Rishi Sunak’s budget speech

Speaking against the Chancellor’s budget this afternoon, we first have Mr Rishi Sunak, in 2015:

No more irresponsible borrowing. No more spiralling debt at the taxpayer’s expense. No more passing the debt to the next generation. I was delighted to hear the Chancellor’s plans for this nation finally to run a budget surplus.

I have spent my career in business. Every company I have been involved in sets a budget, as indeed does every household in this nation, and when they do they operate with these basic principles: first, “How much is coming in?” and only then, “How much can I spend?” For too long, Governments have got that back to front, spending first, ignoring how much is coming in, then letting borrowing endlessly make up the difference.

Coming from a financial background, I decided to spend some time analysing our nation’s fiscal history. I wanted to know, when it comes to our Government’s revenue, how much does in fact come in. I can tell the House that, since 1955, tax receipts, with limited variation and remarkable consistency, have averaged 36% to 38% of GDP. In spite of the vast differences between Labour and Conservative Members in our approach to setting tax rates, the average tax take has been remarkably similar under Governments of both parties. There appears to be a natural ceiling to what any Government can extract from the pockets of its hard-working taxpayers.

That to me suggests a simple conclusion: in normal times, public spending should not exceed 37% of GDP. That is the best estimate of our income as a Government and therefore the best guide to what we can afford to spend. So the Government’s plans to get public spending to that level are not, as some Opposition Members have suggested, an ideological crusade or clever politics; rather, tackling excessive public spending is simply the sensible, logical and responsible course of action. That action, taken to make sure that we live within our means, is the same course of action that any business or household would take when presented with the facts. We all know what happens when those facts are ignored: more borrowing, more debt.

[….]

All debts need to be repaid, with interest. For the next generation, that means higher taxes or less money to spend on public services. As the hon. Member for Streatham said, we already spend more money on debt interest than we do on the police, transport or housing. That simply cannot go on.

Whether one is a Thatcherite or a Trotskyite, the rules of budgeting are the same: one cannot sustainably spend more than one earns. I commend the Chancellor for acting on that principle and ensuring that Britain’s finances will once again be back in the black.

He then added, in 2017:

Fiscal responsibility is not just an ideological pursuit. Without a prudent approach to borrowing and debt, ordinary people pay the price. They pay it through slower growth, less fiscal resilience and interest rates that begin to climb. Let me start with growth.

As Government borrowing grows, it crowds out the lending available to British businesses to expand and invest. The results of these things around the world are clear. On average, economies with debt exceeding 90% of GDP grow 1 percentage point slower than those where it is between 30% and 90%, and 2 percentage points slower than those where it is below 30%. If it were not for the actions of this Government, our nation’s debt would already have spiralled well beyond 90%. Although a 1 percentage point hit to growth does not sound like a lot, it would be £100 billion in GDP, and £40 billion less to the Treasury’s coffers.

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The new challenges for 2021

Happy New Year to all; and now we roll our sleeves up to achieve what the opportunities of the year put before us.

Few were sad to see the end of 2020. It has been a bad year, which is one reason for not doing a jaunty end-of-year round-up yesterday.

There have been happy things: Britain came out of the European Union at last on 31 January 2020 and the hang-over transition period ended as the new year fireworks were bursting, and with a good, new trade treaty agreed, not a cliff-edge. However the dominant theme of the year has been the plague from Wuhan.

The worst thing has not been the disease but the lockdown imposed to try to control it, which failed, lengthening pain. I found it hard to celebrate the New Year – when they end the lockdown, then I can celebrate.

In the meantime, we look ahead. There is work to be done.

For all of us, the priority is to work, and work hard, at whatever we do that is economically active, or social. The lockdown has trashed the economy and bankrupted many, but the overall structure is sound, when allowed to work, and hard work will revive the engines of prosperity. Work is there, fundamentally, to create value, as Adam Smith explains. There can be forms of work which are valuable in one sense but create no lasting value, such as the work of civil servants, judges, stage actors and the like: the priority is value-creation as all prosperity depends on it. (If that means sending unnecessary civil servants out to work in factories and shopfloors, I am all for it.)

Society too has taken a body-blow: we have got unused to congregating together, attending church, organising social gatherings and attending and organising the clubs and societies which form the sinews of active society, and it will take an effort to convince anyone to come off the computer screen, stop watching daft YouTube videos (guilty as charged) and to step outside the house and into those social groups. It has even got to the basic level of decay that many have found they do not have to give a friendly greeting or to smile.

Within government too, action is needed, and it must not be driven by professors on a power-trip. Indeed after this period of utter negation of liberty, we need to see a major drive to boost individual freedom. Politically it will be important to be seen to champion freedom and personal responsibility, but then any politician can make the right noises: Tony Blair was hailed as a champion of civil liberty but in the event was an enemy to it. Society suffers and the economy suffers when its members are not free. We can thrive economically and in our mental state when we have personal responsibility and the freedom to pursue our personal goals. I feel more specific articles coming on.

In a few days’ time the country with the world’s biggest national debt will have a new President, and we must see how he swings America’s weight around.

Liz Truss for one will be busy, signing even more trade deals across the globe. Fascinatingly, her bouncy confidence and speed of action have driven even the glacially slow European Union to up their game in signing deals in the wider world. They are being overtaken though.

Then the loneliest man of them all is Rishi Sunak, with an empty Treasury and knowing that he if he raises taxes to fill the gap, it would bring no more cash in anyway, and would put another wrecking ball into the economy.

There is a lot to look forward to in 2021, but it is not going to be easy. We cab look for politicians to acct wisely, but really the hard work is for the rest of us. We must all work hard.

Jacobean court farce

The reign of King James I began to fall apart into farce in 1612. The King was no fool, or if he was, he was as the cliché has it “the wisest fool in Christendom”, and in character he was uncertain, fearful and indecisive, which led to his relying on other who were unworthy of trust. Until 1612, he had at his right hand Robert Cecil, who had served Good Queen Bess as had his father and who guided the new, inexperienced king. In 1612, Cecil died and the King was adrift, and the kingdom with him.

King James was a good king to the extent he could be given his limitations. He had ruled in Scotland, and had been impatient to rule his inheritance in England too, making plans based on expectation not experience, and the change from the unruly, poverty-stricken court in Edinburgh to the surface splendours he found in England left him unsure of how to react.

The King also had a nervous complaint which led him to fidget constantly and left him unable to concentrate his mind on the task at hand whenever another presented itself, and make the King unable to govern himself let alone a kingdom. Part of this was his unfortunate fondness for handsome young men, many of whom were promoted in court despite no merits beyond their comeliness, and a court full of handsome young men and many rather personable young ladies was a source of constant intrigue.

Had this dysfunctional royal court been merely a private parlour, one might pass over in distaste it like a tabloid sensation, but these plotting courtiers were governors too, in the absence of control by the King. It led to the collapse of the King’s authority, and worse later.

They competed for favour and gathered positions and titles from an impressionable king who saw these favours as costing him nothing. Two such young men were Robert Carr and Thomas Overbury, who came to London together and wormed their way into the court, Overton by his intelligence and Carr by his face; Oveton gained a knighthood, and Carr was made Earl of Somerset. This is a poor substitute for the competition of merit which the kingdom needed, but it is not unknown to this day.

These games become dangerous. Those competing for favours formed factions of convenience, and whispered accusations circulated, in a dangerous atmosphere where treason was the fear in the wind, as well it might be after Guy Fawkes and after the By and Main plots, and was a fatal accusation, but even an accusation of discourtesy would be fatal to a career.

History books tell better how the breach between friends came, when Carr openly took up with Frances Howard and arranged the annulment of her marriage so he might have her. Overbury’s poem The Wife was a deadly insult to Frances, now Countess of Somerset. She pulled an old and cruel trick: she spread a tale that Overbury had been disrespectful to the Queen. He fell from favour at once and and the next year, though further intrigue he was in the Tower accused of treason, where Carr and Frances arranged for him to be poisoned. Their faction were all implicated.

It starts with personal disagreements, and political rivalry which has personal motives, rarely the good of the nation, fought by personal intrigue, with never a thought to the public responsibilities of office – and when power is purely without responsibility it is precious indeed and to be defended at all costs. Courtiers fought like rats in a sack, and their political heirs still do today. If they stay in the sack it might not bother the wider world until we realise whose taxes are still paying them.

No servant is greater than his master, and it is a weak master who allows them to think they are. That was King James’s failing, and that of several other political leaders down the ages.

The scandal that culminated in the death of innocent Overbury was just one of the many intrigues that scared the Jacobean court, and lost the king the love of the nation. It all continued under his son, King Charles I, which led to the discontent, rebellion and Civil War.

I wish that we had learnt to rise above this sort of thing, but apparently not.

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Build Back Britain, Boris

I worried about the new slogan, ‘Build Back Better’, looking out over the (so far still) green fields, but in the context, there is more to it than the sick-in-the-stomach vision of concrete and bricks: the whole underpinning of the nation’s political and social structure needs to be rebuilt. This afternoon, up stood Boris with a vision for that task. Let us hope his team are up to the task.

It has been 10 years since Gordon Brown was hurled out of Downing Street, and it has sometimes seemed like a wasted 10 years, but that is not so: David Cameron and George Osborne in their six years worked hard to mend the financial mess left by the Blair and Brown years, and to reverse much of Tony Blair’s egregious imprecations upon the liberty of the subject. They neglected to overturn the leftists’ stranglehold on the levers of state though and left the sprawling edifice largely intact; then on the Brexit issue they brought the party members’ ignominy upon themselves, but they deserve credit where it is due. Theresa May, though a likeable individual, was unequal to the immense divisions riven through the nation and was given little opportunity in her three years. Boris has been in for over a year but still seems only just to have begun.

In that time, Boris has only made one noticeable political mistake: the Lockdown, and it is an overwhelming mistake, that has wrought in a few months more damage then the whole of the Blair-Brown years. He can’t very well pull out of it now out of embarrassment, and so we are stuck in the mire for more months yet, and we descend further, maybe not as deep as Atlee territory, but deep and damaging. Maybe we are coming out. Now we must build back better; build Britain as she should be.

we human beings will not simply content ourselves with a repair job.

Now there is a truth. It is ludicrous to compare the Wuhan flu with the Black Death, but after the latter shock society was transformed, building itself back better, sloughing off the restraints of feudalism and even seeing the first daystar of the Reformation that was to rise over the lands nearly two hundred years later. This is not the Black Death, but it is a shock that has felled the economy and society in such a way that new normality much change to look for resilience, and to climb high enough that new shocks “the next cosmic spanner may be hurtling towards us in the dark” as Boris put it, can be ridden, without the temptation for another devastating lockdown of life and liberty.

Resilience does not fit the modern sentiment. Many are infantilised because we can be: there has been no active war for generations, which is an introduction to real life like no other, and the state has grown so as to smother all discomforts, which is exactly how it should not be. Immediately taking offence at trivia is a symptom of infantilised discourse (though more likely to be a bid for power).

This is not a luxury but basic survival necessity. This is a hard world, and has been since man first left Eden, and those who are ready for it will thrive, but at the moment we are the ones also made to carry the others. The problems of those others are real and heart-rending in their consequence: I have been in case briefings, told repeated stories of individuals who simply cannot cope with anything in life unless all their wants are brought to their plate by others, and who drift into crime and madness as an unavoidable consequence. Throwing money at the issue does not help if there is no training to resilience and independence, and any build-back must assume the necessity for individual resilience, or no other measure will work, or at least not reach those at the bottom of society.

What we heard from Boris Johnson today were ideas and inspiring ones. Behind it I could hear unspoken numbers, cash to be taxed on my children and their eventual children; or could it be done another way? Most government spending is on health and the welfare state (though goodness knows what the health spending goes on, because doctors have been refusing to see patients for months) and it may be that efficiencies can be made in this colossus of a budget, keeping effective spending up while reducing the amount actually consumed in the system. Outside that sector, there are many efficiencies that could be made in everyday government without affecting what it actually does, and much of what it does do it need not. That was a theme of David Cameron’s early years, but not one which really took off as it should have. At that time of course Dominic Cummings was not deployed to his full capacity.

The implied road-building programme then struck a theme I have often worried about. Roads are needed outside the South-East, although at the same time I believe would be better to let some roads rot for a few years as there is no money left to mend them; as long as they are not the roads I race down. The subject hovering over the project was the North. This is important for a proper Build Back Better: the Northern towns are not actually ignored by the government, but they can appear neglected – a drive through the leafy villages of the Home Counties, or up the millionaire’s row that is the Thames will look a world apart from a drive through the ex-industrial towns north of the Trent. The missing element to prosperity is not government but commerce. There is no inherent reason why Worksop should not shine like Guildford, but that economic buzz of the one stutters in the other. The thing is that this is not a zero-sum game between towns: if Nottinghamshire takes wing, that does not beggar Surrey. The nation is the poorer for having wealth-creation in too small a sphere, and if part of the fault is poor infrastructure, then putting some in may bring in the medium term a tax-take to repay it – maybe. On the other hand, that could be the wrong way round – the broad roads came to the Home Counties because they prosper, not to make them so.

(It feels like the Matthew Effect: For to every one who has will more be given, and he will have abundance; but from him who has not, even what he has will be taken away.)

I am suspicious of government interference, and the spending of my money on projects that would be better done by those who know what they are doing, which is to say commercial entrepreneurs. That said, the south is awash with gold at the moment and can be left to fester for a bit while the North is under the spotlight, to encourage the private investment which could be its due. What the North needs more than grands projets though is less government; for the state, often local government, to get out of the way and let enterprising men and women do their magic (and not to blunder in with well-meaning subsidies to unfair competition).

If the left-behind areas can have the yoke taken off so that they thrive, that is more prosperity to the nation as a whole. That would really be building back better.

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Books

Last year was so last year, lads

Tension in the Commons, procedural skirmishes, the Lords ready to pounce, rebellion on the government side of the House, all over Brexit. Yet this is not 2019. That annus horribilis was meant to be over and done with when Boris rode back to Downing Street in triumph after the Winter election.

This time the voices are as shrill but it is a matter so petty that you wonder why they bother being so emotional. Last year Brexit itself was in the balance and for all the platitudes about procedure and just securing a deal (which they then voted against) it was about whether Britain would leave the European Union at all, and the entire country knew. Brexit itself was in the balance. Then the election happened, the Zombie Parliament was driven out and Britain sailed cleanly out of the European nightmare.

Compared with all that, this local difficulty is as nothing. It does not concern the grand picture but two lines or so in the Withdrawal Agreement, and with no intention to change them anyway.

The principle of keeping to treaty obligations is generally a good one, but this phase ‘international law’ is lie in a line, and always has been: there is no such thing as international law, or rather it is not actual law, just a way of getting along. The concept is there, but there is also the Second Law of Thermodynamics, and no one has been arrested for trying to break that. The word “law” is a red rag to a Twittermob and many a foolish remark has been heard on the subject. It turns the stomach to hear an adjustment to an administrative arrangement compared to murder or to the Uighur genocide.

This site has observed before the imbalance that the EU negotiators have at every step introduced into negotiations: in several places their proposed treaty provisions have provided for heavy punishment were Britain ever to depart from points in a trade agreement, but no sanction at all for their own breaches. A glance at the EU’s practice over many years shows it to be an unrepentant, serial rule-breaker, so no one should be outraged that our government should seek to prepare for when they do it to us.

Another cause of dissent, and one more comprehensible, is that the role of the House of Commons in supervising all this seems to have been minimised, and MPs want to do the job they were elected for. In fact, the Bill as presented strikes a practical balance. It is good for the government to hear strident voices from the backbenches, and even the weird voices projected from the other side of the House, but ultimately speedy action must come from the executive.

Al this said, the whole thing has been appallingly handled in public relations and diplomatic terms, unless; unless it was a smuggling exercise, but let us pass over that – BEIS knows what that is about and it has been successful if so.

The Bill last night passed in the Commons, unamended though with assurances about the use of the powers and promises of further consultation. The rebellion was small, and the DUP voted for the Bill, as well they might as the clauses fought over are for the protection of Ulster. In the Lords, we can but wait and see what more overblown rhetoric emerges. The margin in the Commons was massive: this is not 2019.

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