Wednesday 8 July 2020

Rishi Runs Riot. Open Chequebook, OpenThread

Well the Left certainly don't know what to think ...

(give them time - someone will tell them)

What do we think?



Matt said...

They might *MIGHT* just learn something useful about the reduction in VAT as consumption taxes are the worst.

I'm not seeing how this is all getting paid back however unless the government doubles down on the tax reduction measures. This will mean sacking great swathes of the civil service (the oft longed for Bonfire of the Quangos) which I don't think Boris has the balls for (nor Cumming the plan).

Money supermarkets said...

It has never been tried. Not with our own money. So why not give it a go? See if you really can pull levers on the economy to make it run as you want.

If the whole thing is a disaster, it only means cutting back on something only the FO and the bleeding hearts will miss. Foreign aid.. ten years of foreign aid at 0.3%. Or two years at 0.0% and the debt is no worse than it would have been in normal times.

If that isn’t enough, HS2 goes in the bin. No one really misses it except Adonis. And we are no financially worse off than before covid.


BlokeInBrum said...

We're into uncharted territory at this point.
Fair play to Rishi, he's at least attempting to jump start the economy, prevent mass unemployment, and get people spending again.
If they do nothing and the economy implodes then it would cost the government (and us) anyway. Better to be proactive.
It's a shame they don't have the balls to radically cut the civil service, or flog off the Beeb to generate some cash.

Matt said...

@ Money supermarkets

Problem is that we know (from Hayek - that local information is not available to central planners and thus they make sub-optimal decisions based on statistical aggregates.

Case in point - throwing money at home insulation. Most of the easy to do houses have been done. We're on the long tail of those that are not economic. Throwing thousands to save a few 10s of pounds is madness. Especially when it will be taken advantage of by bodgers who will go bust once the scheme has dried up and leave the householder with substandard work.

Matt said...

To elaborate on my previous point, Sunak would have been better to give everyone £500 to spend as they wish - no restrictions. Helicopter money in the venacular.

If 3M people like the arts they could have spend it there (replacing the £1.57Bn announced the other day). Maybe there are 4M people would wanted some money towards home efficiency - not insulation, but perhaps a more efficient boiler (the £2Bn announced for that).

Point is, we'd have £30Bn in the economy that would be allocated in whatever way the recipient of the helicopter money gained the most benefit. Perhaps swapping a clapped out car for a new bike. Better computer for working from home etc.

That's the local information part as opposed to the government trying to direct it and people finding ways to bend what their intention was.

dearieme said...

You mean he hasn't cancelled bloody HS2 and Foreign Aid? Plonker.

Raedwald said...

Sadly, HS2 is now more secure than it was before Covid - even if it ran in a great big £100bn circle going nowhere. Jobs. Consultancies. Fees. Whole families of lawyers dependent upon construction litigation, Audi dealers dependent on executive car leasing, 10,000 greasy spoons dependent on selling banjos to blokes in hi-vis. Even if you count a conservative multiplier of 1.5x, that's £150bn of economic activity that we desperately need.

The VAT cut is the one that interests me the most. No doubt HMT have found a loophole, but I was under the impression we weren't allowed to cut VAT substantially until January. Give French and Spanish hoteliers and bistrot papas a day or two to realise the flanker that's just been pulled and I'm expecting a stern notice from Brussels threatening legal action against the UK. Well done, Rishi!

And it looks as though 'Captain Hindsight' is now being encouraged throughout the party for Kryten. Expect ambitious junior ministers to adopt it in the house with alacrity.

DJK said...

It all seems rather pointless. The £10 restaurant voucher might work if people were staying away from restaurants because they lacked money. But they are staying away either through fear (justified or not) of catching a rather nasty virus, or because social distancing has made eating out a joyless experience. If the government could actually get track and trace working and control the virus, then the economy would recover naturally. It pains me to point out that infection numbers have collapsed to almost nothing in Scotland and Northern Ireland, but have stopped falling in England and Wales.

The prediction from the Institute of Health Metrics at the University of Washington did have C-19 numbers in the UK falling to almost nothing by the end of July, but their latest update notes that progress has stalled, and their model shows deaths ramping up again in October. Sadly, it seems all too likely.

Raedwald said...

As Allister points out in the 'graph, the meal vouchers will infuriate the health fascists - Rishi's left the free market rather than the State to decide which food establishments survive. Hint: It will be Nandos and the fried chicken shops, Indians and kebab houses. Macrobiotic salad restaurants and woke hipster organic porridge bars will not do so well.

Rishi's measures have infuriated the left and the UKIP / BP alt-right in equal measure, have exposed as vacuous ex-Tories such as Gaulk and Hammond who were hoping to gain some traction for a counter-reformation in the Party and I think will delight ordinary voters. Watch ministers' approval ratings rise.

They're quite clever in Number 10. Well done!

E-K said...

So. Second spike in the Autumn. Are we going to do this all over again ?

I've read that the present levels of debt (if paid at the same rate as our war debt to the Americans) will take until the 27th century to clear.

And if we can't do it again - and again... why did we do it the first time ?

Social distancing is what will kill jobs. No amount of magic money can save them.

We know who is at risk. They are mostly economically inactive and relatively easy to protect.

E-K said...
This comment has been removed by the author.
E-K said...

Matt said: "Especially when it will be taken advantage of by bodgers who will go bust once the scheme has dried up and leave the householder with substandard work."

I expect there will be 'apprenticeshps' in step ladder climbing, loft hatch opening and insulation rolling and for a Nike clad foot to be coming through my loo's ceiling sometime soon.

E-K said...

Clever government ? It won't stand up for free speech and that is what is under assault at this very moment.

The Met apologised yesterday over a crime it did not commit. A traffic stop gone awry yet no suspension of officers - presumably because they did nothing wrong.

Will the Government point out how many black lives the Met Police have saved through its waging of war on knife crime, BAMEs breaching lockdown - the recent mega bust of Mr Bigs ????


Instead it goes along with the oppression of free speech. You try saying anything common sense without risk of losing your job. Even those we thought of as full on Lefties are finding this out now.

You're all making the mistake of thinking that the Tories are on your side.

Red team, Blue team shit.

formertory said...

What Matt said!

Or, cut the threshold for NI contributions. New loft insulation schemes won't do anything for tenants of lousy bedsits. Or, cut the rate of VAT across the board. Anything, really, except have politicians decide they know how money should be spent.

Better yet for kick starting the economy, take the forecast £100bn for HS2 (which will inevitably be £200+bn if it ever gets finished, in a world that won't need it) and take the lowest paid out of tax and NI altogether, and reduce consumption taxes with the rest. Any economic benefit from HS2 won't come through for years, so talk of "multipliers" is pretty pointless. We're in for a 100-Years War ver 2 - this one between enraged local communities, hapless and semi-competent officialdom, and the Courts / Review system.

As for measures to "stimulate the housing market" by suspending Stamp Duty on sub £500k purchases........ words fail me. Apparently Sunak has a PPE First; did he sit out the Economics module? Or was he in fact studying a thing called Personal Protection Endeavours?
He seems to be ignoring things like tax incidence and obviously doesn't understand much about how lender processes work, or the some-might-say-corrupt relationship between lenders and valuers.

jim said...

What business would I start up next week - if I had access to a stash and could be arsed?

Transgalactic Transporters? Probably not, and there is the rub, not many interesting innovations out there. Worse, everyone else can do the same. Mobile phone derivatives and services - a bit crowded. Sex, money and power look to be traditional lines of business. Two of those are a bit troublesome and money is an overcrowded market.

All admiration to anyone who starts up. But Rishi's plan lacks some initial conditions. Perhaps a nice little war somewhere, a spot of infrastructure destruction - not in some poor insignificant place, try Henley-on-Thames instead. I see a hint or two on the horizon, but too many spoilsports around.

Extend the Green Belt by 5 miles around big cities, 3 round towns and 1 mile around every village. Councils given six months to zone and be handing out full and valid permissions. To discourage foot dragging, after six months a central team consisting of 12 year olds armed with crayons will do the job for them.

dearieme said...

HS2 is going to use construction workers who could be used for far more profitable purposes. Cancel the bloody thing.

Elby the Beserk said...

Well given that the only thing the govt have given us in this whole fiasco is the £10 food voucher, we shall be toodling off to our local hostelry to take advantage of it. Past caring about everything else, in deep depression realising that even if Sunak and co. salvage the economy, we seem to have lost the culture war and all our institutions are indeed, as I have been saying for a long long time, infested with parasites. Unless this is dealt with, it curtains for the UK and eternal FUBAR is all that is left. Blair needs hanging for what he set off. Slowly.

Read and weep

Matt said...

@ Elby

Skim read the URL but I think the conclusions are incorrect. What we need is a Bonfire of the Quangos - we need to purge the Left from state institutions to release us from their power. Then remove their pensions as a warning to others in the future what will happen if they try it again.

Matt said...

On the last point, the decision to give Sedwill £250k to sod off is the wrong one. Perhaps right to get him to go quietly but entirely the wrong message to send to people across the country who can only imagine that much money in their pension (and his is a top-up).

Still, it's only taxpayers money so who (in government) cares?

Sobers said...

"So. Second spike in the Autumn. Are we going to do this all over again ?"

More to the point, Spanish research suggests the immunity from having had the virus will only last a few months at best. It is after all a coronavirus, ie same family as the common cold. So I hate to say it, but I think this thing will be around for a looong time. Hopefully it may mutate into less virulent forms, which is what usually happens, but that takes some time.

Everyone is acting as if this is something we can 'get through', and return to normal. I think its around for good, or at least the next 5 years or so. So we have to decide, are we men or mice? Do we cower behind our masks and social distancing forever, destroying just about anything that makes life worth living, or do we say 'F*ck it' and just get on with life with no restrictions and let the chips fall where they may?

IMO this is a test of the nations resolve, and so far we are failing badly. So much for the much vaunted 'Dunkirk Spirit' etc.

E-K said...

Sobers - It's all gone quiet on a vaccine too.

APL said...

ND: "What do we think?"

This is the point where Sterling which was on it's last legs:- £5 in 2000 handed to a taxi driver would get the response, 'haven't you got anything smaller?' - now takes two of 'em to get a modest ride anywhere.

Well, give it a year, two perhaps, and we may as well rename Sterling the Lira.

Dr Crippen said...

Instead of sitting at home pontificating about the economy why not get out and enjoy what is left of the summer. And spend, spend, spend.

I've stayed in hotels, eaten in restaurants, gone to the pub a number of times, travelled on trains and shopped etc, etc.

At all time, there has been social distancing, and wearing of a face mask where required. Not all of my fellow travellers and customers maintain the same level of distancing and masks but as the say in the film La Haine - so far, so good.

Dr C