A Brexit-themed payments size spot chart
As a public service: an aide memoire for putting past and future discussions in context
There has been a lot of noise about money recently
One of the single most disappointing thing to me about the modern politics as currently practised is the cynical misrepresentation of the significance of numbers, and the exploitation of framing numbers out of context in order to mislead.
In English: you need to see these things side by side, and in equivalent units, or your brain will *fail to process the information correctly*
I have made my opinion on this known before:
Problems We Do Not Have: Immigration.
Let’s start from first principles…
We should probably ban or tax* the subsequent tacking on of emotive prefixes, such as “Outrageous Divorce Bill”, “Magic Money Tree”, “Grubby Deal”, I shan’t go on, because this stuff rots your brain…
* depending upon your political stripe for applying discouragement
So, I want to fix this
And to get started: let us get some facts we can treat as objective.
Caveat: in some cases we need to attempt to get the number into the right ballpark for the time range. The intent here is to better frame numbers that get bandied around quite often, and when we look at the numbers in context I hope it will become more apparent [SPOILER].
I cannot claim to be expert in these metrics, but I now have at least a better rule of thumb as to the import of some figures. I will be wrong / have fat-fingered / misunderstood some figures.
The key phrase is “treat objectively”, which means my proposals and calculations need to have some level of peer review which will improve them -for me and for thee.
There is literally TMI out there, so I think the best approach is to pick a heterogenous mix of sources, sense check and cross-check them and make sure you make a credible theory for what the figures means. If not, move on — there will be more numbers, I promise you.
The secret to this game is invariant laws which cannot be gamed nor avoided: conservation of energy, conservation of money supply, conservation of numbers of people.
It must all add up.
My personal selection of key indicators
So without further ado: here are some figures that should be familiar to us, or have been in the news recently. All these figures are sourced from a reference or can be easily enough cross checked. There may be some misreadings or slightly debatable calculations and as per usual for finance, some figures are more up to date than others (sigh).
Note: I do not bother with quoting real life numbers to 3 decimal places, and nor should you
- UK GDP — $2.8 Tn [UKGDP]
- Government Debt Operations — £34Bn (2017) £21Bn (2018 to date)— [DMOOps]
- UK Govt Interest repayments £43Bn [UKDEBT]
- Tax cut ~ £1.8Bn (£9Bn over 5 years) [2018Budget]
- DUP “incentive” for confidence and supply ~ £500M (£1Bn over 2 years) [DUPDeal]
- 2017 fishing catch: £980M [UKFishing]
- Brexit preparations: up to a total of £4.2 billion [BrexitPrep]
- Budget measures: £450 million to fix potholes [2018Budget]
- Climate Change Strategic Spending £416M [UKClimate]
- “Little extras” for schools £400M [2018Budget]
- £160 million for police officers who identify and tackle terror threats [2018Budget]
Et enfin, Voici Les Cartes
And here are some charts plotting all these figures on the same chart, perhaps a first?
As we are probably a little fatigued of hearing — the UK GDP is pretty big, both in absolute terms around the world, and also relative to any individual expenditure.
The interesting thing (to an economist, perhaps) is how our tax take is split into many many smaller flows. This implies to me, that in fact, we are perfectly capable of paying for the odd one off expense once in a while — that’s the definition of comfortable; whether we have the will to do so, is another matter.
And here some the stragglers, which are regularly haggled over so vituperatively by the talking heads, and the call-in radio hosts. Interestingly these are getting to the stage of not even being rounding errors on the headline items.
So, where does the “Brexit Divorce Bill” fit in?
Just for fun: let’s see where a one-off payment might fit into this chart.
This figure has be a regular feature in some columns, and it seems apt to chart it in context.
Caveat: this chart is for yearly flows: a divorce bill is only once, though of course the remorse may be unending…
“By international standards, Britain enjoys very low borrowing costs.” [UKDEBT]
- The Brexit Divorce Bill is a one-off payment that matches the current yearly interest payments.
- the UK puts a lot of effort into successfully seeking sources of low interest long term debt.
Conclusion: this really matters. long term
- Going off the magnitude of our recent national expenditure, we care about the following, in this order:
- Preparing for Brexit
- Tax Cuts for the comfortable
- Climate change
- Anti-terrorism measures
Conclusion: It’s Business As Usual (For Now)
With the greatest of respect to HMG ministers and HMG opposition, this picture I’m painting is of a nation sleepwalking towards its next crisis.
The good news is: we have the resources and the information.
Sadly it appears we are way off having the will and the intent.
At least the latter are free…
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