Beyond Brexit: A Programme for UK Reform
Beyond Brexit: A Programme for UK Reform
The Policy Reform Group
London: Sage Publications, 2019
Abstract: Beyond Brexit: A Programme for UK Reform is a series of essays compiled by the Policy Reform Group and published in volume 250 of the National Institute Economic Review. Contributions from 16 authors address a broad range of key policy areas: macroeconomic policy, housing, infrastructure, climate change, foreign policy, and inequality. Few of the policy proposals can be expected to find sympathy with economists of the Austrian school, but the near-mainstream proposals may be interesting as possible players in the formation of the next consensus.
macroeconomics — economic policy — brexit
George Pickering ([email protected]) is a postgraduate student at the University of Oxford.
Despite its name, Beyond Brexit: A Programme for UK Reform is only partially a book that addresses the economic consequences of Britain’s exit from the European Union. In many respects, and certainly when it is at its most broadly relevant and boundary pushing, it is about the economic consequences of the Great Recession of 2007–09 and of Britain’s long retreat from the forefront of the global economy in general.
The book—which consists of a series of essays compiled by the newly established Policy Reform Group and published in volume 250 of the National Institute Economic Review—includes contributions from sixteen different authors on a broad range of key policy areas. These include everything from macroeconomic policy to housing, to infrastructure, to climate change, to foreign policy, to inequality—a breadth of subject matter which structurally reflects the sort of political manifestos the book is hoping to influence. The book’s introduction, attributed to the Policy Reform Group as a whole, argues that the current politico-economic crisis surrounding Brexit requires the adoption of a national industrial strategy “for the decades ahead,” with the purpose of the book being to “launch a serious debate about what such a strategy should look like” (p. 2). The dry and occasionally technical language in which the book delivers its proposals gives an indication of the type of audience that it hopes to spark debate among, although several of the policy proposals made are deceptively broad and qualitative in nature.
Indeed, Beyond Brexit is somewhat slight in its use of economic theory or detailed technical justifications to support its proposals, partly as a result of its orientation toward policymakers rather than academic economists, but partly also due to the restrictive brevity of many of its chapters. Each chapter is tasked with presenting a sweeping program of reform for an entire broad area of the British economy or political system, including numerous specific policy proposals, but all in an average space of only around five pages per chapter. The book as a whole could have benefited considerably from a more extended presentation of its ideas, to enable the contextualization of its proposals in economic theory in addition to the granular, fact-by-fact presentation that it affords. However, the book’s repeated appeals to “evidence-based” policymaking suggests that the relative absence of Austrians’ preferred theoretical approach was more likely an intentional decision than a mere matter of space limitation.
As mentioned at the outset, the book’s most surprising aspect is the relatively little attention it gives to issues specifically and exclusively related to Brexit, much to its own benefit. The task of addressing Brexit directly is left primarily to the two chapters on international trade, while other chapters tend to address issues which have been major areas of discussion in British economic policy since at least the 2008 financial crisis, if not before. In the preface, National Institute of Economic and Social Research (NIESR) director Jagjit S. Chadha contextualizes the book as a response to the current “break-down of the liberal rules-based consensus” (p. 1), which had guided politico-economic decision-making from roughly the demise of Keynesian demand management in the 1970s until the Great Recession.1 In the context of this breakdown, Beyond Brexit presents a series of policy approaches neither too near nor too distant from the current mainstream, such that their potential to be adopted into the new consensus, whenever it arrives, can easily be imagined. This marks the book’s relevance as extending far beyond Brexit and the present moment in time, with potential interest for economists of all countries.
This broader relevance is especially apparent in the first chapter, in which Russell Jones and John Llewellyn, both of Llewellyn Consulting, address the growing difficulties faced by countercyclical monetary policy since the 2008 crisis in Britain and elsewhere. Over a decade after the crisis, the Bank of England’s key “bank rate” of interest remains at only 0.75 percent, leaving little room for orthodox credit expansion when the next recession arrives, while even the unorthodox policies adopted after 2008 have also “become less effective over time” (p. 9).2 Jones and Llewellyn suggest that still more unorthodox policies could conceivably be adopted to address the next recession: an extension of Large-Scale Asset Purchase programs, a temporary overshooting of inflation targets, a transition to a cash-free economy, taxation or subsidization of currency itself, or a negative 10 percent interest rate on bank deposits held at the Bank of Engla
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