Universities at GMB25

a group of people from above wearing U. of Bradofrd academic gowns

I moved a motion entitled higher education, knowledge and funding.  In my speech I placed the crisis of HE funding in the context of macro-economic policy and as the results of Labour’s hostile environment. I had been inspired to write the motion as a result of Rachel Reeves autumn statement 24 and after reviewing the industrial policy white paper. The seconder of the motion made what I believe is a powerful statement in favour of universal access to higher education. In this article, below, you will find a video clip of the debate, the words of the motion and my notes, that I used to make the speech.

In this article, below or overleaf, you will find the words of the motion and my notes, that I used to make the speech. …

A budget that “needs improvement” &“exceeds expectations”

Rachel Reeves in front of No 10/1 with a red box

The budget headline is a £127bn deficit and current account stabilisation where the Tories had planned further reductions in expenditure. I am on the side of those who say, it’s not too bad and could have been worse. It, in the words of most performance management systems, “Exceeds expectations”, although most of those were set by themselves. There remain some unsolved problems and some risk but I think this response from Jeremy Corbyn and the Green Party misses the mark, it is not austerity light. There's much more, overleaf ...

More on growth & debt

More on growth & debt

The problem with the Truss mini-budget was not that they had an ‘unfunded’ deficit but that there was no mechanism between the deficit and investment. Rich people tend to save and for the deficit to do any social good, the banks would have to lend to investors i.e. entities looking to buy or make capital goods; which they have never done. Private sector domestic investment has usually been funded by retained earnings!

The lesson here is that the markets were not frightened of the deficit, just its purpose.

See also Growth vs public debt management on this blog. …

Growth vs Public Debt management

Growth vs Public Debt management

You don’t have to be a modern monetarist to believe that the UK has a debt crisis. There are a number of well evidenced and widely believed economic theories that support the use of a Government deficit to induce growth which is the surest way to reduce national debt. Those that argue austerity is a choice are bang on the money.

Debt fetishists need to get this, but so do those who argue that we should fund some desirable programme, be it pensioner’s winter fuel allowances, doctor’s recruitment or student debt forgiveness because we can fund a defence budget. How we use and deploy our military is of course a matter of other priorities but arguing we need to accept austerity by applying the cuts elsewhere is ignorant.

Investment led growth requires expenditure in increasing the productive capacity of the techno-economy, although there is some recent writing and research that traditional industrial policy focused on startups and R&D doesn’t work and that looking at public service outcomes is a more effective growth measure. I’d add that investment in labour force skills is another investment which means that University [& FE] funding and student finance should be considered investement, although none of this seems important to this Government who are prioritising reducing the public debt before investment. Housing is not an investment in productivity; the reason for doing this is social, and not based on macroeconoic policy goals.

You can’t grow the economy while reducing the deficit! It works the otherway round.  …

Labour and the Cuts (again)

Labour and the Cuts (again)

Two comments on the Reeves announcement to cut albeit fake investment projects and the pensioner’s winter fuel allowance. On the fuel allowance payment, this is not means testing the entitlement, it will be linked to Pension Credit entitlement, the threshold for which which is slightly less than the state pension paid to someone with full contributions record. It also ignores the fact that additional income is taxed. This entitlement limit is £11,500, about half, under the national living wage, and the amount required to sponsor an immigrant is £29,000. I quote these figures to show how necessary and low the contribution-based pension is. This is mean and unnecessary.  

On the macro-economics, the “golden rules” were designed to protect investment against short-term debt management fetishism. Until now no-one has ever argued that you shouldn’t borrow to invest, and while I usually argue that investment in human capital is a legitimate use of the state’s borrowing capability, which some consider to be a stretch, that can be no doubt the roads and railway lines warrant being borrowed for.

Jeremy Hunt and Owen Jones both accused Reeves of implementing cuts that she had always planned to do. If the labour front-bench did not know that the last Tory budget was fake, then they should have done. I’m also taken with the Twitter correspondents here and a thread here who point out that it is not just modern monetarists who state that the constraint on the capacity of the economy is its inputs and neither the money supply or the borrowing capacity. …

Labour’s macroeconomics

Labour’s macroeconomics

An article reviewing the politics behind the Starmer and Reeves’s speech to #lab23 and pointing at the arguments of some of the critics of their line on macroeconomics. I also look at the supply side initiatives they propose and question if it’ll be enough. I note that even funding these supply side measures will remain difficult while they maintain the harshest aspects of their fiscal responsibility rules and their promises on tax i.e. no increases in VAT, income tax and no new wealth taxes. I comment that the growth target is a necessary goal but they don’t specify a credible means of achieving it. This could easily be corrected even if one thinks that these fiscal rules are necessary. Conference also passed a union backed motion on critical infrastructure calling for the renationalisation of energy and railways. For the full article, use the read more button …

Is Brexit worse than expected?

Is Brexit worse than expected?

I was talking to a friend, who asked if anyone had predicted the current chaos caused by Brexit, which led me to look for and find my personal manifesto for remain [ or on medium ], both published in May 2016

I got the economy, rights, and the loss of freedom of movement right. I was also right on sovereignty and remain so on peace and hope!

I didn’t predict the collapse of offshore fishing industry, food rationing, or an energy cost crisis or that we would have a trade agreement that didn’t allow people to come here to work, although on fish & food, others did. I, and I think most people, have a better understanding of what we’ve lost. I think we’ll be back. …

Trade Friction and free movement.

I co-authored this, published at Brexit Spotlight by Another Europe.

Measuring the Brexit impact on the economy: the evidence that points to a self-inflicted calamity

It is little wonder then that the Conservatives are under acute pressure to revise their trading arrangements with the EU in order to re-open access the European single market. But it seems likely that – at least for the time being – Brexit ideology will not allow any serious recognition of the economic reality.    …

Trebles all round!

Trebles all round!

This week, the Labour front bench, in a trinity of acts, supported the autumn statement and thus austerity in principle, criticised Tory immigration policy on the grounds of competence and repeated their promise to not join the EU, its single market, or adopt the EU’s freedom of movement in the next parliament (if they win).

The inconvenient truth is that the UK economy needs unskilled EU workers to do the work, It’s not the net fiscal impact that’s the issue. We have a massive labour shortage, we need migrants to do the work, it’s about the output. It’s not all highly skilled work as we define it either, it’s hospitality, agriculture, and health care. And today we define highly skilled as highly paid; even if only the highly skilled were desirable, they are not synonymous.

I have thought long and hard to find a way of compromising with those who want to pander to racists on free movement, and I can’t find a way of doing it while solving both the macro-economic problems and remaining true to our internationalist principles. All this “control immigration” or a fair “points based” immigration policy which involves stopping people is just pandering to racism.

Differentiating from the Tories on competence is morally vacant.

Accepting the debt fetishism at the heart of the Tories “New Economic Policy” is also morally vacant, and self defeating, you can’t cut your way to growth and austerity causes poverty, homelessness and is killing the NHS. Labour’s next manifesto and government must offer hope. They will lose votes from Corbyn’s voting coalition, and as far as I can see it’s deliberate.

You’d think they’d learn that voters always have somewhere else to go! Some demographics, historically Labour voters, are choosing to vote Tory.  …