Coming together? I don’t think so, not unless it’s coming together to the realisation we’re screwed.
Theresa may signs letter to trigger article 50 asking UK to ‘come together’.
What would Britain be like if it were 100 people? #brexitday pic.twitter.com/DjnKJdsLVT
— Channel 4 News (@Channel4News) March 29, 2017
A recent article in the NYTimes asks: “Is America’s Military Big Enough?”
Trump has proposed a $54 billion increase in defense spending, which he said would be “one of the largest increases in national defense spending in American history.”
U.S. defense spending
Source: Center for Strategic and Budgetary Spending (in 2017 dollars) with POTUS changes marked
Past US administrations have increased military spending, but typically to fulfill a specific mission. Jimmy Carter expanded operations in the Persian Gulf. Ronald Reagan pursued an arms race with the Soviet Union, and George W. Bush waged wars in Iraq and Afghanistan.
Mr. Trump has not suggested a new mission that would require a military spending increase which kind of begs the question about why. Erin M. Simpson, a national security consultant, called Mr. Trump’s plans “a budget in search of a strategy.”
“Our current strategy is based around us being a superpower in Europe, the Middle East and Asia-Pacific,” said Todd Harrison, the director of defense budget analysis at the Center for Strategic and International Studies in Washington. “We’ve sized our military to be able to fight more than one conflict at a time in those regions.”
Some of Mr. Trump’s statements have suggested a reduced footprint for the United States military.
He criticized America’s role as a global military stabilizer. Last month, in his first address to a joint session of Congress, he said the United States had “defended the borders of other nations while leaving our own borders wide open. He also called for defusing tensions with Russia, the United States’ chief military competitor. But he has also taken positions that point to a more aggressive military posture. He has advocated challenging China and Iran more directly. He wrote on Twitter that America must “greatly strengthen and expand its nuclear capability.”
These statements have left analysts unsure about the role Mr. Trump wants the United States military to play in the world.
The United States has approximately 1.3 million active-duty troops, with another 865,000 in reserve, one of the largest fighting forces of any country.
The United States also has a global presence unlike any other nation, with about 200,000 active troops deployed in more than 170 countries. Many are stationed in allied nations in Europe and northeastern Asia. Mr. Trump has criticized these alliances, saying the United States does too much to defend its allies. It seems unlikely, then, that Mr. Trump intends his spending increase to bolster those deployments.
“The general concept of readiness often happens without a conversation about what the forces are for,” said Benjamin H. Friedman, a research fellow at the libertarian Cato Institute in Washington. “They don’t know exactly what they want to do, except that they want a bigger military.”
Mr. Trump wants to increase the number of active-duty military personnel in the Army and Marine Corps by about 70,000 — a rise of about 11% over the current total of 660,000.
The United States increased troop levels in the early 2000s for the wars in Afghanistan and Iraq, but has scaled down as it has withdrawn from those conflicts. Mr. Trump has been critical of those missions, suggesting that he does not plan to ramp up operations in either conflict.
Gordon Adams, a former senior White House national security budget officer, said, “Unless you decide you’re going to war — and going to war soon — nobody keeps a large military.” Arguably a large military creates it’s own problems. It needs to be paid, fed and watered and kept occupied. Large groups of young fit men need active engagement if they’re not to become a social menace.
The United States has around 2,200 fighter jets, including about 1,400 operated by the Air Force. Mr. Trump wants to add at least 100 more fighter aircraft to the Air Force.
Analysts informally categorize fighter aircraft by “generations” and there is a broad consensus that American aircraft are more advanced than those of other nations. The military already has plans to spend an estimated $400 billion on new F-35 fighter jets, a fifth-generation plane. But Mr. Trump has not provided any details on which programs he would expand.
Because different warplanes serve different roles at different costs, it is difficult to know what problem Mr. Trump is trying to address by adding 100 fighter aircraft.
The United States Navy has 275 surface ships and submarines. Mr. Trump wants to increase that number to 350, including two new aircraft carriers.
The new carriers would add to America’s already overwhelming advantage: More than half of the world’s 18 active aircraft carriers are in the United States Navy.
The world’s 18 active aircraft carriers, by country
In early March, Mr. Trump said that the United States Navy was the smallest it had been since World War I. Most analysts reject this comparison. Technological advances mean that individual ships are far more powerful and versatile than they were a century ago, allowing a single ship to fulfill capabilities that would have once required several ships.
Mr. Trump has not specified new missions that would require additional carriers, which could take years and billions of dollars to build. Expanding the fleet size could come at significant cost. The Congressional Budget Office estimated that building a fleet of around 350 ships could cost about 60 percent more per year than average historical shipbuilding budgets, with a completion date of 2046.
But a larger fleet could help reduce pressure on the Navy, according to Brian Slattery, a policy analyst at the Heritage Foundation, a conservative think tank. “They’ve had to push those deployments longer and longer because the Navy needs to be in all the same places in the world, and there are fewer ships to do it,” he said.
Others argue that the Navy’s resources are stretched because they have too many deployments and that a more modest strategy around the world would alleviate the strain. “To the extent that they are not in great shape, it’s because they have too many missions,” Mr. Friedman said.
After Mr. Trump tweeted his pledge to expand America’s nuclear capability, he told the talk-show host Mika Brzezinski of MSNBC: “Let it be an arms race. We will outmatch them at every pass and outlast them all.”
He has not specified whether he hopes to build more warheads or develop new weapons systems for delivering them.
The United States and Russia possess the vast majority of the world’s nuclear warheads, although both have reduced their arsenals under a series of treaties. Mr. Trump criticized the latest of those treaties, a 2010 agreement with Moscow called New Start, as “just another bad deal,” according to Reuters.
He has not clarified whether he will consider abrogating the treaty, which could open the way for the United States and Russia to expand their nuclear arsenals and capabilities.
Analysts say Mr. Trump’s call for a nuclear “arms race” could potentially cost billions. But as with other spending plans, he has not articulated a strategic goal.
While Mr. Trump has said that he wants to defeat the Islamic State, he has not explained how increasing the size of the military would accomplish that.
Mr. Trump’s focus on big-ticket items is mainly “useful in more conventional military campaigns,” said Michael C. Horowitz, a University of Pennsylvania professor who studies military leadership. “The kind of investments you would make if you were primarily focused on counterinsurgency campaigns are very different.”
Mr. Trump’s announcements appear to emphasize optics as much as strategy, Mr. Horowitz said. “To the extent that tangible pieces of military equipment symbolize strength, those are things that I think the administration is interested in investing in.” He appears more interested in buying bright and shiny toys for “show and tell”, more money spent to demonstrate size and virility?
One of the worries is that having invested all of this money, potentially buying a lot more kit, the president might feel in need of a war or similar in order to play with these new shiny toys.
In many respects, the vote to leave the EU was paradoxical. It was a vote for change that made positive change harder to achieve, but change of some sort much more likely. First and foremost, our economy is in need of deep, fundamental change. During the referendum, Remain campaigners argued that things were fine when they were not and, since the result, Brexiters have argued that things will be fine when without serious change they will not be.
Even now, some Remain voters have retreated into the comforts of pointing to a base and deceitful campaign by the Brexiters, rather than seeking to define or to solve the deeper problems that led to the vote against the status quo.
At the heart of both the Leave and Remain failure is an inability to identify, acknowledge and understand the reality of daily life for many people and communities in modern Britain, the refusal to acknowledge that the current economic model is not working for many people.
It is argued that immigration has become such an important issue precisely because free movement of labour is the crucial enabler of the low skill, low productivity, low wage economic model that has been imposed on much of the country. It is this economic model – combined with the cultural and identity challenge of large-scale immigration – that has created such discontent with the status quo.
But of course, freedom of movement has had a different response in the parts of the EU. The UK’s move towards a low skill, low productivity, low wage economic model is a very British interpretation of freedom of movement, not an inevitability. leaving the EU, is unlikely to change an economic model that the British have chosen to follow. We are now told by government representatives that immigration is unlikely to fall, unlikely in fact to change very much at all, as a result of brexit.
The version of brexit that we are heading towards is likely to deliver “more of the same” rather than addressing underlying problems within our economy.
There is of course nothing progressive about declining to invest in skills in this country, while plundering poor countries of nurses or doctors or carers and then approaching immigration as if people were commodities to be bought up on the open market.
But when challenged about the costs of Brexit, leading Leave figures continue to argue that the UK can enjoy all of the benefits of membership, such as frictionless, tariff-free access to the single market, while bearing none of the burdens. When asked about the challenges, they respond with false reassurances that everything will be fine, and nostalgia for our past, as if this is a prescription for the future.
Brexit is the summit of their ambitions for Britain, not the starting point to solve our future challenges. Indeed, it has never mattered to the Brexit campaign leaders that leaving the EU will make it harder to confront Britain’s economic and social problems.
Theresa May offered her analysis of the problems facing Britain on the steps of Downing Street moments after kissing the Queen’s hand in July. Chancellor Philip Hammond offered an “upbeat assessment” of the British economy. Just like his predecessor, Hammond chose to focus on the top-line numbers while ignoring the deeper problems below the surface.
Relatively good headline growth figures mask a more troubling story about the fundamentals of the British economy. A few quarters of reasonable economic growth serve only as a rebuke to the more alarmist predictions of Remain campaigners.
There are multiple symptoms of a distressed economy, many of which stretch back for decades. Brexit is not the cause of these problems, but it should force us to face the diagnosis. We need a new national economic policy that is pro-growth and pro-economic justice.
The first problem identified is one of investment. Investment is the engine of the economy, driving wealth and prosperity now and in the future. For a quarter of a century, the proportion of the UK economy dedicated to investment has been declining. We lag behind comparable countries in the west, and miles behind fast-growing economies in the east.
Businesses in Britain are failing to invest in order to create good quality jobs. Brexit compounds the challenge by undermining two central parts of the investment case in Britain: political stability and unfettered access to the single market of 500 million people.
Cheap and plentiful labour from across the European Union has led firms to add more workers at low cost rather than to invest in plant, machinery or new forms of automation that drive up productivity. Some British corporations appear to have given up on investment, preferring to return more cash to shareholders than to invest in the future. This has led to the rather astonishing situation where British companies have become net savers rather than borrowers.
The second major problem is poor productivity. Low investment leads in turn to low productivity, and thence to low wages. As Nobel Prize-winning economist Paul Krugman observed: “Productivity isn’t everything, but in the long run it is almost everything.” Since the financial crisis, productivity growth in the British economy has stalled, leading to a stagnation in living standards for the majority of households.
The third problem is trade. It is all well and good to aspire to be a “great global trading nation” but today we have a massive trade deficit. If countries are queueing up for a free trade deal with Britain – and it’s not clear that they are – it is because we’re an importer, not an exporter. The last time we sold more to the rest of the world than we bought was in the mid-1990s, and sustained surpluses have not been achieved since the late 1970s and early 1980s.
Our enormous trade deficit means that the British economy is dangerously dependent on the “kindness of strangers”, who we need to sustain investment in our economy.
The difference between what we sell and earn from the rest of the world and what we buy from it has grown to 6% of the entire British economy, financed by expanding debt and selling off British assets. Were it not for the sale of ARM Holdings, Britain’s largest tech company, to Japan’s SoftBank for £24bn in July, the position would be even worse.
The fourth problem is inequality between households. In the 1980s, the gap between the richest and poorest in society accelerated rapidly, where it has stubbornly remained ever since. The richest 10% of households have incomes that are 11 times those of the poorest 10%; in France and Germany, the difference is seven-fold, and in Denmark it is five-fold.
These differences accumulate over time, meaning that there is an enormous gap in wealth as well as income.
The fifth problem is the profound regional imbalance of our economy. London is the wealthiest region in Europe and, together with the south-east of England, accounts for 40% of national output. Meanwhile, all other regions of the UK lag behind most other regions of northern Europe. Outside London and the south-east, every other region has below average productivity.
The most striking fact about these problems is that they are all of long standing, in some cases going back three or more decades. They are not temporary weaknesses in an otherwise sound model. they are not due to membership of the EU. They show that fundamental reform of the British economy is necessary.
As well as facing up to the deep and persistent problems in the economy today, we need to prepare ourselves for a decade of disruption. The changes on the horizon have the potential to reshape our economy and society – for good or for ill, depending on the quality of our response.
During the referendum campaign, there was no articulation of the challenges that we face in the decades ahead and why and how they might be easier to confront in partnership with our neighbours than alone. With better leadership, the EU might have been transformed into a safe harbour in an era of profound challenges from globalisation.
During a campaign that revealed the public’s appetite for change, Remainers had fought an uninspiring campaign for the status quo. There was no attempt to make the positive case for international co-operation. No account was given of how Britain had shaped the EU, nor any roadmap offered for how we might influence its future to better respond to the big drivers of change.
But that boat has sailed.
The first driver of change is what has been described as the fourth industrial revolution: exponential improvements in new technologies. Accelerating computing power, machine learning and artificial intelligence, automation and the “internet of things” have extraordinary power to utterly reshape how we live and work, to reorganise our social, economic and political institutions and to redistribute power and reward in society.
Without deliberate policy, technological change is likely to increase the share of rewards to those who have capital, whilst diminishing the rewards that go to workers for their labour. The rich will get richer. Moreover, the rewards for the highly skilled will continue to accelerate whilst diminishing for everyone else.
The second big driver of change is demographics. Our population will continue to grow, with the UK set to become more populous than France by 2030, and exceeding Germany’s population by 2040 to become Europe’s biggest country. At the same time, the population is set to age significantly, with a 66% increase in the number of people over the age of 75. With this change comes huge challenges in housing, health and social care. Between now and 2030, the working age population will grow by just 3%, while the number of people over 65 will increase by one third.
The continuing shift in economic power eastwards is the third driver of change. By 2030, emerging economies will have emerged: they will account for half of global output, up from a quarter today. Nearly 60% of global middle-class consumption will come from Asia, and 17 of the top 50 cities by GDP will be in China. With American leadership of the post-war global order increasingly in question, the shape of global institutions is likely to shift considerably.
The final driver of change is the new geological era we appear to have entered, where human activity has become the dominating influence on nature.
Today, we are consuming resources at 1.5 times the ability of the earth to replenish them. This requires a radical economic response in the coming decades to mitigate and reverse environmental damage. The transition towards a low-carbon world is crucial to the vision of an economy fit for the future.
There are two possible broad choices to be made in responding to these changes.
One is to embrace greater international co-operation, act in the belief that a problem shared is a problem halved; that just as capital flows and firms operate across borders, so there will be a greater premium on nation states working together in the future. That argument – the positive case for the EU – was never really put to voters. Exiting the EU makes this path significantly harder.
The other choice is to argue that the extraordinary pace of change means that it will be agility – the ability to respond rapidly and flexibly to change – that will matter. If this is true, then Britain might be better placed to prosper outside the clunky framework of European regulations and institutions. This argument was only ever made in the abstract, devoid of any substantive actions.
Yet it is precisely in their response to the challenges of the future that Brexiters reveal themselves. Lacking any substantive answers, they respond by attempting to shut down debate by condemning “remoaners”. They do not even attempt an argument that future success will be determined by the agility that Brexit might create, let alone offer meaningful ideas or proposals. In truth, their version of Britain’s future is a nostalgic past that never really existed.
We are living at a moment when an old economic settlement is in crisis, but a new settlement has yet to be formed.
The politics of the future will belong to those leaders who are prepared to face up to our present problems and future challenges – and to articulate a new destination for our economy and society. As our politicians navigate the Brexit storms, they would do well to keep an eye on the new horizons which will come to define the new era of British politics.
Sometimes, most times these days, I’m left who brexit is for exactly. If you voted “remain” clearly it’s not for you so that’s 48% population screwed.
If you voted because of immigration, the recent White paper and comments from government minister have made clear that numbers might well rise, so that’s the 52% disappointed.
If you voted to take back sovereignty, well the shenanigans of the Tory government trying to avoid parliamentary scrutiny, have certainly disappointed, and that’s the two main reasons for anyone who voted “leave” rendered totally meaningless.
In the meanwhile, stuff people really want to happen like trade and looking after citizens located outside their place of birth, have long been sacrificed.
As Britain heads for Brexit, most think a good deal is elusive and free trade is more important than border controls https://t.co/sBnPelOWoS pic.twitter.com/1eVESgvEPq
— The Economist (@TheEconomist) March 23, 2017
Another week another pointless argument started with America’s allies by it’s president.
The German defence minister, Ursula von der Leyen, on Sunday rejected Donald Trump’s claim that Germany owes Nato and the US “vast sums” of money for defence.
“There is no debt account at Nato,” Von der Leyen said in a statement, adding that it was wrong to link the alliance’s target for members to spend 2% of their economic output on defence by 2024 solely to NATO.
“Defence spending also goes into UN peacekeeping missions, into our European missions and into our contribution to the fight against [Isis] terrorism,” Von der Leyen said.
Trump, who was spending the weekend at his Mar-a-Lago property in Florida, said on Twitter on Saturday – a day after meeting the German chancellor, Angela Merkel, in Washington – that Germany “owes vast sums of money to Nato & the United States must be paid more for the powerful, and very expensive, defense it provides to Germany!”
His words prompted criticism, also published on Twitter, from a former permanent representative to Nato under President Obama.
Ivo Daalder, permanent representative from 2009 to 2013, wrote: “Sorry, Mr President, that’s not how Nato works. The US decides for itself how much it contributes to defending Nato. This is not a financial transaction, where Nato countries pay the US to defend them. It is part of our treaty commitment.
Trump has urged Germany and other Nato members to accelerate efforts to meet Nato’s defence spending target.
Von der Leyen said everyone wanted the burden to be shared fairly and for that to happen it was necessary to have a “modern security concept” that included a modern Nato but also a European defence union and investment in the United Nations.
German defence spending is set to rise by €1.4bn ($1.5bn) to €38.5bn ($41.4bn) in 2018 – a figure that is projected to represent 1.26% of economic output, the finance minister, Wolfgang Schäuble, has said. In 2016, Germany’s defence spending ratio stood at 1.18%.
During her trip to Washington, Merkel reiterated Germany’s commitment to the 2% military spending goal.
NATO is actually divided into three different budgets:
The USA is indeed the main contributor, around 22%. Then comes Germany (14.5%), France (11%) and UK (10.5%).
But it’s important not to conflate the money contributed towards Nato with the overall military budget of a country. The US spends a huge amount on it’s military, an amount set to rise under it’s new president according to his recently announced budget. This is a political choice, one each country is free to make or not.
A recent Wall Street Journal article conflated NATO budgeted expenses with member’s military expenditure the data can be found easily on the NATO database (Nato funding).
But of course spending a great deal on your own military escapades, does not necessarily make you useful to the defence of your allies
Just remember the huge cost of the American interventions in Afghanistan and Iraq. This military cost is included in US military expenditure, though obviously both Germany and France, two major contributors to NATO, refused to participate in the intervention in Iraq and did not pay a dime on it.
The USA has a large military budget. It is a significant part of how the country self-identifies. It’s a political choice.
By the end of this month, perhaps as early as next week, the prime minister will have signed and dispatched a letter notifying the European Council of Britain’s decision to leave the European Union through the provisions of article 50 of the Lisbon treaty. There will be no turning back. The most serious negotiation in our post-war history will commence. It must conclude within two years – unless the remaining EU member states determine that the negotiating period can be extended. It will shape our new settlement for decades to come.
It has been suggested that there is a 50:50 chance that no deal will be struck and the UK will bounce out of the EU onto WTO rules only. The UK government as represented by David Davis and Boris Johnson could not even bring themselves to agree as to whether any contingency plans for WTO rules were being in put in place on Sunday.
At this juncture in our history, we face a crucial choice. Will this be a moment for national renewal, where we courageously confront our problems, or will we simply attempt to muddle through? Nothing would be more British than the latter – and that would appear to be where both sides of the Brexit divide are taking us. I am now entirely convinced that whilst we are where we are, none of the leading “out” campaigners currently in government, and certainly none of those in government who campaigned to remain, believe that brexit is going to be good for the country.
As time has passed, committed brexit campaigners such as David Davis and Liam Fox, have come face to face with the many many complexities staring them in the face as part of the negotiations, not least of which is managing the still rand expectations of some Tory back-benchers.
So if the government is increasing aware of the looming disaster, and is with the best intentions set upon mitigating the disaster whilst delivering on the referendum mandate, what happens next?
We muddle through. We pay the price for a poor decision to call a simple referendum on a complex questions after years of demonising and blaming the EU for UK government mistakes and unpopular decisions.
But there is also a case for the other approach – for using Brexit as a moment to bring about the change that Britain needs. If we are to embark on fundamental changes, we must first frankly acknowledge our problems. The rancour over the referendum, plus the fundamental ambivalence by the people who won the vote makes the acknowledgment of problems near impossible but it is the only way to make something positive, to turn the sow’s ears into silk.
There was an excellent article in the Spectator by Matthew Parrish that I have decided to take to heart. I have decided to enjoy brexit going forward. This does not mean I agree that it was a good idea, in any way shape or form. I think we’re fucked. I genuinely believe that we have taken a turn in the wrong direction and millions of British citizens will be poorer as a result.
But that’s not on me. That’s entirely the responsibility of those people who voted “leave” and I’m not one of them.
So when the discussions turn to the rights or otherwise of British citizens living in the EU, I am calm. I have done my best for them. I voted “remain” to maintain their rights so the current turbulence, the lack of security and serenity is entirely due to “leave” voters.
Maybe all of the many many pitfalls and pratfalls I see opening up in front of our country will never come to pass. It’s possible that pessimism is overstated.
But each and every time something goes wrong, I can clearly and easily acknowledge the fact that this is not my doing. I did not vote for this. And if you did, well shame on you because you were definitely warned.
I am increasingly taken with the idea of a Universal Basic Income or benefit scheme – the payment of a regular and guaranteed income to a country’s citizens as of right – despite the scoffing of many of my friends from both the right and the left
Worldwide, enthusiasm is beginning to gather pace. Trials are being planned in several countries while Silicon Valley incubator Y Combinator is to test a scheme in California.
In the UK, the idea is backed by the Green Party and the SNP, is being seriously examined by the Labour Party, and has support from the Royal Society of Arts and the pro-market think-tank, the Adam Smith Institute.
Here in the UK, growing interest is being driven by two deep-seated structural trends: the growing fragility of the jobs market and the inadequacies of the existing, increasingly punitive, intrusive, and patchy benefits system. With its built-in income guarantee, a universal basic income (UBI) would help relieve both problems.
It would bring a more robust safety net in today’s much more precarious working environment while boosting the universal element of income support and reducing dependency on means-testing. A UBI also offers a way of providing income protection as the robotic revolution gathers pace, and could be used to help ensure that the possible productivity gains from accelerated automation are evenly shared rather than being colonised by a small technological elite.
Despite these benefits, the idea remains highly controversial.
Although support spans the political spectrum, the Right and the Left embrace very different visions of a UBI. Left supporters view such a scheme as part of a strong state, and a recognition that all citizens have the right to some minimal claim on national income. Supporters from the libertarian right, and some Silicon Valley enthusiasts, in contrast, favour a basic income as a way of achieving a smaller state.
Some critics view UBI supporters as utopian zealots for a new workless nirvana. Yet one of the central merits of a UBI is that it is non-prescriptive. It offers more choice between work, leisure (not idleness), and education, while providing greater opportunity for caring and community responsibilities. Under a UBI all lifestyle choices would be equally valued. It would value but not over-value work. A UBI would both acknowledge and provide financial support for the mass of unpaid work in childcare, care for the elderly, and voluntary help. By providing basic security it would offer workers more bargaining power in the labour market.
A UBI would, over time, change behaviour, and the results of the national pilots will provide important new evidence of the likely impact. Some might choose to work less, take longer breaks between jobs or be incentivised to start businesses. Some might reject low paid, insecure work leading to a healthy rebalancing of wage structures. Some might retrain or devote more time to personal care or community support, in many cases producing more value, if currently unrecognised, than paid work.
The net effect is more likely to promote than weaken the incentive to work. Indeed, incentives will be stimulated by lowering dependency on means-testing while tackling poverty would become less dependent on the ‘work guarantee’.
But can a UBI be made to work?
Critics claim that a UBI is simply not feasible because it would cost too much. Yet new evidence suggests that it could be made progressive and affordable. One recent report for the think tank, Compass, modelled several different alternatives to see how affordable and feasible such a scheme might be. These simulations show that a full and generous scheme, one that swept away the existing system of income support in one go, would be either too expensive or create too many losers. This is because the current benefits system, partly because of its reliance on means testing, is able to deliver large sums to some groups.
However, our study also found that a ‘modified’ scheme, one that still provided a universal and guaranteed income, albeit at a moderate level, and that initially left much of the existing system intact, would be feasible. Such a scheme – while not a silver bullet – would offer real and substantial gains: a sharp increase in average income amongst the poorest; a cut in child poverty of 45 per cent; and a modest reduction in inequality, all at a relatively modest cost of £8 billion. This model would also strengthen the universal element of the current benefit system, thus reducing the reliance on means-testing.
This approach is not utopian – it is grounded in reality. It offers a piecemeal approach to reform, not wholescale replacement. Such an approach reduces the risks of big bang reform, while offering flexibility for gradual improvements over time. It could, for example, start with a UBI for children. This is evolution, not revolution.
Far from encouraging idleness, a UBI also offers greater flexibility in how to balance work-life commitments in a much more uncertain world and the gradual casualisation of much of the workforce. And far from promoting the end of work, a UBI would aim to tackle the greater risks of a weakened labour market, not aim to replace work. With opportunities likely to become ever more fragile, it is time that policy makers gave much more serious consideration to how a UBI scheme could be made to work.
One of the biggest claims made by the Brexit campaign was that we could leave the EU and in doing so save ourselves £350 million per week that could be spent on the NHS instead. Despite being thoroughly debunked at the time, some people have clung to this “promise” and were somewhat vocal in their displeasure when campaigners such as Nigel Farage backtracked the day after the referendum.
Michael Gove, another out-campaigner and currently campaigning to be the next prime minister, has suggested he will pay £100million per week across to the NHS. And although significantly lower than the campaign promise, this remains a significant sum of money.
Is this new promise worth any more than the first?
First think about where the original figure came from. The sum of £350m a week is based on the Treasury’s estimation of the gross amount the UK contributed to the EU last year, which was £17.8bn, or £342m a week.
This figure is purely hypothetical because since Margaret Thatcher negotiated Britain’s rebate in 1984, the UK has been required to pay significantly less than the 1% of national GDP that member states are normally expected to pay into the EU’s collective budget.
The same Treasury figures clearly show Britain’s EU budget rebate last year was £4.9bn. Deduct that from £17.8bn and you get £12.9bn – or £248m a week. This is the sum now recognised by the independent fact-checking organisation Full Facts.
Plus, as Prof Ian Begg of the London School of Economics notes, the rebate is deducted before any payment is made, so it was simply wrong – and arguably deliberately untruthful – to say Britain “sends the EU £350m a week”.
The Treasury actually remits around £100m less a week.
Even the lesser weekly sum of £248m does not fairly reflect the cost to the UK of EU membership, because it ignores EU spending on the UK. Last year, the Treasury estimated these receipts from Brussels at £4.4bn, money spent mainly in the private sector but also distributed by public bodies, to farmers and poorer parts of the UK, such as Cornwall and south Wales, both of which voted “Leave”.
As pointed out by InFacts the EU also injects money directly into the UK’s private sector, for example, for scientific research through programmes such as Horizon2020. The most recent figure for this, from 2013, is £1.4bn.
Deduct both the rebate (£4.9bn), which is never actually paid, and the money that is paid but sent back (£5.8bn), from the gross £17.8bn annual “membership fee” and you arrive at a net figure of £7.1bn.
This equates to £136m a week, less than 40% of the amount splashed on the battles but still enough to make good on Mr Gove’s promised £100 million, unless …
Both the Treasury and the Bank of England are now warning of difficult economic times ahead due to the market uncertainty because of the Leave vote.
The size of the UK annual economic activity was £1,800 billion in 2015. Just a 1% economic change is £18bn a year or £346 million per week.
So if as a result of the referendum, the economy contracts by just 1%, we will be £210million out of pocket. Forecasts before the referendum ranged from a contraction of 4-8% to the economy.
At this stage it will be a struggle to maintain the amount of money we are currently paying towards the NHS never mind increase it.
