.

  11. Bloke
    February 9, 2023

    The majority of those eligible to vote for Liz Truss as PM also thought she was right. We would now be led by her in the way voters supported had she not been stitched up like a frozen kipper by those with sinister motives. Fortunately she still has a place in parliament as does the truth which SJR helpfully reveals.

  12. Sea_Warrior
    February 9, 2023

    I have no confidence in either the Chancellor or the Governor. I have only a little more confidence in Sunak than I did in the utterly useless Johnson. I pity any blue rosette-wearing councillor standing for re-election in May. They will be taking the hit for the incompetence at the top.

    1. IanT
      February 9, 2023

      Unfortunately, I can only agree with you SW

  13. MFD
    February 9, 2023

    I looked on in horror yesterday at the fawning over an American puppet, Where have the intelligent people who used to be in parliament gone!
    In a fight home defence is the first priority. I knew it was wrong allowing a descendant of a foreign migrant into the top job.
    From now on its my intention to look after myself and family only!

    1. Cuibono
      February 9, 2023

      My sentiments exactly! How shameful that was!

  14. Ian B
    February 9, 2023

    ‘I  watched in horror as events unfolded as she tried to change economic policy in the face of a hostile establishment.’

    The Blob rules, the Government ‘refuse’ to let Democracy and their Duty interfere out of fear. If the elected Government doesn’t do as they are told the Blob will brief and conspire against them. The Government to lazy to challenge just says OK we will fall into line. I didn’t particularly take to the man (I didn’t know him) but it appears we need Dominic Cummings back and pronto. Not for getting it was the Blob that briefed against him to have him removed

    1. Ian B
      February 9, 2023

      Ian B – It would also appear that the Establishment has got ahead of its self and its position as a Servant to the Country.

      By all accounts (and without having the full details), the Civil Serpents are fighting to have a Government Minister removed for suggestion they do their job.

      The main point there right or wrong it is one of those area were the Blob briefs and fights those elected until they (the Blob) get their way. The unaccountable, un-responsible commanding the Country instead of serving – it needs sorting.

    2. Cuibono
      February 9, 2023

      He calls what we now have an “idiocracy”.
      So he’s not stupid is he?

  15. Ian B
    February 9, 2023

    ‘It is good news that late in the day the Bank did what it took to sure up the very vulnerable LDI fund bond markets’

    That was only needed because Andrew Bailey made big mistakes while allowing their introduction in the first place – it was a case of covering up personal failure at everyone else’s cost. The new function of the BoE.

  16. Donna
    February 9, 2023

    Without following the Markets closely or understanding the finer details, I worked out very quickly that the B of E had deliberately destabilised the Bond Markets in order to get rid of Truss and get their tame marionette Sunak installed in No. 10, with lefty Remainer Hunt replacing conservative, Brexiteer Kwarteng as Chancellor.

    Why? Because we are not to be allowed to deviate from left-wing economic policy; we are not to be allowed to distance ourselves from the EU; and we are not to be allowed to change the WEF’s objectives ….. with Net Zero authoritarianism and the plans for a Digital Currency to be imposed with no mandate from the people.

    It was a coup …. plain and simple. This Government has NO democratic legitimacy whatsoever.

    Off topic: perhaps Sir John could tell us what agreement Sunak has reached with Zelensky for repayment of the £billions of military equipment he has demanded and is being given. It is not without precedent for an ally to require repayment …. as Sir John will be well aware, even if Sunak isn’t, the Americans operated a Lend-Lease policy in WW2 and we only finished repaying our ally for their equipment when Gordon Brown was Prime Minister.

    We are already hearing demands from the military that, for our own defensive purposes, we must replace the equipment we’ve been sending to Ukraine. I fail to see why British taxpayers should be funding Ukraine’s military, as well as our own.

    Second off topic: Farage provided proof on his GB News show that the French Government is effectively providing free buses to the beaches for the thousands of economic migrants who are paying to force their way into the UK. Why has Sunak not demanded that Macron take back the tens of thousands of criminal migrants France is bussing to the beaches to catch their dinghies?

  17. agricola
    February 9, 2023

    08.34 thursday 09.02.2023.
    Was the “Horror” at what Liz Truss was proposing, or at the strength and power of the establishment trying to stop her. Having witnessed years of their reaction to Brexit I was not so surprised. As a warning, gird up your strength against “Britcoin”, their latest Orwellian thrust at our democracy and individual freedoms.

    Get your head around reality.There is a war in progress between the individual citizen with a belief in democracy and the establishment comprising the upper echelons of the civil service, the BoE, the Treasury, the BBC, internationally such as the IMF, the EU and central banks who collectively want greater control. In effect they are out to create a new ” Serfdom”. They have no time for democracy or individual freedom, they want a world of worker bees. The greatness of the United Kingdom was built on the exact opposite, the inventiveness and inquisitiveness of the individual, the one who drives against the arrows in the metaphorical car park. We did not get where we are by repetition of the same, we always looked for better. So you all need to wake up and smell the poison being brewed in the establishment kitchen and firmly block it.

  18. Anselm
    February 9, 2023

    Today family centres were announced for a paltry £300,000,000. I am not exactly sure what they are for. But – hey! – we all want to help the vulnerable single Mums!
    With immigrants pouring in from all sides, I wonder if we can afford the Welfare State any more? Already the NHS is a bottomless pit. The Social Services are overstretched. The vast civil Service is overstaffed and very inefficient. The old Protestant work ethic is daily eroded as fewer and fewer young men and women want to shape up to learning work. Only the Police seem to have realised that things have to change.
    If – if – Mr Putin simply swamps the gallant little Ukrainian forces this spring, then they will sweep into Kiew, Lwiw and then into Romania, Poland or perhaps even Austria and Germany. All more or less defenceless.
    Meanwhile we are concerned about single mothers…

    1. Clough
      February 9, 2023

      Anselm, I’m sure you’re right about our unaffordable spending. But throwing £2.5 bn a year into prolonging the slaughter in Ukraine is also among the government policies we can’t afford.

      The best thing this country could do is to start finding ways to a peaceful solution for the parties involved. Putin knows that Russians don’t want an all-out war with the West because it would mean ruin for them. He tried to negotiate last Spring but failed. He is turning up the heat on Ukraine now to get what he couldn’t get then: A negotiated settlement offering security guarantees for Russia, plus now the annexation of four Russian-speaking areas in the south and east of the country. I think that is preferable to the total destruction of Ukraine, which is looking increasingly likely if Kiev continues to refuse peace, hoping the NATO cavalry will come riding over the hill and save them.

      International politics, like all politics, is said to be ‘the art of the possible’. A Ukrainian victory is not possible, a negotiated settlement is.

    2. Berkshire Alan.
      February 9, 2023


      “Single mothers” why does nobody ask, “where is the father” ?
      And go for him to provide first, clearly it takes two to create a family.
      Why should I as a taxpayer fund someone else’s living expenses and life style choice, as well as my own ?

      1. Mickey Taking
        February 9, 2023

        Sometimes the ‘father ‘ arrives by next day delivery post!

    3. glen cullen
      February 9, 2023

      money money money
      BBC reporting that the UK to pay EU a further £1.7bn to settle a tax dispute

  19. The Prangwizard
    February 9, 2023

    Government and its politicians and its bureaucrats and career creeps fail us. They go on about how they are working for us. They lie and deceive.fThey just want control of us and fame for themselves. There are a few who try to do better but they are careful to keep in policy line, they dare not risk isolation.

    What we should do all the time is organise our lives to beat them. Theorists and academics can sit in their comfy chairs and live in their imaginary worlds.

  20. Ian B
    February 9, 2023

    ‘Slash energy use by 15pc, new Net Zero department to urge households’
    More dumb spouting by a clueless Government. UK security and resilience in energy has been neglected all the time the Conservatives have been in power. Now due their neglect and no plan to solve the situation other than import and pay other Nations to supply it, it is the UK People that are punished and expected to sacrifice.
    You cant have an economy, any sort of economy unless there is energy security and resilience.
    Then you get another dumb and on top of all the others insulting headline grabbing sound bites from a man that has yet to achieve, given a title and a department that is an oxymoron ‘Security and Net Zero Secretary’
    How on Earth did the PM think that shuffling the deck chairs on the Titanic would make a difference to anything. That was never the reason things have been failing in the last decade or more, it is simply the ‘Refusal’ of Government to manage

  21. Philip P.
    February 9, 2023

    It appears, Sir John, that Liz Truss did not grant you a personal interview to hear the advice you had to give her, but you had to send them to her. You don’t say how she responded, except to indicate that what she did was rather different from what you were proposing. It seems regrettable now that you were not accorded a better audience by the then PM.

    1. Berkshire Alan
      February 9, 2023

      The real shame of it all was that she employed a friend, rather than someone competent, knowledgable, and with experience of the markets and banking system like JR

  22. Richard1
    February 9, 2023

    Unfortunately we cannot avoid the overall conclusion that Liz Truss was a terrible choice as PM and should never have been supported for the leadership, she simply wasn’t up to it. She turned out both to be alarmingly inarticulate and incompetent. That doesn’t make up for having a few good free market thoughts when you want to be pm. Perhaps we need to change the system so the tiny unrepresentative minority which is the Tory membership doesn’t choose the PM. Under our constitution the PM needs to be the person who commands a majority in Parliament. Last summer that person was Rishi Sunak. Had Sunak been chosen immediately we would not now have hunt as chancellor and would not be having the struggle we do have and have had to re-establish confidence in the markets. And we wouldn’t be 20-25 points behind Labour in the polls.

  23. William Long
    February 9, 2023

    Thank you for that very cogent explanation of what happened last September; it deserves far wider currency. My guess though is that we will find that the Chancellor has learnt nothing at all from these events, except that they put him into office.

  24. Original Richard
    February 9, 2023

    There is growth!

    All those jobs which are funded by the taxpayer are growing exponentially such as the civil service, local government, quangos, NGOs, NHS (Admin), “border force”, Home Office Immigration, “charities” – including those funded by the taxpayer via the Cabinet Office and the Home Office to take the Government to court – judiciary, social services, police (Admin), educational establishment (very big), devolved and mayoral administrations, various czars, SPADS, taxpayer funded advertising and behavioural departments, various activists, lobbyists, organisations giving “independent and authoritative analysis etc etc.

    Plus of course the growth in government spending, such as Net Zero and HS2.

  25. Original Richard
    February 9, 2023

    It has now become very simple to predict our future laws and policies. It is only necessary to ask the question:
    Will this make us poorer?
    If the answer is “yes”, it will be implemented.

    Unilateral Net Zero being the most obvious example. We are being forced to destroy our economy to zero our 1% contribution to global CO2 emissions (which are going to increase substantially anyway as China and India have said they intend to burn increasing quantities of coal) simply to show “strong global leadership”.

    At least that the reason given by my Conservative MP.

    Except of course, the RoW are not so stupid to follow.

  26. Bryan Harris
    February 9, 2023

    <BlockquoteI thought Liz Truss was right to want to break out of low growth and looming recession. Many of us did – It was the right answer to a declining economy.

    It would be nice if the Chancellor had learned some lessons, but that’s not the way he works… The establishment is still hostile to tax breaks – So he will continue to weaken the economy to keep it in line with globalist policies that demands depression and ruin.

    The BoE is it seems in competition with the Chancellor and Treasury, to see who can achieve the base objective most easily

  27. glen cullen
    February 9, 2023

    Great article today, Liz wanted growth, you wanted growth, the membership wanted Liz and growth, the majority on this diary want growth, the Reform Party want growth, a minority of Tory MPs want growth …however its obvious that the majority of Tory MPs, Cabinet Ministers, the PM & Chancellor, the Treasury and the BoE want zero growth – they want higher TAXES

    1. Mickey Taking
      February 9, 2023

      Higher taxes to fund more crazy ideas, fill begging bowls all around the planet, provide remote defence against unhinged dictators, create situations for mates to acquire £millions and even £billions. It is all an expensive business and we are a wealthy nation, well we were and might be yet, BUT…

    2. Paul Cuthbertson
      February 9, 2023

      GC – the Globalist UK Establishment control the agenda. We are irrelevant however Nothing can stop what is coming, NOTHING.

  28. glen cullen
    February 9, 2023

    Has anybody else notice a worrying trend with the Tory parliamentary party and the implementation of democratic instruction …the people vote for brexit and we got brino, the membership vote for Liz and we got Sunak …I’m sure that if the people voted to cancel HS2 and Net-Zero the Tories would forestall that order
    I don’t see any democracy here

  29. Keith Jones
    February 9, 2023

    We have had this explanation of that sad affair many times over the past few weeks together with counter claims it was all Liz Trusses fault. For what it’s worth I prefer your version.
    However I gasped when I heard that Pension funds were buying on margin which is a really good way to get wiped out. What I don’t understand is why the regulator allowed it and that the Bank of England’s Pension funds were similarly invested, estimated losses to that Pension fund £1.5 billion. Completely reckless.
    But it raises another question which is Solvency 2, here we are saying we must relax it to allow the life and pension industry to invest more when we have just had the most horrendous example of a failure of prudent investing.

  30. Jim
    February 9, 2023

    Rebalance the economy. The top end services make plenty but don’t pay much tax. Bottom end services don’t pay any tax. Manufacture makes up only about 10% and declining. Go figure.

    Build low cost public rental housing – where it is needed. Helps to keep wage costs down and keeps investment away from tarting up houses for BTL. You can flog it off in 50 years time.

    Get on the Green bandwagon. There are no good new technologies on the horizon, that is why the Americans are trying to grab anything any good and pull up the drawbridge. We go with what we have and Green is the only game in town – probably won’t work but it tides us over until Armageddon.

    Make nice with the Chinese, they have got the money and need such brains as we have. Rather than counting selling pasties to the South Seas as a Brexit benefit make Brexit a real benefit. The Americans are not our friends – unless they build a really big car factory or windmill here, otherwise its the Chinese. Learn from the Mayfair tarts – work where the money is.

  31. Lynn Atkinson
    February 9, 2023

    Sunak is a calamity. We are now in an all out war with Russia, supplying fighter planes and tanks as well as personnel ‘advising’ and ‘in medical capacities’ all with guns.
    Can we afford this? Do we want this? Why are we intervening in a civil war which is none of our business? And on the side that revers Stepan Bandeira?
    Churchill have been demeaned by having the crack-head sit in his chair in the war-rooms.
    For the first time in my life, I’m ashamed of my country, although I do point out to everyone, it’s no longer in the control of my people.
    I know you disagree SJR, but I am certain you will come to agree. You disagreed with our fight against the EU saying we had to accept the ‘72 referendum result. But that was fraudulent and had you and Mrs T weighed in early, we would have had a hope of recovering our administration – which is lost.

  32. Bert Young
    February 9, 2023

    The timing of Truss and her approach to the economic scene was wrong . She was entirely overcome by outside economic bodies and world events . Stimulus was and is still needed – without it , those who manage and run all forms of business need degrees of hope on their planning horizons . Encouragement is essential from the establishment today and the stance from Downing Street has to change ; the manner exposed by Hunt is -even to put it mildly – devastating .

  33. Keith from Leeds
    February 9, 2023

    An excellent article, Sir John. But why has Andrew Bailey not been sacked. If you tolerate mediocrity that is what you get. No sign that Sunak or Hunt have any understanding of how to get growth.
    No 1 – Cut the cost of government, starting with making 80% of Civil Servants redundant, cut Quango budgets, get rid off all woke jobs in government, local government & the NHS, get rid of Net Zero.
    No 2 – Use the massive savings from that to reduce taxes properly then watch the UK economy grow.
    First 20k tax free, next £55k at 15%, not 20%, over £75k @ 40%, cut IHT to 10%, cut VAT to 15%, get rid of clawback at certain income levels. Strikers will then get pay rises from less taxation & go back to work.
    No 3 – Win next General Election with a good working majority, by telling voters tax cuts will only remain under a conservative government.
    No 4 – Repay massive UK debts over sensible time scale by only running surplus budgets & make that a legal requirement.

    No 3 – That will enable repayment of our gigantic debts over a reasonable time scale.

    1. Lynn Atkinson
      February 10, 2023

      I’m with you Keith.
      What Truss simply refuses to accept is that The State must be cut to the bone. No PM will succeed until that is the core principle.
      We NEED these over-cosseted and over-renumerated clock-watchers to be active in the wealth creating sector. They need to learn how to make themselves useful!

  34. Ralph Corderoy
    February 9, 2023

    The Pension Regulator highlighted the LDI risk in the preceding months, as I’ve reference here before.
    The Bank of England would have been aware of this and the spiral of selling which they would kick off with their announcement of a future sell-off of their holdings.
    They chose to make this announcement the day before Kwarteng’s ‘budget’.

    Q. How common is it for the BoE to announce a sell-off in advance like this? It would naturally move the price now, not just when the sell-off happens.
    Q. How common is it for announcements which move the gilt market to be made the day before a Chancellor’s budget?

    Biden had already been critical of Truss/Kwarteng’s overall approach as it rejects his approach of ‘spend, spend, spend’. Obtaining growth would show up Biden’s approach, and that of the consensus group-think orthodoxy, to be wrong. Central banks chatter all the time and collude their actions. The outcome must delight them: No ‘Sweden’ to show the One True Way is wrong.

  35. Peter Boyes
    February 9, 2023

    Dear Sir John, thank you for a brilliant recording of the facts- distorted by the BBC and main stream media, naturally. So glad to hear what sounds very much for your support of Liz Truss which I truly share.
    This leftie government employing their managed decline – what else? Made a grave mistake in their choice of chancellor and others
    My choice of chancellor would be Sir John Redwood- who else? Without this unmandated PM of course!
    Kind regards,
    (Previously a constituent of yours)

  36. Stred
    February 9, 2023

    Your article is confirmed by the above. The LDI purchases, from BlackRock for the Bank’s own pension, is an accident waiting to happen and the regulator and bank are a disgrace. Bailey should have been sacked,not Truss.

  37. agricola
    February 9, 2023

    Your last paragraph is bang on reality. Nobody is going to invest their tallent and money knowing that any success will be heavily taxed and in the near future even more so. Captive industry should be looking seriosly at overseas incorporation, or upping sticks entirely to a more intelligently run tax regime. Productive industry is being made to pay for the BoE’s and Treasuries activities in their casino of financial transactions that have no basis whatever in the real world. Additionally, along with every household in the country they are being crippled by energy bills occasioned by government’s absolute incompetence at running an energy market with sources within our territorial borders. In fact everywhere you care to look in Parliament or among the scribes, they are utterly useless. It is in fact worse, they are dangerously useless, as in drunks with pinless live grenades.

  38. forthurst
    February 9, 2023

    In the first place, the mini-budget was completely unnecessary and the optics were dire. Economies don’t move that quickly so why the indecent haste?

    Anyhow, that is in the past; what is not is the even more indecent haste with which the Tory Party is escalating our involvement in a civil war in Ukraine initiated by the US State Department. We can’t stop the US from warmongering but there is no need to give them support in such a way that our own people are suffering from very high energy prices and the US warmongers are making huge profits at our expense.

  39. Elli Ron
    February 9, 2023

    Liz Truss was ousted by a BoE putsch as part of a left wing tendency in the Tory party aligned the with Remoaners. Baily should be removed from his position for gross negligence and for politicising the position of governer.

  40. Sakara Gold
    February 9, 2023

    For whatever reason – and there is some truth in what you write – the markets reacted very badly indeed to the Truss/Kwarteng mini-budget. Over that weekend, the value of sterling collapsed to a tad over $1.04 to the pound and this alone caused ginormous sums to leave the country. And it inevitably destroyed what was left of the Party’s reputation for fiscal probity

    The markets do not like unfunded tax cuts when we have a national debt of £2.4 TRILLION to service – and when we are dependent on the kindness of foreigners to fund our short-term borrowing requirements.

    It is worth pointing out that when Gordon Brown was Chancellor he paid down the national debt to 35% of GDP. Looking at today’s absolutely awful polling, it seems another Labour Chancellor will have to inherit the mess and keep the markets happy.

    1. rose
      February 11, 2023

      How do the markets feel about unfunded tax rises? They mean shrinking revenue, more public spending, and higher borrowing. Tax cuts in the right way don’t.

  41. Lindsay McDougall
    February 9, 2023

    Once Jeremy Hunt has presented his Spring Budget, there will follow a Finance Bill including his proposed tax rises (including failure to raise income tax thresholds in line with inflation). I am not one of your constituents
    but I have e-mailed my MP Ranil Jayawardena to state that I shall be voting for the Reform Party at the next General Election unless he votes against each and every one of the proposed tax rises and fiscal drag. I suggest to fellow bloggers who are your constituents that they take exactly the same line with yourself.

  42. Jamiea
    February 9, 2023

    It would probably have been much better Sir John if you had put no proposals to her as it only got her all mixed up – simple creature that she is – she was also getting advice from some – she with Kwasi – by the way where Is he now? havn’t seen or heard a peep since.

  43. SimonR
    February 9, 2023

    And so say all of us!

    1. Stred
      February 10, 2023

      Speak for yerself.

  44. Michael Saxton
    February 9, 2023

    A most interesting and informative analysis Sir John. Who should have advised the PM and her Chancellor about the LDI fund bonds? Was it the BofE or the Treasury?

  45. glen cullen
    February 9, 2023

    Home Office – 8th February 2023
    Illegal Immigrants 189
    Boats 4
    Its not in the media but they still coming everyday

  46. Derek
    February 9, 2023

    Compared to countries like Greece, Italy, USA, France , Portugal, Spain Canada and Belgium, the UK debt per GDP is low. Yet these ‘big’ spenders do not have the crazy desire to pay down total debt, sacrificing both growth and essential foreign inward investment in the process. UK Job losses can be guaranteed now and that will increase the welfare benefits burden on our Treasury not relieve it.
    Raising taxes at a time when the economy is failing and falling into recession, is a recipe for a slump and depression. The very reason why the IMF now predict the UK will be bottom of the economic growth league table this year.
    Wake up Chancellor and break away from those hopeless Treasury models. Go for growth not for stagnation and or decline.

  47. Paul
    February 10, 2023

    Didn´t the Pound fall to 1.06 on the Sunday? What caused that – wasn´t it Kwasi´s TV interview that day?

  48. a-tracy
    February 10, 2023

    So even with all these labour unions cutting everyone’s productivity, train companies not operating for multiple days last year, 2022, the establishment still got it wrong on recession.

    In Sept 2022, we had a once-in-a-lifetime event, a monarch of 70 years dying, causing a mourning period and two days of loss of turnover for a vast majority of businesses. The odd extra B&B booking doesn’t make up for that loss for the rest of the businesses closed down by the government.

    “The Office for Budget Responsibility (OBR), the Government’s independent tax and spending watchdog, also predicted a downturn lasting longer than a year. In the end, the economy has so far performed better than expected, prompting forecasters to upgrade their predictions.” Telegraph today

    And Labour MPs tell you that you’re not allowed to critique them or ask questions!

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