by Jeremy Warner
We are all Keynesians now”. No really. This famous remark by the free market economist Milton Friedman was meant as a rebuke to the then US president Richard Nixon, who was refusing to embrace interventionist economic policies even in the face of a financial crisis.
Fortunately, no such intransigence is evident among UK policymakers in the wake of the Brexit vote. The Tory leadership seems to have caved in almost entirely on deficit reduction and swallowed Friedman’s advice hook, line and sinker.
Since Britain voted to leave the EU, plunging the economy into a state of deep confusion, the Budget surplus target has been abandoned, George Osborne has promised a further 2 percentage points cut in the rate of corporation tax – at a cost to the public purse according to the Revenue’s ready reckoner of £4bn a year; Andrea Leadsom has committed to tax cuts for the low paid, money allowing; before throwing in the towel Stephen Crabb had pledged an extra £100bn of infrastructure spending, and Theresa May has said she won’t raise taxes to defend the debt target.