One of the great economist John Maynard Keynes’s most memorable statements was: “In the long run we are all dead.”
Alas, Keynes himself did not have an especially long run. Those wearing negotiations he undertook with the Americans and others on the postwar international economic settlement took their toll, as vividly described in Robert Skidelsky’s masterly biography. He most certainly battled for his country, as well as for a less depression-prone or beggar-my-neighbour world economy than was experienced in the 1920s and 1930s.
The great man died in 1946 at the age of 62.
This week I wish to pay tribute to one of his followers, my friend Robert Neild, who had a much longer run, dying peacefully in his sleep a week before Christmas at the ripe old age of 94. Keynes would no doubt have been proud of the way Professor Neild kept the flag flying right to the end. I have referred from time to time in this column to his rigorous opposition to the Cameron-Osborne austerity programme – the folly of which is now increasingly acknowledged. More recently he wrote a devastating critique in the journal of the Royal Economic Society of the government’s refusal to accept that the manifest deterioration in our public services reflects a reluctance to finance them with realistic levels of taxation.
Robert Neild’s name has long been known in economic and political circles for the way that he resigned as chief economic adviser to the Treasury in 1967. The Wilson government, with James Callaghan as chancellor, had refused to take his advice that a devaluation of the pound was required to redress a balance of payments problem that was inhibiting its freedom of action.
Ironically, the Labour government was forced to devalue shortly after Neild resigned to become director of the Stockholm International Peace Research Institute. He was devoted to this cause, and declined an invitation to return.
Which brings us to what has become my regular topic: the damage being done by the mere prospect of Brexit, let alone by the growing fear that this disastrously incompetent government is heading the country in the direction of no deal.
Just like Labour in 1964-67, the country is on the verge of a massive loss of confidence as a result of the present state of the balance of payments, and the threat of much worse if we go on heading for the cliff edge.
Sorry, did I say “just like”? No – the position is far worse. The 1967 devaluation “worked” in the sense that it bought the economy time until the next crisis. In a major speech at the University of Liverpool just before Christmas, our former ambassador to the EU Sir Ivan Rogers pointed out that, before we have even left the comfort zone of the customs union and the single market, “we have seen, in the last two and a half years, the most anaemic boost to UK net trade triggered by any major sterling devaluation since world war two. For politicians not completely blinded by their own rhetoric, the warning signs for the UK economy … are there to see.”
To put it bluntly, thanks to the uncertainty created by Brexit, the investment needed to take trading advantage of the post-referendum devaluation has simply not taken place. Suddenly the UK is not an obvious foothold for inward foreign investment to take advantage of our privileged place in the single market.
Rogers was more or less drummed out of his job for telling the prime minister and cabinet that they were living in a fantasy world if they thought they could swan through negotiations with the EU, and he was early to warn of the dangers of no deal.
Which brings us to the most disappointing leader of any Labour opposition in living memory. Despite the fact that 60% of Labour supporters voted to stay in the EU, and an estimated 80% of under-25s wish to remain, Jeremy Corbyn has announced that, if elected, he would go ahead with Brexit. I am not making this up.
Even the founder of the pro-Corbyn group Momentum, Jon Lansman, is a Remainer, and told the New Statesman that he thinks Tony Benn, Corbyn’s political mentor, would by now have been a Remainer too.
Rogers could hardly believe his ears – or perhaps he could – when he recently heard a shadow cabinet minister fantasising about negotiating “a completely different deal, including a full trade deal, which would replicate all the advantages of the single market and customs union. And all before 30 March.”
Rogers, who knows more about trade than the entire cabinet, added: “I assume they haven’t yet stopped laughing in Brussels.”
Our political class has let us down. We need that referendum. And if it were to go wrong a second time – unlikely, in my opinion – then God help us …