A hasty election before Britain sees the hard truth of Brexit

April 22, 2017, 10:59 pm

≫ Next: The secret history of inflation, from Black Wednesday to Brexit

≪ Previous: Brexit hasn’t happened yet – and it is changing all the time

Of all the reasons for Theresa May to go for an immediate vote, the clearest is that the future prospects for Britain are darkening all the time

My friend Paul Whitehouse told me the news in my local cafe. At first I thought he was practising a sketch for a re-run of the much-missed Fast Show.

Sadly, he wasn’t. Theresa May’s repeated denials of an intention to call a snap election had gone the way of so many of her inconsistent and often fatuous pronouncements. There was going to be an election after all.

If she ploughs on, she could end up by 2020 as the most unpopular prime minister since records began

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The secret history of inflation, from Black Wednesday to Brexit

May 6, 2017, 10:59 pm

≫ Next: From tax to Brexit, the Tories will do anything to stay in power

≪ Previous: A hasty election before Britain sees the hard truth of Brexit

Britain’s struggle with monetary policy has not just had economic consequences: it is also a key source of the Euroscepticism that has brought us to crisis

This month sees the 20th anniversary of the granting by New Labour of independence to the Bank of England.

It was not full-scale independence but “operational independence” in monetary policy: that is, the freedom to change interest rates without having to consult the chancellor. The Bank is still the Treasury’s agent in other matters, such as decisions about the nation’s currency reserves.

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From tax to Brexit, the Tories will do anything to stay in power

May 20, 2017, 11:00 pm

≫ Next: Let’s hope a hung parliament can halt the Brexit disaster

≪ Previous: The secret history of inflation, from Black Wednesday to Brexit

Nothing – not even policies for which Labour was excoriated two years ago – is too much to swallow for a party, and a leader, determined to rise above the fray

Jeremy Corbyn may score badly with the wider public, but for as long as I can remember the press have given even the most admired Labour leaders a hard time during election campaigns. A recent exception was Tony Blair, who – for a time – achieved rock star status with the media.

Many reports have suggested that when presented with individual Labour policies – in what one might call a “blind tasting” – respondents have been much more enthusiastic than when the names of Corbyn and some of his colleagues come up.

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Let’s hope a hung parliament can halt the Brexit disaster

June 3, 2017, 10:59 pm

≫ Next: Brexiters have voted for a poverty even worse than austerity

≪ Previous: From tax to Brexit, the Tories will do anything to stay in power

If the SNP or Lib Dems end up holding all the cards come Friday morning, the economic catastophe of leaving the EU could be averted

An important moment during the so-called election “debates” last week occurred when a young lady in the studio audience told Theresa May that she had voted for Brexit because she had swallowed the lie that it would bring £350m a week for the health service. The prime minister, an uncomfortable Remainer and now an uncomfortable Brexiter, had no answer to this, resorting to the cliche that the government spends more every year on the NHS. This, like so many of the answers trotted out by her (also uncomfortable) team is an example of what Dr Johnson might have called “a last refuge of the political scoundrel”.

The crisis arises because the increase in NHS spending each year is nowhere near enough to meet the well-known demands on the service. As I understand it, extra NHS spending is running at no more than 1% a year in “real” – ie inflation-adjusted – terms, whereas merely to avoid going backwards the service needs an annual real-terms increase of 4%.

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Brexiters have voted for a poverty even worse than austerity

June 17, 2017, 11:00 pm

≫ Next: Hard Brexit has been confounded by some harder realities

≪ Previous: Let’s hope a hung parliament can halt the Brexit disaster

With living standards already stagnating or declining, the remorseless reaction of the international markets to the referendum vote is starting to make itself felt

When I suggested before the election that an ideal outcome would be a hung parliament and a coalition to think again on Brexit, I was certainly not thinking of the DUP. But, as Harold Macmillan once said: “Here we are, and the question is: where do we go from here?”

It seems to be generally agreed that the election result boiled down to a vote against austerity and a vote against a so-called “hard Brexit”, with the young – predominantly Remainers and angry about austerity – in full swing.

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Hard Brexit has been confounded by some harder realities

July 1, 2017, 11:00 pm

≫ Next: Election euphoria won’t last if Labour doesn’t foil Brexit folly

≪ Previous: Brexiters have voted for a poverty even worse than austerity

If the public did not vote to be poorer, as a resurgent chancellor suggests, they must be disturbed by the mounting evidence of looming economic damage

As the true extent of the Brexit farce becomes more apparent, it is now open warfare between the Brexiters, while the rest of the world – with the possible exceptions of Presidents Putin and Trump – look on in sympathetic bewilderment.

One of several satisfactory aspects of the election result was the way that Theresa May and her advisers at No 10 met their comeuppance over their widely leaked plans to sack the chancellor of the exchequer.

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Election euphoria won’t last if Labour doesn’t foil Brexit folly

July 15, 2017, 10:59 pm

≫ Next: Labour used to be the party that saw the folly of leaving the EU

≪ Previous: Hard Brexit has been confounded by some harder realities

Countervailing action is needed now to curtail economic disaster and preserve the enthusiastic support of young voters

At a friend’s wedding celebration on a remote Swedish island last weekend, I kept being approached by baffled Swedes. Their recurring refrain was: why is your country doing this?

Sweden is a fellow member of the European Union and, in common with the UK, enjoys “the best of both worlds”. Like us, at the moment, it possesses all the advantages of EU membership, not least from belonging to a powerful trading bloc: it is also not a member of the eurozone, whose economic policies have been far too deflationary. The recent recovery in the eurozone is to be welcomed, but by no means justifies the previous policies that aggravated unemployment in so many countries, especially Greece.

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Labour used to be the party that saw the folly of leaving the EU

July 29, 2017, 4:05 pm

≫ Next: We helped save Europe: now Europe could save us from Brexit

≪ Previous: Election euphoria won’t last if Labour doesn’t foil Brexit folly

Harold Wilson was not a Europhile, but a clear-eyed realist. Jeremy Corbyn could learn much from the story of the 1975 referendum

What have David Cameron (Tory prime minister, 2010-16), and Harold Wilson (Labour prime minister, 1964-70 and 1974-76) got in common?

Answer: in order to keep their respective parties together, because they were split over “Europe”, each of them called a referendum. Wilson triumphed, and went down in history as a consummate politician, indeed statesman. Cameron failed lamentably, and his mishandling of this vital issue is sometimes described as the biggest prime ministerial disaster brought upon the nation since Lord North lost the American colonies.

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We helped save Europe: now Europe could save us from Brexit

August 12, 2017, 11:00 pm

≫ Next: The EU is not the enemy of the state. Time to think again on Brexit

≪ Previous: Labour used to be the party that saw the folly of leaving the EU

We are fond of remembering our role as wartime liberators. But now it is we who need help, in the form of an offer to protect us from our folly

‘A visitor from Mars would assume that the UK is under attack from a hostile power seeking to destroy our economy and many of our national institutions … But there is no hostile foreign power. The threatened damage is entirely self-inflicted.”

This forceful reflection on the state of the nation comes from Sir Brian Unwin, former president of the European Investment Bank, one of the many EU institutions from whose work the British economy has benefited through our membership.

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The EU is not the enemy of the state. Time to think again on Brexit

August 26, 2017, 11:00 pm

≫ Next: There is no Brexit ‘punishment’, apart from the self-inflicted one

≪ Previous: We helped save Europe: now Europe could save us from Brexit

Labour has a golden opportunity to capitalise on the strong pro-European feelings of the young

When I referred in my last column to Chancellor Philip Hammond as the only grown-up minister in this chaotic cabinet, I was unaware that he had just put his name to a joint article in the pro-Brexit Sunday Telegraph with his arch-foe Liam Fox, making the following statement: “We respect the will of the British people – in March 2019 the United Kingdom will leave the European Union. We will leave the customs union… we will leave the single market… ”

True, this was followed by reports that he wanted, in effect, to retain quasi-membership for several years, but the two emphasised that such a precaution “cannot be a back door to staying in the EU”. There were also reports that Hammond had in some mysterious way scored a victory, which contrasted vividly with other reports that his attempt at some kind of coup had been foiled.

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There is no Brexit ‘punishment’, apart from the self-inflicted one

September 9, 2017, 11:00 pm

≫ Next: Brexit isn’t a new Black Wednesday. It’s far darker than that

≪ Previous: The EU is not the enemy of the state. Time to think again on Brexit

Michel Barnier did not say we needed to be taught a lesson. We are not being blackmailed or fined. We are simply unwilling to accept our obligations

‘Sometimes you get the impression that the British are talking to themselves,” said the outgoing French ambassador, Sylvie Bermann, on the Today programme last week.

There have been suggestions that the French are rubbing their hands and doing their best to lure as much business as they can from the City of London to Paris.

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Brexit isn’t a new Black Wednesday. It’s far darker than that

September 23, 2017, 11:00 pm

≫ Next: Don’t count on our independent Bank to stop Brexit disaster | William Keegan

≪ Previous: There is no Brexit ‘punishment’, apart from the self-inflicted one

This autumn marks the anniversaries of two notable economic humiliations. But they are as nothing to what might happen if we leave the EU

This is quite an anniversary year for great British economic disasters. Last weekend saw the 25th anniversary of the ignominious exit of the pound from the European exchange rate mechanism – “the first Brexit”, and, I still hope, the only one.

Then this November will see the 50th anniversary of the dramatic 14% devaluation of the pound – an episode from which the Labour government of Harold Wilson never quite recovered, not least because Wilson made the mistake of proclaiming that “the pound in your pocket has not been devalued” – based on a brief by Treasury officials which was aimed at explaining that, from the point of view of the pocket or purse, it was only the price of imports that were going up, and spending on imports was only a small fraction of total household spending.

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Don’t count on our independent Bank to stop Brexit disaster | William Keegan

October 7, 2017, 11:00 pm

≫ Next: Brexit makes a nonsense of Nigel Lawson’s struggle against inflation

≪ Previous: Brexit isn’t a new Black Wednesday. It’s far darker than that

It’s had control of monetary policy for 20 years but, if the government persists with leaving the EU, governor Mark Carney only has the power to limit the inevitable damage this will do to our economy

In common with Sir John Major, Denis Healey, the Bank of England’s historian David Kynaston, and former governor (1983-93) Robin Leigh-Pemberton, I had great reservations about the granting of independence to the Bank.

By independence – more precisely “operational independence” – was meant control of monetary policy: giving the Bank the power to change interest rates, as opposed to merely offering advice to chancellors and prime ministers that could be ignored.

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Brexit makes a nonsense of Nigel Lawson’s struggle against inflation

October 21, 2017, 11:00 pm

≫ Next: Struggling Brexit Britain can barely afford this rise in rates | William Keegan

≪ Previous: Don’t count on our independent Bank to stop Brexit disaster | William Keegan

As chancellor, his enemy was rising prices – which is precisely what has followed the vote to leave the EU

A few years ago I shared a platform with my old friend Lord Lawson at a conference on our membership of the European Union. This was some time before the infamous referendum. The event was good-tempered, and it will come as no surprise to readers that Lawson was, in a term yet to be coined, a “Leaver”, and your correspondent was not.

What surprised me over subsequent coffee and drinks was the number of successful, and obviously intelligent, people in the audience who thanked Lawson and me for having covered the history of the EU. It turned out some of the audience had only the vaguest idea why, to use the original title, the European Economic Community was set up in the first place.

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Struggling Brexit Britain can barely afford this rise in rates | William Keegan

November 5, 2017, 12:00 am

≫ Next: Brexit lacks credibility – but Remainers lack leadership | William Keegan

≪ Previous: Brexit makes a nonsense of Nigel Lawson’s struggle against inflation

Ten years of austerity has put the UK in the doldrums: that fact, coupled with the referendum, means there is scarcely a need to dampen things down further

You can look at it two ways. After ten years of inertia, Bank rate has doubled. Or: after 10 years of inertia, Bank rate has been raised by one quarter of one per cent, to half of one per cent. Big deal!

Of course, for most businesses and individuals, the official rate is meaningless. It is the rate to which everything else is geared, but everything else is usually a lot higher than 0.25% or 0.5%. We read reports daily of how so many desperate borrowers find themselves struggling to pay the usurious interest rates associated with credit card debt.

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Brexit lacks credibility – but Remainers lack leadership | William Keegan

November 18, 2017, 11:00 pm

≫ Next: The Brexit ‘patriots’ care little for British history or influence

≪ Previous: Struggling Brexit Britain can barely afford this rise in rates | William Keegan

Past generations of British politicians proved equal to the crises that faced them. This time, there is a strong whiff of panic in the corridors of power

To say that the lunatics have taken over the asylum would doubtless be termed politically incorrect. But the uncomfortable truth is that a bunch of ideological Brexit clowns have perpetrated a coup on the British government and the majority of the British people.

Seldom – or, to be more precise, never – in half a century of covering British economics have I encountered such a failure of leadership at a time of crisis. We came close to the abyss in 1976 but were saved by Jim Callaghan, the prime minister, and Denis Healey, the chancellor. On that occasion, after fraught talks, the two held the cabinet together and negotiated a loan from the International Monetary Fund which restored our credibility in the markets.

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The Brexit ‘patriots’ care little for British history or influence

December 2, 2017, 11:00 pm

≫ Next: There is hope: Brexit has few zealots and many floating voters | William Keegan

≪ Previous: Brexit lacks credibility – but Remainers lack leadership | William Keegan

Those who seek a hard exit from the EU do so in defiance of old allies in Europe and beyond, and of long-held principles of UK foreign policy

Philip Hammond’s recent budget – are you old enough to remember it? – was completely overshadowed by the gloomy analysis of our economy, present and future, presented by the Office for Budget Responsibility on the same day.

Politically, the chancellor was constrained by the knowledge that the minority of deranged Brexiters who seem to be running this government were out for his blood. However, he managed, with limited room for manoeuvre, to ward off the hyenas for the time being. Why, the prime minister – who had earlier contemplated sacking him – even turned up for the Treasury’s post-budget drinks.

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There is hope: Brexit has few zealots and many floating voters | William Keegan

December 16, 2017, 11:04 pm

≫ Next: Even bravery won’t help the nightmare of Brexit’s new world

≪ Previous: The Brexit ‘patriots’ care little for British history or influence

As some hard economic truths become clear, the many ideologically uncommitted Britons who chose to leave may start changing their minds

My football team, AFC Wimbledon, may be languishing down in the third division, as it was once called, but the Conservative MP for Wimbledon, Stephen Hammond, showed himself to be in the Premier League last week.

In that refreshing, surprising vote on Thursday, he and his fellow Tory rebels stood up to be counted in the cause of parliamentary democracy. By voting against Theresa May’s plan to prevent parliament from having the last say on whether the terms of any Brexit deal should be accepted, they joined the noble ranks of “mutineers” and “enemies of the people”.

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Even bravery won’t help the nightmare of Brexit’s new world

December 30, 2017, 11:00 pm

≫ Next: We had a lot on our plate already: Brexit was the last thing we needed

≪ Previous: There is hope: Brexit has few zealots and many floating voters | William Keegan

The powerful forces driving the current nationalist upheaval also present the prospect of a future only previously imagined by Huxley or Orwell

Most readers will be familiar with Aldous Huxley’s vision of a dystopian future, Brave New World. Indeed, my contemporaries and I often find ourselves observing that this or that latest invention could have come straight out of Huxley’s nightmare vision.

Given the reaction against the ill-effects of globalisation by those who have been left behind– but not left out of electoral and referendum polling booths – it was a clever idea of the British economist Stephen D King to produce a book earlier this year entitled Grave New World.

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We had a lot on our plate already: Brexit was the last thing we needed

January 13, 2018, 11:00 pm

≫ Next: Freedom? We have plenty of that inside the EU | William Keegan

≪ Previous: Even bravery won’t help the nightmare of Brexit’s new world

The young people of Britain are threatened not just by leaving the EU, but by the accumulation of problems created by neglect of public services

One of the many annoying aspects of the Brexit referendum fiasco is that it has diverted attention from so many pressing domestic economic and social problems.

Yet those of us who are unrepentant Remainers still regard the struggle as worthwhile. Brexiters may argue that the prospect of short-term economic damage was exaggerated during the campaign, and, as I acknowledged in a recent column, it was. But that this is a case of “so far, not so bad” is beside the point. The damage will hit us if we go ahead with leaving our largest market and indulge the extreme Brexiters’ fantasy of contriving wonderful new markets in far less important countries from the trading point of view – markets, that, strangely enough, already exist.

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