Cable call

For most of this week the media have been wanting me to “hit out” at Vince Cable’s attacks on unbridled capitalism.

There seemed no point. Mr Cable was speaking to the Lib Dem conference. He obviously thought anti capitalist words would make him the conference darling. I had no wish to be party pooper. As I patiently explained to disappointed journalists, I could see no policy recommendaitons in what he was saying that alarmed me. A consultation on how we can have more competitive markets and more engaged shareholders need not frighten the enterprising horses. I was also aware that I would have to answer about his remarks on Question Time.

If you ask what has capitalism done for Mr Cable, you might mention it has provided his breakfast, his lunch, his dinner, his suit, his tie, his shirt, his home, his car, and the tax revenue to pay for public services. If you ask where the most rigged and damaged markets are, they lie in areas where government intervenes or controls too much.

I look forward to Mr Cable adding his voice to those of us who want competition to work its magic more extensively in the water industry, in broadcasting and media, in railways and in banking – all areas with nationalised industries, heavy government regulation and state ownership.

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29 Comments

  1. P Haynes
    Posted September 24, 2010 at 8:51 am | Permalink

    The government certainly needs to look at the structures in the areas you mention water, broadcasting, railways and banks.

    There are also serious structural problems relating to shareholders inability to properly control of directors' remuneration, the prohibitive costs and uncertainty in legal services, the medical professions and the absurd UK employment laws.

    Easy and cheap hire and fire is best for all in the long run.

  2. Nick
    Posted September 24, 2010 at 9:42 am | Permalink

    I look forward to my 5K a year educational voucher for my son.

    After all, education is fundamentatly a state monopoly. You have to pay even if you don't use the service.

    Give us a voucher and the public will make the choice.

    • Andy
      Posted September 24, 2010 at 10:35 am | Permalink

      Yes and I don't have any children so why can't I have a rebate ??

      • John C
        Posted September 24, 2010 at 10:58 pm | Permalink

        Yes, and I've never used the health service – 50 next year.

        Can I have an even bigger rebate?

        See how silly this gets?

      • Robert George
        Posted September 25, 2010 at 5:12 am | Permalink

        Because life's not fair. Get over it!

  3. DBC Reed
    Posted September 24, 2010 at 10:02 am | Permalink

    The items on your privatisation shopping list : water,banking,railways and the media are already largely privatised.They are also natural monopolies in varying degrees. Radical liberals of a bygone,better era would have recognised this.Henry George who was a free-trader to the edge of reason still wanted the railways in public ownership because competition could not be made to apply: nobody is going to construct a railway line in parallel with an existing one and compete on grounds of efficiency. Nobody is going to build parallel mains water supplies;nobody is going to establish a chain of retail banks across British cities
    unaffected by the interest rate decisions of the MPC;nobody is going to raise a media empire to rival Murdoch'.s .In fact the dangers in the British media are of private monopoly and cartels.

    Reply: people can compete to use track better, can compete to send their water through common carrier pipes, and can put in new pipes and tracks where there is a shortage.

    • Stuart Fairney
      Posted September 24, 2010 at 11:02 am | Permalink

      "The items on your privatisation shopping list : water,banking,railways and the media are already largely privatised"

      Really? The BBC, Channel 4, the state banks, railtrack/network rail?

      "Nobody is going to build parallel mains water supplies;nobody is going to establish a chain of retail banks across British cities"

      Isn't someone doing exactly that now?

      "nobody is going to construct a railway line in parallel with an existing one and compete on grounds of efficiency"

      No-one would do it where there isn't one as rail is an inefficient means of transport, thus we should withdraw support/subsidy, close the railways, sell tha land for private roads and let three or four coach firms compete (in electric coaches if the CO2 stuff bothers you)

      • A.Sedgwick
        Posted September 24, 2010 at 7:43 pm | Permalink

        Some years ago there was a study that suggested ripping up many railway lines and converting them into coach/bus ways. Taking into account the overarching power of trade unions there is no economic justification for expansion, the cost base is just far too high.

        • John
          Posted September 26, 2010 at 1:53 pm | Permalink

          AS I recall, the study found that it would be extremely expensive and (because railway lines tend to occupy less space than roads), the resultant roads would be extremely narrow. I am not aware of any other country in the world which is doing this on a widespread basis. I am sure if you asked the good citizens of Wokingham (or anywhere else) whether they want to see their railway line ripped up and turned into a busway, you would receive a fairly dusty response!

  4. oldtimer
    Posted September 24, 2010 at 10:09 am | Permalink

    The damaging aspect of Mr Cable`s remarks is the implied smear of all of British business. If he knows of rigged markets he should do something about it, not whinge and whine. He is the Secretary of State for Business after all.

    The reaction of British business was not unlike that of the English cricket team, accused of accepting bribes by a Pakistan cricket official (according to rumours he heard). I am not impressed.

  5. R Whitehand
    Posted September 24, 2010 at 10:18 am | Permalink

    Your contributions to Question Time last night were right on the mark. You did not rise the bait laid out by Dumblebee and kept the leftie in his box.
    At last the Conservatives are allowing some one to speak on their behalf who talks sense and not Westminsterspeak.

    • Pamela
      Posted September 24, 2010 at 4:55 pm | Permalink

      I absolutely agree with you – Mr Redwood has the courage to calmly stand up and tell the truth about the state of the country and what is needed to put it right. The legacy of this government is what counts in the long run. I hope they show as much courage as is needed.

  6. Mark
    Posted September 24, 2010 at 11:10 am | Permalink

    Vince Cable came up with some accurate diagnoses of problems the country faces: poor education in schools and inappropriate use of "universities", the massive deficit Labour expanded, the property bubble that dominates banking problems. He even stated that recovery will depend on real growth, not the inflation of the economy that Brown and Darling preformed as a backdrop to the election designed to create a double dip. Unusually for a Lib Dem, he actually put together a sustained and credible attack on the Labour legacy. All spoken with much more candour than most politicians in Parliament today. It appears he has been reading too much about vampire squids., rather than trying to understand the real complexities of banking and the City and the contribution it might make to our future if sorted out.

    However, I am slightly less sanguine than you about some of the remedies he prescribes. A Green Bank, to make loans to uneconomic projects that depend on subsidies, while encouraging "metal bashing" to go to Asia because of our unnecessarily high energy costs; heavy taxation of our most value adding people to encourage them to emigrate; destruction of banking ("been there done that") except for loans to small business. It's no way to achieve the growth he aims for, while ignoring the impact of constricting regulation and excessive taxation.

  7. grahams
    Posted September 24, 2010 at 11:21 am | Permalink

    Heavy-handed government interfvention in the name of competition is no better than any other kind of heavy-handed government intervention.

  8. Bob
    Posted September 24, 2010 at 12:24 pm | Permalink

    Good show on QT last night, Mr Redwood. What a shame no-one has called out Mr Hasan (whose politics are absurd) for his remarks about non-Muslims:
    http://www.youtube.com/watch?v=WhPeyxJ7vGU

    If it was right to confront Mr Griffin with his stupid views (as it surely was), it would seem no less correct to force Mr Hasan to address his own ideological oddities.

  9. Mike Stallard
    Posted September 24, 2010 at 1:37 pm | Permalink

    OK, loads of words. But when are taxes going to come down and regulation going to be slashed. it is all going typically slowly at the moment. (PS This is in no way personal. I am an OAP and I only brush against ridiculous form filling – I have just two more hours signing lies on Monday afternoon – unpaid natch).

  10. forthurst
    Posted September 24, 2010 at 2:06 pm | Permalink

    I do not like the conflation of banks within the concept of capitalism and business as though we have to accept the former doing whatever they like as the necessary adjunct to not having state operated communism. The purpose of entrepreneurialism for the consumer is to supply a need either that has not been met before or or supply it more cheaply or better. When banks lend money reponsibly so that depositors can retrieve theirs with interest, then they offer a very necessary supporting role to capitalism, but large parts of what banks do as well as some other finiancial institutions is predartory and parasitic and would preferanbly come within the criminal code and if it did, none would complain other than those who believe the rest of society owes them a very fat living indeed.

  11. Trev
    Posted September 24, 2010 at 3:01 pm | Permalink

    I am not a great fan of Cable – but all the attacks on him since the election are way overdone.

    He pointed out he was a supporter of business in his speech and of small businesses. His comment of capitalism tending to monopoly is self evidently right – look at Tesco and the supermarket cartel and look at the banks for goodness sake.

    I cannot take anybody seriously – Tory capitalist or otherwise who betray their ignorance by selectively quoting and ignoring the facts staring them in the face.

    • simon
      Posted September 25, 2010 at 11:41 pm | Permalink

      Free markets leading to monopolys was something Margaret Thatcher had trouble grasping when Lord Weinstock tried to explain it to her .

  12. StrongholdBarricades
    Posted September 24, 2010 at 4:03 pm | Permalink

    The only issue I have with Mr Cable would be ably demonstrated by an interview of him by Andrew Neil where he is usually left looking flaky and readily flip-flops his opinions.

    I think that the enquiry into Bank Regulation is too late. The horse has bolted out of the country, never mind the stable. It is unlikely that the same issue will arise again if the Coalition ensures that the BoE actually watches house price inflation as part of it's brief and encourages more house building or emmigration

  13. Alan Wheatley
    Posted September 24, 2010 at 5:55 pm | Permalink

    I should like to add another area where a more competitive approach is required – Final Third Broadband. OFCOM have established that there is no business case for BT to roll out Next Generation Access (to broadband) to a third of the population, who are left to their own devices or government subsidy. Yet there are other companies who are demonstrating that they can do what BT say they can not. While this only applies in certain cases, it does undermine BT's unimaginative and don't care attitude and OFCOM ineffectiveness.

    BT saying there is no business case for the Final Third should not mean they have the last say on the matter. I suggest the government invite tenders to roll out NGA to the whole Final Third taking over BT's physical infrastructure, which will make it much cheaper because of scale and being able to use the existing infrastructure rather than construct a new one, even allowing for compensating BT for the loss of "the third", which in any event cannot be worth much as their own assessment shows.

    Come on Vince, give us the cable!

  14. Alan Jutson
    Posted September 24, 2010 at 6:03 pm | Permalink

    Think you have been correctly restrained in your comments ref Vince Cable, his comments mean that he is digging a big hole for himself, into which he will eventually have to jump.

    Thought your comments on Question time clear, concise and the most sensible of all those present.

    Clearly the BBC thought Vince and yourself may be at loggerheads, inviting you both on the same programme at the same time, bet they were dissapointed.

  15. Iain Gill
    Posted September 24, 2010 at 6:42 pm | Permalink

    john,

    i only had time to see about half of question time but during the bits I say I was very impressed with your performance. Many thanks from all of us out here who need these things to be said.

    Cheers

  16. P Haynes
    Posted September 24, 2010 at 7:04 pm | Permalink

    It would also be good if there could be fair competition in electricity so that mad wind power schemes could be avoided.

    Reported cost of the Thanet offshore wind scheme reported at £780M. Estimated annual true (unsubsidised) value of the intermittent electricity produced perhaps as low as £17M. Maintenance, depreciation, insurance etc. perhaps 10% of the initial costs -£78M.

    Why?

  17. John C
    Posted September 24, 2010 at 11:21 pm | Permalink

    The media don't seem to really get this whole coalition thing.

    Personally, I think it's a brilliant development and wish it well.

    Peter Oborne's article this week in The Telegraph was spot on. If this were New Labour the party machinery would have been deployed to try and destroy Vince Cable with off the record briefings and all the evil means that the odious cabal of Alistair Campbell, Ed Balls, Gordon Brown, Charlie Whelan and Damian McBride could muster.

    In contrast. Number 10 let it be known that they saw the speech and were relaxed about it.

    Proper grown up politics.

    Mr Redwood, in my opinion, you are a credit to the political class by being relaxed about the fact that, in a coalition, you have to compromise.

    I have commented before about your inaccurate portrayal in the media as a right wing head case. The more I see you on the media and read your blogs, the more impressed I am. The only thing that puzzles me is why you are not a minister.

    Ian Hislop, in my opinion, made the best observation of the night.

    For decades, the public have pleaded with politicians to get away from confrontational party politics and work together.

    When they do, for the first time in 80 years, that same public accuse them of selling out!

  18. Fox in sox
    Posted September 25, 2010 at 7:53 pm | Permalink

    The best bit of Question Time was Vince's face when you were complimenting his speech. Praise from John Redwood will not have gone down with his fans. I expect that was intentional!

  19. withygreen
    Posted September 28, 2010 at 1:48 am | Permalink

    P Haynes is spot on. It is the professional "unions" that are uncompetitive. Legal costs are far too high, although the market is beginning to take its toll. The medical profession has written its own contracts with government to the detriment of patients – and now its own junior doctors, for the Working Time Directive is an irrelevance. Teachers have controlled state education for far too long. The Financial Services industry makes money for its participants, not investors. Remuneration committees reward directors' failure through a cosy union of non-execs. These are all structural problems that this government has to deal with if it is be seen as "fair" and if it is to win the next election.

    • Bazman
      Posted October 6, 2010 at 8:54 pm | Permalink

      Bankers have organised themselves a great professional union.

  20. Bazman
    Posted October 5, 2010 at 7:28 pm | Permalink

    I took the speech as not an attack on capitalism, but on communism for the rich which is working very well here and abroad.

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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