I have no more idea as to the truth about the leaks from the Office for Budget Responsibility last week, the dispute over the so-called fiscal black hole that very obviously preceded it, and whether or not anyone, or who, or when has been stitched up as a result. As a result, I am not going to spend a lot of time commenting on any of these events or consequences. That would be pointless.
All I am going to say is that it seems there is something very rotten in the state of the Treasury, and it needs resolution.
This is, of course, an issue I addressed in my Alternative Budget, in which I suggested that the Treasury should be split into three different departments, firstly to break its oppressive power, and secondly to focus it on the need for proper management of the economy, and not balanced spreadsheets. If we were to do that, we might just get better government, a stronger economy, and a proper understanding of how the whole thing works.
You can get the download here.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
There are links to this blog's glossary in the above post that explain technical terms used in it. Follow them for more explanations.
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
Buy me a coffee!
Short answer?
Yes.
Read ‘The Capital Order: How Economists invented Austerity and Paved the Way to Fascism’ (2022) by Clara Mattei.
Her research into what ‘drove austerity’ here (pp. 19-20) is revealed clearly by her to be in the British Treasury in the inter war years. Names?
Ralph Hawtrey
Sir Basil Blackett
Sir Otto Niemeyer
Some of these were not even economists! And the head of the BoE, Montagu Norman was mates with some of them.
Try pages 164-169 for example or the whole of Chapter 6 ‘Austerity: A British Story’.
Mattei certainly wears some Marxist goggles in this book, but the research and the conclusions are sound in my view – for example that austerity in the UK – the Geddes Axe for example – was a ‘repressive project’ aimed at keeping the ‘natural order’ of society at the time.
I think that Geddes, Niemeyer, Blackett etc., all live on in the Treasury today because what Mattei suggests to me at least is that austerity may have been created there – there is a streak of authoritarianism present that can only come from the knowledge of extreme power that can turbo charge one’s partiality.
In short, the Treasury’s job is to preserve the monarchy and the coterie of rich around it so that citizens do not get too big for their boots, or making sure we cannot afford boots at all.
This is what the establishment in this country calls ‘strong and stable’.
Agreed
My guess is the OBR leak was cock-up rather than conspiracy, some junior staff member putting the document on the web site and hiding the link until asked to make it live – not realising that it would be quickly picked up by the crawler bots that continually trawl for google listings and AI. I was mildly impressed that the chairman resigned, presumably to stop a witchhunt scapegoating some poor individual.
However it is something that should never ever happen, and they will have learnt that in future it needs to be managed by someone more aware of the risks; posting it late would have been a much lesser problem.
More of an issue is the torrent of “leaks” of budget information in the weeks and months preceding the budget. They were not leaks in the sense of that accidental early OBR release, they will have been briefings made to members of the press who will have known perfectly well their source but under an agreement not to tell. The effect was quite destructive, they enabled the right wing press to tell scare stories (“Rachel Reeves plans to steal your pension”) and they could add their own fictitious elements knowing they couldn’t be called out since the actual briefing was unquotable. It created an enormous noisy distraction that prevented serious discussion in many places (this blog was an honorable exception) about what adjustments to taxation and spending would actually be a good idea at this time.
That is what ought to be investigated. It won’t be of course because governments of all hues have found it convenient to use anonymous briefings once they are in power, however much they complain about it in opposition. It is a PR tool, but also buys them favourable coverage from key journalists who know that their ability to write apparently insightful analysis would disappear if they lost the favour which gives them access to anonymous briefings.
The resignation was on orders / under immense pressure to prevent him giving evidemce on what Reeves knew before the Budget to the HoC.
I’m not sure if this is pertinent here, but the Observer ran a long article on Sunday looking at the ‘development’ of the budget. One section struck me quite forcibly. I quote, and I apologise for its length:
“Bell pushed the idea of an annual mansion tax, based on a percentage of the total value of a home. It would have meant people with a house worth £3m paying £30,000 a year. Jokes were made about which members of the budget board might be affected. Bell also backed an exit tax for those taking assets out of the country as a precursor to equalising capital gains tax with income tax.”
“These ideas were presented as “red meat” to Labour MPs but they were supported by Treasury civil servants too. “The trouble is, there’s an alliance between Treasury officials and ideologues on the left,” one Whitehall source said.”
“They added: “A lot of this is driven by envy – there are people working in the Treasury who are very clever, they have good degrees, they have chosen to go into the civil service but they look at their contemporaries who are earning multiple times what they earn and they resent it.”
“When the Tories were in power, they pushed against that but now the ideologues in the Labour party say: ‘Great, let’s do it and more.’ There’s a hostility to wealth.”
Whether or not the proposals were apt or workable, it’s the assertion that the supportive Treasury workers were ‘driven by envy’ that raised my eyebrows somewhat. It’s such a classic anti Labour trope but it does make me wonder if some of those workers, at least, are alive to the evils of neoliberalism.
https://observer.co.uk/news/politics/article/economic-with-the-truth-the-mis-selling-of-the-budget
I don’t believe it. They know they could leave. It does not stack.
That excellent quote from the Observer should remind us that right wing thinking is a strange mixture that includes aspects of the moronic, the dishonest and the disconnected.
When such nonsense as “the politics of envy” are trotted out in front of me, as they occasionally are, I soon leave my errant interlocutors with no doubt as to my opinion in the matter. There are no compliments for speaking, no matter how eloquently, through the posterior orifice. It is still nonsense.