Wednesday 20 December 2023

Inflated Opinion

Inflation of 3.9 per cent still means that things cost 3.9 per cent more. It is nothing to celebrate. A two-year low, you say? Who was the Chancellor of the Exchequer in December 2021?

While claiming that everyone else's pay claims are somehow the cause of inflation rather than a desperate attempt to survive it, MPs are about to increase their own pay by 7.1 per cent, putting up their basic salary from £86,584 to £92,731. There will be a General Election in the next 13 months, and MPs still have final salary pensions.

A sovereign state with its own free floating, fiat currency has as much of that currency as it chooses to issue to itself, with readily available fiscal and monetary means of controlling any inflationary effect, means that therefore require to be under democratic political control. They just refuse to do it. 

It follows that, at 100 per cent of GDP or otherwise, there is no debt. It is an accounting trick. The Treasury, which is the State, has issued bonds to the Bank of England, which is the State. Even if those bonds were held by anyone else, then the State could simply issue itself with enough of its own free floating, fiat currency to redeem them. There is no debt. There is no debt. There is no debt.

There have been strikes for over a year and a half because work no longer pays, yet the line from all parties is that wages are causing inflation. Read that again in case you had understandably thought that I had mistyped it. I had not. We savers are seeing no benefit from these increases in interest rates. Guess which thieves are once again back funding all political parties. But while I never thought that I would thank Norman Lamont for anything, it turns out that recessions are a matter of choice by the State after all.

Meanwhile, giving up democratic political control of monetary policy has therefore proved to have been a disaster. Without a manifesto commitment, Labour farmed out monetary policy. The Liberal Democrats forced the creation of the Office for Budget Responsibility. On their own initiative, the Conservatives last year created the Economic Advisory Council out of thin air. Yet on none of those occasions have the salaries of the First Lord of the Treasury, of all other Treasury Ministers, and of all senior Treasury civil servants been halved, as in each of those cases they should have been.

If there is an Economic Advisory Council, then what is the Treasury for? And look who is on it. Imperial protectorates and Indian princely states had British advisers whose advice had to be taken, and our nominally sovereign little colony of BlackRock and JP Morgan is in much the same position. Rupert Harrison was George Osborne's long-time Chief of Staff and then Evening Standard employee, while Osborne, Philip Hammond and Sajid Javid are also all advising Jeremy Hunt. Harrison has been selected as the Conservative candidate for Bicester and Woodstock. Yet whom would you have instead? Rachel Reeves? Even if Harrison were a sitting Conservative MP, then would Reeves remove him from the Economic Advisory Council? Merely to ask that question answers it.

But when I tell you that there is going to be a hung Parliament, then you can take that to the bank. I spent the 2005 Parliament saying that it was psephologically impossible for the Heir to Blair's Conservative Party to win an overall majority. I predicted a hung Parliament on the day that the 2017 General Election was called, and I stuck to that, entirely alone, all the way up to the publication of the exit poll eight long weeks later. And on the day that Rishi Sunak became Prime Minister, I predicted that a General Election between him and Keir Starmer would result in a hung Parliament.

To strengthen families and communities by securing economic equality and international peace through the democratic political control of the means to those ends, including national and parliamentary sovereignty, we need to hold the balance of power. Owing nothing to either main party, we must be open to the better offer. There does, however, need to be a better offer. Not a lesser evil, which in any case the Labour Party is not.


  1. Tweets Tom Harwood:

    In 2010/11, MPs earned £65,738.

    If that kept up with inflation, today they would earn £97,040.

    April's "mega pay rise" announcement reported today takes them to £92,731.

    That's a real terms pay cut since 2010.

    1. He is rumoured to be looking for a seat in 2029.