The
British Labour Party's Economic Advisory Committee was in 2015-16 a group of economists, described as experts on globalisation, inequality and innovation,
convened by
Shadow Chancellor
The Shadow Chancellor of the Exchequer in the British Parliamentary system is the member of the Shadow Cabinet who is responsible for shadowing the Chancellor of the Exchequer. The title is given at the gift of the Leader of the Opposition a ...
John McDonnell
John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. A member of the Labour Party, he has been Member of Parliament (MP) for Hayes and Harlington since 1997. ...
and reporting to
Labour Party Leader Jeremy Corbyn
Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who served as Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. On the political left of the Labour Party, Corbyn describes himself as a socialist ...
, announced on 27 September 2015 at the
Labour Party Conference in Brighton,
and intended to meet on a quarterly basis to discuss and develop ideas around the official economic strategy to be advocated by the
Labour Party,
but not to set policy.
It has been described as a way to give the Shadow Chancellor defensive cover.
In June 2016 Piketty and Blanchflower left, and the remaining members of the Economic Advisory Committee announced they had decided to postpone any further meetings, in the wake of the
resignation of numerous members of the
Shadow Cabinet in protest over
Jeremy Corbyn
Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who served as Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. On the political left of the Labour Party, Corbyn describes himself as a socialist ...
's leadership. Wren-Lewis cites the Labour leadership's acquiescence of Brexit as his reason for resigning from the Committee.
Membership
The committee originally consisted of seven members, described by then ''
BBC News
BBC News is an operational business division of the British Broadcasting Corporation (BBC) responsible for the gathering and broadcasting of news and current affairs in the UK and around the world. The department is the world's largest broad ...
'' Economics Editor
Robert Peston
Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
as, "some of the world's most influential left-wing economists".
*
David Blanchflower
David Graham Blanchflower, (born 2 March 1952), sometimes called Danny Blanchflower, is a British-American labour economist and academic. He is currently a tenured economics professor at Dartmouth College, Hanover, New Hampshire. He is also a ...
, Professor,
Dartmouth College
Dartmouth College (; ) is a private research university in Hanover, New Hampshire. Established in 1769 by Eleazar Wheelock, it is one of the nine colonial colleges chartered before the American Revolution. Although founded to educate Native ...
and former member of the
Monetary Policy Committee Monetary Policy Committee (MPC) may refer to:
* Monetary Policy Committee (India)
The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least fo ...
, described by
Channel 4
Channel 4 is a British free-to-air public broadcast television network operated by the state-owned Channel Four Television Corporation. It began its transmission on 2 November 1982 and was established to provide a fourth television service ...
Economics Editor
Paul Mason as a, "scourge of austerity".
(resigned 28 June 2016 stating that Corbyn should step down)
*
Mariana Mazzucato
Mariana Francesca Mazzucato (born June 16, 1968) is an economist with dual Italian–American citizenship. She is a professor in the Economics of Innovation and Public Value at University College London and founding director of the UCL Institute ...
, Professor,
University of Sussex
, mottoeng = Be Still and Know
, established =
, type = Public research university
, endowment = £14.4 million (2020)
, budget = £319.6 million (2019–20)
, chancellor = Sanjeev Bhaskar
, vice_chancellor = Sasha Roseneil
, ...
, whose ideas on ''smart'' state direction through a national investment bank or sovereign wealth fund have impressed
Vince Cable
Sir John Vincent Cable (born 9 May 1943) is a British politician who was Leader of the Liberal Democrats from 2017 to 2019. He was Member of Parliament (MP) for Twickenham from 1997 to 2015 and from 2017 to 2019. He also served in the Cabinet as ...
and
Chi Onwurah.
*Anastasia Nesvetailova, Professor,
City University London
City, University of London, is a public research university in London, United Kingdom, and a member institution of the federal University of London. It was founded in 1894 as the Northampton Institute, and became a university when The City Univ ...
*
Thomas Piketty
Thomas Piketty (; born 7 May 1971) is a French economist who is Professor of Economics at the School for Advanced Studies in the Social Sciences, Associate Chair at the Paris School of Economics and Centennial Professor of Economics in the I ...
, Professor,
Paris School of Economics
The Paris School of Economics (PSE; French: ''École d'économie de Paris'') is a French research institute in the field of economics. It offers MPhil, MSc, and PhD level programmes in various fields of theoretical and applied economics, i ...
(resigned 29 June 2016 due to time constraints)
*
Ann Pettifor
Ann Pettifor (born February 1947) is a British economist who advises governments and organisations. She has published several books. Her work focuses on the global financial system, sovereign debt restructuring, international finance and sust ...
, Director, Policy Research in Macroeconomics (PRIME), a debt campaigner drawn from what Channel 4 Economics Editor Paul Mason describes as a “post” socialist think tank.
*
Joseph Stiglitz, Professor,
Columbia University
Columbia University (also known as Columbia, and officially as Columbia University in the City of New York) is a private research university in New York City. Established in 1754 as King's College on the grounds of Trinity Church in Manhatt ...
and recipient of the 2001
Nobel Memorial Prize in Economic Sciences
The Nobel Memorial Prize in Economic Sciences, officially the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel ( sv, Sveriges riksbanks pris i ekonomisk vetenskap till Alfred Nobels minne), is an economics award administered ...
*
Simon Wren-Lewis, Professor,
University of Oxford
, mottoeng = The Lord is my light
, established =
, endowment = £6.1 billion (including colleges) (2019)
, budget = £2.145 billion (2019–20)
, chancellor ...
The inclusion of Piketty and Stilgitz was seen as a particular coup for the Labour Party leadership due to their breakthrough success in mainstream publishing,
while the absence of
Richard Murphy, who had advised Corbyn on his cornerstone policy of
People's Quantitative Easing
People's Quantitative Easing (PQE) is a policy proposed by Jeremy Corbyn during the 2015 Labour leadership election in August. It would require the Bank of England to create money to finance government investment via a National Investment Bank ...
was noted.
Following the formation of the committee, Economics Editors
Robert Peston
Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
, then of ''
BBC News
BBC News is an operational business division of the British Broadcasting Corporation (BBC) responsible for the gathering and broadcasting of news and current affairs in the UK and around the world. The department is the world's largest broad ...
'', and Chris Giles, of the ''
Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Ni ...
'', confirmed that the seven members were unified in their opposition to the spending cuts of
Chancellor George Osborne
George Gideon Oliver Osborne (born Gideon Oliver Osborne; 23 May 1971) is a former British politician and newspaper editor who served as Chancellor of the Exchequer from 2010 to 2016 and as First Secretary of State from 2015 to 2016 in the ...
,
although the latter warned that they had less in common in other areas.
History
Formation
Regarding the formation of the committee, its convener,
John McDonnell
John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. A member of the Labour Party, he has been Member of Parliament (MP) for Hayes and Harlington since 1997. ...
later stated, as part of a series of public debates to present his Party's "New Economics", that the Economic Advisory Committee had initially been set up to conduct reviews into public institutions including
HM Treasury
His Majesty's Treasury (HM Treasury), occasionally referred to as the Exchequer, or more informally the Treasury, is a department of His Majesty's Government responsible for developing and executing the government's public finance policy and ...
, the
Monetary Policy Committee Monetary Policy Committee (MPC) may refer to:
* Monetary Policy Committee (India)
The Monetary Policy Committee is responsible for fixing the benchmark interest rate in India. The meetings of the Monetary Policy Committee are held at least fo ...
and
HM Revenue and Customs
, patch =
, patchcaption =
, logo = HM Revenue & Customs.svg
, logocaption =
, badge =
, badgecaption =
, flag =
, flagcaption =
, image_size =
, co ...
, and that it was due to the surprising number of people at the
2015 Labour Party Conference in Brighton who felt the Labour Party should be an anti-austerity party that the policy of anti-austerity was set.
Committee member
David Blanchflower
David Graham Blanchflower, (born 2 March 1952), sometimes called Danny Blanchflower, is a British-American labour economist and academic. He is currently a tenured economics professor at Dartmouth College, Hanover, New Hampshire. He is also a ...
, who confirmed he was undertaking an independent review of the Bank of England for the shadow chancellor, had however stated that opposition to austerity on its own was not enough and that it would take some time to produce a coherent new economic strategy that party members share.
The formation of the committee, according to
Robert Peston
Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
, then ''
BBC News
BBC News is an operational business division of the British Broadcasting Corporation (BBC) responsible for the gathering and broadcasting of news and current affairs in the UK and around the world. The department is the world's largest broad ...
'' Economics Editor, went some way to answering the common charge that
Jeremy Corbyn
Jeremy Bernard Corbyn (; born 26 May 1949) is a British politician who served as Leader of the Opposition and Leader of the Labour Party from 2015 to 2020. On the political left of the Labour Party, Corbyn describes himself as a socialist ...
and
John McDonnell
John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. A member of the Labour Party, he has been Member of Parliament (MP) for Hayes and Harlington since 1997. ...
were "left-wing dinosaurs" and would ensure, "a properly emotional debate" between the
Labour Party and the
Conservative Party
The Conservative Party is a name used by many political parties around the world. These political parties are generally right-wing though their exact ideologies can range from center-right to far-right.
Political parties called The Conservative P ...
about, "how to maximise growth and prosperity".
Peston went on to contend that this was the first time since
Conservative Party Leader Margaret Thatcher
Margaret Hilda Thatcher, Baroness Thatcher (; 13 October 19258 April 2013) was Prime Minister of the United Kingdom from 1979 to 1990 and Leader of the Conservative Party from 1975 to 1990. She was the first female British prime ...
had drawn upon the ideas of
Milton Friedman
Milton Friedman (; July 31, 1912 – November 16, 2006) was an American economist and statistician who received the 1976 Nobel Memorial Prize in Economic Sciences for his research on consumption analysis, monetary history and theory and the ...
and
Friedrich Hayek
Friedrich August von Hayek ( , ; 8 May 189923 March 1992), often referred to by his initials F. A. Hayek, was an Austrian–British economist, legal theorist and philosopher who is best known for his defense of classical liberalism. Haye ...
, that a leading British political party had, "attempted to establish an economic ideology outside the mainstream".
Chris Giles, ''
The Financial Times
The ''Financial Times'' (''FT'') is a British daily newspaper printed in broadsheet and published digitally that focuses on business and economic current affairs. Based in London, England, the paper is owned by a Japanese holding company, Nik ...
'' Economics Editor, countered this claim by referencing relationships between former
Labour Party Leaders and economists, such as
Neil Kinnock
Neil Gordon Kinnock, Baron Kinnock (born 28 March 1942) is a British former politician. As a member of the Labour Party, he served as a Member of Parliament from 1970 until 1995, first for Bedwellty and then for Islwyn. He was the Leader of ...
with
John Eatwell
John Leonard Eatwell, Baron Eatwell, (born 2 February 1945) is a British economist who was President of Queens' College, Cambridge, from 1996 to 2020. A former senior advisor to the Labour Party, Lord Eatwell sat in the House of Lords as a non ...
and
Piero Sraffa, and
Gordon Brown
James Gordon Brown (born 20 February 1951) is a British former politician who served as Prime Minister of the United Kingdom and Leader of the Labour Party from 2007 to 2010. He previously served as Chancellor of the Exchequer in Tony B ...
with
Robert Reich
Robert Bernard Reich (; born June 24, 1946) is an American professor, author, lawyer, and political commentator. He worked in the administrations of Presidents Gerald Ford and Jimmy Carter, and served as Secretary of Labor from 1993 to 1997 in ...
and
Richard B. Freeman, as well as
Conservative
Conservatism is a cultural, social, and political philosophy that seeks to promote and to preserve traditional institutions, practices, and values. The central tenets of conservatism may vary in relation to the culture and civilization in ...
Chancellor George Osborne
George Gideon Oliver Osborne (born Gideon Oliver Osborne; 23 May 1971) is a former British politician and newspaper editor who served as Chancellor of the Exchequer from 2010 to 2016 and as First Secretary of State from 2015 to 2016 in the ...
with
Alan Budd
Sir Alan Peter Budd (born 16 November 1937) is a prominent British economist, who was a founding member of the Bank of England's Monetary Policy Committee (MPC) in 1997.
He left the MPC in May 1999, and between August 1999 and 2008 was Provo ...
and
Kenneth Rogoff
Kenneth Saul Rogoff (born March 22, 1953) is an American economist and chess Grandmaster. He is the Thomas D. Cabot Professor of Public Policy and professor of economics at Harvard University.
Early life
Rogoff grew up in Rochester, New York. ...
.
Although, as Peston concludes, none of these had formed a similar committee.
First meeting
The first meeting of the committee was convened at 2pm on 12 November 2015, at Labour Party’s Brewers Green headquarters, with
Shadow Business Secretary Angela Eagle,
Shadow Chief Secretary Seema Malhotra
Seema Malhotra (born 7 August 1972) is a British politician serving as the Member of Parliament (MP) for Feltham and Heston since 2011. A member of Labour and Co-operative, she has served as Shadow Minister for Business and Consumers since 20 ...
and the entire Shadow Treasury team in attendance.
At the meeting,
Simon Wren-Lewis spoke about fiscal policy,
Mariana Mazzucato
Mariana Francesca Mazzucato (born June 16, 1968) is an economist with dual Italian–American citizenship. She is a professor in the Economics of Innovation and Public Value at University College London and founding director of the UCL Institute ...
about strategic investment, and
Ann Pettifor
Ann Pettifor (born February 1947) is a British economist who advises governments and organisations. She has published several books. Her work focuses on the global financial system, sovereign debt restructuring, international finance and sust ...
about the importance of a strong economic narrative.
Although Anastasia Nesvetailova and
David Blanchflower
David Graham Blanchflower, (born 2 March 1952), sometimes called Danny Blanchflower, is a British-American labour economist and academic. He is currently a tenured economics professor at Dartmouth College, Hanover, New Hampshire. He is also a ...
were also in attendance, the latter via
Skype
Skype () is a proprietary telecommunications application operated by Skype Technologies, a division of Microsoft, best known for VoIP-based videotelephony, videoconferencing and voice calls. It also has instant messaging, file transfer, deb ...
,
neither of the two most high-profile members,
Thomas Piketty
Thomas Piketty (; born 7 May 1971) is a French economist who is Professor of Economics at the School for Advanced Studies in the Social Sciences, Associate Chair at the Paris School of Economics and Centennial Professor of Economics in the I ...
and
Joseph Stiglitz, were present at this initial meeting.
First "New Economics" Public Debates
On 26 January 2016, committee member
Mariana Mazzucato
Mariana Francesca Mazzucato (born June 16, 1968) is an economist with dual Italian–American citizenship. She is a professor in the Economics of Innovation and Public Value at University College London and founding director of the UCL Institute ...
, gave the first of the ''
New Economics Tour'', which had been announced by
John McDonnell
John Martin McDonnell (born 8 September 1951) is a British politician who served as Shadow Chancellor of the Exchequer from 2015 to 2020. A member of the Labour Party, he has been Member of Parliament (MP) for Hayes and Harlington since 1997. ...
with the intention of broadening the political debate.
In January 2016, coinciding with the start of the party's series of public debates presenting their "New Economics", it was reported in the ''
New Statesman
The ''New Statesman'' is a British Political magazine, political and cultural magazine published in London. Founded as a weekly review of politics and literature on 12 April 1913, it was at first connected with Sidney Webb, Sidney and Beatrice ...
'' that the committee had only met once and members had accused the party of having “stupid ideas” about economic policy.
In the article which the report was based upon
David Blanchflower
David Graham Blanchflower, (born 2 March 1952), sometimes called Danny Blanchflower, is a British-American labour economist and academic. He is currently a tenured economics professor at Dartmouth College, Hanover, New Hampshire. He is also a ...
, committee member and ''
New Statesman
The ''New Statesman'' is a British Political magazine, political and cultural magazine published in London. Founded as a weekly review of politics and literature on 12 April 1913, it was at first connected with Sidney Webb, Sidney and Beatrice ...
'' economics editor, confirmed that although the committee had only met once the plan was to convene every quarter from then on and that the "silly stuff" he referred to was companies not being able to pay dividends if they don’t do certain things.
Blanchflower, who admitted that it was early days and that the new Labour Party still did not have many economic policies to speak of, nonetheless confirmed that economists in the group were smart, left-leaning and credible, and that it was time to start thinking about how Labour could become a credible opposition.
Leadership crisis
Blanchflower quit the panel and said he would also wind up his review of the role of the
Bank of England on 28 June 2016 following the
mass resignations of the Shadow Cabinet, joining them in calling for Corbyn to step down.
Piketty revealed that he had also left the panel in June, citing work commitments. He also criticised Labour's "very weak" referendum campaign to remain in the EU but said this was not a factor in his decision.
Some other members of the panel, including Mazzucato, Pettifor and Wren-Lewis issued a statement saying the panel had agreed to delay further meetings as a result of mass resignations over the leadership of Jeremy Corbyn. They also criticised the Labour leadership over the EU campaign, but said they saw their role as "providing advice to the Labour party as a whole, and not as an endorsement of particular individuals within" and would be "honoured" to serve the party in future after the leadership situation was resolved
Simon Wren-Lewis later joined with Blanchflower endorsing
Owen Smith
Owen Smith (born 2 May 1970) is a former Labour Party politician and subsequently a British lobbyist, who has been the UK government relations director for pharmaceutical company Bristol Myers Squibb since 2020. Smith was Member of Parliamen ...
over Corbyn for the leadership on 31 July 2016.
Policies
People's Quantitative Easing
Shortly after the formation of the committee,
Robert Peston
Robert James Kenneth Peston (born 25 April 1960) is an English journalist, presenter, and author. He is the political editor of ITV News and host of the weekly political discussion show ''Peston'' (previously ''Peston on Sunday''). From 2006 u ...
contended that the composition of the panel signalled that
People's Quantitative Easing
People's Quantitative Easing (PQE) is a policy proposed by Jeremy Corbyn during the 2015 Labour leadership election in August. It would require the Bank of England to create money to finance government investment via a National Investment Bank ...
, the policy of requiring the
Bank of England to print money to finance government investment, which had up to that point been considered the cornerstone of
Jeremy Corbyn's economic policy, was probably dead, as he felt that while this particular group of economists would, "back the notion of the government taking advantage of prevailing low interest rates to borrow considerably more for investment in infrastructure," they would not support the ultra formulation of the policy, "for fear that the anti-inflationary credentials of the Bank of England would be destroyed", and that if the policy survived it would be as, "a contingent rainy-day monetary tool, for when the economy is next in direst straits."
See also
*
David Blanchflower
David Graham Blanchflower, (born 2 March 1952), sometimes called Danny Blanchflower, is a British-American labour economist and academic. He is currently a tenured economics professor at Dartmouth College, Hanover, New Hampshire. He is also a ...
*
Ann Pettifor
Ann Pettifor (born February 1947) is a British economist who advises governments and organisations. She has published several books. Her work focuses on the global financial system, sovereign debt restructuring, international finance and sust ...
References
{{DEFAULTSORT:Economic Advisory Committee
Jeremy Corbyn
2015 establishments in the United Kingdom
2015 in British politics
Global policy organizations