Author Archives: Geoff Crocker

Brexit hits the buffers of logic

Brexit, the will of 52% of the people, now completely consumes the UK’s political energy. Yet the process itself is stuck in paralysis, because it is trying to confront incontrovertible logic head on. It has hit the buffers of reality. Hence Teresa May’s paralysed government, and the permanent state of internal feuding from Tory Brexiteers, who remain full of nationalist passion, but void of logical argument. The nightly appearance of their cheerleader Jacob Rees-Mogg on our TV screens needs countering with that logic. Here is some of it.

1 UK currently has the best trade deal available with the EU by being a member of the EU. Any deal as a non-member must by definition be worse. Therefore, UK should seek a deal as close to the existing deal as possible. Philip Hammond was totally right in saying this. His detractors are definitively wrong. This is a matter of logic and not of opinion.

Posted in Op-eds | 45 Comments

Why Basic Income Should Be Lib Dem Policy

Over the last 70 years, an inexorable long-term structural change has taken place in the economy.

Source: ONS, defining ‘labour income’= wages + self-employed earnings

 

It’s very clear that aggregate ‘labour income’ (=wages + self-employed earnings) has declined compared to consumer expenditure, with a turning point in 1995, such that

  1. From 1948 to 1995, labour income exceeded consumer expenditure.
  2. From 1995 to 2016, consumer expenditure now increasingly exceeds labour income.

By 2016, labour income only funded 86% of consumer expenditure. 14% of consumer expenditure was funded by unearned income. This trend is structural, …

Posted in Op-eds | Tagged and | 47 Comments

The UK’s ritual humiliation of disabled people – Part 2 The PIP interview

In an earlier post, I wrote about the process of withdrawal of Disability Living Allowance and the requirement for disabled people to apply for Personal Independence Payment (PIP), as I experienced it in caring for my adult son Paul who has a condition known as Williams Syndrome. Several respondents shared similar stories, and urged our party to adopt a much stronger care policy for disabled people, so far to no avail. (I was by the way mistaken in my claim that all PIP application notices had been sent out over Christmas and New Year – it appears that a rolling programme is in place and this was just when Paul happened to receive his notice).

As other respondents also warned, the PIP application form and subsequent interview deepen the hostile challenging nature of the process. The application form is indeed 40 pages long. Brutally, DWP specifically refuses to allow a PIP applicant to state a well-known, well-documented medical condition with known symptoms as a statement of need. So for example you’re not allowed to state conditions such as Downs Syndrome or in Paul’s case Williams Syndrome and then allow this to refer to all its known symptoms and detailed conditions. Instead DWP insists that the applicant sets out in detail all the distressing elements of that condition, from intellectual lack of capacity, physical impairment, to hygiene and continence issues. I completed the form, ending up choked with distress at having to specify this detail. 

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The indecent haste of Theresa May

Susanna Rustin argues in the Guardian that Theresa May being the first national leader to meet Donald Trump is ‘a national disgrace’. This depends on the purpose of May’s visit. If it were to urge President Trump to reconsider his flurry of illiberal executive orders, from a wall along the Mexican border, revocation of trade deals, approval of torture, reduction in UN funding, etc, then the free world would applaud her brave initiative and wish her every success. Sadly though, the pragmatic priority announced for her visit is to secure a trade deal for the UK with the US, something she desperately needs to shore up her otherwise vacuous Brexit strategy.

Posted in Op-eds | 45 Comments

Disabled people claiming vital benefits are being treated disgracefully

We hear regular assurances from our political leaders, that priority will be given to meet people’s mental health needs. The opposite is currently the case. Many people with mental health needs receive Disability Living Allowance. DLA is ending and being replaced by Personal Independence Payment (PIP). DLA recipients, and/or their carers, were sent a letter from the Department for Work & Pensions dated 11 December 2016, informing them that DLA is ending, that they will not automatically be transferred to PIP, but must submit a claim by telephone by 8 January 2017. If the DLA recipient makes no contact, then DLA payments will simply end. The letter ends by suggesting that help can be obtained from unnamed organisations whose details can be found ‘online, at your local library, or in the telephone directory’! The letter was repeated in a follow up dated 25 December 2016! Some Christmas present from our renowned DWP.

I have care responsibility for my adult son, Paul, who has support needs resulting from a condition known as Williams Syndrome. Paul receives DLA, and care support from an organisation called ‘Options’ which I fund. I was away from home over Christmas until 30 December and so had to move quickly to telephone the call number to apply for PIP for him by the 8 January deadline. I called on 3 January, waited for 17 minutes, was then told that the system was down and I would receive a call back the next day. No call back came on 4 January, so I called again myself on 5 January. This time I had to wait 30 minutes to be answered. A DWP (although probably contracted out) officer then took me through an application process which required extensive data of Paul’s NI number, GP address and telephone, social worker and care organisation addresses and telephone numbers, nationality or immigration status, details of time spent abroad, and bank account details. There were bizarre questions about EU and Swiss connections which I didn’t even understand. During the process the officer frequently read out to me various warnings and threats of action which DWP would take in the event of false information being submitted, ranging from benefit withdrawal to prosecution.

Posted in Op-eds | Tagged and | 12 Comments

The divisive inconsistencies of Theresa May

Theresa May’s triumphalism over the Brexit election result is divisive and shocking. 48% of the electorate voted Remain, apparently including, inconsistently, Theresa May. Her statement that anyone continuing to campaign to Remain is ‘subverting democracy’ is equally shocking. Do Remainers no longer have the right to freedom of speech and democratic campaigning? The Brexiteers campaigned long and hard against a previous democratic vote to join the EU, so Remainers are equally free to do the same now. And they should. I’m ready to join and support any such campaign.

Her claim to be uniting the country whilst setting ‘the working class’ against the ‘international elite’ is yet again shocking. Caricaturing a whole group of people who, in the main, are hard-working intelligent professionals working internationally in this way, and pitting them against the ‘working class’, is outrageous. These groups of people should and can respect and value each other in a civilised society.

Posted in Op-eds | Tagged | 11 Comments

Congratulations Brexit, but Scotland holds the key

It would be churlish not to congratulate the Brexit campaign, especially its leaders Boris Johnson, Michael Gove, and Nigel Farage on their stunning success, which amongst other things has led to

  • The ousting of Boris and Michael’s friend Dave from the office of Prime Minister. Chimes of Perfidious Albion. ‘Et tu, Brute?’ With friend like this Cameron needs no enemies. The rest of us should watch Johnson and Gove, and beware.
  • The wiping of many £billions value from UK shares
  • The wiping of $trillions value from global shares
  • The fall of about 10% in the value of the £
  • The lowering of the UK’s credit rating to negative
  • The very possible introduction of tariffs against UK imports into the EU, specifically on cars made at UK Japanese implants, leading to loss of jobs and future investment – ouch!
  • The very likely secession of Scotland from the UK
  • The less likely but possible secession of Northern Ireland if Sinn Fein saw its chance and managed to call a referendum for re-unification of Ireland which were then to succeed based on the Catholic majority in the population and the general desire to stay in the EU
Posted in Op-eds | Tagged and | 17 Comments

The mess we are in

The EU referendum delivers an unmanageable mess. The UK will lose its membership of the EU, and more immediately has lost its elected Prime Minister. Like many Lib Dems, I have never voted Conservative, but I do recognise the dignity and decency of David Cameron. The referendum outcome creates space instead for Michael Gove, Boris Johnson, and the reactionary Nigel Farage.

Democracy itself is in an impossible contradiction. The UK norm is representative democracy expressed in Parliamentary sovereignty. The policy of the majority of Members of Parliament is to remain in the EU. But the referendum decides to leave. Paradoxically, those wanting to leave the EU favour Parliamentary sovereignty, but reject this principle on the question of EU membership. This is an irresoluble conflict.

There is therefore a greater decision UK society has to make – whether government is to be by representative democracy or by popular referenda. We cannot have both. This is the first question of principle. The second is the criteria which should apply to either representative democracy or referenda. The last general election showed how unrepresentative first-past-the-post constituency voting is. The referendum highlights the huge problem of maintaining social cohesion when half the population wants exactly the opposite of what the other half wants. Reconciling this is nigh impossible.

Posted in Op-eds | Tagged and | 22 Comments

What’s wrong with the Chancellor’s Autumn Statement?

There are three huge defects in the Chancellor’s autumn statement

1 Technical

The Chancellor fundamentally believes that the government budget can and should be balanced, or even run in surplus. This basic accounting assumption drives his whole thinking. But facts prove him, and the traditional thinking of the whole financial establishment, wrong on this. He has been unable to eliminate the deficit. He will not be able to eliminate it. In modern high technology, high productivity economies, deficit is inevitable, and manageable.

There’s a huge problem in thinking here. The Chancellor approaches economic policy like an accountant, rather than as an economist. Books should balance. He talks about what we can afford, purely in financial terms. But it’s not money which gives value to the real economy, but rather it’s real economic activity which gives money its value. Economic activity creates financial value, and not the other way round. What we can afford has to be measured in real resources of people, skills, natural resources, technology and capital assets. A thought experiment demonstrates this. If it were possible to plug a machine into the earth to produce the whole GDP without labour and therefore without wages, then the money vouchers the government would have to allocate would all be a total financial deficit each year. Money does not have to be backed either by gold, or by the sale of government bonds, but only by output GDP. Deficits are here to stay. Facts support this hypothesis.

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Book Review: Money for Everyone

A Citizen’s Income Convincingly Argued

In ‘Money for Everyone’, Malcolm Torry delivers a blockbuster argument in favour of a Citizen’s Income to wholly or partially replace current benefits. His book is well-researched, well-informed, well-written, and is articulate and readable. His main argument is that, given widespread acceptance of a benefits scheme of some sort, then a Citizen’s Income is by far the best option. Specifically it avoids the disincentives of very high marginal deduction rates of current benefits which create the familiar unemployment and poverty traps. According to Torry, a Citizen’s Income would incentivise employment, training, new business formation, women’s …

Posted in Books | Tagged | 39 Comments

Opinion: Clinical Commissioning Groups – don’t hold your breath

nhs sign lrgWe are now 6 months into the much touted reorganisation of the health service, with the advent in April this year of Clinical Commissioning Groups to replace Primary Care Trusts, the only real difference being that GPs run the Clinical Commissioning Groups.

The reorganisation did ensure a reduction in cost by the simple expedient of setting Clinical Commissioning Group administrative budgets one third below historic  Primary Care Trust administrative cost, yielding a Clinical Commissioning Group admin cost of £25/head of population. There are 211 Clinical Commissioning Groups. The adjusted population figure is 53.8m, and so total Clinical Commissioning Group admin spend is £1.345bn. Clinical Commissioning Groups are administering a total health budget of £60bn, averaging £284m per Group. Clinical Commissioning Group admin costs are therefore 2.24% of total health service expenditure.

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Book Review: Austerity: the history of a dangerous idea

Mark Blyth delivers a masterful, blistering, devastating, and totally convincing critique of austerity in his book Austerity: the history of a dangerous idea. It’s impossible to read this book and still believe that austerity is the right policy. Blyth writes engaging, powerful economic history of economies applying austerity, including the US, UK, Sweden, Germany, Japan and France in the 1920s and 1930s, Denmark and Ireland in the 1980s, and the Baltic states in 2008, demonstrating in each case that austerity does not work. It does not generate growth or reduce debt. He shows that the current hot spot crises …

Posted in Op-eds | Tagged and | 45 Comments

Opinion: Should the Queen speak out on the Belfast flag issue?

Queen Elizabeth IIThe pictures of the Queen joining the Cabinet meeting were charming. They conveyed a reassuring image of a stable democracy with a historic back-stop. Almost always we want the democratic element to prevail, but there are perhaps very limited issues and occasions when the monarchy can make a difference. The Queen inviting Harold Macmillan to form a government rather than Rab Butler in 1957 is the occasion often quoted. It did actually make a political difference, since Harold Wilson was later reported as having feared that Rab Butler may well have won the 1964 election.

Northern Ireland may be another occasion when the monarchy could make a

Posted in Op-eds | Tagged and | 12 Comments

Opinion: Why Wealth Can’t be Taxed (except very occasionally)

Wealth tax is becoming, or has become?, a core Lib Dem policy. Nick Clegg shakes his head alongside his Cabinet colleague the Chancellor of the Exchequer announcing that the coalition government will not introduce a mansion tax. Vince Cable is back on the World at One the next day defending it.

There has been much discussion as to whether wealth and mansion taxes are fair. But fairness is a very subjective concept. Some think that wealth taxes appropriately ask the rich to shoulder relatively more of the financial burden imposed if we needlessly insist on the financial orthodoxy that the …

Posted in Op-eds | Tagged and | 133 Comments

Opinion: So what’s really wrong with the economy?

The autumn statement was reminiscent of the 1961 Sid James film ‘Carry on Regardless’. Austerity policy is not working, and the claim that it will work is constantly pushed to the far future. What’s wrong? There is nothing wrong with the real supply side economy. But there are two crucial things wrong with the financial economy, meaning that we have a crisis of demand, not of supply. These are:

1. Disposable income has grown significantly less than GDP

2. Financial orthodoxy insists on balancing government accounts

Between 2001 and 2007 when the crisis hit, GDP grew by 19.5% but disposable income by only …

Posted in Op-eds | Tagged | 61 Comments

Opinion: Get real about corporate tax

Companies currently pay corporation tax in the country where they are incorporated. A campaign is under way, in the Guardian, and the Commons Public Accounts Committee, that companies should instead pay tax where they make their sales. The proposal has populist appeal, but is impracticable.

Many companies, including UK companies, make export sales without costly incorporation in each sales country. If a US coal producer sells 1m tonnes of coal to UK powerplants for £100m, and makes £5m profit, it submits accounts in the US for tax authority scrutiny, and pays US tax on the £5m. Should this profit be …

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Opinion: Stop all extraditions to the USA

Nick Clegg is celebrating the UK decision not to extradite Gary McKinnon to the USA. The extradition of Abu Hamza then sparked controversy and discussion on LDV. But last week the Guardian reported on the case of Christopher Tappin, the Kent businessman extradited to the US on charges of selling batteries to Iran. Tappin has entered a plea bargain, pleading guilty in return for a 33 month sentence to be served in the UK.

The Guardian reports Tappin’s UK solicitor, Karen Todner, saying

Posted in Op-eds | Tagged | 24 Comments

Opinion: Give us an energy policy

Our party’s energy policy is totally inadequate, consisting only of motherhood and apple pie statements in favour of efficiency and green policies. We went into the last election on the populist platform of no new nuclear power generation and no new coal power without carbon sequestration. Like the student fee policy, this has also proved predictably unsustainable. It was seriously irresponsible. Hence the familiar u-turn

Posted in Op-eds | Tagged and | 13 Comments

Opinion: A Really Popular Lib Dem Policy Proposal – Free Anti-Viral Software!

Free anti-viral software to every citizen. This should be adopted immediately as core Lib Dem policy, and be in the manifesto for the next election. Like Roman bread and circuses, it would be a hugely popular vote-puller. It would propel the party to first place in the polls. Moreover it is also intellectually defensible, a rare combination of virtue in today’s post-modern sound-bite world.

You might smile and think this is typical wacky Lib Dem stuff, the kind of thing which George Orwell’s bearded fruit juice-drinking …

Posted in Op-eds | 62 Comments

Opinion: Britain should join the Euro

Lib Dems have gone remarkably quiet about Europe, whilst the Conservative Euro-sceptic agenda gains ground, certainly within its party conference, and probably within its party at large. Euro-scepticism flourishes in large swathes of the UK media. This swing of opinion is fuelled by the perspective that the Eurozone economy is in dire trouble, that the Euro might not survive, and that the UK was very sensible to have kept out of it. We are told all this every night on Newsnight. Gillian Tett wrote recently in the FT, that her father was correct in dismissing the Euro project as unworkable 16 years ago, and she had been wrong in her Euro enthusiasm.

Posted in Op-eds | Tagged and | 163 Comments

Opinion: The Conflicts of Economic Policy

Nick Clegg’s conference speech committed Lib Dems to manage debt out of the economy and implement a fair tax regime. But the objectives of economic policy often conflict with each other.

Let’s take it that there are three objectives for current economic policy:

  1. to reduce deficit and the debt it accumulates
  2. to inject demand into the economy
  3. to have a fair tax system

In the following table, I’ve had a try at evaluating recent and proposed economic policies against these objectives.

Posted in Op-eds | Tagged , and | 53 Comments

Opinion: Why austerity is the wrong answer to debt

Austerity policy continues to be embraced by the UK coalition government as well as by governments across the world. This is causing predictable political unrest with large demonstrations and riots in Spain and Greece. The pain to UK households is substantial and set to increase. This is clearly socially undesirable, but more importantly is based on a technically incorrect analysis of the current economic crisis.

It is fashionable and great sport to blame bankers for the crisis, to say that the developed world has ‘lived beyond its means’ and that we ‘cannot afford’ economic growth and therefore must cut our economic output …

Posted in Op-eds | Tagged and | 32 Comments

Opinion: How Lib Dems make policy – or fail to – and the consequences

Causal chains can be very long, with surprising connections between initiating events and final outcomes. Severe violence between protesters and police on the streets of London resulted from the debacle over student fees, broken pledges, and continuing double talk as to whether this is a coalition compromise, or has now somehow magically become best policy. But it has its roots further back in a faulted policy making process in the Lib Dem party. How did an intelligent political party get such policy so wrong less than a year ago, when it already knew all the current economic issues? To understand …

Posted in Op-eds and Party policy and internal matters | Tagged and | 40 Comments

Opinion: Martians report humans are mad (particularly Brits) – they are cutting their own economy

Some time ago a TV ad reported the bemusement amongst Martians at human behaviour with mashed potato. They fell over themselves laughing at how we humans grow potatoes in the ground, collect them, peel them, boil them in water, cut them up and then smash them to pieces before eating them. Very bizarre behaviour! Martians began to worry whether humans were sane or not.

Now the Martian press is equally dumbfounded at reports coming from planet Earth that humans are cutting their own production economies because they say they don’t have enough money.

Martians always thought that humans made this …

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Opinion: revisit economic theory before cutting the real economy

The UK is now in a great rush to reduce GDP in order to reduce the financial deficit. But before we frame economic policy, we need to revisit  economic theory, in particular the theory of money and macroeconomic demand theory.

On the theory of money

Money is an artefact, not a real physical commodity. It does not obey the laws of thermodynamics – it can be created and destroyed. The idea that macroeconomic budgets have to be balanced is a category error. It takes a microeconomic simplicity, that individuals or firms have to balance their budgets, and falsely transfers this to macroeconomics. …

Posted in Op-eds | Tagged and | 43 Comments
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