Parliament has failed to have a proper debate on the economy for many years. The main reason is thatĀ it has fallen for the lie that the Bank of England is independent. Because many commentators and politicians think that they fail to debate the crucial reliance we have had on the Bank printing loads of money and keeping the government’s borrowing costs very low. The Opposition keeps off all matters that the Bank is involved with and wishes to blame the government for any economic failing in a way which reveals a deep misunderstanding of how the modern Treasury and Bank work together.
Let me have another go at explaining. The Bank under the last Labour government at the end of its time in office, under the Coalition and under the more recent Conservative government has relied primarily on printing more money and buying bonds to keep rates low. There were times when this was the right policy, mostĀ notably in 2020 to offset some of the bad economic consequences of lockdown. There were times when this was a bad idea, as with continuing it throughout 2021 when it was bound to be inflationary. The crucial thing about this central economic policy is it is a combined responsibility of the Chancellor and the Bank. Indeed, the Chancellor not only has to give approval for the Bank’s recommended money printing, but he has to underwrite the Bank against losses on the bonds it buys. So far the Bank in several bursts over the last thirteen yearsĀ has created and bought up bonds to the value of Ā£895bn.
Despite these enormous moves, Parliament has preferred to argue about the odd Ā£10bn of spending or savings either way in a succession of budgets, or to laser in on individualĀ spending programmes arguing over whether they are a few billion too light. The recent centre of the national debate has been Ā£12bn of extra tax in a Ā£2.2 trillion economy. The Treasury absurdly argued they needed exactly Ā£12bn extra for social care and health, when they overestimated public borrowing for last year by a stonking Ā£95bn. As they did not have much of a clue about how much revenue existing taxes would bring in it was a particularly precise nonsense to say they needed Ā£12bn. Then in the Spring statement they decided they did notĀ need a third of that Ā£12bn after all so they raised the threshold before you pay national Insurance!
Such a pity we did not debate the Ā£895 bn and its more recent inflationary impact. The Ā Treasury says the Ā Bank is independent and is responsible for controlling inflation. Now the Ā Bank has visibly failed to control the inflation or to even predict it until Ā recently maybe Ā we are due a proper debate about economic policy.
April 24, 2022
Good morning.
So what you are saying is, Sir John is nobody thought to do that which they were employed to do. Am I right ? Because if so, then why employ you all in the first place ? Right there and then, that is a cost saving, not only on salaries and benefits, but office space and costs to the public purse due to bad policies and spending which, when you add some of them up (eg overseas aid, HS2, Hinkley Point, Test and Trace, Net Zero, Mass Immigration and so on) adds up to quite a sum.
Mr Piggybank is looking rather emaciated these days.
April 24, 2022
+many
I would like to see all those in parliament formally declare they are not deliberately trying to bankrupt the country, so they can “build back better”, whilst ensuring it will be everyone else who will “own nothing and be happy”.
April 24, 2022
My Piggybank will look rather more emaciated the way Boris is going all out to destroy food production in the UK. Housing on farmland, rewilding, wind turbines and solar panels, and now paying farmers to retire. Boris really means (no) business, doesn’t he! He even allows the EU to raid our fishing stocks at sea. He does know that the EU fishermen have a well deserved reputation for overfishing, doesn’t he, and they aren’t too keen on sticking to any rules the UK may make!
It appears Boris wants us to increase our food imports to feed our quickly growing overpopulation, give the EU more blackmailing power, and increase our trade deficit in one fell swoop. Does he have any care for the UK? Any at all? Why are we spending money buying food from abroad instead of earning it in the UK?
April 24, 2022
Johnson doubled down saying he wants even more wind farms in the sea not fish. He started the Cameron principle of smearing his supporters yesterday if they dare challenge his wifeās green quackery. I say his wife because we have read what he wrote in the Daily Telegraph before and his views are 180 degrees at odds with his current comments. Either that or he has lost his marbles. Either way his party needs to act quickly and oust him. We cannot afford the Bullingdon party goer who has never grown up! Including his school boys lies I did not know, it was not me, he told me to do it etc.
Our country being invaded by land and sea and he wants to talk big and waste billions of our taxes on the Ukraine which is of no strategic interest to our country whatsoever. It is the EU foreign policy to expand east not UK. I thought we are no longer under EU foreign policy?
I want action to take back control of N.Ireland, I want our govt to help Gibraltar, I want our govt to act as an independent nation away from EU orbit laws and regulations, I want our fishing waters back, I want England to be recognised and given the same rights as other devolved UK nations. I want NHS reform and huge savings to be made, same for other public sector bodies particularly wasteful councils, I want all Marxist ideology challenged and prevented from investing public sector, particularly education. Announced climate change GCE, no stop it. Get rid of Relationship Sex Education Act.
The only party I heard remotely conservative is Reform Party.
April 25, 2022
+ millions Hope. You are not alone in your desires for the UK and England.
April 25, 2022
Hope
It must be difficult living with all these unrealistic illusions
April 24, 2022
I wonder if Boris has worked out yet, how much net zero is going to cost the UK?
Maybe he’d like to tell us?
April 24, 2022
State Secret
April 24, 2022
why would he care?
April 24, 2022
Spot on Mark B
April 24, 2022
āThe lie that the Bank of England is independent.ā is also another very convenient excuse or explanation to hide behind when things are not looking good.
Itās the equivalent of saying āitās not my fault guv!ā
April 24, 2022
Indeed Mark; government squandering has reached a new high and needs to be stopped, especially on the Net Zero and illegal immigration fronts.
April 24, 2022
Good Morning,
Sir J, I hate to be such a cynic about your colleagues, but perhaps first it might be useful to know how many in the House have any financial learning or qalification, or even take an interest in the topic? Not the the PM, that’s for sure! (If your topic was ‘How should Parliament improve Inclusivity and Gender-Neutral toilets’, I’m sure you’d get a full house)
Regarding Money Printing, it’s fine to do so in an emergency, but as soon as stability is achieved it needs to be reversed, as they are in the USA. Our interest rates are far too low. Every time we try to fight inflation interest rates are increased in 0.25% increments, as though you’re too scared of something. Put rates up fast and large. As long as the action is published beforehand, we can cope. You need to re-establish value in the currency, interest rates do that.
In case you hadn’t noticed, central banks are competing with crypto-currency. If CB’s don’t re-establish the ‘store of value’ in their currencies then you won’t have one.
April 24, 2022
Interest rates have to be kept low because people have borrowed too much for that rabbit hutch they are living in. Plus. The Tories need to keep the property Ponzi scheme going both for their donors and all that Stamp Duty (money for literaly nothing).
April 24, 2022
No one should pay tax to buy their own home. Second house for holidays or renting might be debated to attract taxation but certainly not your principle home. Then to tax again for inheritance and all things bought for it is simply Tory theft.
Energy and Johnson wind farm revolution to bankruptcy will be the Ned of his party. They need to wake up fast. No one voted Green Carrie Goldsmith party.
April 24, 2022
God damn right….no one voted for this green party
April 24, 2022
Nor taxed for getting to work. For example:
A tank of petrol paid for out of taxed income taxed at 300% (yes, really !) of cost price and then the petrol garage pays taxes on profits.
And then tax on vehicle maintenance and repairs and road tax… on and on it goes.
April 24, 2022
+many
April 24, 2022
I agree that they want to keep rates low, but they won’t be allowed to. The USA will likely be above 5% on the Fed funds rate, and the 10 yr Bond over 7%. by year end. (This is going to cause mayhem in the US housing market) If the BofE thinks it can hold rates substantially below US rates it’ll cause sterling to drop like Bunter from a zip line when the catch brakes. We’re seeing the start of it, so the B of E had better get it’s game plan out, and it’d better be aggressive.
April 24, 2022
Mark, are not most taxes money for nothing? As in the Dire Straits song.
April 25, 2022
John
I believe it is time to look at the tax system in this country. Taxes have to be used to pay for services but, I think it hightime that some of those services were funded differently. eg from the consumers pocket.
Less is more
April 24, 2022
A similar lack of science, engineering, medicine, energy and all STEM qualifications too. Mainly lawyers, politics, language, history & classics graduates it seems. On the Labour/Plaid/SNP sides specialists in pushing the evil politics of envy and the magic money tree.
April 24, 2022
Engineers aren’t necessarily the best either. They may be able to create something technically amazing. But is is useful for or attractive to others?
IBM had brilliant engineers but lost out to Microsoft over the personal computer because Bill Gates wasn’t just an engineer (type) but also a creative type too who understood the market (/ people).
The success of Steve Jobs’ Apple wasn’t just engineering but the look and feel of the products. In fact, Steve Jobs’ degree was in typefaces I believe (or something like that – not engineering or computer science or whatever).
You need both. Science. And Arts. At least in leadership in business / the economy. (although I agree with you about law).
April 24, 2022
Napoleon was both technically and creatively brilliant.
Genius / to excel in leadership requires both.
April 24, 2022
Decent engineers and scientist can understand markets and design too. The point is we have almost no scientifically minded people in parliament. The Energy department is led by historians who do not even seems to understand the difference between or units for energy and power! Nor the very real problems of intermittency of renewables. Nor the vast costs (financial and environmental) of the green hydrogen, EVs and battery agendas. Fools wittering on about battery aircraft and hydrogen planes.
Boris Johnson (classics) has just refused to remove the renewables surcharge and claimed – renewables help lower energy bills – only a total scientifically illiterate, a complete moron or a blatant liar would make this absurd claim.
What numerate, right thinking, impartial person would be vaccinating children for Covid when it clearly does such a large net harm statistically?
April 24, 2022
Indeed LL.
April 24, 2022
‘Decent engineers and scientist can understand markets and design too’ – of course. I don’t disagree with that. But you need both kinds of brains: the technical and the creative. Most people only have one. The best have both: technical and creative.
April 24, 2022
(Mind you, I’d also add ‘practical’ to the mix as well. 1. Technical 2. Creative and 3. Practical).
April 24, 2022
Who would do that, LL? Someone who wanted to make plenty of money, I’d say. The going rate for a GP jabbing a patient was Ā£15 per jab last time I looked. It all mounts up, you know. Mortgage to pay off, children’s education to pay for…
April 24, 2022
It seems there is also a lack of lawyers as well, just when you thought there were so many. So finding a prosecution barrister is becoming harder and harder. Accountants too are becoming thin on the ground, would you believe.
Any occupation requiring study or hard work is a turn off to the modern UK school leaver. 50% more doing social studies than engineering, and I suspect a large proportion of those doing engineering are foreign students.
April 26, 2022
Regarding the “magic money tree”, what have the Tories been doing? Keeping a bloated property market going with a game of low interest rates and Nimby planning laws. Classic inflationary policies. Not that the opposition have bothered opposing this game of houses.
Regarding your swipe at Historians, perhaps you should study the events of summer 1914 and contemplate the situation in Ukraine. You may also wish to contemplate Mt Hitchin’s views on 1914 and the decline of Britain !
https://hitchensblog.mailonsunday.co.uk/2014/01/we-should-have-stayed-out-in-1914-major-historian-agrees-.html
April 24, 2022
As a Tory voter, I don’t really understand the world of Finance (but appreciate we need smart brains in politics thinking about it and acting upon) but I do understand the world of high tech / digital and that our economy needs us making high tech things and the services around that, involving lots of high skills, productivity and exports. Hope the gov figures out how we can help the UK / Cambridge and Oxford areas more to become Europe’s Silicon Valley.
April 24, 2022
Ed M
Are you one of these people who think that London/Cambridge/Oxford are the only areas worth investing in ?
Where was Graphene disovered ?
“Europe’s Silicon Valley”
Dream on !
April 24, 2022
The reality is that it’s not just the work that attracts people to an area but the location too. Why businesses are flocking to Berlin. But why Frankfurt finds it hard to attract people (because, to be frank, a lot of people find Frankfurt boring). But Cambridge and Oxford full of culture etc (ditto why London popular place for people to move to in business).
April 24, 2022
Graphene was discovered in Russia.
Russia is a GREAT country. I love its saints and churches and icons and orthodox traditions. And Tolstoy, Dostoevsky, Pasternak and Tchaikovsky.
I pray that St Basil and the other saints of Russia will intercede to bring this horrible, unjust war to an end as soon as possible.
April 24, 2022
Ever heard of the āSilicon Fenā, the CaMKOx corridor, or the Silicon Roundabout in London?
April 24, 2022
Sort of. But they don’t have the same ring about them (yet) as Silicon Valley. More work to be done.
April 25, 2022
The UK’s “Silicon Valley”, ie the bits that did the engineering as opposed to just the comp sci, was spread across many areas of the country – Manchester, Thames Valley, Letchworth, Stevenage, Harlow, Torquay, Scotland, Wales as well as Oxford and Cambridge.
The repeated focus on Cambridge and Oxford and pretence they were and are the beating heart of technology is ignorant of history and reality, it does a great disservice to the country as a whole.
April 26, 2022
But that’s like saying America’s Silicon Valley should be spread out between Deotroit and Cleveland and Pittsburg and wherever. Doesn’t work.
1) You’ve got to have it one central area (because they all interconnect with each other in various ways)
2) You’ve got to have it near a famous university connected to high tech (like Stanford University)
3) You’ve got to have it somewhere where people really want to live (California has sun, sea and lots of interesting culture).
Sorry, but your argument doesn’t work. Silicon Valley isn’t just a theory. It’s a reality. And I think 99% of CEOs in Silicon Valley would agree with me. And somewhere such as Oxford, but in particular, Cambridge is the best place for it here in the UK – and to become Europe’s major high tech hub.
April 27, 2022
You don’t have to have a single area, particularly with digital technology. and you don’t have to have it near one “famous” university. I worked in mainstream computing and telecommunications for decades and neither Cambridge nor Oxford figured very much in our work, the bulk of R&D was done in the corporate space away from those places.
The key is to have a critical mass of activities which network effectively amongst themselves and with industry, and the more distributed the better to avoid tunnel vision.
BTW a top AI institutions list has – Harvard (East US), Stanford (West US), MIT (East US), Max Planck (Germany) Oxford (UK) .. Cambridge UK, Columbia (East US) – not even one state in the US.
April 24, 2022
Indeed it would be interesting to know how many in government are qualified to oversee their portfolios.
Mainly arts graduates bankrupting the country with ecoloon green policies.
No engineers planning a sensible energy policy or fuel self sufficiency.
Just a green blob minority wagging the dog.
April 24, 2022
+1 – the Russia people and many young conscripts are clearly victims of Putin too.
April 24, 2022
You mean the Ukrainian conscripts, I suppose, LL. Russia hasn’t conscripted any soldiers to send them into the fighting, but Ukraine has. They are the victims of their regime that offered to engage in peace talks in Turkey last month, but then withdrew the offer. When all this is settled, it will be interesting to find out where the pressure to refuse negotiations came from. What they did, they will have to defend to the wives and mothers of the dead conscripts you are rightly concerned about.
April 24, 2022
You post is propaganda for an evil country. Shame on you.
April 24, 2022
Sea Warrior
‘An evil country’
Please stop it. I now know how it must have felt to have been in Britain in the prelude to WW1.
April 24, 2022
For conscripts they seem mighty well motivated and determined, don’t they?
Are you sure, furry Hat Man?
April 24, 2022
+1
April 25, 2022
How do we get more qualified people into Parliament?
I think this is a problem for governments around the world. Even more so now as politicians often get so much flack from the media.
I saw article saying Switzerland best governed country in world. With a head / PM / President who is a wine grower by trade.
April 24, 2022
+1
Re interest rates.
Are they scared of all the debt they have allowed people and the govt. to take on?
Maybe they love low interest rates because of paying back said debt!
However, youād think theyād be happy about all the repossessions ensuing from rate hikes.
Think how multinationals could ramp up their house purchasing. Street by street.
And nudge on the likelihood of Joe Bloggs owning nothing!
But then againā¦they might be relying on mass immigration to achieve thatā¦enforced billetingā¦ threatening ancient property rights.
April 24, 2022
Everhopeful, according to Sky around Ā£500 billion of UK government debt is index-linked to RPI which is currently approaching 10%.
April 24, 2022
Surely the idea that counterfeiting = inflation MUST have occurred to one of our fine bankers/ economists?
So why on earth did the BoE just ignore the possibility?
Perhaps they should just stop trying to predict like some latter day oracle and respond properly to problems as they arise.
I read that some years back they decided there would be ultra low interest rates for a long time. Spitefully trying to get people to compromise themselves by spending and ākick startingā the economy. š
April 24, 2022
To answer your question – Politics !
April 24, 2022
+1
Yes. Totally agree.
April 24, 2022
I suppose that people whose personal interests are not rooted in the U.K. and who draw huge salaries arenāt particularly bothered as to whether their la la land, LAZY policies work or not.
Itās us mugs more firmly stuck here than ever before, facing vast bills just to survive who will suffer.
As ever!
April 24, 2022
I totally agree with your statement EVERHOPEFUL, we should be recruiting local and permanent officers for all our vital country positions. Islamists and others should never be in a position to harmour country.
April 24, 2022
+1
April 24, 2022
+1
April 24, 2022
Debate till your heart’s content but in the final analysis unless and until somehow in the party is prepared to expose the immorality and criminality at the heart of our politics then nothing will change. Pressure will then come from OUTSIDE the body politic and it will be imposed from those who have been neutered
We all know the Treasury and the Bank of England are both political organisations whose objective is to assert power and to expand those powers. I have no doubt that central banks across the West are now working on some form of centralised digital currency that if it transpires will be represent one of the gravest threats to our personal freedoms and privacy since the emergence of Communism and Socialism
So yes, debate changes bugger all, absolutely bugger all. Only power matters.
Totalitarianism is just around the corner. Hayek noted that when the State started to interfere directly in an individual’s economic choices then freedom itself had been compromised. Keynes argued otherwise but then closet Marxists are sneaky reptiles. When digital currencies become a reality your economic choices will be a question for the State.
As an aside. I see the Lockdown strategy that idiotic Parliament approved of is now being used in Shanghai to obliterate the very nature of human freedom. If this NHS CEO and Marxist Labour think they can use this in the future then I predict a Berlin Wall moment. Lockdowns are fascist
April 24, 2022
+many
April 24, 2022
”debate changes bugger all, absolutely bugger all”
DOM have you been watching the parliament channel….short speech followed by another short speech, there’s more real debate in a school play ground
April 24, 2022
Off topic – seeing as there are so many establishments opening up female only spaces to ‘trans-women’ I would ask that we have legislation to check that these ‘transwomen’ have actually registered their gender change before being allowed entry, and are not just allowing any male into those spaces which is what appears to be happening currently.
I would prefer men to be kept out of womens spaces altogether, especially if they still have all their wedding tackle. It’s asking for trouble by allowing voyeurs, sex pests, and paedophiles to just put on a dress and their dreams come true!
April 24, 2022
Building back better. Cancelling women. Ask Sir Kneel.
April 24, 2022
The Equality Act 2010 only recognises those who have transitioned. That is the benchmark and we are being distracted by activists to lower that benchmark.
No men should be allowed in women only spaces unless they are responding to an emergency.
April 24, 2022
+1
April 24, 2022
I contacted Monsoon to complain about their new policy of allowing men-wearing-a-dress to use their women’s changing facilities on the grounds of safety and privacy for women and girls.
Someone from their customer service dept replied saying that Monsoon had a policy of promoting diversity and inclusivity … ie the policy stays. They followed it up with another email saying that now they had SOLVED my enquiry (their words) they’d like my score from 1 – 10.
I gave them 0 and told them I won’t be shopping there again. Women must use their purchasing power and refuse to go along with this misogynistic rubbish.
April 24, 2022
+1
Yes.
Thanks again idiot government.
I keep remembering my Victorian junior school. āBoysā and āGirlsā in concrete over the separate entrances!!
I can see I will have to invest in more of those horrible wee bags if I ever travel again.
Public loos? Nooooooooo!
April 24, 2022
Well said Shirley. I agree 100%. Get them out of WOMEN’S sport too. I mean biological women.
April 24, 2022
I totally agree Shirley but it would seem what we women would prefer is of no importance. LGBT rights trump those of the majority, i.e. women, every time.
April 24, 2022
Yes, you’d think politicians would have the sense not to alienate 50% of the population by telling them they are less important and have fewer rights than the handful of men who want to be women!
April 24, 2022
Shirley, a good site is women-uniting.co.uk where they urge you to ask your local politician to “respect their sex if they want their X”.
April 24, 2022
+1
April 24, 2022
Shirley Not.
Our local theatre has gone for gender neutral loos instead.
Women have to sit on wet seats, blokes have to queue behind women doing make-up. Lose lose for all. Especially the bar takings now that the blokes prefer to go to the pub across the road during the interval.
April 24, 2022
Sorry. This was in reply to, Everhopeful
April 24, 2022
It’s alright trying to have a proper debate but only if those taking part know what they are talking about. It would seem many of those involved in the workings of the economy know three fifths of naff all. I don’t pretend to know much about complicated finances but I do manage to run a household budget without going into debt even when the BofE and governments pork it up! Those of us that actually have to worry about our finances from week to week have to continually plan to accommodate the financial consequences this governments virtuous policies are causing. I can tell you it’s one big bloody headache for most people. For God’s sake someone get a grip.
April 24, 2022
I wonder what Sir John’s colleague Simon Clarke MP has to say about all this. He is Treasury Secretary and according to government information is ‘responsible for public expenditure’. Is he allowed to take a critical view of matters, or when he became Treasury Secretary did he have to toe the line?
I can’t seem to find many public statements by him, except for a claim that scaling back net zero measures would be ‘irrational’. That doesn’t sound encouraging.
April 24, 2022
In what way would scaling back (better still killing) ānet zero policiesā be āirrationalā Simon Clarke? I do not suppose he elaborated or was even capable of doing so.
Private schools, History Oxon. and then a lawyer so unlikely to have any understanding of science, climate, maths, energy economics or energy engineering beyond GCSE level. Nor how people on average or lower incomes actually get by.
April 24, 2022
Careful before you bash MPs, Bryan! Remedial English might include the fact that there’s no apostrophe in the word maths.
April 25, 2022
Mathematics abbreviated ……
In any case, I’m not running the country…!
April 24, 2022
I have no confidence in a sufficient number of MPs to have the knowledge to contribute to an informed debate, which in any event will be predominantly virtue signalling from entrenched positions, with whipped outcomes and the ambitious merely seeking to ālick backsidesā.
And what would change? Nothing. The Treasury is uncontrollable and will do its own thing irrespective of what is said in the HOC. A strong Chancellor and a non libertine PM would make the difference, sadly we have neither.
Surely these things are discussed interminably in the corridors etc.
As for independence/arms length etc. Like Quangos it is a political trick to be able to say āDonāt blame guvā when things go wrong.
April 25, 2022
It would be quite amusing to have the Treasury MPs all 6 of them + (Boris -who is the Formal head of the Treasury – I’m laughing out loud reading that our chief Spendthrift).
-v- the six shadow treasury MPs facing off against each other with Jeremy Paxman in a Treasury challenge to actually see which ones of them know what they are talking about.
With a panel of mathematicians and economists like Ruth Lea, Yanis Varoufakis, Jonathan Rosenhead (or another Labour bod). To ask the burning questions of the day and discover what the actual reasons and responses for current policies on interest rates, tax rates, NI rates etc.
April 24, 2022
The Bank of England is as independent of The Treasury as my right leg is independent from my left leg.
They stand and progress together.
We have a Gordon Brown Treasury. It is left-wing; it believes in the State’s function to tax, spend, borrow and squander money. Occasionally it graciously allows “the peasants” to retain a tiny bit more of their own money, but only for a short time and it generally tries to claw it back through stealth taxes ….. so we have the illusion of more money and choice of what we do with it, but in reality the Government still controls it.
In recent years, the tax, spend, borrow and squander tendency has been exacerbated by massive money printing, given the grand title of Quantitative Easing to disguise to “the peasants” what is really going on ….. devaluation of the currency, through inflation.
I don’t believe that this policy which The Treasury and the Bank of England are jointly engaged in, is unintentional or a mistake. They know exactly what they are doing: they are devaluing and stoking inflation and that, I suspect, is because the left-wing Civil Service Mandarins want to destroy the CONs reputation as the Party more trusted on the economy in order to get the Labour Government they want.
And the Pretendy-CONs in Government haven’t got the savvy to realise that, or the guts to deal with the left-wing Civil Service Mandarins.
April 24, 2022
Again, spot on
Those with their hands on the various and sometimes competing levers of power (Labour controlled public sector etc and the Tories had on the taxpayer cheque-book) know precisely what they are doing and what they want to achieve. But people vote for the fascist SNP and two other ghost parties who died sometime ago. Labour in 1979 and the Tory party when Blair became their leader in he guise of that person namely Cameron
But I have no doubt that all main parties including John’s cooperate with each other to neutralise ALL threats to the status quo. It’s worth focusing on Tory silence on any issue (Peterborough, Batley, Bradford, etc etc) that some time past they would have viscerally and publicly opposed.
We, our identity, our democracy and our freedom are being screwed over by all parties to protect their own interests and to bid for their international obligations
I am convinced that British democracy will have been dismantled by 2040
I see in Australia some local councils have banned the word ‘woman’ for being ‘offensive’…these Stonewall-esque activists are dangerous
April 24, 2022
+1 DOM
April 24, 2022
Totall agree Donna. Highest taxes for over 70 years from this Con-Socialist Government. Like all good socialists they love squandering other peoplesā hard earned money as long as itās not their own money. Just ask Mr. & Mrs Sunak.
April 24, 2022
Have a debate on “the economy”?
Isn’t that rather like having one on “life in general”?
This just seems like yet another attempt to blame someone other than the present government for the effects of its ineptitude, in this case previous parliaments.
April 25, 2022
‘another attempt to blame ………, in this case previous parliaments.’
A fair target I’d have thought?
April 24, 2022
The real problem is that no one really wants to balance the books, because it would lead to such a huge cut in Government expenditure, the Party that did so would never get elected again.
The only way to very, very slowly get back on track, is to put a moratorium on increasing any further the Countries existing debt, and simply not allow quantitative easing at all.
April 24, 2022
They could start balancing the books by cancelling HS2, foreign aid, EU payments, house all refugees in army barracks, cap all civil service and local government salaries to under Ā£75k……
April 24, 2022
Many years ago the economy mattered. Today being woke is more important than being wealthy. Once people canāt afford their food, heating or rent the economy will suddenly become important and all those woke causes will become the opposition.
April 24, 2022
Javelin, let’s hope so. I’ve just read the review on the BMW M50 Electric. A blinging car with all the mod cons, fancy upholstery and paintwork. A staggering sports performance vehicle.
Um
I thought the virtue signalling middle classes were supposed to be showing us how to save the planet.
An EV should be about frugality. Otherwise don’t bother with it.
April 24, 2022
Ā£64k…..twice the average salary
April 24, 2022
and value after battery knackered?
April 24, 2022
This government will probably charge you to recycle the old battery
April 24, 2022
Sadly, people on the left think that there is something inherently evil about money / ambition / success (rubbish – all these can be great in the right way).
And then you get people on the right who think gaining as much money as you can is the secret to happiness (like Scrooge in Christmas Carol). That too is rubbish. I’ve seen so many wealthy people destroyed by their own wealth (and poorer people destroyed by thinking they need more money instead of just enjoying what they have and making the most of life).
This is important as our country’s economy would be much more stable and strong and our workers and people a lot happier if we followed this more. I think at least (And religious leaders / people in the arts and media have a duty to remind people of this too). About getting healthy balance ..
April 24, 2022
Very well put. There are very few MPs who understand these issues. Probably not many treasury officials either, which is rather a concern.
April 24, 2022
Sir John,
The low interest rate regime started in 2008/9 was to allow banks to sweep the problem of non performing loans under the carpet. How much of that problem do you think is still with us today – and hence the continued low interest rates?
April 24, 2022
Loose credit. Once the commercial banks were allowed, effectively, to become printing presses western economics went out of control.
There is no putting a lid back on it, hence they can’t put interest rates back up to where they should be. They have to put an economic brake on things in the guise of Greenism whilst telling us it’s for our own good, which it is but not for the reasons they’re telling us.
April 24, 2022
OR:-
– the way our freedoms are being whittled away;
– the way Covid has been used against us;
– the way we are being fined and persecuted by so many new ‘silly’ rules affecting motorists;
– the way freedom of speech is being killed off – not limited to the online safety bill;
– the true cost, financially and socially, of Net-Zero;
– the way it has failed to get a real BREXIT;
– the power of civil servants;
– the way the Treasury has failed to contain wasteful expenditure;
– not holding the government to account adequately;
– quangos;
– the extensive use of psychological nudgers….. and so much more.
To say Parliament are failing us all is an understatement.
April 24, 2022
Bryan. Even the word failure is an understatement where the Tory government is concerned.
April 24, 2022
BH
+ hundreds!
April 24, 2022
Parliament is thus made an irrelevance by our responsibility-dodging parliamentarians.
It is no wonder “We don’t believe you” has become the standard response.
April 24, 2022
[…] The Bank of England is not independent ā John Redwood […]
April 24, 2022
This is the problem of voting MP’s into parliament. They don’t understand what is going on in the treasury or the Bank of England. How can there be an effective debate without the knowledge of the mechanisms involved?
I have heard an MP saying that John ( meaning yourself) understands all these thing but I don’t know what they are talking about. I should guess that this is a very common theme among MP’s. I am not being high and mighty re these things , as I don’t understand either,which is why we look to government to do the right thing on our behalf.
April 24, 2022
That’s part of the problem – an inadequate education for far too many MPs?
The thing is though that if things cannot be discussed in every day English then someone is making it all too fanciful, to confuse and get their way.
If MPs still cannot understand the issues when plain English is used then they need remedial English and basic math’s.
April 24, 2022
BH, What about the same requirements for the public at large? How many conservative party members chose Johnson because āhe was funā in June-July 2019?
April 24, 2022
H — It’s all part of the dumbing down of education of course – People accept PR rather than use valued judgement.
Perhaps if Boris hadn’t been alone in the spotlight, things might have been different — he had PR going his way, while those on the back benches who had far more to offer were not inclined to step into the ring, probably because of how easily the media can ruin lives of those that stand up for a cause.
There simply was no one else, as well known as Boris, to stand up.
In other words we have a deficit of smart well educated people coming into politics, so we end up with a second rate government.
April 24, 2022
Bryan — you have to wonder why these newbie candidates who got lucky against Starmer wanted to be an MP in the first place !
April 24, 2022
Economics aren’t a core curriculum up until the age of 18 years. Are you suggesting that MPs should be educated in this subject prior to being called for election? Simple English doesn’t cut it, if we regard the various economic models. There is more to it.
April 25, 2022
Most adults gave up slapstick knockabout ‘humour’ by the late teens. Johnson might do well in the Christmas Pantomimes.
April 24, 2022
Not sure the BoE is old enough to be independent
April 24, 2022
A debate on the economy should include how the tax revenue is raised, how money & investment moves and develops growth, how spend & subsidy underpins that growth and how governments can use the instruments of the BoE to contain inflation. Our politicians only like to debate the spend & subsidy part to gain votesā¦..any debate needs to start with a clean tax book and choose whether the people & business shape our economy with the support of government or vice versa
April 24, 2022
That the government has replaced an inflation target with an interest rate target without parliamentary approval is yet another indication that MPs are as much useless lobby fodder as the majority of the civil service are useless jobsworths. How much longer can the private sector support so many drones, especially when they are doing their level best to hamper the productivity of the private sector having had their total ignorance of science exploited by foreign confidence tricksters, saboteurs and nutjobs.
April 24, 2022
Today there are reports that Boris is mulling over an early General Election.
He is utterly deluded if he thinks the Conservatives will win a majority at the current time.
This Conservative Government has done a Stirling job of alienating many of its loyal supporters, including myself.
Many things what Conservative supporters desire, hasn’t been achieved, given, nor satisfactorily implemented.
Call an early election. I won’t be voting Conservative, that is for sure.
Buck up your ideas and I may change my mind.
(Sending Theresa May to my street yet again, asking me how I will vote, will not easily sway me.)
April 24, 2022
Mark. Having Theresa May on your doorstep is definitely a vote loser.
April 24, 2022
Is the ‘fix term’ parliament still in force
April 24, 2022
What is there to debate?
The vast majority of MPs, whatever their party allegiance, believe in high spending and high taxation and then how many know enough to have a serious discussion on the economy?
As well as a lack of competence, Parliament doesnāt need debate CC/catastrophic man-made global warming, Net Zero, or the continuing the high levels of immigration of economic ā but not cultural ā migrants because theyāre all in agreement.
April 24, 2022
Fully agree ā thatās why you see so many at parliament doing their knitting during debates
April 24, 2022
Oh! I thought they were all struggling with WORDLE on their mobiles.
April 24, 2022
Weāll all need āwoolly hatsā soon enough when the heating bills arriveā¦.best start knitting
April 24, 2022
Just as I expect there are few MPs capable of a serious discussion in economics I expect there are even fewer capable of discussing BEISā plan to achieve Net Zero, which is an engineering problem once the political decision to achieve Net Zero by 2050 had been taken.
The Secretary of State of BEIS read classics and history, the Minister for Business, Energy and Clean Growth read Modern History,
The Permanent Secretary read PPE at Oxford and economics at the LSE. The two colleagues of the Permanent Secretary who also gave evidence to the HoC Public Accounts Committee on Net Zero, one read Modern Languages and the other was drafted in from the NHS.
Even the Chief Scientific Adviser to BEIS is not a physicist or an engineer but a professor in Atmospheric Chemistry and Earth Observation Science.
No wonder the Net Zero Strategy is going to be an economic disaster.
April 24, 2022
Have you ever thought that this might be a rather stupid argument, OR?
Because for more than ten years there has been an idiot on this blog who keeps judging peopleās intrinsic value on the degree they got when they were at uni ten, twenty or even thirty years before, you donāt need to parrot such a dim-witted person.
How do you know that the people you criticise for their degrees have not done as Sir John did who originally got a BA and DPhil in History then took years later some other financial qualifications.
Do you really think that there are no users for Open University and similar adult education services?
What I can only conclude from your pensum is that some diseases are obviously catching.
April 24, 2022
Stupid…idiot…you say of others heffy.
Yet you seem to consider yourself very superior.
Not the way I was taught to debate topics which have different opinions.
Do you actually think people who hold different opinions to you can legitimately be described in such dreadful terms?
April 24, 2022
And dim-witted.
April 25, 2022
Peter 2
You are totally out of order and should be ashamed of yourself
April 25, 2022
Thanks for your input billy.
Try posting something of significance for a change.
April 24, 2022
Off topic, an editorial in the Irish Independent roundly condemns any plan to disapply the NI protocol:
https://www.independent.ie/opinion/editorial/threatening-the-protocol-is-reckless-move-by-uk-41581124.html
“Threatening the protocol is reckless move by UK”
I have to write “any plan” rather than “the plan” because the supposedly leaked information on a supposed plan could easily be nothing more than another diversionary tactic from the Great Charlatan in the runup to the Assembly elections in Northern Ireland. Indeed to some extent I am inclined to think that is the reality because Boris Johnson must see that it would be easier to persuade the Lords to pass the necessary Bill, and it would also be less likely to provoke a trade war with the EU, if the proposal included an alternative system to protect the EU Single Market from non-compliant goods being carried across the land border into the Irish Republic, and so far nothing has been said about that.
April 24, 2022
Well put. The debate needs to be well informed and I would suggest that “Quantitative easing: a dangerous addition” as a starting point. This is an excellent report from the House of Lords Economic Affairs Committee which seems to have been brushed under the carpet.
There is also a need for a proper understanding of the inequality caused by QE. It has disconnected financial markets, including house prices, from the real economy. Not many politicians will understand why higher interest rates would be fairer to young house-buyers, and many would question your sanity if you were to say it. We need these things properly explained.
April 24, 2022
Everything they do ramps up house prices. Help to Buy especially.
April 24, 2022
The billions of furlough fraud money sloshing around in our economy doesn’t help the inflation situation.
I read in Janet and John that the government would be happy as this fraudulent money would help to prop up the economy.
April 24, 2022
The bank profits are booming because they are not passing on interest rates to savers. The government allows banks to do this.
Remember it was us the tax payer who bailed them out and this government should remind them so
April 24, 2022
Lloyds 2011 $86bn ā 2021 $7bn
Barclays 2011 $43bn ā 2021 $6bn
Royal Bank of Scotland 2011 $40bn ā 2022 $17bn
HSBC 2011 $70bn ā 2021 $25bn
I donāt see any booming profits rather a massive decline in profits this past decade
https://www.macrotrends.net/stocks/charts/HSBC/hsbc/revenue
April 24, 2022
The tax payers didn’t bailout the Banks the Treasury did. Tax payers never had a clue what was going on and no politician would dare tell them; hence, tax payers never felt a thing. Banks are quite well capitalised at the moment, they don’t need to raise interest rates to attract more capital from savers. Remember, if your Bank goes bust, savers go bust along with the shareholders. That’s why the government insures your savings.
To explain, have a look at these two charts. First, the Public Sector Gross Debt around 2008. https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/timeseries/bkqa/pusf?referrer=search&searchTerm=bkqa During the 2008 crash the magic money tree (National Loans Fund) created Ā£3,000 billion for the whole economy; that is both for Banks and the rest of the non-government sector. That was 150% of GDP. It is approaching that level again today.
Now look at how much of that Ā£3 trillion went into the Banks in 2008 https://www.ons.gov.uk/economy/governmentpublicsectorandtaxes/publicsectorfinance/timeseries/jx9r/pusf two thirds of it.
As JR says, it makes fussing over Ā£12 billion and raising taxes to cover it, really silly. The bottom line is the UK can live with that debt for decades, no problem. The Governments money debt is the non-government’s money savings to the penny. And; your children and your grandchildren won’t be required to pay off that so-called “debt” either.
April 24, 2022
So what of our economic credibility as a country with the wider world ? The BRIC nations ?
Surely there is a Magic Money Tree cost to all this.
April 25, 2022
acorn, you only seem to be telling one half of the story – of the Ā£2 trillion that went out into the Banks how much was repaid? Of the rest how much of a Stake in the banks does the UK magic money tree own and at what current value? I thought banks like Lloyds paid back in full and that Barclays didn’t borrow anything from the UK government.
An article in the Guardian in 2011 said that ‘Ā£2.46bn of loan repayments have been received from banks and the Financial Services Compensation Scheme, offsetting an increase to the loans of Ā£0.12bn’
April 24, 2022
In a sovereign fiat currency economy, the Treasury and its Central Bank are one and the same thing. Monetary Policy interest rate changes, are mostly useless at controlling inflation. An interest rate change takes twelve to eighteen months to work through the economy.
The Central Bank only “prints money” when the High Street wants the physical form of Pounds Sterling. Then the Treasury has to fund the issue of and the printing of those paper/plastic notes. The Banks etc, pay for those notes with “reserves” (government Treasury electronic spending).
The Treasury has two accounts at its Central Bank, one called “reserves” and the other “securities” (Bonds). When the Treasury pays you state pension electronically into your current account at your Bank, it also pays the exact same amount into your banks “reserve” account at the Central Bank; this to keep your Bank’s balance sheet balancing.
If you transfer your pension to another account in another Bank, the “reserve” follows it to the new Bank’s reserve account at the Central Bank. If you then spend that pension and buy a Treasury Bond/Gilt savings certificate; that reserve moves from the Treasury reserves account to its securities account. Everything balances.
The Central Bank believes there is a shortage of liquidity in the banking system and needs an injection (QE). It makes you an offer for your Bond that gives you a profit which you take. The Central Bank then empties your bond and transfers its Sterling content into your Bank’s reserve account with the exact same amount being deposited into your current account. The Central Bank hasn’t bought anything, it has just swapped the Treasuries “money” into another form. There has been no new “money” created by the monopoly currency issuing Treasury. The Central Bank, by swapping your Bond has increase the price of it and subsequently reduced the current yield on it, reducing the general interest rate in the economy.
The Central Bank now has a huge balance sheet full of Treasury Gilts with no “money” in them, except the promise of a coupon payment. That payment will be made by the Treasury to its in-house Central Bank; which will subsequently give it back to the Treasury.
Are you with me so far?
April 24, 2022
Nope.
It sounds like a con trick to me.
April 24, 2022
It’s sad to see the state the country is on and the dire level of political debate.
Perhaps worse is to see the comments here. Unusual to see so many five year olds writing on a political blog.
April 24, 2022
Sir
Might the remit of the Treasury Committee be expanded ?
https://committees.parliament.uk/committee/158/treasury-committee/
April 24, 2022
I hope not true some Tories complaining that Angela Rayner flashing her legs at Boris. Even if true, so what? WOKE gone nuts.
April 24, 2022
You are quite right that the BoE is not truly independent of the Treasury and the Chancellor. The request, nay demand, for easy money has come from No 11 Downing Street. Most politicians, including unfortunately many Conservative ones, think it is OK to spend money that we haven’t got. The pandemic is as good as over and we need to rein in special State expenditures. The arms that we are supplying Ukraine with are not cheap and I am not aware that Ukraine will pay for them. There is a case for saying that UK taxpayers must finance these weapons supplies. It might cost the Government re-election at the next General election. The fate of the Bushes, father and son, is instructive. Father HW raised taxes to finance the first Iraq war and was a one term president. Son GEW did not raise taxes to finance the second Iraq war and was re-elected.
April 25, 2022
All well and good but i can’t print an extra 10-20 %pa to pay all the bills that have increased. So where did all the price increases come from? Someone got given a load of money for nothing or access to a loan at a real negative rate? Its a subsidy but its a death grip and suits totalitarians well enough. You will be dependent and controlled by hook or crook.
Its amazing .. the protected elite just breeze on.
A snap election.. ha. It must be bad if losing an election now is better than winning. Perhaps they will dump this all on the reform party.