Malcolm Blair-Robinson's Blog, page 97

The Budget: A Waste of Time? And A Big Blunder?

You have to have a Budget to gain parliamentary sanction for spending and investment for the coming financial year. So it has to happen. But it does not have to be politically dramatic, nor does it have to be re-constructional, nor does it need to be a framework  for economic remodeling.  But this Budget needed to be all three, because the work has to begin to equip this country to prosper under whatever form of Brexit we are forced by circumstances to submit. This means changing an economic model which sucks wealth from the many to the few, relies on asset inflation, and creaks under a taxation framework designed in the first half of the twentieth century, now utterly unfit for purpose. The consequences are everywhere to be seen and are felt by the majority of families all across the land.

Yet the show stopper of Hammond’s debut effort yesterday was a big hit on the self-employed. What a blunder! You cannot reform taxation by hitting at minorities bit by bit. They at once feel put upon because they are not part of the big picture. They are carrying the load for everybody. Why? Because says Phil, who has clearly lost the plot, they get the same benefits as everybody else and they should pay the same tax. Dear me. They do not get holiday pay or sick pay or maternity leave if they are small or start ups, because if they are not working no money comes in. So they have to provide all that for themselves and paying less tax helps them to do that.

This is politically peculiar for another reason. Most economists tell us that without immigration and the growth in self-employment, there would be no economic growth at all. This government is hitting both. Moreover this fragile growth is nearer stagnation than real expansion, which is why we are continuing to live in perpetual austerity. Last of all most self employed people vote Tory. But they also voted Remain. Suppose they switch, as they have before, to the Lib Dems, especially in the South and South East? There is a phrase for that in Tory HQ. Ooh err….

A Snap Election? May Yes or No?

May is a shrewd politician. She knows that the opinion polls predict a landslide for her if she went to the country now. She also knows that opinion polls can be wrong. But the reason that she would be taking a terrific gamble (and she is not a gambler) is that an election fought now would become a second Brexit vote.

With the vagaries of the first past the post system, a coalition of outright opposition to Brexit, (the Lib Dems and SNP) and those opposed to hard Brexit (Labour), would be very likely to win a majority of Commons seats. There is, or was, a majority to leave the EU, but never to leave the single market and the customs union. Only a minority of ideologues actually want that and it is to that her government is effectively committed. May knows she won Copeland where Brexit was not really a feature, but when it was, Richmond Park, she lost fair and square a very safe seat.

Rather than a big majority, as promoted by those advising her to repeal the fixed term parliament act so as to be able to ask for a Dissolution, she could well end up without a majority relying on the likes of the Democratic Unionists or even UKIP. Or be excluded form government altogether. This Blog cannot predict that she will stay put and soldier on, but certainly speculates that she will. She is also haunted by the fate of David Cameron, who thought he was sure to win the fateful referendum.

Quantitative Easing Explained. Download 99p: Paperback £2.99

An idea to stimulate economic growth without further government borrowing. Written in plain English and very easy to follow, this is the only really fresh approach out there to the intractable problems of the UK economy, and it is just beginning to be noticed in important places. Buy! Download only .99p Paperback £2.99

Kindle or Paperback  UK        US            

Boris and Phil and Dave: May’s Strong Men

This week we have Phil’s first full Budget. We also have the best piece of news coming out of the Foreign Office for more than five years. Boris is off to Moscow. And at the end of the month Article 50 is triggered, putting David Davis into overdrive. These three are the big hitters who hold the fate of Theresa May’s government in their hands. So far May’s vicarage style rhetoric has carried the Tories to dizzy heights few expected. But the time for speeches is almost over. Action and indeed outcomes will now begin to drive the political climate. As we know, they speak louder than words. Boris, Phil and Dave will be in the thick of it. The rest of the government are muddlers and nonentities, failing at almost every level.

The first set piece event is the Budget on Wednesday. This blog will declare its disappointment in advance. We have a stagnating economy which would have no growth at all without immigration and PPI compensation. The whole economic model is dysfunctional, with the relationship between money supply, asset inflation and interest rates completely broken down with nobody either in charge or in control. Tinkering with tax rates will have no effect and more borrowing, even to invest, is questionable when the interest bill for the government, at very low rates, is already over £50 billion per annum. The solution, indeed the only viable option and the economically correct one, is to have a big stimulus funded by treasury quantitative easing. Until that is accepted beyond this blog, nothing much will work as planned. But the forecasts will continue and the targets will be missed.

The chances of the cautious Hammond having the courage to do this are slim. But he may surprise us. Let us hope so.

 

UK Union: Is It Safer?

Politically it looks more at risk because of the majority in Scotland voting Remain. This has presented a strong platform for a strident Nicola Sturgeon to fight for Scotland’s interests and threaten another independence referendum if London does not listen. But whilst politics is the driver of the referendum itself, economics is the driver of how people vote in it. And the economics do not favour Scottish independence. The oil revenues are half what they were last time, which failed because of a muddled approach to the currency  and a bravado agenda for the economy that sometimes defied arithmetic.

Moreover if Scotland broke from England and the remaining UK went for hard Brexit, that would mean a customs border and tariffs on Scottish exports South, which account for twice as much trade as Scottish exports to the EU. Naval shipbuilding and refitting would also migrate south to Portsmouth. So if Scots were nervous last time, they could be more so next time, if there is one. Nothing is for certain; even the EU itself is showing political uncertainties and stresses, both inside the eurozone and outside it, which were not so obvious before. So while the rhetoric from Edinburgh will grow more shrill, the threat may actually diminish. We will have to wait and see.

Transatlantic Thriller: Download or Paperpack

Dr. Rachael Benedict is an American historian and a best-selling author. Through the death of her estranged father she sets out to expose secrets from the Nazi era, which are so sensitive they have been subject to an extensive cover-up lasting seventy years.  This provokes a killing spree as parts of the security services of both Britain and the United States become engaged in the drama, with one side determined to get the secrets out and the other determined to keep them hidden.

Rachael battles forward to unearth the truth from intrigues of the past, but also within her own family, surviving three attempts on her life, before finally achieving her goal. Not only does she expose the truth from history and from her own roots, she has to delve deep into her own emotions to find the truth about hers elf.

Click on image for uk.          Click here for US

American Democrats: Get Real

There are always two Americas. At the worst they fought a civil war and at best they unite as one, to face a challenge together, as after 9/11. But it is not always the same two, although broadly it is, like every democracy, a conservative tendency versus a liberal enlightenment. What is going on now is doing America’s standing in the world a great deal of harm.

It is not about the two Americas. It is about one political party, the Democrats. They are behaving like spoiled children in a grown up world because they lost the Presidency and control of Congress. This was not because of Russian hackers, but because  the Clinton/Obama years had failed to protect the interests of ordinary working people upon whom their party relies to win. Furthermore if there was any fallout from the Wikileaks disclosures it was not because a dodgy Clinton’s e-mails were hacked, but because she wrote them.

There is no doubt that Trump is what in England we might call a Marmite President. A unique flavour you either love or hate, nothing in between. But he is the President, he is clearly working at an astonishing pace for a 71 year old and he is doing his best. It is irrelevant whether you like his policies or not. It is also irrelevant whether there are screw-ups in a White House bedding down. But what is very relevant is the duty incumbent upon the smarting Democrats to be a responsible Opposition, which is both effective and dignified. America is not at war with Russia. Russia is not the Soviet Union. There is not a single western democracy in which politicians cannot talk to whomsoever they like, because that is what freedom is.

The Attorney General may have talked to the Russian Ambassador in connection with his congressional duties before he joined the Trump administration, and there is absolutely no valid reason anybody, outside the fetid cauldron of Democratic party despair, can see why he should not. He answered a question about  contacts at his confirmation hearing truthfully by saying he had not had contacts with the Russian government in connection with the Trump campaign.

Two final points. The Democratic Party of the United States, previously the one I have favoured from afar, is now a political train wreck and needs to do something about itself.  Second, if the fabric of the world’s leading democracy is so rotten that it can be destabilized by Russian hackers using methodology and algorithms within the competence of thousands of teenagers across the world, there is work to be done there too.

 

Brexit: Headwinds Building?

This Blog is beginning to detect a change of political mood about Brexit. There is no doubt that the prophesied disaster in the aftermath of Brexit vote not only did not happen, but was supplanted by a kind of euphoria that the Brits had stood up to be counted and were willing to have a go on their own. Then it was all about legal process and the constitution. And there was May and her no nonsense approach. This ensured a relatively smooth passage of Article 50 through the Commons. Yes there may be a few delays via the Lords, but nothing significant. So we will be all set to go into the negotiations with clear heads and firm purpose by the end of this month. So what is different?

Now or very soon it will be not the politics, but the money and the consequences. Here hard facts determine outcomes, which may not all be good news.  It will get more difficult as people begin to see where the hurt will strike, especially if it strikes them. There have been new warnings from the defeated grandees, Blair, Major and Osborne and this time they were taken a little more seriously than before. There are now many City firms preparing to move outrider footprints to Paris or Frankfurt. Vauxhall’s future production plants in the UK look threatened. Did Nissan understand that May was going for hard Brexit, even over the cliff Brexit? What about this E60 billion bill to meet our ‘commitments’ which nobody told us about before? Apparently the government is now really worried about a fresh Scottish referendum in the face of hard Brexit. What is going to happen in Ireland? What about Gibraltar? The list is piling up.

Maybe there are answers. We hope so. News that top insiders describe various government ‘how to go forward’ meetings as shambolic is not encouraging.

Turn Left To Power

Turn Left To Power is an explosive dissertation in book form offering a fundamental redirection for Labour’s return to power, with bold ideas for a new economic and social settlement, including economic and taxation reform, restoration of responsibility in government and a renewal of democracy. The ideas are relevant whether Brexit goes hard or soft. Frank and at a times brutal, Turn Left To Power offers a collection of fundamental reforms which amount to a political revolution which can propel Labour back to government in 2020.

Check it out now. Paperback £4.99   Kindle £1.99     AMAZON UK

Labour’s Long Haul

Once again the Labour party risks further erosion of support by discussing its leadership. So it is time to get real. Labour’s problems are not about Corbyn. It is almost certainly the case that under another leader they would have lost both Copeland and Stoke. Stoke held because Corbyn saw off UKIP’s Nuttall. But that is not the message of this post.

The message is that Labour is not the natural party of government, it is a movement for change; moreover it has its roots in socialist principles, it is of the left, it is for ordinary people and it will govern only when its socialist ideology, its proposed economic reforms and the demands of ordinary people align themselves. It is a startling fact that in the 100 years during which Labour can be ranked as a major political force, only three leaders of the party, Attlee, Wilson and Blair, have ever won a majority at Westminster and formed a government. Callaghan and Brown fought one election each and both lost. Over the same period there have been twelve Tory prime ministers, including May. Only two Conservative leaders in that hundred years have failed to make it to Downing Street, having fought one or more general elections, Hague and Howard.

There is more. Labour’s roots are socialist, but also Scottish and Welsh. It is not an English party by heritage and sends MPs to Westminster from cities and deprived areas in England but never from prosperous rural shires or suburbs doing okay. So if you factor in annihilation in Scotland, with little chance of that changing, Labour is in a serious predicament, not only missing over forty MPs, but also a good deal of talent. So to imagine that changing a leader who has twice been elected by a mass membership which he has grown to the biggest in Europe is, it seems to this blog, to simplify a complex problem. Where that to happen, you would change the cast but not the play. Soon the old refrain would be back; ‘we cannot win under Bloggins’. So how can Labour win?

First of all if the parliamentary party, including the best talent, does not unite behind the leader, it cannot. The British public never vote for split parties. But and this is a a serious point, moving from the left to the centre will make matters worse. The present crisis for Labour has its origins not in Corbyn, but in Blair. For it was the perceived and mostly actual abandonment of the traditional working class and its ability to rely on decent employment prospects in worthwhile jobs, by New Labour, which shrank the Labour vote by over 5 million post 1997. These lost voters have yet to be recovered and until they are Labour will have to content itself with Opposition.

To win them back requires a narrative which people can follow and remember, which relates to them and which offers hope. Its core has to be an economic re-boot of spectacular scale which erases the failures of austerity and delivers real, consistent, economic growth of 5% for several years, driven not by asset inflation but new production to create new wealth. If Labour can present that manifesto of hope and ambition in 2020 it will achieve, post Brexit, a spectacular win, even with Corbyn as leader. Just as Attlee did post  WWII in 1945. Yes May is riding high at the moment and in 2020 could be riding higher still, but Labour need have no doubts. Just think how high the victorious Churchill was riding in 1945, yet he lost to a Labour landslide, because Attlee’s message of a better way forward resonated with the people. In politics nothing is impossible.