Economists question 'black hole' in UK finances

I wasn't sure where to place this thread so if Mods see a better fit that's fine.

The UK is about to endure yet another enforced round of Austerity that will deliberately target the most needy and infirm in our society.
This is due to an alleged approximately £50billion 'black hole' in our finances.
Everyone is predicting the usual doom and gloom.
Quite bizarrely this 'black hole' has been caused by Tory policies - of which Rishi was Chief Architect for a while - and mis-management.
Yet we are being force fed the myth that only The Tories will be responsible enough to deal with this economic disaster.

But is this 'black hole' even real?

I came across this report earlier today.
www.bbc.co.uk...
Its basically saying that the UK government recently changed the way they estimated government debt etc and that if they calculated it the same way they did when Rishi was Chancellor of the Exchequer the UK wouldn't have this massive debt but would in fact have a surplus of around £14billion.

Media discussion of the government's tax and spending options ahead of the Autumn Statement has been dominated by talk of "black hole" in the public finances, put at anything from £35bn to £60bn, which, it is assumed, must urgently be "filled" with spending cuts or tax rises.

...reversing a decision to exclude the Bank of England's debt from the government's own debt figure, made in January 2022, "completely wipes out the projected 'fiscal hole' and, on the official forecasts, leaves the government with an additional £14bn to spend against its own debt targets by 2027", they said.

But changing the accountancy rule used to measure the government debt back to what it was before the Autumn Statement in 2021 completely removes the "black hole", according to the economists' analysis, putting government debt back on a sustainable footing.

"There is now a consensus among economists that austerity does significant damage to an economy's potential, undermining growth, as the experience of the last decade in Britain has shown us," Mr Calvert Jump said.

"Further austerity will do far more damage than a 'fiscal hole' that disappears with tweaks to models or accounting rules."

So, my questions are;
Why the sudden change in the measurement system?
Who benefits from this?
Why isn't this being broadcast to a wider audience?

I have more questions and observations, but they can wait.
I was just wondering what the more economically/financially aware amongst us might have to say?

It's called "hiding a tree in a forest". the trees still there but you can't see it and you can't find it because you don't know where they put it. But it's still there. The Tories have been in power over 11 years so they cannot blame anyone else for these failings and because of that, we have to pick up the tab for their failures. And makes us pay they will.

Can we get rid of Rishi allready , eh i mean can YOU...

Yes, it`s time for new PM

a reply to: Kenzo
NO. the UK electorate cannot choose any government positions (that includes the PM) this is all down to the ruling party. The electorate cannot force the government to call a general election and if the ruling party has the majority it's up to them. But a government has a fixed term, usually 4 years, but can go to 5 years.

a reply to: crayzeed

Well damn, honestly i dont know Rishi, but something about he`s character......dark energy .

a reply to: Freeborn

Perhaps I've seen too many numbers in my career to be convinced by any of them, I know 'Accountancy' for sure delivers 'not wholly true nor fair view' on too many occasions to be credible without reading the small print.

So lets imagine the £14Bn surplus exists, and the £50Bn 'hole' is phantom, and down to manipulation - why would that be?

There are a rainbow of options. My first thought is failure is not what Sunaks in the game for, so maybe he will fix a problem that doesn't exist a lot quicker than we thought possible, it may well be an (next) election winner. There is also a fair argument that climate-change is far worse than we thought, 'Austerity' providing leverage necessary social changes, like fossil fuel usage. Possibly, the war in Ukraine has been a lot more expensive for us than we care to let on, and the $14Bn , or at least a chunk of it, doesn't exist and he wouldn't like to admit that, so worse fake news is better than not so bad real news.

What I need to see on News at 10 is that the way of calculating debt changed, and the reasons for that change.

Somehow, I don't think I will.

a reply to: crayzeed

the liberal/tory fixed terms where ended by johnson in the The Dissolution and Calling of Parliament Act 2022.

a reply to: Kenzo

the only ones that have any real chance of changing the status quo at this point are the conservative/liberal unionist party members and party activists.

their choice at this point is to let the party die or fight to change it...

at tis point a lot of activists are cross over to either the Reform party or the SDP who have joined forces to fight the next election..

at this point there is a good chance the SDP will do an en Marche on both the existing mainstream parties but the real tipping point will be how far the cons/lib unionists are prepared to go in their war against their own party.. the coming budget will define how much longer parliamentary part can survive being at war with their own support base and financiers..

I'm betting on this being the year of 4 PMs..

a reply to: Kenzo

the war against their own party members started under Johnson so what is happening is simply a continuity of that war started by Cameron/Osborne against the backbenches that evolved into a war against the fabric of the country... which is why it has that dark energy about it..

a reply to: Kenzo

Get the lettuce out!

a reply to: nickyw

UK politics is confusing, i hardly understand anything about it Which is why i should not even comment about it


Thanks for explaing

a reply to: Oldcarpy2

a reply to: Doxanoxa

I'm no economist....but I do know statistics and I know they easily manipulated in order to project whatever message you are choosing to push.

Why did they change the way debt is measured?
Why haven't they broadcast this?

Rishi knows all too well what metrics are used and how.

As you intimate; is this all so that he can be perceived as some economical genius that has saved us from the brink come the next General Election?
Is it to hide some funding that is being diverted elsewhere and which 'they' don't want us to know about?
Are 'they' just trying their best to squeeze even more blood out of a stone and victimise and punish the most needy in our society as part of the drive towards a Victorianisation of our society?

Or is there even some truth in the WEF nonsense after all?

One things for certain, I find it all very suspicious.
Rishi resigns - Boris is dumped - Truss commits political suicide - Rishi is the saviour.
All by design and manufactured through the way those self-same people measure national debt?

a reply to: Freeborn

So, my questions are;
Why the sudden change in the measurement system?
Who benefits from this?
Why isn't this being broadcast to a wider audience?

I have more questions and observations, but they can wait.
I was just wondering what the more economically/financially aware amongst us might have to say?

this is all about Osbourne/Browns fiscal orthodoxy and using austerity to supress wages of the poorest,

they want to turn the clocks back to getting cheap nannies, these are the very last people to care about migrants borders as all they care about is cheap labour..

i don't ever repeat anything Redwood says but he's right on what'll happen if Hunt goes full Osbourne... that they'll end up creating a whole new level of tax avoidance and corruption which we already see with the bankers getting their bonuses in foreign currencies so the bonuses are neither capped taxed or spent here.

in this instance letting the wankers sorry bankers be paid uncapped bonuses would increase tax revenues.. as does decreasing the higher rate to 40% most of whom already have their avoidance schemes in place or at the very least using every single salary sacrifice scheme going to not pay a penny more than they really have to... it sucks to say it but that's how it is.. the rich can afford the effort to avoid taxes that we mere workers can't..

the gov have 2 choices make it appealing to pay tax at the top or increase taxes and further corrupt the system we have..

all Austerity will do is supress the wages at the bottom while those at the top find ever more ingenious ways not to pay..

if you want to understand why the bankers want parity £$ its to make their US$ bonuses go that much further..

its all banana republic stuff

a reply to: nickyw

I openly admit I don't understand how the financial markets work.
I also only have a rudimentary understanding of global economics etc.

But I do know trickle down economics does not work - no matter how they try to sugarcoat it and whatever its current nom de guerre is - and I do know that Austerity is more about pushing an ideology rather than an economic necessity.

And I do know that raising interest rates to such an extent when its not consumer spending and high wages that is causing inflation is absolute bollocks.

Since right back in the day when I first joined ATS I have been saying that 'they' are determined to take this country back to some sort of Victorianesque society along with all the social injustices and inequalities that went with it.
Low wages is paramount to that.

Nothing I've seen over the years has changed my mind, quite the opposite.
The older I get, the more I see and the more I reflect then the more I am absolutely convinced of this.
It started with The Ridley Plan and its continued.

I don't know the extent of this 'conspiracy' and I don't have any definitive proof - I'm conflicted as to whether its part of some super-duper global plot - but there's something amiss.

originally posted by: nickyw
a reply to: crayzeed

the liberal/tory fixed terms where ended by johnson in the The Dissolution and Calling of Parliament Act 2022.

Even so, the maximum term a government can sit is 5 years. From the UK Parliament web site this government took office on 17th December 2019 and will be dissolved on 17th December 2024.

a reply to: Kenzo

not really surprised you're at a loss as we are in uncharted territory as all the political parties are at war with and radicalising their own support bases..

its in that element that I see a real breakthrough party appearing from the lost support of all the main parties as new liberalism eats itself as it did in the 1930s..

what is interesting is that Churchill left the liberals and ended up crossing the floor when new liberalisms died never wining another UK election... with all his hints I am expecting Johnson to do the same but he'll wait for others to make the first move to a new party as he is a follower not a trail blazer..

all interesting stuff i expect an election sometime early next year.. in the meanwhile labour will try to win over the city and the disillusioned conservative base in the hope of a clean sweep.. but he is no Blair he'll struggle with the liberal unionists.

a reply to: crayzeed

PM can call an snap GE now though as per normal for a PM.

The other route is through party membership forcing another leadership contest..

another route is if enough MPs cross the floor..

its not simple as when parliaments terms where fixed.. the con/lib unionist internal war has been raging since Cameron/Osbourne and doesn't seem to be abating, f anything its getting worse in the same way labours internal war is...

put both together and it opens the door to the SDP rather than reform/heritage or change UK becoming the break through party.

a reply to: Freeborn


As you say... "One things for certain, I find it all very suspicious.
Rishi resigns - Boris is dumped - Truss commits political suicide - Rishi is the saviour.
All by design and manufactured through the way those self-same people measure national debt?"

In Finance I've found you gamble on numbers, but you back people.

Just a thought but it strikes me Sunak is as likely to do as he is told as Johnson is to go AWOL from the script.

No idea who the director is though!

a reply to: Freeborn

I have an "A" level in Economics and I don't understand it either.

Putting up interest rates to curb inflation at times like this seems bonkers.

Something stinks, for sure.