Friday, June 15, 2012

Talking Down

The Treasury’s £100bn bung of cheap loans to business is meant to install confidence in the economy. Previous similar actions on a smaller scale has not worked and no number is given for the expected take up. Asked on Today what will happen if this does not work, Treasury minister Mark Hoban said “we need to make this work!” Just the sort of language to inspire that much sought after confidence…

Tuesday, June 12, 2012

Treasury Denies Secret Eurozone Contingency Planning
Revokes “Trading With Enemy” Legislation Without Debate

The Treasury has denied to Guido that a discreet Statutory Instrument is part of a secret contingency plan preparing for the potential collapse of the European Central Bank. At the end of May the government rushed through an order revoking the 1939 Trading with the Enemy Act, which prevented the UK from trading so-called Negotiable Instruments with former enemies – including former enemy Axis powers. The Act will now allow the UK to trade complex debt packages directly with EU countries, effectively allowing us to directly provide bailouts for European states unable to repay the money they owe to their British counterparts. Greece and Italy are on the list of countries that have now had their enemy status revoked for the purposes of dealing in their government’s debt paper.

The S.I. was slipped through quietly just before the Jubilee break at the end of May. Senior Treasury sources ignored our questions for weeks, until finally a junior press spokesman then directed Guido to Vince Cable’s  BIS. When Guido pointed out it was clearly a Treasury initiated Statutory Instrument they tried to play down the impact of the order, insisting that the existing legislation was obsolete and that it was simply an attempt to clean up the statute book. Yet with the Eurozone entering a new critical phase of financial crisis, the timing seems more than a coincidence…

Friday, April 20, 2012

Osborne’s “Clear Position” on the IMF

This £10 billion bailout for the IMF brings the total Osborne has pledged to £40 billion, or some £666 for each and every man, woman and child in the Britain. In October last year after British taxpayers sent £9 billion to the IMF – £9 billion that Osborne had to borrow, Osborne told the House of Commons categorically:

“Britain will not be putting money into the bail-out fund either directly or through the IMF…. The IMF exists to support countries, it does not exist to support currencies… The IMF contributing money to the eurozone bail-out fund, no; Britain contributing money to the eurozone bail-out fund, no. That is Britain’s clear position.” 

The Chancellor could not be any more clear, he gave his word, it was an unqualified promise. Which Osborne has now broken.

Friday, March 23, 2012

Finally a Good Front Page for George

Thursday, March 22, 2012

Osborne Biggest Loser in Budget

Osborne’s budget has gone down like a bucket of sick on the front-pages this morning. As long as we have flat-lining growth and a failure of political will to tackle spending, all fiscally-neutral budgets will be like this, identifiable ‘losers’ will out-number identifiable ‘winners’. The losers this time are those who were prudent enough to save for their retirement. The so-called lucky generation of baby boomers who had a working life in a long term growing economy and an overly generous welfare state which has now impoverished their children and grand-children. Some might spin this as a bit of inter-generational payback, others as an unjust punishment of those who saved for their retirement. Pensioners have a propensity to be voters…

Osborne is spending more than Brown, borrowing more than Brown and taxing more than Brown. The official numbers revealed yesterday show that spending is still rising in real terms, there is no hope of for an “expansionary fiscal contraction” if there is no fiscal contracti0n. The national debt is still rising. The coalition government’s self-defined primary mission, to close the deficit by the next election, is on course for failure. As long as this obsession with fiscal neutrality and timidity towards cutting spending continues the tax burden will not be reduced, the debt will not be reduced and growth will flat-line. Fiscally neutrality is just another phrase for tinkering with the tax burden.

The bond markets already know the government is going to miss the deficit target. All the fast growing economies in Asia and the Americas have lower tax economies than the UK and Europe. A dash for growth stimulated by across the board tax cuts will not as Osborne fears be punished by the bond markets, that is a fundamental mis-reading of bond market mentality. Osborne knows bond markets think long term, that is why the Treasury is contemplating issuing 100 year bonds. Bond traders understand that broad tax cuts are a real stimulus that will lead to a more dynamic growing economy which will reap more tax revenues long term. Why are we waiting?

Wednesday, March 21, 2012

Budget Bingo

Click the above to download the PDF with hyperlinks. Rules are simple: choose one phrase, policy or scenario from each row, so eight overall. Listen out during the Chancellor’s statement, first to six wins. Don’t forget to shout “Budget Bingo”!

Sunday, February 19, 2012

Ed Balls Calls for Tax Cuts to Boost Growth from Zero

Ed Balls was on the Marr show this morning and also has an article in the Sunday Times ahead of the budget, advocating tax cuts to boost growth. He repeats his long-standing call for a reversal of the consumer whacking VAT hike and comes over like a born-again Nigel Lawson in his article:

…cut the basic rate of income tax by 3p for a year. Or raise the income tax personal allowance to more than £10,000… It would be better to cut VAT now — it’s fairer and quicker and would help pensioners and others who don’t pay income tax. But any substantial tax cuts to help households and stimulate the economy would be better than doing nothing.

Tax cuts won’t scare international bond markets, even the austerity friendly IMF is advocating a VAT cut for Britain, government gilts are propped up by QE (for now) so the issue of bond market vigilantism doesn’t arise.

It was a mistake to hike VAT and it is a strategic error to burden industry with crushingly high green taxes and penal marginal income tax rates of over 50% discouraging entrepreneurs from coming to invest in Britain. If the government is going to miss the deficit target, and it is, miss it because the government slashed taxes to grow the economy. The international bond markets will forgive a finance minister with a growing economy who misses his deficit target, they won’t forgive a finance minister with a contracting economy in any circumstances. Chancellor Zero knows that with no growth there is no hope for the deficit.

Sunday, January 29, 2012

Zero GDP Growth Has Zero To Do With €urozone

Last week’s shrinking GDP figures were spun by George Osborne as due to the crisis in the €urozone. The decline in GDP could hardly be blamed on the US market which is picking up and growing at a respectable 2.8% last quarter, nor on Asian markets where China grew at an annualised 8.9% and India at 7.8%.

Is the decline in UK GDP really, as George Osborne implies, down to economic trade with the crisis ridden continent falling? The answer is no.

UK exports to €urozone states actually rose a healthy 11.3% last year:

It is a myth that the decline in GDP has anything to do with the €uro-crisis leading to a decline in exports to the €urozone. The barriers to growth are a domestic problem… 

Saturday, January 28, 2012

Not a Single Billion More

George Osborne gave a cast iron promise last October:

“Britain will not be putting money into the bailout fund either directly or through the IMF… the IMF exists to support countries, it does not exist to support currencies. The IMF contributing money to the eurozone bailout fund, no; Britain contributing money to the eurozone bailout fund, no. That is Britain’s clear position.”

Ed Balls and Tory backbenchers are at one on this, it is for Germany through the ECB to support the €uro. The American and Chinese Treasury ministers agree, it is not the purpose of the IMF to bailout an ill-conceived currency union. Don’t forget your promise George*…

*Guido hasn’t forgotten his IMF promise.

Wednesday, January 25, 2012

Chancellor Zero

Even if the GDP numbers are not entirely unexpected, they are still a failure, a failure to grow the economy. The deficit can only be paid down if the economy grows, we can’t borrow our way out of a debt crisis. It is time for a supply-side revolution, why is the government implementing a policy of selected regional enterprise zones, why not make the whole economy an enterprise zone? It was a mistake to hike VAT and it is a strategic error to burden industry with crushingly high green taxes and penal marginal income tax rates of over 50% discourage entrepreneurs from coming to invest in Britain.

If the government is going to miss the deficit target, and it is, miss it because the government slashed taxes to grow the economy. The international bond markets will forgive a finance minister with a growing economy who misses his deficit target, they won’t forgive a finance minister with a contracting economy in any circumstances. Chancellor Zero knows that with no growth there is no hope for the deficit.


Seen Elsewhere

Cam Cannot Stem EU Immigration | David Keighley
9 Mansion Tax Questions for Ed Balls | TPA
Politicians are Lying to You About Immigration | Alex Wickham
Give Journalists Public Interest Defence in Law | Guardian
Cameron is Going to Have to Deal With UKIP | Dan Hodges
Opinions on Key Issues By Constituency | Red Box
Britain Irrelevant Inside EU | Dan Hannan
Cameron Heading for Fall on Europe | Rachel Sylvester
Lords Speaker Spends £350 on Two Mile Limo Ride | Sun
Shapps Slaps Down Barroso “Propaganda” | City AM
Bookies v Pollsters: What We Learned From IndyRef | Paddy Power


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Chris Bryant talks to the Times Diary about a famous gay actor:

“I don’t think I’ve had sex with him. He says we had sex in Clapham. I’m fairly certain I’ve never had sex south of the river”



Progressive Inclusion Champion says:

Great to hear Carswell call for inclusive policies and that UKIP must stand for first and second generation immigrants as much as the English.


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