A.E.I.P.

daveinbrusselsepchamber

I am standing for a place on the AEIP National Committee. Its role is changing, and I think I have the campaigning and professional experience to help it develop into what it needs to be. If you are a member, you will receive your vote via email shortly. Please use your vote wisely, and for me 😉

I am a Londoner and committed pro-EU activist in the Labour Party ; I supported remaining in the EEC in 1975, and it’s wrong to leave now. This is a lifelong commitment for me.

The need for AEIP is still as great today as we move into a post-Brexit relationship with the EU and that relationship is governed by a Tory Govt and the partnership council. The issues raised by the alternate mandate remain as live today as they were before the treaty on future relationship was signed. I am quite shocked at how quickly even the stuff the Tories supposedly value is falling apart, from fishing, to exports, to creative artists and financial services, the worst predictions are coming true. It seems too few people understood, Johnson’s anglo saxon summary of his industrial policy. The good news is that we can still conduct politics as the treaty is a living treaty with institutions in which we can build coalitions for a better answer. To do that, we need popular support and AEIP is the best instrument for doing that.

I am used to and experienced in arguing for good policy in the Labour Party; this experience will be useful for AEIP as we develop policy and seek support for it. I have written a lot about the economics and justice of the remain case on my blog, http://davelevy.info/tag/brexit/ . I have worked in IT for a series of blue chip companies and am a trained economist. I have expertise in macro-economics, and industrial innovation; I served on one of the predecessor Horizon 2020 incubator committees in the noughties. I am a co-author of the European Union’s software strategy and an expert in data protection law. I believe this experience would be of use to the AEIP national committee.

On Europe and the European Union, I believe in the words of my father, a WW2 veteran, that the EU is a project for peace, it’s been too often forgotten. Free movement and the Charter of Fundamental Rights will come to be seen as the greatest losses, the case on economics was won 18 months ago. AEIP needs to continue to campaign for a better Britain. For more of what I think, I have written a lot about the economics and justice of the remain case here, on my blog, http://davelevy.info/tag/brexit/ …

Thinking about macroeconomics with Anneliese Dodds

Thinking about macroeconomics with Anneliese Dodds

While writing, Responsible Opposition, about Sir Kier Starmer’s 1st speech of the year, I pointed out that Anneliese Dodds would be giving the Mais Lecture, which had been previewed in the Financial Times (paywall). They said that she will,

 …  call for a ‘responsible fiscal framework’ based on ‘pragmatism, not dogmatism’  … [and] … signal … that the Labour party is backing away from the hard-left economic policies of former leader Jeremy Corbyn, seeking instead to fight the Conservatives on economic competence and protecting the UK’s recovery from the damage caused by the Covid-19 pandemic.

Chris Giles – Financial Times

The speech has now been delivered and I heard/watched it live. The first thing to say is that I do not consider this to be a repudiation of late stage Corbynomics.

I needed help to work out what was said, it was a very low key speech, certainly not in the style of a UCATT shop steward, more in the style of one of the academics from the cast of Inspector Morse. There was no emphasis and so we need to work out what’s important and what is just said in passing. Stephen Bush points out the unusual nexus of welcome from James Meadway & Chris Giles, he writes,

… [ the speech] attracted a glowing write-up from the FT’s influential economics editor Chris Giles and an approving tweet from James Meadway, the adviser who more than anyone bar John McDonnell himself shaped the Labour Party’s economic strategy under Corbyn

Stephen bush – New Statesman

Meadway’s tweet was trolled by Richard Murphy, who was one of the authors of Corbyn’s original Corbynomics manifesto and is a supporter of modern monetary theory (MMT), but Labour stepped away from these monetary & fiscal policy  ideas after 2016.

I found the speech underwhelming, almost academic in its tone, which given the host may have been appropriate. I am certainly of the view that it is not a step away from or a rejection of McDonnel’s policies. If anything, the call for a ‘responsible fiscal framework’ based on ‘pragmatism, not dogmatism’ is an attack on Osborne and the politics of austerity and his remaining fans in the Tory party. She praised the independence of the Bank of England, but this has had its problems; it failed in 2008 and it was politicians that rescued the economy and the argument for its independence is based on the argument that politicians and their electors can’t be trusted to make the right decisions. If those decisions are painful, why should they? Independence is a way of baking in neo-liberalism. She was clear however that monetary policy is not enough to build a successful macroeconomy.

Over-relying on monetary policy levers for economic growth – as the UK has arguably done for the past decade – can lead to undesirable outcomes. Without accompanying fiscal action, low interest rates and gargantuan quantitative easing programmes can exacerbate inequality and concentrate economic gains in the hands of those who were already asset-rich, at the expense of those who rely on income from their labour. Risky indebtedness, especially combined with a highly unequal distribution of assets, can exacerbate inequality.

Anneliese Dodds

She spoke on fiscal policy; did she repeat McDonnel’s Golden rule? If she did, she qualified it by saying that borrowing to invest is only available because of the low interest rates. I have two things to say, firstly, I thought interest rates are a policy instrument, so if a government which is a currency sovereign wants them low, then low they are! Secondly, defining what is current account expenditure is not simple. Why is the education budget not considered an investment in human capital?

Is this as good as it gets? We are to be grateful that a Labour Shadow Chancellor still intends to borrow to invest and that monetarism is no longer part of Labour’s macro-economic tool kit.

On the upside she mentioned wealth inequality and aggregate low wages as constraints to growth but no mention of remediation which would be an effective wealth tax, a better minimum wage, reformed procurement policies and labour law reform. She also mentioned critically the growth in value of unproductive assets, such as art and wine; but surely this is the result of quantitative easing and a side effect of the increasing marginal propensity to save by the rich, again addressable by a wealth tax.

She announced a series of technical changes to the budget management process, all of which are good, but not particularly left wing and so likely to be nicked by the Tories. These consist of ensuring equality & carbon impact analyses on the budget and spending plans and placing a longer term time frame on the budget together with using more very long term bonds.

I also noted that while it seems that Labour is committed to a high wage, high skill economy, our reticence to talk about the means by which we select the short and medium term winners is not talked about; under Corbyn’s leadership, the new National Investment Bank was to be the instrument for seeding innovation and new jobs, but the means of funding it, and the way in which loans and grant were to be allocated remains unclear.

I submitted a question on this i.e. selecting industrial and innovation winners, which the moderator, Prof. Barbara Casu put as her first question; if Anneliese Dodds had wanted to talk in detail, this would have been in the speech, it wasn’t and her answer to Professor Casu’s question added no clarity.

It was a very technocratic speech, delivered in a technocratic style, presumably designed not to frighten the horses. It was a rejection of both modern monetary theory (MMT) and fiscal consolidation but not a manifesto for socialism.

ooOOOoo

The speech was introduced by the Dean of Faculty at CASS, Paulo Volpin, and the questions moderated by the Professor of Banking, Barbara Casu. Both would seem have been initially educated in Italy, I hope that the new immigration rules post Brexit will allow others to follow their route and come to the UK to teach.

I have written previously about Corbynomics on this blog and also on MMT on my bliog, and on my wiki, and on QMT in my obituary on David Graeber, on the blog. …

How to make Labour’s policy and manifesto

How to make Labour’s policy and manifesto

Consultation is currently taking place as part of Labour's review of the way it makes policy.

Below are set out suggested responses to the questions the party is asking in the consultation. They are also attached as a word document here and a PDF file here.

Responses can be made up till 3 February, either on Labour's website here or emailed to here.

These will be more powerful if you could get a party unit to approve a submission, but there is not much time left.

The Labour Party web site offers the ability to upload the document, if you do this do not forget to add the name of your organisation to this document and to the relevant fields on the website. Otherwise, you can paste each response into the relevant question and amend it if you see fit.

The text of the submission is below/overleaf ...

Finance in the City

Finance in the City

I made a blog on linkedin; a lot of money left the City on the 4th Jan, the first day of trading after the end of the UK’s brexit transition period. The article has a bit of explanation and a bit of prediction; more could follow and some of the market infrastructure companies and lawyers may need to do so too. While non European finance will likely remain in London, and provide both volume and gravity, the death of LIFFE showed that things can change.

Bloomberg are not so equanimous, and express their views in an article behind a “please pay us” splash screen; it’s a review of the leading merchant bank’s economists talking about the investment opportunities in the UK now that we have an idea of the new framework defining the terms of Trade. Many are neutral, the headline quotes the ‘bear’.

I am not sure, I suspect that the gravitational effect of world trade in non-Euro shares and the trade in currencies will maintain a critical mass giving the skills and infrastructure the reason to stay in London. What’s gone is gone but we need the Government to get on top of the negotiations on “equivalence”, which will determine the banks’ ability to serve both the EU market and EU citizens in the UK.  …

Happy Fish

Happy Fish

Who’d have thought it? After threatening a no-deal Brexit to protect Britiain’s fishing industry, we discover that the goal would seem to have been to make Britain’s fish happy! FFS! The inconvenient truth is that most of the fish caught in British waters are sold in the EU and given the need for more paperwork at the border, the industry is having such severe difficulty in getting their fish to market that they are keeping the boats in port to save the quota until a time when they can sell what they catch. It seems, however, we still have time and resources to chase the Irish away from Rockall. It may not just be fishing, the LSE predicts that UK Exports to the EU will fall by ⅓, total trade by 13% and GNI by 6%.

There is a murmur of evidence that, what economists call, increased friction at the border is causing supply chain disruption for the super-markets and there are coming shortages in the shops, it could of course just be as people enter the new lockdown they stock up to minimise their visits to the shops but if it’s a customs check thing, then we should note that the UK imports half it’s food. In the words of Corporal Jones from Dad’s Army, “Don’t panic!”.

I am shocked at how fast it seems to be falling apart but can’t deny myself a bit of schadenfreude about the fish but any lost job is shame and will impact the workers and their families and I remember that offshore fishing is the most dangerous job in the country. I wonder when Richard Corbett and Seb Dance will be calling for us to rejoin and whether real industry will join them.

But Labour’s front bench have hitched their fortunes to making the Brexit deal work. Too late to do any good electorally, and too early to avoid the coming shit storm. We are telling our remaining core vote to once again, concede political and moral space to people who don’t support us; given a choice between blue labour and red clydeside, Starmer’s Labour has made its choice and we’ll have to see if it’s the right one. …

Responsible Opposition

In his first speech of the year, Sir Kier Starmer, the Leader of the Labour Party makes a speech on the Tory Govt’s flawed response to the coronavirus pandemic. Is this a redefinition of ‘responsible opposition’? I am not so sure.

Here’s the speech on youtube,

The speech ends at 32.35 and is followed by journalists questions, which are mostly shit and fishing for a bad headlines but he does use the opportunity to expand on whether nurseries should remain open. The words of the speech are on the LP press site.

It’s Ok, as far it goes. …

The press spin is that he focuses on families and parents which some off the right wing press seem to think is a threat. To which I ask why? Single people, old and young are also suffering furthermore, there is no mention of sick pay or redundancy pay and he merely opposes cuts in universal credit. But why exclude some people from support during a pandemic.

There’s no mention in the speech of the education fuck ups, of closing schools late, of letting students enter their courses for a year obviously to be bighted by lockdown and the Williamson’s exam debacle of last summer, presumably partly because his fingerprints are on these decisions although he calls for, possibly, closing the nurseries which would be a relief to the workers there but why aren’t we calling for Williamson & Jenrick to be sacked?

While he looks at the positives of rebuilding the economy, where he name checks high wages and high skills, and it may be premature, but some signals from our borders suggests that Brexit will increase foreign goods’ prices, and may cause shortages and job losses but he’s closed that door on seeing this as a contributory cause to our awful economic state.

He’s still focusing on competence not on corruption, but I like this quote,

The government says it’s trying to balance the health crisis with the economic crisis. Yet we ended  2020 with one of the worst death tolls in Europe and the deepest recession of any major economy.  That’s not bad luck.  That wasn’t inevitable. It’s the consequence of the PM’s repeated delay and incompetence.

Sir Kier Starmer

On the question of competence, as well as Williamson, I think we need to mention the “eat out to help out” campaign and it’s author, Rishi Sunak and the impact it had on spreading the virus. No stats from me today, but I assure you it did not reduce it. Starmer is silent.

I object to the cardboard cut-out patriotism, British science is global and Oxford research team is multi-ethnic/multi-national and again I ask if it will be possible to put such a team together in the future once the full impact of Brexit on immigration, professional recognition and student access becomes obvious. Also platitudes about the best in the world always remind me of Steve Bell’s cartoon about the “best used kebabs in the world”.

After 9 months of responsible opposition, is this enough? Should this be welcomed or not. In my book, it’s late, it does not rectify the errors on schools and the silence on economic support, the silence on the inadequacy of sick pay and statutory redundancy payments. It’s not really enough for me.

I wanted to behave differently to the right in the Labour Party, to give him a chance to stand by his 10 pledges, to respect those Party comrades that voted for him, but I lost confidence before Xmas and this speech is not enough and when taking account of the policy direction on Brexit, immigration and Human Rights, we are still in the wrong place to represent our core constituency and even a majority of the country.

I may need to write more because Anneliese Dodds will be giving the Mais Lecture, which is previewed in the Financial Times (paywall). They say that she will,

 …  call for a ‘responsible fiscal framework’ based on ‘pragmatism, not dogmatism’  … [and] … signal … that the Labour party is backing away from the hard-left economic policies of former leader Jeremy Corbyn, seeking instead to fight the Conservatives on economic competence and protecting the UK’s recovery from the damage caused by the Covid-19 pandemic.

It’s all very disappointing although not unexpected. I wonder who the visionary that plans this stuff is? While Dodds has the chops to carry this off, Starmer seems lost. …

How to rejoin the EU

How to rejoin the EU

This is the treaty obligation on the EU that governs entry into the EU. It’s Article 49 of the Treaty on European Union.

Any European State which respects the values referred to in Article 2 and is committed to promoting them may apply to become a member of the Union. The European Parliament and national Parliaments shall be notified of this application. The applicant State shall address its application to the Council, which shall act unanimously after consulting the Commission and after receiving the consent of the European Parliament, which shall act by a majority of its component members. The conditions of eligibility agreed upon by the European Council shall be taken into account.

The conditions of admission and the adjustments to the Treaties on which the Union is founded, which such admission entails, shall be the subject of an agreement between the Member States and the applicant State. This agreement shall be submitted for ratification by all the contracting States in accordance with their respective constitutional requirements.

Article 49 Treaty on the EU

Might come in useful sometime soon. …

Nationalism and the class struggle

Nationalism and the class struggle

So many friends are considering leaving the Labour Party, for some it’s the lack of vision expressed by Starmer, for others it’s the rejection of Corbyn’s social democratic manifesto and for others it’s the collusion with the bullying bureaucracy. Others have a powerful political critique of how change happens in society and believe that the events of the last five years show that the Labour Party is not part of a better future. This has been said before by among others Ralph Miliband and so I was looking at his Wikipedia page to see which of his books was the critique of the “parliamentary road”.

There is a quote from his diary, in 1940, which today helps explain the forces behind Brexit,

The Englishman is a rabid nationalist. They are perhaps the most nationalist people in the world … When you hear the English talk of this war you sometimes almost want them to lose it to show them how things are. They have the greatest contempt for the continent in general and for the French in particular. They didn’t like the French before the defeat … Since the defeat, they have the greatest contempt for the French Army … England first. This slogan is taken for granted by the English people as a whole. To lose their empire would be the worst possible humiliation.

Ralph Miliband – from his diary via Wikipedia

Not much has changed it would seem. …