Rishi Sunak and the Conservative Party.

[Purple Train]

Away from all the drama of the Autumn Statement, James Cleverly has been reported using an expletive to "answer" why Stockton North has a high poverty rate:

https://www.itv.com/news/tyne-tees/2023-11-22/senior-tory-mp-appears-to-insult-stockton-with-derogatory-remark-in-pmqs

Apparently he has defended himself by saying he was using the expletive to describe Alex Cunningham, not Stockton.

What a mad world we live in. On what planet is that a vaguely acceptable excuse?

 

[Busaholic]

Apparently he has defended himself by saying he was using the expletive to describe Alex Cunningham, not Stockton.

What a mad world we live in. On what planet is that a vaguely acceptable excuse?

It would normally be a place rather than a person referred to as a s**thole, so Cleverly is just digging himself such a hole! Now, if he'd said a* *hole, we could believe him.

 

[renegademaster]

up if they are being paid more

By the amount of things they are being paid they are being paid less

 

[Purple Train]

It would normally be a place rather than a person referred to as a s**thole, so Cleverly is just digging himself such a hole! Now, if he'd said a* *hole, we could believe him.

Apparently he said that the exact quote was "s*** MP". So, if he is admitting to saying it, and if the audio (as claimed by Mr Cunningham) shows that what was said (by an unidentified MP) was indeed "s**thole", then it is obvious from his admission that he said it, but also that he lied about what he said and changed it in his statement into a personal attack, which doesn't reflect well on him.

 

[edwin_m]

It would normally be a place rather than a person referred to as a s**thole, so Cleverly is just digging himself such a hole! Now, if he'd said a* *hole, we could believe him.

When you're in a s**thole, stop digging.

 

[Gloster]

Apparently he said that the exact quote was "s*** MP". So, if he is admitting to saying it, and if the audio (as claimed by Mr Cunningham) shows that what was said (by an unidentified MP) was indeed "s**thole", then it is obvious from his admission that he said it, but also that he lied about what he said and changed it in his statement into a personal attack, which doesn't reflect well on him.

I think that there is a custom in the Commons that the Speaker ‘does not hear’ asides, as opposed to direct comments, unless they are insulting to the house or similar. The comments made by Lang, the Deputy Speaker who was presiding, suggests that she did hear him and did not approve, but followed this habit, although she made a couple of pointed, for the House, comments.

 

[DynamicSpirit]

I don't doubt that played a part, but why has inflation in the USA come back down again to around 3% when they pumped as much "free money" into their economy (something like $4.5T) and ours remains well above normal?

I would guess, maybe because growth in the USA has remained strong, which means there's more stuff available for that "free money" to buy. You can't get out of the basic maths that (roughly speaking) if the amount of money flowing around increases more quickly than the stuff that is available for that money to buy, the difference will manifest itself as inflation.

== Doublepost prevention - post automatically merged: 24 Nov 2023 ==

BoE appears to be ignoring the Brexit-related dampeners of growth - sudden reduction in immigrant labour, businesses finding it more difficult to import and export.

I would assume that's because they were one-off things. They would have reduced growth rates during the couple of years when EU immigrants stopped coming, and also as soon as the post Brexit trading regime came in, but once those things had happened, they were in effect baked in to the existing GDP level, so weren't going to impact growth rates going forward: So Brexit is unlikely to be a significant factor in today's UK growth rate - it just means we're growing from a slightly lower base.

 

[edwin_m]

I would assume that's because they were one-off things. They would have reduced growth rates during the couple of years when EU immigrants stopped coming, and also as soon as the post Brexit trading regime came in, but once those things had happened, they were in effect baked in to the existing GDP level, so weren't going to impact growth rates going forward: So Brexit is unlikely to be a significant factor in today's UK growth rate - it just means we're growing from a slightly lower base.

Some effects are temporary but others will be ongoing. It's still much more difficult for British companies to export to the EU and just-in-time supply chains are still disrupted. Plus we still have uncertainty such as the looming extra tariff on EVs if batteries can't be sourced within the UK or EU, the reduced but still significant striking out of EU legislation, and the whole agreement coming up for re-negotiation in 2026. Uncertainty is anathema to businesses that are considering investment to improve productivity and market share.

 

[najaB]

Some effects are temporary but others will be ongoing.

Yeah, but don't tell any Brexit supporters/apologists that.

 

[DynamicSpirit]

Some effects are temporary but others will be ongoing. It's still much more difficult for British companies to export to the EU and just-in-time supply chains are still disrupted. Plus we still have uncertainty such as the looming extra tariff on EVs if batteries can't be sourced within the UK or EU, the reduced but still significant striking out of EU legislation, and the whole agreement coming up for re-negotiation in 2026. Uncertainty is anathema to businesses that are considering investment to improve productivity and market share.

Perhaps I should've been clearer what I meant by one-off. Let's say you're making gadgets, and as a result of Brexit, one of your supply chains breaks and you have to change the supply chain/do some extra paperwork/whatever, and that causes the cost of making your gadgets to rise by 5%, which in turn means you end up making 3% fewer gadgets. That contributes a bit to inflation and to reducing GDP growth rate in that year. And that impact on inflation/growth is one-off: The next year, your gadgets are still 5% more expensive to sell than they would've been without Brexit, and you still sell 3% fewer than without Brexit, but that doesn't cause any further inflation so or any additional loss of sales because that hit has already happened. So the next year, there is no impact on either inflation or GDP growth rate. Ditto the following year. And the following year, and so on. So The impact of Brexit on your sales is permanent - your gadgets will always be 5% more expensive than if Brexit hadn't happened, but the impact of that on inflation and growth is temporary - and that's because inflation and growth aren't measuring absolute values, but differences from the previous years.

Obviously I'm simplifying a bit. Things don't happen quite overnight: Supply chain changes might take a year or two to work through, so the impact of Brexit on growth etc. statistics will be spread out over a few years rather than one single year. Also, you'd expect that businesses will adapt and be continually innovating and finding new supply chains and products etc. - but that will happen equally with or without Brexit. And the principle stays the same: Because GDP and inflation are measuring changes relative to the previous year, they are not going to be impacted significantly by Brexit now that Brexit has mostly already worked it's way through and got baked into the economy. (With a small proviso that there may be additional later changes in future years that you mention). Absolute economy size this year is probably a couple of percent lower than it would have been without Brexit, as it will be next year and the year after, but Brexit has no further impact on the % change from year to year - and that's likely to be why the Bank of England (correctly) doesn't mention it.

 

[bspahh]

Perhaps I should've been clearer what I meant by one-off. Let's say you're making gadgets, and as a result of Brexit, one of your supply chains breaks and you have to change the supply chain/do some extra paperwork/whatever, and that causes the cost of making your gadgets to rise by 5%, which in turn means you end up making 3% fewer gadgets. That contributes a bit to inflation and to reducing GDP growth rate in that year. And that impact on inflation/growth is one-off: The next year, your gadgets are still 5% more expensive to sell than they would've been without Brexit, and you still sell 3% fewer than without Brexit, but that doesn't cause any further inflation so or any additional loss of sales because that hit has already happened. So the next year, there is no impact on either inflation or GDP growth rate. Ditto the following year. And the following year, and so on. So The impact of Brexit on your sales is permanent - your gadgets will always be 5% more expensive than if Brexit hadn't happened, but the impact of that on inflation and growth is temporary - and that's because inflation and growth aren't measuring absolute values, but differences from the previous years.

I would expect it to be the other way around, so a 3% increase in price leads to a 5% decrease in sales.

Brexit isn't a one-off hit, if you are a UK manufacturer selling parts which products which fit into a workflow or product in the EU market. The UK manufacturer needs to keep their paperwork to show the origin on their materials. If they use suppliers from the EU, then they have potential delays if there are problems with the paperwork. If they use UK suppliers, then they need the products to match EU rules. To date, there hasn't been that much actual divergence in the UK and EU rules, but there is still the requirement to document stuff that was not necessary when we were in the single market. If we use our new-found freedom to diverge with the regulations, then its not just a paperwork problem.

For an EU customer, they next time they come to choose a supplier, they might a choice between a UK vendor, and the joy of paperwork, and an EU one, from a frictionless single market. Once they switch from using a UK vendor, because of the hassle of the paperwork, that is an ongoing effect of Brexit. If regulations diverge, the effects will increase.

 

[Dent]

Perhaps I should've been clearer what I meant by one-off. Let's say you're making gadgets, and as a result of Brexit, one of your supply chains breaks and you have to change the supply chain/do some extra paperwork/whatever, and that causes the cost of making your gadgets to rise by 5%, which in turn means you end up making 3% fewer gadgets. That contributes a bit to inflation and to reducing GDP growth rate in that year. And that impact on inflation/growth is one-off: The next year, your gadgets are still 5% more expensive to sell than they would've been without Brexit, and you still sell 3% fewer than without Brexit, but that doesn't cause any further inflation so or any additional loss of sales because that hit has already happened. So the next year, there is no impact on either inflation or GDP growth rate. Ditto the following year. And the following year, and so on. So The impact of Brexit on your sales is permanent - your gadgets will always be 5% more expensive than if Brexit hadn't happened, but the impact of that on inflation and growth is temporary - and that's because inflation and growth aren't measuring absolute values, but differences from the previous years.

If it more difficult to trade then that makes it more difficult to grow a business, therefore growth will continue to be stifled as long as trading is being stifled.

The impact on inflation may be temporary, but the impact on growth of trade being permanently stifled is certainly not.

 

[DustyBin]

I would expect it to be the other way around, so a 3% increase in price leads to a 5% decrease in sales.

Brexit isn't a one-off hit, if you are a UK manufacturer selling parts which products which fit into a workflow or product in the EU market. The UK manufacturer needs to keep their paperwork to show the origin on their materials. If they use suppliers from the EU, then they have potential delays if there are problems with the paperwork. If they use UK suppliers, then they need the products to match EU rules. To date, there hasn't been that much actual divergence in the UK and EU rules, but there is still the requirement to document stuff that was not necessary when we were in the single market. If we use our new-found freedom to diverge with the regulations, then its not just a paperwork problem.

For an EU customer, they next time they come to choose a supplier, they might a choice between a UK vendor, and the joy of paperwork, and an EU one, from a frictionless single market. Once they switch from using a UK vendor, because of the hassle of the paperwork, that is an ongoing effect of Brexit. If regulations diverge, the effects will increase.

I have a good friend who imports and exports goods from/to the EU (mostly via The Netherlands). He voted for Brexit, but in many ways it was a heart over head decision by his own admission, for obvious reasons.

It's interesting talking to him, as business is currently booming and he finds the additional "red tape" nothing more than a minor inconvenience. (It's worth noting as well that the goods he handles are highly regulated, so it's a red tape fest at the best of times!). According to him, others in the industry are struggling as they simply failed to prepare; they genuinely believed that Brexit would be enacted in name only, or wouldn't happen at all.

Anecdotal but interesting (in my opinion)!

 

[edwin_m]

Perhaps I should've been clearer what I meant by one-off. Let's say you're making gadgets, and as a result of Brexit, one of your supply chains breaks and you have to change the supply chain/do some extra paperwork/whatever, and that causes the cost of making your gadgets to rise by 5%, which in turn means you end up making 3% fewer gadgets. That contributes a bit to inflation and to reducing GDP growth rate in that year. And that impact on inflation/growth is one-off: The next year, your gadgets are still 5% more expensive to sell than they would've been without Brexit, and you still sell 3% fewer than without Brexit, but that doesn't cause any further inflation so or any additional loss of sales because that hit has already happened. So the next year, there is no impact on either inflation or GDP growth rate. Ditto the following year. And the following year, and so on. So The impact of Brexit on your sales is permanent - your gadgets will always be 5% more expensive than if Brexit hadn't happened, but the impact of that on inflation and growth is temporary - and that's because inflation and growth aren't measuring absolute values, but differences from the previous years.

Obviously I'm simplifying a bit. Things don't happen quite overnight: Supply chain changes might take a year or two to work through, so the impact of Brexit on growth etc. statistics will be spread out over a few years rather than one single year. Also, you'd expect that businesses will adapt and be continually innovating and finding new supply chains and products etc. - but that will happen equally with or without Brexit. And the principle stays the same: Because GDP and inflation are measuring changes relative to the previous year, they are not going to be impacted significantly by Brexit now that Brexit has mostly already worked it's way through and got baked into the economy. (With a small proviso that there may be additional later changes in future years that you mention). Absolute economy size this year is probably a couple of percent lower than it would have been without Brexit, as it will be next year and the year after, but Brexit has no further impact on the % change from year to year - and that's likely to be why the Bank of England (correctly) doesn't mention it.

If it more difficult to trade then that makes it more difficult to grow a business, therefore growth will continue to be stifled as long as trading is being stifled.

The impact on inflation may be temporary, but the impact on growth of trade being permanently stifled is certainly not.

Or the growth will take place in other countries instead.

All this reduces the tax base, so government has to raise tax rates or cut public spending. And for all these reason people are poorer on average, so won't be spending as much in the British economy.

 

[DynamicSpirit]

Or the growth will take place in other countries instead.

Eh? Growth isn't an either-or thing where you can only have growth in one country or another country but not both. Why on Earth should growth in one country hinder growth in another country? What's to stop other countries' economies growing AND the UK's economy growing? That is after all how it usually works, with or without the EU because innovation and technology improvements encourage growth everywhere!

All this reduces the tax base, so government has to raise tax rates or cut public spending. And for all these reason people are poorer on average, so won't be spending as much in the British economy.

But that doesn't change the point that the reduction in GDP (or in total wealth, or tax base or however you want to measure it) is one-off. It has happened, and now we probably have a total GDP that is semi-permanently slightly smaller than it would have been without Brexit (probably only a couple of percent), but that won't change % growth rates going forward. To claim otherwise is to misunderstand the maths of how growth is measured.

 

[edwin_m]

Eh? Growth isn't an either-or thing where you can only have growth in one country or another country but not both. Why on Earth should growth in one country hinder growth in another country? What's to stop other countries' economies growing AND the UK's economy growing? That is after all how it usually works, with or without the EU because innovation and technology improvements encourage growth everywhere!



But that doesn't change the point that the reduction in GDP (or in total wealth, or tax base or however you want to measure it) is one-off. It has happened, and now we probably have a total GDP that is semi-permanently slightly smaller than it would have been without Brexit (probably only a couple of percent), but that won't change % growth rates going forward. To claim otherwise is to misunderstand the maths of how growth is measured.

If a business starts or increases its activity, that contributes to growth in the country where it takes place. Brexit makes it more likely that will be in another country, either the same business moving its investment or the business not investing and a competitor elsewhere filling the gap in the market instead. The tax arising from that activity also goes to some other country instead of the UK.

If consumers and governments spend less money, that also reduces growth.

Here is the Bank of England deputy governor on the consequences of Brexit: https://www.theguardian.com/busines...vestment-says-bank-of-england-deputy-governor

The outcome of the Brexit vote and years of political uncertainty it triggered has had a chilling impact on business investment in Britain, a deputy governor of the Bank of England has said.

Dave Ramsden, the Bank’s deputy governor for markets and banking, said the fallout from the 2016 referendum had “chilled” investment levels compared with other leading nations and contributed to a lower “speed limit” for the UK economy.

 

[Howardh]

Really upsets me that while more and more migrants come here - necessarily to fill our NHS/care/hospitality etc roles - we voted away OUR freedom of movement to get away to warmer shores, thus freeing up housing, health appointments, road space here etc. If we could have that back with the EU we might be able to balance out those net migration figures.

 

[nw1]

Really upsets me that while more and more migrants come here - necessarily to fill our NHS/care/hospitality etc roles - we voted away OUR freedom of movement to get away to warmer shores, thus freeing up housing, health appointments, road space here etc. If we could have that back with the EU we might be able to balance out those net migration figures.

Exactly, FoM is both ways. Makes it easier for us to get out.

== Doublepost prevention - post automatically merged: 24 Nov 2023 ==

So NI tax to be cut in January. Energy bills rise £94 a year in January?

If I have to spend £94 on something, I'd prefer to spend it on National Insurance than lining the pockets of the energy industry.

 

[Howardh]

Exactly, FoM is both ways. Makes it easier for us to get out.

== Doublepost prevention - post automatically merged: 24 Nov 2023 ==



If I have to spend £94 on something, I'd prefer to spend it on National Insurance than lining the pockets of the energy industry.

Other than the price cap being increased, will they increase standing charges too? That to me is a total rip-off, those that are very light users are penalised more, as are those on dual fuel having to pay ST's for both their electricity and gas. Those on electric only only pay one ST.

 

[renegademaster]

Exactly, FoM is both ways. Makes it easier for us to get out.

== Doublepost prevention - post automatically merged: 24 Nov 2023 ==



If I have to spend £94 on something, I'd prefer to spend it on National Insurance than lining the pockets of the energy industry.

If the rate cut didn't happen the energy price rise still would have happened

 

[JamesT]

Other than the price cap being increased, will they increase standing charges too? That to me is a total rip-off, those that are very light users are penalised more, as are those on dual fuel having to pay ST's for both their electricity and gas. Those on electric only only pay one ST.

It's been reported that Ofgem are reviewing standing charges. The standing charges don't appear to be changing much this time https://www.ofgem.gov.uk/energy-price-cap
Even if you're not using any, there's still a bunch of infrastructure that needs paying for the maintenance and the overheads of billing you.
Before the cap came in this was an area of competition, I used to optimise which deal I went for by the cheapest gas standing charge but the cheapest per unit cost of electricity.

 

[Lost property]

It's been reported that Ofgem are reviewing standing charges. The standing charges don't appear to be changing much this time https://www.ofgem.gov.uk/energy-price-cap
Even if you're not using any, there's still a bunch of infrastructure that needs paying for the maintenance and the overheads of billing you.
Before the cap came in this was an area of competition, I used to optimise which deal I went for by the cheapest gas standing charge but the cheapest per unit cost of electricity.

Yes there is, however, when obscene profits are being made, let's get the priorities right ( the energy suppliers that is )....why squander profit on inward investment when those dividends and bonuses are so essential !

 

[JamesT]

Yes there is, however, when obscene profits are being made, let's get the priorities right ( the energy suppliers that is )....why squander profit on inward investment when those dividends and bonuses are so essential !

A distinction has to be made between the retailers we buy from and the wholesale suppliers. For example, Octopus Energy made a loss last year. https://www.current-news.co.uk/octo...-surge-110-in-2022-despite-retail-challenges/

The company reported a £161 million loss, predominantly due to its decision to absorb £150 million of wholesale cost increase on behalf of customers, keeping tariffs below the price cap. For 2021, the group had reported an operating loss of £84.7 million.

 

[Typhoon]

There is another component of the standing charge

Standing charges cover the suppliers cost of:

• Maintaining the energy supply network that delivers gas and electricity to your home
• Visiting homes to take meter readings
• Supporting government social and environmental schemes like the Warm Home Discount
• Failed suppliers exiting the energy market – electricity only

We are paying for all those companies who did not have the financial backing to withstand changes in wholesale energy prices so went belly up. I assume this is an example of the market working!.

There is a whole list of them at https://www.standard.co.uk/business/money/bust-energy-suppliers-b958705.html (but look out for repeats) up to Feb '22.

Standing charge list from https://www.britishgas.co.uk/energy/guides/standing-charges.html

 

[DynamicSpirit]

We are paying for all those companies who did not have the financial backing to withstand changes in wholesale energy prices so went belly up. I assume this is an example of the market working!.

Rather, we're paying for the cost of a stupid regulatory regime that at one point forced suppliers to sell us gas/electricity below the price that they were paying wholesale for it, therefore driving the smaller suppliers out of business. If it had actually been a free market with suppliers allowed to set prices in accordance with market rates, then those suppliers would probably still be in business, which would have likely meant more competition and therefore lower prices.

Or to put it another way: We're paying for an example of what happens when well-meaning politicians who don't understand how markets work try to interfere with free markets for populist reasons

 

[GusB]

It would normally be a place rather than a person referred to as a s**thole, so Cleverly is just digging himself such a hole! Now, if he'd said a* *hole, we could believe him.

They've got JCB to back them up when it comes to digging holes

Rather, we're paying for the cost of a stupid regulatory regime that at one point forced suppliers to sell us gas/electricity below the price that they were paying wholesale for it, therefore driving the smaller suppliers out of business. If it had actually been a free market with suppliers allowed to set prices in accordance with market rates, then those suppliers would probably still be in business, which would have likely meant more competition and therefore lower prices.

Or to put it another way: We're paying for an example of what happens when well-meaning politicians who don't understand how markets work try to interfere with free markets for populist reasons

That'll be the system devised by the Tory party, then

 

[JamesT]

That'll be the system devised by the Tory party, then

I thought the Tories had nicked the idea of the price cap from Ed Miliband?

 

[brad465]

I thought the Tories had nicked the idea of the price cap from Ed Miliband?

Then the Tories need better advisers who actually help come up with good advice on how to govern, and not cave in/nick others' bad ideas.

== Doublepost prevention - post automatically merged: 25 Nov 2023 ==

Or to put it another way: We're paying for an example of what happens when well-meaning politicians who don't understand how markets work try to interfere with free markets for populist reasons

Maybe, and/or maybe they are in the pockets of bigger energy suppliers who want reduced competition to be able to run a cartel.

 

[al78]

I have a good friend who imports and exports goods from/to the EU (mostly via The Netherlands). He voted for Brexit, but in many ways it was a heart over head decision by his own admission, for obvious reasons.

It's interesting talking to him, as business is currently booming and he finds the additional "red tape" nothing more than a minor inconvenience. (It's worth noting as well that the goods he handles are highly regulated, so it's a red tape fest at the best of times!). According to him, others in the industry are struggling as they simply failed to prepare; they genuinely believed that Brexit would be enacted in name only, or wouldn't happen at all.

Anecdotal but interesting (in my opinion)!

There are a lot of Brexit supporters who don't want to admit they voted for something very bad for poor reasons that are now being shown to be rubbish, and come out with all sorts of excuses for the way things have panned out. Your anecdote is a classic example of I'm not affected so there is no problem and if anyone is affected it must be their fault (i.e. victim blaming). Classic toxic right wing extremism attitude and is the kind of people the government is hoping to attract at the ballot box with their attack on the sick and disabled.

"heart over head" is often how bad decisions are made, logic is frequently superior.

 

[nw1]

Rather, we're paying for the cost of a stupid regulatory regime that at one point forced suppliers to sell us gas/electricity below the price that they were paying wholesale for it, therefore driving the smaller suppliers out of business. If it had actually been a free market with suppliers allowed to set prices in accordance with market rates, then those suppliers would probably still be in business, which would have likely meant more competition and therefore lower prices.

Or to put it another way: We're paying for an example of what happens when well-meaning politicians who don't understand how markets work try to interfere with free markets for populist reasons

I have to admit, I don't even understand the notion of competition in electricity and gas.

Unless each electricity supplier has its own grid, coming from its own power stations, it's surely just a fiction. The physical infrastructure is, by my understanding: power stations, National Grid, local grid (132kv and 33kv) and local lines feeding properties (11kv). All power comes out of that infrastructure, no matter who your supplier is. So you're basically buying exactly the same product, with a different label stuck on top.

And I don't understand how an electricity supplier can claim to be more "green" than others when all electricity comes from the same National Grid served by the same group of power stations - some green, some not.

Whoever our supplier is, some of our electricity will come from Ratcliffe, and any supplier claiming to be "greener" than others is denying that basic fact.

(This is not a comment either for or against green energy, BTW - FWIW my position is that green energy is better, but if we have to keep coal-fired power stations open to mitigate the difficulties caused by the Ukraine war, so be it).

== Doublepost prevention - post automatically merged: 25 Nov 2023 ==

There are a lot of Brexit supporters who don't want to admit they voted for something very bad for poor reasons that are now being shown to be rubbish, and come out with all sorts of excuses for the way things have panned out. Your anecdote is a classic example of I'm not affected so there is no problem and if anyone is affected it must be their fault (i.e. victim blaming). Classic toxic right wing extremism attitude and is the kind of people the government is hoping to attract at the ballot box with their attack on the sick and disabled.

"heart over head" is often how bad decisions are made, logic is frequently superior.

Indeed, one of the best comments on Brexit I've seen on here. If people voted for Brexit for "tribal" reasons despite knowing it would cause problems for the country, and also knowing it would not benefit them personally, that is a strange decision.

I can understand a vote for Brexit made in the knowledge that it would benefit the voter personally. I would disagree with their decision, but at least I would understand.