Ex-MPC member: Britain has an investment crisis, not a debt crisis

Adam Posen hits out at governmental "misinterpretation" of the economy.

Former Bank of England Monetary Policy Committee member Adam Posen has a post up at Jonathan Portes' Not the Treasury View… where he lays out what, precisely, is screwed up about the UK economy. The whole piece is at Portes' blog, but here's the bullet point version, in Posen's words:

  • The British economy is lacking productive investment, but not for want of investment opportunities. Banks and large corporations are sitting on cash, households are holding back on large purchases (including of housing), and the public sector is slashing its investment flow.
  • The current British coalition government’s economic policy program, however, is intended to address a lack of savings, not of investment.
  • This false assumption feeds back into further arguments for fiscal and household consolidation. The UK public and private sectors are paying down debt less quickly than expected to, and that means by assumption that their future ability to pay down debt is declining, so they must cut back spending and borrowing even more today to remain solvent.
  • The facts of recent experience, including of the recession, do not fit with [the misinterpretation that debt is the problem], but do fit with the view that investment failings are at work in the British economy.
  • So should the British government just go on a spending binge instead? No, clearly not. Even though there is legitimately little fear about UK government finances at present, with the large deficits largely driven by slow growth pushing down tax revenues and up benefits spending, there is nothing to be gained by making those fears more realistic.

Posen's full piece has a long list of examples backing up his reading of the economic situation versus the Chancellor's, which is worth reading if you have the time.

Photograph: Getty Images

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

Photo: Getty Images
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When will the government take action to tackle the plight of circus animals?

Britain is lagging behind the rest of the world - and innocent animals are paying the price. 

It has been more than a year since the Prime Minister reiterated his commitment to passing legislation to impose a ban on the suffering of circus animals in England and Wales. How long does it take to get something done in Parliament?

I was an MP for more than two decades, so that’s a rhetorical question. I’m well aware that important issues like this one can drag on, but the continued lack of action to help stop the suffering of animals in circuses is indefensible.

Although the vast majority of the British public doesn’t want wild animals used in circuses (a public consultation on the issue found that more than 94 per cent of the public wanted to see a ban implemented and the Prime Minister promised to prohibit the practice by January 2015, no government bill on this issue was introduced during the last parliament.

A private member’s bill, introduced in 2013, was repeatedly blocked in the House of Commons by three MPs, so it needs a government bill to be laid if we are to have any hope of seeing this practice banned.

This colossal waste of time shames Britain, while all around the world, governments have been taking decisive action to stop the abuse of wild animals in circuses. Just last month, Catalonia’s Parliament overwhelmingly voted to ban it. While our own lawmakers dragged their feet, the Netherlands approved a ban that comes into effect later this year, as did Malta and Mexico. Ringling Bros. and Barnum & Bailey Circus, North America’s longest-running circus, has pledged to retire all the elephants it uses by 2018. Even in Iran, a country with precious few animal-welfare laws, 14 states have banned this archaic form of entertainment. Are we really lagging behind Iran?

The writing has long been on the wall. Only two English circuses are still clinging to this antiquated tradition of using wild animals, so implementing a ban would have very little bearing on businesses operating in England and Wales. But it would have a very positive impact on the animals still being exploited.

Every day that this legislation is delayed is another one of misery for the large wild animals, including tigers, being hauled around the country in circus wagons. Existing in cramped cages and denied everything that gives their lives meaning, animals become lethargic and depressed. Their spirits broken, many develop neurotic and abnormal behaviour, such as biting the bars of their cages and constantly pacing. It’s little wonder that such tormented creatures die far short of their natural life spans.

Watching a tiger jump through a fiery hoop may be entertaining to some, but we should all be aware of what it entails for the animal. UK laws require that animals be provided with a good quality of life, but the cruelty inherent in confining big, wild animals, who would roam miles in the wild, to small, cramped spaces and forcing them to engage in unnatural and confusing spectacles makes that impossible in circuses.

Those who agree with me can join PETA’s campaign to urge government to listen to the public and give such animals a chance to live as nature intended.


The Right Honourable Ann Widdecombe was an MP for 23 years and served as Shadow Home Secretary. She is a novelist, documentary maker and newspaper columnist.