In 2010 Liam Byrne MP left a word for his Tory successor as Chief Secretary to the Treasury saying that he was very sorry, however there was no cash left. He at all times stated it was a joke, that he by no means meant it, and that he regretted it.

Possibly he did, however in the present day a Labour shadow minister – Lucy Powell – is saying the identical factor. I posted this on Twitter quoting her:

It staggers me that somebody supposedly able to being a minister within the subsequent authorities can say one thing as silly as “there isn’t a cash left”. Would not she know that probably the most elementary jobs of presidency is to create the cash we’d like? It could actually by no means run out, ever. https://t.co/u2OJIEv3D7

— Richard Murphy (@RichardJMurphy) July 18, 2023

It’s staggering that she might say such a factor. It reveals both a really deep ignorance of what cash is, the way it works, and what the position of presidency is relating to cash creation, which ignorance ought to by itself actual rule her out of consideration for prime workplace till she has acquired appropriate coaching to know the duty, or it reveals one thing far more sinister, which is a wilful want to disclaim help to youngsters in poverty because of a selection made by the present authorities.

It could value about £1.3 billion – or about 0.05% of GDP – to alleviate that poverty.

The sum required is about 0.16% of presidency spending.

It might be lined greater than twenty occasions over by reducing the curiosity paid to business banks on the deposits they maintain with the Financial institution of England, on which there isn’t a authorized obligation to pay curiosity at base charge.

It might be lined by merely telling the Financial institution of England to chop the financial institution base charge by lower than 0.1%, so reducing authorities borrowing prices, which a Labour authorities might do.

It might be greater than lined by elevating the upper charge of capital good points tax from 20% to 24%.

It might be lined by decreasing the upper charge of tax aid on contributions to pensions from 40% to possibly 38%, which nobody would discover.

It might be lined by issuing new bonds to cowl the price as an alternative of letting the Financial institution of England challenge greater than £80 billion of such bonds within the subsequent yr (because it plans) merely to withdraw cash from circulation within the financial system to power up rates of interest to unaffordable ranges.

In actual fact, there are nearly numerous ways in which £1.3 billion might be discovered.

However what’s emphatically unfaithful is that there isn’t a cash left.

I despair.