Mr Hammond says he will need a second budget if we leave the EU on 29 March. That much I agree. But far from needing a version of Mr Osborne’s ridiculous Punishment budget we could afford a budget for higher growth and higher net incomes.
Freed of the need to pay £ 39 bn for no good reason to the EU we could have a great budget for prosperity. Lets do just that. No deal is a lot better than Mr Hammond’s idea of a deal. He wants to delay our exit and sandbag us with a huge EU bill.
October 28, 2018
Well sack him then!
October 28, 2018
Enough Conservative MPs openly criticising Philip Hammond’s bad decisions often enough shall increasingly sap him of any value, resulting in his self-sacking.
October 28, 2018
If the government is committed to Brexit as it claims, doesn’t Mr Hammond have his priorities in the wrong order? Should he not be expecting us to leave, and be delivering a budget accordingly? Still he had to rethink his last two budgets without Brexit as an excuse, so this year it simply sounds as though he’s laying the groundwork early.
A competant Chancellor could surely deliver a budget that plans for the worst case, whatever they consider that to be, and then use any additional funds to reduce deficit and bolster services where required without having to rethink their entire financial plan.
October 29, 2018
Agreed…
October 28, 2018
As usual, this budget will be about politics, the EU and winning the next election, even the large sums of money going to health service won’t do much with them popping up before the next election saying, the money wasn’t enough, it disappeared into a black hole of debts of 26 billion, pay rises and pension rises with little left for improvements.
Tell me the old old story how people ended up with nothing, spending their way to victory on the backs of the people.
October 29, 2018
Hammond and May are certainly not the people to win elections. This even before they established their appalling record in office (of being disingenuous, their IHT ratting, Brexit means Brexit ratting, pension pot mugging, landlord and tenant mugging, endless tax increasing and endless government waste promoting) they were already robotic, wrong headed electoral liabilities and socialists at heart.
Better than Corbyn just is the best one can say of them.
October 28, 2018
Philip Hammond is still pretending that it would hurt the UK economy by about 8% of GDP if we left the EU without any special trade deal, just defaulting to the WTO treaties which already exist and which already bind the EU and each of its member states without any need for the UK government to go grovelling for a new trade treaty.
And rather than question the reliability of the government’s dismal forecasts this morning Andrew Marr really wanted to know whether updated but similarly bleak forecasts would be made available before MPs were told to vote through whatever rubbish withdrawal deal Theresa May is going to agree.
There was no reference to that letter you signed, JR, demanding to see the details of the model which the government is using:
http://johnredwoodsdiary.com/2018/10/14/mrs-may-damages-the-union-she-wants-to-defend/#comment-966493
and there was no reference to the recent alternative forecast from Open Europe:
http://johnredwoodsdiary.com/2018/10/15/an-mps-surgery/#comment-966631
according to which the deficiency might be only about 2% spread over 13 years, or with correct responses it could be only a quarter of that:
“In a new report, Open Europe argues that a No Deal exit from the European Union would be sub-optimal and would entail some material costs. However, we find that the medium-term impact on UK economic growth would be relatively small, both in absolute terms and relative to other factors that are likely to affect the UK economy.”
Here I would point out yet again that in 2012 when he was an EU Commissioner Michel Barnier issued a report claiming that the creation of the Single Market had added about 2% to the collective GDP of the member states, while another report estimated that the gross benefit to the UK has been less than that average at about 1% of GDP:
http://johnredwoodsdiary.com/2017/09/25/the-german-election-2/#comment-890829
So I find Open Europe’s forecast far more credible than the government’s.
However I emphasise that this is only without any special trade deal, not without any deal on anything at all; and there would be no hope of avoiding some payments connected with future commitments we have already accepted as a member – not a cost of leaving, mind, but just part of the cost of having foolishly joined in the first place.
October 29, 2018
Marr is just appalling. A inveterate lefty, a “BBC think” English graduate & grade one dope. Get Andrew Neil at least he is fairly middle of the road and fairly sound on economics. But then May and Hammond would insist on being interviewed by a wet, lefty, patsy like Marr I suppose.
Did Hammond write or approve of the questions one wonders?
October 29, 2018
Philip Hammond’s left foot tensions signalled his concerns of some unexpectedly difficult question points from Andrew Marr. It was, however, a soft flabby process for which he might have been primed anyway.
Andrew Neil has exhibited far sharper interrogative skills, yet his presence recently has waned & he resorts more now to lightweight humour.
Emma Barnett has shown some instances of high performance, but Andrew Neil at his previous peak was probably one of the best ever. Vacancies exist for an Inquisitor General.
October 28, 2018
Off-topic, a lady has a letter printed in the Maidenhead Advertiser dismissing the Irish border problem as a “red herring”, so I have sent in this letter to support her:
“Dear Sir
Mrs K L Holliday is not alone in spotting that the Irish border question is a red herring.
Among others, the Northern Irish MP Sammy Wilson said as much in the House of Commons on July 16 2018, at Column 119 in the Hansard record.
However his explanation was not that the EU wished to punish the UK, as suggested by Mrs Holliday in her letter, but that the government of the Irish Republic is striving to keep at least Northern Ireland, and preferably the whole of the UK, under EU economic rule.
As he put it: “this red herring has been thrown into the debate to try to persuade people like me and members on the government benches to stay within the customs union and the single market”.
Unfortunately too many of those members, including the Prime Minister herself, have needed little persuasion to go along with the wishes of the Irish government, notwithstanding earlier pledges.
In fact it might be convenient if representatives of the Irish government were given a permanent office in Number 10 Downing Street, then they could issue their orders directly.
Yours etc”
October 28, 2018
I agree with you JR but you had better be able to convince a lot more of your fellow and opposition Mp’s that a WTO deal is better than what May is trying to get through.
I get the feeling that many MP’s are actually quite dim with regards to finance, trade and commercial matters, but are too embarrassed to poke their heads above the parapet and admit such, as all we ever get to hear from them is the Party line clap trap jargon, proving they have no mind of their own.
No surprise that Years after they cease to be MP’s, we then find out they did not believe themselves in the rubbish they were talking at the time.
October 29, 2018
Alan Jutson
many MP’s are actually quite dim with regards to finance, trade and commercial matters,
No Alan not dim. Totally thick. It is in their DNA it is the way they were taught and the qualifications they aspired to achieve.
The whole selection process for candidates especially for the Conservatives has be completely rewritten and acted upon.
October 28, 2018
Too much posh talk, generally, in Hammond. He can’t hear the hand in front of his face
October 28, 2018
Good afternoon
Steady on. This is a supposedly Conservative Chancellor you are talking about. I mean, he’s not Gordon Brown.
We are not leaving the EU. We will get Chequers and pay the 39bn.
End of.
We won the referendum but lost the war.
October 29, 2018
“We won the referendum but lost the war”.
Well the war has not ended quite yet. May & Hammond need to be stopped and to be replaced. We can get a real Brexit and also avoid the disaster of Corbyn. But we will not get it with the disingenuous T May & P Hammond with their misguided socialist, interventionist, tax to death, EUphile, higher taxes and ever bigger government agenda. Both are robotic and are massive electoral liabilities.
October 29, 2018
Provided the patriotic minority of MPs can hold the line and prevent the government changing the definition of “exit day” in the withdrawal Act then we must cease to be subject to the EU treaties at 11 pm March 29th 2019, as that is when the ECA72 will be repealed under Section 1:
http://www.legislation.gov.uk/ukpga/2018/16/crossheading/repeal-of-the-eca/enacted
“The European Communities Act 1972 is repealed on exit day.”
So removing the domestic legal approval of our subjugation to the EU.
The danger is that the unpatriotic pro-EU majority of MPs could easily approve a regulation to postpone “exit day”, possibly indefinitely:
http://johnredwoodsdiary.com/2018/10/25/the-expansion-of-china/#comment-969074
(The unelected legislators-for-life in the Lords would probably not even need to take a formal vote on that, like every other pro-EU measure since 1972 it would barely touched the sides as it passed through.)
Of course thanks to the Remoaners our withdrawal could end up being a lot messier, and costlier, than it needed to be.
October 28, 2018
Exactly right.
Hammond is going to present another appalling budget tomorrow. Then he and May are clearly going to present the country with an appalling deal and then try to ram it down the throats of the sensible wing of the Tory party. Using dishonesty, threats and yet more idiotic scare tactics. May needs to be stopped she will destroy the party, damage the economy and give us Labour/SNP. The Tories will never be forgiven.
What on earth is this “fiscal firepower” buffer of £15.4bn (built up in case there is a disorderly Brexit that Hammond and indeed the BBC’s economic editor Kamal Armad go on about.
Chancellors can increase or decrease taxes, borrow or repay debt and spend (usually waste) more or less money. So what on earth is “fiscal firepower”? Hammond is still spending/ largely wasting far more than the government raises in tax and most taxes are way beyond the optimum point for the economy or even for tax take. Perhaps Hammond and the Treasury can explain this fiscal firepower? How did he come up with the precise £15.4 Bn figure. Drawn from a hat perhaps?
We are governed by complete and utter buffoons.
October 28, 2018
I commend your website to Mr Hammond. Here he will learn about the positive up sides of Brexit if he were to look for them. He should keep your company – or swap roles.
October 29, 2018
Edwardm:
HM Treasury & our nation would gain from better but Wokingham citizens would not accept such a raw end of a local worst deal.
October 28, 2018
Not the £39 bn AGAIN!
Just how much have we lost since the disastrous Brexit vote by 17m old age pensioners and ambitious, discontented politicians and their hangers on?
October 28, 2018
There is no evidence that we have lost anything as a result of the vote, so far:
http://johnredwoodsdiary.com/2018/10/28/what-a-brexit-budget-would-look-like/#comment-969471
We certainly have not lost the 6% of GDP that the Treasury predicted we could quickly lose if we even dared to vote to leave the EU, and instead we have gained over 3% of GDP; hence as of August the economic geniuses George Osborne and David Cameron were out by 10% in their prediction of May 23rd 2016:
http://johnredwoodsdiary.com/2018/08/13/change-in-the-high-street/#comment-954603
Yet we are still supposed to give credence to the new editions of the government’s doomladen predictions.
October 29, 2018
Indeed. Project fear continues despite all the earlier predictions being wrong. Rather like climate alarmism where all their earlier alarmist projections were proved totally wrong.
Prince Charles warned early in 2009 that nations have “less than 100 months to act to save the planet from irreversible damage due to climate change”. I assume he has spent circa £9 million on his personal travel arrangements since then so as to set a good example.
October 28, 2018
What a silly post. There is no evidence we have ‘lost’ anything. Brexit is about the future – decades of the future. There were good arguments on both sides in the referendum but Leave won even with the vast weight of establishment scare mongering and the full resources of the government + extra money set against them. So now it’s about finding a way of having a close economic and cooperative relationship with the EU but being outside the political structures. The £39bn should of course only be paid if there is a comprehensive and attractive FTA within sight.
October 28, 2018
M Howard: do posters such as yourself and Andy get paid for each ignorant and offensive remark you make about pensioners?
Or have you just run out of rational arguments in favour of the UK being subsumed into the Holy REUman Empire?
October 29, 2018
“Or have you just run out of rational arguments in favour of the UK being subsumed into the Holy REUman Empire?”
Were there any in the first place, to run out of?
October 28, 2018
I’m nowhere near pensionable age (unfortunately) and looking at the dreadful obesity problem among my much younger colleagues I fully expect it to be my generation looking after theirs.
Many of them are graduates who struggle to spell and do mental arithmetic.
October 29, 2018
5o% of the people going to university now have 3Ds at A level or lower still. Should we really be funding them and getting them into £50K of debt for largely worthless degrees? I personally have trouble spelling things when in a rush. English spelling is very irrational and largely fixed in aspic.
As Richard Feynman put it:-
“I was terrible in English. I couldn’t stand the subject. It seemed to me ridiculous to worry about whether you spelled something wrong or not, because English spelling is just a human convention–it has nothing to do with anything real, anything from nature. Any word can be spelled just as well a different way.”
The spoken equivalent to spelling is accent, should one accent be considered right and another considered wrong and marked down?
October 29, 2018
magaret howard
Well why dont you tell us, exactly how much we’ve lost. Who lost it and where it went ?
By the way you’ve now also got your more than £350 million per week for the NHS so I’m looking forward to your abject apologies for being so severely wrong about that too
October 28, 2018
Stupid talk..the 39B is part of the withdrawal already accepted but not signed off yet..as with the Irish border and the movement of people..these things will have to be agreed and settled before we move any further with them. If as JR seems to be saying we don’t pay or we don’t agree the Irish Backstop then we had better put whatever money we can aside because we’re only going to have to pay at some time in the future and very probably with interest and damages added..JR says 39B is for no good reason..well I am clear if there was no reason to pay this amount then we would not be obliged to pay..and please don’t quote us for legal reasons..none of this is to do with legal reasons or what’s morally right or wrong..it’s all about politics..and just like the talks of one hundred years ago leading to the treaty of Versailles..except this time we are on the losing side..Savvy…deal or no deal we are on the losing side
REPLY There is no need to pay unless we want an agreement with them!
October 28, 2018
JR, do not talk rubbish. You sound as bad as the idiots in govt. There is no need or legal liability to pay deal or not. You do not pay to get an agreement for trade!
May stated line by line examination of the EU extortion demand and then offered £20 billion, presumably a fee to stay in her punishment extension. Then she offered twice that amount plus all UK assets! £100 billion plus, not forgetting May’s dishonest Kitkat policy to hide true costs and ties to EU. So when May lies to say it is the UK legal obligation it is nothing of the sort evidenced by her first offer!
By her own admission and offer this has to be a bad deal.
Once more JR, you keep bleating about May and Hammond and sit on your hands. Your party deserve these idiots and deserve to be in the worldliness forever under Corbyn.
October 28, 2018
Why be so rude? Listen to President Trump – we need more respectful and calmer language in public discourse.
October 28, 2018
Nor should we pay, unless the deal offered is worth the money. The deal T May seems to have in mind is far worse than no deal. It would be a disaster politically too.
Typically Hammond today talks about ‘austerity’ in the state sector. What about the private sector who are paid only about 2/3 of the state sector (when pensions are included). They have suffered hugely under Osborne & Hammond with the pension pot mugging and being undercut by low paid immigration. Carney, for example, must be suffering huge austerity with his circa £860K of remuneration poor chap. Many businesses employing perhaps as many as 15 people can have turnovers of rather less than this sum. Perhaps someone could remind him that about the 80% of people work (in the far more productive) private sector. The people whose taxes largely carry the bloated state sector. These people have had their pensions mugged, their NI increased, their insurance tax increased by 20%, have to pay for expensive greencrap energy, their child benefits and personal allowances taken away, council taxes increase …… perhaps he should listen to them rather more than he does.
October 28, 2018
Paying Child Benefit to those with more than 2 children might work as an incentive for those who may not be able to support a larger family to increase the population. Many of the scarce & over-stretched resources & congestion result from the UK being overcrowded in parts.
October 28, 2018
JR..the 39Billion is a figure to do with the past and past commitments already made..it is a figure worked out as a price to extract ourselves from this mess. It might be unfair but it is a figure already agreed about the past..it has absolutely nothing to do with the future only for one thing..if it is not signed off and settled together with the Irish Border question then there will be no future transition trade or anything else with them until it is settled. Not even under WTO rules will they allow us to trade in the meantime, not while the whole business goes to WTO for arbitration. It’s not about punishing UK but more like with helping us get away from fantasy thinking and face up to reality.
Reply The £39 bn has nothing to do with the WTO and has no effect on our trade under their rules. We do not owe this money and should not pay it.
October 29, 2018
‘Freed of the need to pay £ 39 bn for no good reason to the EU …’
T. May does not know this. She keeps saying ‘we will honour out commitments’ meaning paying up, for what we haven’t been told, with that £39bn.
October 28, 2018
We Brexiteers might be advised to spend some time refuting the Osborne / Hammond forecasts of economic growth.
Firstly, let us identify two over-optimistic features of the Remain forecast.
(1) There is not a cat in Hell’s chance that the Single Market will be extended to include services; we have been asking for this ever since the Maastricht Treaty became law and got nowhere. Look through a copy of the European Journal, where adverts for major contracts must be placed; many of the ads appear open and transparent until you see the bottom line – e.g. “Italian language only”.
(2) There is no allowance for the negative effects of further interference in the operation of free markets by the European Commission. The EC has form in this matter.
Now look at the objectives and plans for a so called No Deal scenario. There are objectives besides the obvious gains in sovereignty and self respect:
(3) To maximise GDP per capita growth, not GDP growth.
(4) To use immigration control to make our contribution to world zero population growth, without which reducing CO2 in our atmosphere and plastic in our oceans is virtually impossible.
(5) To use immigration control to protect our culture. etc ed
(6) As an obvious consequence, the Brexit scenario envisages more efficient use of labour through the use of robotics and AI.
In short, the most likely Brexit scenario cannot be assessed by economists alone.
October 28, 2018
Too scared to leap into the unknown.
October 28, 2018
Look like the chancellor going to use the budget politically for a second vote on staying in the EU, after listening to the comments he is making in the news, lots of little goodies which sound good but mean little.
More money for BT, for broadband, hundred of millions of pounds every year for the last 20 years or more, look more like handouts of public money than anything with people paying at both ends with not much to show for it as usual.
October 28, 2018
When I read the headline on the BBC about this I thought it was the same thing as Osborne tried to do when he attempted to blackmail us into voting Remain.
But it looks to me like it’s the opposite.
Hammond said that if the UK leaves without a ‘deal’, the government would have to “revisit where we are”.
He added: “I’ve got fiscal reserves that would enable me to intervene.”
That suggests to me that he’s being cautious and that in the event of no ‘deal’ there’ll be more of a fiscal relaxation, which will be quite easy to do because the monetary relaxation which would likely accompany it, could be some extra QE.
It seems to me that’s entirely sensible approach.
If there’s no ‘deal’, or when we know what any ‘deal’ actually is, all this can be sorted out in the Spring Statement well in time for the tax year starting on April 6th 2019.
It’ll also give the EU something to think about. Do they really want the UK undercutting their Corporation Tax rates and deliberately forcing down the value of Sterling against the Euro?
October 28, 2018
Merkel, Putin, Macron and Erdogan – all holding hands.
Two (autocrats ed) holdings hand with two grotesques
A terrifying photograph to be confronted with which left me speechless
Merkel and Macron hate Trump so much that they’ll throw their lot in with two vile autocrats
Let us no longer spend time in the company of the ( nasty? ed)Merkel and Macron
October 28, 2018
It is clear now what the Tory pensioners want. They want a Singapore style economy.
This is great for the super rich – who will make themselves even better off.
But for the majority at the bottom – who work without rights in sweatshops – life is tough, short and brutish.
And this is what Brexit has always been about. The rich Brexiteers elite wanting to make themselves even fatter, even richer at your expense.
And be in no doubt. If you are earning less than £150k a year – in other words nearly all of you – then you will lose out of Brexit.
October 29, 2018
You have a very odd idea of what Singapore is like.
And the rich elites love the EU.
October 29, 2018
Andy
By God you are totally ignorant of life outside France.
You think Singapore is full of sweatshops…. ha ha ha
Facts
Singapore GDP per person 55235.51 USD
Free at point of use health care from the worlds 6th best health provider ( UK is 30th )
Singapore average salary S$58,246
Being a very tiny but tax efficient country property is very expensive
82% of the resident population live in government owned social housing on 99 year leases These flats are located in housing estates, which are self-contained satellite towns with schools, supermarkets, clinics, sports and recreational facilities.
There are a large variety of flat types and layouts which cater to various housing budgets. HDB flats were built primarily to provide affordable housing for the poor and their purchase is financially aided by the Central Provident Fund
Singapore is one of the best places to live on the planet
Meanwhile in Billionaire backed Soros, Branson, Sainsbury, David Harding, Lloyd Doorman the EU has provided a great place to live in Greece, Italy, Portugal etc and the young of those countries are looking forward to a great future ……of unemployment
You need to get out more Andy, find out what the real world is like
October 28, 2018
Depressing to see that Dr Redwood is still in his bunker and unwilling to face up to the consequences of a no deal Brexit on our chemical industries, food exports, manufacturers and airlines etc. When you have taken the wrong path it is never too late to turn back – that is a sign of strength not weakness.
Here was a golden opportunity for the Brexiteers to provide a credible pathway to a better future and they have have totally blown it. If they had explained that it was impossible to unwrap 40 years of EU integration in one easy step we would be in a much better place now. The rules of the single market are clear this was all predictable – had they been smarter they would not be on the backfoot to the Europhiles.
We need engagement with the details and less political posturing.
October 28, 2018
..the solution is EFTA/ EEA membership !
October 29, 2018
And how will you get the Irish government to accept a customs border like that between Norway and Sweden?
http://johnredwoodsdiary.com/2018/10/25/global-britains-new-independent-poll/#comment-969080
“I guess most of the 11% who want to stay in the EEA are unaware that the EFTA member states of the EEA are not in any customs union, either with each other or with the EU and its member states, and that the Irish government would veto even so-called “light touch” customs arrangements like those between EU Sweden and EFTA Norway.”
October 29, 2018
Ken Moore
We want a WTO option, we dont want a customs union, so called single market or outdated protectionist mercantilism ..
We want to trade freely with the world, not a bunch of bust countries in a corner of Western Europe..
October 29, 2018
The word that stands out here is “IF”
Have you not questioned him on this?
October 29, 2018
This morning on Sky News Ed Conway, billed as an economics expert, stood in front of a large chart showing the declining trend in UK economic growth rate since Q1 2015 and attributed it to the EU referendum which was held in Q2 2016, and was even marked on the chart. In fact as shown on the five year chart which can be brought up here:
https://tradingeconomics.com/united-kingdom/gdp-growth-annual
the UK economic growth rate has been trending down since it peaked at a little over 3% a year in late 2014, before the Tory government was even elected and before the Act for the EU referendum had even been passed, let alone well before the referendum.
And bringing up the chart for the maximum period back to 1956 and looking at the right hand end it is clear that nothing in particular has happened since the referendum.
This chap produced the same kind of nonsense three weeks ago:
http://johnredwoodsdiary.com/2018/10/08/interest-rates-savers-and-borrowers/#comment-965467
Like Philip Hammond he has his anti-Brexit story and he’s sticking to it.
October 29, 2018
Fully agreed: it’s also terrible politics to use what should be a unifying occasion to further divide the Conservative Party with more project fear nonsense. Mr. Hammond should read the Old Testament account of how Samson wrecked the temple (or maybe he has!).
October 29, 2018
A nothing budget, threaten to vote it down, get a new leader and chancellor, write to HQ and tell them that you will only accept a leader pick by the grassroots of the party, the DUP will threaten to vote the budget down anyway and will carry through on it.
You have to get your house sorted out one way or another and maybe this is your last chance to do so for Brexit, it could come to a confidence vote which Mrs May will lose but in a fixed term parliament the rules are now different about an election because of it, you can just rid of Mrs May and stay in power, if she refuses to go, just keep voting her down, This is your last chance saloon to save the taxpayers of the UK hundreds of billions of pounds and your career.
October 30, 2018
Mr Hammond and Mrs May have been playing for time since june 23rd 2016.
Trump is key. He should win the mid-term elections on November 6th more than comfortably. Also later do a second term as President.
It is hard for Trump’s opponents here, which go cross-party to believe Trump is a winner.
He is a curious phenomenon. Hatred by the SNP , Labour Party in particular before he became a politician. It is as if they were psychic.They still are. They have never heard him make a full speech on anything, yet know what he said.
Had they actually heard a full speech then their Intelligence would possibly somehow turn into pure Spirit and flit from their heads upwards.
No, joking aside. it is eerie indeed, quite spooky, how and when they originally focussed on him.
October 30, 2018
And two months in advance with my rent which the second caller informd me I could have returned to me. I said “What?” Well…I think my reaction was NORMAL. Just me.
In Barnsley. That could be an explanation for Tories and Mr Rees-Mogg in particular.
October 30, 2018
I see labour going to support the budget, good opportunity.