Wednesday 23 August 2023

The public finances - and polling

It’s odd isn’t it how the same piece of financial news is presented differently depending on your point of view. Don't get me wrong, I'm not suggesting for a second that I'm personally totally free of unconscious bias, because I'm probably not, but I never do it knowingly. However, yesterday the ONS released figures on the public finances, particularly on borrowing and debt. The data was not good and revealed just how badly the economy is faring at the moment. Sky News reported it basically straight and quoted the ONS more or less verbatim. 

Julian Jessop for one, didn’t compare this year with last, as most people would expect and as the ONS presented it, but with what the OBR forecast this year would be:

It turns out we needed to borrow £4.3 billion which is £3.4 billion (80%) more than in July 2022 and the fifth-highest July borrowing since monthly records began in 1993.  In other words, our borrowing is higher than it was the same month a year ago

But note how Jessop presents it, as "less-bad-than-expected" with borrowing 'undershooting' the official OBR forecast by £11.3 billion (cumulatively so far this year) and the clear implication that the public finances are improving rather than deteriorating.

It looks much better, doesn’t it? So good that he (and others) are actually asking about tax cuts.

The BBC did its usual balanced reporting job with an article headed: Public borrowing below forecasts despite July rise. But even they managed to insert that borrowing - the difference between spending and tax income - was £4.3bn in July, "below analysts' forecasts of about £5bn." 

You have to get down to the seventh paragraph to read, "While that is higher than in the same four-month period last year, it is still £11.3bn lower than the amount predicted in March by the government's independent forecaster, the Office for Budget Responsibility (OBR)."

The original ONS statement is clearer:

"PSNB ex [Public Sector Net Borrowing excluding public sector banks] in the financial year to July 2023 was £56.6 billion, £13.7 billion more than in the same four-month period last year but £11.3 billion less than the £68.0 billion forecast by the Office for Budget Responsibility (OBR)."

Four months in we have so far borrowed £56.6 billion - on track for something like £150 billion for the full year

The interest on our £2,578.9 billion national debt was £7.7 billion, £1.5 billion more than in July 2022, and the highest interest payable in any July since monthly records began in April 1997.

There is no doubt that the public finances are not in a comfortable position although you wouldn't know it by reading Mr Jessop.

And on data from the CBI about the state of the UK manufacturing industry (dire) he softens the blow by suggesting things are probably going to be as tough - or worse - in the EU:

We won't know what the figures are for Europe until today and they may be worse, but we'll see later. 

Polling 

Whatever its dwindling band of supporters claims, the sorry truth is the public is losing faith in Brexit and simply don't believe the hype anymore.

The numbers thinking that in hindsight Brexit was a mistake has reached 64% compared to 36% who still think it was right. This isn’t a new record but it does equal the figure from 14 July this year, so again right at the very top end. 

It's just a matter of time before we're at a big 2:1 advantage.

The poll of polls asking if we should join/rejoin or stay out has also reached 60% to 40% and as several people have pointed out, this is entirely organic since no major mainstream political party is advocating such a move. Imagine what would happen if Labour were in power - with all the resources of  The Treasury and the voice of British industry behind it - and set out the genuine benefits of getting back into the single market and the customs union. 

This, as I have always argued, would lead inevitably to full membership since it’s simply irrational to be following rules - including flanking rules on employment and the environment - with no vote and little influence. This is unthinkable for the sixth or seventh largest economy in the world.

The poll by the way, averages the last six surveys and now you can see YouGov, Deltapoll, and Omnisis are all in the same ballpark

Also, note that 87% of Labour voters support rejoining.  This will take some resisting on the part of Kier Starmer. 

I don't minimise the problems of getting a referendum on Article 49, it's going to take a sea change in attitude and Britain would have to become far more Europhile in every way but I think we can do it, eventually.

The EU has forged closer ties in our absence as you can see in this FT article (no £).  They are not going to beg us to come back - it may well be the other way around.

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