Reform/Farage - economic policies don’t add up.

Interesting news about Zia Yusuf, a Muslim entrepreneur who has donated a large amount to Reform. Ex scholarship public school .

I don't know why this should surprise anyone. Muslims are defined by their religion they don't necessarily share anything else. It's some Non Muslims who like to stereotype them, you only have to read a few posts on GN to know that.

MaizieD

^Yes that correct but taxation funds part of it the rest is funded from borrowing or QE.^

Taxation doesn't fund spending. Taxation's primary function is to destroy excess money in the economy.

That’s an interesting concept I havn’t come across before, maybe you could give a reference.

David49

MaizieD

Yes that correct but taxation funds part of it the rest is funded from borrowing or QE.

Taxation doesn't fund spending. Taxation's primary function is to destroy excess money in the economy.

That’s an interesting concept I havn’t come across before, maybe you could give a reference.

Goodness, David49, have you never read any of my posts on the subject (including the one earlier in this thread)?

www.ucl.ac.uk/bartlett/public-purpose/sites/bartlett_public_purpose/files/the_self-financing_state_an_institutional_analysis_of_government_expenditure_revenue_collection_and_debt_issuance_operations_in_the_united_kingdom.pdf

gimms.org.uk/fact-sheets/origins-of-mmt/

gimms.org.uk/2022/11/26/spending-chains-sankey-diagrams/

www.youtube.com/watch?v=IHxloLkMXeU

There is loads more on line. I think the last 2 are helpful because they are fairly simple visual explanations.

The first link is to an academic paper which examines the mechanism of government expenditure. Long, but with a fairly succinct summary of the research findings.

Keynes is interesting, too. His work supports much of MMT, it's just that MMT goes deeper into the source of a nation's money. Most economists ignore that bit...

If you feel tempted to cite Weimar, Zimbabwe, Venezuela after having looked at this lot I suggest that you search for economists' analyses of these particular countries' socioeconomic circumstances.

Or you can just dismiss me as a nutter. Lots do

Farage is not nearly right wing enough for me but its a start!

I wouldn't expect Reform's figures to add up.

The problem for Labour is rejuvenating the economy which means increasingly public spending to crowd in private investment but under the present fiscal rules that would mean raising taxes (which they have left some limited scope for). However, the fiscal rules (essentially a falling national debt over the next 5 years and a final ratio of deficit to GDP of 3%) limit Labour's options but the rules are not set in stone. The present ones favour short term tactics over the longer term strategies needed. Therefore they need revision.

Here is an interesting quotation

“ How does tax take money out of the system? Well, in a sense, tax destroys money. It is a bit like a cinema ticket: the cinema prints it, and it’s worth something in your hands as a temporary store of value — and then as a medium of exchange when you hand the ticket in just before you get your popcorn and take your seat. But when the usher takes your ticket, they tear it up and throw it in the bin. Having served its purpose, it can be dispensed with. This is essentially what happens when the government receives your tax payment.”

It doesnt though does it, because the cinema owner uses the value of the ticket to pay the usher and all the other costs of providing a cinema.

Taxation is revenue collected and redistributed. In isolation a government could create unlimited currency, with no outside influences it wouldn’t matter. In practice high borrowing causes currency to fall in value, so a balance has to be found, there is a Magic Money Tree but it has limitations

I have had 3 Reform UK leaflets through my door, two hand delivered, one yesterday as part of the Royal Mail delivery (had LibDem yesterday in the post too).

The first two were ripped to bits and binned. I've made a pledge to myself that, for every leaflet I get I'm donating £10 to the RNLI, £30 gone to them in the last few days.

Would anyone like to see what yesterdays Reform UK leaflet says? This is under the name of Richard Tice, "A National voice for Boston & Skegness" - quoted word for word:

^Dear Resident
This is the immigration election. Britain is at breaking point and only Reform UK can freeze immigration and stop the boats.
Labour and the Tories have lied to you about uncontrolled, mass immigration for over 25 years. They have broken promise after promise. They have done huge damage to our country and our economy.
Since the 1990s Britain’s population has exploded from 58 million to around 68 million. Uncontrolled immigration, including illegal entry, is responsible for a staggering 8 million of that growth. That means a population over 6 times the size of Brimingham has arrived and there is no end in sight.
Our public services are crumbling. Wages have stagnated. We have a housing crisis, an NHS waiting list crisis and a cost-of-living crisis. Illegal asylum seekers stay in luxury hotels and flats while British families go to the back of the housing queue.
Foreign criminals enter Britain unchecked and commit shocking crimes. Labour and the Tories put the rights of illegal asylum seekers above law abiding British People. Some of those arriving then reject British values and threaten our way of life.
Make no mistake. A vote for Labour of the Tories is a vote for more of the same. The government expects over 6 million more migrants to arrive in the UK by 2036.
But it doesn’t have to be like this. For the first time in decades the people of Boston and Skegness have a real choice.
We can repair our broken public services. Restore law and order. Stand up for British values, put a stop to politically correct nonsense and put hardworking, law-abiding British people first.
Only Reform UK can deliver a plan for zero NHS waiting lists in 2 years. We can lift the starting salary for tax to £20,000 to save the lowest paid £1,500 per year. We can unlock Britain’s vast energy treasure of oil and gas to slash energy bills, beat the cost-of-living and unleash real economic growth.
The greatest danger we face is that many have given up on politics and lost hope. But never forget. Our great country ahs faced huge odds in the past and we have always overcome them.
We can do so again now. The fightback starts here. You can choose Reform on 4th July and if you do, you will be starting an earthquake that will shake Labour and the Tories to their foundations.
For the first time your voice will be heard on the national stage in Westminster. You can end the broken promises, betrayal and lies.
If you want change, vote for it.^

The back of the leaflet shows "REFORM UK's 6-POINT PLAN TO STOP THE BOATS
1. Declare a National Security Threat
2. Leave the European Convention on Human Rights
3. Confirm that Zero Illegals will be resettled in the UK
4. Create a new Dept. of Immigration staffed by believers
5. Pick up and take them back to France
6. Set up offshore processing centres

"staffed by believers". Seriously. Seriously? Just vile. Hitler's Germany.

I see a lot of support on the local Facebook pages for Reform UK. While I feel just sick about the idea of Richard Tice winning, wouldn't it be something if he wins and then the Country is shown what a load of unworkable nonsense is in their "promises".

Apparently there's a chance that Farage won't win in Clacton!

It doesnt though does it, because the cinema owner uses the value of the ticket to pay the usher and all the other costs of providing a cinema.

I agree that the analogy falls down here, but the essential difference between the cinema owner and the government is that the cinema owner can't create the money they need to run their business.

Whereas for you to have the money that you pay your taxes with the government has had to create it and release it into the economy. Only the government, and the banks it licences to do so, can create money.

Even in the days when currency was backed by gold and silver reserves banks and government created far more money than the 'value' of their reserves warranted. Financial transactions were done by bills of exchange and promissory notes. Both the government and banks gambled on the assumption that their creditors wouldn't all simultaneously demand their pounds worth of gold or silver in exchange for the promissory notes they'd been given. In the days before tighter bank regulation many failed if there was a 'run' on their banks, when all their customers did demand their gold or silver in exchange.

But the 'gold standard' was abandoned in 1971. Since then currencies have been 'backed' by nothing but trust. Even the 'reserves' which banks are required to hold are just numbers.

UK reserves have been created by the BoE, under instruction by the govt. after the GFC, to ensure that all banks can cover the government guarantee that all customer deposits held by the banks can, in the case of bank failure, be repaid up to the value of £85,000. (Which makes it nonsensical that the government pays interest on those reserves and counts them as a govt. liability. Many countries don't)

Taxation is revenue collected and redistributed. In isolation a government could create unlimited currency, with no outside influences it wouldn’t matter. In practice high borrowing causes currency to fall in value, so a balance has to be found, there is a Magic Money Tree but it has limitations

'Borrowing' is a misnomer which harks back to the days when governments did have to borrow in order to pay its bills because its currency was backed by gold and silver.

In effect today, through the sale of bonds and provision of savings facilities, NS&I, the government is just using another method of restricting the amount of money in circulation.
Yes, it costs the government in interest payments, but they are small in relation to the amount of inactive money the 'borrowings' represent. People and institutions deposit their money with the government because it is the safest form of saving. They know that the government will repay their principle at any time they ask for it. It's guaranteed because the government can always create the money for repayment.

Once the money is repaid and the recipient uses it to purchase goods and services in the economy it becomes subject to taxation in the usual way.

Of course money creation can't be unlimited. It is constrained by the amount of resources available for purchase. Hyperinflation is caused by a shortage of resources and an excess of created money.

NoraBone

The back of the leaflet shows "REFORM UK's 6-POINT PLAN TO STOP THE BOATS
1. Declare a National Security Threat
2. Leave the European Convention on Human Rights
3. Confirm that Zero Illegals will be resettled in the UK
4. Create a new Dept. of Immigration staffed by believers
5. Pick up and take them back to France
6. Set up offshore processing centres

"staffed by believers". Seriously. Seriously? Just vile. Hitler's Germany.

So Reform are still promising to "process off shore (where, why not say?

and

" Pick up and take them back to France"

how. I challenge any Farage voter to answer this one.

Illegal asylum seekers stay in luxury hotels and flats while British families go to the back of the housing queue.

Nora Bone

Interesting NB!

To pick one hole on a matter which I do know a little about.

Those "luxury hotels" - I chatted with a person who worked in one - are, when they are used to house immigrants, no longer the luxury brand. They are hotels which, for various reasons, have struggled to compete in the market. Some have closed all together, and others, because they were not attracting guests, were only too pleased to stay in business by accepting the governments offer of housing the immigrants.

When that happens, most of the staff are 'let go' (which was the case with the individual I spoke to). There are cleaners employed and admin. The kitchens are only open for basic requirements - they do not cater for the immigrants, that is done by a catering company in the same way that food is supplied to hospitals. The bars are closed off as are other areas in the hotel, and there is a basic area with tables and chairs for the immigrants who don't eat in their room.

These hotels also house homeless people sometimes too. Though usually not together with immigrants.

In other words, they are hotels which have basically passed their sell-by date, and government funding is keeping them afloat.

Luxury accommodation, which Reform would have you believe is what the immigrants are getting - it is not.

It is a roof over their heads, needed because the processing of immigrants - and the high numbers of them - are not managed by the numbers of staff employed to do the vetting. There are too few and therefore the pressure on them is enormous; staff turnover is high, and some of those recruited are not fully-trained when they take up their positions which, naturally, makes the job difficult - and they leave.

It's not a desirable situation, and I can understand local people being concerned about the number of (mostly) young men wandering around the locale with nothing to do and nowhere to go.

But to try to spread the lie that they are living a luxurious life in a luxury hotel, simply adds fuel to the fire and prevents any rational discussion.

MaizieD

How do I find his critique of the BoE, Petra?. Do you have a link?

I hope this works. I would be interested in your take on his opinions ( obviously leaving out his comment early on Re Nigel Farage)

www.youtube.com/

Sorry, that link isn’t the one, either.

Local hotel to my Village - less than a mile away - was used for approx 12 months to house immigrants. Village was seething, absolutely furious almost to a (wo)man. Furious they weren't held under lock and key, but "allowed" to walk through the Village ... I would check social media, saw a post saying (on Twitter) they'd been told how the women in the village were carrying knives because they were afraid (not true), that crime had gone up (not true).I would see some most evening out for walks, in two's, three's, sometimes five - quietly chatting to each other. What else was there to do? They were about 8 miles from Boston, no means of transport. A group took to helping clear the Church grounds, with the blessings of the Church Warden. They were quiet, polite (I'd give a wave, gave out a few cheap footballs too), and caused no problems that I was aware of.

It's probably a 3* at best hotel, on the junction of busy roads.
Photos show rooms to be basic, and wasn't busy prior to the immigrants arriving, and I'm guessing after Covid the £ they were paid would have been very welcome.

I found Richard Tice's leaflet to be scaremongering. Constituents are worried about energy payments, the foodbank at Boston are always asking for donations. There are very much more real and immediate problems, but, for me, it feels Reform UK have found their scary declarations to hit a sore point with some of the UK.

NoraBone we too have a hotel housing immigrants, slap bang in the middle of my residential area in leafy Cheshire. Most residents were furious and voiced their concerns at a neighbourhood meeting. This was 2 years ago. To my knowledge, there has been no trouble at all. Granted, the immigrants are families, which isn't the norm, but they are polite and respectful.

Hotel is a misnomer. They are unofficial refugee camps.

There are billions of pounds to be made out of misery.

Please , don't come back at me with racist nonsense anybody.

1. It makes me heave

2. I do not what I'm talking about.

ronib, I am interested in the data regarding the sums raised from " overpaid consultants" and " overpaid bodies" Which bodies are these, and how many are there?
How much money does this represent- £ 3 billion? - £ 121?
Who knows: the Reform Party do not. This is not economics, this is fluff.
And, whilst we're on the subject of " overpaid bodies"- where went all of the money raised from no longer paying MEPs? Asking for a friend, obviously.

here is an intersting thought.

One of the main reason's we need so many immigrants is because birth rates have fallen below replacement rate. Not just in the UK,, but across the world.

Surely the most practical way to reduce the number of immigrants is for those of child bearing age to have more children.

If a party is opposed to immigration, we should be asking them what their population policy is.

Chocolatelovinggran The fact that there’s so much fluff in politics isn’t unexpected and not new. Obviously Reform is highlighting areas which Labour and Conservatives are not too concerned about? I have an unexpected emergency just now so perhaps you could get some figures?

“In effect today, through the sale of bonds and provision of savings facilities, NS&I, the government is just using another method of restricting the amount of money in circulation.
Yes, it costs the government in interest payments, but they are small in relation to the amount of inactive money the 'borrowings' represent. People and institutions deposit their money with the government because it is the safest form of saving. They know that the government will repay their principle at any time they ask for it. It's guaranteed because the government can always create the money for repayment.”

The Government creates new bonds in addition to those that expire and are replaced, this happens continually it been 20 yrs since extra bonds were not issued.

Posted too soon

20 yrs ago borrowing was below 40% of GDP now it’s close to 100%, it was 80% before Brexit. I would like to think growth does happen but it’s going to be an uphill battle. Finding the money in addition to the infrastructure improvements we need is going to be a challenge.

ronib- there aren't any figures are there?
If it were something I had proposed in my three year school plan, back in the day, it would have had to be itemised and costed, but hey, that's running a primary school - not needed when you're suggesting how you'd run a country, apparently.