Realist, not conformist analysis of the latest financial, business and political news

Ed Davey’s Lib Dem Mistake On Public Services

Ed Davey – third place in a Wayne Rooney lookalike competition

Ed Davey wants to tell us all that Brexit would be a mistake. Well, even since he actually was a minister in government we’ve known that he’s a loon. The question is only ever which lunacy is her perpetrating today?

Here it’s that Brexit will shrink the economy. Hmm, well, no, it won’t, not if we go full Minford but OK, we’ll take it as the starting point of the argument.

So, the economy’s smaller, we’ve the same number of people. That means all of us peeps is poorer. OK, not what we desire but still, it follows from the first assumption. But that then means that this is wrong:

The hard economic fact is this: Brexit will hit growth – short term, medium term and long term. And that means a Tory or Labour Brexit will hit our public finances, our schools, police and NHS, now and in the future.

No, that doesn’t follow at all.

So, we’re all poorer. We all gain less in wages – we’re poorer. So, how much money do we need in order to be able to buy the labour of those who do that police, teachin’ and NHS stuff? Less, right?

That is, the fact that we’re all poorer as a result of that Brexit means we can and will afford exactly the same public services as we did before. Because we’re all poorer – it’s cheaper to hire people.

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The Mole
The Mole
4 years ago

If we are poorer then presumably the costs of foreign costs would go up, so things like drugs, tear gas, surveillance equipment and many other school supplies would increase in price, even if wages in the public sector were to actually reduce (or even stay the same in real terms).

Mr Yan
Mr Yan
4 years ago
Reply to  The Mole

Likely a much smaller percentage of overall costs versus wage bill which will be the largest single cost.

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