Robert Skidelsky
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Parliament

Recent Articles

The Hole in Budget or the Hole in the Economy?
Robert Skidelsky
Project Syndicate | Friday, August 13, 2010

 
LONDON - All economies recover in the end. The question is how fast and how far. When Keynes talked of persisting ‘under-employment’he did not mean that, following a big shock, economies stay frozen at one unchanging level of under-activity. But he did think that, without an external stimulus, recovery from the lowest point would be slow, uncertain, weak, and liable to relapse. In short, his ‘under-employment equilibrium’ is a gravitational pull rather than a fixed condition. This is a situation which Alan Greenspan has aptly described as a ‘quasi-recession’, a better phrase than ‘double-dip recession’.It is a situation of anaemic recovery, with bursts of excitement punctuated by collapses. It is the situation we are in today.
 
 

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Future generations will curse us for cutting in a slump
Robert Skidelsky and Michael Kennedy
Financial Times | Wednesday, July 28, 2010

 
In 1937 Keynes wrote: “The boom, not the slump, is the right time for austerity at the Treasury.” Jean-Claude Trichet, president of the European Central Bank, disagrees. Stripped of its jargon, his argument last Friday in the Financial Times is that fiscal retrenchment is needed to “consolidate recovery”. This has become the standard European – though not American – line. “Failure to address the deficit is the greatest danger we face,” said UK Treasury minister Lord Sassoon in the House of Lords on Monday, faithfully echoing the words of his master, chancellor George Osborne. But beyond vaguely referring to the need to restore “confidence”, none of the cutters can explain how reducing public spending when private spending is already

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House of Lords Debate: Finance Bill: Second Reading and Remaining Stages
Robert Skidelsky
Hansard Column 1192 - 1201 | Monday, July 26, 2010

 
My Lords, the Finance Bill implements the taxation provisions of the emergency Budget Statement of 22 June. These will come to about 20 per cent of the total fiscal tightening which has been planned in this Parliament. So the Finance Bill as we have it before us is part of the Government's programme for balancing the Budget over the next five years. In his opening speech, the noble Lord, Lord Sassoon, said that a failure to address the deficit is the greatest danger we face. I would say that the failure to address the hole in the economy is the greatest danger we face and that unless the noble Lord is able to demonstrate how cutting the deficit will produce an economic recovery, there is a massive hole in his speech. I listened in vain

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By George, he hasn’t got it: What would JM Keynes think of George Osborne’s Budget?
Robert Skidelsky
The Independent | Friday, June 25, 2010

 
I don't wish to examine the structure of George Osborne's emergency Budget, but to analyse its logic. On the structure I have only this to say: the balance between increased taxes and reduced spending is probably right. It is right to demand sacrifices from all sections of the community, though I doubt the attack on welfare benefits (designed to save £11bn a year by 2014-15) will be seen by many as fair. And there are a number of useful measures to encourage enterprise. My objection is to its overall fiscal – and ideological – stance. It is deflationary – not as deflationary as the Chancellor's rhetoric demanded – but deflationary all the same.
 
At a time when the UK economy has an estimated "output gap" – the gap between what the

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Once Again We Must Ask: “Who Governs?”
Robert Skidelsky
Financial Times | Wednesday, June 16, 2010

 
 In 1974, Edward Heath asked: “Who governs – government or trade unions?” Five years later British voters delivered a final verdict by electing Margaret Thatcher. The equivalent today would be: “Who governs – government or financial markets?” No clear answer has yet been given, but the question may well define the political battleground for the next five years.
 
In one sense, next week’s emergency Budget is simply the logical working out of an intellectual theorem. The implicit premise of the coming retrenchment is that market economies are always at, or rapidly return to, full employment. It follows that a stimulus, whether fiscal or monetary, cannot improve on the existing situation. All that increased government spending does is to

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