As The Guardian notes this morning:
Rachel Reeves is braced for revised forecasts by the Office for Budget Responsibility (OBR) to blow a £20bn hole in her tax and spending plans before the autumn budget.
Even without changing the totals the chancellor set out in her spending review on Wednesday, a weaker forecast from the the Treasury's independent watchdog could force her to find significantly more money at the budget to meet her “non-negotiable” fiscal rules.
They add:
Reeves has said repeatedly that flexing her fiscal rules – designed to provide certainty over UK public finances – is not an option even if the economic outlook deteriorates.
At her spring statement, she left herself on course to meet those rules with less than £10bn of headroom to spare, on a total budget for day-to-day spending of more than £1.3tn.
What is so bizarre about this story is that everything about it is artificial.
There are no fiscal rules. They are just made up. Rachel Reeves does not need to comply with them, any more than she needed to create them.
And, the budgets that the Office for Budget Responsibility will submit to Reeves are just as artificial. They are, at best, a complete stab in the dark. No one knows what will actually happen. The OBR is possessed of little more insight on this issue than anyone else.
What is more, Rachael Reeves does not need to borrow if her books supposedly do not balance. She could just leave a deficit outstanding on the account that exists, all the time, between the government and the Bank of England. There is absolutely nothing that would stop her from doing so. She would not, as a consequence, create any form of fiscal crisis as a consequence of not meeting her wholly artificial rules.
Despite these facts, this story is presented as if it is real, when nothing could be further from the truth. The implication is that Rachael has a crisis to face when there is none.
If the Guardian was really interested in writing about what is actually happening in our economy, it could discuss the crises in private debt markets, which undoubtedly exist the present, and which may get worse if the Bank of England decides to keep interest rates too high, yet again, as a consequence of what is happen between Israel and Iran.
It could discuss the problem of child poverty.
Or of housing, and the lack of it for so many people in the UK.
It could discuss the failure of the government to meet needs.
It could discuss the deliberately manufactured health crisis that is threatening to overwhelm the NHS.
It could discuss why economics education is so bad that we think that things that aren't real are significant, when things that are decidedly real are not.
The Guardian could do these things, but it doesn't. And that makes it part of the problem.
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Regardless of overall living standards there will always be “child poverty” as it is no more than a statistical measurement away from a mean. So even if the entire population were given free holidays to the carribbean eat year, you would still cite “child poverty”. Why not look at the absolute improvements to everybody’s living standards over the years instead?
Very politely, this is complete and utter drivel, and you know it, and if you do not, you should.
We are not talking about relative issues here.
We are talking about families who go without food.
We’re talking about children who live in damp rooms.
We are talking about families who suffer absolute deprivation.
This is the reality in this country.
How dare you pretend otherwise?
What gives you the right to deny the truth?
“Why not look at the absolute improvements to everybody’s living standards over the years instead?”
Because living standards are falling across the UK, just like longevity.
Wages have stagnated for decades in the UK, although wealth creation certainly hasn’t. Just where has all the money gone in that case? It certainly hasn’t been to the workers, has it?
What will your next piece of trollery be?
You will need to come up with something better than the “absolute/relative poverty” diversionary trope to get a hearing here.
If you want the stats just say so, we have them ready.
Start here:
https://www.bbc.com/news/uk-68625344
and note how direct government investment, the spending of created money in greater quantities, during and after Covid, had a direct, (but temporary) effect in reducing ABSOLUTE poverty. But then we went back to austerity, and ABSOLUTE poverty rose again.
I spent 5 years running a food bank. I know plenty about absolute poverty, and my Tory MP used the relative poverty argument to ignore my hard data about my year on year growing number of clients including a growing proportion of people in employment.
Next?
Thanks
Would you tell a real child doesn’t turn up to school on PE day, because the family can’t afford PE shoes and school regulation walking shoes, that they are ‘no more than a statistical measurement away from a mean’?
When I was young and (more) naive, I used to think that The Guardian was a bastion of progressive enlightenment. Indeed, it seemed to be in the forefront of resistance to Thatcher’s Britain. Maybe that was true, or maybe I just looked at the evidence that supported my belief and ignored the rest. The scales really fell from my eyes in 2016 when The Guardian fully participated in, some might say lead, the character assassination of Corbyn on trumped up charges of antisemitism. There they clearly revealed themselves to be a fully signed-up component of the establishment that was terrified of the actually quite mild social democratic changes proposed by Corbyn’s Labour Party. Despite the liberal facade and all the crocodile tears about various social and economic problems, and one gets the strong impression that overall The Guardian actually represents forces that are more than comfortable with the status quo. Permitting an occasional platform for dissenting voices such as Owen Jones or George Monbiot is certainly admirable, but when the chips are down who does the editorial team really side with? Are they really as progressive as they might fancy themselves to be or just another slightly different flavour the establishment? The constant flow of unchallenged neoliberal economic BS such as that highlighted in this post strongly suggest the latter.
Once upon a time, the G’ had journalists worthy of the name – Hugo Young for one. There are still a couple of Ok journos – Harris, Owen Jones, Monbiot, plus one or two others. But ref the economics, the G’ is simple a LINO mouthpiece. There is no questioning – indeed, the stuff published looks more like re-worked LINO press releases. In short, trash.
How did we ever manage without “fiscal rules” before 1997, when the New Labour team decided that it would be politically expedient to create some self-imposed restrictions on action?
Every government since then has found it convenient to hoodwink the public that there are some revealed and unimpeachable economic laws of nature, despite every previous “fiscal rule” being either broken or amended or abandoned, rather than taking responsibility for their political choices.
Much to agree with.
Andrew says: How did we ever manage without “fiscal rules” before 1997,
It was sort of required by the EU, not explicitly stated though.
Paragraph 5 of Treaty Protocol No 15 required that “UK shall endeavour to avoid an excessive government deficit”.
Having a fiscal rule meant the UK government could say “We are complying with that and we’ve got a fiscal rule to prove it.”
That is diplomatic language for soemthing everyine knows will be ignored.
The Uk didn’t have a great track record for knowing what it could and couldn’t ignore with regard to Eu rules.
In this case the Commission and Council could still approach the UK with EDP recommendations if it considered UK deficits to be excessive but, unlike with Eurozone members, could not launch any sanctions against the UK if they did not comply with the recommendations.
Such a situation could still be politically embarrassing, though, if opposition parties made an issue out of it.
Being able to say, it’s Ok we’re following a fiscal rule could be used to counter such criticisms from the EU and others.
That doesn’t necessarily mean Gordon Brown didn’t also operate such rules because he thought they were a good thing though.
“Paragraph 5 of Treaty Protocol No 15”? What treaty and what year, Robert B? Before or after 1997?
Top marks if you can relate it back to the Maastricht treaty (agreed in 1992 and effective in 1993), explain why it said “shall endeavour to avoid” rather than the more stringent “shall avoid”, and explain why the Excessive Deficit Procedure never really had much if any impact on the UK anyway. Or indeed on any other EU member state, as demonstrated by the large number of EU member states in breach of their treaty obligations and failing to take action to address the failure.
https://www.consilium.europa.eu/en/policies/excessive-deficit-procedure/
These rules are more like guidelines. Especially as the club seems more concerned about keeping the members of the club in it, than ensuring that they all follow the club rules.
I agree, guidelinbes at most.
Several years ago I met one of the Guardian lead writers during a lunch in advance of a presentation by Steven Hale in Oxford. He certainly did understand the modern monetary system, yet the Guardian continues to come up with fiscal nonsense. I also read a novel by Robert Peston in which he relates the story of a newspaper financial journalist and how he is leaned upon by his editor and prevented from publishing the findings of his investigation into a minister. That’s how it works.
This is a specific case of a general problem, as Jim and Mike Parr suggest.
At the core, the establishment does not want new ideas that threaten its absolute control.
Surrounding the establishment, the punditry mimics its messages, and will not risk losing access by propagating unapproved ideas. It has become a barrier to change. The Guardian has joined the club slowly over at least a decade.
The punditry, in turn, is surrounded by a ring of thoughtful people, whose ideas and viewpoints go largely ignored.
The layer of those who are easily led sits on the outside.
There is little hope for Britain unless ideas can flow upwards, from the thoughtful ring. But they are unwanted, and ignored by the punditry. Three or four really independent thinkers do occasionally get an article in the G, like Richard occasionally gest national media coverage, but that is all. Most of the other media do not want originality.
These forces will lead to the UK breaking up, over a timescale of a quarter of a century or more. Eventually England will be left in splendid isolation, with its antique constitution, class system, colonial instincts — but no colonies, not even in the British Isles.
Radical change is needed, but is blocked at every turn.
“Eventually England will be left in splendid isolation, with its antique constitution, class system, colonial instincts” and not many real resources if what I read some years ago is correct. That is apart from a so-called post industrial service economy.
I am seriously thinking of turning the Guardian off for good. But I get my on back by not paying a penny for their ‘content.
They interviewed the completely useless Paul Johnson of the IFS (now going to Oxford – Jesus!!) talking about George Osbourne’s ‘courage’ and how the British public cannot grasp the trade offs in public expenditure whilst a certain part of the public – the very rich – do indeed live without trade offs (or just problems with which yacht to buy) and have their cake and eat it. They never questioned a word he said, and he is portrayed as some one who did his best to explain the complexities of fiscal policy to the public when in fact he never got anywhere near the truth of the matter.
Mr Johnson is a liar and charlatan who is going to be richly rewarded because that is how this society works – it rewards people who sustain the status quo.
End of.
I long ago gave up my subscription to the Guardian and transferred it to The National, which does a decent job of trying to tell the truth about the decaying UK, the blood-soaked impunity of Israel in Gaza, the increasingly abusive and paranoid relationship between England and its UK possessions and so on, despite its very limited resources.
Stuff the arse-licking, Unionist Guardian wouldn’t touch with a bargepole, in other words.
Now over to the Adrian Chiles, the editor’s husband, for 1,000 words about his amusing trip to buy some socks for his summer holiday wardrobe!
You and me too Bill.
The Guardian is a dreadful paper these days and its Scottish news is out of date and under researched.
Hopeless.
The National, though not perfect, is the only subscription I’m prepared to pay. And it’s the only paper telling the truth about Israel / Palestine and LINO’s part in it all.
Belatedly (because there have been frequent references to her on this site in the past) exploring links to Christine Desan I found the website https://justmoney.org/ which she edited at one time.
I found this paper from 2022 which, for me, explains a great deal about media commentary on economics.
‘The power of folk ideas in economic policy and the central bank–commercial bank analogy’
The author contends that, not only commentators, but also financial institutions, are unduly influenced in their presentations and actions by the the general public’s perception and ‘understanding’ of ‘economics’ and the perceived need to accommodate them , despite the strong probability that these perceptions are misinformed. The Guardian is little different in this respect from other media.
“This article argues that policy-makers’ non-expert or ‘folk’ ideas can affect policy outcomes in a way that challenges the assumption of economic policy-making being guided by expert ideas emanating from the realm of economics and other sciences. To substantiate this argument, the article invokes literatures on audience costs as well as on economic folk theories to highlight the power of analogies and fallacies in the formulation of policy.”
https://www.tandfonline.com/doi/full/10.1080/13563467.2022.2109610
The 2022 ‘Review of the impartiality of BBC coverage of taxation, public spending, government borrowing and debt’ (Michael Blastland and Andrew Dilnot) seems to go a long way to understanding how these ‘folk views’ can be formed (or reinforced)
https://www.bbc.co.uk/aboutthebbc/documents/thematic-review-taxation-public-spending-govt-borrowing-debt.pdf
The frustrating question is; how can these ‘folk ideas’ ever be modified when the institutions most likely to influence them, especially the media, persist in accommodating them?
P.S I can’t find it now, but this morning have actually read a suggestion that the UK may soon have to apply to the IMF for funds! Excuse me, but WTF?
Thanks
I long ago gave up any hope of quality reporting from their business/economics/political coverage.
They do seem to have nailed their colours to Starmer’s mast – which is akin to supporting the tories.
Might the main stream media, not least the B. B. C., be the “fifth column” of the deep state who, behind a crummy/crumbling facade of democracy, run the country?
Might the “fiscal rules”, like currently dominating form/fashion of economics, be an overuse of numbers and calculations to objectify the citizenry and their children which better hides treating them dishonestly, with unkindness and, increasingly, with cruelty?
disappointed by how many commentators on this blog only want to read things they agree with.
The question is why do these intelligent folk hold different opinions.
But there is an opportunity to get new economic thinking into the mainstream: I believe Reform are looking for an economic policy and if we could get Farage to adopt just some of it then, all of a sudden, it would be headline news in the Guardian, BBC and indeed everywhere.
This might come as some surprise to you, but I do not cooperate with fascists.
I don’t know how you got on here Douglas but just a few points if you will?
Firstly, it seems that all you want to do is debate whilst there is already sufficient evidence around even you that something is seriously wrong with the country. The growth in prices, de growth in real wages, effects of BREXIT and the continuity of Tory policy are all sufficient evidence that we are beyond ‘debate’ and in accident and emergency as far as analysis is concerned. And there is not debate about how this has come about really.
Secondly, I am deeply concerned about your thinking about Reform being capable of bringing in new economic thinking when they are just another bunch of well-heeled blokes having a dalliance in British politics at everyone else’s expense. They are a single issue party who are so shallow you can see easily to the bottom, who rely on low taxation to be able to fund such a party in the first place. There is nothing there Douglas. There will be no epiphany Dougie if Farage gets in I promise you.
And as for wanting to read things that we agree with, well what is wrong with that? With such a lack of analysis in our media, we have the right to go someplace and find it here.
As for you, I think you faith in Farage is misplaced. I believe that you and many like you are just being cynically exploited.
Sorry, but there you go.
I read douglas as complteely tongue in cheek. Am I naive?
No…but sometimes these time wasters promote ideas and good responses – so I turn them on themselves via you out there.
Last Thursday I was in Sainsbury’s when I noticed a copy of Byline Times on the shelf. The cover was a photo of Farage with the title Falling for Farage.
I decided to buy it in the end despite the cover and put it in my trolley under other shopping so I couldn’t see his face. A woman saw what I was doing and suggested I tore the cover off and left it on the shelf. The problem with that was the bar code.
The article is by Adam Bienkov and is about how the media are falling over each other to praise Farage.
In the photo, sitting at a table and clapping Farage, is Wes Streeting.
Today I noticed this.
https://jujuliagrace.substack.com/p/is-starmer-remortgaging-the-nhs-for
I didn’t think I could get more depressed about this country until I read that. It doesn’t matter how many groups I belong to to try and save the NHS, it just seems impossible.
We will win in the end, though….
@JenW. Never give up Jen. It might seem hopeless but we owe it to my father’s generation never to be beaten by fascists, whether they are German, American, Russian. Nationality matters not one bit, just their horrific political views. We will win, we will find a way. The NHS and all the good policies that came out of the post war settlement must be fought for.
I was fortunate to be taught by Prof Ralph Miliband at Leeds University. How, having a father as wonderful as that can lead you to be part of a right wing government and to push policies that will enrich the nuclear industry and impoverish all but the one percenters is beyond me. People like Ed Miliband have to be opposed along with the rest of his cabinet colleagues.
Thanks
You don’t seem to have been keeping up with Reform’s recent policy hop scotch. The Reform UK Ltd company boss is far ahead of you, but not in a way that inspires confidence.
So far he’s dabbled with MMT on money creation and come up with a Bill on quantitative easing (but he forgot to sponsor it as he was attending to his many extra-territorial duties at the time in a foreign country), and he has his own economically incoherent ideas about nationalisation of some key industries.
https://hansard.parliament.uk/commons/2025-01-08/debates/8B7172B2-ADDA-4448-B830-D96FAF3FAD5E/QuantitativeEasing(Prohibition)
&
https://duckduckgo.com/?q=farage+%2B+Nationalisation&t=fpas&ia=web
But as to how he would actually implement any of his ideas the member for Mar-a-Lago South, hasn’t any more grasp of that, than he has of electoral law, or how Reform are going to run Kent County Council. He can’t even keep 5 MPs in line in the commons, or hold on to his party/company chair. He and his party are a rolling omnishambles of the first water, just like his hero Trump. But I fear he may yet be PM by 2029 unless Labour MPs pull the plug on Starmer/Reeves/McSweeney. I fear him.
You lost me at Reform.
Guardian are very much part of the ConLab pact, and so very much part of the problem.
It’s there to hoodwink the middle classes into believing the they are above they are more informed and a cut above the riff-raff British rag.
When it’s just another neoliberal mind control.
The British media is perfect for the era we have now entered – the age of the bulldozer.
Not only do they not ask questions – or are allowed too – as was reported in a thread here last week – the gatekeepers say any challenge to change narratives is ‘too confusing’ for the public to grasp. Hmmm…
Someone said to me once the secret of life is… There is no secret. But we have institutions and elites who spend a lifetime creating clubs that you are never allowed to understand. But actually, there is nothing to understand only thier greedy sense of self-entitlement. The prestige for their honours.
The age of the bulldozer because of Rachel Thieves and her fiscal rules cobblers. How Liz Kendall is trying bulldoze her way through the abhorrent disability bill. Despite deseperate calls from charities, disability groups – they turn the other way with trumped up excuses, all misdirection and no one says a thing.
Are these people purely motivated by hatred? Neither can be questioned as they press on regardless. They get away with this and were will it end?
Has anyone ever read ‘The Phaantom Public’ by Walter Lippmann?
Really, its about time that pressure was put on the press by learned institutions and financial voices that the idiocy of Thatcher economics has to be discredited for the survival of the country
The Guardian certainly mainly toes the neoliberal line and uses its language without hesitation while permitting some articles from contributors, some of whom have been mentioned above, which challenge that. Occasionally, and it is very occasionally, it even goes off piste with editorials though, as with this one from 2020
“This is ideological. Mr Sunak will not invest on the scale that Britain desperately needs because it will risk his self-imposed borrowing limits. The Conservative manifesto in 2019 said that while the Treasury could borrow to invest, this could not exceed 3% of GDP on average. Mr Sunak’s splurge will come in under this rule. Given its historic levels of underinvestment, it is astonishing that the UK will invest less than the international average of 3.5%. Investment is crucial in any economic recovery from coronavirus and for dealing with the climate emergency.
State spending can play a central role by providing demand where the private sector cannot. It will create jobs in uncertain times. A recent report for the Institute for Public Policy Research reckoned that Mr Sunak is only providing a quarter of the boost it needs to stabilise the economy.”
The Guardian view on a national infrastructure bank, Editorial Nov 2020
https://www.theguardian.com/commentisfree/2020/nov/30/the-guardian-view-on-a-national-infrastructure-bank-proving-keynes-right-again#comments
I’ve been a Guardian reader since about 17. My history teacher thought then that the Guardian wasn’t much when compared with the old Manchester Guardian. It’s progressive views then more class based.
Fast forward 52 years and the Guardian in my view has got worse in terms of quality journalism and its politics of cultural identity that nicely mimics the Daily Telegraph provides cover for broadly supporting the economic and social orthodoxy that is so damaging to the people of the UK.
I just read the odd article now.
Such a shame.
Like you Eric I have been a long time reader of The Guardian and to be honest I’m just about done with it. Too much lifestyle crap for starters, along with your point about unquestioning acceptance of orthodoxy. And yet a couple of good journos, Nesrine Malik comes to mind, and not as awful as the BBC which I abandoned in 2016. Not sure my disaffections are about getting long in the tooth or just that I live in a country where I no longer share the dominant values. Been a reader of The Byline Times since it launched.