In hindsight it is tempting to say that Remainers should have set their sights on something close to a BINO type deal (UK remaining part of the Single Market (SM) and Customs Union (CU)) rather than campaigning for Remain, and some have already suggested that. Is that a reasonable conclusion in the light of Remain’s defeat in December 2019? In mid May it all looked so different. I wrote“It seems odd writing that Brexit is on its deathbed, in a coma but with no chance of recovery, when a year ago the Remain cause seemed hopeless. The thing everyone under estimated was the way Brexiters themselves would effectively kill Brexit.” The essential problem was that a significant section of Conservative MPs (and Farage) wanted no shared sovereignty … [Read More...]
How business lost its influence on right wing parties
This covers ground which others may be more knowledgeable about, so please let me know of any references or sources that I really should read that cover issues central to the discussion below. When Trump threatens governments that want to tax tech giants, most of which are based in the US, it seems like the familiar story of governments acting in the interest of business. But when Trump imposes tariffs on imports he may be favouring particular firms, but he is also acting against the interests of US trading firms in general. Brexit is a much more potent example. Brexit is clearly not in the interests of firms that trade. Because Brexit makes the economy as a whole poorer there are not many firms who support it. … [Read More...]
The left needs to campaign for social liberalism
The continuingexpulsion of the Windrush generation from their home country to a country they hardly know, splitting up families in the process, is just a deliberateact of state cruelty. Why did the government go ahead with these deportations despite sitting on a report suggesting they should stop? Their pretext was that these individuals had at some stage in their lives committed a ‘serious’ crime, yet all had served their time for these offences. This act of cruelty is part of the Conservatives attempt to appeal to socially conservative voters, both traditional Tories and one time Labour voters. What do we call splitting up families just to make a political point? As Paula Surridge shows here, voters who were thinking of leaving Labour for the Conservatives in June 2019 … [Read More...]
If the UK and EU can do a deal is everything now fine?
In case you hadn’t seen it, hereis my article that was published in the Guardian yesterday. It was my luck that on the evening of publication, and after it appeared that Johnson had put a hopeless deal to the EU, his talkswith Varadkar suddenly sounded positive. But is everything as it seems? The obvious point is that one set of bilateral talks do not make a deal. Both parties had reason to sound positive. The EU does not want to be blamed for obstructing a deal, and Johnson wants grounds for going into the forthcoming election with the prospect of a deal. Cummings rhetoric is quite consistent with that, as they want to make No Dealers believe that will be what eventually happens and they also want … [Read More...]
Tactical voting advice for December 2019
According to a surveycommissioned by the Electoral Reform Society, around a quarter of voters plan to vote tactically in the forthcoming General Election. That is a lot of voters, although I would argue the number should be higher. This raises the obvious question, which is who should I vote for in my constituency? For many it is a good question, because the current polls suggest that the result is not obvious. Take, for example, the seat of Kensington in London. If you look at the last election the answer seems obvious. In 2017 Labour just won with just over 42.2% of the vote, with the Conservatives on just under 42.2%. The LibDems got just over 12% and the Greens 2%. So if you are inclined to vote LibDem … [Read More...]
Is Labour’s economic plan credible?
Labour have a huge set of spending proposals, many of which are unequivocally good like extra spending on the NHS, some are open to debate like abolishing student loans, and only one that I think is foolish (keeping the state pension age at 66). It would be good if all the debate was about these spending pledges. However the standard excuse for why you cannot have these things has always been about paying for them. There are actually two issues here. The first concerns current spending, around £80 billion each year or about 4% of GDP, and public investment, expected to rise by about £50 billion a year or over 2% of GDP. Labour’s current spending increase is financed £ for £ mainly by higher taxes on … [Read More...]
Who to blame for Johnson winning?
When I wrote thisin July I desperately wanted to be wrong. (Of course I was wrong about a lot of the details but alas not the main point.) But it soon became clear that, compared to 2017, the press had had two more years to paint Corbyn as marxist, unpatriotic and racist, and for enough people that would be a reason not to vote Labour. Among others who supported Brexit, they really did believe that Johnson was the man to get Brexit done. Many will say that Labour lost badly because they had a left wing manifesto. They always do after each election defeat. I doubt that has much to do with this defeat, although the large amount of giveaways to the wrong people was probably a … [Read More...]
How to disguise a really big lie? Put it on a bus.
The Tories, and particularlytheir leader, lie all the time. It is quite shameless. But there is a corollary to this. If your whole campaign is based on one big huge lie, make it your main slogan. Because, even today, many voters still think you wouldn’t dare lie about something so important. Unfortunately recent history suggests otherwise. We all remember the £350 million for the NHS lie in the 2016 referendum. It was famously on a bus. Except it seems that a good part of the voting population has forgotten the reason that slogan is notorious. It was a huge lie, the opposite of the truth. The have forgotten because the Tories have a new bus with a new slogan that a lot of voters appear to believe. In … [Read More...]
Journalists’ own pact with the devil
While Dominic Cummings is no genius, he does have a good understanding of how the UK media works, and therefore how to manipulate it. There are many ways to do this, but one of the most obvious is to use privileged access in return for uncritical coverage. This is how it works. One of the prizes journalists most aspire to is being first with the news. To get an ‘exclusive’ story. In the political world the biggest generator of news stories is the government. This gives the government the potential to act as the devil to which journalists can sell their souls to. The value of access increases when the government reduces the amount of information it supplies for free in other places like parliament. The price … [Read More...]
Why you should vote tactically, and how to do it.
In this election we have a choice. We can choose a party led by an inveterate liar, which is happy to appeal to the racist or xenophobic vote, happy to take us out of the EU with no deal with all the consequences for public services that entails, happy to see ever longer waiting times for GPs and A&E, happy to see more homeless people on the streets and more food banks.*** Instead we can choose a hung parliament with a Labour minority government that may not even be led by Corbyn, with their power curtailed by the smaller parties, including the Liberal Democrats, that can actually do something about the problems we face. But we can only make that choice by voting tactically. But … [Read More...]
Evidence and the persistence of mistaken ideas: the case of house prices
Another paper, this time from the Bank of England written by former MPC member David Miles and Victoria Monro, shows that the rise in house prices we have experienced since 1985 is mainly the result of lower real interest rates. The other, less important, driver is household income. Those two effects together can account for all the increase in house prices relative to inflation. The increase in house prices is not the result of a shortage of new houses. Those who remember two earlierpostsof mine will know of my own conjecture along similar lines. More recently Ian Mulheirn has championed this theory: herehe is commenting on an apparently contrary view from Paul Cheshire. The importance of real interest rates to house prices has been understood for a long … [Read More...]
The UK’s place in the world
As an economist, I naturally focus on the economic aspects of the EU. The EU is mostly about economics. To counterpoise sovereignty as an alternative perspective to economics misses an important point: most EU rules stem from the economics of free trade within the EU. The EU wants common regulations to make it easier to trade. The EU wants restrictions on state aid to prevent countries giving their own firms an advantage over others in the union. Much the same applies to labour market and environmental standards. Economics is also involved in another aspect of being in or out of the EU, and that is how the UK sees its place in the world. Is the UK’s identity partly a European identity, or does the UK ‘stand … [Read More...]
The Tories will never undo the impact of austerity
One of the impacts of 2010 austerity we saw again last week. Widespread floodingruining hundreds of homes, and costing a life. Can we say those floods were caused by climate change? Not with certainty, but climate change has made this kind of flooding more likely. Can we say the lack of spending on flood defences under a Tory government made the recent floods worse? Not with certainty, but lack of spending has increased the damage flooding does more generally. In 2007 the Labour government commissioned from Michael Pitt (no longer available on a government website, but available here) which stated:“The scale of the problem is, as we know, likely to get worse. We are not sure whether last summer’s events were a direct result of climate change, but … [Read More...]
The othering of Jeremy Corbyn
By otheringI mean treating Corbyn (or more generally the Labour left) as beyond the pale in terms of conventional politics. Othering implies that because of his past or current beliefs, associations and actions Corbyn should not be even considered as fit to be an MP, let alone a Prime Minister. Other politicians can be evaluated in conventional ways, but this does not applyto those who are othered. Othering has a number of distinctive, and potentially useful, features. Let me list two. First, those who associate in any way with those othered are themselves regarded as questionable. I discovered this myself when I joined Labour’s short-lived Economic Advisory Committee, as I discuss here. This can be a potent threat. Second, those who are othered can be discussed … [Read More...]
Corbyn and Antisemitism
There is no doubt that the Labour party has an antisemitism problem. But the figures (see below) suggest it involves a tiny minority. Claims that the party is “riddled with antisemitism” are a deliberate lie. What makes antisemitism claims against Labour powerful is that they are associated with Jeremy Corbyn. In particular many have suggested that Corbyn himself is antisemitic. And if you present the evidence is a certain way the claim looks like a strong one. I am no Corbyn fan, and actively campaigned against him in 2016. My problem with him was not antisemitism, but Brexit, and my fears came to pass this summer. But I could see immediately that there was something odd about the evidence produced to suggest Corbyn was antisemitic. With a couple … [Read More...]
Some thoughts on Labour’s campaign
The importance of this election cannot be overstated. Voters have a choice between re-electing a government that since 2010 has done untold damage to this country and which will be led by someone totally unsuited to be Prime Minister, or giving a minority Labour government a chance to do better for a few years. The fact that the polls suggest the public want more of the same illustrates how close we are to becoming an authoritarian, populist (in the Jan-Werner Müller sense) right wing state where it becomes very difficult for any opposition to break through.This post looks at some key aspects of Labour’s campaign so far, in I hope a helpful fashion. Tax and spend One of the dangers Labour faces is that they … [Read More...]
Brexit is a denial of economics as knowledge
A well known Brexiters said it was almost worth doing Brexit because of the anger I feel about it. He is right about the anger. The prospect of Brexit has filled me with the same horror as austerity did. The connection between the two is obvious. Both involve subjecting the whole country to a policy that basic economic ideas tell you will do nearly everyone harm. We have seen nothing like this in my lifetime. The only person to try austerity (by which I mean fiscal consolidation in a recession) was Thatcher, and the policy was reversed (not stopped, but the consolidation was undone) within two years. Every government, and especially Thatchers, has pursued regulatory harmonisation and tariff reductions to increase trade. Now in just one decade … [Read More...]
Monetary and fiscal cooperation: the case for a state dependent assignment
In December last year Mark Carney said“In a global liquidity trap, central banks cannot be the only policy makers who do “whatever it takes.” There are clear gains from coordination, with other policies – particularly fiscal policy” I of course agree, as would most academic macroeconomists. So would any sensible informed fiscal policy maker. But of course this didn’t happen in the Global Financial Crisis from 2010 onwards in some key major economies, including the UK. Carney’s statement, which follows similar statements by the central bank governors of the Fed and ECB, goes against what I have calledthe ‘consensus assignment’. The consensus assignment has monetary policy looking after the stability of aggregate demand and inflation, while the fiscal authority looks after government debt. In the UK at … [Read More...]
What causes concern about immigration
It is part of folk law among politicians and most social scientists that concern about immigration is governed by the number of immigrants. So how do we account for the decline in the relative salience of immigration since the EU referendum (source)? There are of course many explanations for this decline. Perhaps people now see the benefits of immigration after all the post-referendum talk of nursing and doctor shortages. A rather more straightforward explanation is that people think that by leaving the EU the immigration ‘problem’ is being solved (i.e immigration numbers are much reduced). If it is the latter, then their knowledge is incomplete. Immigration from the EU has declined dramatically, which is not surprising, but this has been partly offset by a significant … [Read More...]
Will UK voters really vote for the Republican party and our own Donald Trump?
There is so much about today’s Conservative party that is very similar to the Republican party in the US. To establish this, there is no better place to start than our future Prime Minister for the next five years, if polls are to be believed. Trump and Johnson are both inveterate liars. They lie when they have no need to, just for effect. To take some recent examples. He told Andrew Marr that the Tories don’t do deals with other parties, when everyone can remember the Coalition government and the DUP. (Marr, as so often with interviewers, let that pass.) Johnson has said that the extra money he has allowed for the health service is the biggest boost for a generation. In fact it is smallerthan … [Read More...]