21 August 2020 – today’s press releases

  • The Chancellor needs an ambitious plan to save the economy
  • Government continue to threaten economic recovery
  • “Shameful” that bereaved families of NHS and care workers risk losing access to welfare benefits
  • Extending eviction ban nothing more than kicking the can down the road
  • Brexit reality falls short of rhetoric again as “no deal” threat looms

The Chancellor needs an ambitious plan to save the economy

Responding to reports that debt has increased to over 100% of GDP for the first time since 1961, Acting Leader of the Liberal Democrats Ed Davey said:

This news must not be used as a reason for the Government to make cuts or return the country to austerity.

We know that borrowing is historically incredibly cheap, so it is absolutely clear that borrowing money to boost the economy is the best way to get public finances back on track.

The Chancellor must be far more ambitious in his plans to rescue the economy. The Liberal Democrats have called for a £150bn Green recovery plan to boost the economy and create thousands of new jobs.

Government continue to threaten economic recovery

Responding to ONS figures that show retail sales rose above pre-pandemic levels in July, Acting Leader of the Liberal Democrats Ed Davey said:

This will be welcome news for so many people working on our high streets who would have spent several months worried about their job.

However, we are not out of the woods yet. The Government is yet to bring forward a proper plan for high streets in locally locked down areas, so people are likely to go through more tough times.

The Government also continues to threaten our economic recovery with its damaging Brexit policy. The fact that we could still leave negotiations with the EU with a bad or no deal means that many high street businesses will still be very concerned about what the future holds.

“Shameful” that bereaved families of NHS and care workers risk losing access to welfare benefits

The Liberal Democrats have warned it is “shameful” that bereaved families of NHS and care workers who die of coronavirus risk losing access to welfare benefits if they receive payments under the government’s Covid-19 compensation scheme and called on Ministers to “scrap this senseless rule immediately.”

The Government has confirmed that families who receive the £60,000 payout under the scheme will no longer be able to claim for universal credit, housing benefit or pension credit, as they would be in breach of capital limits.

Layla Moran led the cross-party campaign calling for the introduction of the Covid-19 compensation scheme for families of NHS and care workers who lose their lives to coronavirus.

Figures she uncovered in July revealed only 19 families had benefited so far from the scheme, despite there being over 540 Covid-19 related deaths of health and social care workers in the UK.

Liberal Democrat MP Layla Moran said:

It is utterly shameful that bereaved families of NHS and care workers face losing access to benefits if they receive a payment from the Covid-19 compensation scheme.

This scheme was set up to provide financial security and comfort to the loveed ones of those who tragically died on the frontline against coronavirus.

This exercise in penny pinching is completely tone deaf and risks rubbing salt in the wounds of grieving families. The Government must scrap this senseless rule immediately.

Extending eviction ban nothing more than kicking the can down the road

Responding to reports that the eviction ban in England will be extended until 20 September, Liberal Democrat MP Layla Moran said:

No-one should face losing their homes while this deadly virus still hasn’t been properly brought under control.

Extending the eviction ban by just a mere month is nothing more than kicking the can down the road. It is a dereliction of duty.

For families who have been days away from the threat of eviction, this news will go down like a bucket of cold sick.

The Government must get real on renters right and immediately ease worries by extending the ban until there is a proper long-term solution for people who have found themselves in crisis.

Brexit reality falls short of rhetoric again as “no deal” threat looms

Responding to news that the EU’s chief negotiator Michel Barnier has said a post-Brexit trade deal between the UK and the EU “seems unlikely”, Liberal Democrat Brexit and Foreign Affairs spokesperson Alistair Carmichael said:

We were told that this would be the easiest negotiation ever but, yet again, the Brexit reality is very different from the rhetoric.

Millions of people are looking to the future with dread. With no end in sight to the COVID crisis and the worst economic forecasts for a century or more, the disruption of a no deal Brexit threatens to push the UK into total meltdown.

This is not about party politics. It’s about making sure families can put food on the table and access life saving medicines.

The Prime Minister’s childish refusal to extend negotiations in the face of the COVID-crisis shows he would rather flatter his ego than confront reality. If he can’t face putting the national interest first then he is not fit to lead this country.

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19 Comments

  • Peter Martin 22nd Aug '20 - 3:34am

    This news must not be used as a reason for the Government to make cuts or return the country to austerity……..We know that borrowing is historically incredibly cheap…… borrowing money to boost the economy is the best way to get public finances back on track……..The Chancellor must be far more ambitious in his plans

    If only Ed, and other prominent Lib Dems, had been saying the same thing 10 years ago! Then it was “we have to live within our means, the credit card is maxed out, the Labour Govt has been spending like a drunken sailor etc etc……”

    Th reality is that public finances won’t, anytime soon, be “back on track” in Ed Davey’s neoliberal terms. We’ll likely become increasingly like the Japanese in this respect. So a better way to put it is to say they have never been “off track”. Just like exchange rates, they vary according to economic circumstances. This isn’t to say that some economic austerity should be ruled out. If an inflation problem arises from the extra Govt spending, it could be necessary. But not to “balance the books”. That just doesn’t work.

  • Peter Martin 22nd Aug '20 - 4:19am

    “Millions of people are looking to the future with dread……no end in sight to the COVID crisis…. the worst economic forecasts for a century or more….”

    Firstly, albeit in our own bumbling way, we do seem to have made reasonably good progress in bringing the virus under control. Much better than many, including myself, expected when the death rate was rising exponentially in early April. Secondly, the economic forecasts have been much worse in the last century. They weren’t looking too good in 1940, for example, when we couldn’t trade with Europe at all and our trade with the ROW was hampered by submarines sinking the ships that were necessary for that to continue. Plus we had, in neoliberal terms, to find money “we hadn’t got” to pay for the war effort. So we need to put our present problems into a correct perspective.

    Things aren’t looking too good in the EU at the moment. Yes, they have come up with a supposedly generous €750 billion package, but this is spread out over more than just one year. However, the GDP of the EU is some €16 trillion pa. So if their GDP falls by 10%, which it probably will, then the package will need to be double that, for at least a year, and probably for several years to correct the problem.

    Furthermore the money can’t be in the form of loans. It has to be created, spent where it needed then forgotten about. Will the EU under the influence of Germany and other frugally and fiscally conservatively minded countries rise to the challenge? Maybe. But maybe not!

    In any case, from our own perspective, we can’t look to the EU to do us any favours when they have such problems of their own. We need to look both to ourselves and elsewhere.

    https://www.theguardian.com/world/commentisfree/2020/jul/24/eu-coronavirus-fund-europe-recovery-package

  • Steve Trevethan 22nd Aug '20 - 7:11am

    From whom do we borrow the money?
    What are the terms and conditions?
    When does it have to be repaid by?
    Why did and does our leadership, national, party and media, still behave with pre-fiat money habits?

    The”Deficit Myth” by Stephanie Kelton is a most exciting, useful and hopeful book on fiat money economics as are the books by Warren Mosler!

  • Steve Trevethan 22nd Aug '20 - 7:20am

    And, most important of all, why do we “borrow” money that we can, and sometimes do, create for ourselves?

  • Peter Martin 22nd Aug '20 - 8:41am

    @ Steve,

    “why do we “borrow” money that we can, and sometimes do, create for ourselves?”

    We, ie the British Govt, don’t actually do any borrowing, as such, unless it is in a foreign currency. Or possibly gold. We can borrow, for example, some dollars or some gold from the USA or the IMF, in just the same way as you and I can borrow from bank.

    But when it comes to the domestic currency the situation is different. It’s not possible to borrow your own IOUs in any case. What we call ‘borrowing’ is just an exchange of one type of IOU for another. Cash for bonds and vice versa. The process of the swaps is simply a way of controlling interest rates. If Govt wants lower long term rates it creates cash in exchange for bonds. If it wants higher long term rates it does the opposite.

  • This seems like a good time to look at introducing a government and local authority employment scheme for anyone wanting to work on worthwhile projects. Being paid to work on the land for six months or longer to help farmers, create wilderness or in our national parks would look good on a cv and help restore our infrastructure following Brexit.

  • One of the interesting things about a democratic but unequal country, when the latter outnumber the former there is tendency to approve measures that will destroy the wealth of the minority, either by maxing out taxation or printing more money (which usually destroys the currency, the virus the exception as all large countries simultaneously printed extra money).

    If you want to generate extra wealth you encourage people to risk their own money and time starting up a new business, current tax/NI rates do not make that particularly attractive. The huge layers of wasteful govn spending suggested would merely mean higher taxes and even less incentive, the country is sadly bloated and somewhat ruined by excessive government and councils…

  • Peter Martin 22nd Aug '20 - 4:26pm

    @ Frank West,

    I think we’d all agree that if countries create and spend too much of their currencies they can create an inflation problem. Let’s consider three possibilities:

    1) Just proportion of countries are doing that and so they are the ones who are suffering from high inflation.Their currencies are falling in value on the FX markets relative to the ones who run a more sensible fiscal and monetary policy.

    2) Everyone, or at least those who are in charge of the major currencies, is creating and spending too much, and to the same extent. Everyone is suffering from high inflation even though the relative values of their currencies is remaining approximately the same on the FX markets.

    3) Everyone isn’t creating and spending too much, and maybe should even be spending more. Everyone has a low rate of inflation and currencies aren’t varying too much in value relative to each other.

    So which one best describes the current situation?

  • Peter Martin 23rd Aug '20 - 7:04am

    “If you want to generate extra wealth you encourage people to risk their own money and time starting up a new business.”

    This is an assumption made by the neoliberal right which does need to be challenged. Wealth isn’t all created by small businesses, especially if they used to be much larger ones. How many cafes do we really need on the high street? What about previously successful business such as post offices, greengrocers and bakers? Are we better off with a new take-away instead? As has already been said, 60% of new ventures fail in the first three years. That doesn’t of course mean that the remaining 40% go on to be rip roaring successes. There will be failures after that too. Many just limp along until the owners retire or expire.

    This is not to say that those who genuinely want to start a business shouldn’t be given the opportunity. But there have to be other opportunities too. Not everyone is suited to running one. Not everyone can afford to take the risk. And the risk always involves being able to find enough paying customers to support whatever the business is supplying. A worker co-operative or council ownership won’t change the fundamentals. A posh restaurant in an affluent area could possibly do quite well. But put the same business in a depressed region and it will flop badly. There won’t be enough paying customers.

    And where does the money come from originally to create those paying customers? Joe likes to spin the yarn that it all comes from private banks. But there are private banks in Middlesbrough just as there are in Maidenhead. Where are we more likely to find the paying customers? And is it because the residents there are somehow intellectually superior and know how to make money from starting up new businesses?

  • Innocent Bystander 23rd Aug '20 - 7:39am

    Frank,
    Please ignore the usual socialist insults. I proudly boast that I am a neo liberal. The history of the world shows we have always won and socialists have always lost.
    But it is true we don’t need any old business. Economic success does not come from making a living taking in each others’ washing.
    No. We need to do what we were once good at and what the rising nations are getting supreme at.
    That is, we need businesses that suck the wealth out of other countries’ economies.

  • Peter Martin 23rd Aug '20 - 3:20pm

    @ Innocent Bystander,

    Just to check there’s no mistake:

    You are advocating for ” businesses that suck the wealth out of other countries’ economies.” ?

    And how do you suggest they do that?

  • Innocent Bystander 24th Aug '20 - 9:56am

    Just by doing what the Chinese, Germans …. are doing to us now. Have you not spotted that they are getting richer while we get poorer?
    It’s not zero sum or a children’s party game where someone makes sure everyone gets an equal prize. It’s winner take all.

  • Innocent Bystander 24th Aug '20 - 11:31am

    Joe,
    Ownership structure does not change business basics, as you say, but it does influence the drive and energy of the operation.
    Trabant was state owned, Porsche is private. Which would you rather have on the drive?
    p.s. sorry that was a bit mischievous, my very first car was a Berkeley T60 which had a 328cc engine ,even smaller than a Trabbi, but I miss it still.

  • Innocent Bystander 24th Aug '20 - 4:10pm

    Joe,
    So many round here would like us to be like Germans but our paths diverged centuries ago.
    Firstly, their TU are not like ours. Imagine Len McCluskey as a director. Next, they have been growing since the Wirtschafts Wunder. How would TU reps cope with closing a factory or two, like we have to do?
    I dealt with TUs all through my career and worked with some shop stewards I would happily charge barbed wire and machine guns alongside. Others were pure nihilists.
    Also, Germany has always revered engineers and technicians. We revere everyone but.
    Finally, Ford learned from their mistakes, stopped making the Edsel and offered something else. Not Trabant, of course, they kept making the same rubbish with their motto “If you want to give up your place on the 10 year waiting list, you can”.

  • Peter Martin 25th Aug '20 - 5:50am

    Germany’s mercantilist economic model is considered fairly old fashioned and stagnant now. The big names of German industry are all old names. Their biggest bank Deutsche Bank makes ever increasing losses and has lost over 90% of its value since the GFC. So Germany has its problems too. They don’t seem to understand that the purpose of exporting is to be able to import. That used to be considered Economics 101.

    Consequently they needlessly suppress domestic demand, causing their own workforce to be poorer than it need be, to be able to divert production overseas. The resulting imbalance causes lots of problems in the eurozone and naturally the German working class doesn’t see why they should be expected to bail out the rest of Europe. Why can’t everyone work as hard as them and produce an export surplus too?

    Yanis Varoufakis discusses the problem:

    https://www.project-syndicate.org/commentary/next-generation-eu-recipe-for-divisiveness-paralysis-by-yanis-varoufakis-2020-08

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