I've sat through a lot of Budgets in my time at MoneyWeek, but this week's was one of the most boring. There wasn't much of interest in the macroeconomic forecasts (growth was revised down a bit, now it has been revised up a bit again). There wasn't much on the debt front (the deficit is going to last for longer than it is possible even vaguely to forecast). The tax system has not been reformed. The NHS has not been saved and the few horrible complications left in our pension system have not been removed.
The only thing of any note was the rise in national insurance for the self-employed, something that was fully expected and makes perfectly good sense. This week, John Stepek has run through what Philip Hammond said and explains why it matters (mostly it doesn't). But it is dull stuff. So much so that the second Hammond finished speaking, I headed off to the Pensions and Lifetime Savings Association Investment Conference 2017 for some proper entertainment.
Ed Balls, the former shadow chancellor, was up first. Back in his political day, he told us, they assumed that globalisation was about the movement of goods. They assumed new technology would hit the incomes of the poor harder than anyone else. They assumed that one of the biggest problems facing the UK was the rising gap between pensioners' incomes and working incomes (at the time pensioners' incomes were 30% lower). All these things turned out to be wrong.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Opening the UK's borders to the populations of new members of the EU didn't bring us 10,000 new workers, as the government confidently predicted at the time. It brought millions. And in the UK it is neither the incomes of the poor nor of pensioners that have stagnated for a decade. It is the incomes of those in the middle bracket largely, I suspect, because of the huge cost involved in meeting the pension obligations promised to those who have already retired.
Balls was followed by the FT's Gillian Tett. At the beginning of the latest communication revolution, she said, we all assumed that the ability to communicate anywhere anytime with anyone would bring the world closer together. It didn't. Instead, it has played directly into our tribal instincts, making it easier for us to seek out the like-minded and totally ignore those we disagree with. The result? "Single issue, flash-mob politics."
This should be a reminder to us to examine our own assumptions. In the papers this weekend, you read that a boring budget should be seen as a good budget the last thing we need at the moment, everyone will say, is upset. I'm not so sure. If you interpret the Brexit vote as a demand for the government to take real decisive action to have a go at solving our long-term problems and an acceptance that action comes with risk it was a pretty bad budget.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Why we need to get a grip on our governmentEditor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
