Friday 19 October 2018

To Do Things Differently

Fraser Myers writes:  

As the Brexit talks go nowhere fast, the potential for a No Deal scenario has seen Project Fear return with a vengeance. 

But is Brexit really the economic disaster it is often made out to be? Are there not opportunities to be seized from leaving the EU? 

Some on the right envision an economy of low taxes and deregulation. But what are the opportunities for the left after Brexit?

spiked caught up with Larry Elliott, the Guardian’s left-wing, Leave-voting economics editor, for a chat. 

spiked: Why did you vote to leave? 

Larry Elliott: A number of reasons. I didn’t think the economy was working very well for large chunks of Britain. Economic change comes through shocks – Brexit was a massive shock. 

I also have an old-fashioned left-wing view of the European Union. I don’t think it is democratic, I don’t think it works very well, and I think it is run in the interests of big business rather than ordinary people. 

I voted to come out in 1975, along with a large portion of the left, for what were then seen as Bennite reasons: democracy and the fact that it was pro-boss and anti-worker. I haven’t really changed my mind over the past 40 years. 

Greece is a pretty big example of this. There’s the way the single currency works – it has austerity ingrained in the Stability and Growth Pact. 

The way it operates is driven by German thinking: balanced budgets, very hardline monetary policy. You see this in the way Brussels has become a haven for lobbyists for big multinational corporations. 

spiked: What are the economic opportunities of Brexit? 

Elliott: The big opportunity is just to do things differently. Big economic shocks give you the space and the ability to say, hang on, the status quo is no longer a valid option, we want to do something different. That’s the overarching thing.

There are also a number of freedoms that you get from being outside the EU. You get to have your own trade policy, you have much more freedom in terms of industrial strategy, you’re not bound by EU rules that might hinder you from renationalising chunks of industry.

To me, the economy is really run in the interests of one particular region. The geography of Europe means that London and the south-east are plugged into the central European core of the EU and the rest of the country is a different planet.

I want to rebalance the economy away from the Remain-voting areas to the Leave-voting areas. I think that’s what those areas were really demanding when they voted to leave.

spiked: Is there a danger that the left has spent the past two years fighting for the status quo? 

Elliott: Absolutely. There are an awful lot of people on the left who see their task in life now as being to turn Britain back to how it was on the day before the referendum.

But if you’d gone back there and talked to people on the left and asked them, ‘Do you think David Cameron and George Osborne’s Britain is really working?’, they would have said: ‘No, no, no! There’s a balance of payments deficit, a north-south divide and rising inequality…’ 

The left’s approach to Leave voters has been very, very patronising and condescending, i.e., ‘they didn’t know what they were voting for, they were just conned into it by the slogan on the side of a bus, these are the people who are going to be hit hardest…’.

I find that really, really annoying. It strikes me as weird that on the left there’s been this wave of support for internal Labour Party democracy.

Momentum say ‘we should listen to the people’, but what about listening to people on the Brexit vote? The people voted in the biggest referendum there has ever been, many of them for the first time. 

spiked: There were a lot of scare stories about the economy during the referendum. Why have these predictions not come to fruition? 

Elliott: One reason is that a lot of those forecasts were just wrong. Whether it is the Treasury, the Bank of England, the IMF or the OECD, all of their forecasts were based on pretty much the same model.

If you put the same stuff in, you’re going to get the same stuff out. There has been slower growth over the past two years, but it is what you’d expect given the wall-to-wall diet of negativity.

The BBC and most of the papers are just full of Project Fear Mark II stories about how terrible it is all going to be. So it is not surprising that businesses have decided that it is not a great time to invest. 

At first, the economy slowed a bit because the pound fell and inflation went up, but now it is slow mainly because business has put off investing for the duration of the Brexit process.

The idea that we’ll be impoverished after Brexit is complete cobblers. The economy that will be created after Brexit will depend on the choices we make after Brexit.

Even if you assume that there is going to be this massive hit to trade and productivity, which is what the IMF and Treasury studies show – and those are really overblown – they also presuppose that there is going to be no other changes to the way the economy is run! 

I don’t think the economy is going to go down some preordained path. 

spiked: Should we fear a No Deal outcome? 

Elliott: If by ‘No Deal’ you mean leaving on WTO terms, I think there would be some problems initially, but I don’t think it would be that bad an outcome. The US and China trade with the EU on WTO terms. 

It would add some frictions in the short term, but I’m not someone who thinks it would be disastrous for the economy. 

To be honest, I’d rather have a clean Brexit than what currently seems to be on offer: staying in the EU in all but name, with no say over how things are run. 

That’s the sort of outcome that May is aiming for. That seems to be how the British establishment has sorted out the ‘Brexit problem’. 

Having put a lot of pressure on people to vote a certain way and being disappointed, it is now trying to find a backdoor way to keep Britain essentially in the EU – or so closely aligned that people will eventually say, ‘we might as well be in’.

If the Remainers get their way, the votes of all those people will be proved to be completely worthless, and nothing will really change. 

The people who run this country don’t give two hoots about people in Stoke-on-Trent and Hartlepool and all those places that voted heavily for Leave.

But if the vote is reversed, what sort of backlash are we going to get in four or five years’ time? I think we could see a really aggressive form of right-wing politics.

There is going to be a massive alienation in those parts of Britain, who will feel, rightly, let down.

Another hung Parliament is coming, however, and our people need to hold the balance of power in it. My crowdfunding page is here, or email for other options. That address accepts PayPal.

No comments:

Post a Comment