“A” loss under Plan A

I drew attention to the rising UK bond yields and falling sterling sometime ago. Moody’s decision to remove an “A” from the UK rating reflects changes already occurring in markets, and should come as no surprise to readers here. The UK both needs more growth and less public sector borrowing. I have talked about changes that would help bring this about, and will return to this in my pre Budget pieces soon.

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132 Comments

  1. Nina Andreeva
    Posted February 23, 2013 at 9:32 am | Permalink

    Yes and you should also mention serious cuts into entitlement spending which now seems to be funding horses, parrots and flying lessons for the disadvantaged. Until you tackle this seriously (which no party will do for the sake of short term political advantage) things are not going to change.

    What worries me now is that the tinkering on spending in the past always used to revolve around trying to achieve minuscule savings by hacking away at the budget of the BBC World Service for example. However now these ineffectual cuts are now aimed at parts of the state that have important functions like the forensic service. Think about that one the next time you are burgled or are a victim of violence.

    • Bazman
      Posted February 23, 2013 at 2:14 pm | Permalink

      How would you tackle this one example of extreme behavior Nina? Lets hear your police state and inhuman ideas and lets face it she must be extreme as she made the national papers. Little to say about rich parasites though have you and as a cost to the state how many and how much as a % of GDP to single mothers with large families cost? Is this what you are hinting at when talking about tinkering at the edges.

      • Nina Andreeva
        Posted February 24, 2013 at 1:14 pm | Permalink

        Bazza your powers of comprehension seem to be as bad as Jerry’s. Where did I advocate a police state ( I am a big opponent of the death penalty for example)? Where did I advocate a return of the poor house?

        As pointed out here previously, as of 2010, the accumulated liabilities for the state pension and public sector pensions for example, regardless of what is being spent on people like Mrs Frost, lie at around 321% of GDP. How long can you keep that up for?

        Osborne is getting away with it at the minute by and large because he has a phoney buyer for his gilts in another part of the state i.e. the Bank of England. He is also assisted in paying his bills with the BoE handing over to him the “interest” (coupon payments) from the gilts that it bought with money that it created out of thin air to buy them with in the first place. The maths says this cannot continue forever no matter which party is power.Even a Chancellor Redwood would chicken out at the remedies needed to prevent himself being thrown out at the next election. Unfortunately when the great reckoning comes we will all be leading a wretched existence as the underclass enjoy now. Plan your family finances accordingly.

        • Jerry
          Posted February 24, 2013 at 8:31 pm | Permalink

          Nina, you seem to love telling others how to live their lives (with little or no actually knowledge of these people), that is a police state in all but name [1]. The fact that you can’t understand this suggest that the person with a comprehension problems is you.

      • David Price
        Posted February 24, 2013 at 1:29 pm | Permalink

        More to the point, how would a socialist deal with such an obvious case of abuse of the welfare system?

        • Jerry
          Posted February 24, 2013 at 8:46 pm | Permalink

          @David Price: In what way does it break the rules, I’m sure that if she has broken any such rules she will be prosecuted, morally wrong yes but not illegal in other words – just like someone at the other end of the economic scale avoiding their tax and spending on houses, parrots or flying lessons if you like…

          As for how a socialist government/country would deal with this sort of thing, she would likely be offered a proper job and day care for the kids that do not go to school – and there would be before and after school care for these kids too. Why is it that countries like Sweden can offer such things (that help boost the economy too) and not the UK?

          • David Price
            Posted February 25, 2013 at 10:02 am | Permalink

            I did not say the rules were broken, I said that (in my opinion) the welfare system was being abused.

            Come now, it was a straightforward enough question, stop trying to deflect the issue. Are you saying that socialists wouldn’t attempt to curtail such excess but would pander to it?

            So what happens if the client did not accept the offer of a job? Do socialists even consider it necessary to justify the expenditure on such things as parrots, horses and flying lessons to those net taxpayers who cannot afford such luxuries but are being increasingly fleeced by the state?

          • Jerry
            Posted February 25, 2013 at 3:35 pm | Permalink

            @David Price: “I did not say the rules were broken, I said that (in my opinion) the welfare system was being abused.

            You mean like tax avoidance is an abuse of the tax system, as I said, such actions might be morally wrong but not illegal. What is more, if there was less -perceived or real- tax avoidance by some there might be less benefit abuse by others, what is good for the Goose is good for the Gander and all that…

            Oh and as for the second part of your ‘comment’, for the second time, in a socialist economy this person would be found a job, if that to difficult for you to grasp, this person would have no need to be claiming benefits!

          • David Price
            Posted February 25, 2013 at 8:01 pm | Permalink

            @Jerry: I didn’t ask how you would deal with the situation in a socialist economy (which does not exist here as yet), I asked how a socialist would deal with what appears to be unrealistic demands on the welfare system here and now. Would it be curtailed or would you simply write a blank cheque?

            It doesn’t matter what abuses or not you imagine other people may or may not be involved in. Are you seriously expecting the net taxpayers and their children to foot an unlimited welfare bill because you are incapable of saying no to someone demanding a pony, a parrot or flying lessons?

            Where do you draw the line on welfare payments? Is that question too difficult for you to grasp?

          • Jerry
            Posted February 26, 2013 at 8:44 pm | Permalink

            David Price: In other words this is about you not liking the answer given, this is not about me answering not your ‘question’ because I did.

        • Bazman
          Posted February 25, 2013 at 7:02 pm | Permalink

          If there are undeserving poor then there must by default be undeserving rich a point lost on you it seems. You want to punish the woman in some way and this is not really possible whatever your political ideas and how could you stop her from having the children without a police state? Which I’m sure you would like, but only for your own causes.

          • David Price
            Posted February 26, 2013 at 9:10 pm | Permalink

            Your (and Jerry’s) unwillingness to answer your own question is illuminating.

            You really have no idea what I would like or believe. My question was a simple one yet you and Jerry refuse to offer an answer. Instead, you persist in trying to demonise anyone who disagrees with you and believes the state should live within it’s means. You try to ascribe motives and intents to others that have no basis in reality except in your own prejudiced fantasies.

            Are we therefore to believe that those who profess a socialist disposition are unwilling and incapable of curtailing any excesses in welfare support whatsoever? Is any question on the topic to be continually diverted to whining about the rich while instead punishing all the aspiring and hard working private sector tax payers?

    • Mike Stallard
      Posted February 23, 2013 at 3:07 pm | Permalink

      Well said!
      If only we had a Chancellor who had the guts to do the right thing instead of haemorraging both money and popularity!

      • Nina Andreeva
        Posted February 23, 2013 at 6:09 pm | Permalink

        Fat chance of that! The Cromwell will only emerge after the disaster hopefully. However history tells us that there is more chance of the people going for a Lenin, Hitler or a Mao. The thing that concerned me most when I was living in Warsaw in the early ’90’s, was as to how quickly the people would forget the misdeeds of the Quisling Communists and vote back into power its successor party, the SLD, as they went through a period if not hyper, but very high inflation and unemployment as the economy transformed itself

    • zorro
      Posted February 23, 2013 at 6:56 pm | Permalink

      The clinical look at what needed to be done by government and a proper allocation of spending resources to do the job has not occurred. There have been token cuts and token rises (overseas aid). There have also been large cuts (UKBA/Border Force) where spending should have been used to reduce demand on other services (Housing Benefit and other social services ad infinitum)…..

      zorro

    • wab
      Posted February 24, 2013 at 12:00 am | Permalink

      “However now these ineffectual cuts are now aimed at parts of the state that have important functions like the forensic service.”

      Indeed. Although Mr Redwood would like to pretend there are no cuts, in fact this government has cut useful things and left the waste, as many predicted would happen. This government seems to be full of ministers who like to smash furniture (so to speak) but are not so good at actually running the country (Gove, Pickles, etc.). Osborne is good at making surprise announcements which look good for ten seconds before everyone realises it is a con.

      Unfortunately, the alternatives to the Tories are if anything worse. The idea that Balls would be allowed anywhere near the levers of power is frightening. And obviously the Lib Dems are a walking disaster.

      Reply I have never claimed there are no cuts. I have rightly claimed that overall current public spending has risen in cash and real terms. There have of course been cuts in areas like defence.

      • lifelogic
        Posted February 24, 2013 at 4:26 pm | Permalink

        To reply – No net real cuts in effect.

    • Leslie Singleton
      Posted February 24, 2013 at 1:35 pm | Permalink

      Nina–Anybody who can spell minuscule cannot be all wrong

      • Jerry
        Posted February 24, 2013 at 8:47 pm | Permalink

        Leslie, any fool can use a spiel chocker!… :)

  2. A.Sedgwick
    Posted February 23, 2013 at 9:39 am | Permalink

    This is want you get when you have someone who wouldn’t get a job as an accounts clerk running UK plc finances. Then there is Cameron, who would be more politically honest as a fully paid up member of the Libdems with his other mate, Clegg. This country’s finances are unsustaineable with national debt doubling from 2010 to 2015, ridiculous levels of welfare, state headcount, state salaries(not wages) and pensions increasingly funded by the taxpayer with central and council taxes. Millions of C21 immigrants, probably in excess of five million with illegals, who get full benefits and have contributed next to zilch. A financially and seemingly clinical unsustainable NHS in its present form, overseas “aid” and military adventures and our funding the EU add to the increasing financial misery. The inevitable fall in the pound and rising interest rates has been evident in the last few weeks and when it works through QE will not come to the rescue, we will just be stuffed with calamitous national debt interst payments. Have a good day!

    • alan jutson
      Posted February 24, 2013 at 9:13 am | Permalink

      A.Sedgwick

      Add to that all spending based on a theoretical automatic growth in income, and you have a full set of rogue figures which will never add up or balance.

      Thus no surprise that the cat is now very firmly out of the bag.

  3. Brian Tomkinson
    Posted February 23, 2013 at 9:52 am | Permalink

    It comes as no surprise, but it is equally a sign of failure by your party’s own definition. If I may remind you of the following extract from your party’s 2010 election manifesto:
    “For the first time, the British people will have eight clear and transparent benchmarks against which they can judge the economic success or failure of the next government. We will be accountable and open. These are the eight Benchmarks for Britain. Achieving them over the next Parliament will mean we have put Britain back on its feet and are building a new British economic model, very different from the debt-driven economy of recent years.
    1. ensure macroeconomic stability: We will safeguard Britain’s credit rating with a credible plan to eliminate the bulk of the structural deficit over a parliament.”

    I note that you say “The UK both needs more growth and less public sector borrowing.” I look forward to your further ideas but I worry that even you seem to have chosen your words carefully to exclude ‘less public spending’. Too much current public spending is, in my view, the very reason why the deficit reduction plan is not working; but since Osborne never planned to cut current public spending it was always doomed to failure. Today the national debt stands at £1,147 billion and, as I keep saying, is rising inexorably. Does any one in Parliament care?

    Reply: As a regular reader you should remember I have often set otu ways to cut current levels of current public spending and recommended doing just that. I stand by what I have said in the past and try to avoid simply repeating myself every time the newspapers catch up with the reality. I proposed 5% less cash current spending – ie no increase- in Year One of the strategy which would by now have compounded to a large reduction in the deficit compared to the government’s course.

    • Brian Tomkinson
      Posted February 23, 2013 at 10:10 am | Permalink

      Reply to reply,
      Thank you but can you get anyone to take the necessary action?

      • zorro
        Posted February 23, 2013 at 6:59 pm | Permalink

        Unfortunately, our host has been frozen out by the Cameroons. They smile, hear his words, and then ignore them……

        zorro

    • JimF
      Posted February 23, 2013 at 10:29 am | Permalink

      Reply to reply:
      Yes but sadly (for you and us) you are one of the parents whose children are running wild and in charge of the sweet shop. Until you and your colleagues in the Conservative Party vote for some more mature and knowledgeable individuals to run the show, you will be on the sharp end of comments of the type you are receiving here.

      • me
        Posted February 23, 2013 at 11:20 am | Permalink

        But the Tories don’t care about comments, they care about power and power comes from votes.

        The only way to get the Tories to take notice is to take your vote away from them for doing the wrong thing and give it to UKIP who propose doing the right thing.

        Every vote for the Tories now is an endorsement of their wrong headed policies and failure.

        Every vote for UKIP is a slap in the face for the Tories that must eventually bring them to their senses.

        Ah but, you cry, a vote for UKIP risks letting in Labour. It doesn’t matter if we have Labour or the current Tories, it results in only a minor change in the speed at which our country disappears down the toilet. We are eventually flushed either way.

        The change in direction required can only be supplied by a conservative party that eschews political correctness and puts the national interest first. That conservative party will either be UKIP or the Tory party frightened into sanity by UKIP.

        Reply: As I have explained many times before the Conservative leadership is not frightened by UKIP, but it will have to listen to its own MPs.

        • nina andreeva
          Posted February 23, 2013 at 11:50 am | Permalink

          Well why bring in Crosby then? The sort of ideas that one
          associates with him hardly fit into the “Notting Hill mindset”

        • lifelogic
          Posted February 23, 2013 at 11:55 am | Permalink

          @me:- “the Tories don’t care about comments, they care about power and power comes from votes.”

          Well if they care about votes we need lower taxes, cheaper energy, fewer regulations, a small state vision, much less EU and selective immigration.

          So they are doing the wrong thing on every issue for both results and votes.

        • me
          Posted February 23, 2013 at 12:13 pm | Permalink

          OK, is it coversation 1:

          Tory Grandee: What’s up now?

          Tory MP: My seat and the seats of many of my colleagues are under threat because we are not a conservative party and we are leaking votes of conservative thinking people to UKIP.

          Tory Grandee: We need to do something about that and will try and be more conservative.

          or is it more like conversation 2:

          Tory Grandee: What’s up now?

          Tory MP: Please we must be more conservative in our policies.

          Tory Grandee: Shut up and do as you’re told. All the time people are stupid enough to vote for us because we’re called Conservative even though we’re not conservative we can chase the good opinions of the Islington set.

          My money’s on conversation 2.

          • Bob
            Posted February 24, 2013 at 11:05 am | Permalink

            @me

            1. The Tory Party can no longer be described as “Conservatives”. Perhaps “The Monster Raving Loony Party” would be more accurate?

            2. The Labour Party should be renamed the “Layabout Party”.

            3. The Liberal Democrats. They’re neither liberal nor democratic, I’m struggling to think of a name that can characterise a party that took a £2.4 million donation from a criminal and who membership has included people such as Jenny Tonge, Chris Huhne, Cyril Smith, Paddy Ashdown, Mark Oaten, Vince Cable, Jeremy Thorpe, Chris Rennard, Mike Hancock and Nick Clegg.

            Maybe the “So, So Sorry Party”?

        • Jerry
          Posted February 23, 2013 at 12:18 pm | Permalink

          @me: “Every vote for UKIP is a slap in the face for the Tories that must eventually bring them to their senses. Ah but, you cry, a vote for UKIP risks letting in Labour. It doesn’t matter if we have Labour or the current Tories”

          But that is simply not true and UKIPers know it, even though they try and ignore the elephant in the room, so until such time as Labour (officially) also pledge a EU In/Out referendum it does matter, and as such ever vote for UKIP is not only a slap in the face for the Tories but a full kiss on the lips of Labour and the EU!!

          I see that Mr Farage yesterday was claiming that Mr Cameron will have leadership problems should the Tories fail to win Eastleigh but surely the boot in on the other foot today, after being compared to certain Mr Stalin by a one time UKIP MEP (now Tory, since yesterday…). Party leaders just can’t go around singing the praises of their MEPs for leaving a job(s) to expose the truth one month and then claim that they keep ‘leaving under a cloud’ the next – it just makes the politician -and party- look total hypocrites. :(

        • Denis Cooper
          Posted February 23, 2013 at 12:59 pm | Permalink

          But an increasing number of Tory MPs are increasingly frightened of UKIP, and so they should be.

          Not so much those with large majorities, who are unlikely to lose their places in the Commons through the intervention of UKIP and only have to worry that if other Tories don’t get elected then they may not get a place in government.

          • zorro
            Posted February 23, 2013 at 7:00 pm | Permalink

            Hear, hear….

            zorro

        • MajorFrustration
          Posted February 23, 2013 at 1:39 pm | Permalink

          “Listen to its own MPs” LOL. Yes indeed, listen to their own MPs . That will be a first. Its all over JR

        • uanime5
          Posted February 23, 2013 at 2:14 pm | Permalink

          A UKIP MEP has defected to the Conservatives, so it seems that if you vote UKIP you get Tories.

          http://www.independent.co.uk/news/uk/politics/ukip-mep-marta-andreasen-defects-to-the-tories-and-launches-attack-on-nigel-farage-8507960.html

          At least UKIP doesn’t have to worry about any of their MPs defecting for obvious reasons.

          • Denis Cooper
            Posted February 23, 2013 at 6:25 pm | Permalink

            And if you vote Tory you get LibDem:

            http://www.guardian.co.uk/politics/2010/mar/12/edward-mcmillan-scott-defects-to-lib-dems

            “The former leader of the Conservatives in the European parliament has joined the Liberal Democrats, the party announced today.”

            Apparently upset that having got the eastern Europeans into the EU it turns out that some of them still have attitudes which have largely gone out of fashion in western Europe.

          • lifelogic
            Posted February 23, 2013 at 6:49 pm | Permalink

            It seems she saw the promise, by (proven totally untrustworthy) Cast Iron, of a referendum and years after he has left power, is a game changer?

            Clearly some people can be taken in twice very easily. I suppose she might even believe Osborne promising to abolish IHT in the year 2050 too.

          • Jerry
            Posted February 24, 2013 at 11:46 am | Permalink

            Lifelogic: What chance a promise from a party that hasn’t had a single MP elected (to Westminster) in 19 years, if that is not a promise broken then Gods knows what is…

            Anyway, Cameron’s ‘promise’ related to the (then) non ratified Lisbon Treaty, you can’t have a referendum asking the people if Treaty “XYZ” should be ratified if it has already been ratified – Duh!

          • lifelogic
            Posted February 24, 2013 at 4:36 pm | Permalink

            Jerry he did not specify that in his dishonest cast iron promise. Any way you clearly can have have a referendum to see if the people approved of the ratification – done without their authority or if they wanted to withdraw from it.

            To do so would have strengthened his hand. But he is a, say one think do the opposite, cast iron liar. No one who appoints Chris Patten – to do anything important – is the EU sceptic he claimed to be in his speeches.

          • Jerry
            Posted February 24, 2013 at 6:35 pm | Permalink

            Lifelogic, you are simply wrong, by definition any post LT ratification referendum would have to be one asking the In/Out question. That fact that you and others do not understand this just weakens your own arguments, not those of Mr Cameron or the Tories.

            This from the Daily Telegraph of 04 Nov 2009;

            “[..//..] Mr Cameron said that the Conservative Party campaign for a UK referendum on the Lisbon Treaty was over after the Czech Republic became the final EU member state to sign the document on Tuesday.

            “It’s no longer a treaty, it’s been incorporated into EU law,” he said, adding that the new posts of president and foreign minister were now being created. “We cannot hold a referendum and magically make those posts or the Lisbon Treaty itself disappear, any more than we could hold a referendum to stop the sun rising in the morning,” he went on. [..//..]”

          • lifelogic
            Posted February 24, 2013 at 9:13 pm | Permalink

            @Jerry.

            Nonsense – A referendum could be any question the government choose to put. Such as “do you approve the the Lisbon treaty or do you want the government to kill it dead, as it was clearly entered into without the peoples authority?

            There was absolutely no wriggle room in the unambiguous pledge he fraudulently made to garner votes in September 2007. He offered a “cast iron guarantee” to put any treaty in front of the voters. No mention of ratification what so ever at the time.

            I realise he ratted before the election but he clearly and blatantly ratted. Treaties are Treaties they do not vaporise on ratification. His claim that the treaty stops being “a treaty” on ratification is complete b******. Just a pathetic fig leaf for his – it will not work twice with his latest pathetic promise – well after he is complete history

            A ratified treaty clearly needed the referendum rather more than a non ratified one would. Either he thought the people should have a say or he did not.

            He was quick to give them the silly Libdem preference vote. Lisbon could have been done at the same time and for no additional cost.

            Reply A Treaty entails the consent and implementaiton of the other Treaty parties as well as our own. It was always clear that once the Lisbon Treaty had been implemented by all signatories it ceased to exist as a seperate legal document we could renounce, and became an integrated part of the Treaties. The option then had to be an In/Out referendum on membership of the whole. That was soemthing I and some other Conservative candidates offered, and susbsequently proposed in Parliament and voted for. Mr Cameron did not agree with us and did not make any such offer.

        • Bob
          Posted February 23, 2013 at 2:29 pm | Permalink

          The Tories are definitely not worried about UKIP, that’s why they have asked one of their top MEPs to come up with a three point plan to beat them. David Campbell Bannerman, who was UKIP deputy leader before returning to the Tories, highlights the dangers in a “creative” briefing note seen by Guido:

          “Judo teaches you to use the strength of an opponent against them. Applying this analogy to UKIP, we should acknowledge the one strength of UKIP: they seem to be in tune with the majority of the British population on the EU issue. Multiple polls show that over 54% of the public and two-thirds of Conservative Party supporters (You Gov Poll August 2011) want to leave the EU. They may appear to be more in tune with traditional Conservatives on other policies such as immigration, grammar schools or the environment”

          Rather bizarrely, Campbell Bannerman goes on to tell Tory candidates to disrupt UKIP pub meetings: “let the pub landlord know that people attending these meetings must not be given any free food or drink as this is classified as treating”.

          from order-order dot com

        • Pleb
          Posted February 23, 2013 at 2:43 pm | Permalink

          I agree and will always vote UKIP now. I can only presume that the leadership(sic) don’t care and have set up new jobs in Brussels.

          • Jerry
            Posted February 23, 2013 at 6:45 pm | Permalink

            @Pleb: Indeed, UKIP MEP’s seem very happy -if not comfortable- in their jobs in Brussels, so much so they no longer wish to stand for the UK parliament…

          • APL
            Posted February 24, 2013 at 9:38 am | Permalink

            Jerry: “UKIP MEP’s seem very happy -if not comfortable- in their jobs in Brussels, ”

            There you see the EU working as planned. MEPs know very well they are largely cyphers, but extremely well paid and very low taxed.

            What’s not to like? Ah, the representing the people bit!

        • Brian Tomkinson
          Posted February 23, 2013 at 2:54 pm | Permalink

          Reply to reply,
          The leadership will be worried about UKIP when they see how many previously Conservative voters they have driven into their arms.

        • Mike Stallard
          Posted February 23, 2013 at 3:09 pm | Permalink

          Every time I ask this very simple question:
          When did you last even have a chance to say, “Hello” to either the PM or the Chancellor?

          Reply: And I always reply that I have recent meetings with one or other of them. MPs are in regular contact with Ministers.

        • Duyfken
          Posted February 23, 2013 at 3:15 pm | Permalink

          Reply to Reply:

          If the leadership is not frightened by UKIP, it is because it is deaf or blind to the reality of the situation. But if the leadership needs to listen to Tory MPs, it may be told that those MPs are frightened of losing seats because of UKIP.

          Of course it is not UKIP which endangers the Tories, instead it’s the dire performance of this government and in particular of the Exchequer. We can now all see plainly that Osborne is a failure in his post. The one vital hope we have had is that the Tory-led government would efficiently redress and eradicate the ills of the previous regimes. But nothing has resulted except failure. What an abysmal shower!

        • lifelogic
          Posted February 23, 2013 at 3:19 pm | Permalink

          To reply “it will have to listen to its own MP’s” but it has not listened to the sensible ones at all has it – it is far too late now, they lost the last election due to Cameron’s errors and have destroyed their reputations by ratting on the EU and IHT and economic incompetence. They are clearly heading for destruction in 2015. Perhaps the plan, like Brown’s clear was, was to leave as big a mess as possible for the next government.

        • Leslie Singleton
          Posted February 24, 2013 at 1:55 pm | Permalink

          Comment on Reply–John, you unfortunately carry a lot of denial on this. Of course the Conservative Party will have to listen to its MP’s but those very MP’s, many of whom agree with UKIP to a large extent anyway (why wouldn’t they?) are behaving rationally and starting to look over their shoulders so pay considerable and increasing attention to UKIP’s increasing popularity (how could it be otherwise?). Of course forget the thinking of the dopey Conservative leadership which is beyond comprehension on just about everything. You have shown more fortitude and been longer in the field on this than most but even you cannot proceed as if UKIP did not exist.

          Reply : I am reporting accurately to you the stance of the leadership so far, which you need to know.

          • Posted February 24, 2013 at 8:08 pm | Permalink

            John–Cannot give you an inch in my little share of the fight for UKIP. I have just read Andrew Pierce’s piece on that “creature” O’Farrell and have a smile on my face. He is obviously simply demented and I am staggered that the Labour High Command should cement their suicide in Eastleigh by putting him forward. The goody-two-sandals Liberals are also making a Godsent mull of it and I see with great pleasure that the most recent poll has UKIP on 21%. I think I realise that they have a hill to climb but just imagine if they succeeded. Even if they don’t, but poll over 20% you will have then to stop the pretence that the Conservatives can ignore them. Let’s hear it for UKIP and all they stand for.

            Reply: I suspect the view of the Conservative leadership will be that a win is a win – if the Conservatives win UKIP’s strategy of trying to stop a Conservative win will have failed. If by any chance the Lib Dems did win the leadership will be more interested in why Lib Dem policies are more attractive than Conservative ones. Today the leadership think the Conservatives can win. I am describing the views of the leadership as I hear them, not expressing a personal opinion. I have set out before my view that Eurosceptics need to unite to fight. The longer the battle between Eurosceptics continues, the more likely we are to lose to the federalists as we did continuously from 1997 to 2010.

      • APL
        Posted February 23, 2013 at 5:31 pm | Permalink

        JimF: “Until you and your colleagues in the Conservative Party vote for some more mature ”

        John Redwood voted for David Cameron.

        • zorro
          Posted February 23, 2013 at 7:04 pm | Permalink

          He did, but he supported Liam Fox first of all. You need to join up the dots to make a sensible estimate of what he must think now in 2013 of what he did then……Marry in haste, repent at leisure……

          zorro

          Reply I voted for Liam Fox whilst he was still in the contest.
          When asked to choose between David Davis and David Cameron I held a meeting of all interested members of the Wokingham Association. They voted by a substantial majority for DC, and I voted for him following that discussion and guidance. I did not think David Davis’s choice of Chief Whip would be a long term sensible choice, as time proved.

          • Bob
            Posted February 24, 2013 at 1:51 pm | Permalink

            “… the Wokingham Association. They voted by a substantial majority for DC…”

            John,
            Are they regretting their decision?
            or are they closet Lib Dems?

          • lifelogic
            Posted February 24, 2013 at 4:40 pm | Permalink

            You and your Association were all conned well and truly by a professional at such matters. He cannot con again he is history.

          • zorro
            Posted February 24, 2013 at 9:40 pm | Permalink

            Reply to reply – Indeed, very true, but it didn’t stop Cameron retaining him in his shadow cabinet position or indeed appointing him to chief whip seven years later…..

            zorro

  4. a-tracy
    Posted February 23, 2013 at 9:55 am | Permalink

    Aren’t we simply consuming too many products which originate overseas. Then selling too little abroad in return. It matters little how the money circulates in the UK if there is a constant drip drip flowing out of the UK. As this pot reduces we will have to borrow more to meet the public sector spending pledges unless there is a realisation by everyone that we’re not the industrial Country we used to be nor are we likely to be again in the future.

    If UK plc was a Company we would now be downsizing if what you make is made and sold elsewhere cheaper to the same and improving standard. Niche markets aren’t so intensively staffed nor as big. So all these large empty offices, empty for the last decade, need turning into apartments, we can’t just keep hoping something will turn up, we need a kick start and a wake up call.

  5. Ben Kelly
    Posted February 23, 2013 at 9:59 am | Permalink

    Does this suggest the markets now feel someone less political should inhabit no. 11?

    Someone who will take decisions based solely upon the likely economic outcome and not on political dogma and playing to the crowd?

    This chancellor’s credibility has been lamentable since the previous year’s budget, when you have no money that people can believe in your ideas is the one asset you have. Time to go one feels.

    • lifelogic
      Posted February 23, 2013 at 3:33 pm | Permalink

      Pretty much the only sensible thing Osborne did was to promise the £1M IHT threshold. This put Brown off his early election in 2007. He has, needless to say, even ratted on the promise (even after the next election).

      Now even this seems to have been a disaster. Had he not made the promise and had hapless G Brown gone on to win we might now have had a proper Tory government.

      • zorro
        Posted February 23, 2013 at 7:09 pm | Permalink

        Yes, if only the veritable ‘cible facile’ had gone for the election, he would have beaten Cameron and then we could have a chance of a sensible government now! I really do wish GB had beaten DC then in hindsight….

        zorro

        • lifelogic
          Posted February 24, 2013 at 4:43 pm | Permalink

          Agreed.

        • lifelogic
          Posted February 24, 2013 at 4:44 pm | Permalink

          It would have been good if Thatcher had not been knifed and has lost too and we would not have had to suffer the John Major disaster. Labour would have had the ERM farce Major put in place.

          • zorro
            Posted February 24, 2013 at 6:09 pm | Permalink

            Yes, they could have won in 1997, and controlled public spending and could have made a long term goal of getting rid of most rates of income tax (if not abolish it)……..but someone like Cast Elastic would have got in and messed it up, and only add to the disappointment……

            zorro

    • Jon
      Posted February 23, 2013 at 6:47 pm | Permalink

      We have a democracy, if you don’t play to the crowd or listen then you don’t get elected to wield the power in the first place. What I think you suggest is a move away from democracy to just one persons idea of what is right and a dictatorship.

      • APL
        Posted February 24, 2013 at 9:25 am | Permalink

        Jon: “if you don’t play to the crowd or listen then you don’t get elected to wield the power in the first place.”

        We had a constitutional democracy, constraints on the freedom of those in control of the mob to implement whatever it wanted were applied by the Lords the monarchy and the judiciary*.

        Now, we have evolved to mob rule. The mob, in this case are the executive and whomever it has on its parliamentary payroll, thinks it can do what it wants. We’ll see.

        *Less than ideal, but in the absence of a written constitution with rights and obligations enumerated in a manner similar to the US, it worked pretty well.

      • Ben Kelly
        Posted February 24, 2013 at 9:04 pm | Permalink

        What I suggested was that our Chancellor had put all his eggs in one basket (that of Fiscal credibility). UK Plc benefitted from low yields and available finance due to 1 QE and 2 The markets believing the plan (ie credibility). If you wish to continue with only QE (set by unelected committee) then I contend that it is you who asks for dictatorship.

        I merely suggested that someone proven to be lacking might be replaced.

  6. Graham
    Posted February 23, 2013 at 10:46 am | Permalink

    A parasitic dead man walking = UK

    • debra
      Posted February 23, 2013 at 10:00 pm | Permalink

      so true :)

  7. NTropywins
    Posted February 23, 2013 at 10:50 am | Permalink

    John

    wealth can only be created by doing things more efficiently. Making energy artificially more expensive makes everything we do less efficient. Energy policy is killing wealth. Third world status awaits.

    • lifelogic
      Posted February 23, 2013 at 11:58 am | Permalink

      Indeed doing pointless things, and thinks that are hugely inefficient like HS2, the Olympics, green deal, home energy certificates, hip packs, gender neutral pensions and insurance and quack green energy just makes everyone poorer and destroys jobs.

    • me
      Posted February 23, 2013 at 12:19 pm | Permalink

      100% correct and the Tories are utterly committed to this ruinous policy. A complete u-turn is necessary but impossible for Cameron, which is all very pleasing for his father-in-law.

      Electricity prices that are unnecessarily high kill old people, it’s as stark as that. These lunatic, Tory endorsed, policies are killing our pensioners. They need to be brought to justice for these killings.

    • lifelogic
      Posted February 23, 2013 at 2:32 pm | Permalink

      And who pushed the Tories into the quack green branding daft energy agenda that is doing so much harm? Was it not Cameron as part of a silly party re-branding exercise? This was also partly responsible for his losing the election – that and the rest of his Labour light big state, high tax, agenda and Cast Iron ratting.

      A good presenter with no compass, alas now history having squandered an open goal.

      Good to hear that Osborne has insisted the country will not “run away” from its problems – after Moody’s downgraded the country’s AAA credit rating.

      Is this all he can say? Did anyone even think the UK could run away form its problems? It might be good if he personally did though given his approach so far. Had he inspired confidence in the economy and some growth he might well have actually raised the £3.5bn from the 4G mobile sale instead of being £1.2B short.

      Confidence is vital there is none in Cameron and Osborne nor with Miliband in 2015.

      • zorro
        Posted February 23, 2013 at 7:10 pm | Permalink

        ‘Is this all he can say?’…….Do you honestly think that he is actually capable of doing anything useful?

        zorro

    • Pleb
      Posted February 23, 2013 at 2:50 pm | Permalink

      “Third World status awaits” Especially if we overrun again next January.

      • zorro
        Posted February 23, 2013 at 7:12 pm | Permalink

        Any chance of any estimates by then?…..Pathetic…..

        zorro

        • lifelogic
          Posted February 24, 2013 at 4:47 pm | Permalink

          They have seen figure but do not trust them so we cannot see them!

          • zorro
            Posted February 24, 2013 at 6:11 pm | Permalink

            Nothing like a ‘transparent, evidence based’ government is there?

            zorro

  8. David Hope
    Posted February 23, 2013 at 12:22 pm | Permalink

    Osborne simply has to go. He put too much into the AAA rating. It’ll now cause great problems as all his interviews are replayed back and he’s made to look a prat. The disastrous Ed Balls will be made to look good.

    Someone untainted with determination and credibility is required. There are a few decent choices so Cameron should act fast

    • Jerry
      Posted February 24, 2013 at 12:10 pm | Permalink

      @David Hope: “The disastrous Ed Balls will be made to look good.

      Mr Balls has been warning of this outcome since first made Osborne’s shadow, it will make some ask who is the ‘disastrous’ one… I have to agree, and plead once again, Osborne has to be replaced, he has become an electoral millstone around the neck of the Tories, cut him loose now and there is still 24 months to turn things around – otherwise Mr Balls might be reading note that says and really does mean it this time“Sorry, but the money (really) has all gone”

      • zorro
        Posted February 24, 2013 at 6:13 pm | Permalink

        I fear that Gideon will be blushing ever so slightly before Mr Balls on Wednesday……

        zorro

        • Jerry
          Posted February 24, 2013 at 9:19 pm | Permalink

          @Zorro: I fear that he might be rather red in the face long before Wednesday, the far eastern markets open later tonight (UK time), what will we be waking up to…

  9. Jerry
    Posted February 23, 2013 at 12:31 pm | Permalink

    I bet there were a few metaphorical daggers being spat about late last night, and the government has the audacity to tell us that they are “making progress”, if loosing our triple A rating is ‘progress’ then what the hell was all the pre election bluster all about… But congratulations Mr Osborne, you have joined a very select group in the UK, how does it feel to be in the same ‘club’ that Denis Healey joined in 1978?!

  10. Bob
    Posted February 23, 2013 at 12:32 pm | Permalink

    Labour would have cut spending more effectively than the Tories.

    They also would not have poured an extra £4 billion per annum into foreign aid, and then pass the bill to English university students.

  11. John Maynard
    Posted February 23, 2013 at 12:43 pm | Permalink

    I would be very interested to hear John’s opinion on Mervyn King’s campaign to talk down Sterling, talk up inflationary expectations, threaten more QE, and generally destroy business confidence and the credibility of the UK’s public finances.
    Has to be a major factor in spooking the credit agencies.

    As for rising UK bond yields – a direct result of the pause to QE ?

    • zorro
      Posted February 24, 2013 at 6:16 pm | Permalink

      A distinct possibility…..the political reaction will be interesting, and it’s effects on the markets this week. I think that I had better buy some US dollars before my trip in April……

      zorro

  12. Denis Cooper
    Posted February 23, 2013 at 12:48 pm | Permalink

    Osborne must take the blame, not only as Chancellor since May 2010 but as both Shadow Chancellor and Tory election supremo in the preceding year.

    In 2009 the Labour government was having to borrow a quarter of all the money it was spending, and that reality should have been hammered home to the electorate again and again and again in simple terms that everyone could readily understand.

    By May 2009 it had also become obvious that QE was being used not “to stimulate the economy” but to enable the government to indirectly borrow from the Bank of England rather than private investors so that it could carry on with its over-spending in the year leading up to the general election.

    Osborne also failed to explain what was going on with QE in simple terms that everyone could understand, with the result that come the general election most of the electorate still had little idea of just how serious the position was and just how painful the corrective measures would have to be, whichever party or parties formed the government after the election.

    • zorro
      Posted February 23, 2013 at 7:16 pm | Permalink

      He just repeats his mantra of ‘not fixing the roof while the sun was shining’ twaddle, and blaming Labour, and not sorting out what really needed to be done by government and what could be contracted out for provision. They have woefully failed and now lost the triple A. God knows how they kept it for so long. They will now be forced to QE more to get through to the next election, and probably more radical banking measures will be required to avoid more debt financing through private sources.

      zorro

  13. Matthew
    Posted February 23, 2013 at 1:00 pm | Permalink

    Just hope that Mr Osborne gets this budget right.

    He and Mr Cameron, say a lot of the right things, but their action on the economy hasn’t been up to what’s needed.

    If not then it may be too late to turn the economy before the election.

    • lifelogic
      Posted February 23, 2013 at 6:55 pm | Permalink

      It is clearly too late.

  14. uanime5
    Posted February 23, 2013 at 2:20 pm | Permalink

    First Osborne said his deficit plan would help the economy, when the economy declined he said it was necessary to preserve the triple A rating, now the UK’s credit rating has been downgraded it will be interesting to see what excuse the chancellor concocts to explain why we still have to follow Plan A when if keeps failing.

    I expect April will be interesting as we’ll have the growth figures for the first quarter of 2013, which will determine whether the UK has entered a triple dip recession or not; tax cuts for millionaires; benefit cuts for everyone else; and another budget from Osborne.

    • Leslie Singleton
      Posted February 24, 2013 at 2:24 pm | Permalink

      unanime–Just because Osborne was a bad choice, chosen for the wrong reasons (Cameron should not have chosen his look-alike buddy), that does not make Plan A wrong especially not if, like me, you do not believe there is an alternative, other than to make the plan stronger (“Cuts? What cuts?”) .

      As to the dreaded triple dip, I reckon that phrase is one of the silliest and more useless terms around. The way it gets used, one would think that a triple dip was worse than a continuous period of decline of same length whereas the opposite is much more likely to be the case. The very name ensures that the economy must have broken surface twice in the period so on average the performance is unlikely to have been anything like as bad as those wishing to impute a triple dip are so keen to imply. If it should turn out this way, are we to face talk about a quadruple dip etc? Besides, the ups and downs are risibly small (lower than the margin of error I reckon if only because the meaning of GDP is so hopeless) that all that is really meant is bouncing along the bottom. This is not good of course but counting the dips adds less than nothing.

      • zorro
        Posted February 24, 2013 at 6:26 pm | Permalink

        Whichever way you look at it it’s bumping at the bottom and hopelessly out of line with ludicrous propaganda spouted in 2010 with regards to growth and how Plan A would work in practice.

        zorro

      • Jerry
        Posted February 24, 2013 at 7:16 pm | Permalink

        @Leslie Singleton: Sorry but the markets and ratings agencies have said it is wrong, unless you are implying that he has not actually stuck to his Plan (“A”)?…

        As for triple dip, what term would you prefer, “depression”, OK so not technically a depression but it is going that way if the economy is either flat-lining or dropping further and never growing – the economic effects will be much the same.

  15. Nicol Sinclair
    Posted February 23, 2013 at 3:10 pm | Permalink

    My hearty congratulations to George Osborne for succeeding, where others failed, in losing UK plc the coveted AAA rating. I could see this coming (as could others on this blog) but I had hoped that we would escape by the skin of our teeth. I was wrong, it seems.

    The so-and-so now needs to adopt Plan B. Oh, sorry, I forgot. There is no Plan B. So George has well & truly stuffed us. See how this will affect the Bond Markets, inflation, and a further plummet into debt & disorder.

    Cut the bloody public sector – drastically and fast. Who really needs all these this green mantra and these ‘jobsworths’? Give incentives to the private sector – simple really. But, to achieve that, one needs testicles. Eunuchs the lot of them.

    • lifelogic
      Posted February 23, 2013 at 6:57 pm | Permalink

      Indeed government by the state sector and for the state sector the other 80% are just there to be mugged.

    • uanime5
      Posted February 24, 2013 at 4:08 pm | Permalink

      Osborne already tried cutting hundreds of thousands of jobs from the public sector because he believed that it would create millions of jobs in the private sector. The result was barely enough jobs being created in the private sector to replace those that were lost, increased unemployment, and the public sector couldn’t function effectively because they didn’t have enough staff.

      Further cuts to the public sector will result in the same outcome.

      Reply Employment is up strongly, well ahead of puboic sector job losses.

      • Jerry
        Posted February 24, 2013 at 7:28 pm | Permalink

        @JR reply: “Employment is up strongly, well ahead of puboic sector job losses.

        How many of those jobs are;

        1/. Full time (30hrs or more).

        2/. Actual new jobs, not just people being transferred from the public to private sectors at a stroke of a pen.

        3/. Real jobs, (meaning that people have not simply either signed off JSA, become self employed but doing very few hours -and thus most likely still claiming housing or tax credits and the like- or are not jobs at all but those on “workfare” who have been removed from the DWP official unemployment figures).

        • Bazman
          Posted February 25, 2013 at 7:12 pm | Permalink

          Ive been looking for a job and some companies in the business of supplying welded structures to the building industry are doing badly and some are taking on all in the same area. I found a job with a company that has a lot of work at the moment and is paying good rates. The problem with get tin a job these days is that the work is increasingly becoming more specialised even within the same industry and getting a job doing anything out of your own occupation is difficult and I mean even supermarket and labouring jobs. Teenagers with no qualifications as such and no experience have no chance and the government has a duty towards them.

          • Jerry
            Posted February 26, 2013 at 9:30 pm | Permalink

            @Bazman: Indeed, that old “No job due to no experience – No experience due to no job” chestnut…

            To give the Thatcher and Major governments their due, they did acknowledge this very problem and went some way to offer proper training (which was seen as an investment by the government, not a cost to come out of the ‘Providers’ profit margins), which makes it even more gruelling that the DWP now seem unable to square this circle, does no one from the DWP ever talk to anyone from the Thatcher/Major era?!

            I known some people over the last 30 or so years who stared very successful careers in their chosen [1] trades or industries during the 1980s and early 1990s having started via the old YTS and Man Power style schemes, indeed I gave some of them their basic on the job training, I also seem to recall that older people who already a skill-set were often sent back to FE college or a suitable work place so that they could update their skills.

            [1] it really is pointless, unless the idea is to introduce workfare via the back door, to make people work doing something they have absolutely no interest in and no commitment to, even if there is no one to ‘posh’ to stack shelves

  16. David Langley
    Posted February 23, 2013 at 3:28 pm | Permalink

    I think Cameron is in for a kicking in PMs question this week. His much vaunted A,s are in tatters and right on for Eastleigh. I expect UKIP to do better than expected. Its got to be time for a change John, when people like yourself are totally ignored who on earth is he listening to? Big bird out of the Muppets?

    • lifelogic
      Posted February 23, 2013 at 6:58 pm | Permalink

      Big bird out of the Muppets sounds preferable to me.

    • zorro
      Posted February 23, 2013 at 7:18 pm | Permalink

      Why do you think that Big Bird from the Muppets would waste his time talking to Cameron…?

      zorro

    • R.T.G.
      Posted February 23, 2013 at 11:02 pm | Permalink

      “…,when people like yourself are totally ignored who on earth is he listening to?”

      http://blogs.telegraph.co.uk/news/iainmartin1/100155166/david-cameron-says-oliver-letwin-is-the-governments-mainframe-computer-turn-him-off-and-on-again/
      ………………………………………….

      A hat tip to ‘alternative_viewpoint 05/02/2012 07:19 AM’ in the comments section from the above link, who makes an interesting point about unmanageable complexity – from which we might infer that even someone as special as Mr Letwin with all his international perspective (apologies to our host) couldn’t cope.

      “Modern Britain is quickly discovering that when numerous, seemingly simple systems begin to interact the net complexity of the overall arrangement escalates exponentially.

      This is the source of unintended consequences and the reality is, this level of complexity is rapidly surpassing our ability to manage it.

      We have too many rules, too many laws, too many exceptions, too many processes, too much tinkering and too much bureaucracy; the latter of which is an obvious consequence of the former.

      The mantra for the government should be devolve and simplify.

      Trying to create an all encompassing system which ameliorates inequalities in society is bound to fail simply because society is neither static nor is it homogeneous. It is a dynamic and seething mass of contradictions and discontinuities and no human system will ever posses the adaptivity and transparency to accommodate these.

      The right has always instinctively known this, hence it has traditionally employed hierarchical organisations of trusted and educated individuals with the authority to make decisions according the the peculiar circumstances experienced on the ground.

      The left has always sought to flatten structures and replace people with systems, rules and laws: to remove inequality, to treat everyone the same. Unfortunately the only way messy people have been made to fit into their social models is by oppression. By forcing homogeneity and ironing out the discontinuities.

      We need a few, very simple laws and systems employed globally, which will accommodate the demands of the majority, and capable people with sufficient authority and appropriate oversight employed locally to respond to individual cases of obvious failings.

      Unfortunately the conservatives are following the tried and failed path of the left and seem resolutely determined to make the very same mistakes as well.”
      ……………………………………………………………………………………

      One could be forgiven for thinking that the potential for implosion is not entirely unforeseen, given that such a clever group of like-minded people is involved in testing the organisational complexity, not to mention cognitive dissonance, of our society to the point of destruction.

    • uanime5
      Posted February 24, 2013 at 4:09 pm | Permalink

      Bid Bird is from Sesame Street, not the muppets.

      • zorro
        Posted February 24, 2013 at 6:34 pm | Permalink

        Thank you for correcting us there, and of course he is from Sesame Street….but you can see how we made that error talking about muppets….

        zorro

  17. Alan Threlfall
    Posted February 23, 2013 at 5:12 pm | Permalink

    Whoever would have thought that Britain would lose it’s triple A status under a Conservative Majority Coalition specifically formed to deal with the appalling financial situation left by the previous Labour Government?
    Whoever would have thought that public spending would increase, and the pound be deliberately manipulated to fall?
    Whoever would have thought that the Coalition would shut down working power stations, to meet some imaginary EU target no other European country is bothering to match?
    Whoever would have thought that hundreds of thousands of additional EU citizens will soon arrive on this sceptered isle, and there is nothing anyone can do about it?

    My forecast, in the 2015 General Election, Conservatives will lose many seats.
    Labour will be elected, but as they have the same policies as the Coalition, they too will fail.
    Sooner or later the IMF and maybe even those nice technocrats from Brussels are going to visit London and administer the extremely painful financial medicine that Britain needs, but whose politicians, with notable exceptions, lack the courage to implement.
    The EU has been a disaster for Britain and democracy. Give us the referendum now.

    • lifelogic
      Posted February 23, 2013 at 6:59 pm | Permalink

      Indeed.

    • zorro
      Posted February 23, 2013 at 7:20 pm | Permalink

      I’m sorry to say that I did think that these things were likely to happen. There was no steel in this Coalition. Watch how it falls apart this year when the markets take a punt now that the Eurozone has sort of stabilised….

      zorro

  18. Bernard Otway
    Posted February 23, 2013 at 5:37 pm | Permalink

    Hello again after many moons John.
    If as you say the Tories are not scared of UKIP,that in my opinion is as silly as not being
    scared of any danger threatening anyone,if the river is overflowing it,s banks and still rising
    it is also silly to think the flood will not do you harm IF you are in it,s path.If as some think
    UKIP will lose the next election for Cameron and all of you to Milliband ,then we will go down the same path as Greece etc and something horrible will emerge here,as the people (are very unhappy about rapid inward migration and other policies-ed)
    (analogy with 1930s left out-ed) When I was at school [I left in 1963] nobody bullied either me or any of my friends either at school or out I and my friends used to HIT first and ask questions
    after,the LEFT consensus as encapsulated by COMMON PURPOSE and all the rest of it,s drivel Has to be punched hard on the nose,if not it is too late,and if it is I for one am glad I have only 10 maybe 15 years left,to be gone will be mercy that is why all my children and grandchildren are thousands of miles away they have ESCAPED.

  19. Monty
    Posted February 23, 2013 at 5:52 pm | Permalink

    Our only hope is that the PM and Chancellor can be persuaded to turn this into an opportunity for some serious root and branch pruning of public spending. Starting with the most expensive jobholders first please. The public sector is riddled with policy groups and steering committees and all manner of overpaid sinecures. Get rid of them first. Have that bonfire of the Quangos, throughout local and national government. You can’t expect to make nurses and firemen redundant, while retaining all that indirect overhead.

    • lifelogic
      Posted February 23, 2013 at 7:01 pm | Permalink

      Well even if Cameron wanted too (which he clearly does not) he has saddled the party with the Libdums – so he can not anyway.

      This is what happens when you through sitting duck elections away with fake green, big state, pro EU drivel.

      • Jerry
        Posted February 24, 2013 at 7:51 pm | Permalink

        @Lifelogic: Not true, the voters ‘saddled’ the [Tory] party with the LDs, or do you think that Cameron invited Clegg into coalition out of Christian charity and/or pity?!

        Clue, without the LibDems there my have been no Tory in government (unless a government of national emergency had been formed). I also doubt that, given the swing to UKIP from the Tories, unless a bout of sanity had broken out amongst existing and would-be UKIP supporters it would not have been certain that the Tories would have gained a majority -enough to lead a coalition- had a second election taken place in 2010.

    • uanime5
      Posted February 24, 2013 at 4:16 pm | Permalink

      Isn’t the new Governor of the Bank of England one of the most expensive jobholders? I can’t imagine him being fired, so it’s unlikely anyone who is paid less than him will be fired.

  20. Jon
    Posted February 23, 2013 at 6:36 pm | Permalink

    Plan A seemed fine except I feel they didn’t stick to the part about cutting spending as well as should have been the case. Instead there were tax rises to replace the cuts in spending as is often inferred on this blog.

    The Conservatives have had to deal with being on the back end of cutting but without the level of cuts to justify the criticisms. They should have at least made the cuts during that time of criticism.

    • Jon
      Posted February 23, 2013 at 6:41 pm | Permalink

      Also again there is the issue of marketing messages. Labour would have bankrupted us and put us in the hands of the IMF and the Euro would most likely have sunk as a result. The blows were not placed early on and hard enough just like the pensions black hole. Those effectively marketing strategies that were too weak are biting now for the party.

  21. acorn
    Posted February 23, 2013 at 6:55 pm | Permalink

    I keep having this bad dream. These two kids are ,posing on the prow of this huge ship, but it’s not Kate Winslet and Leonardo DiCaprio; it’s George and Dave. What can it mean?

    • Denis Cooper
      Posted February 24, 2013 at 9:56 am | Permalink

      That George will survive but Dave will not?

  22. Dennis
    Posted February 23, 2013 at 7:18 pm | Permalink

    More nonsense from Mr Redwood when he never informs us where he thinks the fundamental source of all the inputs are coming from to fuel growth and what this really means.

    He has attempted to explain this before but is sadly misinformed particularly as he apparently does not understand the meaning of ‘fundamental’.

  23. margaret brandreth-j
    Posted February 23, 2013 at 7:22 pm | Permalink

    Apparently the all so important triple’ A ‘rating which George was trying to hang on to and use as a trophy to the success of his policies, has failed. Now the failure is highlighted, it has suddenly become less important.
    The reason is the sluggish growth. How can we grow if jobs are being lost and money is less? How can we grow if competition is so dirty , anyone about to make it is pulled down? We need to change our perceptions of growth and understand that if we all live on less and maintain a continuum then that can be growth in itself , just keeping up our standards yet making do with less speaks of better management of available funds. The growth here is relative to a moving base line.
    You always make sense John, but your game isn’t everyone elses . Most don’t work with rationality and reason (and kindness). The few who grow are quickly put down and the opportunist grabs the credit , both in monetary terms and prestige. They can’t maintain this , the game is cheat and boast.
    I am looking for a sofa bed for my spare bedroom to utilise it as a room for the grandchildren ..I personally hope that more people enjoy the benefits of a room with a view as beautiful as mine , however small, but to do this there are so many attitudes to change ..other’s don’t want this, they want to throw their Mcdonald packages out of the window of the sports car and drive to a club where they can have all night fixes and one night stands. Things have changed ; the factory type town flat and careless wasteful living is what is now desirable. Wokingham may be a highly desirable area , but for many this will never be so, therefore money is wasted on what is affordable.

  24. Bob
    Posted February 23, 2013 at 9:25 pm | Permalink

    A report in the Telegraph says that councils spend £155m p.a. on taxis to ferry children to school, because the couldn’t get a place in their local school.

    • Bob
      Posted February 24, 2013 at 2:36 pm | Permalink

      A report in the Daily Mail says that The NHS paid more than £1million last year for pregnant Polish women to give birth in Poland.

      • Jerry
        Posted February 24, 2013 at 8:10 pm | Permalink

        Bob: Nice Headline from the Daily Maul, now for the details….

    • uanime5
      Posted February 24, 2013 at 4:22 pm | Permalink

      Are taxis cheaper than a school bus?

      • Bob
        Posted February 24, 2013 at 6:43 pm | Permalink

        @uanime5

        Is it cheaper to travel one mile or twenty?

        • Jerry
          Posted February 24, 2013 at 8:07 pm | Permalink

          @Bob: The majority of children have never lived within 1 mile of their secondary school, and you forget that there are many reasons why children might need to use taxis, for example children that have a SEN statement and go to a school outside of their normal catchment area, or were the child qualifies for free school transport but (as uanime5 says) it would cost more to pay for a bus service.

          Anyway, I thought the Tories wanted inclusion and choice in education , or is this inclusion and choice only if you can afford it and no inclusion or choice for everyone else?…

  25. Mark
    Posted February 23, 2013 at 9:28 pm | Permalink

    At times like these it has been traditional for the Bank of England to intervene in the markets. The announcement of the downgrade came justs before 5 p.m. New York time on Friday – enough time for forex markets to react by chopping a cent off cable almost instantaneously, but little else. If there was any intervention it would have been by the US Fed.

    Monday will perhaps provide a sterner test. Gilts may not react in the same way as sterling, because there may be an expectation that the Bank may choose to mop up gilts sales as those who are limited to investing in AAA rated securities sell in anticipation of downgrades by other agencies that would force sales anyway. Of course, some £375bn has already been disposed of. Sellers will be only too happy to see the Bank continue to pay top pound, while prices for imported goods are likely to rise sharply on the back of the effective devaluation – further undermining strategies that give us imported energy and export industries to more competitive economies.

    This downgrade is of course not the first – Chinese Dagong cut the UK rating to A+ with negative outlook in May, 2011 (from AA-) and reaffirmed that rating last August. Whether Fitch and Standard & Poor will wait until after the budget is an interesting question: a downgrade that followed the budget might be seen as a particular vote of no confidence in the measures.

    Following the announcement last week that the Treasury had drawn down the cash balance of coupon income of the BEAPFF by £3.8bn, and the associated somewhat obfuscatory notes on the treatment in National Accounts and comments by the OBR, I have written to ONS, the OBR, the Treasury and the Bank of England with a number of questions that arise from this transaction and the plan to purchase more gilts as the first redemptions of holdings come in: that £6bn+ warchest now looks rather convenient in present circumstances. The Bank of England has already promised a proper reply. I will report back on answers I receive.

    In passing, I revalued the QE portfolio based on Friday’s closing prices, which showed an uptick (falling yield) at the long end of the market. It was worth £383.4bn. I will also report on the value next week, and the consequences for future borrowing costs arising from this downgrade.

  26. Steve Cox
    Posted February 24, 2013 at 4:42 am | Permalink

    “If you pretend you are reducing the deficit, but are actually on a £600bn Keynesian deficit-financed stimulus, then expect to be downgraded.”

    Mark Littlewood, 22/2/13

    • Jerry
      Posted February 24, 2013 at 12:24 pm | Permalink

      @Steve Cox: It’s not so much the downgrade, remember that both France and the USA have also been downgraded (and it has actually assisted the US whilst making little difference to France), nor it is not any -suspected- Keynesian style stimulus, any damaging factor here will be the stead-fast worshipping of the triple rating by the UK government – Osborne was warned, by politicos and markets, but the man would not listen, the markets will now be asking -and perhaps testing- if he will listen now…

  27. Bernard Otway
    Posted February 24, 2013 at 11:49 am | Permalink

    Gone for a long time and CENSORED again,I saved my comment and will now show it to UKIP and ask them WHY they thought it was
    BYEEEEEEE

    • Jerry
      Posted February 24, 2013 at 8:16 pm | Permalink

      John, fixing this Cookie problem really should have been done by now by your webmaster or server host!

  28. David Langley
    Posted February 25, 2013 at 8:16 am | Permalink

    We are on a downward slope, neither Labour or Conservative will do the things they have to do to stop it. Taking the very real actions we have to have will make them unelectable to the Great British public who have yet to fully understand the real disaster we are in. Therefore no real change of policy just rhetoric and bluster which is gradually convincing more and more of us that we need real radical change.
    We have no chance of recovery until we face the hard facts, we are in a war with those nations that are manufacturing and producing goods and services with a cost base half of ours including shipping costs. There are many emerging nations slowly climbing on the world exporting bandwagon and the more they are encouraged to do so the more we slide down the economic recovery scale.
    The current attitude of the government is always to apportion blame on Labour and defend an economic policy that is only good in parts. We must stop borrowing and giving away. We need a real wartime/economic reality government, not this rentamob of election pleasers. The first things to do is cut the policies dragging us down and axe all spending on nil return projects and policies. We are a country that cannot afford new infrastructure, we can hardly maintain the current infrastructure, see railways and housing shortage. The dead hand of government and the ridiculous extra tier of EU government is the last thing we need. It provides the electorate with a picture of Nero fiddling away rather than politicians like yourself who are in the minority as you say in your own party, and you seem unable to convince the majority of your conservative fellows of the soundness of your advice. What does that tell us about your job, your structure and the vision of the Conservative party. Mired in a dream past and pretending you can somehow legislate us into prosperity.

  29. Bazman
    Posted February 25, 2013 at 7:04 pm | Permalink

    The triple A rate was worth nothing anyway. How many of the auditing companies saw the financial train crash coming. Non and if they did were in on it in some vested interest at least.

  • 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.
    Published and promoted by Thomas Puddy for John Redwood, both of 30 Rose Street Wokingham RG40 1XU
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