Summary
Labour is claiming that cutting the winter fuel allowance and keeping children in poverty has prevented UK economic collapse. That is untrue. No cuts are necessary as many atermative sources of funding are available to the government. Reeves is prioritising financial markets over public welfare. Her decisions are harming vulnerable populations.
I posted this thread on Twitter this morning:
Would the UK economy really have collapsed as Labour is saying if it had not cut the winter fuel allowance for most pensioners within days of coming into office, whilst announcing more ‘pain' to come? Of course, it wouldn't have done. A thread…..
Lucy Powell MP, Leader of the House of Commons, made the absurd claim that cutting winter fuel allowance saved the economy from collapse when taking on television on Sunday morning.
I suspect that she would have said the same of keeping the two-child benefit cap in place. Together these policies saved maybe £4 billion. They reduced the well-being of more than 10 million low income people, many living in poverty.
“it was made clear to me that unless I acted urgently, market confidence in the UK's fiscal position could be seriously undermined. That would have meant higher debt, higher mortgages and higher prices in the shops. I was not prepared to let that happen.”
This claim is linked to her suggestion that officials told her of a £22bn hole in Jeremy Hunt's budget hours after Labour won the election.
Candidly, I don't believe her. She had been seeing those officials for months already, as is normal for the Opposition before an election.
More than that, though, everyone knew Jeremy Hunt's budget was a fantasy that did not in any way add up back in March. Everyone said so. If Reeves did not know, she was negligent.
But let's suppose she was right (if she can play make-believe, why can't we?). What if this £22 billion ‘black hole' appeared from nowhere? It could have easily been filled without ever requiring that fuel poverty be imposed on millions or that children be kept in poverty.
First, it could have been filled by the Bank of England simply offering the Treasury an increased overdraft facility. It did that in March 2020. It could have done it again now.
Or, the Bank of England and Treasury could have agreed to do £22 billion of new quantitative easing. No one would have cared if they had done so.
To make that easier they could have cancelled the quantitative tightening programme, which wholly unnecessarily sold £33bn of gilts between April and June this year without a penny going to the government to fund spending.
Alternatively, a new bond of £22bn could simply have been issued. That would have been easy to do. The City would have bought it, without the bat of an eyelid, most especially if the quantitative tightening programme had been cancelled.
The next option for finding £22 billion would be to simply have the Bank of England cut its base rate by at least 2%. The economy desperately needs this. There is no way it can grow with rates anywhere near where they are. This would save more than £22 billion a year.
Finally, a wide range of tax increases on the wealth alone are available. Capital gains tax rates could be increased. Useless inheritance tax reliefs could go. Pension tax relief could be cut. VAT could be charged on financial services. See https://taxingwealth.uk/ for more.
My point is that cuts were wholly unnecessary, in my opinion.
Would the financial markets have agreed with me? I think so. They don't like quantitative tightening and would love to see it gone.
They would like rate cuts: they have no desire for the stress they have caused.
They could also easily find £22 billion for a new bond, with ease. They'd rather do that than see more quantitative tightening.
And they want the growth that Reeves is deliberately destroying with her cuts.
And everyone now thinks tax increases are inevitable now.
In other words, was there really likely to have been an adverse reaction to an honest suggestion from the government that it needed more funding that would have in any way spooked the markets? No, of course, there was not.
Nor was there anything to push interest rates up in any of this - most especially if quantitative tightening had been abandoned - which would have helped them fall.
And would exchange rates have collapsed when it is obvious that the trend in interest rates is downward worldwide? No, of course not, not for the tiny sums involved in real-world terms. That claim by Reeves - which is how she generates a bogus claim of inflation risk - is absurd.
Let's get real here: why would markets have wanted to create such an issue over such a small sum? There is no logical reason for them to have done so.
There would be absolutely no gain for them from doing that. In particular, pushing up UK interest rates as Reeves suggests likely (beyond the levels the Bank of England has already inflated them to) reduces the value of City bond holdings, and I can't see anyone wanting that.
And exchange rates are ultimately not influenced for long by short-term interest rate changes. They change because of altered trading conditions e.g. Brexit, and changes in productivity. I am not saying rates have no influence, but let's not overstate it.
So, the two real questions to ask are, firstly, who told Reeves she would crash the markets unless she cut the winter fuel allowance and left children in poverty, and, secondly, why was she daft enough to believe them?
If it was her advisers who told her the economy was in peril when it so obviously was not, she should sack them.
If it was the Treasury she should have ignored them. Their forecasting record is dire, as the last fourteen years where they have got just about everything wrong shows.
And if it was ‘someone in the City', why didn't she think that they might be wanting to make a little profit at having the inside information on what she was going to do - as was their likely motive?
And why did she believe them and not make up her own mind, as she makes clear she did not do? Is that because she is not capable of doing so? Is any other conclusion possible?
In that case, we have to, firstly, conclude that pensioners and children in poverty are paying the price for Rachel Reeves' incompetence and that, worryingly, many more will do so before her time in office is over.
But there is a second, and as worrying conclusion. That is that Reeves does not think she governs on behalf of the people off this country. She thinks that she governs for the benefit of the financial markets. It is they, she thinks, who rule the roost and they that she must obey.
But this is very obviously untrue. The 2008 crash and Covid proved otherwise. It's not the City that funds the government. Nor is the government dependent on City money. It is the government that creates the money that the City uses.
What is more, the government does not need the City to save money with it (because that's what they do: they don't fund government spending, ever). As quantitative easing proved quite emphatically, the government can fund itself.
What the unpopularity of quantitative tightening has also proved is that the City can very happily live with the government funding itself.
In other words, Reeves is also presenting a falsehood to say that the City and its whims constrain what she can do. That is utterly untrue.
So, what is the truth? It can only be that for her own, very warped reasons that seem to represent a bizarre test of supposed strength, Reeves wants to harm children living in poverty and pensioners. The City just provides an excuse. But in that case, is she fit for office?
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When politicians talk about ‘difficult’ decisions, I am reminded of this 1920s Labour poster-‘Equality of Sacrifice’.
https://www.reddit.com/r/ukpolitics/comments/5j0ln5/equality_of_sacrifice_labour_poster_1929/#lightbox
Appropriate
Richard
Of course I don’t resent it. We should all have a fair deal. I was replying to the comment on ‘Equality of Sacrifice’.
While MP’s seem to have made no “sacrifice’, they have told junior doctors (who asked for 35% to make up for lost earnings for the last 14years), that their claim was unaffordable. But of course their (MP’s) increase of 39%, was affordable.
Pensioners are told their pension is to be reduced by axing the winter fuel payment, as it is unaffordable, (according to Lucy Powell).
I could go on.
My point is that there does not seem to be much ‘Equality of Sacrifice’ on the part of MP’s
But it seemed you were saying rhey got an unfair deal – hence my reaction
Framing matters, is my point
I now get what you meant
In the last 14years, MPs have voted themselves an increase in their salaries of £25,608, taking them from £65,738 to £91,346, an increase of nearly 39% (House of Commons website). About the rate of inflation in that 14years.
The latest news is that they can now make unlimited claims for expenses to heat their second homes.
Not much ‘Equality of Sacrifice’ from MPs then.
Why do you resent this?
Why not demand a fair deal for everyone?
“Scamming” is all that Scammer & Co are fit for. Sadly many of the British electorate are deficient in understanding how things work particularly the electoral, monetary, and global economic system which has allowed the so-called Labour Party to gain office.
In answer to your last question, “Quite obviously not.’
Phil Burton-Cartledge has a very succinct contrast between Labour’s approach to statecraft and the Tories approach to statecraft in his latest blog post here:
https://averypublicsociologist.blogspot.com/2024/09/a-note-on-authoritarian-modernisation.html
Phil’s analysis explains well the Starmer/Reeves ‘there is no money’ shtick coming from Labour.
Thanks
Interesting
The economy could have crashed had the government not found savings by cutting winter fuel payments for pensioners, a minister has said.
When I read this I just wondered what planet this Lucy Powell lived on maybe this is Labours way of saving more money by having pensioners freeze over the winter.
Thank you Richard a very good report.
Now that it is very clear of the direction of travel and the intentions of this current Government and that what they are doing is causing, and going to cause, great harm and death I would like to know where “the left” is. Why are those who are able to organise demonstrations not doing so, we could have had a summer of protest as soon as it was clear what was happening. The longer Labour are able to get away with these excuses and lies, the more entrenched they will become and the harder it will be to turn them around or even to force them to adjust their course even a little bit. His honeymoon should have been weeks, now its dragging on far longer than it should have.
If we don’t it’ll be five more years of this and then goodness knows what the next election will look like when everyone intensely dislikes both parties. Fertile ground for the right, no doubt.
As a pensioner I regard Reeves unfit to clean a public lavatory let alone to serve in public office. I suspect I am not alone in this view.
That’s if she can find a public loo still open and needing to be cleaned. Just another public service destroyed by neoliberalism.
You’re definitely not alone in your view.
It’s difficult not to conclude that some politicians are drunk on power and don’t give a stuff about the most vulnerable in our society. They care only for money and the people who have got a lot of it – especially billionaires. Millionaires are probably beneath them these days!
Their long suffering people count for nothing. They listen only to the money markets and the MSM billionaires once in power.
There’s something far wrong with people who do not care that very young children are suffering from lack of food and adequate heating in the winter nor that winter deaths will increase amongst the elderly. They are heartless and, in my view, evil. They should not be in government.
Oh, come on! You’re too polite, Steve!
Let’s revive that old Glasgow University Beer Bar song, using the tune of Landlord Fill the Flowing Bowl, that says (among other things):
“She’s not fit to shovel shit,
“She’s not fit to shovel shit,
“She’s not fit to shovel shit,
“The . . . “
If Reeves was a real political leader arriving in Office to put the people ahead of all else – she should have called together all her civil servants into the room and asked which of them believed that statement and advice to the incoming government.
All who put their hands up should have been told to leave the room and go clear their desks and leave the building within the hour to await a reposting – paid of course – because she could afford to do that! and replace them with those who didn’t believe the bs.
But of course that’s a fantasy of Mr Smith Going to Washington variety.
The only option we had at that was a Corbynite government.
But that wasn’t ‘allowed’ by the Deepstate apparatchiks.
How much more money has Herr Starmztrooper ‘found’ to spend already on in our warmaking ukraine misadventure inherited from Bozo and co and in supplying armaments and military support to the illegal Apartheid Entity that is bombing into genocide daily, dozens of new Palestinian Guernicas?
Seriously – if we don’t see the whole plot , we keep our blinkers on as the media gaslights us into domestic Narratives of not changing ANYTHING that was done by previous governments.
The boots filling Tories and before them the LibDem/Tories, the Blairite NuLabIncorporated war mongers, all the way back to the media/PR/Advertising created Thatcherism.
They with our acquiescence, turned this country into what it is now – as we carry on being hooked on Narratives THEY create – we DESERVE to be shafted daily more. Our kids and grandkids shouldn’t blame the government. The blame is US grownups, for swallowing hook lie and sinker the whole austerity never ending story, as billions – hundreds of billions go to the Miltary industrialists, the big Pharma, the Builders of unsustainable housing , the Media moguls and the international hedge funds and tech billionaires that run the Collective Wastes Golden Billion Dream Garden future.
There will only be one form of possible effective protest in the short term, in parliament. That is if enough Labour MP’s who aren’t part of the cabal refuse to endorse the party line and protest by not voting for it.
By creating the only real Opposition in Parliament , destroying the majority, forcing the uniparty to show its true self, by supporting the Labour policies rejected by Labour MP’s.
They who will lose the Whip and be forced to become Independent Labour.
I doubt there are any front benchers or cabinet members that have been allowed in that would disagree with the ‘agenda’ – having perfected chickencoup skills against JC since 2016, failing every time, they know what awaits them.
A civil war in parliament and massive grassroots protests in the streets , marches, invasion of London and Parliament… is the only way forward now.
Unfortunately the subdued by the religion of football and Narrative propagandising mass media, the blinkered Masses will happily suffer more, including sending their kids and grandkids to fight and die for fascist wars – only when they return in bodybags will they finally wake up.
Another Labour government heading for a “Winter of discontent”?
Will we ever be told who told Reeves she would crash the markets unless she cut the winter fuel allowance and left children in poverty?
Funnily enough the Bank of Japan has been under pressure from the big Japanese commercial banks to shift to higher interest rates, and other neoliberal policy.
The BoJ simply called them out, as it, as currency issuer it has the real and final power, not Sumitomo Mitsui Banking Corporation, or the Mizuho Bank etc.,
In the UK the BoE are in cahoots with the commercial banks, and have always tried to put the frighteners on a Labour government.
It worked in 1976/7 and that memory is still there.
Reportedly John McDonnell was also ‘feart’ of the power of the City, and the
Wormtongues in the BoE reinforced that message.
However, Reeves is a BoE insider so pretty much beyond redemption.
John was
I have to say this has surprised me and no one appears to have remarked upon the fact that the Bank of England should even have been researching the question of exactly how the system over which it presides actually works in practice.
I have been saying for several years now that a far greater, and indeed existential myth remains undispelled which such a review of sovereign finance would in my view also dispel.
This relates to the precise nature of the ‘modern money’ created by banks.
The new conventional wisdom is beginning to be that banks create credit/modern money when they make loans, and with few exceptions economists who even get as far as thinking that (and there are not many) believe that this modern money is destroyed or cancelled when loans are repaid. There is also a conflation of undated call deposits (current accounts and reserves) and dated term deposits(loans by depositors to banks) as ‘liabilities’ of banks.
In my analysis, modern money created by Central Banks is created as an agent of the Treasury and not an accounting counterparty. What the Central Bank is doing is creating Treasury credits each returnable in payment of £1.00 in tax and then holding them on behalf of the recipient bank into whose account these credit instruments have been deposited.
In accounting terms, the Central Bank is maintaining a memorandum account (not an account payable), exactly as though it were a warehouse or custodian holding valuables on deposit.
These account entries in what is essentially a title registry for modern money can only ever be positive, and loans occur when an agreement is made to sell and repurchase these credit instruments, which thereby gives rise to loans, and to accounts receivable and payable of these ‘look-alike’ treasury credits.
The Central Bank creates and where necessary cancels these Treasury credits on behalf of the Treasury. Note here that it is completely open to the Treasury to create credits directly itself. During the first world war the Treasury created ‘Bradbury’ Treasury notes as money: likewise there is still a rump of US Treasury ‘Greenback’ Notes circulating in the US in addition to Federal Reserve Notes.
So far, so good. But the £640 billion question is the nature of private bank credit.
In my analysis, this private bank credit/modern money ALSO consists of ersatz Treasury credits manufactured by private banks as fiscal agents of the Treasury. This virtual modern money is indistinguishable from Central Bank money and can only be destroyed/cancelled by the Central Bank. It is NOT destroyed when loans are repaid, as is easily demonstrable by a simple thought experiment.
In other words, the undated credit created by private banks is not a loan – it is the OBJECT of a loan, or the credit instrument which is held on deposit and lent like any other security.
So what? The answer is that the so-called National Debt is not and never has been debt. It is a form of National Equity, with Bank of England’s reserves of £375bn equating to a form of equity in UK Incorporated paying a dividend of 0.5% pa, and Treasury gilt edged stock equating to redeemable preference shares.
Far from being equivalent to that of a household, the UK balance sheet is better seen as that of a ‘Profit for Purpose’ Company. This opens up an entirely different narrative in relation to investment in productive people and assets and to national dividends as basic income.
Sorry Chris – biut that makes no sense. You can’t pretend lo0ans and repayments are not what they are and that they do not have the consequnce that they do and still hope to be credible.
Your claims creat incredible and unrealistic double entry that cannot reflect what is happening – and fantasy is not the basis for explaining the economy when reality (the sort you are rejecting) can do so very well.
Thank you and well said, Richard and commentators.
One should read this post with today’s other one, regarding how miserable young people are, last week’s depressing news about suicide rates increasing and recent reports about stunted growth in British children and the return of diseases associated with poverty and slums.
Having worked on regulatory policy and come across the likes of Reeves in the past two decades, I think these sociopaths will relish these indicators. This is evidence that their policies are working (for their oligarch donors). Older readers may recall Badger Lamont saying, “If it’s not hurting, it’s not working.”
One sociopath was a banker, became a politician and rose to cabinet minister before returning to banking after two attempts at the Tory leadership. In 1994, as the Tequila Crisis engulfed Mexico, he, then a young banker at a US firm, advised the Mexican government to shoot anti-austerity protesters so as to give the markets confidence that the government meant business. This is not untypical. the British people have no idea how deranged its elite is.
Reeves has made comments about the poor, unemployed and disabled. She has always been like that, i.e. hell bent on making people miserable. Odd for the child of south London teachers. Son of the manse Gordon Brown and grocer’s daughter Thatcher were not dissimilar. Much of the Labour, Liberal and Tory uniparty is like that. What is it with these petit bourgeois? Not that upper class Cameron and Osborne were better.
I began working in the City when firms were smaller, not the too big to fail giants of today, giants that can blackmail governments or are allowed to. In those days, some firms still had founding family members around. These people were often paternalistic, comfortable in their skins, and saw no reason to make people’s lives a misery, unlike the modern elite and its proxies like Starmer, Reeves and Streeting.
These sociopaths don’t care about losing the next general election. Their oligarch owners will look after them. Look at Tony Blair and his family. What sort of democracy is this? Please focus on this comment and read what the outgoing Mexican president said on Sunday about “a people’s democracy, not a sham oligarch democracy.” He concluded with “to hell with oligarchy”. It’s no wonder St Barry Obama, beloved of centrist log rollers and oligarchs, and US and Mexican elites cheated him of victory before last round.
I really think that 2019 was the UK’s last chance to reverse course from what was described in a recent comment here as “a sickness… since 1979”, i.e. Milksnatcher’s election. After the 2017 scare from Corbyn, the elite had to ruthlessly put down any sign of revolt, including getting their man Starmer in.
I recently suggested that my parents and I are thinking of leaving. It’s not just me. Someone even more inside the system, ex US Fed and Bank of England, is contemplating similar, but to Asia, not native USA, emulating another US insider, career in NYC and London, who has moved to Thailand. People should wonder why we think like that.
The reason many of the elite seem deranged is perhaps because they are only neoliberal for the purpose of appearance (the neoliberal profession has the same authenticity as a seventeenth century oath of allegiance: none). They are not neoliberals, but mercantilists: you can only profit, if someone else loses. Big profits require big losers. Hey, it worked well for mercantilists, when slaves paid the biggest price. If parasitism didn’t work, there would be no parasites. Oh, look ……
Thanks for your contributions colonel they are always very enlightening .
I really think their mission is to destroy the Labour Party as we know it.
I came to this conclusion about 2 to 3 years ago and that is why I joined the Green Party.
Both my husband and I had been Labour Party members for a considerable time and we had been Labour Party elected councillors in Wolverhampton.
It is quite sad to see senior LP ministers acting in this way.
Lest we forget, here’s Reeves apparently a good few years ago (looking younger at any rate) stoutly declaring that when in power Labour would means test the WFA to save money https://x.com/i/status/1828754181211206095 making a complete nonsense of any idea they were recently forced into it by the presence of alarming fluctuations in local spacetime.
Means testing would be ridiculously costly for a benefit of that size – which she has linked it to another benefit which she knows is massively underclaimed.
Here’s Reeves having it pointed out to her, in the HOC, that she was planning to means test the WFA and mumble-swerving the issue entirely https://x.com/i/status/1830957071702831407
Really, Parliament’s a waste of time when that sort of thing’s allowed.
No money for old and young people but plenty of money to be handed out to the rich. And Rachel Reeves is supposed to have checked out the books!
https://www.theguardian.com/environment/article/2024/sep/02/england-landowners-given-9bn-in-environment-payments-despite-decline
https://www.theguardian.com/environment/article/2024/aug/31/water-companies-natural-england-sites-special-scientific-interest
Scammer & Co are gas-lighting you just like the previous Tory Party scum. No way has Rachel Reeves made a thorough examination of the books!
One word (maybe): Fascist political science?
The perpetual war against the ‘other’ for the (in this case) perpetual conformity to austerity.
Of all the things to copy from the Left – many good ideas about how to support people, fund the NHS etc., Laboured have chosen the ‘capitalist bogeyman’ trope instead to try convince people that – what? – we share the same enemy?
Or do they think that we share the same view of the power of the markets?
Is Reeves suggesting that Andrew Bailey and the MPC is bullying her?
As you point out, none of this make sense at all.
But I will say this Richard.
Rachel Reeves has the education to do this job in my view.
It’s just that she has decided instead to go unquestioningly along with the established doctrine as before and obviously her loyalty is to whoever her advisors and funders say it is owed to. She is going to be paid for saying and doing outrageous things.
It is simply an exclusive agreement between an exclusive group of people.
That my friends is increasingly modern politics in post-soviet Britain.
If it were not so serious, I would have thought that Lucy Powell was a new stand-up comedian. But it is serious and worrying. If Rachel Reeves believe this, then its probably time for her to stand down and hand over to someone who is competent. Is it that the governments is thinking that most people do not understand public finances or the economy and so this is a means of frightening them into accepting stupid policies?
Whatever it is, its obvious that we have a government which is out of its depth and lacks any understanding of policy issues. They are building up trouble for the future, people may turn to populists of the right in desperation. Its very serious.
[Have any journalists picked them up on this? Did Time Radio call her out and tell her she was talking absolute rubbish?]
Richard Murphy for Chancellor! If only ’twas possible.
It will never happen….
Probably not – but I’m working towards an administration lead/strongly influenced by Independent MPs which will be heavily guided by your thinking.
“…………..market confidence in the UK’s fiscal position could be seriously undermined. That would have meant higher debt, higher mortgages and higher prices in the shops. I was not prepared to let that happen.”
“Fiscal position” – relating to tax, public revenues, or public debt. BoE could always have printed. Why not fund the (implied) deficit by printing (or taxing along the lines suggested in the blog – times without end). Why would a wobbly gov fiscal position mean… higher mortgages (interest rate setting is in the gift of the gov – as discussed in the blog). Higher prices in the shops? why? Like Reeves, LINO drones are great at making assertions – but incapable of justifying them. The LINO gov has no legitimacy and as every day that passes, they show their true, city of London colours.
It’s the sheer stupidity – even within their own terms, ( which is apparently to make life a lttle better for those struggling , without threatening the wealth and power of those in charge) .
Just as Blair did -(despite his Iraq and PFI disasters) they could improve the NHS – and aleviate poverty – even within the desperately dysfunctional capitalism we have – but they darent engage with people who could show them how to do it.
So its going to end in tears – and quite quickly.
Many thanks to you Richard and other commentators. It makes for such depressing reading. I also despair reading the contributions made to publications such as The New Statesman and The New European who should know better than repeat the same economic nonsense as that emanating from Reeves and co. Richard, any chance of you getting a regular spot of writing in the NS and NE publications?
I have no love for the NS
Is the NE worth it?
I am finite and I suspect this blog and my YouTube have much broader reach
Thank you, both.
Both are oligarch owned.
“The Labour government must swiftly resolve this contradiction. It has inherited a massive road-building programme estimated to be worth up to £27bn, enough at least to fill a good proportion of the famous £22bn black hole”
https://www.theguardian.com/commentisfree/article/2024/sep/02/road-plan-britain-16-highway-schemes
I understand Labour has also mooted a cut to Railcard subsidies.
There is no need for Austerity.
Labour are not working for us.
Labour (or someone) HAS cut the Railcard discounts. From 34% to 33.4%. WHY? What is the point of making a £100 rail fare £66.60 instead of £66?
David Byrne says:
Sorry to ‘Labour’ my point, but:
Rachel Reeves, Oxford University, PPE degree,
Jeremy Hunt, Oxford University, PPE degree.
Who is bankrolling Oxford University, which body accredits the PPE degree, how are the applicants chosen?
The country deserves better.
One of the `deep, fascinating questions` proposed for discussion in the Oxford PPE prospectus is, `Why be moral?`. As if it were an option for normal behaviour. The graduates you mention seem not to have made their minds up yet. But psychiatrists agree that people without morality are in fact psychopathic, a trait seemingly common in our politicians.
Why is the road-building programme still in place when the railway reopening schemes were axed? It doesn’t make sense and would be popular – apart from motoring organisations few people want more roadbuilding.
I see Lucy Powell is still in office – why has she not been sacked for gross irresponsibility and telling a blatant lie?
In my opinion an extreme ambition for power and exceptionally enjoying the delight in an overwhelming willingness to have anyone powerless against inherent snobbery inspired dogma designs to pay any price chosen to achieve that power. One could also compare behaviour like that to the likes of recently departed short termed similar Tory types. It invariably never ends well for the perpetrator or their powerless victims.
During the great financial crisis of 2007-2009, which was caused by the criminal and reckless speculation of the too big to fail banks, the Labour government of the day lent £137 billion to the British banks and provided a trillion in guarantees to them. In 2021 the OBR stated that the current cost of these interventions was £33 billion comprising a £35.5 billion loss on the NatWest rescue. Then during the Covid pandemic the BOE lent £193 billion to the UK banking sector. Of which £100 billion is still outstanding!
The £22 billion ‘black hole’ pales in comparison to these figures. These bail outs show the decision to make massive spending cuts is a political not economic decision. Shame on the Labour government and those who provide political cover for its austerity plans. We need a new workers party.
Reading you assessment of RR can’t help thinking she is clearly out of her depth. She clearly has not considered the alternative options you set out and has chosen the worst one. Can only think she has accepted the Treasury’s advice and not considered other less harmful options.
It does not bode well for the future as the Treasury is renowned for getting all their forecasts wrong, which she should have been aware of.
Common sense never was going to be prevalent as far as this Government is concerned