The UK should stop the fiscal and monetary tightening

The UK economy has slowed a bit this year. This is the direct result of Treasury and Bank policy, which has been tightening.

In 2016 the then Chancellor decided to slow the housing market by hitting Buy to let hard with new taxes, and by imposing higher Stamp Duties on the high priced end. This policy did indeed slash transactions volume with knock on effects to conveyancers,  removal companies, furnishing companies, decorators and the rest.

In 2017 the current Chancellor decided to hit the dearer end of the car market, at a time when cars were selling well with good growth in the market. His high levels of VED have knocked sales of higher priced cars ever since.

The Bank of England has reinforced these trends by issuing  warnings over consumer credit, certain mortgages and car loans. There has been a macro prudential tightening, as messages have been sent to banks and finance houses to rein in credit. The Bank seems to have reinforced the hit on the car market around the start of the second quarter.

The Chancellor is still out to tighten the fiscal stance, taking a tough line on more spending and revenue.

The Bank has recently been successful in talking up sterling , particularly against the dollar and yen. Whilst this has some desirable effects, it is also a clear monetary tightening.

There is no need for more tightening, and some need for a more balanced policy. The quickest way to get the deficit down faster is to grow faster. Both the Treasury and Bank need to be kinder to enterprise and growth in their approaches.


  1. Peter VAN LEEUWEN
    September 27, 2017

    Absolutely nothing to do with a looming brexit, only years away?

    1. NickC
      September 27, 2017

      PvL, Look there’s a squirrel. You are happy to be subsumed into a USE. We are not. What’s it got to do with you anyway?

    2. ju
      September 27, 2017

      Correct, what’s your point.

      1. Peter VAN LEEUWEN
        September 27, 2017

        My point is my surprise about the glaring absence of the word brexit in this. That can hardly be a coincidence.

    3. Hope
      September 27, 2017

      JR, you are correct but this helps the scare of leaving the EU. Today we read the EU commission sanctioned May’s Florence speech including editing the part of how much the U.K. Would continue to pay! Is this correct? Why would the U.K. PM need the EU to sanction, edit see her speech before hand and be allowed to comment!

      Good grief get rid of her she is an embarrassment.

      1. Chris
        September 27, 2017

        Courtesy “Olly” Robbins, in his new post, apparently. If true, not a very smart move.

        1. stred
          September 28, 2017

          EUSSR Commissar meets would be USSR Commissar on instruction of Conservative PM who has moved him into her own office. Surely this must be fake news. Surely, to arrived in no 10 the PM has to have some sort of competence?

          1. stred
            September 28, 2017

            For anyone who has missed the Telegraph article, in which EU officials reveal their delight that the British public will not realise that the 20bn figure will be much higher, the free copy is here-


            £40 billion amounts to almost the whole cost of HS2 or £800 per UK resident or £getting on for £4k per household and much more for average taxpaying households. It will be more by the time the expansion of the EU army and subsidies for states with German induced unemployment are paid for.

            May and the civil service have sold us out.

          2. stred
            September 28, 2017


            This by Leave means Leave tells that the Project Fear chief of the civil service has been rejecting business people who favoured Brexit and stuffing the ministry with lifelong Europhile civil servants. The fact that May has allowed this means that she is deliberately undermining Brexit or totally incompetent.

          3. Peter VAN LEEUWEN
            September 28, 2017

            @stred: If you’ve seen the Davids-Barnier press conference today you might realise that the EU27 is not going to pay Britains part in what was committed as EU28, i.e. including the British commitment. THe EU27 also has no responsibility for any possible misleading (on the finances) during the referendum campaign. Witty legal arguments won’t fly, and the Florence speech was a first UK step in realising that.

          4. Chris
            September 28, 2017

            Stred, see the latest info on City AM about Olly Robbins and his new Brexit unit, apparently drawing away resources from Davis:

            Civil servant Olly Robbins is setting up a Brexit team outside DexEU
            Senior civil servant Olly Robbins is setting up a team of Europe-focused specialists, pulling more resource away from David Davis’ Department for Exiting the EU (DexEU).
            Robbins, who earlier this month moved from DexEU to Number 10, is in the process of pulling together a crack unit of around 20 people, to form a “a major Whitehall power base”, Politico reported this morning.
            A spokesman for the Prime Minister told City A.M. the team was being established to support his work for Theresa May as EU adviser in the cabinet office. Staff will be brought in from DexEU, as well as other parts of government, he added.
            The move will consolidate more of the Brexit braun away from Davis’ dedicated department under May and her deputy Damian Green, and comes amid rumours of a clash between Robbins and Davis during the critical negotiations about Britain’s future relationship with the European Union

          5. stred
            September 29, 2017

            As Facts4EU shows today, the wilful misleading was by Remain outfits such as the civil service and BBC. The true figure given by the EU, which they need to extort by trade blackmail, is £12-13bn and not £8bn.>>>>> available here.

          6. stred
            September 29, 2017

            PS. If the EU decides to block lorries carrying Dutch flowers and cheese to the UK, I will be delighted. It will save me a fortune and stop a huge pointless source of CO2 and pollution just for women to watch vegetables die and get fat.

    4. Peter Martin
      September 27, 2017

      We’ve had economic slowdowns, before, when we’ve been in the EU and no doubt we will have them after we have left the EU.

      The sensible thing for Governments to do in such circumstances is to relax fiscal and monetary policy to compensate. This option is denied to those countries within the EU/EZ who might have similar problems. They are constrained to have no more than a 3% budget deficit. France has just slightly more than that and yet the EU PTB are ordering Macron to impose ever greater levels of austerity as a cure for previous bouts of imposed austerity.

      What’s special about 3% anyway?

      As John says if deficits and debts are a problem the easiest way to reduce them, as a % of GDP, is to grow your economy. ie Increase GDP. Austerity never does that.

  2. Lifelogic
    September 27, 2017

    Indeed, and what is the point of these irrational taxes on landlords which fall on tenants in the form of higher rents, and clearly damage provision of new properties to rent and job mobility. The artificial tightening of mortgage rules also harms new builds. Often people are trying to borrow against properties for investment into trading businesses so this further damages the economy and jobs. It does not even raise much tax for the government to waste on idiocies like green crap subsidies or HS2 as transaction reduce.

    We have had quite enough of economic illiterates like Osborne and Hammond. Stamp duty at up to 15% is insane. Indeed turnover taxes in general are a very bad idea, you should tax profits not (potentially) augment losses.

    Under Lady Thatcher who (actually won elections) there was tax relief to encourage the provision of rented properties. They are needed as not everyone wants to buy. Indeed with high stamp duty there is no real point in buying for less than perhaps 5-10 years as the in and out costs are far too high. Especially with the prospect of Corbyn and a UK version of Venezuella which May makes more likely by the day.

  3. Lifelogic
    September 27, 2017

    Talking of economic illiterates we had Paul Mason on Newsnight last night talking about UBER. Going on about them being anti-social and needing more competition law.

    What about some real competition in the dire virtual state monopolies of health care (that kills thousands) and education? Here he want to kill competion even more by abolishing charitable relief and taxing them out of business. Why on earth did the BBC or Channel 4 employ such a daft, misguided, chip on the shoulder dope as Economics Editor?

    I for one will never use a black cab again in protest at TfL’s pathetic protectionism.

    1. Lifelogic
      September 27, 2017

      Black cabs have had an over protected monopoly for far too long over charging the public for years and providing a poor service with lack of provision at peak times. Why are only they allowed to do street pick ups and to drive in bus lanes? If Mason is concerned about the tax that Uber pay then that is a job for the chancellor – just adjust the tax rules.

  4. Mark B
    September 27, 2017

    Good morning.

    The General Election has been held, the party is over, and now for some reality. ie The bad stuff always follows after the GE and some good stuff just before.

    I stated sometime ago on these very pages, that things in the market were slowing down. I do not have access to vast databases or any special insight in financial matters, just a keen eye, a critical mind, and a belief that I should; “trust, but verify” all information given.

    The BTL was over inflating the housing market. This was due to previous governments stealing from pensions to fund their spending, forcing people to put their money elsewhere. With historically low interest rates, MASS immigration and a short supply of affordable housing, it was only natural that that market ballooned. Unfortunately, a sledge-hammer was used to hit a peanut, with quite predictable results upon the wider economy. Chancellor are you listening ?

    What is of greater concern, and not mentioned by our host, is the, not quite MASS exodus of highly skilled Eastern European immigrants, mostly Poles, who have made their money and are going back to their homeland. Poland is by far and away the biggest recipient of German and UK monies from the EU, and are using it well to rebuild their country. Let us hope they use my money a bit better then Spain did with theirs ? They are, for now, being replaced with others from the EU and elsewhere, but for how long ? Our economy has been turned into a ‘cheap labour junky-economy’ and would clearly suffer as a result.

    I am not against immigration, just MASS uncontrolled immigration and the importing of people who have no skills to offer, will not integrate, and in some cases, are quite hostile and demanding to this nation and its people. The Home Office is largely responsible for this as not even EU immigrants can come to the UK without sufficient means to support themselves, but are, nonetheless, allowed in. And I do not blame the current Home Secretary but the previous one.

    It always seems to me, you can always tell where government has been, by simply following the trail of mess that it leaves behind.

  5. Duncan
    September 27, 2017

    The State is a vested interest and so policies are directed towards its protection. Politicians lack conviction and courage and so are attracted towards policies with the lowest probability of political conflict thereby reducing the possibility of politically damaging headlines

    And so the debt builds up because a gutless Chancellor prefers consensus over reform. He hits the private, because he can and the private can’t hit back while the State and the pro-Labour, unionised and highly organised public sector enjoy ever greater levels of protection simply because they represent a source of political conflict

    I say this. Hammond can do what he likes from here on in. He’s nothing more than a Labour stooge. He’s a classic example of a caretaker Chancellor

    Well, the debt is building and eventually someone with real guts will have to bite the bullet and start the necessary task of reform and public sector reductions.

    You know something? I don’t care any more. What is the point of the Tory party when it behaves like the Labour party?

  6. robert lewy
    September 27, 2017

    JR, is this an indirect reference to the threat posed by Corbyn?

    If Labour are indeed close to power and even the betting companies have Corbyn
    as close favourite as next PM the Conservative party must somehow ward of the threat posed.

    It was spine-chilling hearing McDonnell talking yesterday about preparing for a run on the pound. At first I was amazed by this apparent admission that radical Labour Governments
    are associated with runs on the pound.

    However, Corbyn then went on to claim there had “effectively” been a run on the pound since the Leave vote in the 2016 Brexit referendum,

    This suggests to me that Labour calculate that an induced collapse in Sterling would seriously impact on the present Government’s ability to conclude a “successful” Brexit. This
    would deny the Conservatives of the only likely winning card for the next general election.
    Unless the Conservatives can find a way to appeal to young voters they have little other
    scope for securing a victory.

    How else can you explain this apparent targeting of Labour’s own feet?

  7. Nig l
    September 27, 2017

    And of course a slow down in the economy just happens to suit the Remainers mantra of the effects of Brexit. Incidentally it is being claimed that some of Theresa Mays speech was written in Brussels etc and seen by them before the Cabinet. If true that is disgraceful and shows she is in the EUs pocket.

    1. Denis Cooper
      September 27, 2017

      I’ve certainly seen it reported that our civil servants gave civil servants in continental capitals advance notice of what she intended to say. So she goes to Italy to make her speech before an audience largely made up of journalists in a disused building rather than making it in this country, and preferably to our elected representatives in the House of Commons which so far is not a disused building given over to the pigeons, and while we British voters have to wait on tenterhooks to hear what she has to say much of it has already been communicated to the other side and then (accurately or inaccurately) leaked to the media. It is almost as if there are people close to her deliberately giving her bad advice.

    2. Tad Davison
      September 27, 2017

      You beat me to it!

      Surely they couldn’t be so cynical?

      Not much they couldn’t!

      Tad Davison


  8. Lifelogic
    September 27, 2017

    Up to 15% stamp duty also makes many house builds simply not worth constructing. Thus killing Jobs in construction and restricting housing supply further, making the UK less competitive, pushing up housing costs for employees and hitting living standards.

    Is this what Osborne and Hammong wanted? It was entirely predictable after all when they introduced and retained these taxes.

    1. Peter Parsons
      September 27, 2017

      The current stamp duty model in Engkand means that purchasers pay less tax on all properties under £937,000 than they would have under the previous “slab tax” model.

      Most house buyers in most parts of the UK are better off as things are now.

      1. Lifelogic
        September 27, 2017

        It is absurdly high even on modest properties and many have the extra 3% to pay too.

        1. Diogenes
          September 27, 2017

          Life”logic”. Do not be ridiculous. Look at the distribution of prices of British properties. What is the average and the median prices? What is the standard deviation? If, as you pretend, you have an ounce of science. in you, tell me where £937,000 falls relative to the mean price.
          Then I tell you you are simply talking plain rubbish with above comment.

  9. Bryan Harris
    September 27, 2017

    “Both the Treasury and Bank need to be kinder to enterprise and growth in their approaches.”
    But surely – hasn’t this chancellor already shown he is against BREXIT succeeding – If the economy does worse, then he might yet force a U-Turn, and he’s already persuaded Ms May to stay in the EU for 2 more years….

    TBH – I am sick of compromising governments that betray their own backbone – We had it with Cameron, and now Ms May appears to be going further by capitulating to the EU – Time to kick out all the europhiles and implement policies that will make us successful!

    1. NickC
      September 27, 2017

      Bryan, I agree, I am sick of the current EU (and related) policies of this government. It has to be sorted, otherwise they will take the country down with them. Snatching defeat from the jaws of victory in front of our eyes.

      The only actual majority mandate they have is to leave the EU. It’s not just the open ended “transitions” (read EU control as usual) but signing up to a new defence, diplomacy, aid, and security treaty with the EU. Back in the EU in all but name.

      Boris Johnson got slagged (I wonder why? – sarc) but his vision is streets ahead of Mrs Maybe’s.

      1. Bryan Harris
        September 28, 2017

        Yes – While those that would reduce BREXIT to a sham, work in the background, and little by little change the game plan – it is now time for all decent politicians to come out and label these people as antiBREXIT, and to show how they are planing to ruin everything by keeping us tied to the EU – in time they will surely be seen as the real traitors.

    2. C
      September 27, 2017

      When I heard the news that we’d voted Leave, I didn’t think that meant another four and three quarter years (or more?) in the European Single Market.

      1. Fedupsoutherner
        September 27, 2017

        C, try lifetime

  10. Roy Grainger
    September 27, 2017

    Off topic but of interest to contributors – Telegraph is reporting that May cleared the “financial settlement” section of her Florence speech with the EU and certain EU country leaders before she even showed it to the cabinet. You could call it good planning but only if the news hadn’t leaked. Makes you wonder what else she has cleared with them.

    1. Oggy
      September 27, 2017

      Roy – It’s no wonder Tusk et al welcomed the speech. If this claim is true then Mrs May should be removed immediately.

      1. Chris
        September 27, 2017

        Agreed, Oggy. I fear that things are being carefully choreographed by the Remainers, which in my mind include Theresa May.

    2. brian
      September 27, 2017

      “Fake news” probably.

      1. Fedupsoutherner
        September 27, 2017

        Brian, normally JR tells us when its fake news. He’s quiet on this subject so read into that what you like.

    3. A different Simon
      September 27, 2017

      Wasn’t that the criticism of her handling of the G.E. manifesto – that she had discussed it without outsiders before presenting the cabinet with the finished article ?

      If so , it casts doubts on her ability to learn from mistakes .

    4. BOF
      September 27, 2017

      Also mentioned by Nig 1. Does this mean that the 5th column is commanded from No. 10?

      I have also read the overly supportive words of Daniel Hannon and can only think that the current leadership have no intention of taking us out of the EU and also that to that end are prepared to be reckless with the future of the CP.

      Do you have a view on this development John?

      1. Chris
        September 27, 2017

        I fear Daniel Hannan has never been a true leaver, but rather someone in favour of an associate type membership. I have never felt I could trust him.

    5. Mitchel
      September 27, 2017

      As Junkers stenographer,she has finally risen to her level of competence.

  11. Caterpillar
    September 27, 2017

    Although the tightening may indeed have caused the slowing growth rather than the often blamed Brexit, we should recall that we have had this AD focus for a longtime now but net capital formation is only a little ahead of population growth, ZIRP has supported zombie businesses, ZIRP has allowed existing businesses not to need innovation etc., in general resource allocation has been misdirected. Assuming the unemployment figures are correct then one has to question why such a demand focus and not supply side.

  12. Richard1
    September 27, 2017

    The labour party conference with its calls for mass nationalisation, price controls (I assume income controls also?), returned powers for militant unions to blackmail society and hints of ruinous taxes and borrowing, remind us why the EC/EU was a good idea in the 70s and 80s. labours policies would be illegal under EU rules. The irony of this at the same time as they are in effect now arguing for permanent EU membership through the single market and the customs union seems to have been lost on the BBC.

    1. NickC
      September 27, 2017

      Richard, Labour’s stated nationalisation policies are allowed by the EU. The following is an extract from the EU publication “Competition”:

      “Some essential services — energy, telecommunications, transport, water and post — are still controlled by public authorities rather than private companies in some countries. EU governments can entrust specific public service functions to a company, conferring on it duties, specific rights and financial compensation. This must comply with state aid rules.”

      1. Richard1
        September 27, 2017

        Yes but they won’t be able to expropriate them at sub market value without legal challenge, not on,y under EU laws, but even under human rights laws.

    2. Hope
      September 27, 2017

      You could be forgiven that it was a Tory speech. Over 300 tax rises under Osborne, second home jealousy tax, long haul flight and ax, energy price caps by May, Ed Miliband’s EU energy policy continued by May. Not much difference.

    3. eeyore
      September 27, 2017

      Textbook Marxist destabilisation from Labour, who are now 4% ahead in the polls. Not that they need to be in power – just the threat is enough. Who’ll put money into Britain when the government-in-waiting warns it will steal it?

      At least Labour doesn’t have a private army of uniformed thugs – yet.

  13. Narrow Shoulders
    September 27, 2017

    The quickest way to get the deficit down is to control government spending and waste.

    Population growth by itself will grow the economy, creating money benefits only those who can access the additional money and widens the gap between haves and survivors.

    Government should worry less about growth and more about quality.

    1. Ian Wragg
      September 27, 2017

      Increasing numbers will increase the benefits bill as the majority of them are net recipients of benefits and services.
      Just a ponzi scheme to increase gdp at the expense of per capita.

    2. Ed Mahony
      September 27, 2017

      ‘The quickest way to get the deficit down is to control government spending and waste’

      – It was madness to hold the referendum on Europe until we had brought down our deficit as well as carried out the appropriate research, planning and strategy for leaving the EU.

      The whole government approach to the referendum and Brexit would get a big, fat fail if this was in the world of business. Not surprising since Boris Johnson, the man who helped the leave campaign pip the remain campaign at the posts, has no experience of business whatsoever (along with Michael Gove, Liam Fox and so many Tory Brexiters). Which is one reason why so many UK businesses are uncomfortable with Brexit, for Mrs May’s disastrous UK election results (and things can only get worse for the Tories now), as well as the UK being a laughing stock around the world.

      It’s not Brexit I object to, so much the timing of and the amateurish approach and all the bravado and wishful thinking that goes with it.

      1. Ed Mahony
        September 27, 2017

        If Brexit does ‘work’ in the short to medium term (5 to 1o years) it will be a fluke.
        I have little doubt Brexit could ‘work’ in the long-term (20 years time) but there won’t be any significant improvements to our economy.
        Meanwhile there is going to be a lot of trouble ahead. Further financial burdens on the young (18 to 49) who mainly voted to remain (and angry with the older generation) at a time when our country still has a large deficit. The Tories losing even more support as a result. The socialists could get into office, and mess up our economy (as well as plans for Brexit) even more. And trouble in N. Ireland, Scotland and Gibraltar. As well as all sorts of unforseen problems that Brexit will throw up.

        If people really want Brexit. Fine. But first we have to pay off our deficit. And then we have to have to do proper research, planning, and strategy to make it work. Including having a leader in place to make something so complicated (as complicated as a ‘moon landing’) work as well as get a leader who can get people united around it, with one clear goal for the country that everyone agrees on, or agrees on more than now.

        This is just bog-standard common sense.

        1. Ed Mahony
          September 27, 2017

          And in 20 years time, how many people will still support Brexit, not forgetting that the leave result was based on age (many of whom will be dead in 20 years time), and people in general will only get more antagonistic towards Brexit as it impedes more and more on their finances and jobs before things begin to get better (and this could be many years).

          We can still think again. Remain in the EU whilst trying hard to reform it for our benefit (and Europe’s), in particular, purging it off its political power.

          Reply I we just get out and keep our own money we will be better off!

          1. Ed Mahony
            September 27, 2017

            Mr Redwood,
            I really respect your opinions. You’re way smarter and more experienced than I. You give details for your views. And argue your case well in general.
            I’m not arguing so much against Brexit (although I think we’d be better off in a reformed EU working for us), but my (limited) common sense just says that we should at least have paid off our deficit first and planned for Brexit much better.
            I still think Brexiters can be heroes by trying to get the EU reformed (in particular purging it off its political power). But I don’t think they will be by pulling the UK right out of the EU. I think you have so much talent but I would like to see it used differently sometimes.
            Regards and respect you, sir.

      2. Denis Cooper
        September 27, 2017

        Of course it was madness to ask the people what they wanted to do about the EU until (insert preferred precondition which would not have been met for decades if ever). But it was done, and are you now going to say to the people who bothered to vote that both the referendum and their vote to leave was TOO EARLY, and THE GOVERNMENT HAD MADE NO PLANS, and so the referendum result is invalid?

        1. Ed Mahony
          September 28, 2017


          Don’t put words in my mouth! I’m not saying that. But we need to stay agile and pragmatic in our thinking about how to proceed. We want the best for our country’s long-term future, not unintended consequences.

          Lots of people hadn’t a clue what they were voting for, in the sense of not knowing how complicated and risky the process of implementing Brexit could be and whether to remain in the single market or leave (there’s lot of clips on the internet of leading Brexiters talking about Norway-style option before the referendum). , whether they were voting because of immigration, the economy, sovereignty or something else .

      3. NickC
        September 27, 2017

        Ed, Give us a break – the time would never be right for you.

        1. Ed Mahony
          September 28, 2017


          As I said, I’m a Reformer (remain in Europe but only so long as we try and it reformed for our benefit and of Europe’s). But if people want Brexit (and there are very good arguments), then go with what the majority want.

          And there are times when the time would be right (or better than now). Such as when we’re riding the wave of a boom, with our deficit paid off. And using the time, waiting for that, to plan ahead for Brexit, and making sure you have a strong leader in place in carry everything out.

          In business, you have to get all the conditions as right as possible before embarking on some new business enterprise or company. You might have a great idea, but get some of those conditions wrong, you’ll flounder. Similar for running a military campaign. And similar for something as controversial and complicated (‘moon landing’ and Brexit).

          This is just pragmatism, and bog-standard common sense! I just find it hard for people to dispute this approach. But i might be wrong, and open to correction.

          1. The Prangwizard
            September 28, 2017

            Has you not realised the EU cannot be reformed, but I suspect you and the others who say it know only too well it is not possible. Something of a ‘cheat’ to keep saying it.

      4. zorro
        September 27, 2017

        Oh come on Ed, be honest?! There would never have been a good time for Brexit in your opinion surely. Your advocacy is rather lukewarm and in name only. You always seem to point out failings and never any positives, It is Brexit which will be the catalyst to allow the UK to improve its economic performance and be far more flexible in approaching economic policy in the future. I can clearly identify several occasions where our following/shadowing of EU policy has led to economic downturns for the UK where a more sovereign economic policy would have avoided those pitfalls.


        1. Ed Mahony
          September 28, 2017


          My approach is entirely pragmatic. I’m not like Ken Clarke who just focuses (essentially) on remaining. And I agree with so much of what Brexiters say (in particular, Lord Dyson – however, i don’t think Brexit would be good for the country overall, although it might be good for him). Overall, i think it’s better we remain in the EU (but as long as we try hard to get it reformed for our benefit and Europe – purging it of its political power).

          There are lots of comments of mine here supporting Brexit once we had the referendum result (although i still favoured remain-but-reform) but i wanted to unite behind the country to make things work. All that was fine until Mrs May’s disastrous election result (and an election result which I can only foresee getting worse with time). A big project like Brexit requires a strong leader with vision. That’s lacking. It’s like charging into battle with a general whose forgotten his glasses, has just drank half a bottle of whiskey, and can’t remember which side of the horse you get up on. I’m being facetious. But you get my point.
          And you only charge having done as much military planning as possible, and ensuring that your artillery are fully equipped for the battle.

          1. zorro
            September 28, 2017

            The EU – purging of its political power?!? But THAT is the whole idea of the Europaische Union – a single political power in Europe. We have had no chance of changing that over 40 years, and what about their plans for the future? They would never listen to the UK, it would be a total waste of time akin to tilting at windmills!


          2. Ed Mahony
            September 29, 2017


            ‘it would be a total waste of time akin to tilting at windmills!’

            – You might be right .. Part of me says it’s possible, on the other hand, we do need a leader to implement the radical reform and that’s lacking.

            (But we could at least have a proper debate about it at a national level!)


          3. Ed Mahony
            September 29, 2017


            Nothing particularly exciting will emerge from Brexit (or remaining in the EU without reform for that matter). Except lots of extra stress for the next 20 years.

            Oscar Wilde says we are all in the gutter but some of us are looking at the stars. Winston Churchill looked at the stars (metaphorically-speaking). Sir Francis Chichester looked at the stars (metaphorically and literally-speaking).

            Extraordinary things are possible. I’d love to see people such as John Redwood and Ken Clarke come together to try and reform the EU. Mr Redwood with his particular insight into the EU and with his skills, talents and experience. And Mr Clarke with his. They would be a formidable team. It would be very exciting. It would be like looking at the stars!

          4. Ed Mahony
            September 29, 2017

            Why is it that human beings have to take polar positions so often? Why can’t there be more convergence of views? I think people think that giving something up is being a loser. But it’s being a winner. When you give up your independence to your wife, you’re gaining, not losing. You’re really being a winner (great sex, great love, children and family in general).

            Why can’t we have more convergence between Leavers and Remainers? To marry what is best between them and discard the rest. Instead of one having to be completely right. And the other completely wrong? And we could have what most people really want in the UK: a reformed EU working best for us and Europe, with the fruits of prosperity, peace and security.

          5. zorro
            September 29, 2017

            Your first mission is to get Juncker/Guy V to move a millimetre! No chance… unless you pay them and offer lots of clarification for years and years and years……


          6. Ed Mahony
            September 30, 2017


            ‘Your first mission is to get Juncker/Guy V to move a millimetre! No chance… unless you pay them and offer lots of clarification for years and years and years’

            – Why can’t our political leaders go straight to Merkel and Macron (over essential structural EU reform as opposed to negotiating Brexit). They are the ones with the real power. Not Juncker and Guy V.


    3. Turboterrier.
      September 27, 2017

      Narrow Shoulders.

      You use two words in your entry today that I really do believe is in the perception of a lot of us are barely understood by the majority of today’s politicians.

      Waste and Quality

      They might be talking and listening but they sure ain’t hearing what they are being told by the electorate.

      When you do not address waste in your daily operations and throw money at it, all you do is create even more waste.

      As been said many times by our host it is all about working smarter not harder.

    4. Derek Henry
      September 27, 2017

      Why do you want to bring the deficit down ?? It does not and never has operated like a household budget.

      John is bang on the money here and nails it.

      The actual accounting between HM Treasury and the Bank Of England shows very clearly that ….

      The government budget deficit is the private sector surplus = Everyone’s savings to the penny.

      If the budget deficit becomes too small or even worse becomes a budget surplus. Then the private sector holds a deficit. Hence, why private debt becomes a huge problem.

      John is absoloutely correct to highlight this. It’s such a shame that other Tory MP’s and more of the public don’t understand this.

      1. Narrow Shoulders
        September 28, 2017

        Mr Redwood is looking for the banks to lend more money created out of thin air and collect interest on it.

        That merely inflates assets and delivers returns to those creating or holding money.

        Growth is not the be all and end all.

        Less growth, fewer people and more stability.

    5. BOF
      September 27, 2017

      Quite right N S, the public sector is far too big, too wasteful and creates no wealth.

    6. Peter Martin
      September 27, 2017

      “The quickest way to get the deficit down is to control government spending and waste’

      No-one wants government spending to be UN-controlled. And no-one wants wasteful spending. But I sense that you really want to cut sensible spending too.

      If Govt cuts its spending unnecessarily it also cuts its own income as the economy slumps and tax revenue falls. The same with tax increases. Raise taxes too much, the economy slumps, and tax revenues fall.

      If tax revenues fall the deficit doesn’t reduce.

      1. Narrow Shoulders
        September 28, 2017

        I am not looking to cut sensible spending Peter but we may have different ideas of what constitutes sensible spending.

        Defence, selected welfare and pensions, education, law and order, small government administration, transport, utilities and selected infrastructure projects.

        All locked down with targets and proper tendering which does not exclude small deliverers.

        1. Peter Martin
          September 29, 2017

          No mention of health?

          I agree that we can have a successful economy with greater or lesser amounts of public spending. It’s a political choice. There no real reason why a public sector of 40% or even 50% of gdp should be better than 30% or vice versa.

          We somehow have to decouple that from the question of deficits and debt. The UK economy has always run deficits for as long as anyone can remember. Even Margaret Thatcher ran them. The US economy is no different. So some new thinking is needed.

          From a right wing perspective you’ll need to argue for substantial tax reductions so we all can then afford to pay private insurance health premiums. As anyone with any experience of the US system knows, they aren’t cheap. 1p off income tax isn’t going to be quite enough!

          1. Narrow Shoulders
            September 30, 2017

            @peter from a dogmatic perspective I would advocate that health and many other public services should be paid for at the point of use rather than out of taxation. The charge to the user determined by earnings band. When users pay service improves and only required services survive.

            I accept that will not happen but health was left from my list in error. But my health service would be unrecognisable to the behemoth we have today. There would also be tax breaks for private insurance rather than income and insurances tax charges.

  14. John S
    September 27, 2017

    Rising debt still bothers me. There are still too many worthless jobs in the public sector and too much inefficiency, particularly in the NHS. I can give a specific example in another sector. Someone I know has a farm shop which is visited regularly by two Environmental Health Inspectors. They spend about 20 minutes looking round the premises and then go into an office on his premises for the next two hours, writing their report. He has a clean bill of health each time, so why can’t they cut and paste from their previous visit? These public sector employees are little better than parasites.
    Their is also a woman employed by Norfolk CC who has had 100 days of sick in 2 years. One excuse was that she was depressed because she had fallen out with her daughter!
    This would never be allowed in the private sector.

  15. Ed Mahony
    September 27, 2017

    What do people here think about the US imposing a hefty tax on the C-Series jet made by Bombardier and the effect of this on Bombadier in Northern Ireland?

    Can we really trust the Trump admin to give us a fair trade deal? Or will they try and put America first at every opportunity? What do you think?

    1. Ed Mahony
      September 27, 2017

      I can see the Japanese and Chinese governments queuing up to screw us after America does, in any future trade deal, especially the Japanese who are not too happy about Brexit. And they can do so because, alone, outside the EU, we’ll be like small fish swimming in a sea of sharks (America, Japan and China).

      1. NickC
        September 27, 2017

        Ed, Yet above you said: “It’s not Brexit I object to . . . “

        1. Ed Mahony
          September 27, 2017


          My primary position is to remain in the EU but just importantly that we do our best to reform the EU for our benefit (in particular purge the EU of its political power over nation states). Not because I love the EU but for reasons of economics and security.

          My secondary position is support for Brexit (since the majority voted for it and there are very good reasons for it) but I find it hard to stomach that the referendum was held when our country still has a large deficit and that no real planning was done for something described as complicated as a ‘moon landing.’

          That’s what Conservatives are best at or meant to be: paying off deficit and planning for things. Not so now. We’ve made a priority of something (Brexit) that should come after paying off our deficit, and that we should have planned properly for it. We haven’t. Plus there’s a lack of leadership. All goes, fundamentally, against good, British, Conservative common sense.

      2. Mark B
        September 27, 2017

        The 5th Largest economy is not small.

        1. Ed Mahony
          September 27, 2017

          I never said it wasn’t. But it’s relative. If you’re a prize bantamweight fighter and you take on Mike Tyson in the ring, doesn’t matter how good you are, you’re going be to knocked out with the first blow in round 1.

      3. zorro
        September 27, 2017

        Again, another negative post from someone who claims ‘not to object to Brexit’….. What about how the EU might try and treat us with this Napoleonic style Continental system when the computers supposedly say no?


    2. Denis Cooper
      September 27, 2017

      I think this is happening while the UK is still in the EU and while the latter still has the responsibility not only for our arrangements for trade with the US but also for deciding whether any state aid proposed by our government is acceptable.

      I also think Theresa May needs to take more care about publicly trying to sort out disputes over our trade outside the EU when it is known that the legal competence to do that still rests with the EU and not with her and her UK government.

      I cannot say how the US government privately reacted to her diplomatic advances on this dispute; they may have simply dismissed them out of hand as not within her legal province, and if so that will continue while we are still in the EU.

      1. Ed Mahony
        September 27, 2017

        Wha’ ?

        Come on Denis, you’re kidding yourself.

        And if not, then why is May and Fallon trying to hit back so hard, with Fallon threatening Boeing. And the Wall Street Journal describing it as, ‘Why is Boeing picking on the little guy? Because that is how you stay big and dominant.’

        It’s much easier to pick on a country on its own that a group of countries working together. It’s not rocket science. It’s street-wise common sense.

        1. Denis Cooper
          September 28, 2017

          I really don’t know who is kidding whom or why.

          I do know that while we have been in the EU it has run our trade and state aid policies for us, and I do know that Theresa May still has no legal right to launch a trade war against the US as imagined by the Telegraph today:

          And nor do I assume that US law grants the President the arbitrary power to intervene on a specific trade dispute, however well disposed he may be towards the trading partner in question.

          You seem to have overlooked these realities.

        2. Hope
          September 28, 2017

          You are confused Ed. If it were a common market as sold to us no one would object because it would be a international agreement between ibdividual sovereign states i.e. A buying club of small countries to compete with larger countries. Not. Supra national agreement to create a superstate where countries are taken over without a say.

          The EU project is political not economic. The economic blurb being a ruse to pacifify the masses. You need to rethink and Dennis is spot on, as always.

          1. Ed Mahony
            September 28, 2017


            I never said i loved the EU!
            I’ve said time and time again the EU needs reforming, badly. To be purged of its political power.
            Whatever you think, most Brexiters would support remain in the EU if it was radically reformed as I support.
            Only a small percentage of people are either completely for or completely against the EU. That’s the reality!!

    3. Excalibur
      September 27, 2017

      If, as has been reported, Bombadier is selling the aircraft to Delta at below cost because of government subsidies, then Boeing has a case.

      I read somewhere that it would cost Northern Ireland about 400 million pounds a year if the Bombadier project is cancelled. As we have just handed them ten billion pounds, they are still handsomely in profit.

      Bombardier now needs to sell its aircraft elsewhere at a competitive price. I do not think this will influence President Trump in his decision to give the United Kingdom a preferential trade deal.

      1. Ed Mahony
        September 27, 2017

        ‘If, as has been reported, Bombadier is selling the aircraft to Delta at below cost because of government subsidies, then Boeing has a case’

        – What, and you think Boeing is faultless, overall, themselves?
        This isn’t about Boeing or Bombardier but about politics and Donald Trump enacting on his manifesto, ‘bringing back jobs to the US’ (albeit stemming from a flawed, protectionist economic policy).

        1. stred
          September 28, 2017

          Outside the EU we could have threatened to put a tariff on Boeing aircraft because of their military orders allowing them to use factories for commercial aircraft, The EU will do nothing, as they are selling Airbus and would like to take wing building back from the UK. We could always get Bombardier to pay back the state loan and transfer it to a bank at zilch interest rate, then the Boeing objection would be invalid. Unfortunately, the civil service is working for the other side.

          1. Ed Mahony
            September 28, 2017

            ‘Outside the EU we could have threatened to put a tariff on Boeing aircraft’

            Technically, you’re right. But politically it makes no sense at all, when you’re trying to create trade deals with the US, having just left the largest economic market in the world to which you export 40+% of your goods.

            Whatever you think about the single market, it’s really important for lots of business here in the UK.

            And all i am saying, is remain agile/flexible and pragmatic in your approach to Brexit (i agree with a lot of Brexiters about Brexit). Not ideological with doses of wishful thinking.

    4. MickN
      September 27, 2017

      You mean what do I think of an elected leader of a country putting his own people first? I WANT ONE !!!

      1. Ed Mahony
        September 27, 2017

        ‘You mean what do I think of an elected leader of a country putting his own people first? I WANT ONE !!!’

        – So do I. But that doesn’t mean you leave a large economic area to try and do trade deals with someone whose going to try and bite your ass if he can like he’s trying with Bombardier and jobs in N. Ireland for jobs back in the US.

    5. Prigger
      September 27, 2017

      What makes you think America is not justified in its accusation that Bombadier has received unfair financial and infrastructural support from the Canadian and British governments? Have you read or heard any detailed arguments to the contrary?
      Trump and America are not part of Canadian and UK social security systems

    6. Peter Parsons
      September 27, 2017

      Looks like the UK government’s response may include banning Boeing from future contracts. The post-Brexit poster child for future trade relationships is going well…

    7. acorn
      September 27, 2017

      The USA is the most protectionist State, even before Trump. Slapping 200% tariffs on stuff is par for the course. BTW, the EU, in the same position would only impose import tariffs to equalise import prices with domestic producers.

      The EU understands there is always a trade off between resilience and efficiency to get a sustainable cohesive economy, that has low-coupling with the rest of the world. The UK prefers to go for the cheapest; domestic or imports. Being “globalist”, it treats domestic and foreign suppliers as market competitors and cares not which goes under.

      The US military is the main subsidiser of US industry. The Pratt & Whitney engines on the CS100/300 are a game changer in geared fan engine design. NASA did a lot of the development work in its super high tech facilities. Who funds NASA???

      1. Ed Mahony
        September 27, 2017

        Well just warn Liam Fox about this, next time he hops on a plane to the US, exploring the possibilities of great trade deals with the US.

  16. ChrisS
    September 27, 2017

    This should be a lesson to McDonnell and Corbyn, one which they will ignore, of course.

    If even a so-called Conservative Chancellor can hit sectors of the economy close to the heart of its supporters, heaven only knows what the Marxist shadow chancellor would do to them !

    We seem to be in a kind of Japanese-style situation as far as the older generations are concerned. People of working age are saddling themselves with debt, particularly car rental schemes, and the older generation are not spending the cash they have accumulated. In particular and unsurprisingly, they are not moving house and the excessive additional taxes introduced on the Buy To Let sector are hitting house prices .

    It all comes back to Government spending. While Government continues to demand large sums to waste, taxes have to go ever higher to pay for it.

  17. agricola
    September 27, 2017

    I am not qualified to make any sensible comment on todays subject, so I will refrain.

    The most pressing subject is the so called EU negotiation. I describe it as such because it does not have the appearance of a negotiation from where I am sitting. Only one side the UK appears to be doing any negotiating. The EU merely states its position and awaits our agreement to it. The Donald Tusk visit merely confirmed this, the EU does not intend to budge one inch. I would advocate giving them further breathing space to consider the implication of what they are doing. If it is effectively nothing then they need to be told that they are wasting our time and we should break off. The most important aspect of this is to plan in depth for a no agreement, trade on WTO terms situation so that come 29th March 2019 we are ready to go. We can provide our own solutions to citizens rights and the Irish border.

    Remoaners make it out to be a cliff edge, which it would not be. All our trade with the rest of the World is on a WTO basis. All these remoaners have created in the minds of the EU the idea that if they sit tight on their demands we will tire and give in. A dangerous piece of treachery.

  18. Epikouros
    September 27, 2017

    Politicians, experts and vested interests are more interested in running a country in ways that they perceive are in our best interests based on their ideas, dogmas and that which will further their self interests. Mostly from good intentions not always but far too often with poor results even inputting unwanted damaging side effects into society and the economy. We are not happy with this and show our distaste either at the ballot box or by protest sometimes violently in the hope that the right rulers and decision makers are put in place so that all results turn out as intended.

    Unfortunately society splits into factions all having different ideas of what they wish to achieve and how. Depending on which faction is dominant depends on the the rulers and decisions makers we are saddled with. The more left leaning the dominant faction the more incompetent are those put to govern us. The right do predominantly better but are far from perfect as the likes of Theresa May and Phillip Hammond currently prove. The answer of course is to not to allow those who rule over us and their agencies the considerable amount of power, influence and means of intervention that they currently posses.

  19. William Long
    September 27, 2017

    Unfoortunately the current Prime Minister and Chancellor have made it abundantly clear that they are not interested in enterprise and do not understand that growth can only come from a market place that is encouraged by Government action and not impeded by intervention, complication and wasteful state spending. We badly need a Chancellor who has the vision and character to stand up to the Treasury and start the process of simplifying the Tax system instead of allowing it to get ever more complicated. The Treasury will of course oppose that tooth and nail because a simpler system will mean a comensurate reduction in the need for the services of its minions.

  20. Peter
    September 27, 2017

    The housing market is grossly over inflated anyway.

    In London rich foreigners use it as their overseas safety deposit box. Many don’t even bother to use the apartments they buy.

    The trouble is many people see no other alternative for their savings.

    Cheap housing credit is not needed.

  21. James Neill
    September 27, 2017

    There would be no need for more credit tightening if everyone was acting responsibly and taking credit only when needed and for important reasons like business expansion etc etc. But in this country unfortunately some people are not happy unless they are driving the latest flash car irrespective of the cost or of their own circumstances for paying back the loan and that is partly why we have this huge debt around our necks going forward. The Chancellor as is the Governor of BoE are to be rightly concerned and to put the brakes on.

    On another point more tax for the government is just more money for them to waste..HMRC please note.

  22. A different Simon
    September 27, 2017

    Transaction taxes like stamp duty are clumsy and damaging .

    They should have been replaced ages ago by annual taxation on residential land as proposed by Adam Smith with his Annual Ground Rent and a reduction made to treadmill taxes like income tax .

    This would have levelled the playing field between BTL speculators and owner occupiers .

    The fact is that *most* flats and houses were already massively overvalued on a fundamental basis , i.e. the net present value calculated on discounted future net cash flows from renting the property out were much lower than the current purchase price .

    Given BTL at current purchase prices did not make sense for the rents it could generate , the only way it could make sense was capital appreciation …. of already massively fundamentally overvalued houses .

    I don’t like Spreadsheet Phil but he may have spared millions of potential latecomers to the BTL party large losses and wrecked retirements .

    Perhaps people …….. will be unable to unload their illiquid assets when it all goes to pot and will be left holding the bag after all .

  23. alan jutson
    September 27, 2017

    Higher and higher taxes will eventually kill the goose …..

    Of course we need some sensible financial controls, but too much tinkering, short term planning , and poor fiscal control over spending will eventually wreck the productive parts of our economy.

    How long before we get a complicated tax system on electric car fuel on charging points at home.

    Will we need two separate meters, one for the car and one for domestic use, because somewhere somehow the Chancellor will have to make up for the tax demise of petrol and diesel receipts.
    How will that then effect the new so called progressive clean car industry.

    The problem with most government policy is the goalposts are moved too often, that long term planning becomes a farce.

    1. Lifelogic
      September 27, 2017

      Indeed pensions are long term and look at the endless rule changes and absurd complexity there thanks to dopes like Osborne.

  24. Iain Gill
    September 27, 2017

    Sounds like boom and bust economics with eyes off the fundamentals

    Fundamentals like our need to maintain our world leading intellectual property, and protect it from theft

    Fundamentals like protecting our borders

    Fundamentals like a coherent description of our place in the world as a high cost base economy, which cannot include a race to the bottom

    Fundamentals which include simplified tax and benefits regime, and lower cost public sector

    Fundamentals like handing power over to individual citizens in many more parts of their lifes and allow their buying behaviour to force improvements in standards of service provision

    Maybe we need 5 years of Corbyn disaster to force the emergence of a sensible modern Thatcherite party instead of this thinly disguised alternative version of the liberals

    Maybe we need some radical improvements to political candidate selection to stop the overwhelming swamping of the system with people from a very narrow section of society and world view

    We surely cannot go on like this, its ridiculous

  25. Derek Henry
    September 27, 2017

    Brilliant John !!

    And If I may add very brave of you to mention this. Well done and I’m very proud of you for doing so !

    For example….

    I’m the monopoly issuer of the £ and I can create £’s any time I choose to do so from thin air. So taxes are worthless to me I only collect taxes to destroy high powered money to control inflation so that we do not spend more than our economic output. I spend first and collect taxes later as I can’t do a reserve drain without doing a reserve add first.

    If I run a balanced budget with you and give you £100 but then tax you £100.

    How much can you now save and spend in the economy ?

    If I run a budget surplus with you and give you £100 but then tax you £150.

    How much can you now save and spend in the economy ?

    If I run a budget deficit with you and give you £100 but then tax you £30.

    How much can you now save and spend in the economy ?

    It’s why we’ve ran budget deficits for over 300 years.

    This also holds true in an open economy because in a floating exchange rate system you need a buyer and a seller or the FX transaction would fail. If someone like China wanted to move their £’s back home to change them into Yuan.

    Then they need other people wanting to change Yuan into £’s or the FX transaction would fail. So the £’s never leave the BOE all that changes is who now holds the £ in the reserve account at the BOE.

    John is also correct to say that a budget deficit can become too big. Because too much saving by the private sector ( surplus) means goods and services do not get sold which can cause a huge fiscal drag and unemployment.

    Full employment is the answer and the deficit will take care of itself and will be whatever it takes to reach 2% unemployment rate.

    Reply It is correct that all the sector surpluses and deficits in an economy sum to zero. It is too simple to say a government deficit must be offset by personal saving – there is also the overseas sector and corporate sector in play to complete the sum

    1. Ed Mahony
      September 27, 2017

      Why can’t we keep things even more basic by focusing on the deficit first, and then focus on Brexit? Not the other way around.

      And why haven’t we spent more time researching and planning for Brexit instead of diving into it?

      And why do we have to be so radical in leaving the EU? Why can’t we try and reform the EU so that it works best for us and Europe?

      Seems to me that the whole Brexit approach is heavy on ideology and light on common sense.

    2. acorn
      September 27, 2017

      Sector Flows Quarter 1 (Jan to Mar) 2017 £ billion.

      Households and NPISH -17.5
      Central government -4.6
      Local government -2.9
      Financial corporations -2.6
      Public corporations 0.5
      Private non-financial corporations 14.5
      Rest of the world 17.3

      You can see from above sector flows. The rest of the world figure is Pounds Sterling that have left domestic circulation in the UK economy. The private non-financial corporations are stashing their cash and doing nicely thank-you.

      The two government deficits in MMT terms, are too small for the state of the economy; so, in simple terms, the Household sector can be said to be paying for the imports, with Pounds Stirling they have exported, to the rest of the world.

      Remember, that taxes; domestic private sector savings and payments to the rest of the world for imports; take spending power out of the domestic economy which slows it down.

      You may get to read my yesterday’s post which has a good link in it.

    3. Caterpillar
      September 27, 2017


    4. Derek Henry
      September 27, 2017

      Very true.

      It’s called our sectoral balances and I know it very well. It’s all still sterling savings

      “Sterling savings” of the external sector is part of domestic private sector “Sterling savings” that makes up the deficit to the penny.

      The Sectoral balances all add to zero.

  26. Ralph Musgrave
    September 27, 2017

    The basic reason for tightening is that inflation is above the 2% target. Don’t see how anyone can argue with that reason.

    1. Roy Grainger
      September 27, 2017

      Though one could, of course, argue about the 2% target and the thin air from which it was plucked.

    2. Peter Martin
      September 29, 2017

      We need a better method of measuring inflation than the CPI. At present, if UK domestic prices are stable and the pound is falling we have inflation. If the pound is rising then we have deflation.

      What really matters, and all we can reasonably expect to control, are UK domestic prices.

  27. MikeW
    September 27, 2017

    Agreed.. the fastest way out of this huge deficit pile is to grow ourselves out..and that would be great if only we could guarantee that by opening the purse strings we were not going to increase the amount of debt just who is going to police all of this going forward..if not Hammond then maybe john mcdonnell.. but I don’t think so..the whole way of looking at things in this country is for short term gain while ignoring the longer term considerations.. it’s all about selfish selfserving greed, power and grandstanding. In fact i would go further and say that we are not fit as a people to govern ourselves anymore in a responsible way..Boris is still going on about 350 million, fake news, when everone knows it’s a big lie but he doesn’t care, is not embarrassed, McDonnell on the other end of the spectrum with Corbyn are spinning fake news just the same..tje whole thing is a disgrace.. so better we stay in the EU where we can have some oversight by outsiders otherwise we are sunk, lost, gone as a society.. now what’s that you were saying about relaxing the credit controls? Jeez nearly time to emigrate

  28. Fed Up and Angry
    September 27, 2017
    1. Duncan
      September 27, 2017

      I am speechless at this. To say that I am exhausted, disappointed and empty at these two (May and Hammond) in charge of the party is an understatement

      Unfortunately for the British people even so called Leavers on the Tory backbenches appear remarkably sanguine about this pathetic excuse of a leader.

      This is a party who dispensed with one of their and indeed our greatest ever leaders in MT and now accept that May is the best we can do

      I sense a disaster on the horizon

    2. Denis Cooper
      September 27, 2017

      She has been taking bad advice from civil servants, including the one mentioned in that article. It started even before she actually became Prime Minister.

    3. stred
      September 27, 2017

      Something got lost in translation. Click the picture of Macron down the page to discover his list of expensive projects for his empire.

    4. Monza 71
      September 27, 2017

      It is completely pointless calling for Mrs May to resign or be replaced.

      Whatever we feel about her leadership, there is no way that the party can cope with a leadership contest lasting up to three months in the middle of the Brexit negotiations.

      The inevitable calls for a General Election would be very hard to resist, especially with Momentum’s thugs ready to take to the streets in the event of a change of PM.

      Fortunately Conservative MPs are wise enough to realise that a challenge from Boris or anyone else would be a very high risk enterprise and the press would go out of their way to make Brexit look even more of a mess than they are making it look at the moment.

    5. Chris
      September 27, 2017

      The very recent YouGov poll exposes just how disastrous at handling Brexit Theresa May is perceived to be. From Westmonster:
      Just 2% rate government as handling Brexit ‘very well’. YouGov’s latest poll shows just 21% now approve of the government’s handling of Brexit, down 3% from earlier in the month.”

      Westmonster site gives link to YouGov poll.

      1. Monza 71
        September 27, 2017

        Hardly a surprise, is it ?

        David Davis has almost everyone in the media, every one of the opposition parties, many Conservative Remainers and Brussels all lined up against him. All are being dismissive of his activities and many are spouting bile.

        The biggest problem will come when he has exhausted every avenue of negotiation and has to announce that no “good deal” is possible.

        I suspect he has known this would be the inevitable outcome all along, just like our host, the other “Bastards” and most of us posting here.

        Given the political situation Mr Davis has no option other than to carry on “negotiating” until the talks grind to a standstill.

        Unfortunately the blinkered Remainers are desperate enough to accept any deal on offer so there will then be the most almighty row.

    6. Bob
      September 27, 2017

      The most surprising thing to me is that I’m not surprised about this.
      I always suspected that the fifth column was rooted in the heart of Westminster.

      Mrs May will Remain leader as long as her party wants her to, and they seem to be quite relaxed about her actions so far.

      1. Chris
        September 27, 2017

        ..and this of course is the problem, Bob, as you say. I wonder if Cons MPs actually realise that Corbyn is a real possibility. May and team have failed us, I believe, and on top of that May with Hammond and Damian Green are so “grey” and “dull” and do not inspire anyone. They seem to have not personality, enthusiasm or vision, but instead are quite content, apparently, to have us shackled to the EU, in one form or another. Corbyn is winning because he is fervent about his vision, he doesn’t care how outrageous his actions (or those of his followers) are. In short, he is on a mission. May et al symbolise drudgery in my mind. So, time for someone who can light a spark and is passionate about what he believes in. Boris has faults but he could do it, and so could Rees-Mogg. He has quite a following amongst those that the Cons government is not reaching at the moment. There is huge potential there. However, there is not much time, and this is what the Cons Brexiter MPs do not seem to appreciate.

    7. Gary C
      September 27, 2017

      To obtain votes you have to show a level of trust, if this is true the Conservative party may just as well not bother to fight the next election.

      To deceive the electorate in this manner is unforgivable.

      I am fast loosing faith in the party I voted for, this would speed up that loss considerably!

  29. Bert Young
    September 27, 2017

    Hammond’s record as Chancellor is shocking . His decisions on property tax have done enormous damage to all levels of buyers and done nothing to aid the dwindling reputation of the Conservative Party . Why is he still in office ? . If Theresa had shown tough and determined leadership from the word go some – if not all , of his decisions and influence would not have happened .

    Add to his poor record is his publicity on Brexit . Businesses have been lulled into thinking that they can slowly cruise towards the breakaway ; both the CBI and the BBC ( recipients of direct funding from the EU ) have further encouraged this view and the speech Theresa made in Florence `has cemented the fact that ” going slow ” is now Government policy .

    I feel terribly let down by these tactics and I am not convinced we will benefit from further negotiations . The EU want and need our money , they know that it will not be possible to make up the loss of our contributions by imposing extra demands on Germany and the other better off countries ; it heralds the end of the Union .

  30. Derek Henry
    September 27, 2017

    Hammond and Osborne operated the fiscal levers by imposing self imposed constraints on themselves. Hamond should try taking the straight jacket off. Then everybody would be better off and the private sector would invest more and save less.

    Hammond and Osborne does not and never did understood Keynes.

    People really like to throw bombs at “Keynesian” economics because it’s become synonymous with big government and unfettered spending. The really common (and incorrect) understanding of Keynesian economics is that people shouldn’t save and should just consume until they are so fat that the economy is at full employment. The other (slightly less incorrect) version is that the government should help these people get as fat as possible by spending money all the time. This is totally wrong and Keynes was much more nuanced than that.

    Keynes was really specific about how he thought the economy worked. Basically, entrepreneurs and businessmen spend money on things that make our lives better (investment spending) and we should hope that consumers demand these goods and services so much that the businessmen feel comfortable hiring all the workers who want to work. And if, for some reason, the economy operates below capacity then the government can tinker with taxes, interest rates and spending to push the capitalists over the top. And if capitalists and consumers get out of control and spend in excess of productive capacity then the government should step on the breaks in a countercyclical fashion so things don’t get out of control. This is Keynesian econ in a nutshell and it’s a very capitalism friendly theory. It’s not socialism at all.

    None of that is super controversial. Entrepreneurs are the engine of growth and we should hope they spend and invent and hire, etc. The government’s involvement is a little more controversial, but operating in a countercyclical manner isn’t that crazy in my view. It just kind of makes sense. But one thing we should definitely agree on (and one thing Keynes was 100% right about) was that we need and want businessmen/entrepreneurs to spend.

    Anyhow, I feel like it’s pretty important to get this right in the current environment because this is precisely the type of environment that would have worried Keynes. While private investment has averaged 6.8% per year since 1950 the rate of change since 2000 has been just 3.4% and below.

    This is primarily the result of corporations spending far too little. So we see these huge cash piles building up at big firms and not enough of that cash gets piled back into the economy. For whatever reason capitalists just don’t feel very comfortable spending on future production (investing) at a rate they once did. And we’ve seen that the government has an extraordinary amount of flexibility in this environment without causing high inflation. So it makes one wonder – if people understood Keynes a little better could we do something like cut taxes or spend more and bolster private investment in a way that might entice capitalists to invest more? but it seems like the problem isn’t just that government officials misunderstand Keynesian economics, but economists seem to misunderstand it as well. And while Keynes would have perfectly understood this environment it seems like a lot people use his name to scare the world about government insolvency in a world where the insolvency and inflation never arrives and growth underperforms…..And so here we are muddling along.

    The UK needs someone who controls the fiscal levers that understands this especially after Brexit.

    John do you not fancy the job ??

    Hammond and Osborne must be the 2 worst chancellors this country has ever seen. They’ll never reach their budget surpluses as it pushes the private sector into too much debt ( deficit). As Osborne quickly found out and had to change track.

    If they ever did achieve a budget surplus. Then it would be quickly followed by a recession. It makes no sense at all for the monopoly issuer of £’s to save £’s unless you need to control inflation and destroy high powered money by taking it out of the system.

    1. Mitchel
      September 28, 2017

      It was a feature of Osborne’s tenure that,to hide his ignorance,he avoided submitting himself to a serious forensic interrogator until the Andrew Neil interview during the Referendum campaign – in which he was slaughtered.

  31. Prigger
    September 27, 2017

    Our media have such bombed out heads and weird obsessions of condemning Trump that they are celebrating Trump’s defeat in his endorsement of a losing candidate in a race to the Senate from Alabama. Instead of Trump’s candidate , a man very much to the Right of Trump’s politics has been chosen instead.
    #We still pay the TV licence fee.

  32. Peter Martin
    September 27, 2017

    “There is no need for more tightening, and some need for a more balanced policy. ”

    Exactly. We Keynesians have been saying this for quite a few years now. The time for fiscal tightening is when the economy is overheating and its not exactly been doing that!

    We have problem in the housing market. Property is overpriced. But if it falls in value too quickly we’ll be in for a full scale recession. Even a depression. And guess who an what will be blamed ? It will be Brexit and all us Brexiters.

    So we cannot afford to give the Remainers the political ammunition which could derail the whole Brexit process. Government has to play its part to keep the economy buoyant.

    I’d just make the point that its not just about how much money Government spends. It’s also about where the money is spent. Too much spending in London and the SE of England could be inflationary. A little more spending in the depressed regions is unlikely to be.

  33. ian
    September 27, 2017

    The system is breaking down and becoming unhinged, the signs are everywhere. It not working for the poor because gov needs there money, also now ordinary people, nor public services, which most people rely on.
    Its going the way of communism, out of control or as one might say to lopsided, that what happens when policy is all one way, the globalist have over done it and, are now back into a corner. The fed will start QE again in the next year, as for interest rises, i think they will come to a stop. They running out of road.

  34. Denis Cooper
    September 27, 2017

    Off-topic, a very good article here today:

    “Macron calls for ‘sovereign EU'”

    I note that he refers to the Schuman Declaration of May 9th 1950, which the EU takes as its starting point, and which aimed for a pan-European federation:

    “The pooling of coal and steel production should immediately provide for the setting up of common foundations for economic development as a first step in the federation of Europe … ”

    “… this proposal will lead to the realization of the first concrete foundation of a European federation indispensable to the preservation of peace.”

    So that is what Macron wants, a sovereign federation in Europe to mirror the sovereign federation on the other side of the Atlantic, a United States of Europe.

    1. Monza 71
      September 27, 2017

      A sovereign federation of Europe with, of course, a French President……………….

  35. Denis Cooper
    September 27, 2017

    Off-topic again, this is not the hardest line:

    “… we will very soon need to assume that there will be no Brexit deal with the EU, and use the rest of the Article 50 transition period to actively prepare for that scenario. We should wait a few more weeks – perhaps another five or six – after setting a public deadline for the date at which we will start active preparations for a no deal scenario … ”

    Well, I think the government should have long ago started drawing up contingency plans for no deal, and should have made it clear to the EU that it had started to prepare for a no deal scenario, and should now say that unless the EU allows enough progress to be made this week then the UK will postpone the next round of negotiations until such time as the EU shows some signs that they wish to be more reasonable.

    Like, agreeing that in the next round of negotiations there will be four negotiating groups not three, the fourth being on our future trade relationship:

    1. acorn
      September 28, 2017

      Dream on Denis. The EU has got the UK by the short and curlies. The only people who can’t see that are brexiters. I have got Daily Mail readers on my patch who are throwing their cards on the table and heading for the bar.

  36. ian
    September 27, 2017

    Communism lasted for 72 years in russia, the fed has been going for a 103 years and, modern day globalism for 35 years so far, so as you can see this policy can go on for a lot longer as yet and, as you can also see the raise of gel new socialism party, it is just a sign that more people are falling behind or you could say, casualties of financial globalism.
    You live in a country that has raised a single persons job seekers pay by 4 pounds in 17 years to £ 73.10 a week, and pay the worst pension in western and southern europe to it people who have worked for the private sector of £ 122 pounds a week or £ 159 pounds a week. It would cost less than 350 million pounds a year to raise job seekers pay to 90 pounds a week

    1. Mitchel
      September 28, 2017

      The USSR was never communist despite what they called themselves and what we called them(it suited both parties to maintain the fiction).

      Lenin,who was a great pragmatist,abandoned-or at least postponed the idea very quickly-Russia would not be ready “for decades”was his view on emerging from the Civil War in 1921.

      In fact it was Gorbachev’s attempt to try again with socialism that caused the disintegration of the USSR as the empowered member states decided they preferred nationalism

  37. Prigger
    September 27, 2017

    Corbyn says at his Conference that the mayors of Manchester Mr Burnham and London Mr Khan were “key” in “bringing communities together” in the context of terrorist attacks. No they were complete and absolute failures or those attacks would not have and could not have taken place.
    The “key”, if there is one, is not to accept the idea that the nebulous so-named “community” should be in the plural. You cannot cut Beauty into bits and hope the parts will retain their essence. Though Corbyn understands this which makes his speech wholly offensive and deceitful

  38. Mick
    September 27, 2017

    The European Parliament is set to demand that the European Union’s top court retains its powers on British soil after 2019, in a resolution that could test the limits of U.K. Prime Minister Theresa May’s room for maneuver in Brexit talks.
    The resolution by the EU’s legislative body, which has veto power over any Brexit accord, will be put to a vote in Strasbourg next week and will seek to ensure that the European Court of Justice’s “jurisprudence is directly applicable and enforceable in the U.K. in order to guarantee the coherence and integrity of the EU legal order,” according to a document circulated to lawmakers.
    “ECJ must remain the sole and competent authority for interpreting EU law and the withdrawal agreement,” according to the paper, which outlined the main points of the resolution.
    Continuing application of EU law in the U.K. after 2019, when the country is set to leave the bloc, is among the thorniest separation issues negotiators must resolve before talks on a future relationship between the two sides can begin. While the bloc’s 27 remaining states have welcomed May’s “more realistic tone” in her Florence speech last week, they insist her concessions don’t go far enough, suggesting that prospects of starting trade talks as soon as next month continue to fade.
    Even though both the U.K. and the EU agree that a transition will be needed to cushion the impact of Brexit, the bloc’s terms for such an arrangement may trigger a backlash from U.K. government officials who have promised that Britain will regain its legislative sovereignty in 18 months.
    ‘We Will Leave’
    The “transition can only be envisaged under the full jurisdiction of the European Court of Justice,” the EU Parliament will say, according to the document obtained by Bloomberg. That stands in contrast with comments made by U.K. Brexit Secretary David Davis during a Sunday interview on the BBC: “I mean firstly in 2019 we will leave. We’ll come out from under the jurisdiction and the law-making of the European Union.”
    Until now the EU has refused all U.K. attempts to talk about the future until there’s “sufficient progress” on separation issues. May’s pledge to plug the black hole in the EU budget during a transition period could persuade European leaders to be more flexible by allowing talks on this interim phase to start before the divorce negotiations are completely finished.
    Michel Barnier, the EU’s chief Brexit negotiator, signaled on Monday that leaders at their summit in October might allow him to take the transition phase into account. “Partial links between divorce and transition might be explored” at the summit, according to the Parliament document.
    What part of on your bike don’t these muppets in Brussels understand, just try and control us when we leave, we will not be pushed around and told to lay on our backs to have tummies rub anymore

  39. Newmania
    September 27, 2017

    Don`t you think you have shoved enough Brexit problems into the future then ?. Monetary Policy has been on emergency ” save us form Brexit” mode ever since the referendum .
    This is slewing the economy form investment to consumption creating inflation and hurting savers.

    At some point you will have to explain why you felt it was worth hurting so many people . If you think Labour will fail to tell the word the mess you have created , think again, and they will be right

    1. Anonymous
      September 27, 2017

      Labour caused Brexit.

  40. Denis Cooper
    September 27, 2017

    I’ve just been watching my recording of the BBC’s “Daily Politics” over lunch, and there was Labour’s Barry Gardiner talking absolute rubbish about Brexit, and not just rubbish about policy but about factual, legal, details; and so I thought I’d have a look to see what the always vigilant rapid rebuttal unit in the Department for Exiting the European Union had to say about it, these days on twitter of course:

    And the answer is: NOTHING. Because of course there is no “rapid rebuttal unit”, ever vigilant or not, and there is no contradiction of the arrant nonsense being spread around by this opposition spokesman. Why not?

    Whatever lies, factual nonsense, garbage about Brexit may be disseminated by anyone goes completely unremarked and unanswered by the government department which is supposedly fighting our corner on Brexit, and the only explanation for that paradox is that those running the department are not actually committed to its stated objective, quite the opposite, and they are content to see it defeated by a propaganda war.

    1. Chris
      September 27, 2017

      My view is that they (Dept for Exiting etc) do not care, and that the reason for that is, as you say, that they are not committed. The fact now that is clear for all to see is that they don’t actually care if people have rumbled them. It is quite shocking, and yet it appears that Brexiteer Cons MPs (for the most part) stand back and do nothing, apparently.

    2. Chris S
      September 27, 2017

      I heard Gardiner too. Instead of supporting the Brexit negotiations in the National Interest, Labour are simply trying to score political points at ever turn.

      But then most of the Labour conference speeches and interviews have been based on lies and gross distortions of the truth.

      You only had to listen to McDonnell state categorically that he would take back in-house all the PFI contracts. An uncosted commitment, of course.

      The party were backtracking before he had even sat down – the following morning the shadow health spokesman had watered it down to “looking at” all the NHS PFI contracts to see if anything might be done.

      Shades of Corbyn’s election promise to eliminate tuition fees !

  41. PaulDirac
    September 27, 2017

    The buy-to-let marker was out of control, many young people blame it for the steeply rising cost of housing.
    The BOE warned against dangerous lending in the new car sector, and they are absolutely right there (if not much else).

  42. Chris
    September 27, 2017

    The condemnation of Theresa May and her government seems to be growing significantly, and of course the conference has given the fervour of Corbyn supporters a real boost. Increasingly there are remarks about May’s weakness in government and in her feeble efforts and delay in effecting Brexit. The wider party in government I have seen described as “….not fit for purpose. A bunch of lib dems with blue rosettes”.

    This really is extremely serious, but MPs seem unwilling to take the radical action needed to at least ensure Brexit succeeds, and also to ensure the survival of the Conservative Party. At the moment, I feel the government’s days, and the Party’s days are numbered, and Cons MPs have not yet cottoned on. What a shambles. I would go so far as to say that I believe that the electorate have been insulted by Theresa May and her government. The electorate deserves much, much better

  43. MikeP
    September 27, 2017

    If you have heard Corbyn’s speech today, it would be invaluable in the next few days if you were able to give us a thorough analysis of the number of untruths, misconceptions and pure fantasies he spouted.
    – there he was repeating a desire to abolish tuition fees (costly)
    – or the £100m per DUP MP rather than £1bn for Northern Ireland
    – being “on the threshold of power” (really? still needing another 64 seats, more than twice as many gained in 2017)
    – apparently now more people in poverty (I don’t believe this is so but if relative to the UK’s growing wealth anyway)
    – or claiming there was a Tory pledge to bring back fox-hunting (rather than have a free vote on it)
    We can’t let such blatant fiction to go unchallenged. Politicians claiming to be “ready for Government” shouldn’t build their prospectus on so many lies, unfunded promises and fabrications.

  44. BartD
    September 27, 2017

    Neither a borrower nor a lender be

    If you have not got it don’t spend it! – so save save save and then invest and live within your means

  45. Prigger
    September 27, 2017

    The BBC are now asking in its usual balanced manner three senior Labour politicians how good or bad Corbyn’s concluding speech. They thought it was brilliant which is news indeed!
    This balanced band regret however, he will take over a very weak economy.
    Oh calamity! Oh despair! Oh wicked world! How could you have smacked him so heavily in his stride to victory and so pitilessly??? All the people who would have hung on to his every word LIVE were in fact at work this afternoon or asleep before their twilight-shift or night-shift or having a couple of hours snooze after completing their day-shift. He does it all right but just can’t win can he. If only he had party members who knew the slightest about real work and the habits and behaviour of our glorious British working class!

  46. Chris
    September 27, 2017

    Well, well. If Arthur Scargill can see that Theresa May has betrayed voters…..For once in my life, I agree with him.
    Arthur Scargill compares Theresa May’s Brexit ‘betrayal’ to Neville Chamberlain’s ‘sell-out to Hitler’
    Arthur Scargill has compared Theresa May’s commitment to stay in the EU until 2021 to Neville Chamberlain’s appeasement of Hitler. The former union boss, who led the 1984 miner’s strike, accused the Prime Minister of “betraying” Brexit voters after she committed Britain to remaining in the EU during a two year transition period.

    He called on her to resign over her “act of treachery” and warned that voters “will never forgive her.”

  47. John
    September 27, 2017

    Yes, they are trying to make their scaremongering predictions come true.

    They are fighting against a positive economy trying to derail it.

    Pitty Treason isn’t taken seriously any more. Time will be the judge, they won’t escape the ridicule they deserve.

  48. Jack
    September 27, 2017

    Do we really have to wait until the Corbyn government to get genuine fiscal stimulus? Budget deficit is currently far, far too small if we want to hit 10%+ annual GDP growth.

    PS Lower interest rates cause lower inflation

  49. Prigger
    September 27, 2017

    The Conservative Party Conference 2017 is in Manchester 1st-4th October. Mrs May will be telling them what her achievements have been since the General Election and share out the pot of gold given to her by DUP Leader Arlene Foster for releasing her.

  50. mickc
    September 28, 2017

    Yes, this is right. However, it won’t happen.
    Corbynism has the wind behind it, and Labour will win on that agenda.

  51. Stephan Schmid
    October 3, 2017

    John Redwood, you’re either a demagogue or a fool. Answer.

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