I am not usually inclined to engage with UKIP, but this morning Paul Nuttall, its leader has an article in the FT in which he says, amongst other things:
In 2017, Ukip will continue to push for the Australian style points-based immigration system that the British public overwhelmingly wants. We will further define Ukip as the party of law and order, with zero tolerance on crime. We will argue for a meaningful reduction to the bloated, indefensible foreign aid budget, and we will argue for a better deal for veterans.
It was almost exactly a year ago to the day that I wrote about Simon Danczuk's quite similar and seemingly economically illiterate comments on the foreign aid budget on this blog. It seems I have to do so again.
What Nuttall is suggesting is that we have a choice of either doing overseas development aid or looking after veterans, or something else. What this implies is one of two things. He either thinks that we are living in an economy where we are either at our full economic capacity and, therefore, to do more requires something else be stopped. Alternatively, he thinks there is a finite amount of money in the UK and that nothing can be done to change that meaning that we can either spend it on veterans, or on overseas development, but both are not possible.
Nuttall is completely wrong in all aspects of this analysis. Glaringly obviously this is an economy that is not operating at full capacity. We still have large numbers of people who are unemployed. We have 5 million people who are self-employed, many of whom would much rather have an employment paying at the proper rate for regular hours. And, we know that there are millions of people who are working part-time who would like to work full-time. In that case to suggest that in any way we are working at our full economic capacity is absurd: it is very obvious that we do have the resources to assist veterans, and we can at the same time fund overseas aid, much of which aid comes in the form of goods made in and exported from this country which as a result creates employment here in the UK.
So let's look at the money issue instead. Nuttall is presuming that there is, somehow, a shortage of money available to the government. When the UK has its own currency to suggest that there is a shortage of money is absurd as suggesting that there are a shortage of miles, or a shortage of kilograms. We can have as much money as we need to do a job: we proved that with a £375 billion quantitative easing programme from 2009 to 2012 and a further £60 billion programme of QE that is now underway. What is more, at present there is no persistent or long-term inflationary risk from creating that money until full employment is reached, and as I've just noted, there is no chance we will reach that point some time to come. But, even if we did create inflation at that point, firstly that is our goal: the Bank of England's Monetary Policy Committee has been tasked with creating 2% inflation year, and has been failing to do so for some time. Secondly, it is entirely possible to take inflationary pressure out of the economy by increasing taxes. In other words, any risk that does exist is minuscule, to some extent desirable, and anyway totally manageable. So, for Nuttall to suggest that because of a constraint on the amount of money that is available in the economy we cannot afford to do both support for veterans and overseas aid is completely incorrect. It is factually wrong. It promotes a myth, originally attributed to Liam Byrne that a government can run out of money. That was a joke, even if it was a very bad joke. Nuttall should know that. He clearly does not.
But as a result, based on total misinformation and ignorance, he blames the development budget for hardship in this country. That is, I suggest, a deliberate attempt to create tension that is, in my opinion, callous.
Nuttall needs to do three things. First he needs to learn some economics. Second, he needs to shut up until he has. Third, he needs to apologise when he realises how wrong he is. I do not expect any to happen. What is likely instead is that he will continue to deliberately blame the overseas aid budget for a lack of services in the UK when that is simply code for despising those in other countries with which he does not wish us as a country to be associated. And that has to be named as the xenophobic policy it is, because economics cannot justify it.
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“First he needs to learn some economics. Second, he needs to shut up until he has. Third, he needs to apologise when he realises how wrong he is.”
Indeed, there are many commentators these days about whom the same should apply!
Sorry but the truth is even more prosaic – Paul Nuthall needs to sod off and do something else with his time because from what I’ve heard he is contributing a whole lot less than zero to the politics of this country.
This is why, when Andrew Neil interviews Labour MPs about investment pledges, and asks “How will you pay for it?”, their answer should be “In pounds sterling”.
Like… Indeed, it’s time they stood up to the bullies, like many of us have been trying to…
This is an lovely idea and should show up the BBC economics commentary for the misinformation that it is. If the BBC aren’t guilty of fake news they are certainly guilty of fake economics.
I cannot believe the number of people who read this sort of nonsense and accept it as orthodoxy. Such an obvious attempt to twist basic economics to suit one’s own distorted political beliefs deserves mockery, not indulgence.
He reminds of the zero sum mentality of politicians in Northern Ireland. If someone becomes better off someone else has to be worse off as a result (“them lot get everything, we get nothing”). It’s the politics of division which UKIP are very good at exploiting.
It shouldn’t be forgotten by Veterans that the Torys scrubbed 5 years off their pensions, and Ukip has drawn most of its politicians from Tories. The utter hypocrisy is breathtaking.
Cant really think of Paul Nuttall without recalling Stuart Lee’s comedy sketch. I’m sure most have seen it.
https://www.youtube.com/watch?v=tKEsyIuTrO8&feature=youtu.be
Sadly it is not just Paul Nuttall, the Daily Mail when it is not attacking the EU and immigration is obsessed by the wickedness of the “bloated” overseas aid budget. Priti Patel wants to make it a bargaining chip to link aid and trade deals.
There was much to dislike about the Cameron government but the sticking to the 0.7% overseas aid target was one policy that the I admired and thought the UK could be justifiably proud. The linking of the overseas aid budget to veterans treatment is as incongruous a use of hypothecation as linking the EU budget to the NHS. Sadly we seem to be moving to an era where more people believe such nonsense. Economic illiteracy seems never to have been greater.
(sent over my landline!)
Has BT found you again?
Indeed after a week and 5 hours repairing/rerouting the 1930′ aluminium line
Amazing how long it takes to find some gaffer tape
Nuttall has been reading the Daily Mail & The Express which have told readers that money from their pockets has been spent on foreign aid instead of the more deserving closer to home. Attacking him is attacking a symptom. The problem is that citizens in the West are vulnerable to disinformation and misinformation because experts discredited themselves, either because they weren’t as expert as claimed, or they were on the take (see e.g., the economists in the film Inside Job). The Tories have weaponised public innocence of economics very successfully, helped by incoherence & unbelievable stupidity on Labour’s part (Liam Fox has a Harvard MBA, for which stupidity is apparently a requirement — see Henry Mintzberg’s book “Managers not MBAs; or.. George W Bush).
Nuttall is tapping into a powerful public conviction that has been carefully nurtured for political reasons by the right wing press for a long time.
I doubt that debating the merits or the man will work. Too many are innured and expect motivated reasoning (essentially dishonesty) from all quarters (hence: “they’re all the same”, “in it for themselves” — the latter being a particular problem for UKIP).
Better to focus on the bigger scandals where the Tories are vulnerable: tax avoidance, concealment of beneficial ownership, regulation and non-regulation for the rich. A cynical public just needs to be sufficiently convinced on these issues to throw them out. The biggest obstacle is Labour’s own incoherence and indiscipline. Short of a Mossack Fonseca PLUS level data leak or other very dramatic event (incl war) that upends things I don’t expect Labour to form a government again.
What do you suppose Labour is doing now in light of what is known (and will be further confirmed today) about Russian misinformation campaigns during western elections? My guess: absolutely nothing.
Meanwhile, Eric Pickles, borrowing without shame from the GOP playbook that elected Trump, is intent on disenfranchisement of voters without ID. Politically it’s a clever distraction. Every minute of airtime is a minute not spent on issues of tax and justice. And party funding sources.
Trump’s election and Brexit are the result of disillusionment with rigged systems. As yet we have no coherent vision of an unrigged system from the non-Tories. Attacking the Tories for lack of a Brexit plan is not as good as putting forward an alternative. The cowardice over immigration says it all. First the Tories had to outflank UKIP, now Labour.
Did you mean Liam Byrne?
Apologies, I did, of course.
I totally agree.
Though, I think this exact same finger needs to be pointed at many. It is certainly not just a UKIP trait. Indeed I would say millions of people in the UK believe the exact same thing….and, at first sight, it appears an entirely reasonable argument. “Why do we send millions abroad in foreign aid, when the UK’s public infrastructure is failing”….this together with article after article in the likes of the daily mail, spreading this falsehood.
Paul Nuttall (regardless of his economic literacy), is just appealing to these people….to get their vote.
Re: comment by George Parkinson, above. Yes, Andrew Neil bangs on, on the BBC, about where money can be found to fund X. It starts here…… with the UK’s government sponsored TV channel giving out economically mistruths / fake news. And, ends with people wrongly thinking that foreign aid is bad when we could be spending this ‘limited’ cash on uk public services instead. And the likes of Paul Nuttall lap it all up for their own political gain.
Interesting idea that BBC economic commentary is fake news
I think why overseas aid is so controversial is because that we have a most monstrous foreign policy and yet then want to be seen as ever so nice with overseas aid. Which leads itself tothe point it almost certainly is wasted. For example had we not just invaded iraq/wrecked Libya etc that would have benefited more people than all the years of overseas aid since 2010. Plus Labour bellyache about reducing the top rate which all told cost about 1/3 of what overseas aid does.
Unfortunately it seems the prevailing ‘junk’ economic rhetoric is so firmly (and increasingly) entrenched into the general public mindset that I fear there is now no immediate chance of reversing it. Only a collapse of the status quo, with all the attendant damage to society, will open the door to a new economic agenda and political parties that espouse it. In the meantime there will be a further shift to the autocratic right. The Labour leadership should hang its head in shame and apologise to the nation for its dereliction of duty. No point blaming the Neo-liberal Tories & UKIP et al. because they advocate just what it says on the tin.
I don’t think even a collapse in the status quo would achieve any improvement. The door is already open to anybody with the courage and wit to go through it. Only 25% of those eligible to vote voted for the current government. Even allowing for tactical voting and those who saw no point with FPTP, the majority of voters didn’t even vote for the government. I agree with you that the Labour Party should hang its head in shame. The last time I remember the country being so despondent about government was 1997 (I’m too young for 1945), but I don’t see anybody charismatic enough to step up. The Labour Party is a shambles. I would like to think that the LDs and Greens offer some hope, but (being pragmatic) they’re not going to form a government in the foreseeable future.
It’s pretty dire, isn’t it?
It would appear that ‘taking back control’ is a euphemism for ‘discriminating against the poorest and scapegoating migrants’. It would appear the message has merely changed accent from a Southern city type to a working class Mancunian. The response is sadly one that can easily be seen throughout history. What are UKIP if not the fascists of Cable Street reincarnated?
“he needs to apologise when he realises how wrong he is.”
Indeed. You are big enough to do so – eg when we were discussing WTO rules the other day.
A curious fact about UKIP is that they have never won a Parliamentary seat off somebody else. Yet to paraphrase the Nobel Laureate Bob Dylan they have ‘won the war after losing every battle’. Quite remarkable really.
Paul Nuttell and Ukip scare the hell out of me.
Why,John? They are an undisciplined and fractious rabble.
What is scarier to me is the way the bulk of the Tories have happily adopted most of UKIPs policies (if you can call them that…), making UKIP irrelevant. And the Tories are in power and in a position to implement them, with only the feeblest of opposition.
The Tories, UKIP, the media and the right have succeeded in establishing a particular set of narratives, that have succeeded in producing the intended public response. In George Lakoffs terms, they are framing the arguments and their opponents are responding to them, playing their game
It’s going to take time and careful thought to develop the alternative narratives and framing, and then get them sufficiently widely shared. I don’t doubt that they could be developed and much of the thinking here would be a start. How to get them more widely shared and taken up is a bigger challenge. That and getting some credible political ownersh
Time to work on it