Thursday 30 November 2017

UK's deaf ears to the Irish Border problem

As a former teacher I'm quite accustomed to people not listening.  That's why I always regarded the golden rule of successful teaching to be:

  • tell them what you're going to tell them;
  •  tell them
  •  tell them what you've told them.
Of course, this approach wouldn't wash with OFSTED and its aims "tailored for every individual child"  but I found it pretty effective with my students..

Unfortunately it doesn't seem to work with British politicians, or the British media.

From the beginning the European Commission has been perfectly and repeatedly clear that progress on trade deals etc could not proceed until satisfactory arrangement had been made on the three basics of the UK's "divorce" settlement, the status of EU nationals already in the UK, and the Irish border.

It has always been obvious that the divorce settlement would be easiest to settle because it is the easiest to fudge.  Now that fudge has been reached.  Boris Johnson's lofty assertion that [the EU] could "whistle for their money" was clearly directed at his potential supporters -  "Boris will tell 'em!" - rather than a serious contribution.  An initial offer of around £20bn was  hinted at and the EU was said to be thinking of anything up to €100bn.

Now the compromise of around £/€50bn appears to be on the table but, since no specific final amount is mentioned, and the payment could be in instalments over several years, or even decades, after the initial indignation the whole thing will be pushed into the long grass as we obsess on other things (possibly more royal babies.)

A civilised reciprocal arrangement for EU citizens already in the UK and UK citizens remaining in the EU should not be beyond the will of skilful diplomats.  "All the rights you already have," announced on the day after the referendum, would and should have been a healthy start. If our government were capable of shame they would experience it in the cruel folly of making people's lives a bargaining chip

But there really is no credible solution to the problem of the Irish border.  The Brexiteers fantasise about some technology so modern that it does not yet exist  which will allow free passage of goods and services from Northern Ireland, in the UK and outside the EU, to the Republic of Ireland, in the EU and outside the UK, without the UK's being in the Customs Union or even the Single Market

This obviously can't be done.  the Irish Government and the EU's negotiators,have said so from the beginning.  The Brexiteers, and their supine media supporters, have simply not listened, and now cry "foul" as the December deadline for the next stage of the talks approaches.

This earlier post illustrates how tragic it will be if this wilful blindness upsets the fragile peace based on the Good Friday Agreement and results in a resumption of the "Troubles" which have caused so much misery for  ordinary people for the past century and more.

Friday 24 November 2017

Timid touches of the tiller in Hammond's budget.

The most eye-catching announcement in the Conservative budget - the standard "rabbit out of the hat" designed to catch the headlines - is the exemption from stamp duty for first-time buyers of houses up to the value of £300 000.  Happily this is by no means as generous as it looks, as house purchases up to the value of £125 000 are already exempt.

 Given that the average value of the first time buy is £165 000 this means that the lucky purchaser will save a princely 2% of £40 000, or £800: better than a poke in the eye with a burnt stick, as the Australians say, but hardly the kick in the backside  needed to to stimulate our dysfunctional housing supply

Buyers in London, where house prices are higher, will gain the benefit of the exemption up to £300 000 for purchases up to half a million, which can amount to £5 000 for those with monster salaries or a generous and helpful "bank of mum and dad."

So, be it £800 or £5 000, this either a nice little extra or a generous bung for the "haves" in society: a typical feature  of a Tory budget. 

Similarly the rises in the thresholds for the payment of income tax  benefit the "haves"  already paying the standard rate (an extra £70 a year, 20% of the tax exempt increase of £350) and ££340 a year for those on the £40%rate.  By contrast those receiving Universal Credit  gain a net ££25.90 a year, or about 50p a week.  More Tory "unto him that hath shall be given"

More promising is the tacit abandonment of the desperate attempt to put the economy to rights by the fancifully named "expansionary fiscal contraction "  - analogous in medical terms  to bleeding the patient until he or she either expires  or gives a desperate jerk back to life.  This budget is mildly, very mildly, Keynesian, with extra government borrowing of £2.7bn next year  for infrastructure development (some of it in the North!), and ££9.2bn (wow!) for  for 2019-20.

How much past and future misery could have been avoided if this light had flashed into the blinkered neoliberal eyes from 2010 onwards.

Because the truth of the budget is in the forecasts: that the miracle promised from 2010 onwards has failed, , and all those boasts about the "long term economic plan" are empty air.

The economy has stalled and with no substantial change of direction (and government?) we shall be limping along for another decade or so before we get back to where we were before the 2007/8 crash., Until then the poorest and weakest in our society must continue to bear the burden, with those on Job Seekers' Allowance, poor things, continuing to tote their CVs,  on an unimproved  £73 30 a week ( £57.90 if under 25) and new  recipients of Universal Credit mildly comforted by having to live without incomes for only five waiting weeks rather than six..

Figures quoted in this post can be found here

Tuesday 21 November 2017

Budget obsession

The annual obsession of Britain's political and chattering classes with the government's budget is both  unhealthy and unrealistic.

Unhealthy because it is simply not true, for the vast majority of us, that a little bit more or a little bit less income or spending power is going to make much difference to the quality of our lives and our happiness.  Yet on Thursday (the budget is tomorrow, Wednesday) the papers will be full of charts and columns showing how the budget will affect the incomes  and spending of various groups: single people; single mothers with one, two or three children;  happy families with a mother, father and 2.4 children; pensioner couples, and single pensioners.

For all of these groups a decision to take a twenty-minute walk every day, to eat less junk food, and to smile more often at our neighbours, would make far more difference to the quality of our lives than any decision the chancellor of the exchequer can make.

That is not to say that those on and below the margin, some twenty percent of our population, will not be affected by minor changes in their incomes, but these can be made, and often are, at any time on the year. .A decision to cut the "waiting time" for universal credit from six to four weeks has already been made, and it should now  be reduced by anther two,  There's bags of opportunity to force builders hoarding land with planing permission (a problem that  has existed for decades, but which the government has apparently only just recognised) to build on it or lose it.

There is no need to parcel all the possible improvements into one piece of political theatre.

Unrealistic because  there is the expectation  that the budget, for good or ill, will turn round the fortunes of the government.  Uniquely I think, some members of the governing party are hoping that the budget will be a flop as  this will enable them to get rid of the chancellor becasue he is insufficiently enthusiastic about Brexit.  But how many. other than anoraks (and not all of those)  now remember the details of last year's budget, or even George Osborne's omishambles?

More seriously, it is unrealistic that one collection  of economic tweaks  is going to transform the ailing British economy. As Larry Elliott pointed out here; 

"even before the referendum Britain was running a record current account deficit, growth was being pumped up by an overheating housing market, factories were still producing  less than before the start of the financial crisis, and people in the poorest parts of the country were being targeted  with deep cuts in welfare benefits."

Since the referendum matters have worsened. The pound has depreciated by some 15%, fuelling inflation; investment  has been held back because of the uncertainty caused be Brexit, and influential firms and organisations are either planning or actually moving to other countries. Yesterday, for example, it was announced that Goldman Sachs would make Paris and Frankfurt their post-Brexit" hubs,"  and two EU institutions will, not unexpectedly, move out of London:  the Banking Authority also to Paris and the Medicines Agency to Amsterdam.

There used to be a "joke" that it took three  miles (or was it three leagues?) to turn round the RMS Queen Mary.  Something similar can be said of the British economy: it well take not one but a decade or more   of the constructive budgets to put matters right..  There is no shortage of such constitutive ideas.  My own humble Keynesian contribution was published as early as 2011 and can be seen here.It all remains highly relevant, though I would now add, of course , that we abandon Brexit.

If Mr Hammond sticks to his guns tomorrow's budget may make a start, but I suspect it will be modest.

Saturday 18 November 2017

Albion still perfidious.

I think most of we British are at least vaguely aware, possibly from the Lawrence of Arabia film, or reading his book, that our government let down, or even double-crossed, the Arabs, after the First World War.

As I understand it, and I'm no expert, Britain  promised, or at least indicated to, the Arab peoples, that if they revolted against the Ottoman Empire which had for centuries ruled much of the Middle East and was our enemy in the First World War, then, when the Allied victory was achieved, their lands would be handed over (or back?) to the Arabs as their own country.  This is what Lawrence of Arabia is said to have believed and promised the Arabs if they gave their support to the British forces.

Instead, the British and French parcelled up the area between them in the Sykes-Picot Agreement and, on top of that, apportioned a chunk as an international home for the Jews,without so much as a with your leave or a by your leave of the people who lived there,  in the Balfour Declaration..

Less well known (or at least it was new to me) was a betrayal of Chinese expectations which was exposed in a documentary, Britain's Forgotten Army, shown on Channel 4 last week and still available to watch again here.

Some 140 000 Chinese were recruited and acted as labourers for the Allies on the Western Front and elsewhere during the First World War.  Many were killed, and it is acknowledge that, without their help, it would have been far more difficult, if not impossible, to supply the troops.  In the event of Allied victory the Chinese government anticipated that the German concessions on the Chinese mainland would be handed back to them.  This expectation (promise?) was ignored at the Versailles Peace Conference, and the concessions were handed over to China's traditional enemy, Japan.

"New" Labour's shadow foreign secretary in the 1990s, Robin Cook, aware of this history of duplicity, outlined the "ethical foreign policy"Labour would adopt if returned to power.  He had the honesty  to resign when Tony Blair's government supported the Americans in the invasion of Iraq.  Sadly this exemplar of political  immediate integrity died shortly afterwards.  Cook's successor, Jack Straw, quickly reverted to type and it is hard to see your foreign policy becoming more ethical under the present foreign secretary, the vacillating and opportunist Boris Johnson.

Saturday 11 November 2017

Remembrance Day

Here's a telling sentence from Giles Fraser's article in yesterday's Guardian:

"...I am always conscious that remembrance is too easily purloined by those who want to celebrate precisely the sort of militarism  and nationalistic chauvinism that led so many young men  to pointless deaths."

That certainly resonates with me, and for some years, in order to try and balance the motives behind Poppy Day I've worn a white poppy* alongside the red one..

In his article Fraser quotes this poem by  Ellis Humphrey Evans, who was killed on the first day of Passchendaele:

Why must I live in this grim age,
When, to a far horizon, God
Has ebbed away, and man, with rage,
Now wields the sceptre and the rod?

Man raised his sword, once God had gone,
To slay his brother, and the roar
Of battlefields now casts upon
Our homes the shadow of the war.

The harps to which we sang are hung,
On willow boughs, and their refrain
Drowned by the anguish of the young
Whose blood is mingled with the rain

I believe the poem was originally written in Welsh.

I shall try to publish this post as near as possible to 11am today, and reflect on  the poem in my Two Minutes' silence.

* These can be obtained from the Peace Pledge Union.  It's probably too late to buy one for this year but you cn read about them here.

Friday 10 November 2017

UK unempoyment: a record low?

It's natural that those who want to boost our image as "global Britain" make much of any positive information about the performance of our economy.  Eighteen months or so ago much was made of the statistic that we were " the fastest growing economy in the G7."  Now, since the referendum result, we've slipped to the slowest among the G7, we no longer hear  much about that.

However, last week there was "good" news: our current level of unemployment, at 4.3% is the lowest since the days of Harold Wilson, and now among the lowest of the major economies of Europe - less half that of that of France, for example.

Those of us in the  economics education business learned to distrust government unemployment statistics way back in the 80s. That 4.3% is based on what is known as the "claimant count"  - the number of people "signing on" for unemployment benefit.  Mrs Thatcher's government made over 30 adjustments to the way the claimant count was calculated, almost all of them leading to a lower total.  Basically, if there is no entitlement to a benefit, many those who are unemployed don't bother to "sign on" at the Labour  Exchanges created by Winston Churchill when he was a member of  the Liberal government in the noughties of the last century and now called Job Centres, as these places are no longer  all that helpful in finding people jobs.

Rather, economists now focus on the International Labour Organisation's (ILO) broader measure of unemployment.  Independent research  by Sheffield   Hallam University, summarised here, claims that  that 735 000 people would need to be added to the claimant count to match the ILO measure.That's almost as many as the 785 000 on the claimant count, so  just about doubles the percentage figure to bring it roughly equal to that of France.

But that's not the end of the story.  There's another 750 000 people who have been shunted  off on to Incapacity Benefits who would really like a job but can't get one.  Many still look vigorously, but many have given up hope, I suspect because, once employers see a gap in someone's employment history they are reluctant to offer a job if there are other candidates with a continuous employment records.  Most people these days these days are careful to  disguise any gaps in their CVs.

The Sheffield Hallam researchers refer to this factor  as "hidden unemployment."  Whether in this they also include  the vast number, particularly women, who are in part-time jobs but who would really like full-time jobs, those on short-term contracts who would like longer-term security, those with routine jobs which make no demands on their qualification and capabilities, and those at the bottom of the pile on "zero-hours" contracts, I don't know.

What I do know is that the state of the jobs market is a far cry from the healthy days of my early teaching career, when we regarded 3% as the normally tolerable rate of unemployment.  Even today's claimant count is nearly 50% higher than this.

Saturday 4 November 2017

Exiting Brexit: how democratic is that?

Handing out pro-EU leaflets in Brgigate, Leeds's main street, on Saturdays is an interesting experience.

Most people walk past and ignore us.  A surprising number come quietly to our little stall without being asked and sign our petition to put a stop to Brexit, and only a very few come actually to talk about the pros and cons of leaving or staying in the EU.

Every half hour or so we will be abused by an angry pro-Brexit enthusiast.

"It's democracy," they'll shout." It's decided.  We're leaving . Good riddance.. . " etc"

 They rarely want to talk about it, to listen, yet alone discuss, any of the arguments about the damage being done to the nation's status, their own wellbeing or  future prospects. The few who do simply harangue us.

"We've voted, that's it."

I'm not surprised.  These are the people who, under our "first past the post" electoral system have rarely cast a vote which counts for anything or decided anything.  Only those living in a tiny handful of marginal constituencies have that privilege.

But this vote, the referendum, was a chance to have a crack at the establishment which they feel has complacently ignored their needs.  For years they have been drip-fed  bile from the biassed press,(largely  owned by tax-avoiding foreigners) that their perceived ills -  wages undercut, traditional (white?) culture threatened, unaffordable houses, prising rices, crumbling transport system and health service  - are largely if not all the fault of the EU.

Over 40 years no leading politician since Ted Heath : not Wilson,  not Thatcher, not Major, not Blair, not Brown, not Campbell, has had the guts to put the positive case of the benefits to us of EU membership.  Indeed the reverse:  the EU's alleged regulations, red tape and bureaucracy have provided both major parties with a convenient scape-goat for any unpopular policy which may be for our long-run good

However, what did surprise me was this statement, aired by John Redwood on the BBC Radio 4 "Any Questions" programme.  (It comes about  ten minutes from the end)

In a debate on the so-called "meaningful vote" which Parliament is to have on the result of the negotiations Redwood says:

 "Parliament can vote what it likes.  We are leaving the EU in March 2019 [said twice] whatever Parliament thinks  about it."

Now Mr Redwood is no neglected left-behind from a deprived region but the Rt Hon John, MP for Wokingham since 1987 (that's 30 years), one-time Minister of State in the(Department of Trade and Industry), Minister in the Department of the Environment), and Secretary of State for Wales.

Not the most outstanding political career, perhaps, but pretty glittering all the same, and certainly not lacking in influence.

This, from a distinguished and informed politician who campaigned for "taking back control" and the "supremacy of the UK Parliament) is disgraceful.

Democracy is government by discussion.  There is no reason for the discussion to stop after a narrow victory in one flawed advisory referendum campaign supported by an overwhelmingly biassed press and, possibly , we now hear, dodgy money.

Public opinion has probably already reversed the narrow "Leave" victory.

Sadly so far that;s insufficient to stiffen the sinews of our supine legislators.

But a further shift to, say, 60:40, is surely well on the cards as the false prospectus promised by the Leave campaign unravels day by day

Brexit is by no means a "done deal" and the weakness of the Brexit case is revealed in their present  reliance  on the assumption that it is.