Category Archives: Economy
“The savage rules of the almighty Market have created the conditions that are speeding us to destruction”.
Paul Halas: “As we approach the 2020s there’s a growing awareness that we need change and we need change now. Running the country according to the savage rules of the almighty Market has created the conditions that are speeding us to destruction”.
In the Western Daily Press (26th April) Paul describes the Conservatives’ genius in persuading millions of long-suffering voters that the national economy operates like a household, so in order for the nation to “live within its means” we all have to tighten our belts.
But this concept – invented by Margaret Thatcher’s think tanks – was directed only at the 99% who always “suffer the destructive effects of austerity” as Halas points out.
The cuts to health, education, transport, disability benefits and other sectors go un-noticed by the I% who can afford to opt out of these systems – symbolised here by one of her ministers.
The household economics concept, Halas continues, ”echoed by every administration since . . . (is) easy to understand yet utterly meretricious”.
He refers us to sources such as the Office for Budget Responsibility, so the writer obediently found the latest report, which certainly did not confirm “the impression that everything in the garden is rosy”. Tax receipts have risen, but there is no indication that “lashings of money are flowing into the Treasury” as had been stated in the same column on 23rd April.
OBR: damned with faint praise?
- The economy ended 2018 growing a little less strongly than we expected in October. In recent weeks survey indicators of current activity have weakened materially, in part reflecting heightened uncertainty related to Brexit.
- The Government’s stated ‘fiscal objective’ is to balance the budget by 2025-26 and past forecast performance suggests that it now has a 40% chance of doing so by the end of our forecast in 2023-24.
- One risk to the public finance metrics that we do expect to crystallise over the coming months is an improvement in the accounting treatment of student loans . . . we estimate that it could increase the structural budget deficit by around £12 billion or 0.5 per cent of GDP in 2020-21.
- Net trade and private investment were markedly weaker than expected, weighed down by a slowing global economy and Brexit-related uncertainty. Business investment has fallen for four consecutive quarters – its longest continuous decline since the financial crisis.
Halas expands on tax issues and the misdirected quantitative easing adventure:
Although the prime function of tax is to regulate the economy and keep inflation under control, the failure of many of the richest individuals and corporations to pay their dues, thanks to absurdly flabby fiscal legislation, has helped fuel the UK’s runaway inequality and damaged society immeasurably.
It is estimated that 80% of new money created (by the government, via the banks) ends up into the coffers of the financial institutions and their clients, rather than funding investment and welfare as it should.
And ends: “The only sustainable way forward is to invest massively in greener forms of energy and greener transport, to create a greener infrastructure and a greener environment. This won’t be possible without a vast reduction in inequality, more public ownership, more localism, and a far more cooperative approach to economics – all policies the Labour Party is adopting. All those with vested interests will doubtless raise a billion objections, but the consequences of keeping our heads in the sand and trusting the Tories to come up with solutions would be catastrophic”.
Richard House draws attention to a letter by Ruth Steigman published in the Independent this week. She writes
In the 2017 general election, Labour gained 40% of the vote, and the largest increase in its share of the vote since the 1945 general election.
Jeremy Corbyn, who started the campaign 20 points behind in the polls, achieved this result following two years of attacks from all sides, and, in the words of the BBC, “in the face of a brutal onslaught from the print media”.
He had, again in the BBC’s words, “changed British politics” and “showed, amazingly, that Labour did not have to move to the centre to win votes but could do so from the unashamed left”.
Does this totally unexpected result explain the extraordinary escalation in the onslaught from the BBC and other establishment institutions since then?
Do the countless absurd smears stem from the fact that Jeremy Corbyn and his policies are now seen as a clear threat to the establishment in this country?
The Labour MPs opposing him see their power base in the party, established over the past 30 years, under attack, but know that with half a million party members behind him, a further challenge to his leadership would fail.
They do not understand that the era of submission to Thatcherite policies is over.
Anyone standing outside a polling station in May 2017 could see what these Labour MPs cannot: instead of the usual trickle of elderly voters, large groups of enthusiastic and optimistic young people turned out to demonstrate that they were not fooled by many of the unfounded smears of antisemitism, espionage etc, and that they understood the Labour leader was under attack from all sides because he stood outside the establishment, and because his policies threatened the political dogma that had prevailed since Margaret Thatcher won power 40 years ago.
Those who hold power naturally want the status quo to continue untroubled: power never cedes without a fight. But the people are eager for change, and want a government that serves the public, not powerful vested interests.
Jeremy Corbyn’s policies articulate their anger at the failed privatisations of public services, and widespread deregulation. Ordinary Labour Party members want MPs who will not undermine the party’s democratic processes, or sabotage their efforts to achieve a Labour government.
A Labour MP from the left of the party brought us our most treasured institution, the NHS.
Now that the country is suffering in every sphere under Tory austerity – from poverty to knife crime to slum housing – Labour has the policies to prove the BBC correct in their assessment that British politics has indeed changed, and moved, with the Labour Party, to the left.
This prompt led to the discovery of Ms Steigman’s signature below the following testimony in the Islington Tribune
One of the frequently expressed taunts equating Britain’s future under a Corbyn government with the current state of Venezuela is a Telegraph headline, above a recent article by William Hague:
“The tragedy of Venezuela shows us how dangerous Jeremy Corbyn and his acolytes really are”.
An article by American Ellen Brown, chairman of the Public Banking Institute (below left), explains that Venezuela’s problem is that it has massive U.S. dollar debts, mainly for imported food and medicine, according to online sources.
Ellen recalls: “When oil (its principal resource) was booming, Venezuela was able to meet its debt repayment schedule. But when the price of oil plummeted, the government was reduced to printing Venezuelan bolivars and selling them for U.S. dollars on international currency exchanges. As speculators drove up the price of dollars, more and more printing was required by the government, massively deflating the national currency”.
The government issued money to hire people to build infrastructure, provide essential services and expand economic development. Hugo Chávez had set in place a series of economic and social reforms nationalizing key components of the nation’s economy, dramatically reducing poverty and illiteracy as well as improving health and living conditions for millions of Venezuelans.
Governments that are sovereign can, and have engaged in issuing their own currencies for infrastructure and development quite successfully. Ellen has discussed a number of contemporary and historical examples in very interesting articles, relating to Japan, China, Australia and Canada.
Professor Michael Hudson confirms that Venezuela’s disasters are not due to governments issuing money to stimulate the economy: “Every hyperinflation in history has been caused by foreign debt service collapsing the exchange rate. The problem almost always has resulted from wartime foreign currency strains, not domestic spending.”
Venezuela is not technically at war but it is suffering aggressive economic attacks by a foreign power – ongoing U.S. sanctions have cost the country at least $20 billion in losses. About $7 billion of its assets are now being held hostage by the U.S., which has waged an undeclared war against Venezuela ever since George W. Bush’s failed military coup against President Hugo Chávez in 2002.
National security adviser John Bolton (right) was explicit about America’s interest in Venezuelan oil:on Fox News, “It will make a big difference to the United States economically if we could have American oil companies invest in and produce the oil capabilities in Venezuela.”
Bloomberg reported that, evading any further escalation of the debt trap, Nicolás Maduro, elected president following Chávez’s death in 2013, announced in October that Venezuela will not be trading oil in U.S. dollars following sanctions.
Full text here: Jeremy Corbyn’s speech to the Make UK conference (EEF Feb. 19)
Make UK, the manufacturers’ organisation, is the representative voice of UK manufacturing, with offices in London, Brussels, every English region and Wales
Manufacturing is the beating heart of our economy. For those employed in the sector, manufacturing doesn’t just offer a good job that pays well, it offers creative and satisfying work. But manufacturing needs the right environment to flourish: high quality infrastructure, a skilled workforce, and open and stable trading relationships.
A government prepared to invest in our economy and pursue an active industrial strategy could bring about a renaissance in manufacturing. The next Labour government will start with infrastructure. Our dilapidated transport, communications, and energy infrastructure is desperately in need of an upgrade.
Labour will unleash a massive programme of investment with a National Transformation Fund delivering £250 billion of direct capital expenditure on infrastructure and R&D, benefitting every region and nation of our country, not just London and the South East.
And we will establish a National Investment Bank to make available a further £250 billion over 10 years in the form of patient capital lent to small and medium-sized enterprises in line with the priorities of our industrial strategy, providing funding for green industries and the technologies of the future.
How can we mobilise industry to help avert the destruction of our climate?
Let me give you an example of the change we need. To avoid climate catastrophe we have to reduce our net emissions to zero by 2050 at the latest. That’s not going to happen by itself. It requires large-scale public investment into renewable energy and home insulation, which will in turn create new opportunities for private enterprise.
This is not a burden. It’s an opportunity to kick-start a Green Jobs Revolution.
Labour’s plans will create at least 400,000 skilled, unionised jobs and bring about a seven-fold increase in offshore wind, double onshore wind, and triple solar power. These new manufacturing and engineering jobs will bring skills and opportunity to parts of the country that have been held back by decades of neglect.
Technology and manufacturing don’t have to be a threat to the environment. Our responsibility is to develop the next generation of technology that will help us preserve our natural world.
Labour is committed to investing on a scale that will transform our economy. Those policies won huge public support at the general election 18 months ago. I’m disappointed that a small number of MPs yesterday decided to take a different path.
But university fees, the scrapping of grants, and cuts to training have made education less accessible just when we need a highly skilled workforce more than ever. So today I am proud to announce the appointment of our Commission on Lifelong Learning to help make the principle of lifelong learning a reality.
The Commission will bring together 14 experts from across education – top names in their fields – including Make UK’s very own Chief Economist Seamus Nevin. It is co-chaired by the former Education Secretary, Estelle Morris, and the General Secretary of the Communication Workers Union, Dave Ward. Lifelong learning will be available to everyone no matter their background. It will make detailed proposals on how to integrate qualifications, introduce a credits system to make qualifications transferable and make it as easy as possible for people to pick up or pause their studies at times that work for them. Under a Labour government workers will never again be left feeling discarded because there will be an industrial strategy creating good, well-paid jobs and training to help workers learn new skills.
I strongly believe there should be genuine parity between vocational education and academic education.
We have to end the outdated grammar school mentality of looking down on someone who does a vocational course and looking up to someone who does an academic course. I see the skills of electrical work of computer work of design work learned through vocational courses as just as valuable as academic courses taken at university. We need all of those skills in our society. In Germany, where they really value engineering, they say: “You’re a clever kid – get down the metal workshop.’’
We ask employers to step up to invest in their workforce too.
Last week I visited the gear manufacturer Beard and Fitch in Harlow, and met Carol, a supervisor who is partially sighted. She was doing the final checking and polishing of the gears, and she had been provided with big screens to help her do her work. That’s a sensible employer who has made an investment in someone who was very good at her job. And it was paying off.
Earlier this month I wrote to the Prime Minister laying out Labour’s alternative plan based around a permanent customs union with a British say in future trade deals, a strong relationship with the single market and full guarantees on workers’ rights, consumer standards and environmental protections. Later this week I will travel to Brussels to discuss it with Michel Barnier and others. Labour has consistently advocated a comprehensive UK-EU customs union to deliver frictionless trade and protect supply chains that stretch across the continent. Disrupting those supply chains would threaten good businesses and skilled jobs that we can’t afford to lose.
Concerns about a ‘no deal’ crash go well beyond the car industry. Take food and drink, which is actually the UK’s largest manufacturing sector. It needs frictionless trade for perishable goods, where time is of the essence. Or steel. Half the steel we produce is exported most of it to the EU. A disastrous ‘no deal’ Brexit would mean trade restrictions on virtually all steel companies’ export markets. And while the big household names get all the media attention, it’s the small and medium-sized manufacturers who will find it most burdensome to adjust to new customs arrangements.
Brexit has crystallised a choice about the kind of economy we want. On the one hand, the harsh economic environment fostered by the Conservatives: low investment, low productivity, low growth and a damaging trade deal with Donald Trump. On the other, Labour’s investment-led approach, underpinned by a close relationship with our European neighbours, in a rebalanced economy that no longer privileges those who lend and speculate over those who make things.
These are anxious times for manufacturers. But the future doesn’t have to be one of decline. With a government that believes in and supports industry, manufacturing will be the engine of innovation in the green economy of the future. Infrastructure, skills, certainty. That’s what manufacturing needs. That’s what only Labour will deliver.
Your chilling, but hardly surprising, front-page revelation that one in four Europeans vote populist was long on excellent analysis, but lacked any solutions. Reversing this trend and its fallout, including Brexit, will require tackling the reasons for its rise:
- widespread concerns about inadequately controlled migration
- and the economic insecurity now rife among both the employed and unemployed.
Tackling the latter will require spelling out a “project hope” agenda which reverses austerity and instead invests in the rebuilding of Europe’s social infrastructure, while also funding a massive green infrastructure programme for transforming the energy, energy-saving and transport systems continent-wide.
Europeans should take inspiration from the US, where progressive new congresswomen and men are now pushing the Democrats into adopting just such a “Green New Deal”.
They realise that a “jobs in every part of the country” programme is central to defeating Trump.
Here, Jeremy Corbyn could play a central role by capitalising on the present parliamentary chaos and asserting that Labour supports a people’s vote, but with the “remain and reform” agenda for Europe, similar to that he “campaigned” for in the run up to the referendum.
Putting rebuilding local economies at the heart of such reform would gain support from leave-voting areas and could be a rallying call for those fighting rightwing populism across Europe. It could also have the domestic payoff of forming the core of Labour’s next and hopefully successful election manifesto, whenever required.
Message received on Mon, 12 November: David Bailey presented Economics for the Many (link to slides) at an interesting event at the WM Labour Party regional office. Over a hundred people came and there was a great discussion.
Professor of Industrial Strategy
Aston Business School
The Aston Triangle, Birmingham, B4 7ET, UK.
tel: +44 (0)7981 925713 or +44 (0)121 204 5262
David’s Blog: http://www.birminghampost.co.uk/authors/david-bailey/
2nd August: already has over 55,000 ‘views’; go to https://twitter.com/jeremycorbyn
Ten slides, ends:
Kevin Pringle, former strategic communications director for the SNP, opens his latest Times article:
“Here are words I never thought I’d write: Jeremy Corbyn could save the country. But only if he wants to.
“Brexit is an Anglo-Saxon farce, revealing a depth of incompetence, division and utter lack of preparedness on the part of the UK government that has plumbed even my low expectations. The antics of Boris Johnson, Jacob Rees-Mogg and David Davis are about as funny as a Carry On film long after the franchise went stale. The issues at stake are too serious”.
Pringle continues with a summary of recent cabinet discussions and warnings from big business of the risks of relocation, withdrawal of investment and job losses.
He describes the prospect of Britain’s alignment to EU regulations in some sectors as a ludicrous mishmash that should be unacceptable to remainers and leavers alike – a ‘dud destination’, adding:
“Corbyn needs to take a long view of the country’s best interests and act accordingly. He should commit Labour to backing a fresh referendum so that people have an opportunity to exit Brexit when its final form is known. In these circumstances, the SNP would come on board alongside the Lib Dems and others. Such a bold move could attract the relatively small number of Tory MPs needed to deliver a House of Commons majority for a people’s vote.
“I’m no fan of Labour but I recognise that in times of need it has been the agent of Britain’s deliverance.
“One of the best-ever Commons speeches was by Michael Foot at the end of the no-confidence debate in March 1979, which the Labour government lost by a single vote. Foot argued that Labour had “come to the rescue of the country” on at least two occasions: “It is in the most difficult and painful moments of our history sometimes that this country of ours has turned to the Labour Party for salvation, and they’ve never turned in vain so far. We saved the country in 1940; we saved the country again in 1945.”
“He was right.
“It was Labour that forced a vote in the House of Commons in May 1940 after the debate on the military fiasco of the Norway campaign. The result precipitated the fall of Chamberlain as prime minister, and creation of the wartime coalition under Churchill’s leadership that was an essential element of victory.
“And in 1945, Clement Attlee’s Labour Party had the ideas and determination to rebuild an exhausted Britain, including creating the NHS 70 years ago.
“This is another historic moment, and once again only a decisive Labour intervention can set the country right”.
Sienna Rodgers writes about the new amendment Labour has tabled to the Taxation (Cross-border Trade) Bill and Trade Bill, and as an amendment ‘in lieu’ of the European Economic Area amendment passed by the Lords, calling for “full access” to the EU’s internal market.
Tabled as a new clause Labour’s proposal would make “full access” to the single market a negotiating objective of the government.
It is not a change of direction but a clarification of Jeremy Corbyn’s Coventry University speech (February). In this he revealed that the party would back membership of a customs union. He also said: “Labour would negotiate a new and strong relationship with the single market that includes full tariff-free access and a floor under existing rights, standards and protections.”
Labour’s amendments specify:
- full access to the EU single market,
- common minimum standards, rights and protections,
- shared institutions with the EU
- and no new impediments to trade.
The Labour leadership maintains that joining the European Economic Area (EEA) – advocated by some Labour MPs – would make the UK a ‘rule-taker not a rule-maker’. These new amendments are designed to replace the EEA amendment passed by the Lords and the Labour leadership will whip MPs to abstain when it comes to the Commons on Tuesday.
Keir Starmer, the Shadow Secretary of State for Exiting the European Union, called Labour’s new amendment “a very strong and significant statement of policy” and said it was “essentially tying together the single market and customs union as a strong economic package, which I think will be welcomed by businesses and trade unions”.
The full text may be read here. Some points made follow:
Twenty years ago, this week, the people of Northern Ireland and of the Republic of Ireland voted in a referendum to accept the terms of the Good Friday Agreement. That vote changed the course of history on this island and represented the clearing of the final hurdle of a long and difficult process that opened the door to two decades of sustained peace.
Many young people across Northern Ireland, the Republic of Ireland and Great Britain do not remember a time when the bloody hand of conflict held a grip on our respective lands. Communities from Derry to Omagh to Warrington were afflicted by the plague of violence for a generation, leaving deep and long-lasting scars for all those who lived through those troubled times.
All too often in that period, the willingness to use force and reach for weapons instead of dialogue and diplomacy inflicted unnecessary suffering on innocent people.
So as we rightly celebrate the anniversary of the end to those years of violence, it’s important we remember the effort and determination it took on all sides to get where we are today.
I stand here as leader of the British Labour Party, a party that is proud of the part it played in helping to bring peace and stability to this region. Something many believed could never be achieved.
The transformation we have seen in Belfast alone since 1998 is remarkable. I visited this city long before today’s peace became a reality and have witnessed the very visible and cultural transformation that has taken place here.
After paying tribute to Martin McGuinness and Gerry Adams, men who led the Republican movement from conflict to negotiation and diplomacy, arts they both mastered in the cause of peace, Corbyn added: “I can’t think of a greater sign of the progress made over the last two decades, when at Martin’s funeral last year, not only were there people in attendance from republican and nationalist communities, but also representatives of the loyalist and unionist side, including First Minister Arlene Foster. It is also right to recognise the work of the British and Irish government leaders of the time, whose determination made the impossible possible. For that, both Bertie Ahern and Tony Blair should both be given credit for their work.”
He also extolled the work of Mo Mowlam in negotiating the peace process, continuing: “I have always believed that to bring about real change, to end conflict, to bring communities together, you have to talk to people with whom you don’t agree. In 1998 we were fortunate to have leaders who were prepared to put that principle into practice . . .
“It was essential we recognised the traditions of each community and recognised and respected the identity of people on either side of the divide. This was and still is important for strong and healthy long-term relationships here, across communities and across borders. Perhaps where the agreement was at it boldest was in its radical reform of Northern Ireland’s political and institutional structures, as well as in creating a framework for North-South relations, and the relationship between Britain and the Republic of Ireland. That gave all parties a basis to find a route out of a generation of conflict together.
“For all the current problems and deadlock, there can be no doubt that devolution and power-sharing have given every community a voice and helped maintain the peace process.
He added that the move to establish the Northern Ireland Victims Commission helped both to promote reconciliation and preserve the memory of victims, bringing a new beginning and laying the ground for the vital work of decommissioning of arms and the removal of military infrastructure.
Looking at Stormont’s achievements, Corbyn noted that it had resisted many of the worst aspects of the government’s punitive social security policies using the powers provided by devolution.
His message to the people of this island: “Labour is as committed to the Good Friday Agreement as we have ever been. It has served us well for twenty years and, with commitment and determination, will provide us with the framework for the next 20. And with that in mind I want to make a plea to all parties and all sides. We must do all we can to make power sharing work again in Stormont. We need all sides to come together and make devolution work again. That means tough choices. It means compromise and give and take. But we owe it to the people of these islands not to allow political disagreements to open the way for any return to the grim days of the past”.
Stormont must be an example throughout the world of how dialogue, negotiation and diplomacy can defeat conflict. Now let’s show we can continue to build on that peace through democracy.
He called on the UK government to reconvene the British-Irish Intergovernmental Conference if the current stalemate in Stormont cannot be sorted out in Belfast and to find a creative solution in the spirit of the Good Friday Agreement that avoids a return to direct Westminster rule, and lays the ground for further progress for all communities.
Peace can and must be extended through real social and economic advances for all communities, with the state at regional and national level prepared to act to bring about a full-scale upgrade of the economy.
A Labour government in Westminster would make sure that Northern Ireland has more money to invest in its people and its public services, though many economic decisions for Northern Ireland would rightly be decided in Stormont,
He gave a commitment to supporting manufacturing in Northern Ireland and to reverse the decision to put the £1 billion contract to build the Royal Fleet Auxiliary ships out to international tender, in order to keep jobs and prosperity in Britain’s shipyards and benefit Belfast. Northern Ireland can have a high tech, high skilled and exciting future.
Brexit, and the future relationship between the United Kingdom and the Republic of Ireland must be discussed, in particular the securing of future prosperity and peace on these islands:
“Labour will not support any Brexit deal that includes the return of a hard border to this island . . . By negotiating a new and comprehensive customs union with the EU, which includes a British say in future trade deals, we can ensure trade on this island stays frictionless and free flowing and prevent communities being divided . . . Opposition to the idea of bringing back a hard border to this land isn’t just about avoiding paperwork or tariffs, important though that is. It’s about deep rooted cultural and community ties. An open border is a symbol of peace, two communities living and working together after years of conflict, communities who no longer feel that their traditions are under threat”.
He emphasised that, as we leave the European Union, it is essential to ensure our manufacturers have access to markets and on-time supply chains and the communities of Northern Ireland continue to have access to vital funding for energy, research, agriculture and cultural projects.
Powers returned from Brussels to intervene, upgrade and reshape our economy for the 21st century may be used to deliver real social and economic advances for all our communities.
I’m proud to be here in Belfast as leader of the Labour party, a party with a strong record in helping to deliver peace and greater prosperity. I hope to use this visit to talk to people from different communities and listen to their concerns and hopes for the future. We are here to celebrate twenty years of peace, twenty years as an example to the rest of the world of how communities can turn conflict into co-operation.
Let’s work together in the spirit of friendship, co-operation and hope for another twenty and beyond.