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

Voting history

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.

Secular Stagnation

Question 2: Do you think that current structural and fiscal policies should place a considerably greater emphasis on pushing the natural rate into positive territory?

Answer:
Neither agree nor disagree
Confidence level:
Confident
Comment:
Again, I think the definition involved is confused and so cannot really give a clear answer. If the UK and the US and related advanced economies (not to speak of the emergent economies) have no particular 'stagnation' problem, whereas Japan and the euro-zone do for the reasons given, then there is in principle a good real return to be had on capital in the former set of countries and a low or even negative one to be had in Japan and the euro-zone. the answer to this problem is for capital to flow from these countries to the others until the real rate rises in them to the world level. I would agree that in these latter two countries there would be room for stimulative policies under suitable 'reform'- which in Japan would mean 'third arrow' policies and in the ruo-zone would mean the abandonment of the whole current 'euro orthodoxy'. But my firm assessment is that neithr poltical development is at all likely.

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