Patrick Minford's picture
Affiliation: 
Cardiff Business School
Credentials: 
Professor of economics

Voting history

Transparency and the Effectiveness of Monetary Policy following the Warsh Review at the Bank of England

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Question 1: Do you agree that the simultaneous release of the policy decision, the enhanced minutes (including the voting record) of the MPC meeting and (in the relevant months) the release of the Inflation Report will facilitate inference on the likely stance of monetary policy?
 
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Answer:
Disagree
Confidence level:
Confident
Comment:
This question needs to be considered against the background of the policies the Bank has adopted since 2007 when the crisis first erupted. During this period we have had various degrees of transparency about both monetary policy and financial stability policy. But the main facts have been that for all this information there have been serious policy mistakes (the worst being the Bank's failure to cooperate fully with the Fed and US policymakers over the Lehman affair which precipitated the worst part of the crisis) and quite a lot of confusion about what the overriding aims of monetary and financial stability policy were. For example were they to get banks back on their feet lending strongly to advance the recoevcry or were they to blanket them in regulative chains to prevent any 'risky lending' (their job, one would have thought). Was QE intended to jolt lending and money supply growth back into action, and if so what was its relation to bank regulation? On all these important matters there was complete confusion where there was not utter silence. yet we kept on getting 'minutes' and 'reports' which told us nothing much at all. So my reason for disagreement is that I think these measures will have no effect on the central questions of the Bank's policy aims. There is a further implication: 'transparency' is essentially a natural concomitant of agreed and clear policy. When there is no such agreement or clarity, then transparency is no substitute; it can contribute nothing. Indeed if badly handled it simply reveals confusion which worsens things. A competent organisation will sidestpe any transparency in these circuumstances by various well-known bureacratic means- which is of course just as well.

Greece’s elections and the future of the Eurozone

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Question 2: Do you agree that refusal of the core EU countries to a renegotiation of the Greek bailout agreements would carry serious risks for the economic well-being of the Eurozone?

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Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
This refusal makes Grexit far more likely. Effectively Greece can leave the euro and stay in the EU; any attempt to force it out of the EU for leaving the euro would create severe division between north and south Europe, since other southern countries may be forced to leave the euro too. The dangers of leaving are greatly exaggerated by euro-zone leaders; the benefits of an economic 'reset' and debt write-off are substantial.

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Question 1: Do you agree that a Syriza victory on 25 January would lead to a significant or sustained escalation in spreads for other peripheral Eurozone countries?

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Answer:
Strongly Agree
Confidence level:
Very confident
Comment:
The social problems created by the euro-zone crisis are as intense in these other countries. Grexit would increase the attractiveness of exit by others.

Devolving Income Tax Powers within the UK

Question 2: Do you agree that that there is a clear economic case for establishing "English votes for English laws" with the same tax and spending powers as the Scottish Parliament?

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
My answer to this follows from my previous answer where I argued that the devolution of taxing powers to Scotland and Wales should be strictly limited. The problem lies in the lack of an intelligent and vibrant local democracy in what is a small nation with a representative Parliament. Political activity at the local level is limited to a small minority of the population; the local debate is weak and the talent pool small. Local politics is dominated by welfarist pressure groups. Thus devolving power to regions will lead to poor results. As for creating an English Parliament this is a non-starter in a unitarian state like the UK. Even with devo-max the role of the UK Treasury will dominate the devolved areas. Central state policy concerns everyone in the UK and devo-max makes little practical difference to this. However what devo-max does is increase the power of pressure groups for public spending because opinion is not well organised to oppose it at the devolved level, owing to the lack of good local politics. Hence more devolution equals more public spending and redistribution, paid for ultimately by the successful businesses and areas of the UK.

Question 1: Do you agree that the economic benefits of devolving full income tax powers to the Scottish Parliament and Welsh Assembly outweigh the possible costs?

Answer:
Strongly Disagree
Confidence level:
Very confident
Comment:
I look at this issue from the perspective of the political preferences of the dominant political parties in Scotland and Wales. Both of these favour higher social spending and redistribution. Hence if tax powers were devolved it is likely that taxes will be raised in both places in order to fund higher spending. This will drive capital, business and employment out of Scotland and Wales. Yet the UK is committed under the Barnett formula to equalising the outcomes of public services across the UK. As these two parts of the UK impoverish themselves, English citizens will be under pressure to raise transfers. In effect therefore net incomes (even including public spending as an offset to the higher taxes) will be reduced across the UK- not just in Scotland and.Wales but also in England. There is a parallel to be found in the taking away from local authorities of the business rate; this was being used as a (politically) cheap way of funding local services. Yet it drove business away from these jurisdictions, putting more pressure on central government for funding via the Barnett formula.

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