I have been warning for two years that the combination of fiscal squeeze and tight money policy would slow our economy. So it has proved. Indeed if anything I am surprised that our economy has not slowed more. The global background is an additional reason for the weakness, with Germany slowing more than us and the USA less.
The USA has shown that the combination of rate cuts, liquidity provision by the Fed, and big tax cuts are delivering better growth than we and the other Main European economies are showing. That is why I welcome the new government’s decision here to increase spending on schools, the NHS and police. I also think we need some tax cuts soon, so individuals and families have more money to spend on their own priorities.
Those who write in to say I am too lax about the debts misunderstand the position. The government’s proposals are prudent and necessary. Excessive borrowing and spending on Labour plans would undermine confidence and be damaging. Faster growth will boost tax receipts and some of the tax rate cuts will bring in more revenue. After allowing for the state debt the Bank of England owns on behalf of taxpayers our debt to GDP ratio is fine. The QE debts we owe to ourselves so there is no net interest cost.
The latest GDP figures show we avoided recession last quarter and are growing at around 1% a year. We should aim to double that growth rate, which a sensible fiscal and monetary easing with the right tax cuts could do.
November 12, 2019
Good morning.
I am sick of hearing about GDP as if this was the only measure that ever mattered. What about the quality of life ?
If the UK is growing and we are still in the EU, then people from the EU will come here looking for work. This creates further pressures on our system and society. Pressures throwing more money at the NHS will not resolve.
The country is crying out for proper governance. The Conservatives have been in office for nearly 10 years and it feels as if New Labour never went away. Oh for a Conservative Party worthy of the name.
November 12, 2019
Me too, more GDP isn’t everything. I went for a holiday in the Spanish Basque country this Summer, and the people there were the personification of the saying ‘hard up but happy’. Strangers invite you to come and share supper with them. I cannot see that ever happening to Spanish tourists in the UK. The destruction of community and its replacement with an ‘up yours’ culture in Britain is something to be regretted.
November 12, 2019
you can put away your Basque flag now that you are back here.
November 12, 2019
Indeed. Read the Centre for Policy Study article on popular capitalism which should be required reading for all Tory MPs and the separate analysis showing massive levels of mistrust in politicians and then despair at much of the legacy of the last ten years.
November 12, 2019
I’d actually like to see a recession, accompanied by a reduction in population, maintaining and perhaps increasing GDP per person. First step though is a recession in government spending.
November 12, 2019
Can you tell us how you plan to reduce the population?
November 12, 2019
As the indigenous population fertility rate is below 2 then by stopping all immigration that will reduce the population. You didn’t think of that?
All immigration? We need immigrants with a population > 60 million? If so we are a very stupid people. Perhaps you will agree with that, Many will, even me.
November 12, 2019
I forgot the leavers from the UK – this will mean even more rapid depopulation.
November 12, 2019
Morning.
The hope was that the Brexit party might morph into at least a moderately sensible centre-right party, if only to give voters a genuine choice. No chance of that now; the Brexit party, AKA the auxillary Tories, are done. Perhaps some of the good people in it will come out and form a new party, but it’s difficult to see any new party gaining traction.
Democracy squeezes the people of a nation into one lumpen mass, and this lumpen mass then gets the politics it deserves. Either there is something profoundly wrong with democracy, or something badly wrong with the majority of people in this country (apathy, wrong-headedness, narrow self-interest). Whichever, the sensible minority are tyrannised by the masses.
November 12, 2019
Who knows after the election the TBP may morph into Britain’s answer to the CSU, centred in the North of England instead of Bavaria, socially and fiscally conservative that may occasionally help the metrosexual globalist Tories (the CDU)
November 12, 2019
Seems unlikely. Farage’s political ability cannot be underestimated. What he achieved, almost singlehandedly, was remarkable. People like that, leaders like that, are pretty rare. It would take someone with similar powers to even threaten the LibLabCon, let alone supllant them. And I sense that the appetite for real change is not sufficient. We are British. We’re not French. I might be wrong, but I think only economic collapse will create the conditions for a revolution in politics. (And no, I don’t believe Corbynomics could bring this to pass.)
November 12, 2019
We do not have a democracy with FPTP. Farage should have demanded the end of FPTP as his price for helping the Tories win seats
November 12, 2019
Never know if it is Here Here or Hear Hear!!
But anyway I TOTALLY agree with you.
Life is so miserable now.
November 12, 2019
Quality of life or even GDP per capita.
How do we make our daily dirge more bearable?
I hear no politician who speaks for me. I am again tempted by “none of the above”
November 12, 2019
Quality of life?
Have you compared rates of divorce, unwanted conception, STIs, drug dependency, crime etc. in the UK, with other European Union countries? We’re at the top of the League Of Shame old chap!
Other countries do rather better on pension provision, life expectancy, educational and healthcare outcomes too.
Yes, you are right. GDP based on a precaritised, frightened workforce is no credit to a country any more than is slavery.
November 12, 2019
Amazing that hundreds of thousands of people leave their European nations to come to the UK to live and work.
November 12, 2019
People pay large sums and risk their lives to get here when they would obviously be better off staying in France …
November 12, 2019
Edward2
Like they do in Germany , Austria, Switzerland Netherlands and the Nordics, even Italy from eastern Europe
November 12, 2019
That doesn’t alter the point I was making.
November 12, 2019
And thats without living in Cardiff.
November 12, 2019
“You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement. You are here to enrich the world, and you impoverish yourself if you forget the errand.”
Woodrow Wilson
November 12, 2019
As Dr Tim Morgan writes ….
If you were to believe official figures, British economic output increased by 11% between 2008 and 2018, adding £212bn (at 2018 values) to recorded GDP. This in itself is far from impressive and, since population numbers increased by 7% over that decade, left GDP per capita just 3.6% ahead.
Even these uninspiring figures flatter to deceive. Over a decade in which GDP has increased by £212bn, debt has risen by £890bn, meaning that each £1 of recorded “growth” has been accompanied by £4.18 in net new borrowing.
This, to be sure, is an improvement over the 2000-08 period, which witnessed a reckless, credit-driven bubble in which debt increased by £5.63 for each £1 of “growth”. But the UK economy remains excessively dependent on continuing increases in debt.
November 12, 2019
But the UK economy remains excessively dependent on continuing increases in debt.
Because population growth is driven by the low paid. This in itself should give pause for thought. Free movement can not work in a welfare state
November 12, 2019
If you remove immigration and inflation we have absolutely no growth.
Mass immigration is both Liebour and Tory answer to growth.
Never mind UK kids being bussed miles to school as Immigrants get priority at local schools. 3 months for a doctors appointment unless you are an Immigrant and are allowed to jump the queue.
Not to mention some of the ghetto areas and rough sleepers in our towns and villages.
Just keep spouting GDP figures.
Reply Since 2010 GDP growth is well ahead of population growth
November 12, 2019
That’s only because the economy tanked in 2009
November 12, 2019
Those figures seem to suggest that government borrowing does not, to any meaningful extent, create growth. Which suggests that if you just keep increasing government debt, eventually the debt will consume us with unplayable interest.
I thought all this government debt was supposed to be used for ‘investment’ to drive growth. It appears this is nonsense.
I will be interested to see if Mr. Redwood responds to your post.
November 12, 2019
He cannot, like a junky, the only way he keep the economy feeling normal is just one more hit which will eventually kill it
November 12, 2019
Tim Morgan further says (issue #158,11/11/19-“An air of unreality-degrowth and denial in the UK”):
“Even on the basis of official data,Britain’s financial assets ratio-a measure of exposure to the financial system-stands at more than 1300% of GDP.This compares with 480% in the USA and is a dangerous place to be as a GFC II sequel to the 2008 global financial crisis(GFC) becomes ever more probable.
As a result of the continuing addiction to cheap credit,most (83%)of the recorded growth in British GDP since 2008 has been a function of simple spending of borrowed money.
If the UK hadn’t joined in the pan-western(and now pan-global)debt binge in the first place,output last year would have been £1.63 trn,22% below the recorded £2.08 trn.
Like so many others,the British economy shows all the hallmarks of “activity” created artificially by the injection of credit.”
Precisely!
Reply Plenty of overstatement of the debts in this contribution. UK debt levels not out of line with other advanced countries.
November 12, 2019
JR just because other countries are debtoholic does not mean its a good thing for Britain.
November 12, 2019
Dame Rita,
Off to the gulag with you for incorrect thinking-it’s not “continuing increases in debt”,it’s “liquidity provision”!
November 12, 2019
Question:
£890 billion borrowed but £212 billion increased GDP. Where has the remaining £678 billion gone ? Who has got it ?
November 12, 2019
Surely that money is simply used to pay the bills. To pay the salaries of public sector workers, to pay people for turning up at the House of Lords for 10 minutes, to pay for the offices of former prime ministers at £160k p.a. each, to pay the grotesque salaries and pensions of senior council staff, to pay the gold-plated pensions of former public sector workers. It appears that borrowing money and using it to pay the wages/pensions/perks of the public sector does not increase GDP. It just puts future generations into debt.
Reply The government’s new rule, which it currently meets, is all current spending will be paid for out of taxation, not borrowing. Paying public sector employees money does boost GDP – as the value of their output in providing health/education etc. They then spend their incomes on private sector goods and services.
November 12, 2019
JR the global economy is slowing down and the UK will not be immune from that. So how are you not going to have to resort to borrowing (which you promised to stop doing in 2015 by the way) when the tax receipts start to decline?
November 12, 2019
‘They then spend their incomes on private sector goods and services.’
How much can they spend out of their massive salaries at their age? They already have houses, cars etc. I can’t see they will boost the economy.
November 13, 2019
Will they include all the money the government tip down the drain on saving c02 emissions and green wash as “investments” and capital expenditure or as what it actually is:- pissing tax payers money down the drain as the return is clearly non existent and negative?
Who will decided what is a real investment by government? They care not what they spend not what value if any they get in return.
November 12, 2019
The citizens have got it kzb. They keep saving it in Building Societies, Government/ NS&I Bonds, various dividend-paying investments.
The government does not want you saving its “units of account”. It wants you spending those “units” (call them Pounds), as often as possible so it can grab some of them back in taxes, every time they move from one wallet to another.
BTW. The “government’s new rule” is an equation that tends to zero; a recipe for terminal decline.
There are four primary components of spending GDP. (1) Personal (household) consumption circa 63% of UK GDP. (2) Business Investment circa 17% of GDP. (3) Net exports circa MINUS 5% of GDP. (4) Government spending circa 19% of GDP. About 6% is spent on new build property (second-hand sales of anything are not included in GDP).
November 13, 2019
Can we please copy Singapore who went from about half the UK’s GDP per cap to double in just a few years please. Cheap energy, lower taxes, far smaller government, a real Brexit and a bonfire of red tape, freedom and choice in health care and education would do this for sure.
In 2018, government expenditure in Singapore amounted to about 17.48 % GDP. Which is about right perhaps allow 20% in the UK that is more than enough.
November 12, 2019
I too am surprised that our economy has not slowed more. Particularly with the threat of Corbyn/SNP, plus all the damaging red tape, the endless green crap and the often worthless degrees we all have to subsidise. Plus May’s moronic gender pay reporting laws. the expensive renewable lunacy and the rigged energy markets.
Deregulation, tax simplification and cheap reliable energy would be a win, win. It would cost the government nothing and would boost the economy. Just having a postive we can do it vision would be a boose after the miserable dishonest dope May and Grim Reaper Hammond.
What is really needed is huge tax cuts and changes to make tax simpler and more rational after the tax to death lunacies we had from Osborne and Hammond. The mugging of landlords and tenants, the robbing of private sector pension pots, the IHT threshold ratting, the £100K (up to 15%) plus taxes on people who want to move home. This plus scrapping all the vast waste in government. The government should spend no more than 25% of what would be a much larger GDP. People should have freedom and choice in education and healthcare not often dire & rationed state monopolies.
November 12, 2019
I think people might be more comfortable with your position if you made it clearer that you still believe in paying down the debt in good times and gave an indication of when you think paying off our massive debt should resume.
November 12, 2019
The key thing is surely to get the wasteful government spending down hugely and reduce the size of the very inefficient and largely parasitic state sector. HS2 still set to go ahead it seems – from the duff report/review (total economic lunacy so surely just vested interests or even corruption at work here). Lord Berkeley (a Trinity educated Engineer is surely right here).
Most government expenditure is very wasteful indeed, much of it totally misguided and a lot is even actively damaging. Unless you do this the government will still have to borrow or tax more to cover this endless waste.
The only way to pay of the national debt is to spend less. Simply taxing more damages the economy hugely as you are taking money from people who use/invest it well and giving it to government who generally piss most of it down the drain and even do active harm with it.
Taxing even more from the current highest taxes for 40 years position will kill the golden goose and push investment, the hard working, wealth and the wealthy away. As does the bonkers expensive energy agenda, daft employment laws and endless red tape.
Corbyn policies would do this double quick. His policies would destroy the wealth creating sector and the state will default on all his mad spending promises (free at the point of use National Education Service today) are thus all fraudulent promises that he and Labour will never fulfil.
November 12, 2019
Tax simplification? Tax simplification!!!
If I remember correctly I recall Mr. Redwood being interviewed on the box by (I think) Andrew Neil while Osborne was still chancellor. Andrew Neil stated that since 2010 the tax code had NOT been simplified. It had grown from a notional 13000 A4 pages to 18000 A4 pages – in just a few years!!!
If tax simplification is what you are after, you can’t seriously be thinking of voting Tory. They are NOT a tax simplification party.
November 12, 2019
Indeed the Office of Tax Simplification an office of HM Treasury was created on 20 July 2010. Since then the tax complexity has roughly doubled.
This is the productivity you get in the state sector! What has this office cost so far to double tax complexity!
November 12, 2019
‘The Office of Tax Simplification’ – sounds like something Orwell would have come up with.
You’d think that, by definition, it would have to be disbanded.
November 12, 2019
LL frames the issue succinctly. If only our politicians would follow the recipe and switch to “good” as opposed to “bad” economics. Quantities Easing is in essence a fancy name for debasing the currency.
November 12, 2019
Quantitative
November 12, 2019
I cannot comment on the detail of our financial economic position because I am not an economist. However if you allow individuals to retain more of what they earn and reduce or eliminate double taxation, IHT, Stamp Duty,and VAT; then the chances are that they will spend more or upgrade their house more readily. This in turn brings in tax to the government through increased activity.
Using the same principal, reduce drastically Corpoation Tax to encourage investment from overseas. Reduce or change the basis of high street business tax. The high street is not dead or dying, it is in a state of change. There are many small high street businesses that the internet cannot impact upon. I have in mind specialist shops and catering in all its forms. My suggestion is to tax them on profit or turnover not by the square foot. Such taxation could take in the internet and global giants on UK turnover, getting round their tendency to incorporate where it suits them or shifting their profit centres offshore.
Were government as swift on their feet as the big corporations they would have a better chance of indulging in social good. Ridding the economy of payday loan companies and replacing them with credit unions would be a great step in the right direction. xxxxx has been allowed to operate for far too long.
November 12, 2019
Yes, that is why Labour propose preventing landlords from relieving half of particularly young Londoners of upwards of half of their income.
November 12, 2019
The massive growth in buy to let – as almost compulsory for the middle classes – started under New Labour in the late 1990s and early 2000s. You couldn’t open a paper without being assailed by ‘get rich from property’ articles.
November 12, 2019
Their policies were tried in the 1970s.
It lead to a collapse of the private rented sector and an increased shortage of housing available for renting.
You waited for many years on a Council housing list to be allocated a state sector property.
November 12, 2019
Supply and demand – what is needed is more supply so relax planning and get more investment in building and cut the taxes and red tape that delays this – then you will get more supply.
The only real protection for tenants is knowing they can move to another flat if they do not like this one. Labour’s policies will be a disaster for all.
November 13, 2019
Martin
And that kind of stupidity along with paying burger flippers £15 per hour is why Socialist Labour are unfit to run a whelk stall let a lone a country
You restrict rents , you get fewer properties available
Supply and demand , to reduce rents , relax planning build far far more properties by making it tax efficient to do it
You force payment of £15 per hour they end up earning zero as jobs are automated instead
If you want to earn £15 per hour improve your skills , improve your work ethic & work in organisations where they generate the income needed to pay at that level
Try thinking instead of spouting virtue signalling cobblers
November 12, 2019
Imagine the boost to the economy once it becomes clear the threat of a far left Labour govt is removed!
Anyone thinking of voting anything other than Conservative should remember that a coalition of Labour with the Scottish separatists and the Liberal ‘Democrats’ will be just as bad. The Labour programme is one of arbitrary confiscation, crippling taxation and ruinous borrowing, unprecedented in the free world since the War. Venezuela is the only possible example of a more or less prosperous democracy to have adopted the sort of extreme socialism Corbyn and McDonnell advocate, and look at that.
Even more sinister will be the likely loss of political freedoms once the Marxists have done away with economic freedom. At last a trickle of Labour MPs are showing the character and courage to speak out against the menace of Corbyn’s socialism.
November 12, 2019
The double whammy, is that the better we do the more we hand over to the EU, and they will need plenty of money from somewhere. Who will bailout the EU as it sinks into the mire? We are still liable for bailing them out (oops, I meant ‘loans’ that we make, that we repay to ourselves) aren’t we?
November 12, 2019
They don’t need our money. Many of them are richer than us and, not long after Brexit, the majority of them will be richer than us.
November 12, 2019
They seem very keen for our £39 billion but if you are correct and they don’t need our money well tell them to stop asking for it.
November 12, 2019
£39bn is our bill for what we owe. Why should they pay your bill just because you are having a hissy fit?
November 13, 2019
You said “They (the EU) don’t need our money”
That plainly means any money from us.
That is what you said.
I’m not having any kind of fit.
November 12, 2019
The European Union is “us”, not “them”.
November 12, 2019
It might be you and Andy , but it isn’t 17.4 members of the electorate.
November 12, 2019
Oh don’t be silly!
November 12, 2019
but its from Martyr in Wales….
November 12, 2019
Europe is “us”.
November 12, 2019
There is so much of the state sector that could usefully be cut. Much of it even does positive harm and most of the rest produces little of any real value. Even the more efficient parts of the state sector produce perhaps at best 50p of value for even £1 raise in tax. A pound probably taken from someone who would have used or invested it far better had they left it with them. Plus in taking the pound of them you have further tax them time and some admin costs.
Cameron (low tax a heart he claimed – but never in reality) even threw away many £ millions of tax payer money by giving it to Kids Company as an example of totally absurd government waste. I remember first seeing the BBC favourite Camila Batmanghelidjh – whom the Guardian described as “one of the most powerful advocates for vulnerable children in the country”. It seemed clear to me almost from the first time I saw her on TV that such a person should not be trusted to run anything. Needless to say she received endless honorary degrees from the dafter universities, the support of many luvvies and won awards from many lefty organisations.
People should give to charities directly if they choose to & not be forced to by governments through taxation and then government choosing which charities to subsidise. Tax relief for charities should be restricted to real charities not lefty pressure groups and pushers of the climate alarmism exaggeration religion.
November 12, 2019
The biggest part of public spending is on the elderly. Pensions, social care, old age perks, extra NHS care. I would be more than happy to see this wasteful spending axes entirely. It is close to half the government budget. And it goes on old people. Let them pay their own way I say – give youngsters a tax cut.
November 13, 2019
ah. you’ve woken up again with the usual pathetic whinges.
Youngsters – how about reducing education to stop at 14. No unemployment benefits under 21, reduce teaching staff count. Stop fixing leaking school roofs – just close the classrooms affected. Add 20% tax to games devices. Add 50% tax to baggy jeans, similarly to tattoos.
November 13, 2019
Andy
“give youngsters a tax cut”
Lol Youngsters DONT PAY TAX
November 13, 2019
Youngsers are a burden too.
The vast majority pay no tax yet get free State education and free health cover including dentistry and opticians.
They get reduced charges for buses and trains and reduced admissions into numerous venues.
They cost a fortune in social care and juvenile justice provision.
They need to get to 40 years of age and be earning over £35,000 per year before your youngsters start to make a contribution to the public purse.
November 12, 2019
That you favour increases in State spending with cuts in the rates of income tax as an afterthought reveals a lot about how government, parties and dependent State bodies have revived the idea that the politicians and bureaucrats are the source of wealth.
You appear to have forgot that the State’s role is entirely parasitic
Again. No reference to reform. No reference to efficiencies. No reference to privatisation.
The more the State takes the more powerful the State becomes. It takes more today than it has ever done. We now live in a state of semi-authoritarianism.
I want to see less State intervention, less politicisation of our world, less government, fewer laws that demonise people.
People are exhausted by immersive politics. They are tired of being bombarded with liberal left indoctrination 24/7.
I actually feel that I am living in a social and political experiment
Reply I have always said increasing spending on the NHS for example requires careful management of the money to ensure we do buy the additional capacity and higher quality we seek. I also wish to strengthen individual ownership and encourage new businesses and private enterprise which often provides great answers at affordable prices.
November 12, 2019
Careful management at the dire state monopoly NHS!
This seems very unlikely indeed – it is appallingly run and has some of the worse outcome for a developed nation. About 50% of doctors who expensively qualify in the UK do not even want to work for it and simply choose to take jobs elsewhere or overseas.
November 12, 2019
Yesterday I watched a slew of well-heeled “social workers” demanding more money for – social work! I do not know, but I wonder whether they were really “administrators”. TV News is full of “deserving causes” which also demand a lot of money. Little children with disabilities are presented so that their cause can be examined and the mother is allowed to tell of her (genuine actually) agony. Then there is the political use of the homeless. I wonder myself whether they are getting the UC hand-out and where it goes.
Resisting all this so that there can be more and more tax cuts is going to be very hard.
The truth – tax cuts bring more tax – got lost in there ages ago.
November 12, 2019
Why is it ok to “take account of” the QE debt? I know the interest is paid from the government to the Bank which hands it back to the government…but the principal has to be paid back sometime, otherwise you’re inviting every government to print money to pay for stuff. Never mind the economics, once you’re in that state, why not vote Labour who’ll print enough money to buy everyone a Lamborghini. What would be the point of the Tories?
Reply We own the debt! You cannot usually create money to spend as you wish because it would be inflationary. In the extraordinary conditions of the post banking crash world governments did create money without causing much inflation. Japan after her much bigger asset and banking crash in 1989-90 went on to create huge sums of money with no inflationary impact at all. You certainly cannot now create a lot of money in the UK to give away without causing inflation and a loss of confidence.
November 12, 2019
Presumably fiscal squeeze carries a political cost? A vote loser…and how!
Didn’t Junker say something of the sort…politicians know what do…but don’t know how to deal with the consequences.
2008 …we were “all in it together” and it was the poor what got the blame for the salami slicing. Their reward was fiscal squeeze. Assets boomed however…..We are such good “Wall watchers”!
Along with austerity came much loss of liberty and diversionary new laws.
And then the Referendum Performance.
Still…most of us noticed the lack of local services etc.
It’s just that in our stupidity we have been politically stitched up.
November 12, 2019
I think people might be more comfortable with your position if you made it clearer that you still believe in paying down the debt in good times and gave an indication of when you think paying off our massive debt should resume.
(Posted in wrong place above)
Reply I think we should run an overall surplus when the economy is growing fast. Debt as a percentage of GDP has been reducing whilst we are still borrowing some additional money. Debt interest as a proportion of tax revenue is under good control thanks to low interest rates. It is always a judgement what is the right balance. When the economy is growing at only around 1% it would not be a good idea to cut spending or raise taxes to try to generate a public sector surplus.
November 12, 2019
Debt as a percentage of GDP has been reducing whilst we are still borrowing some additional money.
So why do most recent PMs and Chancellors keep saying that we are “repaying the debt”? Surely they were not lying are they?
November 12, 2019
Increases in government spending do not boost an economy, they simply inject inflation into the system. Increases in material prosperity come from the productivity of private companies not from the reckless spending plans of profligate politicians who believe they can manipulate voting intentions by making ridiculous spending proposals financed by ever more burdensome tax liabilities onto the private sector, a sector that can’t fight back.
Your spending recommendations are more to do with appeasing public sector unions and the baying left wing media who continually call for more and more debt financed State spending
You keep financing Labour’s client state with our money, upping its political power, no threats to reform and let’s see where that gets us all.
Labour’s aim is simple. It is the construction of an all powerful, impregnable Marxist client state that affords them total power when in government and when not in government. Your job is to prevent that from happening. At present your proposals make that horrifying prediction more likely, not less
Reply You are wrong. The sale of an over the counter medicine through a chemist shop is very similar to the gift of a free medicine to an OAP through an NHS surgery. They both add to GDP and wellbeing. A private doctor selling a consultation to an individual who pays direct, and an NHS doctor providing a consultation free to a patient paid for out of taxation, is also similar in economic impact. Most people do not see the idea of medical treatment free at the point of use as Marxist.
November 12, 2019
John
Will you specify the nature of the tax cuts you would like to see? Are you talking about raising personal allowances, reducing the basic rate, both? If so by how much and what other taxes would you like to see reduced (if any).
Details please.
Reply I set them out in a past post and will do so again. Look back at my £22bn 1% GDP boosting package.
November 12, 2019
It must help with imposition of fiscal squeeze/austerity after a ( completely foreseeable) financial crash to set different economic groups against each other.
Retired with pension v in work under less favourable ( govt caused) conditions.
Low paid v benefits recipients
White collar v blue
Students v everyone else etc etc
Divide and rule…
November 12, 2019
Speaking of “schools, the NHS and police”, the politicisation of education was once so widely debated that it was satirised in Yes, Prime Minister. More recently, allegations of politicisation have been made against the police and even the health service. The Conservative Party, unless I am mistaken, used to be in touch with concerns such as these. I believe, for example, that this formed part of the context in which the Party introduced the first statutory national curriculum in 1988, and that Robert Peel’s intention for the police was that they should be politically neutral. Even if fears of politicisation are exaggerated, can the Party at least acknowledge the possibility, and provide reassurance on the matter?
Reply The clear legal framework is for these public service employees to be neutral politically when at work, with procedures for dealing with abuses. If you have complaints with evidence about particular cases they should be pursued through the proper channels.
November 12, 2019
The British state education expenditure is one of the highest in the world but the achieved standards are below countries such as Poland and Vietnam which spend much less but use traditional teaching methods with the teachers directing the whole class and no assistants. There is no need to increase spending. Just close the teacher training colleges and train in the schools, taking graduates.
Most of the time wasted by the lower ranks of the police, poring over social media or pursuing cases which are obviously nonsense, is caused by overpaid senior officers promoted for their political views. Demote these and put practical cops in charge and money would be saved.
November 12, 2019
Thank you for your reply. I understand you to mean that these things should not be happening, and if they are there is a statutory framework in place to deal with them. In a recent TV interview, Conservative government minister, Kwasi Kwarteng, stated that “many people are saying that the judges are biased” (emphasis added). Given that the interpretation of legislation is the province of the judiciary, how much confidence does the Tory Party think voters should have in the application of this statutory framework?
November 12, 2019
Some people claim we’ve had tax rises under the Tories since 2010. Have we?
The personal tax allowance has gone up a lot – saving people at least a £1000 in income tax.
If you add up income tax, national insurance, VAT, council tax, insurance taxes, aviation taxes, duties on fuel, car tax, council parking charges etc. – have we had a tax increase?
Reply As people earn more and more people are in employment, and as people buy more things, tax receipts go up in total. Income taxpayers have had tax cuts which allow them to keep more of what they earn.
November 12, 2019
You have neatly avoided my question. My question was ‘taking into account all the various (and numerous) taxes, have we had tax rises since 2010’? You decided to focus on just income tax.
November 12, 2019
Fake statistics to justify fake policies. The US economy is a disaster. Government policies across the world have led to gigantic public, private and corporate debt, massive loss of freedom, censorship, immigration on a far greater scale than any society should have to tolerate, illegal wars and falling living standards. Government education produces illiterate zombies with few life skills and an entitlement mentality. If politicians genuinely wanted to improve the lot of the tax cattle they would call for less government in every area especially education.
November 12, 2019
“The US economy is a disaster” You read the stars. From which world do you come? Welcome to Earth, make your self comfortable, put your feet up, dip your bread in.
November 12, 2019
On the GDP figures, I challenge anybody to look at the chart of GDP growth here:
https://order-order.com/2019/11/11/recession-averted-uk-grows-0-3-q3/
while taking care not to read the timescale revealed in the title, and on the frequently claimed basis that just voting to leave the EU has already damaged the economy try to pinpoint where on the chart the referendum took place.
No, it was not just before that major dip into negative territory on the left hand side; that was the kind of effect that George Osborne had predicted but it did not happen.
November 12, 2019
Taken overall, rather than highlighting carefully selected companies or sectors:
https://blogs.spectator.co.uk/2019/11/today-is-the-day-that-project-fear-died/
“The reality is that UK membership of the EU never made much difference to the economy one way or another.”
November 12, 2019
Denis, you are looking at the wrong metric. You need to be looking at the four primary components of GDP; namely, “personal (household) consumption”.
See the HoC Library chart for household consumption at “Economic Indicators October 10, 2019 Number 02787”.
November 13, 2019
Just a dishonest attempt to shift the goalposts, acorn. I suggest you read the Spectator article, “Today is the day that Project Fear died”.
November 12, 2019
“No, it was not just before that major dip into negative territory on the left hand side; ”
That was the sort of economic downturn that shouldn’t have happened during our Membership of the European Union.
There is out there a corresponding chart of house prices, and we all of course remember George Osborne’s remark that voting to leave would mean house prices would drop by 20%.
There was of course, no discussion of would that be a good thing for the first time buyer. But then George isn’t too bright.
November 12, 2019
Sir John
You could also boost the economy by redirecting spending funds from the following areas:- EU withdrawal bill (£39bn+), foreign aid (£14bn+), hs2 (£60bn+) & nuclear weapons (Sub £41bn+ and missile £130bn+)
If only a government had the bottle
November 13, 2019
update
HS2 is now projected at £80bn
We only need a fraction of this rise to fully support our local governments ?
November 12, 2019
No concern at all from politicians as British Steel is sold off to the Chinese. How much of our manufacturing industry is actually controlled by British management these days? Few other advanced countries have been so daft as to sell off their hard-won intellectual property and physical assets to foreign ownership in this casual fashion.
The FT and Economist have peddled the mantra that ‘it doesn’t matter who owns what’ for decades. Of course it doesn’t matter to those who see the economy as just numbers on screens. For those who invent, develop, manufacture and export real tangible products it matters very much. How sad that our once-great manufacturing is so defeated and humiliated that we have to beg foreign companies to come in and ‘save jobs’ like this.
Why can’t our supposedly world class financial services raise capital domestically for investment in the British steel industry ? Doesn’t anybody care ?
Reply I agree it would be good if someone raised capital to own the UK steel industry here at home. I suspect that what is missing is an entrepreneur who wants to take the risks or who has a profit making business model for British Steel. I do not know of anyone being turned down for financing a take over.
November 12, 2019
@Reply, perhaps if our government and utilities adopted the same purchasing policy as countless others, especially Germany and France, UK businesses could make more of a profit with local sales.
Do you think the German government would allow ThyssenKrupp to be sold to an Chinese company as easily our government let go of British Steel.
Come on, the government backs the banks and finance industry to the hilt but everyone else can go to the wall.
November 12, 2019
There should be a radical rethink by the Tories. See what President Trump has done since he came to office – quite incredible. There are many very important lessons for our government to learn from P Trump, but it will only be possible if they abandon the globalist model which favours the multinationals/big business and which depends on unending supplies of cheap labour, both flexible and mobile, enabled by open borders.
Obama openly mocked Trump on video (see youtube) claiming that these manufacturing jobs could not be brought back. He was wrong, just as our naysayers in the UK.
Listed below are just a few of P Trump’s achievements on the economic front since he came to power:
6 million new jobs
303,000 new jobs last month (see Larry Kudlow interview, Conservative Tree House website).
500,000 new manufacturing jobs
Lowest unemployment rate in 50 years https://www.whitehouse.gov/articles/u-s-unemployment-rate-falls-50-year-low/
African American and Hispanic unemployment at all time low, as also for those with disabilities.
Income of middle earners has increased by $5000 AFTER tax in the first 2 1/2 years of Trump’s presidency.
Record highs for S&P 500 and NASDAQ.
Since 2016 Election – DOW Reaches 111th All-Time High – Markets Up More than 50% – Largest Increase in History**
Deregulation and tax cuts. Now looking at Tax Cuts 2.0
** The markets again reached a new high on Friday 8 Nov – three years since the 2016 election. This was the 111th all-time high since the 2016 election and 111 more all-time highs than the two previous Presidents reached in their entire first terms. After President Trump was elected the stock market skyrocketed. The markets are a gauge of the economy and include expectations of the future. On November 8th, 2016, the DOW stood at 18,332. Since that date, and after Donald Trump won the 2016 election, the DOW has soared. Friday the DOW closed at another new high of 27,681 – 9,349 points higher than the day of the 2016 election (Source Gateway Pundit).
Reply Today unemployment in the UK fell again and is now at 3.8%. The UK too since 2010 has been at generating extra jobs and getting people back into work. Earnings are now rising at 3.6% per annum, usefully ahead of inflation.
November 12, 2019
And Trump hasn’t waged war either.
You wouldn’t know any of this from the Clintonesque BBC. She banged on about abuse of women yesterday. The only person I know who is openly abused is Trump. One mega star went on an expletive laden, hate-filled rant against him at an awards ceremony.
November 12, 2019
Chris
I do wonder how many of those jobs came about through his fracking programme and commitment
November 12, 2019
Many of those figures are simply a continuation – an extrapolation, really – of the figures under Barack O’bama
November 12, 2019
I note you don’t mention the 1 trillion dollar deficit he is running-how long do you think that can continue?And why does Trump keep putting pressure on the Fed to reduce interest rates if everything is so rosy?
He is trying to stop the wheels coming off ahead of the election.
Reply The Fed overtightened money late last year and have had to reverse their approach. They were slowing things too much. Yes the state borrowing has gone up as a result of the tax cuts and spending rises.
November 12, 2019
Chris
This Trump so called economic boom you are talking about is creating a deficit of about US$ 1 trillion on the federal budget, which needs to be paid by future generations, it is not sustainable by any measurement
November 12, 2019
Yes, it is sustainable. Running a 5% budget deficit is using up US spare capacity. Inflation is circa 1.8% and not showing signs of accelerating yet. There are some signs of a loss of confidence by US consumer households.
M2Velocity has been dropping since the 2008 crash. That is the number of times the same dollar is used to buy something in a year, is slowing down, which means people are saving dollars for longer and not spending them. But, nowhere near the saving that Japanese citizens are doing.
November 12, 2019
Bear in mind that great wealth is being generated in the US (4% growth) as a direct result of P Trump’s policies, from the return of industries, higher employment, and higher tax takes and fewer on government support. Costs abroad e.g. defence, unfair trade deals e.g. with China are being very significantly reduced and over time this will have a huge impact.
There is in essence a long overdue rebalancing act being effected, whereby the USA no longer pays the dues that other countries have hitherto got out of paying e.g. NATO. The US was bailing out many countries, including EU countries who were not paying their way and making fair contribution to costs.
In contrast look at the spending plans of the Democrats which quite frankly will completely bankrupt the country. Two examples:
Democrat Ocasio-Cortez’s Green Deal is estimated to cost the taxpayer over $9 trillion dollars, and their Medicare for All (Elizabeth Warren) programme much more, between $52 and $59 trillion over a decade:
From npr.org
“In that analysis, the Urban Institute calculated that under a single-payer plan that looks a lot like Medicare for All, costs would total $59 trillion over a decade, which would require $34 trillion in new federal spending.
Warren’s plan estimates that total health costs could be held to $52 trillion and that $20.5 trillion in new federal spending would be necessary….”
Add to that the open borders policy of the Democrats and supporting the huge numbers that would move into the USA, and the costs would be completely unsustainable. I believe if the radical Dems had their way they would destroy the US economy, reducing it to the state of the Venezuelan economy.
November 12, 2019
A link to part of the address by P Trump to the Economic Club of New York:
https://twitter.com/TrumpWarRoom/status/1194310336498851840
“The average median income under President Bush rose only $400 over an 8-year period. Under President Obama, it rose $975 over an 8-year period…And under my administration, it rose $5,000 over slightly more than just 2 1/2 years. That’s a big difference.” –
President Trump is turning things round at an amazing rate and with speed. He puts to shame the naysayers and prophets of doom. He is a hands on business man and he knows how to negotiate and to win. Sun Tzu.
November 12, 2019
Off topic, in 1997 the Tory propagandists told us not to vote for the Referendum Party in case we let in Labour and/or the Liberal Democrats, then they said the same about UKIP in subsequent general elections, and now the focus is on the Brexit Party … yet despite more than two decades of involvement Nigel Farage has still not worked out that whichever party he is leading should look carefully at each individual constituency and decide in each case where the probabilities lie, that is whether putting up a candidate would be more likely to benefit the cause or harm the cause.
November 12, 2019
Standing down those running against Leavers makes sense, but I do find it curious that Farage would just stand down so many candidates.
In areas where the Tory candidate is Remain and Remain Alliance are active, who are Leavers supposed to vote for? Expecting leave voters to vote for a Tory Remain candidate who isn’t going to support Johnson’s deal, far less No Deal, just because they wear a blue rosette is ridiculous.
November 12, 2019
Coincidentally, somebody in UKIP has just attempted that job, and identified:
86 marginal seats where UKIP should definitely not intervene.
20 other seats where UKIP should probably not intervene.
526 seats where UKIP should feel free to intervene, because:
“Our participation in these contests is very unlikely to reduce the Brexiteer count in the new Commons.”
November 12, 2019
Regarding the 317 Conservative seats that Nigel has agreed not to contest, it is true to say that they would form a base vote in favour of a form of Brexit. However in other seats predominently Labour it would be better for the country if Boris stood to one side, for two reasons. Disenchanted Labour voters who can see through Corbyn marxism are more likely to vote for the Brexit Party than the Conservatives. A significant number of successful Brexit Party members in the HoCs is likely to insist on a proper form of Brexit and oppose WA2. Boris therefore needs to hold his nose and think of what is good for the country, which WA2 is not.
November 12, 2019
WA2 (which is essentially WA1) is the only game in town. The Brexit party are done. They are now Tory auxillaries. Natural Labour voters aren’t stupid. Farage has pulled the rug out from his own feet and totally undermined his party’s appeal to these voters who were his main targets. And besides, there’s no reason for BJ to stand down (sarcasm alert) good Tory candidates when they are BJ’s lobby fodder. If Farage can take a chance trusting BJ, so can everyone else, and vote Tory. The Brexit party will probably end up standing in a handful of seats, and if they’re very lucky, and spend all their money in Hartlepool, they might even end up with one seat. Then Tice can fulfil his ambition to get thrown under the bus by Boris, just like the DUP. The game is up. Brexit is over. Either it’s BJ’s BRINO or remain. I know which I prefer, though to be frank, I don’t think it makes much difference either way.
November 12, 2019
To an outsider, it does look surprising that nobody wants to expose the xxxxxx gloablist conspiracy to stop Brexit and keep Britain in the EU to await ultimate abolition into an EU region.
It would be so easy to crush Remain !
Why is it that nobody will touch this story ?
It is beginning to look like one of the biggest cover ups the world has ever seen !
Will nobody save Britannia ?
Polly
Reply In order to prove such a conspiracy it will take detailed evidence about funding of campaigns and political interventions with proof of people and payments involved. I do not have the resources on this site to host any such attempt, as those you accuse may well hit back and you need to be well advised and very accurate. Newspapers with investigative journalists, big budgets and legal advice are the obvious people to look into this.
November 12, 2019
Thank you for your reply.
I suspect the conspiracy is so serious that even parts of the British media are now involved.
That would explain why there were many reports up to mid 2018 about a well funded campaign… and now those same media outlets do not want to follow up.
In view of what happened in parliament, follow up reports seem so obvious, but instead it’s a virtual complete media blackout !
Words left out ed
So many unanswered questions !
Do you have ”privilege” in the UK to ask questions ?
Polly
Reply There are no MPs at the moment so no-one has Parliamentary privilege to ask questions. When Parliament is in session MPs can ask questions with some protection, but should only do so on the basis of evidence where it is in the public interest to pursue. The Remain campaign produced financial reports and current political organisations and parties have to declare their sources of income.
November 12, 2019
Thank you, Sir John, for your informative replies to ‘Polly’.
Food for thought.
November 12, 2019
It seems Farage has been got at.
November 13, 2019
See excellent article by Alexandra Phillips, Brexit MEP for the South East in D Tel this morning:
https://www.telegraph.co.uk/politics/2019/11/13/democracy-brexit-party-voters-cannot-represented-no-democracy/
A democracy in which Brexit Party voters are not represented is no democracy at all
November 12, 2019
Japan – zero interest rates. Two decades of rock-bottom interest rates have hurt the nation of savers, who have responded by tightening their belts. Low-cost loans have propped up unprofitable companies while big business has piled into investing overseas as the market shrinks at home.
Those two decades of failure to reflate the economy have created a whole generation of consumers with little understanding or expectation of rising prices. Banks and debt markets have been caught in the crossfire, with negative rates crushing the profit margin on lending and the BOJ’s massive asset buying under quantitative easing sucking the life out of bond trading.
While it’s hard to call the world’s greatest monetary experiment a success, it’s also clear things would have been far worse without it. The BOJ has got the better of deflation, even if the consumer price index dips into the red briefly in 2019 because of low oil prices and one-off changes in phone and education costs. And instead of economic malaise, Japan has enjoyed a modest expansion in recent years, with unemployment near the lowest since 1992 and wage growth, though tepid, still the best in many years. After 20 years Japan isn’t much further on, they’ve asked the same question over and over hoping to get a different answer.
November 12, 2019
Nothing to do with another potential banking crisis eh? Has not one big bank just lost more than £3 billion in the second quarter of 2019 alone?
November 12, 2019
Of course it is all about balance. Does everyone understand this or will they do their own thing anyway. Global slow down there may be . I heard this am that there has been an increase in GDP , however the previous quarter was negative so the increase is much smaller than boasted. This is the problem , whilst spending is necessary especially on the NHS and Education much extra money will be lost . More staff doesn’t mean more spending if each individual has their own problems and cannot purchase.The type of staff who do the same job , have more experience and don’t demand as high salaries can often produce more , get better results and more quickly . Thinking skills are required, not blanket donations to the institutions en masse.
November 12, 2019
National debt in 2006 and 2019 – £0.5 and £1.8 trillion respectively.
National debt as a % of GDP in 2006 and 2019 – 38% and 82% respectively.
The NHS needs to be more efficient and the large salaries of local trust managers should be looked at and should be performance related. The rot set in under the Heath government reforms in 1972. There are too many worthless jobs in education. I know, my cousin and her husband worked for Brighton council. Then there is the nonsense of 0.7% of GDP spent on foreign aid, much of which is spent on dubious projects and in countries which do not need the money.. This should be for humanitarian relief only. Set aside 0.7% of GDP and top it up year on year.
November 12, 2019
It seems no Chancellor in recent times (except possibly Gordon Brown, and then for entirely mistaken reasons) has been able to persuade the Treasury to follow government fiscal policy, rather than its own.