Barclay Exposes Flaws in Treasury’s No Deal Forecasts

As Barclay points out, a forecast 15 years out that assumes the Government takes no action is not likely to be the most reliable…

McDonnell’s Ten-Point Treasury Takeover Plan

Shadow Chancellor John McDonnell has written to the Treasury’s most senior civil servant, Sir Tom Scholar, to put the Treasury on notice of the radical changes he is planning for how it operates if he ever becomes Chancellor. Guido has obtained his own copy of the three-page letter setting out McDonnell’s 10-point plan to reshape the Treasury as the all-powerful instrument of his own economic ideology. Guido gives you a taste of the future that lies in store under our glorious Corbynite overlords:

The revolution will be swift, McDonnell wants an emergency budget passed “within no more than 10 weeks”. The Treasury is instructed to “plan for the necessary preliminary actions to be taken to ensure that spending in advance of Royal Assent is permissible” – he wants the civil service to enact his “urgent spending priorities as well as tax proposals” including a “National Investment Bank” before he has even secured full approval from Parliament. The centrist counter-revolutionaries will never see it coming…

A full civil service re-education programme will be implemented: “The Treasury will widen the range of economic theories and approaches in which its officials and those in the rest of the government are trained”. Those emergency spending powers will help them get their own copies of Mao’s Little Red Book in good time…

McDonnell plans to centralise more power under himself by introducing new versions of Brown’s Public Service Agreements scrapped by Osborne, which give the Treasury the power to impose “monitoring arrangements” and exercise much tighter control over individual Government Departments. He also wants the current 3-year Spending Reviews to be replaced by good old 5-year plans. They worked so well in Soviet Russia and Maoist China after all…

The Treasury will also be required to throw open “all its policy making processes, including Budgets and Spending Reviews” to “wide” and “meaningful” consultations with the public, “businesses, trade unions, civic organisations and relevant stakeholders.” Will Momentum be getting a seat at the table?

The obvious reason why this is not done is because the contents of the Budget are highly market-sensitive, it would cause absolute chaos with price moving leaks. Of course in McDonnell’s true Marxist utopia, all businesses would be owned by and all prices set by the state, so maybe this wouldn’t be an issue after all…

The letter makes clear the scale of Corbyn and McDonnell’s ambitions to fundamentally reshape the institutions of the state along their own ideological lines. Any moderate Labour MPs who are happily going along with it on the basis that it’s just a slightly stronger form of Milibandism are going to be in for a nasty shock…

Remain and Leave Economists Pressure Treasury to Reveal Project Fear Models

The Treasury is under renewed pressure to reveal the models behind its latest round of Project Fear forecasts, with a group of 26 economists including Remain and Leave supporters writing to Treasury Select Committee Chair Nicky Morgan, calling on her to demand that the Treasury makes its models available to “qualified independent economists”. Signatories to the letter include former external members of the Bank of England’s Monetary Policy Committee, former economic advisers to government and the CBI and former Treasury officials. Not just the usual Brexiteer economist crowd…

The letter notes the “widespread unease about the very negative post-Brexit outcomes predicted by the Treasury’s economic model” and complains that the Treasury’s attempts to explain its approach have been impenetrable even to “experienced macroeconomists”. The Treasury’s black box figures are playing a huge role in the Government’s approach to Brexit, they should be subject to full independent scrutiny…

Read the full letter below:

Continue reading

Treasury Modelling Based Off Nonsense Assumptions

The Treasury’s modelling is notoriously dodgy. So dodgy in fact that in 2010 George Osborne set up the independent Office for Budget Responsibility to provide less political analysis than the hyper-political plaything of the chancellor of the day.

Economist Andrew Lilico has pointed out that in its analysis, the Treasury makes three remarkable assumptions.

  • Assumes there is no economic gain at all from controlling our own policy compared with the EU doing it.
  • Assumes there is no gain from “Future domestic policy choices.”
  • Assumes GDP gains from new trade deals with non-EU countries are only 10% of what the EU estimated those gains would be.

These are clearly ludicrous assumptions as no credible economist assumes there are zero economic gains to be made from liberating companies from EU red tape. This further exposes the Treasury as a political tool not a serious economic body.

Guido remembers the Treasury’s bogus analysis during the referendum….

“Britain’s economy would be tipped into a year-long recession, with at least 500,000 jobs lost and GDP around 3.6% lower, following a vote to leave the EU, new Treasury analysis launched today by the Prime Minister and Chancellor shows.”

In February of this year, Cambridge academics concluded that most of the economic impact assessments before the referendum were “flawed”, and that the Treasury’s analysis was particularly bad.

“The short-term forecasts of the Treasury and OECD, which have turned out to be wrong, have further damaged the already weak public confidence in economists’ contributions to public debate.”

Wrong then, wrong now…

Mogg: Either Hammond or Treasury Officials Trying to Frustrate Brexit

The Mogg has a point here. As Guido pointed out yesterday, Charles Grant of the Centre for European Reform did say that the Treasury is trying to bounce the government into a softer Brexit. That is either a breach of Hammond’s collective responsibility or the civil service’s duty to implement government policy. Isn’t that the more important story?

Charles Grant DID Say Treasury Pushing Government Towards Softer Brexit

The big row today is over whether the Centre for European Reform’s Charles Grant did or didn’t tell Steve Baker that the Treasury was deliberately trying to change Brexit policy and keep us in the customs union. Baker says he did. Grant says in a statement:

“I did not say or imply that the Treasury had deliberately developed a model to show that all non-customs union options were bad, with the intention to influence policy.”

Fair enough. But it turns out Grant did say the Treasury was trying to influence policy by forcing the government into a softer Brexit. Publicly, in July:

Charles Grant, director of the Centre for European Reform… revealed the existence of an unpublished Treasury analysis showing that the costs of leaving without a customs union deal far outweigh any benefits from future overseas trade deals.

“The coalition of forces pushing for a softer Brexit is considerable,” Grant said. “The Treasury, long an advocate of retaining close economic ties to the EU, is newly emboldened.”

Does anyone really think the Treasury doesn’t want a softer Brexit?

Ultra-Remainers Claiming End State Victory

Wishful thinking from the Treasury’s ultra-Remain former Perm Sec? Or is he onto something?

We have seen briefings before from the Treasury that May is going to end up closer to Hammond’s vision of the end state than Boris’ and Gove’s, so it’s worth taking this with a pinch of salt. But the Remainers’ optimism explains the increasing concerns of Cabinet Brexiters that we are not going to pursue a Brexit that makes the most of leaving…

“Technical Problems” With Hammond’s Plane

Today’s Times has a belter of a story about the MoD banning Philip Hammond from using RAF planes and helicopters until the Treasury settles his jet-setting bills. An epic tale of briefing and counter-briefing after Team Hammond dubbed Defence Secretary Gavin Williamson “Private Pike” in the Mail on Sunday.

Yesterday Hammond was late for his meeting with EU finance ministers – journalists were told “because of technical problems with his plane”. Were the technical problems that the RAF wouldn’t let him on board?

Hammond Refuses to Budget For No Deal

For months Brexiters have warned the Treasury and civil service are not preparing properly for the possibility of no deal. Despite May and Davis starting to make more encouraging noises on no deal preparations, Philip Hammond writes in the Times that he won’t spend any money now to prepare for that outcome. In March Number 10 sources told Guido the likelihood of no deal was 50-50, those same odds were offered by a Cabinet minister to the Sun this week. Why would the Chancellor rule out budgeting for something which the government says could easily happen? That is just irresponsible. 

If Hammond won’t fund plans for no deal it simply doesn’t look like a credible option. It’s not hard to see that this clearly weakens our negotiating position with the EU. Also curious for Hammond to come out and say this given it is a direct provocation to Leave Cabinet ministers who asked for the money this week. Arguably a greater undermining of the PM’s position than anything in Boris’ article…

Hammond Overspending By Just £10 Million-an-Hour

The Tories are claiming it is some sort of achievement that public sector net borrowing was £28.3 billion between April and August, down £0.2 billion on 2016. Yes, big congratulations to Philip Hammond for getting government overspending down to just £10 million or so an hour.

Hammond and Treasury “On Manoeuvres” Against Brexit

A timely intervention from Theresa May’s former chief of staff Nick Timothy, who fingers Philip Hammond for being “on manoeuvres” against Brexit. Timothy says May “deserves the support of her ministers, Leavers and Remainers alike” – the implication being that the likes of Hammond and Rudd are undermining the PM on Brexit. He accuses Hammond of playing “games” and says “the Treasury’s reluctance to even mention the positives of leaving the EU, such as the Brexit dividend, is why the government has not talked positively enough about the opportunities of Brexit. In that respect, the Foreign Secretary was right in his Daily Telegraph column last Saturday”. As Guido reported on Monday, Hammond and the Treasury have been pushing for a soft EEA-light Brexit, contrary to government policy…

For an idea of just how much the Treasury hates Brexit, here is former HMT permanent secretary Nick Macpherson responding to Timothy’s article:

The man who ran the Treasury until last year implying Brexit is an “overwhelming wickedness” and some terrible example of human nature that needs to be “curtailed“. This is the sort of pompous, anti-democratic civil service intransigence May is still having to deal with. Mandarins and Remainer Cabinet ministers are working against government policy and the referendum result…

Hammond Hires Sky’s Giles Winn

Guido understands Philip Hammond has hired Sky News’ Giles Winn as his new media SpAd in the Treasury. He will be working alongside his former Sky colleague Poppy Trowbridge. Winn was the editor of Murnaghan and then in charge of interviews at Sky – it’s another example of the government mopping up experienced broadcast veterans from the Sunday shows. He also knows pretty much every Tory MP and Lobby hack since he’s booked most of them for interviews, which can only help. Winn had been set to join PR outfit Pagefield so it’s a bit of a coup for the Treasury to steal him away. This morning’s reports of a Brexit victory for the Chancellor may have been exaggerated, no arguments that this is a Winn for Hammond…

GDP Would Need to Collapse 5% in Next 12 Months to Meet Osborne’s Treasury Predictions

Worth reading the new growth figures in the context of the Treasury’s pre-referendum projections. HMT warned that in the two years following a Leave vote, the UK would enter recession with GDP falling by between 3.6% and 6%.

There has been growth in each quarter following the vote to leave: 0.6% in Q3 2016, 0.6% in Q4 2016, 0.2% in Q1 2017 and 0.3% in Q2 2017. That means to meet Project Fear’s two-year prediction, GDP has to fall by over 5% in the next 12 months. Let’s see…

Number 10 Blaming Number 11, Number 11 Blaming Number 10

Treasury sources tell Newsnight’s Nick Watt that “Number 10 just wants to spend money” and that “some of the senior political advisers around the Prime Minister have anti-Tory ideas about raising taxes”. They say Hammond had to fight against May and claim she wanted to raise Capital Gains Tax and NICs for higher-rate taxpayers. Meanwhile there is pushback from Number 10 in the Times, which quotes a source saying of Team Hammond: “They just forgot the manifesto”. Trouble…

Treasury Spin Falls Apart

The Treasury is shamelessly spinning that the Tory manifesto commitment on National Insurance only referred to Class 1 NICs, not Class 4. This is untrue. There is no mention of Class 1 or Class 4 NICs in the Tory manifesto, it says very clearly in black and white that there will be no increases to National Insurance whatsoever. As Tom Watson says, they must have put the words “Class 1” in invisible ink. The Treasury won’t be getting away with spinning these alternative facts…

Icing on the Cake for “Wellbeing Workstream”

Guests on today’s Daily Politics enjoyed slice of cake dedicated to the Treasury’s over-zealous “wellbeing workstream“. More sweet defiance of yesterday’s killjoy ban on sugary treats which Guido revealed to a horrified Whitehall. Send over a slice…

Political Correctness Gone Mad-eira! Treasury Cake Ban Panned

The Treasury has been slammed over its half-baked proposal to stop civil servants from bringing cake into the office. Guido’s story that the civil service ‘Wellbeing Workstream’ sees “cake office culture” as a “public health hazard” has got a rise out of John O’Connell, chief executive of the TaxPayers’ Alliance. He warns:

“This is little more than a bittersweet waste of taxpayer-funded time and resources. Taxpayers would want to know what exactly the role of the Treasury’s ‘Wellbeing Workstream’ is and how much taxpayer-funded resources are poured into this nannying of fellow civil servants. It might come as a shock to Whitehall penpushers but people are perfectly capable of deciding for themselves what sort of snacks to bring into work without the meddling of a colleague with some fancy title.”

Number 10 have weighed in, insisting they are “pro-cake”. We know the Foreign Secretary’s view…

UPDATE: Ban panned by minister:

Will Self: Big Mac Bigot

McDonald’s plans to set up a holding company in the UK to pay tax on its global income outside the US. UK tax competitiveness reducing the burden for everyone. But not according to Will Self, who interrupted Nigel Farage on Question Time last night to derisively belittle 85,000 Golden Arches employees in Britain and more than a million globally:

“Great jobs! Great jobs for everybody! Mine’s a Big Mac.”

Big gaffe…

Treasury Implements Amy Lame Tax

lame

The Treasury has warned public bodies they can no longer employ staff through personal service companies – a direct challenge to Sadiq Khan to change the tax efficient contract of his aide Amy Lame. Khan’s controversial ‘Night Tzar’ receives her taxpayer-funded £35,000 salary (for two days’ work a week) through her company Amy Lame Ltd, a highly unusual arrangement for a public servant. Chief Secretary to the Treasury David Gauke has today ordered public bodies like City Hall to ensure this is not allowed to happen:

“Public sector bodies should be leading by example… From April 2017, where a public sector body engages an off-payroll worker through their own limited company, that body will become responsible for determining whether the rules should apply, and paying the right tax… the responsibility for determining whether or not the rules apply will remain with the public sector body, who will need to inform the agency or third party of their conclusion.”

Will Khan and City Hall now end Lame’s cushy tax arrangement?

OBR Debunks Remain Predictions on Growth, Unemployment

obr

Worth pointing out that yesterday’s OBR forecast comprehensively debunked several of the key claims made by the Remain campaign. During the referendum Osborne and the Treasury told voters 500,000 jobs would be lost in the aftermath of the Brexit vote. The OBR’s numbers are hugely more optimistic, they say unemployment will only go up by 100,000 by 2020 and that employment will rise too: 500,000 more jobs will be created.[…] Read the rest

+ READ MORE +

Seen Elsewhere



Tip offs: 0709 284 0531
team@Order-order.com

Quote of the Day

Boris as Hulk…

‘Banner might be bound in manacles, but when provoked he would explode out of them. Hulk always escaped, no matter how tightly bound in he seemed to be – and that is the case for this country. We will come out on October 31 and we will get it done.’

Sponsors

Guidogram: Sign up

Subscribe to the most succinct 7 days a week daily email read by thousands of Westminster insiders.
Crowdfund Libertarian Music Video Crowdfund Libertarian Music Video