Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
Yes that’s my guess. WFH
It’s self harming bollocks and it will fuck productivity in western economies (not just the UK) in the medium term
WFH is fine if it works, but it needs monitoring in respect of productivity. Something which both business and public bodies need to do.
They need to know their KPI's (Key Performance Indicators), and that they are being met.
I expect businesses are better at looking at this than Public bodies.
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
That's awful. I received mine in about a month IIRC. What is it? Its what happens when the state provides insufficient resources at HMRC. Just wait to see what the coming massive belt-tightening does...
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
Quite so. When you want to dramatically change direction or even need to, you simply have to seed that idea in the public discourse first. Look at Austerity, it came on the back of a battle of ideas and approaches played out in public. You can't just chuck it out there. Kwarteng should have got his ideas on the table at his conference speech, got Labour arguing and giving response, seeding the idea we are struggling because we are uncompetitive and regressive in tax policy. All the mini budget needed to do was deal with the immediate CoL/Energy crisis, he coukd have had a full budget in November after 2 months of 'this is what we need'. It may still have been unpopular but would at least have avoided 'what the actual fuck?'
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
I had a similar experience where I had to get HMRC to stamp a document so I could claim Swiss Withholding Tax back. The wait time was scheduled for 15 month. I pointed out this was outside of the deadline I had for making the claim so pointless. They sorted it, but it was ridiculous.
The HMRC agents helpline used to be answered instantly. It now takes ages and all call centres (Commercial as well as Govt) have gone right out in time in my experience, even sales ones, which seems bizarre as they lose business. Recent calls to insurance company, bank, travel agent, etc all at the 30 - 60 min range. Hopeless.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
Yes that’s my guess. WFH
It’s self harming bollocks and it will fuck productivity in western economies (not just the UK) in the medium term
WFH is fine if it works, but it needs monitoring in respect of productivity. Something which both business and public bodies need to do.
They need to know their KPI's (Key Performance Indicators), and that they are being met.
I expect businesses are better at looking at this than Public bodies.
As a long time WFHer, it takes a particular kind of mindset to stay motivated and productive. Its so easy, especially with the internet, just to take a few minutes to errhhh post of a message board etc.
The not being able to just pop and talk to somebody can be really problematic. Its all well and good saying schedule a meeting on zoom etc, but sometimes all you need is 2 seconds, this ok? do you know where y is? on the way to make a coffee.
The leader of the CDU in Germany has called Ukrainian refugees "benefit tourists" and accused them of milking the system by travelling back and forth between Germany and Ukraine.
The SDP and CDU are both utterly contemptible in this conflict, and the build up to it.
What surprises me is that people are surprised at the way a large proportion of German's think and behave. They were the birthplace of Nazism, its in their nature unfortunately.
Germany is sheltering about eight times as many Ukrainians as the UK. Cheap talk from a country whose Home Secretary is telling police to worry less about racism.
So you are happy with what the CDU (a major political party in Germany) are saying about Ukrainians?
Are you happy with the way Germany has supported Ukraine in this war by forcing RAF flights to go around its airspace and providing very little in military aid?
There is a big difference between criticising a nation for stuff and accusing its population of barely concealed fascism ('it is in their nature'), particularly when there is not one iota of evidence. One has to ask: How is it in their nature? Do you think fascism genetic?
Fascism genetic? Well, that's kinda what the Fascists believed..
The YouGov details are all fairly predictable and of course dire for the Tories in every respect. Two things to note:
There is as much as usual self interest in the views about tax - supporting all the stuff that advantages the majority, and opposing everything that gives to someone else.
And the figure for those who "Cannot afford my costs and often have to go without essentials....." is, at 5% lower than I would have thought.
Maybe that's why I am told, counter intuitively, that our local foodbank is remarkably quiet at the moment.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
Yes that’s my guess. WFH
It’s self harming bollocks and it will fuck productivity in western economies (not just the UK) in the medium term
WFH works (ha) with the right work, and the right structures and processes.
In software development, the Agile/Scrum methodologies were explicitly invented to deal with distributed teams. So, strangely, software development teams find that using Agile, they can WFH effectively.
Simply sending everyone home with a laptop is to WFH, what shutting down the warehouse and saying we will rely on the daily shipment turning up on time, is to supply chain management.
And I don't see how KK goes but Truss survives. Every letter of the special financial operation would have been driven by, or at minimum endorsed, by her.
PMs sack chancellors all the time...
But Truss knew all about KK's policies and may even have suggested some of them (see once again the article in the Sunday Times I posted on both Sunday and last night).
Which means she is too tied to these policies for her to sack KK without the response hurting her as well.
Some interesting points being made on twitter, that so many of Kwarteng's friends and former colleagues are making a fortune shorting the pound...
Who said deliberately? The Truss - Kwarteng pact genuinely believes in this policy direction. Absolute zealots. But TK have been telling everyone publicly and hedgies privately what they are doing.
Hedgies are absolute zealots for money. They hear what TK are doing, and massively short sterling knowing that TK are fucking mental. Kerching! In any market calamity there is a fortune to be made.
Then what's the relevance of being "Kwarteng's friends and former colleagues"? Are his enemies and people who've never met him not capable of making the same trades?
Once the borrowing to finance the price support cap for energy became policy, the pound was only going to head down. The tax stuff is just a cherry on that cake.
That's not a bet, that's simply economic gravity at work.
This. The extra economic stimulus was something like 5% of national income on top of the existing Sunak deficit. When rates are going up, locals and foreigners aren't going to finance that scale of extra sterling borrowing for free.
I don't understand the whole "secret information" thing.
Once I heard that they were going to intervene massively in the energy market to protect consumers, I moved to be in a situation to benefit from the pound going down.
That's GCSE economics.
Exactly.
The pound going down is not a bad thing. It would be bad if they were trying to keep the pound up.
That was the mistake of Black Wednesday, not letting the pound freely float to its proper level.
The pound devaluing on Black Wednesday helped the British economy in the years ahead. The Lira remaining locked to the the Deutschemark via the Euro has deeply damaged the Italian economy.
A freely floating currency helps economies adjust to turmoil, by lowering when there are economic difficulties and so boosting competition and growth, or by rising when the economy is overheating, thus reducing inflation. It is not a machismo virility symbol to be kept as high as possible all the time.
I watched an interesting debate last night on the Tech Industry in the USA, the high dollar is killing its competitiveness.
Indeed, its amusing that people are responding to an economic statement designed to encourage growth by suggesting that a small fall in Sterling is a problem.
Devaluations help boost competitiveness and encourage growth.
Its a good thing that Kwarteng is following traditional Chancellor policy of not speaking on market movements, as the media would probably get more hysterical if he pointed out that the currency falling is a good thing ...
More royalist than the king as usual Barty, I don't see any mainstream tories going down the crashing the currency is good route.
Imports being expensive means stuff is more expensive. All stuff, for everyone. Have a look around at your car, furniture, electrical goods, the clothes you are wearing and the contents of your fridge and tell me how much was made in the UK.
Exports being competitive is largely baloney. Manufacturing = doing things to imprted materials with the help of imported energy. Your model is not just o level economics, it is 50 years ago o level economics.
"A small fall in sterling" isn't what's going to slam growth; the rather large increase in borrowing costs which accompanied it...
AS the Euro, Dollar and Pound approach parity should we merge them all?
The Brexit vote closed off the euro option. And I don't think the US would be particularly keen on taking on a 51st state in our condition ? We could ask, I suppose.
The leader of the CDU in Germany has called Ukrainian refugees "benefit tourists" and accused them of milking the system by travelling back and forth between Germany and Ukraine.
The SDP and CDU are both utterly contemptible in this conflict, and the build up to it.
What surprises me is that people are surprised at the way a large proportion of German's think and behave. They were the birthplace of Nazism, its in their nature unfortunately.
Germany is sheltering about eight times as many Ukrainians as the UK. Cheap talk from a country whose Home Secretary is telling police to worry less about racism.
So you are happy with what the CDU (a major political party in Germany) are saying about Ukrainians?
Are you happy with the way Germany has supported Ukraine in this war by forcing RAF flights to go around its airspace and providing very little in military aid?
There is a big difference between criticising a nation for stuff and accusing its population of barely concealed fascism ('it is in their nature'), particularly when there is not one iota of evidence. One has to ask: How is it in their nature? Do you think fascism genetic?
Fascism genetic? Well, that's kinda what the Fascists believed..
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
HMRC is just creaking at the seems utterly. Massive delays everywhere. Its one of the things which really needs investment.
I am trying to make a list of of state managed things that don't need extra expenditure and/or investment. So far my list is empty. While on the 'Extra' side (often of an order of magnitude) is:
Education Debt management NHS, social care Education Defence Pensions and income support Energy costs support Transport Housing Local Government Justice, policing.
Leaving requisitions (paperclips) on the 'managing OK' side.
Mr. Leon, WFH may worsen some things where jobs are practically guaranteed, and pay likewise. For those in the private sector, especially the self-employed, that's rather less the caase.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
You miss the central point. Once you cliff us, you have to spend disproportionately more to recover. There is not enough tax available to pay for all that - as Healey discovered in the 70s.
The YouGov details are all fairly predictable and of course dire for the Tories in every respect. Two things to note:
There is as much as usual self interest in the views about tax - supporting all the stuff that advantages the majority, and opposing everything that gives to someone else.
And the figure for those who "Cannot afford my costs and often have to go without essentials....." is, at 5% lower than I would have thought.
Maybe that's why I am told, counter intuitively, that our local foodbank is remarkably quiet at the moment.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
So what you're saying is that these policies could lead to more productivity, more hard work, and more growth?
Crispin Odey, Hedge fund king and leading backer of Brexit, is one of those profiting from the sterling crisis . Odey told the FT his bets against gilts as “the gifts that keep on giving”. https://www.ft.com/content/d54b4915-60a2-4f73-b1b9-6ea4b7523dd9
If you recall, one of Liz Truss's big promises when running to be Tory leader and PM was she would parcel up hundreds of billions of pounds of Covid related government debt and turn it into long term debt. Since Kwarteng's mini-budget on Friday, the interest... rate on 30 year UK government debt - the gilt yield - has risen to 4.54%, more than the equivalent for Italy, and more than double what Germany pays. She and Kwarteng have engineered conditions in which borrowing for 30 years or more would place an unsustainable interest-rate...burden on the UK's public finance. She has achieved in that budget precisely the opposite of what she said she wanted to achieve
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
Yes this is so transparently the plan. How else to you go from telling people to vote for Brexit to get more spent on the NHS to implementing Singapore on Thames? I remember being told explicitly that this was the trajectory by a former Tory PM not long after the Brexit vote.
The suspects: Russia itself ; One of the baltic states or Denmark; The USA (CIA); pro Russian partisan; pro Ukranian partisan.
I don't think it's Russia - not their style. They'd announce "maintenance" and squeeze the pips that way. I don't think one of the EU states (Or us) has clandestinely done it. The pipeline is useful longterm when relations are perhaps more normal - Russia turned off the gas, the EU didn't say they didn't want it. The baltic states would have mos motivation here but I don't think it's them. The USA ? It's a good conspiracy theory, USA cuts off pipeline permanently so it can't be reused - Europe reliance on LNG is baked in even longer term than the current status quo ante. But far fetched Pro-Russian partisan sabotage ? Can't see it - the pipeline is a useful tool of blackmail for Russia this is a bit self defeating (Though Russia frequently is) but nah.
So having rules out all the other options I think it's probably a pro-Ukranian baltic? group of partisans with some diving/submarine proficiency who want to sever the Russia - EU gas link permanently.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
Taxes have been far too high and interest rates far too low, for the entirety of this period of Conservative govt and even before. The new head of the Treasury did his job last week. The head of the independent Bank of England failed to do his. It's really as simple as that.
I know that some PBers drink wine, so just to advise that I have received an ad saying that you can get 4 for the price of 3 at Asda, and that is after the price has been reduced anyway.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
When this thought meets with the political need for food security a certain friction will arise.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
Yes that’s my guess. WFH
It’s self harming bollocks and it will fuck productivity in western economies (not just the UK) in the medium term
WFH is fine if it works, but it needs monitoring in respect of productivity. Something which both business and public bodies need to do.
They need to know their KPI's (Key Performance Indicators), and that they are being met.
I expect businesses are better at looking at this than Public bodies.
As a long time WFHer, it takes a particular kind of mindset to stay motivated and productive. Its so easy, especially with the internet, just to take a few minutes to errhhh post of a message board etc.
The not being able to just pop and talk to somebody can be really problematic. Its all well and good saying schedule a meeting on zoom etc, but sometimes all you need is 2 seconds, this ok? do you know where y is? on the way to make a coffee.
The point is what matters is outcomes. I know for example my work targets in terms of my billing, so if I meet them it's all good and dandy. If I beat them, I get a bonus, if I don't match them, I'm in trouble.
When I'm WFH I dont have to be 100% productive and no one can be. Again it's about whats expected of you as an employee and that should be clear for both employees and employers.
🚨🚨New Voting Intention🚨🚨 Labour extend their lead over the Tories to 13 points in latest poll. Con 31% (-1) Lab 44% (+2) Lib Dem 12% (+2) Other 13% (-3) Fieldwork: 16 - 20 September 2022 Sample: 2,129 GB adults (Changes from 16 - 20 September 2022) https://twitter.com/DeltapollUK/status/1574702890534535168/photo/1
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
That's just crap systems.
Teams / Zoom easily allows you to create an IP based phone system that can be used anywhere.
Plenty of software exists to manage task allocation and customer service reporting.
I wish it was easy to solve but a lost of public sector type organisations have no interest in doing anything about it.
Councils used to be our blue chip customers but we will not deal with 2 local ones anymore. Its impossible to speak to anyone during a project and payment can easily take 6 months when it used to take 2 weeks.
What you get is denial of everything, "i never received your telephone call, email , invoice etc"
When we complain to the higher echelons you get a response stating how dare you complain.
I was accused of being a rottweiller for chasing a 6 month old invoice with a Housing Association, despite me emailing a copy of the invoice 11 times, they denied receiving it.
My experience of WFH is that people do not work and their bosses cover for them as they are not working either.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
So what you're saying is that these policies could lead to more productivity, more hard work, and more growth?
What's the downside?
Slave labour, Bart. No minimum wage and no rights.
I don't want to get ad hominem on your ass, but you spend as much time on here as I do. You are a hard work and productivity fanboi, I am explicitly hostile to both concepts and as economically inactive as you can be without being in an induced coma.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
I had a similar experience where I had to get HMRC to stamp a document so I could claim Swiss Withholding Tax back. The wait time was scheduled for 15 month. I pointed out this was outside of the deadline I had for making the claim so pointless. They sorted it, but it was ridiculous.
The HMRC agents helpline used to be answered instantly. It now takes ages and all call centres (Commercial as well as Govt) have gone right out in time in my experience, even sales ones, which seems bizarre as they lose business. Recent calls to insurance company, bank, travel agent, etc all at the 30 - 60 min range. Hopeless.
HMRC had basically had to bear the brunt of the last two great upheavals in government, Brexit and COVID. It had to deploy massive resources to Borders and Trade in order to administer the new borders as well as the bureaucratic spaghetti of the NI protocols. Then it had to administer most of the COVID schemes. On top of that like other departments it has to cope with the lurch in direction caused by the new government. Not to say it doesn’t have it’s own problems but I think it’s worth remembering that it’s not always lazy civil servants responsible for bad service. Politics and circumstance play a massive part on what the civil service can deliver.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
When this thought meets with the political need for food security a certain friction will arise.
At current food production levels per area of land would take over 100% being farming to be food secure.
If you want food security then more intensive and productive farming could give that. Plenty of our competitors globally are successfully more intensive and productive, so cutting barriers to trade and cutting subsidies to agriculture and making our agriculture sector compete on it's own merits would lead to more productivity and thus more security.
🚨🚨New Voting Intention🚨🚨 Labour extend their lead over the Tories to 13 points in latest poll. Con 31% (-1) Lab 44% (+2) Lib Dem 12% (+2) Other 13% (-3) Fieldwork: 16 - 20 September 2022 Sample: 2,129 GB adults (Changes from 16 - 20 September 2022) https://twitter.com/DeltapollUK/status/1574702890534535168/photo/1
It's interesting that those are changes from the same poll!
To record a swing even when comparing with the same poll implies a phenomenal - indeed infinite - rate of change.
If you recall, one of Liz Truss's big promises when running to be Tory leader and PM was she would parcel up hundreds of billions of pounds of Covid related government debt and turn it into long term debt. Since Kwarteng's mini-budget on Friday, the interest... rate on 30 year UK government debt - the gilt yield - has risen to 4.54%, more than the equivalent for Italy, and more than double what Germany pays. She and Kwarteng have engineered conditions in which borrowing for 30 years or more would place an unsustainable interest-rate...burden on the UK's public finance. She has achieved in that budget precisely the opposite of what she said she wanted to achieve
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
So what you're saying is that these policies could lead to more productivity, more hard work, and more growth?
What's the downside?
Grinding Poverty Jobs with poor pay and no rights A millions-strong underclass.
"more productivity" where people are given a choice of work three jobs or die is not the future most of us want.
The suspects: Russia itself ; One of the baltic states or Denmark; The USA (CIA); pro Russian partisan; pro Ukranian partisan.
I don't think it's Russia - not their style. They'd announce "maintenance" and squeeze the pips that way. I don't think one of the EU states (Or us) has clandestinely done it. The pipeline is useful longterm when relations are perhaps more normal - Russia turned off the gas, the EU didn't say they didn't want it. The baltic states would have mos motivation here but I don't think it's them. The USA ? It's a good conspiracy theory, USA cuts off pipeline permanently so it can't be reused - Europe reliance on LNG is baked in even longer term than the current status quo ante. But far fetched Pro-Russian partisan sabotage ? Can't see it - the pipeline is a useful tool of blackmail for Russia this is a bit self defeating (Though Russia frequently is) but nah.
So having rules out all the other options I think it's probably a pro-Ukranian baltic? group of partisans with some diving/submarine proficiency who want to sever the Russia - EU gas link permanently.
🚨🚨New Voting Intention🚨🚨 Labour extend their lead over the Tories to 13 points in latest poll. Con 31% (-1) Lab 44% (+2) Lib Dem 12% (+2) Other 13% (-3) Fieldwork: 16 - 20 September 2022 Sample: 2,129 GB adults (Changes from 16 - 20 September 2022) https://twitter.com/DeltapollUK/status/1574702890534535168/photo/1
It's interesting that those are changes from the same poll!
To record a swing even when comparing with the same poll implies a phenomenal - indeed infinite - rate of change.
The YouGov details are all fairly predictable and of course dire for the Tories in every respect. Two things to note:
There is as much as usual self interest in the views about tax - supporting all the stuff that advantages the majority, and opposing everything that gives to someone else.
And the figure for those who "Cannot afford my costs and often have to go without essentials....." is, at 5% lower than I would have thought.
Maybe that's why I am told, counter intuitively, that our local foodbank is remarkably quiet at the moment.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
That's just crap systems.
Teams / Zoom easily allows you to create an IP based phone system that can be used anywhere.
Plenty of software exists to manage task allocation and customer service reporting.
I wish it was easy to solve but a lost of public sector type organisations have no interest in doing anything about it.
Councils used to be our blue chip customers but we will not deal with 2 local ones anymore. Its impossible to speak to anyone during a project and payment can easily take 6 months when it used to take 2 weeks.
What you get is denial of everything, "i never received your telephone call, email , invoice etc"
When we complain to the higher echelons you get a response stating how dare you complain.
I was accused of being a rottweiller for chasing a 6 month old invoice with a Housing Association, despite me emailing a copy of the invoice 11 times, they denied receiving it.
My experience of WFH is that people do not work and their bosses cover for them as they are not working either.
Oh it's easy to solve it just requires a desire to solve it...
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
If they are going to lose office anyway (and they probably are), then why not do something with the remaining time? Sitting around waiting to lose doesn't strike me as a great idea.
Sitting around doing nothing and waiting to lose office is pretty much what Gordon Brown did for a couple of years.
A wasted opportunity to enact some Socialism before the two Bullingdon lads took over.
He introduced the additional rate of income tax...
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
Yes this is so transparently the plan. How else to you go from telling people to vote for Brexit to get more spent on the NHS to implementing Singapore on Thames? I remember being told explicitly that this was the trajectory by a former Tory PM not long after the Brexit vote.
This was the *Singapore-on-Thames* vision post-Brexit. But it had to compete with the "Mercantilist" group who wanted freer trade, and out there in the red wall the "Socialist Republic of Britain" group represented by the likes of the RMT's Mick Lynch.
Its only in the Truss win that SoT have taken over. And now that we have had "whoops apocalypse" on the markets they can present their glorious vision for the future. You workshy scum have had it far too easy for too long. If we slash your rights and let wages float to wherever we want them to be and remove the namby-pamby safety net then you plebs will finally get off your arse and work for our living.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Well she probably wouldn't.
She has choices, she can unlock some of that, she can sell, etc etc.
In my experience, a lot of elderly spinsters have plenty of liquid cash floating around as well.
A friend of my wife's (Remember, we are all in our 80s) and her husband moved some 5 years ago into a retirement village. Husband has now died, quite suddenly, and the widow has been very grateful for the support she has had from her neighbours. My cousin and her husband, both in their 90s, are similarly very pleased to be living in such a place. I've never been in favour of such communities but I am now beginning to wonder!
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
You miss the central point. Once you cliff us, you have to spend disproportionately more to recover. There is not enough tax available to pay for all that - as Healey discovered in the 70s.
So what, Labour will always try. They are the party of tax and spend after all even if it means a new wealth tax and 60% top rate of income tax and increased corporation tax
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
While I agree with your central point, it is important to note that most people would regard quite a few people on the public payroll as "rich". And a lot of these rich "public servants" have the safest jobs in the world with pensions that easily exceed what many less well off people get in full time employment.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
The statement I replied to was tax wealth not income not tax wealth and income
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
You missed the bit about telling the poor saps that they are paying less tax, so they should be thankful.
"Ferguson obtained a 424-page document from a design consultant setting out CalMac's technical requirements, while other bidders had to rely on a more limited 125-page specification. A key section of its bid was mostly cut-and-pasted from this longer document"
🚨🚨New Voting Intention🚨🚨 Labour extend their lead over the Tories to 13 points in latest poll. Con 31% (-1) Lab 44% (+2) Lib Dem 12% (+2) Other 13% (-3) Fieldwork: 16 - 20 September 2022 Sample: 2,129 GB adults (Changes from 16 - 20 September 2022) https://twitter.com/DeltapollUK/status/1574702890534535168/photo/1
It's interesting that those are changes from the same poll!
To record a swing even when comparing with the same poll implies a phenomenal - indeed infinite - rate of change.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
When this thought meets with the political need for food security a certain friction will arise.
No. I thought that at one time. But if land is designated for different purposes, it can be taxed at those rates, whether it is developed or not.
So land which is designated for building houses is taxed at the appropriate level, whether the houses are built or not. Land which is designated for food production obviously cannot be used for building, so it is taxed at a very low level indeed.
Similarly with listed buildings...
This was Liberal policy as far back as the 60s. Site Value Rating, it was called. I wonder if Truss remembers it.
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
While I agree with your central point, it is important to note that most people would regard quite a few people on the public payroll as "rich". And a lot of these rich "public servants" have the safest jobs in the world with pensions that easily exceed what many less well off people get in full time employment.
Yes but they still mainly vote Labour. The private sector rich however, who are the majority of the rich, mainly vote Tory
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
HMRC is just creaking at the seems utterly. Massive delays everywhere. Its one of the things which really needs investment.
They sent me a pretty snotty letter quite promptly when we were under a week late paying my VAT this month.
Edit, but that in fairness only took a computer, not a human being. Those managers who think those WFH are less productive seem to be getting the better of the argument to me.
If you recall, one of Liz Truss's big promises when running to be Tory leader and PM was she would parcel up hundreds of billions of pounds of Covid related government debt and turn it into long term debt. Since Kwarteng's mini-budget on Friday, the interest... rate on 30 year UK government debt - the gilt yield - has risen to 4.54%, more than the equivalent for Italy, and more than double what Germany pays. She and Kwarteng have engineered conditions in which borrowing for 30 years or more would place an unsustainable interest-rate...burden on the UK's public finance. She has achieved in that budget precisely the opposite of what she said she wanted to achieve
Sports Personality of the Year to take place on [Wednesday] 21 December
They might as well not bother; we seem a bit rubbish at sport this year. Win some, lose the ones that matter.
Bit disrespectful to the ladies World Cup winners ...
There's certainly no man I can think of that deserves to win it.
Euros, but yes, they're a shoo-in for Team of the Year - there wasn't really a stand-out individual who grabbed the headlines above her team-mates though.
Really? Beth Mead won the Golden Boot.
There are other SPOTY candidates about. Joe Fraser with triple gymnastics golds at the European Championships and Commonwealth Games. Couple of golds for Laura Muir. Jonny Bairstow hammering (and I mean hammering) 1000 Test runs to play a big part in turning England around. Ronnie O'Sullivan on vintage form more than 20 years after first World Championship win. And there was a certain romance in Non Stanford winning her last major triathlon.
I'm not saying it's one of those years where a dozen people could easily deserve it, but there are plenty of good sporting stories.
I'd be in favour of taxing stupidity. That way you would find for the first time in your life you are in the highest tax band.
Tax thingy.
You know, *thingy!!!!*
I am not sure what you are referring to, but if you are referring to Baldrick's turnip-that-is-shaped-like-a-thingy then I am all in favour of taxing it
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Its WFH, the change in working practices cause by WFH is incredible. Try dealing with a Housing Association where everyone works from home, you basically cannot speak to anyone and all emails are ignored
That's just crap systems.
Teams / Zoom easily allows you to create an IP based phone system that can be used anywhere.
Plenty of software exists to manage task allocation and customer service reporting.
I wish it was easy to solve but a lost of public sector type organisations have no interest in doing anything about it.
Councils used to be our blue chip customers but we will not deal with 2 local ones anymore. Its impossible to speak to anyone during a project and payment can easily take 6 months when it used to take 2 weeks.
What you get is denial of everything, "i never received your telephone call, email , invoice etc"
When we complain to the higher echelons you get a response stating how dare you complain.
I was accused of being a rottweiller for chasing a 6 month old invoice with a Housing Association, despite me emailing a copy of the invoice 11 times, they denied receiving it.
My experience of WFH is that people do not work and their bosses cover for them as they are not working either.
Oh it's easy to solve it just requires a desire to solve it...
Exactly, large swathes of people have just got used to getting paid for not working.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
Taxes have been far too high and interest rates far too low, for the entirety of this period of Conservative govt and even before. The new head of the Treasury did his job last week. The head of the independent Bank of England failed to do his. It's really as simple as that.
I am a conservative sort of Conservative. You can cut taxes when you have a surplus or, in extremis, when you have cut spending. Cutting taxes whilst undertaking to subsidise everyones' gas bills for an unknown cost was simply reckless. I agree about the Bank though.
Why should an elderly spinster living in a large house pay more than a city banker earning £500k?
Why should an elderly spinster living in a large house not pay their own way? They can always downsize into a small bungalow if they'd prefer, freeing up the large house for a family that needs a large house.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
When this thought meets with the political need for food security a certain friction will arise.
At current food production levels per area of land would take over 100% being farming to be food secure.
If you want food security then more intensive and productive farming could give that. Plenty of our competitors globally are successfully more intensive and productive, so cutting barriers to trade and cutting subsidies to agriculture and making our agriculture sector compete on it's own merits would lead to more productivity and thus more security.
Or, more likely, a lot of rewilding, a collapse in domestic production as all our more marginal land falls out of production and an increase in imports.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
Taxes have been far too high and interest rates far too low, for the entirety of this period of Conservative govt and even before. The new head of the Treasury did his job last week. The head of the independent Bank of England failed to do his. It's really as simple as that.
I am a conservative sort of Conservative. You can cut taxes when you have a surplus or, in extremis, when you have cut spending. Cutting taxes whilst undertaking to subsidise everyones' gas bills for an unknown cost was simply reckless. I agree about the Bank though.
From the comments of some of the PB Tories, I can see why LT and KK thought this would be a great budget and to be greeted with acclimation.
I am starting to wonder when workhouses will be reintroduced to motivate the feckless....
Truss is definitely bonkers and/or thick as pig-shit.
I think it's not so much the specifics - it's a gamble but there's political sense in creating a 'small state de-reg' v 'tax & spend' ideological divide with Labour and on that basis trying to win an election that looks lost if they just chug along - it's more the cackhanded way they're going about it.
I mean, what's with the mad rush? Truss and KK arrive, get the Queen buried and then, whoosh, they're up and off, announcing all of this, no attempt whatsoever to roll the pitch, get buy-in, frame a long-term plan, no forecasts, nothing other than 1980s soundbites to accompany measures that nobody voted for and which involve a radical change of direction and huge sums of money.
So imo the market reaction isn't really against the policy, it's about looking at these people and as the football chant goes concluding that "they don't know what they're doing, they don't know what they're doing." The impression is of a couple of teenage siblings left unexpectedly Home Alone and going a bit nuts with the freedom.
Again, that's the malice vs incompetence thing. These are not wacky teenagers, look at the hurdles they have cleared to have the careers they have had and get where they are today. They are much more likely to be serious and deeply malignant adults. Like their predecessor.
What I mainly get from them is not so much unseriousness - I think they are (unlike Johnson) serious - but a certain immaturity. As for malignant, yes I agree. I'm happy to assume that (again unlike Johnson) they are in politics to 'make a difference', but unfortunately the difference they are going to make is almost wholly negative.
Kwarteng's mini budget was a disaster and has thrown the new Truss administration into chaos but it is worth looking at why.
His analysis of the problem was that the UK has been growing too slowly since the GFC, that growth is not keeping up with the ever increasing demands of an ageing population that expects to be protected from the visisitudes of life. I think there is some truth in that, subject to what I say below.
He therefore wanted to go for growth. His ways of doing this were eccentric. He wanted to cut taxes because that is what Truss had promised. He wanted to expressly reverse some of Sunak's policies, eg NI and CT increases, and he wanted to make a bit of a splash.
What was missing were the very reasons that Osborne and Sunak and even that bean counter Hammond had been so cautious. The GFC seriously weakened this country and the way the economy was supported through Covid weakened it yet further. We are right on the 100% GDP debt ratio and heading over.
We have a real problem with an excessively low savings rate which has suffered from artificially low interest rates since 2008 which have driven such savings as we have to largely uproductive assets, such as houses, instead of cash, the return on which has been severely negative. This lack of savings has driven consumption which in turn has driven a perpetual trade deficit. Our ecomomy was producing pretty much full employment but far too many of those jobs were poor offering unstable employment, minimum wage and focused on servicing the excess consumption.
Tax cuts really were not the answer to this problem. What we need are more savings, more investment, less consumption and better productivity. Truss was right that our policy, along with most of the western world, of severely negative interest rates was having distorting and harmful effects. We need higher interest rates and we need to rebalance our economy. But she, along with her Chancellor, failed to appreciate that we needed to move gradually given the weakness of the patient who has been dependent on negative interest rates for far too long. A rich country, like Germany, could afford to take the risks Kwarteng wanted to take because they have a lot of accumulated capital to cover it. We had spent ours on a consumption driven economy buying far more from abroad than we were able to sell.
I think a summary of the plan is: 1. Create a crisis. Who would have known? 2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people 3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job. 4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier. 5. Profits. Huuuuuge profits.
Yes this is so transparently the plan. How else to you go from telling people to vote for Brexit to get more spent on the NHS to implementing Singapore on Thames? I remember being told explicitly that this was the trajectory by a former Tory PM not long after the Brexit vote.
This was the *Singapore-on-Thames* vision post-Brexit. But it had to compete with the "Mercantilist" group who wanted freer trade, and out there in the red wall the "Socialist Republic of Britain" group represented by the likes of the RMT's Mick Lynch.
Its only in the Truss win that SoT have taken over. And now that we have had "whoops apocalypse" on the markets they can present their glorious vision for the future. You workshy scum have had it far too easy for too long. If we slash your rights and let wages float to wherever we want them to be and remove the namby-pamby safety net then you plebs will finally get off your arse and work for our living.
What's the distinction between the 'Pore' and 'Mercantilist' factions? Isn't the overlap bigger than the difference there?
Not a bad article from Adam Tooze here. He thinks Kwarteng and Truss may have anticipated the "Italy and Greece" scenario, and the next stage is massive spending cuts, on a scale far higher than Cameron's.
Its definitely plausible. A scenario where they assume they have a finite period of time in office, and head sprinting out the gate to reshape the country so heavily that the changes become irreversible.
Its very clear that the Singapore-on-Thames faction of Brexiteers have taken over, and they want to get on with the reshape of the fabric of the state. If it makes them lose office afterwards but the changes stick, they will probably see that as a price worth paying.
They won't stick, Labour have already announced higher taxes on the rich and corporations and an end to austerity if they win.
What it would do is kill off classical liberal small state libertarianism in the Tory party for a generation to the benefit of the populist Nationalist right and social conservatives in the party initially and then the One Nation wing again
Never say never. If the scale of the change is big enough to make for a vertical wall to climb then it could stick. Lets assume that "to calm the markets" they have taken an axe to worker rights, to pay, to social security, to the support web of public services. This will prompt a further run on British assets and the currency because its seen by the majority of western economies as mad.
Lets further assume Starmer becomes PM in late 24. He inherits a state where we have mass need for huge spending but massive debts, an economy that has shrunk, and the inability to copy Sunak and just print money cos its an emergency. The remake of Britain to Singapore sticks simply because reversal is so difficult.
No, Starmer would just increase taxes by their highest amount since the 1970s. The public sector are his core vote, not high earners and the rich
You miss the central point. Once you cliff us, you have to spend disproportionately more to recover. There is not enough tax available to pay for all that - as Healey discovered in the 70s.
So what, Labour will always try. They are the party of tax and spend after all even if it means a new wealth tax and 60% top rate of income tax and increased corporation tax
We can't go back to all that. It drives top rock bands off to the South of France to record career-defining classic albums.
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Received a tax rebate this week that was clearly an error - correct name/address details, wrong NI number and financial info. When I finally got through to them they told me they would look into it and get back to me by MID-FEBRUARY. In the past I would have expected this sort of issue to be resolved in a couple of weeks
As an aside, I have been waiting for a couple of Certificates of Residence from HMRC so I can avoid foreign tax on some flintwork earnings
These used to take quite a while to be processed - 3 months on average. I have now been waiting 8 months. It is indescribably slow
Has anyone else experienced this? How much is the country losing by the slowing machinery of government and civil service, the law and the NHS?
Is it covid? Is it WFH? What the fuck is it?
Me too. Not primarily WFH: the problems were there before covid. In particular, they kept telling me not to do a tax return from about 6 years ago but every year I had to write an "informal" letter as they always got it wrong.
I discovered this year, apropos of checking NI contribs for pension entitlement, that they had not received one such letter. This had not been in the least obvious because of their way of presenting information. Consequences, I had to do 4 years' back tax return forms all at once (although they had the data for most of the years). Not easy as I had chucked much of the older records as per their guidelines.
Not complaining - turned out I had been overpaying (fortunately, in the circs, so no question of penalty) but it meant more work all round for everyone.
Not enough staff, and trying to cut corners with the ones that they do have.
And I don't see how KK goes but Truss survives. Every letter of the special financial operation would have been driven by, or at minimum endorsed, by her.
PMs sack chancellors all the time...
But Truss knew all about KK's policies and may even have suggested some of them (see once again the article in the Sunday Times I posted on both Sunday and last night).
Which means she is too tied to these policies for her to sack KK without the response hurting her as well.
Some interesting points being made on twitter, that so many of Kwarteng's friends and former colleagues are making a fortune shorting the pound...
Who said deliberately? The Truss - Kwarteng pact genuinely believes in this policy direction. Absolute zealots. But TK have been telling everyone publicly and hedgies privately what they are doing.
Hedgies are absolute zealots for money. They hear what TK are doing, and massively short sterling knowing that TK are fucking mental. Kerching! In any market calamity there is a fortune to be made.
Then what's the relevance of being "Kwarteng's friends and former colleagues"? Are his enemies and people who've never met him not capable of making the same trades?
Once the borrowing to finance the price support cap for energy became policy, the pound was only going to head down. The tax stuff is just a cherry on that cake.
That's not a bet, that's simply economic gravity at work.
This. The extra economic stimulus was something like 5% of national income on top of the existing Sunak deficit. When rates are going up, locals and foreigners aren't going to finance that scale of extra sterling borrowing for free.
I don't understand the whole "secret information" thing.
Once I heard that they were going to intervene massively in the energy market to protect consumers, I moved to be in a situation to benefit from the pound going down.
That's GCSE economics.
Exactly.
The pound going down is not a bad thing. It would be bad if they were trying to keep the pound up.
That was the mistake of Black Wednesday, not letting the pound freely float to its proper level.
The pound devaluing on Black Wednesday helped the British economy in the years ahead. The Lira remaining locked to the the Deutschemark via the Euro has deeply damaged the Italian economy.
A freely floating currency helps economies adjust to turmoil, by lowering when there are economic difficulties and so boosting competition and growth, or by rising when the economy is overheating, thus reducing inflation. It is not a machismo virility symbol to be kept as high as possible all the time.
I watched an interesting debate last night on the Tech Industry in the USA, the high dollar is killing its competitiveness.
Indeed, its amusing that people are responding to an economic statement designed to encourage growth by suggesting that a small fall in Sterling is a problem.
Devaluations help boost competitiveness and encourage growth.
Its a good thing that Kwarteng is following traditional Chancellor policy of not speaking on market movements, as the media would probably get more hysterical if he pointed out that the currency falling is a good thing ...
The cost of borrowing is increasing, for government, for business, for all of us. If borrowing is expensive, companies are less likely to invest, which is very definitely bad for growth.
The (non) budget is not a clever wheeze to trick the markets into a desired devaluation. It’s a clusterf***.
And I don't see how KK goes but Truss survives. Every letter of the special financial operation would have been driven by, or at minimum endorsed, by her.
PMs sack chancellors all the time...
But Truss knew all about KK's policies and may even have suggested some of them (see once again the article in the Sunday Times I posted on both Sunday and last night).
Which means she is too tied to these policies for her to sack KK without the response hurting her as well.
Some interesting points being made on twitter, that so many of Kwarteng's friends and former colleagues are making a fortune shorting the pound...
Who said deliberately? The Truss - Kwarteng pact genuinely believes in this policy direction. Absolute zealots. But TK have been telling everyone publicly and hedgies privately what they are doing.
Hedgies are absolute zealots for money. They hear what TK are doing, and massively short sterling knowing that TK are fucking mental. Kerching! In any market calamity there is a fortune to be made.
Then what's the relevance of being "Kwarteng's friends and former colleagues"? Are his enemies and people who've never met him not capable of making the same trades?
Once the borrowing to finance the price support cap for energy became policy, the pound was only going to head down. The tax stuff is just a cherry on that cake.
That's not a bet, that's simply economic gravity at work.
This. The extra economic stimulus was something like 5% of national income on top of the existing Sunak deficit. When rates are going up, locals and foreigners aren't going to finance that scale of extra sterling borrowing for free.
I don't understand the whole "secret information" thing.
Once I heard that they were going to intervene massively in the energy market to protect consumers, I moved to be in a situation to benefit from the pound going down.
That's GCSE economics.
Exactly.
The pound going down is not a bad thing. It would be bad if they were trying to keep the pound up.
That was the mistake of Black Wednesday, not letting the pound freely float to its proper level.
The pound devaluing on Black Wednesday helped the British economy in the years ahead. The Lira remaining locked to the the Deutschemark via the Euro has deeply damaged the Italian economy.
A freely floating currency helps economies adjust to turmoil, by lowering when there are economic difficulties and so boosting competition and growth, or by rising when the economy is overheating, thus reducing inflation. It is not a machismo virility symbol to be kept as high as possible all the time.
I watched an interesting debate last night on the Tech Industry in the USA, the high dollar is killing its competitiveness.
Indeed, its amusing that people are responding to an economic statement designed to encourage growth by suggesting that a small fall in Sterling is a problem.
Devaluations help boost competitiveness and encourage growth.
Its a good thing that Kwarteng is following traditional Chancellor policy of not speaking on market movements, as the media would probably get more hysterical if he pointed out that the currency falling is a good thing ...
The cost of borrowing is increasing, for government, for business, for all of us. If borrowing is expensive, companies are less likely to invest, which is very definitely bad for growth.
The (non) budget is not a clever wheeze to trick the markets into a desired devaluation. It’s a clusterf***.
Did the ultra-low interest rates of recent years lead to a bonanza in business investment? If not, then there may be some problems with your assumptions.
Comments
1. Create a crisis. Who would have known?
2. Present the tough but market-demanded solution. Smash the state. Stop spending money supporting people
3. Arbeit macht frei. You want to stop living in the abject poverty and misery we have put you in? Get a job. Working all hours for minimal pay and no rights? Get a better job.
4. Desperate people work harder. And with a remade state spending much less on wasteful things like benefits, growth comes easier.
5. Profits. Huuuuuge profits.
They need to know their KPI's (Key Performance Indicators), and that they are being met.
I expect businesses are better at looking at this than Public bodies.
I see the pound against the dollar has steadied a bit, but is making a substantial comeback against the Thai Baht.
When you want to dramatically change direction or even need to, you simply have to seed that idea in the public discourse first. Look at Austerity, it came on the back of a battle of ideas and approaches played out in public.
You can't just chuck it out there. Kwarteng should have got his ideas on the table at his conference speech, got Labour arguing and giving response, seeding the idea we are struggling because we are uncompetitive and regressive in tax policy. All the mini budget needed to do was deal with the immediate CoL/Energy crisis, he coukd have had a full budget in November after 2 months of 'this is what we need'. It may still have been unpopular but would at least have avoided 'what the actual fuck?'
The HMRC agents helpline used to be answered instantly. It now takes ages and all call centres (Commercial as well as Govt) have gone right out in time in my experience, even sales ones, which seems bizarre as they lose business. Recent calls to insurance company, bank, travel agent, etc all at the 30 - 60 min range. Hopeless.
The not being able to just pop and talk to somebody can be really problematic. Its all well and good saying schedule a meeting on zoom etc, but sometimes all you need is 2 seconds, this ok? do you know where y is? on the way to make a coffee.
SNP 44%
SLab 21%
SCon 19%
Grn 7%
SLD 5%
Ref 2%
oth 1% (presumably Alba)
Pro-independence 52%
Unionist 47%
A long way off @Casino_Royale ’s mooted
SNP 35%
SLab 30%
In software development, the Agile/Scrum methodologies were explicitly invented to deal with distributed teams. So, strangely, software development teams find that using Agile, they can WFH effectively.
Simply sending everyone home with a laptop is to WFH, what shutting down the warehouse and saying we will rely on the daily shipment turning up on time, is to supply chain management.
We could ask, I suppose.
It's those little rays of sunshine that cheer up ones day.
Education
Debt management
NHS, social care
Education
Defence
Pensions and income support
Energy costs support
Transport
Housing
Local Government
Justice, policing.
Leaving requisitions (paperclips) on the 'managing OK' side.
Mr Urquhart, indeed.
Land should be taxed as it is part of the country and anyone who is using it is preventing anyone else from using it, it is an externality.
She has choices, she can unlock some of that, she can sell, etc etc.
In my experience, a lot of elderly spinsters have plenty of liquid cash floating around as well.
What's the downside?
Robert Peston
@Peston
If you recall, one of Liz Truss's big promises when running to be Tory leader and PM was she would parcel up hundreds of billions of pounds of Covid related government debt and turn it into long term debt. Since Kwarteng's mini-budget on Friday, the interest...
rate on 30 year UK government debt - the gilt yield - has risen to 4.54%, more than the equivalent for Italy, and more than double what Germany pays. She and Kwarteng have engineered conditions in which borrowing for 30 years or more would place an unsustainable interest-rate...burden on the UK's public finance. She has achieved in that budget precisely the opposite of what she said she wanted to achieve
...At the time, Labour accused the "chaotic government" of "performing another U-turn" instead of cutting childhood obesity...
I remember being told explicitly that this was the trajectory by a former Tory PM not long after the Brexit vote.
Who sabotaged Nordstream...
The suspects: Russia itself ; One of the baltic states or Denmark; The USA (CIA); pro Russian partisan; pro Ukranian partisan.
I don't think it's Russia - not their style. They'd announce "maintenance" and squeeze the pips that way.
I don't think one of the EU states (Or us) has clandestinely done it. The pipeline is useful longterm when relations are perhaps more normal - Russia turned off the gas, the EU didn't say they didn't want it. The baltic states would have mos motivation here but I don't think it's them.
The USA ? It's a good conspiracy theory, USA cuts off pipeline permanently so it can't be reused - Europe reliance on LNG is baked in even longer term than the current status quo ante. But far fetched
Pro-Russian partisan sabotage ? Can't see it - the pipeline is a useful tool of blackmail for Russia this is a bit self defeating (Though Russia frequently is) but nah.
So having rules out all the other options I think it's probably a pro-Ukranian baltic? group of partisans with some diving/submarine proficiency who want to sever the Russia - EU gas link permanently.
Clearly poor targeting, sending me this ad.
When I'm WFH I dont have to be 100% productive and no one can be. Again it's about whats expected of you as an employee and that should be clear for both employees and employers.
Labour extend their lead over the Tories to 13 points in latest poll.
Con 31% (-1)
Lab 44% (+2)
Lib Dem 12% (+2)
Other 13% (-3)
Fieldwork: 16 - 20 September 2022
Sample: 2,129 GB adults
(Changes from 16 - 20 September 2022) https://twitter.com/DeltapollUK/status/1574702890534535168/photo/1
Councils used to be our blue chip customers but we will not deal with 2 local ones anymore. Its impossible to speak to anyone during a project and payment can easily take 6 months when it used to take 2 weeks.
What you get is denial of everything, "i never received your telephone call, email , invoice etc"
When we complain to the higher echelons you get a response stating how dare you complain.
I was accused of being a rottweiller for chasing a 6 month old invoice with a Housing Association, despite me emailing a copy of the invoice 11 times, they denied receiving it.
My experience of WFH is that people do not work and their bosses cover for them as they are not working either.
I don't want to get ad hominem on your ass, but you spend as much time on here as I do. You are a hard work and productivity fanboi, I am explicitly hostile to both concepts and as economically inactive as you can be without being in an induced coma.
how does this work?
If you want food security then more intensive and productive farming could give that. Plenty of our competitors globally are successfully more intensive and productive, so cutting barriers to trade and cutting subsidies to agriculture and making our agriculture sector compete on it's own merits would lead to more productivity and thus more security.
To record a swing even when comparing with the same poll implies a phenomenal - indeed infinite - rate of change.
Jobs with poor pay and no rights
A millions-strong underclass.
"more productivity" where people are given a choice of work three jobs or die is not the future most of us want.
Corrected, new poll is 22-25 Sept
Its only in the Truss win that SoT have taken over. And now that we have had "whoops apocalypse" on the markets they can present their glorious vision for the future. You workshy scum have had it far too easy for too long. If we slash your rights and let wages float to wherever we want them to be and remove the namby-pamby safety net then you plebs will finally get off your arse and work for our living.
My cousin and her husband, both in their 90s, are similarly very pleased to be living in such a place.
I've never been in favour of such communities but I am now beginning to wonder!
Also you need a few thumbs up in there. 👍
You know, *thingy!!!!*
https://www.bbc.co.uk/news/uk-scotland-glasgow-west-62986757
"Ferguson obtained a 424-page document from a design consultant setting out CalMac's technical requirements, while other bidders had to rely on a more limited 125-page specification. A key section of its bid was mostly cut-and-pasted from this longer document"
So land which is designated for building houses is taxed at the appropriate level, whether the houses are built or not. Land which is designated for food production obviously cannot be used for building, so it is taxed at a very low level indeed.
Similarly with listed buildings...
This was Liberal policy as far back as the 60s. Site Value Rating, it was called. I wonder if Truss remembers it.
Edit, but that in fairness only took a computer, not a human being. Those managers who think those WFH are less productive seem to be getting the better of the argument to me.
There are other SPOTY candidates about. Joe Fraser with triple gymnastics golds at the European Championships and Commonwealth Games. Couple of golds for Laura Muir. Jonny Bairstow hammering (and I mean hammering) 1000 Test runs to play a big part in turning England around. Ronnie O'Sullivan on vintage form more than 20 years after first World Championship win. And there was a certain romance in Non Stanford winning her last major triathlon.
I'm not saying it's one of those years where a dozen people could easily deserve it, but there are plenty of good sporting stories.
https://twitter.com/votevets/status/1574466498332356609
https://twitter.com/petetidbits/status/1573971037255045120
If Biden doesn't run again, the Democrats really ought to nominate him.
I am starting to wonder when workhouses will be reintroduced to motivate the feckless....
I discovered this year, apropos of checking NI contribs for pension entitlement, that they had not received one such letter. This had not been in the least obvious because of their way of presenting information. Consequences, I had to do 4 years' back tax return forms all at once (although they had the data for most of the years). Not easy as I had chucked much of the older records as per their guidelines.
Not complaining - turned out I had been overpaying (fortunately, in the circs, so no question of penalty) but it meant more work all round for everyone.
Not enough staff, and trying to cut corners with the ones that they do have.
https://twitter.com/BadBalticTakes/status/1574498272764477440
The (non) budget is not a clever wheeze to trick the markets into a desired devaluation. It’s a clusterf***.