Why Europe will be outpaced by Asia and America

 

               Yesterday the papers splashed a long range forecast which said the UK economy would soon overtake the French in size, and by 2030 would be larger than Germany. The reasons given were the UK’s relatively low tax regime compared to the continent, a younger and growing population compared to declining and ageing populations on the continent, and our avoidance of the Euro. All that makes sense.

             However, what the forecasts and figures also reveal is the growing irrelevance of Europe to the progress of the world economy. The individual large EU economies will lose out to China, India and other emerging market countries, as they surge. According to UN population forecasts Europe’s overall population will shrink from 728 million in 2000 to 632 million by 2050. Meanwhile China’s population will grow to be more than twice that of Europe’s and India’s will be more than 2.4 times Europe’s. As India and China get bigger and as they raise their living standards and output per head, so they will come to dwarf the economic output of the main European countries.

            Mrs Merkel has wisely asked the question how can such a small part of the world’s population in Europe account for one quarter of world output and one half of world social spending? It looks as if the answer to the question on the share of world output will be answered by Europe’s share contracting over the next two decades, as the emerging economies outgrow the west. Our living standards can only remain substantially higher than those elsewhere if we continue to develop the companies, the products and services with high value added that command good prices around the world. This is going to get more difficult as the rest of the world catches up with brands and technology and as EU government does its best to undermine enterprise.

             Whilst some of the high proportion of the world’s social spending will be eroded by the same process, by growth elsewhere, it looks as if the brutal logic of the Euro will continue to put downward pressure on social spending, forcing higher retirement ages, lower pensions and meaner social benefits. That is what Mrs Merkel implied in her remarks.

            Europe will make its position worse by continuing with high energy prices, relatively high taxes, and an excess of poor regulation. EU government specialises in  the hammer of regulation to miss the nut, and will probably continue with more of the same. This will compound Europe’s difficulty in earning a good living and boosting value added and real wages. The pressures from EU government are mainly in the other direction, forcing EU companies to do less with more.

             And what of the UK?  If  the UK could cut lose from the EU’s dear energy and excessive regulation it could grow faster still. It has an advantage from being out of the Euro, and another from relatively low corporate taxes. If it added more competitive personal taxes and dug itself out of the excessive burden of so called single market regulation it could do even better. Above all it needs a more plentiful supply of cheaper energy, which is probably beneath our feet as we think about it. Lots of cheap gas would power an industrial recovery, which would add to the present recovery underway.

 

 

 

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111 Comments

  1. Brian Taylor
    Posted December 27, 2013 at 6:00 am | Permalink

    Why oh why are we wasting valuable time on negotiations with the EU, The conservative manifesto should state that if they win a majority in 2015 they would invoke Article 50 of The Lisbon Treaty which would concentrate the minds of both the EU and our own Sir Humphrey we would then by 2017 have something to vote on.
    Otherwise it will be like 1975 again a few cosmetic concessions, we will miss the chance to get a new deal with the EU or we then in 2017 invoke Article50 which will have wasted two year!!
    Get planning now!!

    Reply UKIUP has demonstrated in successive elections that you don’t get a single seat with that as your manifesto. The Conservative leadership will stick with trying to negotiate a better deal and then letting us , the people decide whether to leave or not.

    • Roger Farmer
      Posted December 27, 2013 at 9:32 am | Permalink

      Your reply on what happened in the past may be accurate, but has a whiff of complacency about it. Take a look at the opinion polls and relate them to any sitting Conservative MP with a majority of less than 5000 and realise you are in trouble. It saddens me but it is a self inflicted wound that you are heading for. Who in the EU is saying “Lets have a renegotiation”. It will not happen because the totalitarian forces of Brussels are never going to be ready to talk their way out of a 12 billion sterling contribution to their fantasy. In addition to which Cameron has stated over and over again his love for this incestuous relationship. You should be asking yourself who is controlling Cameron. I would suggest a worldwide cabal of the seriously rich, be it banks or individuals, whose wealth has multiplied while the majority suffer austerity in various forms. Logic would dictate an exit now via Article 50 and negotiation from a position of strength, not the weak plea you are advocating.

      Reply If the rest of the EU declines to negotiate then I assume the British people will simply vote for Out, so what’s the problem?

      • Leslie Singleton
        Posted December 27, 2013 at 11:03 am | Permalink

        Comment on Reply–The problem is of course that as things stand it is odds-on there will be just a fig leaf of a renegotiation and even then only if the Conservatives win the Election which you can have no basis for assuming. What is being offered is jam tomorrow combined with blackmail with the continuing flavour of selling the country down the river. And that is after giving Cameron the benefit of the doubt, of which there is a lot, whether he is playing all this straight.

        Reply And all the rest offer me no jam, including UKIP who after 10 years as a party are no nearer to getting us out of the EU than when they first promised to do so!

        • lojolondon
          Posted December 27, 2013 at 1:22 pm | Permalink

          John, UKIP has been operating in a media vacuum for years, as the Biased BBC intentionally strangled them of the publicity that every political party needs to put their point across. Then, during 2013, BBBC came to the (false) belief that a strong UKIP could damage Tory hopes for a win in 2015. They immediately threw the doors open to Nigel Farage for more appearances in 6 months than he had in the previous 10 years. These factors conspire in UKIP’s favour – watch the European elections, I hope that UKIP does as well as expected there, and then people will trust them with their votes in the UK elections. Remember, they don’t have to win an election, they just have to be in the same position as LibDems are now – kingmakers. I can’t think of a better result for the UK than a coalition of UKIP and Conservatives for the next 5 years – of course, David Cameron will have to go first, but here’s hoping!

          • Richard1
            Posted December 27, 2013 at 5:50 pm | Permalink

            What UKIPs new exposure in the media has demonstrated is that apart from Nigel Farage they have no articulate or even coherent spokesmen or women. For those on the political right the Conservatives are the only game in town.

        • Leslie Singleton
          Posted December 27, 2013 at 1:51 pm | Permalink

          Comment on Reply–I struggle to understand how you can apparently not see that whilst certainly the first half or so of UKIP’s existence was ineffective and no oil painting they are now on the verge of murdering you next year (very soon it will be this year) and that if that happens, as seems very likely, the Conservative goose is well and truly cooked. The scales are dropping from the electorate’s eyes. 16% (and rising?) and everything to play for. Nobody said it would be easy.

          Reply I am not planning to fight an election in 2014 myself so I do not understand the “murdering” comment.

          • Arschloch
            Posted December 27, 2013 at 6:36 pm | Permalink

            I cannot understand the “murdering” comment either. The SDP did not finish off Labour and they seemed to be able, unlike UKIP, to win by-elections, attract defecting MPs and councillors were on the other hand UKIP only sees its MEPs defecting elsewhere. If Farrage were to have another accident and disappear from politics UKIP would soon develop a profile something similar to that of the Natural Law Party

          • Bob
            Posted December 27, 2013 at 8:35 pm | Permalink

            @Mr Redwood,

            Reply I am not planning to fight an election in 2014 myself so I do not understand the “murdering” comment.

            Leslie was not referring to you as an individual, but rather your party.

      • Posted December 27, 2013 at 11:04 am | Permalink

        Cameron has already said that he will campaign to stay in the EU, so my worry is that the EU will offer some trivial concession, which will be blown up by the pro-EU group as a great victory.

        • lojolondon
          Posted December 27, 2013 at 1:25 pm | Permalink

          EP, you are 100% correct, that is what will happen. The EU will agree after months of deliberation that Britain can decide the lengths of our own matches, and with that concession we will stay in the EU. A year later we will discover that the contract is void because Barosso had his fingers crossed behind his back, and we have to use EU standard-length matches after all. It has happened before and it will happen again, expect the next ‘red line’ sales pitch.

        • Livelogic
          Posted December 27, 2013 at 6:18 pm | Permalink

          That is exactly what will happen, in the very unlikely event that Cameron wins (and does not rat completely again). BBC will surely be to the fore with the usual propaganda.

      • Roger Farmer
        Posted December 27, 2013 at 11:15 am | Permalink

        The problem John is that it is too slow, and that beyond 2015 it will not happen because the Conservatives will not be in power to implement it. Doing something now might just see them survive.

        • William Long
          Posted December 28, 2013 at 12:00 pm | Permalink

          Do we want them to survive in their present form? What is the value of the present Conservative establishment when it is happy to share power with the likes of the Lib Dem leadership (I am being very careful to obey the rules by not naming names). JR may say that coalition was a necessary outcome in the circumstances of the time, but a party leadership that had sufficient confidence in itself and what it had to offer the nation, would have done better to have governed as a minority till a promising moment arrived for a second election which precedent indicates it would have won, particularly if it had taken the trouble to nail the Labour party with responsibility for the financial mess rather than acquiescing in the myth that it was all the fault of the bankers. I am afraid the current Conservative leadership gave the show away when it promised to match Labour spending and waffled about ‘Sharing the proceeds of growth’.
          You may say all you like about UKIP but it is the only party that offers a clear message that does not ‘fellow travel’ with the left wing.
          I would consider voting Conservative again (I was once a constituency vice chairman, and County Council candidate) if Boris Johnson became leader but clearly the existing crew would have to go to enable that to happen.

    • Hope
      Posted December 27, 2013 at 9:33 am | Permalink

      Cameron chose to go in coalition. He could have gone alone and called an early election, like Harper did in Canada. He did not have the courage and wanted to change his party by blaming the Lib Dems. His pro EU green quack ministers with an aggressive gay lobby of MPs is not an accident, it was his choice. Major and Heseltine as advisors was not a coincidence either. Clarke the EU watch dog making sure Cameron keeps to the EU script, even correcting/ contradicting him in public. All the dangers he warned us about will happen in 2014. He chose to do nothing about it ie treaty change to allow Eurozone bail outs for nothing in return, providing money for bail out while promising us he would not. Gold plate all EU and Labour policies.

      UKIP will be winners in the May EU elections causing further problems for Cameron, QMV comes into effect in November 2014, this will mean the UK pays more, gives more and has no say over treaties that effect our national interest. People will come to realise MPs are redundant as everything is controlled by Brussels- energy, immigration, justice, regulation of everything, banking, taxation and so forth.

      • Denis Cooper
        Posted December 27, 2013 at 1:15 pm | Permalink

        “QMV comes into effect in November 2014″

        I commented about this on the previous thread.

        Somebody set this hare running, and it keeps running because people just repeat it without stopping to check the facts, which are explained in Box 2 on page 5 here:

        http://www.openeurope.org.uk/Content/Documents/PDFs/2011Eusocialpolicy.pdf

        • Hope
          Posted December 28, 2013 at 8:43 pm | Permalink

          It states there will be an in built majority for Eurozone countries once the Lisbon Treaty comes into effect. And other parts of the link make clear Eurozone countries are being forced to act as a caucus because of their plight, perhaps a necessary crisis?,therefore the in built majority will be used to help the caucus making the UK a very small isolated voice. Not the the big voice at the head of the table rhetoric Clegg speciously rants on about. While I bow to your knowledge in this area the sentiment and principle remains that come 2014 the UK will be pi..ing in the wind to be heard.

    • Leslie Singleton
      Posted December 27, 2013 at 9:39 am | Permalink

      Reply to Reply–As so often you say things about UKIP that are irrelevant, specious even, given that we all know that historically UKIP has been small and very much still finding its feet. The fact that a small growing Party, in the past troubled even, didn’t then break through proves precisely nothing about anything in its Manifesto, then or now. It is the policy, if you can call it that, of continuing to kick the can down the road that is exciting no-one, simply and truly because few believe the Conservatives will be in charge to implement it, and with good reason. It will soon be May 2014. New ball game then with a bit of luck.

    • Brian Tomkinson
      Posted December 27, 2013 at 9:56 am | Permalink

      Reply to reply,
      “The Conservative leadership will stick with trying to negotiate a better deal and then letting us , the people decide whether to leave or not” – whilst claiming success in negotiations, whatever the outcome, threatening economic oblivion if we leave the EU and strongly recommending staying in the EU. Your party is led by people who are determined to keep us in the EU.

    • Timaction
      Posted December 27, 2013 at 10:02 am | Permalink

      A good analysis Mr Redwood. By any true measure we are better off out.
      The EU has to keep putting further regulatory burden on us as their officials would otherwise be out of a job.
      I recently took a look at the billions of Euros in the giveaway CAP and Structural budget grants. Freely available on the EU website. I was shocked at the appalling waste. We are being fleeced/taxed to give away taxes to further the propaganda of the EU. The BBC gets millions!
      Our leading politicos all know this is a political construct with no benefits to the UK or its people. We don’t have to be in the EU to trade with it and we don’t need the free movement of people into our most overcrowded island in Europe.

      • Hope
        Posted December 28, 2013 at 8:46 pm | Permalink

        It is also reported that the will be another treaty to realise the EU superstate dream coming next year and will by 2015 require further agreement/referenda. Therefore Cameron appears not to be offering anything that he would otherwise be forced to offer.

    • ian wragg
      Posted December 27, 2013 at 10:16 am | Permalink

      UKIP is a relatively young party and 20 years ago people were not aware as to how we were being lied too and cheated on.
      Now as I have said before people are internet savvy and can see where the 3 federalist parties are taking us. Next week when the trickle of immigrants becomes a flood, you’re finished. It will become apparent to all and sundry exactly what powers you have given and continue to give away.
      Yesterday someone on the Tory blog indicated how intelligent people like john Redwood are increasingly taken in by Camerons spoof renegotiation ploy.
      Wake up and smell the coffee John. Cut the C##p as the Yanks say.

      Reply I just want an In/Out referendum and only by voting Conservative is that likely.

      • Duyfken
        Posted December 27, 2013 at 11:36 am | Permalink

        JR: >i>”I just want an In/Out referendum and only by voting Conservative is that likely.”
        It may be a possibility but hardly something which is likely, given the past vacillations by Cameron & co. Not only that, were a Conservative government actually to conduct such a referendum, I would doubt it to be a fair one. My vote will not go to the Conservatives, which Party in any case deserves upbraiding for its confused, devious and untrustworthy behaviour. That does not imply personal criticism of JR except to the extent of my agreeing with Mr Wragg’s assessment.

    • JoeSoap
      Posted December 27, 2013 at 10:28 am | Permalink

      RTR
      I think the whole point of this blog is to argue for policies divergent from those of the contemporary mainstream. Whether these ideas do or don’t win seats right now is beside the point. If they can over time be shown to make sense then they will win seats, even if they haven’t in the past. If you don’t believe this, we might as well all pack our bags.

      Reply I am trying to find a way to sort out the EU soon – not in many years time when we are too fully absorbed and damaged by membership.

      • JoeSoap
        Posted December 27, 2013 at 11:37 am | Permalink

        RTR
        So why, then, do you support an if, but, maybe, referendum “pledge” four years away, when you could be championing an in-out referendum now?

        Reply I have voted for an immediate referendum and would be happy to do so again, but you may have noticed there was and still is no majority in the Commons for an immediate referendum.

        • Graham
          Posted December 27, 2013 at 1:34 pm | Permalink

          JR,

          You are right about the parliament – lobby fodder – but don’t you believe that a committed well respected MP such as yourself could be more pro – active in your special position.

          As it stands you really are just on the sidelines with the rest of us and maybe your commitment doesn’t extend to upsetting your party.

          • APL
            Posted December 28, 2013 at 9:52 am | Permalink

            Graham: ” .. doesn’t extend to upsetting your party.”

            Unlike Ken Clarke. Who will throw anyone under a bus to support the destruction of the United Kingdom.

      • Tad Davison
        Posted December 27, 2013 at 2:34 pm | Permalink

        John,

        ‘I am trying to find a way to sort out the EU soon – not in many years time when we are too fully absorbed and damaged by membership.’

        Try all you like, I really can’t see that happening. The anti-EU lobby in the Tory party has been systematically marginalised, and government policy is overseen by failed and very nasty pro-EU politicians of the past. Clarke still hangs in there without portfolio to make sure that pro-EU policies are maintained. He might not have won the leadership contest back in 2005, but he’s still pulling the strings.

        You have ministerial experience and good anti-EU credentials, how come you weren’t given a cabinet position?

        There is a massive disconnect between the people at ground zero (and I don’t use that term glibly) and the political stratosphere. We can see how damaging the EU is and is likely to be in the future. For Cameron to say he wants the UK to remain in the EU on different terms, but then give us no clue as to what that new relationship might look like, is pure nonsense. If he wants a re-negotiated settlement, he must surely know which parts of EU law he wants to change, and how he proposes to do it. It can only be good for everyone if he lets us in on the secret.

        But we’ve been here before. This is just more blather. Tories pretending to stand up for Britain to con the public, then underhandedly giving it all away behind our backs. The trouble with cons, is they gradually lose their effectiveness as people get wise to them – witness the rise of UKIP. I have been watching quite a lot of YouTube clips featuring Christopher Monckton over the past few days, and despite being an adviser to Margaret Thatcher (so you should know him well) his critique about Clarke and the present day Tory party is spot on!

        Perhaps we ought to lobby for JR to be Minister for Europe?

        We’d have some fun with the likes of Clarke and Heseltine if we did! We might even show them up for what they are to a far wider public, and thereby make real progress, but Cameron would not allow such a thing. He wouldn’t want the Tories to tear themselves apart, but the purging of the pro-EU federalists is long over due. It’s got to be done some time, but the longer the task is left, the deeper into oblivion they will sink.

        Tad Davison

        Cambridge

        • Hope
          Posted December 28, 2013 at 8:50 pm | Permalink

          Excellent.

    • APL
      Posted December 27, 2013 at 12:08 pm | Permalink

      JR: “The Conservative leadership will stick with trying to negotiate a better deal and then letting us .. ”

      Christmas truce is obvioulsy over.

      It is patent rubbish to suggest the Tory leadership is trying to negotiate any sort of a deal. They are Europhiles to a man/woman – whatever ( there ain’t a spine among the lot of ‘em).

      In the meantime, the posturing will continue right up to the eve of the next general election. Whereupon we’ll get Lib/Lab/Con hydra foisted on us again and another helping of betrayal.

    • peter davies
      Posted December 27, 2013 at 2:12 pm | Permalink

      I presume you are talking about the CEBR report. Given its prominence I was surprised that the BBC chose not to talk about it in the news early this morning (I was woken early due to the high winds)

      Lets face it, the more we hear the more we must conclude that the EU is a waste of space. Heath’s govt entered into the then European Community without a mandate refereendum and we only had a token referendum a few years later. Time to reverse that mistake and pull the plug obviously making sure we retain market access via EEA.

      • Mark B
        Posted December 27, 2013 at 4:47 pm | Permalink

        It was no mistake ! They KNEW exactly what they were signing us up to.

  2. Richard1
    Posted December 27, 2013 at 6:32 am | Permalink

    An excellent summary, the trends are very worrying for Europe. Only trade, innovation and business formation can generate continued prosperity in Europe, and all policies which work against this should go. That means out with high taxes, excessive social spending, governments in hock to unions, burdensome regulation, protectionism and expensive green energy. The big question for the UK over the next 4 years is whether we can achieve this, either by reform or by renegotiation, from within the EU. If we can’t we’ll have to get out.

    • Hope
      Posted December 27, 2013 at 9:42 am | Permalink

      Wishful thinking. QMV in November 2014 means the UK will have a little unheard voice, one out of twenty seven countries. Forget the top table rubbish talk, there is no such thing. The UK could have treaties imposed on it without having a say whether it agrees or not it is on our national interest. Cameron warned us about it and did nothing. Look at the European arrest warrant, May and Cameron did not have to accept it, but they did. Treaty change for bail outs could have been vetoed, money given for bail outs refused or at least bartered for something in return. Nothing, absolutely nothing. The people of is country have not vote do or any of these EU politicians, we have no say whether they come or go and would not have voted for former communist politicians to be in charge of us. The people of this country will have no say about how they are governed.

      • Denis Cooper
        Posted December 27, 2013 at 1:19 pm | Permalink

        I refer you to my reply above; thanks to the treaties agreed by successive governments, starting with the Single European Act, we already have QMV for most EU decisions, and the change will be to the rules under which it is operated not to its scope.

        • Hope
          Posted December 28, 2013 at 8:53 pm | Permalink

          Not sure this is correct Dennis, as I pointed out to your above reply. The Eurozone countries are being forced together to act as a caucus because of their perilous economic position which in turn will affect their social base, justice etc. they will have an in built 66 percent majority come 2014.

    • uanime5
      Posted December 27, 2013 at 7:06 pm | Permalink

      Only trade, innovation and business formation can generate continued prosperity in Europe, and all policies which work against this should go. That means out with high taxes, excessive social spending, governments in hock to unions, burdensome regulation, protectionism and expensive green energy.

      Care to explain why Germany has higher taxes and social spending, more union power, more regulations, and more green energy than the UK but performs better than the UK. Could it be because you get better businesses if you treat your employees and citizens well, rather than forcing them to work for as little as possible.

      It’s no surprise that the UK is declining when so many talented people leave the UK for countries where they’ll have better working conditions. You can’t create good companies simply by pandering to employers, you also need to offer employees incentive to work in these companies.

      • Richard1
        Posted December 28, 2013 at 7:19 pm | Permalink

        As discussed before, Germany introduced extensive supply side reforms in the 2000s and does not suffer from the likes of Unison / Unite politicized union activism. Germany runs a balanced budget but has in any event been an exceptional beneficiary of the Euro. You should look at economies such as the US, Hong Kong, Singapore, Switzerland, or even Australia and Canada. The big government, high tax, expensive energy model of government is a road to poverty and decline.

  3. Lifelogic
    Posted December 27, 2013 at 7:10 am | Permalink

    If you have some capital in UK (and invest it well) then NI, income tax, corporation tax, capital gains tax, inflation, stamp duty, vat, IHT and the rest can easily take 80% of your capital off you over say 20 years. The government having had (and usually wasted) the 80% of it. Is this really supposed to be “a relatively low tax regime”? Relative to the fiscal and political insanity of the French perhaps only.

    The UK only really works well for rich non doms who can escape many of these taxes. Even this is being attacked by Cameron’s 299 tax increases so far. (he still claims, at heart, to be a low tax conservative, but then saying one thing while doing the complete opposite is rather Cameron’s speciality).

    You say “EU government specialises in the hammer of regulation to miss the nut, and will probably continue with more of the same.”

    Perfectly put and very true. CAP, a barmy very expensive/religious energy strategy, an absurd forced, fake equality agenda, subsidies for lunacy all over the place, large scale government corruption, the absurd EURO construct, dreadful bank regulation, high state dependency, absurd regulations everywhere, huge over taxation, a huge & largely parasitic sector, poor health care & education systems and an anti business approach to almost everything they touch.

    But these are clearly Cameron’s policies too. He accepts the equal gender insurance price control nonsense, the expensive “green” energy nonsense, he increases taxes 299 times, he wants to build the absurd HS2, he fails to build runways at Heathrow and Gatwick, he thinks the NHS is just fine, he does not want Grammar schools or any quality in education. ……………

    He is clearly a fake green, tax increasing, government increasing, regulation increasing, Patton, Cable, Huhne and Davy appointing, pro EU Tory to his very core – whatever comes out of his mouth – just look at his actions.

    • Hope
      Posted December 27, 2013 at 9:51 am | Permalink

      Absolutely. But Cameron CHOSE this course. Let us be clear there were choices and this is what he decided to do. His list of failures is endless whether that be U-Turns or failed promises, or change the direction of his party to the pro EU, quack green energy nonsense with an aggressive lobby of gay MPs who wanted to change the religious definition of marriage. Now he is trying to change history by pardoning a man who knowingly broke the law of the day and pleased guilty to his crime! It would be better if concentrated in present day on those MPs who broke/ break the law and have not been investigated and introduce a system where the dishonest and corrupt could be sacked by their constituents because he does not have the courage or will to do so.

    • JoeSoap
      Posted December 27, 2013 at 10:24 am | Permalink

      Because, according to our host in his reply above, that’s what wins elections, and any differing views aka UKIP policies, aren’t therefore worth discussing. Which begs the question, why are we arguing for anything different?

    • behindthefrogs
      Posted December 27, 2013 at 1:10 pm | Permalink

      “If you have some capital in UK (and invest it well) then NI, income tax, corporation tax, capital gains tax, inflation, stamp duty, vat”

      What nonsense! Invested capital is not affected by any of the taxes that you list. The amount of profit that you receive may be affected by most of them. However only inflation can reduce the value of your original investment if it is soundly iunvested.

      • lifelogic
        Posted December 27, 2013 at 9:38 pm | Permalink

        Just do the sums. The taxes reduce the net return PA and thus any growth of capital. The taxes combined are quite likely to leave you with 20% of what your money would have grown to without any taxes after 20 years. Indeed is hard even keep your capital at the same level (in real terms) after all these taxes.

        IHT alone takes 40% on death.

    • APL
      Posted December 27, 2013 at 2:03 pm | Permalink

      Lifelogic: ” then NI, income tax, corporation tax, capital gains tax, inflation, stamp duty, vat, IHT and the rest can easily take 80% of your capital off you over say 20 years.”

      And inflation at the government target ( snigger ) of 2% will half the value of anything leftover in thirty years.

      Meanwhile, our hardworking MPs will make sure their pay and remunuration is inflation proofed.

      • APL
        Posted December 28, 2013 at 10:04 am | Permalink

        “inflation at the government target ( snigger ) of 2% will half the value of anything leftover in thirty years.”

        Which explains the ‘short termisim’ that lefties always complain British industry suffers from.

        If your own government is destroying the currency, you simply cannot invest for the long term, simply because the value of your funds will be decimated. Viola! Short termism.

        According to the Bank of England’s own inflation calculator. To get the same spending power of £100 in 1970, today you’d have to spend £1309.09 in 2012, the bank proudly informs us that inflation averaged 6.3% over the period.

        The bank of England’s rather infantile inflation calculator

        • lifelogic
          Posted December 29, 2013 at 8:43 am | Permalink

          Indeed to them is it a government debt reduction calculator.

          Of course the government still want 28% CGT tax on the gains you have not really made (just by your assets keeping up with inflation).

    • Bazman
      Posted December 27, 2013 at 3:43 pm | Permalink

      What is this religious green energy you keep writing about and absurd subsidies. Does it apply to nuclear and other conventional forms of energy. We know that green energy is not ‘green’ anyone with any sense does. Thats the problem and why it is being subsidised. In the case of the Chinese by billions selling solar to the west to fund it. Not tax or subsidy then everything must be funded by the ability to pay and tolls. You presume this would be OK with transport and housing? It would not.
      Inherited and married wealth does not give anyone divine rights and privilege over everyone else with the hope some crumbs might fall our way. That is the point of democracy. Would the conversion of a large number of flats in Mayfair by a Russian oligarch be a good thing or and thing? Just asking as a relation tell us her school friends father is doing this.

    • Posted December 27, 2013 at 6:53 pm | Permalink

      I agree with 90% of what you have said here.

      DC definitely leans to the very left of the party and that’s why he finds it so comfortable working with Clegg.

      He was probably the right ( only ? ) person for the present coalition because there are no towering political heavyweights around who could have forced a more sensible policy through against LibDem opposition.

      Can’t see how Mrs May, for example, would have done any better, she has the right ideas but not the powerful personality of a Thatcher or Churchill. The outcome would probably have been a break up of the Government.

      John : With a law in place for a fixed term Parliament, if a vote of no confidence was to be voted through by Labour and the LibDems, would the Queen have to ask Miliband to form a Government without an election ?

  4. arschloch
    Posted December 27, 2013 at 7:12 am | Permalink

    OK America may be tapping into relatively cheap forms of energy but how is it going to deal with its debts and still out of control spending? Is the Chinese economy stable, I would dare to say it is not. There is plenty of stuff on GOOGLE offering guided tours of all those phantom cities where nobody lives. Back in the West we have invaluable things like the rule of law to which is quite vital if you want to set up in business too. Also the idea of trust does not exist in Chinese culture (see Francis Fukayama’s book of the same name if you are interested). The Anglo-Saxon economies dominated the 19th and 20th centuries because we had the idea of the limited liability company. Have a look at all the big businesses that you are familiar with in the Far East and you will find that they were founded by Scotsmen not by the Chinese e.g. HSBC. The Scottish legacy still exists in the Hong Kong and Singapore stock exchanges where you find companies with the names of Jardine, Swire, Watson, Fraser and Neave?

    Reply We may have founded some of these companies but they are Asian success stories today. The US has done more to cut its deficit and control its spending than the UK, and has no problem sustaining its debts.

    • arschloch
      Posted December 27, 2013 at 9:48 am | Permalink

      ” … and has no problem sustaining its debts.” Thats a nice hostage to fortune especially when one considers your professional role in investing other peoples money.

      Reply I am not providing investment advice on this site, as you well know. There is no evidence that the US is unable to borrow in the world markets at fine rates, and it is my view that despite the budget rows the US will carry on -paying the interest on Treasuries. If you thin k the opposite you must be very worried about the impending collapse of markets etc

      • Tad Davison
        Posted December 27, 2013 at 3:09 pm | Permalink

        ‘it is my view that despite the budget rows the US will carry on -paying the interest on Treasuries. If you thin k the opposite you must be very worried about the impending collapse of markets etc’

        It might happen, it might not, but I have been looking at the explanations and scenarios given by many neutral economists who show that it isn’t out of the question – but it should be in order to maintain faith and confidence, and so that underhanded people cannot use a collapse to clamp down further on civil liberties, and manipulate the markets through contrived legislation to their own advantage.

        How long before the US has to raise the debt ceiling again? And what about the time after that?

        The US Dollar is the world’s reserve currency, but others are catching up fast, and have already overtaken the Euro in usage.

        Interesting times ahead!

        Tad

    • Anonymous
      Posted December 28, 2013 at 11:20 am | Permalink

      We shouldn’t rely on the rule of law remaining in this country.

      Presently 80 police officers in my local force are suspending for failed drugs screening. Younger officers have a very different attitude to the law and it seems things are changing.

      I expect our country will turn into one of bribes and injustices within a few generations.

  5. margaret brandreth-j
    Posted December 27, 2013 at 7:30 am | Permalink

    I have also heard that China is lifting it’s restriction on birth control.The EU undermines enterprise : by this do you mean that the taxes do not allow growth or that there are other reasons ?
    Not sure about shale gas, as it is not sustainable ; like all fossil fuels it is finite, but as an interim project and provided other sources are being improved or developed , quite so.

    Reply The EU’s high regulatory costs, high energy prices and large tax financed state are all anti enterprise.

  6. Mike Stallard
    Posted December 27, 2013 at 7:36 am | Permalink

    Nobody knows the future – a hundred years ago in 1913 it looked as if the Edwardian world would go on for ever.

    I have just been reading the Analects by Confucius. His thesis is that what makes a civilisation great is by each individual improving their morality by doing what is traditionally right. The moral ones then look after the common people.

    Do you personally, Mr Redwood, have the pleasure of working with Indian managers? Or Chinese factory workers from the CPR? Their morality is quite often very different from our Anglosphere morality and traditions, not so? They quite often have a very different outlook and vision.

    Does that matter though? Well, we are in direct competition with both societies. If they become powerful, I wonder which morality (assuming they are different) will be taken as normal in the world?

    Reply The last industrial company I chaired had Chinese and Indian factories, so yes I do have direct experience.

    • APL
      Posted December 29, 2013 at 9:44 am | Permalink

      JR: “The last industrial company I chaired had Chinese and Indian factories, so yes I do have direct experience. ”

      Could you also explain why it wasn’t cost effective for this company to set up British factories and employ British workers in preference to the Chinese or Indian factories and workers?

      Reply We did have a large UK factory as well. We found if we wanted to supply the Chinese and Indian markets we needed plant there. We supplied European markets from the UK.

      • APL
        Posted December 30, 2013 at 5:14 pm | Permalink

        JR: “We did have a large UK factory as well. ”

        Given that the EU (as a whole) buys massive amounts of tat from China and it is shipped from China at rates that barely impact the retail price.

        What advantage was there to locating in India or China, or was it:

        1. It was an Indian or Chinese firm
        2. A British firm but it was a political decision to manufacturer abroad.
        3. Some other reason.

        JR: “We found if we wanted to supply the Chinese and Indian markets we needed plant there.”

        As is it currently easy to ship all around the world, it sounds like political pressure, to manufacturer in China or India.

  7. Andyvan
    Posted December 27, 2013 at 8:42 am | Permalink

    Our economy won’t be helped by the ongoing ruination of sterling by government policy either. One day soon the reckoning for the waste and stupidity of big government will come and then what? If it follows historical precedent the collapse will be very painful and, if government still exists and attempts to “manage” it, very prolonged. We can only be certain that things that can’t go on forever, won’t go on for ever.

  8. MajorFrustration
    Posted December 27, 2013 at 9:23 am | Permalink

    So if we can see the problems why not Dave – we really are wasting out time to support him and his party- unless he gets kicked out and some one new sees the light.

  9. petermartin2001
    Posted December 27, 2013 at 9:54 am | Permalink

    Lots of cheap gas would power an industrial recovery, which would add to the present recovery underway.

    I seem to remember thinking this was going to happen, in the 70′s, the first time gas was discovered in large quantities in the North Sea. It didn’t quite work out that way. There was nothing which could be termed an “industrial recovery” which came about from its discovery.

    The gas and oil was hardly, if at all, cheaper for the UK than it was for other countries who didn’t have anything like the same finds within their territories. It was all a bit of a disappointment when you look back on it.

  10. Posted December 27, 2013 at 10:27 am | Permalink

    Everyone who posts here (with the probably exception of uanime5) knows that, far from following our example, the majority of EU countries, particularly all the ones that are currently in trouble, led by France, will do everything they can emasculate our economy in new regulation with the deliberate intention to slow us down and make life as difficult as possible.

    Dragging everyone down to the lowest common denominator is, of course, completely the wrong way for them to react. They will never see it that way because British success will just show everyone just how spectacularly wrong their style of EU model actually is.

    As for Germany, I don’t think for one minute that Britain will ever overtake the German economy. They are far more dedicated to success and hard work than we are and that isn’t going to change. I know, I lived and worked there for five years.

    So far, the Euro and the EU has been spectacularly good for German business but now they are on the brink of having to subsidise the whole rotten mess, this will inevitably change.

    The powerhouse of Germany, their automotive industry, is already a long way down the road of repositioned itself by concentrating on the Chinese, US and Asian markets. They will soon be in a situation where the markets of the ClubMed countries will be of no loss to them whatsoever. If young Italian, Spanish and Portugese flood into Germany for jobs, even better for them ! There is plenty of space in the former DDR for them to live and work.

    Jaguar Landrover is right alongside them but, sadly it’s no longer British owned and it’s just one company compared with VW, Daimler Benz and BMW. Audi is up there as well and although owned by VW has grown so quickly that it can rightfully take its own place as one of Germany’s big four in its own right.

    Renault and Peugeot are nowhere in this battle and it’s hard to see how Peugeot can survive. There are still some serious concerns about FIAT as well.

    Sooner or later Germany will be in a position to break out from the concrete overshoes that is ClubMed. They will take a lot of pain from currency appreciation but German big business already has very substantial capacity in Poland, the Czech Republic and China so they will be able to weather that storm. They can also make an even greater effort to improve efficiency.

    To see how they can change up a gear, you just have to look how the German machine bore the huge cost of absorbing the DDR with barely a break in step.

    Britain, with its investments overseas and service industries and Germany with its manufacturing will come to dominate Europe. Northern Italy could stand alongside them but only of the Northern League could get its own way and break away from the bankrupt and unproductive South.

    As for the rest, change will be forced upon them but it will be a painful transformation.

    • Douglas Carter
      Posted December 27, 2013 at 2:47 pm | Permalink

      ….’regulation … to slow us down’…

      Whilst I think your core sentiment here – that there are central EU nations which will resent a UK detached from the EU and will contrive to emplace obstacles- is doubtless correct, it’s unlikely it will result from specific regulation and\or articles of manifest legislation.

      Such international regulation usually takes some years to conduct and in this case it would also have to be worded in a manner in which conduct of normal terms of reference with UK trading links would be intentionally harmed. The UK could take any signatory nation or administrative body to the WTO if that happened – and in basis it would likely be illegal.

      However, ‘imaginative’ interpretation of existing treaty would doubtless take place, but that goes after what would likely happen long before any of that took place. French Governments have a long fractious relationship with the French Trades Unions and the nation’s workforce. Trades Union reform in the country is essentially impossible and if the Unions can bring the nation to a halt, then they will do so. They have done so before and I have no doubt that they’ll do it again in the coming years.

      In terms recently, I’ve heard senior international commentators refer to the contemporary France as ‘almost ungovernable’.

      Writ big, with the UK outside the EU, I think we’d see an almost overnight return to the almost-forgotten phenomenon of the Continental arteries for cross-channel trade blockaded. Only a few short decades ago this was wearily frequent. The history of those occasions lies to the advantage of the French activists since generally – with the caveat of rare specific examples – people are aware that British Governments habitually capitulate to such blackmail. Ferries immobilised. Roads blockaded, borders choked and likely criminal damage to vehicles with a UK registration. These protests occasionally transferring to other international centres too – for example Rotterdam has been blockaded in such process by militant French workers in orchestrated actions in the not-so-recent past.

      Historically, even if the French Government was possessed of an ability to take action against such obstructionism, they’ve never shown any particular appetite nor enthusiasm to take responsibility to break up the activities. If it came to pass that the UK withdrew from the EU, and that the circumstances I illustrate came to pass, we would then – quite legitimately – look to a UK Government to take very swift and if necessary strident courses to circumvent that nature of illegal activism. Historically, it’s very rare we have a Government to act in those ways.

    • uanime5
      Posted December 27, 2013 at 7:21 pm | Permalink

      Everyone who posts here (with the probably exception of uanime5) knows that, far from following our example, the majority of EU countries, particularly all the ones that are currently in trouble, led by France, will do everything they can emasculate our economy in new regulation with the deliberate intention to slow us down and make life as difficult as possible.

      So the other EU countries, including those who need financial assistance, want to turn the UK from a net contributor to the EU budget to a net recipient; even though this will reduce the amount of money they get from the EU. Care to explain why these countries would want to do this when they will suffer the most because of it.

      They will never see it that way because British success will just show everyone just how spectacularly wrong their style of EU model actually is.

      What success? We’ve had one of the slowest recoveries of the EU states after the 2008 financial crisis. Also as the Germany model is more successful than the UK model it seems that some EU models are better than the UK’s model.

      Sooner or later Germany will be in a position to break out from the concrete overshoes that is ClubMed.

      Why would they want to break away from these countries? They’re keeping the euro low, which is making German exports more competitive.

  11. Alan Wheatley
    Posted December 27, 2013 at 10:44 am | Permalink

    As to population size, I think more can be a disadvantage rather than benefit, though it does depend on the timescale over which a judgement is made, and it does depend on what population flows are allowed.

    And also the judgment as to whether ever more is inherently good or bad does depend on who you are.

    Ultimately the production of all goods and the provision of all services is driven by consumer demand. So in one sense the more consumers the more business there is to be done and the more profit there is to be made. Therefore population growth is good.

    But on the other hand, the World is a fixed size, and it is not inhabited by just humans. Human life would not be possible without other species, and the more space taken up by humans the less space there is for everything else.

    But it is not just a case of sharing the space. The advance of technology means that fewer humans are needed for the production of goods. So what are all the additional humans going to do? How many services do we need?

    Within the World picture are the nations. Nations should be allowed self determination, including striking a happy balance as to population. The happy balance is impossible with the free movement of peoples.

    I am far from convinced that ever growing national populations, especially rapidly growing populations, is an inherently good thing. Population growth seems to me another of those bubbles that will eventually burst, and this one could be the end of us all; hopefully not in my lifetime.

    • Dennis
      Posted December 27, 2013 at 2:16 pm | Permalink

      Yes what a nightmare Mr Redwood paints – more people, more production, more consuming, more waste, more ripping off the biosphere to get richer etc., etc. – his greed (for all) is insatiable.

      And his speculations/assumptions! ” the UK’s relatively low tax regime compared to the continent” of course that couldn’t possible change and younger populations never grow old – perhaps he wishes for the techno fix of genetically modifying the young to never age.

    • peter davies
      Posted December 27, 2013 at 2:25 pm | Permalink

      Good point. Look to expanding populations in Africa to see they are often no better off – poorly governed and in need of aid in many cases.

      I have often been of the mind of should there be huge urban populations, many of whom depend on the state for everything – what would happen if there was a huge catastrophe of some sort and the food and power supply dried up?

      In the countryside with some land you may have a chance but built up areas I fear would be a disaster

  12. Posted December 27, 2013 at 11:09 am | Permalink

    I can’t believe that any real negotiations will take place whilst the UK representatives in Brussels and those who are charged with negotiating are pro-EU.
    We need the most anti-EU team that can be found to carry out the negotiations, otherwise the negotiations will merely be a chat amongst friends looking for some way to save face.

    • peter davies
      Posted December 27, 2013 at 2:31 pm | Permalink

      You need a Tory party governing like they are now propped up by 30 odd UKIP MPs to make the majority with a load of anti EU shrewd business people employed as negotiators.

      Do away with these “YES MINISTER” Civil Servants and political has beens of the Major, Heseltine and Clarke types who have had their day and helped lead us into this mess.

  13. oldtimer
    Posted December 27, 2013 at 11:33 am | Permalink

    I agree with your analysis. The European social model is unsustainable. The question is how this will be resolved in the years ahead. On present evidence it is not obvious that the political model that advocates and seeks to sustain it is capable of resolving it – even if it wanted to. The Eurocracy, it seems to me, is the latest manifestation of an ancien regime clinging to power and privilege. It is doing so by making promises it cannot keep. So far it has succeeded in fooling enough people – despite the cost of doing so as in countries like Greece.

    In the UK the current energy policy is unsustainable. Storm induced power cuts have given many a taste of what is in store for the rest of us. Mr Halliday, CEO of the National Grid, was interviewed this morning in the central control room. One screen revealed that c40% of energy consumption was provided by coal fired power stations – far more than any other source. He commented that no one wants to invest in providing new energy in the UK – the BBC interviewer failed to pick him up on this significant remark. The failure to attract new investment is no surprise given the existence of the Climate Change Act, the regime and regulations in place and the comments of the various party leaders. Only a fool would invest risk capital in this country given the stated policies of the three main political parties.

    As you say, the (possible) solution is to test drill and develop the potential of the UK`s shale gas fields. But keep in mind that the antis, in DECC and elsewhere, are determined to make this as difficult and as expensive as possible.

    • uanime5
      Posted December 27, 2013 at 7:27 pm | Permalink

      I suspect there has been little investment in energy in the UK because the private sector hasn’t considered if profitable enough (especially when they can charge higher prices as energy becomes more scarce), which once again shows that you can’t rely on the private sector to provide essential services.

      • Edward2
        Posted December 28, 2013 at 7:17 pm | Permalink

        That is rather odd logic Uni, because you have spent time on here complaining about the energy companies cartel and saying they are profiteering by exploiting their market strength.
        Now you are complaining that they have failed to invest in greater capacity because you say “the private sector hasn’t considered it profitable enough”

      • APL
        Posted December 29, 2013 at 9:54 am | Permalink

        uanime5: “which once again shows that you can’t rely on the private sector to provide essential services.”

        Clearly you can’t rely on the public sector. It is actively shutting down perfectly serviceable capacity to comply with insane CO2 emission targets.

        It’s not even as though CO2 at the current atmospheric concentrations is harmful.

        By the way, any chance of that plot of CO2, concentrations since 1913? I really would like to establish the veracity of your claim that CO2 has doubled in the last century.

        If not, you are always welcome to admit that you were, mistaken.

  14. lojolondon
    Posted December 27, 2013 at 1:28 pm | Permalink

    Great article once again, John, I agree whole-heartedly.

  15. Denis Cooper
    Posted December 27, 2013 at 1:43 pm | Permalink

    The economy of the UK is now about 3% of the total world economy.

    (UK GDP from here:

    http://en.wikipedia.org/wiki/Economy_of_the_United_Kingdom

    divided by world GDP from here:

    http://en.wikipedia.org/wiki/Gross_world_product )

    That isn’t because the UK economy has shrunk but because the economies of other countries have expanded; and one can hardly object to that, unless one would prefer to have billions of people continuing to live in poverty.

    Whether that 3% is smaller or greater than the corresponding percentage for Germany is important for the balance of power in Europe but relatively unimportant as part of the global picture.

    • Dennis
      Posted December 27, 2013 at 5:40 pm | Permalink

      “That isn’t because the UK economy has shrunk but because the economies of other countries have expanded; and one can hardly object to that, unless one would prefer to have billions of people continuing to live in poverty.”

      With these kind of views I don’t understand why it is not advised to keep on drawing out from one’s bank account/savings continuously to remain prosperous or to use the payday loan people. Surely there is no limit on what we can use from limitless resources. Problems solved.

      No need to get to a world population of 1 or 2 billion for a sane world society.

  16. Rods
    Posted December 27, 2013 at 1:55 pm | Permalink

    Agree with all that you say, but politics is the art of the possible and the vision from those in charge of the Conservative party is very different from that of a small Eurosceptic group within the party. I read recently that there is not one Eurosceptic within the proposed EU-renegotiation team, which says it all. I’m sure they will come back from Brussels with a ‘peace in our time’ speech, where they will have won major concessions like the UK being able to decide the diameter of the wire used in our paper clips. All three parties will then throw their weight along with the BBC on a yes vote.

    You might walk, the walk as well as talk the talk but very few politicians do and we are all well versed with Dave’s cast iron guarantees. Once a reputation (and for many voters their vote) is lost it can never be recovered.

    The next election is going to be very interesting, where many people in the north of the country, still remember the miners strike and the closing of the collieries and will vote for any party except Conservative, so where they may well find an increasingly left wing Labour party unacceptable, we will see where their vote goes.

    Our demographics are not much better than those of the rest of Europe apart from the mass migration from within the EU and the rest of the world of a younger generation who are also tending to have more children which helps us get to a sustainable population with an average of 2.1 children. However, will this also apply to the next generation, with the financial pressures and also the establishment of a career and trying to buy an expensive house during the best biological years for having children when in your 20′s? Also as contraception is becoming more available, globally, population growth is slowing down and as developing countries get richer and Europe poorer, Europe is not going to be the migration magnet it is now.

    Our and all of western Europe’s pyramid, pay now maybe benefit later, ever increasing cost welfare systems are clearing unsustainable in the long term. We all like something for nothing and want to only pay in 50p for unlimited resources out as an entitlement. The only solution is going over to personal welfare / pension funds like Singapore and Hong Kong, but the transition from our current system to this would have to be a long on, as the transition requires the funding of both, so it needs a working generation 40-50 year timescale. Nobody in politics is discussing or proposing this, where making people slightly poorer in the short term for a longer term massive gain is never popular politics. This transition would be a good use for an oil and gas shale boom, so we have some to show for it this time, rather than just frittered away, like the North Sea oil and gas taxes.

  17. Posted December 27, 2013 at 2:37 pm | Permalink

    A good post, Mr Redwood; it neatly sums up the position.

    I would also add that commodities are increasingly making their way to China while Europe (and the U.S.) is left with paper.

    If and when there is a loss of faith in the U.S. Dollar we could be in trouble.

  18. Popeye
    Posted December 27, 2013 at 3:21 pm | Permalink

    Very interesting Mr Redwood, so why are we still giving our hard earned cash in foreign aid to these very countries?
    India has already told us they don’t want our piddling contribution.

    • Tad Davison
      Posted December 27, 2013 at 6:01 pm | Permalink

      It’s a PR stunt Popeye, designed to make politicians look good, but the bitter irony is, it’s at our expense. If they really wanted to make a difference to impoverished people in underdeveloped parts of the world, there are far better ways to do it, but the elite (I could almost say fascist elite) wouldn’t like it because giving others an equal shot at resources and industrialisation isn’t in their thinking.

      Tad

    • Bazman
      Posted December 27, 2013 at 9:13 pm | Permalink

      In the real world it would mean pulling the plug on real people, some of the most vulnerable in the world, though Vanishing Thick could no doubt be brought in to tell them they are being incentivised and it is for their own good.

      • APL
        Posted December 29, 2013 at 10:08 am | Permalink

        Bazman: “In the real world it would mean pulling the plug on real people, some of the most vulnerable in the world, ”

        Actually Bazman, in the real world it would mean pulling the plug on a very real corruption scandal.

        According to the Indian government, described in a report released in 2011, it’s likely that £70 million of DfID’s £388 million aid programme had been stolen or lost. I imagine that annual sum.

        For that we could build a couple of nuclear power stations, or renovate a few schools or even, give a pay rise to one or two of your cleaner friends, my preference is that we don’t borrow the money in the first place.

        But no, the political class and their international parasite (NGO) chums would prefer to siphon off the funds for their own ends.

      • Bazman
        Posted December 29, 2013 at 4:28 pm | Permalink

        Corruption is a problem, but many smaller charities can account for every single penny and for rural Indian woman every penny counts. You are willing to just pull the plug on them? Interesting to hear of the views of the fantasists on food banks on this site. Very ‘quiet’ aren’t we? No VC’s for running away which explains why Quiet Vanishing thick never received one. It’s all very telling and blaming the poor and unemployed for the economic problems will only stretch so far. Ram it.

        • Edward2
          Posted December 29, 2013 at 6:56 pm | Permalink

          If you want to give your money to charities of your choice Baz, then please feel free to do so.
          But I don’t see why my Government should feel free to spend many hundreds of millions when its prime responsibility is to the residents of the UK who voted them in and we are currently borrowing £120 billion a year.
          Poll after poll shows the policy of generous overseas aid is not supported by a large majority of voters.

        • APL
          Posted December 30, 2013 at 7:22 am | Permalink

          Bazman: “Corruption is a problem, but many smaller charities can account for every single penny”

          So freely give of your own disposable income yourself to these smaller charities.

          Bazman: ” and for rural Indian woman every penny counts. ”

          As it does for your poor underpaid cleaners in this country. What have they done to you to so fall out of favor?

          Bazman: “You are willing to just pull the plug on them?”

          Their own government has just launched its own space programme, our government is going deeper into debt every day, the Indian government is clearly in a position to fund its own welfare programmes.

          • Bazman
            Posted December 30, 2013 at 11:39 am | Permalink

            From this we can read that you are in favour of pulling the plug on them as this government has done to millions of the low paid in this country whilst denying there is any problem.
            From a moral standpoint, this is in British interests if we think it is important to show leadership in our global society. But it is also important from a narrower, self-interested material perspective The relationships and partnerships we form in working together in the social sphere will translate into the economic and political spheres too. Your short term mean minded attitudes are alive and well and can be shown in this and the denial of the work by often grass roots Tories who believe in charity and putting the big sociality into action. As I said very quite on food banks ain’t we?
            Ram it.

          • APL
            Posted December 30, 2013 at 5:24 pm | Permalink

            Bazman: “Corruption is a problem,”

            So more than a fifth of the Indian aid budget is being filched and you don’t much care about it one way or another?

            Bazman: “From this we can read that you are in favour of pulling the plug ”

            Why am I wrong to ask that the Indian government ( seventy years after independence ) should look after its own domestic affairs?

            Bazman: ” on them as this government has done to millions of the low paid in this country ”

            I have already suggested alternative uses for the funds, that included paying your cleaner chums more money.

            But yes, I’d prefer we not borrow money to give to the thieving international bureaucrat mafioso.

            Bazman: “Ram it”

            Thanks. Or you could try to make a coherent argument.

          • Edward2
            Posted December 30, 2013 at 7:31 pm | Permalink

            Indeed APL.

            It has been said before but it is worth repeating, that overseas aid is the process of taking money from poor people in rich nations and giving it to rich people in poor nations.

          • Bazman
            Posted December 30, 2013 at 8:39 pm | Permalink

            Paying your cleaner chums more money? Say it all really of your petty mean minded views. You propose to use the money improve the lives of the lowest in British society but stopping aid instead of stopping corruption is your argument as India is a country able to pay for this? As you point out they are corrupt so will not and as I pointed out you are happy to pull the plug. Very telling of you views on humanity and cleaners Who are your ‘chums’? Coherent enough? It is. Ram it

          • Edward2
            Posted December 31, 2013 at 5:25 pm | Permalink

            Coherant enough? you ask Baz.
            Your post is just a rant which has no meaning and makes no sense.
            So the answer is …No

          • Bazman
            Posted January 1, 2014 at 10:49 am | Permalink

            I wrote it slowly for people like you to read slowly edward. Its not rocket science and pretending you do not understand something or refusing to believe something does not exist is a right wing default for many. As is being told that you are to old/young, harrumphing when faced with facts and claiming that it is nature and nothing can or should be done. Except when it effects themselves of course. As a middle aged man I squash nonsense where I can and self obsessed middle aged men who believe they are victims need squashing often.

          • Edward2
            Posted January 1, 2014 at 3:31 pm | Permalink

            No coherant argument yet again Baz.
            You resort to childish abuse every time your argument is challenged or fails.
            It is a weakness of the left in general who feel their opinions are the only correct ones to be allowed.
            The argument if you recall is about how much overseas aid should be spent when there are so many problems domestically.
            A large majority asked in polls say they believe it should be greatly reduced.
            Presumably their opinions are all “nonsense” that need “squashing” as you so nicely put it.

  19. Gary
    Posted December 27, 2013 at 3:44 pm | Permalink

    The EU is restructuring, relatively, we are printing. Restructuring means high unemployment, writing off debt and rediscovering productive efficiencies as investment is cleaned out. Printing kicks the can down the road, increases the debt and leaves bloat in place.

    We shall see who does better.

    • margaret brandreth-j
      Posted December 27, 2013 at 6:02 pm | Permalink

      Lets see who is bribed and as we go round the prickly pear ,there is no stopping those who are paid to perpuate self destruction.

  20. Gary
    Posted December 27, 2013 at 3:45 pm | Permalink

    should read: malinvestment is cleaned out

  21. The PrangWizard
    Posted December 27, 2013 at 3:47 pm | Permalink

    I would like to see more growth in the UK, one way which would help achieve this would be to relax labour laws to get back nearer to freedom of contract, including the abolition of the minimum wage which hampers enterprise, both individual and business and leads to a rigidity of thought. It will not lead to more poverty and exploitation.

    I would however, perhaps strangely, use the reaction to the recent bad weather as my main point, as it illustates I think a wider malaise.

    Sensationalist reporting and forecasting has, over a number of years, been following a narrative. There was a time when the weather was seen and understood by everyone to ebb and flow in a continuous pattern – it still does of couse, but not according to the Met Office. It is now being packaged, we have ‘advisories’, ‘warnings’ and the rest, culminating in ‘events’. The way these are used and usually exaggerated by the 24 hour news broadcasters in particular is I think intended to change peoples’ perceptions; with the Met Office they wish to make us believe that what has hitherto been normal is something abnormal, that this will affect our lives considerably and we must take a much more defensive view. ‘Don’t go out, stay at home’ they urge with greater emphasis.

    This is also affecting industry and commerce; we have seen it in action in the last week or two. The transportation industry is becoming more ‘risk averse’, with train services cancelled, often before anything has happened, speeds reduced, bridges and roads closed more often and for longer and so on.

    All this creates a feelings of anxiety, so that rather than make the extra effort to face and overcome adversity, we must give way to it. That is the malaise that we must challenge somehow because our children and grandchildren will grow up thinking this is the right approach. Other nations think differently however, the Chinas and the Indias you mention, they are much more likely to just ‘get on with it’. We need to produce more and, as they say, every little helps.

    PS I’ve tried to keep it brief – I need a good editor.

    • Tad Davison
      Posted December 27, 2013 at 6:25 pm | Permalink

      TPW, I quite enjoyed Christopher Monckton’s ‘The Climate Change Con’ (and many others) free to view on YouTube. He’s very articulate. You might find solace there, if not a really good explanation for many of the points you raise.

      See also the effects of Solar Maximum on the earth’s climate. This is taken directly from ‘The Universe Today’ website:

      ‘If the energy from the sun varies by only 0.1 percent during the 11-year solar cycle, could such a small variation drive major changes in weather patterns on Earth? Yes, say researchers from the National Center for Atmospheric Research (NCAR) who used more than a century of weather observations and three powerful computer models in their study. They found subtle connections between solar cycle, the stratosphere, and the tropical Pacific Ocean that work in sync to generate periodic weather patterns that affect much of the globe.’

      Hope that helps.

      Tad

    • The PrangWizard
      Posted December 27, 2013 at 6:47 pm | Permalink

      I understand that Cameron has said ‘we are seeing more of these events’. And the evidence is? May The Saints preserve us from dangerous and unprincipled political leaders like him.

      • Edward2
        Posted December 30, 2013 at 7:37 pm | Permalink

        I agree PW.
        Its not the weather, its the many 24 hour news channels grasping for something exciting to report.
        It has the effect of making many dim people feel there is more extreme weather events as they appear every day on their TV screens from every corner of the globe.
        But the peer reviewed scientific evidence does not support this feeling.

    • uanime5
      Posted December 27, 2013 at 7:35 pm | Permalink

      I would like to see more growth in the UK, one way which would help achieve this would be to relax labour laws to get back nearer to freedom of contract, including the abolition of the minimum wage which hampers enterprise, both individual and business and leads to a rigidity of thought. It will not lead to more poverty and exploitation.

      The only thing your proposals will lead to is more poverty and exploitation, mainly because these laws were created to stop employers exploiting their employees. Do you really believe that employers who are already paying their staff as little as possible won’t immediately reduce their staff’s wages if they’re legally able to?

      Your plan will also lead to all the talented employees going abroad, where they’ll receive superior pay and working conditions. Something that won’t benefit the UK.

      • Edward2
        Posted December 28, 2013 at 7:19 pm | Permalink

        If you are right Uni, the employers will find themselves short of staff and then what will happen to wages?

    • lifelogic
      Posted December 27, 2013 at 9:57 pm | Permalink

      Exactly, you make the point very well, even without an editor.

  22. Antisthenes
    Posted December 27, 2013 at 4:26 pm | Permalink

    This prediction about the UK’s economy being the largest in Europe by 2030 has the model they used factored in what effect a number of Labour governments before that date will have. I suspect it has not and if it had I believe it would not be at all optimistic about the UK’s economic future. I cannot think of any time when after Labour has been in government the economy has not suffered dramatically even to having at one time required an IMF bailout. The paten is now established Labour wrecks the Conservatives mend as much as they can to hand it back to them to wreck again. Even David Cameron for all his faults has through some of his ministers repaired some of Labours disastrous mismanagement during it’s last tenure of office. It all seems a waste of effort if now the recovery has started government will be handed back to the left to do their worst once again.

    • Tad Davison
      Posted December 27, 2013 at 6:50 pm | Permalink

      Anti, it is a matter of record that what you say is true, how ever much the lefty deniers would have us re-write history. But what is also a matter of record, is that all three major Westminster political parties have been pro-Europe, and given the treaties they have signed us up to, are essentially EU federalists to boot!

      I believe the massive debts Labour left us with make us vulnerable as a nation, but their reduction is not being prosecuted to anything like the degree it should, so there’s not too much room for the coalition government to congratulate itself just yet.

      Unlike Mr Cameron, I feel our best chances to achieve prosperity and thus reduce the debt, lies outside the decaying, decrepit, and downward-spiralling EU. But he can’t really attack Labour’s EU policy when it doesn’t differ that much from his own. This is why a totally new party, with a new leader, and a new direction, is the way forward. By merely saying he wants to remain within the EU, Mr Cameron destroys his own credibility.

      Tad

    • uanime5
      Posted December 27, 2013 at 7:41 pm | Permalink

      I cannot think of any time when after Labour has been in government the economy has not suffered dramatically even to having at one time required an IMF bailout. The paten is now established Labour wrecks the Conservatives mend as much as they can to hand it back to them to wreck again.

      Well the last Labour government delivered 10 years of economic growth before they were hit by the global financial crisis. By contrast the Coalition has in 3 years borrowed more than Labour did in 13 years yet it’s resulted in much less growth.

      So it seems that your pattern isn’t occurring.

      Even David Cameron for all his faults has through some of his ministers repaired some of Labours disastrous mismanagement during it’s last tenure of office.

      Care to explain what Cameron has done. So far he’s increased the debt more than Labour did and is borrowing more than Labour did. There’s also been 3 years of low growth, a fall in living standards, a fall in wages, a massive increasing in emergency ward waiting times due to so many emergency wards being closed, tuition fees have been trebled, the bedroom tax is harming the vulnerable and disabled, and there’s been a massive increasing in the number of people needing food banks.

  23. Peter Stroud
    Posted December 27, 2013 at 4:36 pm | Permalink

    Excellent article. High energy prices are crippling both the UK and Euroland. But we can stand alone, and repeal the stupid Climate Change Act. And ignore the falsified climate models. Then examine all the green taxes, and abolish any that are not supported by empirical data. Also ignore greenie protestors, and begin fracking in earnest.

    Of course: these moves will only be possible, if a Conservstive government is elected in 2015.

    • lifelogic
      Posted December 27, 2013 at 10:01 pm | Permalink

      Well there will not even be a proper conservative party to vote for in 2015. There will be one led by the pro EU, high tax, fake green, Dave Cameron. John Major destroyed the Conservative Party and Cameron is busy burying it.

    • Posted December 27, 2013 at 10:33 pm | Permalink

      Peter,

      Conservative opponents like to present Conservatives as, typically, having your political views. Which you are of course entitled to.

      However, David Cameron knows that to help the chances that ” a Conservative government is elected in 2015″ it is necessary to attract the votes of those who aren’t quite so keen as you might be for oil and gas companies to start fracking in their immediate locality. The Conservative Party leadership knows too that it needs to attract those who do accept the scientific line on climate change which is presented by such bodies as the Royal Society.
      You aren’t helping your party with these kind of comments!

  24. matthu
    Posted December 27, 2013 at 5:37 pm | Permalink

    Guido Fawkes reports that “Matt Chorley . has discovered that in two decades the official number of SpAds has tripled to 98. Despite Cameron’s promise to reduce the number of SpAds their numbers have increased. Their pay is on average at £73,470 now higher than it is for MPs.”

    I just wondered whether you, John, have any strong views on this?

    Which of the political parties support this, and which party should we vote for if we feel aggrieved by this?

  25. Dennis
    Posted December 27, 2013 at 5:59 pm | Permalink

    As all the usual comments on Mr Redwood’s blog, except mine of course, mostly, try to point the way to prosperity, the obvious comparable solution to those others which I haven’t seen here is for the government/industry to give everybody a £1,000,000 say, and then invest at say 5% – who here has an argument against that?

    The source for this wealth is limitless, or at least not beyond the Earth’s resources, it seems according to Mr Redwood.

    • petermartin2001
      Posted December 29, 2013 at 5:05 am | Permalink

      Most people would think this to be a silly comment but it does show one serious point.

      The conventional wisdom is that Government borrowing actually drives up interest rates. Its actually the other way around. ‘Government borrowing’ is actually a misnomer. It’s just not technically possible to borrow back your own IOUs.

      Governments can create more of their own IOUs though when they run short. Those IOUs of course wind up in the hands of the commercial banks and the more they have on their hands the harder it is to find anyone, with sufficiently good creditworthiness, who wants to borrow them and pay any interest at all.

      This drives down interest rates to almost 0%. Just like now!

  26. uanime5
    Posted December 27, 2013 at 7:46 pm | Permalink

    The reasons given were the UK’s relatively low tax regime compared to the continent, a younger and growing population compared to declining and ageing populations on the continent, and our avoidance of the Euro. All that makes sense.

    These claims are largely wishful thinking as both France and Germany have already recovered more of their pre-2008 GDP than the UK and there’s no guarantee that the UK will grow faster than either of these countries over the long term. So based on past trends and the UK’s current economy it’s unlikely that the UK will overtake either any time soon.

    Over the past 3 years the repeated cuts to corporation tax haven’t resulted in higher growth and there’s little evidence that other tax reductions will result in more growth. By contrast Germany has higher taxes and better growth.

    The UK’s younger population won’t help if there aren’t any jobs for young people to work in. At present 1 million people aged between 18-24 are unemployed so it’s hard to see how a growing population will benefit the UK.

    Meanwhile China’s population will grow to be more than twice that of Europe’s and India’s will be more than 2.4 times Europe’s.

    Given that China has been trying to reduce their population for decades using the one child policy and there’s currently more males than females it’s unlikely that China’s population will grow any time soon.

    While India’s population is growing the main result has been an increasing number of poor people, which has dragged down the GDP per capita. So a large population many not benefit India.

    As India and China get bigger and as they raise their living standards and output per head, so they will come to dwarf the economic output of the main European countries.

    While China may achieve this India has very little chance of achieving this due to their rapid population increase. Let’s not forget that India and China are mainly growing because they can provide goods and services very cheaply, something they won’t be able to do if they increase their living standards and wages.

    Our living standards can only remain substantially higher than those elsewhere if we continue to develop the companies, the products and services with high value added that command good prices around the world.

    Something which German manufacturing does very well and the UK financial services isn’t so good at.

    Europe will make its position worse by continuing with high energy prices, relatively high taxes, and an excess of poor regulation.

    None of which is currently harming the German economy.

    If the UK could cut lose from the EU’s dear energy and excessive regulation it could grow faster still.

    How? What energy intensive industries would want to locate themselves in the UK (if the UK leaves the EU), especially when they could locate themselves in the EU to avoid EU tariffs? Given that these energy intensive industries usually aren’t labour intensive how many jobs would they provide?

    It has an advantage from being out of the Euro, and another from relatively low corporate taxes.

    Have any studies been conducted on whether the low corporate tax is benefiting the UK? It seems to get cut every year but the result is low growth. Even this year the growth has mainly been due to the housing market, rather than corporations.

    Finally given that the Conservatives consider food banks a good thing would you mind explaining why they rejected an EU offer that would have resulted in food banks getting an extra £22 million from the EU. Is the government going to match the amount of money the EU promised?

  27. Posted December 27, 2013 at 9:24 pm | Permalink

    Mrs Merkel has wisely asked the question how can such a small part of the world’s population in Europe account for one quarter of world output and one half of world social spending?

    She may have wise asked the question but she would be even wiser if she could provide some sort of sensible answer.

    A large part of European social spending would be on education. Europeans are good at that. They are less good at getting a return on that investment, 0r spending , if you prefer, because they seem quite unaware of the importance of giving their young people the opportunity of that ‘good first job’. Unemployment levels in parts of the Eurozone among the under 25 year olds are above 50% in places and over 25%. on average. That ‘good first job’ is just as, if not more important, than a tertiary education, and often makes the difference between a lifetime of productive employment, a lifetime paying taxes etc and a lifetime of dependency on State welfare.
    The high rates in many nations have persisted now for several years and don’t look like changing any time soon. This will undermine the future prosperity and productivity growth for the entire region for decades to come and will mean that Europe will inevitably fall behind Asia and South America, and sooner rather than later.

  28. bigneil
    Posted December 27, 2013 at 10:03 pm | Permalink

    so the population of Europe is to drop to 632m by 2050? – -can anyone clarify that they WON’T all be here in the UK on benefits?

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  • 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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