Winner of the New Statesman SPERI Prize in Political Economy 2016

Saturday, 10 November 2018

If May loses her Brexit vote, what happens next?

If the withdrawal agreement is defeated in parliament (due to too many Brexiters and Tory Remainers voting against and not enough Labour rebels voting with May) what happens next? Answering that question has some impact on whether the agreement with the EU will be voted down, of course. As I noted in an earlier post, what May says will happen before the vote will have virtually no implications for what actually happens because May has no interest in keeping her word.

I want to pursue one possibility, but I’m making no predictions this will actually happen. It is, in a way, a precautionary tale, because it tells us what might happen if parliament is not very active. Losing the vote will be a huge personal blow for May. In those circumstances, the last thing a Prime Minister wants is to appear to be powerless. She will therefore try to regain the initiative quickly.

One option is to go back to the EU and ask for more time. If the vote is very close this will be very tempting. She will be thinking about twisting arms of certain rebel MPs to try and get them to switch. But I suspect the EU will not play this game, partly because agreeing any serious extension of Article 50 would have to involve all member states, and partly because they would fear subsequent requests after each further failure. An instant rebuff from the EU will not be the look the already weak PM will want, so this road is not as attractive as it might first appear.

Announcing a General Election is another possibility, but this too is problematic, essentially because she has already tried this trick in 2017 and failed dismally. She will need a two thirds majority of MPs, and it is possible that her party from Brexiters to Remainers would not follow her. She could also decide to call the whole thing off, but I suspect even imagining she might do that is wishful thinking.

Which leaves a referendum. She has ruled out “under any circumstances” a second referendum, but she also ruled out a general election before she called one in 2017. I would be surprised if the EU did not agree to extend Article 50 if a second referendum was called. But if she did go down that route, I would be incredibly surprised if the two choices she would propose were not No Deal or her deal. This is where parliament would need to act. But it would require the Conservative rebels on the Remain side to step up and be counted - something that they have often failed to do.

In addition, would the Labour ("We can't stop it") leadership vote to put Remain on the ballot, and even if they did how many rebels would defy any instruction to do so? It seems to me that any attempt to get Remain on the ballot by parliament would be a very close call. Added to that would be the further problem of how Remain appears on the ballot. Does it replace No Deal, which some might feel (not me) is anti-democratic? If not, someone needs to come up with a more complex referendum choice (e.g this suggested by Chris Giles) that a majority of the House will support.

The more I think about the option of going for a deal or No Deal referendum, the more attractive an option it looks for May. She will be fighting on just one flank, rather than multiple flanks. If parliament fails to get Remain on the ballot, it seems almost certain that she will get the popular vote for her deal she wants. Remainers and Labour might talk defiantly of boycotting the ballot, but that would only increase the chances of No Deal winning, and I doubt they would carry many voters with them, as it would be a futile and dangerous gesture. Parts of the press would push No Deal, but May would hope enough ‘sensible leavers’ would unite with ‘fearful Remainers’ to defeat them. MPs would not dare to vote against a deal backed by a referendum victory.

That way, May turns a disaster (losing the vote in parliament) into a triumph. Which is why I really hope that behind the scenes certain key MPs are planning for exactly this scenario. The executive have a huge first mover advantage over parliament, and leaving this planning until after May’s deal with the EU is voted down would probably be too late. Advanced planning in some detail is needed, something that the other Mr Johnson can fill his newly found spare time doing perhaps.

Wednesday, 7 November 2018

The Lies We Were Told

Many of the key events of the last eight years have a common thread to them. In the case of austerity, the Eurozone crisis, the 2015 UK election, the Brexit vote in the UK and Trump’s election, the media played a critical role in making them happen. This involved ignoring expertise, ignoring facts that didn’t fit the chosen narrative of one side, or simple lies. None of these events are mistakes only in hindsight, but rather errors that were predicted at the time. Documenting that is an important part of this book.

It was for that reason that I tell the story through my blog posts at the time, with additional postscripts, preambles and introductions that enable each chapter to tell a complete story. There seemed no better way of showing how all of these policy or electoral errors were understood at the time and therefore could easily have been avoided.

I began writing my blog mainlymacro because of my anger at austerity, and the fact that the view of the majority of macroeconomists that it was a bad idea was largely ignored by the media. When the media did talk to economists, they tended to be from the financial sector. Financial sector economists are biased in two directions: they tend to be right wing and they tend to talk up the importance of a capricious financial market and their own ability to know its ‘needs’. I used the term ‘mediamacro’ to describe how most of the media seemed happy to tell the story of the deficit as if the government was a household, which any first year undergraduate textbook explains is not true.

Many used the Eurozone crisis as an excuse for austerity, but I quickly discovered that the line most journalists took was missing the key reason for that crisis. Eurozone countries cannot create their own currency, and the institution that could act as an unlimited lender of last resort to individual governments, the European Central Bank, was refusing to do so. The crisis ended when the Eurozone changed this policy and became a lender of last resort to most countries. The exception was Greece, and I tell their more complex but shocking story in a few posts.

Before the UK’s 2015 election the Conservatives talked about a strong economy, and talked up rising employment levels. The media went along with this narrative. In reality the recovery from the recession had been the weakest for centuries, in good part because of the policy mistake of immediate austerity. Strong employment growth combined with weak output growth meant productivity was stagnant, which in turn helped create falling real wages. Yet for mediamacro the government’s deficit was a more important goal of policy than economic growth or real wage growth, and as a result the economy was the Conservatives strong card that led them to victory at the election. Adapting an old Sun headline, I argued it was mediamacro wot won it, although luck also played its part.

Defeat in 2015 led to Jeremy Corbyn being elected as leader of the Labour party. Although this took the commentariat by surprise, I argued it was the logical result of Labour’s weak or non-existent stand against austerity and a lot of what austerity required. When John McDonnell became shadow Chancellor, he invited me to be part of an Economic Advisory Council, and I explain how this led me to help create Labour’s fiscal rule, which is the first such rule that prevents austerity. I also explain why the Council came to an end.

A consequence of the Conservatives winning in 2015 was a referendum on Brexit. A few months before I wrote a post reproduced in the book which fairly accurately set out how the campaign would play out. Remain’s case was that leaving the EU would have serious economic consequences, and it was a very strong case, but I suggested the media would balance this case against nonsense from Leavers, and the electorate could convince themselves that the economics was not clear cut. The fact that free movement prevented controlling immigration from the EU was by contrast clear cut, but as the government had played up the negative aspects of immigration they could not credibly change course.

Alas the media’s failed to present near unanimous expert opinion in economics and elsewhere as knowledge, and instead it became just Remain’s opinion to be balanced by the other side. As a result the electorate, who craved information about the EU, did not get it from the broadcast media. In addition, those that read most of the daily papers by readership got propaganda pure and simple, and had been getting it for a year at least. I present strong evidence at how influential the media can be, and therefore argue that Brexit represented the triumph of the right wing press. I showed that the media were failing in similar ways in the US, and that therefore confidence that Trump would not get elected could be misplaced,

The book also has a chapter on the role of economists in influencing policy. Did the global financial crisis or the failures of macroeconomic forecasting discredit economics, and is macroeconomics influenced by ideology? I explain why the delegation of economic decisions can be partly about transparency, and why economics is most like medicine among the sciences.

While the media played an important role in Trump becoming President and Brexit it does not explain why those things are happening now rather than ten or twenty years ago. The final chapter in the book looks at what neoliberalism is, and why both austerity and using fear of immigration to gain votes despite austerity can be seen as neoliberal overreach, by which I mean taking deception of the electorate in order to pursue ideological goals to a dangerous extreme. Both austerity and anti-immigration feeling helped the cause of Brexit and helped elect Trump.

The Global Financial Crisis required a strong and quick recovery to avoid the dangers of populism. Austerity prevented a strong recovery, and it was undertaken as a cynical attempt to reduce the size of the state. The subsequent populist mood was directed towards the right by politicians and the media playing on racism and xenophobic fears. This was fertile ground for disasters like Brexit and Trump to happen. This suggests that even if we could go back to the world as it was before Brexit and Trump that is not enough to stop similar disasters happening again.

Monday, 5 November 2018

Health spending over time

There has been some comment on the fact that, with recent increases in spending on the NHS, the health budget is taking a growing proportion of UK state spending. I am missing Flip Chart Fairy Tales, so here is a chart heavy post to make one or two obvious points that regrettably are often missing from political reporting.

The first is that health has been taking up a growing slice of our total expenditure (i.e.GDP: expenditure on everything including investment) for a very long time. Here is a chart from a recent IFS publication which is a good source for more in depth analysis.

Note that real spending numbers can be misleading: although real spending has increased since 2010, as a share of GDP it has not, which is a reversal of previous trends. That alone does not inevitably explain recent problems in the NHS, but it certainly could do.

So why is it only recently that the growing share of public spending has been so obvious? Again the IFS have a handy chart that goes a long way to providing the answer.

In 1955/6, defence spending was over 20% of total spending, while by 2015/6 it had fallen to just 5%. This peace dividend (actually two: first a retreat from empire and then the end of the cold war) masked a steady rise in heath, which was only 7.5% of total spending in 1955/6 but was approaching 20% by 2015/6.

Many economists would simply describe this as reflecting that health was a luxury good, which means that spending as a share of income rises when income rises. Not all the evidence confirms this, e.g. the spending patterns of lottery winners. In reality I think there are various things going on. One may be that medical science has got better at prolonging life faster than it has held back the aging process. Another is that medical innovation is increasing the scope of what medicine can do. For example cancer is now increasingly survivable, but only with expensive care. While there is productivity growth in the NHS, it is below the national average and therefore fails to match increases in wages. In the document all the figures so far come from, the IFS expect these factors will require real health spending to increase by 3.3% each year over the next fifteen years.

Politicians, particularly those adverse to taxation, love to think that some kind of reorganisation will somehow change the inevitability of an increasing share of government spending and GDP. But this chart, taken from this source, suggests these trends are not some peculiarity of the way we organise things in the UK

In 1970 health spending was between 4-6% of GDP in these 5 countries, but by 2016 it was between 9-16% of GDP. (There is a definitional break in the UK series in 2013: there was no leap of spending in 2013 as earlier graphs show.) If there is any organisational lesson here, it is not to run a health service in the way they do in the US. It is indicative of the mess the world is currently in that politicians are busy trying to dismantle the positive recent reforms in the US and key politicians in the UK have once talked about making the UK health system more US like.

If the IFS is right, this inevitably means that taxes of some kind will have to rise significantly. Yet the Conservatives have repeatedly pledged not to raise any of the headline taxes, and Labour have felt compelled to match these pledges at least in part. That the budget included increases in the tax thresholds, and Labour’s internal spat over whether to vote for them, illustrates nothing has changed in this respect. This year this tax/spend dilemma was avoided by a tax windfall no one had forecast. But at some point in the near future something will have to give, and I really hope it is not once again the quality of our health services.

Friday, 2 November 2018

Mediamacro is in rude health, and is also indicative of a deeper failure

A key part of my forthcoming book is about mediamacro. Mediamacro is how the macroeconomics of fiscal policy is presented in the media as if the government was a household. It is as if Keynes, and the General Theory that is often said to have begun macroeconomics as a discipline, had never existed. What every first year economics text book tells students is that the government is not like a household.

Mediamacro has become so ingrained in the UK media for two reasons. The first is that one of the two main political parties, and their associated press arm, have pushed it for all its worth, while the other political party has not challenged the idea in any systematic way. But if you ask many Labour MPs why they have not challenged it they will say that doing so is too difficult. This leads to the second reason.

Most political journalists are not economists. How households work they do understand, but the idea of using fiscal policy in a recession to support the economy is more difficult for them. What is true for political journalists is also true for most voters, and journalists wish to keep it simple and understandable only reinforces mediamacro. The same thing influences politicians who listen to focus groups.

I was reminded of all this when the Prime Minister lied in saying I thought Labour’s 2017 manifesto wouldn’t add up. What I actually said was that it would be good if it didn’t because the economy at the time was stuck at the ZLB and needed a fiscal boost. She was not interested in this. For her and her party saying the ‘numbers did not add up’ was sufficient to say that taxes would go up and jobs would be lost. The whole point I was making was that jobs would be gained and taxes wouldn’t need to go up because of simple Keynesian effects,

I had forgotten that the IFS analysis didn’t only say that Labour were being over optimistic on the tax part of their programme. Here is a chart from their presentation.

This chart is based on the IFS’s assessment of what Labour’s tax increases would bring in. Labour’s fiscal rule is to achieve current balance after 5 rolling years. As the chart says, even with their numbers ‘not adding up’ they meet their rule comfortably, with £21 billion to spare.

Do you remember this being widely reported in the media at the time? Of course not: the dominant story from the IFS’s presentation that the media took away was the numbers not adding up. So much simpler and catchy than Labour would easily meet its fiscal rule. The power of this story for the election was somewhat blunted by the fact that the Conservatives did not present any costings at all, but they will not make that mistake again. [1] But every budget day the focus is on marginal changes in deficits over five years which have an economic importance in themselves of virtually zero.

The problem of keeping economics simple so it is media friendly is not just about mediamacro. Departmental budgets are all about whether amounts are increasing or decreasing when sometimes this is wildly misleading. Education is currently a good example: a constant budget in real terms does not deal with the fact that pupil numbers are increasing so spending per pupil is falling.

The clearest example is the NHS. You hardly ever hear it said that the NHS budget needs to increase over time, even when measured as a share of GDP. Just look at this share over the last half century. That trend is easily explained. Yet it is almost never explained by journalists, who instead fall for the line that keeping real spending fixed ‘protects’ the NHS. You can see this lack of explanation in the public’s attitudes to the NHS.

This is but one illustration of why what the media says matters, because it has a strong influence on public attitudes and opinions. The evidence for this is now overwhelming. Will Jennings talks about a number of studies, and I have mentioned others in my posts.(e.g. here). I talked about a paper looking at the media’s influence on attitudes to austerity and the deficit here. I cannot remember if I included this paper, which looks at the influence of Murdoch’s switch in support before the 1997 election. Similarly for this interesting study, which showed that attitudes towards welfare recipients worsened after the 2011 riots, but only among those who read newspapers. It shows that the print media can be opportunistic in influencing how real world events are interpreted. It helps snake-oil sellers peddle their wares.

Press bias increases the need for the non-print media to educate and explain as well as entertain. It can do that by thinking about economic and other policy issues where abundant evidence exists as if they were like scientific issues rather than political issues, requiring expertise or links to expertise to help explain them. We need to move away from giving priority to Westminster political gossip, and giving political balance priority over facts and evidence.

[1] I criticised the IFS’s analysis at the time because they only allowed for positive macro effects (using the OBR’s numbers) for the additional public investment, and not for the large balanced budget fiscal expansion (and if they were right, a smaller debt financed expansion).

Tuesday, 30 October 2018

The Chancellor continues his steady fiscal tightening

A few things you probably won’t read about what the Chancellor announced yesterday. You will have read that the budget measures as a whole amounts to a significant fiscal giveaway. In which case the following chart may appear surprising.

Negative numbers represent a current budget surplus, and growing surpluses are a fiscal tightening. You can see that with the exception of this fiscal year, when policy is tighter, the current balance profile of rising surpluses has not changed very much. The reason for this apparent contradiction is simple enough. If nothing had been done, the higher taxes than forecast represents a significant fiscal tightening compared to previous expectations, albeit a tightening that represents forecast error rather than policy decisions. [1] What the Chancellor did yesterday from next year onwards is restore the policy stance to what it was before the forecast error was discovered.

What this means is that the Chancellor has kept his path of modest fiscal tightening over the next five years, As I have said many times, this is simply not appropriate in a situation where interest rates are close to their lower bound and the immediate outlook is highly uncertain. But then this government has never understood about monetary and fiscal coordination.

Labour’s fiscal credibility rule (fcr) allows us to see how differently a Labour government would run the non-investment part of fiscal policy. The ficr requires the government to aim for current balance in 5 years time. That, of course, is zero on this chart. That tells you that, if this is indeed the path the current balance follows, Labour will have extra spending or lower taxes than the Conservatives worth over 1% of GDP. That covers the gap the IFS suggested in their costings from the 2017 manifesto with plenty left over.

As I have already suggested, Labour’s overall fiscal stance if they stick to the fcr makes a lot more sense The Conservatives are trying to reduce the level of debt to GDP by too much prematurely. That does not make sense from a precautionary Keynesian point of view, or from a simple tax/consumption smoothing point of view. But macroeconomics remains an excluded consideration from Conservative/Treasury budgets, and mediamacro pretends the government is just like a household that needs to pay off its debts within its lifetime.  

[1] Suppose the forecast error was X. Then imagine that error had not occurred, but the Chancellor had raised taxes by X. The latter would clearly be a fiscal tightening by the Chancellor. But in macroeconomic terms taxes rise by X in each case, so the two are equivalent.

Saturday, 27 October 2018

Why should someone who is anti-austerity care about debt

Most of the posts I have written about austerity have been aimed at countering the idea that in a recession you need to bring down government deficits and therefore debt. But what if you accept all that (you are anti-austerity). Why should you care about debt at all? Why do we have fiscal rules based on deficits? Why not spend what the government needs to spend, and not worry that this resulted in a larger budget deficit?

The story often given is that the markets will impose some limit on what the government will be able to borrow, because if debt gets ‘too high’ in relation to GDP markets will start demanding a higher return. You can see why that argument is problematic by asking why interest rates on government debt would need to be higher. The most obvious reason is default risk. But for a country that can create its own currency there is never any necessity to default.

However there is another reason to demand a higher nominal interest rate on debt, and that is if you think there will be additional inflation in the country. Spending more without raising taxes will tends to increase inflation. But if the government or central bank is sure to raise interest rates to offset this inflationary pressure then the concern about inflation disappears.

In MMT inflation is also the fundamental constraint on how far you can raise spending without raising taxes. MMT also says that you do not need to worry about the deficit, but this is only true if - as they advocate - fiscal policy rather than monetary policy controls demand and inflation. Under MMT the link between the deficit and inflation is direct (assuming no change in the composition of either) .

When inflation is controlled using interest rates the situation is fundamentally different. There is now no single point at which the deficit is consistent with stable inflation. In the short term there are a whole range of interest rate/deficit combinations that keep inflation stable today (e.g. high deficit and high interest rates or low deficit and low interest rate). Does this mean we do not need to worry about the deficit and the debt it leads to because monetary policy will always take care of inflation?

The answer is no, if we think about dynamics. What happens if we choose a high deficit high interest rate combination because we want higher government spending without paying more in taxes? There are two important dynamic effects here. The most basic is that a high deficit raises the stock of government debt. Because of interest rate payments on that debt the deficit rises further. In addition raising interest rates to stop inflation will itself tend to raise debt interest payments. This is an unstable debt interest spiral. You cannot say why not fund the additional debt interest payments by creating money, because that will tend to reduce interest rates and raise inflation.

This means that over the longer term you have to adjust spending and taxes to keep government debt relative to GDP stable, That does not mean debt has to be stabilised at a particular level, but just that if there is not a compelling reason to do otherwise you need to keep debt stable rather than rising upwards. A recession is one such compelling reason, and there are others (like adding to the public sectors stock of assets).

Stability does not mean deficits have to be zero because we have to allow for the growth in GDP. The maths is simple (see [1]). Take the stock of debt to GDP as a fraction of GDP (say 0.8), multiply by the trend rate of growth of nominal GDP as a fraction (say 0.04), and you approximately have what the total deficit should be as a fraction of GDP to keep debt stable (0.032), which is a deficit of 3.2% of GDP. .

There is always the temptation for politicians to raise debt now, and let future governments stabilise debt at a higher level. In the past the US under Republicans and other countries (but not the UK) tended to let this happen in the 30 years before the GFC, and economists call it deficit bias. Fiscal rules began life because it was hoped they would reduce deficit bias.

So why not raise the level of debt by spending more for a period, and then stabilise it by cutting spending or raising taxes a generation later? Here we have to note that the stabilising deficit (the deficit that keeps debt to GDP stable) includes debt interest payment. What we call the primary deficit is the total deficit less interest payments, You should now be able to see the problem with allowing debt to increase and stabilising it later. If you raise the level of debt to GDP and then stabilise it, debt interest payments will be higher and the level of the primary deficit left over is smaller than the one you started with. This is one sense in which letting debt rise today takes from future generations. [2]

This is why it is never a good idea to increase the stock of government debt without good reason, as Trump is doing, because it either cuts spending or raises taxes in the long run. This logic does not mean that future GDP is any lower (although there may be other theoretical reasons why higher debt can reduce output), but it means that if debt to GDP is stabilised, debt interest rates will be higher and so something else has to adjust to compensate, which means higher taxes or lower spending. [3]

There is an important caveat to this dynamic, which becomes clear if you do the maths. You only get a debt interest spiral if the nominal interest rate exceeds the growth rate of GDP (call the difference between the two the ‘very real interest rate’). If the very real interest rate is negative, extra debt for a given deficit allows a higher primary balance. Journalists sometimes look at the level of debt interest as a share of GDP (currently 2% in the UK) and say government spending could be 2% of GDP higher (or taxes lower) if we didn’t have to pay interest on debt. But if you could somehow magic your debt to zero so debt interest rates were zero, the stabilising deficit would fall from a current level around 3% to 0, requiring a 3% fall in the primary balance. This reflects that the current very real interest rate is negative.

Does this mean we do not have to worry about the debt interest rate spiral, and therefore debt? Only if we know that the very real interest rate will stay negative. This is unlikely to happen, particularly if interest rates are having to rise to combat the inflationary effects of high deficits. Because debt levels should never be adjusted down quickly, it is best to act as if the very real interest rate will become positive at some point.

This is not the only reason why raising government debt to GDP in the long run can be detrimental, but this one is simple because it depends only on some basic economics, algebra and logic. This and other reasons will never be enough to justify cutting deficits in recessions, not even close. But being anti-austerity does not mean we can forget about debt completely, as long as we are using interest rates rather than fiscal policy to control demand. (On why you might want to do that see here.)

[1] G is government spending, T taxes, r is the nominal interest rate, and B the stock of debt. Little letters mean as a ratio of nominal GDP (Y). x is the growth rate of nominal GDP, delta means change in. We ignore money for reasons given in the text. The budget identity is

G - T + rB = deficit = delta B

So dividing by GDP gives

g - t + rb = deficit/Y

In continuous time (or approximately otherwise) we can write

deficit/Y = delta b + xb

So for delta b to be zero, deficit/Y = xb

Or equivalently g - t + (r-x)b = 0

[2] More strictly in this case it takes from future generations the benefits of public spending or adds to the cost of taxes, and transfers it to bond holders.

Thursday, 25 October 2018

The day Theresa May lied in parliament about something I wrote

When I became part of John McDonnell’s Economic Advisory Council I knew that would put me in the political spotlight. I write about what I helped achieve in that role in my forthcoming book. I left over Labour’s support for Brexit in part because my clear and public anti-Brexit views could be used to attack Labour, when the people driving Brexit were Conservatives. I found out yesterday that at PMQs the Prime Minister was carrying on regardless, although in this case it was over Labour’s 2017 manifesto.

In reality I was strongly supportive of Labour’s overall fiscal stance in 2017. I wrote a lot in my blog before the election, and a summary of my views are in a chapter in a book of essays by various authors published by Verso and edited by John McDonnell. The point I wanted to stress was that it didn’t matter if the IFS were right that the numbers didn’t add up, because the fiscal stance was good for the economy, and could well satisfy Labour's very good Fiscal Credibility Rule.

The paragraph that says all this in the book starts
“Let us suppose the IFS was correct, …”

and I go to argue in that case that the ex ante deficit would have boosted the economy and it might not have added to the deficit ex post.

Unfortunately she said, holding a copy of the book in her hand
In an article by an economic adviser to the Labour Party, he says about their manifesto, “the numbers did not add up”. That this was a “welcome feature” and “largely irrelevant”Well it may be irrelevant to the Rt Hon Gentleman and the Shadow Chancellor but it’s not irrelevant to the people’s whose taxes go up, whose jobs are lost and whose taxes pay Labour’s debt”

Nowhere in the article did I say I thought the numbers did not add up. I was clearly misquoted. If you say otherwise, imagine I write an article that says ‘suppose austerity is expansionary’ and go on to explain how that generates consequences that contradict reality. It is called a proof by contradiction, and that is similar to the structure of my argument. To report that I said “austerity is expansionary’” would be ridiculous. If it was done to score political points you would conclude it was a lie.

Was this an unfortunate case of misreading? It seems extremely implausible. I’m certain that when the PM or more probably some adviser misquotes someone in a draft PMQ response, someone - possibly even the person themselves - checks that the quote is correct. You have to have serious comprehension difficulties to misunderstand the meaning of “Let us suppose”.

So I tweeted this
“Apparently the Prime Minister quoted me saying about Labour's 2017 manifesto "the numbers did not add up" In fact I said "Let us suppose the IFS was correct" and examined consequences. I have never taken a view on whether they did/didn't add up. If that is what she said, she lied”

I later looked at a recording of PMQs and she did indeed say that. Now maybe I am wrong about a deliberately lie told to gain political effect. If it was an honest mistake she or someone who works for her can explain to me how that mistake was made. I asked CCHQ for an apology, but I am not holding my breath.

The Mirror picked it up here, as did the BBC in their PMQ factcheck. In the scheme of things the issue is very minor, but the Prime Minister lying whatever the context should be important. But the sad thing is that no one is surprised by this kind of thing any more. We in the UK look at Trump’s lying with horror and think this is something uniquely American. But this government has been pulled up countless times (e.g. here) for misleading the public by misusing statistics and of course the lies of the Brexiters are shameless. The majority of press titles will ignore or play down any criticism of Conservative ministers or the PM (unless it is over Brexit), and the BBC is timid to say the least. It is asymmetrical of course: any mistakes the other side makes are examined in great detail. If you do not have the media to call out lies, they will pass as the truth and democracy dies.