NAUGHTY NUMBERS – How Politicians Spin Public Finance Stats

Another Budget – another torrent of numbers twisted to suit the arguments of all varieties of politicians. So here’s a simple ‘bluffers guide’ to how to understand some of the figures, and how they can be “massaged”.

Let’s start with a few definitions. Continue reading

Grenfell Tower

Municipal Dreams

For almost four decades, we have been taught to see public spending as a bad thing; ruthless economising as a virtue.  We have come to know the price of everything and the value of nothing…and have ended with the funeral pyre of Grenfell Tower. 

Three days after the night of Wednesday 14 June, I still haven’t written anything about Grenfell Tower.  I’ve been trying to process the tragedy emotionally and intellectually. Even the pronoun jars.  This is – or should be – all about the pain and anger felt by the victims of the tower block fire. Those feelings are shared by many but have been appropriated by a few to fit their existing worldviews, to serve pre-existing agenda. In the meantime, it seems every journalist has become an expert, every pundit has their opinion.

Grenfell nowI do know a bit about social housing but I’m certainly not an expert on…

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The Invisible Hand’s Shadow

This article was originally drafted in 2004 but most of the argument is still highly relevant today.

WARNING: longer read

What links the terrorist attacks in the USA on 11th September 2001, the failures of the UK Child Support Agency, and outbreak of “foot and mouth” disease in the UK? The answer is simple – the shadow economy.

Continue reading

£375bn Reasons for George to be Cheerful? Behind the smoke and mirrors of government borrowing.

There is one number virtually no-one* has mentioned in all the coverage of the Budget – £375bn.

£375bn is the amount of government debt (bonds) held by the Bank of England. Part of the reason for Mr Osborne’s perpetual smirk may well have something to do with this £375n number.

These government bonds were purchased – from ‘the market’ and private sector financial institutions – as part of BoE ‘quantitative easing’ program. It was their way of pumping ‘created’ money into the financial system by buying up Government bonds.

(We’ll leave aside the fact that as these bonds may well have been owned outside the UK it meant a lot of the ‘quantitive easing’ went straight out of the country).

At the moment this £375bn represents around a quarter of all Government bonds – or put another way, about 1 in 4 of every pound of the national debt is owned by the Bank of England. Continue reading

A brief note on PFIs (and why I am sick of people misrepresenting them)

The “Private Finance Initiative” (PFI) policy was a curate’s egg – sometimes it worked, but in many (most) cases it was probably mistakenly conceived and implemented.

But what irritates me most about PFI is not the mistakes that were made around it, but the complete (wilful?) ignorance of many of its critics in understanding what most PFI deals were. Continue reading

£35bn on debt interest? But what about the £375bn held by the Bank of England?

One thing has puzzled me since the introduction of “Quantitative Easing” (QE) in 2009. Between then and 2012 the Bank of England ‘bought’ £375bn of government bonds from their previous private sector owners.

This is a pretty sizeable chunk of the total Government debt of about £1.5bn – roughly a quarter. And it costs us nothing. Continue reading