A new framework for our economy

The UK economy has been steered for twenty years by the Maastricht requirements. The UK has sought to keep state debt down to 60% or to get it moving towards that total, and to keep the budget deficit down to below 3% of GDP. The inherited targets are to record state borrowing below 2% of GDP this year and to see net debt declining as a percentage of GDP. Overall borrowing should be at or below zero by 2025-6. These targets of course were blown away by the measures to tackle the pandemic.

The government needs to consider new rules. Of course it needs to control public spending and taxation to affordable levels. Maybe it should go over to a target of not normally allowing borrowing for current spending, but allow borrowing for capital spending. That capital spending should continue to need a value for money and rate of return test ,preferably better estimated and policed than prior capital projects have often been.

I dislike the Maastricht rules for a variety of reasons. Now most advanced countries are borrowing around 100% of GDP the idea that anytime soon can see them back to 60% is silly. The usually automatic 3% running deficit control can cause austerity or undesirable tax rises and cuts. I have no wish to advise the EU on what to do about their rules, and understand that they are trying to avoid the free rider problem. When countries share a currency with a common official interest rate a country which had borrowed too much could seek to take advantage of the better credit rating of leading members of the zone and carry on borrowing excessively. The fact that the criteria are recorded in the Treaties makes changing them very problematic.

For the UK we now need rules which keep our finances in good order and take advantage of a good credit rating and low rates to allow productive investment. The Maastricht figures do not adjust the state debt figures for all that debt now owned by the Bank of England as agents of the Treasury which also seems strange.


  1. Mark B
    March 23, 2021

    Good morning

    Now most advanced countries are borrowing around 100% of GDP . . .

    And just like all the other Lemmings we can follow them off the same cliff. No thanks.

    Those rules were put there for a reason. Of which I care not, but they were there. Gordon Brown circumvented them buy using PFI’s. Essentially off the book borrowing. He lumbered us with these and other debts.

    I have never kept it a secret that I am an avid follower of Sir John Cowthepaite, the man credited with Hong Kong’s success. I therefore want to see is better value for money. I want a more market led economy with less government involvement and taxpayers cash. We need more private investment and lower taxes on the returns for said investment. The Industrial Revolution was not built on government handouts. It was built by men of ideas, belief and Private Capital. We need to build an economy around such people. If the government want a project to be built, all it has to do is pass the necessary legislation and planning, with some very light taxation on profits, and leave the rest to the markets. If it’s a winner it will get built. If not, then we’ve just saved a pile of cash.

    1. NickC
      March 23, 2021

      Mark B, You are so right. Even for the absurdity of reducing CO2 levels the government could make emmissions laws progressively more stringent, relying on the market to come up with solutions, rather than promoting particular technologies such as battery cars and gas-less houses. We are governed by politicians’ spasms not by common sense and rationality.

      Never forget that a government dollar is only worth 50 cents.

    2. Hope
      March 23, 2021


      China has a different model to the one you highlight.

      I was interested to listen to John Ratcliffe former Director of National Intelligence in US. He thinks China is the biggest threat as it wants to replace US as the biggest superpower. He believes the strategy is Rob, Replicate and Replace and warns every US business to consider very carefully before setting up in China. He points out the aggressive attitude of the Chinese recently at Alaska with US. He fails to understand Biden’s tough talk with Russia when China is the threat on so many issues.

      Worth considering when we recently heard Johnson speak so favourably for business with China. It appears China likes to indebt countries to it and exert pressure for what it wants to achieve.

      1. Ed M
        March 24, 2021

        China is fast on the way to becoming the world’s first super power. It’s ultimately down to the fact that Civilisation in the West is in fast decline – as we indulge in Social Liberalism / Feminism / Dumbed-down media and arts / Quick, easy money instead of money based on work ethic and planning far ahead / family and neighbours unravelling / lack of patriotism and sense of public duty, and so on.

        Even though China is a Communist country, it is still strongly rooted in traditional philosophical / ethical ways of life such as Confucianism and Taoism. Even an economy and money has to be based on some overall good, robust ethical system – or its each man (or rat) for himself.

    3. Ed M
      March 23, 2021

      ‘ It was built by men of ideas, belief and Private Capital’

      – That’s a vague and over-simplistic view of the causes of The Industrial Revolution.

      Plus The Industrial Revolution was both good and bad.

      Be careful of solving our economic problems through too much economic / political theory. It is ultimately INDIVIDUALS not theory that creates strong and stable economy. And individuals, with something positive to offer, are essentially made, to an important degree, by the values they’re brought up with: work ethic, taking responsibility for oneself, the joy and importance of risk and adventure in life, family values, and so on, which are influenced to an important degree by Education / Media / The Arts and so on.

      Positive cultural / social influence is far more important and effective than political / economic theory (important as these are). This is what we should ultimately be focused on (although so much harder to achieve – but if we try to over-compensate with what’s wrong with our economy through over-emphasis on economic and political theory (or ideology) then there is always a price to be paid for this (boom / bust / recessions / depressions / wars etc).

      1. Ed Mahony
        March 23, 2021

        ‘Education / Media / The Arts ‘ – and really importantly, religion – look at the Quakers and the huge success they have had in business, from a relatively small population of people – not just great success but great work ethic too.

      2. Mark B
        March 24, 2021

        Ed M

        I only have so much time in my day and so little time to type. I therefore have to be overly simplistic. Or is that too much for you to understand ?

    4. hefner
      March 25, 2021

      Cowperthwaite! If you are such an admirer and ‘avid follower’ of him you should at least know his name!

  2. agricola
    March 23, 2021

    I find it all somerhing of a mystery. Government behaves financially in ways that I as an individual would never be allowed to, because I could not bare the consequencies. Yet I have to bare the consequences of government borrowing behaviour. I also suffer the consequencies when government spend money on white elephant projects, but fail to spend on things that directly affect my and everyone elses quality of life. I have in mind a properly funded NHS, people sleeping rough on the streets and totally inadequate housing at the lower end of the market. Experiencing all this lumpen management of the money, I have been forced to give government, I can understand those individuals who move or incorporate offshore. In the best possible way they can they are safeguarding the best interests of those they are directly responsible for, their family. Knowing that government will waste whatever tax they might have been forced to pay. Am I missing some great hidden truth.

    1. Peter Wood
      March 23, 2021

      It was ever so; if you’re a leading political figure a large ego is part of the package and consequently want something with your name on it to be revered for generations.

      A possible solution, in this age of communications, would be to add a bit more democracy to hold the purse strings a bit tighter, namely require consent be given by the tax payer for expenditure over a certain figure on large projects. Specific spending limits could also be specified for such essentials as defense, NHS etc.

    2. Everhopeful
      March 23, 2021

      Whatever virtue-signalling, fluffy pink bunny stuff the govt. pretends to espouse it actually only ever does what suits!
      Like its apparent addiction to human rights until it comes to vaccine coercion, first victims ..care home staff. But then …maybe their aim is to close down care homes?
      Always a hidden agenda, never upfront with the truth. Just nudging and manipulating…disgusting!
      eg Do they want HS2 because they intend to abandon London to its fate?

      1. No Longer Anonymous
        March 23, 2021

        Mr Hancock has just happily told us on BBC TV that we’re all used to face masks now.

        NO WE’RE NOT !!!!

    3. Dave Andrews
      March 23, 2021

      You don’t have to suffer the burden alone. Much of the cost isn’t on the taxpayer, but pushed onto the next generation in the form of debt, but with nothing to show for it.

    4. SM
      March 23, 2021

      You are simply (and understandably) reiterating the problems of all societies over millennia that have developed beyond small tribal areas and groupings.

      The history of every civilisation shows that firstly economies start growing, bureaucracies are developed, forms of societal welfare arise, cultural and scientific developments occur etc, and then the governing individuals or bodies become power-crazed in one way or another, the peasantry (who provide the basics of life) are neglected, the constructive critics are at best side-tracked or at worst disposed of, and revolutionaries start uprisings ~ and lo and behold, it’s back to stage one yet again.

      1. jon livesey
        March 23, 2021

        And our last revolution was when, exactly? And we went back to stage one when, exactly?

        1. SM
          March 24, 2021

          I would say look at the history of the Roman, Greek, Chinese and Ottoman empires for a start.

    5. oldtimer
      March 23, 2021

      No you are not missing anything. The flight from ultra high taxation by those with the reason and ability to do so has been a persistent since post WW2. Lower top rates in the Thatcher years provided some relief. But the political instinct to overtax the rich remains alive and well. It provides the cover to justify pet political schemes that waste money.

      1. jerry
        March 23, 2021

        @oldtimer; But this county has gone way beyond stopping the need for what was always a minority to take “flight from ultra high taxation”, now even our moderate taxation levels (necessary for a functioning, secure, society) get described as theft buy many on the right.

        1. NickC
          March 23, 2021

          Jerry, The reason that moderate sensible people describe taxation as theft is because so often it is. Not in all cases of course because most people want internal and external defence, the rule of law where contracts can made and protected, and a few other benefits inherent in a civilised nation.

          But how many want £100bn spent on HS2? Or £2trn on tilting with windmills? Or £14bn annually on foreign aid? Some do of course, but far fewer. What we have is capture by vested interests. People like you and Andy insist on spending my money on programs I do not want, or actively oppose. Without government coercion you couldn’t get the money out of me except by theft.

          1. jerry
            March 24, 2021

            @NickC; “People like you and Andy insist on spending my money on programs I do not want, or actively oppose.”

            But it is not for (often, a minority of) individuals to decide how taxes are spent, if it were the UK would no longer have a nuclear deterrent, the CND rabble would have had it scrapped in the 1980s!

            If you do not approve of how the govt has spent taxes over the last electoral cycle then you are fully entitled to vote for a party whose spending policies will better fits your wishes in the next 5 years, it’s called living in a democratic society…

            You mention HS2, I also object to that white elephant but do so because I want the same money spent on better and more logical (transport) schemes, not just cancelled, so some can have tax cuts.

        2. dixie
          March 24, 2021

          I don’t call the government taking more than half my income from me while I am alive and close to half what is left away from my dependents when I am dead, “moderate”.
          And this is in return for what? Questionable vanity projects, a dismantled security force that refuses to defend our borders effectively, a sainted NHS that hasn’t been functional for over 12 months and a government that continually devalues what assets we had that they haven’t yet given away.

          1. jerry
            March 24, 2021

            @dixie; Thanks for proving my point! Compared to the mid 1970s the current taxation regime is very moderate, and of course some would still complain if their tax rate was just 1%…

            As for death duties, I agree they are a stealth tax, but anyone with significant wealth, common sense and/or a half decent financial advisor should be able to make significant arrangements during their lifetime to offset such taxes.

          2. dixie
            March 25, 2021

            @Jerry, I agree IHT is a voluntary tax, the poor do not fall into it’s net and the rich can readily avoid it. The problem is that more of the aspirational groups are increasingly falling into the net without having the background, awareness or attitude to seek professional advice. It is not them being robbed by the state, it is their children who they strive to provide for.
            If you have disabled children to plan and provide for it adds yet another set of complications and stress to an already overwhelmingly stressful position.

          3. jerry
            March 25, 2021

            @dixie; Ignorance is no reason, anyone can find [1] and get financial advice, most banks or lenders offer it free or at modest cost, after all if you are likely to be subject to IHT you do have either substantive savings and/or estate linked to them. I take your point about those with disabled children, but what a condemnation of what the State and society has become over the last 40 years or so years, due to cuts in services and other help…

            [1] or could, by way of the CAB service, until they had their grants cut

    6. Hope
      March 23, 2021

      Johnson both personally and in his role as PM has a chaotic approach to finances. Electoral Commission currently investigating how he funded decorating No.10 flat!

      Ten years of this govt proves all economic policies failed and targets not achieved. The current govt cannot be trusted at all with the economy. Johnson thinks he has a magic money tree. JR’s attempt to blame EU does not cut the mustard.

      We read today govt will outlaw holidays abroad this year next week! Why have people got vaccinated? In stark contrast Johnson three weeks ago invited to host EU countries to come here in July for national European championships! He has no control over the health of EU citizens, vaccination roll out worse across EU lots of carping and threats over vaccines and yet he invites 27 nations to come here but bans UK citizens going abroad! Last year he allowed 30-40 million to fly in to our country from virus hotspots and told the nation it would make no significant difference! A couple of weeks ago a hunt for one person for failed track and trace! Boat people allowed in by the thousand!

      My question is: has he lost the plot? What is JR and chums doing to allow his errant illogical nonsensical behaviour?

      Suggest they all read evidenced based articles in con woman. Also suggest they listen to Dr M Yeadon, Dr Sunetra Gupta, Dr Lee etc. No, they still get advice from xxxxx Ferguson who has a proven failed record!

    7. Narrow Shoulders
      March 23, 2021

      I think the NHS is quite well funded as it is @agricola but agree with much else that you wrote.

  3. skylark
    March 23, 2021

    “not normally allowing borrowing for current spending, but allow borrowing for capital spending”.

    Yes but as we know Government will call almost anything “capital or investment spending”. Even things as daft as HS2, renewable subsidies and the insane net zero carbon agenda. Sunak even thought taxing people, (wasting much of it in collection and admin) then paying half people’s restaurant bill was a good plan.

    “to control pubic spending and taxation to affordable levels” no sign of this at all. Taxes absurdly at a 70 year high with the dire socialist Sunak planning new vast increases. Pension pots, income tax, IHT, NI, CGT all to suffer back door threshold muggings, IR35 and large council tax increases too.

    1. hefner
      March 23, 2021

      It indeed is a perineal problem.

      1. graham1946
        March 23, 2021

        An unfortunate use of the word, but not totally inappropriate.

      2. Narrow Shoulders
        March 23, 2021

        Freudian or intentional?

    2. MiC
      March 23, 2021

      The most important part of the framework for the economy is probably not financial but educational.

      You could have a high salary, high skill, knowledge-based one if you wanted, but that would mean educating the people – and properly – and an educated population would never, ever, return a government such as we have today.

      So sadly it won’t happen any time soon.

      1. No Longer Anonymous
        March 23, 2021

        There have never been more graduates.

      2. NickC
        March 23, 2021

        How do you know that “educated” people would not elect the current government, Martin, given the actual choices we had? And do you mean educated (which almost everyone is in this country), or do you mean your own warped politically correct views imposed on them? I strongly suspect that your educating “properly” is what I would call badly.

        1. dixie
          March 24, 2021


      3. jon livesey
        March 23, 2021

        The fact that half of all the start-up companies in Europe are in the UK is a pretty good sign that the UK workforce is educated to the level that is needed.

        And of course “educated” here means that they are capable of helping to run growing businesses using all the available software and other tools we have available. It does not mean some some old person’s idea of obedient children sweating over their copper-plate writing.

        And talking of signs, to me an eighty seat majority is a pretty good sign that the current Government is pretty good at understanding what people know is necessary, even if it involves some day to day inconvenience.

      4. Paul Cuthbertson
        March 24, 2021

        The standard of education today is abysmal, deliberately so.

    3. DavidJ
      March 23, 2021

      Even more unacceptable when one considers the regular squandering by government.

  4. Peter
    March 23, 2021

    It also seems to strange to see a Conservative advocating a move away from a tight monetarist policy and an increase in public debt.

    1. Everhopeful
      March 23, 2021

      Not sure but I think I have seen those who understand economics accuse JR of being a Keynesian.
      He (they say) was a socialist.

    2. jerry
      March 23, 2021

      @Peter; You mean Mr Churchill, Eden and Macmillan, even Heath, were not Conservative when they embraced Keynesian policies?!

      1. Peter
        March 23, 2021

        Churchill lost to Attlee. If you can’t beat them join em.

        Eden and Heath are mostly regarded as failures.

        Supermac was in the ‘one nation Tory’ mode which mostly disappeared after Mrs. Thatcher.

        1. jerry
          March 23, 2021

          @Peter; Your comment regarding Churchill and the 1945 election, you obviously have never bothered to read the Conservative manifesto of that year if you think Churchill was proposing anything radically different (other than nationalisation), the post war consensus having been agreed during the national war time coalition after all.

          Supermac was in the ‘one nation Tory’ mode which mostly disappeared after with Mrs. Thatcher.

          There, corrected that for you, in my opinion….

    3. Norman
      March 23, 2021

      Sounds like the deck of the Titanic, with ever-fewer places to go!

      ‘On Christ, the solid Rock, I stand;
      All other ground is sinking sand,
      All other ground is sinking sand.’
      (Refrain from hymn by Edward Mote, 1797-1874.)

      1. Everhopeful
        March 23, 2021

        The govt seems to have realised the possible risks of out of control household and personal debt and anyway what else can they do to encourage/dupe people into more debt? QE has failed to stimulate borrowing and interest rates are non existent. As you say..run out of options.
        They will be casting around for “new ideas”to further ruin our lives.
        How about a spot of GREEN QE or helicopter money ( like Biden is doing I suppose?) or Strategic QE ( they always think they know what benefits us!).
        That’s just rearranging the deckchairs though isn’t it?

  5. Sea_Warrior
    March 23, 2021

    ‘Maybe it should go over to a target of not normally allowing borrowing for current spending, but allow borrowing for capital spending.’ So, a variant of Gordon Brown’s ‘Golden Rule’, which was just an excuse to borrow & waste after having been left a good financial position by the Major government. I expect governments to live within their means – and that means spending less than the tax-take.
    P.S. And on that point, I have just finished reading books by Warren Buffet and Benjamin Graham. Both lament the fact that few businessmen are much good at ‘capital allocation’. I lay the same charge at the feet of out current crop of politicians. Yesterday, Ben Wallace, whilst savaging Defence, sought points by pointing to our soon having a sovereign space launch capability, something that clearly isn’t ‘needed’.

  6. GilesB
    March 23, 2021

    ‘ That capital spending should continue to need a value for money and rate of return test ,preferably better estimated and policed than prior capital projects have often been.’

    This is absolutely vital. Why is the public sector so bad at it? Private sector has multiple objectives and stakeholders too, but does a much, much better job.

    Here’s an idea. Set up a scrutiny body staffed with seconded, or retired, Financial Controllers from industry and publish their reviews of every capital expenditure project over say £25 million. The Civil Service would hate it, so that’s a good sign.

    1. GilesB
      March 23, 2021

      Or upgrade the ‘Value for Money’ remit of the Audit Commission, so that it cannot be ignored or trivially over-ruled by the Government of the day. Make it as independent as the Bank of England.

  7. ChrisS
    March 23, 2021

    The problem of allowing borrowing for capital projects in excess of 3% of GDP would be fine if one could rely on all governments to only spend on capital projects that are good value.

    Unfortunately, the taxpayer has never been able to rely on Labour governments to be sensible but these days that extends to Conservative ones that are daft enough to spend more than £100bn on HS2. Our current Great Leader is seriously considering investing English taxpayer’s money on a tunnel between Northern Ireland and Scotland, both of which are likely to leave the UK in the next decade.

    No, we need to maintain tight control over spending, particularly in the three provinces that rely so heavily on the “generosity” of English taxpayers.

    For example, where is the£65m coming from to pay for Wales’ own Erasmus Scheme ?
    English taxpayers, of course.

  8. ian@Barkham
    March 23, 2021

    Good morning Sir John
    I have no wish to advise the EU on what to do about their rules, and understand that they are trying to avoid the free rider problem
    Then again if we ‘are’ and I hope we ‘are’, an outward looking democratic free and sovereign nation, the thinking and thoughts from a system that aims for protectionism and isolation should no longer be on anyone’s radar. Unfortunately they are as we are made to comply, as we signed up to an extremely bad deal that undermines the UK’s ability to thrive.
    Yes we need to be on a level playing field that recognizes the State should ensure our freedoms and should ensure that ethos is not undermined by external forces. But that should only be seen as a backstop to ensure predatory forces don’t set out to undermine our society and our wealth creation. What the UK does inside the UK is determined by the citizens of the UK

    In a slight tangent in the Telegraph yesterday there was an opinion piece that related to the vaccine ‘wars’ created by the EU. It reasoned we should never get into the pettiness that would stop the world moving on from Covid. It did however, reason that as with ‘Trump’ some times pending emergency powers is all it takes i.e. if the Government having signaled emergency import duties on EU car and wine imports. How long would the threat of taking the life of a UK Citizen by the EU Commission last.

    1. Alan Jutson
      March 23, 2021


      Perhaps Boris should advise the EU that without UK taxpayer money and UK Government decisions there would be no Oxford Astra Zenica vaccine to argue about, as it would not exist.

      Contracts of supply are exactly that, contracts to supply, if you order late you pay the price which is delay.

      Are they not satisfied that we organised it to be non profit for the rest of the World in so much as its price is about 15% that of the Phizer jab

      Given they have spent 3 months trying to rubbish it, and keeping millions of doses it in store instead of peoples arms. The EU should be thankful we are not keeping all of the first 100,000,000 doses to ourselves.

      The EU are now even losing its supporters over here such are their recent actions in trying to punish the UK.

      1. Ian@Barkham
        March 23, 2021

        @Alan, you could even reason, they caused death of EU Citizens due to petty arguing over price when it was at cost and paid for by the UK taxpayer, so were late in ordering. Not content with that it is the taxpayer that funded the development that has to meet their end so the EU Commission can jump the queue, and pass the blame.
        Real bullies and Boris calls them friends. Bow down again, then again and once more – never forget who is your ruler

        1. bill brown
          March 25, 2021


          you do write so much nonsense and biased sentences

    2. dixie
      March 24, 2021

      The issue for me is that making the threat to do something is equal to actually doing it. For politicians this may simply be a game of brinkmanship but for this pleb it is a clear declaration of intent and attitude by the EU. The consequences should therefore be the same in both cases which is unfortunate since so much could have been accomplished if the EU had pursued a collaborative rather than spiteful colonial approach.
      In my view we should bypass the hateful EU and any adherents but if a country is and acts friendly we should reciprocate.
      Another reason to have no deal with the EU but deal with countries directly.

  9. Nig l
    March 23, 2021

    And in a roundabout way related to the economy or it’s resurgence, a question for the PM/Health Secretary or you.

    Why, when we have had the much vaunted two vaccinations, are we banned from going anywhere?

    The context being increased red zone countries and HMGs reluctance to even discuss foreign flights. Either the vaccine is not effective or the government is using it as a pretext to permanently reduce our freedoms?

    1. SM
      March 23, 2021

      Perhaps it’s not so much the going as the coming back (with a new virus variant) that might be the problem? I know that Germans are allowed to travel to South Africa and return home, but unless you hold a German passport you will not be allowed into Germany. Unless you are a senior African politician requiring medical treatment, of course.

    2. Bill B.
      March 23, 2021

      Definitely the right questions, Nig 1. I think you are starting to suspect what the answer is. I would not like to be a Conservative MP right now.

      1. Fred.H
        March 24, 2021

        They seem to have an inbuilt ability to appoint a leader and sit back ‘declining’ to do what screams out needs doing. Cameron, May, Johnson…..’not me guv’.

    3. MiC
      March 23, 2021

      Well, make your mind up.

      Either you want vaccine passports or you don’t.

      The Right generally don’t.

      1. NickC
        March 23, 2021

        Martin, Sensible people do not want internal vaccine passports. If foreign countries insist on vaccine evidence before admitting a traveller from abroad that is up to them.

    4. Narrow Shoulders
      March 23, 2021

      The red wall will want (and can afford) to go on holiday – not cool.

  10. Sir Joe Soap
    March 23, 2021

    Mainly it shows that many EU Treaties are just pipe dreams.
    Reality bites and they are ignored.
    The NI protocol is one such.

    One day soon the EU will be ignored by pharma companies, then others. When silly strikes, walk away.

    1. MiC
      March 23, 2021

      Contempt of Court is pretty serious in all jurisdictions, including the European Union’s.

      1. NickC
        March 23, 2021

        So is protection of contracts pretty serious, Martin, including in the EU. Which is why it would be pretty serious if the EU breaks them. Just as it was pretty serious when the EU flouted the Northern Ireland Protocol.

        1. bill brown
          March 25, 2021


          we flouted the agreement on the protocal as well and are currently doing it as well

      2. Fred.H
        March 24, 2021

        Contempt Martin – you hit the nail on the head.

    2. agricola
      March 23, 2021

      Sir JS.
      The Initial concept that countries that trade together are less inclined to the open warfare of ww1 and ww2.was a good start and the USA piled in a mass of cash to revitalise Europe called Marshall Aid.
      Had the free trade in goods and services been properly developed I would be a happy bunny. As it is it was hijacked by a succession of second rate politicians, mainly socialist, intent on a power grab, with little concept of what democracy was, or if they knew, it did not suit their purpose. Apart from Switzerland and Sweden they were all emerging from the opposite of democracy. Even France only knew revolutionary democracy or in effect anarchy, a talent they have retained. The hijackers sank into an ever increasing , at the present, a less malicious form of the USSR. We now have no real democratic control, an entity largely dependant on handouts from a small number of viable states. A dependency brought about by the use of a mostly common currency but lacking the cental control necessary for it to function. It is an aircraft thrown together from a series of component parts from a range of different aircraft. Every time it tries to respond to different challenges it fails, witness covid vaccination. We are well out of it.

      Like all bullies it is threatening in the playground. Do not for one minute believe that they will see sense, they will not. If anything they will get worse. It is a fantasy to think we can have a normal positive relationship with the EU in its current mindset. We need to go flat out to look after our own interests. It will be some time before the EU realise that a more pragmatic attitude to our sovereign status is the most productive course.

      1. dixie
        March 24, 2021

        Excellent comment.
        btw, your allusion prompted me to recall the definition of a helicopter when I expressed an interest to a flying instructor – a collection of spare parts flying in loose formation. The EU parts seem to be extremely loose, but then they do seem to have at least 5 pilots in nominal control.

    3. jon livesey
      March 23, 2021

      That’s pretty much it. The EU is currently running on momentum, from the days when it was seen as a serious improvement on what went before. But when it starts threatening to run pharmaceutical companies on a day to day basis to recover from its own inadequacies, people start to take notice.

      The scale of the EU’s failure is gigantic. Not only has the EU completely failed to produce its own vaccines, but *nine* months after the beginning of the crisis it woke up to the fact that it had not even signed contracts to obtain vaccines produced by the UK and US – not to mention Russia and China -and the scrambled to catch up.

      A vast bureaucracy with a budget in the hundreds of billions, sat on its hands for nine months, and when it woke up its only solution was to seize the output and intellectual property belonging to Governments that had been working hard at solving the underlying problem.

      That is a huge indictment, not just of the EU, but of the kind of organization it is. And when companies see that, they do indeed figure out ways around the useless lumps.

      1. Ian@Barkham
        March 23, 2021

        @Jon, but they do get to jump the queue. You will give us what we order you to do, if not we will hold your citizens and their welfare hostage – the good old EU way.

  11. turboterrier
    March 23, 2021

    Sir John.
    Could it really be too much to expect and ask for, that we have a leader and a government that will stand up and take face on the waste that haemorrhages out of every sector of civil and public services.? The list of areas to be addressed are well recorded on this site every day, or are nearly all the contributors to this site wrong?

    1. turboterrier
      March 23, 2021

      How much is the feasibility study and provisional costings for a tunnel or a bridge to connect Northern Ireland to Scotland going to cost the taxpayer?
      This is typical of the la la land our leader and his cabinet live in.

      1. agricola
        March 23, 2021

        Yes TT, one is supposed to learn from history. However HS2 is not yet history nor has it finished hoovering up vast sums of money. Perhaps the Boris Burrow hopes to be started before history on HS2 is written. The history of government forays with technology are well documented, but if they cannot read there is always the Dome just down the river. Even Crossrail, which possibly did have an economic argument , is now in question due to the sense of working from home. The question has not yet arisen. However if demand is now down I will not be blaming government for creating it. No government crystal ball could have anticipated China’s Covid blow.
        With a provision for exceptions, 95% of government projects should be subject to the question, would the private sector invest in it anticipating making a profit. If not forget it. The 5% exception type case would be the NHS, because the cost of not having a healthy nation outweighs the cost of an unhealthy one. This puts us firmly in the area of unfinished business.

      2. DavidJ
        March 23, 2021

        Indeed TT, add to it HS2 and the green nonsense and we really do face an unwelcome future.

    2. JoolsB
      March 23, 2021

      They’re too frit turboterrier, they might upset the unions. Plus they’d have to start with the waste that is 650 Members of Parliament. Why do we need so many especially when three out of the four nations now have their own administrations? Far easier to pick on the wealth creating private sector.

  12. Nig l
    March 23, 2021

    And in other news the BBC is asking HMG for permission to borrow £150 million to compete with Netflix. The answer must be no, find it from your bloated bureaucracy and what is a news organisation doing competing with Netflix anyway. The private sector fulfils our needs, we want less BBC not more.

    And what is Cameron doing lobbying on behalf of a bankrupt loan company. Sums up his knowledge of business and arrogant sense of entitlement that he should be listened to. He should be reminded that having failed as PM he is now a private citizen. Well done Sunak for ignoring him. As usual the left wing FT etc is trying to make it a political issue. Sunak ensured it isn’t.

    1. dixie
      March 24, 2021

      That is a key question – “what is a news organisation doing competing with Netflix anyway”
      The could start by getting rid of very expensive “talents”.
      Perhaps the role and purpose of a public broadcaster should be revisited as a matter of urgency as context for consideration of the programming, people, remuneration and funding.

  13. Alan Jutson
    March 23, 2021

    Why is it we require an army (if it was only as small as the real Army) of people to spend OUR money.

    I think it is time we had a real and grown up discussion on who and how OUR money is spent.

    Taxed on Earnings, Taxed on Spending, Taxed on saving, Taxed on investments, Taxed on driving, taxed on fuel, taxed on parking, taxed on some food and drink, taxed on using heat, light and power, even a tax on the air we breath because its not good enough. Then they tax you when you die !

    Work out how much you pay the government with all these taxes added together over your lifetime and you actually wonder who benefits most with you working.

    1. Fred.H
      March 24, 2021

      I watched the Fred Dibnah programs recently. Mostly a very entertaining northener’s view of manufacturing heritage based on steam, steel and stone. Something he said amongst mates over a pint was roughly this ‘Down in London there are 3 men being paid by the Government for each man making things.’ pause for reflection?

  14. jerry
    March 23, 2021

    How convenient for our host, blame it all on those Maastricht requirements, rather than on the economic thinking that created those Maastricht requirements, and had shaped the UK’s own economic rules for twenty years before they became enshrined into EU treaty law – Monetarism theory…

    I seem to recall Mrs Thacher had no objection to the economic part of the Maastricht treaty, it was the socio-political chapter and the ERM that caused most problems.

    Reply I consistently opposed the Maastricht rules. Monetarism was the view of Alan Walters. When he arrived ion No 10 he advised money was too tight and we needed to expand!

    1. jerry
      March 23, 2021

      @JR reply; I thought the IMF, as part of their loan agreement, required the Callaghan govt to impose Monetarist policies, and by April of 1979 Mrs Thatcher was most certainly not extolling the virtues of eynesian theory!

      Reply Why comment on things you clearly have not read? I helped write one of her big Conference speeches which quoted from Keynes on unemployment when we were tackling the need for more jobs.

      1. jerry
        March 23, 2021

        @JR reply; My original point was that Mrs Thatcher welcomed the Monetarist element of the Maastricht treaty, and I stand by that, nothing you have said in your replies has addressed that point.

        As for Conference speeches, sorry, actions speak louder, unemployment was falling by the end of the Callaghan Govt on 4th May 1979, 12 months later the official figure stood at a two year high of 1.5m, 12 moths later in 1981 it stood at 2.4m, and peaking at 13% (3m+) of the labour force by early 1982. Of course all that was before you became head of Mrs Thatcher’s policy unit, so perhaps policy did change, mellow, from then on, the Parties fate at the next election relied upon it, Mr Foot and the hard left would be gone, perhaps even the entire Labour party!

        Reply Maastricht was after she left office

        1. jerry
          March 24, 2021

          @JR reply; “Maastricht was after she [Mrs T] left office”

          The Maastricht treaty was signed on 7 February 1992, Mrs Thatcher had left office in Nov. 1990, are you seriously suggesting a full treaty was negotiated and agreed, complete with UK opt-outs, in little more than 12 months? So much for the EC/member states taking years to decide anything!…

  15. James Freeman
    March 23, 2021

    You should do something about the application of annualised accounting rules to government.

    If a department undershoots on current spending, they can lose out in following years. This results in a wasteful dash to spend money at the end of each year.

    This also applies to capital projects, which by their very nature can have delays. For example if a general election getting in the way of a ministerial approval. Even worse, if there is an opportunity to speed things up, this is difficult to achieve due to the in year spending constraints.

  16. Iago
    March 23, 2021

    A year now since the government began its second fraudulent charade and it is encouraging a candle-lit vigil and imposing a dictatorship. We urgently need to be rid of these villains.

  17. Iain Gill
    March 23, 2021

    the new framework seems to be mad so called green nonsense, to push costs up here, force work abroad from where we will import even more stuff pushing up net world pollution…

    mad anti car nonsense, in a seeming hatred for the majority of decent hardworking drivers who keep the country running

    and an even bigger less responsive public sector

  18. Keith from Leeds
    March 23, 2021

    The problem is our leaders face no penalty for accumulating debt. For example, show me the MP who borrows money personally to give away because it makes him/her feel good. Yet the government is facing opposition to its cut to Overseas Aid from 0.7% to 0.5% of GDP. The PM & all Ministers salaries should be tied to having a balanced budget. Let’s pay the PM £500k per year if the budget is balanced, £150k if it is not, with the same arrangement for all Ministers & MPs. Ministers maybe £300k p.a. & MPs £200k. On that basis how fast would the annual deficit come down? Growth on its own will never eliminate the deficit, there has to be a ruthless crackdown on costs as any competent business person will tell you. The increased salaries may also attract some higher calibre individuals who actually care about our freedoms & don’t blindly vote for lockdowns which don’t affect their pockets & pension contributions in any way!

  19. Andy
    March 23, 2021

    Today marks one year since Johnson announced his lockdown.

    Many of us had already been working from home for weeks and had removed our children from schools already.

    We could see from Italy what was coming. The government – obsessed with its Brexit – could not.

    A new book out this week called Failures of State by two Sunday Times journalists catalogues the repeated failures Johnson made that led us to such a huge death toll and massive economic hit.

    It is hard to believe that we could have had a less able man at the helm in our new darkest hour. Whilst his taking credit for the NHS’s successful vaccine rollout may give him a temporary boost in the polls – history will, rightly, damn him and his failed government. And so will the public inquiry.

    1. Peter2
      March 24, 2021

      Many other nations in Europe locked down at around the same time as the UK.
      I never see a shred of criticism from you of their actions.
      You are playing politics with a pandemic which is very sad.

    2. Fred.H
      March 24, 2021

      What public inquiry was ever worth having? They tend to ignore the bleedin’ obvious to the man on the Clapham Omnibus.
      The public will get the chance to pass their opinion in due time. I hope memories survive and dementia will not have taken hold.

  20. oldtimer
    March 23, 2021

    There is a case for identifying exceptional debts incurred as a result of the pandemic (£300 Bn?) separately within the national accounts. This could be earmarked to be paid off, at say £10 Bn a year over 30 years. The remaining debt and annual deficits should be managed to achieve financial stability and security. In my view this would be lower or zero deficits and debts over time to provide a margin to cater for emergency spending when required. Such self discipline is not characteristic of the political class; the urge to buy votes with more madcap schemes is more likely to prevail.

  21. Bryan Harris
    March 23, 2021

    Makes sense – Seems that the Chancellor needs some ideas putting his way.

    He should get a survey out so we can all advise him

  22. villaking
    March 23, 2021

    As we were not in the euro, the UK was not subject to the fines that could be imposed on other EU countries under the excessive deficits procedures as you imply here. This is in fact another example of why our being in the single market but with lots of opt outs and exceptions was the best of both worlds.

    1. Richard1
      March 23, 2021

      I think that was probably right for a time. But the more the inexorable push for federalism the harder that was and would have become to sustain. Eg In the recent euro bailout (called covid recovery), Sweden and Denmark, neither of which are in the euro, are on the hook for their share of the €390bn of transfers to the southern eurozone. There will surely be more of that.

      Anyway we are where we are so the question is how to make the best of it.

    2. John Hatfield
      March 23, 2021

      Membership of the Single Market was too expensive and came with too many political strings.

  23. Caterpillar
    March 23, 2021

    “targets of course were blown away by the measures to tackle the pandemic”
    No. Measures did not tackle the so-called pandemic.
    “rate of return test”
    Yes appraisal mechanism might be improved but IRR, NPV etc. are in no way suitable for long term projects, with uncertainty (not just risk), option value, crowd-in effects and enactment of the future. So depends on project type.
    “better … policed than prior capital projects”
    Yes, if ‘policied’ means managed and effectively overseen by relevant department without adding huge additional overheads (make-work for depts).

    “For the UK we now need rules which keep our finances in good order”
    1. Does the knowledge exist? Threshold effect of debt on growth-interest gap had a research basis but now that debt is held by central banks, the context seems to have moved from one of risk to one of uncertainty (and possibly side-effects on interest held further from ‘natural’ rate). Is research still valid?
    2. In terms of monetary policy should BoE inflation target become sectoral (though how unclear) e.g. N.Z. P.M. asking RBNZ to consider housing policy?

    Suggestion 1 Replace Johnson as leader with one that immediately restores freedom, removes authoritarianism and gives confidence that it will never be allowed to return.
    Suggestion 2 The climate agenda is wrong.
    Suggestion 3 De-China/CCP the economy
    Suggestion 4 Much closer ‘policing’ of monopoly power of big tech, big pharm, big food etc.

  24. Newmania
    March 23, 2021

    Ha …well lets just say “recollections may vary “. In 2003 Germany and France broke the supposed constraints of Maastricht were not punished and no country has ever faced the notional penalties least of all the UK to whom a 60 % ,limit at the time seemed a monstrous idea anyway. At no time in the Blair period did the National debt ever exceed 35%.
    The UK is not guided by “Maastricht” rules which were never applicable as we were not joining the Euro what Sir John wishes to imply here is that running the country like Sailor on shore leave is your patriotic duty , in fact the UK has only ever been guided by a wish not to become a basket case country.
    At the moment the balance of risks is such that serious retrenchment is not possible but as soon as it is the UK must get its books straight and it has nothing to do with Maastricht.

    Reply The UK did run on Maastricht rules. The 3% rule did bite and the 60% rule became important after the financial crash.

    1. Newmania
      March 23, 2021

      The 60% rule was so overwhelmingly important that UK debt reached 75% in 2010 , and stayed at about 80% 2011 ,2012 ,2013 .2014 . Perhaps you could remind us of what dire consequences the UK faced for its transgressions ?
      None whatsoever at all is the answer.
      If you wish to argue that the UK should ‘Go for Growth’ ….. and ignore any inflationary risk – fine , you may be right, no good choices are there , but stop blaming Maastricht, those days are gone

      1. jon livesey
        March 24, 2021

        Here we go again. Last week it was that EU members should know when to ignore the EU when it comes to vaccination. Now they should know when to ignore fiscal rules set collectively and “enforced” by the EU.

        If EU fiscal rules were any good, why ignore them? If they were pointless, why have them in the first place?

        And why are the individual members the right level to judge when fiscal rules are right and when they are wrong? Isn’t collective decision the whole point?

        You really cannot have something like the EU and tell everyone “It’s really good to have this framework, especially since you can ignore it.” People will laugh at you if you do that.

    2. dixie
      March 24, 2021

      @Newmania I thought the EU fiscal rules were only supposed to legally apply to Eurozone members, which the UK has never been. So it is not valid to compare the treatment of Germany and France who broke a legal undertaking with the UK which did not.
      Letting those two get away with such a large infraction surely gave a very strong message to all other members of the Eurozone, and wider EU, that the rules do not matter and won’t be enforced, unless you are a smaller and/or weaker state of course

      Reply We agreed to the Maastricht rules on budgets, submitted our figures and promised each year to take actions with them in mind

  25. kb
    March 23, 2021

    The UK economy consists mostly of a property Ponzi scheme. Chancellors have done everything to maintain insane London house prices which ordinary workers simply cannot afford without a subsidy. Hammond admitted recently that high immigration is essential to keep the Ponzi scheme going. That is why nothing is ever done to limit immigration.
    If we are going to borrow more, let us borrow to invest in productive activities and infrastructure, instead of property speculation. We have to get back to people buying a home not an investment vehicle.

  26. Iain Gill
    March 23, 2021

    I see the world skills think tank is complaining that fewer and fewer Brits are studying Computer Science.

    Its hardly surprising that when all the jobs in Computer Science are given to cheap foreign imported workers that Brits stop studying it.

    It is not a skills shortage causing a need for immigration, it is too much immigration causing Brits to refuse to gain those skills.

    The political class fundamentally fail to understand this dynamic.

    1. Original Richard
      March 24, 2021

      Iain Gill : I agree with you completely except for your last sentence :

      “The political class fundamentally fail to understand this dynamic”

      Our political class fully understand.

      For decades they have unashamedly imported doctors and nurses trained in countries whose needs are greater than ours in order to save money on training and keep down hospital salaries.

      When the Blair government realised that Labour’s eradication of secondary modern schools led to a shortage of carpenters, plumbers, electricians, plasterers, bricklayers etc. they saw the solution as the importation of hundreds of thousands of skilled craftsmen from Eastern Europe.

      There are many other examples going back in history and it explains why no government wants to tackle our high levels of immigration despite 70% of voters wanting to see a decrease.

  27. formula57
    March 23, 2021

    “For the UK we now need rules which keep our finances in good order….” – or, as an alternative to rigid rules that somehow never get revised and so end up (if they were not ab initio) inappropriate for an ever changing world (certainly Maastricht and also the Barnett formula), perhaps we could just have some commitment to sound economic management, constantly fashioned to suit the prevailing circumstances?

    Rules are used too often to justify courses of action as though they were self-evidently appropriate, thereby stifling or avoiding debate (which was of course the purpose of the Barnett formula).

  28. Ian Pennell
    March 23, 2021

    Dear Sir John Redwood

    David Cameron, our former Conservative Prime Minister once stated “An Economy built on Debt is an Economy Not Built To Last!”. He was right, but how far we have come today!

    Rishi Sunak is set to borrow 17% of GDP this year-much of it from money Printed- and our total National Debt is set to rise over 100% of GDP. But there is a better way of helping the Economy grow and funding better Public Services- whilst reducing the now-potentially- dangerous levels of National Debt, whilst also protecting Sterling from the whims of currency traders. It’s called Modern Monetary Theory with Precious Metal Buying.

    I believe Modern Monetary Theory (MMT)- printing money to finance deficits in Government spending alone is dangerous, as that could lead to a Zimbabwe-type situation with hyper-inflation. But what if MMT is applied with the existing QE balance at the Bank of England used to buy Gold and Platinum-backed securities from within Britain ? So whilst MMT is applied by the Bank of England to give some new money to the Government, the Bank of England is also selling Government bonds but using the money raised to buy Gold and Platinum. The Gold and Platinum (plus the Gold bullion still in Bank of England vaults) is used to back up new and existing money issued by the Bank of England whilst the Government stops borrowing.

    There is about £900 billion of Gilts held by the Bank of England- all of which could be converted into Gold and Platinum to help back up another £900 billion printed to help the Economy- over several years. The risk of high Inflation is reduced by the Gold and Platinum Securities (plus the Gold Bullion still in the Bank of England) backing up existing and new British Pound Sterling, debt will fall as increased revenues will more than provide enough for the Government to service the existing £ 2.1 Trillion debt pile- and the Government will be able to fund Levelling Up, more money for the NHS, Police and Defence- whilst avoiding economically- harmful Tax rises.

    It surely, Sir is an economic solution worth thorough investigation. I don’t know why a Money- printing and Bullion buying (or buying Shares in Gold/ Platinum) Programme is not given serious thought because if you back up the new money (and provided you don’t overwhelm the Economy with too much new demand) you could grow the Economy with much less risk of Inflation. That then means the Government can pay for things which it can struggle to afford today- i.e. proper funding for the Armed Forces, dealing with the Social Care problem and maybe being able to provide a Citizen’s Basic Income so everyone is supported whilst automation takes away jobs in future. Extra spending could be financed without mortgaging our children’s and grand-children’s futures with Debt!

    And you would take Sterling back towards a Gold (or Precious Metals) Standard- away from the potential danger of being just a fiat currency- whose value is 100% at the mercy of what Traders think it is worth -those same Traders are today looking at the Bank Of England and what Rishi Sunak is borrowing and are thinking “Hmmm!” with suspicion!

    So MMT with Gold/ Platinum buying is surely worthy of investigation and discussion with your Conservative colleagues.

  29. Narrow Shoulders
    March 23, 2021

    Seen the price of steel and other commodities today?

    No inflation…..

  30. Nick
    March 23, 2021

    I have two finance-related questions (and therefore on-topic!), which are not rhetorical – I genuinely am at a loss to understand what is going on:

    1. Given that the debt held by the BoE is, as you say, held on behalf of the Treasury, why don’t we just write it off? Why, in any sane world, would you count money you owe yourself? It’s all your money! This makes no sense to me.

    2. Given that the government has made it clear it does not believe the EU is acting in good faith in relation to the checks required for the movement of goods (primarily foodstuffs) either to NI or the EU, why is the government still paying the EU over £10 BILLION this year? Surely any sane government would say to the EU: “eliminate all these unnecessary checks immediately or we don’t pay you a single penny”? What on earth is going on? Why isn’t the ERG raising this? Has it been disbanded? You certainly don’t hear anything from them any more.

    Reply 1. Removal of both the bonds and the CB reserves that finance them could undermine market liquidity and remove future flexibility of monetary policy.
    2. The ERG is fine and has not been seeking publicity for its work. The Uk has recently taken some action to tackle the friction around NI trade and might need to take more.

    1. jon livesey
      March 23, 2021

      Monetizing debt by buying it from its holders actually *is* writing it off. You are taking debt you would eventually pay with new cash, and paying for it early. After you buy the debt, the Treasury pays interest to the BoE and the BoE pays its profits back to the Treasury.

      And you could stop worrying so much about the ERG. In the big picture, they are not very important. What is important is the the EU is casually racking up a number of obvious violations of the WA and FTA and in due course HMG will use that against them.

      When that happens, you will hear dark mutterings about “ERG pressure”, but that will just be a joke among journalists, and how we eventually put pressure on the EU will be Government policy, not some backbench project.

  31. Denis Cooper
    March 23, 2021

    Off topic, an Irish parliamentarian pronounces herself to be “gobsmacked” that some UK imports arriving at sea ports in the Irish Republic are being treated in such an “illogical” fashion:


    “TDs and Senators reacted with shock to the news, with Committee Chair Lisa Chambers saying she was “gobsmacked” and that the new system introduced post-Brexit was “so illogical”.”

    But she should be even more “gobsmacked” that the illogicality described to her committee is doubled up when UK goods arriving in sea ports in Northern Ireland are treated as being ‘at risk’ of passing on to the Republic across the land border, even though the trade across that real border is only about a fifth in volume of the trade across Boris Johnson’s newly invented sea border, and doubled up again when at present the UK is still aligned to EU regulations and so all goods moving from Britain to Northern Ireland will still comply with EU Single Market requirements.

    It is hard to believe that this is not deliberate arbitrary obstruction of our exports.

    1. jon livesey
      March 23, 2021

      So TDs and Senators are shocked and surprised at EU regulations imposed on Ireland that they didn’t know about, and that don’t even make sense?

      Isn’t a good job that EU members don’t lose their sovereignty, eh?

  32. ukretired123
    March 23, 2021

    Unbelievable that Rolls Royce wanted to sell their Bergen Marine engine plant to Russia of all people but Norway has blocked it correctly recognising its strategic importance to a potential hostile navy.
    Pity that Warren East left Arm Holdings before it was sold off to another potential hostile country via the backdoor without any UK Govt awareness of its major strategic importance to anyone.

    1. Philip P.
      March 23, 2021

      It’s also surprising, ukretired 123, that Russia would want to source their marine engines with a very clearly hostile country, at least at government level. It would give them supply, replacement and maintenance problems in the event of conflict. What can they be thinking of?

  33. Denis Cooper
    March 23, 2021

    Also off topic, I have just noticed this recent report in the Irish Examiner about the seizures made by the Irish Revenue Commissioners during 202o, which has a couple of points of interest:


    The first point is that while there were many and various seizures of contraband goods their total value came to less than €0.1 billion, which is trivial in the context of the €347 billion value of the Irish economy. Even if just leaving the land border open and completely eschewing all checks on the goods which crossed into the Republic did lead to increased smuggling it would be increasing from a very low base, less than 0.03% of Irish GDP and of course much less than that in relation to the whole EU Single Market.

    But the second point is that the checks which are being carried out are not all at entry points:

    “A spokeswoman for Revenue said: “Revenue has anti-smuggling teams at all main ports and airports and at the main postal depots, who routinely profile imports and exports and carry out X-ray examinations and physical examinations based on risk assessment.”

    Well, what a pity that nobody mentioned those Irish anti-smuggling teams at “main postal depots” in the Republic back in the autumn of 2019 when Irish politicians – and then Angela Merkel – got themselves into a bother about Boris Johnson’s suggestion that there could be “customs clearance depots” not at the border itself but well back from the border.


    “Labour leader Brendan Howlin described the plan as “entirely unacceptable”, adding: “that’s been the position since the beginning of these negotiations.”

    He said: “I don’t think anyone would table such proposals with a view to securing an agreement. No matter where you locate check sites – they amount to a hard border.””

    So there you go – it turns out that the Irish Revenue has long ago instituted a “hard border”.

    Boris Johnson’s mistake was to surrender to this silly nonsense rather than laughing at it and saying:

    “Well, this is what we are going to do on our side, you can please yourselves what you do on your side”.

  34. jon livesey
    March 23, 2021

    I think that the idea that we need a “different set of rules” to Maastricht rather misses the point. The real point is that having Maastricht rules was a mistake in the first place, and writing them into a Treaty was even worse.

    People forget that any Government of legislature that sets rules for its own behaviour is really negotiating with itself,a pretty silly procedure. We don’t elect Government to follow fiscal rules, no matter who writes them, but to use its own judgment in dealing with fiscal situations as they come up.

    I think we have already forgotten the complete idiocy we watched for years as the EU tried to wrestle with the euro crisis. They issued rule after rule, none of which worked, until Draghi simply said he would do “what it takes” – which meant creating new money, buying up debt, closing Banks and ATMs, and so on – to prevent the euro from breaking up. In other words, he announced a goal and said he would do *anything* to meet that goal. And at that point the market relaxed. Given the defective design of the euro, that was quite an achievement.

  35. acorn
    March 23, 2021

    The Maastricht figures do not adjust the state debt figures for all that debt now owned by the Bank of England as agents of the Treasury which also seems strange”.

    Why would they? It makes no difference to the total quantity of Treasury currency in circulation, if that currency is held as securities, Gilts (tradable savings accounts); or, reserves that can be turned into currency notes or coins as required by the populace. There is no net change in the fiscal assets in the economy other than the Treasury is paying more interest to itself and less to the non-government sector savers.

    1. jon livesey
      March 24, 2021

      If “the Treasury is paying more interest to itself and less to the non-government sector savers” then debt figure absolutely *should* be adjusted to reflect that.

  36. Denis Cooper
    March 23, 2021

    Here is a disgraceful UK government leaflet, a leaflet which should not even exist, about the new rules for moving goods from those parts of the UK which are now free from EU domination to that part which has been unjustly singled out to remain under the economic thumb of the EU in perpetuity:


    “Moving goods from Great Britain to Northern Ireland?

    Instead there should be a different UK government explanatory leaflet, one entitled:

    “Moving goods from Northern Ireland to the Irish Republic?”

    because the problem to be addressed relates to that, not movements within the UK.

  37. agricola
    March 23, 2021

    Well NS I think the NHS needs an in depth financial audit. Before Covid we suffered very long waiting lists in many disciplines, orthopaedics and mental health come to mind. The numbers now must be horendous. To resolve delays we need medics at all levels, which means money to pay them.
    An audit of how hospitals operate 24/7 is needed to confirm or otherwise that we are utilising capital equipment to its maximum.
    An audit of purchasing and its professionalisation after PPE I would think is a must. Similar with waste which I would guess is an unnecessary and curable on cost.
    Finally I would introduce a system of Kenzai using everone in the NHS because they know better than anyone where the bodies are buried. The above should indicate whether the funding is adequate or not.

    1. agricola
      March 23, 2021

      The positioning of replies is neurotic.

  38. Original Richard
    March 23, 2021

    The fact that the government intends to continue spending money on HS2 rather than on fibre optic cable shows they have not learned that mass transit systems are useless in a pandemic.

    This is in addition to the vast costs involved for building and maintaining a high speed out-of-date technology (steel wheels on a steel track) whilst ignoring the immense environmental damage.

    You would have thought that the pandemic would have given the government a perfectly valid reason to cancel this folly.

    1. Fred.H
      March 24, 2021

      HS2 ? a mass transit system? I think not .

  39. Margaret Brandreth-
    March 23, 2021

    There is no specific time that finances should be kept in order. They should always be kept in order and private investment isn’t the only way . A firm is only as good as the people in it , not those who try to out do others by bringing them down with fake figures .

  40. No Longer Anonymous
    March 23, 2021

    Did I really just hear Mr Hancock say on the BBC “To think, a year ago wearing masks seemed odd but now we’re all used to them.” ?

    What a peculiar man he is.

  41. Lindsay McDougall
    March 24, 2021

    If the portion of State debt owed to the Bank of England can be ignored, then it could be cancelled. But I don’t think that is the case. The current ultra low interest rates and oodles of QE are being used to finance public sector projects, starving the private sector projects that would lead to new export markets and import substitution, of investment capital. The State no doubt justifies prioritising its projects because they are infrastructure projects. A study of the history of canals and their current uses might lead to scepticism about the rate of return on the capital invested in them. It’s not necessarily going to be different with HS2, Heathrow runway, 5G communications, the NHS and the PM’s extra trains and buses.

    1. jon livesey
      March 24, 2021

      You have just explained why the State invests in infrastructure. It’s because it does not fit neatly into the usual framework of investing in a product and expecting to make a profit by doing so. Building a bridge or a road is essential for the economy, but you can’t sell it the way you can sell a box of biscuits.

      And by the way, this also explains why the Government borrows to fund such projects. If a future generation will benefit from the bridge you build today, then they can also help to fund it by pay off the debt that built it.

  42. Ed M
    March 24, 2021

    Boris saying ‘greed is good’ at Party Conference (and then apparently saying something similar about vaccinations) is exactly what is wrong with our whole economy.

    You can’t have an economy built on greed. It just means you have every man out for himself, using and abusing everything and everyone for his own persona profit. People in business, abusing the system, and aiming for short-term profit out of long. Employees not turning up to work / low productivity. And how this attitude then filters into the rest of society in more subtle ways, like being being greedy about abusing the NHS services and other public services, creating a general sense of entitlement.

    Boris also has zero proper experience of business which makes his comments even worse. And I’m not being idealistic about business. The Quakers were hugely successful in business, basing their work on work ethic – and a work ethic that you could see in abundance in the past in the UK. If you love your work and work hard and are an expert at what you do (and take sensible risk and have the right amount of courage) then good profit will flow from that – and profit based on future long-term growth and stability (and all this impacts on raising productivity, exports and a sense of patriotism as we’d have more excellent UK brands that people were delighted to work for / be associated with).

    Reply He did not say greed is good, it was not at a party conference and he immediately withdrew his mistake

    1. Ed M
      March 24, 2021

      And you can play and have fun outside work as well. In fact, the play and fun will be even better as you won’t be playing and having fun to ‘escape’ work but because it’s just an another area of life you want to enjoy (and enjoying your work doesn’t just impact in a positive way in how you enjoy your free time but also interacting in a positive way with people outside work etc – we’d then have far stronger families, neighbourhoods, communities as a whole – and people a lot happier and taking more responsible for themselves and so hugely cutting down on the cost of public services – and so taxation would fall —-> tumble.

      There is ALWAYS a price to be paid for greed – at both an individual level and community level as the greed of the individual always impacts on others not just themselves. Where as a healthy, thriving, cheerful nation thrives on work ethic – and ultimately and paradoxically makes the nation richer in the long-term as well as hugely reducing taxation.

    2. jon livesey
      March 24, 2021

      It’s probably a political error to come out and literally say “Greed is good” because that just puts a sound-bite out that mischief-makers can use against you.

      But it’s only an error in that a lot of law people get their moral outrage mixed up with their economics.

      If you take the Adam Smith view that the economy keeps moving along, and you and I get our daily bread because it is in someone’s self-interest to bake it for us, and make a profit doing so, then yes, greed really is good. Greed is the motivation that causes people to go on investing, inventing new products, creating new jobs and opening the shop each morning.

      If you want to live in a society that rejects greed as a legitimate motivation then it’s a bit late to move to the USSR, but there is still Cuba, Venezuela and probably Somalia.

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