Both the Tories and Labour are gaslighting the public over Britain's fiscal challenges because both are committed to flawed fiscal rules. What's needed is honest accounting and a focus on net worth
A very interesting read and a massive opportunity for Reeves to make her mark early on in her new role as Gordon Brown did in 1997 with a decosove and positive step.
I only hope she doesn't then follow his example and sell a key financial asset on the nations balance sheet, its gold reserves, at a knock down price. But I digress.
Good article, Simon. Look forward to reading more on this topic. What about the liability side of the balance sheet ? We need to consider contingent liabilities, ie not just 'official' debt but also the significant multiple of that in unfunded public sector and state pensions ?
Thanks Rashid. You are quite right about the liability side. I should have made clear that Britain's vast unfunded public sector pensions are a large part of the reason why the country currently appears to have negative net worth. A focus on net worth could offer opportunities to address this too by borrowing to build up over time the necessary funds. I'll be coming back to this in a future post, but let me know if you have any thoughts.
On the face of it, if Labour followed this approach, they could spend a lot more money on things like council houses and renationalising the water industry without risking their own fiscal rules. Reeves would gain the ability to spend more money on things her Party members like.
A very interesting read and a massive opportunity for Reeves to make her mark early on in her new role as Gordon Brown did in 1997 with a decosove and positive step.
I only hope she doesn't then follow his example and sell a key financial asset on the nations balance sheet, its gold reserves, at a knock down price. But I digress.
Just bought the book. Please keep it coming. 👍🏼
Good article, Simon. Look forward to reading more on this topic. What about the liability side of the balance sheet ? We need to consider contingent liabilities, ie not just 'official' debt but also the significant multiple of that in unfunded public sector and state pensions ?
Thanks Rashid. You are quite right about the liability side. I should have made clear that Britain's vast unfunded public sector pensions are a large part of the reason why the country currently appears to have negative net worth. A focus on net worth could offer opportunities to address this too by borrowing to build up over time the necessary funds. I'll be coming back to this in a future post, but let me know if you have any thoughts.
On the face of it, if Labour followed this approach, they could spend a lot more money on things like council houses and renationalising the water industry without risking their own fiscal rules. Reeves would gain the ability to spend more money on things her Party members like.
Excellent article. An honest balance sheet would also include the value of public sector pension liabilities.