Propaganda: Entire MSM change their tune over budget
TruePublica Editor: I said long before last December’s election that Jeremy Corbyn was not electable. Regular readers will know that I said this not because of the man or what his principles were or anything else for that matter – it was because the establishment was collectively going to ensure Corbyn was demonised and his brand of politics was to be consigned to the bin. The campaign to achieve that was astonishing. Some (but not many) veteran journalists were quite vocal about it. It was a bewildering campaign designed to completely overwhelm the opposition and was something that Britain had never witnessed before. The public swallowed its message whole.
For further evidence of that, let’s very briefly look at the difference between what the national printed media were saying about Jeremy Corbyn’s spending plans in the runup to that election and what they are saying now. In addition, I have added some up to date commentary about what the City of London really believes.
From the FT Nov15th: Will Jeremy Corbyn’s spending plans bankrupt Britain?
There’s a huge row over Labour’s tax and spending plans, with Tories claiming they will blow a £1.2tn hole in the nation’s finances.
From The Times Nov 10th: Election 2019 – Labour splurge to bankrupt UK
Row over Tory estimates of Corbyn spending
From the Express, Nov10th: – Jeremy Corbyn’s spending will bankrupt Britain
THE MOST disturbing part of this General Election campaign is that we are only just beginning to appreciate the harm which a Labour government led by Jeremy Corbyn will do to this country.
From The Telegraph: Labour manifesto would ‘bankrupt Britain’ with £250bn debt and biggest tax burden since 1950s
Jeremy Corbyn has been accused of planning to “bankrupt Britain” with a manifesto that would ramp up debt by £250 billion and stage the biggest tax raid the country has ever seen
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From The Guardian Nov 2nd: Super-rich prepare to leave UK ‘within minutes’ if Labour wins election
Wealthy see potential taxes imposed by Jeremy Corbyn as bigger threat than Brexit
Yesterday, we saw Britain’s new Chancellor Rushi Sunak deliver a budget, where a magic money had not just been discovered but thoroughly shaken and so it was clearly time to splash the cash – hundreds of billions of completely unfunded expenditure that is to be laid at the feet of future generations in national debt that is already costing the taxpayer nearly a billion a week just to service interest payments.
And where was the outrage by the any of the mainstream media? Not a single pointed criticism was displayed anywhere. Not one.
My point is not that the national debt will now escalate, or that the last decade of so-called fiscal-tightening – also known as austerity – has been found to be nothing more than a failed ideology implemented by a truly spiteful political elite in what was simply a class war. It’s simply this – if there was ever any doubt in anyone’s mind that Britain is run by a national programme of propaganda, then this is confirmation that that is indeed the case.
Explosive expansion of debt
The government has announced more than £600bn of infrastructure spending. Sunak said – “Public net investment will be the highest its been since 1955” – something you might notice that the MSM had said just three months ago would bankrupt the entire nation. This level of expenditure just announced is more than double what some of the nationals said would require – “the biggest tax raid the country has ever seen.”
You might not have noticed that the £106 billion cost of HS2 was not included in Sunak’s budget. That cost is in addition.
And what did the City of London and even some of those right-wing think tanks who worked so hard to get the Tories into power really think of the 2020 budget?
The Adam Smith Institute is about as right-wing as you get. It politely started off by calling the budget “seriously concerning” and accused Sunak of being in danger of ripping up fiscal rules.
But as the speech went on, the think tank made clear exactly what it thought:
“Spending like a drunken sailor will not create a thriving entrepreneurial economy. Expansive vanity projects won’t make us better off. Bureaucrats picking winners does not support risk-taking by entrepreneurs — the Government should be cutting red tape on innovation like limits on biotechnology, not presuming to know what is best.”
The Office for Budget Responsibility (OBR) said:
“(that compared to its previous estimates) Sunak’s spending spree will increase the budget deficit by 0.9 per cent of GDP on average over the next five years and add £125 billion to the public debt in just 48 months.“
It seems the OBR was getting confused. It also said government borrowing will jump straight to the same high that caused all the concern defending the country from crazed bankers who crashed the economy back in 2008. Next year, the government will add £70 billion to the national debt alone. For perspective, that is £197million every day, seven days a week. At this level of expenditure, Britain’s national debt, currently 86 per cent of GDP will hit 100 of GDP in a few short years.
Hidden amongst all of this is an additional £5bn being thrown at ‘export loans for businesses.’ This is the drive to help ‘global Britain’ get on its feet after the disastrous effect it will have on those very same companies now having to fund massive changes to export practices as a result of leaving the EU. Much of this money will be used to help companies gear up to export … to the EU under different rules.
Not mentioned is the plain fact that Britain’s GDP has shrunk by £130 billion since the EU referendum – due to hit £200billion by the end of this year. Less revenue means less tax take – which means increasing borrowing yet again – or taxes of course.
Also unbudgeted is the £1.5 billion required each and every year to fund 50,000 form fillers at the border to ensure exporters and importers are correctly classifying their goods. This is exactly the same expenditure required for the 50,000 nurses the government has announced will be employed – but won’t. Over the next five years that will cost another £8bn or thereabouts.
Sunak announced that the governments’ fiscal rules would be adhered to and then further on in the speech announced that its fiscal rules would be ‘reviewed’ later this year. Astonishingly, Sunak stated that “Today’s budget is delivered not just within fiscal rules in our manifesto, but with room to spare.” It will for now but the only way for that to continue is to change the rules – hence the ‘review.’
The OBR also said inflation was predicted to be 1.4 per cent this year but next year will rise almost 30 per cent to 1.8 per cent annually.
The Bank of England base rate cut from 0.75 per cent to 0.25 per cent is the equivalent cut in loan costs to all UK businesses of about £100billion. But that cut goes directly to banks who are supposed to pass it on, which they won’t and even if they did, they would only partially pass it on and take the cut as a profit opportunity. The banks have done the same for years as interest rates have fallen.
The FTSE listened intently as they are obviously deeply embedded in the financial fortunes of their shareholders. The immediate response – the FTSE fell 1.4 per cent as it wasn’t impressed.
Chris Beauchamp, chief market analyst at IG in the City of London said:
“markets have mostly shrugged their shoulders, failing to be enthused by the Conservatives’ new devotion to spending.”
Helal Miah, an investment research analyst at The Share Centre, said”
“The very small moves in the pound immediately after the announcement may be a better reflection of insignificance global investors place on this event in the context of the current events.”
None of this criticism was in the national print press or broadcast media. The Daily Mail is a classic example. Not so long ago they were saying that a £30 billion ‘black hole’ generated by Labour’s budget planning will actually be £95bn and will ‘bankrupt Britain. Labour’s spending plans were ‘fatally flawed’ they said. Wait … they meant £30billion under the Tories will rescue everyone and don’t worry about the £600 billion or exploding national debt that will actually be the ‘biggest splurge in three decades.’ Also, there were no mention of ‘drunken sailors’ at the helm.
In fact, you can only imagine if the Adam Smith Institute had said ‘drunken sailors’ were constructing Labour’s budget for 2020 – those two words would have been splash headlines across the MSM networks and supported by cartoons and other descriptive phrases of ridicule.
City AM this morning said – “Chancellor Rishi Sunak’s Budget splurge will put a rocket under government borrowing, the UK’s spending watchdog said today in forecasts that do not include the economic hit from coronavirus. Sunak dodged a decision over the government’s fiscal rules – which say day-to-day spending must be balanced in three years – after much speculation, he would change them.
Ben Lord, co-manager of the M&G Corporate Bond Fund, said the rules are likely to change as the current forecasts that they will be met “are highly questionable and optimistic”.
On a day notable for the absence of right-wing backlash against higher spending, the director of the Centre for Policy Studies think tank Robert Colvile gently reminded the government of the “need to live within its means and to raise GDP growth”.