Briefing from the Treasury for over a year now has been rightly telling us inflation is too high, and wrongly saying what we need to do about it.
Their mantra is unfunded tax cuts cause inflation. No recognition that the last two years of high inflation have been years of tax rises, so there is no possibility the current inflation was caused by unfunded tax cuts. No mention that if unfunded tax cuts can cause inflation then so can unfunded spending rises. No mention of the huge surge in spending in the last three years.
They should think again. The present inflation was brought on by
The Bank of England printing £150 bn of extra money during 2021,a recovery year.
The Bank keeping interest rates near zero by paying ever crazier prices to buy up state debt and to enable the government to borrow huge sums at very low rates
The Treasury imposing high carbon taxes, fuel duties and windfall taxes on energy to give us very dear energy at a time of high market prices
The Treasury agreeing to a 103,000 increase in civil service numbers from 2017 to today and a 68,000 increase in other public administration posts , resulting in a 7.5% fall in public sector productivity over the 3 years 2020-22.
The big expansion of state debt this decade effectively financed on a Bank of England overdraft
Tomorrow I will examine how the right tax cuts offset by spending controls and asset sales can bring inflation down. I am not recommending more borrowing to fund tax cuts, but if you did borrow by issuing a longer dated bond to pay for a tax cut the bond withdraws the same amount of spending power as the tax cut injects, though from different people.
October 30, 2023
Good morning.
I could not agree more. However. There is one small caveat. Your party have been in government all the time this has been going on and has done nothing to address these and other issues. My question to you is simply this:
Why ?
October 30, 2023
They serve vested & often corrupt interests and global masters not the voters. Hosing tax payers money into certain people’s pockets while they still can do.
October 30, 2023
Indeed. Young naive English students stitched up with high interest loans and appalling courses while free money has been chucked at just about everybody else, especially since 2020. That alone should disqualify this bunch from ever being in control.
October 30, 2023
Indeed, but very depressingly the only realistic alternative is even worse. Plus with votes for children perhaps compulsory voting and other rigging we might be stick with them for 15+ years. Perhaps best to leave the country.
October 30, 2023
Yet more depressing new in Sunak’s deteriorating. 3000 university “students” claim asylum in their first year over half from Bangladesh.
Bike thefts at railway station up 40% in a year so best use a bike worth no more than £20.
Then in Bath the paking machines charge much less to park your EV car than you old diesel or petrol. EV Cars that cause more CO2 and more road and tyre wear that is. Great plan Bath but they have all those gold pensions to pay and all that virtue signalling to do.
October 30, 2023
Until 1998 full-time students in England could attend free of charge.
How much interest you’re charged depends on which plan type you’re on.
You’re currently charged 6.25% if you’re on Plan 1. 7.3% if you’re on Plan 2. They charge that interest from year 1 of the course.
The original English student loan started in 1998, following an inquiry by Gillian Shephard, all voted through by English MPs in Blair’s years. £1000 per year at first, to be repaid by the English only, a graduate tax of 9% on earnings over £10,000 pa to apr 2005 then £15,000 to apr 2012. At first 1998 I believe there was only 1.5% interest charged capped at 4.4%.
My question is, of those original English Student loans from 1998 for £1000 per year, so £3000 in total, in 2023, what % of them are repaid in full after 25 years, Sept 2023? Those that weren’t able to repay this small amount, what degrees are they? What % are none English students that didn’t bother paying?
Higher Student loans started in 2007. Under Blair and his five Scottish MPs required for a majority, they raised it to £3000 for English students only. Then £3225 in 2009.
Plan 2 loans started at £9000 in 2012, Thanks Mr Osborne.
Now £9250 pa.
October 30, 2023
The bill would have failed had Scottish MPs, some of whom were dragged off their sick beds to vote for it, even though they wouldn’t countenance it for their own and John’s lot as now, didn’t bat an eyelid at the fact England’s young, and only England’s young are clobbered with £9,250 fees thanks to the votes of Scots (and Welsh) MPs. And to add insult to injury, they also see nothing wrong with English taxes providing them free or heavily subsidised for elsewhere in the U.K., anywhere except England.
October 30, 2023
My point was-why are English students handicapped in this way when £10k grants and furlough was chucked at all comers during Covid? If youngsters can be summarily strapped up with debt, why couldn’t loans have been issued then to those who took the option to not work in the pandemic?
October 31, 2023
Because Sir Joe, many people wanted to work but were closed down under threat of imprisonment if they were open, I think of those gyms and a shooting range, golf clubs etc.
A lot wanted to stay at home and be paid a Universal benefit to do so, but there were also a lot of people who wanted to open their businesses willing to take the risk. The vast majority of British people would have chosen lockdown in a referendum we see the result of that more clearly now. There were people, MPs etc trying to warn people what closing the economy would bring. Boris is being called out for questioning it, but NICE make decisions on life and death like Boris was being asked to consider on a daily basis.
October 30, 2023
There are fundamental problems with our economy, our host knows this and ever so politely points out critical issues, but there seems to be no interest in the Treasury to address them. Statista suggests tax as % of GDP is around 33% and government spending as a % of GDP is around 45%. So the difference, borrowed, and sooner or later the markets are going to stop lending to us. Taxes are going to rise further OR there has to be real cuts in expenditure.
Why not start with the Trade deficit?
October 30, 2023
Because we need to manufacture stuff to redress the deficit, we both increase exports and decrease imports, so it’s a given if you get the energy on stream and stop punishing the productive.
October 30, 2023
@Mark B; Indeed, decisions by successive Tory governments, some made as far back as the 1980s.
The 1983 Conservative Manifesto, has two enlightening proclamations, one about the importance of our coal industry until we build more Nuclear power capacity, and the other suggesting withdrawal from the then EEC (and I quote) “would be a catastrophe for this country. As many as two million jobs would be at risk”.
Our host talks about high energy prices, he talks about increase in civil service numbers, yesterday he was complaining about falling numbers of self-employment, suggesting IR35 is to blame, except sub-contractors are always the first to be laid-off when a downturn hits, IR35 or no IR35.
Coal was cheap, with an abundances of supply, even if the main trade union was troublesome, but we never got the promised nuclear investment; having repatriated layers of governance from the EU since 2019 is it any surprise civil service numbers have risen, Whitehall having gone from rubber-stamping to making policy?
Tax cuts might get the Tories reelected, keep Starmer out of No.10, but tax cuts will not sort out the core problems.
October 30, 2023
@Mark B +1 – remainer revenge?
October 30, 2023
Bailey doesn’t like tax cuts for both political and socio-economic reasons as it deflects away from Labour’s Socialist authoritarian culture and hands back partial control to the individual, with less leeway given to Labour to use such funding for spending bribes come the next election. Many Tories think the same.
I always associate politicians who oppose to tax cuts with a culture akin to a parent dictating to a child about how they should spend their pocket money. Under Labour the State’s knows best. This sniveling, patronising, paternal barbarism is repugnant to those who recoil at Labour and some big State Tories
Opposing tax cuts is fascist in nature. No doubt Labour will make voicing opposition to tax cuts a hate crime. They may as well as every other form of opinion is slowly being criminalised
God save us from the totalitarian scum
October 30, 2023
Other causes QE under Sunak (the main one bing Sunak’s Net zero, vast government waste (Net Zero, the net harm Covid vaccines and lockdowns lockdowns, HS2, test and trace, open door migrant costs pushing up rents and hotel costs, the loans for worthless degrees…)
October 30, 2023
Cheap hotel costs seems to have doubled in two years & more bed bugs too it seems.
October 30, 2023
@Lifelogic Sunak has money to burn, its in your pockets
October 30, 2023
Clipping and counterfeiting were both deemed capital offences in the 17th and 18th centuries. This meant that if convicted coin crime suspects could be sentenced to death.
Not it seems the QE currency debasing this century though.
October 31, 2023
If you look at the Roman Empire during the troubled third century AD,the monstrous debasement in the currency(ultimately the “silver” coinage had no silver left in it)caused by the surge in state expenditures as a result of efforts to fight off multiple usurpers in the regions and multiple barbarian incursions(as well as the need to placate the plebs at home with handouts),did not by itself destroy the Roman economy-it was the currency reforms that followed once the political/security situation had been -temporarily-resolved that destroyed the economy and banking system.Barter and payments in kind re-entered the system-officially-under Emperor Diocletian and the latter’s infamous Edict on Prices(a maximalist system of price controls introduced to stop runaway inflation) proved unworkable.When the Emperor Aurelian found out that the monetarii(mint workers) had been syphoning off precious metal meant for the coinage he had many of them put to death.
Eventually Constantine gave up on the old empire,moved the capital east and started afresh with a new ultra pure gold currency-the solidus,from which the English word “solid” is derived.Eventually the western provinces fell away.
October 30, 2023
“The Treasury” couldn’t do any of this if the First Lord of the Treasury (Sunak) and the Second Lord of the Treasury (Hunt) didn’t support, or at the very least, authorise it.
Or is Sir John confirming that Sunak and Hunt are just puppets, jerked around by the Treasury Blob, IMF and WEF?
After all, “The Treasury” isn’t responsible for the Net Zero lunacy which is causing our high energy bills. VAT is imposed because the Not-a-Conservative-Party refused to LEAVE the EU as the electorate instructed and Carbon Taxes are levied because the Blue-Green Socialists are imposing UN Agenda 30 – with no mandate to do so.
October 30, 2023
You’re getting a bit close to the truth here, Donna.
October 30, 2023
ouch – that hit home.
October 30, 2023
+1 and both still idiotically pushing net zero to drive up taxes and energy costs for no reason too.
October 30, 2023
@ Donna
The HM Treasury website says: “WE maintain control over public spending, decide how money is raised from taxpayers, set the direction of the UK’s economic policy and work to achieve strong and sustainable economic growth.”
I would hope that the “WE” includes the Chancellor or the Exchequer.
https://www.hmtreasurycareers.co.uk/about-us/role-of-hm-treasury/
October 30, 2023
Donna, +++++++++
October 30, 2023
Spot on Donna and I would add.
Fuel costs impinge on the manufacture of goods including food. Fuel costs impinge on everything that has to be moved including people who have to move.
We have a very poor business model for getting fuel to all the end users. This is of course exacerbated by government itself via an overbearing tax take, none of which is directed to correcting the third world infrastracture they impose upon the population. Government fail to fully take advantage of our own fuel resources, prefering to subject the UK population and business to the vagueries and predation of a world market place, itself subject to cartels and random warfare, even when we are buying our own fuel. Make no mistake, UK government action is deliberate and the you the population are the cash cows. The above accounts for most of the inflation we suffer. It is added to by government borrowing way in excess of the tax take, releasing more money to chase fewer goods to further exacerbate inflation. Question, is it malevalence or serial incompetence.
Finally of course are the chancers, fuel companies and supermarkets. Check out their profit levels. All in all a compound rip off of a captive population.
October 30, 2023
@Donna +1 Yup!.. who do we empower and pay to manage the UK?
October 30, 2023
Indeed just the same with Ulez and low traffic neighbourhoods. This government backs this motorist mugging and road blocking agenda too.
October 30, 2023
Did the Government’s new Chief Scientific Advisor and lockdown zealot Adviser Professor Dame Angela McLean really cause the sensible and correct Carl Henegan a F***witt and Suank Dr Death? Why do the government employ such (people Ed)?
The Covid Enquiry (under Baroness Hallett) clearly seems to be a sick joke, the outcome will surely be the reverse of the truth (which is Lockdowns did net harm, vaccines did vast harms & certainly for the young and those who had had Covid, vast sums of money were wasted, vast corruption too.)
Carl Heneghan & Tom Jefferson who have been largely correct throughout Covid should surely withdraw due to the absurd and evident bias of the enquiry. See their excellent Trust the Evidence, Oxford University website.
https://www.cebm.ox.ac.uk/research/trust-the-evidence
October 30, 2023
Masks were pointless too and probably indeed surely did significant net harm too especially to children.
October 30, 2023
When masks were mandated a local GP told a friend that she was concerned that the masking would make matters worse. In her opinion once a mask has been exhaled into a few times it becomes a warm and moist perfect breeding environment for bacteria, which are then inhaled back into the airways in quantities higher than the immune system might cope with. I read that many of the “covid ” deaths were in fact caused by bacterial pneumonia as a secondary infection. Could there be a connection?
October 30, 2023
Indeed. Initially they got masks right but they changed their minds – why? Follow the money or the mad WHO agenda.
October 30, 2023
I think that’s highly possible. The number of people I know who kept their mask stuffed in a coat pocket, or handbag; wore them repeatedly, day in, day out!
October 30, 2023
merely there to show conformity – not a belief in health value.
October 30, 2023
@Donna +1 Yup!.. who do we empower and pay to manage the UK?
October 30, 2023
In the wrong place
October 30, 2023
@LL – wrong type of mask, needed to be N95 to protect yourself and others
October 30, 2023
The “Inquiry” has three main purposes:
1. To string out the process as long as possible – so that everyone who was in a position of authority is long-gone, by the time it reports and cannot, therefore, be held to account.
2. To find that most of the lock-downs and restrictions were appropriate and necessary and the occasional “mistake” was made because the evidence against them was insufficient. However, “they saved the NHS and hundreds of thousands of lives.”
3. To enrich the lawyers
Rigged doesn’t begin to describe it.
October 30, 2023
@LL; Nothing like per-judging an Inquiry, because you are scared witless the conclusions will not be what you want to hear, not blame those you want blamed, exonerate those you want exonerated…
Tell me, if face masks do not work why do health professionals wear them, and how come surgeons and nurses are not falling ill with bacterial pneumonia (as suggested by @David L)?
I recall there were concerns with regards teachers wearing masks due to children not seeing the teachers mouth move, but how is that any different from young children watching cartoons for hours on end via the child-care TV channels. Such concerns are easily solved respectively, by the use of transparent face shields, and turning off the TV!
October 30, 2023
If you listen to the proceeding you will see how it is being prejudged and the sensible experts set up. But we shall see if I am right, in about 3 years time and £ millions of wasted money I assume.
October 30, 2023
@LL; That reply just proves my point, unless the outcome is what you want to hear you will shout “Stitch-up!”…
Given that 99% of the (available) evidence, if not all, is being placed in to the pubic domain, for anyone to examine, there is actually very little scope to rig this Inquiry, it is going to be far to easy for expert-groups to publish their own independent findings.
October 30, 2023
There is a big difference between the cheap masks loosely worn by the public and masks used by medical professionals Jerry.
October 30, 2023
@MiB; So the highest grade of medical masks have the higher free-flow of air, I find that hard to believe.
Logic says it would be the other way around, those cheap low grade medical masks as sold in the supermarkets would have the least filtering and thus the higher free-flow or air, even more so if “worn loosely worn by the public” as you suggest. The next step up from the highest grade, tightest fitting, medical face mask being respirator masks.
I will accept, and I suspect this is what the said GP probably meant, if people reused single use masks, or did not wash reusable masks frequently and properly there might well have been problems, but that’s not the fault of masks nor the requirement to wear them.
October 31, 2023
Medical masks are far better at protecting their wearer than the masks the public routinely wear
You could waffle for England Jerry.
November 1, 2023
@MiB; But the masks for sale in supermarkets are medical grade masks. The only person waffling is you Martin!
October 30, 2023
The situation wrt civil service productivity is even worse than you say, Sir John. The Taxpayers’ Alliance has discovered a huge increase since 2016 in mandarins taking home six-figure salaries, and an almost threefold rise in those earning over £75 grand. Your government’s determination to cut Whitehall bureaucracy has succeeded only at the lower-paid levels, reduced by more than 10%. E.g. there are now fewer officials such as prison officers (at a time of rising prisoner numbers).
Under T. May and her successors, the Civil Service payroll has expanded at the highest rate in 50 years. This is likely to be a lasting increase in the public sector, as Starmer is not going to reduce it. Who would have expected the Conservatives to saddle the country with a hugely bloated state bureaucracy?
October 30, 2023
Much of what the Civil Service produce is of negative value – net zero, road blocking, worthless degrees for large debt, the lockdowns, the net harm vaccines, over the top red tape, this absurd Covid Inquiry… can we just stop these and fire the civil servants – release them to get productive jobs instead.
October 30, 2023
Cut their numbers in half – would we notice? Probably not, especially if our politicians had the guts to get them back to the office instead of working from their sofas. Productivity in the public sector is down, not surprising, when they can be sticking the washing on, prepping the dinner, taking the dog out, all in a days paid work. If only Sunak had a backbone and told them to get back to the office or collect their P45s.
October 30, 2023
Agree totally John. Let’s get the government spending down. the tax burdens down and look at increasing domestic productivity in manufacturing so we are more self-sufficient in food and manufacturing and seek long-term supply security and price stability (long-term contracts from reliable partners) to reduce costs for families and businesses. A significant issue for families and businesses is the hundreds of billions of dollars wasted on pushing and subsiding bad technologies such as wind, solar, evs, heat pumps etc. Prices will rise as eliminating fossil fuels is not reasonable or viable. It is money wasted. Our costs will continue to rise both due to the expansion of the not-at-all green technologies and lack of investment in needed coal, oil and gas. Lastly inflation is being compounded by fiscal drag. That is almost all of us personally and businesses are finding themselves dragged into higher tax bands or VAT brackets and we are charged capital gains on changes in monetry value when absolute value hasn’t changed. It’s just price that’s inflated by the BoE money printing.
Let’s scrap Net Zero and the entire grift that the climate industrial complex represents. We need to get interest rates down as this is making all debts very expensive. We need to pay off our national debt and not inflate it away which just cheats everyone else out of the value of their stored cash-wealth and spending power of fixed income.
Let’s get rid of all those who are here illegally by mass deportation just as Denmark and Germany are considering. They represent a huge cost and social and security threat. We must see that it agitates even those who are 2nd generation immigrants are encouraged to join in mass protests in London.
A big change with a Trumpian Britain First focus is required.
October 30, 2023
But that is pure nonsense. Where are you going to mass deport people to? Who is going to accept them? If people are allowed to enter this country there is nothing that can be done.
October 30, 2023
What is becoming clear is that those in hotels being told to leave, must approach local authorities ( for housing ?)
Unless there’s a revolution, these tens of thousands of illegals are here to stay. Gulp!
October 30, 2023
What a defeatist attitude. Of course, we can deport people if politicians have the will. Most, if not all, countries refusing repatriation receive foreign aid from us. Stop aid to any country refusing the return of their citizens. Also, this myth that you can’t determine where a person comes from if they throw away their documents is just that, a myth. If you line up a Scotsman, Welshman, or Irishman in front of me I’ll tell you exactly where they come from. It’s nonsense that people pertain to being from another country and are allowed to get away with it.
October 30, 2023
+1
October 30, 2023
“Where are you going to mass deport people to?”
Gaza?
October 30, 2023
Only if they are from Gaza.
October 30, 2023
DB, ++++++
October 30, 2023
Yes we need to repatriate our investments too, boost production in Britain powered by our own energy. We could do with repatriating our own highly educated and skilled people, but they will only come when the country is safe and solvent.
We do have a chance because of the dire situation facing the EU and the USA. Sterling could well be the only western currency that is viable if we keep our heads and go back to the standards which forged the U.K. as a genuine world leader in so many spheres, in the first place.
We must unleash the Kraken!
October 30, 2023
The Treasury needs to think again about inflation – and also about nearly all their other anti-growth anti-citizen policies:- the absurd tax l& red tape levels, the Net Zero and intermittent expensive energy agenda, road blocking, the wars on motorists, landlord, small business and the self employed, the dire virtual state monopolies in healthcare, schools, universities… the soft loans for worth less degrees, this appalling sick joke of a Covid Enquiry, the open door low skilled immigration levels, cancel HS2 in full, stop the dangerous Covid vaccinations, the over restrictive planning… U turns all round please the current direction of travel is moronic in almost every single way.
October 30, 2023
@LifeLogic
You’re on a roll this morning. Not even 8 o’clock and you’ve made 7 posts already. All saying exactly the same things as you have said literally hundreds (if not thousands) of times before. Do you never tire? I picture you looking up from your keyboard and saying to your long suffering wife; ‘I’ve told the couple of dozen regular contributors to John Redwood’s site a million times and still nothing changes’, and your wife as she leaves the house to live her life saying ‘Yes, dear, don’t stay there typing all day, you need to get some exercise occasionally.’
October 30, 2023
Well what I say is all surely true and correct or do you disagree. Off to walk the dog now.
October 30, 2023
I agree with much of what you say. But, really, you trot the same stuff out over and over and over again. It’s like listening to my wife going on about Brexit – she’s a remainer. I glaze over listening to her. As I read the posts in here it tend to just scroll down and read the post. If it’s interesting I will then look at the top of the post to note who made the post. Within the first two lines of reading your posts, I know exactly who the author is, I know exactly what you are going to say – for the umpteenth time – so I move straight on to the post below.
I like reading the posts in this site but, really, yours are getting ridiculous. You must tire of posting the same stuff every day. Surely you must. You’re preaching to the choir. What do you get out of it?
October 30, 2023
LL, ++++++. You persist in covering many important points, and long may you do so, at least until notice is taken and action expedited.
Great innings, keep batting.
October 30, 2023
Thanks.
October 30, 2023
John Redwood’s version of Geoff Boycott.
Although maybe 100% of school leavers should be offered PPE degrees.
They have helped so many politicians get ahead. Widespread availability would help create a level playing field.
October 30, 2023
Can we have Andrew Bailey comments on you post today?
October 30, 2023
Let’s face it, the Treasury and the Bank, as well as HMG have made a complete imbroglio of the economy, and that’s using nice words.
I appreciate the fact that almost alone, our host is trying to inject some sanity back into the management of the economy. Using his vast experience to highlight the issues, and from the back bench, he is a voice in the wilderness – Why aren’t more MPs demanding that we return to realistic fiscal policies?
(I’ve answered that many times here)
If things are to improve we have to get more MPs fighting against establishment tyranny. That may sound like a lost cause, but let’s just remind our MPs that they work for us, and we are demanding that they do their job with us in mind and a sound economy as a goal.
October 30, 2023
they all feel trapped by the manifesto, the three-line whip, the promises to their constituency, the desire to avoid the claim of rebel or u-turncoat.
October 30, 2023
@Bryan Harris – it would appear the Conservative Party is being suppressed by the Conservative Campaign HQ that are of on some kind of Socialist kick, and in league with the Collective ‘Blob’ are extracting Remainer revenge. Those campaigning at the next GE on behalf of this Conservative Party at the GE need to ask themselves do they want to lie once more?
October 31, 2023
I’ve been “reminding” my MP that he works for me quite regularly over the past 3 years – after he voted to strip me of my Civil Rights over a virus the Government had already downgraded to a Low Consequence Infectious Disease because they KNEW it had low mortality rates (and they also knew it was really only the very elderly/frail and those with serious co-morbidities who were vulnerable).
For a while, he replied …. usually just trotting out the Government’s “line to take” on any issue I raised with him. Now he doesn’t even bother doing that.
Work for us? Don’t be daft – most of them are lobby fodder and nothing more.
October 30, 2023
The Treasury is worthless.
October 30, 2023
@Bloke; “The Treasury is worthless.”
Quite true, totally penniless! 😮
October 30, 2023
Don’t confuse them with the facts now that they have made their minds up
October 30, 2023
I have two possible reasons for the Treasury’s performance, such as it is. They are either totally corrupt serving a purpose other than the UK people and their interests, or they are mind bogglingly incompetent. They may be economists(doctors) concentrating, not on the health and well being of the people but acting as pathologists picking over the remains. Sadly for the people they are supported by your government. Much as we and you SJR may have positive solutions, nobody is listening. They have settled for failure, and all but the most blinkered supporters know it.
October 30, 2023
Sir John
Raising costs, causes a rise in inflation – cost need to be covered, paid for.
Our 2 Chancellors have raised taxes exponentially and are still doing so, therefore are the main drivers for increased costs, price rises and ultimately inflation sits with those in this Conservative Government.
October 30, 2023
Sir John
What ever way you wish to frame it this is a Socialist tax and spend Government. They give money away like there is no tomorrow, then raise even more taxes and create even more borrowing to cover their own malicious nonsense.
The retort from these people is they have to keep taxes high to reduce inflation, but they are the sole driver of UK inflation, they are the sole reason those that can move away from the UK do to avoid their(this Conservative Governments) punishment
For how long can the Conservative Party, its Campaign HQ allow this deception to go on?
The Country has had enough of these lies
October 30, 2023
From The Telegraph
“estimates from the Office for Budget Responsibility (OBR) suggest that just £6bn of headroom will be available for next month’s Autumn statement – the smallest margin since the watchdog was set up in 2010 and minuscule compared to Britain’s £2.6 trillion debt pile.“
The OBR is George Osborne’s a Conservative Chancellors invention, since its creation it has never been correct in its assumption – what are we(the taxpayer) being forced to pay for?
The debt pile is the Conservative Governments offering to the people(the taxpayer) in 2010 before the OBR it was just £1.8 Trillion(I guess not them but this Conservative Government). Now we(the Taxpayer) have to pay down a £2.6 Trillion debt
Because this Conservative Government has increased Costs everywhere, they have increased inflation and the interest rates. The higher interest rates they have introduced into the UK has increased the costs of the UK debt.
This Conservative Government keeps giving our money away, it refuses to manage its personal expenditure, it refuses to keep its spend within the means of the Country. In Collusion with the Collective ‘Blob’ they are clearly setting out to damage if not destroy the UK – Remainers revenge
October 30, 2023
The Treasury is a joke. But who has been sacked over the problems caused by it & the BOE over the last three years? No one & until that happens, they will carry on regardless. It seems neither Sunak nor Hunt have a clue about managing the economy. Who allowed the Civil Service to grow unchecked & why has that person not been sacked?
It seems controlling spending & making room for tax cuts is forbidden!
October 30, 2023
Sorry SJ, your headline is too long. The words, “Again”, “About” and “Inflation” are superflous.
October 30, 2023
I see we’re once again being drawn into using the socialist lexicon, allowing them to control the narrative.
What is an “unfunded tax cut”? The right tax cuts more than pay for themselves – by stimulating economic activity, changes in behaviour, a tax cut can more than pay for itself.
For example, many higher earning contract workers simply don’t bother to look for more work when their income might hit the 45% band. Some will work and put into pension (which *defers* tax into retirement, it does not necessarily avoid it altogether) but many will simply become economically inactive. Some feel the same way about paying 40% and take a holiday. If they were paying less tax they would work more and increase overall tax *revenues* while paying lower *rates*.
And if regulation such as IR35 were not getting in their way, they would find more work and pay more tax. This is not “funding” a tax cut, it is simply changing the tax code for the benefit of all.
But the socialists foment the green-eyed monster view of this “Look at him/her, they’re getting all that money and they pay the same as me” when actually, if they earn a lot more then they pay a lot more tax, even if it’s at the same rate.
October 30, 2023
‘I am not recommending more borrowing to fund tax cuts, but if you did borrow by issuing a longer dated bond to pay for a tax cut the bond withdraws the same amount of spending power as the tax cut injects, though from different people.’
I read this blog to learn. I’m not quite getting the equivalence above so perhaps tomorrow’s post can explain.
What I have so far: Milkmen are a dying breed. The Government must intervene. Hunt introduces a lower ‘gold cap’ income-tax rate for milkmen. Hunt is beyond skint so sells ten-year gilts to cover the drop in income-tax take. In year one, Ernie, feeling flush, becomes even faster by splashing out the gain on a new EV float he could otherwise not afford. (Though he misses out on green subsidies by it being lead battery.) But subsequent years see Ernie content and so his gain is ‘saved’ at the bank.
Those that bought the gilts today can’t now spend that money elsewhere for ten years. Ernie gets drip-fed money over ten years by keeping more of his well earned. A discount rate is used to estimate the spending power’s time difference. But presumably, it’s still quite a ‘finger in the air’ job to size the gilt sale? Plus that gives Hunt the ten years’ IT on day one to fritter away, encouraging a short time preference.
And the gilt buyer is probably an active investor. Unlike Ernie who stashes his cash where it does no good and just erodes. The bank doesn’t need his cash to lend out because of fractional reserve banking. Their multiplier of deposits to lending can be adjusted, if it’s the BoE policy, instead of seeking more deposits by paying higher interest.
So I think increasing the spending power today only works if the ‘different people’ are consumers, not savers. We are all pushed into consuming or investing in risky assets because saving no longer pays.
October 31, 2023
And when the suppliers of the stuff we consume but don’t produce decide they are no longer willing to accept our worthless fiat as payment(or can no longer be forced to do so),the whole thing falls apart.
De-dollarisation!
October 30, 2023
Surely other causes of high inflation were the rising cost of oil and gas and food prices, caused by the Ukraine war. I do agree that BOE kept interest rates far too low in the 10 years after 2010. The minimum should be fixed at 2%.
October 30, 2023
“The Treasury imposing high carbon taxes, fuel duties and windfall taxes on energy to give us very dear energy at a time of high market prices.”
This green (=communist) policy is designed to de-industrialise the UK by not only making our energy expensive to reduce our competitiveness but the carbon credit scheme is also designed to encourage many companies to close down their UK factories since they can sell their carbon credits at a huge profit.
The Greens know this which is why the next step is CBAM to place extra taxes on imported goods followed, finally, by an individual carbon credit system using forced electrification and smart meters plus CBDC to be able to ration our reduced access to food, energy, transport and heating.
In addition, the continued importation of the third world will make our transition to a third world country complete.
October 30, 2023
In the land of the blind, the one eyed man is DANGEROUS.
Schoolchildren would be able to follow your logical and rational arguments.
Let’s hope the Government is as able as the schoolchildren.
October 30, 2023
Not much mention of high priced energy and the mind boggling profits made by the providers on the back of the Ukraine invasion. Pure greed. Was there ever an energy shortage here? We seemed to be able to send gas to the Continent when they were short. Anyone find they could not put petrol in the car or have their gas or electricity cut off? I agree the government is too greedy with taxes on energy and everything else but the high prices came before the windfall taxes. If it was tax on the energy companies as the sole cause of the high prices, what happened in all the preceding years? Of course it was international oil prices, but that was co-ordinated and even now Saudi are cutting production to force up prices again. Then of course the ludricrous connection of gas prices to oil which still pertains. High energy prices affected everything that is manufactured, grown or transported and of course the government loved it all as the tax take went up. They did reduce petrol prices at one time by 5p per lite, but that was not passed on to the consumer. Again, pure greed. The rest of your piece i agree with, of course as it is just common sense, a commodity seriously lacking in this government.
October 30, 2023
Strangulation is one thing stimulation is another . It doesn’t matter what you do but if encouragement and initiative is missing in any control enviroment the reaction will be negative ; in schools , in business in all sorts of group involvements . Human psychology functions all the time and the Government has to keep things running as smoothly as possible . Change now must happen from the very top down for there to be improvement .
October 30, 2023
Thank you for posting my two off-topic contributions on Gaza two days ago, but could we please have an opportunity to hear your thoughts and contribute ours on this important historical event? Thank You.
October 30, 2023
The Telegraph reports that Hunt is considering cuts in IHT. The Tories always bring this out when they’re in trouble…but nobody believes it anymore.
Some thirty years ago Major wanted “wealth cascading down the generations”. He forgot to tell us it would be cascading from the people to the State.
October 30, 2023
I hear hundreds of thousands shouting back ‘ reduce IHT! you’ve had the skin off my back, whats left to leave anybody!
October 30, 2023
+1
October 30, 2023
The government seems powerless to take any of your very sensible advice, or to deal with many other problems.
Is the mechanism of government now so left wing and liberal and powerful that ministers are effectively neutered ? Even the Home Secretary and her equally forthright predecessor have proved incapable of getting to grips with the Home Office and imposing government policy. Ditto at the FCO !
As for the Bank of England and the Treasury, they effectively carried out a coup against Liz Truss, to install their preferred PM, Sunak. Her policies have gradually proved to be right all along and are quietly being adopted by stealth.
October 30, 2023
I don’t understand the majority of ‘big stuff’. I would like to reduce waste and save money by working from the bottom up.
For example, and I know this may be considered trivial and ridiculous to many, especially to those at high level who are detached, but outside workers are over equipped and over dressed. Internally, desks have too many screens and other kit, for example.
Road works are over identified and protected and screened.
Multimillions of £s could be saved. Is there anyone anywhere who can say ‘not necessary’, ‘we don’t need all that’, or only those who say ‘we must be safer’ and ‘we must have more’.
October 30, 2023
Does the DVLA cover totally its pension obligations and total costs of operation?
Does the passport fully cover all its costs with the passport charges?
What about the probation service? Is that fully covered by the costs your government charges? Houses are often left unable to be sold (one in our case of one year waiting for probate on an estate worth less than £150,000 in total).
Do any of these service providers give any dividends to the government to spend elsewhere?
What is the productivity like for this workforce compared to the private sector?
October 30, 2023
The government needs to regain control of both fiscal & monetary policy, start by disbanding the OBR and restricting the powers of the BoE ….than you could develop a strategic plan for growth & inflation (call it the Liz Plan)
October 30, 2023
Off topic, seeing that the Australians have walked away from trade negotiations with the EU:
https://www.independent.ie/farming/agri-business/australia-eu-say-trade-deal-likely-years-away-after-rejecting-terms/a1140772371.html
I wondered how much a special trade deal might be worth to either party, bearing in mind the low value of CETA and TTIP. So I had a quick look on the EU website, but without finding any valuation of a prospective deal. I did however find this from 2018, from Emil Karanikolov, minister of economy of Bulgaria, which was then holding the Presidency of the Council of the EU:
https://www.consilium.europa.eu/en/press/press-releases/2018/05/22/council-gives-the-go-ahead-to-trade-negotiations-with-australia-and-new-zealand/
“Today’s decision to open trade talks with Australia and New Zealand sends a strong signal to both countries that we value our partnerships with them and want to strengthen our existing ties. But it is also a reminder to the world of the EU’s commitment to openness, free trade and global cooperation.”
We didn’t see much of that commitment when we were trying to negotiate a trade deal with them.
October 30, 2023
I really dont know why you bother John.
October 30, 2023
The Annual Report from the Magic Money Tree (The National Loans Fund) has just been published.
Total gross assets decreased by £3.2 billion from £297.4 billion in 2021-22 to £294.2 billion in
2022-23. Total gross liabilities increased by £156.9 billion from £2,557.9 billion in 2021-22 to £2,714.8 billion in 2022-23. This is largely a result of gilt-edged stock increasing by £169.1 billion, NS&I liabilities increasing by
£10.7 billion.
Definitely not funded by a Bank of England overdraft!
October 30, 2023
The shareholders need to sack the Directors.
October 30, 2023
Please get rid of city mayors, regional mayors and the mayor of london ….and return to democratic local councils
October 31, 2023
Good morning, I would mass deport illegal entrants back along the corridors which they came where identifiable, or back to their country of origin or the last safe country they left along their travels to our country. As Suela Braverman said some treaties may need to be changed, withdrawn from or simply enforced or reinterpreted as other EU countries are starting to consider.
The current setup is a joke! Anyone stepping on a boat out of Africa is a refugee by the simple fact that the continent is corrupt a d under developed. People in this country can be thrown to the streets and not get social housing nor enough benefits and help to feed a family, whilst people with no documentation are housed in comfort, fed, with spending money besides and an infinite number of appeals to being deported. You couldn’t make a more stupid, anti-British, unjust and unfair system if you tried.