Non-voting membership?

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As the official Brexit negotiations continue at a pace which would appear on the slow side to a snail, the contradictions within the ‘leave’ side become increasingly apparent.  This post has already been widely shared as a word of warning from a leaver about the direction that things are taking.  Some have interpreted it as a sign that leavers are changing their mind, but I think that what it actually shows is that ‘leave’ means – and always did mean – different things to different people.  The campaign may have managed, by fair means and foul, to amass a slender majority in favour of the simplistic concept of leaving the EU, but there was never any real agreement about what that would mean in practice.  I read the article less as an expression of regret about the fact of Brexit and more as laying the groundwork to say that those in charge got the detail rather than the principle wrong.

Laying the groundwork for blaming someone else is what the Brexit minister seems to be doggedly trying to do as well.  Demanding ‘flexibility’ from the EU27 sounds more like an attempt to blame Brussels inflexibility than make any sort of breakthrough in the negotiations.  Looking at the detail of the ‘flexibility’ that he’s asking for, it seems that it’s just a continuation of the ‘have cake and eat it’ dictum of the Foreign Secretary.  It amounts to a demand that the UK should continue to enjoy all the benefits of membership (and even retain an input to the regulations) whilst not being a member and reserving the right to do all sorts of things which members are not allowed to do.  In practical terms, it’s not far short of asking the EU to more or less disband itself and turn itself into a much looser relationship solely to accommodate the UK.

That’s not as stupid, in principle at least, as it might appear – I’ve argued before that the one context in which Brexit starts to look like a coherent policy is the context in which it is the first brick to fall in a process of pulling down the entire edifice.  The Brexiteers might say, repeatedly, that they want the EU to remain as a strong and united partner, but that’s the last thing they really need.  The problem is that there are no signs that the expected collapse is going to happen any day soon; in fact, quite the reverse.  If anything, Brexit appears to be provoking more, rather than less, unity among the 27.

But Davis is right on one important thing: if a deal is to be done, there will be a need for a lot more flexibility.  It’s just that it needs to come from the 1, not the 27.  The question is whether he prefers to stick to the ideological view of many within his party, and allow the talks to fail whilst blaming someone else, or whether he’s prepared to be flexible to the point at which non-membership looks increasingly similar to membership, but without a vote.  That latter is gaining in credibility as a likely outcome, as this piece suggests.  The potential political consequences are very far-reaching.

Selfishness isn't always the driver

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In yesterday’s post, I referred to the response by a group of LSE economists to the suggestion made by a group of economists led by Professor Minford of Cardiff University that a so-called ‘hard’ Brexit would boost the UK economy substantially.  Part of the LSE group’s critique of the report by Minford et al was that “Minford uses a 1970s style trade model in which all firms in an industry everywhere in the world produce the same goods and competition is perfect. There is no product differentiation – a German-made car is identical to a Chinese-made car. Importantly, trade does not follow the gravity equation – everyone simply buys from the lowest cost producer”.

This idea of a ‘perfect market’ where everyone acts in accordance with his or her own best financial interest, seeking to maximise income and minimise spending, is at the heart of a lot of thinking on what is often referred to as the ‘right’ of politics.  Many of them really do believe that we are all motivated by one and only one factor, and that our behaviour in response to events can be predicted from that.  It helps to explain the bemusement of many of the Brexiteers when they discover that the EU27 are considering factors other than exporting cars from Germany or Prosecco from Italy.  I think that they generally don’t get the idea that people might just be considering other factors rather than solely economic ones.

It isn’t just in relation to Brexit that we see this tendency.  We’ve seen it time and time again from the Tories in the Assembly who argue – and seem genuinely to believe - that increasing income tax rates will lead to an outflow of wealthy people whilst reducing them will lead to a corresponding inflow.  There is, as has been discussed before on this blog, no hard evidence of which I’m aware to justify this belief, but the theory says it should be so, so it must be so.  Empirical evidence is not necessary to justify or support beliefs derived from theory, from their perspective.

Today, there was another example of the same sort of thinking.  The Adam Smith Institute has come up with what they see as a wizard wheeze to persuade young people to vote Tory – scrap air traffic duty on flights to Ibiza.  Seriously.  OK, there are a few other suggestions as well – including one to make it easier for young people to travel to ‘English-speaking countries’ to replace the lost European opportunities post-Brexit, and another to legalise cocaine – but the basic underlying point is an attempt to appeal to what they see as the naked self-interest of young people.  Or, perhaps I should say, a certain type of young people, since some of the suggestions make me wonder whether they’ve ever spoken to any young working-class people at all.  But then, they don’t need to speak to anyone; their theory says that people will act in their own selfish interests at all times, and the theory must be right, no?

At one level, I find it deeply depressing that anyone could believe that selfishness is the sole motivation of all humans, but at another level, the fact that they are so divorced from the complex reality of modern life in the developed world shows the extent of the opportunity available to present an alternative vision for humanity’s future.

The answer really isn't in the stars

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There was a report published last week by a group of Brexit-backing economists suggesting a significant economic boost for the UK following a so-called ‘hard’ Brexit, whilst suggesting that a so-called ‘soft’ Brexit would leave us no better off than we are now.  This report stands out from the crowd in that most other economists suggest that the reverse is likelier to be true; and another group of economists has drawn attention to what they see as the flaws of the pro-Brexit report.  All the various predictions are based, obviously, on models and assumptions, including assumptions about how all of us as consumers and spenders will respond to various events.

That question of assumptions and models is at the heart of the reason why economic forecasting has a bad name.  That is the underlying truth which gave rise to Galbraith’s claim that: “The only function of economic forecasting is to make astrology look respectable”.  Sometimes an economist gets it right and gets feted for doing so; but whether getting it right is a tribute to the correctness of the model used or a result of simply having enough ‘monkeys with typewriters’ is another question.  Based on historical experience, the safest assumption is that both sides in this particular debate about the consequences of Brexit are likely to be proved wrong in the long term.  (As I’ve posted before, the argument was never primarily an economic one for me.)

There is also a sense in which both sides could be regarded as being right, despite the wide variation in their conclusions.  What I mean by that is that their answers are probably ‘right’ in terms of the application of the assumptions and models: an argument which follows logically from a given set of premises isn’t in itself illogical just because those initial premises are wrong.  It’s just not very useful in real life.

This doesn’t just apply to Brexit, of course.  A recurrent theme of any discussion of Welsh independence is a demand that those of us supporting independence provide a definitive set of figures spelling out the economic consequences, with the implicit assumption that failure to do so means either that we have something to hide or else that the numbers will never stack up.  But, with a little effort, I could produce a range of numbers showing a range of outcomes, from Wales as a land of milk and honey to Wales as a complete economic basket case.  And any of those sets of numbers would be entirely valid and correct (discounting any simple arithmetic errors!) in the context of the assumed starting point, the assumed policies of an independent Welsh government, the assumed responses to those policies, and the assumptions made about external events.  And all of those sets of numbers would, in all probability, prove to be wrong after the event – not because of any errors in the process of deriving them, but because of the invalidity of the assumptions made, and the sheer impossibility of knowing in advance which assumptions are the correct ones to make.

What we can say, with a high degree of confidence, is that countries which become independent usually end up better off than they were beforehand, invariably set economic policies to suit their needs rather than the needs of the larger entity of which they were previously a part, and don’t ask for their independence to be reversed after the event.  But the reasons for seeking that independence are rarely, if ever, primarily economic in nature.  In the same way, whilst much of the argument about Brexit has been about the likely economic consequences, and whilst both sides seize on reports produced by ‘their’ tame economists to justify their position, their real motivation is rarely about economics. 

There’s something apparently inherent in British politics which demands that we pretend that everything comes down to economics, and that the debate revolves around that question, but the result is that the very different world views which really drive the debate are insufficiently scrutinised and challenged.  The selection of economic forecasts which fit the initial belief is more to do with a rationalisation of that belief than anything else. 

Gaining influence in the world

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The Prime Minister of Slovenia warned on Sunday that the UK position on Brexit is unrealistic and that negotiations are likely to take longer than the UK is assuming. 

Slovenia is a small country on the fringes of the EU.  Its surface area (20,273 km²) is remarkably close to that well-known universal measure ‘the size of Wales’ (20,799 km²), although its population (just over 2 million) is only two-thirds of that of Wales (a little over 3 million).  Its GDP per head is rather lower than that of Wales.  (Contrary to the oft-asserted ‘fact’, Wales isn’t the poorest country in the EU; that belief appears to arise from confusion between countries and EU regions.  Wales is actually a middle-ranking EU country in terms of GDP per head.)  All in all, therefore, applying the criteria normally used in discussions about Wales, Slovenia is ‘obviously’ too small and too poor to be an independent country.  Unfortunately for the Slovenes, they didn’t have a ‘national’ party pointing that out to them, and the country became independent anyway.

Its Prime Minister will, as a result, have more influence and a bigger say over the terms of Brexit than the First Minister of Wales.  Isn’t independence a terrible thing?

Counter-productive arguments

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The reaction of the Tories to the tweet by Plaid’s leader last week about the attack in Barcelona was a little over the top for me.  But given the propensity of Plaid politicians in recent years to demand apologies, resignations, and sackings whenever a political opponent says something that offends their sensitivities, they can hardly complain when other people want to play the same game.  It’s all just part of the froth which passes for political debate.

The underlying point of the tweet has a degree of validity when looked at objectively; much of the ISIS ideology does indeed overlap with the ideology of other groups such as those demanding white supremacy in America.  So, as a statement of fact, it’s hard to disagree.  I wonder though what is the purpose of drawing a comparison, and I find it hard to avoid the conclusion that it was intended as a means of lumping together a number of disparate groups under a single label, and claiming guilt by association.  It’s disappointing that a party like Plaid, which has suffered from similar attempts at guilt by association over many decades (along the lines of ‘you’re a nationalist, Hitler was a nationalist, therefore you’re a Nazi’) should be playing the same game rather than trying to maintain a higher standard of debate.  Those who have attempted for years to smear Plaid in that fashion really have no right complaining when the boot’s on the other foot, but two wrongs never make a right.

The real issue for me is about using such a simplistic approach as pinning labels on political opponents.  Oh, I know they all do it, and I’m singling out Plaid only as the most recent transgressor here, but what exactly does the label ‘far-right’ add to meaningful political debate about the aims and objectives of all the groups so labelled?  Labelling is invariably a substitute for analysis rather than a part of that analysis; a short-hand way of dismissing arguments without needing to debate them.  But it’s extremely imprecise; there are people who are socially very conservative whilst holding what might be called left-wing economic views, and there are people with what might be called right-wing economic views who are socially liberal.

Winning people over, or changing their minds on specific issues, requires a degree of engagement with those details rather than dismissing them with a label.  Labelling may feel very ‘right-on’ to the in-groups in politics (and the Labour support for Leanne is relevant in that context), but ordinary voters who feel that they have, in effect, been told that they are little different to ISIS are unlikely to be well-disposed to listen for very long to those who they feel have told them that.  It’s not a reason for demanding apologies, resignations, or sackings, but I do seriously question whether it’s an approach which is likely to advance the cause of those using it.  It basically just seems counter-productive.

What is the basis of the alternative?

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On Monday, the BBC reported on Neil Hamilton’s call for Plaid to work with UKIP; yesterday there was an article on Nation.Cymru calling for a coalition between Plaid and the Tories.  It’s obviously August, and the traditional dearth of hard political news is being replaced by the equally traditional speculation, which is unlikely to lead to anything at all once 'proper politics' recommences in September.

That’s not to say that there isn’t a serious point underlying all this though.  There is a perception that Wales, and Welsh democracy, have a problem.  We are eighteen years on from the founding of the Assembly and one party has either formed, or led, the government for the whole of that time.  Only once, and then only briefly, was there a serious possibility of an alternative, but since then the possibility has disappeared and currently seems further away than ever.

I’ve talked before about the question of the so-called rainbow alliance in 2007, and I’m not going to rehearse all the arguments here.  For a variety of reasons, some of which I’ve mentioned before and some I have not, I was opposed to that proposal, but my opposition wasn’t based on some vague ‘principle’ about never dealing with the Tories; it was more to do with whether such a government was viable, and to what extent it would advance the cause of independence.

Those latter questions go to the heart of my reaction to the idea that Plaid should be prepared to work with the Tories.  Any party of independentistas should be judging and responding to that question on the basis of an assessment of whether, and to what extent, such a government would be a step towards or away from achievement of that goal, and an assessment of the political costs and benefits to the national movement over both the short term and the long term.  It says a lot about the stage that Plaid has reached that the reaction is more to do with a refusal to work with evil baby-eaters than about making such an assessment, predictable though such a reaction is.  Plaid, as I’ve commented before, seems unable to decide whether Labour are pink Tories, little different from the real ones, or a progressive force which should be supported.  It frequently seems that they believe – and want the rest of us to believe – that both of those things are simultaneously true.

I don’t entirely share the analysis in the Nation.Cymru article, but neither do I believe that basing the entirety of Welsh politics on an assumption that the Tories are inevitably and immutably toxic is showing any understanding of the reality of political trends in Wales.  For sure, the threatened Tory surge in the June General Election didn’t happen, but the fact that – however briefly – the polls suggested it as a serious possibility underlines, yet again, that Welsh politics (at Westminster level at least) is converging with, rather than diverging from, the mainstream of English politics.  Any party which bases its whole approach on an assumption that the Tories and their ilk are forever beyond the pale is likely to find itself being overtaken by events.  It’s simply a question of time before such an essentially negative approach fails.  And there’s a danger that Labour take Plaid down with them.

The bigger problem that I have with the suggestion of such coalitions is the assumption that having an alternative government is, axiomatically, a good and necessary thing for Welsh democracy, and that, if the people don’t choose one themselves when they go out and vote, it’s down to party political manoeuvring to create one.  After all, we have a Labour-led Government in Wales, and have had one since 1999, because that’s what the people voted for under the electoral system which is in operation.  One could (and I do) criticise the electoral system for not adequately representing the range of opinions amongst the Welsh electorate, but even under my preferred option of STV, I’m certain that Labour would have emerged from the Assembly election as far and away the largest party.

The so-called ‘problem’, in short, isn’t that there is a lack of an alternative government, it is that the government we have is the one that the electorate chose; and any post-election stitch-up between parties which claim to be fiercely opposed to each others policies, with the sole aim of displacing Labour, lacks any obvious legitimacy.  I agree with the perception that continuous government by one party is leading that party to be complacent, timid, and lacking in vision.  But the solution to that is to do with persuading people that there is a better alternative and getting them to vote for it, not some back-room deal.

The obvious continues to elude them

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The stated aim of the UK Government in publishing ‘position papers’ in relation to Brexit is to start providing some clarity about what the UK actually wants.  On the basis of what they’ve come up with so far, it appears that they’re really no clearer now than they were 14 months ago.

Amongst their proposals to date are:

·       There should be a customs union which mirrors the existing one in all important respects except that the UK uniquely should be free to negotiate different trading arrangements with non-EU countries than those negotiated by the EU itself, because ‘obviously’ a country with a market of 60 million and no trade negotiators will get better deals than a market of 450 million with a host of experienced negotiators.

·       There should be something called ‘regulatory equivalence’ under which the UK basically mirrors all the EU regulations except that it also retains the right to vary them as and when it chooses.

·       There should be completely frictionless trade between the EU and the UK except that the UK should have the right to opt out of all the mechanisms and costs involved in managing that trade.

It amounts to little more than an elaboration of what we already knew – the UK still expects both to have its cake and eat it, and any attempt by the EU27 to prevent that will be portrayed as a deliberately punitive response.  The Brexiteers continue to believe in the fantasy that ‘they need us more than we need them’.

Yesterday, we had the latest thinking (although that may be too grand a word) on the question of the border between the UK and the Republic of Ireland.  According to the Northern Ireland Secretary, the proposal is entirely reasonable and should be accepted because of the trade involved on all sides.  This seems to be repeating the same mistake that the UK Government has made from the outset – they have a deeply ingrained mindset that tells them that trade is the only factor to be considered.  Once again, they show themselves incapable of understanding that for all the other EU countries there are a range of other factors to be considered – it isn’t only about trade and economics.  It’s a transactional approach to international relationships which fails to grasp the wider motivations.

One essential element of the proposals on Ireland appears to be a heavy dependence on IT as a way of managing and controlling border crossings.  The UK Government – of all colours and over many decades – has an appalling record on delivery when it comes to large new complex IT systems.  They almost never come in on time or budget (and closer examination of those that do claim to have met the time and budget would almost certainly reveal that it’s often a result of ‘descoping’ – delivering a lesser system than that original envisaged).  That in itself doesn’t augur well; but in this case, they’re talking about delivering a complex system the scope of which has not yet been defined, let alone agreed, within a fixed and immutable timescale.  Still, it will generate some good revenues and profits for one or two large IT companies, whose directors are likely to be laughing all the way to the bank.

There is, though, a cheap and easy way to maintain frictionless trade with the EU27, to maintain regulatory equivalence, to retain a customs union, and to avoid a hard border across Ireland.  I wonder how more position papers need to be ridiculed before they work out what that might be…

What's the question?

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Someone once said that if the answer is ‘more politicians’, then the question must be a very strange one indeed.  A similar feeling struck me over the past few days as I read about the speculation over the next Tory leader and Prime Minister.  If Jacob Rees-Mogg is the answer, then what on earth is the question?

A price worth paying?

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Many years ago, I remember one independentista telling me that he would be willing to eat grass if that were to be the cost of Wales becoming independent.  It’s rather a fundamentalist position, and not one that I share.  And it’s certainly not a case that I’d ever be willing to put before the people of Wales in an attempt to persuade them to support independence.  There is a price to independence of course – just as there is a price to not choosing independence.  And much as I might wish it were otherwise, neither of those prices can ever be fully known in advance; there is an element of faith on both sides.  Both sides can produce their own numbers ‘proving’ the truth of their prior beliefs, but neither can ever actually be certain that they are right.

That underlines the point that there is a more general truth underlying that grass-eating argument; most of us are willing, in principle, to pay a price of some sort for something which we believe to be of greater overall good than mere material wealth.  For example, I don’t doubt that democracy costs more than dictatorship, and can often be more decisive, but few of us would actually choose to live in a dictatorship purely for a small reduction in taxes.  In principle, that idea that some freedoms are worth having even if they come at a price is an entirely reasonable and honourable political position to take.  The extent to which others can be persuaded to support it will depend on how much they value those freedoms and how large the price is, and both of those factors are legitimate issues of political debate.

I detect an increasing tendency amongst those who led us down the Brexit path to adopt a similar position, arguing in effect that freedom from what they portray as ‘interference’ from ‘Brussels’ is of value in its own right, even if it involves taking an economic hit in the process.  It’s certainly more honest than their previous position of arguing that we were all going to be better off, despite all the evidence to the contrary.  The problem is, though, that it’s being honest after the event.  It also omits spelling out that those taking that hit will not be themselves, but the rest of us.  Honesty now is not enough to make up for previous dishonesty, and the ‘people have spoken’ mantra is a wholly inadequate defence.

Big lies and bigger lies

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There has been widespread coverage today of the release by the UK Treasury of its estimate of the amount of money “sent to Brussels” each week (£156 million), and the comparison between that and the headline figure on the side of that infamous bus, which was £350 million.  The i newspaper has an opinion piece by John Redwood in which he makes a number of points in response.  He glosses over the figure by saying that everyone was aware “that a large sum of money was at stake”, and that “the two sides disagreed about just how large a sum it was”.  Well, yes, they did indeed disagree about the sum involved, but I’m not at all sure that the fact that the £350 million was an outright and blatant can be glossed over by calling it ‘a disagreement about the figure’.

Anyway, he (like others) makes the point that the real issue was that “taking back control of our money”, and “being able to spend our money on our own priorities” were key issues for the Leave campaign.  And in a related story the Director of Get Britain Out makes the rather fluffy point that even £150million per week “is clearly still at too much” without advancing much by way of argument to explain why, or how much exactly would have been acceptable.  The problem with all of this is that the assumption is being generally made that, after Brexit, the UK will be free to spend this money – whatever the actual figure – on things like the NHS and social care.  Put in simplistic terms – give the money to Brussels, or spend it on the NHS – the attraction to many is obvious. 

It’s not an honest choice, however, unless we first consider what else we lose by not paying that money ‘to Brussels’ – because it isn’t simply some sort of membership fee which simply disappears into the so-called bureaucracy in the UE.  Firstly, the UK will need to replicate all the bodies which we currently share with the other members of the EU on a collective basis; and the cost per head is likely to be higher for unique UK institutions than it is for shared agencies.  Then there are little matters such as payments to farmers, and regional aid, the continuation of which the UK has conspicuously declined to guarantee.  Rather than 'NHS vs Brussels', a more honest choice would be NHS vs Regional aid and farming subsidies.  Perhaps people would still choose cuts to both of those in preference to EU membership, but at the moment the reality of the choice that they think they've made isn’t even being made clear to them.

And, in reality, that’s no surprise.  People like Redwood and Farage never suddenly developed a deep commitment to paying for the NHS and social care; they merely latched on to an argument that they thought – rightly so as turned out – would persuade people to vote for something which would otherwise be seen to be against their own best interests.  And that’s the real issue about the infamous £350 million for the NHS.  It’s not just that the sum was a complete lie, it’s also that the whole line of argument was a lie.  The choice was never a real one, just a ploy to achieve the aim of Brexit. 

Coming back to bite them

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One of the problems with simplistic political slogans is that turning them into reality never quite matches the image that those targeted by the slogans took them to mean in the first place.  One obvious example, in relation to Brexit, was “control of our borders”.  It is increasingly obvious that what many of those demanding this outcome meant was control of other people coming into the UK; they certainly didn’t intend it to be reciprocal.  Hence the outrage being increasingly expressed by the tabloids about delays to holidaymakers entering other countries.

People who have, for years, demanded a tightening of border controls are now complaining bitterly about the delays which result from more stringent checks of passports and other entry documents.  But what does "controlling the borders” mean if not paying more attention to who is entering a country and whether they are who they claim to be?  It could be, of course, that what they really intended was for more people to be employed to man the borders.  Perhaps it was all a giant job creation scheme for the border agency.  That might be a bit more credible if the same tabloids hadn’t also spent years complaining about the ‘bloated public sector’.

Personally, I suspect that it is related to the long-standing tradition of British exceptionalism.  It’s not ‘freedom of movement’ that they want to stop, it’s other people’s - foreigners’ – freedom of movement.  The traditional blue British passport which they think they’re going to be getting back always asserted, as I recall, the demand of ‘Her Britannic Majesty’ that the holder should be allowed through without let or hindrance.  For some strange reason, however, those strange foreigners don’t see things in the same way – they actually have the nerve to think that UK subjects should be treated the same way as everyone else.  Inevitably, this clear and logical outcome of Brexit will be portrayed as yet another example of Brussels punishing the UK.  Of course.

Baldrick and the cunning plan

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Could it really be, as some in Brussels are starting to suspect, that the UK’s apparently shambolic approach to Brexit is all a bluff, part of a cunning plan to lull the EU27 into a false sense of security?  Under this interpretation, it’s not that they don’t have a strategy at all; it’s more that their strategy is one of pretending not to have a strategy so that they can brilliantly blindside everyone in a few months’ time.

I can see why the rest of the EU might fear that this might be the case.  And I can see why many in the UK might be hoping it’s the case – it’s far better to believe that than to believe that the government really is completely clueless.  But such an analysis goes against a variant of Occam’s razor.  When in doubt, the simplest and most obvious explanation (in this case, total cluelessness) is generally to be preferred.

And as we learned from that master of philosophy and deception, Baldrick, cunning can sometimes be a euphemism for extremely stupid.

All models are wrong - and some aren't even useful

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On Monday, the Tory group leader in the Assembly demanded that the First Minister dissociate himself from Corbyn’s policies, claiming that they would result in around £4,000 of extra debt for each person in Wales, and that the UK would end up paying around £5.8 billion a year in additional interest payments if Labour’s plans were implemented.  It’s the stuff of good political knock-about, but without a lot more information on how they’ve done their sums (and the Tories don’t exactly have a brilliant record when it comes to financial arithmetic), it’s difficult to know what, if any, relationship exists between his figures and ‘truth’, in the mathematical sense of the word.

But, for the sake of argument, let’s suppose his figures are accurate ones.  Is it really the economic disaster as which he paints it?  Of course, £5.8 billion sounds like a very large sum of money to be paying in extra interest every year, but that’s in absolute terms.  And it makes a number of unstated but implicit assumptions.

The first comparison that has to be made is not, as the Tories effectively claimed, with the status quo, but with what the outcome would be over the same period with a Tory Government.  The implicit assumption in what Davies said is that Tory spending plans would not lead to a similar outcome, but given the way in which out-turn has varied from predictions over the last few years, and the way in which much of the (uncosted) Tory manifesto has been ditched, that looks to me like an invalid assumption.  If there is a gap between the likely outcome under a Corbyn government and the likely outcome under a Tory government (and even that is a significant ‘if’) then it is probable that the gap would be much smaller than Davies is suggesting.  All the signs are that the Tories will also increase borrowing to pay for their programme; the honest question is not how much Labour would need to borrow, but what is the difference in borrowing levels between the two.

The second question is about what proportion of GDP the debt would represent, and what proportion of expenditure any extra interest payments would represent.  Both of those are dependent on a range of assumptions and guesses about the likely level of inflation, economic growth, and interest rates.  Given the propensity of all involved to get such estimates wrong, it would be a very brave person who would claim to know the correct value of any of those variables over a five-year parliament.  But in principle, simple mathematics shows that a debt which increases in absolute value by a smaller percentage than the rate of economic growth will end up reducing the ratio of debt to GDP, which is why the absolute value being used by Davies is irrelevant.  The same mathematics also demonstrates that when interest rates are lower than the rate of inflation, paying more interest in absolute terms can still result in a reduction in the percentage of government income committed to paying interest.

What we do know is that, as things stand today (and I accept that’s a very important caveat), the UK Government is effectively borrowing money interest-free.  It’s costing us, in real terms, absolutely nothing, and given the demand from people who want to lend money to the government, there is no immediate problem in borrowing more.  Indeed, some would even argue that increasing government spending actually generates more tax income than the amount spent: the calculation all depends on the value assigned to the infamous ‘multiplier’.

Now of course it is true that different economists will give different answers to questions such as these, but that merely serves to underline that economists base their predictions on models rather than on absolute truths, and there are a number of different models available.  As the famous statistician, George Box, said, “All models are wrong, but some are useful”.  It’s a point worth bearing in mind that when politicians state categorically what the outcome of a particular policy will be for the economy they are depending on a model of some sort, whether they admit it - or even realise it - or not.

As I said at the beginning, this sort of guff from Davies is all good knock-about politics, but it’s really froth; he has no more clue than do I about the accuracy of what he says.  The real question is why one particular model – the idea that the government is like a giant household, which is used by the Tories when they come out with this stuff – is taken as gospel truth by a media which regularly demands that politicians from other parties explain themselves in the terms mandated by that model.  It would be more useful to political debate – let alone to economic policy – if the idea which underlies much of what they say was challenged more forensically rather than being simply accepted.  And it’s a shame that more opposition politicians don’t appear to have the understanding or the confidence to do that.

Agreeing to disagree

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The increasingly public disagreements within the UK cabinet would be funny if the issue weren’t so serious.  Their attempts to claim that they’re saying the same thing when they are very obviously saying something very different are stretching the meaning of language considerably.  Agreeing that ‘freedom of movement’ ends in 2019 because the EU rule no longer applies, but then arguing that ending compliance with the rule does not mean that people will no longer be free to move for some years to come is a distortion worthy of Orwell.  And even that distortion isn’t acceptable to the Foxes of this world.

It isn’t only the Tories who are struggling, though.  When John McConnell claimed last week that Jeremy Corbyn and Carwyn Jones ‘are on the same page’, I surely wasn’t the only one left asking myself whether they were indeed looking at the same page number, but in completely different books.  In a similar attempt at distorting language, it seems that the claim is based on them wanting the same thing – the ‘exact same’ benefits of membership of the single market.  It’s just that half of them believe that they can have that without being a member of the single market whilst the other half have at least a nodding acquaintance with Planet Earth.

The denied divisions are having a serious impact on both parties.  On the government side the paralysis caused by infighting and a lame duck Prime Minister is increasingly hampering the government’s ability to do anything very much; and on the opposition side, some are even starting to talk about splitting the party over the issue. 

Margaret Thatcher once famously said that her greatest achievement was New Labour; that she had, in effect, provoked a change as a result of which the party became little more than a clone of the Conservative Party.  She didn’t do a lot for the Tories, though.  She left them as she found them – bitterly divided over Europe.  It’s a division which has haunted her successors.  The Cameron-May legacy doesn’t look to have done anything other than made that problem worse, although perhaps they too will look to what they’ve achieved for Labour instead.  Infecting that party with the same toxic virus over Europe as their own party has suffered for many years is an achievement, of sorts, I suppose.