Current Affairs

[Kendhni]

I don't think this should come as a surprise to anybody, but it is still a shame to lose a high technology opportunity.
https://uk.finance.yahoo.com/news/bmw-a ... 02258.html
I really hope that does not spell the end for Cowley when BMW stops manufacturing petrol Minis.

[Kendhni]

As we’re talking about Brexit, I see the Telegraph is saying that ‘Project Fear was right all along’!

If the Telegraph has turned, it must be bad!

Hi Gill, by any chance do you have the text of that article - it seems to be behind a paywall ... I would be interested to read it

[Onelife]

And a lady who was mocked and humiliated by her 'friends ' in the EU who saw her as a soft touch.

She never had any friends in the EU and less so in her own party...

[anniec]

As we’re talking about Brexit, I see the Telegraph is saying that ‘Project Fear was right all along’!

If the Telegraph has turned, it must be bad!

Hi Gill, by any chance do you have the text of that article - it seems to be behind a paywall ... I would be interested to read it

Here you are, Ken,

Call it revenge of the Remainer Establishment, if you like. The revolution in the British economy promised by Leave campaigners six years ago finally seemed to go the way of all revolutionary movements this week: it ended up eating itself.

Downbeat predictions by the Treasury and others on the economic consequences of leaving the EU, contemptuously dismissed at the time by Brexit campaigners as "Project Fear", have been on a long fuse, but they have turned out to be overwhelmingly correct, and if anything have underestimated both the calamitous loss of international standing and the scale of the damage that six years of policy confusion and ineptitude has imposed on the country.

A serious house price correction, substantially higher interest rates and a permanently impaired exchange rate may be the least of it.

Credibility is all in politics, finance and economics; this week was the point at which the UK Government finally managed to lose all last remaining vestiges of it. Britain's trusted institutional framework, together with its hard won reputation for sound money and certainty in policy, all went down the pan.

Perhaps I exaggerate, but not since the humiliation of the International Monetary Fund bailout in 1976 have we seen an unravelling quite as spectacular. This too from a Tory Government with a substantial overall majority. It is scarcely believable.

These are dark days for Tory MPs, who will be acutely aware that loss of reputation for economic competence is electoral poison for their party. As the former Chancellor, Philip Hammond, has already observed, that reputation has been comprehensively trashed by what's just occurred.

I feel sorry for Kwasi Kwarteng. He now bears the dubious distinction of being Britain's second shortest serving Chancellor ever after Ian Macleod, who died in office almost immediately after being appointed.

Others have been chasing the silver medal hard in the turmoil of the last several years; Sajid Javid lasted just six months, and Nadhim Zahawi only eight weeks. Anyone would think we had become Italy or Greece, such is the turnover in key government positions and the growing sense of political, economic and fiscal instability.

Nor is the storm by any means yet over. Stripped of all authority and credibility, it is hard to see how Liz Truss, the Prime Minister, can survive the traumas of the past several weeks. As Norman Lamont said of John Major, she's in office but not in power.

The U-turn on corporation tax, the scapegoating of Kwarteng, and his replacement with the supposedly steadying hand of Jeremy Hunt is unlikely to save her. The cut in spending plans that she implied on Friday may be what the markets demand, but politically it threatens finally to destroy her.

Kwarteng was a likeable Chancellor with many of the right intentions. He is not wrong about the need for radical action to correct multiple long term weaknesses and deficiencies in the UK economy. Many of the supply side measures announced in the mini-Budget were more than welcome, and might in time have made a significant difference to the UK's long term growth trajectory.

Yet the unfunded tax cuts were always going to be a bridge too far. Fiscal policy 101: you do not attempt to do a permanent fiscal giveaway against the backdrop of sharply rising inflation and interest rates, a punishing energy crisis, a current account deficit swollen to an unprecedented 8 percent of GDP, and a seemingly intractable black hole at the heart of the public finances.

To have rejected independent assessment of the plans by the Office for Budget Responsibility only further added to the sense of alarm in financial markets.

When we talk about "financial markets", it is important to note that they are not some god-like arbiter of policy whose judgement on matters is beyond challenge, but essentially just a lot of excitable children who, with herd-like conformity, are merely chasing the money.

The idea that the £18bn a year of corporation tax revenues that seemed to be at the centre of this week's rout would make the difference between national solvency and insolvency is almost beyond ridiculous. It would not have done. Yet sadly it became totemic in a wider loss of political and economic credibility, which has been cumulative now over a number of years.

It is perhaps not so surprising that the passionate Remainer who became a passionate Brexiteer should choose to throw her Chancellor to the wolves in order to save her own skin.

Yet the fact is that Truss was in lockstep with Kwarteng in challenging "economic orthodoxy" and the institutions that were its standard bearers. On the campaign trail she was, if anything, even more of a zealot for economic radicalism than Kwarteng.

In any case, she plainly didn't understand the sometimes destructive way markets interact with policy. It's been a rude awakening.

In the end, it was Andrew Bailey, Governor of the Bank of England, who brought matters to a head, by insisting that there would be no extension to the bond buying programme he had initiated to counter forced selling by UK pension funds.

This has been widely portrayed as another foot in mouth episode by a Governor with something of a reputation for gaffes. Having failed, despite all the warning signs, to see the surge in inflation coming, the Bank fully deserves whatever criticism is thrown at it. The Bank has failed to conduct itself well in recent times.

Even so, the Governor had little option but to say what he did. It makes no sense at all for a central bank, which is supposed to be tightening policy to fight inflation, to be simultaneously loosening it through resumed asset purchases.

To do so would be seen by "Mr Market" as monetary financing, or what is sometimes referred to as "fiscal dominance", where monetary policy is used to support the government's fiscal needs.

By making the programme time-limited, the Bank was able just about to pass its intervention off as justified on financial stability grounds. It would have been game over had Bailey made the programme open ended.

Already, acute loss of credibility in monetary policy would have spiralled out of control, and the rout in bond markets would have gotten even worse.

Once the Bank had made clear that it would be ending the programme as scheduled, the Government had no option but to reverse its fiscal plans. It would have been mayhem in the markets on Monday had it not done so.

"Economic orthodoxy" is back in the saddle. But then it never really went away. Instead we had a brief aberration in which the Government, having dispensed with all sensible advice, thought bizarrely that it could defy gravity.

If it had been done differently it might have succeeded, but it was not. We'll be paying the consequences in reduced standing and prosperity for years, if not decades, to come.

[Gill W]

Thanks for doing that, Annie

[anniec]

Pleasure, Gill; wasn't sure if you were a subscriber.
BTW, it's written by Jeremy Warner, Assistant Editor of The Telegraph.

[Kendhni]

Thanks Annie, much appreciated.
For a while there it was possible to blame COVID for lack of progress, but the reality is that the major economies of the world recovered in Q1/Q2 of 2021 (the UK took until Q3). Even allowing for the financial and energy crises the major economies have retained levels above those pre-COVID. That may change over winter.

There is no doubt the UK has self-inflicted major damage to its economy and international reputation ... it is going to take a while (possibly decades?) to rebuild that, but it is doable ... Trussonomics could possibly have achieved that, it was just too much too soon (equally it could have irreparably damaged the UK economy). The problem is that Trussonomics is actually over 10 years old and was designed for a different world and different circumstances (did anybody else notice kami-kwasi's little freudian slip when he correctly referred to his policies as being '10 years old' before quickly changing it to '10 weeks old'?).

Whatever happens we need a new way forward with a whole new way of thinking. I was surprised to see Rees-Mogg in Truss's government since he is the opposite of what she is striving for ... he represents a dead imperial(ist) past, going that direction is destined to failure ... we are in a new and different post-COVID world requiring the government to adapt to new challenges.

PS: I have seen an argument put forward that says COVID is what saved brexit.

[oldbluefox]

An interesting article which, apart from the first two paragraphs goes on to reflect on the current situation. I suppose any ardent Remainer could attribute anything negative to Brexit.

Just by way of giving balance to this debate you may find this interesting:

https://ukandeu.ac.uk/lord-david-frost- ... t-working/

[Onelife]

I’m inclined to agree with most of what you say Ken, in particular the need for change, a change which incorporates a new way of thinking, which incidentally is why I backed Truss’s promise for change, sadly timing is everything so It now appears we will have a new PM within weeks due to her stepping aside?

Where I differ from you is that I see Brexit as a long-term way forward, it was never intended to reap economic benefits in the short term, the thinking I believe was that we would take the initial pain for long term gain, whichever way you look at it, it was a new way of thinking and one which might just pay off in the future.

I would like to see either Theresa or Penny taking us there.

[Gill W]

An interesting article which, apart from the first two paragraphs goes on to reflect on the current situation. I suppose any ardent Remainer could attribute anything negative to Brexit.

Just by way of giving balance to this debate you may find this interesting:

https://ukandeu.ac.uk/lord-david-frost- ... t-working/

To be fair, David Frost was one of the chief architects of Brexit - not sure anything coming from him would provide true balance

[Onelife]

An interesting article which, apart from the first two paragraphs goes on to reflect on the current situation. I suppose any ardent Remainer could attribute anything negative to Brexit.

Just by way of giving balance to this debate you may find this interesting:

https://ukandeu.ac.uk/lord-david-frost- ... t-working/

To be fair, David Frost was one of the chief architects of Brexit - not sure anything coming from him would provide true balance

I think the same could be said about (Remainer) Jeremy Warner who wrote the Telegraph article.

[Kendhni]

Where I differ from you is that I see Brexit as a long-term way forward, it was never intended to reap economic benefits in the short term, the thinking I believe was that we would take the initial pain for long term gain, whichever way you look at it, it was a new way of thinking and one which might just pay off in the future.

It will not be our generation that takes that 'pain' ... it is the next generation that we are expecting to take it.

To be fair we were told that it would take 10 years (Johnson) to 50 years (Rees Mogg) before we would see any benefits ... but noone has ever vocalised what the tangible benefits might be. In the meantime, the problem is that the brexit delivered by Johnson was 'brexit at any cost' ... so far that cost has given a 'run rate' of somewhere between £40bn and £80bn per year ... that cannot be sustained. Something has to be done to bring those costs under control ... I hope they can come up with some policy to fix this before it leaves an entire generation wallowing in poverty.

I would like to see either Theresa or Penny taking us there.

I wonder if May would even be interested in taking it on?

[Onelife]

Where I differ from you is that I see Brexit as a long-term way forward, it was never intended to reap economic benefits in the short term, the thinking I believe was that we would take the initial pain for long term gain, whichever way you look at it, it was a new way of thinking and one which might just pay off in the future.

It will not be our generation that takes that 'pain' ... it is the next generation that we are expecting to take it.

To be fair we were told that it would take 10 years (Johnson) to 50 years (Rees Mogg) before we would see any benefits ... but noone has ever vocalised what the tangible benefits might be. In the meantime, the problem is that the brexit delivered by Johnson was 'brexit at any cost' ... so far that cost has given a 'run rate' of somewhere between £40bn and £80bn per year ... that cannot be sustained. Something has to be done to bring those costs under control ... I hope they can come up with some policy to fix this before it leaves an entire generation wallowing in poverty.

I would like to see either Theresa or Penny taking us there.

I wonder if May would even be interested in taking it on?

I’ll ask her

The way I see things, if the conservative party have any chance of moving forward it will be with Penny Mordaunt at the helm…her first move should be to keep most of the present cabinet in place as I believe it contains some forward thinkers, however she should sack Hunt…. he is far too toxic with the voting public…especially Doctors, Nurses and by association their families. Next, she should bring me in as her adviser/lover…please don’t judge me, what I do, I do for my country.

[Kendhni]

The way I see things, if the conservative party have any chance of moving forward it will be with Penny Mordaunt at the helm…her first move should be to keep most of the present cabinet in place as I believe it contains some forward thinkers, however she should sack Hunt…. he is far too toxic with the voting public…especially Doctors, Nurses and by association their families. Next, she should bring me in as her adviser/lover…please don’t judge me, what I do, I do for my country.

At the minute I see Mordaunt as 'tainted' goods, her campaigning and policy statements aligned her more closely with Sunak, but yet when she got removed from the race she chose to side with Truss ... doesn't make sense (beyond selfish interest). I find your stance in your final sentence to be very patriotic, it is good to see someone willing to inject themselves fully into the role, ride the ups and downs and take one ... or two ... or three ... for their country.

As always, I will judge someone on their performance in their role ... maybe Hunt was rubbish in the NHS but he could be the best chancellor ever ... we have to wait and see.

Did you see his comments this morning? When asked why people should trust Truss, Hunt said: “Because she’s listened. She’s changed. She’s been willing to do that most difficult thing in politics, which is to change tack.” ... does that now make her part of the anti-growth coalition?

[Onelife]

I think Lizz needs a good seeing to…but as I’ll be preoccupied with Penny, I think you should do your bit for the country…however, a word of warning, if you find yourself in a hole that’s getting deeper and deeper, you’ll do best to withdraw and think of the pleasures of Ireland.

There is one thing you can say about all politicians… when the going gets tough they all turn to their narcissistic survival packs…it’s just that some are better than others at hiding them. It is for this reason; I think Penny Mordaunt would be well equipped to take her party into what is fast becoming a political assault course.

[Gill W]

I think the same could be said about (Remainer) Jeremy Warner who wrote the Telegraph article.

Come on now, Keith, the Torygraph wasn't a 'Remain' newspaper. If they are publishing stuff like that, things are changing

[Mervyn and Trish]

The Telegraph wasn't. But this isn't a news piece. It's a comment piece by Jeremy Warner who has written a number of Remainer articles in the paper.

[Kendhni]

I think Lizz needs a good seeing to…but as I’ll be preoccupied with Penny, I think you should do your bit for the country…however, a word of warning, if you find yourself in a hole that’s getting deeper and deeper, you’ll do best to withdraw and think of the pleasures of Ireland.

I am holding out for Teresa Coffey who isn't attracted to a champagne swilling, cigar smoking, pendulous hunk of womanhood ... shudder!!!!!

[Gill W]

The Telegraph wasn't. But this isn't a news piece. It's a comment piece by Jeremy Warner who has written a number of Remainer articles in the paper.

Ok, dismiss the article.

But he's not wrong.

Brexit has cost us billions, has caused turmoil and constitutional crisis, resulted in weak governments and has made life more difficult for businesses - and there is still not a tangible benefit.

What was the point of it all? If it was 'sovereignty', and 'making our own decisions' - we've made a real pig's ear of it so far

(of course, we always had 'sovereignty' before, and life wasn't so bad in 2014...... not like the post Brexit bin fire)

[Onelife]

I think the same could be said about (Remainer) Jeremy Warner who wrote the Telegraph article.

Come on now, Keith, the Torygraph wasn't a 'Remain' newspaper. If they are publishing stuff like that, things are changing

Hi Gill, I don’t know what Jeremy Warner’s Brexit slant is/was but with newspaper circulation in decline it isn’t surprising that Editors are looking to write articles that incorporate a wider reader viewpoint, one which may conflict with their papers political stance.

I think with the political landscape as it is we will probably see more fluidity from that which are perceived to be left/right favouring newspapers.

[Onelife]

I think Lizz needs a good seeing to…but as I’ll be preoccupied with Penny, I think you should do your bit for the country…however, a word of warning, if you find yourself in a hole that’s getting deeper and deeper, you’ll do best to withdraw and think of the pleasures of Ireland.

I am holding out for Teresa Coffey who isn't attracted to a champagne swilling, cigar smoking, pendulous hunk of womanhood ... shudder!!!!!

There men who have laid down their lives for a good cause…you have just taken it to the next level

[Mervyn and Trish]

The Telegraph wasn't. But this isn't a news piece. It's a comment piece by Jeremy Warner who has written a number of Remainer articles in the paper.

Ok, dismiss the article.

But he's not wrong.

Brexit has cost us billions, has caused turmoil and constitutional crisis, resulted in weak governments and has made life more difficult for businesses - and there is still not a tangible benefit.

What was the point of it all? If it was 'sovereignty', and 'making our own decisions' - we've made a real pig's ear of it so far

(of course, we always had 'sovereignty' before, and life wasn't so bad in 2014...... not like the post Brexit bin fire)

Not dismissing it Gill, merely pointing out it is an opinion from a known Remainer, nothing more.

Your position (see post #17385) seems to be that anything that supports your view is fact, anything that doesn't is biased.

Brexit, like all in politics, is a matter of opinion. That's why 52% voted one way and 48% the other. We are all entitled to our views. On Brexit you and I will never agree. Maybe there's lots we have in common, who knows, but not that.

[oldbluefox]

Ok, dismiss the article.

But he's not wrong.

Brexit has cost us billions, has caused turmoil and constitutional crisis, resulted in weak governments and has made life more difficult for businesses - and there is still not a tangible benefit.

What was the point of it all? If it was 'sovereignty', and 'making our own decisions' - we've made a real pig's ear of it so far

(of course, we always had 'sovereignty' before, and life wasn't so bad in 2014...... not like the post Brexit bin fire)

Living in the North of the country, in all the years we were EU members I saw no advantages from our membership.
I'm delighted we have left. Of course those who benefited will think differently.

[Gill W]

Brexit, like all in politics, is a matter of opinion. That's why 52% voted one way and 48% the other. We are all entitled to our views. On Brexit you and I will never agree. Maybe there's lots we have in common, who knows, but not that.

I’ve given my opinion that it hasn’t gone well, and has led us to this current bad place. You say that we won’t agree on this subject - but surely we can agree that it hasn’t gone swimmingly?

Living in the North of the country, in all the years we were EU members I saw no advantages from our membership.
I'm delighted we have left. Of course those who benefited will think differently.

What tangible benefits has Brexit given you, that actually improve your day to day life

[Kendhni]

Fry me an egg Keith ... I do what I do for the betterment of all