Andy Verity @andyverity Twitter profile | Pikagi

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Andy Verity

@andyverity

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‘A man with no eyebrows telling you the emperor has no clothes’. Author of 'Rigged'. BBC economics + investigative hack. Bust myths. Expose cover-ups. Listen.

London

Joined March 2011

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@andyverity

Andy Verity

9 months

My book Rigged, exposing an establishment cover-up at the highest level on both sides of the Atlantic followed by a whole series of miscarriages of justice, has already sold out its initial print run and been reprinted in the UK. Now it's being published in the United States:

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@andyverity

Andy Verity

2 years

Is it responsible politics to describe 40,000 people crossing the channel in the year to date as ‘an invasion’ of southern England? It’s worth remembering that in normal times about 130,000 British-born people leave the country - every 3 months. I wonder where they are invading…

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Andy Verity

2 years

Mortgage lenders are pulling deals because the cost of borrowing over 2 or 5 years has shot up so fast along with gilt yields. That’s happening regardless of attempts at calming by BoE. I can’t remember seeing that before - and I’ve been reporting financial markets for 27 years.

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Andy Verity

2 years

The estate agency Savills just put out the following research finding: 'The average house price was just under £2,000 when the Queen ascended to the throne in February 1952 – the equivalent of just £56,000 in today’s money'.

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Andy Verity

2 years

For all those talking as if the government has no alternative but to ‘balance the books’, here’s a question. In how many years in the last half a century would you say the government’s budget has been in surplus? Answer: six. Did you know this before you decided it was crucial?

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Andy Verity

1 year

Before we accept it when we're told the government 'can't afford' something that might be to the public good we should remind ourselves of facts like the following from the Office for National Statistics this morning:

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Andy Verity

3 years

I've just got figures for how much of the money borrowed by the government since April (by issuing IOU notes - also known as government bonds or gilts) now has the Bank of England as creditor (which created the money to do so from nothing). /1

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Andy Verity

2 years

There's a danger in what happened in the past three weeks since the mini-budget. That is that in the coming years, Chancellors of whatever stripe run scared of the bond markets, thinking they'll tolerate nothing other than 'balancing the books.'

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Andy Verity

3 months

At the BBC we've had a whole independent review which made it very clear we shouldn't use profoundly misleading household finance analogies for the public finances. But now the Labour front bench keeps doing it. And it's not the first time:

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Why is Labour still using the self-defeating, discredited ‘maxed out credit card’ analogy? | Yanis...

It is one thing to U-turn on a modest green transition programme. It is another to do so using mendacious Tory economic paradigms, says the economist Yanis Varoufakis

www.theguardian.com

@jrc1921

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3 months

Labour's Darren Jones states that his party is committed to austerity as the Tories 'have spent all the money and maxed out the country's credit card'

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Andy Verity

10 months

Here's a startling passage from the Bank of England's financial stability report that somehow didn't make it into the summary - which is all that many journalists read, all about buytolet mortgages. Around 2.1 million renters live in homes with buytolet mortgages on them:

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Andy Verity

2 years

Q: When is a black hole not real? A: when it disappears at the stroke of an economic forecaster’s pen.

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Economists question 'black hole' in UK finances

The government's justification for upcoming UK tax rises and spending cuts is shaky, economists say.

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Andy Verity

11 months

If you only read one bit of news this weekend, make it this one - on the front page of the BBC’s website. In my whole career I have never come across a personal story as extraordinary - and shocking - as that of former Barclays trader Peter Johnson:

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Whistleblowing banker who went to prison speaks out

Peter Johnson, who was jailed for "rigging" interest rates, speaks publicly for the first time since being released in 2018.

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Andy Verity

11 months

Here's something the review of the BBC's coverage of issues like tax and the public finances said recently: “Too often, it’s not clear from a report that fiscal policy decisions are also political choices;' /1

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Andy Verity

2 years

The fiscal pendulum is now swinging back like a wrecking ball. For the sake of a sane public debate, can we please be really clear about the economics here? Spending cuts and tax hikes are not going to boost growth in an economy already heading for a recession.

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Andy Verity

3 years

This is why it's wrong to say because we've got big debts, we must fix them immediately. Financially, governments aren't like households. As sovereign currency issuers, they can borrow vast sums from themselves (the Bank of England is ultimately another branch of govt).

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Andy Verity

1 year

The truth is that whenever a government says it 'can't afford' something, it's expressing a subjective judgment, dressed up as an economic fact.

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Andy Verity

3 months

The Post Office scandal doesn't stop with the Post Office. Read this for the low-down on a story that emerges from documents released under Freedom of Information. Assembled in a timeline, they become a little unsettling...This is top story this morning:

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Cameron government knew Post Office ditched Horizon IT investigation

Documents show the secret investigation may have helped wrongly accused postmasters prove their innocence.

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Andy Verity

3 years

After the financial crisis, austerity in public spending and weak private investment led to the worst decade for improvements in living standards in 200 years. Please, not again.

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Andy Verity

2 years

So soon after the Bank of England raised interest rates while warning we’re heading for the longest recession on record, it’s extraordinary to hear talk to ‘fiscal consolidation’ (ie spending cuts and/or tax rises) on top of that.

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Andy Verity

3 years

All of which is to say that if you get the economy going with sufficient momentum, you can then grow your way out of debt - rather than cutting your way out of it. Taxes can rise later, at a time when the brake they put on economic growth won't bring things juddering to a stop.

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Andy Verity

1 year

As long as we labour under the delusion that financial choices are the same for a government as they are for households or firms, who don't have a bank or a money printing machine in their front room whenever they need to spend, we'll be having the wrong conversations.

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Andy Verity

3 years

Far from mortgaging the futures of the children of that generation's voters, it was a long-term strategy with long-term goals in mind: a better future. And the children of that generation ended up, when they grew up, with far greater prosperity than any preceding generation.

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Andy Verity

3 years

Of the vast £485.5 billion being borrowed in this financial year (2020/2021), £450 billion will be owed to the Bank of England.

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Andy Verity

3 years

The pandemic put the economy and the public finances on something very like a war footing. Note in 1945, when debt was much higher, the Attlee government embarked on the biggest expansion in peacetime of the role of the state and public spending.

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Andy Verity

2 years

The Bank of England just sent this letter to the Treasury committee of MPs. It calls into question the government spin that global factors are pushing up mortgage payments. Interest rates were already rising - but the acceleration in the UK after the mini-budget is undeniable.

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Andy Verity

1 year

That of course doesn't at all mean the government has £88 bn 'to spare' - because spending's gone up by even more. What it does mean is that the government is taking more money out of the economy in tax at a time when the economy's in a sharp slowdown.

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Andy Verity

1 year

Total central government receipts were £929.0 billion in the full year to the end of March 2023, an increase of £88.0 billion (10.5%).

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Andy Verity

7 months

If you're struggling with the cost of food and energy, have you stopped to think where the extra money you're paying goes after you hand it over? Well here's one place - into corporate profits. As prices have risen, profits have risen faster than they have in a long time:

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Andy Verity

1 year

That 'can't afford it' thing...here's the text of a report I did for @BBCRadio4 's six o'clock news bulletin - one of the best places you can go in the BBC for strong, objective reporting:

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Andy Verity

1 year

What the public too often too meekly accept is this idea that government's are constrained by the public finances in the same way that households are. This is (insert suitable fruity word).

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Andy Verity

1 year

What a pity we're now so used to them. And what a pity the political will and strength of vision required to meet net zero targets now looks so absent from the major parties' public statements and policy documents. Don't we want our grandchildren to look back on us well?

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Andy Verity

2 years

The @FinancialTimes points out this morning that the UK's housing stock is 'older and less well-insulated than that almost any other nation in Europe'. More than £10bn - or £390 per household - could be saved on energy bills if leaky homes were properly insulated.

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Andy Verity

4 years

I just paid half price for my morning coffee at a well-known chain. Because I’m addicted, i was going to buy it anyway. How to justify using taxpayers money subsidising coffee - yet refusing to help 3.1 million people deprived of their livelihoods and excluded from support?

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Andy Verity

2 years

It's the economically wrongheaded belief that as owners we benefit from price rises that's led politicians for so long to look on rising house prices as a political benefit - and not seek in more determined fashion to make this essential of life more affordable, not less.

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Andy Verity

1 year

It's not the public finances that constrain us so much as a lack of imagination and political vision. It's finances of hard-pressed households, not government finances, that are the locus of human suffering right now - and which therefore should be the focus of policy attention.

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Andy Verity

2 years

The immediate crisis is not one of the public finances but household finances. It's households, not the Exchequer, that have the deficits that really matter - meaning many are being forced to outspend their incomes and get deeper into debt.

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Andy Verity

2 years

Remembering that housing is something we all need and that renting in this country can be unpleasantly insecure - Is that a great success - or a terrible, 70-year failure?

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Andy Verity

2 years

If you’re up at 10.30 for @BBCNewsnight look out for some exclusive journalism from the BBC data team: about the govt leaving a legal loophole that’s allowed Russian oligarchs close to Putin, among many others, to move money using English firms - in spite of a govt ‘crackdown’.

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Andy Verity

2 years

The government wants us to believe the causes of the market turmoil of the past week – including the biggest falls in the price of UK government bonds on record - are global, caused by Vladimir Putin, rather than its ‘mini’ budget. Is that credible?

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Andy Verity

1 year

As the £300bn spent in the financial year 2020 demonstrated, when the government refuses pleas for necessary spending (or, if you prefer, tax cuts) on the basis that it can't afford something, it is not saying 'we can't' but 'we don't want to'.

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Andy Verity

2 years

In the public finances, there is no 'fund'. Taxes do not go into some mystical deposit account, then to be spent on the NHS or teacher's salaries. Money is spent into existence at the command of parliament, and then taxed back out of the economy.

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Andy Verity

1 year

But these days, young adults almost have no clue that from World War II until the Blair era, everyone could take it for granted that their pay would rise faster than inflation - every year. Real terms pay cuts were greeted with outrage.

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Andy Verity

1 year

Value Added Tax receipts were up £17.8 billion or 10.7%. Money paid in income tax was up £26 billion or 10.8%, boosted by record self-assessed taxes. Fiscal drag is pulling more people into higher tax bands. That's deliberate policy by the way.

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Andy Verity

3 years

To anyone rushing to buy property right now I would like to offer a note of caution from an ageing hack who’s been watching the housing market since the 1980s and fronted a tv series in 2007 anticipating a crash. Be careful: you may be buying the peak.

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Andy Verity

2 years

'Yet today’s average house price stands at £260,771 according to the Nationwide, making home purchase four times more expensive in real terms than at the start of Her Majesty’s reign.'

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Andy Verity

1 year

Apparently the government (or is it the banking industry?) thinks the 'senior managers regime', brought in 6 years ago to hold top bank bosses accountable for the actions of their banks, needs changing because it's 'too onerous'.

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Andy Verity

1 year

And is that a good idea? The traditional view for most of the past 100 years has been that the government should act 'contra-cyclically' with both monetary and fiscal policy (interest rates and taxes), offsetting any slowdown with spending.

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Andy Verity

2 years

Really great ‘big board’ by my colleague @BenChu_ explaining what fiscal ‘holes’ really are - or rather, aren’t. Note - we’re projected to borrow a lot less as % of the economy (GDP) than other countries - including borrowing to invest. Big question -

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Andy Verity

2 years

So, if any sector can be taxed without harming growth, perhaps it's not households but the corporate sector, with many corporations distributing record profits.

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Andy Verity

2 years

Whenever you hear talk about the UK government 'running out of money' (Liam Byrne, 2010 etc), you know you are listening to someone who doesn't know what they're talking about. At best, what he said was a bit of fun - intended as a joke.

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Andy Verity

3 years

Rishi Sunak’s come under repeated fire in the House of Commons over the millions of people excluded from support - with at least 10 questions on the issue in @hmtreasury questions just now. His response? “I don’t agree that those people have been excluded...

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Andy Verity

4 months

It’s rare to see behind the bits the Post Office bosses and top lawyers wanted blacked out. But here, you can. Neither they nor the government wanted you to see this:

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Post Office accused of cover-up over secret Horizon documents

BBC obtains unredacted minutes showing government knew of plan to sack experts who found Horizon IT bugs.

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Andy Verity

2 years

It's hard to say how the alternative - hitting households at their lowest ebb - can help the economy to avoid recession, let alone grow.

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Andy Verity

2 years

Taking money from corporations enjoying windfall profits, on the other hand, can be done without necessarily deterring investment. Where corporations are currently engaged in share buybacks, it may suggest they have more money than they know how to invest.

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Andy Verity

1 year

By 2025, households will be no better off than they were 20 years before. Now if you'd told someone that in about the year 2000, they'd have thought you were off your head too. In almost every year from 1945 to 2005, real incomes rose.

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Andy Verity

2 years

It couldn't be less like household finances for a very simple reason. Governments that issue their own currency in a post gold-standard world can create money from nothing at will. Unlike currency users, they cannot go bankrupt.

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Andy Verity

1 year

But there's a vast difference between what corporation tax does to firms who've had so much money from the surge in energy prices - money they've done little to earn and don't know what to do with - and small companies squeezed tighter by energy costs than they've ever been.

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Andy Verity

2 years

The answer to that is definitely not ‘cut spending and raise taxes immediately’. More government ‘borrowing’ is normal going into recession. If government makes £50bn of spending cuts or tax rises too soon - and the recession is therefore deeper - markets won’t like that either.

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Andy Verity

1 year

As as if the whole economy - households, government and businesses - has suddenly decided to throw huge sums of money at oil companies - and only tax it back quite modestly, pushing us into greater borrowing.

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Andy Verity

2 years

In 2020/21 the government borrowed £300 billion to pay private sector wage bills via the furlough scheme, to keep the transport system running without any passengers etc. No-one objected, 'where's the money coming from?' No-one talked about all that covid support as 'unfunded'.

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Andy Verity

1 year

Amid talk of how all political parties would like to support businesses (and a surge in profit warnings), Corporation Tax is up £10.6 billion or 14.7%. Some of that's the energy profits levy - a modest tax when energy firms are making colossal profits at all our expense.

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Andy Verity

11 months

'...they’re not inevitable, it’s just that governments like to present them that way. The language of necessity takes subtle forms; if the BBC adopts it, it can sound perilously close to policy endorsement.'

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Andy Verity

1 year

It's only because people - from Lloyd George with his people's budget in 1913 to the founders of the welfare state (on both sides of the House of Commons) - had both the imagination to envision and the determination to enact these things that we grew up benefiting from them.

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Andy Verity

2 years

ThIt may suit governments intent on either shrinking the state (the right of the Conservative party) or demonstrating their 'fiscal discipline' (the right of the Labour party) to talk about the public finances as if they were like a household's. But they simply are not.

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Andy Verity

1 year

And this was before the big hike in corporation tax took effect (this month). The problem is that if you focus all the public support on subsidising energy bills, then only tax energy firms quite lightly, everything gets a bit unbalanced.

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Andy Verity

4 years

The latest figures show the government's spent more than £27 billion pounds on the Coronavirus Job Retention Scheme and the Self Employed Income Support Scheme. @hmtreasury It's still not clear why the 2-3 million people excluded from support are not equally deserving of help.

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Andy Verity

1 year

Only once you realise those important facts can you have a rational debate about whether fiscal policy is doing what you want it to - whether it's stimulating the economy out of slowdown, building a green economic future, or improving health and education.

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Andy Verity

1 year

In a way that's exactly what the government's doing by spending so much on energy support. But at the same time it's giving with one hand, it's taking away with the other. Take in the significance of the following:

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Andy Verity

1 year

Meanwhile everyone from military commanders wanting to support the war in Ukraine to unions begging the government to fix desperate skills shortages affecting patient safety are told there's not a few billion to spare.

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Andy Verity

3 years

Listen out this evening for our @BBCPanorama scoop about David Cameron and Greensill Capital. He didn't want to tell MPs how much he made - but we've found out. And if you watch the film at 7.35 on BBC1 you'll learn a few things more about the firm he was working for...

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Andy Verity

2 years

This is so important. If you want to be well informed about what’s going on right now, read this - including the Telegraph article quoted. We shouldn’t forget what subordinating the economy to an arbitrary fiscal goal can do to everyone’s prosperity - and has done since 2009.

@michaelujacobs

Michael Jacobs

@michaelujacobs

2 years

So, despite what the media are telling you, the size of the ‘black hole’ – and even whether there is one – is a matter of choice: choice of overall economic strategy, of fiscal rule, of fiscal policies, and of modelling assumptions. It’s not a ‘fact’. /8

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Andy Verity

2 years

The Office for National Statistics just published these striking numbers. The market price of gas dropped by 60% last week, to 2.08 pence per kilowatt hour (7 day average). That's plummeted from a peak of 17.2p in August - and 6 pence the week before Putin invaded Ukraine.

Tweet media one

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Andy Verity

2 years

Talk of 'unfunded' tax cuts is at best a form of shorthand. At worst, though, it perpetuates a myth, namely that the there is a 'fund'; or that the money has to 'come from' somewhere.

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Andy Verity

1 year

That doesn't mean a Chancellor can spend whatever he likes (notably there's never been a female one). But the real constraint is not some arbitrary fiscal target but the risk of inflation.

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Andy Verity

2 years

What references to the 1970s overlook: in most years of that decade, inflation was less damaging to working households because their pay went up faster. Living standards continued to improve (unlike the 2010s, the worst decade for improvements in living standards in 200 years).

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Andy Verity

1 year

Similarly, if you'd said to someone in 1895, 'fifty years from now we'll have universal education, universal health care and everyone will pay about a third of their income in taxes', they'd have carted you off to Bedlam.

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Andy Verity

11 months

They may be dressing up a subjective political choice as an objective reality - making us think 'running out of money' is as much of a real risk for a sovereign government issuing its own currency as it is for a household or firm. But it's simply not.

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Andy Verity

3 years

In this article I've done some analysis trying again to bust an egregious economic myth. "Economics" comes from a Greek word for 'household management'. In respect of the public finances, it's a complete misnomer:

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UK government borrowing hits February record as virus impact continues

The government borrowed £19.1bn last month, the highest figure for February since records began.

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Andy Verity

3 years

@ToryFibs Thank you. And by the way - I’m fine. Outside the BBC there’s a statue of former employee George Orwell and a quote “if liberty means anything at all it means the right to tell people what they do not wish to hear”.

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Andy Verity

1 year

Dear politicians, left, right and centre. The public don’t want spin. They want integrity. They don’t want to be told what politicians think they want to hear. They want to be told the truth.

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Andy Verity

2 years

In the pandemic, it suddenly became obvious in March 2020 that fiscal goals mattered not a jot compared to the higher priority of limiting the death toll. By its decisions, a Convervative government demonstrated that 'fiscal discipline' was subordinate to more important things.

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Andy Verity

1 year

But as the lockdowns showed, governments can do things that previously almost everyone would have thought unimaginable. In 2019, if you'd said, 'next year everyone will be ordered not to go outside by the government - and people will obey' - who would have believed you?

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Andy Verity

3 years

Whenever anyone says they ‘can’t afford’ something it is a subjective judgment dressed up as an objective fact. Unless you’re truly destitute the honest way to say it is ‘that’s not my priority right now’. Perhaps you need a home first - or food.

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Andy Verity

3 years

In this article you’ll find a reminder that government finances are entirely unlike household finances. Therefore dubious statements about what the government ‘can’t afford’ are political judgments dressed up as economic ones.

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Government borrowing fell in April as UK reopened

Despite the fall, borrowing was still the second highest on record for April as Covid spending continues.

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Andy Verity

1 year

And that's a pity when there's so much to be done. Whatever policy goal you have, until you talk about it with the right information, you're never going to know whether or not it's feasible.

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Andy Verity

2 years

If a new chancellor wants to restore fiscal credibility and also grow the economy, it's hard to see how taking money from hard-pressed households (eg those on wages so low they need topping up with benefits) is going to boost economic activity.

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Andy Verity

2 years

Behind the idea of austerity was always a dim, unspoken anxiety, aggravated by false comparisons of the public finances to household finances. We, the households, fear debt because we know if we don't keep up the repayments - then it's the bailiffs, or homelessness.

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Andy Verity

2 years

The question does not have to be - how do we balance the government budget?’ Or ‘how do we fill this (theoretical) fiscal hole?’ but ‘how do we balance households’ budgets?’ Or better still - how do we stop this recession lasting so long and being so damaging?

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Andy Verity

1 year

If you'd said, 'next year, the government will shut most business down completely and offer to pay private companies wage bills', anyone listening would have thought you were off your head.

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Andy Verity

11 months

Wise words. So when the government (or opposition) uses the language of necessity - 'we can't do X because we can't afford to' - due scepticism should be applied.

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Andy Verity

3 months

We should have a fiscal swearbox, calling out anyone who gives the public this wrong-headed idea. It may sound folksy and appealing - but it's economically illiterate. There is no national credit card.

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Andy Verity

1 year

When a government says it can’t afford something, it’s much less an objective fact and much more a matter of priorities than it is for a household running low on cash.

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Andy Verity

2 years

Update - yield on 30 year uk government gilts - now being heavily sold in New York - has now shot up to show a gain of 30 basis points on the day to 4.85 - more than the record daily hike before the mini-budget. That means prices plummeting. Uk govt debt is in meltdown - again.

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Andy Verity

11 months

If any of those politicians who've studied mainstream economics presents a policy choice as being dictated by necessity eg they 'can't afford' something because the government would 'run out of money', they need to be asked a few challenging questions, like:

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Andy Verity

2 years

This time is different though - because of the thing that really is a constraint on government spending - the capacity of the economy to absorb extra spending without stoking domestically driven inflation.

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Andy Verity

2 years

That extra spending is going somewhere - not to the government but to large corporations, especially in the extractive industries (oil and gas but also steel, wood, semi-conductors etc). They are booming, making huge, unexpected profits.

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Andy Verity

2 years

The gilts sell-off is more significant than the pound’s fall - because it means the cost of borrowing over 2,5 or 10 yrs has jumped not just for the government but for mortgage lenders. They’re withdrawing mortgage deals because they hadn’t budgeted for rates this high.

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Andy Verity

2 years

I’ve spent six years aghast that this sort of thing can happen. Ask yourself as you read it, or as you listen to The Lowball Tapes, is this justice? And is there equality before the law? The whistleblowing bankers who were sent to jail - BBC News

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The whistleblowing bankers who were sent to jail

Traders who blew the whistle on fraud were jailed, but no senior figure was prosecuted.

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Andy Verity

1 year

What then becomes important is to consider what effect it has on the sector you're spending money on - and whether that's where, taking into account your policy priorities, you want the money to go.

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Andy Verity

2 years

The Bank of England no longer wants to be buying bonds but selling them as part of 'quantitative tightening'. And the capacity of the economy has been unexpectedly reduced because of the half a million workers who never rejoined the workforce - partly because of long covid.

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Andy Verity

2 years

That barometer of bond market anxiety - 30 year gilt yields (the higher they are, the more worried the market is) have been heading back up to where they were before the Bank of England's £65bn intervention - and this morning's announcement hasn't stopped it:

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