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[BroxtoweInfo] Personal manifesto, part I: Making Britain viable‏

4th January 2015 Nick Palmer, Updates from Politicians Tags: , 0 Comments

Hi all,

After my recent columns criticising other parties, I’d now like to turn to the sort of issues that I’d like as an MP to help address.

What can you expect from your MP?

You can expect three things of an MP:

(1)   (1)They should use their intelligence and experience to contribute to achieving good policies and point out the risks of bad policies

(2)   (2) They should take up issues for you, responding swiftly when you ask something, and do their best to represent the constituency

(3)   (3) They should seek to maximise their influence, either through a Ministerial role or a more independent Select Committee.

Re (3): If I’m elected in May, I shan’t be trying to get a Ministerial role; I’ll be hoping to get back onto one of the key Select Committees that provide independent scrutiny of whichever Government is in power. Because I’ve been lucky enough to have a varied background outside politics (18 years in industrial management and two successful small businesses, a mathematics PhD and six languages), I hope to contribute insights that others may not be able to.

Re (2): I think I did a fairly good job at being responsive before and would want to do that again. You can normally expect a personal response within 48 hours.

That leaves (1), so I’m planning to put forward a series of pieces on what I’d like to take up as your representative. They will be relatively long, but I won’t apologise for that – they have to be, to get beyond the sound bites and half-baked ideas that typify our political world. Not everything I say represents a Labour view and there’s no guarantee that it will all be implemented – we are electing 1 MP out of 650. But you’re entitled to know what I’ll be saying on your behalf if you choose to elect me. I’d like to ask for your feedback in advance, so I can revise it and add your ideas: you may well have more expertise than me in one of the areas I’ll be discussing!

Is Britain currently viable?

First, I’d like to look at the basic issue of making Britain competitive – or, indeed, viable at all. Have we as a country really got to grips with the impact of globalisation? Before the lowering of trade barriers, we had quite distinct economies in the West and elsewhere, with incomes in the West a gigantic stride ahead of everywhere else. After opening up, it became evident to companies that low-skilled mass production could be done more cheaply elsewhere and that’s been followed by jobs requiring more education or training. Any implicit assumption that countries like China and India were basically only capable of mass assembly is long gone.

Now, we should recognise that this isn’t necessarily a bad thing in itself and it really isn’t reversible – hiding behind trade barriers like North Korea is a formula for long-term catastrophe. The global effect is that global productivity has risen by leaps and bounds, and many developing countries have done remarkably well. As a whole, the globe is much better off.

But globalisation is acting to reduce differences between nations at the cost of increasing internal inequality. In Britain, the gap between people with multinational activity (and often multinational tax benefits) and everyone else is widening. We see this in China too, where the gilded rich lead lives far removed from that of the factory worker and peasant.

Here in Britain, our cost of living has been kept down by cheaper manufactured imports (when did you last see a laptop made in Britain?). However, the flip side of that is that since we are not making enough money in exports to cover the cost of those imports, we are paying for our standard of living by selling our assets. Our balance of payments deficit is enormous and getting worse: it’s now averaging £59 billion/year, or roughly £1000/year for every adult in Britain. Moreover, our productivity record is really bad, the worst in the West by a large margin: output per hour worked in Britain is 29% lower than in the US and 24% lower than in Germany and France.

There are three possible consequences of this. Either

(1) British-based firms will move up the value scale to replace the losses of low-value production or

(2) immigration at low wages will help firms stay in Britain and still compete (I am going to discuss immigration in a separate piece) or

(3) real wages will decline until we reach global equilibrium (in other words, until it’s as cheap to produce in Britain than in China or Thailand, which is a LONG way down).

(1) hasn’t happened to a sufficient degree, so we’re seeing (2) and risk seeing (3) unless policies change. Britain needs a strategy to move upmarket or we are actually just seeing the start of a cost of living crisis that will dominate our lives for a generation or more, which will produce unrest on a scale that we can’t yet imagine. Government deficits are also a consequence, which is why the Government hasn’t succeeded in stopping the rise in debt – if production is increasingly overseas or wages in Britain are squeezed, then tax revenue goes down.

What can we do about it?

My personal view – and I stress that I’m not speaking for anyone but myself – is that we need to give absolute priority to restructuring our economy – it’s more important than any of our other themes (lower taxes, more housing, better health care), most of which depend in the long term on the restructuring. There is infinite scope for debate about how to do it, but important elements that I’ll focus on include:

(1)    (1) making it more profitable to invest in Britain

(2)    (2) improving infrastructure so investment pays off better than elsewhere

(3)    (3) making education more effective in developing high-end productive skills.

I’m going to write separately about these areas, but the first question for any policy should be “Will this affect our long-term economic viability?” This in turn needs to be linked to fairness – people will tolerate the effects of restructuring if they can see that they are being looked after as well.

So part of my personal manifesto is going to be a medium-term perspective that is focused on making Britain viable but fair. That means, specifically, that I don’t favour significant tax cuts for individuals unless they’re funded from other sources. I’m sorry, but we need to be honest with each other. At the moment, we can’t afford them, and I’d recommend looking with suspicion at anyone who says we can.

I hope you’ve found this interesting and perhaps useful? In subsequent pieces, I’ll be looking beyond this overall theme at the individual issues.

Best wishes

Nick Palmer

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