Blog 2023 Malcolm Blair-Robinson

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.

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.

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.

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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 To 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.

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 met in reality. There will either be Soft Brexit, which will place limits on Parliament’s sovereignty, require some financial contributions with virtually unrestricted free movement of people, to gain tariff free access to the single market, or Hard Brexit which will have potentially major financial and economic implications which could cost jobs and prosperity for a generation. Nobody knows for sure until some indication of the terms on offer are clear.

At that point Blair says the people, either through a parliamentary vote, a general election or another referendum, must have an opportunity to confirm their commitment to Brexit, or to change their minds. There was in June a small margin for Brexit, yes. But not at any price.

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.

Whichever way you look, problems are piling up over Brexit. This is because the Brexit which everyone was promised is a fantasy. Even if a soft Brexit were pushed through the EU council of ministers, the chances of an absolute majority in the EU parliament backing it are slim and as we now see from the Canada trade agreement debacle, the chances of getting all parts of the 27 member states to ratify some special deal which favours Britain are near to zero.

In fairness to May she was not the author of this misfortune; she came in to pick up the pieces. Cameron had promised throughout the referendum campaign that if defeated he would carry on, trigger Article 50 immediately and negotiate the exit. He broke that promise straight away. Furthermore the notion of Brexit was never a product of policy analysis, but rather of emotional prejudice, which became a source of never ending civil war within the Tory party. Cameron’s decision to offer the referendum had nothing to do with changing the fortunes of his country. It was designed to end the civil war in his party. Of the 17 million who voted Brexit, it is clear that at least 5 million voted to kick the political class, the establishment and the bankers in the teeth, without a thought for what Brexit actually was.

A proper government would have had, before proceeding with the referendum, Cobra style case studies prepared both for staying in and for Brexit, what the future would hold under both and how the process of Brexiting would work and with what objectives in view. Those objectives would have been stress tested to see if they were achievable or based on wishful thinking and fantasy. This would have led to a coherent and sensible plan, allowing a timely and orderly procession to the chosen Brexit option, with all the stakeholders clear about our vision of the way forward. Instead of which the good ship GB set sail into unknown seas, without charts or compass and without agreement among the crew, the captain who proposed the voyage having jumped overboard before it left harbour.

So Hard Brexit, ranging from rock hard to jolly uncomfortable, is the only option and although the three Brexiteers in the cabinet, Boris, Davis and Fox will go with that, the House of Commons will not. Scotland is already making very angry noises, the governments of Wales and Northern Ireland are anxious, the City is dismayed, business investment is on hold and still we have no idea what the government’s plans actually are, if they exist at all.

Now we learn that, contrary to what we were told by the promoters of this reckless adventure,  our membership of the WTO is via the EU and will have to be ‘renewed’. That will require detailed negotiations which cannot begin until we have left the EU, will take about two years and have to be agreed by all the other members, over 160 of them, including the likes of Russia, whom we constantly upbraid and criticize. Downing Street still falls back on the mantra that Brexit means Brexit, but neither it nor anyone else knows what Brexit means. Well the truth is beginning to dawn.

There will be consequences. The only relief may be if in the up coming elections in 2017 Merkel, Hollande and Renzi are voted out and replaced by populist Eurosceptics. In that event there will be a real chance for the whole EU to start to unravel. That would be the worst option of all. Forest fires start from the smallest spark, or fools like Cameron, playing with matches.

This result is very significant. It is way off the national opinion polls with not just a big drop in the Tory  share of the  vote but a big advance for the Lib Dems. This will play heavily into politics at Westminster, because the Lib Dems are the only party which is actively campaigning to reverse Brexit. Translated into real politics it means this. The government stands very little chance of getting much beyond Hard Brexit in its negotiations, which will be pretty much a choice between hard Brexit or no Brexit.

The government (in neither the government nor the Commons is there a majority who want Brexit) will have difficulty in demonstrating the advantages of that leap in the dark, while the snags will be obvious and the pain of falling living standards and rising costs will be beginning to hurt. When May comes to the Commons to get the deal passed it will be defeated. The subsequent general election will be unwinnable for the Tories, because unlike the referendum, not every vote will count. It will depend where it is cast. Moreover voting for the proposition will almost certainly push Scotland to independence and bring an end to the United Kingdom. England, the Brexit stronghold, will shrink from that. Brexit will be over.

The only person who can save the day is Hammond, by introducing an eye popping economic stimulus in November to run alongside the fall in sterling, which will demonstrate to the country and to the world that the future for the whole UK, whatever sort of Brexit, in or out of Europe, is golden. If he cannot do that Brexit sooner or later is over.

As for the Tory Right Wing who have campaigned for Brexit for years, and the imploded UKIP founded for the single issue of Brexit, they will face a devastating price for their complete failure to invest the intellectual energy to plan and to prepare so that they could lead their country forward through the biggest political event, short of war, in its modern history. They will pay with their dreams.

There are reports that May’s ministers, in conversations with EU officials, reveal a surprising lack of knowledge of the details of how the EU actually works. This would explain the complete paralysis apparently gripping the government about how to proceed with Brexit, because their Brexiteers had literally no idea what was involved. It is established that the Brits love process and procedures. Most of our public services are bogged down with ever expanding nostrums of due process. We love and include in national life ceremonial procedures from centuries past. Within all these processes there is a flexible approach to rules, even, perhaps especially, within our constitution

The Continental countries, Germany in particular, are sticklers for detail and for rules. Work within those and the process will take care of itself. So the EU is built on rules which cannot be varied and details which are exact. The Brexiteers for long thought and continually asserted that the attraction of trade with Britain would cause the rest of the EU to agree sensible terms which amended details and changed rules. That will never happen. The sanctity of their rules is way above their interest in trade with GB. The BIG RULES will not change. They are free movement of capital, goods and people and contributions to the EU budget, over none of which is the UK parliament sovereign.

Essentially the Brexit case voted for in the referendum was that there should be free movement of capital and goods but controls on the movement of people and no further contributions to the EU Budget. Sovereignty over all of it would return to the UK parliament. This will not even be discussed. The reason the May government is holding a veil of secrecy over its negotiating position is because it finds it does not have one. There are no cards in its hand. There are no negotiations available. On the BIG RULES you either accept them or you go. It is either hard Brexit or No Brexit. It is not a negotiation but a choice. When that becomes clear to the House of Commons, and to the country at large, the May government will fall.

No. Not yet. He remains in the fight, a loose cannon firing off in all directions, none of which is a traditional aiming point. He is certainly bloodied, but he is not broken. The polls have slipped, but they have not crashed. Many of his supporters are young women who should be running miles from The Groper, yet they flock cheering to his rallies, where wild enthusiasm reigns. Much depends on the opinion polls over the next ten days. If there is an unambiguous opening up of the  Clinton lead, the answer is probably yes. Failing that Trump will fight to the last and an upset on election day is well on the cards. But if not, there could be even bigger drama ahead to mesmerize an already spell bound world.

The Trump campaign was badly  damaged as he appeared to fall into the Clinton laid trap, perhaps her campaign’s best ever move, of taking the bait on challenges to his fitness for the highest office. He has hit back with ugly stuff about putting her in jail, recalling Bill’s spectacular White house sex life and making her take a drugs test. He is now claiming the election is rigged. This last item may hold they key.

Trump does not do losing. He will not hang around to be humiliated like Goldwater. If he is sure he is losing big, he will cause a world sensation by withdrawing on the grounds of a rigged election. The Republicans will breathe a sigh of relief. Pence will step forward to take the nomination, Christie or some such will become the Veep, the Republicans will be defeated, but they will feel clean and will rise to fight another day. But so far that escape hatch will likely remain closed.

Trump is very much in there and fighting and we will not know until the morning after the poll what, in the end has happened. Prepare for the kind of end which is the beginning of some new convulsion. One thing we can bet on. Hilary’s campaign lacks passion, Trump’s has unbounded enthusiasm. Whilst Trump is Mr Teflon, Hilary is vulnerable, although she believes she is winning. But any further blow to her credibility could see him snatch the keys to the White House out of her her very hands.