Brexit update - Rishi's interesting comment

He is completely out of touch with what is happening in the UK at the moment which is surprising considering that even the Tory red tops were opposed to his spring statement.

Surely those on benefits are in greater than those actually in work? I include in this statement those who are in work but poorly paid who should be able to receive top benefits, The only saving I can see is the increase in the lower limit for NIC to the Personal Allowance which would reduce contributions by about £6.70 per week when it comes into force.

I don't see how keeping people on the bare minimum or less, to survive is good for a country's economy.
We are a capitalist society which depends on us all buying and selling goods and services to each other. What use is it to prevent people from buying goods and services (because they don't have enough money) but allowing very well off people to hoard money which they squirrel away and don't use.

As for his remark about Brexit, he probably knew that it would affect trade, but knew that supporting Johnson would help his career at that time. if he didn't realise that it would affect trade he is even more unfit to be Chancellor than he appears.

Brexit, as many foresaw, has been an utter disaster for UK exporters.

It follows that our economy will continue to decline until we can at least rejoin the Single Market.

The green agenda alone makes it imperative that we should trade more with our neighbours and less with countries on the other side of the world

Have you heard any other Brexiteer admit the truth was always different to what we have been told though Varian. I don't think any of them have 'fessed up before. Perhaps Rishi is above the fleas you get when you lay down with dogs.

Some interesting conclusions from James O'Brien today discussing the outrage felt by some people about the change of name from ploughman's to ploughperson's lunch. Apparently the landlord of a Devon pub changed the name in order to acknowledge the women farmers in the area.

J O'B suggested that the Daily Express had run a story concerning complaints (fictitious) about the change accusing the landlord of being woke. This then prompted a number of actual complaints. He was wondering why people were getting so agitated about this and he concluded that the people who complained about this and wokeness in general were all Brexiteers.

Here's a comment from his Twitter feed:

"The cheese ploughperson’s story is an almost perfect illustration of the inanity of ‘anti-woke’ posturing. People genuinely offended by the nomenclature of a cheese-based lunch claim to be outraged by the idea of people being outraged by the nomenclature of a cheese-based lunch!"

I notice that the border crossing checks are having to be delayed again because of the worry over supply chains crashing.

Project fear in action?

Even the Daily Express, the Brexiteer's bible, is beginning to acknowledge there may be a few problems ahead. I wonder what they will be able to blame next? Covid, Ukraine have all been used, partly as reasons, chiefly as excuses, but the cost of living crisis, shortage of NHS beds, reduced educational achievements etc., etc., are all as a direct result of Tory policy, and of Brexit in particular. I agree with your comments Ilovecheese, the economy is based on consumers spending, and if people are either unable to spend or unwilling due to uncertainty, it will hit the economy badly, and tax receipts too. If a man with the wealth of Sunak, or JRM pays less tax, he stuffs the money away, probably offshore. If a person of less wealth pays less tax, s/he may organise home improvements, new carpets, eat out more, buy a new coat or whatever, ie the money goes back in to the economy. We are in the fortunate position of being able to absorb the increased fuel costs, but it will mean less popping out for lunch, less spent on the garden this summer. Not a major problem for us, but it is for the garden centre or local pub.

That's the problem, isn't it? All these things, not least Brexit, are adding together to make it more and more difficult for people to spend freely, and so everyone suffers. I feel so sorry for the small businesses which have managed to get through covid so far, only to be hit by all the other problems preventing their customers from coming back.

Ilovecheese

I don't see how keeping people on the bare minimum or less, to survive is good for a country's economy.
We are a capitalist society which depends on us all buying and selling goods and services to each other. What use is it to prevent people from buying goods and services (because they don't have enough money) but allowing very well off people to hoard money which they squirrel away and don't use.

As for his remark about Brexit, he probably knew that it would affect trade, but knew that supporting Johnson would help his career at that time. if he didn't realise that it would affect trade he is even more unfit to be Chancellor than he appears.

You're absolutely right about the domestic economy, Iam64.

But not only that, but by reducing public spending even more parts of the economy suffer because they lose the custom of the public bodies which cannot afford to buy their goods and services; which leads to job losses and loss of income in those businesses, to spend in the domestic economy. And low wages of state employees, plus increased taxation also leads to loss of spend in the domestic economy.

Even cuts to benefits, effected by not increasing them in line with inflation, means loss for the businesses in which they would spend their benefit money.

I do not understand how the Chancellor (and previous tory chancellors) is so ignorant of how the domestic economy actually works. We went through all of this under Osborne and now it's happening again.

What is quite ironic is that the so called 'national debt' is actually composed of people's, & institutions, savings and investments. So some of the money flowing to the 'wealthy' will be going to buying government bonds and swelling the 'debt'. That's the debt that he's claiming to be trying to reduce.

It is so utterly bonkers.

It has been proved time after time that Tory austerity does not work, it harms the economy and it harms people. Why will people (and they will) vote for more of this? I get that some were terrified at the prospect of a Corbyn administration, but that no longer is a reason. Why would you vote for your life, and that of your friends and neighbours, to be made more difficult? Its as if the whole country is under some kind of Stockholm Syndrome.

Actually, one of his most 'interesting' comments was that about the £200 enforced loan that we'll be getting in the autumn to 'help' with our energy bills. And which will be repaid to the energy companies via subsequent year's standing charges...

(Sorry, I like to chose whether or not to take out a loan, not have one imposed on me)

When it was pointed out to him that this was indeed a loan (debt) to be paid back, he said it wasn't a loan because there was no interest being charged on it. WHAT? ?

Even the Daily Express, the Brexiteer's bible, is beginning to acknowledge there may be a few problems ahead. I wonder what they will be able to blame next? GillT57 Wed 30-Mar-22 15:00:45

I think we have a clue Gill. On Politics Live, the "After PMQs" Tory MP, in reply to a question about the budget, said "we have inherited a really, really difficult situation from the pandemic."

So it's all the fault of the pandemic - not the party in government at the time. Apparently.

Sunak may not be as smart as he likes to appear, he certainly hasn't grasped GCE economics ( or 'O' level as us oldies studied and understood). These Deutsche Bank ex employees ( Sunak and Javid) aren't hot on simple economics.

I think we have a clue Gill. On Politics Live, the "After PMQs" Tory MP, in reply to a question about the budget, said "we have inherited a really, really difficult situation from the pandemic."

Still trying to con us!

We haven't inherited any 'difficult situation' from the pandemic. The money used to pay off all the tories' friends and relations in dodgy PPE contracts, fraudulent furlough claims and the dreadful Test a7 Trace fiasco was created out of thin air by the Bank of England to 'buy' millions of Treasury Bonds (also 'created' by the Treasury for that purpose). The resultant 'debt' is owed by the Treasury to the Bank of England, but as the Bank of England is owned by the nation we, in effect, owe it to ourselves. It isn't going to be 'repaid'.

This is also pretty basic economics. The Bank of England has always issued the nation's money; remember all the fuss about 'money supply' over the years? That's what it was always about, how much extra money should the BoE issue.

How else do people think the amount of money in the economy has managed to continually expand over the years? It isn't from the country's 'earnings' through trade. It's been created by the BoE.

Have a look at this. Our 'trade balance' has mostly been in deficit over the last 50 years... So that ain't where our expanding money supply has come from...

www.macrotrends.net/countries/GBR/united-kingdom/trade-balance-deficit

So, where has it come from...?

GillT57

Sunak may not be as smart as he likes to appear, he certainly hasn't grasped GCE economics ( or 'O' level as us oldies studied and understood). These Deutsche Bank ex employees ( Sunak and Javid) aren't hot on simple economics.

It is being whispered by many that Sunak is very light weight and not up to it.

“The resultant 'debt' is owed by the Treasury to the Bank of England, but as the Bank of England is owned by the nation we, in effect, owe it to ourselves. It isn't going to be 'repaid'.”

The UK hasn’t reduced its indebtedness for decades, we simply replace one loan with another. The crunch will come if interest rates keep rising along with inflation, it could get quite tricky.

The resultant 'debt' is owed by the Treasury to the Bank of England, but as the Bank of England is owned by the nation we, in effect, owe it to ourselves. It isn't going to be 'repaid'.

It's widely accepted both by traders and economists that this debt doesn't need to be repaid and will not be repaid. In fact, it will probably be extended over a longer period - and at reduced interest rates... interest which is paid back to the Government, anyway.

And debt, itself, is not a problem. The only problem with printing money is inflation. Which can be counteracted.

The Tory budget, like all Tory budgets, is based on the ideology of small-state. So if you are a struggling pensioner, someone on benefits, or disability allowances, you should not expect the budget to be "fair". Fairness doesn't come into it. The very wealthy will benefit from the tax cut - the poor will do what they've always done - put their meagre amounts straight back into the economy by spending it on essential goods and services, thus keeping the economy ticking over.

I do know that this is a very trivial comment but if I were Sunak's PR advisor I might suggest that he invests a tiny fraction of his clothes budget on some bigger suits.

He looks lightweight because he reminds me (and who knows how many other voters) of a wee lad who has grown out of his school uniform but his Mum won't buy new clothes to fit because there is still a lot of wear in his wee clothes.

It does make him look a tad lightweight.

Dickens

^The resultant 'debt' is owed by the Treasury to the Bank of England, but as the Bank of England is owned by the nation we, in effect, owe it to ourselves. It isn't going to be 'repaid'.^

It's widely accepted both by traders and economists that this debt doesn't need to be repaid and will not be repaid. In fact, it will probably be extended over a longer period - and at reduced interest rates... interest which is paid back to the Government, anyway.

And debt, itself, is not a problem. The only problem with printing money is inflation. Which can be counteracted.

The Tory budget, like all Tory budgets, is based on the ideology of small-state. So if you are a struggling pensioner, someone on benefits, or disability allowances, you should not expect the budget to be "fair". Fairness doesn't come into it. The very wealthy will benefit from the tax cut - the poor will do what they've always done - put their meagre amounts straight back into the economy by spending it on essential goods and services, thus keeping the economy ticking over.

Yep.

But we’ve gone over these arguments 1 million times, and it makes not a bit of difference.

It's widely accepted both by traders and economists that this debt doesn't need to be repaid and will not be repaid. In fact, it will probably be extended over a longer period - and at reduced interest rates... interest which is paid back to the Government, anyway.

I'm trying to work this statement out.

Who pays interest to the government?

The government nominally owes interest to the BoE for the money the BoE created for it by purchasing (also 'created') Treasury bonds. Quantitative Easing (QE) That would be the interest due on the bonds, not the principal 'loan'.

Other 'government debt' is the money paid to the government by investors, big and small, for bonds & gilts, premium bonds, and national savings accounts. In other words, it is people's savings. Mostly British people's savings, though there is some foreign investment in bonds and gilts. All these vehicles are for the purpose of 'borrowing the public's money for use by the government. The government pays interest on most of these.

Who wants their savings returned to them?

So, I can see the government paying out interest, but I can't see anyone paying 'it' interest (unless you count the small amounts which might be gained by charging interest on overdue taxes).

The QE 'debt' won't be repaid and that's what makes up a large part of the deficit. The rest won't be repaid, either, because it's peoples savings.

Thus, it's crazy to cut spending to reduce the 'deficit' /'debt' (yes, I know they are different things)

Because WwMk2 the right wing press perpetuate the myth of debts to be repaid by the tax payer, helped by stories of benefits cheats. Are we really meant to believe that without covid19 it would have been hip replacements all round? Smaller class sizes? Better quality housing? Yeah right

Brexit: more than 7,000 finance jobs have left London for EU, EY finds

www.theguardian.com/business/2022/mar/29/brexit-finance-jobs-london-eu-ey-paris-frankfurt-dublin

varian

Brexit: more than 7,000 finance jobs have left London for EU, EY finds

www.theguardian.com/business/2022/mar/29/brexit-finance-jobs-london-eu-ey-paris-frankfurt-dublin

Not to mention all that dodgy Russian cash that cannot now be handled.
That was of course the main reason the Brexit enthusiasts wanted us out of the EU regulation - so that dodgy money could be laundered.

Katie59

varian

Brexit: more than 7,000 finance jobs have left London for EU, EY finds

www.theguardian.com/business/2022/mar/29/brexit-finance-jobs-london-eu-ey-paris-frankfurt-dublin

Not to mention all that dodgy Russian cash that cannot now be handled.
That was of course the main reason the Brexit enthusiasts wanted us out of the EU regulation - so that dodgy money could be laundered.

It's quite extraordinary how many of the leading Brexit campaigners had ties with Russia. Including Johnson...