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Brexit – the Elizabethan settlement is in trouble

10 Dec

Well, this morning I re-read my post from July. My prediction that the EU might play ball with Theresa May’s Chequers Plan was accurate enough, but it now seems as if the ‘Mad Hatter’ Brexiteers are even madder than I thought and the Labour Party are – at least on this subject – behaving as completely duplicitous shits. Perhaps from time to time Theresa May wishes she were back in Elizabethan times and could simply send them all to the Tower instead of facing a Commons vote.

There are both real and imaginary difficulties with the Withdrawal Agreement and Political Declaration – admirably well summarised in No 10’s ‘Explainer’ slide show (see http://bit.ly/2C1rlMk). The apparent difficulties centre on the Northern Ireland ‘backstop’ and the threat this is deemed to pose to the ‘territorial integrity of the United Kingdom’. The real difficulties centre on trade and ‘free movement’, but more of that anon.

So the NI backstop – why all the fuss? OK, it will treat NI differently, but it is treated differently already isn’t it? – think LGBT rights (see http://bit.ly/2G6wBlW), or abortion law, where the UK’s 1967 Act does not apply, and the UK’s Supreme Court (yes, that’s right, the one taking back control) said that the position in NI is incompatible with human rights legislation. Or the rights of citizens in NI to apply for EU passports – quite handy in current circumstances. And how important (dare we ask?) is NI to the UK economy? – I recall in my HM Treasury days, when we only had figures for Great Britain rather than the UK, we had the rule of thumb ‘add 2% for Northern Ireland’. So, in short, f**k Northern Ireland and the backstop.

The real difficulty seems to me to lie with the Political Declaration. The ambition is fair enough – ‘an ambitious, broad, deep and flexible partnership across trade and economic cooperation’ – but it is not clear how the trade deal we want (and, to be fair, which the EU  also wants) will fit with us ‘taking back control of our borders’. Within the PD, there is a commitment by the UK not to discriminate between Member States, so we can forget banning Polish plumbers and welcoming German bankers. But more broadly, the EU has repeatedly emphasised that the ‘four freedoms’ – free movement of goods, services, capital, people – are indivisible. It is not clear how this tension will be resolved – but on the track record so far, a UK cave-in on EU migration (i.e. no real, effective, controls) must be a front runner.

But back to the Elizabethan Settlement. I am glad, at a personal level, that it seems to have at least reconciled the sensible Brexiteers (like my local MP, James Cleverly), and the moderate Remainers (e.g. Vicky Ford, MP for Chelsmford). It will mean Leave, especially over time, but will minimise the economic damage and will keep us in close co-operation with the EU. It is a considerable personal achievement for Theresa May and her unfairly maligned civil service team, and there are no credible alternatives available (there is another piece to be written on this, but not today). All we need is Elizabeth I’s secret police to get it through.

 

Brexit the day after: on the stairs

30 Mar

So I’m sitting in the cafe in St James Park, looking out towards Whitehall – the pulsating heart of British Government. I’m wondering how many of my former civil service colleagues are suffering from ‘Divorce Separation Blues’ (Avett Brothers).

And why ‘on the stairs’? It seems to me the relationship between Britain and the EU is rather like going to a party. We were reluctant to go to this particular gig – we thought the vibes might be better elsewhere (EFTA anyone?), and we were worried they wouldn’t let our friends come in with us (viz, sheep from New Zealand). Then eventually we said we’d go on certain conditions (‘It all depends on the terms – H. Wilson).

No sooner had we arrived than we had a quick vote on whether to stay, and ever since we got in we’ve been complaining about the food, the drink, the other guests, and how the party is organised.

Now we’ve decided to leave to explore the world, and we’re on the stairs on the way to the exit door. Will we have second thoughts? – apparently the guy who drafted Article 50 doesn’t share the common view its irrevocable. But more to the point, will the other guests ever let such a arkwark fellow back in?

Perhaps De Gaulle was right when he described us as a ‘maritime nation’ ill suited to join his European party?

Seasons Greetings

10 Dec

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I confess – I’m stumped. I can manage a picture (the Christmas Tree in Brussel’s Grande Place, where I’ve recently attended the LSE’s excellent Brexit conference) but after that…

So we leave the EU, and Donald Trump is president. I suppose to look on the bright side, the EU debate may turn out, for the UK at any rate, to be a storm in a teacup, of more interest to ‘the international liberal elite’ (? how does one join this elite? is there a discount for retirees??) than the rest of the country. And in the States, the mid-terms are only a couple of years away (assuming Russia isn’t running the country by then).

But my Cassandra instincts tell me otherwise. Ten years of ‘austerity’ plus exit from the EU look to me like a return to the 1970s – with Southern Rail obligingly providing the industrial action. As for the US – how can so many supposed ‘Christians’ think backing out  of an international climate accord is a good idea?

Perhaps the UK will ‘muddle through’. I can recall the great economist Nicky Kaldor saying in 1980 (as the UK economy fell off a cliff) that we shouldn’t underestimate the resilience of the people and the companies at the micro level that made the macro economy work. Well, that resilience is certainly needed now.

And the US? – well, as I say, I’m stumped. Or should that be Trumped?

 

 

Greenspan – hero or zero?

8 Nov
alan-greenspan

Mallaby on Greenspan

Good session last night at the LSE with Sebastian Mallaby talking about his book on Greenspan. You can see some pics on Twitter via #LSEGreenspan.

The discussion on whether interest rates/monetary policy should be used to deal with asset bubbles was interesting. Mallaby’s view was that the Fed could at least set interest rates, whereas trying to use regulation to deal with asset bubbles (and financial irregularities in general) was much more difficult – attempts to do so were bound to be mired in Washington politics and/or the ‘balkanisation’ of US regulation.

The position has echoes of Keynes ‘monetary policy a l’outrance’ – taking bold an decisive action to deal with a slump or boom. But Greenspan – ‘the man who knew’, as Mallaby explained, was not a man willing to act or confront. Knowing is only half, perhaps less than half, of what a central banker needs to succeed.

 

Business model innovation – Clayton Christensen article in MIT Sloan Review

7 Oct

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Good piece by Clayton Christensen and others on this – see http://bit.ly/2dReEdm. Includes  a useful business model descriptor and a life cycle of business models which reflects Michael Porter’s great chapter in Competitive Strategy on the transition to industry maturity.

MasterCard purchase of VocaLink

30 Aug

An interesting interview in Fortune with a MasterCard exec (Michael Miebach) on why they are doing the VocaLink deal – interesting in two ways. First, the writer of the Fortune piece doesn’t appear to have heard the interview, as he focuses on P2P payments, which isn’t the focus of what Miebach was talking about. Second, in the interview itself, Miebach explains that, while they have a great position in cards, they don’t know much about ACH (viz interbank) payments, and think they should. No doubt the growth of near real time payments globally and the associated apps possibilities (like Zapp) are stirring MasterCard’s interest. Worth a listen! – http://fortune.com/tag/mastercard/.

Hope for a post-Brexit world?

18 Jul

Oxford Spires

‘Remainers’ have been somewhat short of hope post the 23rd June referendum – chortling at the collapse of the leadership ambitions ‘the Oxford set’ (Johnson, Gove) not withstanding. But now an Oxford man has come forward with an intelligent way out of our self-induced morass . George Yarrow (Hertford College and the Regulatory Policy Institute) has called attention to the potential to use the European Economic Area as a way of retaining the benefits of the single market while using its safeguarding provisions to deal with immigration pressures (see http://bit.ly/2a3FQ43).

There are strong similarities between his approach and elements of ‘Flexcit’, which Richard North et al have been advocating (see http://bit.ly/2a6bPA7, or the Youtube movies – http://bit.ly/29P3Ftj, but skip the first 8 minutes).

Whilst tempted to write a longer post on the technicalities, I will forebear. It’s the sunniest day of the year so far, and I didn’t create this mess (stand forward D Cameron plus the Eurocrats pushing for ‘A Country called Europe’). So read the pieces, see the movie, and pray that the new occupant of 10 Downing Street is doing the same!