Tag Archives: economy

Observations of an Expat: The High Seas

About the only time the world’s land-based public thinks about seaborne traffic and the globalised trade it underpins is when they look above the parapets of their sand castles and spy a ship on the distant horizon.

Or, when something happens, such as a war or a vital sea artery is blocked and prices creep up and super market shelves start to empty.

The latter is happening.

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An economy for society based on Lib Dem values

We are part of a wide fellowship in search of an intrinsically fairer economy and social outcomes. We stand explicitly for the ‘well-being of the individual’.

We are democrats. Democracy binds our society together, but struggles to do so when our day to day experience of economic life does not accord with our values of mutual support and well-being. A plural democratic society requires a plural economy and politics but we do not have either.

I founded a not-for-profit organisation advocating the use of our existing housing stock to create affordable tenancies, and identified it as an intervention to societise the housing market, correcting its imperfections (homeswithinhomes.org). I realised we need systemic change in favour of society and our common good, a system that co-exists with capitalism and statism in all its forms but is uniquely identifiable and attributable to a philosophy elevating collective values of equality.

These values will appeal to a significant part of the general population, they are core Lib Dem values. We are uniquely placed to give a voice to such market based, societal economic reform and by doing so can help develop a unique economic platform reflecting Lib Dem ideology, of equality and liberty, with l believe, mass electoral appeal.

Our economy developed during a period when there was no universal franchise, nor meaningful women’s or minority rights and little societal perspective. This history, based on outdated notions of ownership and control, of private share ownership on the one hand and state control of production on the other has driven us towards economic and political polarities; we have an economy that is not mixed enough.

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Unforgivable choices – Lib Dems respond to the Spending Review

For the second time in three days, Christine Jardine pressed the Government to do more to help those who have thus far been excluded from Government support. Three million self-employed people have had nothing since March and some have had no income at all because they work in areas that aren’t yet open. In March they were stressed. Eight months on, they are desperate.

Rishi Sunak was dismissive, but not as egregious as Boris Johnson had been the other day when Christine questioned him.

“I hope we haven’t excluded anyone” said the PM. If he doesn’t know that there is a massive All-Party Parliamentary Group fighting for these people, if he hasn’t been aware of the many questions that have been asked in Parliament, then that shows unforgivable ignorance. If he did know of the plight of the three million, his remarks show callous disregard.

Later, Christine talked to BBC News arguing against the public sector pay freeze and the abandonment of the 0,7% aid target.

On that international aid issue, Wendy Chamberlain highlighted how the Government had gone back on its word:

Ed Davey said that the Chancellor had made some unforgivable political choices:

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22 October 2020 – today’s press releases

  • Economic support plans made “on the hoof” are failing millions
  • Tracing failures shows Hancock needs to overhaul test and trace

Economic support plans made “on the hoof” are failing millions

The Liberal Democrats have accused the Chancellor of “making up plans on the hoof” when it comes to financial support for businesses and workers impacted by COVID-19. Responding to the Chancellor’s statement in the House of Commons today, Liberal Democrat Treasury Spokesperson Christine Jardine said:

Yet again the Chancellor is taken by surprise by events unfolding exactly as predicted months ago. He has utterly failed to address the gravity of the economic crisis, with people and businesses facing devastating pressure across the country.

Beyond tinkering around the edges of the Job Support Scheme and correcting some of its blatant errors, he has offered nothing for those slipping into poverty. 67% of salary is just not enough for people to get by on. The Chancellor is making up plans on the hoof and is failing millions of people.

We need real leadership from Government, not a patchwork of ever-changing measures. It’s clearer than ever that the Government should have kept the furlough scheme in place as the Liberal Democrats called for, yet they are too proud to do the right thing and U-turn.

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5 October 2020 – today’s press releases

  • Chancellor’s speech will have disappointed millions in need
  • Lords defeat Government on Immigration Bill

Chancellor’s speech will have disappointed millions in need

The Liberal Democrats have claimed the Chancellor’s speech at the Conservative Party’s virtual conference will have “disappointed millions who were hoping to hear how he plans to help them through this crisis.”

Liberal Democrat Treasury Spokesperson Christine Jardine said:

The Chancellor’s speech will have disappointed millions who were hoping to hear how he plans to help them through this crisis.

Instead of an extension to furlough, measures to help the millions excluded from help or a boost to universal credit, we were instead given

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On blood letting, Covid economics and Goldilocks

“It ain’t what you know that gets you into trouble. It’s what you know that just ain’t so.” (Mark Twain)

Blood letting is the withdrawal of blood from a patient to address illness, used for about 2,000 years. It harmed patients! William Harvey disproved its theory in 1628. Practice and professional endorsement continued into the 20th century via expert endorsement, “official” endorsement, public trust, inertia, fashion and lack of analytical thinking.

How powerful expert ignorance, endorsed by the powerful, politically and socially, and accepted by an insufficiently educated and ill-informed public can be! And this includes current economics and its “Deficit Myth”. (See Stephanie Kelton’s book of this title which informs this article.)

Our alleged deficit is a myth. We are a currency issuer, not a currency user. Our government does not function like a household which cannot issue its own currency. It cannot run out of money and is not solely dependent upon taxes and borrowing for its spending. “Book balancing” is a theoretical restraint. Real restraints are inflation, employment levels, natural and social resources and infrastructure efficiencies.

Efficient economy balance matters more than budget balance. Increasing “deficits” will not make future generations poorer nor will reduction increase their wealth. Such will depend upon our management of the actual economy.

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GDP share; a more timely and effective alternative to Universal Basic Income

That’s your bloody GDP. It is not ours’. Thus a Brexit supporter expressed their detachment from the national economy in 2016.

This proposal addresses both the perception and reality behind this comment. It provides poorer households with a bigger share of GDP, achieving a more deliverable redistribution of income than a Universal Basic Income. It makes more people feel that this is ‘our GDP’. It also steers the national conversation about growth towards ‘net zero’.

UBI and its problems

A conference motion calls for the party to campaign for UBI.

But the practicalities mean we are doomed to deliver a very small and disappointing version of a very big and (somewhat) controversial idea. The UBI promise of a reasonable income for everyone is not achievable. Recent work by sympathetic academics has shown how far we can (and can’t) get. Even if we raise higher rate taxes a lot and get rid of personal allowances (so that for most people there is no net benefit) to fund a UBI, we cannot sustainably pay a UBI of much more than £3000. At this level, many poor people would lose out unless all or most current means-tested benefits stay in place – thus forgoing one of the significant supposed advantages of UBI. And even to get to £3000, we would likely have deployed the money from all of our tax-raising ideas on this one concept cutting out anything else we might want to do.

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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.

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Lib Dems: The party of wellbeing?

Lib Dem leadership elections often bring up the same criticisms of the party:

  1. People don’t know what we stand for.
  2. We aren’t radical enough.
  3. We need to advance a “core voter” strategy based on values, not just on being “hard working local people”.

I agree with all of these criticisms, but get weary when they are repeated ad infinitum without solutions. Both Davey and Moran talk about the importance of building a distinctive liberal message without saying what this distinctive liberal message should be. What I’m seeing from both candidates is a list of reasonable policy ideas which aren’t meaningfully linked (except by the vague claim that they are “liberal” or “evidenced-based”).

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14 July 2020 – today’s press releases

  • Government must be more ambitious to save the economy
  • UK needs a Green Recovery plan to deal with biggest recession in 300 years
  • Liberal Democrats welcome Government’s “screeching u-turn” on Huawei

Government must be more ambitious to save the economy

Responding to this morning’s monthly GDP estimate from the ONS, showing that the economy grew by only 1.8% in May – lower than the 5.5% forecast by economists – Acting Leader of the Liberal Democrats Ed Davey said:

Regrettably this dashes any hope of an early recovery and is bad news for millions of people experiencing real financial hardship. It confirms fears that

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Who gains from Rishi Sunak’s Summer Economic Statement?

It is easy to criticise Rishi Sunak’s Summer Economic Statement for not doing enough. The Chancellor had a difficult task to assess what size of economic stimulus would be effective.

His main aim was apparently to create jobs for those who had lost them or will be losing them soon. But the Statement.is very disappointing because it doesn’t deal with the realities of the situation for lots of businesses. Social distancing is very likely still to be in place after October, so it just will not be possible for many businesses to provide their services to as many customers as before lockdown.

He should have included a new coronavirus staff retention scheme (turnover based). It should have provided a proportion (say 80%) of the difference between the takings of a business in a month compared to the relevant month in 2019, for businesses that can demonstrate that because of social distancing they can’t deal with the same number of customers.

Rishi Sunak reported that £4.6 billion of consumer debt has been paid off and households have increased their bank deposits by £25.6 billion. This means there is the potential for more than £30 billion (about 1.5% of last year’s GDP) to be spent into the economy when households have confidence restored.

With an economy valued at £2000 billion I believe the maximum economic growth per year with which the UK can normally cope is about £60 billion. Therefore an economic stimulus of £30 billion at this stage is about right.

Instead of allocating up to £9.4 billion for his Job Retention Bonus scheme, I think Rishi Sunak should have used the amount to increase all working-age benefits such as Universal Credit, Family Tax Credit, Jobseekers Allowance and Employment and Support Allowance by £20 a week, the same value as his temporary increase of Universal Credit and Family Tax Credit in March. This would have targeted the money to the poorest in society who are most likely to spend it and to the areas where more of these people live. Giving employers £1000 per worker retained is not going to do much to encourage them to retain the most marginal workers, and will do very little if anything to increase demand in the economy.

A lot of the £5.6 billion for infrastructure projects is not new money and includes maintenance projects. £900 million is for shovel-ready projects in England in 2020-21 and 2021-22. But some of this, maybe the majority, will not be spent until the next financial year. We must hope that most of the £5.6 billion will go into the areas worst affected by job losses.

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Transforming our economy while remedying our environmental crisis – Part 2

In a previous article, I started to highlight policy areas that could advance our fight against the climate emergency and looked at legislation and taxation. This article continues the discussion and looks at additional policy measures to drive change in the way we treat the world we live on.

3. Education – all schools should have climate crises as a part of their social learning – this can be written into the personal, social education time which schools use to address and educate on issues. For adults, continued government promotion on single-use plastics, diets and other life choices is essential, and each individual must take responsibility for their actions. The crisis is unfathomably large but broken down into a single person among 8 billion, and a single footprint to wipe clean, if we all clean up after ourselves, it is possible.

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Transforming our economy while remedying our environmental crisis – Part 1

The fight against climate change is a global one; we understand the issue and science. We also understand the urgency, and in the Paris Agreement, every country committed to reducing emissions to target a significantly lower than a two-degree rise over pre-industrial temperatures. While the complexities are significant, the issue is that globally we continue to put too many greenhouse gases into our atmosphere. The wealthy western countries have been the leaders of this pollution which are making the entire planet suffer, and the poorer countries are suffering more than the wealthiest; we need to lead the recovery.

The good news is that solutions do not have to be complex. For a start, we can put less harmful gases in and take more out. To achieve net-zero means that whatever we put in, we take out, essentially like wiping a footprint in the sand clean, so it looks like you were never there. At net-zero we, as humans, stop making the problem worse. However, we can strive to be better and to take more out than we put in, to allow the planet to get back to its natural cycles of carbon release and absorption.

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Post-C19 UK economic recovery; a new economic orthodoxy beckons?

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Economic crises, and the C19 pandemic certainly is one, have a habit of initiating a major change in economic orthodoxy.

Arguable examples include mercantilism after the collapse of the feudal system, Adam Smith after two long pan-European wars, end of the Gold Standard post-WW1, Keynes after the Great Depression and WW2, ‘market reforms’ after the 1973-5 recession & crash, and the ‘Washington Consensus’ after the collapse of communism 1989-91. Then came the 2008 financial crisis, which was still unresolved when C19 hit. To a great extent, each crisis arose from the ‘flaws’ in each new orthodoxy.

Each of these changes was highly controversial at the time, at first, and even subject to ridicule. But it is easy to forget that the emerging new ideas were aimed at particular problems perceived at the time, where the prevailing orthodoxy no longer had perceived relevance for the problems faced. The new ideas that endured above others did so in that context.

We appear to have reached that point now.  But it’s very messy.

In the UK the post-2008 orthodoxy we are probably leaving behind had already become something of a hybrid. Austerity in public spending aimed at partial debt reduction, was still there, but reductions in regulations had gone. Monetisation/Quantitative Easing had been introduced to purchase bank ‘assets’ (derivative securities). These bank assets had initially been the cause of the 2008 crash, as their value evaporated. However, the asset purchases still continued twelve years later, keeping interest rates artificially low, but leaving international markets awash with cash; evidenced by a rise in international share prices, to two to four times what they used to be, relative to company profits. Culprits’ reward.

Up until Brexit, this was the hybrid orthodoxy.

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Q: Coronavirus state aid.  Who pays the bill?

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A: No one has to pay.

I can imagine the fog in an economist’s head confronted with my question and answer.   This new thinking appears as alchemy to orthodox economists.  Conversely, what they trot out appears to me as an outdated theology, an irrelevant contorting of how many angels can dance on the head of a pin.

Their hand wringing is hollow, “Things cannot go back to how they were.  No More Austerity!” they cry, “The New Sense of Community will not stand for it!”

Chests puffed out quickly deflate as that thread of managerialism runs deep, doesn’t it?  Someone HAS to pay for this Coronavirus aid package that Rishi Sunak has found tucked behind the sofa cushion!   They sweat bullets feverishly calculating the final cost and devising ingenious ways for only the hated bankers and Richard Branson to pay for it, before finally acknowledging that maybe the darkest, quietest voices in the Tory Party have a point….maybe taxes do need to go up, maybe some services do need to be cut.

Any Liberal Democrat who carries on dancing to that Tory tune will lead us to our final death throes.   So let me be clear.

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Return of the Keynesians?

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Since the end of the Second World War British economic policy has largely been an ideological battle between two schools of thought. One embraces the state interventionist ideas of John Maynard Keynes. The other the ideas of free market thinkers such as Friedrich Hayek and Milton Friedman.

But as the financial pressures of the coronavirus hit, and as countries around the world are faced with rising unemployment, a reduction in economic output and the failure of major industries the phrase “We’re all Keynesians now” has never been more apt in our modern history.

The economic and political fallout from the COVID crisis will be huge and bring new challenges to Governments and political leaders around the world. The UK government has already provided a £30 billion stimulus package to help mitigate the financial fallout, followed by a further £330 billion in guaranteed loans to businesses.

With that in mind it the support measures announced so far are time limited. Support for the self-employed and causal workers is focused on mitigating the effects of not being able to work during lockdown. There have been no moves towards permanently readdressing the low pay or inequalities these people routinely face in their day to day lives.

Such short-term changes will be easier to revoke once the crisis is seen to be resolved. It’s also very noticeable that there has been no discussion of pay increases for NHS staff and that in all likelihood a public sector pay freeze will be instituted by the Chancellor in a bid to drawback the costs of the Government response.

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Daily View 2×2: 7 May 2020

2 big stories

Who’d have thought it? The achievement of the testing target on 30 April is already looking deeply shady, with the inclusion of posted tests included in that figure, plus allegations that even those posted weren’t actually usable. And now, subsequent data shows that the numbers are going backwards, not upwards. The solution, a new target. The distraction from failure – some relaxations in terms of going out and about.

Meanwhile, the European Union is predicting that its economy will shrink by 7.4% this year, the worst performance since World War II, with the economies of Southern Europe worst …

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After the virus: an economic future for Wales

Our economy in Wales was already facing difficulties. The Welsh economy’s long-term problems are well-documented; low productivity, a long-term lack of investment, a declining working-age population, significant public health issues. Add to that the likely effects of Brexit – especially a no-deal Brexit, which, on the basis of the OBR’s own figures, would be likely to deliver a severe productivity shock to the UK economy – and the effects of February’s floods, and even before the effects of lockdown are considered, it is clear that Wales was facing serious economic challenges. A recent report by the Centre for Towns and …

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Rennie calls for UBI summit to help those who can’t get government support

Scottish Liberal Democrat leader Willie Rennie has today called for an intergovernmental summit on a universal basic income to take place to ensure that support is urgently made available for those who have fallen through cracks of the current furlough and income support measures.

He highlighted the plight of self-employed workers who were not trading for the entirety of the last tax year, PAYE freelancers,  self-employed workers who are paid in dividends, people who work from home and those who have recently changed jobs as examples of people who have experienced a sudden and dramatic loss of income as well as those struggling to access existing anti-poverty measures.

Across the UK, the Institute for Fiscal Studies estimate that roughly 675,000 people will be ineligible for the government’s Self-Employed Income Support Scheme, which mirrors the 80% wage subsidy scheme for the employed.

The IFS says another 1.3 million people with some self-employment income are likely to be ineligible because they received less than half of their income from self-employment last year.

His call comes as the The Poverty Alliance, Scotland’s anti-poverty network, has identified a number of shortcomings in the current crisis responses, including a lack of targeted social security support for families with children at either the UK or Scottish level, limited access to community care grants and gaps in employment protection programmes.

Willie said:

I fully understood and supported the decision to use the existing tax and spend apparatus to help people financially. Time was short and we needed to act fast. Now that those schemes are getting into place we need to take the next steps.

With economic uncertainty destined to loom for the foreseeable future, we need to ensure that everyone can afford to keep a roof over their head and a meal on the table.

We should be adopting the principles of a universal basic income: no one should be left behind. The UK Government has acted swiftly to back businesses and support furloughed workers but too many are slipping through the cracks and there’s a real risk that furloughed staff will lose their jobs when the current scheme ends.

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Daily View 2×2: 30 April 2020

2 big stories

So, will Matt Hancock reach his target of 100,000 tests today? And even if that capacity is reached, will they be carried out? It’s not looking terribly optimistic when even NHS Providers, which represents foundation trusts in England, dismisses the 100,000 target as a “red herring” that distracted from the failures of ministers.

Setting targets and missing them is bad enough, but setting meaningless, and possibly even misdirected ones, and msssing them anyway, seems to be the story of this Government’s handling of the crisis.

It’s a sign of the general uselessness of the British print media that, for …

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Daily View 2×2: 24 April 2020

We’ve almost staggered to the end of another week, and there’s a weekend to look forward to…

2 big stories

The Government, having missed every target for Coronavirus testing that they’ve set, have upped the ante by setting a new, even bigger target – 100,000 tests per day. Of course, the question of how you get to one of the testing centres, especially if you’re ill, hasn’t really been addressed. Keir Starmer slowly, and patiently, shredded Dominic Raab’s attempts to deflect their failure thus far at PMQs on Wednesday – but the news that Matt Hancock is looking to recruit 18,000

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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.

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Ed Davey asks for more help for self-employed people during Coronavirus pandemic

The Chancellor has announced unprecedented levels of support for British business in the last few days. However, one group of people are not getting what they need to survive.

Self-employed people have been told that they can claim for Universal Credit at the rate of SSP, which would give them a derisory £94 per week.

Today Ed Davey called on Rishi Sunak to do much more to give our self-employed friends and neighbours, the people who clean our homes, cut our hair, walk our dogs and do so much to make our lives easier.

An article on the Lib Dem website sets out the practical help we want to see:

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17 December 2019 – today’s press releases

We’re back, or at least, the Press Team are back, and thus this feature returns…

  • Reckless Johnson risking sending the UK straight off the no-deal cliff
  • Brexit jeopardises pigs in blankets
  • New figures show 2.3 million EU citizens without Settled Status
  • Boris Johnson set to crash UK economy
  • Lib Dems: Whirlpool’s stained reputation on the line

Reckless Johnson risking sending the UK straight off the no-deal cliff

Responding to reports the Government is to add a new clause to the Withdrawal Agreement to make it illegal for Parliament to extend the transition period beyond December 2020, interim leader of the Liberal Democrats Ed Davey said:

This Tory Government’s

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In Full: Ed Davey’s speech on the economy

Today, Ed Davey made a keynote speech on the economy.

He talked about his plans here:

Here is his speech in full:

For too long, Britain has not had the economy it deserves.

Under this Conservative Government, too many people can’t live a secure, happy and fulfilling life. Too many businesses face crippling uncertainty over their future. And too many of us feel vulnerable in the face of technological change.

The fact is, the Conservatives have made our economy weaker – much weaker.
People might be in work, but more and more struggle to make ends meet.
Businesses have been hit, with investment down significantly since the 2016 referendum.

Productivity has been grimly weak – with no growth at all in the last 12 months.
The Office of National Statistics confirmed only this week, that Britain’s economic growth in the last year has been the lowest for a decade.

And this Government has ignored all our long-term economic problems. We have alarming skill shortages. A persistent trade deficit. And inequality that’s both socially and economically damaging.

Yet so far, the debate in this election on our economy – on our future – has been a debate between fantasies.

Fantasies born of nostalgia for a British Imperial past. Competing with fantasies from a failed 1970s ideology.

Fantasies competing to bankrupt Britain.

Boris Johnson has snuck into Jeremy Corbyn’s allotment and stolen his magic money tree.

The British people deserve better than fantasy economics.

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Ed Davey: Lib Dems to spend £100bn to tackle climate emergency

In a keynote speech in Leeds tomorrow, Ed Davey will announce that the Lib Dems will be putting our money where our mouth is about the climate emergency. We’ll spend £100 billion on measures to tackle it:

A Liberal Democrat Government will jump-start an economy-wide programme to tackle the climate emergency: I can announce today that across a 5 year Parliament, Liberal Democrats would spend and invest an extra £100 billion of public finance on climate action and environmental preservation.

“This includes a new £10 billion Renewable Power Fund to leverage in over £100 billion of extra private climate investment. This will fast-track deployment of clean energy, to make Britain not just the world leader in offshore wind, but also the global number one in tidal power too.  And we will invest £15 billion more to make every building in the country greener, with an emergency ten-year programme to save energy, end fuel poverty and cut heating bills.

But we’ll have that £50 billion Remain bonus:

Brexit is already costing the economy £1 billion a week. And the future cost to Britain in lower economic growth could be even higher, if Brexit were actually to happen.

That’s why the election debate on the economy and public spending has Brexit at its heart. For the plain fact is, no party’s economic plan is remotely credible unless it starts with stopping Brexit.  With stopping Brexit as our number one economic policy, Liberal Democrats won’t just grow the economy faster, but we’ll generate a £50 billion Remain Bonus – to pay for our huge extra investment in schools and our policies to tackle inequality.

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8 October 2019 – today’s press releases

  • Davey: Brexit would mortgage our children’s future
  • Jane Dodds Calls for Pledge to Maintain Last-in-Town Banks
  • Blame for the Brexit mess sits with the Tory Govt

Davey: Brexit would mortgage our children’s future

Following reports from the IFS that a no-deal Brexit will push UK debt to the highest levels since the 1960s, Lib Dem Shadow Chancellor Ed Davey said:

This new analysis is a body blow to Boris Johnson’s election spending plans – as it shows the cost of Brexit is much higher than thought.

Brexit would mortgage our children’s future, plunging Britain into the red and threatening years of new austerity.

There is simply no

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LIB DEMS: by default, the only party for Business and sound economic management

The “new normal” was coined as a new lexicon by Mohamed El-Erian, the then head of the global financial firm PIMCO to describe the post-script of global finance following the financial crisis of 2007-08. 

With the torrent of news and scandal, it feels as though we are all becoming immune of not sensitised to an almost daily feed of political shocks and ever-more worsening language in the current political maelstrom. The new normal.

One aspect of the current pre-election phase – but also a reflection of a structural shift – is the position on public finances for the two parties. As Lib Dems should be able to capitalise on as the ONLY sensible party for economic stewardshipmost sensible centrists and business will recognise that the Tories have lost this mantle.

I wrote earlier about PM Johnson’s rapidly escalating fiscal promises that are clearly a pre-election gambit – a well-worn political strategy of governing parties over generations. I also highlighted the risks that the fiscal costs of a de facto government “bail out” by the Treasury in the event of a No Deal could easily get into figures and a scale that would test the UK’s reputation for economic management at the least, and the worst, risk a full-blown economic-financial crisis.  

A further extension into 2020 (June most likely) is now the baseline scenario. I’ll outline why separately.

A quick review therefore of the fiscal issues is apt but without going into policies specifically, or even the legality for some of Labour’s positions eg on sequestration of private school assets. 

These are my 3 main conclusions for the current new normal for economic management in the UK:

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Learn to code: the Technological Revolution

Can I shock you? The North doesn’t end at Manchester and Leeds. For all the bluff and bluster of a ‘northern powerhouse’ we heard when the Tories at least pretended to care, the investment mainly fell around those two main cities. It is true, they are seeing growth, prosperity and attracting young professionals and graduates to the city as businesses prosper and companies choose to open up northern hubs. However, the more rural areas in the North West (particularly West Cumbria) and the North East are seeing their regions stagnate and more alarmingly an exodus of young people who see no future in the area.

According to a recent BBC News study it is estimated that the under 30s population of these regions will significantly reduce over the next 20 years. 3 of the top 5 likely to be worst affected are from West Cumbria, with Copeland anticipated to see a 14% reduction in people under the age of 30. The North East doesn’t fair much better with 4 of the top 10 also from that region, the main county of Northumberland is expected to see the biggest drop of 11%. 

When you look at the common factor in all these regions it is no surprise that former industrial heartlands such as Redcar, Hartlepool and Copeland/Allerdale have a higher rate of youth and adult unemployment resulting in many young people to move away for university and never return. What is most concerning about all this is that there is no real long-term strategy in place to tackle the impending youth deficit, at least not from the two main parties. A reduction in people of working age of this size would also have a significant impact on the local economies of these areas a whole.

As always, the Lib Dems do things differently, and do it better. So why stop now? I propose we look to focus on inspiring investment and increased training for the digital economy, not just by public spending investment but encouraging local and national businesses to increase the number of training schemes and digital apprenticeships in rural areas, particularly those with poorer transport links. If we follow the excellent example set by Recode UK, a free coding training scheme in Bolton which is a joint supported venture by the local JCP and Telecom UK. By championing the private and public sector to educate young people in the tools for the future economy in these regions and help increase social mobility the long term impact will see the wider economy and businesses prosper as well.

Posted in Op-eds | Also tagged , and | 11 Comments

18 July 2019 – yesterday’s press releases

There was a bit of a glitch yesterday, as the press releases ended up in my spam folder for some reason. Things seem to be back to normal, so the usual service resumes here…

  • Welsh Lib Dems – time to embrace zero-carbon housing
  • Lib Dems: EU resolution a vital step in UK’s duty to stand up for people of Hong Kong
  • Davey demands urgent action as knife crime epidemic continues to spread
  • Umunna: OBR report shows No Deal Brexit would be unforgivable
  • Lib Dems: Johnson’s ‘fishy tales’ have no plaice in Number Ten
  • Lib Dems: Milestone victory to block no-deal
  • Gauke talks the talk but can’t walk

Posted in News | Also tagged , , , , , , , , , , , , , , , and | 1 Comment
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