spoke to Mayor of G Manchester @andyburnham for #BBCNewsSix ahead of SR - he warned that infrastructure not enough, citizens need help with lower costs eg bus fares now, and that Covid had “levelled down” UK with North now facing “worse than 80s crisis” bbc.co.uk/news/business-…
Burnham: “north of England has been hit hardest by COVID because of failure to invest.. we could be looking at another period like the 1980s in the north of England, coming out of the COVID crisis, the 2020s could even be worse than the 1980s”
He did welcome the Green Book changes that should direct more infrastructure spending North, though detail on that tomorrow. Said the “bias against the North” goes back decades and he saw it as Chief Sec when he asked for similar schemes at the time of London Crossrail funding..
GM Mayor re HMT “inherent bias” - “always funds projects, in areas of country where economy is already strongest. It has never prioritise funding in parts of the country that most need that investment, very much the north of England. So if this is to change, then it is welcome”
Also gave clear hint that the landmark Northern infrastructure project - high speed transpennine “Northern Powerhouse Rail” isn’t passing BCR test : “I think on government's current test, theres a real risk that Treasury will say, Northern powerhouse rail doesn't pass the test.”
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Second half of Spending Review extra time - at the IFS. @PJTheEconomist pointing out that “precisely zero” additional Covid spending (eg for vaccine/ test & trace) allocated beyond next year’s “whopping £55bn”...
IFS on council tax: “Chancellor has chosen to reduce support to local authorities and has given them the ability to raise council tax by 5% instead. If they do, and they’ll mostly probably need to, that will increase annual tax bills by an average of around £70 per household”.
IFS on partial public sector pay freeze:
- will hit graduate public sector workers in London & SE, least we’ll paid relative to private sector
- Two part time teachers on £20k will each get £250 pay rise but a full time teacher doing same job gets nothing
On Spending Review analysis call for @resfoundation@TorstenBell pondering the Maradona theory of economics first floated by the former Bank of England Governor Mervyn King - basically related to being able to walk straight through defenders if they expect you to go round them...
Here’s Mervyn King’s seminal analysis of the Maradona theory of interest rates from 15 years ago... “the truly remarkable thing is that Maradona ran in a straight line”...
OBR’s new chief Richard Hughes contrasts the deficit spike after financial crisis - mainly tax related - with this year’s extraordinary fiscal support “almost like Beveridge overnight”...
Chancellor announces initial £18bn directly for testing, PPE, vaccines next year #SR20
11.3% fall in the economy this year forecast for this year... (largest for three centuries) growing by 5.5% next year, 6.6% in 2022, then 2.3%, 1.7% and 1.8% in the following years...
By 2025 economy expected to be 3% smaller than expected in MArch #SR20
Government borrowing £394bn this year says forecast - that is 19% of GDP for this one year’s borrowing...
Not far off the official figure four the entire historic national debt in 1990 at 21%
Let me tell you just two* stories which might have wider resonance about a special person who we were saying bye to today... Dadu, Mukul, Chow to some, to me... Dad.
A few years ago, I spoke at the 500th anniversary of my old school. trying to capture spirit of Manchester...
I spoke of Dad, an Indian Muslim student, being given his first career push in 1960s by an open minded Jewish accountant. It turned out he Yitz was in the audience. They reconnected, had big joint clan dinner in Mcr.
He gave a eulogy today.
& I’m godfather to his granddaughter
Dad was very proud to be British, Indian, Muslim, Bengali and Mancunian, saw no contradictions... born into rural Bengal still under British control, first memory the RAF flying over his village on the way to Burma in WW2, his dad’s tannery supplying leather for army boots...
NEW: Told that the this will be a return to furlough scheme for all at rate of 80% of wages, with flexible element to support part time working. So the nearest analogy is the furlough scheme as it was in August. Ie not tied to having to close down, like tier 3 JSS due tomorrow
Understand that the Jobs Support Scheme due tomorrow will now come in when extended furlough ends, currently planned for beginning of December, ie when national lockdown remains.
Obviously extended furlough will apply across the UK to all nations.
Obviously that is interesting re what Welsh first minister said earlier...
Am checking re self emp scheme, generosity of which was doubled last week, though not to august levels.
My rough estimate of cost is extra £2-3billion on what JSS would have cost. Depends on take up.
IMF Article IV initial health check of the UK economy about to report back. We will hear from Chancellor @rishisunak, and IMF chief @kgeorgieva very shortly...
IMF cuts UK economic forecast from last month for this year and next
2020 - -10.4%
2021 +5.7%
But praises “aggressive policy response - one of the best examples of coordinated action globally” on the economy...
IMF: “Room to loosen monetary policy in the near term”
Backs “additional fiscal push”... “there is a case to spend more” than current plans to lift investment...
UK economy “now faces headwinds from a second Covid-19 wave, Brexit related uncertainty, rising unemployment..”