Report: New immigration policy will hurt growth
The Office for Budget Responsibility’s report today had another stark message for Prime Minister David Cameron: his attempts to restrict immigration into the UK would have a huge impact on our economic growth.
It points out that immigration policy will also lead to a long-term decline in the UK’s economic potential.
This key paragraph in the report states:
Our estimate is that trend output will grow at 2.35 per cent over the next three years, slowing to 2.1 per cent from 2014 on as demographic changes reduce the growth of the potential labour supply.
The FT’s Alex Barker says this indicates Cameron’s immigration policy ‘will fail’. He also thinks Cameron will simply fail in restriction immigration anyway.
The implication is to maintain a 2.75 per cent long term growth, either the British birth rate needs to rise significantly (it’s predicted to fall) or immigration levels need to run at the same pace as when Britain opened its doors to Poland.
It’s an economic challenge that runs against the grain of the political debate these days. Most folk in Westminster are only happy to talk about restricting the borders, rather attracting more foreign workers.
The OBR report states that even though immigration won’t fall as much as Cameron wants, it will still impact the UK’s growth prospects.
“Makes you wonder what the additional hit to trend growth would be if Cameron did manage to bring net migration down to under 100,000,” Alex Barker asks.
And that is before news that business confidence was down because the Treasury keeps playing down the economy.
Here comes that Digital Election we have been waiting for
Last week, Anthony Painter launched a Digital Election Analysis he wrote for Orange.
A key conclusion was the that the eager awaited ‘Digital Election’ we had all been expecting (after the fantastic Obama ’08 campaign) simply failed to materialise, and it was TV wot hung it.
My thoughts on the events were blogged elsewhere.
However, since Sunny has just posted his provisonal Blog Nation programme, I will offer a quick addendum to my earlier thoughts here, which is simply that it is the Labour Leadership Election which will prove to be the Digital Election we have all been waiting for.
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Survey: Tory cuts are ‘depressing confidence’
The BBC reported last night:
Business confidence among UK firms has seen its biggest drop since 1995 due to the government’s rhetoric on spending cuts, a survey suggests. The Business Trends survey from accountants BDO fell to 97 in May from 103.3 the previous month – the largest drop since the survey began.
BDO said economic growth forecasts for this year and next now need to be revised down sharply.
It’s rather unprecedented that a government is trying to play down the strength of its own economy and thereby depressing business confidence.
The American economist and Nobel prize winner Paul Krugman also attacked this deliberate push to ‘austerity’ last week.
He said the claim that the markets demanded austerity cuts to stabilise the economy was rubbish for three reasons:
First, it assumes that markets are irrational – that they will be spooked by stimulus spending and/or encouraged by austerity even though the long-run budget implications of such spending and/or austerity are trivial.
Second, we’re talking about punishing the real economy to satisfy demands that markets are not, in fact, making. It’s truly amazing to see so many people urging immediate infliction of pain when the US government remains able to borrow at remarkably low interest rates, simply because Very Serious People believe, in their wisdom, that the markets might change their mind any day now.
Third, all this presumes that if the markets were to lose faith in the US government, they would be reassured by short-term fiscal austerity. The available facts suggest otherwise: markets continue to treat Ireland, which has accepted savage austerity with little resistance, as being somewhat riskier than Spain, which has accepted austerity slowly and reluctantly.
This morning the Left Foot Forward blog reported that there was no longer a case for deeper cuts than that planned by Labour since the government’s borrowing requirement came in lower than expected.
And yet this government carries on blindly, while actually depressing growth forecasts because of its rhetoric. Well done Osborne.
(via Left Outside)
Yes, BP does need its ass kicked
My job sometimes sees me address seminars designed to teach businessmen how to handle the media when things go tits up in a big way, and the week before last I was once again on the platform at such an event.
The other scheduled panellist – booked months in advance, I understand – was to have been a representative of BP. Unfortunately, he had to blow out the engagement, on account of another rather more serious blow out elsewhere in the world.
In the session that immediately followed, the audience was treated to a presentation from a veteran PR man on just how badly the oil major has dealt with the Deepwater Horizon disaster, which has now spilled seven times more oil than the Exxon Valdez.
The speaker could have boiled down the message to attendees to the proposition that they should look at how BP chief executive Tony Hayward did things, and then do the opposite.
LC Blog Nation conference: a draft programme
Thanks to all those who contributed and emailed in with your thoughts and suggestions for the draft programme for LC Blog Nation on 26th June.
If you want to attend you can email me or blognation@liberalconspiracy.org.
Here is a draft programme. This is obviously subject to change, and I’d like your input below.
continue reading… »
These union elections are just as important for Labour
contribution by Paul Lettan
The Labour Movement is in the middle of monumental leadership elections at the moment.
In addition to choosing a leader of the Labour Party and a candidate for the Mayoralty of London, the movement also chooses leaders of both Unite and Unison the two largest trade unions.
Both the Labour Party and the Trade Unions operate in vastly changed circumstances. There is a coherence to the Coalition agenda that trade unionists and Labour politicians have not had to face before.
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Cameron drawing wrong lesson from Canada
Economists say that David Cameron is drawing the lessons from their country’s deficit reductions plans during the 1990s.
Last week the Daily Telegraph reported:
Senior Conservatives, led by Mr Osborne, have examined the Canadian model while in opposition and have taken advice from those involved. The idea of a star chamber – copied from Canada – will transform the way spending rounds are carried out. A committee of around four senior ministers will “test” the claims of each department before their multi-billion pound budgets are agreed.
The newspaper said that George Osborne was planning to eradicate Britain’s budget deficit by emulating Canada, where borrowing was brought under control within just three years by spending cuts of 20%.
But Marshall Auerback, senior fellow at the Roosevelt Institute, with 28 years of investment management experience, argues that:
The reality is somewhat more complex, as Professor Mario Seccareccia of the University of Ottawa has noted in a paper entitled, Whose Canada? Continental Integration, Fortress North America, and the Corporate Agenda (pp. 234-58).
In the paper, Seccareccia noted the real reasons for the “success” of the Chretien/Martin austerity programs:
1. High growth in the US, Canada’s largest trading partner, a sharply declining Canadian dollar (which fell as low as .62 cents against the greenback), and the implementation of the North American Free Trade Agreement (NAFTA), all of which combined to push the export sector’s share of Canadian GDP to 45% by 2000 (now about 33%), and
2. An expansionary monetary policy which did significantly stimulate consumer spending, and which was sustained until the financial crisis.
He adds that Canada’s turnaround was “largely made possible through a revival of growth in the US (Canada’s largest trading partner)”.
The UK has no such option because the EU, our biggest trading partner, is similarly stuck in a rut.
Auerback adds:
If anything, this vast improvement in Canada’s external account largely offset the deflationary impact of the fiscal austerity which, in any case, likely impeded, rather than facilitated, economic recovery, given the slashing of employment insurance and social welfare benefits.
And yet Cameron and Osborne are planning to follow the same paths without learning from Canada’s experience in context.
A poll by YouGov published yesterday found that 49% of the public think the government should raise taxes to reduce the deficit.
Only 39% said the government should not raise taxes at all and instead focus on cutting spending.
Watch: Parody of BP oil spill
via Kevin Blowe
The football world cup is not xenophobic
We’re only three days into the World Cup, and already I’m tired of the drone. I speak not of the Vuzuvelas, but of the naysayers who dismiss the World Cup as being somehow xenophobic.
Laurie Penny was at it last week, now quoted approvingly by fellow Orwell Prize nominee Madame Miaow. Even my friend Ste Curran was at it earlier, and I expected better from him.
These curmudgeons assume that any time two teams from different sides line up against each other, it is inherently warlike.
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Why I find it difficult to cheer England at football
contribution by Madam Miaow
Football — the continuation of war by other means.
The trouble with football (collapsing a whole long list into a handful of bugbears) is that its mindset bears an uncanny resemblance to the belief in “my country/party right or wrong”. It appears designed to programme the collective brain out of thinking and nuance, making those same synaptic connections that can only deal with black and white, binary three-minute hate. Us (good) and them (bad).
Coming out of the Second World War, which devastated huge swathes of the globe, we valued our intellectuals and artists for helping to make the world a better place.
Nowadays, changing social conditions means social engineering, militarising society and the creation a nation of gladiators. From Sky to Skynet, turning you into a combat machine. Prepare to be assimilated.
continue reading… »
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» The real agenda behind Telegraph’s abortion investigation
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» Job snob? No, I’ve got the T-shirt
» Why country-by-country reporting matters to our wellbeing
» If Unions want to become stronger, they need to modernise
» Why work “reforms” in Spain are a warning for workers across Europe
» Five things you need to know about the NHS bill
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» Laziness levels in Britain getting lazier, wails government
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