Is Sunak losing friends?

A remarkable article from Julian Jessop, formerly of the right wing Institute of Economic Affairs, entitled ‘Is the UK government really about to spend £83 billion on debt interest?’, which effectively disses the ‘Spring Statement’ of his right wing fellow traveller, Chancellor Sunak.

Remarkably, it mirrors Richard Murphy’s take down here.

Jessop’s article concludes, rightly in my view:

Put another way, there will still be plenty of cash to spend on other areas, without having to issue loads more new debt.

So to answer my original question, is the government really about to spend £83 billion on debt interest in a single year? In purely accounting terms, and on an accruals basis, yes, and that’s all some might care about. But in my view, this figure gives a misleading picture of the economic, financial and policy implications of the jump in debt interest costs.

Comments

  1. Andrew -

    “Is the UK government really about to spend £83 billion on debt interest?” No. No no no. Anyone who says so either does not understand what they are talking about or is trying to deliberately mislead us.

  2. Tony_B -

    When questioned the Chancellor, as well as the PM, the Health Secretary, Home Secretary, Foreign Secretary and so on all give non-answers or no answers. It’s easier for them to decieve and lie; in fact it is a precondition for them to behave thus in this advanced state of democratic decline.

    In effect they have adopted an abusive relationship with the public.

    A new model for democracy is urgently required! But who is capable of delivering that?

    1. Peter May -

      Much agree with the “abusive relationship with the public”.

    2. Schofield -

      A central purpose of democracy is to allow steering of a country to deliver beneficial economic outcomes for all. What good though is that democracy unless you teach Economics 101 in schools that actually makes sense? You certainly don’t have this in the UK as a core curriculum element let alone one that makes sense if you opt to take economics as a separate course. The British mentality of muddling through wearing a blindfold no longer makes any kind of sense as Brexit has clearly shown!

  3. Teri -

    https://julianhjessop.com/2021/03/20/is-there-any-money-left/

    Then you read this garbage and realise he still operates under the ‘loanable funds’ paradigm.

    Heaven forbid the government spends a bit too much as modern Britain is operating at full employment and capacity and that will drive inflation!

    1. Peter May -

      Agreed – that is pretty dire, although when he admits that “the government doesn’t face the same budget constraints as a household”, that I suppose indicates some small progress…

Comments are closed.