The cost of costing manifestos

Making sure to add up the cost of all your manifesto promises seems like common sense. As I show in this article, though, it is anything but…

The costing of the manifestos is perhaps the most unrelenting of all the election traditions. Like the interminable bore who insists on only paying for his exact share of the restaurant bill, the media police party manifestos of all colours: crying foul for each and every ‘uncosted’ policy and giving praise where spending has been matched with tax – a sort of Tinder for fiscal rectitude.

Costing is a new phenomenon, based on poor economics and politically biased…

But governments are not really like households at all: they are different in type rather than size. Unlike the average household, governments can create money, by borrowing from the bond market. It is this which funds the NHS, public schools and the Royal Navy, not tax income. Sure, governments cannot borrow indefinitely – as the Greek crisis has shown – but in normal times they are able to do so with relative ease. In 1945, for example, British national debt stood at around 200% GDP (it is now ‘only’ 81%), but the Attlee government was still able to fund the construction of the welfare state.

In reality, each penny of new spending does not need an extra penny of tax. To insist that it does is to fundamentally misunderstand economics.

Finish the article on Huff Post

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Theresa is not a leader

There has been lots of broad criticism of Theresa May’s leadership style in the past few weeks. Unfortunately, very little of it digs into which leadership qualities she lacks:

Any leader is defined by their capabilities and the context in which they act. Some excellent leaders can be derailed by an unfortunate change in circumstances. Equally, some poor leaders are able to fly under the radar through periods of relative stability. Until this week, Theresa May appeared to be the former; now it is almost certain that she is the latter – a limited leader whose personal foibles have been exposed by the collapse of political order…

Read the article on Huff Post

The Wrong Time For An Election

At 11.15am on Wednesday, Theresa May announced that there will be a general election on June 8th, a significant step towards implementing her vision of a hard Brexit. In announcing an election – having refused to offer one, up to now – May has taken on considerable political risk.

After all, the very Brexit vote result which delivered her to Number 10 was never meant to have happened. The greater risk, however, is that this election misleads an electorate weary of endless Brexit chatter. If the terms of the debate are not set clearly, Britons may inadvertently allow the Conservative party to define the nature of Britain for decades to come.

And how?

In June, empowered by her election victory, May will argue that she has a mandate for her particularly hard kind of Brexit, when the electorate will, in reality, have voted for her strength in leadership. A vote about competence will be held up as a vote for ideas – delivery as destination…

Her majority secured, May will have the democratic mandate to guide not only the negotiations running up to 2019 but also the shape of the political economy thereafter. Under the conditions of the Fixed-term Parliaments Act, May has the right to govern for five years – up to 2022. This will give her government a three-year free license to alter domestic policy, after negotiations close in spring 2019.

Voters be wary – this election is more important than it seems…

Finish the article on the Market Mogul