Comments on: Two Britains and public sector inflation http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/ Conservative Party Candidate for Wokingham Mon, 15 Mar 2010 18:41:50 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: D BC Reed http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28531 D BC Reed Wed, 03 Dec 2008 17:06:04 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28531 Agreed.But nobody ever concedes there is bureaucracy in large private sector concerns. Agreed.But nobody ever concedes there is bureaucracy in large private sector concerns.

]]> By: APL http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28507 APL Wed, 03 Dec 2008 09:12:56 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28507 I see the US National Bureau of Economic Research has revised its position and announced that the United States has been in a recession for a year. This is not news for anyone who does not live in a sort of economic bubble, insulated from all the effects of the real world economy. I guess that would be Politicians. I see the US National Bureau of Economic Research has revised its position and announced that the United States has been in a recession for a year.

This is not news for anyone who does not live in a sort of economic bubble, insulated from all the effects of the real world economy. I guess that would be Politicians.

]]> By: mikestallard http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28489 mikestallard Tue, 02 Dec 2008 17:14:31 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28489 Not necessarily. If all the top people in their plush offices, well out of touch with the Baby Ps of this world, are either sacked or else driven out to do their jobs, then surely, the front line services ought to improve? In wartime, and even more in peacetime, the problem is that the Central HQ quickly gums up with smart young officers in white uniforms and strings of gold braid, while the front is starved of both troops and officers. That is certainly what has happened in schools, probably in the NHS, probably in Social Services and probably in many other government departments. Cutting back on the HQ staff may well be an utterly unmixed blessing. Not necessarily. If all the top people in their plush offices, well out of touch with the Baby Ps of this world, are either sacked or else driven out to do their jobs, then surely, the front line services ought to improve?
In wartime, and even more in peacetime, the problem is that the Central HQ quickly gums up with smart young officers in white uniforms and strings of gold braid, while the front is starved of both troops and officers.
That is certainly what has happened in schools, probably in the NHS, probably in Social Services and probably in many other government departments.
Cutting back on the HQ staff may well be an utterly unmixed blessing.

]]> By: Bryan Davies http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28467 Bryan Davies Tue, 02 Dec 2008 11:33:55 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28467 John - quite a lot to agree with. Would that your front bench grasp the nettle. John – quite a lot to agree with. Would that your front bench grasp the nettle.

]]> By: rugfish http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28462 rugfish Tue, 02 Dec 2008 10:24:14 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28462 Err....two areas concern me here. One: Public sector over-manning at management and admin levels, PR specialists, contract 'advisers' and 'educationalists', trainers and the like - including but not limited to "Common Purpose". Two: Public sector pensions which are a ) Gold Plated, b ) Unfair, c ) Unaffordable, d ) Not worthy of paying, and e ) Not all spent within our own economy especially given the 'early retirements' of many of these people who appear to either be leaving these shores or returning to their own country and no doubt finding further work whilst being propped up by the British taxpayers. There are indeed a few other concerns but those are the main one's I think about as I wouldn't like to lose focus by writing too big a list here of Labour's crass stupidity. Err….two areas concern me here.

One: Public sector over-manning at management and admin levels, PR specialists, contract ‘advisers’ and ‘educationalists’, trainers and the like – including but not limited to “Common Purpose”.

Two: Public sector pensions which are a ) Gold Plated, b ) Unfair, c ) Unaffordable, d ) Not worthy of paying, and e ) Not all spent within our own economy especially given the ‘early retirements’ of many of these people who appear to either be leaving these shores or returning to their own country and no doubt finding further work whilst being propped up by the British taxpayers.

There are indeed a few other concerns but those are the main one’s I think about as I wouldn’t like to lose focus by writing too big a list here of Labour’s crass stupidity.

]]> By: Derek http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28446 Derek Tue, 02 Dec 2008 03:44:22 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28446 I think it likely that central government will hang local governments out to dry when their cash inevitably runs out. The US federal govt did the same with New York and it took it a decade to dig itself out (and, in fairness, was eventually better for it). The crime has been by central govt allowing them to empire build in return for general election votes. It's the vulnerable who genuinely require frontline council services who'll ultimately pay the price. I think it likely that central government will hang local governments out to dry when their cash inevitably runs out. The US federal govt did the same with New York and it took it a decade to dig itself out (and, in fairness, was eventually better for it). The crime has been by central govt allowing them to empire build in return for general election votes. It’s the vulnerable who genuinely require frontline council services who’ll ultimately pay the price.

]]> By: DBC Reed http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28441 DBC Reed Mon, 01 Dec 2008 23:16:21 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28441 Not sure all this anguish about an "army of officials looking for new ways to check up on us and persecute us" is really appropriate in the case of Baby P.You would have thought the cruel people responsible for his death should have been checked up on and persecuted.Likewise OFSTED (are n't they the people who do schools' inspections?) should have persecuted the Haringey managers who left things in the same state,apparently, as they were in Victoria Climbie's last days. Not sure all this anguish about an “army of officials looking for new ways to check up on us and persecute us” is really appropriate in the case of Baby P.You would have thought the cruel people responsible for his death should have been checked up on and persecuted.Likewise OFSTED (are n’t they the people who do schools’ inspections?) should have persecuted the Haringey managers who left things in the same state,apparently, as they were in Victoria Climbie’s last days.

]]> By: figurewizard http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28436 figurewizard Mon, 01 Dec 2008 20:55:42 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28436 Re. 'The huge amounts of liquidity being built up.' - The lack of inflationary pressure from this on the private sector may well be the case in the short term but as the performance of the pound on the international money markets shows, this term will be very short indeed. In addition given the dramatic fall in overseas earnings through the City of London, the appalling state of our balance of payments will be soon take centre stage. This is why George Osborne is going will be shown to have been absolutely correct in pointing out last week that: 'In the end all Labour governments run out of money'. Re. ‘The huge amounts of liquidity being built up.’ – The lack of inflationary pressure from this on the private sector may well be the case in the short term but as the performance of the pound on the international money markets shows, this term will be very short indeed. In addition given the dramatic fall in overseas earnings through the City of London, the appalling state of our balance of payments will be soon take centre stage. This is why George Osborne is going will be shown to have been absolutely correct in pointing out last week that: ‘In the end all Labour governments run out of money’.

]]> By: Adrian Peirson http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28435 Adrian Peirson Mon, 01 Dec 2008 20:52:23 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28435 Is this Government, with its finger hovering over the civil contingencies button deliberatly trying to Provoke a civil unrest. Don't forget the Council that set up CCTV in acouples bedroom. http://www.infowars.com/?p=6167 Is this Government, with its finger hovering over the civil contingencies button deliberatly trying to Provoke a civil unrest.

Don’t forget the Council that set up CCTV in acouples bedroom.

http://www.infowars.com/?p=6167

]]> By: A. Sedgwick http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28428 A. Sedgwick Mon, 01 Dec 2008 17:50:57 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28428 Excellent critique, it is about time you started writing David Cameron's speeches. In common with others I have been "blogging" for several years about the true extent of the economic disaster that is Gordon Brown.The worst is yet to come and there is a real chance that he will go down in history as the man who bankrupted the country. No doubt he will blame the American war of independence for our demise. Excellent critique, it is about time you started writing David Cameron’s speeches. In common with others I have been “blogging” for several years about the true extent of the economic disaster that is Gordon Brown.The worst is yet to come and there is a real chance that he will go down in history as the man who bankrupted the country. No doubt he will blame the American war of independence for our demise.

]]> By: Brian Tomkinson http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28427 Brian Tomkinson Mon, 01 Dec 2008 17:34:21 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28427 I take it that since you have not replied to say otherwise that your party too would resort to the printing press and all the horrors of inflation that holds for the future. Reply: I would be urging them not to. They also have stated they would spend less, which would be a good start. I take it that since you have not replied to say otherwise that your party too would resort to the printing press and all the horrors of inflation that holds for the future.

Reply: I would be urging them not to. They also have stated they would spend less, which would be a good start.

]]> By: mikestallard http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28420 mikestallard Mon, 01 Dec 2008 16:30:19 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28420 By taking control of the Bank of England with the FSA and the MPC, this government have, as usual, taken away all the checks and balances which they got from Ken Clarke. They have used their power to give what used to be called "jobs for the boys" and they continue to do this, as you show so clearly above, even now. I had not realised that this would lead to inflation, I must admit, but of course it will - even if only because the productive people will be squeezed out, governmental income through taxes will fall and more and more money will have to be borrowed. At the moment, melt down is, (while still very possible if Labour gets re elected or cannot resist nationalising more and more banks), seeming to recede, while a deep Japanese type depression seems much more likely. By taking control of the Bank of England with the FSA and the MPC, this government have, as usual, taken away all the checks and balances which they got from Ken Clarke. They have used their power to give what used to be called “jobs for the boys” and they continue to do this, as you show so clearly above, even now.
I had not realised that this would lead to inflation, I must admit, but of course it will – even if only because the productive people will be squeezed out, governmental income through taxes will fall and more and more money will have to be borrowed.
At the moment, melt down is, (while still very possible if Labour gets re elected or cannot resist nationalising more and more banks), seeming to recede, while a deep Japanese type depression seems much more likely.

]]> By: Acorn http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28419 Acorn Mon, 01 Dec 2008 16:29:05 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28419 You have just come up with a great title for your next book JR; "The Inspector's State". But MPs and Lords have made a large contribution to the proliferation of Inspectors. Mainly because you rubber stamp so many Statutory Instruments. You criticise media pundits for not reading all the fine print in the PBR; but, how many MPs read the fine print of SIs? This is where all the liberty strangling detail is invented and coated with several layers of socialist bile. As a "Rt Hon" you have probably done more than the average via the Privy Council. Reply: As a Rt Hon on the Opposition side I never am invited to Privy Council meetings, so I am not to blame for the last 11 years! The Regulatory Reform Act 2001 and then the Legislative and Regulatory Reform Act 2006 have together, practically made the Commons redundant for revising legislation. And, nobody appears to apply the filter that stops Marxist cells, camped out in Quangos and local government, applying regulations, purely to disrupt and demoralise the populace at every opportunity. In fact, the Commons has not annulled an SI for thirty years! You have just come up with a great title for your next book JR; “The Inspector’s State”.

But MPs and Lords have made a large contribution to the proliferation of Inspectors. Mainly because you rubber stamp so many Statutory Instruments.

You criticise media pundits for not reading all the fine print in the PBR; but, how many MPs read the fine print of SIs? This is where all the liberty strangling detail is invented and coated with several layers of socialist bile. As a “Rt Hon” you have probably done more than the average via the Privy Council.

Reply: As a Rt Hon on the Opposition side I never am invited to Privy Council meetings, so I am not to blame for the last 11 years!

The Regulatory Reform Act 2001 and then the Legislative and Regulatory Reform Act 2006 have together, practically made the Commons redundant for revising legislation. And, nobody appears to apply the filter that stops Marxist cells, camped out in Quangos and local government, applying regulations, purely to disrupt and demoralise the populace at every opportunity. In fact, the Commons has not annulled an SI for thirty years!

]]> By: Stuart Fairney http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28413 Stuart Fairney Mon, 01 Dec 2008 13:52:49 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28413 Thanks for the response, there are obviously a lot of 'hairdressing maniacs' out there. Thank God for the council or one might find oneself enjoying a nice glass of wine whilst at the barber. Will the terror arrests will follow? (Mr Wolfgang, Iceland, someone who puts their bin out on the wrong day, someone who wants their kid to go to a decent school, Mr Green and now someone in possession of peroxide and scissors ~terrorists all!). Mercifully they didn't offer a mince pie because I reckon they would be in breach of the following regulations: ~ Planning, not authorised for the sale or distribution of food under the use classes order ~ Health & safety, no properly trained staff on hand to serve food with appropriate hygeine certificate ~ Improperly insured, not insured to offer food ~ Health & safety again, inadequate sanitary provisons for the sale of food ~ Improper taxation declarations, Shops selling or otherwise offering food are subject to different rentals levels and therefore business rates, they are thus tax evaders And I daren't even mention government edicts on salt consumption, processed food and transfats, five-a-day fruit and vegetables, obesity etc etc ad nauseum. Truly we need a bonfire of regulations and a culling of the useless state employees Thanks for the response, there are obviously a lot of ‘hairdressing maniacs’ out there. Thank God for the council or one might find oneself enjoying a nice glass of wine whilst at the barber. Will the terror arrests will follow? (Mr Wolfgang, Iceland, someone who puts their bin out on the wrong day, someone who wants their kid to go to a decent school, Mr Green and now someone in possession of peroxide and scissors ~terrorists all!).

Mercifully they didn’t offer a mince pie because I reckon they would be in breach of the following regulations:

~ Planning, not authorised for the sale or distribution of food under the use classes order
~ Health & safety, no properly trained staff on hand to serve food with appropriate hygeine certificate
~ Improperly insured, not insured to offer food
~ Health & safety again, inadequate sanitary provisons for the sale of food
~ Improper taxation declarations, Shops selling or otherwise offering food are subject to different rentals levels and therefore business rates, they are thus tax evaders

And I daren’t even mention government edicts on salt consumption, processed food and transfats, five-a-day fruit and vegetables, obesity etc etc ad nauseum.

Truly we need a bonfire of regulations and a culling of the useless state employees

]]> By: Lola http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28410 Lola Mon, 01 Dec 2008 13:04:23 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28410 Right, that's my vote won. And in regards to the MPC, two things. One, they were wrong on interest rates but they had been instructed to track the wrong index - the cpi - and had no mandate to consider money supply. Clearly Brown new exactly what he wanted from them when he drafted their terms of reference - compliance. And two, they have been spineless. They are clever blokes and must have known the problems so why didn't they have a go at the Chancellor? A threat to resign en masse may have had the appropriate effect. Or have they all been bought off by glittering prizes? Right, that’s my vote won.

And in regards to the MPC, two things. One, they were wrong on interest rates but they had been instructed to track the wrong index – the cpi – and had no mandate to consider money supply. Clearly Brown new exactly what he wanted from them when he drafted their terms of reference – compliance. And two, they have been spineless. They are clever blokes and must have known the problems so why didn’t they have a go at the Chancellor? A threat to resign en masse may have had the appropriate effect. Or have they all been bought off by glittering prizes?

]]> By: Paul http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28406 Paul Mon, 01 Dec 2008 11:38:25 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28406 I profoundly disagree. "and paying many very high salaries over £100,000 to people taking little risk and in some cases making little useful contribution. " because IME, they take no risk (it would appear the loathsome Haringey(official-ed) will be paid off) and make no useful contribution. Other than that, sums up exactly how I feel. Had someone like that round our way, a woman put in charge of Social Services Children's division. She was (not up to the job- stated in a much more dramatic way -ed). When the Council noticed (eventually) they first isolated her moving files around so she couldn't do any more damage, then paid her off ; enough, apparently, to buy a house in Tuscany (so I'm reliably informed). I profoundly disagree.

“and paying many very high salaries over £100,000 to people taking little risk and in some cases making little useful contribution. ”

because IME, they take no risk (it would appear the loathsome Haringey(official-ed) will be paid off) and make no useful contribution.

Other than that, sums up exactly how I feel.

Had someone like that round our way, a woman put in charge of Social Services Children’s division. She was (not up to the job- stated in a much more dramatic way -ed). When the Council noticed (eventually) they first isolated her moving files around so she couldn’t do any more damage, then paid her off ; enough, apparently, to buy a house in Tuscany (so I’m reliably informed).

]]> By: Tapestry http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28402 Tapestry Mon, 01 Dec 2008 10:28:37 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28402 This year the bulge in borrowing? My take is otherwise. Business in the UK started to sink in September 2008. Until then demand had held up to a reasonable extent. Only then did unemployment really start rising. That means that government recession expenditure and falling revenues have only just started two months ago, and have, some estimate another 12 months to run, at least. Brown's deficit therefore has a long way to go before he can start hoping for it to start reducing again. In the 1981 recession, government fiscal deteriorated by 8% of GDP. If this one is as mild as that one, Brown still has negative GBP 120 billion to go before he hits rock bottom. That is assuming he doesn't need to rescue any other banks or institutions. If he slides by under GBP 250 billion deficit, he'll be doing well. reply: Yes, of course recession effects will get worse next year, but I am assuming he will not be spending so much on bank shares - then again, you can;t be sure even about that. This year the bulge in borrowing?

My take is otherwise. Business in the UK started to sink in September 2008. Until then demand had held up to a reasonable extent. Only then did unemployment really start rising.

That means that government recession expenditure and falling revenues have only just started two months ago, and have, some estimate another 12 months to run, at least.

Brown’s deficit therefore has a long way to go before he can start hoping for it to start reducing again.

In the 1981 recession, government fiscal deteriorated by 8% of GDP. If this one is as mild as that one, Brown still has negative GBP 120 billion to go before he hits rock bottom. That is assuming he doesn’t need to rescue any other banks or institutions. If he slides by under GBP 250 billion deficit, he’ll be doing well.

reply: Yes, of course recession effects will get worse next year, but I am assuming he will not be spending so much on bank shares – then again, you can;t be sure even about that.

]]> By: Brian Tomkinson http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28399 Brian Tomkinson Mon, 01 Dec 2008 10:05:55 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28399 JR: "In the longer term the danger is that the government will want to use the printing presses to sort out its huge debt, which will be inflationary when the banks are working again." This dreadful government will use the printing presses and inflation will go through the roof ruining everyone on fixed incomes. Can we be assured that a Conservative government would not adopt that approach to relieving the public debt? JR: “In the longer term the danger is that the government will want to use the printing presses to sort out its huge debt, which will be inflationary when the banks are working again.”

This dreadful government will use the printing presses and inflation will go through the roof ruining everyone on fixed incomes. Can we be assured that a Conservative government would not adopt that approach to relieving the public debt?

]]> By: Tony Makara http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28397 Tony Makara Mon, 01 Dec 2008 09:42:54 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28397 Its clear now that we need to look at new ways of quantifying inflation. Headline rates are simply no guide when it comes to factors like imported inflation or the inflationary demand for more money than already exists incurred by interest on loans. When the government was telling us that inflation was as low as 2.4% back in Jan 2006 I kept my own records and found that food inflation was already hitting levels of 8-9%. Since the devalution of Sterling these levels have hit 15-21%, mainly because so much food is imported, while the govts measure only shows 4.5%, a fall from 5.2%. We need to introduce far better measures of the various inflations that run through the economy. Aggregating the figures is not a good benchmark for setting lending rates or understanding cause and effect. One certainly has to be concerned how inflationary borrowing will prove to be in the long term. Its clear now that we need to look at new ways of quantifying inflation. Headline rates are simply no guide when it comes to factors like imported inflation or the inflationary demand for more money than already exists incurred by interest on loans. When the government was telling us that inflation was as low as 2.4% back in Jan 2006 I kept my own records and found that food inflation was already hitting levels of 8-9%. Since the devalution of Sterling these levels have hit 15-21%, mainly because so much food is imported, while the govts measure only shows 4.5%, a fall from 5.2%. We need to introduce far better measures of the various inflations that run through the economy. Aggregating the figures is not a good benchmark for setting lending rates or understanding cause and effect. One certainly has to be concerned how inflationary borrowing will prove to be in the long term.

]]> By: Stuart Fairney http://www.johnredwoodsdiary.com/2008/12/01/the-bank-of-england-interest-rates-and-borrowing/#comment-28395 Stuart Fairney Mon, 01 Dec 2008 08:41:10 +0000 http://www.johnredwoodsdiary.com/?p=2260#comment-28395 "This is why the state can afford to prosecute us for...offering a client a glass of wine" I missed this one, does anyone have the link? reply: Norwich Council - hairdressers offering clients an Xmas glass. “This is why the state can afford to prosecute us for…offering a client a glass of wine”

I missed this one, does anyone have the link?

reply: Norwich Council – hairdressers offering clients an Xmas glass.

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