We had an amazing event on “Dealing with Debt” yesterday: speakers from Canada, Ireland, Sweden, Australia and even the UK giving their various views. I could not possibly summarise it all here and now: maybe at some future juncture, maybe not at all. See below for the speakers: as well as them, there was a strong informed crowd, including people from across the spectrum, journalists and civil servants.
A couple of spotty observations:
- In terms of winning the political debate, you have to treat everyone equally. Every department, every region has to feel it is getting some pain. David Herle, who for my money was the best speaker from a very strong crowd, made the point that they had to scrap subsidies for farmers across their vast country to win support. In which case why are people promising to ring-fence the NHS? It will make it harder going after other areas
- Most of the countries discussed were smaller, economically, than the UK, and had less to gain from fiscal support. In particular, the Irish examples tell us almost nothing about the wisdom of fiscal consolidation here. Their stimulus leaks abroad, and merely hits their borrowing rates. For the UK, it is not so sure
- Related to the first point, if one group seem to be favoured (bankers anyone?) then the chances of widespread consensus are very damaged.
- When I (twice) challenged on the subject of the economic implications of fiscal cuts (see Slash and Grow? – which Chris Cook very generously and probably inaccurately credited with bringing a volte face in Conservative economic policy), the right-of-centres so challenged (Andrew Tyrie, dry and excellent, Nick Bosanquet, similar though looking continuously mischievous) always answered that we are going to have trouble selling our debt. This seems to me a very speculative argument: why the UK in particular? But Andrew Tyrie made a very telling point about how easy QE had made debt-sales this year. I look forward to learning more about what he thinks on that subject – Sally Keeble MP too.
- David Walker had an interesting and slightly dismaying point to make about centralism/localism and fiscal consolidation: you probably need central control to force through tough fiscal policies. I notice that he has been consistent on this point (2002 article): “Local communities, especially those where Labour used to draw its support, tend to lack resources. Some are reactionary and others are incompetent . . . Communities may be energetic and progressive; they may also be sluggish and mean . . . If you value inequality, localism is a fine doctrine to hold.”
I hate to give support to such a pessimistic vision, but yesterday the FT reported this on the success of a particular localist policy:
A £100m programme to screen young people for infection by chlamydia has not been good value for money, the National Audit Office said yesterday. In a blow to advocates of greater localism, the public spending watchdog found that the latitude given to individual primary care trusts involved in the programme, launched in 2002, had led to duplication and inefficiency.
These were the speakers.
- Gemma Tetlow, Senior Research Economist, IFS
- Sally Keeble MP, member of Treasury Select Committee (tbc)
- Andrew Tyrie MP, former special advisor to Chancellors Lawson and Major, member of Treasury Select Committee
- Lord Newby of Rothwell, Liberal Democrat Treasury spokesman
- David Herle, political advisor to finance minister and prime minister Paul Martin, on the politics of the Canadian cuts of the 1990s.
- Warwick Lightfoot, economist, former special advisor to Norman Lamont (tbc)
- Julian McCrae, Research Fellow, Institute for Government, and former member of the Prime Minister’s Strategy Unit (tbc)
- Professor Colm McCarthy, economist and commentator, on how Ireland is dealing with the collapse in its tax base.
- Christopher Cook, economics leader writer, Financial Times
- Chris Sanger, Head of Tax Policy, Ernst and Young
- Pär Nuder, Swedish finance minister from 2004 to 2006, on how Sweden cut public spending by 17 per cent of GDP since 1993.
- Dr Chris Aulich, academic and commentator on Australia’s public sector, on John Howard’s privatisations and public services reforms which reduced the size of the state to 33 per cent of GDP.
- Professor Nick Bosanquet, Professor of Health Policy, Department of Bioengineering, Imperial College and Consultant Director, Reform
- David Walker, communications director, Audit Commission, formerly the Guardian
Today, we have Sharon Bowles MEP, fearsomely bright and now influential in chairing the EU’s Economi and Monetary Affairs committee. Her background in patent law gives her a relentlessly forensic and legally-aware mind, ideal for the work of that committee. I’m chairing the event at Bloomberg, asking how the EU will fit in with the G20 agenda. So that’s why the blogging is light. Anyway, who’s reading? mostly people from the Sceptical Doctor blog, anyway, I suspect.