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John Redwood

@johnredwood

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linkhttp://www.johnredwoodsdiary.com calendar_today01-12-2009 15:27:11

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John Redwood(@johnredwood) 's Twitter Profile Photo

We need a strong minded good lawyer as Home Secretary to stop people trafficking and the illegal small boats. Suella Braverman is the best equipped to do this to save lives and control our borders. The sooner she is allowed to the better.

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The government wants tax rises and spending cuts to reduce borrowing because the OBR says there will be a big deficit in 2025. No-one knows what the deficit will be then so being slave to a made up figure is wrong.

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You cannot tax your way to lower borrowing. Higher taxes will mean a longer and deeper downturn. That will land us with a larger black hole In the finances.

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Glad to hear some second thoughts about a rushed austerity budget. We need an affordable growth plan, not higher taxes and clumsy spending cuts.

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I do not blame Rishi for yesterday’s modest fall in sterling. Time to get off the misleading narrative that markets mainly move in response to UK politics.

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Yesterday the new Leader began by supporting an extra £71 billion of spending in the next five months. The government turned down the ideas I put to them in the Parliamentary debate to reduce this huge figure whilst still helping people with fuel bills.

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Yesterday the new Chancellor got Parliament to authorise payment of £11 billion extra this year to the Bank of England to cover losses on bonds. Why not tell them to keep the bonds instead? We cannot afford this. It is a strange spending priority.

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We need to choose a PM who will promote prosperity across the UK and fight recession. Bond markets will not thank us if by trying to impress them austerity policy slashes growth and tax revenues. This would push up government borrowing.

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As some Conservative MPs undermined the members choice of PM, members should be offered a choice of candidate this week with a ballot.

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Why do so many commentators see creating recession with high mortgage and tax rates as economic stability? Why don’t they believe the official forecasts of inflation falling next year on current policies?

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The USA, Australia, Italy and several other EU countries have ten year government borrowing rates higher than the UK 4.05 %. The Bank of England has big influence over these rates by what it says and by buying/selling bonds. They are not usually a commentary on government.

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We need to cut needless state spending. Mr Hunt should tell the Bank of England not to sell bonds it owns at a loss as taxpayers/Treasury have to pay the bill. They plan losses of more than £11 bn over the next year according to a press report.

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Causing a recession with high taxes and mortgage rates does not bring stability. It brings misery to those who lose their jobs, homes and businesses.

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Those who wrongly think the bond market should rule our lives will create misery if they win by forcing a recession. These are the same people who caused the inflation by printing money to buy bonds. Now they want to correct their error with dearer mortgages and higher taxes.

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You do not stabilise an economy facing a recession by raising taxes and cutting state spending. You make the recession inevitable. You end up borrowing more as more people lose their jobs and businesses close.

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The so called grown ups following international fashions printed far too much money, robbed savers of interest on deposits and created the damaging inflation we are reversing. They now want to plunge us into a longer and deeper recession. Spare us that.

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The main reason UK bonds have fallen a lot this year is the Bank of England forced higher interest rates which means bond price falls. The Fed did the same to US bonds. They are not a daily commentary on the UK government. They did not change yesterday when the PM went.

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