Dame Lucy is pleased with the way things are going

I have been sent a copy of Dame Lucy Doolittle’s latest letter to Dr Roy Spendlove:

from The Director for co-ordinating cross cutting initiatives and partnerships
Whitehall
SW1

Dear Roy,

I am pleased to report that we seem to have weathered the storm over public spending cuts as well as could be expected. The campaign to say “too far too fast” has been too political for my taste, but I fear privately that it seems to have gained some traction. Ministers have to accept they need to be careful from here, given the tough criticisms they are experiencing from the Opposition. As we move into the second half of this Parliament I woudl expect greater realism about spending totals to prevail. The original figures for 2013-15 always looked too tight to me.

Ministers do not seem to be concerned by the paradox of our situation. Total public spending is up by 7.8% this May compared with a year ago, but there have been cuts as most acknowledge. It just goes to show how expensive it is now to provide good government, and how many demands there are on Ministerial priorities and budgets. It is good that public spending has avoided the worst of the cuts as originally vaunted in the media, as public spending has contributed to cushioning the fall in total output at a difficult time in the world economy. I see that real public spending overall is up, but as you know it does not feel like that from where we are sitting.

I give you this background as Ministers do now need more help from your Miscellaneous Projects Division. They are naturally concerned about the double dip and the Euro crisis in the background dragging down the economy. They therefore would appreciate our help in identifying and pursuing capital projects that could provide some counter cyclical stimulus to help lift the economy. They would prefer private finance, but I have explained that these are difficult times and we may need some pump priming public sector money. I think it would be best if you concentrated first on the desirable projects, leaving open the method of financing. We can sort out those details later, once Ministers have indicated their preferences on the type and scale of projects.

We still have some difficult distribution issues for money between departments as a result of Ministerial priorities. Overseas Aid is relatively well off, and European programmes seem to do quite well. At the other end of the spectrum defence and local government seem to be in a tight squeeze. We need to reflect the bduget priorities, though of course we can suggest some relaxation of the squeeze in areas where there are good shovel ready projects. I suspect Ministers are going to be pragmatic about the spending totals given the need for more activity. It looks as if the Bank will oblige by keeping government borrowing rates very low, so there is an incentive to get on and borrow now whilst we can lock in to such favourable rates.

I do hope you can theme some of these projects as green ones, as this will help us meet Ministerial aspirations and EU targets in this important area.

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40 Comments

  1. evad666
    Posted July 1, 2012 at 5:12 am | Permalink

    1.) The Political establishment, the Media and the Financial Sector have either actively or through wilful neglect conspired with foreign nationals against the interests of the English Citizens to deprive said citizens of the following:-
    a. Free and fair elections :-
    i. through selective media manipulation.
    ii. through demographic manipulation
    b. An appropriate and modern education system to provide maximum availability of contemporary and where needed traditional skills to assist citizens in making the maximum contributions to society.
    c. Gainful Employment so that the maximum number of citizens may contribute constructively to the society.
    d. The Financial rewards of the application of the skills through unfair and dishonest manipulation of the citizens finances as a result of a failure to ensure good governance throughout society.

  2. Kevin Ronald Lohse
    Posted July 1, 2012 at 6:15 am | Permalink

    I see that Dame Lucy was unable to access a spell-checking programme. Another example of civil service incompetence when provisioning IT.

  3. lifelogic
    Posted July 1, 2012 at 6:36 am | Permalink

    Another letter, so depressingly close to the truth. Expenditure 7.8% up yet reported by the BBC and labour as cutting “too fast and too quick”. Everyone saying we should “pay back” this mortgage more slowing. Well it in not a mortgage it was not used to buy anything useful and we are not paying anything back quite the reverse.

    So Cameron might give a referendum, he says, in an interview with the Telegraph. Well after the next election, I assume, when he will be gone and perhaps taking up his reward job at the EU. So what he promises after the next election is pretty irrelevant as he clearly realises.

    Clearly was what he promised before that last election was too as we have all seen.

    Indeed anything he promises at all it seems such as:-

    Cameron – I will have a bonfire of red tape
    Cameron – Pledges to tackle ‘health and safety monster’
    Cameron – I’ll protect Britain from European superstate
    Cameron – Will make UK the most business friendly
    Cameron – Demands Lisbon referendum
    Cameron – launches immigration crackdown
    Cameron – promises to cut deficit

    Not one delivered and all the movement clearly in the wrong direction.

    • lifelogic
      Posted July 1, 2012 at 7:16 am | Permalink

      I see the anti-business secretary, Vince Cable, has urged shareholders in UK banks to rise up and purge their companies of corrupt executives, whom he says have allowed “systemic abuse” to take root in the banking system.

      Shareholders cannot even get honest accounts that give them a real picture of the company and cannot control top pay let alone route out fraud within the banks. What an absurd suggestion.

      The job is one for the regulators and the criminal court system what on earth can shareholders do they have not power even to get the information needed?

      • Bob
        Posted July 1, 2012 at 4:34 pm | Permalink

        The shareholders cannot vote their shares if the shares are held in a pension fund or an ISA account.

        The fund managers get to vote instead, and since they often enjoy a bottle of Bolly at the golf club with the execs on whose remuneration they are voting, you can’t imagine them voting against a nice big pay rise, share option award or bonus, can you? No of course not.

        This is how Joe Public are being ripped off by the City fat cats, and the government could correct it (if they wanted to). But they don’t want to. Does anyone know why our elected politicians don’t want to stop the City fat cats from ripping us all off?

        • A different Simon
          Posted July 2, 2012 at 9:52 pm | Permalink

          Another reason why they won’t provide a viable pensions scheme for all .

          Talk about throwing us to the lions !

    • lifelogic
      Posted July 1, 2012 at 1:00 pm | Permalink

      I see that Prince Charles and the Duchess of Cornwall has landed payers with a bill of £1.3 million – up from £1.08 million last year. Good to see he is doing far more than his fair share to warm the planet.

      It might however be politic for him not to lecture average families who perhaps spend about 1/1000 of this (per head) about their C02 usage. Especially when the whole Carbon exaggeration theory is so clearly disintegrating in the view of real & sensible unbiased scientists.

      • Bazman
        Posted July 2, 2012 at 5:27 pm | Permalink

        Write him a letter telling him this.

        • lifelogic
          Posted July 3, 2012 at 8:17 am | Permalink

          Why? He surely would not read it or give any sensible reply. He must have decided that this blatant hypocrisy and political activism is how he wishes to play his royal role, for some reason or other.

          Perhaps he thinks it help him sell more of his over priced biscuits, over sweet yogurts, promote more quack medicine, green bling or something? He should copy his parents rather more.

    • forthurst
      Posted July 1, 2012 at 1:32 pm | Permalink

      He must confuse doing things with talking about doing things; they are afterall quite similar. On the other hand he has done Libya for which, I’m sure, the majority of Libyans are deeply grateful as they look around at the ruins of their once prosperous country, and he is doing Syria now, so another lovely war to service the appetite of neocons to use our blood and treasure to further their ravenously insatiable geostrategic ambitions. Never mind, plenty of asylum seekers heading this way to join those who we have detached from Afghanistan where it’s our war as normal. Isn’t it wonderful, by the way, how we are now celebrating our soldiers who have had their legs blown off whilst fighting the very real (ho hum) war on terror: it really makes one proud to be British.

      • alan jutson
        Posted July 2, 2012 at 7:59 am | Permalink

        Forthurst

        Yes at our expense some of our young men and women go over there to fight for their freedom and risk getting blown up, killed or injured.

        Some of their young men an women come here, and risk getting looked after in the UK, again at our expense.

        Makes you wonder why we are there in the first place, why are they not all helping us to help them in their own Country, if that is what they really want.

        Makes you wonder

        • stred
          Posted July 2, 2012 at 8:37 am | Permalink

          There was a shortage of poppies of the right quality for the manufacture of morphine a few years ago. What better way to benefit the Afgan tribal leaders and damage the Taliban could there have been than to pay them for the crop and deny it to the drug dealers. Instead we spend a fortune blowing everything up, alienating the locals and risking the lives of our best young people.

  4. Denis Cooper
    Posted July 1, 2012 at 9:42 am | Permalink

    As an aside, JR, shouldn’t the police be instructed to start an investigation into the attempts to manipulate LIBOR, with a view to bringing criminal charges against those responsible?

    Even if no crime has been committed under statute law, which seems rather unlikely, the common law offence of “conspiracy to defraud” seems to fit the bill.

    One wouldn’t want to think that the government is setting an “independent inquiry” as a diversion from the need for a police inquiry, as that would be to pervert the course of justice.

    • JimF
      Posted July 1, 2012 at 11:12 am | Permalink

      Yes I too was thinking that the silence on this blog is deafening vis a vis alleged price-fixing in the cost of money. It is yet another example of banks being anti-competitive and merits some sort of comment here.

    • lifelogic
      Posted July 1, 2012 at 12:46 pm | Permalink

      Surely lending people and companies money at an interest rate that you then artificially manipulate. This in order to obtain financial advantage by cheating the borrower is an offence?

      • zorro
        Posted July 1, 2012 at 9:01 pm | Permalink

        ‘Obtaining a pecuniary advantage by deception’ – Section 16(2) Theft Act 1968….It was repealed a couple of years ago but is now covered in the Fraud Act 2006…..We now have “Fraud by false representation”, “Fraud by failing to disclose information”, and “Fraud by abuse of position”…..

        Take your pick…..

        zorro

        • Denis Cooper
          Posted July 2, 2012 at 7:59 am | Permalink

          According to this yesterday evening:

          http://www.telegraph.co.uk/finance/9368655/Adair-Turner-lying-bankers-heads-should-roll.html

          “Lord Blair, a former head of Scotland Yard, added his weight to the call for a criminal investigation.

          He said that there had to be police enquiries into revelations that traders at Barclays, Royal Bank of Scotland and other banks had tried to fix the rate.

          “Anybody, the youngest detective, would say this is conspiracy to defraud. It can mean nothing else. And therefore someone has to launch a criminal inquiry into this behaviour,” he told Sky News.”

          There is absolutely no excuse to hold back from a criminal inquiry.

          Conspiracy to defraud is still a common law offence, maximum penalty 10 years in prison.

          Even if no crimes have been committed under statute law, which seems unlikely, there is still that common law offence, and the SFO are well aware of it – here’s the section on it in their Operational Handbook:

          http://www.sfo.gov.uk/media/98150/conspiracy_sfo_ops_handbook_topic_march2012.pdf

          The police should immediately start an investigation with a view to bringing criminal charges against the perpetrators, and they should follow that investigation wherever it leads them, even if that means the Bank of England or No 11.

    • davidb
      Posted July 1, 2012 at 12:54 pm | Permalink

      How bemused I was to hear an ex chancellor bearing a frenchified pronunciation of his old Scots surname , suggest yesterday that any inquiry should be headed by a bankster. That surely is part of the problem. Might I propose that any inquiry be headed by George Galloway or better, Billy Bragg or Mark Thomas?

      Would the Leveson inquiry be better if conducted by Rupert Murdoch on the grounds that he is familiar with the newspaper industry?

    • forthurst
      Posted July 1, 2012 at 1:59 pm | Permalink

      In principle, if the banksters are involved in a market, it is rigged. How else do you imagine they achieve huge profits from not making anything? Crystal Balls?

  5. NickW
    Posted July 1, 2012 at 10:12 am | Permalink

    Somebody should tell Dame Lucy and Dr Spendlove that there are warnings of major storms over Europe and that they should board the windows and tie themselves to the nearest solid object.

    The German newspapers are carrying headlines such as “Europe is coming for our money”, (Die Welt”)

    The German’s, like the British have realised that their politicians have lied and deceived them and led them into a commitment to fund the whole of Europe at a cost which will bankrupt the country; well over 50% of German GDP.

    The German people are now screaming for democracy in Europe; it is time our Government added its weight behind the very considerable force of the German people.

    http://www.zerohedge.com/news/germany-cries-europe-coming-our-money-greece-promptly-obliges

    • Denis Cooper
      Posted July 1, 2012 at 11:43 am | Permalink

      I think our government is more interested in supporting the German government rather than the German people.

      Otherwise it would not be so keen to get the ESM up and running, and it would not be pushing through a Bill to approve the necessary EU treaty change:

      http://services.parliament.uk/bills/2012-13/europeanunionapprovaloftreatyamendmentdecision.html

      “A Bill to make provision for the purposes of section 3 of the European Union Act 2011 in relation to the European Council decision of 25 March 2011 amending Article 136 of the Treaty on the Functioning of the European Union with regard to a stability mechanism for Member States whose currency is the euro.”

      Started in the Lords on May 10th, third reading there on Wednesday, then across to the Commons.

    • Timaction
      Posted July 1, 2012 at 11:51 am | Permalink

      I’m afraid the mainstream parties have all lied since 1971 about their true intentions to create an EU superstate by stealth. It was articulated by the Foreign and Commonwealth Office briefing paper 30/1048 of 1971 to Ted Heaths Government. We the public have been consistantly lied to ever since by ALL parties. I’m afraid the public are now wise to the EU nonsense and want out at the earliest opportunity. We simply cannot afford the EU (£9 billion net) its stifling laws and uncompetitive directives (£9 billion annually), open door immigration (millions) taking away jobs and opportunity for our own people. We need a patriotic party leader which we do not have in any of the current mainstream parties. Mr Redwood you really should be seeking to chang your leadership as they are trully hopeless!

    • Bill
      Posted July 1, 2012 at 3:35 pm | Permalink

      Agree. The Germans are becoming fed up with lending money and paying for the profligacy of others and are only willing to lend, so it seems, if they are sure of getting it back, which is why the loans are structured as they are. Presumably, if the euro went bust, it is the Germans who would lose most?

    • Lindsay McDougall
      Posted July 1, 2012 at 5:44 pm | Permalink

      The German version of democracy is to give the European Parliament vastly increased powers in a Federal State. No thank you. Do you not recall what it was Mrs Thatcher said ‘No, no, no’ to?

    • Bob
      Posted July 1, 2012 at 6:14 pm | Permalink

      @NickW

      William Hague finally clears up the confusion over the Tories posture on an EU referendum, during interview with Marr:
      http://www.youtube.com/watch?v=SW60xg_ZJ1w

  6. zorro
    Posted July 1, 2012 at 10:42 am | Permalink

    Good old Dame Lucy, can she be redeployed please……Figures too tight for 2013-15, having increased over the last few years. Give me strength!

    ‘It just goes to show how expensive it is now to provide good government’…….Well, we’re not going to get anything cheap from Dame Lucy, that’s for sure! We get expensive and inefficient.

    More ‘pump priming’….eh?……I wouldn’t have minded if they had used the over 350bn QE to invest in infrastructure, at least do something useful. No, instead they use it to cover their own profligacy and allow the useless, zombie banks to try and repair their balances. They should have been culled, it would have been far kinder in the long run.

    So Dame Lucy suggests ‘shovel ready’ green tosh projects killing real jobs and to meet silly EU targets…….just so typical. Please no more, I can feel the blood pressure rising….

    Well, might as well finish me off – I see Hague is saying there is no change in government policy following Cast Elastic’s flexible non statement on an EU referendum……’not the right time’…….He believes in the EU, he would never choose a time….Even for Cast Elastic, this is a nebulous statement. No human on the planet could possibly put any credence in him coming up trumps on a referendum.

    Zorro

  7. Normandee
    Posted July 1, 2012 at 12:46 pm | Permalink

    Can’t believe you have nothing to say about Cameron’s latest attempt to placate us with another lie, or are you going to defend him ?

  8. NickW
    Posted July 1, 2012 at 4:04 pm | Permalink

    Dame Lucy will be over the moon to hear that France, Italy, Spain and Greece have adopted her Brownian, (Gordon), notion of severe negative spending cuts.

    http://www.zerohedge.com/news/europes-phantom-austerity-spending-cuts

    There is no austerity in Spain, France, Greece, or Italy, absolute Government spending in these Countries has increased just as ours has.

    European politicians are encouraging a hate campaign against Germany and Frau Merkel to conceal their own incompetence and paper over the cracks in the Eurozone which are due to differences in productivity.

    Politicians in the bail out countries are behaving like aggressive beggars, attacking anybody who refuses to give them money. Perhaps part of the truth is that they, like us, have been dragged down by bankers who threw morality and common sense out of the window in a frenzy of greed. If that is the case, it is the Bankers who need to be made to pay the price, not the citizens who have been treated with absolute contempt by Governments and Banker alike.

    The European “Union” is rapidly disintegrating into a bunch of starving cats fighting in a sack. Walking away from it will soon be a matter of survival.

    • NickW
      Posted July 1, 2012 at 4:31 pm | Permalink

      Greece has destroyed its economy not with spending cuts, but with tax rises.

      There is a vicious circle between tax rises; shrinking GDP, (and therefore taxation income), followed by more tax rises in an attempt to balance the budget. There comes a point when the economy enters an economic black hole from which there is no escape.

      How close is the UK to that point?

      Does Hollande realise the danger for France?

      • Bazman
        Posted July 2, 2012 at 5:45 pm | Permalink

        The International Monetary Fund has studied 173 cases of budget cuts and found that the consistent result was economic contraction, which a country can handle when the economy is growing but not when it is on its knees and Paul Johnson, director of the Institute for Fiscal Studies, an organisation that is an impartial as a judge, struggles to keep a neutral tone when he tells of the chaos in the public finances. How can the government cope without growth-producing tax revenues to fund the national debt? Should it introduce a mansion tax, as Vince Cable suggested? On no account, for that would upset the wealthy and this is a government out of agitprop nightmare: of the rich, by the rich and for the rich. Extend VAT to food and children’s clothes? Would working people accept public schoolboys taxing the essentials of life?

  9. Colin Hart
    Posted July 1, 2012 at 5:17 pm | Permalink

    Don’t lift a finger to help the Germans.
    They got us all into this mess.
    Now they have got to learn the hard way.
    Sounds familiar?

  10. Leslie Singleton
    Posted July 1, 2012 at 5:42 pm | Permalink

    This huge payout direct to Spanish (and no doubt soon other) Banks, is it payable on demand and how is it to be spread over the banks involved? Dare I ask whether there is to be anything resembling Credit Analysis with actual limits (what an American Bank mght call DPA’s – Deposit Placing Authorizations) for each bank—or bearing in mind that the word I have seen used is “recapitalisation”, is the money going in in the form of Shares, which presumably cannot be the case because of the real or implied Seniority issue which would not even have been mentioned if we were talking Shares? As they say, you couldn’t make it up–throw it up maybe but not make it up.

  11. Leslie Singleton
    Posted July 1, 2012 at 9:01 pm | Permalink

    I hesitate to agree with Cable but he was right about it being nothing short of crazy to allow a (foreign) investment “banker” to be CEO of one of our major Retail Banks. I put “banker” in inverted commas because having worked for both – not out of choice – I didn’t detect anything resenbling banking in the investment “bank”, only the anything-for-the-bonus and SFW? if it goes wrong attitude as accurately portrayed in the media.

  12. A different Simon
    Posted July 1, 2012 at 11:49 pm | Permalink

    Is Dame Lucy in favour of extraditing our discredited bankers for trial in the US ?

    Given that we can extradite people with mental health problems who haven’t actaully caused any damage there wouldn’t seem to be a case for protecting people of sound minds who are capable of defending themselves and can afford the best lawyers .

  13. Leslie Singleton
    Posted July 2, 2012 at 3:45 am | Permalink

    Good with the fancy arithmetric I’ll give them that these masters of the universe types but when it comes to judgement they didn’t have the savvy to appreciate that leaving e-mail evidence all over the place perhaps wasn’t a good idea.

    • Bazman
      Posted July 2, 2012 at 5:33 pm | Permalink

      E-mail evidence? Do you know who I am? Hey! We’ve got someone here who doesn’t know who he is! Won’t be like that will it?

  14. Phil Richmond
    Posted July 2, 2012 at 10:18 am | Permalink

    Hi John – Personally I cannot see any light at the end of the tunnel. Our political class have completely failed us.
    We have a Conservative PM who is nothing of the sort. In fact he is a devious, manipulative, (etc-ed) Europhile who treats the British people with utter contempt! How did you and your colleagues allow this quisling…. to become Tory leader? Why is no-one trying to remove him?
    We will never get a free & fair In/Out referendum thats for sure!

    Best case scenario for this country is that Cameron loses in 2015 (my vote will be UKIP instead of campaigning as a Tory activist), some idiot with a red rossette become PM. Labour will completely bankrupt the country. 2020 is the earliest opportunity to get the sort of Tory leader we need to turn the country around. Thats too late – were finished.

  15. RDM
    Posted July 2, 2012 at 11:28 am | Permalink

    Project Ideas:

    This will, in my opinion, be a problem for the next few years, so;

    1) I propose, USA like, a number of small development banks/funds, not based on Collateral/Matched funding, but Innovation. There are a number of Innovations/Technologies available that could make daily things a lot cheaper to do, but will need long term Project Finance. i.e Gas over electric drive-trains for Truck, Trains, even smaller ones for cars. All based on the premise that Gas (local) will be cheaper?

    2) A number of Community Banks, based on a number of Post Office outlets and backed by a local Solar Farm, etc ..

    Projects:

    1) Small Hydro, wind powered water pumps and storage, smaller lagoons along the Seven Estuary, tidal farms within the Seven Estuary, etc …

    2) Sea bed exploration and exploitation of Rare Earths (aka Heavy Metals).

    3) Sub-Seabed (2.5 km down min) coal/gas exploration (Swansea bay).

    4) Old coal mine gas exploitation.

    etc …

    • A different Simon
      Posted July 2, 2012 at 9:50 pm | Permalink

      RDM , I would dispute that expenditure on solar farms in our location is an investment . Until the efficiency/cost ratio improves , it’s just social engineering and thats something we desperately need to move away from .

      Shale is the here and now and an ideal project for local investment for field development .

      UK Infrastructure projects like things you mention would seem ideal candidates for funding by pensions funds .

      As well as providing a positive return for the funds , they provide a benefit for future generations too and help them earn the money to pay our pensions .

      I would suggest pension funds money should also be used for these type of infrastructure projects . Here are some other suggestions :-

      – these funds to kickstart building of social housing and address the shortage

      – fund nuclear power stations rather than this virtual PFI scheme the Govt want to put in place by putting a floor under energy costs to guarantee a profit .

      – purchasing farms which councils are selling off at rock bottom prices . This shameful flogging off of family silver has been kept quiet .

      – freshwater reservoirs . Rebuilding our road runoff system to direct the majority of it to reservoirs rather than sewerage works .

      I reckon a national pension fund should finance all this through NI contributions but that the board of trustees should be elected by the populace .

      Imagine a growing pool of assets which the Govt could not flog off – the sovereign wealth fund which the North Sea should have bequeathed to future generations .

      • RDM
        Posted July 4, 2012 at 3:36 pm | Permalink

        A different Simon:

        I don’t disagree with your suggestions.

        What I do disagree with is the 19th century solution suggested by P Hines MP. One big barrage that will destroy (completely block) the seven estuary. We need to develop new technology based of smaller units.

        Also; I am completely against Coal mining, within S Wales anyway, simply because of its cost (Human, Environmental, and Economic). The coal left under Neath Valley or Swansea bay is already flooded, far to deep(2.5km), wet, and there is not a large enough seem for it to be a variable investment opportunity. If Tata what’s to invest, for their own benefit (Port Talbot), then let them.

        I’m against Onshore Wind Farms because they are intermittent, need backup base load, and spoil the one industry Wales can build. i.e. Tourism.

        Offshore, I’m in favour.

        A Gas based strategy, I’m in favour.

        I favour of Nuclear, is there a new funding strategy possible?

        What does worry me is how long it is taking, to get through the politics within cabinet?

        Regards,

        RDM.

  • 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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