You do not need to be an economic “expert” to see what is wrong with the UK economy. The government is spending, taxing and borrowing too much. As a result talented people leave for lower taxed new countries, businesses divert investment abroad, jobs are created elsewhere. Meanwhile a badly run public sector wastes and misdirects too much of the cash it syphons off from families and businesses leading to yet more demands for higher spending and taxing.
The fiscal rules are meant to control this, but they do not. One of the main reasons is they are based on “controlling” the level of borrowing in Year five of the 5 year forecast. Under the system year 5 never comes. Instead of sticking with the Year five figure and enforcing the control on borrowing when we get there, they keep rolling forward to always rely on a forecast 5 years ahead. This allows regular increases to planned borrowing for the original year 5 forecast when the passage of time makes it the year 4 forecast then the year 3 forecast down to the current year. Spending and borrowing under control for year five are allowed to be much higher when they become Year 1. Government relentlessly pushes up spending and debt every year.
Because the control is on a distant year it makes it anyway a silly exercise. Neither the government nor the OBR negotiating the numbers for five years time have a clue what the deficit will actually be then. Nor can the rest of us tell them, as it is beyond the capability of forecasters. In 2030-31 who will be the UK government? What policy will they be following to tax and spend? Who will be the US President? What policy will he or she follow on trade, tax and spend and energy? Will the world economy be expanding or contracting? What impact will AI have had on employment and productivity?How much extra pay by then will doctors and train drivers be earning? How much more will HS 2 be costing?
Later articles will expose more of the nonsense of the fiscal rules. The Year 5 rule both seems tough to a Chancellor making a budget, but ensures endless rises in spending and debts because a controlled Year 5 never comes. We need to concentrate on current year and next year, not year 5.
December 13, 2025
You say ‘talented people leave for lower taxed new countries’. I think you mean people who are only motivated by money.
December 13, 2025
‘In the long run we are all dead.’ ?
December 13, 2025
All the more reason to move to better economic climes if necessary and you wish too. Grab and enjoy the days you have left. Rather than giving all your money to incompetent, dishonest, doom loop fools like Starmer, Miliband, Lammy, Phillipson and Reeves to waste doing net harms.
Roger Bolton (ex BBC) complained to Mark Dolan (thursday I thing) about him calling Two Tier Kier a serial liar and wicked. I would add evil too he is far worse than wicked and patently a serial liar. As is Reeves lies like “we are “asking” people to pay a little more! Asking? Well no thanks then dear!
December 13, 2025
You can send letters to your employer saying you wish the Direct Debit from you to HMRC should be cancelled, but they take no notice.
December 13, 2025
Not at all. Many businesses leave or relocate in part as without doing so their business cannot compete with others that do. Also they get sick of all the red tape that strangles their activities and waste their time. They may be interesting in making money but mainly so as to keep their business going and growing or to help children and grandchildren!
It is also of course their moral duty to pay as little to the UK government as legally possible as in the UK they spend it so appallingly v. often doing vast net harms! They will almost always invest and spend it far better as it is very hard not too given the quality of this government’s waste and spending!
December 13, 2025
Motivated not by money but by success and achievement I’d suggest. A trait that would help the UK if all of us followed it.
As to the thrust of Sir J’s article. I agree balancing the budget in 5 years time is a nonsense. Even if achieved in some years the overall outcome is higher Government spend.
It’s OK though – eventually bond markets catch on to the problem and make the Chancellor pay.
December 13, 2025
Alas they do not make the Chancellor, PM or the BoE Governor pay. They all retire on vast index linked pensions and perhaps a seet in the Lords. It is tax payers who are forces to pay!
December 13, 2025
I left the UK after the winter of discontent and returned 22 years later
I had a skill which permitted me to work almost anywhere in the world. It wasn’t money that motivated me but the dead hand of the unions.
As for the OVR and economic forecasting they actually make astrology look sane.
We now have the EU lifting the ban on ICE vehicles indefinitely but milibrains ploughs on regardless. Is there no one in Westminster who can remove him and get him sectioned. No single person should be in a position to do so much damage
December 13, 2025
+1 either Miliband is totally insane or he is out to destroy the UK economy, kill grannies, decimate our defence… I can see no other alternatives!
December 13, 2025
He even looks haunted and not in control of his mind.
December 13, 2025
@Ian Wragg. Careful now, you may be talking about our next Prime Minister!
December 13, 2025
You mean the workers, who earn their living and pay the taxes , not the shirkers, who rely on tax payer funded handouts.
Once upon a time, a long, long time ago the Labour slogan was “Up the workers!”. Now it is “Up the shirkers!”
December 13, 2025
I left to work first in USA and then in EU. I wasn’t only motivated by money. Nobody is motivated only by money.
December 13, 2025
Survival requires money in the modern world. You make fun of people who do what they have to do to survive?
The ‘asylum seekers’ assure us nobody leaves their own country willingly and moving is a trauma.
Equally so for those fleeing their only homeland, the U.K.
December 13, 2025
“The government is spending, taxing and borrowing too much” well it is even worse than this. It is also vastly over regulating massively plus what they spend they largely waste or worse spend doing huge net harms like Net Zero rip off unreliable energy and the climate alarmist lunacy, the net harm Covid Vaccines and Lockdowns, augmenting the feckless with benefits higher than wages, sick joke Covid Inquiries, two tier justice, DEI, diversity appointments over ability, pushing lies & propaganda, political arrests to suppress free speech, the wars on Landlords, Motorists, Business owners, the hospitality industries, oil, coal, gas production…
Vastly over regulating but doing so in moronic ways, sledge hammers to miss the nut but doing vast damage in the process. An absurdly restricted planning system two. Fines even for spitting out a leaf or insect that blows into your mouth now a new part of the tax system.
December 13, 2025
They are over regulating thre private rental sector out of existence now. Fines for non compliance with the new housing act are set at £3k to £30k for crimes such as having the wrong licence for a zone, telling a tenant verbally that you want the house back or serving a notice which the tenant proves to be for the wrong reason. Also of course, having mould growing because the tenant dries clothes on tbe radand doesn’t open windows. Re property 118.
Then they are surprised that homeless families have doubled in 2 years.
December 13, 2025
indeed it was started by Brown but accelerated by the dire Osborne with huge jumps in stamp duty and absurdly disallowing interest deductions. This taxing money you had not even made! Hardly sustainable for long!
December 13, 2025
High taxes alone will give us the doom loop. Is it worth me employing a nanny so my wife can work? probably not with current tax levels, employment laws, commuting costs and hassle plus other costs and risks – unless my wife can earn about 4 times the gross pay of the nanny. Is it worth me moving to take a job paying double – probably not with stamp duty and moving costs of perhaps £150k that my employer cannot cover with me paying even more tax and NI. Is is worth me working from overseas in a lower tax lower cost area?
High taxes, red tape, net zero rip off energy, restrictive planning, paying the feckless benefit claimers more than the workers them wasting much of the taxes raised doing net harms… yet Reeves says she is single minded on growth, growth, growth! Certainly not growth of the real economy or anything productive it seems.
The government is a vast parasitic job creation scheme in red tape and compliance. Parasites that slowly and now not so slowly, kill off the productive sectors orr drive them overseas.
December 13, 2025
‘Doom loop’ one point scored.
December 13, 2025
“Doom loop” is a good expression – rather better than the engineering/scientific term “positive feedback” as some art/humanities graduates think “positive feedback” is saying “I think you did very well”. Positive feedback in control systems is rarely good at all as it usually crashes the plane, car, truck, ship, economy, rocket, or explodes the engine!
I once heard on the BBC a climate “expert” confusing climate positive feedback in climate and thinking this was a good thing! I wonder if he read PPE?
December 13, 2025
An economic doom loop created by Reeves and Starmer videos Jacob Rees-Mogg.
Meg Hillier accused the Chancellor of ‘throwing grenades’ at markets in the run-up to the crucial fiscal package on November 26.
So not so much rolling the pitch Reeves as chucking grenades at it then fully exploding the economic foundations for good measure in the Budget!
December 13, 2025
Meg Hillier Labour MP & Chair of the Treasury Select Committee. Perhaps I should add her to my list of about 5 people who read PPE Oxon. and survived with some brain intact!
Then again Hillier chose to be a Labour MP and was an ardent supporter of the Remain campaign during the 2016 EU referendum, and announced that she was “devastated” that the United Kingdom voted to leave the European Union and that the decision was fuelled by “xenophobic undertones”.
No dear it was just a desire to restore some genuine, democratic and accountable UK government. We still await this restoration alas!
December 13, 2025
I agree John, It certainly does not take an expert to see what is wrong, just someone with common-sense who can budget and do Maths properly.
A home budget is much more simple affair than that of a Country, but no one can have a real knowledge about how much the cost of living will rise in 5 years time, let alone wages and unforeseen expenses.
Yes you can have a good guess/calculation, even make plans for future years wishes, assuming most expenses and earnings remain similar, but you should also keep your own “headroom” (the latest buzz word for contingency/savings) at a sensible level for curve ball events like illness, short time working, maintenance of a house, car, and equipment servicing/replacements or even taxation changes.
The only real way to move forward is to earn more, through working harder, longer, or being smarter and more efficient.
Since the government are bringing in policies and taxes which are killing ambition, savings, investment, prudence and work ethic, is it no wonder they are failing.
December 13, 2025
Another reason why Reeves’ fiscal rules continue with ever higher public expenditure is that Labour doesn’t understand economic growth. A Labour MP/minister was on the news yesterday saying she is optimistic that ‘public investment’ will bring growth. If you have never worked in the commercial world you remain disinterested in the creation of conditions which enable the private sector to grow and prosper. That’s the real engine for growth, especially for SMEs – an alien sector for all Labour politicians.
December 13, 2025
We’ve effectively got Soviet Union-style Five Year Plans.
It worked out so well for the Soviet Union the “geniuses” in the Labour Party thought it would be a good idea to resurrect them.
December 13, 2025
Rachel Reeves should go, carrying her version of the red book under one arm and Keir Starmer under the other.
If she’s as good at chess as she claims, maybe she could try making a career of that. She’s made an extensive mess of being a Chancellor.
December 13, 2025
I suspect that the only thing that makes the OBR tolerable to Governments is exactly the fatuity of their forecasts due to their rolling nature that you cite. If their horizon was sufficiently short term for them to mean something, the Chancellor of the day would have to do something concrete to meet them, which could only be achieved by addressing expenditure levels, not something that this Government can bring itself to face, any more than its recent predecessors did.
December 13, 2025
Good morning
First I would like to congratulate our kind host on receiving his Peerage. I am not so sure that robes of velvet and ermin would suit him but having a more public voice, albeit in an institution (HoL) I would happily abolish, would i feel better a ray of hope in and ever increasingly darkening sky.
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One of my main worries, and there are many, when it comes to losing talented people to overseas nations, is that once these people settle, they rarely return robbing us of both talent and potential wealth.
Those of us who cannot join them are doomed to be captive witnesses to our nations demise.
December 13, 2025
+1
December 13, 2025
You clearly describe the utter insanity of the “rules” that govern the financing of the UK state. We are under the yoke of financial illiterates.
December 13, 2025
The uncomfortable near period of next year is why the political thinkers choose the five years away option. They know it is unlikely they will even be an MP that far forward and very unlikely they will be in the role of Chancellor or whatever by then
The scrutiny and close proximity, near term forecasting brings to the table, is beyond the capacity of the politicians to handle the shame of their forecasting mistakes.
The current practice of putting all decisions off until two or more years hence is simply another example of kicking the ball into the long grass.
We all know how to balance the books. It requires hard political choices. Unfortunately none of the current players in office are strong enough or secure enough, or possess the resolve to do it.
December 13, 2025
One other example of the absurdity of rolling targets is the BoE inflation forecast. This will ALWAYS show inflation as 2% 2-4 years in the future simply because that’s what they are supposed to achieve. When it doesn’t happen the forecast time for it to happen just moves a year into the future.
December 13, 2025
It’s not just “talented people leave for lower taxed new countries, businesses divert investment abroad”, it’s also British people who decide not to grow, not to commence an enterprise, not to begin employing people, because the taxes and regulations are too onerous. It’s a fire hose on aspiration. Why risk your savings when you don’t know what’s round the corner when the government comes back with even more taxes because they’ve chased other industry away and refused to reign in spending?
December 13, 2025
The OBR and its five year forecasts are complete nonsense, Likewise this stupid Chancellor forward loading tax rises so she can pretend we will be reducing the UK debt in five years time. A classic example of someone promoted far above their ability.
That also applies to the PM and most of the cabinet. Especially the chief idiot, Ed Miliband, who will cheerfully bankrupt the UK and destroy our industrial base to solve a non-existent problem. Other countries have been waking up to what a scam Global Warming/Climate/Net Zero are. No one is following the UK on the path to total disaster. The only growth the PM, Chancellor and Miliband know about is weeds, not flowers, growing in their economic plans.
December 13, 2025
Sir John
Your diary digest today assumes that we have a Political Class, a Parliament that is serving the people and the nation. Far from it they are perusing with religious fever political ideology above everything including common sense.
Controlling this, or controlling that has nothing to do with anything. The only control being employed is to manipulate society to conform and mirror personal egotistical ideological images.
The starting point is in a similar way to recognising not every individual is identical to the next person, not every community, area, region is a mirror of its neighbour. The needs the aspirations are different, should be different, that’s what makes a complex growing vibrant society. So, contriving a one size fits all doctrine seemingly based on one section of metro West London was always going to fail for the majority, kill society, kill aspiration, kill our future. Its called Socialism, the WEF doctrine of fighting to tear up and rebuild in the personal image of the Politburo.
We are all part of Kier Rodney Starmer’s (2TK’s) experiment of World order as dictated to him by the WEF, it has nothing to do with the UK, the Nation or its People just his personal ego
December 13, 2025
The political premise that it all comes right in year five has been used by most parties. It could work if action was taken to address any yearly overspends running up to year five – but no it will all come right at the end of year five. Idiots.
December 13, 2025
The Telegraph loves a chart.
An article on this accompanied by a 15 year bar chart of each year showing five year, 4 year, 3 year, two year forecasts and actual for tax take and spend and debt would expose this scam for what it is.
Rachel our PPI clerk has taken the theory and put it into overdrive for this last budget
December 13, 2025
Budgeting for an era when you are not in power is a fraud. Every housewife knows what a budget is. We count our pennies and allocate money to the necessities first. We pay our debts next. If there is anything over for jam that’s great.
There is a wonderful film (1948?) about Norwegian immigrants to the USA called ‘Mama’s bank account’. Mama had no bank account but told the children as she budgeted for the family each week, allocating their income, that they ‘had enough and would not have to go to the bank’.
Not only did Mama pay everything in order of precedence, but she also knew that the children needed to ‘feel safe’.
Would that our ‘chancellor’ was the equal of Mama.
December 13, 2025
I want to pay tribute to the Raise the Colours guys who have undertaken Operation Overlord and go to the beaches of France, destroying boats and taking the documents abandoned in the dunes, film the ‘migrants’ and the NGOs organising the crossings.
All has been published on social media.
As a result ‘ UK has seen longest period without migrants arriving on small boats since 2018’.
Thanks guys, you are heroes and I hope that new Lords will recognize your efforts and propose George Crosses. These few man have achieved what the British and French governments could not!
December 13, 2025
Raise the Colours reports, with pictures, that the invasion has resumed this morning with the authorities on both sides of the channel complicit. The publish film.
Starmer is breaking the law. He should be arraigned.
December 13, 2025
lemonde.fr 07/12/2025 ‘On French coast, far-right British activists try to stop migrant crossings’.
France24.com 11/12/2025 ‘Stop the boats: British far-right activists accused of harassing migrants in Calais’.
Other takes on the same events.
What is interesting is that the few RtCs crossing to Calais have their recording cameras and produce little movies of their ‘exploits’. In fact they appear to be just a self-serving bunch producing ‘media’ for whomever will support them with money/ subscription/ donations.
December 13, 2025
H,
What was more interesting, to me, is the French version. Articles about ‘migrants manche’ talk about ‘extreme droite Britannique’
So they are also using the same globalist newspeak. It is not changed in translation.
December 13, 2025
So why did the crossing stop in that period?
December 14, 2025
Weather? You should have consulted buoyweather.com or oceanweather.com before writing.
When it is blue the wave height is below one metre. Between the swell and the waves it was between two and three metres these last four weeks.
See also ecmwf.int ‘Significant wave height and direction’ (NB: you’ll have to go down the various figures quite a bit to get to the wave and swell information).
December 13, 2025
Hi sir john
The trouble with HS2 there are not enough people working on the project so it’s taking longer costing much more because of inflation. You can’t estimate the cost very far ahead .
December 13, 2025
George.
I understand from my construction contacts that it was never ever costed properly, just given a ballpark figure without any ground condition surveys or the like, even the exact route was left open and not fixed.
I think it was signed off on a cost plus basis, hence the reason we have massive amounts of overspend, over engineering, and a huge amount of waste, all guaranteed to be paid for, plus a bit of so called profit on the overspending.
Very similar terms, (cost plus profit basis) of the taxi journeys used to ferry about the Illegal immigrants which has recently come to light.
December 13, 2025
What commentators forget is that even the slightest reduction in tax somewhere around 12 months before the next election it will be seen as the sacrifice promised is paying off. Put them back in power for another 5 years and we will get to keep more of our money. Of course the country then in any case will be unrecognisable from today.
During the Labour created Sterling Crisis the Labour PM Harold Wilson said “A week is a long time in politics” and he was correct. The mistakes keep on coming.
December 13, 2025
The flaw is that we have a UK Parliament that fights democracy and accountability, therefore the people. 5 year terms without seeking approval is obscene, an absue and insulting. Reflect on what is looking like the last country to defend democracy the USA, the President took over just in January this year, towards the end of next year there will be the mid-term elections, where all representatives will seek re-election. It is also seen as a confirmation on the direction being taken by the President. Then 2 years after they will have a full blown Presidential Election. The UK if elections are permitted then (now looking doubtful) still wont have an election until the year after that.
5 years is an abuse of power, a wreaking ball on the country. Not something a Democracy would entertain.
That seems to be the hope of Parliament create an irreversible tangle that would take someone with serious conviction to unravel and at great cost
December 14, 2025
Firstly, Congrats on your Peerage.
The OBR forecasts and commentary are pure theatre and have no real relevance as the 5th year never arrives.
The only rule that would have relevance should apply to the current budget. That rule should be a balanced current year budget where income equals or exceeds current expenditure and a separate costed capital expenditure should be prepared which may be partially funded by borrowing. The Balance Sheet to take full cogniscance of all financial commitments, particularly PFI, Student Loans and Pensions.
Ponzi schemes need to be eliminated.
Then we may financially see how bankrupt we are.