Former Treasury official
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Over my adult life the national insurance rate has more than doubled from 5.75% to 12% and is set to go higher today. Over the same period the basic rate of income tax has fallen from 34% to 20%. That tells you a lot about the politics of taxation.
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At times like these it's obligatory to quote F Scott Fitzgerald: "They were careless people...They smashed up things and creatures and then retreated back into their money or their vast carelessness...and let other people clean up the mess they had made." #goodgovernment
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It takes rare skill to insist on a hard Brexit on 31Dec but not to be able to implement the border checks after 4 years of planning. By contrast, France & Holland - no great enthusiasts for the ends - have the means: an ovenready hard border ready to go. #amateurnight #freetrade
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Tom Scholar is the best civil servant of his generation. Sacking him makes no sense. His experience would have been invaluable in the coming months as government policy places massive upward pressure on the cost of funding. As Gordon Brown used to say "they're not thinking".
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2 thoughts of the day. Bullying at work is never justified: it can cause huge misery for those affected and their families. In my experience, things have to be very bad indeed for a Cabinet Office enquiry to find fault in a minister -the system is rigged to conclude the contrary.
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Slightly puzzled the Cabinet Office has approved adverts telling us UK will leave EU on 31 October. I though HM The Queen had given royal assent to an Act delaying Brexit (unless there's a deal). Has the Accounting Officer asked for a direction? #impropriety
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I'm told the Chinese media are already quoting Brandon Lewis: no mean achievement. All the Tory PMs I worked for - Thatcher, Major & Cameron - scrupulously observed the rule of law. Now we have a government modelling itself on Victor Orban. #badbusiness
Brandon Lewis just confirmed the new Bill will break international law. On the floor of the House of Commons a Cabinet minister had said the UK will break the law.
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To fire your only official with serious experience of crisis management and then precipitate a crisis a fortnight later brings postmodernism to a new level. #poundrunny
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I worked on some 60 fiscal events over 31 years. I can't remember any generating as strong a market reaction as to today's. The £ is currently down over 3% v $, 1.8% v € and 2.5% v ¥. And the cost of borrowing up 40bp at short end and 20bp at long end. #justsaying
HM Treasury's worst nightmare is a rising cost of borrowing and a falling pound. It may just be a blip but the rise in gilt yields across the curve and the fall in the £ today against the $, € and ¥ is a cause for concern. #soundmoney #abacuseconomics
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Every week since the Euro's inception 20 years ago the Telegraph has predicted its demise. Yet over that period the £ has devalued 22% against the €. Surely time to explain this to its readers. #soundmoney
telegraph.co.uk/business/201…
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The most effective politicians I worked for always made time for their families. Alistair Darling comes to mind. Those who sought to work every hour of the day became increasingly ineffective. This line of attack is utterly incomprehensible.
Keir Starmer's comments that he will not work past 6pm on a Friday to spend time with his children are not "realistic" and "quite tin-eared”, says energy secretary Claire Coutinho.
📻 shorturl.at/0iGnR
@StigAbell
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A brief thread on gilts. Apologies, it's an arcane subject. But the market in government debt, much more than the Bank of England, determines the interest rate homeowners and businesses pay. Today, the yield on 2 year money rose by 26 basis points. 1/6
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I feel for HMT officIals. The rules precluded them sharing spending pressures with Ms Reeves ahead of the Election; the current framework precluded them discussing the realism of spending plans with the OBR. The changes to the OBR charter announced today are a big step forward.
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British institutions may be flawed but they have been instrumental in preventing the UK falling into the abyss since 1660. The deliberate undermining of Sir Kim Darroch & the FCO, following similar attacks on the Treasury & Bank of England, is deeply disturbing. #thiswontendwell
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Alistair Darling was the perfect Chancellor for a crisis. Calm, logical, ordered and decisive. He combined huge integrity with a wonderful dry wit. It was a privilege to work for him and to be his friend. A true public servant and a great Briton.
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The wins the prize for the most wasteful and inept public spending programme of all time. The extraordinary thing is that nobody in the government seems surprised or shocked. No matter: the BoE will just print more money. #soundmoney
bbc.co.uk/news/health-563408…
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"Blackmail" is the perpetual cry of the smaller negotiator with the weaker hand. #getagrip
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Until this announcement, I was unpersuaded 16-17 year olds should get the vote. Now, I regard it as essential. #strangetimes
BBC News - Conservatives plan to bring back mandatory national service
bbc.com/news/articles/cpddxy…
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Feel for the civil service. Sometimes you have to let ministers find out for themselves that an unnegotiable position is..er..unnegotiable.
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Axiom of the last 30 years. Europhile Tories always compromise to preserve party unity, Their opponents don't. #thatswhywearewhereweare
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An early lesson I learnt from international negotiations: if you are going to threaten a larger entity, who is bearing less risk than you are, it's essential to get your ducks in a row first. #freetrade #amateurnight
UK in U-turn on full post-Brexit border controls on.ft.com/3frWObN
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Despite sharing his education, I can't claim to have the same understanding of the constitution as our current PM. So, I'm a little embarrassed to ask: why does an advisory plebiscite in 2016 have more legitimacy than an election to our sovereign parliament in 2017? #justasking
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I don't want to disappoint those wanting a speedy denouement to current market events. But it's a long and repeated game. We have a floating currency which withstands day to day market pressures. London is one of the deepest capital markets in the world. 1/
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David Gauke was one of the best Treasury ministers I worked for. He has great judgement and integrity rare in modern politicians. Needless to say, his commitment to free trade and sound money second to none. Let's hope he triumphs on 12 December.
A Conservative majority at the next General Election will pursue a very hard Brexit. Given the refusal to extend the Implementation Period beyond 2020 and the obvious lack of time to negotiate a Free Trade Agreement before then, this means we will be on WTO terms by January 2021.
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An Irish friend sent me this menu. On asking what a "Brexit" was, the diner was told an "Eton mess".
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Neither Labour nor the Tories have a credible plan for BREXIT. Have the British people ever been so ill served by the two main parties?
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£1 billion for Ulster is just a downpayment. DUP will be back for more...again and again... They have previous in such matters. #profligacy
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One day many years hence HMG will accept that the way to make housing affordable is to ensure supply outstrips demand: that would be leadership. Until then, expect numerous initiatives to pump up demand to support those who own property at the expense of those who don't.#politics
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It was a lapse of taste for David Laws to publish this letter which was a private, comradely & humourous message from @liambyrnemp to his successor. Byrne was signed up to cutting the deficit by the amount Mr Osborne delivered. And of course there was money left. #soundmoney
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Today the prospect of a UK-USA free trade agreement died. So we will never win the right to eat chlorinated chicken. #anationmourns
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I worked for, and with, Alex over 3 decades. He has been a great public servant: full of integrity. As Nigel Lawson has said of him: "he possessed a quick & logical mind, was hard-working and straight as a die...he was outstanding." theguardian.com/politics/202…
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I'm biased, having worked for him, but Ken Clarke is surely one of the greatest parliamentarians of the modern era? #representativedemocracy
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Insecure ministers will want to appoint their mates to departmental boards. It's corrupt and they shouldn't. The job of an independent non-exec director is to provide challenge. All the Chancellors I worked with - Brown, Darling & Osborne - recognised this. #goodgovernance
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Sir David Norgrove is a man of integrity doing his job. As a man of honour, Mr Johnson should issue a correction, apologise and move on.
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I spent months on an unpaid cooling off period to meet ACOBA's requirements back in 2016, and rightly so. Is it churlish of me to find those who persistently ignore and break rules (put in place to preserve propriety) just a little irritating?
Boris Johnson: former PM committed ‘clear breach’ of rules with timing of Daily Mail role, says watchdog – UK politics live theguardian.com/politics/liv…
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Surprised that the Chancellor has not published an impact assessment. One thing to bounce a Withdrawal Bill through. Quite another to do it on basis of no evidence. Would not have happened on the watch of Messrs Brown, Darling, Osborne & Hammond. #badbusiness
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I'm the Chancellor of the Duchy of Lancaster's biggest fan when it comes to improving professionalism across government. But the gap between rhetoric and reality is becoming a chasm. Government procurement should be above suspicion. Sadly, it's not. #soundmoney
EXCLUSIVE: Kate Bingham, chair of Boris Johnson's vaccine taskforce, has charged taxpayers £670,000 for her own team of boutique PR consultants
According to leaked docs, eight full-time consultants from London firm Admiral Associates are on the equivalent of £165K salaries
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Huge credit to Sir Laurie Magnus. He carried out his inquiry quickly. His letter is admirably clear. His job is to advise. The PM has decided. One small step along a very rocky road to re-establishing standards in public life.
Letters from adviser on ministers’ interests to PM, and from PM to Zahawi here gov.uk/government/publicatio…
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Mr Hammond is right to question the political connections of some of the hedge funds with a financial interest in no deal. They are shorting the £ and the country, with the British people the main loser. #soundmoney
A Brexit deal can be done – and it must be done. Boris Johnson promised he could get a deal, and he must deliver on that promise before a general election.
But to do so, he’ll need to make some changes to his approach.
My piece in The Times:
thetimes.co.uk/article/07332…
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As Mr Davis enters another round of negotiations with Mr Barnier, I recall the insights of my old friend Lord Myners
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HMG has broken a cardinal rule: don't look like an outlier relative to other G7 countries. The markets now have sterling and gilts in its sights. There will be rallies followed by brief substantive lurches downwards. We probably haven't seen the bottom. 4/
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Rentiers and trustifarians won't have to pay a penny. And the low paid young will subsidise the wealthy old. Higher spending does require higher taxes. But national insurance is a regressive tax on jobs. #soundmoney
EXCLUSIVE: PM and Chancellor "almost there" on manifesto-busting hike to National Insurance Contributions - of at least 1% - to pay for Social Care blackhole. thesun.co.uk/news/politics/1…
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When a government purportedly committed to economic liberalism celebrates an expansion of the "customs sector", something has gone very wrong indeed. #deadweight #freetrade
We are committed to growing the customs sector for EU trade in 2021.
Find out more about how the government is preparing for our departure from the UK’s transition period 👉 bit.ly/3fnOaeJ
#LetsGetGoing
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"Clean Brexit" is newspeak at its best. The sad fact is the "cleaner" the break the greater the certainty that future governments will be wrestling with its consequences well into the 2030s. #neverendum
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Time for some honesty about Brexit. There is no way the UK will negotiate a trade deal with the EU by December 2020. Even 2022 is very optimistic. Mid-2020s more likely.
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Meanwhile, the UK will pay a high risk premium for the increased debt it is selling, making it all but impossible to live within spending plans, even before inflation. HMG is expecting public sector workers to take bigger real wage cuts even than in 1931, which led to mutiny 5/
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The 3.5% devaluation of Sterling against € and CHF in recent days may not be sustained. But it's a reminder that ignoring the law has consequences: lower living standards. As ever, the rich can hedge; the poor take the biggest hit. #soundmoney
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Intrigued by the politics which requires us to tax low paid graduates while exempting rentiers from the health and social care levy. Is it a reflection of who finances our governing party? #strangetimes
No 10 plans to lower salary level at which graduates start repaying loans on.ft.com/3kIewgz
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The rearranging of public health's deck chairs is entirely predictable. "Radical reformers" with short time horizons always prefer to focus on form rather than substance: one reason why Germany's public services are rather better than ours. #learntnothingforgottennothing
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A short thread on the history of direct taxes over the last century. The 1906 Liberal government introduced the principle that "unearned income" should be taxed at a higher rate than "earned income". This was bad news for rentiers and capitalists. Better news for workers 1/
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David Allan Green, one of best and more impartial BREXIT commentators, on the day the whistling ended. ft.com/content/a0e25381-e85b…
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Quite striking from Dominic Lawson: not a natural opponent of the government or PM. For my part, I shall wait for Sue Gray's report before passing judgement. #strangetimes
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Time to broaden national insurance tax base to include rental, dividend and pension income. If taxes have to rise, which I suspect they have to given the PM's spending ambitions, that would at least limit the increased burden borne by working people. #soundmoney
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It may be novel to some but civil servants have an obligation to obey the law and advise ministers accordingly. Sometimes ministers choose to ignore them; other times officials themselves get the law wrong. Fortunately we have a judiciary who can put them right. #ruleoflaw
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The state pension will rise by 2 per cent above inflation next April at a time when real incomes of those of working age - who pay the taxes to finance those pensions - are falling. How much longer can the old folk carry on extracting rent from the young? #soundmoney
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Much more likely that the Bank of England will raise rates to a level where a recession next year becomes inevitable. As a Chancellor said 34 years ago (albeit a year further out from an election) "if it isn't hurting, it isn't working". #soundmoney 6/6
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The dogs bark, the tumbrels move on. Our new Jacobins may last a little longer than Robespierre & Co. But their fate will be the same. #therevolutiondevoursitschildren
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Proud to be part of huge Lords' majority for customs union with EU. Time for HMG to forge consensus to keep trade flowing freely. #freetrade
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Erecting trade barriers makes us all worse off. Free trade was the driver of Britain's prosperity in the 19th century. Chamberlain and others put that at risk in the 20th century. The new protectionism will make things worse in the 21st. #badbusiness
It is with great sadness we must stop sending our cheese to the EU. Due to an oversight in the Free Trade deal it is impossible for us to send cheese to our EU online consumers. DEFRA has told us not to expect an exemption or change anytime soon. Investment & hope is lost today😪
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Well done @tfl for the fine restoration of the historic destination indicators at Earl's Court station.
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A short thread about Inheritance Tax, a tax which few estates pay and raises little revenue (c£7 billion). But many mistakenly think they will pay it. Hence the political return from cutting it is higher than the cost. 1/
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A bit puzzled. It's the independent Bank which sets interest rates. I feel for Dr Bailey and his MPC colleagues. I don't recall Messrs Brown, Darling and Osborne making similar assertions in the 2001, 2005, 2010 and 2015 elections and for good reasons. #soundmoney
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All credit to Bailey of the Bank whose Friday deadline has forced the government to adopt a more orthodox economic policy and thus restore order to the markets. #soundmoney
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A wonderful statement from the Gladstone Library. I particularly like the WEG quote: "I was brought up to hate and fear liberty. I came to love it. That is the secret of my whole career". Gladstone travelled a long way in his 60 years as an MP.
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I am hearing this absurd advert every three tracks on Spotify (OK I should take out a subscription to avoid adverts). But I fear I'm not the only person getting irritated by this flagrant waste of money and abuse of Parliament. Time to write to the Cabinet Secretary.#soundmoney
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If PM secures agreement to deal, this is just the end of the beginning. If she doesn't, we are back to square one. Either way the heavy lifting lies ahead. Brexit uncertainty will be with us into the mid-2020s and beyond. #getusedtoit
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In run up to Maastricht, UK was 100% focused on treaty text. Now it favours speech over substance, leaving it to EU to make all the running.
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I have the highest regard for Lord Frost from his time at the Scotch Whisky Association. But as the man who negotiated the "triumph" of the N Ire protocol, I'm puzzled why he's so against it. Indulging the loopy wing of the DUP at the expense of moderate opinion never ends well.
Frost warns EU that it needs to rethink Northern Ireland rules on.ft.com/3yhyMKI
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It is not the Bank of England's job to bail out pension funds. But history suggests it's a job the government will take on and it will be working on a scheme right now. Sadly, this can only add to the state's liabilities and to upward pressure on interest rates.
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Britain's failure to support Canada in its dispute with Saudi Arabia is deeply embarrassing. #getagrip thetimes.co.uk/article/stand…
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I worked for Tory governments for 18 years. But I still can't claim to understand the party. Why expel loyalists like Soames, Hammond and Gauke - and Ken Clarke who was a Tory minister for 23 years - while allowing all those who rebelled against Mrs May to get off scot-free?
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The department for business has been through 6 name changes and associated reorganisations since 2005, during which time it has had 13 secretaries of state (7 in the last 4 years). And people ask why it isn't an effective economics ministry or counterweight to HM Treasury.
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Inflationary pressures are persisting in the UK more than in other countries, and this is feeding through to 2nd round effects on wages. Employees and employers are being perfectly rational. We are at full employment. Labour has negotiating power, 2/6
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But I can't remember an election when 18 months out interest rates were still rising steeply. It's still possible the government may get lucky: underlying inflation may come down quicker than expected. But I wouldn't bet on that. 5/6
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HM Treasury's worst nightmare is a rising cost of borrowing and a falling pound. It may just be a blip but the rise in gilt yields across the curve and the fall in the £ today against the $, € and ¥ is a cause for concern. #soundmoney #abacuseconomics
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To make houses more affordable, you need to increase supply. Stoking demand through subsidised mortgages merely raises prices and provides windfall profits to homeowners and housebuilders. #learntnothingforgottennothing
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A sign of desperation that these costings are attributed to Treasury officials, when the assumptions are determined by Tory special advisers. Glad that the official Treasury set the record straight on Monday. #garbageingarbageout
In last night's election debate, there were heated exchanges over tax. Rishi Sunak said Labour wanted to raise tax by £2,000 which Sir Keir Starmer called 'absolute garbage'.
@JustinOnWeb asks energy secretary Claire Coutinho about who costed Labour's spending plans.
#R4Today
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Ivan Rogers huge loss. Can't understand wilful&total destruction of EU expertise, with Cunliffe,Ellam&Scholar also out of loop.#amateurism
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Mr Hunt right to bring forward statement. Opportunity to calm markets and reduce debt interest pressures. Important to retain perspective. UK is solvent. Economy will recover. Inflation will fall. HMT and BoE working well together. Much more a political than an economic crisis.
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Goods' exports to France up 41% on yr ago. ⬆️19% to Ireland. ⬆️17% to Germany. ⬇️1% to US. Is Dr Fox right to prioritise North Am over EU?
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First,it was the communists, then the unions, then Brussels and now HM Treasury which is the obstacle to little england nirvana.#fantasia
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albeit not enough to secure anything other than real wage reductions. But the BoE which has been behind the curve on interest rates has to act decisively otherwise sterling will fall creating more inflation. Higher interest rates cause massive problems for households. 3/6
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They also cause massively problems for the government. Debt interest payments are already growing faster than any other spending programme, crowding out spending priorities like the NHS. An election is on the horizon. 4/6
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"The art of government is that of handling advice". I look back on Mr Darling's and Mr Osborne's attitude to ministerial accountability and feel I was working in another century. The cull of senior officials is a sign of weakness rather than strength.
theguardian.com/commentisfre…
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As the 2019 spending review gets under way, the Treasury chalks up its first efficiency improvement.
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My main advice to public servants, whether political or official, is to avoid self promotion and believing your own myth. Otherwise, it tends to end badly. #thomascromwell
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Mr Sunak has proved that negotiating in good faith is a more effective strategy than megaphone and bluster. Congratulations to all involved in this impressive deal. The pendulum has begun to swing towards a more sensible relationship with the EU, and not before time. #freetrade
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This is an unsustainable equilibrium. Difficult times lie ahead. On the bright side, the British people and the governments they elect generally learn from policy errors...in the end. And so I expect greater realism and better leadership (sometime) in the future. #soundmoney
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How and when did the Tories become Jacobins? They used to want to preserve our great institutions. They are now hell-bent on destroying them. #robespierre
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The interesting question about the universal winter fuel payment is not its abolition but why it lasted so long. Mr Brown introduced it when the state pension was indexed to prices. Once the "triple lock" was introduced, the case for a WFP for all fell away.
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If the so called Malthouse Compromise is the best the governing party can come up with after 2 1/2 years, I really do worry about the country's future. #learntnothingforgottennothing
I've spoken to officials on both sides of Brexit talks who dismiss the Malthouse amendment as “no plan at all” and “bonkers”
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Lucky nobody in Britain cares about the exchange rate. Otherwise the 5% fall in Sterling against the $ and 2% against the € in the last 5 days might be a cause for concern. It's likely to import more inflation and make us all worse off. But why worry? #soundmoney
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For anybody who cares about the rule of law, this is deeply disturbing. Jonathan is a first rate lawyer and a man of principle. #badbusiness
BREAKING on @ft online
The head of the UK’s government legal department has quit over suggestions that Boris Johnson is trying to row back on parts of last year’s Brexit deal relating to Northern Ireland.
ft.com/content/6186bf1c-055b… via @financialtimes
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Over the next 9 months, we will have tobtolerate many an "official Treasury" costing of Opposition policy. Since time immemorial, whatever the party in power, these costings have had little if any credibility. Political advisers determine the assumptions. #rubbishinrubbishout
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Just spotted in C Hoare & Co garden in Fleet Street. Grateful for views on whether a Sparrowhawk or Peregrine Falcon. Am inclined to the former.
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HMG must have known all along that if UK leaves Customs Union & Single Market a Canada-type FTA is as good as it gets, and trade will suffer
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The state aid rules are the best feature of the Single Market, stopping many a stupid intervention in support of vested producer interests.
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HMRC's job is to maximise revenue while minimising cost. Proving error is "deliberate" rather than "careless" is difficult, time consuming and expensive. So understandably HMRC do the deal and move on.
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Delighted my old friend Ken Clarke plans to seek reelection in Rushcliffe. The greatest parliamentarian of his generation. #fatherofthehouse
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