Brexit and the waning days of the United Kingdom

[Tamas]

Car financing. Having reviewed a bit how most people are being taken for a ride (haha) by dealers selling them PCP, I think this could be a big deal:

The Court of Appeal has upheld an appeal against Close Brothers, First Rand Bank and MotoNovo Finance ruling that motor dealers acting as credit brokers have a duty of loyalty to their customers.

The decision could pave the bay for billions of pounds to be paid out to customers although Close Brothers has said it is going to the Supreme Court to appeal the decision.

The Court of Appeal ruled that a broker could not lawfully receive a commission from the lender without obtaining the customer's fully informed consent to the payment.

The court ruled that in order for consent, the consumer would need to be told all material facts that might affect their decision, including the amount of the commission and how it was to be calculated.

In a statement Close Brothers said: "Close Brothers disagrees with the Court's extension of the existing case law in this area and intends to appeal this decision to the UK Supreme Court.

"The Court has determined that motor dealers acting as credit brokers owe both a disinterested duty and a duty of loyalty ("fiduciary duty") to their customers.

"This sets a higher bar for the disclosure of and consent to the existence, nature, and quantum of any commission paid than that required by current FCA rules, or regulatory requirements in force at the time of the case in question."

Stephen Haddrill, Director General of the FLA, said: "This is a significant and unexpected judgment, the implications of which stretch far beyond the motor finance sector, making it an issue that demands the immediate attention of the Financial Conduct Authority (FCA)."

The FCA said: "In January, we introduced a pause to the time firms have to provide a final response to customers about motor finance complaints involving a discretionary commission arrangement (DCA).

"We did this to prevent disorderly, inconsistent and inefficient outcomes for consumers and knock-on effects on firms and the market while we review whether motor finance customers have been overcharged because of the past use of DCAs.

"In September, we extended the pause, in part, so we could account for the outcome of legal cases that may be relevant to our review.

"We note the Court of Appeal judgment on 25 October 2024, in Johnson v Firstrand Bank, Wrench v Firstrand Bank and Hopcraft v Close Brothers Ltd, and are carefully considering its decision."

BTW all you need to know about the industry is that the site I sourced this from (after seeing it discussed on Reddit)  is supposed to be one for the motor industry and yet it is so absolutely riddled with ads including constant popups that I felt like I was back in the early 2000s again.

I have read on Reddit that a few other lenders have paused doing more care financing deals while they work out what's what.

I guess also all you need to know about this industry is that a requirement (that may still get overturned at the Supreme Court) to be slightly more transparent sends such shockwaves and panic.

[Admiral Yi]

1979 interview with Anthony Blunt.

[Sheilbh]

Obviously lots in the budget and will post an article at some point. But an example of why I have some sympathy for the criticism of too much process and quangocracy and failing upwards/jobs for the boys.

The government have set up a new Office of Value for Money (), its chair is, I'm sure, excellent. But he will be on a day rate of about £1,000 for one day a week and a team of twenty civil servants. He will have to fit this in around his commitments on the board of HS2 - and will also presumably be on top of his £300k+ salary (and last year's bonus of £168k) for his work on the stalled refurbishment of Parliament.

[Tamas]

Obviously lots in the budget and will post an article at some point. But an example of why I have some sympathy for the criticism of too much process and quangocracy and failing upwards/jobs for the boys.

The government have set up a new Office of Value for Money (), its chair is, I'm sure, excellent. But he will be on a day rate of about £1,000 for one day a week and a team of twenty civil servants. He will have to fit this in around his commitments on the board of HS2 - and will also presumably be on top of his £300k+ salary (and last year's bonus of £168k) for his work on the stalled refurbishment of Parliament.

Maybe some or all of those positions are just pay-out places for chums, they don't mean they expect actual work to be done.

[Tamas]

I was wondering how the Guardian would be with a Labour government, I am glad to see they are not slowed down in permanent gloom and doom.

Like this article similar to that about the Hamas girl's tribunal: who said this? Because the article makes it say it some stock brokers do their relevance is limited while thekr interests opposed to the government's, but it's never explicitly stated: https://www.theguardian.com/politics/2024/oct/31/ifs-says-extra-9bn-of-tax-rises-may-be-needed-to-avoid-uk-public-service-cuts

Just too eager to push what they want to push.

[garbon]

I was wondering how the Guardian would be with a Labour government, I am glad to see they are not slowed down in permanent gloom and doom.

Like this article similar to that about the Hamas girl's tribunal: who said this? Because the article makes it say it some stock brokers do their relevance is limited while thekr interests opposed to the government's, but it's never explicitly stated: https://www.theguardian.com/politics/2024/oct/31/ifs-says-extra-9bn-of-tax-rises-may-be-needed-to-avoid-uk-public-service-cuts

Just too eager to push what they want to push.

I wondered too but then answer is here in an earlier article:

https://www.theguardian.com/uk-news/2024/oct/31/rachel-reeves-more-money-fix-public-services-ifs-autumn-budget

[crazy canuck]

I was wondering how the Guardian would be with a Labour government, I am glad to see they are not slowed down in permanent gloom and doom.

Like this article similar to that about the Hamas girl's tribunal: who said this? Because the article makes it say it some stock brokers do their relevance is limited while thekr interests opposed to the government's, but it's never explicitly stated: https://www.theguardian.com/politics/2024/oct/31/ifs-says-extra-9bn-of-tax-rises-may-be-needed-to-avoid-uk-public-service-cuts

Just too eager to push what they want to push.

The article you linked doesn't have the deficiencies you say it does.  If you read the full article, there are people who are quoted, there are groups whose positions are quoted, and there are others who are obviously people who did not want to be named, but are prepared to be quoted on background.

These are all standard journalistic methods of conveying information to the public.

It seems like you are looking for a problem that doesn't actually exist and you're the one who has a bias which you are too eager to justify.

The real tip off was your reference to a Hamas girl.  The characterization of that student being a "Hamas girl" is one of your own creation based on your own misguided conclusions about that article. 

Grumbler already corrected you about your misunderstanding, but you go onto repeat it in another post in a different thread.

This is exactly how misinformation and inaccurate information gets repeated in amplified in social media.

[garbon]

I was wondering how the Guardian would be with a Labour government, I am glad to see they are not slowed down in permanent gloom and doom.

Like this article similar to that about the Hamas girl's tribunal: who said this? Because the article makes it say it some stock brokers do their relevance is limited while thekr interests opposed to the government's, but it's never explicitly stated: https://www.theguardian.com/politics/2024/oct/31/ifs-says-extra-9bn-of-tax-rises-may-be-needed-to-avoid-uk-public-service-cuts

Just too eager to push what they want to push.

The article you linked doesn't have the deficiencies you say it does.  If you read the full article, there are people who are quoted, there are groups whose positions are quoted, and there are others who are obviously people who did not want to be named, but are prepared to be quoted on background.

These are all standard journalistic methods of conveying information to the public.

It seems like you are looking for a problem that doesn't actually exist and you're the one who has a bias which you are too eager to justify.

The real tip off was your reference to a Hamas girl.  The characterization of that student being a "Hamas girl" is one of your own creation based on your own misguided conclusions about that article. 

Grumbler already corrected you about your misunderstanding, but you go onto repeat it in another post in a different thread.

This is exactly how misinformation and inaccurate information gets repeated in amplified in social media.

It is buried deep in the article. I missed it too when I first read it. I think they good have done better to follow standard journalistic practice of leading with important bits and I'd consider the source of your headline to be one.

[crazy canuck]

I was wondering how the Guardian would be with a Labour government, I am glad to see they are not slowed down in permanent gloom and doom.

Like this article similar to that about the Hamas girl's tribunal: who said this? Because the article makes it say it some stock brokers do their relevance is limited while thekr interests opposed to the government's, but it's never explicitly stated: https://www.theguardian.com/politics/2024/oct/31/ifs-says-extra-9bn-of-tax-rises-may-be-needed-to-avoid-uk-public-service-cuts

Just too eager to push what they want to push.

The article you linked doesn't have the deficiencies you say it does.  If you read the full article, there are people who are quoted, there are groups whose positions are quoted, and there are others who are obviously people who did not want to be named, but are prepared to be quoted on background.

These are all standard journalistic methods of conveying information to the public.

It seems like you are looking for a problem that doesn't actually exist and you're the one who has a bias which you are too eager to justify.

The real tip off was your reference to a Hamas girl.  The characterization of that student being a "Hamas girl" is one of your own creation based on your own misguided conclusions about that article. 

Grumbler already corrected you about your misunderstanding, but you go onto repeat it in another post in a different thread.

This is exactly how misinformation and inaccurate information gets repeated in amplified in social media.

It is buried deep in the article. I missed it too when I first read it. I think they good have done better to follow standard journalistic practice of leading with important bits and I'd consider the source of your headline to be one.

I'm not sure about that. It's common for practice to have some introductory paragraphs and then get into the nitty-gritty of the sourcing of the story within the body of the article.

[Tamas]

Was any of them quoted giving the number? Nope.

[Sheilbh]

I'm not sure about that. It's common for practice to have some introductory paragraphs and then get into the nitty-gritty of the sourcing of the story within the body of the article.

Yeah although I think UK publishers all think Americans still bury the lede with throat-clearing introductions. I think the UK practice would be more start with the line/crux of the argument and then do introduction and nitty-gritty.

Things have settled down a bit today - gilts down and sterling holding gains. But I find it a little frustrating to see journalists behaving as if they've just discovered fire by pointing out that basically any tax is ultimately shared between profit margin, worker income and prices - in this case, a rise on payroll taxes (which particularly impacts lower paid workers). I suspect that may be a little bit of a timebomb for the government actually because Reeves is basically re-imbursing the extra cost for the public sector (so it won't come out of departmental budgets), but it's going to have a huge impact in the voluntary sector.

This is the thing Paul Johnson of the IFS is talking about:


Basically he says he would be amazed if day to day spending only grows by 1.3% after 2025-6 which implies either higher spending or real term cuts (and points out this is basically making the numbers add up fiscally over the five year period) - so plus ca change. Basically it'll be austerity again either through higher taxes or falling spending. I'm not fully sure that quite works and think there is a change in spending being more than 5% higher in 2026-7. So, yes, growth in spending at 1.3% is only marginally higher than 1% planned by the Tories - but the level will be significantly higher because of the front-loading.

But interesting that the OBR, IFS and IMF basically all agree the budget's a wash on growth (basically unchanged from pre-budget projections - UK is about G7 average, behind the US and Canada, about the same as France, faster than Germany, Italy and Japan). The investment will be positive, the tax rises (particularly payroll) will impact wages and employment. I've seen more than one Labour MP note that all of these entirely exclude what are basically supply side reforms like changes to the planning system, judicial review etc - which means for Labour to achieve its goals on growth (which are key for everything else) the thing that's left is significant structural reform. I hope that's a common view and they've, perhaps accidentally, painted themselves into radical action (I'm just not necessarily sure Angela Rayner or Ed Miliband are the people to deliver it...).

[Sheilbh]

Incidentally on the point about interests not being aligned with the government, I think it's short hand for the point Toby Nangle (veteran fund manager) made in the FT:

However, bond investors and fiscal conservatives are now invoking the memory of Truss to urge fiscal restraint. There's a case for ignoring this as special pleading. Government bonds of developed markets like the UK or US that issue their own currency record their strongest returns when the economy slumps. Austerity is always at the top of bondholders' professional wish lists, and bond investors are frenemies at best to a pro-growth chancellor. Putting too much weight on those investors' opinion would consign the economy to a tepid growth trajectory.

I think the £9 billion number was from the IFS' review of the budget (which they do after every budget and is pored over and heavily reported every time). I don't think you'd necessarily quote a very technical report by a think tank at length, you summarise and say where it came from.

It's for you to decide if you trust the Guardian's reporting/summary.

[Josquius]

Hidden away in the budget was one nice surprise - they seem to have been reading my newsletter and decreased tax on pints whilst increasing it on other alcohol. Not by much but a handy start.

[PJL]

Hidden away in the budget was one nice surprise - they seem to have been reading my newsletter and decreased tax on pints whilst increasing it on other alcohol. Not by much but a handy start.

Though the hospitality industry is saying that the employer NI changes and lessening of business rate relief will totally swamp any positive change in the draught beer tax cut.

[Sheilbh]

The NI rise will have a very big impact on employers - particularly of low paid and casual workers. It's a tax from the 1910s and it shows in a lot of ways and is why long-term I'd like to merge it.

Looks like market reaction has now settled. Basically a small, but significant re-pricing of gilts because the UK will be issuing more debt and also because the markets are now expecting fewer rate cuts in the next year. But nothing too alarming and certainly nothing like Truss (though fully get that wasn't just a reaction to the budget and there were other factors at play - particularly pension funds).

I hope this absolutely kills the discourse on left and right that we can basically do whatever we want fiscally. We are not America, we don't issue the world's reserve currency - so none of that stuff applies because even if the BofE can help stabilise bond markets, we would still face a sterling crisis (plus ca change - this is Britain's economic history from 1945-79). So we can't just have loads of unfunded tax cuts or spending increases - though I think we can, and should, use debt for capital investment/spending (as Reeves has). I think they absolutely overdid on the negativity but got the balance about right for significant investment, big tax rises for higher spending - and modest market re-pricing.

Also, I think this is backing Labour into a more radical reform stance. As I say I'm not sure if the two ministers most responsible for this - Rayner and Miliband - are ones who can deliver it, and I think that's going to be a tension/fight soon. But I think that's maybe a characteristic of Starmer's leadership - because he isn't particularly political himself he basically starts with a sort of soft left/Guardian op-ed instinct but then when that doesn't work (and it never does) is pretty ruthless in fixing it. I think that works in politics which can be fairly quick - it may be a big weakness in policy if he only realises Miliband or Rayner's policies aren't enough or are going in the wrong direction in year 3 of this term - it's a lot more difficult to course correct and see results.

So Starmer today in the FT which gives a hint of being backed into serious reform territory as the source of growth:

Keir Starmer: Reform is needed to make Britain a great place to do business
If we want the country to grow again, then we need to get it working and building again
Keir Starmer
The writer is UK prime minister

The theatrical impulses of Westminster have long seemed out of step with the need to communicate a stable plan for change. And nowhere is this tension starker than at Budget time. Over recent years we have watched successive chancellors pull increasingly threadbare "rabbits" from the hat as government policy veered around under an ever-changing cast of prime ministers.

You can't underestimate the damage this chaos did to our growth and standing with investors. And nor should we undervalue the investment premium that political stability can attract in an ever more volatile world. That is why our recent international investment summit celebrated £63bn-worth of private investment into the British economy. But I want that to be just the start. The decisive election result has handed us a golden opportunity to set this country on a path to sustainable growth — a decade of national renewal. What I hear time and again from my conversations with businesses and CEOs is the enormous value of certainty. That is exactly what this government is offering.

It was work Rachel Reeves, Britain's first-ever woman chancellor, continued this week. Make no mistake, the choices she made have prevented devastating austerity in our public services and a disastrous trajectory for our public finances, had we stuck to Tory plans. She wiped the slate clean, fixed our foundations and began the resolute work of rebuilding. But everything she did was built upon that steadfast commitment to economic stability and policy certainty.

Our tough fiscal rules — which we will meet two years early — lock in stability by guaranteeing day-to-day costs will be covered by revenues. Meanwhile, our "corporate tax road map" will provide boardrooms with a stable and competitive framework for long-term investment. Corporation tax has been fixed, full expensing capital allowances sustained and crucial start-up investment reliefs — such as the Enterprise Investment Scheme — have been extended until 2035. This is vital for new businesses. I am determined that Britain maintains its position as Europe's leading technology sector and a world-leading place for entrepreneurs. Future growth depends on supporting risk-takers through an age of artificial intelligence transformation.

Yet while we have always said economic stability is the first step on our mission for growth, the Budget also opened the door on the next stage of our plan: reform. Just as we cannot tax and spend our way to prosperity, nor can we simply spend our way to better public services. That is why reform is an essential pillar of this government's agenda. Reform of our creaking central state. Reform of our public services. And reform of our economy, with a modern supply-side agenda ready to take advantage of our new climate for investment.

Retailers plagued by shoplifting; transport infrastructure that seldom works; 6mn people waiting for an NHS treatment — these are not just social challenges; they are also profound economic supply challenges. Our investment this week will start that job. And our partnership approach on industrial policy means we can minimise the risk this crowds out valuable private sector activity. After all, we know that growth is a shared mission.

But investment is only part of the answer — if we want Britain growing again, then we need to get Britain working again. The Budget set aside new funding for welfare reforms that will help people back to work. Finally making work pay will be good for long-term productivity. However, perhaps most importantly of all for growth, we will also get Britain building again.

I have spoken to hundreds of leading CEOs over the past few years and I am convinced the biggest supply-side challenge we face is the way overweening regulators and a dysfunctional planning regime combine to stop our country building. Homes, warehouses, laboratories, grid connections — billions upon billions of private investment in the infrastructure of tomorrow is held up or blocked outright in this way. We have ambitious plans to bulldoze through those barriers.

Mandatory housing targets have been restored. Planning reforms, including the release of "grey belt" land, are in train. Clean energy projects have been quickly signed off — a signal of our intent. New planning passports will grant default permission on certain brownfield sites. And a rapid review of regulators is under way that will root out the bureaucracy that stifles growth.

This process involves detailed, often painstaking work. For that reason, it is not yet ready to be included in the OBR's forecast for growth. However, we should be optimistic about the potential. A "big build" could become as transformative for working people as the Big Bang was for the City of London in the 1980s. 

This government is determined to make the UK one of the best places to invest and do business, not just in Europe but the world. Only by working in partnership with the private sector can we deliver change, fix the NHS, rebuild Britain and make good on our promise of a decade of national renewal.

Two other things - one is that I find Labour's excitement at Britain's first female Chancellor is a little bit embarrassing (or no-one else cares) because it's clearly because Labour is the last big party to elect a female leader (and I wouldn't be surprised if they do it again). The Tories also got there first on women PMs and Home Secretaries, plus the first minority PMs, Chancellors, Foreign Secretaries and Home Secretaries, which I think does really irritate Labour every time it happens

Secondly I'll try to find it but I read a piece by a professor of architecture recently on the challenge of developing brownfield sites because of biodiversity net gain. Basically decaying brownfield sites are incredible for biodiversity. They create lots of little mini-habitats - think of all the bits of a derelict factory with puddles, or with trees taking over inside the building etc. These sites are more or less impossible to recreate (except by, say, building another carpark in order to let it decay) and the legal obligation on developers is not just to maintain biodiversity levels but to increase it by 10%. Which is very difficult when you're building on loads of weird, specific ecosystems that you find on a brownfield site - it's relatively easy if you're concreting over arable land.

It feels very much a case of best intentions - but I suspect it's going to be a struggle within Labour because biodiversity net gain sounds very much like the sort of thing that soft left/Guardian core of the party would like. It should be easier because I think it was introduced in Johnson's Premiership, but I'm not sure it'll work like that.