22 November 2022 – today’s press releases

  • Debt figures: Conservative Chancellors have blown black hole in Britain’s finances
  • Welsh Liberal Democrats to Vote to Withhold Legislative Consent on the Northern Ireland Protocol Bill
  • OECD forecast: Damning verdict of the Government’s economic record
  • Sewage: Budget means almost £500 million less to tackle the sewage crisis
  • Levelling Up Bill: Conservative chaos to blame for cancellation of vote

Debt figures: Conservative Chancellors have blown black hole in Britain’s finances

Responding to new ONS figures showing the scale of UK government borrowing in October, Liberal Democrat Treasury spokesperson Sarah Olney said:

These figures reveal just how badly the long list of Conservative Chancellors have trashed our economy. This Government has blown a massive black hole in Britain’s finances and is now expecting hardworking families to pick up the bill.

It is a national scandal that big banks are getting massive tax cuts whilst the squeezed-middle gets clobbered with endless tax rises.

The sensible way to solve this is surely to tax the richest companies making bumper profits. We can’t trust this Conservative Government to clean up their own mess. They should never be trusted to run our country’s economy.

Welsh Liberal Democrats to Vote to Withhold Legislative Consent on the Northern Ireland Protocol Bill

The Welsh Liberal Democrats will vote to withhold Legislative Consent on the Northern Ireland Protocol Bill when it is brought before the Senedd later today with Welsh Liberal Democrat Leader Jane Dodds MS stating that the UK Conservative Government’s proposals to override the Northern Ireland Protocol would not just represent an egregious breach of international law – but risk plunging the country into a trade war with our closest neighbours.

Commenting Welsh Liberal Democrat Leader Jane Dodds MS said:

No responsible government would ever countenance taking such steps – and at a time when we should be working with our European allies in face of Russia’s aggression, it would ignite a diplomatic firestorm.

The Conservative’s plans would turn a cost of living emergency into a total nightmare – at a time when families up and down the country desperately need support.

A trade war would be a disaster for Welsh farmers – who already struggling with increased costs and extra red tape alongside regular families who already face extra inflationary pressures as the result of the Conservatives’ botched Brexit deal.

Rather than throw the economy into yet more turmoil over the Northern Ireland Protocol, the Conservatives should focus on providing the vital support to families which is currently lacking.

The easiest way for tensions to be solved would be for the UK as a whole to re-join the single market and customs union as the Welsh Liberal Democrats are calling for.

OECD forecast: Damning verdict of the Government’s economic record

Responding to the latest OECD forecast which puts Britain bottom of the G7 table for economic growth, Liberal Democrat Treasury spokesperson Sarah Olney said:

This Conservative Government has trashed the British economy and left hardworking families to pick up the tab. The OECD’s damning verdict of the Government’s economic record should shame the long list of this year’s Conservative Chancellors.

Months of Conservative chaos and an ever changing cast of Chancellors has added to the pain. We have all lost track of how many Chancellors there has been this year, but all of them are guilty of hiking taxes in the middle of a cost of living crisis and wrecking all hope of economic growth.

I don’t think the Conservative party will ever be forgiven for this. The blame for this recession lies firmly at their door.

Sewage: Budget means almost £500 million less to tackle the sewage crisis

New analysis by the Liberal Democrats has revealed the department responsible for dealing with the sewage crisis is about to have their day-to-day budget slashed in the wake of the Autumn Statement.

The Department for Environment, Food and Rural Affairs is facing a real-terms cut to its day-to-day spending of 10.6% over the next two years, equating to a staggering £496.8 million.

Water companies have dumped sewage 775,568 times for over 5.7 million hours over the last two years. Meanwhile water company bosses have paid themselves £51.1 million in remuneration including £30.6 million in bonuses.

Under Conservative plans water companies will be permitted to continue to dump sewage until 2050 and bill payers will see hikes to pay for it.

Liberal Democrat Spokesperson for the Environment, Tim Farron MP said:

Whilst banks are being unjustly rewarded with slashed taxes, the department which is supposed to deal with the sewage crisis is getting their budgets slashed. Frankly, the whole thing stinks.

This budget cut gives a licence for companies to pump sewage into our precious rivers and Britain’s treasured coastlines.

Funding to stop sewage poisoning in our waterways should be protected at all costs. We have otters being poisoned and children getting ill because water companies dump sewage where they want. All whilst they make multi-million pound profits and pay their execs eye-watering bonuses.

This Government’s priorities are all wrong. They put big banks and water companies over wildlife and children’s health.

Levelling Up Bill: Conservative chaos to blame for cancellation of vote

Responding to reports that Monday’s vote on the Levelling Up Bill has been cancelled, Helen Morgan, Liberal Democrat Levelling Up Spokesperson, said:

This chaotic Conservative government is once again too preoccupied with party infighting to focus on running the country.

Mortgage rates and rent prices are rocketing after the Tories crashed the economy and now they can’t even get one of their flagship bills through Parliament. Today will do nothing to help people across the country struggling with housing costs.

Towns and cities up and down the country have been waiting years for the Conservative Government to get serious about levelling up, yet their petty squabbles means the long wait is going to continue.

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12 Comments

  • Massimo Ricciuti 23rd Nov '22 - 2:43pm

    Thank you, Mark Valladares. It’s interesting to read about that from Italy!

  • Peter Martin 27th Nov '22 - 9:46am

    “This Government has blown a massive black hole in Britain’s finances ”

    Comments like this simply allow the Government to fight their battle on the ground of their own choosing. The argument will be that if there is a lack of money in the kitty then “painful choices” will have to be made. Black holes may well exist elsewhere in the universe, but they don’t exist in the UK’s national economy.

    Either inflation is higher than desirable and there is a problem, or it isn’t, and there is no problem. Obviously it is the former but the solution to it isn’t just a matter of raising interest rates and taxes with severe spending cuts thrown in for good measure. Creating high levels of unemployment and underemployment won’t do anything to solve the problem in a way that any sensible person would approve of.

    As we saw in the 70s, inflation and class conflict are inevitably triggered whenever there is an energy crisis. We didn’t learn our lesson then and continued to rely on the “international market”, instead of taking steps to become more self reliant. I think we all understand the need to have a secure food supply. The need for a secure energy supply is equally important.

  • There were two energy shocks in the 1970s. The 1973 Opec oil crisis and the 1979 Iran revolution. Both exacerbated underlying inflationary pressure that had been building since the mid 1960s. As with all external shocks they have a temporary impact on inflation, but that impact falls away as higher prices become embedded and after a year or two fall out of inflation measures. The 1970s saw persistent inflation lasting for a decade until the US hiked interest rates in 1981 to 15.8% generating a sharp recession there and in the UK as the Bank of England followed the Federal reserve actions. The 1970s had been characterized by a wage/price spiral where inflation expectations were such that wage negotiations had to anticipate continuing price rises to maintain standards of living.
    The current energy shock will also be absorbed into prices and fall out of inflation measures over a couple of years. As with the 1970s, energy price hikes exacerbate underlying inflation issues arising from the covid pandemic, monetary policy and continuing supply chain interruptions in both commodity markets and manufactured goods. If Inflation expectations can be managed such that a wage-price spiral does not take hold than decades long persistent inflation might be avoided. If not, we are back to the disruption of the 1970s.
    The UK has the additional hurdle of sterling depreciation against the dollar after the 2008 financial crisis and Brexit referendum as well as the drag of Brexit on external trade, so some unique problems to overcome.

  • Jenny Barnes 27th Nov '22 - 2:11pm

    US peak conventional oil production was in 1970. Up to then, the USA could control the oil price by varying production. After that, the power to control the price moved to the Middle East/ OPEC, and they naturally hiked the price. However, what they hadn’t counted on was how crucial oil supply was to the global economy. They created a global recession and the price dropped anyway, so they were losing out both in volume and price. Since then they have tried to balance their desire to maximise oil income with not tanking the world economy. However, we’re now near, or by some analyses past, peak oil for the world. While this is good news for climate change, it implies that the only relief from high oil prices will be economic recession, dropping energy demand and thus price. Increases in supply, as in the late 1970s early 1980s from a new energy source are unlikely.

  • Peter Martin 27th Nov '22 - 9:51pm

    @ Joe,

    If I understand you correctly you’re saying that once inflation falls, any drop in living standards due to the current inflation will simply be forgotten. I doubt this. The nurses’ pay claim, for example, is based on a longer term erosion of relative pay levels going back several years.

    In other words the effects of an energy price shock probably aren’t quite as temporary as you suggest.

    @ Martin,

    Sure we can always write a bigger cheque or type a higher figure into the computer. The limitation as always is inflation and available resources in the economy rather than an amount of perceived money in the pot. We are discussing a currency issuing government. We aren’t talking about a local council.

    I’m not sure if Liz and Kwasi were saying anything like the same thing. They couldn’t have been. If so why choose the worst possible time to take on the economic establishment?

  • Mick Taylor 28th Nov '22 - 7:18am

    @Martin. Clearly you either haven’t read about or don’t understand Modern Monetary Economics. The point is that the UK is a currency issuer, unlike the majority of countries in the EU, where the EU or more correctly the ECB is the currency issuer. As such, the UK government can fund any level of expenditure, provided it keeps inflation under control. The so-called black hole only exists if you apply certain parameters. A group of economists have shown that with only slightly different parameters the black hole ceases to exist. We LibDems should not be prolonging the myth of the need for austerity. Higher taxes for those who can bear the burden are important to aid redistribution of income and wealth and make our country less unequal, but not to eliminate the largely imaginary black hole.

  • Peter Martin,

    the impact of energy price hikes falls out of inflation measures inflation as those price hikes become embedded in base prices. Inflation is projected to turn negative by 2025.
    The OBR forecasts that living standards are expected to fall by 7% over the next two years, the biggest fall in living standards since records began, with inflation “tipping the economy into a recession lasting just over a year” Worst fall in UK living standards since records began
    Inflation, Brexit related barriers to trade and productivity enhancing investment are the big issues for living standards.

  • Mick Taylor,

    MMT advocates higher taxes (and associated debt reduction) as a macro-economic measure to control inflation by withdrawing purchasing power from the economy. Redistribution involves higher taxes on higher income earners/corporates to finance greater spending on public services or benefits for lower income earners. Greater state spending is financed by reducing the disposable income/spending capacity of higher income earners with additional benefit spending being generally revenue neutral.

  • Peter Martin 29th Nov '22 - 8:46am

    Martin,

    You do make a valid point about the degree of interaction between the main global economies. If the biggest of these, ie the USA, is tightening monetary policy by aggressively raising interest rates, others will feel the pressure to do the same. If they don’t, their currencies will fall in value. This is turn will impact the rate of inflation, especially for a country like our own which has a high level of international trade. Everyone else, with the possible exception of Japan, is following the US lead, albeit with some reluctance.

    It follows, therefore, that if the US is getting it wrong everyone else will be making the same mistake. We’ve seen this previously in the run up to the 2008 GFC. So, the crunch when it came was international in nature. We do tend to be too parochial in our analysis of economics. Any government will feel to be caught between a rock and a hard place right now.

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