Month: February 2010

Yesterday we debated water in the Commons. Only the UK and the monopoly left overs from a nationalised industry could conspire to turn such a plentiful resource into something expensive and precious in short supply. Were we ever to have a couple of hot dry summers again doubtless the industry and its regulator would be out there again with hosepipe bans, exhortations for us to go around in dirty cars and requests for us to share a shower.

So I asked whether we could have some competition for retail water, as they now have for large quantities of industrial water. The latter policy has brought the price down as you would expect, whilst the regulated price of householder water has continued its inexorable rise. I am pleased to say I got an encouraging answer for a change. It is true it was from the Conservative spokeswoman rather than from the government, but we live in hope.

The Minister did agree with me that the best way to help those on low incomes afford their water was to cut the price. He, however, wanted to cut the price of water for those on the lowest incomes by increasing its price for everyone else. What we want is a policy to lower the price for all. Competition would probably take 20% off the water price, and create an industry keen to supply more and sell more. After all, most of the time there’s plenty of it about. So much so that the current authorities have difficulty in preventing it flooding all too many homes too often.

There is an undercurrent in present political life that says the rich must pay their way at a time of economic crisis. There are indeed still all too many socialists who wrongly think that if they just put the tax rates on the rich up the money will come pouring in and all our problems are solved. They do not see the queues to go to live in Switzerland, to relocate businesses abroad and to hire better tax lawyers and accountants to find ways round the higher tax rates.

I have a modest proposal for the Conservatives. They should go out on a policy that they intend to make the rich pay more tax. After all, in the 1980s, Tory tax policy led to the rich paying much more tax, and paying a much bigger proportion of total income tax raised. That Tory government did it by cutting tax rates. More rich stayed here. More rich came here. More rich paid more tax here. More ventured their money, created jobs and businesses and paid more tax. That is what we need to do again.

I also think we need to cut back on the large number of very highly paid people in the puiblic sector. It would be a welcome cut of public spending to thin out the public sector rich list, to get rid of the phoney bonuses and the fancy jobs. There are too many quangos and quango chiefs, too many mega salaries in low risk public corporations, too many overpaid public sector bankers.

So here’s a great Conservative policy for enterprise and for growth, for deficit reduction and for social justice – let’s soak and sack the rich in a way which will make us all more prosperous. Let’s do it by cutting tax rates and quangos.

The current political battle is over how soon we start to rein in the deficit. Labour says we must not do so too soon. Doing anything before the election is to them too soon. The Conservatives say start now and get on with it.

The government says ending the large deficit “early” would jeopardise the recovery. Yet their own figures shows that the UK has been the last out of recession and has the most feeble recovery of all despite receiving such a collosal “fiscal stimulus” and monetary boost. Indeed, over the last five years the government has nearly doubled the money supply, and doubled the national debt, only to achieve absolutely no growth in the UK economy. Who does believe on that evidence that their stimuli bring growth? The 1981 and the 1992 recessions ended when the government took action to cut the deficit.

If you look at what the public are doing, they believe the way to tackle excess debt is to pay some of it off. The private sector, families and businesses, were too deeply in debt in the boom. They are busily paying it off or reducing it at the moment. They do not think the best strategy is to go on borrowing more to “borrow themselves out of the crisis”. So why on earth does the government think it can defy gravity and borrow its way out of its own debt crisis? As Greece has shown in the last week, markets can extract a large price on any government that thinks it can get away with huge borrowings. First they make the debt very expensive, then they refuse to lend as much as the compulsive borrower wants.

Conservatives need to explain to people that when we are told the public debt is increasing and this is a good thing, that debt is our debt. As a French King once said “L’etat, c’est moi” . We have to remind our government that we are the public and the public debt is unfortunately ours. We are the state and we will be made to pay the interest and then repay the capital. They need to say that previous recessions only ended when the government stopped overspending and left some money for the rest of the economy to use.

Commonsense says when you are this deeply in debt you need to stop borrowing. It also tells you that the way to do that is to limit your spending. You can have too many five a day officers and Chief Executives of quangos. So bring on the economies before we all drown in a sea of debt.