James Nation

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James Nation

James Nation

@NationJames

Managing Director at Forefront | Lecturer at Stanford | Ex Deputy Head of the Prime Minister's Policy Unit and Treasury Special Adviser to Rishi Sunak

London Katılım Ağustos 2011
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Simon French
Simon French@Frencheconomics·
Some reflections on the OBR's latest Fiscal Risks & Sustainability Report: assets.publishing.service.gov.uk/media/6a4cb4c7… First up this is a seriously good piece of work and @haskelecon inherits some excellent analytical capability on long term fiscal projections for the UK (where I think the OBR is on much firmer ground than its near term projections). Second, the vast majority of the headlines that that generate clicks/ ragebait are a function of compounding forecast assumptions over a long period. These are stark (inevitably) but also hugely sensitive to small variations. The classic is choice of indexation (inflation or wages) for a given set of thresholds. These headlines should largely be ignored/ taken with a bucket of salt. Third, the report is on much firmer ground where it shows the impact of recent developments (slowing population growth, defence spending target of 3.5%, bringing DC pensions into IHT eligibility) as well as the structural erosion of the tax base that may result from Net Zero/ AI grabbing labour share of GDP. Overall, as previous FRSs have shown, this is the warning klaxon for the long term sustainability of the UK's fiscal position (as in the short run funding gaps are always bridgeable with inflation/ issuance trade-offs). How the politics ever coalesce with the warnings is far harder to ascertain. There are pockets of Burnham-adjacent advisers who are advocating for extending/loosening the current fiscal rules. The problem is not the principle/theory of such an approach - it is what the sovereign debt market would conclude given long term structural issues of affordability (e.g. tax erosion, triple lock, health spending, fiscal drag) that are left unaddressed which are brought into stark relief in FRSs.
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James Nation
James Nation@NationJames·
Good to give a view on this last week (let’s see): giftarticle.ft.com/giftarticle/ac… Andy Burnham rules out splitting Treasury to avoid disruption
Whitehall Sources@whitehallsource

"They will make a mistake if this becomes an agenda about actually physically breaking up the responsibilities of the Treasury." Former Treasury Special Adviser, @nationjames, says devolving Treasury responsibilities would be an early error from Andy Burnham. He suggests Ed Miliband is the person who can: "Go in, grip the machine, grip the officials and start to deliver" on Burnham's agenda. @CalumAM | @straighttie

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James Nation
James Nation@NationJames·
@BenZaranko It’s been done. But I think a line which says ‘to be funded at budget 2026’ and £10bn of savings with details confirmed later and where only two roads have been identified feels more novel/extensive to me compared to recent history.
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Ben Zaranko
Ben Zaranko@BenZaranko·
@NationJames I agree it's not fully funded - but there's precedent for making spending commitments and leaving the funding question for a fiscal event, when tax/spending/borrowing can be considered in the round, no?
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James Nation
James Nation@NationJames·
This is true. But it's also fair to say that the £4.7 billion is a larger savings line than the £4 billion achieved through the 1% cut to departmental capital budgets. It's not credible to say this is a 'fully funded' plan and any government, rightly, would be called out for it.
Ben Zaranko@BenZaranko

There's some irony in Reeves and Starmer leaving behind a £1.2bn unfunded spending commitment, but it's not that big a sum to find at the Budget, in the grand scheme of things. Bigger issue: the £25bn funding gap relative to the 3.5% target. Absolutely no realism about that.

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James Nation
James Nation@NationJames·
If in doubt, ‘to be funded at Budget 2026’ will pay for it…
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James Nation
James Nation@NationJames·
Small print on DIP funding suggests there’s £4.7 billion that will be the next chancellor’s problem.
James Nation tweet media
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James Nation
James Nation@NationJames·
Re-upping this from last year, since we are now in a world where the treasury will push to make any defence uplifts as capital intensive as possible. The area for gremlins to watch is transport £, as MPs worry about any cuts to the roads budget in their patches.
James Nation@NationJames

If true, detail to watch will be: a) how much of the increase is capital? That’s where the Gov has more headroom; b) what does that imply re funding left for the 10 year infrastructure plan, where defence wasn’t mentioned?; c) if minimal resource £, what about army numbers?

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James Nation
James Nation@NationJames·
Big fiscal commitments from Burnham. One question is how far he can get away with precommitting capital in future years now (just like the Gov’s existing 10 year infra strategy) vs. whether/when he feels he needs to make a change to the debt rule.
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Tom McTague
Tom McTague@TomMcTague·
The lesson of The Leopard is that things **do not** stay the same once they are changed. The Prince believes he can protect the aristocracy by working with the revolution, but dies understanding that the old world was, in fact, destroyed by it. (Hat tip to @jessicaelgot who noted how often the Lampedusa is being quoted now)
Mark McVitie@MarkMcvitie

Earlier drafts of the Honest Day paper included a version of this quote in the foreword. It is, in my view, the single most important thing for progressives who care about the post-war liberal settlement to internalise in this political era. ‘If we want things to stay as they are, things are going to have to change.’

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Jessica Elgot
Jessica Elgot@jessicaelgot·
@John_ForemanCBE @TomMcTague Arguably though - stuffed dogs aside - by the end of the novel the power structures of the new elite looks a lot like the old elite
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