The Treasury and the Bank put out a wrong narrative on the economy. The BankĀ claims it is independent and responsible for counter inflation,Ā but denies any blame for the great inflation that we are living through. It belatedly and at slow pace is reviewing why it got its inflation forecasts so wrong. You would expect it to move more quickly as how can it control inflation properly going forward if it does not know what it is likely to be? The Treasury and OBR are so far unrepentant for their wildly wrong forecasts of the deficits in recent years, yet still full of themselves in telling us we cannot afford any tax cuts. How can they know this when they cannot forecast tax revenues at all accurately, and have a model which does not seem to understand that tax revenues tend to rise with more growth and fall with more austerity?
Ā Ā Ā Ā Ā Ā Of course the Ministers and Shadow Ministers must defend officials in public and work with them in private to get a good answer.Ā Ā It is not, however, the Minister or Shadow Minister’s role to pretend all is well when big mistakes are being made. It is certainlyĀ not a good idea to accept advice which is wrong, based on models, forecasts and economic theories that have done much damage in the past. The Minister needs to institute reform from within whilst declining the advice in the meantime if it visibly depends on things that have done harm recently.Ā The Shadow Minister should be critical from without, blaming the Minister for a bad scheme or wrong forecasts orĀ bad advice if the Minister isĀ relying on them. It is the Minister’s job to look for and take good advice, not to accept bad advice because of who put it forward. The media should not be reverently presenting every OBR and Bank forecast and statement as the gospel when it has been so wrong in the recent past. It should be shining a critical light on how the Bank forecast 2% inflation and we got 11%, and how the OBR was more than Ā£100bn out on deficits when they claimed to be able to pin point the need for Ā£10bnĀ or Ā£20bnĀ of more tax revenue.
Ā Ā Ā Ā Ā Instead, both the main parties now are telling us we need to accept an iron financial discipline designed by the OBR. Labour wants to double up on the OBR discipline the government accepts, apparently oblivious of the huge errors in deficit forecasting in a control system that relies on forecasts of the deficit to determine spending and taxes.Ā Ā The Chancellor briefs the press that there is no scope for tax cuts based on strange forecasts for five years time, when the only thing we shouldĀ all agree about is the five year forecast is bound to be wrong.Ā So many things might have changed by five years time, whatever the result of the next election . Few professional forecasters would wish to give you a spot forecast for the government deficit that far forward, but would reluctantlyĀ give you a range based onĀ varying scenarios.
Ā Ā Ā Ā Ā Ā Don’t get me wrong. I do not want the stateĀ to spend and borrow more.Ā I am all in favour of getting the deficit down, but do not think high tax rates and austerity achieve that. More often in the past that approach has put the economy into recession, cutting tax revenues, boosting the costs of economic failureĀ and so increasing the deficit. What we need is better spending control, a vigorous assault on the unprecedented 7.5% large fall in public sector productivity this decade, and a combined monetary and fiscal policy that takes inflation seriously. We have lived throughĀ several years ofĀ both partiesĀ agreeing aĀ policy of spending huge extra sums on covid relief and public services, with Labour usually complaining that the very large rises are not sufficient in some importantĀ areas. No partyĀ queried theĀ printing ofĀ huge sums of money to keep rates low and bond prices high, powered by a Bank of England that paid ever more expensive prices to buy bonds. In 2021 those of us who warned of the dangers ofĀ the BankĀ extending bond buying and money creation too far into recovery after a necessary offset to lockdown were ignored. It proved inflationary, as weĀ feared and as they denied.Ā Now the Bank has lurched to a very tight monetary policy and is dumping the very bonds it paid too much for at ever lower prices, maximising the losses it is making.
Ā Ā Ā Ā Ā Over the last year the Treasury has followed a policy they told us would stabilise the bond markets. Instead bonds have fallen further, pushing interest rates up a bit more. The ten year and the thirty year rates of interest hit new highs recently , above the level ofĀ last autumn which attracted so much criticism. So the higher taxes did not bring the rates down or save theĀ value of the bonds. This should not surprise anyone. Throughout the last year the Bank of England has been threatening higher bankĀ rates, raising rates and selling loads of bonds at ever lower prices, driving the market down. It was the Bank of England’s announcement of higher rates and the plan to sell Ā£80bn of government bonds on the eve of the Kwarteng budget that sped the fall last autumn, at a time when the Fed and ECB were doing the same to their bond markets. The Bank engineered a rally last autumn in prices byĀ a temporary reversal of the bond selling. The Bank realised late that bond prices wereĀ destabilising someĀ pension funds who held too manyĀ bonds and showed it couldĀ get theĀ market up if it wanted. Surely those experiences should lead people to see the Bank had an important role and still has an important role in driving rates higher and bonds lower? The recent sell off in bonds clearly wasn’t the fault of Mr Kwarteng and I don’t think Mr Hunt had anything to do with it either.
Ā Ā Ā Ā Ā Ā The UK economy can perform better. The covid lockdowns were a badĀ economic blow agreed to by all front benches in Parliament. The bitter Ukraine war gave energy prices a savage twist, though the general inflation was well set before the war. Inflation in the Uk was three times target on the eve of the hostilities. Today the economy needs more growth as well as lower inflation. It should not be aĀ case of getting inflation down with a recessionĀ first, then thinking about monetary stimulus to cheer things up. What is needed is a successful drive to boost public sector productivity, to at least get it back to 2019 levels, a reining in of someĀ nice to have but not essential spending, and some tax reductions and incentives to boost investment and output. Ending the HS 2 scheme where it can be cancelled and spending on better cheaper transport links that can come in sooner is a good step. Granting permissions to extract more of our own oil and gas from the North Sea down half empty pipelines is very positive, boosting output and tax revenues. It also needs lower taxes on small business, the self employed and company profits. These can be afforded within a sensible deficit reduction strategy, with models that realisticallyĀ capture how more output delivers more revenue.
October 19, 2023
Good morning.
Another, “The dog ate my homework” piece.
The OBR is a Tory creation. Much like Dr. Frankenstein, you cannot put all the blame on your own creation and say it is nothing to do with me.
October 19, 2023
Yes, along the same line; don’t just complain, suggest a better solution…
October 19, 2023
@ Peter Wood – what?! You cannot mean to refer to Sir John, being the only prominent parliamentarian who has for a long time and consistently suggested better solutions.
October 19, 2023
Perhaps Sir J has better solutions to the issues noted, why not share.
The PCP has had more than ample time to correct these issues, in fact the Tory government has created or appointed them; but maintains them even now. Reason?
October 19, 2023
We all know his solutions by heart! The only ones too dim to cotton on seem to be in Downing Street.
You need to read more. Try some of his books for starters.
October 19, 2023
The answer to a lack of Conservatism by the conservative party is more conservatism. Who knew.
October 19, 2023
@NS; Yes, some on the right are in danger of making a similar mistake as the left-wing of the Labour Party did in 1983, “We are loosing support to our (real) opponents, we need to be even more left-wing with our polices”…
October 19, 2023
Then there’s Mark Carney, appointed by a Conservative Chancellor, who’s now endorsing Rachel Reeves, Labour’s Shadow Chancellor. She wants to give new powers to the OBR to scrutinise tax and spending policies, as SJR refers to. So the globalist cabal are happy to see this country continue under Labour the Tory low-growth policy, or no-growth except for ESG projects approved by the likes of Mark Carney.
October 19, 2023
There’ll be plenty of growth when the government starts ripping out the gas pipe networks and heavily subsidising hear pumps which no one wants.
No doubt the incoming liebour government will take all the recommendations onboard and bring the dates forward 10 years. What qualifications has this Lord Arnett got toymaker their judgements.
We are doomed.
October 19, 2023
Look at Poland, they got rid of a dreadful Government but the new coalition is much worse, Tusk will take them into the Euro.
Donāt spite your face by cutting off your nose.
October 20, 2023
Yes, reform is akin to cutting off your nose. But were the local Tories in Mid Beds and Tamworth putting up candidates well known in the area and on the right of the party or not?
You don’t know what you’re voting for with a Tory vote now, so many are really LibDems or Greens in disguise.
October 19, 2023
Even the climate alarmist PPE dope and appalling BoE Gov. Mark Carney seems to be finally realising the vast damage this pointless rush for net zero agenda is doing.
There is in reality not way we can get to net zero anyway and no benefit at all in even trying to do so. Just many Ā£Trillions of totally wasted money.
October 19, 2023
I was looking at potential investments on the stock market yesterday and then read a particular companies annual report including ESG. Total wokism and no place in the investing world. All to support the net zero/woke religions. Forget meritocracy, think how many women and minorities should/must be on boards. No wonder Companies are relocating abroad Sir John. Then there’s the Tory Corporation tax levels, double that of Ireland to raise less money. Who’d invest with that rubbish. I want the best person for the job, not a representative number. May and the Tory’s have a lot to answer for under their woke/net zero agenda’s. Own it Sir J, it’s your party implementing and driving it.
I won’t comply and neither will millions of others. We will replace you.
October 19, 2023
Sir John
Most logical thinkers as yourself will know the system is in self defeating mode, more of what causes the situation and less of what is needed.
All the while those that we empower through the ballot box and pay with our hard earned money, refuse to manage, refuse their responsibility. Instead they prefer pontificating about things that mean nothing and preening their own self gratification as if that alone is enough.
October 19, 2023
@Ian B – Apologies this one is in the wrong place
October 19, 2023
@Mark B +1
And have never been close to being right to this day – so why is it there?
October 19, 2023
lots of old boy network chaps who need ‘gainful’ employment.
October 19, 2023
@Mark B; +1
It is also disingenuous to the average CH reader, and now his own readers, to suggest the BoE has remits were they do not, the bank is merely tasked with attempting to keep inflation to a level set by HMT, but often being unable to do so because HMT and wider govt polices fail, such as their policy of over-reliance on (often imported) fossil fuels priced in USD.
October 19, 2023
Agreed the BoE is not responsible for costly ‘net-zero’ polices Jerry but they were responsible for keeping interest rates far too low for far too long, then rushing to catch up when inflation had already run out of control. They have also been responsible for some very poorly timed decisions regarding Gilt purchase & sales, which has cost the tax payer dearly.
October 19, 2023
@IanT; Perhaps, but the tabloid press, who all to often turn their coats depending on which group of readers they are playing, Savers, or Mortgage holders, were often pleading with or bullying the BoE not to increase the cost of mortgages and credit. And then who encouraged or did not discourage, massive consumer debt, not to mention mortgages, that artificially boost the economy in only the way ‘fools gold’ can, surely not the BoE, unless they write Govts political & fiscal policies.
The BoE is a servant of the State, not the State a servant of the BoE…
October 19, 2023
I think you give too much credit to the mass media Jerry, they didn’t create all that cheap money. Frankly the BoE has not served anyone well in recent years. As for Mr Gove, although I’m sure he is a gifted politician and very clever man, I don’t think I’d want him as my friend. Nor would he get my vote if I were a constituent of his I’m afraid. But then obviously, nor would Kier Starmer š
October 20, 2023
@IanT; In think you are being very very naive if you think the (tabloid) press do not hold huge sway in politics, and not just here in the UK. As for printing money, whilst the BoE might operate the Royal Mint they do not own it nor make QE decisions in isolation; I say again , the BoE is a Servant, not a Master.
Mr Gove???? Yes I know which Mr Gove you must be referring to but, did I miss something, when was he either PM or Chancellor.
October 19, 2023
Once you set up something like the OBS they develop their own agenda that suites their staff particularly senior ones and this rarely has much to with the interests of the tax payers who pay for them.
I have seen such QUANGOs move their whole head offices at v. large tax payers expense, merely for the commuting convenience of a couple of senior staff.
No such organisation is really independent of government in any meaningful sense. Look at the appallingly misguided Committee for Climate Change not a clue about what is practical, sensible or would actually work. For sense see the many reports on the global warming policy foundation – https://www.thegwpf.org/publication-topic/net-zero/
October 19, 2023
Luckily an election enables us to sack failing governments and Ministers. It’s a pity we cannot sack failing civil servants and members of failing Quangos. There needs to be more accountability for these employees performance.
October 19, 2023
That is why Quangos exist, so politicians can say, look over there, it’s not our idea, not our false statistics.
October 19, 2023
+1.
No quango should be able to exist without the authority of the People in a referendum. Cheap at the price too – we could vote on whole batches of them.
October 19, 2023
At least Ā£100m any such referendum involving the whole country.
The 2016 one cost Ā£129m (electoralcommission.org.uk, āThe costs of delivering the June 2016 referendum ā¦ā
The 2011 Welsh Assembly one Ā£8.2m.
The 2011 PVS referendum Ā£75.3m (parliament.uk, NAO, 27/01/2014).
āThe UK spends approximately Ā£150m per year administering electionsā, 08/03/2014, democraticaudit.com
To āvote on whole batches of themā like the Swiss do, it might need a democracy closer to what it is in Switzerland, ie, 1/ popular initiatives (requiring 100,000 validated citizensā signaturesā to create a new law, or 2/ citizen proposals to approve or reject a piece of existing law (50,000 signatures), or 3/ mandatory referendums (to revise constitution, join an international organisation, or introduce emergency legislation for more than a year.
First, only the people of Colombia, Croatia, Ecuador, Hungary, Italy, Liechtenstein, Philippines, Slovakia, Slovenia, Switzerland and Taiwan have that possibility to call a referendum. In all other countries the executive sets up referendums.
Second, for UK people I guess that like in the above countries there should be something like 10% of registered voters needed to call a referendum.
Finally, there clearly are a number of elements in the Swiss (and other countriesā) example that are very unlikely to ever apply to the UK, for one, the absence of a proper constitution that anybody in the country can easily refer to.
October 19, 2023
Ukraine war has nothing to do with Tory party failure over 14 years to set and effective energy policy that would help business and residents alike. Your partyās nut zero and mass importation of energy was the problem. Your party consistently fails to put OUR national interest first, has it ever heard of national security for energy, food, water, steel ,manufacturing?
Stop blaming others for your partyās consistent failure to act in our national interest.
I note Soubry is openly supporting remaining Labour. Therefore showing the Remainer Uni party is in full swing. A few exceptions on the fringes like yourself.
October 19, 2023
+1
Carney – appointed by “CONservative” George Osborne is backing Starmer/Labour. So too is the CEO of Blackrock.
They obviously think the destruction of our economy isn’t happening swiftly enough under the Red-Green Branch of the Uni-Party.
October 19, 2023
Sorry, Blue-Green Branch (although the mistake is easily made, since there’s virtually no difference between them).
October 19, 2023
John, are you in a very small fringe group who think like you on economics like this? What % of the party support your view just on this one matter?
October 19, 2023
Hope : āYour partyās nut zero and mass importation of energy was the problem.ā
Yes, all we hear and read from the MSM, adverts for smart meters, the wind and solar industry, Government and National Grid documents and press releases is ārenewables reduce our need to import gasā.
The way to reduce the importation of gas is to drill for it in the North Sea and start fracking.
We have plenty of gas and there is no climate emergency caused by increasing the amount of CO2 (planet food) in the atmosphere.
October 19, 2023
@ Mark B “Another, āThe dog ate my homeworkā piece” – but Sir John did not create the OBR, was not in government when it was created, and has led criticism of its wretched performance and has said its functions should be passed back to H.M. Treasury. Accordingly, your point seems badly misdirected.
October 19, 2023
I see the Treasury senior organogram lists no fewer than twelve Deputy Directors for Enterprise and Growth. They come under three Directors for Enterprise and Growth.
I wonder if we need them all for this country’s economy to be “enterprising and growing”. Would GDP growth decline if any of those posts were cut, I ask myself.
October 19, 2023
In management I was always given to understand exercising meaningful management stopped at about 7 reporting in? Over that and management falls away and they do what they want…
October 19, 2023
Fifteen Directors of Growth? They should tell us what growth they have achieved.
October 19, 2023
a-tracy :
Growth in the number of directors?
October 20, 2023
Aren’t deputy directors – directors in the public sector? If not why put director in their title at all?
October 19, 2023
It’s all one way, towards a larger State and towards the EU. It’s never the other way, away from the State and back to private sector autonomy. That’s an expression of political power and who’s in control and it ain’t Thatcherites.
Which scumbag dream’t up Quangos? Sneaky Oxbridge snakes, I bet. They have become a well crafted threat to democratic accountability to circumvent Ministers, though I suspect that’s buck-passing by filth politicians in government, while separation of powers trashed. Labour is cock-a-hoop over such developments.
Labour will want total control the OBR to capture future govts and that promotes the State and the EU while the Tory party leaders enjoy such a stance if it smooths their careers.
These slimy turds will mess up one day. They’re not as smart as they think they are. No one can ever circumvent the fundamental laws of finance and economics, certainly not retarded Socialists
October 19, 2023
JR says āI am all in favour of getting the deficit down, but do not think high tax rates and austerity achieve that.ā Indeed high and complex tax rates always deter and often prevent investment, growth & hard work and reduce the tax take too. High levels of red tape, high net zero energy prices and very poorly spent taxes, ineffective police and dire public services do not help either. But this government is delivering all these in spades.
The UK economy could indeed grow far more quickly, but not with the current bloated and generally inept state sector, high and still increasing taxes with very poor and decling public services, over the top red tape, high energy prices (mainly due to the economic and scientific insanity of net zero) thus exporting of our higher energy businesses. But clearly no political will from Socialist, Globalist, tax borrow & waste, QE currency debase Sunak and these appalling fake Tories to address this.
Sunakās tiny touch on the brakes over the net zero lunacy was totally insufficient. Sill heading for the net zero cliff for no reason at all.
October 19, 2023
Two points
1. The OBR, like its creator Osborne, is useless and should be abolished. Financial policy should be in the hands of the elected Government not an appointed body of so called experts.
As quoted on Notayesmanseconomics (a site I recommend), the first rule of OBR is that OBR is always wrong.
2. Conservative Home is actually LibDem Home and a total waste of time for actual Conservatives.
If anyone can recommend an actual proper Conservative site I would be grateful.
October 19, 2023
I popped across to ConHome today, haven’t read it for a long while. A con writer called Maciver wrote “I wince at the thought of what this feels like for Scottish and British Jews”. Aren’t Scottish Jews British Jews, would he say English/Irish Jews or Welsh Jews?
The headline ‘Israel, Gaza and SNP Reaction. Yousaf got off to a bad start, but is doing much better”.
The comments under John’s article: Yet again, everyone is wrong except Redwood. Pop across and read the other ‘conservative’ thoughts. Apparently, an ‘ex’Tory voter thinks food has gone up 100%.
October 19, 2023
John,
You could have reduced the word count by simply saying. It is not the role of government to be naĆÆve and incompetent. Those traits are best left in the hands of the opposition. Further you could have suggested the inability of any public sector body to accept the simple solution common in the private sector when incompetence is on display. i.e. fire the individuals involved, might be worth adopting….
October 19, 2023
A bit long in the telling there John.
People normally get fired when they are incompetent at their job. The Public Sector should give that old fashioned concept a try.
October 19, 2023
only true for Private sector, failure in Public sector might result in being moved on to the next job to damage.
October 19, 2023
You have to explain it to the political class in words of two syllables. These blog posts are for them primarily. Remember these are people who did not know what a bond was!
October 19, 2023
Why should the Treasury and OBR bother put on a show of repentance even for forms sake?
Let’s not pretend that bad management, incompetence, slovenliness and general shrug of the shoulders attitude ever comes anywhere near to being given a kick up the proverbial.
You can be in public office have all the above qualities, cause untold damage and walk away with a nice pay off.
I was shocked to see the figure being bandied around for the cost of the covid inquiry. What an utter waste of money to be told at the end of it all ‘lessons will be learnt’ as all involved walk off into the sunset.
October 19, 2023
Well said Allister Heath today:-
āSickening anti-Israel bias in the West sees the world teetering on the abyss
The speed with which so many gleefully rushed to judgment over the hospital attack was disgracefulā
October 19, 2023
Propaganda always works on the already biased.
October 19, 2023
+1
October 19, 2023
@LL; As the FACTS are still unclear, and will likely remain unclear until there is at least a ceasefire (that allows independent experts to examine the hospital site), I agree, gleefully rushed judgments are pushing the region to an abyss, if not the world. Some people, whatever their views, should keep their OPINIONS to themselves if they can not comment without favoritism or prejudgment. The British press should be reporting with neutrality.
October 19, 2023
‘The British press should be reporting with neutrality’
Yes.
– Ignoring those who won’t openly support Israel and its right to exist.
– And those who support aggressive Israeli Zionism as opposed to fair-minded Zionism based on the Rule of Law.
October 19, 2023
Hold on a second!
There are a lot of ideological, robotic nerds on the right who have forgotten why they are even supporting Israel in the way they do.
Let’s all agree that Israel has a right to exist and to defend itself. 100%, And that there are some real mad-dog, murdering bast-rds who want to do away with Israel / Israelis (and Jews).
But at same time, it’s bonkers to think Israel (and so the Middle East and the rest of the world) can be stable long-term by controlling the Palestinians they way they do. It’s not just unethical – it’s also bad politics.
And lots of Jews – both secular and religious are some of Israelis harshest critics.
Meanwhile, let’s not just support Israel in a fair way but also oppose any form of anti-semitism outside Israel (and that it’s unethical – and wrong – to equate challenging aggressive Zionism with anti-semitism. At least lots of secular and religious Jews think its unethical).
October 19, 2023
Lastly, Northern Ireland demonstrates peace is possible. At least peace compared to what we all remember what happened back in the 70’s and 80’s. And N. Ireland is still under British control.
Who would have thought this was possible.
So a much more stable Israel (and so Middle East) is possible.
But we first have to challenge those on the extremes. Those who want to do away with Israel. And those who support aggressive Zionism – as opposed to fair-minded Zionism based on the Rule of Law.
Anyone who thinks otherwise, it just an ideological nerdish robot as far as I’m concerned.
October 20, 2023
Thanks for that, Ed M.
October 21, 2023
Hello. My grandfather (an officer / senior officer in the British army – and in British Military Intelligence – for 30 years whilst also being mixed Irish Catholic / Protestant – and ultra Conservative / Unionist and Royalist in background – v. much in the tradition of Edmund Burke ..) was an expert on N. Ireland – and my father too. Both my grandfather and father (who was an ultra optimist) were very pessimistic about N Ireland (as I grew up as a boy), saying there would never be (relative) peace in N Ireland. They were both WRONG (although they I and 99.99% of people would have agreed with them back then. There is (relative) peace in N Ireland now whilst it is still part of the UK. My point being: something similar IS possible in Israel / The Middle East.
October 19, 2023
Of course Labour will strengthen the OBR because the OBR is stuffed full of Labour supporting economists who will rubber-stamp Labour policy, and they were appointed during the period of the Conservative government so they can’t complain. No-one seems interested in examining the models they are using. On a similar topic I saw Prof Ferguson at the Covid inquiry this week – they didn’t ask him about his absurd model predictions which predicted rates of infection and death that didn’t happen anywhere in the world, instead they asked him why Ministers ignored (what he claimed to be) his recommendations at the time. Amusingly he said he had made his advice clear via an interview he gave on the Radio 4 Today programme, but they didn’t ask him why he thought that was an appropriate means of communication. It is a pity that inquiry is focussed purely on the political rather than the scientific – that’s what happens when you use KCs and officials without the necessary, or indeed any, scientific education.
October 19, 2023
Good Morning SirJohn, I have long accepted your analysis.
How much would the treasury save by abolishing train company subsidies?
What would be the overall effect of a significant increase in the minimum wage (to match, at least, the Benefits Cap) and st the same time abolish all āin workā benefits?
How much would be saved by slashing NHS management that is not needed for direct Clinical support?
I would like to know your thoughts on such ideas as these. Keep up the good work.
October 19, 2023
The increase in the minimum wage puts businesses out of business and increases the benefits bill.
We need to save by not accepting millions of penniless people demanding houses etc.
October 19, 2023
@Lynn Atkinson; “increase in the minimum wage puts businesses out of business and increases the benefits bill”
That argument was used back when the NMW Act was created, far from increasing unemployment levels they fell, as did the cost to the taxpayer of in-work benefits. Then as more people had greater discretionary spending power that lead to increased consumer sales, which in turn lead to greater B2B sales, which in turn lead to company expansions and/or profits.
As for housing migrants, can farmers for example have their willing workers back if they provide suitable accommodation? Otherwise, where are the hoards of willing 18 to 40 year old British born workers prepared to do the typical work migrants are/were to willing to do; and forget direction of labour, that only worked in countries like the USSR or during wartime conscription… If the current govt was mad enough to take your advice, which they just might have been, I can foresee many businesses going out of business anyway, whatever the level of the NMW, no business can survive without staff, or products.
October 19, 2023
@NotA; “[at] the same time abolish all āin workā benefits?”
Would that include all tax breaks, rebates, allowances etc. (being replaced by a Flat rate of income tax)?
Why do I doubt it!
October 19, 2023
It’s a windy day Sir John, but keep whistling. You never know, someone may eventually pay attention.
But I doubt it.
October 19, 2023
@Donna; Well if he will keep whistling into the wind, rather than with the wind (of change, enlightenment)….
October 19, 2023
The BIG problem with all predictions be it weather . monitary or health too name a few, is computer modelling. The Met office since it got that āsuper computerā is rarely right. The treasury and B of E wildly wrong, and lets not forget the worst, Prof Pantsdown and his 500,000 going to die from a bit of influenza !
We need too return to using brains and experience.
October 19, 2023
Yes even Musk says ditch AI.
October 19, 2023
I fail to understand how anyone could be employed (Prof P) in any consequential position who can claim that starting lock down a week earlier would have cut the death rate by 50%.
But then I wouldn’t be surprised to find his next job was Governer of the B of E.
October 19, 2023
Conservative ministers seem like rabbits caught in a headlight, stunned into ploughing on with blobbish policy though we are -20% in the polls. Why Rishi Sunak has decided to waste time and effort on the bizarre new smoking policy is beyond me, it wonāt win a single vote and may lose yet more.
Another example of the out of control quangocracy yesterday. Sir John Armitt, chairman of the national infrastructure commission, has launched a political campaign to stop the govt selling off HS2 land following the partial cancellation. And he says the gas network should be closed down to be replaced with universal electric heat pumps. I caught a reverential interview with him on the BBC. Of course he was not asked what the cost would be of 30 million or so heat pumps, whether they would actually work in most U.K. houses, and how the electricity would be generated when the sun isnāt shining and the wind isnāt blowing (and indeed even when they are given the actual output). Nor was he challenged as to why he, an appointed official, should feel he is in a position to campaign on an important policy against the elected government which he is supposed to be employed to advise. I suggest this sir John is moved to retirement today as a small public sector productivity measure.
October 19, 2023
+1
He also said cars should be banned in cities, NB.
October 19, 2023
Richard1 : āSir John Armitt, chairman of the national infrastructure commission, has launched a political campaign to stop the govt selling off HS2 land following the partial cancellation.ā
If true, thatās interesting because I read today :
āThe [National Infrastructure] Commissionās remit letter also states that the Commission must ensure its recommendations do not reopen decision making processes where programmes and work have been decided by the government or will be decided in the immediate future.ā
https://nic.org.uk/app/uploads/Operability-of-HRES-February-2021.pdf
Page 3
But then it is the unelected cs, quangos, NGOs, Commissions, institutions and regulators who are really running the country.
October 19, 2023
It is what happens with chumps and charlatans in charge. The UK is in a big hole and the chumps and charlatans keep on digging.
October 19, 2023
Of course Ministers must defend officials in public. They plough into private sector CEOs whenever they want to virtue signal.
What utter boleux. Covering up incompetence. No wander the Civil Service is in such a mess.
What an appalling admission by our host.
October 19, 2023
@ Nigl – this point was explored and explained over forty years ago –
“Jim Hacker – Well, I’m an old-fashioned sort of chap, Betty, and I believe in a thing called loyalty.
Whatever you say in private you defend in public, eh, Humphrey?
Betty Oldham MP – In that case, aren’t you being disloyal now?
Jim Hacker- No. I believe a Minister has a higher loyalty. A loyalty to Parliament and the nation. And that loyalty must be paramount, however hard and painful that may be. Of course, one is loyal to one’s department and officials, until the evidence is overwhelming, but I must say in public, that reforms can and will take place, and I know I shall find in Sir Humphrey my staunchest ally.”
October 19, 2023
Sir John
Most logical thinkers as yourself will know the system is in self defeating mode, more of what causes the situation and less of what is needed.
All the while those that we empower through the ballot box and pay with our hard earned money, refuse to manage, refuse their responsibility. Instead they prefer pontificating about things that mean nothing and preening their own self gratification as if that alone is enough.
October 19, 2023
I wonder is it mere coincidence that a) the man who was chancellor in the Johnson government and gave us the highest tax burden since the war is now the PM and b) that he was chosen by the parliamentary party but rejected by the ordinary membership?
October 19, 2023
New mindless mantraā¦.
Inflate and inflateā¦
Then stick up the rateā¦
October 19, 2023
The OBR approach to ensuring the Treasury doesnāt cook its projections is wrong headed. All that happens is the OBR and Treasury get involved in groupthink together rather than just the Treasury. The OBR can play a useful function, but it needs to be used like risk and audit teams in the private sector.
A good risk team will look at the assumptions used in the business teamsā models and ask the question āis this reasonable?ā or āwhat happens if we vary this?ā.
The OBR could carry out this function, or oblige the Treasury to do the actual calculations which should then be published. MPs and economic journalists can then report on whether what the government is doing is sensible or not, bringing democratic pressure to bear on the Treasury models rather than the Whitehall love in it appears to be today.
October 19, 2023
Totally agree. But the elephant in the room is? Who is actually pulling the BoE & OBR strings? It is clear that the BoE has mismanaged bonds & OBR are unfit for purpose. Therefore, why have these institutions not been been brought to task? Surely senior posts need to be replaced with those who will deliver inflation busting policies!
October 19, 2023
Itās the Treasury pulling all the strings, and we can sack them.
October 19, 2023
“The boss of BlackRock, which manages assets worth $8.5trillion (Ā£7trn), told the Wall Street Journal: āI was in the UK and I spent time with both parties ā the Conservatives and Labour party ā and Iām very pleased to see how the Labour party in the UK went from an extremist party with a Marxist leader to Keir Starmer who has shown real strength as a moderate Labour party.”
Everyone other than the Conservative Party and their not Conservative Government recognises being as far left as they(more extreme Socialist than Labour?) have gone is damaging the UK. The Conservative Government is creating and overseeing the destruction of the UK
October 19, 2023
Good morning Sir John.
I’m curious to understand what you mean by austerity in your article. If it’s state austerity, well of course that hasn’t happened as the government has increased National Debt year on year for the past 2 decades. It can only mean austerity of the individual, with higher taxes and inflation.
October 19, 2023
Managing the economy? You mean the way that worked so well for the Soviet Union? That’s the way we’re going and with the same results. A crushed economy, no freedom but with the added bonus of millions of ethnically incompatable people warring on the streets. Good job managing so far, lets see if Labour can finish us off by being even more totalitarian that the commieservatives.
October 19, 2023
Are we certain that the huge sums spent on getting us into this pickle were actually spent wisely?
And surely if prices are randomly inflated by the unscrupulous ( out to make a killing) that too leads to rampant inflation or hugely increased govt. debt?
Crash and trash the economy.
Debt in excess of GDP.
The West is finished!
October 19, 2023
From the MsM
In his Autumn Statement next month, the Chancellor is expected to announce that the payout to retirees will rise in line withĀ regular wages at 7.8pc, rather than the 8.5pc of actual wages.
The 8.5% is the money given to State employees just to do their job and come into work. Blackmail if you like. So those that cant work more because of age etc, have to loose so those that can work more donāt have to bother.
That’s 14 years of a Conservative Government trashing the economy instead of managing it
October 19, 2023
If doctors were prescribing harmful substances, such bad ways would be stopped near instantly, not remain until retirement or their NHS contract expired. In contrast, this government clings on to power until an election takes that power away, often a period of 5 years. Harmful governments should be stopped in their tracks.
October 19, 2023
This sitting on hands or worse for 4 years of 5 makes me think reducing the Government term in office to 3 years might have some appeal.
October 19, 2023
Where were you during the āpandemicā? 200 excess unexplained, un investigated deaths per week in the U.K. since that mass medication experiment.
October 19, 2023
Youāre right Lynn, and your example reveals an important fault in the contrast I used without adequate forethought. Apols for that.
October 19, 2023
Please write to your MP to ask them to attend the Adjournment Debate tomorrow on the huge number of non Covid excess deaths asks Andrew Bridgen on Twitter.
Will their parties pathetically ban them?
October 19, 2023
Done. And I see there is then also a “Barnett Formula (Replacement) Bill” debate! š
October 19, 2023
that should have read’ (Removal) Bill.
October 19, 2023
The BOE, Treasury, and OBR will not have an entrepreneurial mind set. I liken them to a bunch of pathologists and not very good ones at that. I also ask the question, where did they get their computer programmes. They need programmes as complex as the Met Office but applied with a modicum of common sense. The Met Office are geographically in one of the most difficult places in the World to look more than four days ahead. The financial world is similarly placed with so many variables created by politicians plus of course World events.
For instance politicians over ambitiously decide they can control the climate. They stupidly put in place a series of measures witness, prematurely trying to control the car production process, cancelling gas for domestic and industrial power, closing down our home sources of supply of gas, oil, and coal for the joy of buying them at World prices controlled by cartels and political upheaval overseas. One is forgiven for thinking they are all benefitting financially or they are just plain stupid, the latter most likely. All the above with little commercial vision, an archaic tax system, and absolutely no visible signs that government, politicians, or their civil service are capable of managing anything has led us to the inflation, and cost of living crisis that most of our population is currently experiencing.
My conclusion is that Rishi along with some of the more experienced brains in the conservative party need to sit down with clean sheets of A4 in front of them and rethink the whole process of government, with the purpose of putting Humpty Dumpty together again for the benefit of the people. If they do not they have no right to govern.
October 19, 2023
Excellent advice, and you’d expect more voices to take up the points raised.
The reason, clear to us that can observe from a distance, is that the policies now in force were created in order to destroy the UK economy, our way of life and our future.
When a course is followed, despite the evidence against it, the result will always be devastating.
October 19, 2023
If you want to see where this is all leading, read an extrapolation of what is happening now for a very dismal future: Dark days of the 22nd Century
October 19, 2023
The OBR was an honest attempt to create an independent think tank which would have a stabilizing effect by scrutinizing government policy and publishing an even handed appraisal.
It went badly wrong, their experts and statisticians were wrong and by a large margin, all the time, they became a treasury lap dog.
The main problem is that in-spite of their appalling forecasting record, their output is now used to justify the WRONG policies.
October 19, 2023
The Treasury is the think tank for which we pay. They have no authority to sub-contract their job.
October 19, 2023
The only chance of winning the next GE is tax cuts. But yet again, Mr Negative, Jeremy Hunt, claims there is no room to make them. When will he wake up to the idea it is his job to cut spending & make room for tax cuts?
The PM needs to sack him & appoint an active Chancellor who takes an axe to Government spending.
The first area to cut is all the nonsense connected with Net Zero, which will never be achieved! If the Chancellor can’t save, at minimum, 10% of the Government’s massive spend or her or she is not doing their job. A 20% saving is realistic when you look at spending today compared to 5 years ago!
Another good article but who is listening in senior positions in Government?
October 19, 2023
The problem with this, is that Hunt is just carrying on where Sunak left off, so presumably the two are in lockstep.
October 19, 2023
“The Treasury and the Bank put out a wrong narrative on the economyā¦..The Treasury and OBR are so far unrepentant for their wildly wrong forecasts of the deficits in recent yearsā¦.ā
The purpose of the Marxists in these organisations is to produce the narratives and forecasts wanted by their comrades in Parliament to justify the economy and democracy destroying policies they want to pursue.
It is exactly the same for the entirely false narrative that anthropogenic emissions of CO2 will lead to a burning, now already boiling oceans (Al Gore) and planet (UN Sec Gen). Again, nonsense modelling when the work of Happer & Wijngaarden has demonstrated without doubt that doubling the amount of CO2 in the atmosphere causes no more than an increased warming of 1% because of IR saturation.
CAGW, has been described by the 2022 Nobel Physics prize winner, Dr. John Clauser, as āa dangerous corruption of science that threatens the worldās economy and the well-being of billions of peopleā
We need more atmospheric CO2 not less to green the planet and grow more food. We should increase the use of affordable, abundant, reliable hydrocarbon fuels, or nuclear, to provide greater numbers of people with electricity to lift them out of poverty.
October 19, 2023
The whole idea of putting up interest rates to choke off inflation is standard policy but should it be when there was no significant inflationary pressure in our economy and the inflation was entirely driven by external factors like Putin’s war putting up gas prices and the corresponding rise in grain and fuel costs ?
What is the difference between taking money out of people’s pockets by massively increased their energy bills and Andrew Bailey deliberatley hiking their mortgage payments? The effect is exactly the same, it’s just energy companies that make billions extra rather than the banks. The effect on the poor consumer is identical.
The problem is, thanks to central bankers like Bailey, last winter we were all hit with both !
How we have avoided a recession so far is a testimony to the strength of our economy, and that in the face of the Bank of England doing its best to instigate one.
Our economy, is now driven by intense competition on prices of everything, thanks to the internet. It no longer suffers from inflation as it did in the past because suppliers know that they cannot put prices up without suffering from a drop in sales. A rethink of monetary policy is long overdue.
October 20, 2023
Inflation isn’t “too much money chasing too few goods”. Inflation is “your money is trash.” To say otherwise is letting the government off the hook.
October 19, 2023
I agree with every word in Sir John’s post today . Much of the economic problem we face is of the making of wrong bodies staffed by individuals whose records show they are not properly skilled in the jobs they have . The media also make the mistake of publishing their views and not attempting to consult alternative judgement sources . Effort and stimulation is lacking in the country at a time when it is badly needed . At the sort of “low” that exists horizon sparks need to be spread and judgements made by the right people .
October 19, 2023
Forget UK economics …I believe we may be heading towards an Islamic economics
‘The Islamic economic system is the collection of rules, values and standards of conduct that organize economic life and establish relations of production in an Islamic society. These rules and standards are based on the Islamic order as recognized in the Quran and Sunnah, evolving life of Muslims all over the globe.23 Jan 2023’
October 19, 2023
John, can you and your colleagues put into law, (like Theresa May put things into law that can’t be changed!) to ensure that any changes to the UK voting system from lowering the voting age to PR has to go to public referendum? The same with Citizens panels that is what we have Councillors elected to do, please ensure they can only be introduced by referendum.
We had so much foisted on us by Osborne from the OBR, Mayors (even though they were rejected by the public), devolution of the NHS in that area to Mayors who then fail but the government keeps the blame, to Police PCCs when most of us just want to see bobbies walking around catching the drug dealers we all see on our walks and youths riding around on electric bicycles with balaclavas on in summer! You know deterring shop lifters in what few shopping centres we have left. These people are failing but your government is still taking all the blame.
October 19, 2023
Nobody can put anything into law that canāt be changed. No Parliament can bind itās successors.
October 20, 2023
I thought we were told Theresa May put items into law that couldn’t be overturned without the UK Supreme Court agreement. Sorry, maybe I’m getting confused with all the excuses for not getting things done in our favour. The lengthy negotiation period and withdrawal agreement are over now. Payments to the EU have dropped considerably and, as each month goes along, get smaller.
I realised that the negotiations with the EU were going to take ten years 2016 to 2026, Jeremy Hunt proposed a second referendum when he was Health Secretary on the ultimate deal, he is just in lockstep to conjoin us with the EU hence he has to make things as bad as possible so people stay at home and let Labour take over to seal the deal. One of the big sticking points with the EU is full freedom of movement, freedom to access all benefit packages and higher education in the UK for all 500 million potential citizens. What would the UK be like now if we had to take all EU citizens + all others that wish to come here and can just rock up in a dinghy now?
October 19, 2023
WHY? This is supposed to be a democracy. If officials are useless – lambast them and get rid of them!!! Why defend them! Mr. Redwood – you make me despair. Itās all an old boys network joke. How incompetent do you have to be to get sacked?
Ah well – a severe clear out of the Aegean stables is on its way. Alas, the stables will be refilled in very short order.
October 19, 2023
Anyone with half a brain can see the mess governments have gotten the Western world into over the past few decades. It cannot just be incompetence therefore it must be by design. The printing of money and huge debt will either result in bankruptcy or hyperinflation. There are far too many things happening in the world for this just to be a coincidence from the power grab from the WHO to the takeover of our financial institutions and media, the open borders, the faux climate emergency, the engineered virus, and the clamp down on free speech. Have you noticed how since Brexit any politicians or media commentators who donāt toe the line have been brought down, picked off one by one with spurious allegations? We are at war with our institutions and the global elites, who are out to destroy us all.
October 19, 2023
There is something seriously wrong with our financial institutions. They seem to have been captured by the Environmental, Social, and Governance (ESG) Investing policies that have been created by the WEF. ESG scoring is the new tool in the push for net zero. When a bank is refusing to give a mortgage or loan based on a person or company’s carbon footprint they have really overstepped the mark. De-banking is just the tip of the iceberg they are strangling our industries by withdrawing credit and plan to make much of the UK housing stock unmortgageable by making the energy performance certificate rating C or higher a prerequisite for a loan. We are hurtling towards the “You Will Own Nothing” prediction coming true.
October 19, 2023
I am still in Sri Lanka but upon reading this blog while walking the streets of Colombo I thought of a money saving idea. We can replace all those useless Treasury, Bank of England and OBR officials with a few fortune tellers from Blackpool Promenade. All those many officials can then try and compete for the few resultant fortune telling vacancies on Blackpool Promenade but I doubt they are up to even that trade! Though I don’t waste my money on fortune tellers, as I understand it even seaside fortune tellers would not be stupid enough to commit themselves to definite unambiguous predictions that will soon be proved wrong!
The Government and Opposition politicians are acting like the fictional courtiers in Hans Christian Andersen’s ‘The Emperor’s New Clothes’ story in refusing to acknowledge the clear truth while John Redwood has long been acting like the little child in stating what should be an obvious, albeit inconvenient, truth!
October 19, 2023
It is as if the Bank of England has a private agenda separate from the inflation mandate from Government.āAn agenda agreed with the other main central banks and the BIS, with a bit of help from the World Bank and the IMF on the side.
October 19, 2023
And challenging Israel in proactive way is for Israel’s good as well – as well as the Middle East in general and so the UK.
October 19, 2023
Don t tempt fate
October 19, 2023
I think it will happen, but only if the Tories are allowed to slip the leash of their globalist minders, and provide a genuine alternative to Starmer.
October 19, 2023
From the MsM
āOBR admits āgenuine errorsā in its economic forecasts
The Office for Budget Responsibility (OBR) said its forecasts in March 2021 and March 2022 missed a large part of the spike in prices and the subsequent state support schemes, which led to ramifications for its predictions of tax revenues, spending and interest rates.
āOur March 2021 forecast (made a year before the Russian invasion) and March 2022 forecast (made within a few weeks of the invasion) significantly underestimated the strength and persistence of inflation, and overestimated the level of economic activity,ā the OBR said in its latest Forecast Evaluation Report.ā
āgenuine errorsā? Or irresponsible incompetence.
Their record speaks volumes on their capability
At least the have kept up their form since being created by the Conservative Government. The OBR offers nothing to the development of the UK at best it is a drag on the UKās economy by forcing on the Country ābadā thinking. And, this Conservative Government, those in charge donāt care and refuse their responsibilities and āmanageā Until they are replaced this misery will go on.
October 20, 2023
Oh dear, by election wipe out for the Conservatives in name only.
Unless they rapidly listen to the decent majority on common sense stuff the voters will regard them as even worse than the useless Labour party.
If they had any sense they would call in UKIP, reform, Farage, Cummings and some decent people from outside the bubble and have a fundamental rethink.
And quick.
The same old lame politics is not good enough.
October 20, 2023
The last few years have convinced ex-Tory voters that the Party has nothing for them. Consecutive domestic issues, and doubtful international politics, coupled with their inability to find a PM worthy of the name has turned the majority away – searching for where to turn. Clearly Central Office, the Cabinet and majority of MPs have veered away from Party members and to a large extent the traditional loyal voters.
8.18
October 20, 2023
Didn’t the MSM and Carrie finish Cummings off? Would he even want to come back?
October 20, 2023
Cummings is plotting to come back at the election after next, after the next election wipes the Conservatives out, and he and the better ex-Conservatives and others come together. its all public domain, he is saying it all publicly on social media. It would be better if we could shortcut this process and have a half decent offer, which was believable, at the next election, and cut out the wasted parliamentary term where Labour mess the country up even more.
October 21, 2023
Interesting. I wonder if he would work with Sunak? That would certainly be one in the eye for Carrie.
October 20, 2023
“Borrowing – the difference between spending and tax income – was Ā£14.3bn last month. Economists had predicted government borrowing to be Ā£18.3bn last month while the Office for Budget Responsibility had forecast the level to be Ā£20.5bn.” Source BBC
Comes out a day after the by-elections, yeah, right. Hunt needs sacking don’t tell me he didn’t know these figures to announce earlier in the week.
They’d be sacked now in the private sector for such gross incompetence.
October 20, 2023
correct