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details. Hello

0:43

and welcome to The Rest Is Money with me,

0:45

Robert Perston. And me, Steph McGovern. So we're

0:47

going to do a few of our great listeners questions today aren't we? Yes,

0:50

we are. Thank you for everyone who sent them in.

0:52

We've got loads on all

0:54

kinds of different topics. But one that's particularly

0:56

caught our eye because it's very much in

0:58

the news at the moment is to do

1:00

with what's happening in the

1:02

world of vets. And

1:05

we've had this question in, he says,

1:07

I'm a veterinary professional and the CMA

1:09

is currently reviewing the profession. I currently

1:11

work at a corporate practice owned by

1:13

one of the larger corporations which are

1:15

particularly being scrutinised. In the

1:17

immediate aftermath of the announcement, I had

1:20

a lot of blowback from clients assuming

1:22

vets were practising unethically. God, I'm sorry to

1:24

say that. I want to know

1:26

who are the CMA and what is the significance

1:28

of the industry being under review? Do you want

1:30

to tell us just who the CMA are first

1:32

of all, Robert, and then we'll go into the

1:34

specifics of this story. So

1:37

the Competition and Markets Authority, the

1:39

CMA, is the body

1:41

which has a statutory

1:44

duty to investigate whether

1:46

there is proper competition

1:48

benefiting consumers throughout the economy.

1:51

And they have been looking,

1:53

they've been doing a scoping exercise

1:55

when it comes to veterinary services

1:57

and we should be clear on

1:59

that. about this I know you know

2:01

there's a sort of thought that's it's you

2:03

know it's some sort of smallish you know

2:06

industry what does it matter to anybody well

2:08

this is huge yeah it's a

2:10

16 million people have pets I

2:13

mean look I know about this in my own

2:15

case you know many people spend more money on the

2:18

health of their pets than they do on

2:20

themselves you know that there is no national

2:22

health service of pets and the amount that

2:24

you can be charged I'll be years ago

2:26

we've got a dog Bedlington

2:28

Whippet cross called Merlin he ran

2:30

into a bush he got spiked

2:32

the blood spewing everywhere because

2:35

he was very very young at the time and

2:37

I for whatever reason I

2:39

think something had gone wrong with the

2:42

renewal of our insurance it cost thousands

2:44

of pounds to save his life you know

2:46

we had to take him to some special hospital

2:49

I mean the amounts of money you know if you

2:51

love your pet that you have to spend is

2:53

huge yes okay and what so the CMA also

2:56

very interesting and

2:58

you know shows you how important this market

3:00

is to people they had

3:02

I think more than 50,000 replies

3:04

to their scoping exercise which is

3:06

a huge number yeah

3:08

they said it's an unprecedented response something

3:11

so you know this market matters

3:13

to people and I've taught

3:15

me through because I was really shocked I

3:18

mean it didn't surprise me but taught me

3:20

through some of the things yeah that the

3:22

CMA said about what was going wrong yeah

3:24

I mean fundamentally the big issues

3:26

for customers are

3:29

the lack of transparency so most

3:31

vet practices they found do not

3:33

display their prices on their website

3:35

even for the most basic services

3:38

so like they found that 80% of them had no pricing

3:41

information online also people

3:43

were saying they're not always told about how

3:45

much something is going to cost before they

3:47

agree to it and there's

3:50

a whole big issue of there not

3:52

being enough competition in the market so

3:54

a company can own multiple vet practices

3:56

in the same area without making it

3:59

clear to people which means

4:01

that you might as a customer be

4:03

thinking, oh, I'll compare prices between different

4:05

vet practices, but because you don't know

4:07

they're all part of the same vet

4:09

group, you have no idea, you're comparing

4:11

like for like. So that's a

4:13

big issue. And just on that, one of

4:15

the things I was really struck by is the way

4:17

that really recently there's been this massive increase in concentration

4:19

in the market. I think they said that, you know,

4:22

it was a few years ago, the big chains controlled,

4:24

I think it was 10%, and

4:26

now it's 50%, or 60% of the market is

4:30

controlled by the big international chains. Yes,

4:33

yeah. And that is the big problem.

4:35

There's not enough competition. I was talking

4:37

to my friend who works as

4:39

a vet in one of these big

4:41

corporates, and he was saying, you know,

4:43

he's been a vet now for 10

4:45

years, and he said it's been incredible

4:47

how much it's changed in that time

4:49

in terms of vet practices, these independent

4:51

ones being snapped up by these big

4:53

groups, and there are, you know, the

4:56

big groups in case you're interested, CVS,

4:58

IVC, Linus, Medivet,

5:01

Pets at Home and Vet Partners.

5:04

And they're the ones that

5:06

have been snapping up all these companies. And he was

5:08

saying... I think I've got thousands of practices across

5:10

the world, haven't I? Yeah, they have, yeah.

5:12

And he was saying to me, like, you

5:14

know, they were told things won't change when

5:16

we, you know, take you over. But

5:20

he said in the time he's been working there,

5:22

they've had years where prices have gone up two

5:24

or three times in that year, and when he's

5:27

questioned it as vets, because obviously they're the ones

5:29

who are on the front line, the, you know,

5:31

the veterinary nurses and especially doctors, they're the ones

5:33

who are having to say to

5:35

someone, you know, I'm really sorry it's going to cost you two

5:38

and a half grand to fix your dog and

5:40

fix is probably the wrong word. Can you tell

5:42

I don't have a pet? But, you know, so they're

5:45

the ones facing it. And then whenever they've questioned it,

5:47

they keep being told, well, we're just bringing it in

5:49

line with other companies. But the problem is there are

5:51

now so few companies. It is becoming

5:53

like a bit of a monopoly. It's a bit like the energy

5:55

sector when we talk about the big six And,

5:57

you know, the moment snapped up. That

6:00

another aspect of was to other

6:02

aspects which I think of really

6:05

important about the lack of transparency

6:07

about. you know. That recipe

6:09

for a fact. Frankly, how they do

6:11

their business. I'm one of the things

6:13

that I did not know. Of.

6:16

Any discovered by Read this. Yeah,

6:18

my report is that. You

6:20

can insist when you go to

6:22

the vets that they write you a

6:25

prescription for the medicines that your pet

6:27

needs and then you'll be able to

6:29

buy. That stuff those that those

6:32

medicines online or somewhere or to wherever

6:34

it's cheapest innate. Normally you just go

6:36

to the vet and use you assume

6:38

that you have to buy the Madsen

6:40

from the that you go to but

6:42

that's not true nobody and of ever

6:44

tells you a d you can buy

6:47

cheaper elsewhere and the see I'm A

6:49

says is a real risk that we're

6:51

all being ripped off. And I think

6:53

the other thing we just have to that

6:55

them as they spend some of them are

6:57

making a quarter of them money from those

6:59

medicines. So this is fake. You know it's

7:01

it's. a lot of revenue is. Coming from

7:03

this so it's understandable why they're not going

7:05

to tell you. I mean we we actually

7:08

had this it's as the other day the

7:10

other thing that because he's a lot pets

7:12

in my life of the my but but

7:14

we have saved one of our daughters is

7:16

bull puppies and yet some poison. But the

7:18

thing is right when there's a risk. You.

7:21

Think you're gonna lose the cut. The pets gonna

7:23

die. You will. but you will because you're panicking.

7:25

You'll pay almost anything to say their lives. And

7:28

and again he left the six. If you go

7:30

out of hours right? and they don't tell you

7:32

in advance how much wealth he like, the prices

7:34

are really steep and they don't always tell you

7:36

in advance how much you can have to pay

7:39

to save your pets life. but at that point

7:41

they got you ever a barrel of i'm good

7:43

at most at their ebbing. this stuff is is

7:45

really difficult of course. It is it it.

7:47

you know. As he said, people will pay

7:50

whatever to save their pets. but my friend

7:52

was also telling me that there is a

7:54

huge misconception about where the money goes and

7:56

he thinks is because we don't have. You

7:59

know, Apply. How service in this country

8:01

said the way that they will. You could

8:03

look at it for Saturday practices by looking

8:05

at how the U S how in the

8:07

Us they pay for private healthcare because he

8:09

was says oxford a tech savvy she get

8:11

a pet is incredible. You can guess same

8:13

their blood results. You can get x rays

8:15

same days and get things that you wouldn't

8:18

as. As a human necessarily get

8:20

on the Nhs and so he was said.

8:22

people don't have anything to compare it to

8:24

when they're pan these prices so that they

8:26

think they're paid a lot of money but

8:29

they're actually get in a really good service

8:31

for it and then he was send is

8:33

also a huge discrepancy between some of the

8:35

veterinary practice is so and picked with of

8:38

people don't understand, don't necessarily see the price

8:40

said they might think oh well hang on

8:42

that person that the road is doing it

8:45

for a lot cheaper but they might be

8:47

getting someone really junior and. Not get in

8:49

the ass, the care or whatever. So

8:51

it's It actually is a really hard

8:53

for consumers to com pass between al.

8:55

Short not have such as or two

8:57

other thing about sucky but when i

8:59

took your mountain roads of his life

9:01

side of after he had this terrible

9:04

peter hemorrhage the hospital we went to

9:06

resume usual on it was mixed extraordinary

9:08

say they are overloaded figure out I

9:10

quite like that you know five if

9:12

ago promote quality air it was certain

9:14

he had as well as most men

9:16

his wishes at a at age as

9:18

hospital of of a bathing suit was

9:20

some it was about it was amazing

9:22

of added that went viral thing is

9:24

just as is more about the emotion.

9:26

One feels about one's pets. Yeah, so

9:28

a whole variety of reasons we we

9:30

have this big debate in our family

9:32

about whether or not Merlins should be

9:34

neutered to be castrated and I was

9:37

sort of tags of the view that

9:39

he should be and then when I

9:41

got him to the vet said he

9:43

gave me that local know. How

9:48

am. I. Love

9:50

that's am just a couple of of the

9:52

things I wanted to mention on i am

9:54

one of my friends as well as her

9:57

upper accent called cry Solicited the show with

9:59

may have him. Megyn Kelly's we had to

10:01

spend encrusted things that that's anyway. She was

10:03

sent to me that seen a couple of

10:05

people have taken their pets to France to

10:07

get treatment now because it's a lot cheaper

10:09

That is that right? You would think that

10:11

the bureaucracy of taking your pet to France

10:13

would make it more complicated but she was

10:16

saying that to be thanks. And the other

10:18

point that nothing quite as he was. The

10:20

people I know who work in this indicia

10:22

said to me is already it is to

10:24

stay in a vast it's You know it

10:26

is a bit like in the Nhs front

10:28

line. It's very stressful am. You know you

10:30

can be working long hours and there is

10:32

an issue with people taking their own lives

10:35

in the veterinary sex. did as a charity

10:37

called called not one More Fast which is

10:39

a compared to Stop This because it's nicer.

10:41

Seventy percent of vet have lost a colleague

10:43

to suicide. I know it's officer and what

10:45

the saying about this is that worried and

10:48

this is what the person he sent in

10:50

this question to is referred to as wealth

10:52

about the back plus they're gonna get from

10:54

people coming in now going your have a

10:56

chance you know than those on the front

10:58

line. you know the people who were at

11:01

the actual that's you know it's not that

11:03

false. All of this but. Man living in

11:05

ways of seasonal their business? Yeah, yeah.

11:07

They and also the other thing

11:09

about this is the regulation is

11:11

out of there is no so

11:13

the regulations for veterinary practices with

11:15

set up in the sixties the

11:17

men regulations and that was before

11:19

nonsense were able to warn. That.

11:22

Practices of the see Now lots of

11:24

practices it and now owned by these

11:26

companies, but the regulation is for individual

11:28

practitioners rather than proxy orders which and

11:30

they try to sell this voluntary code

11:33

of conduct about thing sites pricing and

11:35

transparency because they couldn't make these companies

11:37

civics. It didn't fit with the regulation

11:39

so they set up a voluntary code

11:41

but not everyone signed up to it.

11:43

So and it i sixty nine percent

11:46

of the eligible practices signed up to

11:48

it. So there's a big problem with

11:50

regulation been out of this. Which is

11:52

hopefully. Was and the composition a

11:54

Markets Authority. Will be able to

11:56

fix. Enormous this not describe

11:59

bridge. The One. I mean it. It does seem

12:01

to be and I think we should talk about this at some.

12:03

Length on another occasion that I'm

12:05

not sure actually. Ah, regulators in

12:07

general are necessarily serving our interests

12:10

as well as they might yoni

12:12

have to look at the so

12:14

calamity in the water industry and

12:16

sewage good nor streams and or

12:18

the rest of it's a realize

12:20

Klaus and Regulators get things wrong

12:22

or through. Thank you and I

12:24

agree. However, it is long overdue.

12:26

The end of at Me Market

12:28

was hooked up properly. Yes definitely

12:30

not think most people in it with said

12:32

us but it just needs to be done

12:34

with castle that's divest themselves. And openness

12:36

enough to suffer. Because of this, Am

12:39

right let's have a quick break than

12:41

enamel answer some moccasins. I

12:48

come back to the best his money with may step given

12:50

am. With me Robert past and now

12:52

we got really is the question from

12:54

Zone Phone Apps about the black or

12:56

dark economy. He says can you imagine

12:58

any government legalizing and therefore taxing marijuana

13:00

and or prostitution Is they've done in

13:02

Amsterdam? The dark economies worth billions? Is

13:05

it time to look at all the

13:07

web basically saying should we decriminalize or

13:09

legalize add some of these industries. Yeah

13:11

so funny says when I was going

13:13

out to middle spread the jokes. Sector.

13:16

Was pretty by human and so was said.

13:19

Prostitution. And at in I

13:21

saw this one of my dance classes

13:23

was in a halt west which was

13:25

in the middle of them as red

13:28

light district what was a bit awkward

13:30

anathema that can pick me up but

13:32

area and i I've seen the dark

13:34

side of this and so i kind

13:36

of eminent as disease that's a something

13:38

like prostitution a took side of the

13:41

think bit of a different view us

13:43

but prostitution sexy site the oldest business

13:45

in the world is net so people

13:47

are always gonna pay for sex. on

13:49

by people who can't get it ever was

13:52

gonna pay for it so they're saw i

13:54

just things that we should have it as

13:56

illegitimate industry i totally appreciate that they will

13:58

be there as the ah argument of

14:00

exploitation and it's the argument of

14:03

do women, because obviously it's majority women,

14:06

do they really want to

14:08

do this? Aren't they

14:10

being abused in this situation? But I

14:13

think it's always going to happen, therefore

14:16

we should try and make it

14:18

safer and get revenue from it.

14:21

I mean there's a very similar sort of argument when

14:23

it comes to particularly cannabis. So you

14:26

can't spend any time in London and

14:28

not smell people smoking it. Literally one

14:30

of the problems is of course that

14:32

the weed that is sold

14:34

and is produced

14:37

illegally is often the absolutely worst

14:39

quality that is more addictive, leads

14:41

to worse mental health issues. And

14:44

so there is quite a part

14:46

from whether or not there's a

14:48

very useful source of revenue

14:50

for government, the equivalent of the

14:52

duty on alcohol or on tobacco.

14:55

There is also the quality control

14:57

aspect which is if you

14:59

had decriminalization and indeed

15:02

licensed producers of various

15:04

sorts, would the stuff that

15:06

was then sold be less damaging to people?

15:08

And I think that's an issue that we

15:10

need to debate. There's too much hysteria around

15:12

this. On the other hand, I have to

15:14

say I was in New York

15:17

recently where they have decriminalized and there

15:19

are lots of cannabis

15:21

shops everywhere and there's

15:24

an interesting period certainly

15:26

during that initial period

15:28

of novelty when you set up these

15:30

shops. As far as I can see, almost everybody in New

15:32

York was stoned when I was there. I'm not 100% certain

15:35

is great for

15:39

New York. But

15:42

if I'm honest with you, I am broadly one

15:45

of those who thinks that we

15:47

should move towards decriminalization just

15:49

because I have seen so

15:51

much damage done to young people by

15:53

this really awful stuff that is sold.

15:56

And I think we've just got to

15:58

do education gets you so far. Certainly,

16:00

you know, it's far too big a job for the

16:02

police to basically get this stuff off the streets and

16:05

therefore if you can't get it off the streets, you've

16:07

just got to make sure that the quality of it

16:09

is better. And at the same time,

16:12

you know, if this stuff is

16:14

being sold, why shouldn't there be a

16:16

benefit to the Exchequer? Yeah. See,

16:19

I don't know if I agree on the drugs point though,

16:21

because I've never ever, ever

16:23

tried drugs in my life and you would

16:25

think, given where I grew up, that

16:28

I would have. But the thing that has

16:30

put me off is seeing the dark side

16:32

of it in terms of, you

16:35

know, my friends' parents who

16:37

are addicts or seeing

16:40

the kind of the poverty and desperation and

16:42

all of that side of it. And that

16:44

totally put me off as a kid. I

16:46

thought I don't want to end up like that.

16:49

And I think now it's been

16:51

glamorized, drugs have been glamorized. And

16:53

my worry is if they

16:56

were legalized, then I would have thought as a kid,

16:58

if they were legalized, I would have been like, oh,

17:00

try it. It's all right. Because the

17:02

government says it's safe. I would agree with you if I thought

17:04

that, you know, you made a

17:06

choice, loads of young

17:08

people, particularly because of social media, the

17:11

enormous pressure on young, you know, young

17:13

people have always thought I know best

17:15

about substances. And you

17:17

know, yeah, that that is now

17:19

true in spades, particularly because of

17:21

social media. And I think

17:23

that's the question that you can simply criminalize

17:25

and protect people. You need more than that.

17:27

Yeah, but it's the longer term

17:29

mental health impacts from even

17:31

like low level cannabis smoking. I've seen that

17:34

in friends. And I think that's the thing

17:36

that it feels like you might be condoning.

17:38

I totally get your point. Do you know

17:40

what? I tell you what's brilliant on

17:43

all of this is that series top boy,

17:45

which is obviously about a kind of a

17:47

drug scam or various drug. It's not

17:49

weed. It's not. Yeah. So

17:52

we've made a debate here. We should come back to it in more detail at

17:54

some point. Yes. So I'm all for

17:56

the prostitutes and you're all for the drugs. Now I'm

17:58

not all for the drugs. I'm

18:00

just saying. I don't think we have a particular

18:03

rational debate in this country about it, and I'd

18:05

like to see a more rational debate about, right?

18:07

To that's have another question Sally and

18:09

mean I guess the salon see beauty

18:12

to how does the ins workout insulation

18:14

and this is all about. The.

18:16

Shopping basket of goods which they used

18:18

to compare prices and they change every

18:20

edge on a in terms of they

18:22

look up what we're all by. it's

18:25

what kind of things have come in

18:27

an assassin's a men from that they

18:29

build up this sucked in basket they

18:31

call it's got bouts over seven hundred

18:33

items and and nominee they take out

18:35

between. Ten And Twenty Ever. Yeah, and

18:37

posts. Ten. Sweaty in and it's been

18:40

quite interesting watch the house come out

18:42

on what's gone in possess and olds.

18:44

Relic of the past is gone and doesn't it

18:46

tell us about that? Well the

18:49

additions vote call. It.

18:51

A mile off his have some

18:53

has yours to were f rise

18:56

on never use their froggy. I.

18:59

Use an F Riot to know what.

19:01

Whenever I see the O N S

19:04

what's gone and I always think I'm

19:06

the opposite a consumer Inflation is based

19:08

on because I am. As.

19:10

Friars Edible seeds.

19:13

I'm. All about the edible seeds. This?

19:15

yes, that's that's under the of things.

19:17

Have gone, Aunts and Bovine have gone

19:19

in arsonists and get a few business.

19:22

The A so I love a bit

19:24

of vinyl obviously before we get home

19:26

survival. but it's also instinct to me

19:28

that gluten free bread is in that

19:30

it is in see how our dogs

19:32

had changing and you know I mean

19:34

there are lots of people xd Usa

19:36

with long periods of cut gluten other

19:38

die so. I think this some of

19:40

his he's actually related to. really quite

19:42

with his societal changes, some of it

19:44

still related to that awful epidemic we're

19:46

living through February and simulate that that

19:48

gluten free bread is is in there.

19:50

But yeah, the vinyl thing is fascinating.

19:52

a it's because you know any

19:55

it's amazing how it's gone from

19:57

being an obsolete technology through to

19:59

something that was regarded as a

20:01

bit eccentric to be interested in

20:04

and now pretty much every big

20:07

artist wants to put their

20:09

music out on vinyl along with digital. I

20:11

love vinyl. I do think the sound

20:13

is just richer, it's different,

20:16

I love the scratches even. But

20:18

actually I'll tell you what, I

20:20

bought something fantastic the other day.

20:22

I was in East Anglia and

20:25

there was a junk shop and I bought

20:27

for 20 quid something which

20:29

I think is worth rather more than

20:31

that which is a 1964 French

20:35

Les Beatles album which is

20:38

a real thing right. It

20:40

was a sort of Beatles compilation from 1964 produced

20:43

only for the French market and

20:45

it's the most beautiful object apart from

20:47

anything else because the cover is so

20:49

amazing. Yeah so you know if you're

20:52

like me you take the

20:54

view that vinyl should never have dropped out of. Well

20:56

it was 30 years ago it

20:58

was last included in the shopping basket on

21:00

the onus. Yeah 30 years ago

21:03

they say. I know so it just

21:05

shows you what else might come back.

21:07

Anyway but the interesting thing about inflation

21:09

always is the question

21:12

of whether what the

21:14

inflation figure shows really

21:16

reflects people's experience of the

21:18

cost of living and

21:21

I think we should just point out very briefly here

21:24

that it's an average right.

21:26

They tried to put in their

21:28

goods and services that

21:31

reflect you know a typical

21:34

person's experience and

21:36

you know there'll be people listening to this saying I never

21:38

eat gluten-free bread and

21:40

so why on earth is that

21:43

being included. Well it's about as

21:45

I say trying to come up with a

21:47

basket that you know

21:49

covers enough of our experience

21:51

to represent something important but as we

21:53

all have been talking about and you

21:55

and I've talked about during the cost

21:57

of living crisis depending how

22:00

much money you've got, it either

22:02

looks like an understatement or an overstatement. One

22:05

of the things that was really important

22:07

as we talked about cost of living

22:09

during the worst of that crisis is

22:12

if you're on a low income, the

22:15

bit of the inflation index that is

22:17

way more important to you is food

22:20

because it takes up a way

22:22

bigger proportion of your basket

22:25

of shopping and the

22:28

problem with having a whole range of

22:30

goods in the inflation

22:33

basket is it will

22:36

understate if food is going up as it was

22:38

for a period of 25% on an annualized basis

22:43

and inflation is only going up at

22:45

10%, that inflation number understates what's really

22:47

happening to you in terms of the

22:49

squeeze on your cost of living. None

22:52

of us should take the view that the

22:54

inflation measure is perfect but it's

22:56

sort of the best we've got. Yes

22:59

and there's a lot of research that

23:01

goes into why they pick each product because for

23:04

example on the gluten free bread

23:06

thing, the reason they went for

23:08

that is because they noticed that

23:10

the shelf space now for gluten

23:12

free products is now a lot bigger

23:14

and they pick bread as the particular

23:17

product because they said that gives the

23:19

best coverage, it's the most representative item

23:22

in terms of what people might buy and

23:24

that gluten free bread is to represent all

23:26

gluten free products really and then there's loads

23:28

of other products they do that with as

23:30

well to just try and represent it but

23:32

as you said, that can mean there's this

23:34

big price changes that will be missed because

23:37

it's not included in people's basket of goods.

23:39

And let's be clear, lots of people are

23:41

still struggling but statistically and

23:43

indeed not just statistically in terms

23:45

of real lives, real

23:48

wages are now increasing,

23:50

inflation is below the increase

23:53

in wages, we had that

23:55

confirmed again just this week

23:57

and inflation, particularly food inflation.

24:00

is you know it's falling very significantly.

24:03

Right we've got time for one more this

24:05

one is from Andy Rimmer. Now most of

24:07

the post-covery national debt is owed to the

24:09

Bank of England who buys government bonds. Can

24:12

you explain how this works and why the

24:14

Bank of England can't just cancel this debt?

24:16

Would this not be deflationary? Okay

24:19

so let's not go into enormous detail

24:21

about this because we're going to come back to

24:23

this on another occasion. So just to remind people

24:25

the government borrows by

24:27

selling gilts, bonds to

24:29

investors and since

24:32

the financial crisis of 2008 and

24:35

this was very much an

24:38

innovation then the Bank of

24:41

England started in a process

24:43

known as quantitative easing to buy hundreds

24:46

actually in total of billions of

24:49

these bonds which is effectively the

24:51

Bank of England buying the debt

24:54

of the government and

24:56

the reason it did that was because

24:58

when it was buying the debt

25:00

the price of that debt rose which

25:02

meant that the borrowing cost for the

25:05

government fell. Now

25:07

actually just to go back to Andy's

25:10

question that's not gone into reverse right

25:12

that was the original process of buying

25:14

the debt was called quantitative easing. The

25:16

Bank of England is now selling the

25:18

debt it's called quantitative tightening and

25:20

the reason it is selling the

25:23

debt is because

25:26

buying the debt is regarded as a

25:28

way of stimulating the

25:30

economy and indeed that would be

25:32

regarded to an extent as inflationary.

25:35

Selling the debt

25:37

quantitative tightening makes

25:40

interest rates higher right

25:42

and so it started selling the debt

25:44

because it wanted to bear down on

25:47

inflation and to go to Andy's particular

25:49

question he says wouldn't

25:51

cancelling the debt be deflationary now

25:54

and in terms of most

25:57

sort of classical economic

25:59

view. and even Keynesians

26:01

would agree with this, when

26:03

you cancel debt you

26:05

are basically creating money,

26:08

right? Now there is an argument that

26:10

says that even when they buy the

26:13

debt they're creating money but you are

26:15

absolutely, what you're doing is you are

26:17

cancelling an obligation that the government has

26:19

that is creating free money for the

26:21

government and that in itself would be

26:24

regarded as very inflationary. So I

26:26

was just going to say like an example

26:28

in personal finances would be if suddenly someone

26:30

said to you you don't need to pay

26:32

back your mortgage you would then have more

26:35

money to spend on things which would

26:37

push up inflation. That's a very good analogy

26:39

and that's probably a good point to leave

26:41

this particular discussion. Now there'll be some people

26:43

listening who will be saying what about modern

26:45

monetary theory or MMT which is this very

26:48

fashionable view that actually you know the Bank

26:50

of England should just be creating lots of

26:52

free money and we will come back

26:54

to that at some point. Yes we've had questions in

26:56

on that too so that is a good

26:58

one but thank you very much for the

27:00

questions and just a reminder you can email

27:02

them into us therestismoneyatgmail.com and also you can

27:04

send them in on our social media pages

27:06

just search for the rest is money but that's

27:08

it from us goodbye. All the best bye bye.