The delayed budget should not seek to convert a downturn into a recession

There was more uncertainty yesterday about the Financial Statement scheduled for 31 October. We had been told it was crucial to the markets to see early sight of the spending and tax proposals of the new team and to accompany it with Office of Budget responsibility forecasts. I was never that happy about holding it on Halloween, thinking of some of the obvious headlines and journalistic jokes that would invite. It is better it is done in a considered way with full buy in by the new Prime Minister as well as the fairly new Chancellor.  They are saying that they want the latest forecasts, and with the recent fall in gas prices there will be at least temporarily better news on the costs of the Energy package and inflation.

We are told this will be a Financial Statement, not a budget, yet it will have many of the characteristics of a budget. It will presumably have a set of tax proposals, full spending plans, and forecasts of budget outturns with borrowing figures for the next few years. It will be accompanied by OBR forecasts. The difference between a Statement and budget will not it seems be a matter of substance, but a matter of Parliamentary treatment. A budget is presented to the House by the Chancellor often in an hour long speech,  responded to immediately by the Leader of the Opposition with a speech and followed by  a five day debate on wide ranging economic , taxation and public spending matters. A Statement will be a much shorter  speech by the Chancellor followed by maybe two hours where many MPs can ask just one question each of the Chancellor, with the Shadow Chancellor able to ask several things in a short response.  The idea of announcing substantial spending plans by Statement was developed by Rishi during the pandemic to reflect the need for quick action, often agreed on a cross party basis.

The Financial Statement is clearly dominated by whatever figure the Office of Budget responsibility comes up with for the possible deficit or amount of borrowing in 2025. The government has allowed itself against my advice to have as its main economic control the need for state debt as a percentage of GDP to be falling in  three years time. The problem with this is twofold. The OBR has been wildly wrong on its next year forecasts at all three recent annual  budgets. No-one can come up with a realistic forecast of state borrowing three years out given all the likely  big changes to inflation, the costs of the energy package, interest rates and government policy. The second is the figure could send the wrong signal for policy changes now. Today inflation is near its peak and is widely expected by independent forecasters as well as by the Bank of England to fall away rapidly over the next two years. The new threat is to trigger a longer and deeper downturn to the economy as the higher interest rates and restricted credit have their impact. Tightening further into a downturn is usually a bad policy but a negative guess about borrowing levels in three years time could force just such an action.

The cruel paradox is this. Tightening too much now, whether by hiking taxes or cutting public services could create a recession. In a recession deficits rise and the state has to borrow more, not less. Tax revenues fall as people lose jobs, consumers spend less  and companies make less profit. State spending goes up as more people need benefits. It would not be a good idea to follow the wrong response to current economic conditions in pursuit of a lower number for three years time which no-one can accurately predict or deliver .


  1. Mark B
    October 27, 2022

    Good morning.

    I was never that happy about holding it on Halloween, thinking of some of the obvious headlines and journalistic jokes that would invite.

    Hold it on the 5th November then ? I mean, what could possibly go wrong 😉

    Tightening too much now, whether by hiking taxes or cutting public services could create a recession.

    Which is the plan. They are fixated on inflation almost to a German level of obsession as inflation not only erodes our savings and spending power, but reduces the value of government debt the markets now hold.

    We are about to find out who has been swimming without a bathing costume. As they say.

    1. Lifelogic
      October 27, 2022

      Well Sunak and the BoE created this currency debasement & inflation. Inflation will fall anyway as the large energy price increases drop out in a few months time. Indeed and energy cost are actually falling back. Other ways to lower inflation are to scrap net zero (but Sunak like Carrie, May, Ed Miliband seems to be totally hooked on this mad religion), the green levy ‘taxes’ and the huge energy market rigging. Cut back on the vast level of state sector waste and the massive, pointless & misdirected over regulation.

      1. Hope
        October 27, 2022

        Hunt getting help from Hammond and Osborne! They will craft a position that Labour will not want change for the benefit of the EU or return as closely as possible. JR and chums better wake up and do something! The Tory and EU party are on the March they got control of govt, again.

    2. Shirley M
      October 27, 2022

      Agreed. Mark B. All I see is plenty of virtue signalling (we’ll give you some taxpayers money, aren’t we generous) but nothing to help the economy or the country as a whole. In fact, the opposite. WHEN are we going to stop filling up UK hotels and doling out taxpayers money like confetti on people who have NO right to be here while depriving LEGAL citizens of the means to live? Refugees, they are NOT (or very few, VERY few)! You take us for complete fools!

      1. Fedupsoutherner
        October 27, 2022

        Shirley. I couldn’t agree more. Farage is highlighting this problem tonight. So householders are going to be offered money to put up an Albanian! ! Seriously? Nobody in the audience would offer a place to one knowing that many are criminals. Who wants an unknown person in their house? I would be afraid to sleep at night. This government has to get a grip and send the whole lot back. They have entered the country illegally. They should have no right to stay.

        1. Donna
          October 28, 2022

          It’s very noticeable that the Government is not offering taxpayers some of their own money to accept a homeless ex-serviceman into their homes.

          But then, since when has Tommy ever mattered to the British Establishment?

    3. Sharon
      October 27, 2022

      Like you, Mark and JR, I don’t trust what this budget will be. It seems so far, from what we’ve heard, it will lead to recession.

      And why, oh why, has fracking been banned? There seems to be a death wish hovering over us.

      1. Fedupsoutherner
        October 27, 2022

        Sharon. Yes, a VERY disappointing decision over fracking. Everything government does makes no sense. The GBNews audience tonight said we have a socialist government in office. It’s bad news for us all.

      2. Guy Liardet
        October 27, 2022

        Agree. I’ve become a Lib Dem member.
        Not on the fracking issue particularly tho’ it’s the maddest silliest most ignorant decision ever , is it because MPs are rich enough to buy their CH oil? Lunatics,

      3. Hope
        October 27, 2022

        Look to Hunt, Harrison, Osborne, Hammond. The remainers are back in control of Govt with vengeance, I suspect this was Sunak’s price for becoming PM.

    4. Cuibono
      October 27, 2022

      So in the usual crazy way we have gone from total “naked” dereg to this micromanagement.
      (The end of the “Free Market” as an MP trumpeted/deleted on the internet recently).
      Funny how neither works!
      If only govts would just leave us alone!
      We all know quite well how to make an economy work.

    5. Sir Joe Soap
      October 27, 2022

      Well Sunak wasn’t fixated on it last year was he?
      Neither was the BOE.
      We are behind the curve in the latest interest rate cycle, and I’d be surprised if inflation reduces as you’ve predicted.
      1. Supply chains don’t suddenly correct themselves
      2. Wage inflation will become more ingrained with continuing shortages of labour, while benefits climb to catch them up
      3. There’s a central incentive to keep inflation on the boil to reduce debt
      4. Surprises from Ukraine to China won’t suddenly stop happening

    6. Hope
      October 27, 2022

      JR, you forget who is in charge. Finance and energy policy by incompetent lack of integrity Sunak: UK can import fracked gas from Quatar and US but Sunak thinks it is right to ban fracking here!! How is this better for the world? It prevents UK from being energy independent. We cannot have UK succeeding outside EU. Why not ask in parliament why we can import fracked gas but not extract it ourselves? Is not importing it by diesel vehicles and vessels worse?

      Lord Agnew clearly felt Sunak not fit for office, Sunak’s school boy errors which cost us over £11.8 billion which he initially did not want investigated then under pressure changed his mind! Breaking the law he created and lying/misled HoC, Back stabbing, ratting on manifesto to increase taxes and encourage mass immigration is okay, fracking is not!! Integrity my arse. Horrible little creature.

      What is Sunak doing about the Hindu and Muslim rioting in Leicester?

    7. jerry
      October 27, 2022

      @Mark B; “We are about to find out who has been swimming without a bathing costume. As they say.”

      Cough… I’m more worried about those who feel the need to swim WITH a bathing costume, what do they need to hide, nay, what ARE they hiding!

    8. Ian Wragg
      October 27, 2022

      It matters nought what Rishi does, he’s cancelled fracking so is not serious about the nations finances.
      We are to be left to the mercy of the gas spot market when we are sat on years worth of energy.
      The children are back incharge taking orders from Klaus and the Davos crowd.

    9. Mickey Taking
      October 27, 2022

      Most keep asking for a bonfire of red tape. Timing would be impeccable.

    10. Hope
      October 27, 2022

      Developing picture by Guido, Hunt getting “advice” from Hammond and Osborne! JR, what are the leavers going to do as the remainer coup of govt. gets stronger now that Johnson is gone? Remainer Lords doing their best to stop changes to N.Ireland protocol. Read the comments under the article.

  2. DOM
    October 27, 2022

    I can see how recessions must be politically inconvenient. Well I’m sorry but recessions are of fundamental importance to maintaining a healthy economy as John must surely know except he’s now an avowed Keynesian.

    Inflation is the price WE must pay for immoral political barbarity

    1. Mark B
      October 28, 2022

      Inflation, recession and taxation are the price we must pay for them needlessly putting the country in furlough and printing a load of money to pay for it.

      And who was Chancellor back then ?

  3. PeteB
    October 27, 2022

    Sir J,

    I’ve no objection to your statements but do object to the western world current view that Governments need to ‘solve’ everything.
    Some questions it would be good to hear the answer on:
    1. What was government deb as a % GDP in 1920? (soon after WW1 so figure should look poor)
    2. How many of the currernt government departments existed in 1920?
    3. What percentage of the UK economy did the public sector represent in 1920?

    Government got bigger. Not necessarily better.

    1. PeteB
      October 27, 2022

      …and in case Sir J doesn’t answer for those who are interested the figurers to 1. and 3. are available at
      Shows how expensive wars are and how we are in the equivalent of a post world war financial mess.

  4. Sea_Warrior
    October 27, 2022

    ‘The OBR has been wildly wrong on its next year forecasts at all three recent annual budgets.’ Then its personnel need sacking, don’t they?

  5. Richard1
    October 27, 2022

    It is curious how much faith there is in forecasts by these quangos. Anyone who has spent any time in business or finance knows that financial models are useful as a way of trying to encapsulate the relationship between different variables and to test outcomes for possible circs, but knows very well that it is impossible to forecast the future. And that outcomes will vary widely due to unforeseen events. So it is better to implement policy based on fundamental principles and signal a clear direction of travel.

    It is indeed a great pity that Truss and Kwarteng with their correct analysis of the UK’s problems and positive intentions, fell flat on their faces with the implementation, due to their own ineptitude.

  6. Lifelogic
    October 27, 2022

    Starmer yesterday told Rishi he did not need “to explain NonDom status to him” and also, quite wrongly, claimed it costs the treasury £3.2 billion. Someone needs to explain NonDom status to the deluded Starmer. Without this status many of these wealthy foreign people simply would not come to the UK, would not invest or settle in the UK and many would just leave. The foolish Osborne already damaged the NonDom system hugely. Plenty far more attractive places to base yourself than the vastly overtaxed UK. Why move to a place that takes 40% of your wealth off you on death and 45% of your income each year while living here. Monaco takes nothing and many other places have an annual tax cap or or no capital taxes and ~ 20% maximum on income. Ireland has CT of just 12.5% and a NonDon system too. Sensible countries have little or no IHT or CGT.

    Scrapping Non Dom status would therefore actually decrease the tax take. This is a bit of a problem for Starmer who is claiming this policy will fund many of his large government spending & waste plans. It would actually do the complete reverse giving a Starmer government less to spend & waste. Also most of these wealth people use little or no public services like schools, the NHS, benefits or similar anyway. So what are they paying these millions PA in taxes for?

  7. Cuibono
    October 27, 2022

    Yes…very keen on dovetailing..aren’t they?
    Diwali, Halloween….how do they do it?
    Style over substance?

  8. margaret
    October 27, 2022

    If the budget is discussed in the HoC, does that mean that it is open to tweaking and then the statement qualifies any changes?
    It isn’t a wonder that people live in credit when borrowing and deficits are the way of the world. What a loss of power! The banks would benefit from the interest from borrowing, but cutting the ability to pay for loans only causes havoc. We live in a world where the Country’s base line falls into the negative of the axis and I can’t see any improvement until we really get our act together and not compare our financial standards ( bearing in mind that we have to work in that system) to else where .

  9. Donna
    October 27, 2022

    “The idea of announcing substantial spending plans by Statement was developed by Rishi during the pandemic ….”

    So he’s got used to acting in a high-handed, dictatorial manner with minimal (if any) democratic control and now he (or maybe his Globalist Masters) intend to carry on the same way. It’s so much easier to control the peasants when they can be dictated to and “their” MPs are prevented from having a proper debate about the proposals.

    But we know now what the claims will be at the next General Election. “Johnson delivered Brexit and bought jabs: in her 44 days in Office, half of which everything stopped following the late Queen’s death, Truss absolutely wrecked the economy. Rishi was begged to take over and he gallantly rode to the rescue and corrected all the mistakes made by Truss so a grateful nation should elect him.”

    And if they really think that’s going to work, they have a nasty shock coming.

  10. Bloke
    October 27, 2022

    The Financial Statement will be as good or bad as its content from those who compose it. Avoiding Halloween to prevent critical newspapers from making themed links is over-sensitive. Readers can assess newspaper views for themselves. Any worthless view is no better with or without a theme. The content, timing and effect of the Statement are most important. Whether a high quality standard will be achieved is unknown.

  11. Berkshire Alan
    October 27, 2022

    I will listen to the Statement/Budget with interest.
    No doubt the figures will not be as damming as they suggested they may have been under Truss, perhaps because they were overstated at the time ?
    Will the triple lock promise be busted again ?
    Will home energy production increase ?
    Will taxes rise.
    Will annual Tax allowances remain frozen for even longer than 2025. (a hidden tax increase)

    So many questions so few answers expected.

  12. Bloke
    October 27, 2022

    A Financial Statement accompanied by an OBR forecast is like a joint venture. If the OBR and the Treasury are working together, shouldn’t the Treasury do the full job, but do it properly?

  13. turboterrier
    October 27, 2022

    There surely is a simpler quick measure to make inroads into the problem.
    Get on top of ALL the waste and eradicate it. That will help with the figures surely?

    1. Dave Andrews
      October 27, 2022

      Yes it would, but that requires good management skills and diligence. With their focus on media soundbites and a degree in political theory, the politicians can’t possibly tackle that task.

  14. Iain gill
    October 27, 2022

    Meanwhile the labour party is introducing a new education policy. Which includes gems such as “less exam focus”. A mashup of disastrous policies for children. If the conservative party had any sense it would listen to the outrage on this from decent teachers. Fight for the poorest children. And take the political fight onto the labour party beaches on this topic.
    Please don’t let labour do all the ground work for destroying poor kids education without a fight.

  15. a-tracy
    October 27, 2022

    “The government has allowed itself against my advice to have as its main economic control the need for state debt as a percentage of GDP to be falling in three years time. ”

    Do the EU countries like Italy have to take their loans from NextGenerationEU as a % of GDP in addition to any other borrowings they have made? To finance NextGenerationEU, the European Commission will raise funds on the capital markets, which will be repaid over a long period until 2058.

    The EU give themselves until 2058 to repay, how long is Sunak giving the UK?

  16. Des
    October 27, 2022

    We’ll be incredibly lucky to get away with just a recession. With the policies being followed by this WEF controlled sham government and all the other similar puppetts around the world we are looking at the greatest depression of all time. How else will they get us owning nothing and being slaves?

    1. Iain Gill
      October 27, 2022

      flood us with cheap labour from India

      that’s the plan

  17. Lifelogic
    October 27, 2022

    In the week ending 14 October 2022 (Week 41), 11,699 deaths were registered in England and Wales; 565
    of these deaths mentioned “novel coronavirus (COVID-19)”, accounting for 4.8% of all deaths.

    Excess deaths were up on the five year average by about 14% and this mainly non Covid (and even the above deaths within 28 days are (in the main) not actually caused by Covid). So, is the government or NHS going to try to get to the bottom of the causes? Are the MSM going to discuss these 200 extra death each day? How long is this likely to continue? Is it vaccine damage, long covid, NHS failures, ambulance delays or what? Or does no one really care? They just want to ignore/bury it perhaps.

    It does seem rather likely to be vaccine related to a large degree. Yet still they persist even for people not at any real risk.

    1. Shirley M
      October 28, 2022

      Just a personal opinion, but more likely to be people going unseen or untreated by the NHS. There are ways of avoiding giving treatment.

  18. jerry
    October 27, 2022

    Of course another reason for the delay, and the statements elevation into a full autumn budget, could be due to our economic crisis being far worse than the current Chancellor originally thought. 🙁

    1. Berkshire Alan
      October 27, 2022

      Or less worse than was originally hyped up !

      1. jerry
        October 27, 2022

        @Berkshire Alan; Sorry, don’t follow your ‘logic’. Surely if your scenario is correct that would be a reason cancel whatever type of statement is to be made in the HoC shortly (give those Truss tax cuts have already been reversed) and just publish the OBR report?

  19. glen cullen
    October 27, 2022

    We’re now in the era of Boris Mk2, the green revolution, high taxes and socialism continues
    Didn’t only last week ALL tory MPs voted in support of fracking ? So why the ban ? Was that the cost of his Premiership ?

    1. jerry
      October 27, 2022

      @glen cullen; No Tory MP’s did not vote in support of fracking, they voted in support of giving NIMBYs the right to block any possible attempts at fracking…

      1. Peter2
        October 28, 2022

        Ignoring the ability for companies to offer compensation to local people affected.

        1. hefner
          October 31, 2022

          Which companies have actually said they would offer compensation to local people affected? If you have references for that, I would be interested in getting that information. Thanks a lot in advance.

  20. a-tracy
    October 27, 2022

    I watched a podcast yesterday about Basingstoke, “why oh why are the shops empty”? The conclusion; it’s just the Tories’ fault. Not covid closedown. Nothing to do with the promoted work-from-home that the net zero crowds wants, causing the empty office blocks. A town with no local office and factory workers that pop out at lunch will die off. Nothing to do with bad investments by councils gambling on new shops and reducing footfall in the old marketplaces.

    Nothing to do with large conglomerate supermarkets being given permission by local councillors to take over the town and do away with family butcher shops and bakers running for over 100 years, now closed. Given large free parking spaces but only for 2 hours so you can’t get your hair done and something to eat in town, you’ve only got time for the supermarket shop and perhaps pop to the post office. Tesco’s are much easier for politicians to get involved with and persuade to give quotes to the media to lap up than lots of independents. These big supermarkets, (my town went from one to four) caused the shopping centre to empty of small independent shops. They start off offering a butchers department and a fresh bread department; when they’ve closed enough small competitors down, they stop them, and you just have to take what they offer.

    Two of the biggest new supermarkets are German, how much of their profit is retained in the UK why your party is wanting to stiff small businesses 25% on every £1 they manage to make? We are told the next attack will be on dividends levelling them up. If you reduce their pay to the same rate as the worker why would anyone put their house and savings up, take on loans, take on the risk, work all the hours god sends to get your enterprise off the ground and sustain it whilst it is growing for years and years? Worry night and day when sales dip.

  21. Ian B
    October 27, 2022

    Good morning, It is easy to get to the belief that having the Financial Statement/Budget pushed back to the original date has saved 15 Billion, so why not go the full hog and use the long standing traditional date of March/April to make such announcements. We will probably be in the Black by then.

  22. Lifelogic
    October 27, 2022

    The NHS is slowly suffocating British conservatism – and Sunak knows it
    With the Tories refusing to fix the public sector or go for growth, Britain is now stuck with higher taxes

    Allister Heath is surely right as usual today. But higher tax rates will not actually raise more tax (not for long anyway) it just kills the tax base, deters work, growth and investment as does net zero and the vast over regulation. Does Sunak realise this yet?

    1. Original Richard
      October 27, 2022

      LL : “Does Sunak realise this yet?”

      Of course.

    2. a-tracy
      October 28, 2022

      LL Sunak was criticised today by an elderly lady on an NHS ward, extra jelly for her tonight about not paying nurses enough, but why didn’t he respond that three years ago when inflation was very low they had a 12% settlement and the lower grades 22%. Why didn’t he defend the money the government has increased spending since may upped the £325m per week the NHS gets, they decide how to spend it internally don’t they? It is going up to £1bn per week, shouldn’t we be expecting a lot more now.

      I’d have told her a 21-year-old qualified graduate nurse is now starting on £27,055 per year, £520 per week basic, + pensions + full sick pay + shift allowances, weekend rates etc. No one in government ever defends the taxpayers when the NHS is mentioned. The activists interviewed on the BBC do they ever ask them how much they are being paid right now gross not net. For how many hours per week on average, how many days holiday? How can people comment when they don’t even know?

      I know clinic nurses at the matron level are being used to do administration and rotas it’s just ridiculous the amount of waste of qualifications and capabilities. A mathematical computer system could work out fair rotas; instead of Val moans a lot so I won’t give her Friday lates, if I give Sue a Sunday she won’t come in so I won’t give her that shift then I don’t have to deal with the problem.

  23. ChrisS
    October 27, 2022

    If inflation is predicted to fall substantially over the next financial year, is there really any need for another interest rate rise on 3rd November ?

    We have already seen the interest rates on our buy to let portfolio mortgages take another £500 from our business each month. This is annoying as we have not increased any rents for the last three years because of the pandemic. I am reluctant to increase rents now with the energy cost cap not absorbing all of the increases in bills for our tenants.

    I think it is a mistake to delay the Autumn statement until after the next MPC meeting as that will just encourage Bailey to hike rates more than he might otherwise have done. We already know from recent actions that he is no friend of a Conservative Government.

  24. Denis Cooper
    October 27, 2022

    Those who fomented war in Ukraine have a lot to answer for. It would have been enough to deal with the lingering economic effects of the pandemic without adding an unnecessary war. As for Brexit, on Sunday I noticed that Sir Mervyn King mentioned the pandemic and the war as major factors but quite correctly said nothing about Brexit.

  25. Ian B
    October 27, 2022

    Following the item by Guido we should be asking questions of the OBR and its independence.

    Recent hires come directly from the The Resolution Foundation clearly an organisation that is NOT independent., but political

    Likewise recent OBR pronouncements have clearly been Political, not neutral as should have bee expected.

    The OBR came into existence due to a former not so good Chancellor believing that the Treasury was not up to its traditional task. That then highlights further Government failures, hiring more staff technically to usurp others. Yet keeping everything and every one in these over bloated entities employed – more Government waste of taxpayer money.

    Then of course Jeremy Hunt has hired and additional team at the taxpayers expense because both the Treasury and the OBR are not up-to scratch.

    Are any of these over-bloated seemingly overlapping advisors suggesting that they themselves be trimmed back, of course not – its tax increase, tax increase on tax increase and when that doesn’t work its more tax increase. That is how we are at a 70 Year High

    1. Ian B
      October 27, 2022

      Conservative Woman notes – that the chancellors new advisor has declared his hostility to Brexit and opposition to fossil fuels.
      No one voted him and even working for the Chancellor he is not held accountable by the taxpayer. This is the new World of the WEF and Blackrock, they are able to blackmail whole Countries

  26. Bob Dixon
    October 27, 2022

    So Dishi Rishi has ruled out exploiting shale gas.
    Sir John has pointed out the financial benefits of using our natural coal, oil and gas whilst our engineers and scientists find the next generation of producing electricity.
    A very poor decision.

  27. Abigail
    October 27, 2022

    None so deaf as he who will not hear.

    And again, Sunak and Hunt are apparently learning nothing from their own history. The years of “austerity” made the recession infinitely worse. Why won’t they see?

  28. Ralph Corderoy
    October 27, 2022

    Given an MP may only ask a single question of the Chancellor after a Financial Statement, perhaps being the Chair of the Treasury Select Committee would be beneficial to scrutiny of HM Treasury, OBR, etc? It’s a Conservative post at the moment.

  29. Roy Grainger
    October 27, 2022

    Agree there’s not much point basing the budget on predictions three years hence because Starmer will be PM then with associated impact on “the markets”.

    Incidentally it would be useful to specify which “market” the government is trying to placate. The currency market ? The bond market ? Ramping corporation tax up by 6% in a recession means it certainly isn’t the stock market.

  30. Keith from Leeds
    October 27, 2022

    Hello Sir John,
    As a daily reader, I appreciate your insight & comment on various matters & recently on tax, inflation & the likelihood of a recession/depression. But the No 1 problem we have as a nation is the cost of government. Until we have a PM & Chancellor who are serious about reducing the cost of government, not by the constant we will cut waste which means nothing, but who will cut the number of Civil Servants drastically, who will cut Quangos spending & dispense with most of them, get serious about stopping the boats across the channel & spending every pound as if it came from their own pocket, we will make no progress. Simply reducing spending to match income would be a start, but it needs to go beyond that so we can start repaying our colossal debts. Can I suggest a focus on that in the next few days or weeks?

  31. Wanderer
    October 27, 2022

    Depressing that the OBR is given such credence. To only listen to one forecaster…that approach hardly served us well during Covid.

    Do they expect the OBR is the body most likely to produce the figures they want? Do they think they’ll be out of power in 2 years so they can blame Labour for not reaching some impossible and inadvisable target?

    Do they care if there’s a massive recession? I don’t think so.

  32. Mockbeggar
    October 27, 2022

    You rightly point out that the price of gas has fallen, but also overlooked lately is the freeze on tax thresholds which, I believe, is likely to increase treasury income by about £24bn. The rate of inflation means increases in many peoples’ salaries which will also add to treasury coffers. Are we not likely to find ourselves in a position to cover all the Kwarteng tax (non-)decreases? I bet the OBR will ignore all these factors.

  33. turboterrier
    October 27, 2022

    Only a few days into his tenure of No10 and not a hit the ground running start.
    Fracking ban enforced and already the snakes are coming out from underneath their rocks to take down Braverman..
    Nothing changes. Funny old world

  34. Original Richard
    October 27, 2022

    “The OBR has been wildly wrong on its next year forecasts at all three recent annual budgets.”

    So the Government’s plans for our tax and spending plans will be based upon forecasting by a single undemocratic, unaccountable and unsackable organisation whose forecasts have consistently proved to be wrong?

    Very much like our plans for energy are based upon wildly wrong climate forecasts, such as the BBC’s in 2007 that the Arctic summers would be ice free by 2013.

    Is policy following forecasts or vice versa?

  35. Ian B
    October 27, 2022

    Its a Weird World… from the Telegraph “Shell dodges windfall tax despite profits doubling”

    When companies declared ‘profits’ double it means so does their tax on those profits without special measures. On that basis Shell is now paying twice as much as before, presumably according to the MsM it should even more as a deterrent to their success.

    It demonstrates the corrupting Socialist view of the World by the UK Media, that’s why the UK has no start-ups and the successful have left. It is also why the PM and the Chancellor see tax rising above the 70 year high as good practice – if you don’t have a profitable economy why worry about it

    1. IanT
      October 27, 2022

      Let’s take any company actually making a profit in UK and tax them a bit more, at least until they either don’t make a profit (or don’t declare it here). That will raise the UK tax revenue for a little while but unfortunately people will then find that their pensions aren’t as good as they were expecting because the dividends will be lower. But who cares about greedy shareholders anyway?

      1. Mickey Taking
        October 28, 2022

        I’ve never considered myself to be a greedy pensioner! My savings and pension funds invested by ‘experts’ were intended to produce a small amount of top-up to the pathetic State pension. So you’d rather it all went in tax and made me a poor pensioner relying on handouts – like the small army of Ministers, minor Ministers, Advisors, Civil Servants etc all paid off – and for years to come?

  36. Bert Young
    October 27, 2022

    Agree with this analysis however ” growth relaxing ” does not mean an influx of investment as Truss believed and hoped it would be . Keeping a hold on inflation is the first right approach ; the value of the £ will also determine whether further investment is worthwhile .

  37. Narrow Shoulders
    October 27, 2022

    Suspend workplace pension scheme.

    8% returned to the economy and away from asset and bond purchases.

    1% of tax refunds saved. Equivalent to reversing a 1% cut in the basic rate of tax.

    Suspend gift aid.

  38. Lifelogic
    October 27, 2022

    No need to cut public services as all the public services of any value to the public could easily be provided for about half of what is currently spent on them. Imdeed much is spent doing positive harm. You could release thousands of public servants, university “duff degree” providers and their students, diversity officers, pushers of net zero, HS2 managers… to get productive jobs instead. A win, win for all – even they would surely be happier with real & productive jobs!

  39. turboterrier
    October 27, 2022

    Still committed to NZ and STW and no research into the actual costs involved and the impact on society. These people are qualified to sort out our economic crisis? I think not and I am not alone.

  40. formula57
    October 27, 2022

    The danger is Recession Rishi produces the Sunak Slump. I think there is every prospect that he will if he has not already done so.

    How about Danny Alexander- like getting yourself a blue-coloured dispatch box and presenting the budget we ought to have please, the better to inform people of what could easily be?

  41. Ed
    October 27, 2022

    Makes no difference.
    The lunatic and evil obsession with net zero is going to destroy this country soon anyway.

  42. acorn
    October 27, 2022

    “Rishi Sunak’s first job was at the US investment bank Goldman Sachs. He went on to spend 14 years in the sector before becoming an MP. In many ways, his unelected appointment marks the highpoint of big finance’s takeover of Britain’s political and economic system – a quiet infiltration of Westminster and Whitehall has been taking place over several decades and gone largely unremarked. Historically, the Square Mile played a big part in British politics, economics and empire. It’s well known that Thatcherism later tore up the corporatist model of economic management …”

    Worth a read at the Guardian: “With Rishi Sunak, the City’s takeover of British politics is complete” Aeron Davis professor of political communication at Victoria University of Wellington in New Zealand.

    1. Original Richard
      October 27, 2022

      acorn :

      Guardian : Not as good a read as “It’s a Coup, Jim, But Not as We Know it” in the Daily Sceptic 24/10/2022

  43. M.Allen
    October 27, 2022

    Sir John, what did the Tory party expect from a Globalist, determined to follow W.E.F agenda. In addition, he has a chancellor who will ensure that we follow the EU restrictions to the letter. The rank and file Tory members must be livid, that they have been scammed yet again and the Globalist now control the UK.

  44. Ed M
    October 27, 2022

    V interesting article

  45. BOF
    October 27, 2022

    BTW Sir John. Unimpressed with Sunak as he blames Truss for economic problems. She did not have time to affect the economy badly. I see that as very underhand politics to cover up his truly shocking £450 B money printing and other failures as chancellor. But, the global cabal is in charge now.

  46. Ex_Tory_voter
    October 27, 2022

    No, It’s because they have nothing better to do, and they are happy to destroy anything and everything you can!

    It gives them meaning in life! I do have a better way to put it but JR will have to block it.

  47. acorn
    October 27, 2022

    BTW. Do I take it that the Northern Ireland Members of the Legislative Council (MLA), are still getting paid £55,000 plus expenses a year, for doing nothing! There are 90 MLAs, when to equal GB representation ratios, should be nearer 30. How much longer is Westminster going to keep funding this money pit?

  48. Lindsay McDougall
    October 27, 2022

    The Sunak/Hunt axis has, contrary to media hype, made a bad start. Not only have they cancelled most of the Liz/Kwazi tax cuts, they intend to raise other taxes. We need more taxes like we need a hole in the head. They have said that public expenditure will be cut but it seems that the cuts will be limited to refusing to inflation proof fully some benefits. They have no concept of shrinking the State. The PM has cancelled the green light to fracking and the construction of on shore wind farms. He appears to be unaware that imported LNG has a much larger carbon footprint than home produced gas. He also appears to be unaware that on shore wind farms are cheaper to construct and cheaper to maintain than off shore wind farms, with lower distribution costs. He is also unaware that local authorities can be incentified to approve fracking and on shore wind farms by donations from the companies, leading to lower Council Tax bills. It’s a form of bribery but democratic and legitimate.

    We can do something about an increased benefits bill. By all means partially inflation proof individual benefits but the benefits cap – £20,000 and £23,000 in London – should in no circumstances be increased. Someone doing 2000 hours pa (that’s a lot of hours) at the minimum wage earns £19,000. The benefits cap should be less than that to encourage people back into work.

    The Sunak/Hunt axis also places great faith in the OBR which has a dismal forecasting record, probably because its heads are full of neo-Keynsian orthodoxy. Someone genuinely independent like Patrick Minford should ask the OBR how it has taken into account monetary policy and inflation, confidence factors, unemployment levels, fiscal drag , Laffer curve effects and interest on State debt, currently running at double the entire defence budget.

    The Sunak/Hunt axis has placed no restraints on the conduct of the ‘independent’ Bank of England, which appears to be determined that interest rates should follow whatever the US Fed does. That is foolish. The US economy is facing head winds. Biden is spending money like there is no tomorrow and the Fed has decided to have a strong dollar. This will result in a yawning balance of payments as the Reagan years demonstrated. And the Treasury should stop underwriting BoE losses on bond sales. Inflation is only a global phenomenon because the ECB, the Fed and the BoE all behaved foolishly at the same time. If base rate is raised less sharply than the Fed’s equivalent, sterling might fall temporarily. So what; let sterling take the strain. We should end BoE independence, at least temporarily. At the moment, the Conservative Government is taking the blame for BoE errors.

  49. Mickey Taking
    October 27, 2022

    Rishi Sunak is considering deprioritising Jacob Rees Mogg’s controversial legislation to switch off 2,400 retained EU laws that cover everything from holiday pay rights to environmental protections and aircraft safety.The new prime minister has been told it would take 400 staff in the business department alone to review 300 pieces of legislation that resulted from directives, decisions and EU rules over the past 50 years, the Financial Times reported.
    According to a government website outlining the scope of the retained EU law (revocation and reform) bill, a further 570 laws would have to be reviewed by the Department for Environment, Food and Rural Affairs before the deadline of the end of 2023. Under the proposed legislation, which received its second reading in the House of Commons this week, all laws whether reviewed or not would be switched off by the government on 31 December 2023, placing a huge burden on the civil service.
    Officials in the Department for Transport would have to review 424 laws, while the Treasury would have to divert staff to review 374 laws at a time when they face enormous challenges because of the cost of living crisis.
    Officials in HM Revenue and Customs would hvae to review 228 laws, while those in the Department for Work and Pensions would need to review 208.
    According to the FT, some ministers have said the civil service has exaggerated the time it would take to review the laws, but one said: “What a waste.”

    1. a-tracy
      October 28, 2022

      MT, UK holiday pay laws are better than the EU Working Time Directive. Their legislation is for 20 days paid holidays per annum minimum, the UK’s is 28 including for zero hours workers pro-rata.

  50. Geoffrey Berg
    October 27, 2022

    Does John Redwood ever feel like Cassandra foretelling (as here) the truth of what is going to happen but being ignored? I often do.
    I see yet another folly is being reported today. It is reported that the Cabinet Secretary is ‘livid’ at the reappointment of Suella Braverman. What democratic right has an unelected Civil Service have to influence Ministerial appointments by elected politicians? If the Ministerial Code means Ministers can only or mainly discuss draft policies (not even relating to national security) with civil servants and not with other elected politicians they choose, then it is the Ministerial Code that is terribly faulty and should either be radically amended or scrapped altogether. Not allowing M.Ps to get such information diminishes and demeans M.P.s and gives too much power to unelected civil servants who apart from usually not being much good are neither accountable to nor knowledgeable about public opinion in our supposed democracy.

  51. Mickey Taking
    October 27, 2022

    To lighten up the present stressful situation with everything, a friend reported a blackening painful toe, gradually becoming painful from underneath. After a fair hassle he got a phone appointment at his surgery. It was then decided he should take a ‘mobile’ photograph and send it in. What followed was a discussion with a GP, he was to be sent for an X-ray. On arrival at the Hospital [N.Hants] it was noticed that THE FORM stated the wrong foot! However an X-ray WAS taken of the wrong foot, and when friend suggested he crossed his legs to allow the problem to be solved – it was refused! So now he waits for another FORM, and another X-ray……
    You couldn’t make it up.

    1. a-tracy
      October 28, 2022

      Oh dear,, that is just silly; why didn’t they do both feet simultaneously?

    2. a-tracy
      October 28, 2022

      Actually another example of wasting people’s time, my husband popped out of work to get a covid vaccine, he was asked if he wanted a flu jab at the same time, he said yes because he usually has a flu jab every year, the guy said oh, you’re not 65 yet I can’t do the flu jab after all. The next day he got a text, book an appointment for your flu jab!

  52. Original Richard
    October 27, 2022

    How can the OBR possibly be producing accurate forecasts when, according to the HoC Public Accounts Committee Net Zero Follow-Up Report dated 02/03/2022, the Treasury either have no idea of the cost of implementing the Government’s Net Zero Strategy or, rather, refuse to divulge the enormous costs. To quote the report :

    “The government has unveiled a plan [Net Zero Strategy] without answers to the key questions of how it will fund the transition to net zero, including how it will deliver policy on and replace income from taxes such as fuel duty, or even a general direction of travel on levies and taxation. The Government has no reliable estimate of what the process of implementing the net zero policy is actually likely to cost British consumers, households, businesses and government itself. The HM Treasury witnesses we questioned were reluctant to be drawn on what the future costs of achieving net zero would be, cautioning that while the Climate Change Committee has provided estimates, they contain ‘heroic assumptions’ with errors potentially compounding over very long periods.”

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