John Redwood – (Wokingham) (Con) – Could my right hon. Friend comment on what difference, if any, he thinks it makes that a significant proportion of that debt is now owned by the Bank of England, which is 100% owned by the Government on behalf of the taxpayers?
Simon Clarke (Chief Secretary to the Treasury) – The Bank of England has obviously helped to underpin our wider response to the crisis that we face. Clearly, it does have a bearing on the relevant significance of debt, but it would be simply irresponsible to leave ourselves exposed in the manner in which we risk being if we fail to constrain the borrowing, which risks otherwise becoming an unacceptable burden and which would leave us very vulnerable. A 1% rise in interest rates would cost the Exchequer ÂŁ22.8 billion in 2025-26. That is a meaningful level of exposure and one which we want to take action to address.
…
John Redwood (Wokingham) (Con) – Further to that point, is my right hon. Friend not quoting a gross figure for the impact of a rise in interest rates, and quite a bit of that would be credited back to the Bank of England, which, in turn, could pay it back as a dividend to the Treasury?
Simon Clarke (Chief Secretary to the Treasury) – I think it remains the case that we need to make sure that our debt-to-GDP ratio is more sustainable than it is at present, and I do not think colleagues would significantly demur from that. I take the point that, obviously, there is an interactionâsome of these interactions are of a relatively circular natureâbetween the Bank and Exchequer, but none the less, it is important that we control our public debt. Indeed, we were able to respond to the pandemic as comprehensively as we did precisely because of the fiscal space created since 2010. The fact that we faced two once-in-a-generation shocks in just over a decade highlights why we must have the buffers to provide support when it is needed most and why we must act to rebuild those buffers, so that we are ready for any future shocks. In its most recent âFiscal risks reportâânot an easy one to splutter outâthe OBR said:
âIn the absence of perfect foresight, fiscal space may be the single most valuable risk management toolâ
that we have.
The third and final reason we need to keep our debt under control is simple: our public finances are the legacy we leave for future generations, and the decisions we take now will have a material impact on the lives and livelihoods of our grandchildren. They will help or hinder challenges, from climate change to an ageing population, or indeed to seize the opportunities that lie ahead.
The charter for budget responsibility contains new fiscal rules to guide us back to fiscal sustainability in a fair and responsible way. The rules will ensure that we get debt down over the medium term. They will allow us to deliver a significant uplift in capital investment, in turn driving economic prosperity, but without burdening future generations with borrowing to fund our day-to-day spending. The new rules require that underlying public sector net debt, excluding the impact of the Bank of England, must as a percentage of GDP be falling. The current budget must be in balance, which means that everyday spending must be paid for through taxation. Both rules must be met by the third year of every forecast period, giving us the flexibility to respond to events in the near term, such as omicron, while credibly keeping the public finances under control.
Finally, a third rule will ensure that public sector net investment does not exceed 3% of GDP on average over the forecast period. This rule will allow the Government to deliver on our ambitious plans for investment over this Parliament, with the highest sustained levels of PSNI as a proportion of GDP since the late 1970s. With this rule, we are delivering on plans to invest more than ÂŁ600 billion in gross public sector investment over this Parliament to spread prosperity across the UK. The ÂŁ4.8 billion levelling-up fund is part of that. An unprecedented investment package of ÂŁ5.7 billion for eight English city regions to transform their local transport networks is also part of it. On top of these commitments, the UK Infrastructure Bank is now open for business and is expected to support more than ÂŁ40 billion of infrastructure investment. Crucially, the rule also mitigates the risk of increasing debt to an unsustainable level. Our fiscally responsible approach supports growth while keeping debt under control.
Combined, these rules will guide responsible decision making. The International Monetary Fund has noted that
âCountries that have followed a debt rule have typically managed to reverse a jump in debt…significantly faster than other countriesâ,
and it recently assessed that the
ânew fiscal rules have anchored fiscal policy wellâ.
Thanks to our support for the economy and early responsible decisions to strengthen our public finances, in its October forecast, the independent Office for Budget Responsibility confirmed that the rules were met. The current budget is in surplus and underlying debt is forecast to fall in the current target year, 2024-25. The rules will guide fiscal policy for at least this Parliament and will be reviewed at the start of each Parliament to ensure they reflect the economic context and mean that we can deliver for the British people.
In addition to the rules in this charter, we will go further, becoming one of the first countries to formally consider the broader public sector balance sheet in our management of fiscal policy. The OBR will now forecast broader measures, including public sector net worth, which it says provides a fuller picture of fiscal sustainability and allows for more sophisticated analysis.
The charter also retains the welfare cap in order to keep welfare spending on a sustainable path and to support the other rules in strengthening the public finances. Since the cap was last set at Budget 2020, the covid pandemic has had a significant impact on the medium-term outlook for welfare spending. To reflect that and to align with the updated fiscal framework, the level of the cap is being reset in line with the latest forecast. That leads to an effective increase of £10.5 billion in the cap by 2024-25.
…
John Redwood (Wokingham) (Con) – Let me return to the subject of the debate, the charter for budget responsibility. I will not follow the Opposition into a debate on the general state of the UK economy, which I am sure we will have other opportunities to discuss.
I see this as the Maastricht rules tribute debate. Every year under the Maastricht treaty, whether under Labour, coalition or Conservative Governments, we used to have a debate. We had to look at the two fiscal rules, which of course both came from the European Union: rule one was that the budget deficit had to be 3% of GDP or less; and rule two was that we had to either be below 60% of GDP with our state debt, or we had to show how we were going to get down to 60% of GDP with spending cuts or tax rises. The UK normally favoured the tax rise route, rather than the spending cut route.
That was characterised by the Opposition parties of the day, once the Conservatives or the coalition were in office, as austerity economics, although they would never accept that the cause of the austerity was the rules designed in Brussels. They would point out, when I made that point, that, âOh well, because the UK is not a member of the euro there are not the same penalties imposed if the UK fails to comply.â The fact was, however, that the whole UK economic machineâBank, Treasury and officialdomâbelieved they were very serious commitments and that, as they were treaty commitments, the UK had to keep to them. So when we finally got out of the EU, I was one of those voices saying to the Government, âLetâs scrap all that. Letâs not have those Maastricht tribute debatesââalthough I think we had one even after we leftââand letâs have our own UK framework.â That is what we should be debating tonight.
The Government have come up with a charter for budget responsibility, which I welcome, but reading the detail, it has a familiar ring to it. What are the two main rules in the charter? One is that we must keep the budget deficit down to 3% or below. It has been repackaged in relation to investment, but it is basically the 3% Maastricht budget deficit rule. The second rule is that, by the third year, debt should be falling as a percentage of GDP. Of course, our debt is well above 60%, and it will be quite a long time before we get back to 60%, if at all. It is now built into the framework as a regular review item, although it has the extra twist that it is a three-year average, so there is a bit more scope for flexing things.
I think we can do better than this Government. We could come up with an economic framework geared to the modern needs of an independent country, and I would suggest that our charter should embed two great aims of economic policy. The first aim that it should definitely embed is controlling inflation. It is right that the so-called independent Bank of Englandâthis House regularly changes the rules and shows that it is actually in charge of the Bank of Englandâis charged with the duty of keeping inflation down to around 2% on average. I have no problem with that as a target, but the Government need to adopt it as a target as well, because as Ministers must well know, we cannot do all of the heavy lift through monetary policyâwe cannot do it all through interest rates or quantitative easing. We also need to have a sensible fiscal policy.
Above all, the Government, who control such a huge chunk of the economy, need to manage their own affairs well, in terms of productivity, sensible real wage growth and so forth, and they have a duty to follow an anti-inflation strategy for the public sector directly under their control as a back-up to what the Bank and monetary policy are trying to do. I think that we should embed the inflation policy more firmly in the charter and that the Treasury should have to tell us how it is contributing to controlling inflation. It will be very topical this year, because clearly inflation is considerably above where we would all like it to be and there is no immediate sign that it is about to drop down, although I think it will drop down towards the end of the year, unless policy is particularly foolish.
The second criterion or objective that I would put in the charter is a growth objective. Labour made an entirely fair point by saying that what matters is growth. The faster the growthâas long as it is not inflationaryâthe more we would solve our deficit and debt problems. Our economy and our figures are incredibly sensitive to the growth rate. In the first half of the current financial year, we had very fast growth. It was a recovery phase and things were going fairly well from the covid lockdowns. As always, the OBR and the Treasury completely misjudged what favourable impact growth has, so they overstated the deficit for the first six months of the year by a whopping ÂŁ50 billion. The deficit tumbled by ÂŁ50 billion more, with no tax rises. But there was a huge tax riseâit was called tax on growth. More people went to work, and more people earned higher wages, bonuses or salaries. More people spent more money, so there was more VAT. So income tax receipts, VAT receipts and other receipts in the economy greatly outperformed the OBR and Treasury forecast, demonstrating that, if we can go for growth, we will make much better progress on the debt and deficit, which we need to do, than if we go for austerity economics, slowing the economy with tax rises and a too abrupt monetary deceleration.
I urge the Government to look again at whether they can improve on the objectives in the charter, to reflect on it and to see how an independent Britain can have a growth policy. If the Government established a growth targetâthey would not always hit it, but they could establish itâit would start to inform the actions of every Government Department that has a bearing on the strength of our economy, new jobs and all the rest of it. That is what we want. We want a Whitehall that is positive about Britain, not one that is trying to hold it back. We want a Whitehall that thinks Britain can achieve thingsâcan invest here, have more jobs here and substitute for importsârather than a negative Whitehall that says, âGosh, there is too much borrowing, What can we cut? What can we tax? What can we stop?â We want less stopping and more positive going. We want more ability, generated by a growth policy, to show that an independent Britain can produce more of its own energy, grow more of its own food, catch more of its own fish, and make more of its own personal protective equipment and of its own medical requirements.
David Linden (Glasgow East) (SNP) – That speech would perhaps have done even better with âJerusalemâ on in the background. The right hon. Gentleman speaks about growing more food, but can he tell me who is going to pick that food from our fields?
John Redwood (Wokingham) (Con) – It will be picked by people paid decent wages, and if that requires wages to go up a bit, I have no problem with that. It will also be picked by the growing mechanisation of agriculture. Our agriculture is not as fully mechanised in a lot of farms as it is possible to do when there are better capitalised farms, like those that have been growing more food elsewhere. How pessimistic that wasâwhy is the hon. Gentleman not proud of the United Kingdom, Scotland or wherever, thinking that we can achieve more and do more? Why do we always have to be stopping people doing things, and saying that nothing is going to work and so let us import all our vegetables from Spain, all our flowers from the Netherlands and all our energy from Russia, Germany or the Netherlands or wherever because we are not able to do it here in Britain? It is just not good enough. We have this huge opportunity. We have a very talented people. We have many natural resources. We have a perfectly good temperate climate for growing most of our own food. So, Government, get on with it. Having a growth target would help energise a Whitehall that still seems to be very disappointed in the country it is trying to govern and seems to be trying to hold it back.
One other thing that the Chief Secretary mentioned in his remarks, which is mentioned briefly in the text we are debating tonight, intrigues me. It says that balance-sheet items are being worked on but have not yet reached a state of development where they can be shared with the rest of us. How long does it take? Why do the officials to the Government not know the asset and net asset position for the country? I believe there are some figures we can get from public sources that show that we do have some guesses about all that, but is it not rather important that when we debate the state of the nationâs finances, we understand the balance sheet as well as the income account and that we know whether the public sector is adding value and long-term wealth or not? If it is, why do we not claim some credit for it? If it is not doing enough of that, we need to ask the difficult questions about the wisdom of the investments, the productivity of the schemes and all the things that go into making that a success.
I did ask the Chief Secretary about a balance-sheet item. I think it actually makes a difference if you have bought in your own debt, because you owe the debt to yourself. I am not asking for anything imprudent to be done. I understand why we have gone through this rather tortured process, as has the European Central Bank and the Federal Reserve Board, and as, for many years, has the Bank of Japan. But we should not then fool ourselves into thinking that we have a worse problem than we have. The fact is that all these countries and currency areas spent a lot of money and created a lot of money to buy in debt over the pandemic, and we have got away with it, with a caveat that we have a little too much inflation. That debt is purchased; it is now both an asset as well as a liability of the state, so it is wrong to think that it is just a liability. The new argument is, âWe owe the Bank of England and if the short rates go up, we owe the Bank of England more interest and so forthâ. Yes, but it gets the receipt. If we want to do the transaction, the Treasury pays the Bank and the Bank can pay the Treasury back, because the Treasury owns the Bank. If I had bought in my mortgage from a mortgage company, I would probably just forget the whole thing. However, on Bank of England and Treasury logic, every month I would pay interest to myself because I still owe the mortgage, but then I could take that money back and spend it because I own the mortgage company and it is no longer a proper debt.
I think we have to understand that something different has occurred with quantitative easing, and I do not think we should go on doing it. It is normally very inflationary and very dangerous. In the strange circumstances of a covid lockdown in which a huge amount of demand and activity were taken out of the system, we could get away with it; indeed, it was right to do it, and I supported the Government at the time and praised them for the stimulus they offered. However, that has gone, and we now need to have sensible finances. To run those well, I strongly recommend a firm inflation targetâinflation is a little too high at the moment, and needs to be taken very seriouslyâcoupled with a much more optimistic growth target, because that is the way to grow the balance sheet and get the debt and the deficit down.
January 11, 2022
An excellent question by David Linden which destroys your whole argument. It would be great to grow more of our food but that requires more people to work in agriculture. People don’t grow on trees. We used to have ready access to labour from the EU, but that has been cut off by your hard Brexit. Same with hospitals, care homes, truck drivers etc – your hard Brexit has sent thousands and thousands people who helped us in Britain homeward. Result – a Uk economy which is shrinking. Brexit is a catastrophe
January 11, 2022
Ever heard of mechanisation ? There are people creating machines to pick fruit and other such crops, we might have been further down the line of their development and implementation if the labour market hadn’t been distorted by bringing in cheap labour.
As it was 5 million, yes 5 million EU citizens took up the right to reside here , that is close to 10% of our population, and even then you are crying woe and claiming our agriculture will grind to a halt with out millions more . How many millions more immigrants do want until you come to the realisation that this pyramid immigration scam doesn’t work?
January 11, 2022
You are correct about the immigration scam. Many immigrants take the fruit picking and care jobs only until they find better paid work, and they leave the picking and care jobs vacant once again … with the business owners crying for even more min wage immigrants. Immigrants want better pay too. I doubt they are stupid enough to want to work for min wage when there are alternatives available.
January 11, 2022
it was 6 million.
January 11, 2022
Only a fraction of those will be living here at any one time.
They are qualifying close relatives of those actually living here, but who want that contingency, or part time residents, like those from here who live in Spain on a similar basis.
Also children to European Union citizens who were born here.
January 12, 2022
a set of inaccurate, wild guesses made to seem plausible ….nice try MARTIN.
Most of those could travel here on 3 months visas, like we’ve always had right round the world.
January 12, 2022
I remember Brexiters telling us there’d be no new customs controls thanks to mechanisation. Not true.
I remember Brexiters telling us there’d be no border in Ireland thanks to mechanisation. Not true.
Same now. Mechanisation of agriculture. If it were easy to do, it would already have been done.
You all live in a fantasy world where you just invent made-up solutions. In the real world they don’t work. And Brexit is a colossal failure as a result
January 12, 2022
When did they say all that Gary?
You making things up?
Are you claiming mechanisation isn’t possible?
You old lefty luddite
January 11, 2022
No, it doesn’t necessarily require more people to work in agriculture. Mechanisation can provide all the “labour” required in many different areas of agriculture/farming.
I recommend to you an article published in TCW – Defending Freedom published on 2 January called Notes From the Sticks – The Cows That Milk Themselves – which nicely demonstrates how less human labour can mean better productivity and, in this case, more contented animals.
The link is here, if Sir John permits it. https://www.conservativewoman.co.uk/notes-from-the-sticks-the-cows-that-milk-themselves/
January 11, 2022
Taper benefits based on periods in work and out of work, carrot and stick. We have plenty of potential workers.
January 11, 2022
Nonsense Gary.
There are 70 million people in the UK with more new arrivals every day.
Net migration is several hundred thousand per year.
Yet you ridiculously think there are no people available.
And are you opposed to employers paying higher wages to attract more staff?
January 11, 2022
Indeed – we surely just want to ensure we get people who will not be criminals or terrorists, will pay for themselves & family and not live off the backs of others. Anyone can apply.
As to Simon Clarke MP – On 12 June 2019 the UK Government amended the Climate Change Act of 2008 by introducing a target for a 100% reduction of greenhouse gas emissions (compared to 1990 levels) in the UK by 2050. At the forefront of this change in policy was Clarke, who, in September 2018, organised a letter signed by more than 130 cross-party MPs which indicated their support for net zero emissions and stressed opportunities for UK businesses, including in the North-East.
So we can fairly safely assume assume he is a deluded dope with almost zero understanding of energy, climate, science or numeracy. Probably likewise for the 130 signatories too.
January 11, 2022
The extent and nature of the impact of Brexit upon people’s migration decisions during 2020 is currently unknown (ONS). What we do know from gov.uk –>
As of 30 June 2021, just over 6 million (6,050,860) applications had been received (8% repeat applications).
5.4 million (5,444,550) applications had been concluded up 30 June 2021.
Therefore please cease carping on about ‘thousands and thousands’ leaving the UK…. we have millions and millions of europeans living here on a permanent basis. We are now in control of our own migration policy and this can flex to meet the needs of the country and economic areas, including agriculture, truck drivers and care homes, which is being controlled and managed by us. No longer a free for all coming in for our benefits too.
I agree with Sir J, mechanisationof agriculture, yes please and build more big greenhouses for soft fruit and veggies. Save on truck miles and EU imports.
January 11, 2022
est. number of EU citizens in the UK at the time of the referendum – 3 million
est. number of EU citizens in the UK in 2021 – 6 million.
January 12, 2022
Whose estimate?
January 11, 2022
Megson
Don’t you think a country of 70 million should be able to find it’s own workers without importing more ?
January 11, 2022
Only if you don’t want your economy to grow.
January 11, 2022
There are many on lucrative benefits that can’t be bothered to get their ar**s of the mattress and do something. My husband has retired finally at the age of 75 and would love to continue working. I think he’s done his bit. Time for those lazy ones to pick up the slack.
January 12, 2022
The system politicians have enacted encourages such fecklessness. It also encourages parents to spit up and get two rents paid for them rather than one and with higher benefits. It also encourages others to have say 12 children paid for by others while some people working (and paying for these people) cannot even afford to have one or one more.
It is the system that needs to be changes.
January 11, 2022
There is growth of rising GDP per capita by adding value , where we get richer as a people and country, or rising GDP by adding people, which doesn’t improve the living conditions of the British people , in fact their living standards get worse , as property becomes unaffordable, wages get depressed , and life becomes miserable as we all fight for a bit of space in an overcrowded country.
January 11, 2022
Additionally, one of the most populated countries in Europe. Who on earth wants the UK to be the most populated country in Europe? Everyone (except the mega rich) to live in high rises and even more crowded roads? No thank you.
January 11, 2022
Gary, perhaps we should reduce benefits by expecting the same number of hours of work they get in benefits from people at the NLW for that area. Why should able people be idle when there are simple tasks to do. You underestimate your compatriots in the UK, I know thousands of hard-working, grafting people, that do everything from agricultural work to caring and tree cutting. Why should they labour to pay other able people and especially the 11% of young people idling away on benefits?
January 11, 2022
Gary Megson :
Utter nonsense.
How on earth do all the other European countries survive, all of whom except Germany, have a smaller population size to us?
Some very much smaller.
The reason for our lack of labour in many jobs is because we have far too many people in non-productive state, public, civil service, and regulation jobs and an education establishment who value degrees in classics, social history, PPE, law, theatre studies, golf course management over engineering, agricultural and practical skills.
January 12, 2022
Other countries survive by being in the EU, so they benefit from freedom for workers to move where they want
January 12, 2022
Yes, it’s quite simple really, isn’t it?
January 12, 2022
And 160 other nations survive whilst not in the EU.
Yes it’s quite simple really.
January 12, 2022
They didn’t have to throw away a great big cake that they thought that they could both have and eat though.
January 12, 2022
but how do they sleep at night
January 12, 2022
They did because in a democratic referendum a majority (of a million more voters) decided they wanted to leave the EU.
Others countries trade very successfully with Europe whilst not being members.
You keep claiming this cannot happen NHL.
January 11, 2022
@Gary Megson
So, it is your belief that this country cannot harvest its own food without using cheap, imported labour. Of course, it is not true. People will use cheap labour if it is available, if it is not available they will have to pay whatever is needed to get the job done. If that makes food more expensive, so what. We should not rely on poor sods who come here, work long hours in the fields and sleep in portakabins so we can have cheap food. It is disgusting that you are in favour of it. Have you no humanity?
January 11, 2022
For years the EU set about undermining our food production, meat, fruit and veg.
Paid subsidies for not producing, money for trimming hedges for god’s sake.
All intended to diminish UK production, causing reliance on the others, and to profit from CAP.
Now farmers are giving up, where is the investment to modernise equipment and systems?
Why put the very future of the farm at risk when successive governments push farming in the long grass?
Sons go to Uni – why join the Farming Treadmill when Governments, Supermarkets and consumers won’t allow farmers to secure an income?
January 12, 2022
All sorts of reasons no doubt. Maybe some endured problems brought to light under the UK Governmentâs survey in connection with the UKâs seasonal workers pilot scheme launched in 2019. ( âNo running waterâ: foreign workers criticise UK farm labour scheme – The Guardian ) Maybe some did not wish to be formally âregisteredâ as required by the UKâs EU citizens settlement scheme. Maybe some had been lucky to earn enough over time to achieve their aspirations back in their home country. Maybe Covid had, is still having and will continue to have, some effect. Maybe forthcoming new EU minimum wage legislation will have an effect. The HGV difficulties continue here and elsewhere as is often reported.
January 13, 2022
The problem is not Brexit but the appalling mis-implementation of it. Brexit gave control of immigration back to the UK Govt. Brexit doesnt mean we have to slam the door on immigration, but the children in Parliament have decided to unnecessarily slam the door. We could have a policy of allowing all (without criminal records) to come here but on the basis they look after themselves. All can be a tourists or have a work visa. But they get NO STATE BENEFITS and must support themselves. No free NHS (must have insurance and pay), no free education (go private only), no housing or welfare or unemployment benefits. If they become destitute they are deported. If they work and pay their way then they can extend their work visas. After a period (3,4,5 yrs) they can apply for residency and receive some limited benefits and then in time citizenship and finally will have earnt full benefits. Brexit permits many new ways of running the country but our pygmy politicians havent the wit to grasp anything new.
PS: I am an immigrant (so I voted UKIP) to the UK, and after 20yrs working here the UK Govt asked me to take citizenship and paid for my passport. I worked and paid my way and was requested (as a result) to become a citizen.
PPS: All ‘rights’ must be earnt. make that the basis of policy. The human rights Act must be rewritten as the ‘Human Rights and Responsibilities Act’. ie: If you want the Right (at employers expense) to be safe in your work place, you must take reasonable responsibility to behave in a safe manner in that workplace.
If you dont behave responsibly then dont expect ‘compensation’ for your stupidity!
January 11, 2022
ÂŁ22,000,000,000? Cancel HS2 and you’ll cover that several times over.
JF
January 11, 2022
+1
January 11, 2022
+1 then cancel net zero, the climate change act, soft loans for worthless degreesâŠso much to usefully cut.
January 11, 2022
Of course there is no reason why we should continue with the EU’s criteria. Is it just habit, or what?
On the broader subject of ditching EU laws it seems obvious that the government should prioritise those that are having a significant deleterious effect, otherwise just work through them as occasion arises.
As pointed out previously India still has some laws carried over from the days of the Raj:
https://johnredwoodsdiary.com/2017/02/21/the-future-of-the-high-street/#comment-857512
“I happened to come across this 2004 Act of the Indian Parliament … ”
âTHE BRITISH STATUTES (REPEAL) ACT, 2004â
âAn Act to repeal the British Law Ascertainment Act, 1859, the Foreign Law Ascertainment Act, 1861, the Colonial Probates Act, 1892, in so far as they apply to India, and the India (Consequential Provision) Act, 1949.”
There’s no need to worked up about that kind of thing.
January 11, 2022
The EU Stability and Growth pact was suspended till 2023. The 3% and 60% limits that is. I dont know if the EU regulations have been revoked namely, Council Regulation (EC) No 479/2009 and Council Regulation (EC) No 2223/96; or, if they are still active in UK legislation.
January 11, 2022
Maybe you should ask your number crunchers, they seem to know everything.
January 11, 2022
Denis, there are only two things worth owning in this economy, Land and Knowledge. That way, you can be retired for twenty years; in your seventies, and still be a forty percent taxpayer.
January 11, 2022
That’s nonsense acorn
Start a business.
Build it up with a good product and good customer service.
You can make millions
And input into your country by paying loads of tax.
January 11, 2022
Again too ready to take the Mick.Why don’t people have faith in their own country to provide for themselves.Not Jerusalem….. UK.. ( saying that I can trying to grow artichokes this year…they look good and feed the birds.)
January 11, 2022
As for your words ” We want a Whitehall that is positive about Britain, not one that is trying to hold it back. We want a Whitehall that thinks Britain can achieve thingsâcan invest here, have more jobs here and substitute for importsârather than a negative Whitehall that says, âGosh, there is too much borrowing, What can we cut? What can we tax? What can we stop?â We want less stopping and more positive going. We want more ability, generated by a growth policy, to show that an independent Britain can produce more of its own energy, grow more of its own food, catch more of its own fish, and make more of its own personal protective equipment and of its own medical requirements.”, yes! We damn well do! Why cannot we have a government that will deliver that?
Despite a very able effort by Simon Clarke, he is not going to wrest the “most not fit for purpose department” title from the Home Office but his attempt shows the Treasury should have hope.
Yet another maladroit, purposeless SNP intervention – you would think they would learn from the ease with which you bat away their noise – and this one would perhaps have done no better with âDonald, where’s your troosers?â on in the background.
January 11, 2022
A very big cheer for your response to David Linden!
January 11, 2022
John dismisses in a few words the enormous problems caused by his brexit.
I have friends who run an apple farm. They have really struggled to get pickers – they used to use Polish ones.
The process cannot be mechanised. The fruit are picked as they ripen, leaving others behind to mature further.
Yes, a few unusually consistently ripening varieties can be harvested by mechanical tree-shakers, but not most.
The same is true for many crops, especially high value ones.
“Pay higher wages to British people then” he might say. Well yes, fine. Then the crop becomes more expensive and even more vulnerable to the imports that Sir John and Tim Martin etc. want to make easier.
You really don’t have to try too hard, to destroy the brexit nonsense.
January 11, 2022
This disturbs me .Cheap labour from abroad! Can people not realise how arrogant it is to use foreigners as slaves.
January 11, 2022
They were not slaves, nor anything like.
Poland like the UK was never in the euro.
The wages paid by UK farms were attractive, once exchanged into the national currencies of eastern European countries.
Since Sterling’s brexit-induced devaluation, that is less the case, however.
January 12, 2022
The wages were attractive to the Eastern Europeans but not to our own people who were therefore pushed onto the dole, so we subsidised the lower paid employment for the immigrant farm workers.
January 12, 2022
I’ve used a number of Poles and Romanians – very pleasant people, no need for a vast command of language. They want to do an honest days work.
They also admit taking sterling back home buys up to 10x in their country, and thats after you find a job.
So forget exploitation, they work – get paid, invest in homes etc backhome.
January 11, 2022
Your friends shouldnât worry.
If they donât publicly condemn their appalling law breaking leader soon a couple of hundred Tory MPs will be looking for new jobs before long.
They can pick your friendâs fruit instead.
January 11, 2022
Ah. but most will have chums to find them another sinecure (job?).
January 11, 2022
Apples can be picked by machinery.
They are in Europe.
You are misinformed.
Apples ripen off the tree too.
January 11, 2022
I’ll listen to a specialist apple grower, thanks.
January 11, 2022
Well one out of the whole world industry.
Perhaps look up a few websites of companies that make machinery that make harvesting easy NHL
January 12, 2022
Martin, ..who appears to be unshaken by modern technology. The end is nigh.
January 11, 2022
Iâm thinking of starting a business. But it will only be viable if I can use labour from abroad. Hmmm.
January 16, 2022
Move to France and start up there .
January 11, 2022
NLH – You appear to be saying that because the farmer produces apples that ripen at different times, then he should be allowed to employ people on the lowest possible wages, or import Polish workers to work for low wages?
Have you thought that maybe his business isn’t viable if he relies on the exploitation of low paid workers to boost his profits? Maybe he should diversify into more profitable ventures as many other farmers have had to?
January 11, 2022
Nobody pays less than NMW, do they?
So why is a fruit farmer who does this worse than, say, Wetherspoons?
January 11, 2022
Yes they sometimes do NHL
Gangmasters get a contracts and supply labour.
Or board and lodgings are deducted.
Did you not know?
January 11, 2022
Where do the Polish people who picked their fruit live when they work in the UK in season? Is the accommodation satisfactory or poor quality? Could this not be offered as a package to the 11% British youth unemployed from different areas of the UK that have high unemployment?
January 11, 2022
instead of benefits…..You take a job or no handouts. Simple.
January 11, 2022
Get some patriotism. Wages will rise to fill the gaps or they will mechanise as its cheaper in the long run than minimum wages that they have paid to foreign workers to boot.
January 11, 2022
What utter drivel our host has to put up with – Not just a remoaner, but someone who would sell his country cheap.
JR has spoken often on the issue of allegedly not enough workers to pick our food — He quite rightly indicates how people from other countries have been enticed here because the wages are too low to sustain most people — Farmers and others need to invest in modern technology, and innovative to make the picking jobs more attractive – It’s not as though we are short of people, but continuing to rely on foreign labour is a disgrace, but that’s how the EU works.
We’ve adopted far too many silly ways of working from the EU, time we picked our own food!
January 11, 2022
British people don’t want to do it.
How will you make them?
January 12, 2022
Make it appealing to them – stop treating them as automatons, and pay a living wage.
January 11, 2022
When the last unemployed person in the UK gets a job not on a farm, your comments might hold some validity. At which point, rather like New Zealand, we provide temporary visas. This isn’t difficult stuff really.
January 11, 2022
NLH :
I presume it was to satisfy your apple farmer friends that Mr. Cameron was so keen for the EU to expand all the way to the Urals (Kazakhstan speech 2013) or include Turkey (âpave the roadâ speech 2010)?
Perhaps the answer is to re-introduce conscription â not military conscription as we had before â but social conscription to help out where labour is needed, or for emergencies etc.
At the same time the draftees could be taught useful practical skills which our educational establishment does not believe in teaching and would be of benefit to them for the whole of their life as well as to the country.
January 12, 2022
Tree shakers can do 200 trees an hour. Follow with blowers one row over to push the crop into the path of a tractor with sweepers to conveyor belts to hoppers. Go round again some days later for the slower to ripen fruit. The productivity is amazing when you see it in action.
January 12, 2022
Yes and they’re largely bruised by falling and hitting one another.
Might work for cider but not for quality eaters.
January 12, 2022
Amazing how it works OK by using machinery in other countries.
January 12, 2022
they have softer ground – I thought you’d know that.
Or – perhaps they lay out old quilts first to soften the landing?
January 11, 2022
Good afternoon,
I have read your post, and agree with most of it. Regrettably, I don’t think many in the house listened to you. It is not an issue that the healine seekers think worth their time. The minister answering clearly had not thought the issue through, nor did he wish to answer your points.
We are heading for economic disaster, not deliberately but because nobody IN POWER can be bothered to take an interest.
January 11, 2022
Sir John,
I liked your last paragraph on the consequences of Quantitative Easing. My concern is the level of unsustainable Asset Prices that have resulted from it. Companies buying back their own shares with zero interest money just in order to inflate the share price – and therefore the value of the Directors share holdings (including those shares given as performance bonuses) – is almost a Ponzi type scheme. It may not be the Government that causes an economic crash but the attempt to increase interest rates will cause all these ‘hollowed out’ companies to fold. Your thoughts on this would be appreciated.
January 11, 2022
Sir John, clearly your government and administration did not want to leave the EU.
You ought to say this to them in public and in parliament directly and repeatedly and ask them why, and why are they clearly refusing to take action to restore our independence and freedom of action.
January 11, 2022
The Treasury, the rest of the Senior Civil Service, the Establishment and most MPs are (or were) Remainers and are doing their level best to keep us aligned with the EU ….. I suspect so that when the Eurozone eventually Federalises, we can be put into the outer tier of “associated” countries which are not full members.
That was the aim when Cameron was PM; it was basically the Single Market/Customs Union membership which May was aiming for and I very much doubt that the long-term Civil Service objective has changed despite Johnson becoming PM. It certainly explains why NI has been abandoned under the Protocol.
Brexit isn’t over; this is just the latest attempt by the pro-EU Establishment to keep us trapped in the EU’s “sphere of influence.”
And Johnson – First Lord of the Treasury – is not even attempting to stop it.
January 11, 2022
The Civil Service mandarins merely wait, after all PMs and Governments are very temporary, they have many years to serve before drawing a very nice pension.
January 11, 2022
Oh good – an extra ÂŁ10.5 billion for welfare recipients while our taxes thresholds are frozen and our taxes go up. The inflationary pressures of the extra money printing that you are pleading for Sir John will be offset by the increased welfare for claimants but not for those who are net contributors.
The future is indeed bright
Reply I called for an earlier end to QE not more printing.
January 11, 2022
Reply to reply
Have you not recently and regularly called for government to spend more Sir John? Where will that come from?
Your comments to the minister about the netting effect of the Bank of England owning the debt and paying a dividend to the Treasury suggest you feel there is scope for more borrowing (printing if we are to own our own debt and printing if we borrow it from banks).
Printing when there is excess demand is inflationary as we are seeing.
Reply No. My case is go for growth and see the deficit tumble Stop the extra costs of covid policies.
January 11, 2022
I see that (predictably) Simon Clarke failed to answer your question – even given two opportunities to do so!
Yours was a very good speech with which I completely agree. We need to focus on growth, based on promoting British industry not hindering it through excessive taxation.
As for David Linden’s snide and stupid intervention, you batted him away most effectively!
January 11, 2022
I have read the debate in Hansard. There appears to be a misunderstanding of how QE works and the fact that the BoE doesn’t buy anything, it just swaps Gilts back into reserves that bought them originally. There is no extra money printed and no change in the total number of Pounds Sterling, in any form, in the economy, caused by QE. The BoE is the most undercapitalized bank in the country. Fortunately, it’s owned by the people who create Pounds Stirling.
Reply There is extra money created.
January 11, 2022
Where?
January 11, 2022
Anybody really (you really have to be) interested whether extra money is created (the point being: for whom?) can look at the âdebateâ between Richard Murphy and Keith on taxresearch.org.uk (26 October 2020 âMythbuster: What is Quantitative Easing and how does it work?â).
BTW: taxresearch.org.uk is, I find, a very fine website on such economic questions, worth reading after Sir Johnâs website.
January 11, 2022
its odd how so many struggle to understand the difference between gross and net debt. perhaps evening classes in financial economics for officials and relevant ministers would be a good idea.
January 11, 2022
Well said – Excellent points.
Was anybody listening?
Didn’t sound like it from the glib response from the Chief Secretary to the Treasury.
January 11, 2022
Good speech Sir John. You are wasted on the back benches. Far too much spin from Ministers.
January 11, 2022
Clearly the remoaners in Whitehall and govt intend to keep us aligned with EU rules. No doubt they harbour hopes of a great rejoining.
Since they clearly will not change their minds, the question becomes: how do we get these people out? how do we get a small-c conservative government that will take action?
Looking at the Reform UK list of policies… they are all the policies people on the right of centre want to see.
January 11, 2022
I supported Boris Johnson in order to get Brexit done, even though the NI Protocol was never going to work – he had little choice to go along with it or Brexit would have been lost. However, as we saw from his period as Foreign Secretary, he has an inexplicable habit of self destructive behaviour.
I am afraid that this has carried on throughout his Premiership and the lockdown breaches have got to be the last straw. A change of policy is also badly needed to get rid of his ruinously unaffordable Green Crap agenda.
Given the electoral arithmetic and the epic failure of Labour to make any real progress, the Conservatives can still win the next election under a new leader but it has to be one who didn’t break lockdown rules, is squeeky clean and, most important, can rebuild trust, particularly in the Red Wall seats.
There appear to be only two obvious candidates : the current Chancellor and the Foreign Secretary. ( Nice man though he has, Jeremy Hunt just doesn’t have the character necessary to head up a General Election campaign) .
However the recent publicity over one or two hugely expensive lunches does lead one to ask questions about the political judgment of Liz Truss and the Chancellor appears to not be listening to sensible back benchers like our host who want to see the NI increases abandoned, or at least postponed. A comprehensive short and long term solution for cost of living crisis has to be arrived at almost immediately and certainly before increased energy bills hit doormats. Boris shows no sign of even recognising the huge damage this is likely to do to the government unless it is sorted.
Interesting times.
January 11, 2022
What can HMG do to encourage highly geared companies to delever? To limit sharebuybacks from borrowings? and retain reserves. Especially as inflation rises way above the 2%.
January 11, 2022
One has the sensation of a system slowly, but inexorably, collapsing. Once we had park-keepers and groundsmen. Now we have recreation grounds with drugs being dealt to kids. Once you could walk into a council planning department and ask for planning advice. Now you have to pay ÂŁ100 for the privilege of filling out an on line form and waiting indefinitely for an answer.
Once you could ring your doctor and get an appointment. Once your rubbish was collected once a week. A recent (on-line, natch) enquiry to the Land Registry) was answered after six weeks with no way to query the answer. Just do it all again.
Not to put too fine a point on it, put public sector services are turning to crap before our eyes. Taxes go up inexorably.
Sooner or later the public sector is going to consume the economy or sort of collapse. No matter how much money is poured in, services get worse and worse.
Discussion about economics and debt seems academic to me. More money for less services cannot go on forever.
January 12, 2022
Well said, Mike.
January 12, 2022
Cracking speech, Sir John. Government, get on with it.
January 12, 2022
Sir John. I think you are hitting your head against a brick wall.
Admittedly speaking up in the H.o.C. SHOULD have some effect on your party’s leaders (Cabinet) but will it?
It is clear to common sense that the civil service are still entrenched in E.U. Maastricht policies and it is also clear that the Government Ministers have a responsibility to change that.
Somehow though, this never seems to work as it should, does it.
January 12, 2022
The government does not need to pay interest on the money it has asked the Bank of England to create, surely? Why cannot it just issue bonds at zero percent and ask the Bank to buy them?
January 12, 2022
Isn’t that a doubling of the magic money tree theory.
January 13, 2022
Hi Peter,
Hope you had a fab festive.
No problem Peter as long as we have enough skills and real resources to absorb it along with tax cuts where they are needed. Which is what Trump did.
= No inflation.
The OBR have created an environment where people are going around repeating the mantra âmore government spending means taxes must go upâ.
But only, of course, by people who are hard of both accounting and mathematics. Itâs like the household analogy – a common fallacy.
Why Tax Matches Spending
https://new-wayland.com/blog/why-tax-matches-spending/
January 13, 2022
It can David,
One of MMT’s policies.
http://bilbo.economicoutlook.net/blog/?p=3921
The OBR want us to believe we use the Euro and borrow in a foreign currency.
Japan destroys everything the OBR say and have done for decades.
January 12, 2022
Absolutely Brilliant John,
These people at the OBR are acting as if we use the Euro.
The public debt is just the private sector savings held as bonds and only become a problem if it is in a foreign currency – See Turkey and Argentina for details.
Because people save in UK bonds it is a non issue. Even more so if the BOE hold the majority of them.
Japan another sovereign nation that uses the Yen destroys the OBR narrative a framing and has done for decades. With their debt to GDP ratio of over 250% with ultra low interest rates and unemployment rates and low inflation.
What really worries me John is it looks and sounds as if they are following the EU convergence program
https://www.gov.uk/government/publications/uk-convergence-programme-2019-20
Which is a complete and utter disgrace. We voted to leave the EU.