There are always a few "interesting" folk out there who want to propose that when - as has happened recently in Ireland, Greece, Portugal, and Spain - investors cease to want to lend a country money, all it needs to do is to issue more debt and everything will be fine. Because they believe that nothing can go wrong, and there's no problem even if investors cease to want to lend a country money, in advance of the point at which investors run out of patience (e.g. the UK) there's no need to control the accumulation of debt so as to avoid the risk of an investor strike.
Here's what then-Economic Counsellor and Director of Research at the IMF, Kenneth Rogoff, had to say about that in a famous open letter (an official letter, published on the IMF website) to Joseph Stiglitz in 2002:
Governments typically come to the IMF for financial assistance when they are having trouble finding buyers for their debt and when the value of their money is falling. The Stiglitzian prescription is to raise the profile of fiscal deficits, that is, to issue more debt and to print more money. You seem to believe that if a distressed government issues more currency, its citizens will suddenly think it more valuable. You seem to believe that when investors are no longer willing to hold a government's debt, all that needs to be done is to increase the supply and it will sell like hot cakes. We at the IMF—no, make that we on the Planet Earth—have considerable experience suggesting otherwise. We earthlings have found that when a country in fiscal distress tries to escape by printing more money, inflation rises, often uncontrollably. Uncontrolled inflation strangles growth, hurting the entire populace but, especially the indigent. The laws of economics may be different in your part of the gamma quadrant, but around here we find that when an almost bankrupt government fails to credibly constrain the time profile of its fiscal deficits, things generally get worse instead of better.
As they say on Twitter "<< Wot he said".
My highly non-trivial dinner companion summed up his thesis thus: "The guys you have in charge here are clever, and they want to do the right thing (more than they're often given credit for), but fundamentally they're lightweights. On the other hand, it wouldn't make that much difference if they were more heavyweight, because the climate of debate in your country is so impoverished. You and I know it's a crisis, but these folks around us at the other tables have no idea. They've become 30% poorer over the past few years, and unless things change they're going to slide further and further, internationally. They aren't afraid that foreigners might stop lending you money or buying your assets, or that your government could collapse and be replaced by something else, or your economy could be engulfed in inflation or some other disaster because you all still think you're "Great Britain" - you lot need to wake up and realise these things can happen to you, 'cause you're just "Britain" now."
I've been disappointed by our Party's leadership, recently - disappointed its all-consuming fatalism and the distinct impression it gives of lacking ideas. The range of topics over which this fatalism has spread is remarkable: the economy; the 2015 General Election; the EU; the rise of Ukip. The Coalition itself was the product of fatalist pessimism - that the alternative would be a short period of minority government and then defeat, rather than victory. The fatalist pessimist account of the 2010 General Election had it that that was a great result for the Conservative Party (not the failure it really was), because fatalism had extended to the belief that the British electorate is not fundamentally Conservative and cannot be persuaded to believe in the Truth.
Some allegations made by the police are wrong. Sometimes policemen even make things up entirely. Policemen will back each other up with falsehoods. Policemen fabricate evidence, alter witness statements, influence false accusers to come forwards.
Not every child abuse allegation is true. Not every woman who cries "Rape!" was raped. Not every alleged terrorist was plotting murder and mayhem. Not every politician fixes her expenses, has corrupt business practices or cheats on his wife.
The above is hardly news, but the reaction of many in the press to the Mitchell affair suggests that they hadn't really grasped it before. They wail that we can never trust the police again, after this, on top of Hillsborough, somehow forgetting the Birmingham Six or the many other famous cases of the past.
I'm a Christian. Two of the main Biblical heroes - Joseph and Jesus - are falsely accused (the one of rape, the other of blasphemy). I'm a philosopher. The greatest of all philosophical heroes, Socrates, was executed after being falsely accused of corrupting the young and various other crimes. The most fundamental principle in our system of criminal law is that the burden of proof lies with the accusers, and those accused are considered innocent until proven guilty beyond reasonable doubt. This is an application of the Ninth Commandment, "Do not make false accusations", in law, every bit as much as laws against theft or murder enact other Commandments.
The song I most hate in all the world is Imagine by John Lennon. Its lyrics ask us to imagine a world with no countries, religion, or property, in which there is "nothing to kill or die for". As the lyrics tell us that "isn't hard to do". It's 10,000BC. The strong oppress the weak, and no-one knows of any reason to protect them. The strong take from the weak, and no-one can say that's wrong in more than a childish way since there's no concept of respecting property. The powerful rape and murder and none but those compelled by passion and instinct rise to protect them, for there are no abstractions such as countries or religion that tell us we should sacrifice ourselves for others.
So, Imagine, despite its catchy tune, is a vision of a horrific dystopia, a world of nihilism and unrestrained vice. Thus far, however, I've not really said anything much against Imagine. I don't hate it for its dissolution. After all, there are plenty of songs about wickedness and vice that I like - eg the overtly Satanic Gates of Babylon by Rainbow is one of my favourite pieces. No. The problem with Imagine isn't that it's wicked; it's that people think it's good!! They actually appear to regard it as some kind of model. Children were dressed in white and made to sing "Imagine there's no heaven / It's easy if you try / No hell below us / Above us only sky" at the Olympic closing ceremony. Well, imagine those kids had been made to sing lyrics from Gates of Babylon, such as "Sleep with the Devil and then you must pay / Sleep with the Devil, the Devil will take you away", and perhaps you'll understand what I thought of that!
For be under no illusion, despite its wickedness, Imagine captures the zeitgeist. People think we should imagine the ideal for this world is that there should be "nothing to kill or die for". Our picture of war has become the regretful silence of Remembrance Day or Wootton Bassett. At our churches we pray for "peace in the Middle East". We do not pray for justice, for the smiting of evildoers, for the Lord to raise up champions to lead us forwards to break the chains of oppression that imprison the unblessed. We have forgotten what "peace" really is.
During the 1980s, across much of England and Wales, there were fewer new houses built than there was growth in the number of households. So by the time of the 1991 Census in some parts of the country there were only slightly more dwellings than households, as we can see in the following figure.
It was feared that even this might under-state the problem, since the 1991 Census was widely believed to materially under-estimate the population, with large numbers of people refusing to register for the Census or the electoral register in an attempt to avoid the Poll Tax.
With a heavy heart and no enthusiasm, I feel driven by events to write again on gay marriage. Was there ever a measure in which the outrage and enthusiasm were more disproportionate to the harmless nature of what's proposed? I shan't repeat the reasons I've always favoured having a legal form of civil gay marriage. Here, though, I want to defend my opponents - those opposed to gay marriage (as I have tried to do quite frequently through this debate). Here I want to think about two issues of nature: marriage-as-relationship-in-nature versus marriage-as-recognised-by-law; and the natural inclination of parents to desire grandchildren.
First, to even begin to understand this debate and the sentiments of opponents of gay marriage, I believe it is vital to distinguish between two things: a "marriage" as a relationship in nature; and a "marriage" as recognised by law. This distinction is almost never acknowledged by proponents of gay marriage, and their failure to acknowledge this distinction stirs up great and unnecessary antagonism.
What do I mean by a "relationship in nature"? Consider the concept of a "friendship". Being friends is not something that requires any legal recognition. Instead friendship exists "naturally" (i.e. in nature, not law). People are naturally friends or not friends. Again, think of "promises". People can make promises with each other regardless of legal status. Or think of being a "mother". There is such a thing as being a natural mother regardless of legal status.
The Institute for Fiscal Studies points out that on the government's own figures (if you believe those - and presumably the government does?) there are still a further £27bn of unspecified additional tax rises and spending cuts to find in the next Parliament. They don't mean there are £27bn of tax rises and spending cuts next Parliament - there are way more than that! They mean that, in addition to those already set out, there are still £27bn more to find, on the government's own plans (which, observe, fail to meet the original deficit and debt reduction targets, rely on no disasters along the way, and are probably still a bit optimistic even then).
If there were to be no further tax rises or benefits cuts and the NHS, Schools and overseas development ringfences were maintained - so the cuts fell on those departments already being cut 20-odd percent - the total cuts for non-fenced departments would exceed 30%. The IFS describes that as "close to inconceivable". It suggests that there would be scope for £7bn of extra tax rises whilst maintaining the 80:20 spending cuts to tax rises rule. But that still leaves £20bn extra spending cuts.
To be realistic, there are just three kinds of places an extra £20bn could come from: pensioner benefits; schools; and the NHS. Those are all areas Cameron promised not to cut.
Barring some unlikely saving event - men from Mars arriving to dole out free fusion energy for all would be nice, but still might not be enough - in the end, for all its wriggling and hoping and wishing it were otherwise, if it isn't either to default on its debts, see banks go bust, or allow high inflation, the government is going to have to cut in some or all of the areas of pensioner benefits, schools, and the NHS.
"My right is hard pressed. My centre is yielding. Impossible to manoeuvre. Situation excellent. I attack."
This is the famous laconic aphorism attributed to Marshall Foch at the Battle of the Marne in 1914. It could also be seen as the inspiration for George Osborne's political strategy in his 2012 Autumn Statement.
On his right Osborne is hard pressed by those that say for all the government's tough rhetoric about cutting spending to cut the deficit, two years in to the Coalition's Plan A government consumption spending - spending on public sector salaries and the like - hasn't fallen. Though the deficit has fallen a little, it has not fallen anything like as fast as the government hoped or planned. The 2010 Conservative Manifesto and the incoming Coalition government promised to eliminate the structural current deficit over a Parliament, with Alistair Darling's deficit reduction plan being dismissed as incredible precisely because it anticipated taking much longer than one Parliament to eliminate the deficit. In early 2010 George Osborne set a number of "benchmarks" for his period as Chancellor and for a Conservative government, of which the first and most important was that the UK would maintain its AAA rating. He made a virtue of being held to account against these benchmarks. But with both the original deficit reduction target and now (in the Autumn Statement) the debt reduction target being abandoned, with the UK's deficit falling only £1bn this year (from £121bn in 2011/12 to £120bn in 2012/13), and with growth forecasts being downgraded yet again, the AAA is now likely to go.
To try to keep the AAA, Osborne would have had to attempt additional significant spending cuts. He says £17bn would have done it. I think £25bn is more like the required figure. The only budgets he could conceivably have obtained additional savings on this scale were health and schools - the budgets ringfenced in 2010. He was never, politically, going to do that short of some crisis of epic proportions (such as the collapse of the euro or a gilts strike).
When debating the impact of public spending on growth, economists normally distinguish between two kinds of government spending. "Current" spending is the money used for public sector salaries, consultants, and other such day-to-day needs. George Osborne's original key deficit reduction target was that the structural "current" deficit would be eliminated over one Parliament. The other kind of spending is "capital spending". That's the money used to build new hospitals, new roads, or on other such longer-lasting investment projects.
Those keen on the idea of using government spending to boost growth typically argue that increases to capital spending (to government investment) are growth-positive, whilst increases to government current spending damage growth. They also normally agree that raising taxes can damage growth in the short-term.
Consequently, when cutting government spending (e.g. to correct a deficit) it's thought to be better for growth if current spending is cut rather than capital spending cut and taxes raised. In practice, though, governments tend to find it politically easier to cut capital spending that current spending, since cutting current spending might mean firing public sector workers or cutting their salaries. So a politically weak form of deficit reduction programme, most likely to damage growth, will focus on cuts to capital spending and tax rises.
Since the Coalition government started, Labour has frequently complained about "swingeing cuts" to capital spending. Any change to capital spending is seen as an admission by George Osborne that his deficit reduction plan has failed and it's "time for Plan B". When Ed Balls and others say such things, it's worth bearing in mind the following table.
In this table I compare Alistair Darling's plan for cuts to government investment spending (for those interested in checking - Table 1.1 of the March 2010 Budget) with George Osborne's plans and outturns from the March 2012 Budget (Table D.6, adjusted in 2012/13 to take out the effect of the £28bn transfer of Royal Mail assets from the public sector).
We see that Osborne's government investment spending outturns and plans are virtually identical to Darling's. Osborne did not change Labour's capital spending plans materially.
Now one could argue that the Labour Party's 2010 deficit reduction plan was deeply flawed, reliant as it was upon capital spending cuts, tax rises and over-optimism about growth. One could even attempt to argue that Darling's plan involved too much deficit reduction. But let's be clear: when Ed Balls says that cuts to "infrastructure spending" or "capital spending" or "government investment" have damaged growth, what he's saying is that the capital spending cuts which his government scheduled and for which he personally voted have damaged growth. He's not attacking Osborne's "Plan A". He's attacking Labour's Plan Darling - Plan D.
One of the most important events in political and intellectual history was the final collapse of the Roman Empire after the fall of Constantinople in 1453. (Some readers may think of this as the fall of the "Byzantine" empire, but that was just a name later historians gave it. The Empire called itself the "Roman Empire", as did everyone else at the time.)
In the run-up to the fall of Constantinople and especially afterwards, many Roman Empire scholars fled to Western Europe, taking manuscripts with them of ancient works that had, up to then, only been known and debated in Western Europe via secondary sources (i.e. other writers writing about what was said in them). What happened in response to these documents changed everything in the intellectual realm, ultimately transforming politics, also, as we shall see.
Up to this point, the dominant intellectual method in Western Europe was to build upon the knowledge of the past. Some pre-Socratic philosopher had had some idea, Socrates had commented on that, Plato had spun Socrates' analysis, Aristotle had responded to Plato. Onasander, Galen and others had written commentaries on Plato. Ibn Rushd (Averroës) had written commentaries on Aristotle. Aquinas had commented on other folks' commentaries on Aristotle. And so on.
Education in this age consisted in the development of scholarship - to be educated was to have mastery of a vast body of things that others had said. Thinking separately from this structure was pointless and arrogant. Thousands of scholars had spent fifteen hundred years building up this body of knowledge and ideas. How could any one man hope to replicate and improve upon that in one short lifetime? The notion only needed to be stated to be seen as absurd.
Suppose that a UK water company - let's call it "WaterCo" - were discovered to have been involved in human trafficking. Would we declare that Ofwat (the body that regulates water prices and water quality) had failed, and that the system of economic regulation of the water sector needed to be completely overhauled? I reckon not. Why not? Because human trafficking is a crime, and it's the job of the police to prevent and discover crimes, not the body that regulates water prices and water quality.
Hacking phones is a crime. It was never the job of the Press Complaints Commission to prevent or discover phone hacking, so it cannot possibly be any kind of failure for the Press Complaints Commission not to have prevented or discovered phone hacking. Doubtless it didn't prevent journalists from speeding or parking or drunk driving, either - are those failures of press regulation?
Some celebrities complain that the press publishes lies about them. That definitely happens. That's why we have libel laws. If someone libels you, sue. If you think libel cases are too expensive to bring or guilt is too difficult to prove, perhaps you have a point and we should reform libel proceedings. But that's the right way to go about things - improving what we already have and what has worked for centuries and been compatible with an orderly and free society. If someone publishes falsehood - sue. I struggle to believe that Hugh Grant really lacks the resources to do so.
This is the fourth in ConservativeHome's series of posts counting down to the Autumn Statement. On Tuesday, Tim Montgomerie said that George Osborne's economic narrative is taking shape. Yesterday, Peter Hoskin urged Mr Osborne to ditch his current fiscal rules, and Tom Frostick argued that the Chancellor must target wealth.
The British economy has not grown well in recent years, and in particular since late 2009 the government's forecasts for economic recovery have been woefully inaccurate. Ed Balls and certain Keynesian-oriented economists like to blame the Coalition's deficit reduction plan. The Coalition likes to blame the Eurozone crisis. Personally, I always argued that, although there might be temporary periods of faster growth (as, for example, the third quarter of 2012) the underlying capacity for the economy to grow was much lower than government forecasts had it so any rapid growth would be inflationary and reversed in subsequent recession anyway. It's the slow growth that creates the need for deficit reduction - it isn't the deficit reduction that's creating the slow growth.
International events since 2010 have, however, been fairly unhelpful. That's not, as sometimes suggested, because international growth has been poor meaning UK exports have been lower than hoped. In fact, world growth has been fairly strong since the contraction of 2009, growing a rapid 5.3% in 2010, 3.9% in 2011, and probably above 3% again in 2012. And exports from the UK have indeed grown - up 6.4% in 2010, a further 4.5% in 2011 - though over the first three quarters of 2012 they were up only 0.5% on the equivalent period in 2011. Clearly some of this export growth is likely to have been associated with the marked drop in the international of the pound - down more than 30% at peak - but it is also a reflection of a reasonably favourable international growth environment.
Those that term themselves "pro-choice" like to present their position as being "scientific" and the position of their opponents as "religious", and to claim that their position is the "compassionate" one whilst their opponents are "hard-hearted". Anti-abortionists should not concede ground on either of these points.
First, and to get it out of the way, I shall repeat my long-held view that the natural position of science is to hold that the human being is a particular sort of animal with a particular DNA structure, that there is nothing additional to being "human" than being such an animal (e.g. no "soul"), and that that animal comes into existence at conception. In a narrowly scientific sense, I believe it is uncontestable that killing an eleven-week old foetus or killing an eleven-week-old baby are both killing human beings. Most people, favouring some time limit for abortion, dispute this, but in my view they typically do so for religious reasons - they believe, for religious reasons, that initially embryos do not have souls but only acquire them later. Conversely, I have no idea what "religious reasons" people could have for being against abortion.
At present, though, the debate is not about this. Instead, the debate concerns whether the time limit for abortions should be reduced from 24 weeks to perhaps 20 or even 12 weeks. As far as I am concerned, there is no material ethical difference between killing an 11 week old foetus and killing a 21 week old foetus, so my only "stake" in the discussion is: the lower the time limit the less bad things are. But some people disagree with me.
Two high-profile such persons are Jeremy Hunt (favouring a 12 week limit) and Maria Miller (favouring 20 weeks). They claim their views are based on their reading of the evidence. I have no idea what evidence they have in mind. Perhaps they are interested in the survival rates at below 24 weeks - some one in ten babies born prematurely at that age survives at least a year. Perhaps they mean the (hotly disputed) evidence on foetal pain. Perhaps they mean the evidence of their eyes in reflecting upon modern 3D images of infants in the womb. Perhaps, even, they are Democrats and they mean the evidence on opinion polling that says most people (and especially most women) favour a reduction - that certainly seems to be part (though not all) of Maria Miller's position. I don't know. None of these things makes a difference to how I think of the matter, but then I don't take the view that the right question is "What's the right time limit?" For those that do frame the debate in those terms, these things obviously might count as evidence - albeit evidence the significance of which their opponents would be entitled to dispute.
This post was composed jointly with the Rev Peter Ould, who blogs at www.peter-ould.net
The incoming Archbishop of Canterbury, Justin Welby, faces three great issues of church politics: whether, and if so how, to maintain the Anglican Communion internationally; whether, and if so how, to maintain unity in the Church in England, and whether the Anglican Church should continue to be the Church of England. Let us consider these in turn.
First, the international dimension. The Anglican Communion, the collection of 38 provinces and six extra-provincial denominations around the world, with 85 million members, is a key source of British soft power internationally. The largest province of the Anglican Communion is the Church of Nigeria, with around 18 million members. The wealthiest is the Episcopal Church of the United States of America (ECUSA). The key split, internationally, is between the Nigerians and the Americans.
Many senior priests and bishops in ECUSA have beliefs such that they may well not be confirmed Christians in Nigeria, let alone be accepted into the priesthood. Senior ECUSA bishops openly declare that the concept of Christ being divine is incoherent, accept little or no authority of the Bible, and have in some notorious cases (specifically that of John Shelby Spong, Bishop of Newark) suggested that orthodox monotheism is indefensible. Even the Presiding Bishop, Katharine Jefferts-Schor,i has made remarks widely understood as declaring the bodily resurrection of Christ to be unimportant to the meaning of Easter. A number of formerly ECUSA parishes in the US have become part of what is called the “Anglican realignment” movement, severing ties with ECUSA and linking themselves to other parts of the Anglican Communion. In essence, the view of many African Anglicans is that it would be nice if there were an Anglican Church in the U.S, but ECUSA doesn’t count as one.
Much press discussion of this division focuses upon the issue of homosexual priests, but this is merely a flashpoint. Concerns about ECUSA go much wider — it is said to be not unknown for ECUSA cathedral bookshops to sell healing crystals or ECUSA clergy to ask one’s star sign.
Some African Anglicans fear that the Church of England may go the way of our ECUSA cousins, since some Church of England clergy joined Don Cupitt’s explicitly atheist “Sea of Faith” network and some parts of the English church seemed to yield to pressure to abandon Biblical teaching on homosexual relations. Coming from the conservative “open evangelical” tradition that he does, and having deep links to Nigeria through his reconciliation work at Coventry Cathedral, Justin Welby will probably initially carry the confidence of the African churches and their allies in the “Global South”. He will, though, have to decide what to do about ECUSA. Matters may well have reached the point at which the Church of England and ECUSA declare themselves to be in settled disagreements about fundamentals, and that the amicable way to proceed is to establish friendly relations as sister churches, rather than as churches aspiring to be in full communion as now.
Within the Church in England, Welby’s key challenge arises from the issue of women bishops. Contra the press, he faces no significant challenge on homosexual clergy, as the church is collectively quite content with the conservative position set out in “Issues in Human Sexuality” more than 20 years ago. The current committees examining the Church’s ongoing response to civil partnerships and general issues of human sexuality are very likely to reiterate this stance. The only significant “issue” that would arise in respect of homosexuality would be if, reversing his life-long conservative stance on the matter, he sought to change the Church’s teaching on the matter, but this seems highly unlikely.
Women Bishops is trickier. Next week the Synod votes on whether to accept them. If the measure passes, Welby will then have to consider how to handle the traditionalist elements who have already stated that certain provisions they have been offered, together with a Code of Practice, are not sufficient. It may not be possible to find a way to accommodate both parties. Expect a further exodus of some to the Roman Catholic Ordinariate setup last year to receive disenchanted priests and their congregations. An attempt to establish an “Anglican realignment” movement within Britain cannot be ruled out altogether. On the other hand, it is less certain than it seemed until recently that the Synod will pass the measure in its present form. In that case, Welby will have to deal with a large body of disenchanted members whose move to make the Church “more inclusive” will be delayed, perhaps for a decade. Either way he will face the challenge of conciliation and arbitration between deeply opposed and intransigent factions.
The third key challenge concerns whether we should remain the Church of England — in other words, should we continue to be the state church. This issue may come to a head, during Welby’s time as Archbishop, in the event of him having to choose whether or not to ordain a new monarch. A sine qua non for being a state religion is that the orthodox practice of that religion should be legal. If the orthodox practice of Anglican Christianity is illegal, and yet the Archbishop ordains the new monarch, the font of law, the Archbishop is thereby blessing the legal oppression of Christian practice.
A series of recent legal judgements have set out, explicitly and in terms, that it is no longer to be presumed in law that practices that the law recognises as orthodox Anglican Christian are legal. The most explicit of these was in the judgement on Hall & Preddy v Bull & Bull: “Whatever may have been the position in past centuries it is no longer the case that our laws must, or should, automatically reflect the Judaeo- Christian position.” The Church of England has protested against this development. But at the time of the next coronation — an event that seems likely to occur during Justin Welby’s tenure as Archbishop of Canterbury — matters will come to a head.
It is, of course, possible that there will be no next coronation. Perhaps the state will choose no longer to have a monarch. In that case, Establishment of the Church of England will end by default, since our Supreme Governor will no longer be monarch of England. And it is also possible that the next monarch of England, even if there is one, might wish neither to be Supreme Governor of the Church of England nor to be ordained by the Archbishop. Each of these circumstances would create its own moment of decision for the Church of England — what should it do next, then?
Either way, some decision would need to be taken, and the planning for and debate around that decision must take place on Justin Welby’s watch. In many ways, this last of the three great political issues he faces could be the most profound and long-lasting.
The target measure of inflation, CPI, rose from 2.2% to 2.7% this month, well above the 2.4% expected. As recently as August the Bank of England's inflation report expected inflation at about 2% by now. Back in February the inflation report expected inflation by now to be well below 2%. With recent rises in energy and food prices, inflation is now expected to exceed 3% within months (3.5% by the middle of next year is being discussed), meaning Mervyn King's last few months as Governor will feature several more letter exchanges with the Chancellor. If growth were really to get going, 3.5% could be highly optimistic. We've seen over the past four years that whenever the UK economy isn't actually shrinking, inflation goes to 5% and rising. Think how much inflation we might get if GDP growth were to get to the 3% or so annual rate that would herald recovery. Barring some international shock, such as the euro collapsing, I would expect recent inflation highs to be tested or exceeded in the next couple of years.
Governments can often blame recessions on past governments or international events. They can say that spending cuts are a necessity rather than a joy. But voters tend to be less forgiving of rises in the cost of living. The short route to political unpopularity for a government is tax and inflation rises. Osborne will struggle to blame anyone else if inflation starts to race on his watch.