The Cost Of UK Government Borrowing

"In cash terms, we have the highest government debt we have ever had. But the cost is exceptionally low, and even if we increase what is described as borrowing as a consequence of coronavirus the impact will still be very small given current, exceptionally low interest rates, which look like they will persist for a very long time.

Please do always recall, that every penny the government spends on interest becomes someone's income - and most of it in the UK. And there is good reason for that: UK national debt is just a savings mechanism. There is nothing more menacing or threatening about it to our wellbeing than the amount saved in banks and building societies."

So Rail Nationalisation Is Possible After All!

"The sham of rail privatisation has just been exposed. As the FT has announced: "The British government has suspended the UK rail franchise system in a move that effectively nationalises any losses by railway companies for the next six months — in the latest sign of how the coronavirus pandemic is blighting the economy. The Department for Transport announced on Monday morning that it would temporarily end normal franchise agreements and transfer all revenue and cost risk to the government for at least half a year. Operators will continue to run services day-to-day for a small management fee under an “emergency measures agreement”, it said. So, privatisation was always an upside-only bet. I think this is one decision that never need be reversed."


The Tories Are The Biggest Government Borrowers

"So what do we learn? Two essential things, I suggest. First, Labour borrows less than the Conservatives. The data shows that. And second, Labour has always repaid debt more often than the Conservatives, and has always repaid more debt, on average. The trend does not vary however you do the data. I have tried time lagging it for example: it makes no difference. 

Or, to put it another way, the Conservatives are the party of high UK borrowing and low debt repayment contrary to all popular belief.

The Barnett Formula Does Not Subsidise Scotland!

"In stark terms and only looking at one of many devolved expenditure areas, the Barnett Formula will withhold from Scotland, over the five years covered by the spending review, enough money to have hired approximately 7,955 additional NHS medical professionals. That is not a bonus – it’s a smoke and mirrors mechanism that aims to reduce the Scottish Government’s spending power in real terms."