There is something of a consensus in the press that the Labour manifesto has opened up "clear blue water" between the Labour and Conservative parties. The UK voter, says absolutely everyone, has a real choice to make here. That's true but only, I suspect, to a degree. Jeremy Corbyn's manifesto is interventionist, extremely expensive and a bit silly. But you could say that of almost all manifestos. And the truth is that over the last few months all UK politics has shifted firmly towards interventionism.
Corbyn clearly doesn't trust the market: he would like to nationalise everything in sight. But Theresa May doesn't trust it much either: she often says that she is prepared to step in when the market "isn't working" her plan to cap utility bills shows that she is no less prepared to force state control on industries than her rival. They've identified similar villains in the last few months as well.
Corbyn's pretty down on companies: under him, they get to pay lots more tax. But May reckons they can carry a bit more of a burden too: witness her plans for the extension of workers' rights. Corbyn will tax companies up front to finance everything from whopping spending on the NHS to social care. May won't be the middle man for the cash, but by asking companies to offer workers long periods off to look after relatives for example, she's shifting the burden of social care in the same direction.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
I've written here before about our expectation that the next government will be endlessly interfering. Voters clearly want to see a newly powerful state acting to make the unelected-but-powerful behave better hence the talk of worker representatives on boards (May wants one non-executive director on each board to be a workers' champion). Witness also the opening salvos against the big tech firms and the price-cap chat. Like it or not, there is much more of this to come. The combination of Brexit and May seems unlikely to give us the small-state, low-tax Britain we hanker after.
There is, however, some good news. We have wondered previously if May might have a go at capping fees in the financial industry, too after all, the regular super-profits made in fund management tell us the market isn't working here (competition should push fees down). What better way to make everyone richer than to cut the cost of saving? But this might be starting to take care of itself.
This week saw Vanguard, the leader in low-cost investing, launch an online service in the UK. Use it and you will pay an annual administration charge of 0.15% a year on an individual savings account. Hargreaves Lansdown, the UK's biggest retail broker, charges 0.45%. There should be a glorious price war ahead one that shows the market working so well there is no need for intervention. Fingers crossed.
-
Beat the cost of living crisis – go on holidayEditor's letter As inflation rages, energy bills soar and the pound tanks, what’s a good way to save money this winter? Go on holiday, says Merryn Somerset Webb.
-
How capitalism has been undermined by poor governanceEditor's letter Capitalism’s “ruthless efficiency” has been undermined by poor governance, a lack of competition and central banks’ over-enthusiastic money printing, says Andrew Van Sickle.
-
Don't be scared by economic forecastingEditor's letter The Bank of England warned last week the UK will tip into recession this year. But predictions about stockmarkets, earnings or macroeconomic trends can be safely ignored, says Andrew Van Sickle.
-
The biggest change in the last 17 years – the death of the “Greenspan put”Editor's letter Since I joined MoneyWeek 17 years ago, says John Stepek, we’ve seen a global financial crisis, a eurozone sovereign debt crisis , several Chinese growth scares, a global pandemic, and a land war in Europe. But the biggest change is the death of the “Greenspan put”.
-
The wolf returns to the eurozone’s doorEditor's letter The eurozone’s intrinsic flaws have been exposed again as investors’ fears about Italy’s ability to pay its debt sends bond yields soaring.
-
Things won't just return to normal – that's not how inflation worksEditor's letter You might think that, if inflation is indeed “transitory”, we just need to wait and everything will return to “normal”. But this is a grave misunderstanding of how inflation works, says John Stepek.
-
Car hire and the strangeness of the post-pandemic economyEditor's letter A global shortage of hire cars and unusually high hotel occupancy rates sum up the post-pandemic global economy in a nutshell, says Merryn Somerset Webb, with enhanced demand meeting restricted supply.
-
Why we need to get a grip on our governmentEditor's letter Our government is trying to do too much, enacting policies that are destructive to the private sector. It needs to drop the the feel-good nonsense and create policies that lead to long-term wealth, says Merryn Somerset Webb.
