Friday, 10 June 2016

Rock of Gibraltar

An interesting observation by John Curtice at a conference in London today. He noted that Gibraltar was likely to be the first place to declare in the UK referendum as it was one hour ahead of the UK. In a very tight contest, it could decide the result.

He noted that results would be declared by local authority area and the earliest results would be from smaller, rural authorities.

Monday, 6 June 2016

My case for remain

Globalisation is a reality, but its economic advance has not been matched by political structures to offset its worst effects. The European Union represents a new type of political structure which offers the potential to provide some measure of effective regulation. The point was well made by Rupert Murdoch. Asked why he was so opposed to the European Union, he said “That’s easy. When I go into Downing Street they do what I say; when I go to Brussels they take no notice.”

The Bank of England, the OECD, the IMF and the vast majority of economists say that the UK would be worse off if it left the European Union. Brexiters argue that we could easily negotiate a free trade deal with the EU that would give us access to the single market without having to abide by his rules. Perhaps they forget that while exports to Europe account for 12 per cent of our GDP, exports to the UK account for only three per cent on average for the other member states.

The remaining member states are not going to want to do us any favours for derailing the European project, nor are they going to want to offer a deal that will encourage other member states to exit.

Brexiters talk of the savings that would result from exit, working from a gross rather than a net figure and overlooking any decline in tax revenues resulting from a fall in growth or the fee that would have to be paid for access to the single market. It has been promised that this money could be spent on the NHS, on removing VAT from electricity and gas and maintaining subsidies. I have even heard a pro-Brexit MP say that it could be used for mending potholes, keeping libraries open and restoring bus services.

The European Union has played a leading role in developing environmental policy, not least in relation to climate change. Environmental standards in the UK are higher than they would have been in the absence of EU membership. Pollution is no respecter of national boundaries. It is far better dealt with by the EU than through a series of ad hoc agreements.

The study group I chaired for the Yorkshire Agricultural Society concluded that exit would not be beneficial either for UK agriculture or for the food processing industry which is one of our largest industries. Some farmers expect a bonfire of controls, but regulations are there for a reason: for example, we regulate pesticides because they are toxic substances. Relatively few regulations would disappear after Brexit.

We would face great complexities in renegotiating international trade deals after Brexit. The EU negotiates as a bloc that gives it considerable leverage in international trade negotiations. We do not have any trade diplomats experienced in this complex task.

The EU is far from perfect, but we need to continue to press for reform from inside. A UK outside the EU would be diminished in economic, political and cultural terms.

Tuesday, 29 March 2016

The 1966 general election

On Easter Monday, the BBC Parliament channel broadcast the entire coverage of the 1966 general election. With storm Kate raging outside, and making any outdoor activities unattractive, I watched most of the coverage.

David Butler said near the beginning of the broadcast that 'Britain is a uniform country.' Of course, he was particularly referring to the concept of swing which he was keen to defend throughout the broadcast.

What struck me about the vox pops with voters (not easy to do, as I know) was how many of them used the argument that Labour should be given a longer period in office with a larger majority to see what they could do. I was also struck by how many Conservative voters thought there was a real prospect of extensive nationalisation, for example of the banks. It was difficult to see the pragmatic Wilson ever doing that.

One American journalist who was interviewed said that if the country could produce political leaders of the calibre of Heath, Wilson and Grimond, the body politic must be in a healthy state. Could we say the same of today's leaders in either the UK or the United States?

Scottish Secretary and machine politician Willie Ross said that we were too politically mature to contemplate self-government for Scotland. However, David Butler did pick up on the growing Scottish Nationalist vote in the lowland belt.

In his press conference, Edward Heath was far more relaxed than I remember him, although he displayed his distracting habit of heaving his shoulders when laughing.

Tuesday, 24 November 2015

Friday, 13 November 2015

The plight of the CBI

An academic friend asked me recently why I had not returned to my early work on the CBI. (Grant and Marsh, 1977). My answer was that the organisation was a shadow of its former self. Its heyday was in the days of tripartite economic policy in the late 1960s and 1970s. It suffered a body blow under the Thatcher Government when it was seen as a throwback to failed corporatism and more ideologically attuned organisations such as the Institute of Directors found favour. Influence was regained under the Major Government and New Labour, but in some respects the organisation had been ‘hollowed out’ like other British institutions. Now it finds itself in a dilemma over the referendum of British membership of the European Union.

Opponents of membership, two of whom turned up with a banner ‘Voice of Brussels’ when David Cameron addressed the CBI , argue that its pro-EU stance misrepresents the views of British business. Scepticism was expressed about a survey which favoured continued membership. It was only a survey of CBI members and Eurosceptics argue that many of its claimed members are not direct members but only indirect ones by virtue of their membership of trade associations affiliated to the CBI. Nevertheless, the CBI is reasonably representative of big business (even if it has failed to publish a list of members) and, leaving aside some hedge funds and private equity businesses, most big businesses think that Britain would be better off inside the EU than outside it.

Chief executives of some of the Britain’s biggest companies linked to the CBI have been targeted in letters by Eurosceptic campaigners urging them to remain apolitical ahead of the EU referendum. The Scottish referendum has encouraged some business leaders to speak out on the issue. However, other chief executives are remaining neutral in order to avoid getting drawn into a partisan debate. Dave Lewis, the chief executive of Tesco, has said that the retailer would maintain an entirely neutral position in the referendum out of respect for the diverse views of its stakeholders. However, Tesco does not really need access to the internal market and would be less impacted by a Brexit than a manufacturer.

Paul Dreschler, president of the CBI, has said that it has been subjected to a ‘series of systematic and sustained attacks’ by Eurosceptics designed to undermine its credibility. Vote Leave issued an ad campaign to coincide with the CBI conference with the words ‘Wrong on ERM, wrong on euro, and wrong on EU.’ Addressing claims that the CBI was EU funded, Mr Drescher said that only 0.6 per cent of its income came from the European Commission. These were contracts won in competitive tenders.

John Cridland is about to step down as director-general. An insider with 33 years service, he was promoted from deputy director-general in 2010, the first time this had happened in the organisation’s history. In manner and appearance, he reminds me of an old style civil service permanent secretary, perhaps recalling the days when Sir Norman Kipping was the long-serving head of the predecessor organisation, the Federation of British Industries and was a familiar face in the corridors of Whitehall. Indeed, the CBI’s old offices in Tothill Street reminded me of a rather run down out station of a government department Cridland appeared to be in the same wavelength as the coalition Liberal Democrat business secretary Vince Cable who favoured an industrial strategy. His Conservative replacement, Sajid Javid, has a more free market orientation and rebuked the CBI for coming out in favour of the EU before the renegotiation process had even started.

The new director-general, Carolyn Fairbairn, is formerly of the BBC. A consultant and journalist, she is untried in such a high profile post. Katja Hall, Mr Cridland’s deputy and policy chief, is leaving after she failed to get the top job.

Paul Dreschler has just taken over as president, replacing Sir Mike Rake, chairman of BT. Mr Dreschler chairs Bibby Line, a family-owned shipping group. He only got the job when the president-in-waiting. Paul Walsh, the former chairman of Diageo was judged to be too openly Conservative.

A cloud on the horizon is that new Labour leader Jeremy Corbyn refused an invitation to speak at the CBI’s annual conference. There has been no contact between the CBI and Mr Corbyn or the new shadow chancellor, John McDonnell, since they took on their roles in September. Any contact has been through Angela Eagle, the shadow business secretary.

Things aren’t what they used to be!

Reference: Grant, W. and Marsh, D. (1977) The CBI (London: Hodder and Stoughton).

Monday, 9 November 2015

Stop demonising debt

The head of the Association of British Chambers of Commerce, John Longworth, has said that politicians should stop demonising debt. He has called for infrastructure spending to be excluded from national debt targets.

He argued that infrastructure spending was an investment rather than a cost. He commented, 'Politicians are well versed in telling the electorate that we shouldn't leave today's debt for tomorrow's generation. It would be equally calamitous to leave the next generation with an economy ill-equipped to compete on the global stage.'

A BCC report called 'Bursting the Bubble' stated that current levels of investment were inadequate to deliver transport capacity, energy security and digital connectivity: Bursting the Bubble

George Osborne argues that either the deficit goes down or the country goes down. However, the current low interest rate environment offers an opportunity to improve infrastructure. If the Northern Powerhouse is to be more than just rhetoric, urgent investment is needed in transport infrastructure to replace 40-year trains made up of bus bodies welded on to bogies.

Saturday, 10 October 2015

And now its Geoffrey Howe

Former Conservative Chancellor Geoffrey Howe has died at his Warwickshire home at the age of 88: Geoffrey Howe

Denis Healey likened being criticised by him to being attacked by a dead sheep, but Mrs Thatcher's downfall began with his resignation speech.

Introduced to him at a dinner, he said 'Ah, one of those.' Make of that what you will.