Posted in Macroeconomics

Why Theresa May is lying to you 

5733835918_0276881b3c_qIn her party conference speech Theresa May promised to transform the Conservatives into the ‘party of the workers, the party of public servants, the party of the NHS’. She declared: ‘it’s time to remember the good that government can do’. Journalists on both right and left have been queuing up to announce a new era in British politics. Allister Heath has written in The Telegraph of May’s “repudiation of the Thatcher-Reagan economic world-view” and her apparent recognition that government is “the solution, not the problem”.

Meanwhile, John Gray in the New Statesman has claimed that May “has broken with the neoliberal model that has ruled British politics since the 1980s”. So where’s the evidence for all this? Gray finds it in May’s tax reform pledges, her plans for a national industrial strategy and her promise to reassert the role of the state as the final guarantor of social cohesion.  Continue reading →

We need a new agenda for a better and more constructive Europe

Planet of the Apes Euro spoofFor over 45 years, and based on my early involvement with the issue in the Foreign Office, I have contested the issue of Britain’s membership of what was the Common Market and then grew into the EU, and I have always been on the losing side.  It could be argued that my own political career, and my bid to lead the Labour Party, were adversely affected by what was often seen as an odd aberration.   I argued over this whole period that the EU is not Europe and that the actual and very particular arrangement we were offered was not only inimical to Britain’s interests but was not the way to build a better and more lasting European cooperation and identity. Continue reading →

Why I shall vote to remain in the EU

EU_UK FlagsBack in 1975 I did not just oppose membership of the EU, I actively campaigned against it. In the 1990s I strongly opposed Britain’s membership of the Exchange Rate Mechanism (ERM). My opposition to the Labour leadership’s support for ERM helped ensure that I did not get chosen as Parliamentary candidate at the time. I won a modest 6 votes at a General Committee Meeting that in 1991 selected the next MP for Dulwich and West Norwood! (While I was to be vindicated by Britain’s eviction from the ERM in September 1992 that was no comfort as Labour, having backed the ERM, was unable to capitalize on the huge political damage caused to the Conservatives by the Black Wednesday fiasco.) Continue reading →

Rotten Tory ideology is laid bare by crisis in steel

Osborne not saving steelIn order to defeat Osbornomics it is necessary to understand it. A central tenet is that the private sector is the key to prosperity and that therefore everything possible should be done to promote and encourage it. The state should shrink in order to release the inherent dynamism of the private sector. The argument runs that it may be that some people fail temporarily so some sort of safety net may be necessary, if affordable. In this framework, if it is necessary to cut support for disabled people and the poor in order to fund tax cuts for high earners and business, then so be it.

The attack on disabled people has rightly been the focus of hostility to Osborne’s Budget. But this is not an isolated case, as all those who have suffered those cuts can testify. This has been a repeated pattern of Osborne Budgets, supported by all Tory and LibDem MPs beginning in 2010. The right of the Labour Party has had no significant disagreements with it.

At the same time, the long-term decline of the steel industry has turned into a full-blown crisis. In a very useful report the Institute of Public Policy Research (IPPR) debunks the myth that the crisis is due to ‘dumping’ of steel in the EU. The UK loss of market share in core industries producing intermediate goods, such as steel, is twice the rate of the industrialised countries as a whole over the long-term. Despite alleged ‘dumping’ by Chinese firms in Europe, German steel production rose by 2% in 2015. Continue reading →

Mr Osborne’s untruth: the chart that shames the Treasury

Osborne as PinnochioThere was much to disagree with in George Osborne’s Budget announced on Wednesday, in particular the increasingly foolish and damaging target to achieve an overall budget surplus of over £10 billion in 2019/20 and 2020/21 via further spending cuts.  But one specific claim made by the Chancellor in his speech to the House of Commons was an outright untruth – yet so far, this has been passed over by the mainstream media.  Mr Osborne said this:

Today, I’m publishing new analysis that shows that if we hadn’t taken the action we did in 2010, then cumulative borrowing would have been £930 billion more by the end of the decade than it is now forecast to be. If we’d taken the advice, Britain would not have been one of the best prepared economies for the current global uncertainties; we would have been one of the worst prepared.”

Continue reading →