Heseltine or Redwood ?- an answer to Matthew Paris

 

          In an interesting  piece on government intervention Matthew Paris brilliantly exposed the dilemma that faces any Conservative individual, and any Conservative government. When should the might of state power be used for the good in economic matters? How far should a government go in freeing the economy  and following the laissez faire doctrine? How much should it seek to mould, speed or improve the market by Ministerial decision?

            Most of us accept there has to be a balance. Much of UK  economic political debate is about striking that balance. As one towards the free market end of the spectrum, I have always accepted the role of government to enforce a strong competition law, to provide a legal framework, to make some planning decisions about where things can be built in our cramped island, and to regulate the basics of the banks intelligently. In a mixed economy where the state controls so much of the money and resources, the state does need to take strong and good action where it is in charge.

          Matthew Paris asks me how I would have responded to the collapse of Rolls Royce, and what I thought about government intervention in Docklands to create Canary Wharf. They are fair questions which may help to illuminate how the balance should be struck.

             I was a keen exponent of Docklands redevelopment as Chief Policy Adviser to Margaret Thatcher. The land of the old docks was largely in public sector hands. Local and national government needed to provide a planning framework to get things moving, and was able to pump prime what become a very successful private sector property investment. As Adviser, and subsequetly as one of the responsible Ministers I was egging it on and helping design the right mix of public sector intervention and private sector led investment. The aim was to turn public liabilities into mixed economy assets.

              I cannot say how I would have responded to the bankruptcy of Rolls Royce, as it was before my time. Without knowing the detail it would be phoney to dream up a response now.  I can give a parallel in perhaps a more important and testing set of cases. When major banks were in financial trouble in 2007-8 I was a keen exponent of keeping the government out of owning the shares. I urged the adoption of controlled administration.

           This  would have used Bank of England temporary support to avoid meltdown of deposits and UK clearing activities, but would have forced the break up of a bank like RBS. Shareholders and bondholders would have taken more of the hit, and the foreign and investment banking arms would have been sold off rapidly to raise funds and cut risks.  This policy is now adopted by the authorities  as the way future banking crises should be handled, but is still not being followed for the one we are living through. It is rarely wise for the state to step in and nationalise the lossses. I think we would be making more rapid economic progress today if we had sorted the damaged banks out at the time of the collapse, instead of letting them carry on as malfunctioning conglomerates propped up by the public sector.

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124 Comments

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

    The government need to do very little beyond the basics, Docklands really just needed low taxes and a freed up planning system. They should give the whole country these advantages rather than picking special EZ areas for special treatment. Thus discriminating unfairly against others areas and putting businesses in the wrong place for fiscal reasons.

    Shareholders and bondholders clearly should have picked up the bill for the banking fiasco. Risk and reward need to be balanced, this is distorted by the government’s deposit protection “insurance” scheme and interventions in banking.

    RBS/Natwest is still a major cause of lack of growth, it is pulling cash back from businesses all over the place. I suspect the nationalisation of Rolls Royce did not achieve anything that would not have happened anyway by selling of the remains of the company to the private sector. The car business was indeed sold off shortly after. The RR Aerospace in Derby is one of the few world class engineering businesses we have left.

    The key thing to remember is that when government intervenes they are doing it with money they have taken of other businesses and individuals. The damage done by this taxation is nearly always far greater than the good done by intervention.

    • lifelogic
      Posted November 6, 2012 at 7:56 am | Permalink

      I see Iain Duncan Smith is saying bus passes and TV licences for rich pensioners are an anomaly, as he calls for well-off to hand back perks. I do not imagine many rich use the buses that much anyway but yes get rid of bus passes and let them keep the money and spend it how they wish. The anomaly on TV licences is that anyone has to pay in order to be drip fed green tosh, big state, pro EU propaganda by the BBC.

      Interesting to read on Delingpole’s blog how the BBC is spending our money on resisting freedom of information requests, relating to their absurdly biased and unscientific line on the green issue. Ramming the quack science exaggerations down every one’s throats.

      http://blogs.telegraph.co.uk/news/jamesdelingpole/100187595/the-bbc-and-jimmy-savile-peas-in-a-pod/

      And we have socialist Boris calling for a living wage for everyone, so that will be even more businesses lost and yet more jobless if he gets his way. Anyway what is a living wages for one person is not one for another. Surely it is up to employers and employees to agree a wage and terms (or not to agree and go for another job) as suites them both at the time.

      • Disaffected
        Posted November 6, 2012 at 8:29 am | Permalink

        Spot on. Mass immigration employment is based on negotiated wage settlements. Time for BBC to be made private. There is no benefit to the public, let it sink or swim on its own merits. The government and EU should not have a publicly funded propaganda unit.

        • Credible
          Posted November 6, 2012 at 4:12 pm | Permalink

          ‘Time for BBC to be made private’
          Roll on trash telly on all channels then.
          News won’t be any less biased, just skewed by different interests.

          • lifelogic
            Posted November 7, 2012 at 10:39 am | Permalink

            The only justification for the BBC is if they make unbiased quality news and educational programs that others would not make anyway not the current bias and drivel.

            Any state subsidy should be towards the production of these. Not as now to fund a state propaganda organisation.

          • Jerry
            Posted November 7, 2012 at 1:15 pm | Permalink

            Other than in times of war when has the BBC been “state run”?…

      • Bob
        Posted November 6, 2012 at 9:53 am | Permalink

        @lifelogic
        “…the BBC is spending our money on resisting freedom of information requests…”

        They hired expensive lawyers to prevent publication of the Balen Report too.

        It appears that the BBC has much to hide.

        • Jerry
          Posted November 6, 2012 at 10:52 pm | Permalink

          @Bob: Not as much as a certain other media group though, but never a word again those shown to have broken the law, no just your far hate campaign against the BBC…

          • sm
            Posted November 7, 2012 at 9:32 am | Permalink

            When scandals have hit certain other media outlets, they have been closed down.

            Does it not strike you as being odd.
            That at public expense lawyers are being used to prevent publication of a report. Why would a public service broadcaster and mass media organization with a public service remit be motivated to do this?

            The BBC should be prepared to get sued for releasing information to protect free speech. More sunlight please.

          • lifelogic
            Posted November 7, 2012 at 10:44 am | Permalink

            Clearly if the law has been broken that is up to the police to consider acting.

            I do not hate the BBC some of it is great I would happily pay for radio three and even radio four, BBC 2 and 4, despite the huge pro EU, ever bigger state, green tosh bias.

            Just get rid of the drivel and the bias. I do not wish to be indoctrinated by the BBC using my own money.

          • Jerry
            Posted November 7, 2012 at 1:25 pm | Permalink

            @lifelogic: Indeed, but that is no reason to throw the bath (never mind baby) out with the dirty water, what you point to as reasons to scrap the TVL (and perhaps even the BBC) are actually reasons for better -even greater- regulation and what is more, these regulations should apply to all UK print and broadcast (hosted) media. If the BBC is biased then they are by no means alone, it is just that they are not biased to your own political flavour…

          • Jerry
            Posted November 7, 2012 at 8:37 pm | Permalink

            @sm: You miss the issue, and in any case the media company has not closed down [1], and unless you are suggesting that senior people within the BBC not only knew about the abuse but instructed these perverts to carry out the abuse…

            [1] one title has been closed, to be replaced by another title, something that many in the industry suspected would have happen anyway due to the need to consolidation and cut costs

            Reply: No-one is suggesting BBC management required such misconduct

          • Jerry
            Posted November 8, 2012 at 5:28 pm | Permalink

            @Reply: Indeed John, this is why I find it both mysterious and somewhat distasteful that some people seem to be using such (alleged) personal misconduct to ‘bash’ a broadcaster [1] who they simply do not think should exist due to their own political beliefs – whilst possibly too strongly worded my comment was an attempt to illustrate this.

            [1] just as some are now doing to the ‘Westminster Village’, as pointed out by Mr Cameron this morning on ITV’s “This Morning”.

        • lifelogic
          Posted November 7, 2012 at 5:50 pm | Permalink

          It is reported that BBC spent at least £330,000 hiding the Balen Report from the public.

          How much will they spend to stop us reading about their appalling role in encouraging the carpeting of the countryside with pointless bird and bat chomping wind farms. Not to mention the even more absurd fields of PV cells?

          All based on “proven science exaggerations”. Even when they cannot predict a hurricane in the South East a few hours in advance, they still expect up to believe their predictions of calamity for 100 years time. This despite temperature readings showing nothing abnormal in statistical terms whatsoever.

      • Nina Andreeva
        Posted November 6, 2012 at 9:59 am | Permalink

        IDS really just does not get it does he? MPs are in the top 10 per cent of wage earners (even higher if you are pulling in a cabinet minister’s wages like him). However we do not hear about the anomalies of subsidised restaurants and bars being withdrawn from Westminster. You are just going to pee off the core vote again, remember any text book on voter behaviour tells you that the elderly tend to vote to the right.

        Incidentally Ted nationalised RR because of the RN and RAFs dependence on their engines

        • lifelogic
          Posted November 6, 2012 at 2:41 pm | Permalink

          The subsidised restaurants and bars cost about £100 per MP per day attended, I think I worked out. The pension is worth nearly as much as the salary too.

          I would not mind any of this, were it not for the fact that so many of the MP’s are clearly just in it for a career. Many will say, or do almost anything to keep their careers. Many often even act in the interest of their paying “consultancy” clients and against the interest of the voters and public. How else can one explain the green tosh grants for example.

      • David John Wilson
        Posted November 6, 2012 at 12:01 pm | Permalink

        The existence of the TV licence is a piece of red tape that should be got rid of. A small increase in council tax would raise the same revenue and remove all the costs of issuing licences, checking for households without them and prosecuting offenders.

        Bus passes are a different issue. Most of the richer members of the community make little if any use of them. However there are many people who could afford the bus fares that get out and about because they have bus pass who probably would not without the pass.

        • Jerry
          Posted November 6, 2012 at 11:10 pm | Permalink

          @DJW: Except that one do not need to pay the TVL if one doesn’t own or use a TV receiver, what you are actually advocating is a Stealth tax that ever the blind would have to pay!…

      • peter davies
        Posted November 6, 2012 at 1:35 pm | Permalink

        Its high time someone had a good look at the BBC. If they wish to follow their own agenda for their own reasons they should be treated the same a ITV and Channel 5.

        The license fee we pay is for TV transmission equipment much of which goes to the BBC so perhaps there’s a case for dividing this amongst each ‘terrestrial’ channel now or binning it altogether.

        When a news channel distorts the truth I thought it then becomes propaganda.

        • RDM
          Posted November 6, 2012 at 1:49 pm | Permalink

          It’s time we broke-up the BBC!

          Benefiting:

          – RF bandwidth.
          – Sale of Commercial property. Move everything to Manchester!
          – Reduced crowding out of TV (etc) production services.
          – etc …

          The focus on News and Parlimentary services would be a benefit as well.

          Etc…

          Regards,

          RDM.

        • Nina Andreeva
          Posted November 6, 2012 at 2:21 pm | Permalink

          The BBC can go the way of PBS and NPR in the USA and derive its income from public appeals and grants from lefty endowments. I object to the licence fee, not because of the obvious liberal bias and the sinecure for the ever present left wing unfunny man Jeremy Hardy on Radio 4, but because the output is so poor. Even the most “right on” Guardian reader has got to admit that he can pick up the TV guide on any given night and say there is nothing worth watching here.

        • Jerry
          Posted November 6, 2012 at 11:24 pm | Permalink

          The license fee we pay is for TV transmission equipment

          Wrong, all BBC transmitters and channel management services were sold off years ago. The Transmitters that the IBA/ITC used to own and run were also sold off many years ago too.

          When a news channel distorts the truth I thought it then becomes propaganda.

          Indeed and some of the worse offenders are found on subscription satellite in the UK…

          • sm
            Posted November 7, 2012 at 9:40 am | Permalink

            Except you do not have to subscribe to them.

            Watch a foreign news feed on free sat or News at 10 in the UK and you must subsidze the BBC via the license tax?

            I understand also if any program is broadcast as a simulcast live on other technology you still have to pay the BBC tax?

            Competition choice freedom.. i dont think so.

          • lifelogic
            Posted November 7, 2012 at 10:52 am | Permalink

            The transmission equipment is very cheap indeed to operate with modern electronics, or should be.

            I see they are still trying to push battery eating digital radios (that cut out all the time on the move) on us all – for all for no good reason. No one want them, they can just download podcasts on their phones anyway.

          • Jerry
            Posted November 7, 2012 at 1:41 pm | Permalink

            @sm:, Any channel that carries adverts has been paid for by the public, if you do not understand how advertising works then please do feel free to find out, clue, most comes out of the profits of the companies/products being advertised. If I do not want to [pay the TVL then I can chose if to use a TV, except I can[‘t chose not to help fund commercial and subscription TV that carry adverts…

      • Mark W
        Posted November 6, 2012 at 3:05 pm | Permalink

        Red Boris.

        I watched Daily Politics and witnessed two people get off lightly on two issues.

        One) Boris and anyone calling for “living wage”. It is hyprocritcal to support living wage when as an MP you don’t vote in a “living” Tax/NIC system and in your own private life possibly would choose cheap chinese imported goods over a far higher priced domestic manufactured equilivant. Put your money where your mouth is.

        Two) Fiona Philips was ranting on about drug companies putting their shareholders needs first. I would be interested to know if she has a private pension and has requested that her investment is placed in the hands of companies that seek low profits to maintain some ethical pursuit. Just a thought…

        • lifelogic
          Posted November 7, 2012 at 10:54 am | Permalink

          Yes Boris is clearly a socialist and Fiona Philips was indeed rather ranting on the issue.

          • Jerry
            Posted November 7, 2012 at 1:46 pm | Permalink

            Boris is clearly NOT a socialist, he might be left of centre within the Tory party though, now it would be fair top describe Boris’s contender for Mayor as being “socialist”…

            I sometimes think that you and others use the term socialist not as a political description but as a term of abuse, when used this way it does nothing for point you are attempting to make other than weaken them.

          • lifelogic
            Posted November 8, 2012 at 1:21 pm | Permalink

            @Jerry – advocating the push to force a living wage on employers is clearly socialist, top down, central control policy by it very nature.

            To someone who does not have socialist leaning wages are surely a matter for employers and employees to agree or not to agree as they wish.

            Boris is not a socialist in all areas, but in this he clearly is. As are his Boris bike/adverts that block the pavements and are occasionally even used.

          • lifelogic
            Posted November 8, 2012 at 1:23 pm | Permalink

            If you are left of centre of the Tory party you clearly are heading strongly to being a socialist if not one already.

          • Jerry
            Posted November 8, 2012 at 9:30 pm | Permalink

            @lifelogic: Wanting to drive down, or eradicate, poverty is socialist? Next you will be suggesting that if the ‘plebs’ can’t afford bread they should eat cake…

            Anyway, the right-wing rhetoric about the “living wage”, that businesses can’t afford it, with direr warning about costing jobs or even driving entire companies to the wall etc, has all been said before when the National Minimum Wage was first suggested, what happened to all these “on the brink businesses”, nothing, life carried on as before.

            Also “lifelogic” f you think that a left of centre Tory is “well on the way to being a Socialist” then it either tells us just how politically clueless you are or just how far right your own views really are.

      • uanime5
        Posted November 6, 2012 at 3:28 pm | Permalink

        If businesses need their low wages to be subsidised by the taxpayer in order to attract employees then they shouldn’t be in business in the first place. The taxpayer shouldn’t be propping up badly run companies.

        • Mark W
          Posted November 7, 2012 at 11:01 am | Permalink

          Are you forgetting that these businesses are paying some of these taxes or that their management may be paying 40% taxes.

          Or that a pay increase of 13.8% could nearly be put in place if employers didn’t have Employer NIC confiscated from them.

          I take it the taxpayer is fine to prop up feckless households with unlimited subsidy, who contribute nothing to society?

      • Richard
        Posted November 6, 2012 at 3:41 pm | Permalink

        lifelogic, there is an interesting article about “the living wage” in the Times today.
        The thrust of the article is that even on the current minimum wage you some pay tax and NI.
        So, if the Government were to lift those who are on the minimum wage out of paying tax and NI, then they would receive the same as they would on the higher living wage net of tax and NI.
        The solution is therefore in the hands of Government.
        If they feel so morally driven to improve the standard of living of the poorest paid then all they need to do is to just raise the starting point for tax and NI.
        Perhaps they could find some savings in public spending to pay for it?

        As usual they expect the private sector the fund it whilst they carry on spending as if there is no tomorrow

        • lifelogic
          Posted November 7, 2012 at 10:56 am | Permalink

          Indeed if they want to give them a living wage, reduce taxes and NI on the poor – not put companies out of business and people on the dole with an absurd living wage campaign.

          • Jerry
            Posted November 7, 2012 at 1:56 pm | Permalink

            @lifelogic: I seem to recall similar comments and warnings being made about the National Minimum Wage when that was being suggested – of course non of the dire warnings or threats ever came about…

            Sorry “lifelogic” but if what you say is true then how come so many of these SME’s are able to pay their owners/directors substantially more than the suggested health of the company you and others suggest? Don’t get me wrong, I have no problem with such people making money out of their work, just that they should not be allowed to do it by exploiting their employees nor the government.

          • lifelogic
            Posted November 8, 2012 at 8:11 pm | Permalink

            @Jerry the minimum wage clearly did indeed destroy jobs. It seems you can work for nothing if you choose or you have to receive the minimum wage.

            It simply means some jobs are not done abroad, some crops are not worth collecting and some people are not worth employing at the minimum wage so they sit watching tv instead.

          • Jerry
            Posted November 9, 2012 at 8:34 am | Permalink

            @Lifelogic: Care to point out any facts to back your assertions up?

            I seem to recall UK Plc. booming between 1999 [1] and 2007, when it wasn’t the National Minimum Wage that caused companies to fail but the collapse of the international and domestic banking industry.

            [1] the start of the NMW

      • Bazman
        Posted November 6, 2012 at 7:08 pm | Permalink

        A 40 hour week paying less than two hundred and fifty quid subsidised by the state is not a living wage. A fair days pay for a fair days work. This idea that expanding the economy is going to improve things is not real. How are they going to pay for the services you think they should pay for without this? They work full time so do not have time to live your English peasant fantasy. The state subsidises them and business in effect, also your thickness via the middle class social security system which you have never commented on. This is all the fault of the BBC? Ram it.

        • Mark W
          Posted November 7, 2012 at 11:05 am | Permalink

          “A fair days pay for a fair days work”

          We agree on something. I’d be more than happy to see those on benefits having to do something useful like pick up litter or clean signposts. Great statement, As ever I’m looking forward to ramming it….

          • Bazman
            Posted November 7, 2012 at 6:36 pm | Permalink

            The issue of benefits claimants doing work for their benefits is another question and not real. I mean are they to replace legitimate business by undercutting them? How would they be ‘forced to do this and how much would it cost? Would they then in effect be’ working’ and not looking for work?
            What we are talking about however is not benefit claimants but peole working full time for 40+ hours a week when they can get the work and barely earning enough to survive on and being having their income subsidised by the state to allow them to live. Often working for large companies making massive profits and hiding behind self employment, agencies and contractors.
            The problem of increasing the minimum wage is to make it difficult for anyone to be employed by small companies or individuals. The living wage is aimed at large companies exploiting the abundance of workers who will work for the least amount whilst expecting the state to pick up their workers wages to a living wage via tax credits and other benefits. The idea that their can be more low paid jobs than workers willing to do them and this competition will increase the wages is a fantasy. Ram it.

          • Jerry
            Posted November 7, 2012 at 8:48 pm | Permalink

            @MarkW: If this work exists then why shouldn’t it be paid at the correct and going wage, in other words actually give people a proper job?…

        • Richard
          Posted November 7, 2012 at 2:57 pm | Permalink

          Bazman, nice rant, hope you feel a bit less stressed now.
          To reply: If the Government really wants to improve the standard of living of those on low pay they can easily just increase the minimum wage to the suggested living wage level, or raise the starting point for paying tax or do a bit of both.
          Calls for a living wage are just a few politicians indulging in a cheap popularity gimmick.
          This site has given many many examples of savings which could be made to reduce waste in the public sector and the money saved could help fund taking those on min wages out of paying tax and NI.
          I thought you would be all for it. I know I am.

          PS You should do an article on the MCSS system you keep going on about. I and many others are keen to learn all about it.
          Do you mean all those middle class lefties doing massively overpaid quango, charity, NHS, BBC, LEA, Council and EU jobs because if you do I’m on your side!

          • Bazman
            Posted November 7, 2012 at 6:44 pm | Permalink

            Why not look into middle class welfare and get back to us? The tax and NI is a good point, but why should the state further subsidise companies making millions in profits and not rewarding those helping to make those millions. They are already helped by the masses of people willing to work for the minimum wage and the revolving door recruitment policies they have via agencies and other such employment law circumventing methods. Agencies exist for this make no mistake. The answer that there should be less employment law is not real. A worker on a temporary contract for more than three years via and agency. Temporary? Self employed accountants are not the same as self employed cleaners, so don’t give us that one. Leave that to fools like lifelogic. You can ram it too.

          • Richard
            Posted November 8, 2012 at 10:24 am | Permalink

            Another totally nonsensical and very poorly written rant Bazman.
            Failing to address the points made in the original article and in the end resorting to yu usual pathetic and childish rudeness.
            If you can’t respond sensibly, without resorting to abuse then do us all a favour and either grow up or shut up.

          • Bazman
            Posted November 8, 2012 at 6:03 pm | Permalink

            I Think I covered your points in the posts above and you are unable to form a response. As for being rude. Ram it.

          • Richard
            Posted November 8, 2012 at 11:12 pm | Permalink

            Your answer merely confirms all I say.
            Pathethic, childishly rude and unable to formulate an intelligent response.
            You have become the troll of this site.

        • lifelogic
          Posted November 8, 2012 at 8:15 pm | Permalink

          @Bazman -The state subsidises nothing, tax payers do, the state only has the money they have extracted from others, causing great harm in the process.

          • Bazman
            Posted November 9, 2012 at 7:30 pm | Permalink

            Harm being infrastructure that business and individuals are unable to pay for. It’s called democracy and you must pay your share. The rich must pay for the most as they benefit the most. If you are going to tell us they only pay for their bins to be emptied you are beyond help.

    • Peter Geany
      Posted November 6, 2012 at 1:50 pm | Permalink

      RR is just one of many excellent world class engineering businesses in Britain. It just that our idiot government and councils often choses to use EU engineering whilst our companies survive by exporting outside the EU.

      RR was a classic case of promising something they ran out of time to deliver. It took them nearly another 10 years to get to where they wanted to be. The soundness of the design RB211 has ensured that RR is one of only 2 companies now able to develop large civil turbofans solely on their own. Even the once Great Pratt & Whitney is relegated to joint ventures. Saving RR had a strategic element that is not present in our saving the banks, and did not cost that much at the time.

      I can see no parallel between saving RR and either the docklands development or the Banks. Controlled administration for the banks would have been the best coarse of action, but I suspect that Gordon Brown was after nationalising all the Banks and was angry that Barclay’s and HSBC didn’t play ball.

  2. Brian Taylor
    Posted November 6, 2012 at 6:56 am | Permalink

    Look at Iceland now!!

    • Bazman
      Posted November 6, 2012 at 7:09 pm | Permalink

      Still cheaper than Tesco. Who I must say with their rising prices are having a laugh. Their profits confirm this.

  3. Alte Fritz
    Posted November 6, 2012 at 7:44 am | Permalink

    Just because not every piece of public funding will not work is no reason not to use it when necessary; no entrepreneur is infallible. It is very difficult to know where to strike the balance, but an obvious difference is between a Pavlovian call for state intervention and a reasoned response.

    Experience shows that if the state tries to do less, it does it better. The converse applies.

    • Gary
      Posted November 6, 2012 at 8:49 am | Permalink

      Entrepreneurs are not infallible.

      They aren’t. The market has a way of dealing with that, it liquidates failed enterprises and makes way for new growth and innovation. Unlike govt enterprises, which rot like a cancer on the taxpayers indefinitely.

      • lifelogic
        Posted November 6, 2012 at 2:45 pm | Permalink

        The do not “rot like a cancer” alas they grow like one feeding off the productive taxpayers – then finally killing them all off.

        • Bazman
          Posted November 7, 2012 at 6:55 pm | Permalink

          How many private businesses ‘feed of the taxpayer’ as you put it and how do they do this? They don’t? Really. Your blind and simplistic beliefs cannot see this.
          Right wing group think believing that no business is self serving and all they exist for is to help people and provide work and services to the population. If they could do this for free they would, but they have overheads and if they did not employ their worker they would not be doing anything anyway and so on.

          • Bazman
            Posted November 9, 2012 at 7:30 pm | Permalink

            Where is your reply to this lifelogic?

      • Richard
        Posted November 6, 2012 at 4:01 pm | Permalink

        Gary, totally agree with you

      • Jerry
        Posted November 7, 2012 at 2:28 pm | Permalink

        @Gary: High unemployment and/or in-work benefits (to top-up low pay rates) is an even greater cancer on the economy, surely better to subsidise the creation of something -be it widgets or jet engines- that the nation needs than to pay people to sit on their backsides whilst watching daytime TV, of course you might be of the mindset that says the state should do neither and just let those you think as “witless” [1] fall into poverty and homelessness…

        One of the (many) problems with the BoE’s QE policy has been that the created money has simply gone to the wrong parts of the economy, with little or no sign of the elusive “Trickle-Down”, it might have been better to have used QE to pay people to make things, even dig holes and then fill them back in again, thus create a “Trickle-Up” effect as the ‘plebs’ either pay off their debts or create a demand for goods and services and thus cause even more of a Trickle-Up effect.

        [1] and other such derogatory terms so often used on these blogs

    • peter davies
      Posted November 6, 2012 at 1:31 pm | Permalink

      Its because the state can’t organize anything without huge costs and have overbearing factors such as red tape compliance and people with no business acumen.

      They are good at raising and spending money but apart from established service professions they need to stick to being enablers when needed and avoid being deliverers in all possible instances.

      • uanime5
        Posted November 6, 2012 at 3:29 pm | Permalink

        The rail, water, and energy industries seem to have the same problems despite being privately owned.

        • Bazman
          Posted November 7, 2012 at 6:49 pm | Permalink

          Banking did a sterling job of looking after the economy too. Those entrepreneur bankers with no personal lose to be had backing free enterprise that has become to big to fail. Wot a laugh.

  4. Nick
    Posted November 6, 2012 at 8:17 am | Permalink

    All because the lady loves milk tray.

    Or rather spending other people’s money.

    Until you stop spending money you don’t have, its screwed.

    Meanwhile, I’ve managed to find that hidden document where the government estimates the debts its hidden off the books.

  5. Single Acts
    Posted November 6, 2012 at 9:23 am | Permalink

    “When should the might of state power be used for the good in economic matters?”

    Never, it cannot be good by definition because where does the cash come from in the first place?

    “How far should a government go in freeing the economy and following the laissez faire doctrine?”

    It all depends how successful you want to be. the more chains you remove the better, so why not take ‘em all off.

    “How much should it seek to mould, speed or improve the market by Ministerial decision”

    How do you possibly imagine you can ‘improve’ the market which is simply the aggregate of a million personal decisions?

    • uanime5
      Posted November 6, 2012 at 3:31 pm | Permalink

      Given that the economy of the US crashed in 1929 because too many “chains” were removed it’s clear that laissez faire capitalism isn’t infallible and is often disastrous.

    • waramess
      Posted November 6, 2012 at 4:53 pm | Permalink

      Of course, now why did our host not think of that answer!

  6. oldtimer
    Posted November 6, 2012 at 9:43 am | Permalink

    The motor industry offers three significant post WW2 examples of government intervention.

    The first was the direction of expansion away from the existing manufacturing centres in the Midlands and the South East (Ford) to the North, to Scotland (Linwood and Bathgate) and to South Wales. That did not work out well. I think the only significant survivors of that policy are the Ford engine factory at Bridgend and the ex-Ford Hailwood factory near Liverpool.

    The old Rover company (run by the Wilks brothers) were directed to Cardiff (closed in 1986), but otherwise resisted such moves. Instead they got round them by the piecemeal acquisition of old factories in and around Birmingham – one was an old Victorian rope works. Neither route was an efficient way to achieve expansion. Recently Jaguar Land Rover has been more successful in persuading the authorities that its new engine plant should be built on a greenfield site near Wolverhampton, well placed relative to its existing assembly operations. Perhaps the risk it might be located in India or China concentrated ministerial minds.

    At times Chancellors used quite sharp changes in purchase tax rates in an attempt to regulate new car sales; this political intervention produced market volatility and uncertainty – a politically induced boom and bust. We seem to be experiencing the same folly over the issue of subsidies for so-called renewable energy sources.

    The Wilson government, through the Industrial Development Corporation, pushed through the merger of the Leyland Corporation with BMH in the belief that big was better. In reality it created an even bigger muddle as both of these businesses were themselves the product of earlier undigested mergers and unrationalised operations. Then there was the Ryder Report and the imposition of shared decision making (with shop stewards) that ended in failure. No doubt the foreign firms that were persuaded to set up operations here were insistent that they were able to do so on greenfield sites.

    It is characteristic of these interventions that they reflect a producer mentality. That does not lead to market success. That can only come from businesses that achieve sustainable competitive advantage in world markets. That is as true for businesses focussed on the open UK market as it is for those that rely on exports, such as Rolls Royce and Jaguar Land Rover. It follows that governments should not try to “pick winners” – that is doomed to failure. What governments should do is attempt to create an environment that enables investors and businesses to compete in the world. That means competitive tax rates and an end to subsidies.

    • Jerry
      Posted November 7, 2012 at 2:52 pm | Permalink

      Now compare the UK car industry with that of the French, it is often forgotten that major elements of the French car industry were also nationalised like BMH/LMC was, except one was backed by the national government until sold off whilst the other was seen as a cancer upon any change in government…

      The problems of the UK motor industry are far to complicated to be summed up as being caused by nationalisation anyway, the state owned BMLC came about because of these problems, GM and Chrylser had already bought up other sectors of the industry, those sectors have suffered even without the so called death-wise of nationalisation.

    • Alan Wheatley
      Posted November 7, 2012 at 4:48 pm | Permalink

      Agreed.

  7. Andy H
    Posted November 6, 2012 at 9:55 am | Permalink

    John.

    I think a much better test of where best Governments should intervene is the example set by the railways.

    Rail is a natural monopoly. It does not require inventive or entrepreneurial efforts, as the tracks and rolling stock exist.

    All it requires is a decent maintenance program and good administration.

    This is exactly a situation where the taxpayers of this country would expect a decent service run on their behalf by the Government – Not the infrastructure to be handed over and subsidised to a private company in order for them to make a profit out of people that have no choice then to use this service.

    This is a classic case of a national asset that should be managed by the Government for the benefit of taxpayers

    Reply: it’s not that simple. The railway needs large new investment in better signals and better rolling stock, and better management to get more out of the amazing routes the railway owns.

    • waramess
      Posted November 6, 2012 at 4:48 pm | Permalink

      Hardly a natural monopoly when it should be competing with road and rail whilst instead it is receiving millions in unfair subsidies.

      The answer is to sell it, lock stock and barrel, to the private sector and let them get on with the business of making a profit without the subsidies. Let the state fulfill it’s role of ensuring that the quality is maintained, but no more.

      If the new operators pitch their pricing too high they will lose business whilst if they pitch it too low they may go out of business and their assets will be sold on at a discount to other potential operators.

      Put it into the public sector and the business becomes distorted as politicians decide to offer subsidies in order that the railway continues to operate in the same way as before rather than address the real issues.

      Why bother with state control and subsidies when you might instead have a properly competitive railway system?

      • Bazman
        Posted November 8, 2012 at 8:33 pm | Permalink

        As pointed out a number of times this policy would lead to a collapse of the railways. The profitable lines being plundered with minimal H&S and the rest being sold off for scrap and land. All the traffic would be then be on the roads. When asked about infrastructure the railways would say they have business to plunder like banking and you can be sure it is in our safe hands if only you let us get on with our plundering and help us when the nation faces a road gridlock as the population refuse to pay for our profits being sent to the Cayman islands without tax in order to improve the infrastructure of Britain and the mansions of out directors. It is far to complicated for you to understand so just hand over the money and let us get on with our scam.

        • Bazman
          Posted November 9, 2012 at 7:31 pm | Permalink

          Understand this OK Richard?

    • Credible
      Posted November 6, 2012 at 5:26 pm | Permalink

      It is that simple John. We would still have private companies to manufacture and supplying the signals and rolling stock. It benefits the country to invest in good infrastructure.
      It’s just as simple for the water and power company monopolies too.

      I’ve not been on an amazing route recently. If I have it’s been hard to see out the window when standing up in second class.

    • Andy H
      Posted November 6, 2012 at 5:38 pm | Permalink

      That being the case surely strengthens the point.

      Where large investment is required, then surely the only way this can sensibly be handled is as a state sponsored project as private companies will require shorter pay back periods.

      In short, the simple equation must be

      (Taxpayer Investment+Management Cost) / Number Rail users = Rail fare

      vs

      (Private Investment + Management Cost + Subsidy + Profit) / Number Rail users = Rail Fare

      Which one will cost the tax payer and the rail user less?

    • Adam5x5
      Posted November 6, 2012 at 7:30 pm | Permalink

      To JR’s reply:

      Why does the railway system need signal investment?
      Surely a better idea would be to scrap the current system which relies on cabling and a lot of lights all over the place, a system which is constantly under attack from copper thieves, and replace it with GPS trackers in the trains. These could then communicate with a central computer which compares the positions and projected positions of the trains and transmits a signal back to the trains where there are signals for the driver to obey on the dashboard. The signals could be sent over the mobile networks which already exist.
      This system would not be susceptible to copper theft, would be self-financing (copper scrap value from the current cables would easily cover the cost) and wouldn’t be hard to implement.

    • Cary
      Posted November 6, 2012 at 9:30 pm | Permalink

      Rail is not a monopoly, it’s just that the competition is not with other parts of the network but with other modes of transport. And one could get some of the benefits of private sector expertise by having private sector manager run the service, employing them on fixed term contracts. In fact what one wants is something like British Rail.

  8. Acorn
    Posted November 6, 2012 at 10:51 am | Permalink

    If you have Amazon Kindle or the Kindle-on-PC app. I recommend you get a download of “Soft Currency Economics II (Modern Monetary Theory)” [Kindle Edition].

    This will help you assess Ian Duncan Smith’s economic knowledge, which you will find is about the same as his party leadership ability. IDS, a Romney cheerleader, is miffed because the Tory party are not singing the neo-con’s praises. He now professes that US Sovereign debt, is a bigger threat to the world than the Euro crisis; and is all Obama’s fault (Daily Mail 6 Nov). God save us from party legacy politicians.

    • Nina Andreeva
      Posted November 6, 2012 at 2:12 pm | Permalink

      IDS does it again! He wants an administration made up of the old Bush neo-con crowd
      and a man who believes that we are in the “end times” of which this planet is only of temporary worth. While if he is a good mormon he can become a god too with his own planet and adherents. With this lot potentially in control of the world’s biggest nuclear arsenal the economy is the last thing we need to worry about.

  9. Glenn Vaughan
    Posted November 6, 2012 at 11:28 am | Permalink

    John

    Would you describe Rolls Royce as a “malfunctioning conglomerate propped up by the public sector”?

  10. Neil Craig
    Posted November 6, 2012 at 11:29 am | Permalink

    If one assumes the purpose of government is to bring about the most successful economic progress the answer is easy. Look at what, statistically, most closely correlates with, such progress. That has been done and the answer is that ECONOMIC FREEDOM + CHEAP ENERGY = FAST GROWTH. Pretty close to what Redwood wants & far from Heseltine. Indeed nobody seems to factually deny it, they just blow smokw and change the subject.

    If, however, the purpose of government is to “keep the populace scared and eager to be led” & to expand the power of government, its employees and friends and to provide the illusion of trying to actually do something then \Heseltine is right.

    Examinations carried out by researchers in Public Choice Theory have indeed found that most government activity is carried out on the second lines.
    I wish that most of it was along the first, which is why I support UKIP rather than the BBC state broadcaster approved parties.

    • uanime5
      Posted November 7, 2012 at 4:42 pm | Permalink

      The only time you have fast grow is during economic bubbles which burst and cause huge damage to the economy. The Dot Com bubble and the Asian Tigers are prime examples of why fast growth isn’t sustainable in the long term.

      • Neil Craig
        Posted November 8, 2012 at 12:32 pm | Permalink

        China has been growing at 10% a yearfor over 30 years and the remarkable thing is that this “bubble” has been forecast to burst real soon for nearly 30 years. The Asian Tigers are doing well thank you. Singapore has gobe from one of the world’s poorest economies to possibly its richest. It is ludicrous to claim that fast growth “only” occurs during bubbles. I assume uni said the same of the British economy during the 17thC when it first started growing at the, then, historically unprecedented rate of 2 1/2%.

  11. Leslie Singleton
    Posted November 6, 2012 at 11:43 am | Permalink

    I admit to being anti Heseltine and all his views but I have always been at a loss to understand this business of Docklands. Given that it was a very desirable large site in the South East of England, specifically in terms of the mountains of money nearby in the City, that there was no nimbyism because the area was such a wreck, that planning controls were swept aside and taxes greatly reduced, wherein lies the big surprise that it worked?

    • backofanenvelope
      Posted November 6, 2012 at 3:51 pm | Permalink

      I am afraid that there was a form of nimbyism operating in the Docklands area. It took the form of labour controlled local authorities who had their own vision of how things should be. Once control was taken from their hands……….

      Mrs Thatcher again of course.

  12. David John Wilson
    Posted November 6, 2012 at 12:10 pm | Permalink

    There would be fewer failures of UK companies if they operated on a level playing field with foriegn competitors. The government should be taking urgent action to remove the means by which companies like Starbucks avoid paying corporation tax.We need positive action to stop British companies failing rather than action after the event to save them from failing. Appropriate action instead of costing the UK tax payer would lead to increased tax revenue that could be used for further positive action like reducing employers’ NI contributions.

    • sm
      Posted November 6, 2012 at 10:42 pm | Permalink

      Some suggest unitary tax – search web or taxresearch uk

  13. waramess
    Posted November 6, 2012 at 12:18 pm | Permalink

    We have a government composed of career politicians, failed barristers, lawyers and a very few successful business men all led by career Civil Servants with little or no direct business experience.

    Add to all of this the hidden agendas when decisions are made and I fail to understand why anyone mught consider government decisions worth anything.

    As Lifelogic correctly points out Docklands would have been developed with a less heavy hand of government delaying the process. Rolls Royce assets, and probably the company intact would have been purchased by a new owner.and just for a bonus, British Leyland would probably still be around but for the administration of Wilson halting lay offs and the complete nonsense of Heath nationalising it.

    …and let’s not forget the hideous amounts of taxpayers money tied up by Wedgwood Benn on the Concorde.

    But, all of this certainly pales into insignificance when compared to the monumental error of saving the banks.

    • Richard
      Posted November 6, 2012 at 3:58 pm | Permalink

      waramess, I totally agree with you,
      I remenber a time in engineering when lame ducks were propped up with millions and good companies asking for a liitle funding were ignored by Government.
      Problem with politicians, especially now in the era of 24/7 news coverage, is
      they get caught in the spotlight where journalists ar demanding “something must be done”
      There is a decent existing system for dealing with businesses that get into financial difficulty.
      Most get bought up out of administration and trade again in some form, but politicians get in the way and underwrite and subsidise failing companies which just wastes money and the inevitable final outcome.
      Save the world Gordon’s bank bail out was a classic example of this.

    • lifelogic
      Posted November 7, 2012 at 3:53 pm | Permalink

      “led by career Civil Servants with little or no direct business experience” and no interest at all in saving money or even doing anything useful at all.

  14. forthurst
    Posted November 6, 2012 at 1:08 pm | Permalink

    What was extraordinary about how Gordon Brown ‘saved the world’, is that his solution exactly mimicked that used to save the banksters of Wall St. Why this is extraordinary, is that in the USA the power to issue money is uniquely owned by a private secret bank which itself is directed by representatives of the most predatory Wall St banksters who also were extremely well ensconced at the heart of government and were able to advise a terrified Congress that by loading the US taxpayers with huge debt to pay the private secret Fed to create money out of thin air, they would be able to refresh the Wall St banksters to gamble another day by relieving them of their toxic assets at 100c to the $ and so ‘save the world’.

    However, in this country, the BoE is publicly owned; any money it creates belongs to the taxpayer; representatives of predatory banks (apart from one) do not direct its operations and the Executive is exclusively appointed from the legislature and is obligated to act in the public interest rather than that of e.g. banksters. (This of course was not the case when Gordon Brown decided to use our gold to save a firm of American banksters who had shorted gold in order to create gambling chips for the carry trade and were caught out by an ‘unexpected’ strengthening of the gold price, but that is another story.)

    The solution to ‘saving the world’ therefore should have involved the removal and prosecution of the banksters for trading whilst insolvent and the re-ordering of the banks to enable them to do what is in the public interest, namely lend to businesses and individuals of good credit. In order to do this the BoE should have replaced the asset bases of the banks with new money as loans, cleared out the ‘investment’ bankers and their portfolios of toxic assets, written down their property loan portfolios to enable the property bubble to be deflated, and then disposed of the banks as new going concerns after fracturing them into their original components.

    There is no doubt that Rolls-Royce since its unwise contract with the USA for RB211 turbines has been an astounding success; it is most unlikely that had the government of Ted Heath taken a back seat and allowed a private adminstration to sell the business to the highest bidder, it would have remained British and remained in this country. R-R, nevertheless has expanded into a global power systems and service company with a £60bn turnover.

    There are businesses which are strategically important to this nation, some were lost under Thatcher as banksterism became the new ‘metal bashing’, without having a defence dimension, but having a significant skill base or intellectual property or a brand which could in the right circumstances maintain profitable employment in this country and which could not easily be replicated, e.g. Cadbury.

    It is extremely unwise to overlook that fact that most sensible nations protect their successful enterprises from foreign predation, recognising that they provide sources of employment and taxation which governments like. Playing at neo-liberalism whilst the rest of the world plays a different game is a recipe for industrial plants which can be closed on a whim and predatory utility prices and a low skilled workforce.

    • forthurst
      Posted November 6, 2012 at 3:13 pm | Permalink

      …incorrect turnover figure for R-R; should be £11bn (£1.1bn profit before tax).

  15. Pleb
    Posted November 6, 2012 at 1:14 pm | Permalink

    Just in case this is missed by the BBC!
    Eurocrats in Brussels are going on strike over “cuts” to the EU Budget. The European Federation of Public Service Unions is calling for EU staff to walk out on Thursday due to what they claim is austerity.

    • BigJohn
      Posted November 6, 2012 at 5:08 pm | Permalink

      Would anybody notice ?

    • StevenL
      Posted November 6, 2012 at 9:19 pm | Permalink

      Good, if they can’t translate their nonsense and publish it in their official journal we can’t implement it!

  16. Pleb
    Posted November 6, 2012 at 1:22 pm | Permalink

    Shock at 9% pay increase for Eurocrats.
    Today’s news that the EU is set to give its own bureaucrats pay rises and tax cuts equivalent to a 9% increase in salary is further evidence that it is impossible to understand the decidedly peculiar minds at the top of the EU federalist nightmare.

    • uanime5
      Posted November 6, 2012 at 3:33 pm | Permalink

      Which part of the EU do the Eurocrats work for?

    • Richard
      Posted November 6, 2012 at 3:47 pm | Permalink

      Mr Pleb, It all to do with the theory of “O.P.M.” …..i. e. other peoples money.

      So much easier to spend and so much easier to waste

  17. peter davies
    Posted November 6, 2012 at 1:26 pm | Permalink

    I totally agree with your analysis of the banks – instead of nationalization which always seem to end in more headaches (coal, British Leyland to name a couple) the role of the state in this case should have been short/medium term loans to keep them in business with interest and the forced restructuring/selling off.

    Better to have a smaller business fit for purpose making money instead of a cumbersome giant losing money hand over fist.

    Unfortunately it appears the Great Gordon Brown somehow convinced most of Europe it seems that this was the way to deal with it. He spent the next couple of years whilst in office shouting down at his opponents “it was the right thing to do” but its funny how he seems a lot more quiet these days.

    Investors would have taken a major hit but we’d have been well on the way out of this mess by now and if you put your savings in stocks and shares you have to accept that they do go down as well as up.

    Your analysis of providing good planning, tax and regulation framework to allow those who can do their thing is undoubtedly the model that works best from a sustainable business perspective.

    The top down micro managed designed economy is just another version of communism that tends to have high overheads and low productivity.

    • M.A.N
      Posted November 6, 2012 at 6:36 pm | Permalink

      Staged performance dependant loans. It’s not really rocket science, maybe a bonus for increased oversea sales/ real terms profit increases etc. We have seen in cowboy builders what happens when you bung a builder £80k up front for a job, he says right il let you go now and clears off. No different. Nationalisation is reward for (usually) failure. The most antagonising thing is that Clegg & maybe CMD actually think that the old mistakes which were made in the 70’s to nearly bankrupt this country are ok to repeat!. I listened to a local councillor on local radio, talking about traffic congestion, not once did she mention local business etc , profit is a dirty word for her, she kept going on about green issues. Get the basics right first, make work worthwhile then concentrate on other issues because otherwise there won’t be any business left to posture at!. For the earlier post concerning the real national debt, it’s not a secret at all. Burning our money used to do s feature every year. I think it’s about £8 trillion, but its not all repayable at once!.

  18. RDM
    Posted November 6, 2012 at 2:00 pm | Permalink

    There’s nothing to what JR has said that I could add!

    Taking a balanced, measured approach to each failure administered in a systematic way similar to that of Chapter 11, within the States, is what is required! Are we getting Living Wills, should be for all British registered PLC’s.

    I would have put RBS and RR into Chapter 11 Administration!

    Regards,

    RDM.

  19. Vanessa
    Posted November 6, 2012 at 2:10 pm | Permalink

    The goverment never creates jobs. All it does is create an environment in which jobs can grow and flourish. We, the people, set up companies, employ people and buy supplies. When the government realises that it is not an employer in the private sector the better. The government needs to reduce taxation and legislation to enhance OUR ability to help the economy, but of course it can’t while we are stuck in the EU.
    This new idea where the government is now paying a “living wage” rather than the minimum wage to its contractors omits the rather obvious fact that we, the taxpayer, now pay more for government contractors because the government does not earn any money of its own but that which we, the taxpayer, gives it.

    • uanime5
      Posted November 7, 2012 at 4:45 pm | Permalink

      Given that companies wouldn’t be able to earn any money without the infrastructure provided by the Government companies have no right to complain about having to pay taxes for this infrastructure.

    • Bazman
      Posted November 7, 2012 at 7:06 pm | Permalink

      Large construction companies and defence contractors being paid for work provided by the government are in effect publicly owned as they would not exist on the scale that they do without the government contracts. The contractors are in effect being held over a barrel to pay the workforce more and reduce the benefits bill. Either this or another contractor will be found. Who are willing to do this and not just plunder the system for their executives and shareholders. They are not the local takeaway so don’t compare them to this.

  20. Ashley
    Posted November 6, 2012 at 2:29 pm | Permalink

    I believe government involvement in the economy should follow the example of John Cowperthwaite during his time in Hong Kong.

  21. Bert Young
    Posted November 6, 2012 at 2:30 pm | Permalink

    Dr. JR , It’s a great pity you are not Chief Policy Adviser now !!

  22. David Jarman
    Posted November 6, 2012 at 3:32 pm | Permalink

    Governments are RUN BY BANKS, you only have to look at Tony BLIAR and his speaking circuit to know that. (words left out) Cameron is no different and this is why you have these secretive steering groups (like Bilderberg) which make sure people with their own minds who cant be controlled never make it to top echelon of goverment. Until the majority of the population realise this and cut their pupet masters strings, the merry go round and the bank bail outs are going to continue.

  23. outsider
    Posted November 6, 2012 at 4:36 pm | Permalink

    Both John Redwood and Michael Heseltine are big interventionists, in my view. You cannot get much more interventionist than breaking up banks or forcing utilities to subsidise new rivals, though setting up vast bureaucratic 1970s style industrial planning systems is probably worse.

    A sensible intervention and industrial policy should use market mechanisms or interfere with them as little as possible to achieve national or social objectives. An example would be to limit deposit insurance to banks that followed kitemarked policies of prudence and leave the market to sort things out.

    Another example. To my mind, the City takeover industry has emasculated most of British industry to our enduring future cost . But I would not ban them. Just slap on a 20 per cent stamp duty so that the market can back those that really deliver economic gains.

    It is difficult to separate “right” from “centrist” policies in practice. Lord Young, who is a free marketeer, interfered so drastically with our national brewers that none now exist. Lord Heseltine, who supposedly champions UK industrial capability and regional growth, presided over mass closures of coal mines at a moment when energy prices were briefly low, leaving us heavily depending on imports and laying waste to many industrial towns and villages in the North of England.

  24. Matthew
    Posted November 6, 2012 at 5:29 pm | Permalink

    You can’t put it into a formula – take each case on its merits

    Decision on Rolls Royce was a brilliant decision by Heath.

    I think that a government now would though make the same decision, as it has security implications. Just as the government had views on BAe

    Problem was that RR capitalised the development of the RB211 a world beater – making profits but ran out of cash.

    Now Rover – didn’t have a world beater in the locker.

  25. lojolondon
    Posted November 6, 2012 at 5:54 pm | Permalink

    John, I have searched in vain for any reference to the debacle at the BBC.

    I see that Saville has slipped right off the radar in BBC land – although they do have some article about tom Watson saying that some Tories could be accused!

    Cameron is organising a judicial enquiry into a children’s home. BUT not into the BBC, because the BBC are being allowed to investigate themselves!!!???

    Can you imagine the News Of The World being allowed to investigate themselves over charges of phone hacking? Can you imagine the howls of derision from the BBC if that was allowed?

    Now, WHY should any organisation be allowed and trusted to investigate themselves over multiple child rape, paedophile rings and the whole systematic, corporate cover-up that is evidenced in every newspaper daily, witness the over 30 suspects the police are now investigating?

    I cannot imagine any other corporate or government organisation being allowed such leeway, the situation speaks badly for justice and the British way of doing things, it is obviously not right!

    • uanime5
      Posted November 7, 2012 at 4:48 pm | Permalink

      Well News Of The World did investigate themselves over phone hacking and claimed that it was a single rogue reporter until evidence came out that it had been far more widespread.

    • Bazman
      Posted November 7, 2012 at 7:14 pm | Permalink

      Interesting how many so called pillars of the community knew and did nothing. A lot knew of Saville’s antics and did nothing as you point out some even worked for the BBC. You didn’t know The News Of The World investigated themselves over phone hacking, but you chase the BBC? Interesting. A teacher type guy in my street told me Saville had a lot of form with under age girls last year so if this guy knew with no real information, how many really knew the truth?

      • Richard
        Posted November 9, 2012 at 11:27 pm | Permalink

        Because bazman, there is a fortunately in this country a difference between rumour and proof.
        As the BBC are this evening beginning to realise

        • Bazman
          Posted November 11, 2012 at 10:01 am | Permalink

          We will have to remember this if you are murdered in your bed.

  26. Terry
    Posted November 6, 2012 at 6:37 pm | Permalink

    Dear John, what did you do so bad that made Cameron ignore your abilities, experience and talents? Those are the specialties that the country is in desperate need of right now but he appears oblivious of those and your obvious expertise.

    Is it an example of selective ageism on the part of Cameron and his “Quad” that has produced a jumped up Prefects common room to decide the fate of the Nation?
    It would have been more acceptable had that close-knit Senate had much more experience of the world outside of Whitehall but they have not and I fear WE, the little people, are going to pay for their lack of real knowledge. The 13 years of Labour rule were the worst on record yet the new Cabinet are still running with their tried and failed method of boosting the economy. Why the Coalition are following the same old failed BoE policies that have cost £300 Billions and counting, is worrying. And continuing the policy when this country is sinking further into debt, is beyond rational thought. They appear to have the same logic as one Robert Mugabe and I suspect that our Pound will suffer for it. This country needs real men in charge not newbies just out of their political internships.

  27. Jon
    Posted November 6, 2012 at 7:45 pm | Permalink

    Another development around that time (from memory) was Butlers Wharf. Don’t know if it was public owned before but a fantastic development with some design help of Terence Conran. Today its a busy great addition to London.

    It can be telling who someone will employ:

    Some employ substandard so they are not a threat or malleable.
    Some employ talent but keep them on the move so they never get established.
    Some not only employ the talent but use it.

    It takes a great leader to do the last option because they themselves need to be something quite special to manage it. However, the first two lead nowhere and are pointless.

    In the world of MPs I don’t see an abundance of good legislators and those with a track record. A SoS I like got a bit of a roasting yesterday, never mind but we need the tried and tested experience in the cabinet as well as the new.

  28. zorro
    Posted November 6, 2012 at 7:55 pm | Permalink

    John, do you have any comment on the PM/HS announcement regarding child abuse in Wales or allegedly involving powerful figures? I am glad that DC announced that a public enquiry should look at this, because there are a large number of disturbing allegations and seemingly interconnected lines of enquiry which seem to indicate certain patterns of behaviour which need to be properly investigated.

    The reason I ask is that you were Welsh Secretary around that time (mid 1990s) and I believe that you instructed a QC to look into the scope of these allegations.

    zorro

    Reply: I want the allegations to be properly examined and dealt with

  29. Jon
    Posted November 6, 2012 at 8:09 pm | Permalink

    On the subject of Rolls Royce I remember as a kid watching Question Time with Robin Day weekly (who could forget the bow tie). At the sametime I was reading about postwar Japan and management styles like any other spotty kid. It was irritating hearing many a panel and audience reject manufacturing and strategic industries as a relic of the past. It can be right to let said succumbe to market forces of the day but not right to forget the incubation of the new replacements.

  30. zorro
    Posted November 6, 2012 at 9:35 pm | Permalink

    ONS publication on potential state liabilities of state pension scheme…..Read and weep….

    Google the following…..A broader picture of the public sector balance sheet: State pension and other other pension obligations – An update at April 2012

    zorro

  31. Cary
    Posted November 6, 2012 at 9:38 pm | Permalink

    Perhaps there are other questions to answer: what would John Redwood want to do about Nestle’s takeover of Cadbury’s? When a foreign firm can buy a British firm and then export it’s intellectual property, what benefit is this to UK plc?

  32. Posted November 6, 2012 at 11:37 pm | Permalink

    The approach that you advocate is a good one, which I largely agree with. There also needs to another distinction as well. You emphasise the importance of providing the structure in which markets can operate, particularly in the financial sector. Also important is the making strategic decisions that would reduce the long-term risks to the economy. Gordon Brown, up until 2001, had the right idea in balancing the budget over the course of the business cycle. After that, the definition was relaxed, so structural deficits were built up, (etc) One should also realise the massive conflict of interest between long-term fiscal prudence and the maintenance of political popularity.

  33. bolixe
    Posted November 7, 2012 at 7:37 am | Permalink

    Could’ve spelt his name right.

  34. Lindsay McDougall
    Posted November 7, 2012 at 12:29 pm | Permalink

    Re the nationalisation of Rolls Royce. It worked because it avoided the ownership of the aero engine capacity falling into foreign hands and because it was possible to privatise RR later.

    RR only got into financial trouble because of one very bad decision – a failed attempt to make blades of the RB211 engine out of carbon fibre.

  • About John Redwood

    John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College, and has a DPhil from All Souls, Oxford. 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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