The above was the slightly awkward title that my talk to Keele World Affairs ended up with.
The talk will be available in video format soon, but in the meantime I have published my notes, which on this occasion fairly closely reflected what I actually said. They are available here.
As I said in my opening comments:
In this lecture I want to look at what Covid means with regard to three issues. The first is the meaning for the UK's national finances. The second is the dispute that some have suggested exists over who should supposedly pay for the crisis that we have and are enduring. The third is what this might mean for tax.
If that sounds like a roller coaster of a ride, let me start with some words of comfort that set the scene for what is to follow.
First, I want to make clear that there is no one who now needs to pay for the Covid 19 crisis. That is because it has, as a matter of fact been paid for. Quantitative easing — called it the magic money tree if you like — has already settled the bill, in full. There are consequences still to manage but no one need pay again for a bill that has already been settled.
Second, despite what you have no doubt been told, the national debt is well under control, and may be falling as a percentage of GDP and this is likely to be the trend for some time to come.
And third, whilst overall we need no overall tax increases within the UK economy for some years to come if we are to have any chance of an economic recovery, then that recovery is dependent upon significant changes being made in our tax system to tackle inequality. The last decade has been extraordinarily kind to the wealthiest in the UK. It is time that they shouldered their fair share of the UK's tax bill. I would go so far as to say that our recovery is dependent upon it.
So, having fulfilled my first job by telling you what I am going to say, let me get on with saying it.
I hope the notes provide the elaboration required.
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[…] to my talk for Keele from the organizers, a least, seemed to be pretty […]
Read this Richard?
https://www.bailiwickexpress.com/jsy/news/global-care-company-under-fire-jersey-tax-avoidance/#.YDirLmj7TIU
I have,,,no time to cover everything though
[…] they are not representative of the population at large. As data on the sectoral balances used in my talk for Keele last night shows, consumers took more than five years to recover  their confidence after 2008. […]
Interesting speech and thank you for sharing – a far better use of your time that watching either the BBC news or Newsnight last night which would both have had you tearing your hair out – Kuenssberg and Wark doing their very best to ask, “but who pays for Covid”!!
The mainstream narrative continues to roll on (inaccurately)…
Still save your fire power for the next OBR report next week – perhaps you and I are the only people who dive straight to the very small page on sector balances!!
🙂
Many thanks for the notes. One or two points:
1. Chart 5: you say “£450bn has been approved since March 2020″. As I read the chart, that is the sum approved since August 2016.
2. Chart 8:” how household savings have skyrocketed during the last year”. A finer ordinate scale might be helpful: as it is, it looks as if h/h savings may have started climbing in the run up to Covid. However certainly they then rocketed – but have since slumped again. Does that mean that they have been run down and there is no piggy bank to start re-spending with anyway ? Your point about the post ’08 behaviour is a separate and fair one – thank you for pointing that pattern out.
3. I had a little difficulty with Table 1, as your averages generally work out as using 7.7 years. A comparison with summary data shows broadly comparable figures however. (https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/totalwealthwealthingreatbritain )
Your arguments from the figures however make perfect sense: indeed you would probably not argue that they are original, but rather obvious, to anyone considering the figures for wealth distribution in any developed country.
Many of your later points are well taken, for instance the proportion of companies with low-cost loans justifying similar treatment of individuals.
And thank you for the points you recommene on taxes and inequality – your constant readers will already be aware of many of these, but useful to have them put together.
I would just note that I think you are correct about the attractiveness of a 1% savings rate at present – in France the purblind government is tearing its hair out about the money going into in bank savings accounts (Livret A) which has an even lower rate: but people are frightened of the future and want to build up some sort of a buffer.
Forget Point 2 – just taken in that of course these later figures are projections. Silly me.
Sky news online – says
“The difficulty for the chancellor ahead of the budget, is that at some point – with debt standing at £2trn – all this needs to be paid for.“
Setting us up for a financial kicking.
Maybe UK could have made better choices to keep this ‘debt’ down?
https://news.sky.com/story/covid-19-high-streets-look-to-rishi-sunak-for-post-pandemic-help-in-budget-to-save-them-from-collapse-12231244
Not a penny needs to be repaid….