It’s the economy, not the press, stupid. None of Brown’s rivals knows how to fix it either.

Yesterday the press hit a new low for the Prime Minister. The papers plastered a photo of him visiting a hospital, with the sign for the Fire Exit prominently displayed above his head. Apparently, in the mad world of the media, this is a gaffe. We are into that phase that I remember well from the dying days of the Major administration, where photographers are out to get any bad or ludicrous picture they could of the Prime Minister at bay (and in 1995-7 of any senior Conservative). In the words of the spin doctors, “the narrative” is a useless Prime Minister and whether he will go, so the pictures have to fit the story. In his last General Election campaign as Prime Minister John Major was prey to several photo opportunities that were turned into metaphors of his likely defeat.

It is time to take stock of what matters. There was nothing wrong with the Prime Minister visiting a hospital. It is not possible for a democratic politician to get out and about without allowing people to take photos that can juxtapose the unfortunate or the ludicrous against their profiles. Some in the press will say that a professional spin doctor outfit will, as in the early days of Blair, dragoon and control the media to shut down any possibility of embarrassing angles or unhelpful backgrounds. They got away with it then because Blair was popular and enjoyed considerable political authority. A more battered and less popular government will not be able to do it, and as a government loses authority more people exercise more skill in getting the unflattering shots. As far as the public are concerned, our problem this morning is not that we have an “accident prone” Prime Minister who gets into the picture the wrong way. Our problem this morning, as yesterday morning and as tomorrow morning, is that we have a Prime Minister who taxes us too much and spends the money badly. It’s the economy stupid. The Credit Crunch was brought on by reckless borrowing. In the UK the government is the borrower of last resort, the architect of off balance sheet finance on a huge scale, the author of all sorts of expensive PFIs, and now the proud owner of a mortgage bank in run down mode.

Instead of hiring another spin doctor to try to change the narrative, or extra staff to herd the photographers, the Prime Minister should make some of his army of spin doctors redundant. If the expensive spin doctor appointed to avoid embarrassments for the PM can’t do the job – and that seems to be true from the evidence of the recent press – then get rid of him. If the army of spin doctors cannot secure a better press, then slim it down. Spend less time with the spin doctors, and more time trying to get the underlying issue right. Spend less in the public sector by cutting waste and needless spending , and the UK economy will start to improve. Gordon Brown should go back to the period of his greatest success, the early years when he was still married to Prudence and kept a much better balance between spending and revenue. Even then his Pensions Tax was ticking away, but the overall budget was more realistic and the economy performed much better. He was popular in those days. No one took silly photos of him, because there was no need to.

As a Conservative I am delighted to see the leadership turmoil in the Labour party. It helps our party cause. As someone who wants to see my country well run, it fills me with concern. In the phoney campaigns for a change of leadership, fought by shadowy figures through intermediaries, stalking horses and unattributable briefings, one thing stands out. No-one is yet coming forward with the changes the UK needs to give people a better chance in life, and to sort out the economic problems. The nearest anyone has got is those Labour MPs who are calling for the cancellation of the Vehicle Excise Duty increases scheduled for next Spring (see a previous post) and the cancellation of the further increase in petrol tax. They do not go on to say how they would pay for this, in a budget which already contains far too much borrowing, itself just deferred taxation with the extra problem of having to pay interest on the loan. They do not offer any immediate financial relief to people, by proposing cutting the existing level of petrol tax or any other tax. They do not propose a permanent solution to the sting of the abolition of the 10p tax band, after this year’s one year only promise of some compensation.

The truth is that the country needs a new budget and a new economic policy more than it needs a new Labour Prime Minister. The “crown” maybe on the thorn bush after the battles of May 1 and Crewe, but who wants to pick up such a tattered bauble, and who in Labour has more of a clue about what to do to save the country were they to seize the diadem? The most likely runners to take over from Gordon – Milliband, Johnson, Straw – are all cabinet members. We hear no leaks or hints that they opposed the last budget, no suggestion that they are desperately trying to get a change of economic policy, no briefing that they went to the Cabinet with a proposal to lighten the burden on the voters of Crewe and elsewhere in a way which would win some support back. Changing the leader could just be shuffling the deck chairs on the Titanic. The rock of election defeat still looms out of the mist of economic incompetence.

If Labour wants to help themselves and help the country, they should be debating this week how to get much more value out of their public sector, and how to send some money back to the hard pressed voters. If they are not careful Boris Johnson’s better housekeeping at City Hall will sweep through the over bloated costs of the government of London, resulting in a tax rebate for all London taxpayers. That would simply underline what most electors already know. You could deliver what this government delivers for a lot less money, and leave the taxpayer more of his own cash to get on with meeting the soaring costs of living.

So what should the Tories do now? Mr Timpson should show himself a dedicated and caring MP for Crewe, highlighting all the problems of his constituents in the House. Conservative local government should get on with the job of curbing costs and cutting Council taxes, as Hammersmith and Fulham has been doing. The Conservative leadership can leave the personality squabbles and rows to Labour to do for themselves. We need to carry on shining a light onto the government’s biggest failings. We need to show time and again just how much money has been wasted, and how given the chance we would spend more wisely. If Labour do not reform and curb their public sector it does not matter a jot who is their Leader.

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14 Comments

  1. mikestallard
    Posted May 25, 2008 at 10:09 am | Permalink

    Of course you are right.

    The trouble is that the bedrock belief of New Labour is that it isn't what you do, it what you are shown (in the all powerful press) to be doing that gets you re elected.
    The second bedrock belief is that the only way to solve a problem is to feed it with more and more money. Anything else is just hypocrisy, they believe.

    You are challenging these beliefs. That is why the cabinet all seems to agree with Gordon Brown's actions. Look at the way George Osborne was attacked (he had to go into hiding) when he suggested a tax cut before the last election.

    What these out of date men and women are totally unconscious of is that times have changed.

  2. Posted May 25, 2008 at 1:59 pm | Permalink

    That is easily thje berst assessment of what kis wrong with the Brown government & what politicians of all parties could do about it. Brown was neither as good as Chancellor nor as bad a PM as he is being painted, though many of his current problems are things he set up as Chancellor coming home to roost.

    He is, I believe, the first Labour leader to have spoken well of Adam Smith & does have the potential to be a great PM if he would only do the things he clearly understands should be done.

    The good news for him is that Michael Meecher has said he ought to go & Labour should get back to its traditional values (like windmillery). Anybody who does the opposite of what Meecher says can't go that far wrong.

  3. Tony Makara
    Posted May 25, 2008 at 2:19 pm | Permalink

    The public sector is certainly a ticking bomb under the Labour government. There is no way that wages in the public sector can keep up with those in the private sector and when inflation really takes off the Labour government will have the unions biting at its ankles and armed with the ability to bring public services to a halt, causing the like of disruption we haven't seen for thirty years.

    When will politicians realise that a large public sector is too costly to run when it comes to wages which, because of the nature of the state sector, cannot be improved through productivity and increased profits. Anyone taking a job in the public sector is doomed to watching their wages fall behind the rest of the country. The biggest argument against a big state sector is wages. It amazes me how people cannot see this glaringly obvious axiom.

  4. Ian Evans
    Posted May 25, 2008 at 3:08 pm | Permalink

    I see the latest Leftist suggestion is a windfall tax on the oil companies. Funny how noone ever suggested a tax rebate for the oilies when oil prices were at record lows!

    Of course the lefties want to give the windfall tax to taxpayers: using it to pay off government debt would doubtless seem a waste of money – leave the debt for the Tories is presumably the idea!

  5. Posted May 25, 2008 at 4:04 pm | Permalink

    I'm not sure I get this.The government is trying to deal, none too successfully, with an international credit crisis and a shift in the terms of international trade and John Redwood is talking about savings in local government spending.Hmnn interesting.

    Reply: I am talking about savings throughout the UK public sector because it is borrowing too much, and squeezing the rest of the economy with high taxes.

  6. mike
    Posted May 25, 2008 at 5:16 pm | Permalink

    All sensible stuff.

    But Brown has a point about "international turbulence" which is not addressed.

    Exactly, how would a Conservative administration deal with the credit-crunch and rising commodity prices, most notably, oil.

    Easy to say, as regards the credit-crunch, that we would have never got into that mess by ensuring there was a properly regulated banking system. But history suggest Conservative administration have been equally subject to bouts of "irrational exuberance".

    Easy to say, as regards the other factors beyond domestic control that we would have ensured, by operating proper Prudent domestic controls, that the worst effects on the UK economy were better managed.

    History suggests otherwise. Surely, boom and bust and stagflation have been enduring features of the Britain's economy for the last 100 years.

    Brown hasn't managed it but neither did Barber, Lawson, Howell, Uncle Tom Cobbley and all.

    Reply: This site has set out an alternative way to handle the credit crunch that could have avoided the run on the Rock and offered support for UK banks at a much lower cost than the government did. I have proposed reducing the tax component of the petrol price to fofset some of the increase. I would have not fiddled the inflation index before the last election and kept interest rates as low as they did. I would run the economy with less waste in public spending and less borrowing.

  7. Tim
    Posted May 25, 2008 at 8:05 pm | Permalink

    Clearly what Labour needs to be made accountable for is how after 12 years of a boom economy the is nothing left in the cupboard for the tougth times ahead.

    Indeed as peoples disposable income is falling they feel the real effect of the rising burden of taxation.

    I was in America last week and what impressed me was that the government had rebated tax its citzens , interest rates had been cut and its industry was refocussing on the export oppurtunities afforded by a weakened Dollar, By contrast we have rising taxses, interest rate cuts that are on hold to stem inflation and a much reduced manufacturing sector.

    I doubt Labour will get rid of Gordan Brown as their Leader and its a shame we have to wait possibly two years in which People will find life increasingly tough to get rid of him. However the is an element of poetry that his downfall will lie in the deterioting economy: economic problems that are the result not just of the world economy but from his tenure at the Treasury.

  8. adam
    Posted May 25, 2008 at 8:21 pm | Permalink

    George Soros says the British economy is doomed.
    Alright, it is to promote a new book but he doesnt exactly live off his writing career.

    Conservatives better be hoping the crisis gets worse sooner rather than later, Labour will be doing everything possible to delay the effects.

    If we want to save money the mantra of the outside consultant has to be driven out the public sector.

  9. Posted May 26, 2008 at 12:01 am | Permalink

    Well said Mr Redwood. Cogently put.

    When Brown came to Downing St and invoked the well worn mantra of 'change' this was just code for somehow being different from that guy who took us into Iraq and reducing our status in Afghanistan to digging irrigation wells.

    Oh and maybe abolishing a casino or two.

    There was to be no change in the way the economy was to be run. Would any new Labour PM do anything different? Whats seems to be coming clear is that no one has had a clue about whats really been going on, has no clue about what is happening now and no clue about what to do in future.

    The 'change' which is the current mantra means different things to different people. A leadership election now, especially one which was properly examined by the media, would split Labour umpteen different ways to Christmas. Oh, and who would fund it? Even the John Smith Institute is not a bottomless pit.

  10. Atlas shrugged
    Posted May 26, 2008 at 1:16 am | Permalink

    adam

    When people like George Soros say the British economy is doomed. Its like John Wilks Booth predicting the assassination of Abe Lincoln.

    John

    All very sensible stuff as usual, but I cant help thinking that you have missed out more then you have included.

    I think it would be nice if you could have reassured us that we would not be in this mess in the first place is you for example had been in charge for the last 11 years.

    Would you have done any different when it comes to allowing the central banks to have operated like a cartel of mafia bosses hell bent on destroying sound money and rational sane banking principals?

    What practical measures would you have taken not to have allowed a deliberately created boom and bust situation to happen yet again?

    I have only a grade B O'level in economics, but even I could see the BIG CAPITAL letters written on the wall 10 years ago. So why couldn't Eddy baby and his team of so called economic experts?

    This is a serious question.

    Do you really think you can trust The Bank of England with even the tuck shop funds, given their past record?

    Because I personally would not trust a bankster with more then 50 pence or my own money, even if it was attached to a long piece of string, linked up to 24 hour Red Care.

    Reply: I have set out at some length the very different approach to Money and Central banking I recommended over the last decade, which I think would have produced a better answer for the UK. It would not have avoided sub prime in the US, but would have greatly reduced the excess borrowing in the UK especially in the public sector.

  11. Posted May 26, 2008 at 6:58 am | Permalink

    Soros – you're all doomed. dooooomed, I say.

    Brown – Infamy. Infamy. They've all got in for me.

    Redwood – Just sort it out.

  12. Javelin
    Posted May 26, 2008 at 10:45 am | Permalink

    Perhaps the most telling thing is that you can tell Gordon [or any loser] what to do, against your own best, and they will still go on and lose.

  13. Atlas shrugged
    Posted May 26, 2008 at 11:51 pm | Permalink

    John

    Thank you for that but your reply begs more questions then it answers.

    Like

    Why have we not heard you or anyone else in the party mention any of these remedies before on the media, or in parliament?

    Come too think about it, we still have not.

    Could you give a summery of what they where/are?

    I run a small manufacturing company, and would be thankful if you could give me any confidence that this can never happen again under any circumstances.

    I like yourself know my Adam Smith. Therefore I know that without a high level conspiracy or two going on between big capital and world or national governments to deliberately bugger up the system, what is happening now is technically impossible.

    I trust free markets. Unfortunately it seems that a free market in banking where lenders take as much responsibility for their actions as borrowers, is not what we have now, if indeed we ever did.

    Governments bailing out criminally dishonest or vastly incompetent lenders using future tax revenues, is not just a very likely criminal scam of biblical proportions, it could turn out to be the end of the world as we know it.

    Reply: See the entries under the Northern Rock tab of this blog – that will show that I have been olfering very different advice to that adopted by the government over the Credit Crunch, and did get some limited opportunity to say so on the media.

  14. Posted August 30, 2008 at 7:03 pm | Permalink

    What is s rivals knows how to fix it either. | John Redwood MP?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, He graduated from Magdalen College Oxford, has a DPhil and is a fellow of All Souls College. A businessman by background, he has been a director of NM Rothschild merchant bank and chairman of a quoted industrial PLC.

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