The Budget – Conservative Home article

 The Truss team railed against the pessimistic forecasts of the OBR and tried a tax cutting statement without OBR forecasts and without setting out their  alternative view of spending, revenue and borrowing. Many of us thought that unwise at the time.  The Sunak team were strongly critical and argued for higher taxes and less spending. Now today the new PM and Chancellor ponder very difficult options for tax rises and spending  cuts as the likely depressing  OBR forecasts come to haunt them.
        As regular readers will know I have long argued for a different control system for guiding our economic progress, where a tougher rule on inflation complements a  growth target. A limit on interest payments on debt which is already in place  would complete the framework for prudence. Unfortunately no post Brexit  Chancellor wanted in better times to make a change to our system though  we no longer have to follow the EU system based on state debt as a percentage of GDP. The current irony is the EU have seen how impossible steering with such targets is in today’s conditions  and have at least temporarily suspended them. Meanwhile the UK has to set a budget which demonstrates debt falling as a percentage of GDP at least by the end of the forecast period.
       There are various problems with this approach. No-one can know what the deficit will be in three years time, so the controlling number is a guess. If the number shows a possible large deficit it forces tax rises and spending cuts which may result in a recession. A recession would then increase the actual deficits we ran up, as the deficit is  very sensitive to growth rates. The marginal extra pound people and companies earn as the economy expands is highly taxed bringing in more revenue. Growth cuts the  numbers out of work and increases taxable activity. Recession removes the highly taxed marginal pounds and plunges more people onto benefits .
       The Truss team were right that you need to go for growth, or in current circumstances take some action to offset the pending downturn. You need to do so whilst eliminating needless or less desirable spending, showing concern to limit the deficit you run up. The new team need to grasp that they do not  have a lower deficit option going forward. They either allow a  bit higher deficit to offset some of the recessionary forces, or they reinforce the recession with tax rises and end up with an even bigger deficit. Raising corporation tax as much of the world slows down or slumps will doubtless mean much less inward investment and less new business, depressing our revenues. We will have to watch Ireland attracting more of the investment that is available thanks to their much lower tax rate.
        The best approach both for the economic prospects of the nation and to bind the Conservative party more closely together would be a full launch of a Sunak growth plan, including limited  tax cuts to foster more enterprise, investment and revenue, sensible spending levels and an appraisal of forecasts of the future deficits. Scenario forecasts rather than spot forecasts would be so much more informative  given the range of variables. Gas and electricity prices will have a big impact on spending and inflation going forward. Interest rates will have a growing impact on debt service costs so let’s see how outcomes vary with different levels of these and other crucial influences.
        The Chancellor should reinstate the roll back of the aggressive IR35 changes of recent years. We need all the self employed and start up businesses we can get and the onerous rules deter or impede this progress. He should work with the Business Secretary to accelerate permissions for North sea oil and gas investment. We need to cut carbon dioxide output by substituting our own piped gas for the imported LNG, which will also greatly boost tax revenues. We need to extract and sell more of our own oil for the same reasons. He needs to put plenty of tax incentive into the new Enterprise Zones, and to ease Business rates generally. The carbon tax should be suspended all the time energy prices are so high, as it is forcing the closure of high energy using industry. More imports, fewer jobs and less tax revenue will result from failing to tackle very dear industrial energy in the UK.
        The government needs to reduce spending. I repeat that they should tell the Bank of England not to sell bonds at a big loss, saving £11bn of payments to the Bank from the Treasury between now and next March. The bond portfolio of the Bank has always required government consent and underwriting and there is no need to sell these bonds now at current prices. They should amend the generous energy support package. They need to limit the amount of home energy any household can buy at the subsidised price to a reasonable amount of fuel. If rich people want to heat their swimming pools and outdoor hot tubs then they should pay full price for the extra power this takes.
           They could postpone the changes to social care that have not  been fully thought through and costed, keeping the current financial system in place. They could suspend the free smart meters programme which costs over £1bn a year, as the people who want them now have them. They could abandon the later phases of HS2 where construction contracts are not signed, saving maybe £100bn in future years. The collapse of commuting demand for rail travel has greatly changed the capacity case for this investment. The best cuts of all can come from intensifying work to help more of the people on benefits into the many jobs still available in our labour market. We need more mentoring, training, encouragement, and a clear understanding that benefits are temporary support whilst you find the new job. The government also needs to get on with the detailed work of slimming down the  numbers of quangos, working through quality and efficiency agendas service by service, and helping civil servants deliver more with less.
           November 17th is a big day for the government and our country it serves. It has to confirm sufficient help to people so all can afford the winter energy bills and the other rising costs. It has to demonstrate purpose to bring inflation down as the current higher interest rates should do. The future path of deficits and borrowing must  look better as public spending control and a resumption of growth brings revenues closer to expenses. The future energy subsidies must be cut and more market discipline restored. We need to foster much more investment in domestic energy, not deter it by a nexus of price controls and windfall taxes. The government  needs to remember you cannot tax your way out of recession, but you can tax your way into one. There is no way forward for the next year without borrowing more , but there are choices that can reduce the downturn. Austerity would  make it worse. This Financial Statement or budget will define politics up the next election. Going for growth in a  responsible way is what is needed.

107 Comments

  1. Mark B
    November 1, 2022

    Good morning.

    But again I say, they are not interested in growth, but inflation reduction. And to do that you need a recession. I would argue that they are gambling on a short sharp recession.

    I have been arguing for cuts to non-essential public services for ages. I have no confidence taht this government will or can make the right decisions as the party is divided on so many issues.

    The calls I hear are for strong leadership. Will PM Sunak and the Chancellor take the bull by the horns ? I doubt it.

    1. Nottingham Lad Himself
      November 1, 2022

      What do the Tories propose to do about the staggering cost of crime, costing at least 7% of GDP, and which always seems to rise markedly under their periods of office?

      Nothing at all, it seems.

      1. Roy Grainger
        November 1, 2022

        “Seems” doing a lot of heavy lifting there – peddling Corbyn’s discredited lines still ? ONS statistics show crime is in long-term decline but the police are now better at recording it. Anyway, some crime such as the drug trade are actually included in the GDP calculation as positive terms.

      2. Hope
        November 1, 2022

        Mark,

        Socialist Tories have been in power 12.5 years! JR’s aspiration blog is for the birds. His socialist govt. have not listened to former ministers who clear we had good socialist budgets- under Sunak! Carney’s contract extended not cut short.

        You, me and others warned years ago to fix the economic roof. The state grew, quangos increased not put on a fire, public services overwhelmed, useless and lost direction and purpose, magic money printing used time and again not stopped- despite Osborne’s claim to return to sound money! Repeated election claims a balanced Structural deficit achieved by 2015, 2017, 2021 then abandoned and start to pay down debt! What is the deficit and debt now! Look at how this has grown under Socialist Tories since gaining office. Hunt actively getting advice from Osborne and Hammond! All three overwhelmingly failed while in govt. now in control of the levers again, I expect further failure to use as a lever to show UK should not have left EU. Major had no conscience over UK people losing homes and business for his frantic dream to join ERM! May had no conscience for betraying the nation and was still signing up to more EU when we voted leave and she claimed Brexit means Brexit!

        Mass immigration encouraged and supported to destroy our culture and way of life, while deliberately lying to the public that it would be drastically cut. Osborne made clear no one in govt. was serious. He has been made ethics commissioner!

        JR is a lost conservative soul in his socialist party. Tory party needs to die. Sadly they might think like Cameron and swing ever left.

      3. Donna
        November 1, 2022

        Well they’re certainly adding to the problem by importing 1000 criminal migrants every day and refusing to deport them.

        What would Labour do about that? Stop it?

        Don’t make me laugh.

      4. Bloke
        November 1, 2022

        NLH:
        What seems is not what is.
        Conservative Michael Howard claimed to have cut crime by 50%.

      5. SM
        November 1, 2022

        You like making sweeping statements, NLH, so please accept this one:

        the Left give every appearance of liking lax policing and sentencing, making constant excuses for criminal behaviour, and refusing to accept that certain malign cultural off-shoots have no problem with indulging in physical violence/gang warfare, sexual violence and personal corruption.

        1. a-tracy
          November 1, 2022

          SM where is most of the crime, in Labour run cities. Guns in Liverpool, guns in London, machetes in the news every week now, drugs gangs, Khan is out of control in London, thank goodness they don’t run the whole Country, they can’t even stop the paint sprayers.

      6. Lifelogic
        November 1, 2022

        Note sure there is much evidence that crime rises under the Tories any more than it does under Labour if so prob. more about the often crime fraudulent reporting figures which are politically manipulated hugely. What they should do is to have some real deterrents to deter crime and control illegal immigration. Things like investigating, catching and prosecuting criminals rather than almost never doing this. This rather than doing nothing or announcing they will not even prosecuted shop lifters caught red handed. Someone the other day on radio 4 had his house stolen by a fraudster impersonating him and sold to an innocent buyer by an innocent solicitor it seems. Police reaction – oh that is a civil not a criminal matter so get off this new buyers property you are on your own mate! Do nothing if at all possible seems to be the police’s motto. If in doubt go against the victim rather than the criminal much easier and safer. Does stolen property not belong to the person it was stolen off.

      7. rose
        November 1, 2022

        Are you including “hate crime”?

      8. a-tracy
        November 1, 2022

        NLH, how are you calculating that crime costs 7% of GDP?

        Lots of the crime is paid for by insurance policies we have to take out.

        Are you including the cost of prisons? I wonder if we could export some of this cost to the lower-cost countries that many criminals arrive from, prison places per person would cost less back in their home Countries.

        These clean-up operations for the oil people will cost a fortune, so I propose they are charged with cleaning it all up themselves and paying the cost of the cleaning products and equipment.

        Police, fire and crime commissioners, their offices and staff were introduced by the Tories in 2012; many people disagreed with this how much would be saved if they are as ineffective as you suggest and aren’t worth their positions? Let’s just end this when they come back up for renewal, and redeploy their staff back into front-line policing.

      9. Mike Wilson
        November 1, 2022

        Indeed. I heard a statistic the other day, to be honest I can’t remember the exact figure, but I was appalled when I heard it. I think it was that only 1 in a 100 reported crimes lead to a prosecution. Law and order, the justice system, prisons, the NHS, water and energy have all become progressively useless under the Tories. And they’ve made a dog’s dinner of Brexit. Oh, and taxes are at a 70 year high. And people are worried about a Labour government! A bunch of school kids could run this country better.

      10. Mickey Taking
        November 1, 2022

        I totally agree – the sit-in the road idiots should be hauled off minus skin and given a custodial sentence, painting fixed items of property should get stronger sentence and any damage reinstatement costs should be tripled for them to pay. Drivers/passengers delayed should be awarded costs against them in the region of £50.

      11. Peter2
        November 1, 2022

        Crime when Labour were last in power averaged 1.46 crimes per 100,000 people
        Since 2010 under Conservatives the average is 1.05 per 100,000 people.
        So your claim is as usual incorrect NHL

    2. Iain Moore
      November 1, 2022

      “they are not interested in growth, but inflation reduction”

      Which means economic contraction , and so fully in line with the eco zealots where the beggaring of the West is the plan rather than economic development.

    3. Bloke
      November 1, 2022

      Mark B:
      Recession is not needed. Inflation can be reduced by people buying more efficiently. If your competitor increases prices and you offer a higher quality lower-priced alternative, purchasers could spend even more than the increased price for more of yours. That wouldn’t be inflation. That would be growth.

    4. Peter
      November 1, 2022

      ‘Conservative Home’ is a reflection of what the Conservative party has now become. It’s Lib Dem, Blairite in outlook.

      David Gauke is still a star turn on that site even though he had to be booted out of the Conservative party years ago.

      Traditional conservatism is seen on there as old-fashioned and rather embarrassing.

    5. X-Tory
      November 1, 2022

      Basically, Sunak and Hunt are economic MORONS. Truss was right to ‘go for growth’ but her and Kwarteng were just too stupid to do it right. Sir John has the right understanding of both the problem and the economic solution but neither Truss nor Sunak will use him, because they are all TRAITORS. And NO-ONE seems to understand that to get businesses to invest you need TWO things: (i) low corporation tax, and (ii) a SUPER-DEDUCTION on all capital investment (buildings/plant/machinery) and R&D. Instead Sunak and Hunt plan to increase corporation tax and offer no incentives for investment. Why would anyone vote Conservatives when they are just as bad as Labour?

    6. rose
      November 1, 2022

      The Conservative Party does not want to be in government any longer. They are refusing to sort out illegal immigration. They have refused to countenance going for growth, opting instead for the Sunak Slump; they don’t want to get back Northern Ireland; and they will probably dump Mrs Braverman and the triple lock.

  2. DOM
    November 1, 2022

    There’s nothing radical here. Just a continuance of the politics of managing formal State and shadow-State ie Labour’s vested interests. It’s the same old nonsense we’ve seen since 1997. And that’s the problem with Tory MPs and their party, they don’t want radical because party interest comes before all else and that spells the Socialist death knell for British democracy.

    The Parl Tory party is no longer a party, but a personal convenience for its MPs

    1. glen cullen
      November 1, 2022

      Agree

  3. turboterrier
    November 1, 2022

    It would seem that a lot of the possible changes that could be made are restricted with government’s obsession with NZ and all that it entails due to the self inflicted, destructive time tables that have been agreed. Whilst all about them other big industrial driven countries ignore them and the restrictions placed upon them.
    Doesn’t seem right that these action by our government handicaps virtually every aspect of our way of life.

    1. Ian Wragg
      November 1, 2022

      Continuing from yesterday it’s interesting to see the BBC continue the demolition job on the Home Secretary, no doubt Badenoch is next.
      Perhaps Soonack should write to the controller of broadcasting and ask for suitable left wing candidates.
      Your party is now the low growth, high spending party, probably to the left of liebour so nor worth voting for anymore.

      1. Nigl
        November 1, 2022

        Last sentence spot on. Sir JR in denial blinded by unreciprocated loyalty.

      2. No Longer Anonymous
        November 1, 2022

        Indeed. High tax on stagnated wages and cold digs for workers while boat blokes and dole scroungers get index linked free money and free heat.

      3. Hope
        November 1, 2022

        IanW,
        You forgot historically high taxation and still growing!

      4. rose
        November 1, 2022

        Today she is being attacked predictably for her “language” – which was correct and accurate, and carefully chosen. She was model of sobriety.

        Whenever the MSM are losing the argument, as so often in the past with Boris, they fix on “the language”, taking it out of context and misrepresenting it in an attempt to marginalise their victim. Just as predictably, cornered Conservative MPs dissociate themselves from “the language”, as Mr Jenrick did today, thus giving the MSM credibility and even more power over them. Wouldn’t it be wonderful if politicians could admit that grownups are allowed to choose their own words? And tell the MSM where they get off?

        Meanwhile, the MSM are freely using a disgustingly misogynistic nick name for the HS and inciting hatred against her.

      5. Hope
        November 1, 2022

        We had all the lying rhetoric over licence fees from Tory party for 12 years. BBC went back to charging elderly people! It is reasonable to assume it was another Tory lie to get elected.

        When listening to arrogant dope like Roger Gayle I wonder why anyone voted for him or did he get elected on the back of the Johnson/Tory brand? Any view opposite to Gayle’s was whistle politics or rubbished. Typical arrogant lib socialist view where only his view is correct. Socialist Tory party infected with MPs like him.

  4. Fedupsoutherner
    November 1, 2022

    What an absolutely brilliant post. So clear and concise John even I can see the sense in what you say and I’m not one who is into the finer details of the economy. I have to say though I think it’s unlikely that Sunak and Hunt will come up with anything resembling your ideas regarding energy. Sunak has already put a ban on fracking and there have been rumours of windfall taxes. One of the best things they could both do is read this article. It just might make life a little easier for us all.

    1. Beecee
      November 1, 2022

      Mr Sunak’s sister, Raakhi, was heavily involved in Cop 26 as an employee of the Foreign Office. She now has a post with the United Nations and tweets regularly on the ‘dangers’ of Climate Change.

    2. Hope
      November 1, 2022

      FUS,
      Ban on fracking means no energy security which will effect businesses and homes. He said at hustings fracking would be allowed!

      Sunak allows imported fracked gas from Qatar and US to be transported here but not allowed to produce our own so he can tick a green box! Idiot. BMW transferring to China because of cheap coal fired power station energy to transport the cars back here! Idiot.

      It does comply with EU environmental thinking though!

    3. rose
      November 1, 2022

      Has that fracking ban got Gove’s finger prints on it?

    4. formula57
      November 1, 2022

      @ Fedupsoutherner “One of the best things they [Sunak and Hunt] could both do is read this article.” – alas, the strong suspicion must be they read and perhaps heard the original. That we get to see it arises from their outright rejection.

      It is certainly one to print out, ready to place into the hands of a Party vote canvasser as one shakes one’s head and presses shut one’s door at the next election.

  5. Shirley M
    November 1, 2022

    I would love your advice to be followed by the government, but it won’t happen. Either they are incompetent or they deliberately run down the UK for some unpatriotic purpose. You are best placed to know which, Sir John. Which is it?
    I suspect it is not incompetence as this has gone on for years. The choice of Ministers and advisers appears to be selective upon ‘qualities’ other than patriotism and competence. Anyone showing either of those qualities doesn’t seem to last very long!

    1. turboterrier
      November 1, 2022

      Shirley M
      The problem has been there bubbling under the surface for years.
      You are correct it all starts with the selection criteria of candidates.
      Very much confirmation of the well used Scottish saying “you can only piss with what you got”

  6. Donna
    November 1, 2022

    You’re talking to the hand Sir John.

    They have a very different agenda to the one you are commenting on. And it doesn’t involve improving OUR economic prospects or improving OUR energy security. They’re Globalists ….. Sunak is just a puppet.

    1. Cuibono
      November 1, 2022

      IMO that just about sums it all up!
      Except to add that the draconian, virtually at gunpoint “Lockdown”(🤑) was but a tiny foretaste of what they want.
      Consider Oxford and Canterbury and all the “necessary for roadworks”road closures throughout the land.
      If the govt. didn’t want it…it would not happen!

      Virtual currency by 2025 says the PM!
      Oh yes…THAT conspiracy theory!

  7. Stephen Reay
    November 1, 2022

    John Curtis “any government presiding over a financial crisis doesn’t survive at the ballot box”

    1. Mickey Taking
      November 1, 2022

      we can just hope!

  8. Lifelogic
    November 1, 2022

    Exactly right.

    But can we hot make the whole of the UK Enterprise Zones, and ease Business rates generally? Rather than just move businesses from one place to another?

    The carbon tax should be suspended permanently. Not just while energy prices are high. More imports, fewer jobs, more worldwide CO2 and less tax revenue will result from failing to tackle very dear industrial energy in the UK, clearly a deliberate government policy caused by the mad net zero religion.

    The government needs to reduce spending indeed so very much waste that could so easily be cut. Certainly the Bank of England should not to sell bonds at a big loss. By my estimate the illegal migrants are costing each household about £300 PA directly the. additional sums in higher crime rates, depressed wages, lack of rental housing, hotels…

  9. Iain Gill
    November 1, 2022

    Sadly you are arguing for common sense conservative principles, when the Conservative party in parliament is a bunch of lefty liberal WEF virtue signallers with no real world experience at all.

    The best I hope for, is that the current political class of all the main parties collapses in their own incompetence, and some new parties emerge with some people who actually have a clue.

    1. turboterrier
      November 1, 2022

      Iain Gill
      Your best hope Iain is a massive mountain to climb as the apathy of a most of the electorate know no bounds.
      All our political parties are immersed in last century thinking and are totally out of touch with reality.

    2. oldwulf
      November 1, 2022

      @Iain Gill

      Yep … the main Parliamentary Parties are left of centre, which now leaves a large space on the right.

  10. BOF
    November 1, 2022

    Well I understand your article perfectly. Very concise and clear.

    Sunak, however, campaigned for office with entirely different policies so must make some sharp handbrake turns to to come anywhere near your sensible suggestions.

    Those who expect little will not be disappointed.

    1. turboterrier
      November 1, 2022

      BOF
      You assume he is in control and sitting in the front seats. Other new world order organisations are pulling and pushing the strings and buttons.
      The reality is he can do sweet FA.

    2. Mickey Taking
      November 1, 2022

      well u-turns are the thing recently.

  11. Lifelogic
    November 1, 2022

    Greta Thunberg Calls COP Process ‘Greenwashing’ and ‘a Scam’ well she is right on something at last.

    But that whole idea that manmade CO2 is going to cause an imminent climate emergency is a scam. The idea that the solutions being pushed work (even in CO2 terms) is largely a scam too (they just export CO2 production at best. EV cars actually increase CO2. Furthermore world cooperation is not going to happen.

    Britishvolt may slide into insolvency and take with it 3,000 future jobs in the North East I see reported. Well to make EV batteries you need load of cheap fossil fuel energy, basic mined materials, cheap labour, far less red tape… the UK is not a good place to try even with these misguided & huge tax payer subsidies.

  12. Narrow Shoulders
    November 1, 2022

    Cutting expenditure needs a range of initiatives to remove lots of small amounts of expenditure from government delivery. This is a good opportunity to look at government through zero based eyes. What must government do? And then abandon everything else.

    The NHS budget is ripe for shrinking, and the best way to do this is to move to payments for delivery rather than grants for existence. The rather large diversity budget could be binned.

    Immigration processing centres should be closed. No paperwork should equal removal but more importantly illegal entry should also equal removal. We need to extricate ourselves from whichever agreements bind us into accepting these opportunists.

    The workplace pension scheme could be suspended, a saving of 1% of all earnings paid in through tax rebates. This also returns cash to employees and business.

    Benefit increases MUST be limited to the lower of inflation of average wage rises, a double lock. After all we are all in this together. Pensions should also be limited, especially public sector ones, let them buy annuities like the rest of us.

    Decouple the price of renewable electricity from the price of gas. That will save much money when the gas and electricity handouts are calculated. Those crying because energy giants are making excess profits do not bleat about renewable companies fleecing us. Cheaper electricity is also more attractive. There could be a diktat that renewables must be used first if they are cheaper.

  13. Roy Grainger
    November 1, 2022

    What new Enterprise Zones ? Gove has already told us these are “under review” ie. cancelled.

    1. Dave Andrews
      November 1, 2022

      Enterprise Zones – Would they be those offshore multinationals? They certainly benefit from tax incentives.

    2. Donna
      November 1, 2022

      He’s reviewed them. The new Enterprise Zone we will be funding with borrowed/printed money is called Albania.

    3. a-tracy
      November 1, 2022

      Ceramic Valley Enterprise Zone was launched in 2016, is one of the most successful enterprise zones in the UK. 21 Oct 2022 — Stoke-on-Trent City Council wants to create five zones which would benefit from incentives such as business rates relief.

      https://hansard.parliament.uk/commons/2022-05-25/debates/8B164484-CBE1-41DD-A09E-0FA9DCA4E5E5/Stoke-On-TrentVideoGamesEnterpriseZone
      Stoke will be foolish if they go back to Labour. Ignored, left behind and used a dumping ground by them for decades.

    4. Pauline Baxter
      November 1, 2022

      Yes Roy Grainger. I raised my eyebrows on that point!

  14. Berkshire Alan
    November 1, 2022

    Your post todayJR is logical, sensible, clear and understandable, that unfortunately is why it will never happen !

    I see at last we seem to have a Home Secretary who is prepared to say it as it is, about time too, hence she will probably be gone in a few weeks.

    What is it about our Nation that we continue to deliberately self harm ?

  15. Ian B
    November 1, 2022

    Without growth there is no tomorrow, without a vibrant economy there is no tomorrow. The highest taxes in 70 years is not growth that is programmed decline.

    The State keeps growing itself, it is in a phase empire building to protect itself. The State as in all areas that rely directly on taxpayer funding is killing the economy, it is killing the Country. The State as a spender of other people money has to provide value for money, in needs to be more proficient and above all it needs to reduce in size.

    Governments of all flavours have been notoriously rubbish at spending other peoples money. There is a difference in contracting something out with accountable oversight, to the State just growing and chucking money at something in hope. Every taxpayer pound spend should at all times be directly held accountable by the electorate.

    In recent years most of the taxpayers money spent seems more targetted at MsM ‘soundbites’ to stroke egos on the day.

  16. Ian B
    November 1, 2022

    Grant Shapps, again sets out plans to destroy, the Royal Mail this time to be forced in to foreign hands and further decline. We all know the Royal Mail management in recent years has been below par to say the least. But to give it away after eons of taxpayer investment, I would bet the taxpayer still has to support the big pension fund just as it the taxpayer that pays the compensation of the inept ………management.

  17. Cuibono
    November 1, 2022

    On the beach, small children would smash down yesterday’s sandcastle with a red metal, wooden -handled spade. Sharp and dangerous.
    They’d lick their ice cream insouciantly as the tide came in and washed away the ruins.
    Then they’d build a brand new sandcastle, even more unstable than the first!

    At the end of their happy holiday they’d go home with Mummy and Daddy, leaving the beach to the mercy of a cold winter.

  18. Roy Grainger
    November 1, 2022

    What Sunak is doing, consciously or not, it experimenting with Modern Monetary Theory (MMT) which is a newly fashionable leftie/globalist crackpot idea. This in part says if you are close to full employment (which effectively we are) you can control inflation by raising taxes and so restricting the money people have to spend. As others have said here he’s engineering a recession as a means of inflation control. And he can blame it all on this mystery “black hole” of £50bn “caused by the Truss minibudget”.

  19. Ian B
    November 1, 2022

    From the DT – “Public warned it is ‘inevitable’ all will have to contribute more to plug £50bn black hole left by mini-Budget “

    Yet the State keeps growing, Jeremy Hunt has grown his department with more advisors(they appear to be WEF advisors as well) seemingly because the BoE, the Treasury and the OBR are not up to scratch. However he will keep using taxpayer money to fund those areas that he is replacing – because it is part of the State Empire.

    1. Ian B
      November 1, 2022

      The Statement of a Blackhole as a result of a mini-budget is spurious at best, Sunak/Johnson created the problem, they don’t believe the State should be fiscally responsible all the time the taxpayer has something left in their wallet

  20. Lynn Atkinson
    November 1, 2022

    You may as well be addressing Starmer for al, the good it will do. Pearls and all that.
    We are expecting the worst. I have no doubt we will not be disappointed.

  21. Christine
    November 1, 2022

    Why is King Charles allowed to host a lavish pre-COP party for world leaders? How much will this cost us the taxpayer for their security and accommodation?

    Talk about do as I say not as I do, you are all a joke. People need to wake up and vote out all current MPs and annihilate the main parties. Vote Reform. Get out on the streets canvass, deliver leaflets, educate people. That’s what I’ll be doing.

  22. Keith from Leeds
    November 1, 2022

    Hello Sir John,
    An interesting article but you are wasting your time. Sunak/Hunt will follow the treasury line & do the opposite of what you suggest. We need a PM & Chancellor who will ruthlessly cut the cost of government to allow for reducing taxes & stimulating growth. Why do we need more Civil Servants in the MOD than we have soldiers, sailors & RAF personnel? Why is our Foreign Office stuffed with Civil Servants when the media today keeps you ups to date with what is going on? With the growth in the Civil Service since 2010 & again from 2019, what do they do all day? Finally do the PM & Chancellor ever talk to you & ask for advice because there is no sign of that since Brexit.

  23. Mike Stallard
    November 1, 2022

    I see this as a religious problem. People who do not have any faith in God will turn their prayers to the State which they depend on for their fair share. This thrills the people who run the state and they tend to judge their power by the money they get and the number of their employees. I can see that they are hooked on their position which they have spent their lives working towards and I suspect that the supplicants will be furious if their god is insulted by reductions which, they feel, they have earned. It is all about who is in charge.
    So although your excellent ideas for reform are sensible and ought to be common sense, I regret they are doomed, even the little ones like selling off bonds.

  24. Bloke
    November 1, 2022

    Too many people buy things that are not needed, and many of those are unused and wasted.
    Careless buying and waste cause unwanted knock-on consequences.
    Our Govt also makes too many careless purchases at our expense.
    We need to buy a small efficient Govt.

  25. IanT
    November 1, 2022

    I see the BBC is getting itself into a lather about use of the word “Invasion”. Even some ‘Tory’ MPs seem to think that the use of this word is inflamatory. Well, if 40 thousand people turned up on a Kent beach en-masse what word would we use? The only difference as far as I can see is that they’ve spaced it over a period of 10 months. I watched the critics of Ms Braverman yesterday in Westmonster complaining about conditions at Manston but I didn’t hear any of them propose a sensible solution on where to house these people? Maybe AirBnB can help when the Home Office has finally exhusted Booking.com’s hotel stock?

    The “Don’t bring me problems, bring me solutions” approach is no longer fashionable (it seems) in business but I do think our politicians should try, because otherwise we might begin to suspect that they don’t have any.

  26. Original Richard
    November 1, 2022

    “There are various problems with this approach. No-one can know what the deficit will be in three years time, so the controlling number is a guess.”

    How can anyone be producing accurate deficit 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.”

  27. acorn
    November 1, 2022

    So where were the Braverman support club yesterday JR? Haven’t seen a picture of you on the PPS bench. Steve B looked very uncomfortable.

    1. Peter2
      November 2, 2022

      Wrong yet again acorn.

  28. Jackie
    November 1, 2022

    Yes I agree with – ” going for growth in a responsible way is what is needed”

  29. Original Richard
    November 1, 2022

    “They could suspend the free smart meters programme which costs over £1bn a year, as the people who want them now have them.”

    The Head of UK Strategy National Grid told the HoL Industry & Regulators Committee evidence session on 02/11 last year that Net Zero is not possible without smart meters to enable “volatile pricing”. And, of course if there is insufficient energy, which here will be as there is no non-fossil fuel system planned for when the wind isn’t blowing, to control rationing or rolling blackouts, which is euphemistically called “demand management”.

  30. Original Richard
    November 1, 2022

    “They could abandon the later phases of HS2 where construction contracts are not signed, saving maybe £100bn in future years.”

    Since they now say that HS2 is all about capacity and not speed, the HS2 line should be converted to larger rather than faster trains, perhaps by widening the track. We need the rail equivalent of Jumbos to provide affordable travel not the rail equivalent of Concordes simply for the elites to travel at taxpayers’ expense.

    HS2’s high speed is very un-green, very energy inefficient, very expensive to maintain and run and very noisy.

  31. Nigl
    November 1, 2022

    It says it all that they put the ‘failed wet blancmange’ Jenrick in the Home Office.

  32. majorfrustration
    November 1, 2022

    Its just a game of National Monopoly to Westminster

  33. Robert Miller
    November 1, 2022

    What about grasping the nettle and tackling foreign development aid – which economists from Lord Bauer to Angus Deaton have argued do more harm than good.

  34. Original Richard
    November 1, 2022

    “The government needs to remember you cannot tax your way out of recession, but you can tax your way into one.”

    A recession is what they want. It will further reduce our CO2 emissions, weaken our economy, increase our dependence upon other countries for our energy, goods, raw materials and food and by continually expanding the state sector at the expense of the private sector increase their control over the population.

    Why else would they pursue an un-costed, economy destroying unilateral Net Zero Strategy to reduce our 1% contribution to global CO2 emissions, when CO2 is a trace gas needed for plants to survive and when there is absolutely no evidence that it controls global temperature or that an average temperature increase of just 1.5 degrees C will cause the planet to self-destruct?

    BTW, global warming is a misnomer for actually the changing temperature, which the BBC et al deny has happened before the Industrial Revolution despite ice ages and several warm periods since the most recent ice age ended just 11,000 years ago, occurs mainly at the higher latitudes/the poles. The temperature at the equator hardly changes at all. It should be called polar warming.

  35. a-tracy
    November 1, 2022

    The vast majority of people that I know that don’t economic work at all are single parents. All the married women I know have to do some work outside the home.
    I know one man that was made redundant during covid having spent all his working life with one company; he has lost his nerve for work, having never had a day off sick he is becoming ill and will need disability allowances soon if he isn’t helped back into work. He would be ideal as a home carer as he looked after his mother as well as working a night shift for thirty years.

    Can’t we combine single mothers’ love of being mothers with external work, training them in nurseries up to NVQ level III in childcare so the nursery can take in more children at the same cost as simply paying out full benefits for no work expected in return after a year?

  36. Cuibono
    November 1, 2022

    I wish I were one of the 1%.
    I’d love to be p*ssing from inside the tent!
    No taxes for me
    Just jollies for free
    A small jet and I’d be well content!

  37. a-tracy
    November 1, 2022

    Who is employed to decide on asylum application claims?
    What qualifications do they need to do this job?
    Is it decided by a human or a computer program, and the workers input the details? Or the most complex cases referred up the grades to a what lawyer?
    People training to be lawyers in their third year, could they, in their university holidays (bar six weeks) be offered employment in this department to help to process the backlog? Can the computers at universities around the country be used in the holidays to process the applications giving the universities a way to top up their coffers, it is a waste not to use them for 15 weeks? What about the law professors who want to earn extra money is their downturn? To process these quickly, return those not eligible or then allow them to work if they are eligible to stay will save a lot of money as no UK workers are automatically given homes and rooms for free and expensive to live.

    “The number of students graduating with first degrees in law from universities in England and Wales in 2021 was the highest on record at 18,927. The Law Society’s Annual Statistics Report (ASR) 2021 shows over a quarter (27%) of these graduates achieved a first and 55% a 2.1 degree.22 Sept 2022”

  38. Bob Dixon
    November 1, 2022

    Gordon Brown introduced a £10K nil rate of Corporation Tax to encourage SME to be formed.

  39. Sakara Gold
    November 1, 2022

    If this government really wants to cut spending and reduce the proposed tax rises, clearly the best way is to impose a proper windfall profits tax on the fossil fuel industry. What is even more desperately needed is to swiftly build more onshore wind – the cheapest form of electricity available to us – and much more solar. Floating windfarms in deep water would certainly also help. Renewable electricity is currently being generated a a cost of 1/5 that of CCGT and the CfD regime under which they opperate is generating huge sums for the Treasury. More wind/solar installations could be built in 18 months – as opposed to the 25 years it will take to develop the proposed new N Sea licenced fields

    The obscene profits being generated by the oil and gas majors need a humungous windfall tax. It is time that we stood up to the fossil fuel lobby.

  40. Nigl
    November 1, 2022

    Leo Docherty as I have said before is an excellent constituency MP responding courteously and promptly to my some times hyper critical but I hope never rude, correspondence.

    Nevertheless less I cannot avoid the view, that he, and to be fair, the rest of the Tory MPs on the books are more interested in promoting their Ministerial careers, than the Tory Manifesto they all signed up to and were elected on.

    So I have little hope that our hosts (correct) views will gain any traction until we are asked for our vote at the next election.

    We will then get the traditional Tory weasel words/promises that we are expected to believe but won’t because obviously they will be ignored/broken the day after the election.

    Leo has a massive majority so will probably survive. Less fortunate MPs will be electoral toast and if they include some of the big names, so much the better.

  41. Bert Young
    November 1, 2022

    John , A very comprehensive review of economy management in today’s post . The relationship between the Government and the BofE is part of the root cause plus the routine of sticking to international financial discipline . Breaking from these controls is a step that risks the regard that investors make and can punish our place in the world and the growth that we seek . Sunak is no fool and he will only make decisions for the relatively short term ; the Government faces an election within the next two years and he won’t focus beyond that .

  42. Fedupsoutherner
    November 1, 2022

    I see its not just the UK going through tough times. The German state pension scheme is reportedly at breaking point.

  43. Lynn Atkinson
    November 1, 2022

    Nobody can budget in these circumstances: Peskov says ‘Britain’s involvement in attacks on the Russian Black Sea Fleet and Nord Streams cannot just be left, Moscow will think about further steps’.

    What has the Tory Party done to us? And because ‘Russia is an Orthodox country with traditional values – so must be destroyed’ according to Democratic Senator. They have banned the promotion of ‘alternative lifestyles’ .

    British Tories wish the Tory Government was more like the Russian one!

  44. Abigail
    November 1, 2022

    Far and away the most sensible analysis of the current situation which I have read. If only the Treasury/Chancellor/PM would take it on board! But I won’t hold my breath. They seem determined to turn us into a Third World Banana State.

  45. Lindsay McDougall
    November 1, 2022

    Dear Sir John,

    The problem with your CH article is that Rishi Sunak and Jeremy Hunt are Big State Conservatives and won’t take a blind bit of notice of the course of action you have outlined. May I suggest an alternative.

    I have in the early hours of this morning sent to your parliamentary e-mail address a 7 page note entitled “Shrinking the State – public expenditure cuts & deregulation”. It seeks to demonstrate that the Truss/Kwarteng tax cuts and reduced business rates are affordable if the State is shrunk as detailed. My suggestion is that you take the items in that note that are acceptable to you and add them to your list of policies in this area and have them ready as an alternative to the Statement that Jeremy Hunt will present on 17th November. You will need to keep on campaigning. Don’t worry about Party unity; if unchanged, the Sunak/Hunt policies will lose you the next election.

    The Sunak/Hunt axis is not only pro Big State; it is also pro big business at the expense of small businesses and the self employed. There is the failure to repeal EU laws and directives, the way that furloughing was implemented and the IR35 issue. Also, it is no surprise that the big house building companies have prospered at the expense of the small house building companies. To make a success of Brexit, we need investment to take advantage of new export opportunities and to achieve a measure of import substitution. SMEs in particular need investment capital, which will not be available if the State and big business grab it all.

  46. Sea_Warrior
    November 1, 2022

    ‘The future energy subsidies must be cut and more market discipline restored.’ I agree – and explained why yesterday. This morning I heard a government advert about how people could access government support to tackle their ‘cost of living crisis’. The ad stated that there were over forty different programmes, most of which, presumably, are what we would understand to be ‘benefits’. This means that huge numbers are now benefit-claimants, something that Brown wanted. That needs changing and the savings to the public purse used to cut the taxes of the hard-working and productive. And, for the good of the national character, people must be encouraged to sort out their own problems rather than self-identifying as ‘vulnerable’ and running to the government.

  47. Lester_Cynic
    November 1, 2022

    I’ve just watched the film ‘The Real Anthony Fauci’ which reveals the truth about the role that governments played in implementing the plandemic
    And still they try and go us to take the clot shot, I wouldn’t think that anyone hasn’t heard about the dangers
    I’m so pleased that I saw through the deception
    Have you rolled up your sleeve John?

    Just awaiting your inevitable progression to the HoL I can’t remember when politicians where ever held in such low regard, surely time for the Tumbrels?

    And no matter how hard you attempt to bury your head in the sand there’s a growing realisation, thanks to GBNews, TCW and other channels… despite Ofcom trying to shut them down, exactly what’s happening
    Censor all you want, the truth is emerging

  48. Ian B
    November 1, 2022

    “Going for growth in a  responsible way is what is needed.” Sir John, while any logical human-being let alone Conservative can see that. This is not a Conservative Government, this is not even a UK Government, its a bunch of half wits trying to manipulate a country to an undemocratic agenda. The only thing is while they think they have blind sided us it is they themselves that are in cloud cuckoo-land and don’t see the reality of what they are doing. As disciples of this new religion with its external masters they are grasping the ‘Great Reset’ as the only doctrine that mankind must obey.

    We have the Establishment briefing against those that are trying to make the UK prosperous, while at the same time growing their own Empires/Thiefdoms without regard to expenditure. Its not hard to come to the conclusion a revolution would be needed to pull the UK back to being a straight forward Democracy. We have Boris and Rishi, the chancers, to thank for pushing the Country over the brink.

    Some of us blame the MsM, yes they are a bit dumb, but in reality they are snake oil salesmen pushing their wares to grab a viewer/reader to expose them to their advertisers. They get away with it because Government is to ‘frightened’ to defend and support the UK.

  49. Ian B
    November 1, 2022

    Growing Empires on the back of the taxpayer rather than providing the service they are paid for.

    From the MsM taday 01/11/22 – “Cash-strapped NHS bosses advertised hundreds of thousands of pounds’ worth of diversity roles in just one month, it was revealed today.
    Sixteen vacancies for diversity, equality, inclusion and wellbeing officers were put online by trusts in England and Wales in October.
    The roles have a combined annual salary of more than £700,000. For comparison, the same cash could pay for six GPs, 19 nurses or 20 paramedics.”

    Rishi & Jeremy want more from the taxpayer without getting their own house in order

    1. Ian B
      November 1, 2022

      Mr Sunak told ministers that ‘difficult decisions’ are coming, but stressed the NHS would be ‘prioritised’ for funding – you couldn’t make it up.

  50. Ian B
    November 1, 2022

    Matt Hancock is still hitting the Taxpayer while deliberatly making himself absent

    1. glen cullen
      November 1, 2022

      Not just his MPs salary & pension, he’ll still be claiming for his office, transport and working expenses

      1. glen cullen
        November 1, 2022

        No different from Boris going to Egypt

  51. No Longer Anonymous
    November 1, 2022

    What the hell is going on regards the migrant crisis ?

    The whole issue is framed in regard to what’s good for the migrant and never what’s good for the British citizen. The Tories are scattered by a criticism of their language and the misuse of the word “invasion” – be it this or Islamic terrorism the authorities first concern is always the extreme right wing backlash, which never ever materialises.

    Most of your MPs (including yourself, quite possibly) are going to lose their jobs at the next general election over this, against the backdrop of high tax hardships and the fact that you are going to allow depressed and over-taxed wages to end up chasing index linked benefits and that you’re going to let Amazon drivers and nurses live in freezing flats while migrants and benefit claimants are kept warm.

    There is absolutely no point whatsoever in a Tory government.

  52. XY
    November 1, 2022

    Sunak won’t roll back the IR35 changes – the big consultancies are the winners there and etc ed
    Consultanices now inject themselves into contract chains with the client thinking that the consultancy protects them from the costs (now met by whoever is last in the chain and actually pays the worker’s company). All unnecessary middle-man skimming and cost inflation.

    I have also seen consultancies who’ve been told by the client that it’s an outside IR35 contract actually offer the role as inside – at the same rate – so they never assume the risk at all.

    Meanwhile, the self-employed workforce suffer – from lorry drivers to engineers.

    I’ve given up on the mainstream parties, we need a new unified right-of-centre political force. I hope Farage comes back and unites the right around Reform UK – I’ll be voting for them at the next election.

    1. Fedupsoutherner
      November 1, 2022

      I’m voting with you XY.

  53. Pauline Baxter
    November 1, 2022

    Ok, Sir John. Mainly right.
    Presumably you get through to more people by speaking on Conservative Home.

  54. forthurst
    November 1, 2022

    Why is the Bank allowed to meddle in the bond market? Artificially manipulating interest rates simply creates false markets and misdirects investment creating bubbles and shortages. The fact the Treasury is still following
    EU targets for the deficit, suggests that they are either shadowing the ECB to facilitate rejoining or having been in the EU for as long as most careers, simply have no idea how else to run the economy. However, the rest of the government appears equally clueless and wedded to failing policies on immigration, social security, employment, energy, health, education, farming, fishing, and manufacturing, which policies partly arise from the EU and partly from globalist interference apart from the usual problem with having know-nothing Arts graduates controlling all levels of government.

  55. Clough
    November 1, 2022

    Let’s sum up the last few months or so. Johnson out of power, Gove and Hunt back in government, national debt increased by £600bn over the 2019 figure, and a man in number 10 who wishes to ‘rewire the entire financial system for Net Zero’. Is any of this what even the wider Conservative party want, never mind the country at large?

    Not to mention an NHS wrecked by the stresses of the Covid response, the loss of staff following the vaccine mandate threat, and the backlog caused by lockdowns. Who would have wanted to wreck the NHS?

    We’ve seen the country taken in directions voters couldn’t possibly have wanted. I think this means we are a post-democratic country. I read Sir John’s posts with a twinge of nostalgia for times when elections mattered.

  56. glen cullen
    November 1, 2022

    In other economic news –
    Made.Com furniture with 700 jobs and McColls convenience stores with 1,300 job into administration this week without any government assistance, while BritishVolt who doesn’t as yet employ anybody and is foreign owned by Swiss Glencore is receiving millions in taxpayer subsidy – one rule for British small businesses and another for foreign renewable businesses
    In other local news –
    Today I visited a local’ish shopping town centre after a period of three years to find that around 40 of the 100 odd shops where closed and up for sale …and the council had doubled the parking fee …I tell you, it felt like I was back in the early 80s

  57. Geoffrey Berg
    November 1, 2022

    A good article though John Redwood is extremely moderate compared to me. I resent the government being so incompetent as to spend £150 per person per night (long term), for ‘asylum seekers’ (as Suella Braverman revealed yesterday) or indeed for anybody. What’s the matter with our civil servants-can’t they negotiate sensibly? I also resent the public sector spending £38,000 per household per year. Just replace the public sector so far as possible with the private sector and also let’s transfer money from the public sector budget into taxpayers’ pockets where they will get far better value for this money.

  58. turboterrier
    November 1, 2022

    A brilliant letter on today’s Stop these Things site.
    ‘Staggering’ wind farm switch-offs cost energy customers nearly £1bn?
    The Herald Scotland
    Martin Williams
    How can parliament keep on ignoring these figures when we find ourselves in such financial despair and problems?
    Another almighty cock up just like the invaders.

    1. glen cullen
      November 1, 2022

      Now you know why our taxes are so high …to fund the green revolution and net-zero

  59. turboterrier
    November 1, 2022

    Fostering more need for own energy?

    On the STT blog, a hard-hitting article highlights Miners cannot keep up with the insatiable demand for minerals. The foreign coal industries are also struggling to meet the demand, but not in the UK.

    Reality Bites Wind
    Powerline
    John Hinderaker
    It is an article of faith among many governments that we are in the midst of a transition from fossil fuel energy to “renewable” wind and solar. (Notably absent from this consensus are China, India and Russia.) In fact, no such transition is underway; wind and solar account for only a derisory portion of the world’s energy consumption, despite countless billions in subsidies. Nor will any such transition happen at any time in the future……cont

  60. Graham
    November 1, 2022

    For the record Sir John the Truss team followed your advice on going for growth but in this case it proved to be disastrous – for it was quickly seen by anyone who wanted to see that it was all pie in the sky- that borrowing on such a large scale to fund current spending before steadying the ship of state all in an effort to suit trickle down economics would not work – it spooked the markets and unfortunately just like brexit before it was another wrong turn by right wing elements as it was not thought through properly – makes me wonder what is the purpose of all of these so-called think-tank experts – financial wizards and ERG groupings etc – more like the blind leading the blind.

    Reply For the record I proposed a balanced package with fewer tax cuts and some spending reductions, with forecasts and affordable borrowing. I am proposing exactly the same To Sunak/Hunt

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