The propaganda about a general election is ramping upwards. Biases are also, of course, being shown. The FT has most certainly come off the fence. Having published one article lacking almost any hint of objectivity about Labour's plans yesterday it has published another today. The headline is:
Cost soars for Labour's grand pledge to reshape the economy
The claim is:
The next Labour government will have to find at least £26bn in new tax rises if it wants to end austerity, invest in infrastructure, reverse social security cuts and live within its own budgetary rules, according to Financial Times research.
The brutal maths of the public finances mean that shadow chancellor John McDonnell's plan for £250bn of increased public investment over 10 years uses up all of the wriggle room in Labour's fiscal credibility rule. The UK opposition party has pledged to keep public debt lower as a proportion of national income at the end of a parliament than at the start.
Three thoughts follow. The first is that picking on this issue now when the Tories are planning a spending review that is likely to entirely rewrite their own fiscal rules makes no sense at all. Labour is quite simply not the issue with regard to spending at the moment: the Tories are.
Second, this issue would not arise but for the so called Fiscal Rule that Labour has adopted, which means it has committed to cutting the ratio of debt as a proportion of GDP and, whatever its authors claim, committed it to austerity and tax rises (that could have much the same effect) when it is highly unlikely from a macroeconomic perspective that neither are necessary. Such is the error of Labour agreeing to campaign on the basis of neoliberal logic. I think we can safely say my long term case on this point is now proven.
And third, when the FT is willing to be this biased to support a Tory government intent in trashing the economy, business and democracy we need to worry, a lot. The veneer of sanity within political discourse is disappearing if they cannot see the foolhardiness of what they're doing, or can do so and are pushing the Tory agenda despite that fact.
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Having arrived in No10 The new PM can apparently promise rafts of (what he claims is) new money for much needed government investment/spending on the NHS, policing and education, and accompany these increases with reduced taxes (implying income tax rates – because that is what politicians usually mean when they speak of tax without further qualification) yet nobody in the media seems at all curious about where he is going to find the money?
This question is always amongst the first questions asked about any Labour Party proposal…..as this FT article exemplifies.
I interpret this as a frank admission that the present government can access the magic money tree, and the FT (for one) perfectly well understands this, without admitting it; yet the Labour Party has not yet cottoned-on that the keys to number ten also includes a key to the orchard in which the magic money tree is located.
Politicians with progressive intentions really do need to get their heads round this in order not to be bound by the artificial strictures of an economic narrative which carefully conceals the neoliberal agenda which would have the economy of the nation run entirely for the benefit of bankers, financiers, large corporations and an already wealthy elite.
We seem to agree….
My sentiments too!
http://www.progressivepulse.org/economics/the-rise-of-economics-and-policy-based-evidence-making
Who carries more objectivity and less bias you or the FT?? …
Me
I criticise all parties as appropriate
But you start with an inherent and significant left wing state intervention bias.. you can only be objective from that starting point
We all start with a bias
Nick Purves says:
“But you start with an inherent and significant left wing state intervention bias.. you can only be objective from that starting point”
The thing is, Nick, that mainstream media is staffed with commentators who accept the predominant neoliberal paradigm as if was the natural state of affairs and don’t often stray mentally out of the confines of that ‘box’. It isn’t; it isn’t a neutral position it’s an entirely political confection.
That right wing bias is largely invisible to many people who are under sixty and can recall no other way of being. Of those over sixty many remember only the ‘Winter of Discontent narrative which was itself a narrative containing a strong political bias seeking to blame all of societies ills of the time on the power of the Trades Unions.
The Unions did not trash the post war settlement, and Britain’s industrial base on their own, they had a great deal of help from incompetent managers and politicians who were the people actually responsible for maintaining the balance of power in society and who abjectly failed to do so, preferring ultimately to systematically grab power and wealth to themselves.
It is asinine to pretend that this was not ‘politically’ motivated.
Not surprising considering the Financial times is the voice of finance and the Tory Party is financed by financiers creaming off profits and rents from the whole population. Logical inconsistencies regarding comparisons of Tory and Labour economic policy won’t stand in the FT’s way when they know which side their bread is buttered on.
Regarding your other post today regarding financing climate change measures (which both Tory and Labour are underplaying the crisis and not facing up to the huge economic changes necessary) only massive civil disobedience/non-violent direct action on a gigantic scale will make anything change.
As for the post on the Tory expulsions of Brexit “rebels”, David Gauke, was remarkably calm this morning on the BBC Today propgramme – crisis, what crisis? seemed to be his line. More than fiddling while Rome burns is needed in Parliament this week.
I seem to remember the FT, like so much of our media, is the hobby of a very rich family who are disinclined to pay much tax which makes their political views a major conflict of interest. They should be condemning those ‘economic’ judgements that are following the sudden discovery of the magic money tree by Blowjo and the reality of the Tooth Fairy.
Are you sure your memory is correct?
Pearson sold the FT in 2015 to Nikkei who promised not to interfere in editorial matters.
According to the Nikkei Chairman their values of “fairness and impartiality [are] very close to that of the FT”. Well, I’ve never found them particularly fair and impartial on UK politics so maybe the Chair should start interfering.
Good post Richard.
My thoughts on this (in random order) are:
1) £26bn per year isn’t that much… HMRC’s “direct effect of illustrative tax changes” document suggests that a 1%pt increase in corporation tax raises £2.1bn in 2021-22. So an increase from 17% to 25% would raise almost £17bn, which is over half the required amount from one tax alone. Throw in a GAAR and you’d easily reach £26bn total. There are lots of other options of course (e.g. LVT). We’d be talking about an increase of not much more than 1% of GDP in the tax take… peanuts.
2) Richard is of course right that a fiscal rule to ensure that debt falls as a share of GDP over a parliament is unnecessary. Having said that, I think if economic growth is poor under the next Labour govt they will simply disregard or change the rule rather than being straitjacketed by it. (And the fiscal rules are designed to be suspended in the event of a substantial recession in any case).
3) This level of scrutiny suggests that the FT top brass are worried that Labour stands a good chance of winning the (surely?) forthcoming general election, or at least emerging as the largest party – otherwise why bother? And why now?
4) The FT has form for disliking even mild social democracy. It backed the Tories in the 2015 general election, accusing Ed Miliband of being “obsessed with inequality”. And Ed’s 2015 Labour programme was very moderate, to be honest.
5) Labour may actually be quite happy to be taking hits from the FT and others in the economics establishment because it boosts their ‘outsider’ credentials. A few months after the 2017 election I had a few beers in the pub with Paul Johnson (director of the IFS) who is an old friend from way back. While suggesting that the IFS were much harder on Labour than the Tories in their assessment of the two parties’ manifestos (and I think they were), I also put it to Paul that this may have actually helped Labour during the campaign because it gave them anti-establishment credibility (they were able to say “the neoliberal IFS doesn’t like us so we must be doing something right”). In the era of Trump and Brexit there’s more mileage than there used to be in being attacked by the experts. It makes it hard for Boris Johnson to attack Labour as being “establishment” when their policies are being criticised by the establishment. Interesting times…
Howard
Thanks
I think 3 is key: the FT is really labouring (sorry) it about Labour today
They would not bother unless they felt there was a risk
And Labour can only go up in the pools, I think
Richard
Howard Reed says:
“….(And the fiscal rules are designed to be suspended in the event of a substantial recession in any case).”
Were it not for the churn of ‘cheap money’ shovelled into the financial sector post 2008 – several $trillions * of it artificially inflating GDP figures with the illusion of activity I would suggest (looking at the parlous state of the economy as most perceive it on a day to day basis) we are already in a state of ‘substantial recession’ which renders the fiscal rule redundant before it is ever applied.
Even as window dressing it has all the practical utility and charm of the paper chains I remember with revulsion from primary school days; the colours running and soggy and misshapen with sloppy glue paste.
* (I’m including US and ECB contributions because money is international)
I think that the FT has cottoned on to Johnson’s fiscal bribe machine.
The bare fact is that if the Tories are indeed pledging increased spending, then really it is OK for Labour to do so too in this context at this time. The FT therefore feels obliged to make this sound negative for Labour and engaging in scatological analysis of how the increased spending is going to be paid for based on the crappy economics of our times.
But it also illustrates just what a chancer Johnson is – that he may end up in what is essentially an investment auction with Labour in a GE, almost redolent of when the Tories and Labour used try to outdo each other on Council house building. A case of who promises to invest the most perhaps underlined by how they are going to pay for it?
My worry (other than the shitty economic thinking behind it all being tax based) is about when the investment gets turned off. Because the Tories will turn it off or just not bother as say Osbourne did when he reneged on electrifying the Midland Mainline.
Pilgrim Slight Return says:
“My worry is about when the investment gets turned off. Because the Tories will turn it off or just not bother as say Osbourne did when he reneged on electrifying the Midland Mainline.”
…and we really are stuffed from both ends if a Labour government would simply cave-in to the howls of protest from the deficit hawks because they still accept the neoliberal fiscal and monetary strictures of current orthodox economics…… The financial press has been running a virulent and unrelenting ‘Corbyn the Bogeyman’ narrative since he became Labour leader.
So the bidding war for the biggest bribes to the electorate will, as ever, be a complete sham. Either side for its own reasons is likely to renege on its campaign promises. 🙁
Well, this might be a sham with a difference Andy ,especially if Labour did get in. As much as I deplore that Labour sticks to the deeply flawed Tory narrative on Government spending, it was a Labour government that reduced VAT after the credit crunch for example.
Yes I know – we are too often reduced to a binary decision between ‘just bad’ and ‘really shitty’ ideas. But I’d take a bad idea over a shitty one any day of the week.
Think about Theresa May and her ‘No Deal is better than a bad deal’ bollocks. Really? So you’d rather have no boat at all than a bad boat that might just help you even if you had to bail it out to keep it afloat? Really?
I don’t think so. I don’t think you would either for that matter.
It would be interesting to see if Labour would keep to the Tory narrative if it got a 5 year mandate. But don’t forget how Tory spending pledges are being treated now as apposed to how a Labour government would be treated. Sometimes Labour’s timidity is understandable, no matter how infuriating.
Such is England at the moment.