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Why Tory Remain seats could be a struggle for BoJo – politicalbetting.com

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  • HYUFDHYUFD Posts: 92,713

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    No, all that Gove is sensibly proposing is to shift some of the extra housing proposed for the South to the North to avoid overdevelopment in the Home Counties.

    As the article also says housing development will be focused on brownfield sites not greenbelt
  • Foxy said:

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Too few parking spaces is deliberate. It is to discourage driving and encourage use of public transport. The small flaw in the plan is the absence of public transport...
    It is deliberate, but it isn't deliberate by a council trying to boost public transport. Its deliberate by the developers to crush more properties onto the land.

    Is Govey going to force developers to actually build on land banks where permission has been given and the developer refuses to proceed?
    Interesting that Burnham was singing Gove's praise earlier in the week
  • eekeek Posts: 17,300
    Charles said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Do you know what?
    I actually think 1 would be the best all round. Won't happen, cos the Party holding the parcel wouldn't get back in for a generation.
    But 1 would be best. Their store of utterly unearned income wiped out. Year Zero as it were.
    And the banks would be fucked resulting a squeezing on lending and economic catastrophe.

    Why do you think a house price crash is the core part of the Bank of England stress tests? It’s because it’s the single worst thing that could happen to the Uk economy
    Not really - for a lot of BTL landlords there would initially be other assets to use if a bank needs to recover any unpaid loans.

    And most house owners will curse but continue to pay the mortgage off.

    Why do you think I emphasised the Northern Ireland negative equity loan scheme
  • kinabalu said:

    isam said:

    65% of constituencies voted Leave I think

    Higher in this England, our England.
    Very good.

    I assume an educated chap like youself is familiar with this masterwork of Scottish literature ‘ England, Their England’.
    Perhaps you could write a book called "Scotland, Their Scotland" as you don't live there?
    Que d’Escossois, de rats, de poux…
    Ceux qui voyagent jusqu’au bout
    Du monde, en rencontrent partout.
  • PulpstarPulpstar Posts: 69,288
    IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    You couldn't dream up a worse combination than "Right to beggar the council" + "Landlord benefit" if you tried.
    There can't be anywhere else in earth that has gone in for such nonsense.
  • Foxy said:

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Too few parking spaces is deliberate. It is to discourage driving and encourage use of public transport. The small flaw in the plan is the absence of public transport...
    It is deliberate, but it isn't deliberate by a council trying to boost public transport. Its deliberate by the developers to crush more properties onto the land.

    Is Govey going to force developers to actually build on land banks where permission has been given and the developer refuses to proceed?
    Interesting that Burnham was singing Gove's praise earlier in the week
    Burnham and Gove seem to represent the best of each other's parties at the moment and have done for a few years.

    While Rochdale seems to have joined HYUFD in "no building" mode while still embracing "many more people". No doubt he'll soon be parroting inheritances as the way people can afford to get on the property ladder since there'll be no other options based on work alone if things don't change.
  • moonshinemoonshine Posts: 3,396
    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.
  • eekeek Posts: 17,300
    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    The downside will be entirely on those who haven't retired yet, just look at Equitable Life.
  • HYUFDHYUFD Posts: 92,713
    Andy_JS said:

    There are around 40 Tory seats which voted Remain and where their majority is less than 20%. So even if they lost all of them they'd probably still be in office. (Doesn't take boundary changes into account).

    Not if you add the 18 Red Wall Tory seats the Yougov MRP poll suggests the Tories would lose this month.

    Yes most of the Tory seat losses would be in Remain seats but the Tories would still lose a few Redwall seats with small majorities on current polling. That would mean they lose 58 seats overall putting them on 307 seats and short of a majority. They would still win most seats but Starmer could probably form a government with SNP and LD support

    https://yougov.co.uk/topics/politics/articles-reports/2021/10/04/new-yougov-mrp-model-shows-conservatives-losing-32
  • eek said:

    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    The downside will be entirely on those who haven't retired yet, just look at Equitable Life.
    That's not good. It always is it seems. The game is completely rigged, no matter what is proposed there doesn't seem to be any fix.

    OK if inflation to inflate away costs isn't an option then back to the drawing board. That just leaves a crash as the only viable remaining option to get us out of this mess - and caveat emptor for whoever ends up in negative equity.
  • I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Absolutely fantastic if more houses are built! There's more people in society today, so more homes are needed. I think its great if they come here in the North and not just the South, have everyone in the North able to own their own home. Great!

    I'm curious what our emigré from the North to the further North has to object about that considering he's in favour of mass unlimited immigration and is still bemoaning the lack of more immigration to fill "jobs Brits don't want to do.

    Our population has risen by 10 million in a generation and you want it to rise higher yet still - just where in England do you expect everyone to live if we don't build more housing?

    Let me guess, "not in my [ex] backyard"? Any serious suggestion or are you going to just go full NIMBY and still advocate mass immigration? 🤦‍♂️
    Its absolutely fantastic if you want less Tory MPs. What the people of Teesside are complaining about is simple. A fuckton of new houses have been built, most of them over the heads of local people, councillors, previous MPs and even Eric Pickles tried to stop some at one point and was defeated in the courts.

    When you have a roads system already unable to cope and keep building houses life gets worse for everyone. Same for schools. Same for hospital provision. You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you.

    Young James Wharton literally got the SofS to try and stop one development, and failed. He then became Minister for the North and spent £20k in the courts trying to keep secret that he was never in the north. He was also housing minister at one point having to explain to people why the housing policies he had openly campaigned against were now good. He lost his seat.
  • eekeek Posts: 17,300

    Foxy said:

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Too few parking spaces is deliberate. It is to discourage driving and encourage use of public transport. The small flaw in the plan is the absence of public transport...
    It is deliberate, but it isn't deliberate by a council trying to boost public transport. Its deliberate by the developers to crush more properties onto the land.

    Is Govey going to force developers to actually build on land banks where permission has been given and the developer refuses to proceed?
    Interesting that Burnham was singing Gove's praise earlier in the week
    Burnham and Gove seem to represent the best of each other's parties at the moment and have done for a few years.

    While Rochdale seems to have joined HYUFD in "no building" mode while still embracing "many more people". No doubt he'll soon be parroting inheritances as the way people can afford to get on the property ladder since there'll be no other options based on work alone if things don't change.
    RD seems to have witnessed another example of adding more housing without improving the roads. But frankly that is unavoidable in a lot of places as if a road has houses on both sides there isn't much you can do to expand the road.

    locally we seem to be getting a route round this side of town by stealth as the various new estates South West side of town build a road that directly links the estates to the motorway.
  • CharlesCharles Posts: 35,758

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    It will erode the purchasing power of those in the rentier asset holding classes but seeing growth in the value of those actually working for a living.

    That's just a reversal of the past two decades where assets and costs have surged but wages have stagnated.

    Why is that a bad thing? Why should only those renting off the work of others be the ones to benefit from the work others do?
    You asked specifically about the value of fixed rate debt in the context of a discussion of pension funds. That’s not “rentiers”. That’s pretty much everyone in the country.

    Saving is a good thing. Destroying pension funds is not.
  • HYUFDHYUFD Posts: 92,713

    tlg86 said:

    Just caught Ian Dunt on Sky News complaining that nurses won’t be getting a pay rise. There’s definitely a whiff of “the wrong people are getting a pay rise” in all this.

    My advice to kids is to think very carefully about going to university. Plenty of money to be made in jobs not needing a degree a student debt.

    Plenty of jobs that don't need a degree to do, need a degree to get. But yes, I agree with your wider point.
    Unless you go to a Russell Group university though top apprentices earn more on average
  • PulpstarPulpstar Posts: 69,288
    Its probably not related to much, but the power has now gone out 3 times in about 14 hours. >.》
  • I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Absolutely fantastic if more houses are built! There's more people in society today, so more homes are needed. I think its great if they come here in the North and not just the South, have everyone in the North able to own their own home. Great!

    I'm curious what our emigré from the North to the further North has to object about that considering he's in favour of mass unlimited immigration and is still bemoaning the lack of more immigration to fill "jobs Brits don't want to do.

    Our population has risen by 10 million in a generation and you want it to rise higher yet still - just where in England do you expect everyone to live if we don't build more housing?

    Let me guess, "not in my [ex] backyard"? Any serious suggestion or are you going to just go full NIMBY and still advocate mass immigration? 🤦‍♂️
    Its absolutely fantastic if you want less Tory MPs. What the people of Teesside are complaining about is simple. A fuckton of new houses have been built, most of them over the heads of local people, councillors, previous MPs and even Eric Pickles tried to stop some at one point and was defeated in the courts.

    When you have a roads system already unable to cope and keep building houses life gets worse for everyone. Same for schools. Same for hospital provision. You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you.

    Young James Wharton literally got the SofS to try and stop one development, and failed. He then became Minister for the North and spent £20k in the courts trying to keep secret that he was never in the north. He was also housing minister at one point having to explain to people why the housing policies he had openly campaigned against were now good. He lost his seat.
    "You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you."

    When did you join UKIP? I thought you were still in favour of mass immigration, when did you change your mind?
  • isamisam Posts: 38,638
    “ NHS trusts are "gaslighting" patients over the inclusion of transgender patients on single-sex wards, a whistle-blower nurse has warned.

    Dr Sinead Helyar said that in at least one trust if patients questioned why there was a male-bodied person on a female-only ward, medics had been told to "reiterate ... that there are no men present”.”

    https://uk.news.yahoo.com/nhs-gaslighting-patients-over-trans-180002917.html
  • CharlesCharles Posts: 35,758
    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    Depends on how many of their pension are inflation linked, but yes it would be messy.
  • kjhkjh Posts: 4,785

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Anyone living on just a state pension is very poor. Except for those from the public sector the rest of us have private pension funds and our property to live off (downsizing). You potentially are going to move all these people into poverty and wreck the economy. Remember their funds have to last for 20 - 30 years.

    As you know I am all for radical changes in how we are governed, but you are scaring me with your suggestions. Potential massive changes in asset values could be devastating.

    Gordon Brown's changes that lost people their pensions, now partly restored by the FAS and PPF should be a lesson. Most of these pensioners have been suffering for decades through no fault of their own due to minor changes made by a chancellor.
  • CharlesCharles Posts: 35,758

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Absolutely fantastic if more houses are built! There's more people in society today, so more homes are needed. I think its great if they come here in the North and not just the South, have everyone in the North able to own their own home. Great!

    I'm curious what our emigré from the North to the further North has to object about that considering he's in favour of mass unlimited immigration and is still bemoaning the lack of more immigration to fill "jobs Brits don't want to do.

    Our population has risen by 10 million in a generation and you want it to rise higher yet still - just where in England do you expect everyone to live if we don't build more housing?

    Let me guess, "not in my [ex] backyard"? Any serious suggestion or are you going to just go full NIMBY and still advocate mass immigration? 🤦‍♂️
    Nah - he just doesn’t like change. He’s a conservative really under than gruff exterior 😆
  • squareroot2squareroot2 Posts: 4,654
    Pulpstar said:

    Its probably not related to much, but the power has now gone out 3 times in about 14 hours. >.》

    Not enough wind ?
  • eek said:

    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    The downside will be entirely on those who haven't retired yet, just look at Equitable Life.
    That's not good. It always is it seems. The game is completely rigged, no matter what is proposed there doesn't seem to be any fix.

    OK if inflation to inflate away costs isn't an option then back to the drawing board. That just leaves a crash as the only viable remaining option to get us out of this mess - and caveat emptor for whoever ends up in negative equity.
    True, with a couple of extra twists.

    First, if headline inflation goes up permanently, interest rates are likely to follow, leading to a house price crash anyway.

    Second, any government presiding over this will be doomed at the next election. Caveat emptor will go down like a bucket of cold sick on the doorsteps.

    Still, BoJo is apparently going to tell us he is tackling the problems other PMs didn't dare, so maybe he will surprise us all. Or maybe he is following the Yes, Minister principle where the less you intend to do something, the more you talk about it.
  • FoxyFoxy Posts: 28,677

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Absolutely fantastic if more houses are built! There's more people in society today, so more homes are needed. I think its great if they come here in the North and not just the South, have everyone in the North able to own their own home. Great!

    I'm curious what our emigré from the North to the further North has to object about that considering he's in favour of mass unlimited immigration and is still bemoaning the lack of more immigration to fill "jobs Brits don't want to do.

    Our population has risen by 10 million in a generation and you want it to rise higher yet still - just where in England do you expect everyone to live if we don't build more housing?

    Let me guess, "not in my [ex] backyard"? Any serious suggestion or are you going to just go full NIMBY and still advocate mass immigration? 🤦‍♂️
    Its absolutely fantastic if you want less Tory MPs. What the people of Teesside are complaining about is simple. A fuckton of new houses have been built, most of them over the heads of local people, councillors, previous MPs and even Eric Pickles tried to stop some at one point and was defeated in the courts.

    When you have a roads system already unable to cope and keep building houses life gets worse for everyone. Same for schools. Same for hospital provision. You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you.

    Young James Wharton literally got the SofS to try and stop one development, and failed. He then became Minister for the North and spent £20k in the courts trying to keep secret that he was never in the north. He was also housing minister at one point having to explain to people why the housing policies he had openly campaigned against were now good. He lost his seat.
    "You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you."

    When did you join UKIP? I thought you were still in favour of mass immigration, when did you change your mind?
    No, what is needed is proper town planning, not just new houses. Indeed there is a lot to be said for building as New Towns. Proper developments with the full range of facilities rather than dormitory estates.
  • CharlesCharles Posts: 35,758
    eek said:

    Charles said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Do you know what?
    I actually think 1 would be the best all round. Won't happen, cos the Party holding the parcel wouldn't get back in for a generation.
    But 1 would be best. Their store of utterly unearned income wiped out. Year Zero as it were.
    And the banks would be fucked resulting a squeezing on lending and economic catastrophe.

    Why do you think a house price crash is the core part of the Bank of England stress tests? It’s because it’s the single worst thing that could happen to the Uk economy
    Not really - for a lot of BTL landlords there would initially be other assets to use if a bank needs to recover any unpaid loans.

    And most house owners will curse but continue to pay the mortgage off.

    Why do you think I emphasised the Northern Ireland negative equity loan scheme
    Capital adequacy rules for mortgages with a value more than the value of the security are very very painful
  • CharlesCharles Posts: 35,758
    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    Yes. The problem is, as well. We thought we could rely on our neighbours (allowing nearshoring not onshoring). And then Vygon happened.
  • Foxy said:

    So, how does the Tory party still worship the Blessed St Margaret, who fought inflation as the demon of the British economy, triggered a house price boom to spread prosperity, faced down demands from workers for higher pay and was the architect of the Single Market?

    Is it possible to dance on the grave while she spins below?

    I was never a fan, having lived through the Eighties, but nice to see PB Tories have learned to despise her policies. Slow learners these Tories be.

    Tories want power. Nothing more, nothing less. If being in power now means pissing all over Thatcherism, that's what they'll do. Anyway, who knows what they will actually do. For a professional gaslighter like Johnson saying one thing while doing the exact opposite is second nature.
  • isamisam Posts: 38,638

    'Some are just psychopaths': Chinese detective in exile reveals extent of torture against Uyghurs

    https://www.cnn.com/2021/10/04/china/xinjiang-detective-torture-intl-hnk-dst/index.html
  • Charles said:

    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    Yes. The problem is, as well. We thought we could rely on our neighbours (allowing nearshoring not onshoring). And then Vygon happened.
    Also Brexit, of course.
  • IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    Housing benefit is a weird one that very rarely gets discussed but seems easy to reduce.

    If you halve it, the floor for rents probably drops by 10-25% for the local area which benefits primarily the government, but also many millions of renters. 1-2 million landlords are negatively impacted.

    The places that are rented out for housing benefit still will be, they won't be left empty as that is uneconomic.

    I fear that the Labour membership and perhaps their policy makers would be aghast at such an "uncaring" policy as reducing housing benefit, but if they frame it as landlord benefit instead, then it is clear the people they claim to represent, and the country as a whole would benefit from a significant reduction (or at least an end to the massive increases over the last decade).
  • FF43FF43 Posts: 13,107
    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    The issue though is Brexit is massively undermining UK resilience. Which is why we are seeing empty supermarket shelves, queues at fuel stations, pigs being shot etc in the UK, when none of these things are happening elsewhere, even though they are facing many of the same stresses. The loss of resilience is a little understood aspect of Brexit, and one that was not widely predicted ahead of departure from the EU.
  • IanB2IanB2 Posts: 38,102
    Foxy said:

    So, how does the Tory party still worship the Blessed St Margaret, who fought inflation as the demon of the British economy, triggered a house price boom to spread prosperity, faced down demands from workers for higher pay and was the architect of the Single Market?

    Is it possible to dance on the grave while she spins below?

    I was never a fan, having lived through the Eighties, but nice to see PB Tories have learned to despise her policies. Slow learners these Tories be.

    Fear not - far from being an indecisive dithering buffoon, as all appearances would suggest, our PM is apparently going to stand up shortly and claim that his government is determined and decisively working towards a truly cunning plan that will resolve all sorts of previously insoluble problems.
  • Foxy said:

    I note that Ravey Mikey Govey is going to Level Up the north by building more houses.
    https://www.theguardian.com/politics/2021/oct/06/michael-gove-to-push-homebuilding-in-the-north-of-england

    Point of order - does he want to lose the red wall? I can think if many fraught planning rows on Teesside. A decade of building houses fucking everywhere has left people a bit pissed off, so making it easier to build even more houses will go down like a barrel of slaughtered pigs that didn't make the abattoir.

    As I posted the other day, all these housing developments go through with communities unable to resist (unless they give planning permission to developers via a local plan - the only way to stop house building is have a local plan that allows house building).

    Not a single one of these developments bothers with things like new roads, schools and shops, or even sufficient parking spaces for residents. If the Tories think that more houses with less resistance is levelling up, that graphic we saw about red wall Tories heading for the chop will look even grimmer.

    Absolutely fantastic if more houses are built! There's more people in society today, so more homes are needed. I think its great if they come here in the North and not just the South, have everyone in the North able to own their own home. Great!

    I'm curious what our emigré from the North to the further North has to object about that considering he's in favour of mass unlimited immigration and is still bemoaning the lack of more immigration to fill "jobs Brits don't want to do.

    Our population has risen by 10 million in a generation and you want it to rise higher yet still - just where in England do you expect everyone to live if we don't build more housing?

    Let me guess, "not in my [ex] backyard"? Any serious suggestion or are you going to just go full NIMBY and still advocate mass immigration? 🤦‍♂️
    Its absolutely fantastic if you want less Tory MPs. What the people of Teesside are complaining about is simple. A fuckton of new houses have been built, most of them over the heads of local people, councillors, previous MPs and even Eric Pickles tried to stop some at one point and was defeated in the courts.

    When you have a roads system already unable to cope and keep building houses life gets worse for everyone. Same for schools. Same for hospital provision. You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you.

    Young James Wharton literally got the SofS to try and stop one development, and failed. He then became Minister for the North and spent £20k in the courts trying to keep secret that he was never in the north. He was also housing minister at one point having to explain to people why the housing policies he had openly campaigned against were now good. He lost his seat.
    "You cannot keep pouring people into an area making life worse for everyone and then expect people to vote for you."

    When did you join UKIP? I thought you were still in favour of mass immigration, when did you change your mind?
    No, what is needed is proper town planning, not just new houses. Indeed there is a lot to be said for building as New Towns. Proper developments with the full range of facilities rather than dormitory estates.
    "Proper town planning" takes years while free migration is instantaneous and the surging housing costs are already here today.

    How many years do you intend to spend on "proper town planning" and how does that help the people already here today plus the hundreds of thousands more per annum net that RD wants to continue moving here?

    Free movement are "proper planning" are opposites. I'm consistent, I can support free movement so long as we have free migration and planning is abolished.
  • GallowgateGallowgate Posts: 17,550
    I wish I lived in your black and white fantasy world @Philip_Thompson
  • eekeek Posts: 17,300
    Charles said:

    eek said:

    Charles said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Do you know what?
    I actually think 1 would be the best all round. Won't happen, cos the Party holding the parcel wouldn't get back in for a generation.
    But 1 would be best. Their store of utterly unearned income wiped out. Year Zero as it were.
    And the banks would be fucked resulting a squeezing on lending and economic catastrophe.

    Why do you think a house price crash is the core part of the Bank of England stress tests? It’s because it’s the single worst thing that could happen to the Uk economy
    Not really - for a lot of BTL landlords there would initially be other assets to use if a bank needs to recover any unpaid loans.

    And most house owners will curse but continue to pay the mortgage off.

    Why do you think I emphasised the Northern Ireland negative equity loan scheme
    Capital adequacy rules for mortgages with a value more than the value of the security are very very painful
    So the Government bails the loans out or allows them to be moved to another Bad Bank - from memory the 125% Northern Rock loans have had better long term repayment rates than the more standard B&B ones.
  • IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    Housing benefit is a weird one that very rarely gets discussed but seems easy to reduce.

    If you halve it, the floor for rents probably drops by 10-25% for the local area which benefits primarily the government, but also many millions of renters. 1-2 million landlords are negatively impacted.

    The places that are rented out for housing benefit still will be, they won't be left empty as that is uneconomic.

    I fear that the Labour membership and perhaps their policy makers would be aghast at such an "uncaring" policy as reducing housing benefit, but if they frame it as landlord benefit instead, then it is clear the people they claim to represent, and the country as a whole would benefit from a significant reduction (or at least an end to the massive increases over the last decade).
    I think housing benefit should be abolished altogether.

    I'd roll 'housing benefit' into a UBI with a flat tax and let everyone spend their income on whatever they want. If they wish to give income to a landlord, then they could - but if they wish to spend it on a mortgage instead (currently forbidden with housing benefit as far as I understand) then they could do that instead.
  • HYUFDHYUFD Posts: 92,713
    edited October 2021

    Foxy said:

    So, how does the Tory party still worship the Blessed St Margaret, who fought inflation as the demon of the British economy, triggered a house price boom to spread prosperity, faced down demands from workers for higher pay and was the architect of the Single Market?

    Is it possible to dance on the grave while she spins below?

    I was never a fan, having lived through the Eighties, but nice to see PB Tories have learned to despise her policies. Slow learners these Tories be.

    Tories want power. Nothing more, nothing less. If being in power now means pissing all over Thatcherism, that's what they'll do. Anyway, who knows what they will actually do. For a professional gaslighter like Johnson saying one thing while doing the exact opposite is second nature.
    The second most successful Tory leader electorally after WW2 after Thatcher was Macmillan, Boris on domestic policy is more Macmillan than Thatcher.

    In aligning with the US and Anglosphere more than the EU though abroad he is still very much in the Thatcher mould
  • DecrepiterJohnLDecrepiterJohnL Posts: 11,289
    edited October 2021
    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    Do modern defined contribution schemes vary payouts with inflation? Mine do not. We did used to have a couple of pension experts who could tell us. For state pensions, there is a commitment to rise with inflation but a government pledge is worth nothing.

    ETA by pensions, do you mean annuities?
  • I wish I lived in your black and white fantasy world @Philip_Thompson

    I'm talking about the real world and willing to tackle real issues with solutions.

    Other people are either unwilling to face the real issues, or are willing to acknowledge them but have no real solution.
  • IanB2IanB2 Posts: 38,102
    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    It's worse than that. If interest rates rise toward the previous normal before we've had a good dose of inflation, debt-ridden entities from governments downwards would become unsustainable. To avoid catastrophe the options are a good dose of inflation, some very tough decisions to restructure the entire basis of taxation and government financing that no government is going to take, or hanging onto low interest rates for ever (or at least until you retire and can pass the parcel to the next guy).
  • FF43FF43 Posts: 13,107
    edited October 2021
    It is very clear from Johnson's interviews yesterday that he is depending on people not noticing the effects of inflation in living standards, housing market etc., but only seeing the wage rises in part of the population.
  • rottenboroughrottenborough Posts: 46,193

    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    Do modern defined contribution schemes vary payouts with inflation? Mine do not. We did used to have a couple of pension experts who could tell us. For state pensions, there is a commitment to rise with inflation but a government pledge is worth nothing.

    ETA by pensions, do you mean annuities?
    The universities pension people are trying to limit exposure to inflation by capping any inflationary rise in the payouts for pensioners as I understand. This is going forward. iirc the cap is 2% per annum. Existing benefits have to remain by law.

    So younger uni staff are about to be hit with a cap that they effect them in later life.

    Strike ballot has started over this.
  • FF43 said:

    It is very clear from Johnson's interviews yesterday that he is depending on people not noticing the effects of inflation in living standards, housing market etc., but only seeing the wage rises in part of the population.

    We've had inflation for decades. 6.2% compounded annual inflation in housing costs since 1999.

    It seems an asset-holding class are terrified that people working for a living might actually see their standards go up instead of down. Oh well, what a shame.
  • kjhkjh Posts: 4,785

    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    Do modern defined contribution schemes vary payouts with inflation? Mine do not. We did used to have a couple of pension experts who could tell us. For state pensions, there is a commitment to rise with inflation but a government pledge is worth nothing.

    ETA by pensions, do you mean annuities?
    If it is defined contribution rather than defined benefit it is up to you unless you have already converted it to an annuity. But there is still only the fund you have. Pay out more and there is less for later. Convert to an inflation linked annuity and get a much smaller pension. No magic money tree.
  • eekeek Posts: 17,300

    New Thread

  • MexicanpeteMexicanpete Posts: 13,496

    kinabalu said:

    gealbhan said:

    HYUFD said:

    Leon said:

    “French threat to sink Xmas”
    image

    OOOOH

    WARRRR
    Looks like we will just have to swap stilton for brie and drink English and Australian wines.

    Who has French Turkey and French Christmas puddings anyway? It is normally British all the way
    No. You are completely missing it. Take another look. Fuel stockpiling madness stoked by front pages like this. The front of this paper is saying other families are stockpiling for Christmas what are you going to do wait till it’s too late?

    If the Mail gets away with this and it takes hold, it will dwarf closed petrol pumps and bog roll banditry. Your family missing out on Christmas has the most strong emotive pull.
    It doesn't bear thinking about. End of Johnson if it happens. Not even he would be able to spin Christmas dinner out of a tin as a Brexit dividend.
    Off Topic anecdote alert.

    The huge Tesco on Western Avenue in Cardiff had a rather forlorn looking seasonal aisle this evening. I just assumed the lazy staff hadn't restocked the shelves. To be fair I really don't need a bumper tin of Quality Street, so good on Johnson.

    Mrs Mexicanpete visiting her mother in her old people's home found the Manager making Mother-In-Law's breakfast. Staff shortages to the bone apparently. They must have all retrained as HGV tanker drivers.
    Just done a search on line and plenty of turkeys available for order and door to door delivery in December
    It was just all the Christmas tat plus sweets cakes and biscuits. None of which any of us need.
    Christmas is far better without that shite polluting the house. It should be a celebration of great food and drink, not mass produced sweets. If panic buying results in me avoiding unwanted gifts of cheap chocolate, I’m all for it.
    Indeed.

    Some people forget the true meaning of Christmas. It is the day we celebrate Santa Claus' s birthday.

    (Courtesy of Homer Simpson)
  • eek said:

    rcs1000 said:

    Charles said:

    rcs1000 said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Mathematically, you can have general price inflation of 2%, wage inflation of 3% and house price inflation of 0%, and then you would reduce the cost of housing relative to wages over time, without forcing people to live through a damaging period of high price inflation, or to be trapped in negative equity.
    Mathematically possible, not realistically possible as you'll always have variation and any variation from 0% could be dropping people into negative equity, which will affect how the Banks approve mortgages too. Plus it'd take an extremely long time to reverse the damage of the past couple of decades. You'd be looking at over two decades of that implausible scenario to reverse the damage.

    If you have 1% house price inflation, 6% general inflation and 7% wage inflation then you'd have houses going up still (good for Banks to avoid negative equity risks) even with some natural variation and it'd only take a decade of that to reverse the damage.

    If you have 1% house price inflation, 10% general inflation and 11% wage inflation then you'd keep houses going up marginally, and reverse the damage in 6 years.
    You would sadly also bankrupt every pension scheme in the country, which owns large quantities of long term, fixed rate debt.
    Caveat Emptor.

    The pensioners can take a haircut if need be, they'd still be getting the triple lock if they lose their schemes.

    Though if wages are rising and the rates are fixed, won't those investments be pretty safe? Its when wages fall that people default on fixed rate debt.
    Debt fixed at, say, 3% with inflation at 10% is going to see a massive erosion in purchasing power. This will be crystallised pretty quickly with a fall in the capital value of the bonds so that they yield an acceptable return.

    Pension funds may not face defaults, but they are going to be very badly damaged in that scenario
    Philip's example is pretty extreme (and by which, I mean unlikely), but a scenario like that would lead to defaults.

    Effectively, pension funds own lots of long term assets yielding 2-3%. If inflation were to rise to 10%, they would be responsible for increasing payouts dramatically, while having little to no additional yield to do that.

    Now, it might be possible to haircut benefits - but how would that be shared out? And there are contractual obligations here. If a British company were to attempt to rewrite pension payments, it would be successfully challenged in court.
    The downside will be entirely on those who haven't retired yet, just look at Equitable Life.
    That's not good. It always is it seems. The game is completely rigged, no matter what is proposed there doesn't seem to be any fix.

    OK if inflation to inflate away costs isn't an option then back to the drawing board. That just leaves a crash as the only viable remaining option to get us out of this mess - and caveat emptor for whoever ends up in negative equity.
    Whilst I am strongly on the workers have been shafted side and think asset prices need to fall significantly relative to wages, this is the first of your economic points I would agree with this morning.

    5-10% wage inflation over a number of years very likely leads to massive problems, including for workers. It is far from a dream world and should be avoided.

    And undoubtedly it is both difficult to improve the fairness and balance within the economy, especially with the government supported by a client vote that benefits from the unfairness.

    I would be happy with removal of government props to support high house prices, lower housing benefit, increase costs for foreign overseas buyers, aggressively target landlord tax avoidance, stopping QE and expanding NI to all ages.
  • rottenboroughrottenborough Posts: 46,193
    In 20 years we have gone from national debt being 30% of GDP to ≈110%.

    (Latter is OBR projection for 2023)
  • A fairly trivial one in the big scheme of things but a classic example of one of the reasons our justice system can't cope.

    We are criminalising essay mills: https://www.bbc.co.uk/news/education-58811822

    Are essay mills bad? Sure
    Should be they be stopped in an ideal world? Yes
    With many crimes already being dropped in the system and the average case taking 1.5 years from an offence being committed to a court outcome should this be a priority? No

    Why do we keep creating endless laws that result in the implementation of more important laws becoming worse?
  • HYUFD said:

    Foxy said:

    So, how does the Tory party still worship the Blessed St Margaret, who fought inflation as the demon of the British economy, triggered a house price boom to spread prosperity, faced down demands from workers for higher pay and was the architect of the Single Market?

    Is it possible to dance on the grave while she spins below?

    I was never a fan, having lived through the Eighties, but nice to see PB Tories have learned to despise her policies. Slow learners these Tories be.

    Tories want power. Nothing more, nothing less. If being in power now means pissing all over Thatcherism, that's what they'll do. Anyway, who knows what they will actually do. For a professional gaslighter like Johnson saying one thing while doing the exact opposite is second nature.
    The second most successful Tory leader electorally after WW2 after Thatcher was Macmillan, Boris on domestic policy is more Macmillan than Thatcher.

    In aligning with the US and Anglosphere more than the EU though abroad he is still very much in the Thatcher mould
    Macmillan and Thatcher and all Tory leaders in between and subsequently until 2019 sought to maintain close relations with both the US and other European powers as the twin pillars of our security and prosperity. It's only Johnson that has decided to throw all our eggs into the trans-Atlantic basket. Let's see how that works out.
  • CharlesCharles Posts: 35,758

    Charles said:

    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    Yes. The problem is, as well. We thought we could rely on our neighbours (allowing nearshoring not onshoring). And then Vygon happened.
    Also Brexit, of course.
    That’s irrelevant. Brexit is friction in trade.

    Vygon was a case of an ally impounding goods purchased by the British because they believed their need was greater. If an ally does that in your time of need you can’t rely on them from the perspective of building resilience into your supply chain for strategic assets. So you have to go for onshoring rather than nearshoring
  • CharlesCharles Posts: 35,758
    FF43 said:

    moonshine said:

    Inflation will be a price worth paying if it is accompanied by an improvement in strategic resilience. This is no guarantee and requires competent and likely highly interventionist government.

    Covid has revealed just how vulnerable the western economic system (and British quite particularly) has become thanks to globalisation and just in time stock management. We’ve had the PPE shortage, the vaccine shortage, the fuel shortage, the gas shortage, the semi conductor shortage. We’re likely to experience power shortages over the coming years and the semi conductor shortage will be biblical if Xi takes aggressive action in Taiwan. And then after all that you might start to have food shortages if global warming really bites.

    It’s a civilisation’s economic system fraying at the seams because the globalised model of business has not been matched by a globalised civil society or system of governance.

    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    Combating that starts with onshoring strategically important industries. And will likely necessitate nationalising some of them. If cheating on standards globally means things like steel and oil refining are unprofitable in the Uk for the majors, then nationalise them and subsidise a major company to run them, rather than let emerging markets gangsters run the assets into the ground. Think more carefully about energy, medical and food supply chains.

    And try and build resilience into the economy from future disasters. Not just a pandemic but what about something like a solar flare?

    Aukus is but a start.

    The issue though is Brexit is massively undermining UK resilience. Which is why we are seeing empty supermarket shelves, queues at fuel stations, pigs being shot etc in the UK, when none of these things are happening elsewhere, even though they are facing many of the same stresses. The loss of resilience is a little understood aspect of Brexit, and one that was not widely predicted ahead of departure from the EU.
    It’s not reducing resilience.
    It’s highlighting our lack of resilience.
  • CharlesCharles Posts: 35,758
    eek said:

    Charles said:

    eek said:

    Charles said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?

    dixiedean said:

    dixiedean said:

    dixiedean said:

    Boris to commit to minimum wage of £10.50 an hr by 2024.

    Leaving the useless nonentity £10ph look exactly what it is ie pathetic.

    SKS is foikin useless at this Politics lark.

    PB ahead of the curve, we said that £10ph is less than what it would be by 2024 anyway.
    Won't look so bloody clever when he's driven inflation into double figures, mind.
    Double digit inflation could be just what we need.

    We've had over 6% inflation for decades now for prices in things like houses, but wages hasn't kept up. If double-digit inflation happened now with wages keeping up but assets not then that would reverse the errors of the last couple of decades and take us back to a time where people could work hard and progress up the ladders. It'd be a transfer from those on fixed incomes, to those actually working for a living.

    I see nothing wrong with that now.
    How to tell someone didn't live through the Seventies.
    We've gone back full circle back to the Seventies though. Inflation wasn't defeated, that was a myth, instead it was pushed onto certain costs and they've gone through the roof.

    From memory in the Seventies the highest cost in a household's budget was food, rent or mortgage etc would cost about half of what food cost.
    In the Twenties the highest cost in a household's budget is housing. Rents or mortgages for new purchases cost more than what food costs.

    So we've swapped around what's facing high inflation, but the highest element of the household budget was the one facing high inflation both then and now. The difference is that wages were growing in the past at least, they've not been growing anything like costs in recent years.

    So for the I'm Alright Jacks who think costs are assets instead of costs maybe there's no inflation. Because they've found a way to bypass paying inflation, but others aren't.
    That's no comfort if you go to buy bread. And discover that the bread you budgetted for last week isn't affordable now.
    This is life not a theoretical fantasy. Inflation hurts. Real people. Continually.
    Yeah its fucking shit.

    And you know what else is fucking shit? Having people told that their rent or getting a home isn't affordable now.

    That's not a theoretical fantasy either, that's real life for countless people in this country.

    Food is a smaller share of a household's budget than rent, so why is it OK to have double-digit rent inflation but not food or wage inflation?
    It isn't. Housing inflation is dire. You are sound on that. It is shit. The answer isn't to import that into every other aspect of life.
    There are only three paths from here and every single one of them is shit.

    1: House price crash, millions plunged into negative equity immediately.
    2: Years of inflation in wages exceeding inflation in costs (a reversal of past twenty years).
    3: Do nothing and see the problem only continue to get worse, or be locked in as a problem forever.

    I can't think of a fourth solution, so pick yer poison. Which of those three paths should we take? I'm torn between 1 and 2 but think 2 is better. Alternatively if you can think of a fourth solution I'd love to hear it, I'm all ears.
    Do you know what?
    I actually think 1 would be the best all round. Won't happen, cos the Party holding the parcel wouldn't get back in for a generation.
    But 1 would be best. Their store of utterly unearned income wiped out. Year Zero as it were.
    And the banks would be fucked resulting a squeezing on lending and economic catastrophe.

    Why do you think a house price crash is the core part of the Bank of England stress tests? It’s because it’s the single worst thing that could happen to the Uk economy
    Not really - for a lot of BTL landlords there would initially be other assets to use if a bank needs to recover any unpaid loans.

    And most house owners will curse but continue to pay the mortgage off.

    Why do you think I emphasised the Northern Ireland negative equity loan scheme
    Capital adequacy rules for mortgages with a value more than the value of the security are very very painful
    So the Government bails the loans out or allows them to be moved to another Bad Bank - from memory the 125% Northern Rock loans have had better long term repayment rates than the more standard B&B ones.
    How about we address a problem that took 20 years to create with a 20 year adjustment instead of a crash?
  • MattWMattW Posts: 11,717
    moonshine said:


    It’s unrealistic to think the Uk could maintain its living standards under a state of autarky and nor is it desirable to even try. But we really do need to realise how dangerous the world is, how precarious the global system of commerce is and how undependable many alliances really are.

    New Trade Agreements across the world, including the EU itself, rather undermines claims about a State of Autarky.
  • MattWMattW Posts: 11,717
    edited October 2021

    IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    Housing benefit is a weird one that very rarely gets discussed but seems easy to reduce.

    If you halve it, the floor for rents probably drops by 10-25% for the local area which benefits primarily the government, but also many millions of renters. 1-2 million landlords are negatively impacted.

    The places that are rented out for housing benefit still will be, they won't be left empty as that is uneconomic.

    I fear that the Labour membership and perhaps their policy makers would be aghast at such an "uncaring" policy as reducing housing benefit, but if they frame it as landlord benefit instead, then it is clear the people they claim to represent, and the country as a whole would benefit from a significant reduction (or at least an end to the massive increases over the last decade).
    What are these massive increases in Housing Benefit, please?

    This is a very dangerous myth. HB has been repeatedly slashed from 2010 to now.

    Amongst other things - capped at 30tth percentile rather than median rent, increases capped at CPI rather than RPI, a 4 year freeze in cash terms from 2015-2019, another in 2020-21, the "bedroom tax", and so on. And no shortage of reductions of eligibility - one example being the increase in age for people who only get the shared accommodation rate from 25 to 35.

    This Parliamentary report from this summer describes the history:
    https://researchbriefings.files.parliament.uk/documents/SN05638/SN05638.pdf

    I suspect this is (yet) another example of the recirculating bullshit that characterises these housing-for-poor-people debates on PB.

    If the level of Housing Benefit makes properties uneconomic then they will find other tenants who can pay an economic rent, or leave the market, and the person who would have lived there before will become homeless.
  • Philip_ThompsonPhilip_Thompson Posts: 65,826
    edited October 2021
    MattW said:

    IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    Housing benefit is a weird one that very rarely gets discussed but seems easy to reduce.

    If you halve it, the floor for rents probably drops by 10-25% for the local area which benefits primarily the government, but also many millions of renters. 1-2 million landlords are negatively impacted.

    The places that are rented out for housing benefit still will be, they won't be left empty as that is uneconomic.

    I fear that the Labour membership and perhaps their policy makers would be aghast at such an "uncaring" policy as reducing housing benefit, but if they frame it as landlord benefit instead, then it is clear the people they claim to represent, and the country as a whole would benefit from a significant reduction (or at least an end to the massive increases over the last decade).
    What are these massive increases in Housing Benefit, please?

    This is a very dangerous myth. HB has been repeatedly slashed from 2010 to now.

    Amongst other things - capped at 30tth percentile rather than median rent, increases capped at CPI rather than RPI, a 4 year freeze in cash terms from 2015-2019, another in 2020-21, the "bedroom tax", and so on.

    This Parliamentary report from this summer describes the history:
    https://researchbriefings.files.parliament.uk/documents/SN05638/SN05638.pdf

    I suspect this is another example of the recirculating bullshit that characterises these debates on PB.

    If the level of Housing Benefit makes properties uneconomic then they will find other tenants who can pay an economic rent, or leave the market, and the person who would have lived there before will become homeless.
    Your logic is completely flawed since the quantity of housing doesn't change, if they find some other tenant who can pay the rent then the house that the 'other tenant' was previously in is now available.

    And if private landlords leave the market then that's a good thing. It means a newly owner-occupying buyer can buy the home instead reducing by 1 the number of properties available to let and reducing by 1 the number of tenants seeking to let. So no change there either.

    Or the Council could buy the home and it returns back to being social housing and in the future an actual owner occupier rather than a rent-seeking landlord can have right to buy again.
  • MattWMattW Posts: 11,717

    MattW said:

    IanB2 said:

    ping said:

    A nation of property hoarders’: how Right to Buy transformed UK housing - Margaret Thatcher’s scheme ultimately produced a new generation of private renters

    “If the flat were still council-owned, Dorine says that their rent would be about £450 a month. As it’s now owned privately, the rent is £950.”

    https://www.ft.com/content/2e2c1eda-9c6f-4dfc-a79c-5186b1d423ad

    The right should be very worried. They may have dispatched Corbyn, but the threat of Corbynism hasn’t gone away.

    housing still costs the state money: it’s just that what it spends no longer translates into new homes. Rather than enabling local authorities to build housing for security and revenue, the public purse is used to subsidise private landlords. In 2018, the Chartered Institute of Housing found that 95.7 per cent of the government housing budget went on housing benefit and mortgage support in the in 2015-16 fiscal year, compared with 18 per cent in 1975-76. Spending on social housing fell to £5.1bn in 2017 from £13.7bn in 1979-80 (in 2018 prices).
    Housing benefit is a weird one that very rarely gets discussed but seems easy to reduce.

    If you halve it, the floor for rents probably drops by 10-25% for the local area which benefits primarily the government, but also many millions of renters. 1-2 million landlords are negatively impacted.

    The places that are rented out for housing benefit still will be, they won't be left empty as that is uneconomic.

    I fear that the Labour membership and perhaps their policy makers would be aghast at such an "uncaring" policy as reducing housing benefit, but if they frame it as landlord benefit instead, then it is clear the people they claim to represent, and the country as a whole would benefit from a significant reduction (or at least an end to the massive increases over the last decade).
    What are these massive increases in Housing Benefit, please?

    This is a very dangerous myth. HB has been repeatedly slashed from 2010 to now.

    Amongst other things - capped at 30tth percentile rather than median rent, increases capped at CPI rather than RPI, a 4 year freeze in cash terms from 2015-2019, another in 2020-21, the "bedroom tax", and so on.

    This Parliamentary report from this summer describes the history:
    https://researchbriefings.files.parliament.uk/documents/SN05638/SN05638.pdf

    I suspect this is another example of the recirculating bullshit that characterises these debates on PB.

    If the level of Housing Benefit makes properties uneconomic then they will find other tenants who can pay an economic rent, or leave the market, and the person who would have lived there before will become homeless.
    Your logic is completely flawed since the quantity of housing doesn't change, if they find some other tenant who can pay the rent then the house that the 'other tenant' was previously in is now available.

    And if private landlords leave the market then that's a good thing. It means a newly owner-occupying buyer can buy the home instead reducing by 1 the number of properties available to let and reducing by 1 the number of tenants seeking to let. So no change there either.

    Or the Council could buy the home and it returns back to being social housing and in the future an actual owner occupier rather than a rent-seeking landlord can have right to buy again.
    These are the assumptions of an A-level economics seminar, Philip.

    As has repeatedly been explained to you.

    I'm not wasting any more time.
This discussion has been closed.