Malcolm Blair-Robinson's Blog, page 108

Government Chaos

The May government is in danger of losing its authority as a second of its MPs resigns because of ‘irreconcilable differences’ and a new opinion poll shows 51% now wanting to remain in the EU. There is now a three way constitutional crisis  with the Courts, the Government and Parliament at loggerheads, as described in yesterday’s post and covered wall to wall in every type of media. This opens the prospect of mounting uncertainty of whether Brexit is actually a feasible option and whether it will happen. That thought alarms ardent Brexiteers whose  shrill cries about betrayal begin to echo in the general melee.

If you look back to May 2015 everything was calm and tranquil. Cameron had just won a majority and whether you were a Tory supporter or not, the future looked predictable, as the political argument developed not about whether there would be prosperity but how it should be shared. Since then we have had the disaster of a very badly conducted referendum with both sides making claims and promises which cannot be delivered, while casting fears and hatred unknown in Britain since Fascist times. This brought down the Cameron government, and although its replacement by one lead by May  at first looked better, a string of mistakes now throws that into question.

The complete absence of any coherent plan about how to achieve Brexit, the failure to define what Brexit actually means, the delay of nine months before triggering Article 50, and the notion that an advisory referendum won on a very narrow margin somehow authorises the government to bypass parliament, is not the report of a strong administration, but rather one in utter confusion from which events are spinning out of control.

The first responsibility of government is to provide coherent leadership under the law. The path ahead, as soon as the referendum outcome was known, was clear and straightforward. The referendum was advisory. May should have announced that the government would implement that advice through parliament, which under our constitution (which surely should be written down to make it accessible to everyone) it is through parliament that the people of this country exercise their sovereignty by electing representatives to it. This was why the referendum was advisory not mandatory. Now it was (now being then several months ago) parliament’s job to listen to the government’s proposals about how it wished to trigger Article 50 and to authorise it, making sure in the process that the government did not harbour a plan so unrealistic as to take the country over a cliff.

Those debates will have taken account of the potential damage to the economy, the NI peace process, the Union with Scotland and all the other issues like immigration and sovereignty which were advanced during the campaign. This would all be in public so that it would be clear to all people and all interests what the British government wished to achieve once A50 was triggered. There would follow negotiations with the EU in an informed atmosphere with clear objectives to ease us  forward to a deal. By now we would be well on the way to resolving the problems and exposing the opportunities presented by the greatest political peacetime upheaval since the Reformation, when we broke away from Rome.

Compare that analysis with what is happening and it becomes woefully clear that this government has lost its way. It needs to find it again fast or it will fall.

Brexit: High Court Shock For Government.

The High Court has ruled that the government does not have Royal Prerogative Powers to trigger Article 50 to start the Brexit process, without a parliamentary vote authorizing it do to so, not least because it was parliament that authorised our original joining of the Common Market and subsequently ratified successive treaties, which upgraded the original grouping into the modern EU. The Lord Chief Justice ruled that parliament alone is sovereign. In other words, the people elect the parliament and the parliament decides what to do.

The referendum was authorized by parliament, but it was an advisory referendum not a binding one, because it is the basis of the democratic settlement underpinned by the UK’s unwritten constitution, itself a compromise between crown and parliament, that parliament is sovereign. In this case the referendum was advisory to parliament, which authorized it, not to the government which proposed it. Therefore parliament must be consulted both on the process and the outcome. If the government had called the referendum using the royal prerogative it could have argued that it could act outside parliament, but it did not do that. Perhaps that was another Cameron blunder.

So the government has decided to appeal to the Supreme Court. This is madness. If it loses it is arguable that it should resign. Certainly it will be severely damaged and the whole Brexit process will begin to look increasingly uncertain. If it wins it will by doing so cast fundamental questions over the workings of our democracy and the viability of our laws. Because the principle will have been established that the Monarch (i.e. the government using the royal prerogative) can bypass parliament and appeal directly to the people. That will cause uproar. It will also open a Pandora’s box of whether we are in fact a democracy under the law, or a democracy under the whim of whoever is King or Queen.

Hilary Clinton: What is It With Her?

Surely one would have imagined that America would be borderline ecstatic at the prospect of following the first African American president with the first woman in the White House actually running the country from the Oval office? Yet there is turmoil, claim and counter claim, tens of thousands of emails, the FBI and the whole spellbinding unreality of the 2016 US election.

Why is this? Essentially because the Clintons have never been far from scandal in a long political joint career. Whitewater, the Clinton Foundation, various female staffers at the White House, Huma Abedin and her flash flick husband and above all Hilary’s extraordinary decision, brushed off as careless but in truth surely calculating, to run the world’s most powerful foreign affairs department through a private, rather than government, email server. When you stop and consider it, that is truly odd.

Trump’s misdemeanours are by comparison rather unsophisticated and straightforward, if repellent to many. But at least with Trump you are likely to get what it says on his tin. But the biggest problem of this election is that many serious and patriotic Americans feel Hilary’s tin is a can of worms and they worry.

So should we.

A Shortage Of Public Cash: Hammond Should Act

If you have a deficit in your household budget you have two options. You can cut your expenditure or you can increase your income. Or you can do some of each. Some expenditures are difficult to cut and some occupations do not readily offer income expansion.

The government, any government, has the same choices. For eight years now we have been locked in a continuous squeeze on the public purse, yet the budget remains in deficit and the national debt grows. Moreover all public services, especially health and social care, as well as parts of education, are showing real signs of serious strain, which can only get worse as resources fall and demand grows. More cuts will not help, because the heart of the issue is not waste (although there is waste), but a shortage of income for the government, because taxes no longer provide enough.

The solution lies in an increase in revenue. A hike in tax rates will not achieve that, neither will a cut. What is required is taxation reform of business and capital taxes away from profits, towards the circulation of money. In other words a transaction tax for capital and a turnover tax for business. That will broaden the taxation base, simplify it enormously and increase revenue. Rates will be lower because the taxable events will be greater and avoidance impossible, because the event is the circulation of money, not a financial event of taxable classification. It is indeed radical thinking, but if this Brexit thing is to happen and be made to work, nothing less in the thought process will do.

Prepare For Prsident Trump?

Most people thought it impossible that he would survive the primaries. Even more ridiculed the notion that he could clinch the nomination. That he could be president was off the page, the more so since the tape, the gropings and the non taxes. Yet here is, on a roll, the polls narrowing and Clinton imploding under a new emails scandal.

Of course we cannot yet tell whether the latest rather nuanced declaration from the FBI is seismic or simply routine. Wise commentators, who understand the American system, say the FBI is not stupid and would never have acted in the run up to polling day without very good reason. It may not be hard to identify that reason. Whatever the new evidence is could have caused a subsequent crisis for the FBI, if later it transpired it had something which it kept under wraps, which allowed the voters to vote in Hilary, when had they known, they might have held back. A cover up on a spectacular scale. So what is the evidence? This blog does not know, but there is loads of speculation on the net which you can follow up, if you wish to.

The important thing is this. It is just the event the Clinton campaign feared and the Trump campaign wished for. More scandal about Hilary, widely distrusted even by her supporters. The difference between the scandals which swirl around the two most unsuitable contenders in an American election since Abraham Lincoln, is this. With Trump you just find  a serial groper, if you believe his accusers, and a sharp eye for tax avoidance, laced with misogyny and late payment of bills owed to small businesses who do work for him. With Hilary, the more you or the FBI dig, the more stuff wrapped in a question mark you find. And now everybody has a spade. In the run up to polling day.

There is one opinion poll which I think is important, especially now. According to an Economist/YouGov poll, 63% of Americans are unhappy with the direction of their country. That’s a big number. Hilary stands for the things only 37% are happy with. Trump is for change. What that change is exactly, is unclear, but, just like Brexit, it may be a moment for Americans too, to take a leap in the dark.

Brexit Reading: Turn Left To Power

Malcolm Blair-Robinson is a writer and blogger who has been a keen political observer for more than sixty years. Born a Tory, he became a founder member of the SDP, before gradually migrating left. In 2014 he published his idea of Dynamic Quantitative Easing which aroused interest in high places and this forms a core element of this powerful and compact analysis of Labour’s opportunity to regain power. Frank and at a times brutal, Turn Left To Power offers a collection of fundamental reforms which amount to a political revolution.

Post Brexit and with the swing left of the  political centre ground, as the failure of globalization to bring improving prosperity to the majority becomes the mainstream challenge worldwide, this small volume is a must read whichever political party you favour or if you favour none.

CLICK IMAGE TO BUY DOWNLOAD OR PAPERBACK

Brexit Reading: Turn Left For Power

Malcolm Blair-Robinson is a writer and blogger who has been a keen political observer for more than sixty years. Born a Tory, he became a founder member of the SDP, before gradually migrating left. In 2014 he published his idea of Dynamic Quantitative Easing which aroused interest in high places and this forms a core element of this powerful and compact analysis of Labour’s opportunity to regain power. Frank and at a times brutal, Turn Left For Power offers a collection of fundamental reforms which amount to a political revolution.

Post Brexit and with the swing left of the  political centre ground, as the failure of globalization to bring improving prosperity to the majority becomes the mainstream challenge worldwide, this small volume is a must read whichever political party you favour or if you favour none.

CLICK IMAGE TO BUY DOWNLOAD OR PAPERBACK

Nissan: Is This A Brexit Clue?

Political and economic commentators are somewhat perplexed by the enthusiasm of Nissan management for the commitment to competitiveness, the assurances, the industrial strategy and the support for innovation, which they have found in the Brexit plans of the May government. So enthusiastic are they, that they plan to build not one new model in Sunderland, in defiance of their own anxieties about the consequences of a hard Brexit, but two. They and the government assert that there has been no offer of financial compensation for Brexit costs. If you believe them, then something more has happened. More than some nice platitudes over a cup of tea. So what could this be?  Is this a clue to the government’s closely guarded secret negotiating hand? Or is it just another undeliverable muddle from a Tory party which has made undeliverable initiatives its signature dish?

Let us go with the former and venture into the very dangerous territory of calling Hammond’s November Statement. Suppose the key foundation of the Brexit plan is to stun the country and the EU with a financial stimulus on a scale unknown in modern times, which will not only be a political elixir at home but will appeal directly to the disgruntled masses of EU citizens, fed up with low growth, unnerving their already nervous politicians. What if this stunning offer would be impossible under EU rules but there for the taking by a nation set free?

Suppose it involves massive infrastructure and social housing investment, support for a skills upgrade of the workforce, government intervention to support the steel industry and above all a commitment to hold the value of sterling down so that whatever tariffs come along UK manufactured goods will be ultra competitive all across the world? And imports of foreign cars more expensive? And suppose that is backed by slashing corporation tax to Irish levels to make the UK the place to emerge profits? That is opening the doors for British business, and the gates and windows too.

To achieve it would require government borrowing on an undreamed of scale. Or would it? Remember May’s speech to the Tory conference, when she said quantitative easing had not worked for ordinary people and industry as a whole, but only the financial sector and those with assets? Well suppose the idea is to use dynamic quantitative easing direct into the base of the economy to create new wealth?

It is all possible. The government would need to take control of the money supply, interest rates, money printing and the currency trading band, as well as inflation. Ideally it should begin a  shift of taxation from profit to turnover and from capital gain to transaction value, but that can happen step by step. It is all in my little book Turn Left For Power. I wrote it as a road map for Labour. But there is no reason why the left leaning May government should not follow it too.

If none of this happens when Hammond gets to his feet, you will know two things for sure. The government does not have a plan and Brexit sooner or later is over.

Tony Blair : This Time He Is Right

This blog, as readers know, is no fan of Tony Blair, or of his political child New Labour. Both are subject to unrelenting criticism in my Dissertation Turn Left For Power. Indeed whenever he intervenes in UK politics, usually with some anti- Corbyn rant, this blog rushes to slap his argument down. But today he has been in an article and a radio interview one of the few rational and informed contributors to the post Brexit debate and this blog applauds his stand. It is indeed the case that the people voted for Brexit on a prospectus which clearly cannot be me in reality. There will either be soft Brexit, which will place limits on Parliament’s sovereignty, require some financial contributions virtual unrestricted free movement of people to gain tariff ree access to the single market

Heathrow: A Viable Choice?

Taken from a rational economic perspective, the picture of this additional runway for Heathrow looks sharp and sensible and is widely supported by business as the right choice. If it ended there we could be confident that the project will proceed. It does not end there. It starts there, so where does it end? The odds are on nowhere.

The political , environmental and legal challenges are likely to bog it down. There are at least a million people whose lives will be changed by noise and pollution at unacceptable, even illegal, levels. Tory voting constituencies which are affected and feel betrayed by promises previously made, vital to the re-election of May’s government, are up in arms. One MP has resigned. The Liberal Democrats are looking forward to a comeback. They do comebacks rather well. So although it may have been the right decision in theory, it was almost certainly wrong in practice.

A better way would have been to sanction new runways at Gatwick, Luton and Standsted, built by private investment, and for the government to build a high speed rail line, to link all four London airports, Heathrow, Gatwick, Luton and Stansted, to each other and to the main HS rail network. That would have really shown the world that Britain is open for business.