Author Archives: Hugh Andrew

A Modest Proposal

Swift’s famous essay (A Modest Proposal, published in 1729) is, of course, entirely satirical. Its humour merely makes it an even more devastating indictment of a capitalism deracinated from any morality.

We now live in a world where Swift’s capitalism is the norm, now economically transformed through a pandemic. Perhaps it is time for another ‘modest proposal’.

On March 11 the Chancellor delivered his budget. It envisaged 1.1% economic growth this year and allowed £30 billion towards coronavirus. At the time no one seemed to think this unreasonable. It is now just over one month on and the latest economic predictions from the OBR are for a 35% economic decline in the second quarter. Yet the information on the threat of coronavirus, the speed of its spread and the measures necessary to stop it were as known then as they are now. Although it was ‘known’ it wasn’t ‘accepted’.

I thus take all of these forecasts and predictions with a very large pinch of salt. In my own business and those of my colleagues I see far more lasting damage and the necessity of a far longer recovery. It is a dangerous delusion to assume the world will be the same again, nor should we want it to be.

So what can we economically do? The UK budget deficit is already predicted to substantially exceed that of the worst year of the 2008 recession. Our debt levels will balloon well beyond the magical 100% of GDP figure. And we will have all the further unwelcome distortions of quantitative easing, the crowding of credit markets with the governments insatiable demand for money along with all the other consequences of emergency action.

So what is to be done? The British economy in 2018 had a GDP of roughly £2.3 trillion so the scale of this crisis goes way beyond the simple use of tax and spend to both hold the line and rectify the damage. It challenges to other routes such as monetary easing.

Posted in Op-eds | Tagged | 17 Comments

Be careful what you wish for

Lib Dem Voice is currently full of excited speculation about the timing and possibilities of an election. It is worth standing back a little.

Who else really secretly wants an election? Certainly not Labour – it is difficult to think of an opposition in a less credible state. But Boris Johnson does. By tacking to the hard right he can destroy the Brexit party while the collapse of Labour means he has nothing to fear from that direction. His only care is a working parliamentary majority. He could not care less whether the Liberal Democrats get 50 seats or 150 provided …

Posted in Op-eds | Tagged | 14 Comments
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Recent Comments

  • Rabi Martins
    Michael Big Thanks for the questions When I say BME Deficit what I refer to the make up of local Party Membership which do not reflect the racial profile ...
  • Malc
    Lib Dems are now odds on favourites to win....
  • Peter Martin
    Should be "MMTers generally don’t go along with the deregulation of the financial sector that we’ve seen in the last 30 years"...
  • Peter Martin
    @ Joe, I didn't mention that the Covid pandemic has also caused a reduction to supply so this has to be included as a factor. A combination of pent up demand...
  • Joe Bourke
    Paul Johnson of the IFS published an article on the self-employed It’s time we stopped tre...