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Jeremy Hunt’s Five-Billion Pound Headache

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Jeremy Hunt's five-billion pound headache

In an episode of the West Wing, the president’s advisers are alarmed at the size of the budget surplus the government has built up.

Thirty billion dollars sounds like a lot.

There will be calls for tax cuts and other things that are politically inconvenient for the Democrats. What to do?

The official forecasts for the surplus are cut, showing that America is not as rich as the White House feared. Fist-bumps all around.

I wonder if Jeremy Hunt has seen this show.

Today the ONS handed him a clear political problem: the government ran a surprise surplus of £5.4 billion for January. Government makes profit, shock.

This is an irritant to the Chancellor and his boss, since both are insisting there’s no money in the coffers, certainly not to pay striking teachers, doctors, train drivers, nurses, ambulance drivers and physiotherapists (I’m aching already).

Unions might say: there’s £5bn right there! Start with that…

If Labour were cute, which it isn’t, it could use this as an opportunity to start a national debate, a teach-in, about what government money is, and where it comes from.

They could get Hunt to say the surplus doesn’t really exist. He doesn’t have £5 billion sitting in a bank account to distribute.

Aha, so that’s true of deficits also, isn’t it, Sir Keir could say.

It’s not money we owe immediately, or even ever. Same as the interest payments on the debt you keep banging on about.

(Interest payments on government debt are scheduled over decades, but recorded immediately. The money mostly just comes back to us anyway.)

For decades, the Tories have run the narrative that the nation’s finances are a giant credit card, which we have maxed out. (If any maxing was done, they did it.)

Labour falls into line, and finds itself talking about paying down debts and deficits they themselves had nothing to do with running up in the first place, since they weren’t in office.

Now would be a great time to challenge that narrative, to explain why government debt is nothing like a credit card. It’s a mortgage, maybe, one we will never pay off and shouldn’t try to.

That’s the PR battle that would allow them to win all the others.

That they won’t do it, won’t even try, really, really pisses me off.

Press release of the day

Dwayne “The Rock” Johnson can earn £828,000 per sponsored Instagram post, says this from Wrestling World.

That’s not intended to be a business story, but I’m wondering if it should be.

More than £800k for one post?

How much would I get for one of mine?

Stories that will keep rolling

1) Is Charlie Nunn’s plan to target the “mass affluent” really going to work for Lloyds Bank?

2) How far down is Rio Tinto’s dividend? What happens if iron ore prices keep falling?

3) Is Royal Mail boss Simon Thompson doing any better before MPs than he did last time?

4) What do the Fed minutes suggest the next rate rise will be?


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