"The man's deluded"

Tweet The utterer of the words, Prof. Minford, is not a source that I would always quote with approbation, but in this case, the description seems to be highly appropriate.  Clegg’s analysis is badly flawed in several respects.

He argues that the City of London has been a “golden egg-laying goose that produced this great wealth”.  I’m not convinced; it may have produced wealth for some individuals (including, of course, a number of members of the cabinet), but it also produced a crippling level of liabilities which have been passed on to the taxpayers. 

He goes on to suggest that “this great wealth … was shunted northwards and to other parts of the country by governments”.  That would presumably be a reference to the extended period during which the gap in GVA between the South East and much of the rest of the UK – and especially Wales – actually increased?

He’s right of course that government economic policy for so long effectively depended on using the taxes raised in the South East to pay public sector employees elsewhere, and that that represented a degree of transfer, but that isn’t the same as saying that this wealth was shunted northwards etc.  It was more a case of mitigating part of the growth in inequality than of trying to address the inequality.

But it’s his ‘solution’ which should concern us most – or rather his lack of a solution.  Replacing “dollops of public subsidy”  (his words – not a description that I’d use) with proper jobs in research and manufacturing sounds like a good idea – but what does it actually mean?  In terms of actual proposals, we know that the government is planning to stop the ‘subsidies’, but where are the specific proposals which will provide the replacement economic activity which he is proposing?

He appears to be relying, yet again, on the assumption that the private sector will miraculously create these jobs to mop up the unemployment after it has been created, despite the complete lack of any indication that that is happening.  It's a one-sided approach to a two-sided problem.

To return to the words of Prof. Minford – “It’s nonsense.  The man’s deluded”.

PS – What on earth does ‘re-wiring the economy’ mean anyway?  Perhaps he just needs a new speech-writer.