Sep 27 2009
Brown’s new budget law
Imagine if Mr Brown’s promised new law to control the public deficit were already in force.
A policeman arrives at Number 11 Downing Street..
“Excuse me, Sir, but I have reason to believe you are harbouring an overlarge budget deficit in here”
Chancellor (Mr Darling): “Certainly not. I know the law and I know my rights. That is just a necessary fiscal stimulus”.
Police: “But I also see a printing press out the back to print the money to pay for that excess deficit”
Chancellor: “No, Officer, that is just my Quantitative easing machine, part of our new monetary framework”
Police: “I see you are hiding a large number of off balance sheet liabilities to keep your apparent deficit down”
Chancellor: “No, Officer. We have different accounting rules to the private sector, and have always regarded borrowing for anything useful like new schools as off balance sheet through the PFI”
Police: “I think you are understating your deficit by delaying consolidating all the banks you own in your deficit and balance sheet figures. That leaves trillions off the accounts”
Chancellor: “We regard all those toxic liabilities as assets, Officer. They will come good one day you know”
Police: “I have a report that you have failed to account for £1.1 trillion of pension liabiliites, to keep the apparent deficit down”
Chancellor: “Again, the law about pension obligations only applies to the private sector. You should be careful, Officer, as your allegations include the Police pensions which I am sure you want to benefit from”
Police: “Don’t try and get clever with me. You cannot bend the law just because its effects may be unfortunate. Both you and I are under this law. And remember, it was not me who imposed it on us – it was you. We have to enforce laws whether they are good, bad or silly.
I have a complaint that your endogenous growth theory didn’t work, and that you are instead running some kind of growth scam”
Chancellor” No, Officer, You can’t uphold a complaint just because we’ve had a couple of bad years. ”
Police” I think you’d better come down to the station. I have a warrant here to search these premises for the books that tell us the true state of the nation’s finances. In the meantime you can help us with our enquiries”
Just when you thought they couldn’t come up with any more absurd posturing we are promised a Budget balancing Act for the next Parliament. Perhaps bloggers would like to write in with what sanctions they think should apply to Ministers who fail to hit the targets! A little guidance on how to do the sums in the accounts might also be needed for this lot.
33 Responses to “Brown’s new budget law”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
Ooooo, what a temptation. It’d have to be the stocks!
As Rudyard Kipling put it in The Jungle Book :-
“Something noble and grand and good,
Won by merely wishing we could.”
You touch upon an almost unreported aspect of this mess. Many years ago, I concluded it was wise to contract out of the second state pension (SERPS) and have my contributions paid to a private company that could not change the law to suit itself. Since the late 1980’s I received an annual statement from the good people at Legal & General explaining how much money was paid in and how my pot was doing.
So the pot actually exists unlike government schemes which are just future promises to extort money from tomorrow’s suckers. In the last few years I was exorted to ‘rejoin’ SERPS as if the scheme actually existed. I did not of course as this would just be money spent today and I have had more than enough of the PM’s Dr Pangloss approach to the future (where he will be safely retired and wholly unaccountable).
A couple of weeks ago the pleeding stopped and my money was simply taken by force and I am back in the non-existent state ‘fund’ Now I will be rich or poor in retirement by my own efforts but this is more Mugabe politics from a gang of thieves.
Ian Jones Reply:
September 27th, 2009 at 5:01 pm
Shows how much control Labour still has over the media.
Obvously ministers breaking the new law would need to be punished by elevation to the House of Lords.
But don’t forget that they do have excellent lawyers who know how to check documents, so the chances of a conviction would be slim.
Oh great post John, it had me crying with laughter and crying for our poor betrayed nation.
Castration. Then they wouldn’t be able to fcuk up the economy any more.
Well they junked their own Golden Rules and let public expenditure & borrowing rip for political reasons – how on Earth can we trust Brown and co to behave well on fiscal responsibility when they have messed up so badly on the excessive national debt levels ?
That is like saying to an alcoholic who is an ex-Landlord who has drunk one pub dry being allowed to run another pub because he promises to be good……
Sounds a bit implausible to me !
On coming to power this government made it the law that the Bank of England was to interest rates independently & only to prevent damaging inflation. Anybody think that law has been kept?
Last year they passed a law committing the next 5 generations of governments to cut CO2 by savage/serious cuts in our industry which they find too painful to make themselves. Anybody expect that to work?
Such laws are post dated cheques to cover cheques that have already been dishonoured.
I believe under the proposed Mental Health Act one will need only 1 policeman and 2 doctors to be able to section someone for indefinite confinement.
Anyway, laws appear to be irrelevant if one is sufficiently well connected.
martha Reply:
September 28th, 2009 at 9:13 am
Actually we only need 1 doctor now, the government quietly changed it to deal with us that refuse the swine flu vaccine!! wouldn’t it be deliciously ironic if it bounced back and bit gordy on the bum?
http://www.managementinpractice.com/default.asp?title=SwineflupromptschangestoMentalHealthAct&page=article.display&article.id=18628
The latest minutes from the BoE admit that the Monetary Policy Committee “may have misjudged the amount of slack in the economy”.
Quelle surprise! Have these idiots and incompetents judged ANYTHING correctly? They didn’t see the crisis coming, in fact their low interest rate policies deliberately stoked the debt furnace that led to the conflagration that has almost burnt our house down. And yet the same lunatics are still running the show and making more and more misjudgements.
What other industry would allow this? I’m an engineer, and it would be akin to us building a grand suspension bridge which then fell down through our design ‘misjudgements’ and then had to be rebuilt using public money. In the real world, of course, the engineers would end up barred from their profession and with charges of criminal negligence laid against them. Their lives and careers would effectively be over. Yet here we are in the middle of this huge mess and the fools who caused it (step forward Mervyn King, Charlie Bean, Gordon Brown, et al) are still in charge. Not only that, but they somehow seem to feel that they have won everyone’s respect and admiration. (strong words left out)
People make mistakes in every industry, but it seems that only in the realm of high finance and national monetary policy are the miscreants completely immune from any retribution. Why? Surely, this is our most important industry and guiding and monitoring it correctly are absolutely fundamental.
(bring them to court etc)
You laugh, but this is something LabourList was writing about some time ago – putting into law Labour policies that would hamstring the Conservatives when they came into office, all in the name of the good progressive agenda.
Still, it is somewhat ironic that the man responsible for giving us the largest budget deficits in peace time should suddenly decide that what we need to lower the deficit is some kind of law. No Gordon, what we need to keep the deficits down is a chancellor who isn’t an incompetent buffoon so desperate to become Prime Minister that he completely fails to do his job properly. We need a chancellor who sees 16 years of growth as an exception and a time to put some money aside for when the next downturn comes, not one who runs £40bn deficits in order to avoid raising taxes to pay for his profligacy.
I still see that state pensions aren’t on the list. Why shouldn’t the state pension, state second pension also be a liability?
Is it that the Tories intend to default on them?
Let me give you the scenario. Too expensive, so we freeze the amount paid out. Then with a little bit of inflation, it slowly fades away. ie. Same effect as a partial default. Then means test all benefits.
Nick
In the early 18th century, the South Sea Bubble, inspired by a Scottish Financial Whizz, swelled up and burst.
“It soon became apparent that the Company had been falsifying its accounts to inflate its profitability. More significantly, widespread corruption was uncovered. The Company’s negotiations with the government had been advanced by the distribution of bribes to individuals within the government The principal recipient was John Aislabie, Chancellor of the Exchequer. So serious were his offences that he was thrown out of Parliament and imprisoned. Others implicated were the equivalent of the Prime Minister, Charles Sutherland, Earl of Sutherland, the Secretary of State and the Postmaster General, although none was convicted. It is also possible that King George I was involved.”
I feel sure that the same justice will be meted out to the people responsible for the bubble of the early 2000s, inspired by another Scottish Fiancial Giant..
Sally C. Reply:
September 28th, 2009 at 11:11 am
If only!!
The fact that he plans to legislate for future control of the economy is just the ‘emperor’s’ latest new set of clothes.
Andrew Marr was right to ask about medication – a very relevant question to raise, in the circumstances.
It sounds as though the great and good in the international money markets are starting to put the pressure on, to at least have a plan to bring the deficit down. Preferably this to be backed in law. The market is however likely to see through this, and it will make not one iota of difference.
Watching Brown talk about how appalled he is at the bankers’ behaviour, how he is on the side of hard working families and small businesses…. there have been too many actions to the contrary, too many words to the contrary to make his words credible.
We desperately need a Government with concensus with the people for how it taxes and what taxes are spent on. We need to return our currency to a position of strength, backed by real assets. These are what hard working families and small businesses want, not the money printing for hand-outs and to prop up bad banks,at the expense of those who generate real wealth.
JR: “A policeman arrives at Number 11 Downing Street..[polite enquiries follow]”
Dixon of Dock Green is dead. Mob-handed dynamic entry is now an all too common option.
http://www.dailymail.co.uk/news/article-1214755/Baroness-Scotlands-illegal-immigrant-housekeeper-home-raided.html
Stuart Fairney Reply:
September 27th, 2009 at 6:11 pm
The Tongan lady claims she never had an up to date passport, so as a matter of urgency the Tongan high commission must produce the new passport application form. If they can’t, then Baroness Scotland’s claim that she saw an up to date passport is based on four possibilities
- The Tongan’s don’t keep proper records (surely impossible)
- She saw an out of date passport that she did not check properly
- She saw a fake passport that she failed to spot as fake, or
- The reality of events is different from the Baroness’s recollection and also the story she told investigators in which case…
DennisA Reply:
September 28th, 2009 at 6:45 pm
A friend of mine has recently been applying for a new passport and had two photos rejected, one for tinted glasses, the other because he was said to have a slight smile. I puzzled over this one, until I realised that anyone with a smile on their face couldn’t possibly be a current UK resident.
alan jutson Reply:
September 28th, 2009 at 6:59 pm
Stuart
It could get worse.
If Tongan Lady showed her passport, surely her Tongan Passport would be in her maiden Name (as it was when she entered the UK).
If in her maiden Name and a non British Passport then surely alarm bells would ring.
What about the Work Permit which you should ask to see if passport not British Citizen, guess would also be in Maiden name. Again Alarm bells.
Again Work Permit (guess its dated) would surely only show 6 months allowed in UK for a stay, unless it was forged.
Perhaps she used married name, if so Passport would show change of name, again alarm bells.
Could she have shown a British passport, does she have one ???
If the passport or work permit was a forgery, why did the Home office expert in law (Lady Scotland) not spot it.
Tax and National insurance were stopped, if true why did their systems not pick up an out of date work permit.
How does a student national insurance number qualify for paid work, why issue a national insurance number to a foriegn student in the first place.
If stopped tax then there must be an Inland revenue reference, are they happy just to take the money????.
This just goes to show the failure of the said introduced Policy and law.
Many many businesses have a real problem attemping to verify workers identity, forged paperwork and the like, and it would seem that this case highlights all that is wrong with our system, where we are all fined for not being experts in recognising forged papers and the like, but government departments and Law makers are exempt.
Perhaps if she had an identity card then all would have been well in the eyes of this labour expert. If you belive that then perhaps we should all go to the funny farm.
As long as it covers the plonker in charge of the Bank of England who seems determined to create a panic run on the pound then I will be happy.
Is there any chance that the next government will be able to reduce the number of economists that are employed in the public sector and start taking budgetary advice from book-keepers and small business managers. Heaven help us (PLEASE) if we fail to balance our books. Why should the public sector be any different? The books of accounting should show ALL the assets and liabilities however large or small the enterprise. Off the balance sheet borrowing is still a liability which should be ON the balance sheet.
Adrian Peirson Reply:
September 27th, 2009 at 7:38 pm
Not to mention the EU that hasn’t had its books auditer for 13 yrs and can’t account for 90% of its budget.
There should indeed be legal limits on the degree of indebtedness a government can impose upon the citizens of this country without their prior consent. (Incidentally there should be another law preventing the passing of law making powers to unelected bodies such as the EU) The sanctions for failure should be very harsh and include imprisonment and disqualified from public office, sine die.
The miscreants will be tried in the ‘Court of Public Opinion’ – one of the few usefull things Labour has given us to deal with slippery politicians. The Blairs, the Kinnocks, Brown Mandelson and the entire Labour cabinet will be forced to pay reparations to the State and will be bankrupted and end their days penniless, in squalid shared accomodation on benefits in a sink estate oop North.
Surely this would just be a technical breach of the law.
Surely it is just a technical breach of the law?
Another trap? Like the Child Poverty Bill – enshrining the impossible targets they set in law that they are failing to meet just in time to hand over?
It’s not just a question of what ’sanctions’ there should be, there’s the more important questions of who enforces it and what statory powers of investigation they have.
GO has touted this ‘Office of Fiscal Responsibility’ thingy, why not just say that Brown’s idea a good idea and that the tories will exapnd on it by starting a new beefed up Ministry for Fiscal Responsibilty from scratch who’s budget is awarded at Cabinet level from PM to Minister concerned (missing out the Treasury – who they will also regulate) and give it powers of inspection throughout Quangoland, the Civil Service and Local Government? Kind of like a Military Police for the public sector.
Then you could just ‘consolidate’ the legislation within the first few months of power. That’d put the wind up a few people, whether it’d win votes or not is another question that I can’t say I’m qualified to answer.
I feel a ConHome video coming on….!
Bring back the rack! And a public flogging beforehand!
[...] John Redwood thinks so: “Just when you thought they couldn’t come up with any more absurd posturing we are promised a Budget balancing Act for the next Parliament. Perhaps bloggers would like to write in with what sanctions they think should apply to Ministers who fail to hit the targets!” You don’t want to hear the answers. JR himself is better than I had expected. His ditto-heads are worse*. [...]