Sunday, May 14, 2017

Conway & Giles: Election Boldness & Challenge...and so say all of us.

The 2015 election was dominated by the scare stories about the irresponsible plans of Labour against the wisdom of austerity-promotion by the Tories. Electioneering half truths, as usual.  This time the 'leader competence' issue (May vs Corben) is the main Tory theme so far.  Labour is proposing £60bn extra spending for the NHS, education and scrapping university tuition fees. The Tories are using 'nonsensical'  as a favourite word to describe Labour policies and so far Labour poll figures are inching up (but still low), but there are 3 weeks to go. The Lib-Dems are also planning to spend more on health and education. Fuller manifestos are yet to appear.

The ways of financing more spending may not give the Conservatives so much traction as earlier. We have Donald Trump promising mega-spending and US ideas may travel to the UK. The old austerity scare seems to have changed and may be ineffective with voters. Labour is promising to spend to invest.  They say they will establish a national investment bank to release extra funding - different to the British Business Bank?  But also,why not, for the benefit of local economic growth at minimal cost, encourage the establishment of  local community banks See this new venture. 

Ed Conway (Times May 12, 2017) 'Wanted: Some bold ideas to fix the economy' calls for radical action such as: replacing council tax with a proper land value tax; repeal of the Town and Country Planning Act - that 'simply gold plates nimbyism'; giving the Bank of England a mandate to 'target national economic output instead of inflation'. Conway thinks that the opposition should promote such radical ideas and - even if they lose the election as the polls suggest - at least they could introduce some fresh ideas into UK politics to our general relief. Let's have a proper debate over quite different issues. Please. Conway mentions that the monetary system has failed to kick-start the economy, but doesn't mention trying Government deficit financing (see Lord Adair Turner: Monetary Reform ) - maybe Labour's spending plans will incorporate something of this?  Then the Tories may surprise us with radical thinking as per the rumours of talks with Lord Glasman ('Blue Labour').    

Chris Giles (FT 12 May 2017) 'A challenge for May: reward effort over inheritance' taunts the May appeal for the 'ordinary working British families' . The Tories have borrowed from Labour the idea of capping energy bills - i.e. don't let free markets run on. Very UnTory. Giles highlights the roaring house prices of several years  (much boosted by Tory government help) and says that something must be done by a government aiming to benefit ordinary working families to make homes more affordable.  Will they do such an UnTory thing as to knock house prices?  He quotes Prof David Miles that there is no upper limit to house prices relative to incomes especially given the inheritance benefit of the current tax situation, and given that building is artificially constrained by lack of new land. Conway says that to counter the growing wealth disparity arising from favouring comfortably situated home owners for years, Mrs May needs to build on the green belt and raise more inheritance tax on property. This would really be UnTory if it happened. How reforming is Mrs May to be?

Or will Labour and the Lib-Dems demonstrate they care more about the growing minority of left-outs? There are a growing number of home renters who despair of home ownership and students who face large university debt to pay off before ever hoping to save for a house deposit. This is a radical change happening now in the UK and politicians need to tell us what is needed to bring us back to earlier fairness.  Prof Richard Werner in New Paradigm in Macroeconomics (p340-1) promotes the idea of government credit creation of $100,000 for each child born to spend on such productive things as education. Why are not for such ideas as his and Lord Turner's to be seriously proposed by opposition parties with 'nothing to lose'? They might actually gain traction. Three more weeks of dreary party bashing? Can't someone raise the intellectual game?

Posted by Charles Bazlinton. Author: The Free Lunch - Fairness with Freedom.
Director Local First CIC - Promoting Local Banks         

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