The country is going through a painful and difficult adjustment as we seek to rebalance our economy.
For politicians to make the case about being underpaid is inappropriate given the sacrifices being asked of the British public and its work force.
Let’s not forget it is because of the actions of the last Labour government that the country is in the state it finds itself in. How anyone can therefore justify that politicians should be entitled to a larger salary is beyond me. Regardless of whether they caused the crash or are fixing the mess, it is outrageous to think they should be awarded a hefty pay rise at this time.
The matter of principle is that should I be elected I could not accept an 11 per cent pay rise funded by the British taxpayer. I could not take a pay rise funded by those very same people who had nothing to do with the economic crash but have contributed more than their fair share.
And by helping to ensure our economy’s recovery, they have seen their income stifled. We are on the road to recovery but there is more to be done.
That’s hardly fair.
MP salaries are now independently set by the Independent Parliamentary Standards Authority, which means they cannot be rejected. The difference however can be given back. And this is exactly what I will do.
I will give something back to those people who have put their trust in me for the good of our community.
I have put myself forward for election in order to campaign towards bringing an end to child poverty in the UK by 2020. This is about public duty not personal gain. If the state of the economy means asking for sacrifices, I cannot exclude myself and not apply those same rules.
Indeed I do not even see it as a sacrifice, but a great honour to contribute the £7,000 extra to set up a new charity to provide educational opportunities and grants for Brent children.
The Stronger Children Foundation will be based on the philosophy of 19th century African-American slave, social reformer and abolitionist Frederick Douglass who said: ‘It is easier to build strong children, than to repair broken men.’
By investing in education, we can spread opportunity and give the poorest children the best start in life and a much needed route out of poverty.
It is with dismay that I see our local Labour council cut services, raise taxes and then congratulate themselves with a self-awarded 25 per cent pay rise. It is beyond obscene, it is shameless, indecent and criminal.
They have lined their own pockets while others suffer. With 35 per cent of Brent children living in poverty, surely it is time for action, for investment not undue reward? Instead they are helping themselves and disregarding those most in need.
This is not the behaviour of those who seek to improve the lot of others, it is the behaviour of mobsters and gangsters.
I grew up in Brent, I grew up in poverty and I know what it takes to escape. There is no more powerful weapon in the fight against poverty than education. The elimination of child poverty in the UK by 2020 should be the greatest political and social aspiration of our time.
That is why I will contribute my pay rise, if elected, to go towards meeting that goal in Brent.
* Ibrahim Taguri is the Liberal Democrat PPC for Brent Central
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38 Comments
I’m against an MPs pay-rise because politicians from all parties have been indirectly attacking small businesses. It is not so much the cuts that bother me, although that will be the case for public sector workers, but the regulation and regulatory fees.
Good work on setting up the charity. The 25% pay-rises by Labour run Brent council sound shameful.
Again, we need to stay positive, so let me just say that I think the Lib Dems are the best party for small businesses.
Did Gordon Brown and Labour cause the crash in America and widespread world banking crisis, too? Just asking.
If you were paid by result you would get a pay cut look at the mess Political class brought us recession unemployment debt austerity death on our streets Cover up Lies lol need I go on
I do think candidates should look at the detail of the proposed remuneration package due to be implemented in September 2015 and compare it with the current remuneration package. As IPSA claim their proposed deal is self-financing we can’t all be gaining, and of course we are not. The loss of the resettlement allowance, final salary pension scheme and some expenses in return for an increase of 11% on the 2012/13 salary (obviously worth less than 11% come September) is how the whole scheme is self-financing. I tell my constituents who raise the salary rise with me that it is outrageous and if I had a vote I’d vote against it. This leaves both of us happy.
Ibrahim,
You say — “..MP salaries are now independently set by the Independent Parliamentary Standards Authority, which means they cannot be rejected. ”
Nurses and Midwives in the NHS also have an Independent pay review body.
One difference is that the recommendations on their pay HAVE BEEN REJECTED by ministers in the Coalition.
The other difference is that the Nurses and Midwives were not offered 11%,
the recommendation for them, that has been rejected by ministers, was a mere 1%.
That old Coalition line that “We are all in it together” seems a bit sick, does it not?
John Tilley, I think you would agree that MPs should not get to vote on their own pay, regardless of how much or little the increase is.
Although now seems like a silly time to do it (and if you want to donate the ‘extra’ to charity then good for you), it is a good thing that MPs are being paid more. Otherwise we don’t end up with top tier representatives, with many of the independently wealthy.
Well said Ibrahim
Now here is a public pledge the Liberal Democrats Leader, MPs and Parliamentary candidates could make because because no one can stop us keeping it
” Lib Dem MPs will Reject Salary Rise ”
WELL ?
Ibrahim, I respect the spirit in which you make the promise but I couldn’t disagree more about your idea to forgo a pay rise if you are elected. Please think of the possible consequences.
Once upon a time all Members of Parliament were unpaid. This seemingly noble state of affairs meant that only people with independent means or a profession which could be combined with parliamentary duties could be a politician. MP salaries were introduced, allowing working-class MPs to enter the House of Commons.
You may be able to afford to forego £7,000 per year, but will all your opponents in Brent Central be able to match you? If you do campaign on this promise, what happens if an opponent not only matches you but goes further, promising not to touch the public purse at all? At a time when society is becoming even more unequal, I don’t think that the election should become a Dutch auction.
Yes, Members of Parliament get paid a lot of money, but I want all Members of Parliament to show that they are worth that money by working hard, passing good law and repealing bad law. If I lived in Brent Central, I would be more likely to vote for you if you explained why you’re worth the money rather than trying to undercut your opponents by promising to work for less.
Thank you all for the comments and I would like to begin with yours Andy, which are thoughtful and important to address. Please don’t take this commitment in isolation as it is 1 of 5 I am making to my home constituency. The first is to keep an open office five days a week to handle constituency case work. No appointment needed walk in and there will be at least 3 professional caseworkers ready to help. The second commitment is the pay rise, and third forgoing Party politics to address the big challenges in society. My priority is to end child poverty. There is no APPG on child poverty and I will set it up. There is one on the carpet industry, jazz appreciation and American football. But not child poverty.
If you also google my opponent Dawn Butler, you will understand why rebuilding trust on this front is so important. I will leave it at that. Then I hope the context of my decision will be more clear, especially when taken with the self awarded pyrites of local cllrs.
90% of MPs are hard working dedicated individuals. Decent people with good values. That is across every party. But as we seek to rebalance the economy and fix some very fundamental problems how can I look myself in the mirror and say “yeah, you deserve more money pal”, never mind everyone else.
Being the MP for my home constituency is something money can’t buy. Its an honour.
Margaret, I’m sorry that all you took from my article was on who was to blame for bankrupting the country.
And John, I think you are reinforcing the point I was making so thank you.
If there is pain and sacrifice to be suffered we must all share in it. Then we can share in the prosperity. To be clear, for me this is not a sacrifice but part of how much more I value the opportunity to make a change rather than the pay packet.
It’s not correct to lay the blame for teh 2008 Crash at the door of just one party, in this case Labour. All parties have been complicit in neoliberal economics since 1979. All parties have pandered to the bankers – indeed, during the pre-crash period the Tories were critical of Brown’s “over-regulation.” they even said they would cut the red tape on banks and building societies lending more. there may well have been a murmur of disapproval of the Tories from Vince Cable, but that is all.
everyone is guilty.
Tsar Nicholas
Surely not….the whole of the world’s problems were surely due to Labour spending the historical average on public services whilst also trying to turn round 2 decades of Tory neglect (or purposeful destruction)?
The fact that the problems stemmed from their continued insistence on following the neoliberal economic agenda and empowering the city and banks whilst deregulating in the same way as the rest of the Western world has nothing to do with it!!!
For those who remember back to 2010 and before (seems some forget so easily) will remember that the most vicious attacks on Blair came from the left with the right really happy with his economic policies and encouragement of house price inflation. I also remember Cameron and Osborne having nothing, and I mean nothing, useful to say at the time of the crisis – even though they were enthusiastic supporters of the policies that led to it.
The one person who was urging a different way was a certain Vince Cable – remember him? He used to be an economic spokesman but seems to have been replaced by some sort of bumbling puppet – something that would not be out of place in the Sooty and Sweep show
Remember the following phrases that come out of the Tory mouths (and I include certain members of this party in that, as well as a lot of the Blairites we have seen come crawling out from under stones recently – to have this mob against him makes me definitely think Miliband is doing something right!!!)
‘Long-term economic plan’
‘We would have been like Greece’
‘Maxed out the country’s credit card’
‘Labour’s mess’
‘The note said that there was no money left’ etc, etc
‘The first is to keep an open office five days a week to handle constituency case work. No appointment needed walk in and there will be at least 3 professional caseworkers ready to help.’
With respect though this is part of the problem here. MPs have become glorified caseworkers. We can argue the rights and wrongs of that. But MPs should not be some sort of trouble-shooter and, bluntly, the public at large should not go running to their MP at the drop of a hat.
I realise it is not a popular view on here, but I would like to see a quite significant increase for MPs in pay alongside a 60+% reduction in their number. We should reduce the Lords to 150 while we are at it. At the moment I am governed from Europe, Westminster, County Hall and Town Hall. Plus PCC, and any number of other things I can’t be bothered to type out. And of course the corporate interests. Less politics all round would be nice. It wasn’t lost on me that the one time I approached my local MP (about some immigration casework) I was asking one arm of the state to lobby another.
By all means pay MPs more – but I want to pay for an MP, not some sort of souped up Citizens Advice Bureau.
Oh, and 4 term limits for all elected people too an ossified democracy is not a good democracy.
Incidentally Ibrahim, I have been aware of these people for some time:
http://www.appgpoverty.org.uk/childrens-voices/
It’s not a specific child poverty APPG – but you seem to want to split hairs somewhat.
By the way, I strongly doubt it is possible to end child poverty in the UK by 2020 whilst having free movement in the EU.
I am for free movement, but we need to recognise that with free movement to poorer countries poverty in the UK is going to be around for a while.
@ Eddie
“I strongly doubt that it is possible to end child poverty in the UK by 2020 whilst having free movement in the EU.”
I’m sorry, I don’t follow… Is your contention that free movement of labour leads to child poverty? What is the mechanism by which this is supposed to happen? I’m not aware of evidence to suggest immigration has deepened child poverty, but would be interested to see it.
I do agree with you that the 2020 target is likely to be missed. Alan Milburn, the government’s social mobility and child poverty ‘tsar’ (or Tory collaborator – delete according to taste) predicted as much two and a half years ago. He suggested all parties should “come clean” about the fact that it was unachievable by means of extra public spending in the current fiscal climate and should focus on investment in early-years education, which is broadly what the coalition has done.
http://www.bbc.co.uk/news/uk-politics-18786883
I’m not sure that immigration has much to do with it either way. In so far as it is an important feature of a dynamic economy, and a sign of economic success, it might have a net positive effect. If the economy is growing, it will attract immigrants, and immigration in turn boosts economic growth. There may be distributional implications (though the evidence of wage compression is not great), but since a low level of immigration tends to be correlated with a sluggish economy – witness southern Europe – I’m not sure how that would help to reduce poverty however defined.
Alex Sabine – I’m very sorry but I have to take issue with you there. I see no reason whatsoever to equate large-scale immigration with economic dynamism. Germany has a falling population (the Schrumpfnation Deutschland) and they don’t seem to have done too badly. Poland, with no financial crisis recession, has a declining population. The UK had a historically deep recession during a period of high immigration. I see no reason whatsoever to correlate high immigration per se with economic strength.
I have not seen any specific evidence in relation to child poverty here, though it certainly would be interesting, in particular to prove or disprove the suggestion that some EU free movement has effectively been the import of poverty. Certainly the recent controversy about tax credits suggested that import of poverty was, at the very least, not theoretical. I have seen reports that do suggest a level of, ‘displacement,’ in the job market of UK people (https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/257235/analysis-of-the-impacts.pdf) albeit with uneven distribution across different types of immigrant and in different economic climates.
I have no idea what the answer to child poverty is, if indeed there is one. Greater equality would be my guess, but it’s hardly convincing.
“Germany has a falling population (the Schrumpfnation Deutschland) and they don’t seem to have done too badly. Poland, with no financial crisis recession, has a declining population.”
Right now, yes.
But their problem isn’t really GDP growth in the moment, it is the long term erosion of their tax base which is expected to fund the retirement of an ever-growing section of society.
The great longevity acceleration resulting from medical science and 21st century western lifestyle are probably over, and the tail-end of that will occur in 40 years time when the chances of people my age living into their eighties won’t be greatly different from people in their 70’s today.
This being enormously different from even eighty years ago, with the demographic ‘pyramid’ turning into…. well, something more columnar.
The problem for Germany will be its column being inverted as the total population move from 80m (with an average age of 40), to a population of 60m (with an average age of 60). GDP per capita and GDP growth will be enormously retarded.
jedibeeftrix – True. But surely pension provision is a different problem here.
If we (or any country for that matter) wants pension provision then what we need are savings and pension systems that pay for pensions. That and a boomer generation that doesn’t see a property inheritance as a human right. Opening the borders on the basis that maybe the right people will maybe come and might find a job and maybe work long-term and may pay lots into the system doesn’t sound like the most convincing policy response.
The real fun and games here is China and one-child.
“That and a boomer generation that doesn’t see a property inheritance as a human right.”
i don’t see this as a problem at all, eventually the property will transfer hands. What problem if it is inherited?
that said, i have no problem with your original assertion:
“I see no reason whatsoever to equate large-scale immigration with economic dynamism.”
I just don’t think that claiming germany is in a good position (now), is a very good argument to support that assertion.
every country needs a healthy demographic profile, but that does not require the uncontrolled mass immigration of the labour years, and what really matters is that a country’s demographic profile does not suffer catastrophic change.
a similar argument to climate change really, it is the pace of change, beyond our capacity to adapt, that is the real threat.
germany faces a ‘catastrophic’ change in its demographic profile, which will materially damage the future prosperity of its citizens whereas we will not. part of the answer to this difference is immigration. germany needs more of it, as long as its people refuse to breed.
Yes, Ibrahim – that was my intention. I am happy to be reinforcing your point. You make a good point.
I think MPs’ pay should be considered in the wider context of pay and remuneration in 2015.
I find it inexplicable for example that the Met Police Chief gets an annual payment of more than £260,000.
What exactly does the Speaker of the House of Commons do to get free accommodation in the Palace of Westminster and an annual payment of £142,000 ?
I do have an idea what Cabinet Ministers do — but is any one of them actually deserving of £134,000 ?
A second lieutenant in the British Army who has just been sent back to Iraq, despite last year’s promise that there would be “no boots on the ground”, will have an annual payment of only £25,000.
A higher grade, better qualified nurse with considerable day to day responsibility for the life and death of patients can be paid £44,000. Although some nursing grades start with a payment of a mere £14,000 a year..
MPs are not overpaid on £67,000 which is about twice the average salary in the UK.
Iain Duncan Smith should be forced to Iive on £50 per week for the rest of his life, on the grounds that the punishment should fit the crime.
Hi Alex, no I think free movement is broadly a good thing, I am just saying there is a supply and demand problem that makes hitting UK targets harder because higher benefits will attract more economic migrants.
I am for ending child poverty in the UK, I just think having 2020 as a target sends out a message that the scale of the problem is not understood.
@Margaret – You ask “Did Gordon Brown and Labour cause the crash in America and widespread world banking crisis.” Well the UK is one of the biggest financial centres in the world, and Gordon and Labour were oh so easy going with bankers – So yes they had their fingers in that pie too.
David, I am not trying to exonerate any party, but the crash, being an unintended consequence of Reagan and Thatcher banking deregulation, as I understand it, was not even foreseen by Bank of England experts, as they have admitted.Osborne and Cameron had nothing to say, during the crash and the only warnings I recollect ( as an amateur,)were from Cable and Darling.
Once politicians talk in black and white terms, about fault and Labour mess, they lose me, as I recall the Tories screaming for less regulation and the need to leave it to the markets, before the crash and I also remember both Tory and Libdem opposition MPs, prior to the crash, saying that they would match, or exceed Labour spending.
Re the topic,I do not begrudge MPs having a fair wage, though it looks terrible, outside the Westminster bubble, that recommendations can be ignored, where nurses are concerned, but somehow it is OK to give MPs 11%.I can understand the sentiments of the writer.
However, it also worries me that MPs often have time for lucrative jobs on the side and I was amazed that, eg, during the passage of NHS act, it was possible, both in the Commons and Lords, for people with private health interests, to vote.
Hidden in this sounding off about MP’s renumeration, is actually a rather interesting point, namely: should MP’s have a “community fund” for them to spend on projects beneficial to the communities in their constituency? I suggest a fund of £20,000 per annum to permit then to make a few meaningful donations to a few projects, but not become a real source of funding in their own right.
@ Little Jackie Paper
You raise a fair point in response to my comment. Let me clarify a few things.
1. I’m not saying immigration is a necessary condition of economic growth. Clearly in principle there is no reason why GDP couldn’t grow at a healthy clip if immigration were running at a much lower annual level. Other things being equal, the level of GDP would be lower; but since the population would be lower too, GDP per capita (which is what we should be interested in in terms of economic welfare) might be just as high. (Having said that I think there are reasons to suppose it might be lower, which I’ll set out below.)
2. As a supporter of immigration, I get frustrated when people proclaim its benefits purely on the basis that it makes the economy larger, rather than the population wealthier. Though the size of the economy is important geopolitically, ultimately what matters most is individual human beings and their well-being, for which is GDP per head is a better proxy than the absolute measure.
3. We should not think of economies as machines that shift from one static equilibrium to another, but as dynamic organisms that are in constant flux. My contention is that, in an increasingly integrated world economy, migration (both inward and outward) tends to be a feature of dynamic economies. Ongoing economic change requires a continuous reallocation of labour from declining companies, industries and regions to emerging ones, and immigration helps this to be done most efficiently. The associated greater flexibility enables the economy to grow faster for longer without running into inflationary bottlenecks.
4. As Vince Cable argued in the Orange Book (regular readers will know I’m not his biggest fan, but when he is writing learned pamphlets rather than sermonising about bankers, he often speaks good sense): “There is a lot of evidence from economic history and wider international experience that a relatively liberal approach to immigration boosts not just growth, but also income per head, since migrants fill gaps in the labour market. Those who are educated, skilled or entrepreneurial bring their talents with them. Migrants are also likely to be more adaptable and energetic than the host population to justify the costs and risks of moving from one country to another. They help to keep public services going at affordable costs. Their remittances are perhaps the most effective form of foreign aid.” Those arguments still seem to me to hold water.
5. Moreover, as Cable put it, immigration control itself (even if it is deemed necessary for wider social reasons) “inevitably carries with it all the bureaucracy, arbitrations, rough justice and inefficiency associated with other economic controls”. This is particularly true of the logically absurd and distorting net migration target and crude quantitative caps. But it is also true of the ‘points-based’ system of allocating work permits (obviously I’m referring to non-EU migrants here) – an example of ‘economics without price’ whereby the government erroneously believes it can pinpoint which sectors of the economy need how many workers at any given time. This is a strange relic of the misguided postwar belief in command-and-control manpower planning by the state. The economic case against controls on the movement of labour is fundamentally the same as that against those on goods and capital. Free migration is a form of free trade.
6. To link my last point with the previous ones, I’d observe that there has been a high level of immigration in the UK for more than a decade and that this trend is likely to continue even if free movement within the EU were to be qualified or curtailed. Indeed, even if you strip out all immigration from the EU the government would currently still be missing the Home Office’s target of getting net migration below 100,000 per year. The immigration controls that would be required if this arbitrary target were to be met would be likely to impose significant costs and distortions on the labour market and the allocation of capital. Of course it is a legitimate political and social choice to do that, but we should bear in mind the cost to economic efficiency.
7. You rightly point out that immigration in the UK has remained high despite the deep recession. But the continuing influx of EU immigrants, and especially the increased numbers coming from southern Europe, surely supports my theory rather than undermines it. In absolute terms we have had a bad recession. But we’ve fared a lot better than the ‘Club Med’ economies where unemployment has been dramatically higher, and Britain has been seen as a land of opportunity by comparison. And if our economy continues to grow at a decent rate while the southern eurozone remains stuck in a rut, the incentive for young people especially to try their luck in the UK labour market will remain strong.
8. You cite Germany’s prosperity despite a declining population. My contention isn’t that increasing prosperity is associated with a rising population per se, but with immigration. As jedi points out, the issue in Germany is the demographic profile and specifically the ‘age dependency ratio’ (the ratio of older people to those of working age), which will progressively erode the tax base and make it harder to fund their pension system. As he says, immigration may well be more necessary for Germany than it is for the UK in order to improve the dependency ratio – although I would argue that it has net benefits for us too.
@ Eddie
“…I am just saying there is a supply and demand problem that makes hitting UK targets harder because higher benefits will attract more economic migrants.”
Ah ok, so you see the causation that way round… But even if that did happen, why would having more economic migrants working here make it harder to meet the target? I guess it would depend on whether or not they were net contributors to the public purse.
(I may be missing something glaringly obvious here… I should really get some shut-eye to be up for the tennis!)
As I said before, I agree the target probably won’t be met, but for more straightforward fiscal reasons.
margaret 31st Jan ’15 – 1:19pm
“……I was amazed that, eg, during the passage of NHS act, it was possible, both in the Commons and Lords, for people with private health interests, to vote.”
Yes there are literally dozens of MPs and Lords who are “sponsored” – for want of a better word – by large international healthcare companies and their powerful lobbyists.
The amount of cash flowing from these vested interests into our Parliament is a disgrace.
Two books published in the last 12 months give extensive detail —
Owen Jones’ – ‘The Establishment – And how they get away with it’
Donnachadh McCarthy’s – ‘ The Prostiute State ‘
Some MPs receive payments far in excess of the annual salary of an NHS nurse.
That is the sad state of democracy in 2015
Ibrahim is right to draw attention to this sort of thing.
Alex sabine
“an increasingly integrated world economy.”
\you throw in this phrase as if it were an inevitable thing when it is the result of choices by states and corporations. Above and beyond that however, it is a consequence of cheap and abundant energy in the form of oil. once the cheapness disappears because abundance goes away then an increasingly integrated world economy becomes problematic.
The global peak of conventional oil production was reached in 2005 but its effects were masked to an extent by the contribution of unconventional oil sources like fracking. Now that fracking has begun to disappear because of the low oil price.
Hi Alex, I don’t want to go off topic too much. I just wanted to say that with free movement targets need to be EU based.
Thanks
Curb those expense’s and that may be the answer. Live within your budget like most of us are forced to do.
Sorry for veering so far off-topic from the original post, but in reply to Tsar Nicolas:
Indeed states have decided to integrate into the world economy rather than to shelter behind high tariff walls. By and large, they have come to recognise that autarky is not a recipe for prosperity and economic efficiency.
In opening up their economies to foreign goods and capital, they have usually demanded a quid pro quo from their trading partners, hence the realpolitik that globalisation is usually advanced through bilateral or multilateral agreements.
But the economic logic of opening up the economy unilaterally – that is, no matter what policy any other national government adopts – was vividly expressed by the Cambridge economist Joan Robinson (nobody’s idea of a free-market fanatic): “Even if your trading partner dumps rocks into his harbour to obstruct arriving cargo ships, you do not make yourself better off by dumping rocks into your own harbour.”
Incidentally, the phenomenon we now call ‘globalisation’ is nothing new. Britain’s trade intensity was about 26% in 1910, only a little below today’s figure. In many ways the post-WWII period has simply marked a return to the degree of global economic integration that was reached before the First World War. And as far as workers are concerned, there was more free movement a century ago than there is today, since many countries then did not impose immigration controls.
The main reason why trade intensity has stayed fairly constant is that while the volume of trade keeps rising faster than GDP, the value of trade does not because the relative price of the goods and services we trade keeps falling relative to those we don’t trade. This is because – for inherent technological reasons – productivity growth is higher in manufacturing and in those services which depend on information and communications technology than it is in face-to-face services. In simple terms the price of television sets, which are traded, keeps falling relative to the price of restaurant meals or haircuts which are not; that factor limits the proportion of our economy which is traded.
So in this respect there are powerful localisation effects at work in the economy: the falling price of traded goods and services relative to those we don’t trade (as a consequence of their higher productivity growth) makes the traded sector of the economy self-limiting as a proportion of GDP.
If these were the only factors then we would expect trade intensity not only to be fairly static but actually to decline. The reason it doesn’t (at the level of countries and continents) is that there are globalising forces that offset the localising effects. One is improved transport and communications, which make it possible for those products which are inherently tradable to be traded increasingly not from region to region, but across the globe. The other is trade liberalisation (removal of tariffs and quotas), which removes the artificial impediments to the influence of improved transport and communications.
Adair Turner sums this up well in his book Just Capital: The Liberal Economy: “Actual observed trends in trade intensity therefore result from the balance of two offsetting sets of forces: inherent localisation on one side, improved transport and communications and trade liberalisation on the other. The balance between these two sets of forces has shifted over the years.”
Between 1914 and 1945 war and protectionism limited globalisation even in the inherently tradable sectors. Since then, improved transport and communications combined with trade liberalisation in much of the world have reversed this trend and restored the previous level of trade intensity. So in this respect, the world economy in 2015 looks more like the world economy of 1915 than of (say) 1950.
You’re right to say that an increasingly integrated world economy is a political choice – in that countries could instead have decided to keep, or erect new, barriers to the movement of products and capital and to ban rather than merely limit immigration. The reason they haven’t done that is that they have recognised (sometimes a little falteringly, but on the whole) that to do so would make us all poorer. But in the absence of those barriers, the globalising forces are not political but technological, driven by the vast improvements in transport and communications (especially IT) which have been achieved thanks to innovation and science. Trade liberalisation has simply allowed these to be exploited to greater effect than would ever have been possible within closed national economies.
Alex Sabine – I wasn’t going to come back to this as we are some way off topic, however I would like to pick up on one aspect of your reply to me. GDP per capita is the important measure here – we agree on that.
However in the next Parliament it is likely that there will be a very large drive to reduce deficits, with deficits being expressed as a proportion of GDP. Logically deficits in that context are going to be easier to reduce the higher GDP, irrespective of distribution. Put another way there is reason to suspect that in the next parliament we are going to see quantity of GDP chased over quality. Great if you have assets or a ringfence, not in all probability great for everyone else.
I would add there that deficits expressed as a proportion of GDP are a valid and indeed important measure. But I do worry that the likely deficit reduction programme is not going to pay attention to distribution, and I find that worrying.
With respect to immigration in particular you say, ‘And if our economy continues to grow at a decent rate while the southern eurozone remains stuck in a rut, the incentive for young people especially to try their luck in the UK labour market will remain strong.’ OK. But surely you can see that that is not a reciprocal arrangement? Free movement does not necessarily equal reciprocal movement. If the young unemployed of depressed UK towns can not realistically up sticks and are incentivised to move to Southern Europe to, ‘try their luck,’ then there is a problem. Granted, we can argue here about labour market flexibility.
Indeed, it is interesting given the emphasis on free movement that data on how many UK people have moved to other EU countries is rather hard to come by. The closest I can find is here in a Parliamentary Answer – http://www.publications.parliament.uk/pa/ld201314/ldhansrd/text/140204w0001.htm. It looks like those numbers relate to 2010, but I’ve no reason to suspect they are any different now (except in maybe one or two cases).
@ Little Jackie Paper
“Indeed, it is interesting given the emphasis on free movement that data on how many UK people have moved to other EU countries is rather hard to come by.”
Most countries are less diligent in counting people who leave than they are at totting up those who come in! So unsurprisingly the scale and nature of emigration tends to get overlooked.
The IPPR is strong on migration research and has unearthed some striking stats.
From a book called ‘Aftershock’ by Philippe Legrain (who, in the interests of impartiality, I should mention is an advocate of open borders):
“Between 1996 and 2006 the UK experienced a net loss of 2.7 million British nationals. There are more Brits abroad than foreigners in Britain.
“Between 1975 and 2007, 6.2 million foreigners entered the country but 3.2 million left over that period. At least 61,000 foreigners left Britain each year, rising to a peak of 194,000 in 2006. Of the migrants who arrived in 1998, only a quarter were still in the UK a decade later.
“Among the East European migrants from the A8 countries who arrived after 2004, half had already left again by 2008. Many of these A8 workers move back and forward regularly. In effect, they are international commuters. Britain’s open door has proved to be a revolving one.
“Many people move to Britain with a fixed idea in mind – to study, learn English, do a particular job, save up some money – and move on once that has been achieved. The homeward tug of friends can also be strong. Paradoxically, though, the tightening of immigration restrictions encourages many people to stay longer, for fear they could not return at a later date. Yet the easier it is to come and go from Britain, the more likely it is people will leave – and come back.”
On the point about the public finances and fiscal retrenchment in the next parliament:
– I agree that the deficit is usually best expressed in relation to GDP (though the absolute cash figures matter too for financing purposes, gilt issuance etc).
– Clearly this is a ratio, with a numerator and a denominator. We need the numerator (the amount of £ the government is borrowing) to come down and the denominator (GDP) to go up.
– You’re right to infer that this means there is an incentive for GDP to be as high as possible and therefore – because a higher population will produce more stuff – an incentive for immigration.
– However, immigrants use public services and claim benefits (mainly in-work benefits) like British citizens. They also pay taxes. The impact on the borrowing figure (the numerator in the deficit:GDP ratio) will depend on whether they are net contributors to the public purse or net recipients.
– Even if they are net recipients and cash borrowing is correspondingly higher than it would otherwise be, higher GDP might more than offset this with the ‘denominator effect’ reducing the deficit as a proportion of GDP.
– It’s difficult to say in advance whether a particular cohort of immigrants is going to bring in additional net tax revenue or result in additional net expenditure.
– Although immigration in Britain is both historically high and high relative to some of our European neighbours, migrants still make up a small proportion of the population. Therefore their impact on the public finances is not likely to be large (in either direction) and other factors are much more important. Changing immigration policies would not seem a suitable or very effective tool for tackling our present budget deficit in the UK. (Whereas it is relevant to, say, Italy or Germany’s medium to long term fiscal challenge because in those cases there is a clear demographic problem likely to erode the tax base and increase pension outlays).
– Therefore I am not concerned that the drive to tackle the very large residual fiscal deficit will lead to GDP per capita being overlooked. Frankly it’s more likely that ignorance of basic economic concepts and metrics among many politicians will cause them to overlook it! And I’m more concerned that few politicians seem to grasp – or else they deliberately conflate – the budget deficit (which is still far too high but inching downwards, and coming down more rapidly as a share of the growing GDP) with the accumulated debt (which, as a result of continuing heavy annual borrowing, is still rising at a pretty scary rate and as a proportion of GDP).
Alex Sabine,
You missed out my point that globalisation is dependent on cheap energy which is now coming to an end.
some very fair points made in the debate above, but.. surely it is impossible to assess what any job is worth until you define what the job actually IS. Whether, where or how an MP runs a constituency office should not be left to him/her to decide, (and the caseworkers should be employed centrally to avoid conflict with party business) as they work for the voter, not themselves . Whilst it risks the problems that hospital A&E does, of everybody going to the MPs office with every minor complaint, that is a symptom that the rest of our political world needs a similar defining and clarity, so that people understand that their local councillor is the one to go to with a problem about a council service or lack of… and equally the job of a councillor needs defining so that they can have their pay level properly assessed.
When there are failures within in the council system someone has to take note.
I complained about failings within housing on the decent homes, lack of insulation, decent modern affordable housing, lack of respect towards me in some areas.
As with antisemitism, it was the Conservative Party who listened. In the EU there may well be law put into place to prevent further on the subject getting out of hand.
As with other situations that I have worked to improve, international law and child abduction, another situation your Party has not been excepting of, I mentioned this at a meeting in London, Simon Hughes was present.
You should not be too willing that an attitude of, not my responsibility becomes the norm. It was a Labour Party MP who most certainly listened, yet he was not mine.