UK Economy ‘Permanently Damaged’ By Brexit, Says Ex-Bank of England Official

A former Bank of England policymaker has said that the UK economy has been “permanently damaged” by Brexit, because it reduced the country’s potential output and resulted in reduced investment into UK businesses.

In an interview on Bloomberg TV, Michael Saunders said that Jeremy Hunt’s “austerity budget” this week is a consequence of leaving the EU.

Saunders joined the rate-setting Monetary Policy Committee shortly after the Brexit referendum in 2016, and left the role in August this year.

He said: “The UK economy as a whole has been permanently damaged by Brexit. It’s reduced the economy’s potential output significantly, eroded business investment.

“If we hadn’t had Brexit, we probably wouldn’t be talking about an austerity budget this week. The need for tax rises, spending cuts wouldn’t be there if Brexit hadn’t reduce the economy’s potential output so much.”

On Sunday, Hunt denied that Brexit has made the UK poorer – despite the government’s own Office for Budget Responsibility saying it has.

The chancellor, who campaigned for Remain in the 2016 referendum, insisted the UK can make a “tremendous success” of leaving the EU.

He said it is important to consider the effects of Brexit “in the round”, and that Brexit brings both “costs” and “opportunities”.

The chairman of the OBR, Richard Hughes, last year said that Brexit would reduce the UK’s potential gross domestic product by 4% in the long term.

Saunders, who is now senior economist at Oxford Economics, added some of the ambitions behind Liz Truss’s failed mini-budget were correct in that “raising potential output is the big challenge”, but her “suggested solution to cut taxes and deregulate are wrong”.

He added: “I put the emphasis more on improving trade links with the EU, improving education, training, and also fixing this worrying rise in long-term sickness, which has been reducing the workforce so much.”

Saunders said the economy has faced a “challenging period with the Brexit vote, the depreciation of sterling, a long period of political uncertainty, the pandemic and then renewed political uncertainty”.

Last week, former Bank of England governor Mark Carney doubled down on his claims the move has taken a toll on the pound, suggesting the decision to leave the EU continues to play a part in the UK’s financial woes.

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Jeremy Hunt Denies Brexit Has Made The UK Poorer And People Are Making The Same Point

Jeremy Hunt has denied that Brexit has made the UK poorer – despite the government’s own Office for Budget Responsibility saying it has.

The chancellor – who campaigned for Remain in the 2016 referendum – insisted the UK can make a “tremendous success” of leaving the EU.

He said it is important to consider the effects of Brexit “in the round”, and that Brexit brings both “costs” and “opportunities”.

Hunt told the BBC’s Sunday with Laura Kuenssberg that he would set out “some of the ways that I think we can make a success of it” in Thursday’s autumn statement.

Asked if he denies Brexit has slowed the UK’s economic growth at home, Hunt said: “What I don’t accept is the premise that Brexit will make us poorer.

“I don’t deny there are costs to a decision like Brexit, but there are also opportunities, and you have to see it in the round.

“Literally within months of formally leaving the EU we had a once-in-a-century pandemic, which has meant the process of outlining what the opportunities are has taken longer, but I think we need to do that now.”

But Twitter users pointed out that the chairman of the OBR, Richard Hughes, last year said that Brexit would reduce the UK’s potential gross domestic product by 4% in the long term.

Last week, former Bank of England governor Mark Carney doubled down on his claims the move has taken a toll on the pound, suggesting the decision to leave the EU continues to play a part in the UK’s financial woes.

Downing Street has suggested Rishi Sunak is no longer dwelling on the “clear decision” made by the British people six years ago.

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Kwasi Kwarteng Says He Told Liz Truss To ‘Slow Down’ On Economic Reforms That Crashed The Markets

Kwasi Kwarteng has revealed he told Liz Truss to “slow down” with her radical economic agenda as the ex-prime minister was moving at “breakneck speed” after the disastrous mini-budget.

In his first interview since his ousting, the ex-chancellor says he warned her of being out of No 10 within “two months”.

The “slow down” claim is likely to raise eyebrows as two days after the mini-budget – which included plans to scrap the 45p income tax rate paid by the highest earners, cut stamp duty, reverse the rise in national insurance and cancel a planned rise in corporation tax – he told the BBC there was “more to come”.

Kwarteng also criticised the then-prime minister’s “mad” decision to sack him for implementing her tax-cutting agenda.

Truss ended up resigning after only 44 days in office, with her economic measures swiftly ripped up by new chancellor Jeremy Hunt and her successor in No 10, Rishi Sunak.

Kwarteng refused to apologise for the financial turmoil unleashed by his and Truss’s disastrous mini-budget, but acknowledged “there was turbulence and I regret that”.

He said the “strategic goal was right”, but “I think we should have had a much more measured approach”.

He said he bore “some responsibility” for the timetable of the mini-budget, but that Truss “was very much of the view that we needed to move things fast”.

“But I think it was too quick,” he added.

“Even after the mini budget we were going at breakneck speed. And I said, ‘You know, we should slow down, slow down’.”

“She said, ‘Well, I’ve only got two years’ and I said, ‘You will have two months if you carry on like this’. And I’m afraid that’s what happened.”

On September 23, Kwarteng announced the biggest raft of tax cuts for half a century.

The mini-budget triggered turbulence in the financial markets, sending the pound tumbling and forcing the Bank of England’s intervention.

Asked if he wanted to say sorry to the people facing extra costs in re-mortgaging, Kwarteng said: “I don’t want to relive the past.”

He added: “I do feel sorry, actually, for the people who are going through this difficult time in terms of re-mortgaging.

“I’m not going to wash my hands of what we did, I think the strategic goals (were) the right thing, but as it said, the delivery and implementation, there was no real tactical plan, there was no real timetable for it and I think we should have done that.”

The ex-chancellor said he first learned of his firing via a tweet as he travelled to a meeting with Truss in Downing Street.

“I can’t remember whether she was actually shedding tears but she was very emotional,” he said.

Describing his thinking at that moment, he said: “This is mad. Prime ministers don’t get rid of chancellors.

“I think I said to her at the time, ‘This is going to last three or four weeks’.

“Little did I know it was only going to be six days.”

Kwarteng added: “She can’t fire me for just implementing what she campaigned on. And, you know, we had a conversation.

“And I think it was very much the view that somehow she would survive if I took the fall on that.”

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Liz Truss Stares Into Middle Distance During Bizarre Commons Appearance

Liz Truss made a fleeting, impassive appearance in the House of Commons as her premiership appeared to crumble around her.

The prime minister had snubbed Labour’s urgent parliamentary question on Truss’s decision to to appoint Jeremy Hunt as the new chancellor – and sent Penny Mordaunt, the Commons speaker, to deputise.

But the move raised more questions about the grip Truss has of her party.

Mordaunt’s initial explanation that the PM was “detained on urgent business” prompted howls of laughter from the Opposition benches, and failed to reassure MPs.

Stella Creasy, a Labour MP, suggested that based on what they had been told, the prime minister is “cowering under her desk and asking for it all to go away”.

Mordaunt, a one-time leadership rival who is viewed as a potential successor, caused more laughter when she replied: “Well, the prime minister is not under a desk.”

Mordaunt added to the confusion by repeatedly suggesting there was “a very good reason” for the prime minister’s no-show – which even led one MP to ask if she was “on the way to the Palace” to tell the King her government is over.

But then Truss finally arrived while Mordaunt was still speaking.

She was there, it turned out, to sit alongside her new chancellor as Hunt was due to spell out the “eye-wateringly difficult” decisions that were needed as he tore up her economic strategy.

But things got even stranger from there. Truss did not contribute to the debate, and many on social media pointed out she appeared only to be staring into the middle distance and blinking frequently.

She sat next to Hunt for around 30 minutes as he ditched huge chunks of “Trussonomics”.

But as soon as Hunt finished his Commons address and took questions from MPs, Truss departed to accusations of “running off to something else”.

So where was she?

One report suggested Truss had been meeting Graham Brady, the chairman of the 1922 Committee of backbench Tory MPs, who could hold the key to her future if Conservatives revolt en masse.

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A Bad Day For Liz Truss – But Twitter Has Been Very Good

Another day, another round of Tory chaos.

But while the pound bounces around the bottom and mortgage rates surge, the slither of a silver lining is the quality of the content on Twitter.

On Friday, the catastrophic mini-budget struck again as Liz Truss sacked her chancellor Kwasi Kwarteng as she abandoned plans to freeze corporation tax.

Part of a desperate attempt to save her premiership saw Truss appoint Jeremy Hunt as Kwarteng’s replacement in the Treasury, which was followed by a press conference that was as short as it was unapologetic.

Many political reporters, speaking to Tory MPs, suggested the media briefing – eight minutes, just four questions – made things worse. You can see why they might say that.

Speaking of time, here’s a handy refresher.

For reference, the UK has now had four chancellors since July.

Meanwhile, the new chancellor didn’t get off to the best start.

And there was a reminder not to stand too close to either of the top two in government …

… especially if they are indulging in a spot of campanology.

And Britain appeared to be living up to its ‘Normal Island’ nickname.

Back in his constituency, Truss critic Michael Gove was getting on with business.

No, there was absolutely no trolling going on as the former cabinet minister referred to “trip hazards”, “strong leadership”, “funding pressures” and “recruitment and retention”.

And Ed Miliband had been saving one in the chamber for seven years.

As ever, The Thick Of It got there first.

And soon came the memes.

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Vaccinate Children Over 12 And Boost Self-Isolation Pay, Jeremy Hunt Urges Ministers

IAN FORSYTH via Getty Images

Vaccinating children over 12 for Covid and boosting self-isolation payments could both prevent fresh spikes in the pandemic, former health secretary Jeremy Hunt has said.

The chairman of the Commons health select committee told BBC Radio 4’s The Week in Westminster that he believed the UK would soon follow the United States in allowing under-18s to get the jab.

In a wide-ranging interview, he also said it was not right that the UK continued to recruit nurses from India and other countries where they were desperately needed, arguing the NHS should further increase numbers trained domestically.

He called for action to tackle the 40% of Covid deaths caused by picking up the virus in hospital and suggested an independent watchdog should set targets for NHS and care staffing.

Ahead of a hotly anticipated evidence session with former No.10 adviser Dominic Cummings, Hunt said he didn’t want the hearing to be dominated by political “dirty washing” or score-settling and that it should instead be focused on lessons learned from any failures to date.

The Pfizer vaccine is currently approved for use in over-16s in the UK, while AstraZeneca and Moderna vaccines are authorised for over-18s.

Health Secretary Matt Hancock has said the UK has secured enough Pfizer doses for children to be vaccinated, if licences are granted.

In the interview to be broadcast on Saturday, Hunt said: “Vaccinating children is something we definitely need to look into and I’m sure we will because they can transmit the virus across generations even if they are not badly affected themselves.

“I think it’s encouraging the US has approved the use of the Pfizer vaccine for the over-12. I would expect something similar here too.”

Earlier this week, Hancock said the government had “a couple of months” before it needed to make a decision on under-18s jabs.

But Welsh First Minister Mark Drakeford recently said it was likely the Welsh government would want to roll out jabs for children if licences were granted.

Hunt hinted that with upto 50% of people failing to isolate for money reasons, the “lessons learned” inquiry may recommend both a big boost in state payments in future and a more localised test and trace system.

“I think it’s likely that a much simpler financial proposition would have helped. Something like we will make up any money that you lose out on if you’re asked to isolate, because if you’re taxi driver or whatever it is, no questions asked.

“I think the second thing is more localised contact tracing capability would have helped. I think people are more likely to isolate if they were asked to do so by their local council or someone working for their local council than from someone in a call centre 300 miles away.”

TOLGA AKMEN via Getty Images

Dominic Cummings

The Commons inquiry into the pandemic is being jointly held by the health and social care committee and the science and technology committee, with its conclusions due this summer. A wider public inquiry isn’t expected to report until after the next election.

With Cummings due to give evidence next week, Hunt said he was happy to give the former adviser enough time to answer questions but warned he could not be allowed to use if for any personal agenda.

“Select committees are cross party. So what this is not, is a moment for the dirty washing of political laundry. Because what we want to do is to get to the bottom of what we did well and what we did not do well, and what lessons we need to learn.

“But it is a very unusual thing in a select committee inquiry to take evidence from someone who is actually in the room when the big decisions were made, both at the start of the pandemic, and in the run up to second lockdown in November. So we’ll be asking, what were the pressures on decision makers, why certain decisions were taken. And I think that will be incredibly helpful.

“If he’s got a lot to say we’ll give him the space to say it, but we only want to hear things that are relevant to our inquiry which is lessons that can be learned for the future in terms of our country’s pandemic handling.”

With India currently going through its worst wave of the virus, Hunt said that the UK had to now rethink its recruitment of NHS staff from places where they were needed locally.

Asked if it was right that the NHS recruited nurses from countries like India, he replied: “I don’t think so. I think that we have undertrained the numbers of doctors and nurses we need over many decades, because we’ve been confident that we could import them from other countries, if we needed to.

“But for the NHS to have doctors or nurses from places like Sudan and Somalia and India, brilliant professionals though they are, I think poses some very difficult ethical questions.

“I think the NHS should be training the numbers of doctors and nurses that we need for ourselves, and then have all the international exchanges that mean that we are benefiting from contact with the brightest best from all over the world, but not fundamentally depending on other countries to do our training for us.”

The former health secretary said hospital acquired Covid was a big issue that failed to get the attention it deserved.

“One of the things I think is not being talked about enough has been the high proportion of people who caught Coronavirus in a hospital, and died because of an infection that they caught in a health care setting, we think between 20 and 40% of all deaths were from people who actually caught Coronavirus in a hospital setting. And we’ve got to do better.

“ I think there are lots of lessons but it looks like hospitals when they overcame their PPE issues early on, didn’t have any guidance about social distancing and things they should take care of outside the COVID wards, outside the ICU.

“So people were really careful inside intensive care units but in the dementia wards, the elderly care ward, other parts of hospitals where doctors and nurses have teas and coffees, we didn’t do enough early on and there needed to be some national guidance to help people do that.

“I think we also will look at ventilation systems in hospitals because we know with an airborne virus it’s not just surfaces, it’s what’s carried in the air.”

Hunt said that the NHS 1% pay rise offer was “badly handled”, but said the need to recruit many more nurses and doctors was just as important.

He called for an independent watchdog like the Office for Budget Responsibility to publish the levels of staffing needed by both health and social care over the next 10 years “as a way of creating a discipline on the government to make sure we are actually training enough people”.

The Week in Westminster will be broadcast on BBC Radio 4 on Saturday May 22 at 11am

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Is Boris Johnson Fiddling With Brexit, While Home Burns (With Covid)?

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Will Christmas Covid Relaxations Trigger A New Year Hangover?

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Matt Hancock Signals Weekly Covid Tests For NHS And Social Care Staff

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The Waugh Zone Monday July 22, 2019

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