Thoughts on America's emerging market tendencies, bracing for a USExit, Britain's wasted crisis, and the perilous position of the Baltics in Trump's new Yalta
True, though unfortunately it took eight years for the Brexit fiasco to destroy the Tory party and during the time the party radicalised further under Boris Johnson and Liz Truss. God help us if America follows a similar trajectory!
The current Government's public statements on relations with the EU appear to be shaped by Morgan McSweeney's political dogma 'do not disturb the traditional Labor voter, nor those who had never voted until the 2016 Referendum but then voted against the 'establishment'. The argument goes that these will bolt to Reform unless the government can show them that it is palpably improving their well-being and sense of place. The challenge is to improve both within the meagre resources available given their manifesto commitments. It is not clear that the Starmer-Reeves administration is intellectually and politically capable of leveraging the Russo-Ukrainian crisis to carry out the fiscal reforms and realignment with the EU necessary to achieve growth and therefore sustain its huge Parliamentary majority. The last a guarantee of stability in a changing world.
I think this is exactly right. I share your concern that the Starmer-Reeves administration may not be capable of leveraging the Russo-Ukraine crisis to push bold reforms.
I think their motives are of the best, and they have done their homework with thinkers who are thinking 'outside the box' - e.g. on stakeholder approaches (UBI etc.). They have been cowed by the media into adopting an overly technocratic approach - reform by stealth. They should be reminded that the Beveridge Report was not only a blueprint for the postwar age, drew on traditions of radical thinking - and became HMSO's best-seller.
Hey Simon, excellent as usual - especially your quote of your own analysis in the Byline Times
I find it incredibly frustrating right now that the conversation on the left is pivoting to a wealth tax (perhaps the extra noise at the behest of Gary Stevenson) - there’s so many good fiscal ideas they could be discussing instead, several as you say, but if they cared about progressive policies, it’s maddening that there is zero momentum around wholesale tax reform, eg bringing NICs into income tax and reforming council tax
I really hope that this Labour gov is not going to be boxed in for five years by the early election call in 2024 which they dont seem to have been ready for, which appear to have left them idea-less and making easy mistakes on the policy front (the manifesto commitments, the debt definition change) and with policy from now contingent on what they did then…
Thanks James. I agree that the debate on the left is unhelpful, being largely based on wishful thinking. This government seems to have a worrying inability to take risks and set the agenda. Wholesale tax reform is long overdue but requires careful planning and consultation. But Reeves has made no attempt to roll the pitch which suggests it is not on her agenda
agreed, I don't think that they understand that the messing round with GBP10bn of fiscal space every six months would be worse than biting the bullet and making big change that might upset some people (as long as that big change means less issuance and a more sustainable expenditure path)
Excellent read, Simon. About tariffs, I, too, have been struck by the lack of attention to the link between tariffs and tax cuts. And I was interested to hear a US economist, Professor Susan Helper, tell Times Radio yesterday that, unlike a lot of economists, she sees a case for tariffs - that were strategic, limited, accompanied by complementary policies and implemented with some certainty. "And these tariffs have none of those things," she said.
The Labour government's timidity goes beyond fiscal tinkering. There is a need for bolder leadership - and there are opportunities, such as the new/revamped industrial strategy promised for this summer. I hope it has impact, but it will have to be better than the the consultative green paper: "Invest 2035: the UK's modern industrial strategy", published last autumn, which was painfully short of ideas and plain language.
What would you suggest Reeves does to "smash the emergency glass"? A £5bn welfare cut is peanuts compared to the amount of spending that needs to be saved. Meanwhile, when compared to most other European countries (excluding Iberia) the 0.2% of GDP defence spending rise is next to nothing.
Like #Brexit has destroyed the Conservative Party in the UK, Trump's Presidency will destroy the Republican Party in the USA.
True, though unfortunately it took eight years for the Brexit fiasco to destroy the Tory party and during the time the party radicalised further under Boris Johnson and Liz Truss. God help us if America follows a similar trajectory!
I think the USA is in the Johnson phase. It will take less time than the UK. They're a lot less tolerant than us.
Perhaps, but an American Liz Truss moment when it comes will be harder to correct…
The current Government's public statements on relations with the EU appear to be shaped by Morgan McSweeney's political dogma 'do not disturb the traditional Labor voter, nor those who had never voted until the 2016 Referendum but then voted against the 'establishment'. The argument goes that these will bolt to Reform unless the government can show them that it is palpably improving their well-being and sense of place. The challenge is to improve both within the meagre resources available given their manifesto commitments. It is not clear that the Starmer-Reeves administration is intellectually and politically capable of leveraging the Russo-Ukrainian crisis to carry out the fiscal reforms and realignment with the EU necessary to achieve growth and therefore sustain its huge Parliamentary majority. The last a guarantee of stability in a changing world.
I think this is exactly right. I share your concern that the Starmer-Reeves administration may not be capable of leveraging the Russo-Ukraine crisis to push bold reforms.
I think their motives are of the best, and they have done their homework with thinkers who are thinking 'outside the box' - e.g. on stakeholder approaches (UBI etc.). They have been cowed by the media into adopting an overly technocratic approach - reform by stealth. They should be reminded that the Beveridge Report was not only a blueprint for the postwar age, drew on traditions of radical thinking - and became HMSO's best-seller.
Hey Simon, excellent as usual - especially your quote of your own analysis in the Byline Times
I find it incredibly frustrating right now that the conversation on the left is pivoting to a wealth tax (perhaps the extra noise at the behest of Gary Stevenson) - there’s so many good fiscal ideas they could be discussing instead, several as you say, but if they cared about progressive policies, it’s maddening that there is zero momentum around wholesale tax reform, eg bringing NICs into income tax and reforming council tax
I really hope that this Labour gov is not going to be boxed in for five years by the early election call in 2024 which they dont seem to have been ready for, which appear to have left them idea-less and making easy mistakes on the policy front (the manifesto commitments, the debt definition change) and with policy from now contingent on what they did then…
Thanks James. I agree that the debate on the left is unhelpful, being largely based on wishful thinking. This government seems to have a worrying inability to take risks and set the agenda. Wholesale tax reform is long overdue but requires careful planning and consultation. But Reeves has made no attempt to roll the pitch which suggests it is not on her agenda
agreed, I don't think that they understand that the messing round with GBP10bn of fiscal space every six months would be worse than biting the bullet and making big change that might upset some people (as long as that big change means less issuance and a more sustainable expenditure path)
Excellent read, Simon. About tariffs, I, too, have been struck by the lack of attention to the link between tariffs and tax cuts. And I was interested to hear a US economist, Professor Susan Helper, tell Times Radio yesterday that, unlike a lot of economists, she sees a case for tariffs - that were strategic, limited, accompanied by complementary policies and implemented with some certainty. "And these tariffs have none of those things," she said.
The Labour government's timidity goes beyond fiscal tinkering. There is a need for bolder leadership - and there are opportunities, such as the new/revamped industrial strategy promised for this summer. I hope it has impact, but it will have to be better than the the consultative green paper: "Invest 2035: the UK's modern industrial strategy", published last autumn, which was painfully short of ideas and plain language.
What would you suggest Reeves does to "smash the emergency glass"? A £5bn welfare cut is peanuts compared to the amount of spending that needs to be saved. Meanwhile, when compared to most other European countries (excluding Iberia) the 0.2% of GDP defence spending rise is next to nothing.
Please. Someone put this guy in touch with Starmer.
Brexit will not be over until we are back in the Single market.
We are the only modern democracy that does not have a property tax. In a country where many make a fortune from property.
I could go on...... CGT etc..
Then we might keep the cons and Farage out of UK politics longer.