The attitude of the two main parties to those further to the right (for the Conservatives) or the left (for Labour) is very different. In the case of the Conservatives since Cameron, until very recently at least, the best word to use would be appeasement. We left the EU as a result. The attitude of Labour leaders (with the obvious exception of when Corbyn was leader) can be characterised as exclusion. Is this asymmetry just the result of the choices of particular party leaders, or is there something more structural behind this. Another way of asking the same question is whether the suc ..read more

  Russell Jones has written a history of the UK economy since the 1970s, and as narratives go this is very good. While I inevitably had minor points of disagreement, on most issues I think the author makes the right calls. The narrative is clear and not unnecessarily technical, so you don’t need to be an economist to read it. (The book is also chart free, which I think is a shame.) It is very comprehensive implying extensive research, which is quite an achievement when writing about 50 years of economic developments and policies. These virtues have costs, of course, at least for an ac ..read more

  “Healthy People, Prosperous Lives” is the first interim report of the IPPR’s Commission on Health and Prosperity. (I am a member.of the Commission, but not an author of this report.) This analysis could not have come at a more topical moment, as suspicion mounts that there may be a link between the worsening state of our health services and the dire state of our economy. This report uses research to quantify that link. Let me start by looking at the contraction of labour supply since the pandemic that has persisted in the UK, while in other countries it has largely or completely disapp ..read more

  Before answering this question, we need to define what the OECD counts as social expenditure. It is mainly a combination of what we call welfare spending (including pensions) and health spending, but it also includes incapacity-related benefits, active labour market programmes, as well as unemployment and housing benefits. What it is not is just public social spending. In all OECD countries individuals spend some of their own money (either directly or through their employer) on social expenditure. In the UK, for example, private social expenditure exceeded 6% of GDP in 2019 according to ..read more

  The claim often made for fiscal consolidations (cuts in public spending or increases in taxes) is that they are required to reduce the ratio of public sector debt to GDP. But while fiscal consolidations are likely to reduce public sector debt, they are also likely to reduce GDP, so the impact on the debt to GDP ratio is unclear. Research just published by the IMF suggests that, based on past evidence, the average effect of fiscal consolidations on the debt to GDP ratio is negligible (i.e. virtually zero). Looking at the study in more detail, the results are even worse for proponents of ..read more

  For someone who has been described as the “economic brain of Thatcherism”, it was inevitable that evaluations of his career would be ideologically polarised. He was after all the person who started privatisation, created the City’s ‘Big Bang’ and who cut top tax rates. Yet in the eyes of history, successful politicians need competence as well as ideology in order to make good decisions and judgements. The view I want to put forward here is that Lawson had an uncanny knack of making bad decisions. It is perhaps telling that a number of articles following his death contrast his period in ..read more

  If you read some of the UK headlines, it seems that France is having difficulty adjusting to the reality of longer lifespans. Its previous retirement age (the age when you can get a state pension) was 62, which is well below most other countries. Macron has made that 64, in a reform imposed on parliament. 64 is still relatively low, yet there have been strikes and demonstrations against this change that have been large even by French standards. A rolling strike by bin collectors in Paris has left rubbish on the streets. Commentatorsare asking whether these protests will bring about the ..read more

  For many, BBC bias is straightforward. It is about government supporters running the organisation, and others being scared of the financial implications of upsetting the government. While both are undoubtedly important, on their own they would imply that other broadcasters, like ITV for example, should behave very differently. So when both the BBC and ITV fail to hold the government to account over a key mistake, where thousands of lives were at stake, we need to look at other sources of pro-government bias. We should all remember how the government decided, in the crucial initial stag ..read more

  As Chris Giles explains here, Chancellor Hunt is gaming his fiscal rules. He is not the first Conservative Chancellor to do so. In particular, it is now routine for Conservative Chancellors to announce that they are freezing fuel duty, but they then tell the OBR that they will raise them with inflation in every forthcoming Budget. They have repeated this fiction for the last dozen years. The fiction that the duty will be raised in the future, just not now, flatters future revenue projections and makes it easier for the Chancellor to meet his fiscal rules. This particular problem arises ..read more

  As my posts are usually written just before Budgets happen, I will add a postscript after the Budget To say that much of the media treats Budgets as if the government was a household is not really accurate. Much Budget analysis treats the government as a cash constrained household, such that any change in expected tax revenue is regarded as money the Chancellor has to spend or give away. Most households don’t work like that, because they have the capacity to save and borrow. The government of course finds it much easier to borrow than households. Unfortunately some governments encoura ..read more