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

Voting history

Migration and the UK economy August 2014

Question 2: Do you agree that current government policies with respect to non-EU migration (including policies on students, skilled workers, and family migration) are effective in maximizing the gains to the economy from migration while minimizing any possible negative impact to specific groups?

Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
Because of the pressures exerted by very high levels of uncontrolled EU net migration government policy has targeted non-EU migration in order to reduce overall net migration to 'tens of thousands'. This was never feasible and has not been achieved; net migration has risen above 200,000. The result has been problems for students getting study visas, for families wishing to be reunited, and for firms obtaining skilled workers. In most countries outside the EU immigration control is exerted across all foreign entrants. Within the EU few countries are the magnet that the UK is because of its relatively free and dynamic labour market. Thus the UK has a considerable problem with immigration control from within the EU and its single labour market. The achievement of across-the-board immigration control which does not unduly penalise particular groups will require the UK to derogate from the single EU labour market.

Question 1: Do you agree that migration to the UK can be expected to be beneficial for the average income of current UK inhabitants in the upcoming decade?

Answer:
Disagree
Confidence level:
Confident
Comment:
Immigration is increasingly problematic in the UK because of the accession of several poor countries to the EU. Unskilled workers with low incomes in these countries can obtain access to an extremely generous first world welfare state which gives benefits to around half of the employed labour force besides those unemployed. Thus their expected permanent income in the UK will exceed their marginal product, causing a net reduction in existing UK residents' income. Against this there are skilled immigrants whose marginal product is high (eg professors of economics); from these there will be a surplus, in the form of tax revenue, for existing UK residents. It seems to me that the downside from the former is now prospectively greater than the upside from the latter. To these considerations must now be added rising congestion costs of higher population; these generally are not well priced into the choices facing immigrants. A further point is that certain sections of the population experience the costs of immigration disproportionately, while other segments gain the benefits but do not compensate the losers; this creates political tension around this problem,

UK House Prices and Macro-Prudential Policy July 2014

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Question 2: When housing-related risk is deemed excessive from the viewpoint of financial stability, do you agree that the correct response is to deploy macro-prudential tools, leaving interest rates focused on the needs of inflation and aggregate real activity?

 
Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
Macro-prudential tools, by which I take it meant intervention in particular markets for lending by creating restrictive rules of engagement, are distortionary of market outcomes. They therefore cause welfare costs. General control of money and credit is the role of monetary policy. It may well be that merely looking at an inflation target is inadequate, since inflation expectations have turned out to be very strongly anchored by the very fact of inflation targeting; monetary policy should be concerned also with the growth of money and credit. By paying attention to this monetary policy should make additional action by macro-prudential tools redundant. Even at the zero bound for the safe interest rate money creation remains a tool of general monetary policy; thus it is hard to see a suitable role for macro-prudential tools.

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Question 1: Do you agree it is time for more robust policy action to prevent a build-up of excessive housing-related risk?

 

 
Answer:
Strongly Disagree
Confidence level:
Extremely confident
Comment:
The UK housing market is some 30% below its peak in terms of real house prices. In terms of estimates of equilibrium levels it is gradually converging on these from well below. Monetary policy should be concerned with the general economy; intervening in particular markets is distortionary. Even if there is a social objective to build more houses, the right way to achieve this is to allow real prices to rise to encourage greater release of land and building activity. Issues of individual ability to service future mortgage payments are best left to the lenders and borrowers to decide, especially as many young people in this market have high human capital.

Economic Consequences of an Independent Scotland June 2014

Question 2

Assuming that Scotland becomes an independent country, do you agree that the UK government's position of ruling out a monetary union is in the economic interests of the continuing UK? 

Answer:
Disagree
Confidence level:
Confident
Comment:
It seems inevitable that the rest of the UK will agree to Scotland's joining the sterling union. This will be under tight fiscal restrictions. This will be in the interest of the rest of the UK because it will limit the potential fiscal turbulence coming from across the border.

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