The Labour Government

Chippy_boy said:
Nope. The figures he gave are wrong. His £101m per year average over 99 years is correct, BUT that is the already discounted for inflation amount, i.e. 99 x 10.1 = £10bn.

What he's then done I think is apply the discount for inflation again. That gets you to his £3.4bn, but it's wrong. You can't do the discounting twice.

And yes, it's basic accounting. Took me 5 minutes on a spreadsheet, literally, albeit I applied 3% thoughout but it makes very little difference.
Click to expand...
It's not Starmer who's come up with the figures. I might not understand Social Time Preference Rate but should I take your word for it against some Treasury wonk whose job it is?
 
Chippy_boy said:
In what way was it appalling? It's way better than I ever dreamed we'd get. Tarrif free access to the EU markets was never a realistic proposition but with hardball negotiation, we got it.

How might you have expected it (unrealistically imo) to be any better exactly?
Click to expand...
I wanted what was promised. To be in a free trade zone from Iceland to the Russian border.
 
Chippy_boy said:
In what way was it appalling? It's way better than I ever dreamed we'd get. Tarrif free access to the EU markets was never a realistic proposition but with hardball negotiation, we got it.

How might you have expected it (unrealistically imo) to be any better exactly?
Click to expand...
Ask literally anyone that imports and exports to/from the EU. At best it’s just a pain the arse but at worst it restricts trade due to the non-tariff barriers. We should have done a Norway or Switzerland type deal as promised by the Brexiteers, but the Brexit ultras who controlled the Tories didn’t want anything to do with the single market, and Johnson just wanted a deal whatever the fuck it was so he could boast about it. At least the current government is making progress in fixing a few of the problems. Anyway I can’t be arsed getting into another Brexit discussion so that’s all I’m going to say.
 
Vic said:
It's not Starmer who's come up with the figures. I might not understand Social Time Preference Rate but should I take your word for it against some Treasury wonk whose job it is?
Click to expand...
Depends if they got it right (seriously).

Using the contractual figures and an assumed annual inflation rate of 3% you get to £50bn in cash payable.

It stretches the bounds of credibility to discount that to £3.4bn. And here's the issue: According to International Accounting Standards, the discount rate you apply to calculate the NPV must be consistent with the inflation rate you use. That is so that businesses - or governments - cannot artificially show reduced liabilities.

IAS 36 — Impairment of Assets

Para 30–31: Requires that cash flows and discount rates must be consistent in terms of inflation.

IFRS 13 — Fair Value Measurement

Emphasises consistency between inputs in present value techniques.

Appendix B9–B12:

> “Discount rate used should be consistent with the assumptions inherent in the cash flows.”

The upshot here is that the NPV should not materially vary depending upon the rates assumed. A higher assumed inflation rate results in a higher cash amount, which is then discounted at a higher rate. Or a lower assumed inflation rate results in a lower total cash amount discounted at a lower rate. So either way the NPV remains constant and represents a fair value of the liability. That works out at £10bn.

If they are using (say) an assumed inflation rate of 2% per annum and discounting at average say 3%, then that is likely cooking the books.
 
Last edited:
Vic said:
It's not Starmer who's come up with the figures. I might not understand Social Time Preference Rate but should I take your word for it against some Treasury wonk whose job it is?
Click to expand...
I made it £3.6bn total using STPR figures from the green book. That ignores inflation.
 
west didsblue said:
I made it £3.6bn total using STPR figures from the green book. That ignores inflation.
Click to expand...
Precisely! Add in inflation at the same rates and you get £10bn.

You cannot discount future values at 3.5%, 3.0%, 2 5% to allow for the costs of inflation and then use 0% for your inflation rate! That just artificially under-represents the liability.

ChatGPT interpretation:

If the government discounted real cash flows using nominal discount rates, it would be an accounting error and arguably fiscally deceptive. It would significantly understate the true cost of long-term commitments and fail to meet both IFRS and UK Treasury standards.
 
Last edited:
Vic said:
Anyway, however you crunch the numbers it was the Tories' deal...

Click to expand...
I don't care Vic. I'm not a Tory supporter, and haven't been for donkeys years.

A shit deal is a shit deal. And the Tories didn't sign it, btw. Unless you think Labour are just Tory puppets without a voice of their own?

No, I didn't think so.

And REALLY??? Jack Wilkin is a LibDem supporter and a PhD student at the University of Exeter??? Deary me.
 
Last edited:
Hertzblue said:
So they could ditch the Tory Rwanda deal - because it suited them, but not this one ..... because it does suit them .
Click to expand...
Precisely.

It's really amusing the justification gymnastics that goes on on here. Terrible deal - all the Tories' fault. Great result (e.g. net migration halved by the last government's changes) - Labour brilliance.
 
You know what’s bad, that the first year under this government, that has had so many shots in the foot, is still massively better than what we’ve had in the last decade, or so.

Tories, Brexit Party (Reform), have both caused self-arm, undermining working people, yet people still want to turn to them to look after your future?

Absolute barm-pots!!!
 
The Future’s Blue! said:
You know what’s bad, that the first year under this government, that has had so many shots in the foot, is still massively better than what we’ve had in the last decade, or so.

Tories, Brexit Party (Reform), have both caused self-arm, undermining working people, yet people still want to turn to them to look after your future?

Absolute barm-pots!!!
Click to expand...
Just tell me how much you think the financial crash of 2008, Brexit, COVID and the war in Ukraine and ensuing huge inflation, have been contributing factors?

Don't give me any diversionary bollocks. I just want to hear you be honest, or lie. Over to you. How much?
 
Chippy_boy said:
Just tell me how much you think the financial crash of 2008, Brexit, COVID and the war in Ukraine and ensuing huge inflation, have been contributing factors?

Don't give me any diversionary bollocks. I just want to hear you be honest, or lie. Over to you. How much?
Click to expand...
Massively. And I’ll include Truss in those factors.
 
Chippy_boy said:
Just tell me how much you think the financial crash of 2008, Brexit, COVID and the war in Ukraine and ensuing huge inflation, have been contributing factors?

Don't give me any diversionary bollocks. I just want to hear you be honest, or lie. Over to you. How much?
Click to expand...
The Tories have never needed excuses (aka contributing factors) to be the Nasty Party.
 
The Future’s Blue! said:
Massively. And I’ll include Truss in those factors.
Click to expand...
Fair enough. I think these factors are far too often ignored.

I'm not a Tory fanboy by any means, and they certainly made lots of mistakes - though we may disagree on what those are. But where we are now is not all their fault, and it is hugely debatable that were Labour in power all that time, things would be any better. I would argue things would be much worse, although on this thread, views may vary. Lol :-)
 
You must log in or register to reply here.
Unread Posts

Don't have an account? Register now and see fewer ads!

SIGN UP
Back
Top