Best Of

Against my better inclinations I watched QT for a bit last night, more in hope than expectations of Sultana putting up a decent show, unfortunately hopes and expectations were dashed. She’s not a supple or subtle thinker and reverts to slogans at the drop of a hat. Strangely there’s not much difference between what Sultana and Polanski are saying, but it shows you need something extra to front a party, or a movement as Zarah would no doubt say.

Seen some of it as well. Thought she was very ranty whenever she spoke. Looked a sympathetic audience for her views too

I've seen a few clips now from QT. Have to say Ken C may be getting on a bit but he still speaks great sense and with authority.

Where are today's politicians with such talent and ability for the frontline?

Certainly not in today's Treasury.

Reports are that the black hole is £10bn less than forecast so no need to raise income tax rates.

But how will today's interest rate rise affect the numbers? Surely it will widen the black hole again.

And we are still 12 days from Budget so can the numbers still move - ie has OBR done final numbers or is there a further final revision still to come?

If there is a further revision, surely there could be trouble.

All economic statistics are rubbish. It is absurd that the budget and future direction of this great nation are held hostage to forecasters who may as well be plucking numbers from thin air, so wildly do their guesses fluctuate.

This is why Reeves is wrong to faff and tinker. She needs to restore meaningful headroom so that the markets no longer get fits of the vapours every time someone briefs something in the financial press.

Well that's a bad start to the day. The 50 year taboo on increasing the basic rate of income tax is IMO perverse and damaging. When I heard it was finally going to be broken I was cock-a-hoop. I even got a bottle in for the big day - a nice Chilean red that is at its best after two weeks in the larder. Now we find it's not happening and the news is somehow worse for hopes having been raised. If they weren't up for it they should never have hinted it was coming. All it's done is left enthusiasts like me deflated. Lessons learnt anyway. I'm giving up on this one. A hike is never ever going to happen. The 50 years will become 150. Clearly the way to view it is not as a fiscal variable to be adjusted in accordance with financial circumstances but as a numerical constant embedded in the laws of nature. Pi = 3.14159, C = 186,000 mps, the basic rate of income tax in the UK = 20p.

NB, for all those claiming that leaving the EU has had no impact on the UK because we’ve done about as well in economic growth terms over the last five years or so, a new paper published this month by the NBER estimates the total net impact of Brexit at 6-8% of lost GDP!

https://www.nber.org/papers/w34459

The paper takes an interesting approach - they use detailed economic data to construct a synthetic control UK economy built out of parts of other economies from countries that stayed in the EU, combined with known macro & investment data. That synthetic economy has ~7% higher GDP today.

Tom Forth (who runs https://thedatacity.com/ ) had one of their research fellowships try to recreate the same model from scratch this summer (presumably inspired by a pre-print) and was surprised to reach the same conclusion - he’d personally estimated the Brexit impact as being much smaller than that.

Obviously this a speculative paper - we can’t actually know the counterfactual GDP we would have today if the UK had not Brexited, but the finding that the impact has been this large is significant, I think. Sadly, Labour seem determined to completely ignore the possibility of making any changes to our relationship with the EU, regarding it as some kind of political third rail that cannot be touched.

Tom Forth is very good on quite a few things.

Here, for example, is a thread where he gives an example how government could very easily, and at very low cost, make far better use of its data for public benefit.

https://x.com/thomasforth/status/1986795159162704089
About 9months ago I had a really frustrating call with people in the UK government following years of frustrating meetings with people in the UK government. An archive of the UK's bus open data, the location of every bus in real time, was going to be too hard to release,...

system architects and data architects, and the cost would be enormous to host all the data online and make it available for download, but a team would look at it for a few years and write a business case,...

So we just started collecting the data every 30s ourselves and put it on the web. It's a 1TB archive now. It costs us basically nothing. It's on my £41/month home broadband, on a £100 old computer I had lying around running Linux, put a £500 SSD in, and it just works...

Interesting, although I wonder what use I would have of the current location of every bus in the UK. The one I want to catch is enough for me.

Turns out you can use that data for interesting economic studies!

IIRC the company used that data (plus other traffic data) to demonstrate that the ”commutable distance” for the north of England was much lower than in comparable cities in, say, France or Germany. Resulting in those cities being broken up into smaller economic units that fail to attain the economies of scale that cities usually achieve by conglomeration.

A city usually gains in GDP per head in proportion to it’s size & the gain usually follows a power law. For UK cities that power matches the best of the rest of the world only in London - every other city in the country lags behind the increased GDP / head it ”ought” to gain from conglomeration by a significant margin.

Tom Forth’s company’s research strongly suggests this is because the transport networks everywhere except London are far less effective than in competitor cities, leading to a net loss of efficiency across the entire economy.