Winner of the New Statesman SPERI Prize in Political Economy 2016

Wednesday 29 June 2016

Statement from members of Labour’s Economic Advisory Committee

In September 2015, we were pleased to accept the invitation to serve on an Economic Advisory Council (EAC).  We felt strongly that it represented an opportunity to develop a vision of a progressive economic policy for Britain that departed from the destructive austerity narrative. Our collective view is that the EAC, and its various policy review groups, has indeed had a positive influence on the development of Labour’s economic policy, and we hope it continues whatever the result of current divisions.
We have always seen this body as providing advice to the Labour party as a whole, and not as an endorsement of particular individuals within it. For example we all share the view that the EU referendum result is a major disaster for the UK, and we have felt unhappy that the Labour leadership has not campaigned more strongly to avoid this outcome. We believe it is now crucial to find a way to resolve the economic and political impasse with the EU in a way that brings the least damage possible to the UK economy and those of our neighbours. We will be honoured to advise the Labour Party in the future, should our advice be sought once the current situation is resolved.
Diane Elson
Mariana Mazzucato
Anastasia Nesvetailova
Ann Pettifor
Simon Wren-Lewis


  1. As a group of economic advisors you have all added to a positive dialogue taking place both within and without the British Labour Party, a dialogue much lacking prior to the EAC's creation.

    The EU Referendum result has exposed massive divisions within our society, divisions that would not have existed if economic policies advocated by the ECA had been acted upon by our previous governments, both Labour or Conservative, as such, and when it comes to apportioning any blame or fault, perhaps those who created the conditions in the first place should be held accountable for the present outcomes.

    I trust that whatever is to come, your wisdom and wise words will offer hope, where presently there is none as out nation and its elected politicians face up to the crisis they themselves have contributed to.

    Regardless of events within the Labour Party, your services to this nation are not lost on this poster, for which I salute all who contributed to the ECA. As such, and regardless of any Party or factional affiliation, your considered opinion must be always welcome and hopefully one day acted upon.

  2. No Piketty, Blanchflower or Stiglitz, as first two had already quit, and last presumably has. They were, of course, the more high profile names.

    You need to now say publicly that the leadership needs to change if Labour is to find a pro-EU path. What happens now is more important than the failure of leadership during the referendum.

    1. I am finding that correcting your factual errors is becoming tedious. Piketty resigned before the referendum result for time pressure reasons. Stiglitz has not resigned.

  3. Does this mean that you are no longer advising the Labour party and the EAC has effectively been wound up?

    If so, and I imagine I speak for many when I say this, I think that is a great shame. Whatever the faults of the current leadership of the party I think the decision to set up the EAC was the one of the wisest decisions made by a Labour politician in my lifetime. Although, there are plenty of reasons to criticise the current leadership they have begun the vitally important process of shifting thinking on how the economy should be managed.

    Although we haven't much about the working of the EAC, a recent by post by the academic Martin O'Neil suggests you have been doing deeply important work.

    I really hope in the future that the EAC is reinstated because a return to the failed orthodoxies of the past - the consequences of which are what really underlie the Brexit vote - is really too dreadful to contemplate.

    1. "Does this mean that you are no longer advising the Labour party and the EAC has effectively been wound up?"

      No, it does not.

  4. Having heard Jeremy Corbyn give passionate speeches for REmain, I believe it was more a media impression than reality that he was mute

    1. This is true. I attended a large rally in Cardiff at which he spoke clearly and unambiguously for Remain but which was almost entirely ignored by a media happy to promote any lie by Farage or Johnson.

      Angela Eagle herself stated on 13 June: "Jeremy is up and down the country, pursuing an agenda that would make a 25-year-old tired. He has not stopped. We are doing our best, but if we are not reported it is difficult.” Now she wants to claim it was all his fault.

    2. Speaking just for myself, see the subsequent post.

    3. Passionate? Didn't show a lot of passion on The Last Leg. "Ooh, about 7/10...". Even managed to put 7 in the top half of the 5 - 10 range.

  5. Whilst the weaknesses in Corbyn's leadership are all to visible the fear for many members will be as O'Neill puts it:

    "that all that will be on offer from Corbyn’s opponents would be a kind of Blairite revanchism with nativist trimmings: a trailing response to the pathologies of the current moment, instead of a vision of how to move beyond this mess. Labour needs to address the deep economic causes of anti-immigrant sentiment, not just deal with its effects.

    Insufficient numbers of the current parliamentary party have, as yet, shown that they're really up to the task at hand, or have shown that they are able to think beyond the political landscape of the 1990s.

    It would be a crushing shame if John McDonnell's imaginative economic programme, which is ambitious, resolutely anti-austerity, and involves the structural reorganisation of important aspects of the UK economy, with a different remit for monetary policy, and the creation of regional development banks, were to be jettisoned in the party’s rush to depose Corbyn. McDonnell’s impressive economic programme, -- or something very like it – could constitute a big enough ‘offer’ to working-age people left behind by the current shape of the economy. It would be political vandalism if it were to be junked and replaced by something an order of magnitude less imaginative (on which, see the 2015 leadership campaigns)."

  6. This is all very illuminating. I didn't much like Corbyn before any of this, but he is not the one making a total mockery out of the PLP.They are doing that all by themselves. He is right to stay until properly challenged - this will sort the real labour out from the corporates. I think he would stand down voluntarily if he thought that any of the rebels represented the core Labour vote in say, Sunderland or Barnsleyy.

  7. Can we take it that you and your colleagues who signed this statement have, in effect, suspended your participation in this advisory committee?

    In may be some time before the Labour party is disposed to take economic advice. There is an ideological battle between those who wish in vain to “transform capitalism” (or whose hobby is “fermenting [sic!] the overthrow of capitalism”) and those who, unfortunately, have succumbed to its blandishments and fail to understand how it can be shackled and modified to generate economically and socially beneficial outcomes. And this battle has already lost or excluded the vast majority of voters who might be disposed to vote for Labour.

    There are policy initiatives that a Labour party in tune with the interests of voters would advance. But both warring wings of the current party are totally incapable of doing so. Sadly, their increasing electoral irrelevance is well-deserved.

    1. The statement should be seen as a response to Blanchflower's resignation. It is clearly inappropriate that the committee meet during the current situation - that is all. We are still members of it and have not resigned.

  8. "...and we have felt unhappy that the Labour leadership has not campaigned more strongly to avoid this outcome."

    I would not have signed up to those words without due recognition that what occurred in the referendum campaign went back to the Iraq war, where Blair says in his memoirs of 9/11 that:

    "We had to stand together. We had to understand the scale of the challenge and rise to meet it. We could not give up until it was done. Unchecked and unchallenged, this could threaten our way of life to its fundamentals. There was no other course; no other option; no alternative path. It was war."

    That is the big reason why the current Labour Party is divided.

  9. What will you and the other signatories do if (when?) a Labour leadership election returns Corbyn as leader?

    What will you do if the Left take control of the party, and deselect and oust MPs and councillors the same way Blair did when he became leader?

    If it's not a 'personal' problem, then surely you will be happy again to re-integrate a policy advisory committee that will forge and steer Labour's policy - both in opposition and if it gets elected to government - towards fairer and more re-distributive, neo-liberal economic doctrine rejecting, stance?

    But I guess that in the end my question is more to you, Ann Pettifor and Richard Murphy, on whom I, as a Left values espousing party member, had placed my hope.

  10. Labour members voted about 65-35 to Remain, while Conservatives voted 60-40 to Leave.

    Circular firing squad much?

  11. The experts are spitefully going to let the world burn so they can say "we told you so" to the ignorant masses.

  12. "For example we all share the view that the EU referendum result is a major disaster for the UK, and we have felt unhappy that the Labour leadership has not campaigned more strongly to avoid this outcome. "

    Give me a break. This is why people loose faith in experts.

  13. You do realise that if Corbyn gets ousted, all of the things that you hope for the Labour party to achieve (a stop in austerity, a stop to anti-immigrant rhetoric etc) will be just a pipe dream? The PLP have largely accepted the conservative narrative on these issues, with some already calling on labour to target immigration in particular as a means of "reconnecting" with voters. They are dangerously out of touch and deluded. And now they (along with media macro) are using your above statement to further undermine Corbyn; its disingenuous to focus solely on labour's supposed "poor" performance during the referendum without mentioning the broader (and much more significant) failures of the conservative and lib dem remain campaign. To attribute this disaster to Corbyn alone just adds fuel to the fire and protects the real culprits, ie Mr Caneron and his audes.


    What Blairites Were Busy Doing Instead of Campaigning for Remain
    Remember this is what they're using to justify trying to oust Corbyn, that he didn't try hard enough to prevent Cameron from fucking up the country. The reality is, they saw an opportunity long before the vote was taken. The "reasons" were inserted after.
    Labour rebels believe they can topple Jeremy Corbyn after the EU referendum in a 24-hour blitz by jumping on a media storm of his own making.

    Moderate MPs who believe Mr Corbyn can never win back power think his failure to close down public rows which flare up and dominate the news channels leaves him vulnerable.

    By fanning the flames with front bench resignations and public criticism they think the signatures needed to trigger a leadership race can be gathered within a day.

    That was two weeks before the referendum. I wonder how those media storms just happen? Of course the press is really playing along with the "IT'S ALL CORBYN'S FAULT" narrative. New Labour is in their blood. 20 years from now Labour still won't have won an election and it will be Corbyn's fault.

    Launching a coup in the Labour Party at this moment has diverted attention away from those responsible for this national crisis — not least by staggering resignations to ensure Labour’s woes dominate the news cycle for as long as possible.

    That was the plan!
    by Atrios at 12:00

  15. So your not supporting corbyn but the opportunists in the parliamentary labour party. Why not just keep out of it and say nothing. It isn't to the credit of economists that they have become such meddlers.

    1. We are not supporting anyone. We have every right to be critical of him, as being on the EAC was not conditional on us doing otherwise.

  16. Does that imply that the EAC suspends its activities (including unsolicited advice) until the current situation is resolved?
    If so, does that refer primarily to the internal division of Labour or to the Brexit referendum consequences?
    Could the EAC advise on how to unite Labour, the UK and Europe (including the UK) from an econommic perspective?

    1. The EAC has been suspended until the current turmoil in the Labour party is resolved.

  17. To the extent that the turmoil is due to unclarity on the economic way forward (I don't know, not being British), could the EAS contribute to resolving it with proper advice?
    If only by supporting and rephrasing sensible ideas from others, e.g. those from O'Neill quoted by Mike?
    Does that suspension help to resolve the turmoil or add to it?

  18. Whether the 4 who signed the letter wish to call it this or not you have chosen the PLP 'side' of this coup and will rise or fall with their fortunes.
    It doesn't create a good advert for 'objective' experts though; you have done your cause of promoting expert economic advice harm by taking sides like this.

    1. @Allan How do they chose sides if they see the EAC "as providing advice to the Labour party as a whole"??

    2. By ignoring the pragmatic reality of their position; they are not providing advice to the Labour party 'as a whole' they were participating in a body formed by McDonnell, a staunch partner of Corbyn and one of the people propelled to the top of the party by the influx of new members.

      By acting as they did and most importantly at the time they did, most party members perceive they chose the side of the revolting PLP.

      I repeat; they may try to convince everyone that they did not intend this result and it may even be true but they won't remove the perception that they chose sides.

    3. @Allan You may be right.
      Not living in Britain it is hard for me to assess perceptions in Britain.

  19. I’m disappointed that, as professional economists, you feel able to make the statement “the Labour leadership has not campaigned more strongly to avoid this outcome” without providing any supporting evidence. Are you just relying on reports from a media you often criticise and which has been almost uniformly hostile to Corbyn?

    The problem on Labour’s side was not Corbyn’s commitment. He worked as hard as he always does but Labour’s campaign organisation was very poor. This was in the hands of Alan Johnson and the party apparatus who seemed to have avoided any criticism by joining the blame Corbyn campaign.

    I have direct experience of this. Wales Labour ran a professional campaign for the Assembly elections but its referendum campaign was a shambles. Material was produced late and piled up in the Cardiff office car park; events and media communication were inadequate. Some of this is understandable. It’s often unappreciated how stretched party organisation is and how dependent on a small number of volunteers. The Welsh constituencies were exhausted after the Assembly campaign and the attention of the Welsh leadership was on forming a new Assembly government.

    The Leave side evidently had a lot of money behind them judging from the amount of posted material I received. We had to deliver material by hand and we simply did not have time to have the conversations that might have made a difference.

    There was also some complacency in what initially appeared to be an internal Tory dispute with a predictable result. I admit not fully realising myself quite how virulent the campaign was becoming, or how great the risk was, until quite late. But the political choice of Wales Labour to put out messages that were uncritical of the EU clashed with those from Corbyn and I do not believe they were convincing in the many Welsh areas that voted Leave. There was no challenge to Farage and Johnson on migration in either leaflets or commentary.

    This experience might be mirrored elsewhere. Labour did not run a good campaign but to blame all that on Corbyn is just evasion of responsibility from those who have been looking since September for an excuse to implement a PLP coup.

    1. I'm relying on what he said: see subsequent post

  20. I think it is a great pity that such people as yourselves have been mislead. I quote here from a referendum blog from the Guardian, wherein Angela Eagle states the following:
    "Jeremy [Corbyn] is up and down the country, pursuing an itinerary that would make a 25-year-old tired, he has not stopped. We are doing our best, but if we are not reported, it is very difficult. This whole thing is about Tory big beasts having a battle like rutting stags, but it’s far more important, this vote, than any of that."

    The link to the article is here.

    I feel that as professionals you should distance yourselves quickly from the demonisation of Jeremy. He and John McDonnell have done more than any other politicians to open the discussion with economists and the general public in my life time, I have attended some of the events.

    It would be a great pity to have professionals being mislead like this. Labour needs ideas to be aired in public and we should not stop, most of the right wing politicians would never engage in the discourse that is happening now.

  21. Dear Simon Wren-Lewis,
    I fear you may have been misled.
    Jeremy Corbyn delivered the Labour vote and was the most active Labour campaigners for REMAIN when measured by media reports.

    Also this shows that it was the Conservative vote that led to the LEAVE result.

    There are a lot of lies being told about this in the hope that political damage will be done before the lies are recognised as such.

    IMO To accept such propaganda without verifying its veracity risks unnecessarily tarnishing ones reputation.



  22. What a great shame that you don't have sufficient fortitude and vision to continue in this essential role.


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