Politics Thread (encompassing Brexit) - 21 June 2017 onwards

[Rogstanley]

1 hour ago, Strokes said:

I’m not sure it stacks up though, I wouldn’t rubbish all of Labours plans because clearly some do have merit from either a social perspective, an economic one or both. Too say that this will return pound for pound though, feels a bit of a cop out and disingenuous to me.

Presumably because it’s extremely difficult to calculate the return on investment of say a road. But surely nobody would argue that the example given - the motorway network - hasn’t returned the initial investment many times over. Not forgetting that the initial investment itself is an injection of money into the economy providing direct and indirect employment, which itself multiplies and returns tax. 

 

Investment in infrastructure at a time when you’re near the bottom of the global league tables for productivity and when interest rates are at historic lows is as much of a no-brainer as you’re ever going to get in economics. That’s why the Tories promised to do more of it in 2010 & 2015 (then promptly broke the promises). The problem for the Tories is they’re now so politically invested in the idea of austerity that to abandon it would involve admitting they were wrong, which would be political suicide. So we now have a government governing in what they know is a suboptimal way purely to cling on to power.

 

And if that sounds too cynical don’t forget this is a government who borrowed a billion to literally buy power. They couldn’t care less about anything else but power.

Edited 10 December 2017 by Rogstanley

[Sharpe's Fox]

9 minutes ago, Strokes said:

Is it the same guy that used to have a column on the spectator?

No idea, is the spectator still going?

Edited 10 December 2017 by Sharpe's Fox

[Strokes]

5 minutes ago, Rogstanley said:

Presumably because it’s extremely difficult to calculate the return on investment of say a road. But surely nobody would argue that the example given - the motorway network - hasn’t returned the initial investment many times over. Not forgetting that the initial investment itself is an injection of money into the economy providing direct and indirect employment, which itself multiplied and returns tax. 

 

Investment in infrastructure at a time when you’re near the bottom of the global league tables for productivity and when interest rates are at historic lows is as much of a no-brainer as you’re ever going to get in economics. That’s why the Tories promised to do more of it in 2010 & 2015. The problem is they’re now so politically invested in the idea of austerity that to abandon it would involve admitting they were wrong, which would be political suicide. So we now have a government governing in what they know is a suboptimal way purely to cling on to power.

 

And if that sounds too cynical don’t forget this is a government who borrowed a billion to literally buy power. They couldn’t care less about anything else but power.

There is such a thing as making bad investments though ( like smart motorways ) and not knowing what the returns might be, whilst understandable, is a risk. If they came out and said, it should do this and it might do that I could take it more seriously.

[Strokes]

2 minutes ago, Sharpe's Fox said:

No idea, is the spectator still going?

I don’t know tbh, I stopped reading newspapers and magazines about three years ago. The name rings a bell and I did use to read the spectator on occasions.

[Guest]

9 minutes ago, Strokes said:

There is such a thing as making bad investments though ( like smart motorways ) and not knowing what the returns might be, whilst understandable, is a risk. If they came out and said, it should do this and it might do that I could take it more seriously.

The point is to invest well.

Hs2, for example, does not appear to be a particularly good investment. A cross rail for the north would be better.

Clean energy, faster internet, improved transport links, etc etc etc all have the potential to pay for themselves either directly or through productively increases. 

[Alf Bentley]

3 hours ago, Strokes said:

If government spending paid for itself in kind, why the hell are we in debt now?

 

There have obviously been particular reasons for increased debt at particular times - most notably the 2008 financial crisis/bank rescues.

 

Overall, though, I'd say that the main reason is that we've not adapted adequately from our old role as a global empire with cheap raw materials and a captive market for manufactured goods to our new role as a post-imperial medium-large advanced economy.

We've not spent enough - or spent wisely enough - in either the public or the private sector, on investment to boost growth and productivity. That's the sort of spending that can pay for itself - though whether McDonnell would make wise, self-funding investment decisions is another argument.

 

Instead, too often we've been running a deficit on CURRENT tax/spend, as opposed to CAPITAL investment, increasing debt. Successive governments have tacitly accepted the need to offer the electorate low tax and high current spending on public services. Tories cut tax a bit more, Labour increase public spending a bit more, but both run a current account deficit most years. Even now, despite having made eliminating the deficit a priority for 7 years, the Tories are still running a deficit and increasing debt, albeit more slowly, while probably damaging productivity. Of course, spending on investment isn't always wise spending. The second Blair govt wasted a lot of investment cash on PFI schemes - again seeking to offer low taxes and good public services. 

 

McDonnell's policies on investment seem perfectly viable as economic theory - though how well they'd be implemented in practice is a different matter. However, I wonder whether he'll be able to convince the electorate that borrowing to invest CAN be economically prudent? Many voters will instinctively see it as reckless - and the Tories will certainly go big on that argument. Maybe people are getting desperate enough to try something more daring....but maybe not. At least it's a different argument from the old one propagated by both parties for decades - that we can have low taxes and high-quality public services.

[Webbo]

Exclusive: Times/ YouGov Poll Voting intention has the Tories back ahead for the first time since the June election

 

CON 42%(+2),

 

LAB 41%(nc),

 

LDEM 7%(nc)

 

Changes on last week. Poll taken Sun/Mon

[Izzy]

4 minutes ago, Webbo said:

Exclusive: Times/ YouGov Poll Voting intention has the Tories back ahead for the first time since the June election

 

CON 42%(+2),

 

LAB 41%(nc),

 

LDEM 7%(nc)

 

Changes on last week. Poll taken Sun/Mon

[Webbo]

1 minute ago, Izzy Muzzett said:

[Strokes]

21 hours ago, Alf Bentley said:

 

There have obviously been particular reasons for increased debt at particular times - most notably the 2008 financial crisis/bank rescues.

 

Overall, though, I'd say that the main reason is that we've not adapted adequately from our old role as a global empire with cheap raw materials and a captive market for manufactured goods to our new role as a post-imperial medium-large advanced economy.

We've not spent enough - or spent wisely enough - in either the public or the private sector, on investment to boost growth and productivity. That's the sort of spending that can pay for itself - though whether McDonnell would make wise, self-funding investment decisions is another argument.

 

Instead, too often we've been running a deficit on CURRENT tax/spend, as opposed to CAPITAL investment, increasing debt. Successive governments have tacitly accepted the need to offer the electorate low tax and high current spending on public services. Tories cut tax a bit more, Labour increase public spending a bit more, but both run a current account deficit most years. Even now, despite having made eliminating the deficit a priority for 7 years, the Tories are still running a deficit and increasing debt, albeit more slowly, while probably damaging productivity. Of course, spending on investment isn't always wise spending. The second Blair govt wasted a lot of investment cash on PFI schemes - again seeking to offer low taxes and good public services. 

 

McDonnell's policies on investment seem perfectly viable as economic theory - though how well they'd be implemented in practice is a different matter. However, I wonder whether he'll be able to convince the electorate that borrowing to invest CAN be economically prudent? Many voters will instinctively see it as reckless - and the Tories will certainly go big on that argument. Maybe people are getting desperate enough to try something more daring....but maybe not. At least it's a different argument from the old one propagated by both parties for decades - that we can have low taxes and high-quality public services.

Sorry Alf, I completely missed this.

 

I do want investment but I am most definitely more cautious than the reds on here. I would prefer to see tuition fees removed or at least reduced and quality further education available to all for free. I would happily see tax rises to cover this. I know that’s not a normal view of a Tory but I do think education is key in our poor productivity and subsequent stagnant wages. I’m not sure I trust either party to run the country or any of the other also rans but education and social care will be key things when I come to vote, if I vote.

 

[Guest MattP]

Actually pretty confident of the Tories winning the next election now if they can still lead in some polls with May as leader.

 

Labour should be a minimum of 10 points clear, people might be finally seeing through this mob in opposition.

[Rogstanley]

I think right now Corbyn-fever is cooling down a bit and May's stock has risen somewhat perversely as it has become clear she doesn't have the gumption to deliver a hard crash brexit.

 

Delivering a softer sensible brexit which gives people the perception that not much has changed will probably be enough to see the Tories cling to power against such weak opposition.

 

I still find it incomprehensible that seven years of falling wages is brushed off so easily be much of the electorate, and Hammond's "worst economic forecast in British history" didn't seem to bother many people either, strangely. These are weird, meek times we live in, but I wonder if a proper recession might turn the tide back towards Corbyn when the time comes to vote.

Edited 12 December 2017 by Rogstanley

[Realist Guy In The Room]

It does appear that Corbyn and his cronies dont actually want to get into power.  They seem to be happy that they have control of the party and that’s the sum of their ambition.

 

The amount of open goals they’ve missed is astonishing.

[Webbo]

52 minutes ago, MattP said:

Actually pretty confident of the Tories winning the next election now if they can still lead in some polls with May as leader.

 

Labour should be a minimum of 10 points clear, people might be finally seeing through this mob in opposition.

I have a feeling that if we had an election early next year the result would be similar to 2015. Small Tory majority. Tbh I don't think there will be an election any time soon though.

[Rogstanley]

Inflation rockets higher, slashing wages even faster 

 

http://www.bbc.co.uk/news/business-42320052

Edited 12 December 2017 by Rogstanley

[Buce]

Fears grow across the Atlantic over Brexit fallout:

 

Nearly all the possible trading relationships between Britain and the European Union following Brexit would be less favourable than staying in the European Union, according to an influential US think tank.

The Rand Corporation study said the worst option would be a "no deal".

That would leave the UK economy 4.9% poorer by 2029.

"No deal" would also have a negative effect on the EU economy, but it would be "relatively minor".

The report said that even a "soft Brexit" involving staying in the free market would not be as positive economically as staying in the EU.

 

Rand plays a significant role in America, with half of its funding coming from the US government.

In Europe it has advised the UK government on policy issues such as mental health, as well as the European Parliament and the European Commission.

• Did 'soft Brexit' just win?
• Failure to plan for post-Brexit borders 'reckless'
• UK warned on cost of 'hard Brexit'

Its report argues that Brexit was likely to have a "mostly negative effect" on American interests in Europe, given the UK is a firm ally of the US in security matters and a supporter of free markets.

"An EU without the UK may be more willing to create barriers for non-EU companies, to the detriment of US companies and the American economy," the report says.

"In the development of EU defence policy, for example, the UK aim was often to ensure that EU measures did not undermine NATO and the strong transatlantic partnership."

That approach could change once Britain has left the EU.

'How much worse-off'

The Rand report said that there was only one option that would leave the UK better off outside the European Union: a comprehensive three-way free trade deal between Britain, the US and the EU.

But the report admits that is an extremely unlikely scenario, given that the present trade negotiations between the US and the EU (the Trans-Atlantic Trade and Investment Partnership) are not supported by President Donald Trump and are "in a hiatus".

"The analysis clearly shows that the UK will be economically worse-off outside of the EU under most trade scenarios - the key question for the UK is how much worse-off," said Charles Ries, a vice-president at Rand and the report's lead author.

"It is in the best interests of the UK, and to a lesser extent the EU, to achieve some sort of open trading and investment relationship post-Brexit."

Mr Ries is former US ambassador to Greece and was also principal deputy assistant secretary of state for European affairs in the US between 2000 and 2004.

Image copyright Getty Images

Although the report says that a loss of growth caused by leaving the EU could in part be compensated for by free trade deals with other countries such as India and China, they would be difficult to execute.

"Since the EU has a political incentive to demonstrate that the UK is worse off as a result of leaving the EU (so as to discourage other departures), and some in the UK believe the costs of 'no deal' are low, there is a real risk that the parties - even while seeking to cooperate - will find themselves struggling to reach any agreement," the report says.

"Unfortunately for the UK, 'no deal' - or, indeed, any of the 'hard Brexit' scenarios - is the worst situation for the future, with significant losses in terms of economic growth."

The report says that many American companies invest in the UK because it offers open access to the EU.

It argues that foreign direct investment (FDI) has been boosted by 28% because of the UK's membership of the EU.

'Fault lines'

"Our research indicates that a fall back to World Trade Organisation rules would reduce EU FDI inflow into the UK by about $7.8bn (£5.8bn).

"If the UK signs a comprehensive FTA [free trade agreement] with the EU, investment from the EU would fall by $3.4bn - a reduction of about 9% from EU membership investment levels.

"Signing an FTA with the United States would add about $3.2bn in FDI inflows for the UK from our baseline scenario, making up about one-third of investment lost due to termination of EU membership. The best option would be to conclude a three-way UK-EU-US trade agreement."

Rand says that once free trade negotiations start, "several fault lines" could emerge among the remaining 27 members of the EU, which may put the UK in a stronger position.

"These include the diverging interests of the countries that use the euro currency and those that do not, as well as the diverging interests of those countries that are net contributors to the EU budget and those that are net recipients," the report says.

"Interests could also diverge on regional bases. Northern European countries may seek the maximum possible free movement of goods while trying to lure the financial industry from London to their countries.

"Southern European countries may focus on securing a high financial settlement from the UK and preserving agricultural and fisheries policies.

"And eastern European countries may seek strong protections for their citizens currently in the UK. These differing priorities may come into play as trade-offs are made."

 

http://www.bbc.co.uk/news/business-42315280

[Alf Bentley]

1 hour ago, MattP said:

Actually pretty confident of the Tories winning the next election now if they can still lead in some polls with May as leader.

 

Labour should be a minimum of 10 points clear, people might be finally seeing through this mob in opposition.

 

Whenever the election happens (unlikely to be any time soon), the state of play with the economy and Brexit will surely have a massive impact.

 

Fieldwork for this YouGov poll was done Sun/Mon after May's negotiations "triumph", I believe - so at a high point for the Tories.

In contrast, though most polls were pretty static, a week earlier Survation had Labour 8 points ahead: http://survation.com/labour-extends-polling-lead-8-points-conservatives/

 

Labour definitely should be polling higher, though, given economic expectations and the impact of austerity. 

I'm not sure people are "seeing through" Labour, more that Labour are not seizing the agenda, which continues to be all about "Tories, success or failure?".

That's partly understandable, as Labour don't want to draw attention to the fact that they're almost as divided as the Tories over Brexit.....but they're not seizing the agenda over austerity/living standards/public services either.

This was my biggest complaint about Corbyn a year ago - less the odd bonkers policy, more the failure to seize the agenda and establish themselves as a viable alternative among swing voters.

 

If things stay as they appear now - decent Brexit compromise deal apparently achievable, economy/living standards/public services bad but not disastrous for majority - then the Tories might well win again.

The trouble for the Tories is that things staying as they appear now is probably beyond expectations.

More likely, Brexit Phase II will prove painfully difficult or might collapse completely or might require compromises that split the Tory party, there will be at least some further economic decline (possibly moderate, possibly massive) & public services will get worse. In that context (which I really don't think is Project Fear), all bets are off. 

[Guest MattP]

I actually thought the "deal" done this this week would hurt the Tories, we were lead to believe that the party faithful is full of raving hard Brexiteers who will be fuming, it appears mostly people are more pragmatic. 

 

Of course it could also be with Corbyn, McDonnell, Abbott etc as the potential alternative they'll just have to vote Tory whatever May delivers as it's more important to keep them out.

 

The impact of Brexit will obviously play a huge part in the next election but even if it is bad I can't see the public seriously looking at Labour as being a better choice than the Conservatives to sort it out.

 

ICM also have Tories ahead again.

 

Westminster voting intention:

CON: 42% (+1)
LAB: 40% (-1)
LDEM: 8% (+1)
UKIP: 5% (-)
GRN: 2% (-1)

via @ICMResearch, 08 - 10 Dec

[Guest]

Got to question whether this idiot (DD) needs sacking

 

David Davis has damaged trust in UK, says Verhofstadt

Brexit secretary’s comment that UK concessions were merely ‘statement of intent’ will mean tougher stance from Brussels

 

David Davis on the BBC’s Andrew Marr show at the weekend when he made the comments about the UK’s agreement with the EU which will allow Brexit talks to progress to the next stage.Photograph: Handout/Getty Images

Daniel Boffey in Brussels

Published:11:34 GMT+00:00 Tue 12 December 2017

 Follow Daniel Boffey

 

David Davis’s claim that the UK’s concessions in an agreement to move on the Brexit negotiations were merely a statement of intent has damaged trust and will see a hardening of positions in Brussels, the European parliament’s coordinator, Guy Verhofstadt, has said.

The former Belgian prime minister claimed the Brexit secretary’s comments over the weekend were “unacceptable”, and undermined confidence in the British government’s trustworthiness.

The member states will now agree a tougher wording in their guidelines about the next stage of the talks, due to be signed off at a summit of leaders on Friday, Verhofstadt said.

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EU ministers are meeting in Brussels on Tuesday to discuss the text to be put before leaders on Friday morning.

“As someone said, it’s an own goal,” Verhofstadt said. “It is clear that the European council will be more strict now. It is saying: ‘Yeah, OK, these are our intentions, our commitments, we want these commitments translated into legal text before we make progress in the second stage.’ That is now the position of the council. I have seen a hardening of the position of the council and there will be a hardening of the position of the parliament.”

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The European parliament is to vote on a draft resolution on Wednesday and this will also be amended so as to condemn the comments and demand swift legal assurances from the UK, he added.

The proposed amendments claim that in “calling the outcome of phase one of the negotiations a mere ‘statement of intent’”, Davis’s intervention threatened “to undermine the good faith that has been built during the
negotiations”.

They add that “the negotiations must be conducted in good faith … negotiations can only progress during the second phase if the UK government also fully respects the commitments it made … and they are fully translated into the draft withdrawal agreement”.

Verhofstadt, the leader of the liberal group in the European parliament, said: “We will introduce amendments concerning the - for us - unacceptable description by David Davis of this agreement, saying it was merely a statement of intent rather than a legally enforceable text. And in our opinion that is really undermining the trust that is necessary in such negotiations.”

Davis’s comments had come on Sunday in response to reports that some hardline Brexiters in the UK had been assured by the British government that assurances that Northern Ireland would maintain “full alignment” with EU law in future were meaningless.

The Brexit secretary explained that the joint agreement struck with the European commission on the Irish border, citizens’ rights and the financial settlement, was “more a statement of intent than it was a legally enforceable thing”.

The comments, while accurate, caused consternation in Dublin and prompted the European commission to remind the prime minister in a statement that she had “shaken hands” on a “gentlemen’s agreement” last Friday.

Davis subsequently told LBC radio on Monday that his comments had been misinterpreted and twisted.

“I said this was a statement of intent, which was much more than just legally enforceable,” he said. “Of course it’s legally enforceable under the withdrawal agreement, but even if that didn’t happen for some reason, if something went wrong, we would still be seeking to provide a frictionless, invisible border with Ireland.

“I was making the point it was much more than what’s just in the treaty, it’s what we want to do anyway.”

Draft guidelines had already included a clause making clear that the EU did not expect any “backsliding” from the UK government.

It said: “Negotiations in the second phase can only progress as long as all commitments undertaken during the first phase are respected in full and translated faithfully in legal terms as quickly as possible.”

It is now been suggested that the member states will insist that the UK swiftly starts drafting the relevant parts of the withdrawal agreement in the new year in order to maintain the EU’s trust as talks on a transition phase begin.

The latest draft guidelines suggest that talks about a future relationship can only start after a second set of guidelines are adopted by EU leaders at a summit in March.

[Guest MattP]

Davis is fine, aside from the confusion over the impact assessments he's doing OK in one of the toughest positions created in politics.

 

Guy Verhofstadt is horrible anyway, the high priest of the EU - just look at those curtains as well, who has a hairstyle like that in 2017? Says it all about his judgement. 

[Rogstanley]

13 minutes ago, MattP said:

Guy Verhofstadt is horrible anyway, the high priest of the EU - just look at those curtains as well, who has a hairstyle like that in 2017? Says it all about his judgement. 

You'll be picking on him for having girl's names for his middle names next.

[Buce]

19 minutes ago, MattP said:

Davis is fine, aside from the confusion over the impact assessments he's doing OK in one of the toughest positions created in politics.

 

Guy Verhofstadt is horrible anyway, the high priest of the EU - just look at those curtains as well, who has a hairstyle like that in 2017? Says it all about his judgement. 

 

Nuff said.

[Alf Bentley]

32 minutes ago, MattP said:

I actually thought the "deal" done this this week would hurt the Tories, we were lead to believe that the party faithful is full of raving hard Brexiteers who will be fuming, it appears mostly people are more pragmatic. 

 

Of course it could also be with Corbyn, McDonnell, Abbott etc as the potential alternative they'll just have to vote Tory whatever May delivers as it's more important to keep them out.

 

 

The thing we have to remember is that we sad gits who pay close attention to Brexit arguments are entirely untypical of the electorate - and the same applies to activists on either side.

 

I'm sure the majority of Tory activists are Hard Brexiteers, many of whom will be fuming - or getting ready to ensure that Phase II delivers Hard Brexit.

But to those Brexit voters with only a passing interest (the majority), last week's agreement must look good. I imagine that most Brexit voters would be happy to see agreement apparently reached over EU/UK citizens and a soft Irish border, would be able to live with the divorce payment and would be happy at the idea of now proceeding to trade talks allowing us to leave the EU with a trade deal but able to decide our own rules and do our own deals worldwide.

 

Trouble is, I struggle to see how some of that is deliverable - except with a very soft Brexit that would surely cause civil war in the Tory party. I suppose a Soft Brexit could end up being pushed through by Labour if the Tory Govt collapsed (unlikely, surely) or by May despite internal opposition if Labour or the SNP abstained (unlikely but not impossible)?

 

In the absence of such a Soft Brexit scenario, 3 things I cannot see happening:

1) I cannot see the EU agreeing a generous trade deal without the UK guaranteeing to stay closely aligned to EU regulations and the Customs Union.

2) I cannot see the Brexit wing of the Tory party agreeing to any deal that keeps the UK closely aligned to EU regulations and Customs Union.....bit of a conflict between 1 and 2, there!

3) Last week's "deal" notwithstanding, I cannot see the Irish NOT getting shafted over the border (unless there's a change of Govt or extensive opposition abstentions on a Soft Brexit deal). Leaving the Customs Union and deregulating are surely red lines for the Brexiteers - and keeping Customs systems and regulations closely aligned are surely red lines for the EU?

[Alf Bentley]

7 minutes ago, Rogstanley said:

You'll be picking on him for having girl's names for his middle names next.

 

Guy Nancy de Flowerpetal Verhofstadt is quite laughable, tbf.

 

 

(Mind you, Marie Louise is unusual, too! The name Marie is commonly used as a male French name (e.g. Jean-Marie Le Pen), but I've never seen a bloke called Louise before. )

[Guest MattP]

Nothing really I disagree with there Alf, I do think the Tories will stay in line though whilst the opposition is what it is, if they want a harder Brexit than is offered up they can throw that over to the membership in the future who are now obsessed with Jacob Rees-Mogg getting the next leader.

 

Something to cheer up a few from the other side...

 

Westminster voting intention:

LAB: 40% (-2)
CON: 37% (-)

via @BMGResearch, 05 - 08 Dec

Edited 12 December 2017 by MattP