Preview: Dear Mr Osborne, Here's your Plan B

World leading economists present the Chancellor with alternatives to austerity.

In this week's magazine, nine of the world's leading economists -- including a Nobel prize winner, one of the Chancellor's own advisers and three former members of the Monetary Policy Committee (MPC) -- write open letters to the Chancellor, George Osborne, urging him to adopt alternative and radical policies to stimulate growth and create jobs.

 

Christopher Pissarides: Cut VAT back to 17.5 per cent

Professor Christopher Pissarides holds the Norman Sosnow Chair in Economics at the LSE and in 2010 was awarded the Nobel Prize in Economics. Writing exclusively for the New Statesman, he tells the Chancellor: "I know you worry about the deficit but I think that you worry about it too much. . . The markets are clearly telling us that you are too worried about the deficit". Pissarides accuses Osborne of being "inflexible" and says the cuts could "slow down the recovery and may even cause a double-dip recession". In his letter to the Chancellor, the Nobel laureate explains the need for a fiscal stimulus to boost employment:

I don't think reducing the top income tax from 50p to 40p in the pound will create many more jobs . . . Cutting VAT back to 17.5 per cent, or reducing National Insurance contributions for those on low incomes, will revive job creation and reduce unemployment. Deficit reduction is best done with spending cuts when the economy is recovering, not with higher taxes in a downturn. There is enough time in the life of this parliament to achieve your deficit-reduction objective with a policy that is friendlier to job creation.

 

Sushil Wadhwani: print money for the public

Economist Sushil Wadhwani, a member of the Bank of England's MPC from 1999 to 2002 and founder/chief executive of Wadhwani Asset Management, outlines his own radical proposal for stimulating consumption and growth, following the latest round of quantitative easing. He tells George Osborne:

We need to ensure the extra money leads to higher demand. One good place to start is with the textbook example of printing money to finance consumption - sending every adult in the country a voucher that can be spent in the next three months. Allocating £300 to each of Britain's 50m adults to spend on goods and services would cost £15bn, or 20 per cent of the £75bn created by the new round of QE. (In 1999, the Japanese government distributed $175 vouchers to the public - 99.6 per cent of them were spent within the six-month limit.) Perhaps you can persuade the MPC that this is preferable to buying gilts?

 

Jeffrey Sachs: agree financial transaction tax

Professor Jeffrey Sachs, a personal adviser to George Osborne on development issues, and director of the Earth Institute at Columbia University, urges the Chancellor to reverse his stance on a Financial Transaction Tax and raise more revenue from the banking sector:

I am strongly supporting the call for a Financial Transactions Tax, or FTT, which I believe would add efficiency to the global financial system by reducing destabilising speculation.

Sachs appeals to the Chancellor to play a leadership role on the FTT, urging:

Please do use your global influence within the G20 and bilaterally to ensure that the US signs up to the FTT . . . Even if the US does not, I would hope that the UK and all of the European Union would agree to such a tax.

 

David Blanchflower: reduce NI contributions

Warning of a future "lost generation" as the number of unemployed young people nears a million, the New Statesman's economics editor, former MPC member and professor of economics at Dartmouth, David Blanchflower, tells the Chancellor:

I suggest you increase the number of university places by 100,000 at once - the universities have a capacity. You could even insist that the extra places be primarily in science and engineering, which would help future growth. Second, give a tax holiday for two years on employer and employee National Insurance contributions for anyone under the age of 25.

 

Robert Skidelsky: Start a national investment bank
Skidesly, emeritus profess of political economy at the University of Warwick and biographer of Keynes, dismisses the paltry funds allocated to the government's new Green Bank, telling the Chancellor:

"We need a proper national investment bank, with more capital and the ability to raise private money . . . You should use part of the proceeds of the sale of government shared in bailed-out banks to increase the capitalisation of the national investment bank."

 

Jonathan Portes: Lift the cap on immigration
Portes, the former chief economist at the Cabinet Office and director of the National Institute of Economic and Social Research, states:

"There is a simple way the government could boost growth not just in the short term but over the medium to long term, too, while reducing the deficit. That is to reverse the damaging restrictions the government has introduced on skilled immigrants and students from outside the European Union."

 

Ann Pettifor: Launch a green new deal
Pettifor, the co-founder and director of the think tank Prime (Policy Research in Macroeconomics), and one of the few economists to have predicted the crash, calls on the Chancellor to ditch austerity, and instead tackle the threat to Britain's economy and environment:

"We need public works programmes that will mobilise a "carbon army" of "green-collar workers" and offer major incentive to environmentally friendly businesses."

 

George Magnus: Lend directly to small businesses
Magnus, the senior economic adviser to UBS Investment Bank, reminds Osborne that "extraordinary times call for comparable economic thinking", proposing that:

"The Bank of England could get involved in direct lending to SMEs and to the government, so that the latter could fund infrastructure and other programmes to boost employment."

 

Chrostopher Allsop: Set up a recovery fund
Allsop, the Oxford professor of economics and a member of the Monetary Policy Committee between 2000 and 2003, tells the Chancellor that "the only lever left is fiscal policy":

"My preference would be public investment for infrastructure, which is sorely needed and could be financed, currently, at negative real interest rates. How about a recovery fund, financed by index-linked gilts?"

 

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.

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"We repealed, then forgot": the long shadow of Section 28 homophobia

Why are deeply conservative views about the "promotion" of homosexuality still being reiterated to Scottish school pupils? 

Grim stories of LGBTI children being bullied in school are all too common. But one which emerged over the weekend garnered particular attention - because of the echoes of the infamous Section 28, nearly two decades after it was scrapped.

A 16-year-old pupil of a West Lothian school, who does not wish to be named, told Pink News that staff asked him to remove his small rainbow pride badge because, though they had "no problem" with his sexuality, it was not appropriate to "promote it" in school. It's a blast from the past - the rules against "promoting" homosexuality were repealed in 2000 in Scotland, but the long legacy of Section 28 seems hard to shake off. 

The local authority responsible said in a statement that non-school related badges are not permitted on uniforms, and says it is "committed to equal rights for LGBT people". 

The small badge depicted a rainbow-striped heart, which the pupil said he had brought back from the Edinburgh Pride march the previous weekend. He reportedly "no longer feels comfortable going to school", and said homophobia from staff members felt "much more scar[y] than when I encountered the same from other pupils". 

At a time when four Scottish party leaders are gay, and the new Westminster parliament included a record number of LGBTQ MPs, the political world is making progress in promoting equality. But education, it seems, has not kept up. According to research from LGBT rights campaigners Stonewall, 40 per cent of LGBT pupils across the UK reported being taught nothing about LGBT issues at school. Among trans students, 44 per cent said school staff didn’t know what "trans" even means.

The need for teacher training and curriculum reform is at the top of campaigners' agendas. "We're disappointed but not surprised by this example," says Jordan Daly, the co-founder of Time for Inclusive Education [TIE]. His grassroots campaign focuses on making politicians and wider society aware of the reality LGBTI school students in Scotland face. "We're in schools on a monthly basis, so we know this is by no means an isolated incident." 

Studies have repeatedly shown a startling level of self-harm and mental illness reported by LGBTI school students. Trans students are particularly at risk. In 2015, Daly and colleagues began a tour of schools. Shocking stories included one in which a teacher singled out a trans pupils for ridicule in front of the class. More commonly, though, staff told them the same story: we just don't know what we're allowed to say about gay relationships. 

This is the point, according to Daly - retraining, or rather the lack of it. For some of those teachers trained during the 1980s and 1990s, when Section 28 prevented local authorities from "promoting homosexuality", confusion still reigns about what they can and cannot teach - or even mention in front of their pupils. 

The infamous clause was specific in its homophobia: the "acceptability of homosexuality as a pretended family relationship" could not be mentioned in schools. But it's been 17 years since the clause was repealed in Scotland - indeed, it was one of the very first acts of the new Scottish Parliament (the rest of the UK followed suit three years later). Why are we still hearing this archaic language? 

"We repealed, we clapped and cheered, and then we just forgot," Daly says. After the bitter campaign in Scotland, in which an alliance of churches led by millionaire businessman Brian Souter poured money into "Keeping the Clause", the government was pleased with its victory, which seemed to establish Holyrood as a progressive political space early on in the life of the parliament. But without updating the curriculum or retraining teaching staff, Daly argues, it left a "massive vacuum" of uncertainty. 

The Stonewall research suggests a similar confusion is likely across the UK. Daly doesn't believe the situation in Scotland is notably worse than in England, and disputes the oft-cited allegation that the issue is somehow worse in Scotland's denominational schools. Homophobia may be "wrapped up in the language of religious belief" in certain schools, he says, but it's "just as much of a problem elsewhere. The TIE campaign doesn't have different strategies for different schools." 

After initial disappointments - their thousands-strong petition to change the curriculum was thrown out by parliament in 2016 - the campaign has won the support of leaders such as Nicola Sturgeon and Kezia Dugdale, and recently, the backing of a majority of MSPs. The Scottish government has set up a working group, and promised a national strategy. 

But for Daly, who himself struggled at a young age with his sexuality and society's failure to accept it, the matter remains an urgent one.  At just 21, he can reel off countless painful stories of young LGBTI students - some of which end in tragedy. One of the saddest elements of the story from St Kentigern's is that the pupil claimed his school was the safest place he had to express his identity, because he was not out at home. Perhaps for a gay pupil in ten years time, that will be a guarantee. 

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