Article for Wokingham Times

Both sides in the referendum campaign tried to use non politicians to get out their message. They wanted to portray a different kind of politics. Both sides ended up spending large sums of money retailing highly contentious claims in a desperate attempt to grab some headlines and make this rather abstract topic interesting and important to people. Most of us were still left wondering why this was the issue above all others that the Coalition wished to test with the public, and why now was a good time to spend a significant sum of money on organising and counting such a vote.

It was difficult to believe that the extra costs of AV voting would make such life changing differences to the vast sums of public spending as some on the anti side said. It was impossible to understand the claim that AV would make MPs in safe seats more attentive and better MPs, when safe seat MPs already get more than 50% of the vote so AV would make no difference to their election. AV couldn’t even guarantee that after some had voted more than once each MP would have more than 50% of the vote, as some people would not wish to vote for more than one candidate.

Whilst all this was going on far more important things were happening in the world economy. Portugal is close to agreeing a very expensive bail out package with the EU and IMF. I fear this is yet another mistaken proposal, like the Greek and Irish ones. Countries with too much debt do not need more borrowing. They need help to grow their economies more quickly, and to get the deficit down by a combination of extra tax revenues from growth and better control of spending. Countries with weak banks need to force those banks to sort themselves out. I continue  to oppose any UK involvement in these expensive subsidies, both because I do not think they solve the problem for the country seeking help and because the UK cannot afford it.

The recent collapse in commodity prices is helpful. UK inflation has been far too fast, squeezing incomes and damaging recovery. If the lower prices persist it will speed the time when the emerging market economies can take their foot off the brake, and give us better prospects for world growth.  Over the first year  of the Coalition government current public spending was up by 5.1%. Further increases are planned for each of the next four years. Cutting the deficit relies heavily on getting more tax revenue out of a growing economy. I am urging the government to do more to promote growth by setting more realistic tax rates and levels of regulatory cost. Between the two Coalition budgets of June 2010 and March 2011 they decided to spend and borrow an additional £34 billion over four years. We cannot afford more such slippage, and do need to see those rising revenues from faster growth for the policy to succeed. Greece, Portugal and Ireland have shown how if a country spends and borrows too much it ends up in financial crisis, paying very high interest rates for the money it needs to borrow and making economic recovery that much more difficult.

This entry was posted in Articles. Bookmark the permalink. Both comments and trackbacks are currently closed.

One Comment

  1. BobE
    Posted May 12, 2011 at 9:12 pm | Permalink

    John, when it goes pear shaped our leadership will scuttle off to nice jobs in Brussels. The final episode will be full EU takeover. Our leaders only concern themselves with ingrating themselves with the Brussels masters. Even a loyal MP must see the truth in this.
    BobE

  • 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.

  • John’s Books

  • Email Alerts

    You can sign up to receive John's blog posts by e-mail by entering your e-mail address in the box below.

    Enter your email address:

    Delivered by FeedBurner

    The e-mail service is powered by Google's FeedBurner service. Your information is not shared.

  • Map of Visitors

    Locations of visitors to this page