Reform and the UK press

It was entirely predictable that immigration/asylum would become the issue voters thought was the most important facing the country. Many people relate concern about immigration or asylum seekers directly to numbers, but that is only half true. Information about numbers is

mediated through the media, and in particular through the right wing press (which is most of the print media in the UK) [1]. Most of those expressing concern about immigration have no direct experience of the extent of immigration, and will certainly not be looking up the numbers themselves. As is well known, concern about immigration tends to be highest in areas where immigration is very low, and high national concern can coincide with people saying that immigration is not a big issue for their own area (see also here).

I first discussed this in a post in 2017, where I noted that the big increase in concern about immigration at the start of this century lagged increases in immigration numbers by a few years, but the lag between concern and the number of stories about immigration in the press was much shorter. Of course it greatly helps the right wing press to write those stories if they can refer to ‘record numbers’ and talk about ‘invasions’, so numbers clearly matter. But the right wing press is an important filter, as developments over the last decade clearly show.

The most obvious example is in the year before the Brexit referendum. Net migration to the UK was at a similar level to the previous five years, but public concern about immigration peaked in the year before the referendum because the right wing press was determined for Leave to win the referendum and knew negative stories about immigration and immigrants were a good way to achieve this. Once this goal had been achieved, there was less of a political need to write these stories and public concern steadily declined, even though net migration remained high right up until the pandemic. [2] As Roy Greenslade noted in January 2020,

“immigration has all but disappeared from newspaper pages. References to migrants, asylum seekers and refugees have almost vanished along with the associated prejudicial buzzwords and phrases, such as swamping, influx, surge, illegal, bogus, sham, jungle, welfare scroungers, benefit tourists.”

Net migration again hit record levels in 2021, but it wasn’t until 2024 that public concern about immigration came close to previous peaks. With a Conservative government in power and a general election forthcoming, right wing newspapers had their reasons for holding back. Concern might have been lower still if Sunak had not made the foolish decision to prioritise ‘stopping the boats’ through a crackpot scheme. But once we had a Labour government, there was no reason for the press to hold back.

If you think this exploration of the link between press coverage and public attitudes is not terribly rigorous, then there are academic studies that link public concern about immigration in many countries to media coverage (e.g. here and here). We also have studies that link how the media, and right wing press in particular, talk about immigration and asylum to public attitudes towards this issue (e.g. here and here). Images matter as well as words, and the right wing press choose their images as any good propagandist would.

Of course the massive increase in net immigration in 2022/3 was bound to increase public concern among those who worry about immigration levels. But numbers have been falling equally fast in 2024, yet public concern has continued to rise. This is partly because much of the public think ‘illegal’ migration exceeds legal migration, when in 2024 the former was just 5% of the latter. So the press and politicians can switch between the two issues depending on which can be made to sound more alarmist, and because few in or on the media counter this misinformation the public are inevitably misled.

The recent coverage of immigration and asylum in the right wing press has been almost apocalyptic. They have been hyping small demonstrations as if they were indicators of impending national unrest, and the broadcast media has largely followed their lead. The recent celebration by the Mail, Sun and Telegraph of someone who pleaded guilty to inciting racial hatred [3] makes “Hurrah for the Blackshirts” sound rather tame. We have reached the point where a majority of the print media are in effect encouraging civil unrest and racial hatred, yet thanks to political short termism this press remains essentially unaccountable for their behaviour.

This suggests two key conclusions. The first is that we currently don’t have much of a debate around immigration and asylum in the UK, as long as the Labour government continues to believe that parroting Farage and the Conservatives is the clever thing to do. For a debate you need two sides, and beyond the pages of the Guardian, FT and Mirror, where is the side to oppose Farage et al? [4]

This is an example of something I wrote about earlier. Social liberals, despite making up at least half the UK population, have little voice in politics and the media nowadays. They are the new silent majority. This alone is a good reason for a new party of the left, and a more active Green leadership, but neither will make much of an impact on a broadcast media that is used to balancing the government with the opposition, and which largely ignores other political parties unless they are ledby Farage. It will of course make no impact on the right wing press.

The second conclusion is that, on this issue as well as others like net zero, the right wing press may no longer be the “Tory party in the media” (to quote Tim Bale), but is instead Reform in the media. In perhaps the more important sense this has been true for some time, with in particular its support for Brexit. But as long as the Conservatives were the government or main opposition, it made sense for the right wing press to use Reform (and earlier UKIP) to help push its own agenda within the Conservative party, rather than pushing Reform as an alternative to the Tories. With Reform way ahead of the Conservatives in the polls, and with their policies on many (but not all) issues being identical, this is no longer the case.

In terms of its day to day coverage on key issues like immigration, asylum, climate change and Brexit, the right wing media is now acting as a propaganda outlet for Reform at least as much as the Conservatives. But, as previously with the Conservatives, it is often not clear whether the press are following the politicians lead, or whether the politicians are being led by the press. It may be at least as true to say that Farage and Jenrick are part of the political arm of the UK right wing press.

[1] Sales of newspapers may be falling, but their online influence remains large, and more than ever the right wing press sets the agenda for the BBC and others.

[2] Stories about how specific labour shortages, like lorry drivers, were causing economic damage also probably helped.

[3] She said “set fire to all the fucking [asylum] hotels full of the bastards”

[4] Zoe Gardner is great, of course, but I’m sure she would like some support from at least one of the three parties currently leading in the polls.

When did relative UK decline begin? Productivity and the Global Financial Crisis

When did things start going wrong in the UK? Many would give the Global Financial Crisis (GFC) as the answer. Now that may be a good answer for some reasons (see below), but I want to suggest one reason that is perhaps not so good as it first appears. That reason is labour productivity, growth and living standards.

Why does it appear to be the answer for UK productivity and growth? Here I can just refer to the chart that is at the top of my post two weeks ago, showing UK GDP per head before and after the GFC. As I have noted many times, underlying growth in UK GDP per head (and therefore to a first approximation real earnings) before the GFC is remarkably consistent, with a trend growth rate since the 1950s of just over 2%. There are of course booms and recessions around that trend, but until 2007 every economic downturn seemed to be followed by a recovery that put the level of GDP per head back on its trend line. Of course that constancy from the 1950s until the 2000s could well be a coincidence, with different factors influencing productivity more than others over particular parts of those fifty odd years.

Below is UK output per hour worked, which shows the same pattern (source)

After the recession of 2008/9 there was almost no recovery in the sense of output or productivity growing faster than trend. So the level of productivity and GDP per head did not return to its previous trend line. In addition, the growth rate also slowed substantially, to something like half the previous trend. It therefore looks like something disastrous happened around 2007, and the Global Financial Crisis is the obvious culprit.

Now we all know that the GFC started in the United States, and that the US financial system was also very badly hit by that crisis. Below is a picture of US productivity growth (output per hour in the non-farm economy).

It is a more complex picture than for the UK, but growth after 2007 does not look that different from growth since the 1970s, with the exception of a period of more rapid expansion from the mid-1990s to the mid 2000s. That period of more rapid growth is generally put down to the impact of the IT revolution. Here are some average annual growth rates:

Year on year productivity growth in the US (defn and source as previous chart)

Period	%
1948-73	2.8
1974-94	1.4
1995-2004	3.1
2005-19	1.5
2020-24	2.0

If we put the rapid growth around the millennium down to the IT revolution, then there is no downward shift in either the level or the growth rate of productivity as a result of the GFC.

Now it is of course possible that the GFC had a much more profound impact on UK growth than in the US. But there is an additional empirical reason to doubt that the GFC was the obvious reason why UK productivity growth declined so drastically. Below is a chart of productivity in the UK financial sector [1].

Financial services productivity started growing rapidly around 2004/5. We now know this was unsustainable, because it was based on levels of leverage that meant the sector could not survive significant negative shocks. If we take financial services out of the UK aggregate, then it becomes apparent that productivity growth in the rest of the economy began to slow from the post-war trend a few years before 2007. In addition the growth rate in the early 2010s is a bit better than the aggregate figures suggest.

It was for this reason that in this previous post I was careful to talk about a productivity slowdown, in the UK and elsewhere, that happened around 2005, rather than after the GFC. Why does a difference of a few years matter? As the reason for the decline in UK productivity relative to other advanced economies remains something of a puzzle, associating it with the GFC naturally focuses attention on financial factors to explain that puzzle. Placing the decline starting around 2005 allows for a wider range of possibilities.

In particular, it ties UK productivity trends more closely to those in the US. Perhaps UK productivity growth also benefited from the IT revolution around the millennium, and so at least part of the absolute decline in UK’s productivity growth since around 2005 is a result of that revolution petering out, just as we saw in the US. Doing this allows us to be far more eclectic about when underlying UK productivity started growing less than other major economies like the US. Excluding finance, UK productivity growth was quite strong after the recession, and it is only around 2013 that growth rates seem to clearly shift to below US levels. Of course none of this rules the GFC out as a key factor in explaining the UK productivity puzzle, but it does remove the GFC as the empirically compelling cause.

Are there other reasons besides growth for suggesting the GFC was the beginning of the UK’s recent relative decline? The obvious answer is that the deep recession it caused was key in ending the Labour government, and therefore starting a period of Conservative government that has been economically disastrous. However even this could be contested. Gordon Brown became pretty unpopular as Prime Minister well before the recession hit, and some would argue his standing as PM rose as a result of his handling of the GFC.

It is also crucial not to get the impact of the GFC crisis confused with the policy response to it, which was general fiscal consolidation, aka austerity. The long period of ultra low interest rates that began during the GFC but lasted for the next decade, and which helped create a boom in asset prices including house prices, was not a result of the GFC but was instead due to fiscal austerity. If the 2010 Coalition government, and governments around the world, had responded to the GFC recession by continuing rather than reversing fiscal expansion, as financial markets were crying out for them to do (because all interest rates were so low), then the period of ultra low rates would have ended in the early 2010s, and we would not have seen such a marked increase in asset prices.

[1] Levels extrapolated from growth rates, source.

Fascism, Rivers of Blood, and today’s political and media elite

Whether we call the Trump regime fascist or not is in one sense just semantics. Trump clearly has similarities to the archetypical fascist regimes of the 1930s, but there are also clear differences. In this post I defined, following Finchelstein, a fascist as a right wing populist that promoted violence for political ends and tried to subvert free elections. Trump qualifies as a fascist with his 2020 election result denial and the subsequent storming of the Capitol. The actions of the new Trump administration bring yet more parallels with 1930s fascism.

Of course others may have different definitions. Kay and Matlack say that an essential part of fascism is a strong state. The quote Mussolini: “Tutto nello Stato, niente al di fuori dello Stato, nulla contro lo Stato” (“Everything within the state, nothing outside the state, nothing against the state”). Trump and the Republican party, in contrast, are in many ways diminishing the state. Adam Tooze, for related reasons, calls the “Trump=fascism equation” absurd.

There is of course a great deal to debate here. Is ICE, soon to be the highest-funded law enforcement agency in the federal government, going to become a new arm of state terror or just a means of deporting non-white people? (It could, of course, become both.) Are tariffs just Trump’s idiosyncratic plaything or a new means for the state to control corporate America? But that debate is not the purpose of this post.

Instead I want to ask whether the validity of the Trump=fascism equation matters beyond academic discussion of appropriate definitions. I want to suggest one very political reason why it might matter.

As the years go by, the memory of what fascism in Germany in particular involved, as well as what it cost to ensure it did not come to dominate Europe, tends to fade. In particular, it tends to fade in the minds of the political and media elite. As an illustration of this, I want to recall the reaction of the political elite to the Rivers of Blood speech made by the then shadow cabinet member Enoch Powell in 1968.

In the speech Powell quotes a constituent as saying: "In this country in 15 or 20 years' time the black man will have the whip hand over the white man". Powell goes on to say: “Here is a decent, ordinary fellow Englishman, who in broad daylight in my own town says to me, his Member of Parliament, that the country will not be worth living in for his children….We must be mad, literally mad, as a nation to be permitting the annual inflow of some 50,000 dependents, who are for the most part the material of the future growth of the immigrant descended population. It is like watching a nation busily engaged in heaping up its own funeral pyre.” He advocated not just a halt to immigration but voluntary re-emigration to avoid the calamity he foresaw.

Powell’s speech was extremely popular among many, in part because they saw it as someone from the political elite at last recognising their own concerns. However key members of the then Shadow Cabinet threatened to resign if Powell remained in the Shadow Cabinet. Edward Heath dismissed Powell a day after the speech. The Times declared it "an evil speech", saying "This is the first time that a serious British politician has appealed to racial hatred in this direct way in our postwar history." The political elite of 1968 did not talk about the legitimate concerns of their constituents or readers, but condemned racism and the dehumanisation of immigrants in the clearest possible terms.

Compare and contrast with today. The Times, of course under different ownership from 1968, was happy to recently splash on the front page that “1 in 8 of all prisoners were born overseas”, neglecting to follow that up by noting a higher proportion of the total population was born overseas (1 in 6), meaning that those born overseas were less likely to be in prison than those born in the UK. This scare headline is part of what seems like an avalanche of attempts by the right wing press and right wing politicians to suggest that immigrants are much more likely to commit crimes (see also here, or here). It of course echoes Trump, who justifies the arbitrary deportation and sometimes brutal imprisonment of people of a certain ethnicity by describing those deported as hardened criminals.

The effect of all this is to stir up hatred against immigrants in general and particular groups of immigrants in particular. Demonstrations have been held outside hotels housing asylum seekers, with calls to ‘protect our kids’ and ‘get these scum off our streets’. These asylum seekers may well have been the victims of significant trauma in their countries of origin, as well as enduring a hazardous journey to the UK. They stay in hotels at taxpayer expense while their claims are assessed because the UK forbids them to work. Adding to that trauma by staging demonstrations of this kind is not an expression of legitimate concerns, but instead indicates that the UK is becoming a sick society.

A far right MP mistakes some rowers for a small boat carrying asylum seekers and helps organise a group of vigilantes on shore to await them. All this is encouraged by the language constantly and increasingly used in the right wing press and by mainstream politicians: talk of invasion, calling asylum seekers illegal and so on. Are those writing about the UK being at‘boiling point’ that different from Powell talking about rivers of blood? There are of course real issues around the level of overall immigration to the UK, but the demonisation of asylum seekers and small boats cannot be justified this way. Unfortunately spreading or encouraging disinformation about minority groups is as old as civilisation itself.

As the example of Powell shows, there have always been politicians and newspapers that have been able and willing to stir up racial or religious hatred. What has changed in the UK over the last fifty years is that the mainstream political and media elite seem unable to call out this behaviour for what it is. It was a Conservative party leader who did so in 1968, yet today even a Labour Prime Minister seems unable to resist joining in the dehumanisation of asylum seekers, treating them as a problem rather than deserving of our sympathy.

What has changed over the last fifty years to make dehumanisation and racism more acceptable among the political and media elite? It is not the case that the population as a whole have become more racist and intolerant, with a host of evidence suggesting the opposite has occurred. We are a less racist and more tolerant society today than we were in 1968.

The reasons why today’s elite seem unable to stand up to racism and dehumanisation in the way their predecessors did fifty years ago are no doubt complex [1], but one factor could be the distance in time from a war fought against a regime that turned racism into mass murder. Edward Heath and many in his cabinet will have served during WWII. They would have understood the common roots between racism against black people in 1968 and antisemitism in 1930s Germany. They may well have been aware of how many Jewish refugees from Germany were turned away by the UK government before WWII, and that many of those that were allowed in were then confined to internment camps when war broke out.

When I was younger I and others used to make fun of how obsessed people in the UK seemed to be about WWII. Now I think our political elite needs reminding of the characteristics of the regimes that war was fought against. This is why I think calling Trump a fascist isn’t just about semantics. Our elites need reminding about the values that their equivalents, like Edward Heath, helped create after WWII, and about the similarities between the regime currently running the United States and the regimes that war was fought against. Right now our political and media elites appear trapped in the headlights of growing racism and intolerance in the UK, fearful of a press and certain politicians that are doing their best to spread that racism and intolerance.

[1] The proximate causes are familiar. Farage is our own Donald Trump, whose popularity owes much to the desire of the right wing press to achieve Brexit and encourage right wing populism. The Conservative party has collectively decided that the threat of Farage is best met by copying him, so the idea that Badenoch could act towards Jenrick the way Heath did to Powell seems impossible. More extraordinary is that the Labour government is also under the misapprehension that the best way to combat Farage is to sound like him, a mistake that will seem incomprehensible in a few years time.

 

UK Growth, Productivity and Investment.

 

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Jagjit Chadha (ex head of NIESR and now a Professor at Cambridge) and Issam Samiri have an article in the Journal of Economic Surveys that focuses on the UK’s recent productivity problem. The chart above is taken from that article. Economic growth (or not), and therefore how fast living standards rise (or don’t) is all about productivity growth over the medium and long term. The UK’s problem is this. Productivity growth slowed in all the advanced economies from around 2005 onwards, but it declined by more in the UK, and that relative decline has continued until today.

There is not much the UK can do to buck international trends in productivity. There was no way UK GDP per head was going to continue to grow at pre-2005 rates, so the chart above greatly exaggerates the problem. The survey discusses potential reasons why global productivity growth started slowing around 2005. One story is that the earlier boost to productivity provided by IT in the 1990s started to fizzle out, but to be honest we have more stories than clear answers on this. However, between around 1980 and 2005 the UK kept pace with the US, Germany and France on productivity growth, so there was no UK productivity problem over that period. Those who say the UK has always been in relative decline are just factually wrong.

So what caused the relative UK decline in productivity from around 2005 onwards? The paper goes through various different studies and explanations, and I cannot repeat them all here. How much is due to the importance of banking to the UK economy, so the Global Financial Crisis had an outsize impact on UK productivity growth? Did slower global growth have more of an impact on the UK than elsewhere? Coyle and Mei in a 2023 paper in Economica found that the UK productivity slowdown was largely driven by the manufacturing and information and communication sectors.

Below, in another chart taken from the paper, is the UK’s investment to GDP share relative to other major economies. Investment doesn’t just provide capital that helps produce output, but it is often how technical advances are embodied in production. [1]

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In the 1960s UK investment was substantially lower than in the US, Germany or France, but by the 1970s the UK was at least within touching distance of these other countries. It may reasonably take some time for higher investment rates to show up as higher productivity growth, so perhaps the UK’s relatively good productivity performance from around 1980 was the delayed response to this higher level of investment. Equally, perhaps the decline in relative productivity from around 2005 was due to the decline in the UK investment share compared to these other countries from around 1995.

One idea I looked at in a previous post was that austerity, by delaying the UK’s economic recovery from the Global Financial Crisis, may have had a permanent negative impact on productivity through lower investment. I concluded that austerity, in creating an unusually protracted recovery in aggregate demand from the GFC recession, did have some negative impact on productivity growth and therefore a persistent negative impact on output supply, but how large that effect may have been is very difficult to quantify.

As the chart at the top of the page shows, we actually have two UK productivity/growth problems: the one discussed above, and another that is more recent. In the UK the pandemic appears to have been assciated with a fall in productivity, and perhaps a subsequent growth rate that is even slower than since the mid 2010s. Luckily that is easier to explain, as we can see from the chart above. Whereas the investment share in Germany, France and the US went on increasing through the 2010s, the UK share started declining around 2016. The reason is of course Brexit, and lower investment isn’t the only reason that Brexit would lead to lower productivity growth.

While Brexit was clearly an act of national self harm in terms of productivity growth and therefore UK living standards, the reasons for the UK’s relative decline in productivity growth from the mid-2000s remains something of a mystery, with many potential stories with little consensus about which if any are the more important. My own instinct is that the UK’s low levels of investment compared to other countries since the mid-1990s has to be a key part of any explanation of relatively low productivity growth, but the reasons for these low levels of investment in the UK also remain largely unexplained.

[1] The structural econometric macromodel I and others created in the 1990s had a vintage production function, where technical progress is embodied in new investment.

Delusions on the Left and Labour Right

 

I had it with writing about internal Labour party politics at the end of the 2010s, and have written very little on the subject since. Writing about issues where there are clear tribes or factions with a fairly rigid belief system, but reality is not how either tribe sees it, is too much of a mugs game, or perhaps just involves too much self harm.

Let me be more specific. In the summer of 2019 I was writing a regular monthly article for the online New Statesman. Within hours of publishing my latest piece, where I suggested Corbyn would do less harm as Prime Minister than Boris Johnson, they withdrew it. I was told I could continue writing for them only if I stuck to economics and did not mention to anyone what they had just done. I didn’t accept the latter condition, and have never been invited to write for them again. It meant I briefly felt I was doing the right thing and in reality the potential audience for my writing shrank.

However, I think it’s very hard to understand what is currently happening in the UK right now without saying something about internal Labour party politics. What I learnt from the 2015-2020 experience, and what I should have already known from earlier events, especially what happened after 1979, is that the following proposition is probably true.

Proposition:

The Labour Party only works if it is a broad church that spans left to right, but only if the left does not have control.

Labour works best when it’s a broad church for at least three reasons. The first is that Labour’s right needs the left to at the very least critique its own ideas, and more generally to provide ideas and some vision. As Steve Richards writes, the current government is desperately lacking a political vision, and is even failing to point out the failures of the visions of other political parties (e.g. privatisation). The second is that the left can provide a much needed moral compass, as the Labour’s governments complicity in what many believe is genocide in Gaza clearly shows, and what a Labour government treating as terrorists civil disobedience groups who had become annoying (in part because of the habit of juries not to convict them) also shows. The third is that the left represents the views of a sizable proportion of the population, and it is better having that in the tent than outside it.

However, while it is essential for the left to be part of the Labour party, it is also crucial that it never controls that party. To many who are not on the political left this may seem obvious. You just need to mention Jeremy Corbyn’s time as leader, after all. But this is partly because the mainstream media treats ideas and many individuals on the left as ‘beyond the political pale’ while simultaneously treating ideas from the far right as worthy of discussion or even mainstream.

My own reasons for believing this part of the proposition are two-fold. First the Labour right will not tolerate the left controlling the party, and would rather sabotage the party than allow the left to control it. As they have demonstrated in more than one recent historical period they can be very effective at that. Second, Labour led from the left will never win power in today’s UK except by accident, because the forces against it are too strong (see also below). In both cases those facts may be regrettable, but they are nevertheless real. Many on the left believe it is better for the Labour party to be pure than to be in power, but I don’t.

As I have already mentioned, some on the right of the party were prepared to see Boris Johnson as Prime Minister and for us to leave the European Union rather than help Labour under Corbyn against the Tories under Johnson. Given how disastrous Johnson as PM was [1], you have to be pretty outrageous in your beliefs about what a Labour government after 2019 would have done to support that sabotage. Labour under Corbyn, for example, would not have adopted a policy of herd immunity for the Covid virus. How many unnecessary deaths were a price worth paying to prevent Corbyn becoming Prime Minister? [2]

I’m occasionally reminded that some on the left have never forgiven me for not backing Corbyn in 2016. The left can be as tribal as the right. In 2015 it was not obvious to me just how far the Labour right were prepared to go in undermining the left’s leadership, and by 2016 it was also clear that Corbyn himself did not have the skills nor perhaps inclination to be as inclusive as possible. But I also wonder what would have happened if he had tried? Would the right have still sabotaged his attempts at unity? But although Corbyn was not my choice, I have always been clear that a Labour victory in 2017 and 2019 would be far preferable to what we actually got. 

Since Starmer took over as leader, the right of the party has taken charge, and seems to have decided that Labour would be better off without the left. Left candidates have been purged, and rebel MPs have lost the party whip despite Labour having a huge majority. It was first portrayed as a necessary move to restore the voters trust in Labour, and to make it clear to voters that it was now Starmer’s party not Corbyn’s. But the fact that the party is continuing in the same manner now it is in government suggests it was never just that. The right that now runs things seems to act as if it believes Labour would be better off without the left, and it has partly achieved that wish.

This was and continues to be delusional. The best argument they have is that, come the next general election, anyone sensible on the left has nowhere else to go besides voting tactically against the populist right. The battle at the next election will be between Labour and a probably united Conservative/Reform populist grouping, and victory for the latter would be as disastrous for the UK as Trump’s victory over Harris is proving disastrous for the US. I have no time for those on the left who suggest there is no difference between Starmer and Farage/Jenrick, because such arguments are factually wrong in ways that affect many people’s lives..

The reason why this argument from the Labour right is delusional is that many on the left will not vote tactically when it comes to general elections. Tactical voting is widespread but far from universal. The Labour right has now achieved what I suspect it intended. There is going to be a new left wing party, possibly co-operating with the Greens. Labour will undoubtedly lose seats as a result of attempting to purge the left from the Labour parliamentary party and more widely.

In addition, those on the left who would vote tactically in a General Election may understandably not vote tactically in local government elections beforehand. That will condemn the government to a long period of continuous electoral failure, with commentators taking it for granted that Farage is PM in waiting, and it is difficult to know what damage that will do.

One of the reasons the ‘they have nowhere else to go’ argument just doesn’t work for the left is that many on the left find it very hard to, as they see it, vote for a party that does so many things they regard is immoral on the tactical grounds that doing so might nevertheless make the world a better place. For example there was a real opportunity at the last election to consign the Conservatives to third place, making the Liberal Democrats the official opposition, which could have changed the nature of political debate in the UK. It required tactical voting even though Labour were going to win big. But instead some on the left decided that they could vote Green to (hilariously) ‘send a message to Labour’. It was an excuse to do what they wanted to do, and therefore a missed opportunity.

The Labour right is delusional because the left also has the power to help put Farage/Jenrick in power. They can sabotage Labour, not in the same way as the right did when Corbyn was leader but to the same effect. They can help us get a Trump type government in the UK [3]. One of the delusions of Labour’s right is that Labour becomes more electable by disposing of the left, when the reality is the opposite.

As well as delusions about each other, both the Labour right currently in power and many on the left carry delusions about the emergence of right wing populism and what to do about it.

The key delusion of the Labour right, which I have talked about many times, is that right wing populism is best fought by aping its policies and rhetoric. Right wing populism is about stressing differences between people where there often is little difference at all, denying humanity to the ‘other’, and presenting the other as a threat when they are not. You see that view pushed in the right wing press every day. It is a colossal deflection from society’s real problems, often designed to enhance elements of an existing plutocracy. By repeating the right wing populist rhetoric you just confirm rather than challenge this world view. 

One of the delusions of many on the left is not to recognise the shift in UK politics that has occurred over the last few decades. It is a shift which means that, under a FPTP voting system, the left has no chance of gaining power. General elections are now fought between social conservatives and social liberals, rather than between left and right on economic issues. I discuss the reasons for that here and here, and why the demographic trends that led to it are not going to be reversed any time soon here.

This means that social conservatives, and therefore potentially a combined Reform/Conservative ticket, have a natural majority in general elections, just as Brexit did in 2019. It is social liberals who are the new silent majority, who don’t hear their point of view expressed by the major political parties and who are ignored by much of the media (in part because the very right wing populist Conservative party remains the official opposition). It will mean that right wing populism is an ever present threat, and the best its opponents can do is unite against it.

So many on the left fail to see this, in part because they find it hard to stop seeing neoliberalism as their main enemy. As Eagleton notes here, according to some on the left right wing populism represents the death of neoliberalism, while according to others it is hyper neoliberalism. Eagleton gets it half right when he says that right wing populism prioritises the nation state. That can interfere with parts of neoliberalism while not messing with other aspects of it. But right wing populism also negates national unity by prioritising one part of that nation (e.g. ‘real Americans’) against the rest. It is by definition a divisive project, setting one part of the nation against other parts. It is divide in order to rule.

While many on the left wish that voters would regain their class consciousness, the politics of the moment is whether socially liberal values that have made so much progress in societies over the last fifty or so years are to survive or will be cut back with growing social conservatism. Palestinians are being killed in huge numbers every day not because neoliberalism requires it, but because Israel has a right wing populist government that encourages the denial of humanity to Palestinians in the eyes of so many Israelis.

Of course the left is socially liberal, in some cases more genuinely so than many more centrists who call themselves liberal. But what many on the left find difficult to accept is that the struggle now requires them ultimately to make common cause with more centrist social liberals. While every attempt should be made to get a Labour government to pursue more socially liberal and less authoritarian policies, it has also to be recognised that Labour are never going to abandon trying to attract socially conservative voters, because only by attracting those voters can it stop the election of a right wing populist government.

We had five years of UK economic and political decline, as well as a leader during the pandemic who worried more about what the right wing press thought than the advice coming from scientists, in part because the Labour right prioritised regaining the party over the health of the country. [4] Are we to see a Trump type regime in the UK because the Labour right think its clever to expel the left and ape Reform, and because many on the left refuse to accept that the only alternative to a Labour government is a Trump style regime in the UK?

[1] While it was certain that Johnson would take the UK out of the EU and do the UK serious economic damage as a result, if we had left under Corbyn it would have been on better terms and it wasn’t certain we would leave at all.

[2] Yes, I know that is only something we can ask in retrospect, but we can ask it nevertheless. Equally even a united Labour party would probably have lost in 2019, in part because of mistakes made by its leadership, but that is not a good reason for wishing it to happen. 

[3] The idea that the new left party might attract some potenial Reform voters doesn't seem to show up in polls, so far at least.

[4] A rationalisation for doing this, which I discuss in my posts on tactical voting, is that this represents a short term sacrifice for the greater long term good. But when you spell out this calculus it rarely adds up. For example the short term costs, like leaving the EU's single market and customs union, look pretty long lasting right now and the damage that has caused is also clear.    

 

Thoughts on the unpopularity of different approaches to tax rises

 

Rachel Reeves will almost certainly have to raise taxes in the next budget. That budget is too far away to get into specific tax proposals, but there has already been discussion about how these tax increases should be approached. There seem to be three main options:

1. Raise various specific taxes that it can be argued do not contradict Labour’s pledge not to raise taxes on working people. This was the approach the Chancellor took in the last budget.

2. Break that pledge, and raise one of the main taxes Labour pledged not to increase

3. Embark on a process of general tax reform, modernising and simplifying the tax system and raising overall taxes at the same time. This reform could be designed to appear not to break the pledge.
   
   

Economists have long argued that (3) is overdue. Having a series of Chancellors from Osborne onwards who are more interested in politics than having an efficient tax system has ensured that the UK tax regime is in a bit of a mess, and inefficiency can be an important negative for output and growth. Two recent advocates of (3) are Will Dunn and Martin Sandbu, but the IFS among other experts has consistently argued for changes that move towards (3).

Two aspects of the UK tax system stand out as being in drastic need of reform. The first is council taxes. Council taxes are based on valuations made in 1991, when houses in the North and Midlands were relatively more valuable compared to London and the South than they are today. With revaluation, those tax payers in the North and Midlands would gain, while those in London, the South East and a few areas in the South and East Anglia would lose out.

In addition, council tax is regressive in the sense that it is a much higher percentage of a property's value for low value houses than higher value houses. Making council tax proportionate to the value of a house while keeping revenue unchanged would help low to middle income earners while those at the top of the income distribution would lose out.

The second major anachronism of the UK’s tax system is that we have two forms of income tax: what is called income tax, which is paid by anyone with an income, and personal national insurance contributions (NICs), which are paid by those in work but not by pensioners or landlords, for example. The reason we have the two systems is because of the idea that workers contribute to their pensions. But this is a fiction. Today’s pensions are paid for by today’s taxpayers, not by pensioners when they were working. Our state pension is an unfunded scheme, meaning there is no pension pot which those paying NICs contribute to, and which then pays out as their state pension.

We can see this is a fiction because there is no linkage between what pensioners receive and what employees pay in NICs. The last government cut NICs, but they didn’t cut current or future pensions. Under the last Labour and Conservative governments NICs were raised to pay for more funding for the NHS, not higher pensions

The obvious reform is therefore to abolish personal NICs and raise income tax. However the political reason why this hasn’t happened yet is obvious: a revenue neutral reform would mean those working would generally pay less, but pensioners would pay significantly more than they are currently. Problems like this generate a kind of received wisdom regarding major tax reforms, which is that they are only possible to do when the government has ‘money to give away’ which it can use to compensate losers. According to this received wisdom it is not something you do when the government needs to raise money (or, for MMTers, when the government doesn't want to encourage the Bank of England to keep rates higher).

However Martin Sandbu argues the opposite. He writes

“Every tax tweak produces winners and losers. With the incremental changes pursued by Labour so far, the losers (comfortable pensioners, rich farmland owners, and the disabled poor) have been loud and identifiable interest groups, while the winners (taxpayers and the economy at large) were neither. So the squeaky wheel gets the political grease.

In a comprehensive overhaul, in contrast, most people would gain from some changes and lose from others. If well designed, the gains should be larger than the losses. That would make it much harder to mount targeted, single-issue political resistance of the kind that has made the government back down before.”

In other words, (3) is easier to get away with than (1). I read this as a version of the ‘common pool’ problem. When a farmer loses their tax break on inheritance tax, for example, this matters a great deal to them, but the benefits to every other tax payer is so small and so widely spread they are hardly noticed. I’ve argued a similar problem exists with high pay. With wholesale tax reform there are clear winners and losers, and so the tax change has a clear group of people fighting for it as well as a clear group of people fighting against it.

These two examples of tax reform discussed above illustrate the merits or otherwise of Sandbu’s argument quite well. A Labour government might be prepared to see a redistribution of council tax that favoured the North relative to the South, and the poor relative to the rich. However no government would be happy landing pensioners with higher income tax, by an amount that would in financial terms make the winter fuel payment look like peanuts. The two obvious reasons are that pensioners are more likely to vote than other age groups, and pensioners predominantly read newspapers that produce anti-Labour pro-populist propaganda.

There is a common problem with both approaches (1) and (3). They make any public debate about fairness. With (1) it is why should this particular and generally small group get hit, with as I noted here the focus in the media on the most sympathetic hardship cases. Sandbu is right to point out that the question ‘who should pay higher taxes instead’ is rarely raised. With (3) and in the absence of expensive compensation large groups of people will be worse off, and almost everyone in those groups will think that is unfair and will think any beneficiaries of the reform don’t deserve to be better off.

The big advantage of (2) is that pain is more evenly spread, so the focus of the discussion moves from fairness to become a question of do we want to pay for better public services. I’ve argued before, following the experience of Brown’s NIC increase under the last Labour government, that this is a debate Labour can win. But the case has to be made, otherwise the media will just talk about higher taxes required to fill black holes which pleases no one.

While reforming council tax would be both economically desirable and politically possible, I suspect Labour will avoid any major tax reform. This Prime Minister and Chancellor just don’t seem like the kind of politicians who would undertake politically risky major changes of this kind. They have also missed two good opportunities to break their pre-election tax pledges, so it seems unlikely they will do so now unless they run out of other options. So I suspect we will see a repeat of last year’s budget (1 above), with specific taxes raised on ‘non-working people’. That makes it all the more likely that the budget will be seen as more fiscal firefighting to fill black holes rather than a budget about expanding public services, and so is unlikely to be any more successful politically than what has gone before.

Ancestry and Immigration in the US and UK

 

The United States is now being run as a dictatorship. That this would happen was pretty clear the moment Trump won his second term, and the Republicans won majorities in both the Senate and House. There are essentially three reasons for this. First, Trump and the Republicans have taken control of the Supreme Court, and that Court is in the process of neutering attempts by lower courts to stop Trump exceeding his authority as President. To do this they are making some very strange legal judgments: essentially the law is being rewritten to legalise a dictatorship. Second, Congress and particularly the House under the Republicans have made no attempt to oppose Trump, even when that involved Trump taking powers away from Congress. Third, Trump is much better organised than he was during his first term, both in terms of being able to place yes men or women in key positions, and also because he now has an organised movement, MAGA, behind him.

The US now has many of the ingredients of a fascist state. Large sections of the population are at risk of being kidnapped by the state, imprisoned and deported to a random country (sometimes to another prison) without due process. Tourists risk being detained for long periods. The Immigration and Customs Enforcement agency is set to become the highest-funded law enforcement agency in the federal government. The Trump administration is seeking ideological control of US universities, and has already largely tamed what was once called the independent media. Opposition politicians are assassinated and Republican politicians use the occasion to score political points. The government supplies Israel with the weapons and almost complete political backing to what more and more people are describing as a genocide against the Palestinian people, and sanctions international judges and agencies that call this out.

An earlier version of this post was entitled ‘US democracy is now in Trump’s hands’. It was intended to convey not only the extent of Trump’s ability to end US democracy, but also that democracy could still survive because of his obvious incompetence. I now think that is a little too pessimistic. If the Democrats can win back the House in 2026 (winning back the Senate is much less likely) by a sufficient majority, then it could become the centre of an effective resistance to Trump. For that reason, as those elections approach we will see more attempts by Republicans to ensure that they are not fair. These attempts have already begun, and merely represent a scaling up of long standing Republican gerrymandering.

What I wanted to do in this post was highlight one particular current on the US far right (i.e. the Republican party), and link it with developments on the far right in the UK (i.e. Reform and the Conservatives). Part of MAGA thinking is straight political and economic nationalism: a wish to enhance America’s military and economic power. The latter has a strong nostalgic element to it: a fondness for manufacturing jobs, and when there was more economic self-sufficiency and less globalisation. Another key element in MAGA is what some call a return to ‘traditional values’ and which I will call social conservatism.

Part of this can be simple racism, but it is more general than that. It involves antagonism to minorities based on sexual orientation as well as race, nationality or religion, and returning to more traditional gender roles, for example. It involves returning to the social values of the past, sometimes quite distant past. However social conservatism has psychological foundations that go beyond nostalgia for past social values, and are related to wanting conformity (disliking ambiguity) and having a closed rather than open outlook.

This tends to make social conservatives identify with a particular group within society, and feel threatened or uncomfortable with those outside that group. That makes them not just nationalistic, but also antagonistic to nationals who are not like them. They are attracted to right wing populists not just because they like authoritarian figures, but also because those figures talk about, for example, ‘real Americans’ rather than ‘all Americans’. The more far right politicians can focus public discourse on these minorities as outsiders, and portaying them as a threat (calling them criminals etc) the more successful they will become at attracting the votes of social conservatives.

As John Ganz points out, this viewpoint is very different from words set out in the preamble to the US Declaration of Independence, whatever meaning they might have had at the time they were written.

“We hold these truths to be self-evident, that all men are created equal”

To be very simplistic, I suspect most social liberals believe in that statement even though they don’t always act as if they do, while many social conservatives do not believe in it at all.

But how to define ‘real Americans’. Race is an obvious way, religion may be another, particularly for evangelicals. Geography may be another, with small town agricultural America eulogized and large cities feared. What I find interesting about some in the US government and MAGA leadership is that they are promoting ancestry as the key to defining who ‘real Americans’ are, and crucially who are not real Americans.

Vice President J.D.Vance has for some time pushed the view that it is ancestry that defines true Americans. He talks of past generations being buried in US soil, and of a feeling of homeland felt ‘in their bones’. This sounds very similar to Matt Goodwin in the UK, who sees being English as about being able to trace your roots back generations to people who lived here. For both, a piece of paper giving citizenship is not going to suffice in defining nationality. For other right wing politicians expressing similar sentiments, see Ben Ansell here, or Sam Freedman here

Is this just code for skin colour? I’m not sure it is. After all, Goodwin himself and the far right press in the UK seem happy to talk about the dangers of white people becoming a minority in the UK at some date in the future. The days when racist sentiments like this could not be expressed openly have long gone. Instead the focus on ancestry can be seen as representing a ‘blood and soil’ type of nationalism that has a long and often terrible history. It fits with seeing the rural as representing the nation and cities as more alien. Crucially, it is exactly the kind of thinking that fits with an obsession with immigration.

If nationality is all about ancestry, then immigrants by definition can never become true nationals. They automatically become outsiders for those with socially conservative views. As immigration is increasingly viewed as inherently bad in so much public discourse in the broadcast media, this plays into the hands of those who would promote an ethnic type definition of nationality. This dehumanisation has already been achieved for asylum seekers, where the manufactured term ‘illegal’ has provided an additional way of ostracising them, and where the broadcast media showed little inclination to resist using that term.

Is Goodwin and Jenrick’s focus on ancestry just another example of the UK far right copying their US counterparts? Maybe, but it certainly involves a focus on ethnicity that only a few years ago would have been considered beyond the pale to a Conservative party led by Rishi Sunak. Moving the definition of outsiders away from just race or religion towards ancestry may have advantages for far right politicians, for two reasons. First, most people in the UK do not see race or religion alone as barriers to citizenship or being English. Second, a key part of Brexit was about excluding Europeans, who could be very white and Christian. [1]

Increasingly the Trump administration in the US is seen as a template by the two major far right parties in the UK, and much of the UK press. Newly elected Reform councillors attempt to end diversity roles even where none exist. Reform tries to mimic Musk’s DOGE. Both parties have become anti-science with their antagonism to achieving net zero. The Conservatives want to increase deportations.The converse of this, which no one should be shy of pointing out, is that this amounts to copying the policies of a fascist administration.

There is a good reason why Reform don’t like being called a far right party. It is the same reason that Trump denies he is a fascist. In both cases the labels convey much of what these politicians are really about, but which they would rather hide from public scrutiny. With their adoption of blood and soil descriptions of what it means to be English or American, we have one more parallel between them and past dictatorships that they really don’t like being compared to.

[1] In contrast, for a country like the UK, those from ex-colonies who can trace their ancestry back to the mother country can still be regarded as English or British.