How are you doing in the global race?

 

The Prime Minister’s favourite phrase is that we are in a global race.  It’s not a phrase I would have chosen myself,  as images like this can bring in irrelevant or misleading thoughts to people’s  minds. However, his phrase does get across two very important truths which do have a big bearing on our situation. I support the intentions behind the use of the saying.

The phrase reminds us that if we want to carry on enjoying  the first world living standards we are used to, we have to compete successfully in the global marketplace. It reminds  us that the world does not owe us a living. There is no global social security system to top up our incomes to the levels we want. We have to earn our lifestyle in an increasingly competitive world market.

The message is usually tempered by more positive and helpful messages, and needs to be.  If we are all in this race, people need reassurance that the government will be on their side and will help them to win it. The purpose behind policies to promote better schools and better training is to equip more of us to find productive employment at better salaries so we have a better lifestyle.  The idea behind welfare reform is to ensure people who cannot get jobs are looked after, whilst there is a better incentive for the many who are capable of work to get a job and contribute to producing the output the nation needs to earn its living standards.

The Prime  Minister has been especially active in helping the business community to export. He has led the way in showing the opportunities in the large Asian markets, at a time when the UK’s traditional goods markets in Euroland have been under pressure from falling demand. He wishes to get across the need for the UK to widen its base of goods and services for sale, and widen its markets abroad so we  tap into the faster growing emerging economies.

The problem remains that the UK’s ability to compete properly in  this global race, particularly in the production of goods, is being impaired by high energy and other costs imposed by the EU government as well as by domestic policies adopted in the previous decade. The UK is also having to battle against heavy handed but unsuccessful EU regulation of services  pushing more of the UK’s success story in global markets offshore from the EU.

The UK also suffers from the political attacks of those who dislike any success. Now the economy is recovering critics are out and about condemning the rise of London, disliking the recovery of financial and business services, and objecting to any house price rises.

 

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181 Comments

  1. Mark B
    Posted January 3, 2014 at 6:55 am | Permalink

    John Redwood MP said;

    ” If we are all in this race, people need reassurance that the government will be on their side and will help them to win it.”

    The last thing I want from ‘Government’ (sic) is help. I want Government to be small, unobtrusive, submissive and stick to doing its core job. The more Government thinks it has the right to intervene, the more departments, laws, subsidies, all paid for by ever increasing taxes, it creates. Getting bigger, and bigger and bigger !

    Small Government leads to lower taxes. Lower taxes, as you Chancellor found out over North Sea oil contracts, leads to greater investment, more business, and more jobs. This creates more wealth for the populace.

    These are basic ‘Modern’ Conservative values. Values that I believe in. Sadly, as you piece has shown, your leader is an Old Conservative Wet, much like Eden, Heath, McMillan and Asquith. Names that most Modern Conservatives would, and do shy away from.

    • lifelogic
      Posted January 3, 2014 at 9:25 am | Permalink

      Indeed little substantive to chose between Heath, Blair, Brown, Major, Clegg, Miliband or Cameron. Cameron does, very occasionally, say almost the right things but never actually does any of them.

      This is far worse than doing the right things but saying the wrong ones.

      • Hope
        Posted January 3, 2014 at 6:40 pm | Permalink

        Too many U turns and false promises to make your last sentence have any credibility.

    • Atlas
      Posted January 3, 2014 at 10:32 am | Permalink

      Sorry Mark B, but Asquith was a Liberal Party Prime Minister (1908 – 1916).

      If you had said Stanley Baldwin instead then I would heartily agree with you.

    • Posted January 3, 2014 at 1:29 pm | Permalink

      ” If we are all in this race, people need reassurance that the government will be on their side and will help them to win it.”
      There is another saying “There’s no situation so bad that politicians can’t make it worse”. Rather unkind, perhaps, but when you look at much recent legislation, it all seems to fall foul of the “Law of unexpected consequences”

    • Posted January 6, 2014 at 3:24 am | Permalink

      “Lower taxes” ?

      I wouldn’t disagree. But it would depend on what taxes we are talking about here. Lowering the basic rate of income tax would be high on my priority list. Whereas, at some time in the future, when I’m retired I might change my position and argue for lower indirect taxes like VAT!

      I would just make the point that the tax system is largely dependent on the goodwill of taxpayers to do the right thing and not hide their financial affairs. Tax evasion isn’t the national sport it is said to be in some countries. But it could be if cynicism about the widespread tax avoidance/evasion of some large corporations is allowed to spread and the problem isn’t properly addressed.

  2. lifelogic
    Posted January 3, 2014 at 7:55 am | Permalink

    Indeed the UK is also having to battle against absurd regulations, from both the EU and UK governments. Absurdly expensive energy, restrictive planning laws and absurdly high and complex taxes. This all pushes jobs and whole industries out of the EU. Indeed one of the few competitive advantages the UK has, is that it is a fairly pleasant and safe place for rich non doms to base themselves.

    One of the biggest problems is a lack of any smaller government, lower tax vision (other than for rich non doms). Also the virtual certainty of Miliband and Labour, with yet more EU to come and with such little democracy as still remains being fully extinguished very shortly.

    Indeed we are in a global competition, but we have been nobbled by Labour, the Coalition, Cameron and especially the EU. This through absurd regulation, expensive energy/water by government dictat, over taxation, daft employment laws, lack of banking competition, very poor public services and a total lack of vision.

    It is good to hear Liam Fox saying the idea that throwing money at the NHS will make it better has been tested to destruction. The NHS is often totally appalling with some of the worst outcome statistics in the first world. This despite all the money and some very dedicated staff. It is the management system and the way it is funded that is absurd & broken. The NHS simply does not respond to patients real needs, the system provides perverse incentives not to.

    • Bazman
      Posted January 3, 2014 at 9:23 am | Permalink

      Which daft employment laws for the umpteenth time? The lack of ability to hire and fire at will for whatever reason such as complaints against safety, sexual harassment, becoming pregnant, asking for more money and so on?

      • Posted January 3, 2014 at 10:53 am | Permalink

        It is the employment laws that prevent hiring, as you say, (and firing), that are causing so much unemployment. In this market some employers do not treat their employees well.

        If we were much nearer to full employment employees would be treated with much more respect.

        The laws that seem to like so much have the opposite effect than intended.

        Try looking at this from the worker’s point of view.

        • Bazman
          Posted January 3, 2014 at 4:06 pm | Permalink

          Which employment laws specifically are preventing hiring? No answer as you have no idea.

          • lifelogic
            Posted January 3, 2014 at 5:42 pm | Permalink

            The difficulty, risks and cost involved in firing deters hiring.

        • uanime5
          Posted January 3, 2014 at 11:26 pm | Permalink

          What laws are you referring to? You can hire people on a temporary contract which can be as short as one day, so there’s clearly no law that prevents an employer testing their employees before hiring them full time.

          • Bazman
            Posted January 4, 2014 at 9:44 am | Permalink

            Self employed, short term contracts, agencies, umbrella companies and so on. Why do you repeat this right wing nonsense over and over liflogic? Hire and fire at will without reason or legal redress? Tell us in what specific circumstances this is required or stop repeating your mindless drivel and propaganda which you tell us you so despise.

      • John B
        Posted January 3, 2014 at 12:21 pm | Permalink

        Businesses exist because individuals put private stock at risk in order to bring goods and services to market for as much profit as possible.

        The purpose of all production is for consumption; not to,provide jobs.

        Jobs are a cost. Insofar as employees need to be considered at all, it is to ensure the consumer is well served so that the goods and services offered are what market will buy, profitably.

        An employer should be able to fire anyone for any reason at any time, if this will benefit their business: business is not a social service nor a tool of the equality industry.

        • Bazman
          Posted January 3, 2014 at 4:15 pm | Permalink

          For any reason? Like questioning unsafe working practices, getting pregnant or asking for a pay rise, race issues? Not in this era. You are looking for servants not employees and quite rightly no none will work in these conditions except the most desperate and this is why employment laws exist.
          It’s true that jobs are a cost, so do not tell us that tax cuts create jobs, demand creates jobs and proof of tax cuts creating demand is needed or they are just gifts to the wealthy like benefits for nothing in effect. Ram it.

    • Ernest Fishbottom
      Posted January 3, 2014 at 9:27 am | Permalink

      NHS is one of the most cost effective healthcare systems around. UK pays a small % of GDP towards healthcare & has lowest numbers of doctors on per capita basis.

      • Posted January 3, 2014 at 10:56 am | Permalink

        Yes, good point. The low proportion of medical staff compared to non medical staff in the NHS is scandalous. Your point is not dissimilar to that of Liam Fox

        • margaret brandreth-j
          Posted January 3, 2014 at 6:15 pm | Permalink

          You wouldn’t get very far without the scientists, technicians, lab staff, radiotherapists ,dieticians, pharmacists, physiotherapists,cleaners, cooks, porters,occupational health teams,secretaries, computer staff, educationalists etc.

      • John B
        Posted January 3, 2014 at 12:11 pm | Permalink

        Since the NHS is a monopoly absent a free market price system, there is simply no way to know whether the value of input is less than the value if output… which would be cost effective or efficient, so its percentage of GDP or the number of medical staff is no measure of cost effectiveness.

        How do you know that a free market system of competing providers and insurers would not count for a lower percentage of GDP and fewer medical staff?

        We do know in every case where a State monopoly has been privatised, staff numbers have fallen dramatically, costs have plummeted, quality of service has increased and since they make a profit (=value added), whereas before they made a trading deficit covered by the taxpayer, they have become cost effective.

        You can take is a certainty that the NHS is not cost effective by any comparison.

        • uanime5
          Posted January 3, 2014 at 11:32 pm | Permalink

          How do you know that a free market system of competing providers and insurers would not count for a lower percentage of GDP and fewer medical staff?

          By examining countries with a free market system of competing providers and insurers it’s possible to determine how much this system costs as a percentage of GDP and how many staff they have per thousand people. This examination has shown that the UK is very cost effective, though it does have a low level of staff.

          We do know in every case where a State monopoly has been privatised, staff numbers have fallen dramatically, costs have plummeted, quality of service has increased and since they make a profit (=value added), whereas before they made a trading deficit covered by the taxpayer, they have become cost effective.

          What about the rail, water, and energy industries? Their costs have risen not plummeted, their quality of service has declined because they have fewer staff available, and any profits they make go mainly to shareholders instead of the treasury. So they haven’t become cost effective.

          • Hope
            Posted January 4, 2014 at 3:44 pm | Permalink

            And then there is the EU regulation they have to comply with which ties their hands. The EU infectious disease is everywhere.

    • lifelogic
      Posted January 3, 2014 at 9:38 am | Permalink

      Oh and since you ask, we are doing just fine in the global race thanks. This mainly as we have left the UK & the EU for a sensible tax regime and pleasanter lifestyle. My wife’s sister’s family have too (to Hong Kong).

      None of us are intending to return to the UK to pay taxes at perhaps 60% in total + 40% of our capital on death for good measure. Then to watch the government waste it on wind/PV subsidies/HS2/the EU and the dis-functional NHS/poor schools and the fairly dreadful public services they provide. I see quite enough of it when I visit, on my business trips thanks.

      • Arschloch
        Posted January 3, 2014 at 11:19 am | Permalink

        Eh? If that is the case why did you tell us the other day you would be filling in your tax return?

        • lifelogic
          Posted January 3, 2014 at 4:16 pm | Permalink

          I have some UK sourced income and businesses.

      • Bazman
        Posted January 3, 2014 at 12:25 pm | Permalink

        Which regime and tax system will this be then or is it a matter of personal security to keep secrecy the country you reside in? You know if you tell us the game will be up if you tell us and that is why you do not preferring to rant about anything that is not right wing enough for you. How right wing is your bolt hole? Usual scrip of putting these fantasies on everyone else whilst not having to live with the consequences in ones own life and forgetting about the shortfalls of the bolt hole.

        • arschloch
          Posted January 3, 2014 at 8:13 pm | Permalink

          Bazza I smell a lot of BS attached to his comments!

        • zorro
          Posted January 3, 2014 at 10:18 pm | Permalink

          Stop trying to guess/make lifelogic give up his residence details…..etc

        • uanime5
          Posted January 3, 2014 at 11:36 pm | Permalink

          I suspect the reason Lifelogic lives in Hong Kong but has businesses in the UK is that in Hong Kong they get much of their tax revenues from corporation taxes.

          • alan jutson
            Posted January 4, 2014 at 9:06 am | Permalink

            Uni5

            Does it matter where LL lives or works, he has an opinion just like you.
            It may not be to everyones liking, but he is entitled to it, just as you have your views.

            I note you do not volunteer anything at all about yourself either, so what is good for the goose is surely good for the gander.

            Some of us have a very good idea what LL’s situation is, and as long as he is not breaking any laws, bloody good luck to him, why should I care !

            I am sure if any views get rather too extreme, our host will moderate them, so there is absolutely no need to get personal.

        • Bazman
          Posted January 4, 2014 at 9:49 am | Permalink

          Well liflogic we are waiting? You cannot tell us which country you live in or make some sort of reply as why this is a secret? etc ed

          • Hope
            Posted January 4, 2014 at 3:45 pm | Permalink

            Keep going life logic, it is none of their socialist business.

          • Bazman
            Posted January 4, 2014 at 5:54 pm | Permalink

            If you are spouting about living in ‘sensible’ country with ‘sensible’ tax and regulations then it is our business to decide if they are sensible. Have you ever heard anything so ‘absurd’ as to be not able to tell anyone which country you reside in and cannot even explain why!? He is a fantasist and a dreamer at best.

    • Hope
      Posted January 3, 2014 at 9:56 am | Permalink

      The Swiss and Norwegians have an equal say at the world trading table equal to the EU. The UK is one of twenty seven sheep within the EU. The Eurozone countries will have an in- built 66 percent majority next year when QVM comes into effect. The perilous economic position of the Eurozone countries will force them to act collectively irrespective of the UK wishes or national interest. The UK will have a small unheard voice, the runt of the herd.

      The Swiss has just negotiated what immigration it will allow into its country, the UK has to put up with whatever happens and no matter how it effects the UK national interest or economy. Clegg views getting out of the EU as unpatriotic, I think he must mean from an EU perspective it is certainly not from a UK one. This is from a man who has not given his children English names! And sent his child to faith school when his manifesto opposed them! A party which is content to bestow free university education to EU students while imposing£9,000 tuition fees on its English counter parts, even though the EU countries are our competitors! Impose higher pension age and lower pensions than the majority of EU countries while being a main contributor to the EU. It seems Clegg needs to learn a lot about patriotism.

      • Timaction
        Posted January 3, 2014 at 11:42 am | Permalink

        The vast majority who now sit in Westminster need lessons in patriotism. They forgot a long time ago (Thatcher) what National interest really means and protecting and looking after its own British citizens!

        • Bob
          Posted January 3, 2014 at 5:52 pm | Permalink

          At one time one quarter of the world was run by the British.
          Now we can’t even run our own country, thanks to the lies and deceit of the LibLabCon establishment.

          It’s time for a shake up at Westminster.

          • bigneil
            Posted January 3, 2014 at 6:20 pm | Permalink

            can I stand and applaud you ?? – -so long as it is a total change and not more of the same “nose in the trough and two fingers to the electorate” after the election.

      • Denis Cooper
        Posted January 3, 2014 at 12:16 pm | Permalink

        “The Eurozone countries will have an in- built 66 percent majority next year when QVM comes into effect.”

        QVM is already in effect for almost all EU decisions; the exceptions are now few and far between, but some of them are extremely important; what will happen this November is that the rules of QMV will change, generally to our disadvantage, but there will be no extension to its scope.

        I don’t know for sure who first set this hare running, it may or may not have been this chap:

        http://www.callingengland.net/p/never-you-tell-em-lie.html

        “Find Out What Happens on 1st November 2014

        I first posted this in June 2011 and I’ve been meaning to give a page of its own for some time now … ”

        And even when it was pointed out that he had completely misunderstood the position, a year ago:

        “I think you’ve got this wrong.

        The vetoes to be lost through the EU treaty amendments made by the Lisbon Treaty were lost when that treaty came into force on December 1st 2009, and won’t be lost again on November 1st 2014.

        The change that will take place on that future date, in accordance with provisions already introduced into the treaties through the Lisbon Treaty, will be a change to the system of qualified majority voting.

        As explained in Box 2 on page 5 here:

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

        he persisted in completely misunderstanding the position …

        • Timaction
          Posted January 3, 2014 at 7:12 pm | Permalink

          The level of treachery by all three parties and deceit and lies is astounding. Never have we had such a threat from our own Parliament to create a superstate against the wishes of its people.
          This is straight unelected dictatorship forced without consent on the British people. Now we know why they have engineered and allowed mass migration to undermine our feelings of nationality and loyalty to our own Country, culture, heritage and way of life. Disgraceful.

          • Denis Cooper
            Posted January 4, 2014 at 12:16 pm | Permalink

            Agreed, but it still seems necessary to me that we have a reasonably accurate understanding of that treachery, and it is plain wrong to talk about QMV coming into effect later this year when it is already in effect for most decisions, its scope having been gradually extended by one treaty after another over more than three decades now, starting with the Single European Act.

      • behindthefrogs
        Posted January 3, 2014 at 1:18 pm | Permalink

        While we elect MEPs from parties like UKIP we dilute our vote even further. We must have MEPs who work in the interests of the UK and don’t just abandon their participation because their party’s objective is to leave the EU.

        • Hope
          Posted January 3, 2014 at 6:45 pm | Permalink

          Do not expect any change from further integration to becoming an EU superstate, if you do not change your voting pattern.

          • Bob
            Posted January 4, 2014 at 2:38 pm | Permalink

            @Hope

            Do not expect any change from further integration to becoming an EU superstate, if you do not change your voting pattern.

            The last time my voting pattern changed was when the Tories elected David Cameron as their leader.

        • JA
          Posted January 4, 2014 at 1:59 am | Permalink

          If we are going to join a super state where our own parliament is trumped on all decisions then we ought not to have a parliament, nor the costs that go with it.

          We ordinary people are continually told by lofty politicians that our jobs must be cut, our work outsourced etc.

          Now that parliament is becoming redundant …

          It has to have one of the biggest cost saving potentials surely ?

          Parliament could be cut to a fraction of what it is and nobody would notice its loss.

      • uanime5
        Posted January 3, 2014 at 11:50 pm | Permalink

        The Swiss and Norwegians have an equal say at the world trading table equal to the EU.

        The UK also has their own seat at these trading tables, so we’re represented twice unlike the Swiss and Norwegians.

        The Eurozone countries will have an in- built 66 percent majority next year when QVM comes into effect.

        Unless several large countries (such as Turkey) join the EU, then the eurozone countries won’t have a majority.

        • Mark B
          Posted January 4, 2014 at 10:11 am | Permalink

          U5 said;
          “The UK also has their own seat at these trading tables, so we’re represented twice unlike the Swiss and Norwegians.”

          And.

          “Unless several large countries (such as Turkey) join the EU, then the eurozone countries won’t have a majority.”

          As to the first one, can you provide examples please.

          As to the second one of your comments,may I remind you that, should Turkey, or indeed any country, join the EU, they will be compelled to join the Euro and become part of the Eurozone themselves. They are therefore unlikely to vote against matters that will affect them just to appease us.

          So the whole foundation of your beliefs is somewhat rather flawed.

          • uanime5
            Posted January 4, 2014 at 1:27 pm | Permalink

            Regarding my first point I have no objection to providing examples. Which trading tables do you want to know about?

            Regarding my second point for all new countries joining the EU there’s a period of time between joining the EU and adopting the EU. So during this time period they are less likely to vote in favour of things that only benefit countries in the eurozone.

          • Denis Cooper
            Posted January 4, 2014 at 6:51 pm | Permalink

            “So during this time period they are less likely to vote in favour of things that only benefit countries in the Eurozone”

            Oh, that’s OK then, let’s get Turkey into the EU and enjoy them voting on our side for that period of some years, until they join the euro and start to vote against us.

            You really are daft sometimes.

          • Mark b
            Posted January 4, 2014 at 11:12 pm | Permalink

            So you do not deny that a country like Turkey would indeed be forced to join the Euro and vote in measures that the UK may not like. And as for this ‘period’, how long exactly ?

            Remember, the Commission does not like referendum’s and is very keen on those members’ or ‘Regions’ as they call them on voting again if they do not get the right answer.

            As to the first. Anything will do, I am not fussy. Thanks !

    • Posted January 7, 2014 at 5:31 am | Permalink

      lifelogic,

      It’s easy to post up under a pseudonym and make uninformed comments like “daft employment laws”

      Just to put you in the picture: employees in Britain have almost no rights against dismissal in their first two years of employment. Two years is quite an arbitrary figure and it would be possible to argue rationally that it should be longer or shorter. But why is it daft?

      It would be “daft” if a lorry driver, for example, had to be paid even though he had lost his licence for a traffic offence but , no, the law allows for his dismissal under those circumstances. It is quite sensible in most ways when you look into the wording.

      Do you ever bother to do any research before making these ‘daft’ claims?

      https://www.gov.uk/dismissal

  3. Andyvan
    Posted January 3, 2014 at 8:14 am | Permalink

    No, what people need to realise is that government is not now nor will ever be on their side. Government is a club designed to extract wealth from outsiders and redistribute it to insiders whilst giving back just enough to fool people into believing they are being ruled for their own benefit. A democracy is very effective at giving the impression that it is governed by the people and allows the real rulers to set vastly higher tax rates than would be tolerated in a monarchy or similar system. At best a democracy is mob rule that gives a majority the right to steal from the minority. For instance we now have a very large majority in Britain that receives some sort of benefit ranging from pensions to child benefit, family credit to a job in the public sector. All have a vested interest in continuing to steal from the ever shrinking pool of people that get no benefits at all (me and a very few others). Government is the mechanism that allows this theft as well as the more blatant kinds like being a banker or politician. See the world as it really is, not how the establishment tells you it is. Which category do you fit in- giver or taker?

    • Bazman
      Posted January 3, 2014 at 9:26 am | Permalink

      The producer and parasite speech. Wrong. Demand creates wealth not the rich.

      • waramess
        Posted January 3, 2014 at 12:27 pm | Permalink

        An exceptional piece of nonsense Bazman, even by your standards.

        Demand only creates wealth if accompanied by production. A government taking 50 percent of domestic product causes demand at the expense of the productive sector and the bigger government gets, the less benefit will accrue to the productive sector until eventually there is no productive sector to satisfy demand.

        • Bazman
          Posted January 3, 2014 at 4:19 pm | Permalink

          Where does the infastructure, education and security come from for the producer? The private sector can never fill this gap. Demand creates wealth as I have said.

          • Bob
            Posted January 3, 2014 at 5:59 pm | Permalink

            @Baz

            Demand creates wealth

            In poverty stricken third world countries there is lots of demand for food, water, clothing, housing, medicine, consumer goods etc. etc.

            Where will they get the money to pay for it?

          • Bazman
            Posted January 3, 2014 at 6:26 pm | Permalink

            From natural resources they own, but they never will as almost all is stolen via corrupt governments in collusion with big business and foreign governments. Even getting chucked off their land too. So much for low taxes and the tickle down effect Huh bob? Russia is the most natural resource rich country in the world and they live like tramps. Communism and now communism for the rich.

          • Bob
            Posted January 4, 2014 at 2:22 pm | Permalink

            @Baz
            Yes I share your distrust of communism, the disparity between rich and poor usually becomes greater as corruption reigns, and it is invariably accompanied by brutal authoritarianism.

          • Bazman
            Posted January 4, 2014 at 5:56 pm | Permalink

            Basically its just theft in Russia. Forget about communism, fascism, left and right.

    • lifelogic
      Posted January 3, 2014 at 9:41 am | Permalink

      “Government is a club designed to extract wealth from outsiders and redistribute it to insiders, whilst giving back just enough to fool people into believing they are being ruled for their own benefit.”

      “At best a democracy is mob rule that gives a majority the right to steal from the minority.”

      Exactly.

      • Bazman
        Posted January 3, 2014 at 12:30 pm | Permalink

        More mindless ranting from you in your dream world that you cannot tell us where as it is no doubt flawed like here, but not for benefit cheats like yourself.
        A democracy is supposed have a progressive tax structure that is in proportion to the means to pay. We do this because those who get more from the system do so because the democratic system offers them that ability. Their wealth is because of our system and therefore they owe back to the system in proportion. Plus, history has taught the lesson that great wealth opposes democracy, so democracy must oppose the accumulation of great, disproportional wealth. In other words, part of the contract of living in a democracy is your obligation to protect the democracy and high taxes at the top is one of those protections. Ram it.

        • Mark B
          Posted January 4, 2014 at 10:27 am | Permalink

          Define ‘wealthy’ ?

    • Denis Cooper
      Posted January 3, 2014 at 12:24 pm | Permalink

      And what would be your preferred alternative to democracy?

      As Churchill, who in truth was never passionately enthusiastic about democracy, put it:

      “It has been said that democracy is the worst form of government except all the others that have been tried.”

      • lifelogic
        Posted January 3, 2014 at 5:55 pm | Permalink

        Well I would like to see a democracy where the elected representatives act in the interest of the voters and can be removed by them and over rule them by referendum (rather than acting in their personal or party interests as is very usual now).

        But we also need some protection to stop the potential (excessive) legalised theft by the majority from the minority which is inherent in many even most democratic structures.

        • lifelogic
          Posted January 3, 2014 at 6:00 pm | Permalink

          To stop the usual leftist’s position which is usually, we will steal from the rich and use it to buy votes and thus maintain ourselves in power for ever more. Making all poorer in the process.

          • Denis Cooper
            Posted January 4, 2014 at 12:19 pm | Permalink

            You need an educated electorate.

          • Bazman
            Posted January 4, 2014 at 6:02 pm | Permalink

            You can be sure they are educated enough not to fall for liflogics right wing nonsense and make the rich even richer at their own expense which is what has been happening over the last 30 years. Neo Conservative crap that has absolutely failed hundreds of millions.

    • behindthefrogs
      Posted January 3, 2014 at 1:21 pm | Permalink

      Andyvan

      So when you reach retirement age you will not claim your old age pension because it is stealing from the working population?

      • lifelogic
        Posted January 3, 2014 at 6:41 pm | Permalink

        Most have paid loads of NI for the pension so why on earth should they not claim it.

        Mind you it will surely be means tested soon.

      • zorro
        Posted January 3, 2014 at 10:28 pm | Permalink

        No, it will probably be means tested…..

        zorro

    • uanime5
      Posted January 3, 2014 at 11:59 pm | Permalink

      A democracy is very effective at giving the impression that it is governed by the people and allows the real rulers to set vastly higher tax rates than would be tolerated in a monarchy or similar system.

      Well that’s because in a monarchy only the wealthy pay taxes because only they have any money. Also as only the wealthy have the right to vote on tax rates its no surprise that they want to tax themselves as little as possible.

      At best a democracy is mob rule that gives a majority the right to steal from the minority.

      As opposed to feudalism, in which the minority stole from the majority.

      For instance we now have a very large majority in Britain that receives some sort of benefit ranging from pensions to child benefit, family credit to a job in the public sector.

      Well that’s because wages have fallen to such an extent that people can no longer afford to live in the UK without benefits. Perhaps if employers started paying a living wage, rather than as little as possible, so many people wouldn’t need to claim benefits.

      • Mark B
        Posted January 4, 2014 at 10:48 am | Permalink

        I think your arguments are too simplistic and would not stand the rigor of reality of modern life. We live in a globalized world and are members of a Customs Union and open market area. If wages became too high in one country, ie the UK, then companies can all too easily move elsewhere within the market area. eg Ford moves van production from UK to Turkey. This in turn creates unemployment which benefits no one, rich or poor.

        Until you show understanding of how markets work and all the factors that effect them, you will not be able to present reasoned and consistent arguments to support your position.

        Remember, Communism/Socialism has been (USSR), and continues (Venezuela) to be tried with the resulting disastrous results for both the country and its people.

        • uanime5
          Posted January 4, 2014 at 1:38 pm | Permalink

          Mark B in many western European countries the average wage is higher yet unemployment is lower; examples are Germany and Sweden. This is because when people earn more they can spend more, which stimulates demand and job creation.

          Your assumption that companies will always move to the country where they can pay the lowest wages is also incorrect as there are many other factors to consider such as education levels and natural resources. For example German car plants remain in Germany because it would be difficult to find enough engineers if they moved abroad.

          Let’s not a forget about all then employers that can’t move abroad, such as supermarkets and fast food restaurants. They’re unlikely to leave if they’re forced to pay a living wage.

          • ian wragg
            Posted January 4, 2014 at 7:15 pm | Permalink

            Talking nonsense as usual Uni. It is the exception for married German women to work so they do not sign on as unemployed. Many Germans are struggling on mini contracts which benefit employers by giving them tax breaks. Some Germans have 2 or 3 such jobs. Very similar to our zero hours contracts.
            Lots of German industry has relocated due to the ruinously expensive green energy policy and the Germans don’t spend as we do that’s why they object to bailing out the southern states of the EZ.

          • Mark B
            Posted January 4, 2014 at 11:31 pm | Permalink

            You site, “many western European countries”. What, like Greece or Spain ? What about Portugal or Italy ?

            Germany sells more goods that people want to buy. Many German firms like Volkswagen are partially state owned, and others like Miele are family owned so their are a range of issues why these companies might not want to up sticks.

            Just because something is engineered in say Germany, does not stop them manufacturing in foreign countries. Mercedes makes cars in the US because it is cheaper. Also the Euro is lower than what the Deutschmark would have been, helping their exports, so you have chosen a poor example.

            My assumption that companies will move to a low wage environment IS CORRECT. Free movement of goods, people, services (yes services) and capital allows companies to do this.

            Yes, you are correct. Supermarkets etc cannot move abroad, what a silly thing to say ? Unless you have been living in a cave, under the EEA/Single Market, they bring in the people to them. Every time I go to a supermarket or fast foot outlet, they are staffed with low skilled, low wage foreign immigrants. Why do you think big business love you blessed EU so much.

            The problem with Uanime5 is, that in one breath you will condemn Banks and Corporate firms for not paying tax on monies here yet, you will happily defend the very instituion (EU) that allows them to exploit this tax loop-hole, import large foreign workers which drive down wages and create the very problems you rage against.

            You live in a paradox.

  4. Posted January 3, 2014 at 8:49 am | Permalink

    It’s always a good idea to take a look at the current placings in this “race” . If you Google: ‘ List of countries by GDP per capita’ you’ll see that the UK is in 21st spot. Slightly ahead of Japan in 22nd place and slightly behind Denmark in 20th place

    So there are, on the basis of this list, 20 countries who are doing better than the UK. So which one should the UK choose to be more like? Iceland? Germany? Ireland? Taiwan? Sweden? I’ll not list them all you can check for yourself and pick your favourite.

    • lifelogic
      Posted January 3, 2014 at 9:47 am | Permalink

      A mix of Norway, Switzerland, Hong Kong and Canada please, with more of the Hong Kong on the tax side. All richer and all outside the EU, needless to say.

      So in the race we have gone slowly from 1st to 21st the decline continues under Cameron.

      • Arschloch
        Posted January 3, 2014 at 11:29 am | Permalink

        You want a mix of Norway, a country that will have problems when the oil runs out and has an even more generous welfare state and immigration policy than the UKs? (see Canada too). Switzerland that has its own problems with its banks (I will not mention them directly as they will be “moderated”). And Hong Kong? You and your sister in law do realise that it is no longer British and is now run by a corrupt dictatorship, and if it suits them, they can remove any semblance of rule of law that is there at the moment at their will? Why do you think the barracks at Stonecutter Island are full of PLA soldiers?

        • APL
          Posted January 3, 2014 at 5:40 pm | Permalink

          Arschloch: “You want a mix of Norway …”

          Yea, she will have problems when the oil runs out, but then Norway was sensible enough to build up ( the only country in western Europe? ) a sovereign wealth fund to assist her to make the transition when it does.

          By comparison, the UK frittered her oil wealth away on …. welfare? I’m not sure exactly.

      • Bazman
        Posted January 3, 2014 at 12:38 pm | Permalink

        All very different countries you can observe in culture size and geography. You presume to put this Britain. As if. For example Switzerland is a very middle class country. We are not. Hong Kong is a small undemocratic colony off China where many live like rats in tiny flats. We are not. Norway is eye wateringly expensive and taxed. We are not. Canada is vast with massive natural resources and next to America. We are not. They are all in some sort of trade agreements and have to pay tariffs in some way like us.
        Why don’t we just replicate the amazing and perfect mythical countries tax and social system you reside in? A Daily Mail England no less! Idiotic simple politics as usual from you.

        • Bob
          Posted January 3, 2014 at 6:16 pm | Permalink

          @Baz

          Hong Kong is a small undemocratic colony off China where many live like rats in tiny flats.

          It’s no longer a colony, and they don’t live like rats, in fact much of the accommodation is extremely comfortable; I have never heard anyone complain, rather they work hard and strive to improve their lives. They don’t expect the government to do it for them.

          BTW, their public transport system is the model of efficiency, and the food is quite superb.

          • Lifelogic
            Posted January 4, 2014 at 5:04 am | Permalink

            7 Million plus population in Hong Kong so it is not that small either.

          • Bazman
            Posted January 4, 2014 at 10:06 am | Permalink

            It’s smaller than London and don’t compare ex-pat life with living there as a local. The minimum wage in Hong Kong is now HK$30 yet HK has the widest poverty gap in the developed world, according to last October’s UN Human Development report. The richest 10% of the city now enjoy about a third of its total income, whilst the poorest 10% share only 2% of its wealth (SCMP April, 2013) and it is getting worse. Expensive place with low wages, low rights and interestingly a lot of regulations, so don’t tell us from Hong Wrong that the UK is going to the dogs and us this as a model for Britain. Ram it.

          • Bob
            Posted January 4, 2014 at 2:09 pm | Permalink

            @Baz

            according to last October’s UN Human Development report

            This reminds me of Mary Beard on QT telling the people of Boston that all was well because that’s what she had read in a report from the local authority.

            Sorry Baz, I haven’t read the UN report, my comment was based on my own first hand experience. Even the government housing estates I saw were tidy and well kept with no sign of graffiti or vandalism in public areas. The housing estates were usually well connected to the excellent transport system and were surrounded by busy shops and restaurants.

            I’m not sure what you mean by “a lot of regulations”. Certainly you could be spot fined for littering and you’re not allowed to eat and drink on the MTR trains -> is that what you are referring to?

            I think that London could learn a lot from Hong Kong’s success.
            Certainly the Oyster Card system was copied from Hong Kong’s Octopus Card.

            Do you know why HK (the “barren rock”) became so crowded in the first place?

            BTW if you’re interested in an alternative view of the UN try googling agenda 21 for dummies.

      • bigneil
        Posted January 3, 2014 at 6:37 pm | Permalink

        could it be that our competitor is really john cleese as the “Minister of Silly Walks” ?

    • Mark B
      Posted January 3, 2014 at 10:46 am | Permalink

      I think this list is a little bit more telling. Look at the countries at the bottom of the pile, and ask yourself, “What do they all have in common ?”

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

      • lifelogic
        Posted January 3, 2014 at 6:05 pm | Permalink

        Indeed no reason why the UK could not have growth at 6% PA plus with a sensible and much smaller government.

      • Lifelogic
        Posted January 3, 2014 at 9:56 pm | Permalink

        The EU perhaps?

      • uanime5
        Posted January 4, 2014 at 12:12 am | Permalink

        Given that Libya, Iraq, and Afghanistan all have high levels of growth one could infer that that civil wars and being invaded are the best ways to boost GDP. But that’s what happens when you try to make such pointless trends.

        • Bazman
          Posted January 4, 2014 at 10:11 am | Permalink

          Fortunes to be made from destroying countries and rebuilding them. Makes me suspicious of any so called terrorist attacks in Russia. A lot of money has been made from just that for a few.
          Having no infrastructure is what lifelogic means. How this is good for business is not thought of by him as he is just a rent parasite.

        • Mark B
          Posted January 4, 2014 at 11:25 am | Permalink

          Afghanistan has had billions flowing in to it plus all the drug money. Libya and Iraq are oil states.

          When you blow up a building, someone has to clear up the mess and perhaps build a new one. They do not do it for free so, this has to be paid by someone somewhere. After the WWII we, and the rest of Europe had to rebuild. We enjoyed quite a boom at that time, as so did the USA and the USSR.

          But when you suck all the money out of an economy or steal a certain percentage of someones wealth, either by QE or directly going into their bank accounts (Cyprus), you undermine the faith in the economy and the money goes elsewhere. Not that I would expect you to think things through like that.

    • Denis Cooper
      Posted January 3, 2014 at 12:52 pm | Permalink

      I think per capita GDP is a better measure than many others, and especially it is better than total GDP, the measure that the government prefers to use in its vain attempts to justify the policy of allowing and encouraging mass immigration.

      Some of the countries which are higher than the UK in the table for per capita GDP should be seen as special cases – Qatar and Luxembourg take the first two places in this table:

      http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)_per_capita

      But there’s no reason why we shouldn’t be higher up than we are.

      Of course it’s unlikely that we’re ever going to get back closer to the top of the table for total GDP:

      http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)

      and more likely that we’ll slip down a few places over the coming decades as India and Brazil and possibly others overtake us, unless we overtake France or Germany which I suppose could happen.

      But I don’t think a further drop down the GDP rankings would be anything to get too worried or depressed about, it would be the natural consequences of billions of people climbing out of poverty.

    • APL
      Posted January 3, 2014 at 5:34 pm | Permalink

      PeterMartin2001: “So which one should the UK choose to be more like? Iceland? .. ”

      Yep, Iceland. Bankrupted banks put into administration, Corrupt bankers tried and sentenced to prison. Her fishing industry hasn’t been decimated nor her fishing grounds destroyed by the European Union’s common fisheries policy, she has experienced significant democratic ‘feedback’ which made her politicians sit up and take notice.

      • lifelogic
        Posted January 3, 2014 at 6:44 pm | Permalink

        Some truth in that, a warmer Iceland without the volcanoes and all the debt written off too.

    • Posted January 4, 2014 at 12:24 am | Permalink

      Thanks for putting up the link to GDP per capita.
      I must say I was surprised to see the UK were slightly ahead of Japan and quite a bit behind Ireland. I don’t think most people would have known that. So it is important to notice that although things could be better they aren’t as bad as some might think either.
      I was surprised that Singapore rated so highly. Any takers for the idea that the UK need to be more like them?
      I would say Norway can’t be used as a model. That combination of a low population and large oil and gas reserves is not something that can just be chosen. Some would say that’s just luck. On the other hand, the reliance of oil on any economy brings its own problems. Because Norway exports large quantities of oil there is a large influx of foreign currency which has to be converted locally into Krone which pushes up the currency and makes it uneconomic to manufacture anything else there.
      The Norwegian government has to remove Krone from the economy to prevent too much local inflation by running a budget surplus. So what then does it do with these Krone? Saving them up is like saving up your own IOUs ! A sovereign wealth fund might appear to be a good idea but there is an obvious snag that needs a bit of thought. IMO

  5. Arschloch
    Posted January 3, 2014 at 9:00 am | Permalink

    Fancy a BMW 3 series courtesy of the taxpayer? Well one can be yours courtesy of the Motorbility scheme. When IDS gets a rid of anomalies like this then I will believe he is serious about welfare reform. If you are a NHS nurse who works in the community and you see one of these parked on the drive of the family you are visiting, you then start to ask yourself why bother working?

    http://www.whichmobilitycar.co.uk/which-mobility-car-top-10/

    • Bazman
      Posted January 3, 2014 at 9:47 am | Permalink

      More propaganda not dealing in facts using this idea of free expensive cars for scroungers. Facts suit you when they fit your political agenda and not when they do not. Vanishing Thicks entire strategy in fact!
      The Mobility Scheme provides about fifty five quid a week to improve the lives of the disabled by getting around as you as a non disabled person do. To get this you will have to face rigorous tests by doctors and having a sore leg is not enough even if the Daily mail tell you it is. This can be used to fund Taxis, trains peak travel on buses or even and I know you think that to be disabled means not being able to drive, a car. Now some disabled have jobs and money another amazing fact! Some even use this money to fund a more expensive car even a BMW or a Bentley. A Bentley! if they so wish or get a cheaper one and have a car and cash. Car and cash!
      As you can see your entire petty mean minded ignorant post is about envy. Envy that the disabled are allowed a small amount of cash per week to improve their lives because they have a condition which you do not. You are trying to make it into some sort of free for all and presume to make the lives of the disabled worse trapping them at home by putting them forward as scroungers. The state pay for their disability. How civilised. Walked into that one didn’t you? Ram it.

      • Arschloch
        Posted January 3, 2014 at 11:30 am | Permalink

        And why are those old blue cars for the disabled now not necessary?

        • Bazman
          Posted January 3, 2014 at 4:26 pm | Permalink

          You seriously think the old blue Sp75 Chariot. Is in keeping with modern safety standards?
          Whether the envious posters on this site like it or not the payments are to improve the lives of the disabled and you have to be disabled to get them. Can you understand that. It;s money to improve their lives as you are not disabled you do not need the extra money incurred by them in the course of their daily lives. You cannot get around this with you petty and mean arguments. You want to be disabled? Get real.

      • JoeSoap
        Posted January 3, 2014 at 1:03 pm | Permalink

        No, not civilised, just barmy.
        If you work, can afford a car and afford to get around as easily as Joe Average, why on earth are we giving you a sub to buy a luxury car?? It is absolutely typical of the type of thing that, if this government was serious about cutting welfare, would be dead in its tracks.

        • uanime5
          Posted January 4, 2014 at 12:17 am | Permalink

          If someone is disabled they cannot get around as easily as the average person. That’s why they need help to pay for their extra travel costs.

          • Bazman
            Posted January 4, 2014 at 10:14 am | Permalink

            That is the the governments own line and policy. A civilised one too for the greater good of all. How fraud is stopped is another issue and making them all frauds will not wash.

      • Denis Cooper
        Posted January 3, 2014 at 1:34 pm | Permalink

        If that fifty quid a week makes the difference between someone being not able to afford an expensive car and them being able to afford an expensive car then it might be asked whether they actually need the government to give them that fifty quid a week, especially as the government is having to borrow huge sums of money to keep up with all its payments. Oh, of course, I forgot, the government can always induce the Bank of England to print as much new money as it wants to spend, without any limit.

        • Bazman
          Posted January 3, 2014 at 4:28 pm | Permalink

          They get about fifty five quid and it would not go far on Taxis. They have a choice of how to spend their entitlements. Don’t try to blame the financial crisis on the disabled is my main point in all of this.

          • Denis Cooper
            Posted January 3, 2014 at 6:02 pm | Permalink

            Doesn’t answer the question why should someone should get fifty quid a week from the state if they don’t need it.

          • Bazman
            Posted January 3, 2014 at 6:31 pm | Permalink

            Who says they don’t need it? Do bankers need millions?
            They get it as payment for being disabled a sort of wage if you like to compensate for their plight. A wage nobody wants. You can try to scam it, but thats another story.

        • Posted January 4, 2014 at 12:44 am | Permalink

          ” can always induce the Bank of England to print as much new money as it wants to spend, without any limit.”

          No, the limit is imposed by the inflation target. If there is too much spending in the economy, whether by government or anyone else, then inflation can become a problem.
          What should that target be and what should be the trade-off between that and other considerations like unemployment levels? They are political and not economic questions.

          • Denis Cooper
            Posted January 4, 2014 at 12:23 pm | Permalink

            “No, the limit is imposed by the inflation target.”

            Only if the Chancellor insists that the inflation target must be met rather than turning a blind eye to it being exceeded.

          • Posted January 4, 2014 at 2:55 pm | Permalink

            Denis,

            Yes that’s true.

            On a previous thread you specifically made a point, if I understood you correctly, that the raising of funds from the sale of bonds had to precede Govt spending. I would take it that you’d also say the same about taxes. The taxes comes first then the spending follows.

            The flaw, as I see it, in this type of thinking is that it ignores the question of how the money ever got into the economy in the first place. If its not there you can’t raise taxes or sell bonds. So it would make more sense to think that the Govt issues its currency into the economy first and then recieves some of it back by taxation and bond sales later.

            It may seem like asking if chickens preceded eggs or vice versa and that is a sterile argument. Not this though. It is useful to know the extent of economic constraints on government; and, getting the order the wrong way around can lead to some erroneous thinking.

            Reply The government needs to manage its cash flow. It either has to have sufficient tax revenue or sufficient additional borrowing to pay the bills every day as they come in.

          • Denis Cooper
            Posted January 4, 2014 at 6:59 pm | Permalink

            “the Govt issues its currency”

            Our currency is issued by the Bank of England, which is not part of the government. The Bank is an arm of the UK state, and since 1946 it has been wholly owned by the Treasury which is part of the government, another arm of the UK state, but the Bank itself is not part of the government and indeed in 1998 Parliament – which is also an arm of the UK state but not part of the government – passed an Act designed to limit the influence of the government over its operations.

          • Posted January 4, 2014 at 9:38 pm | Permalink

            Reply to Mr Redwood,

            Yes, but how is this done? Olivier Blanchard (1997) in his Macroeconomic text says

            “……with the central bank’s cooperation, the government can in effect finance itself by money creation. It can issue bonds and ask the central bank to buy them. The central bank then pays the government with money it creates, and the government in turn uses that money to finance the deficit.”

            As the Central bank and the Treasury are both owned by the government I don’t quite see the point of the Central Bank owning bonds created by the Treasury.

          • Posted January 5, 2014 at 8:15 am | Permalink

            Denis,
            Methink thou doth protest too much about the status of the BoE . The Bank is a public sector institution, wholly-owned by the government, and accountable to Parliament. The entire capital of the Bank is, in fact, held by the Treasury solicitor on behalf of HM Treasury.

            http://www.bankofengland.co.uk/publications/annualreport/index.htm

          • Denis Cooper
            Posted January 5, 2014 at 11:59 am | Permalink

            Firstly you need to get it clear in your mind that overall there is the state, which has various different arms which are all interconnected but which are still distinct and with distinct functions, and secondly you need to be careful in your choice of words to accurately reflect that complex structure.

            As an example which may make this clearer, the courts in the UK are part of the UK state apparatus but they are not part of the UK government, even though there is a UK government department which exercises some oversight over the way they perform their functions, and nor are they part of the UK Parliament even though Parliament can and does pass laws on what courts shall exist in the UK and what powers they shall have and how they shall exercise them in general terms, and of course how their operations will be funded.

            Both the Treasury and the Bank of England are arms of the UK state apparatus, but while the Treasury is part of the government the Bank of England is not, even though it has been wholly owned by the UK Treasury since 1946.

            And in fact that distinction is made clear in the passage that you quote:

            “……with the central bank’s cooperation, the government can in effect finance itself by money creation. It can issue bonds and ask the central bank to buy them. The central bank then pays the government with money it creates, and the government in turn uses that money to finance the deficit.”

            In that scheme it is the government which issues the bonds, not the central bank, and it is the central bank which creates the money, not the government, and which uses that new money to buy the bonds from the government, and it is then the government which spends the new money, using it to help finance the budget deficit, which of course is the budget deficit of the government, not the central bank.

            As I’ve said before, it would have been much simpler and therefore more transparent if the two arms of the UK state had followed that scheme and the Bank had bought gilts direct from the Treasury, or indeed if it had just extended a £375 billion overdraft to the Treasury, but both of those expedients are explicitly forbidden by Article 123 of the Treaty on the Functioning of the European Union, which you can find on page 99 here:

            http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2010:083:0047:0200:EN:PDF

            “Overdraft facilities or any other type of credit facility with the European Central Bank or with the central banks of the Member States (hereinafter referred to as ‘national central banks’) in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States shall be prohibited, as shall the purchase directly from them by the European Central Bank or national central banks of debt instruments.”

            Hence both the Bank of England and the European Central Bank have eschewed the purchase of “debt instruments”, such as bonds, directly from governments, and instead have resorted to buying up their previously issued bonds; and in the case of the UK, during periods of QE the Treasury carried on selling new bonds to private investors about as fast as the Bank was buying up bonds previously issued by the Treasury.

            I’ve no doubt that if electors had been provided with a better understanding of this before the 2010 election, and they had all understood what was meant by the government’s “budget deficit” and appreciated just how massive a hole there was in the government’s finances, and they had seen through the media claim that the purpose of QE was to “stimulate the economy” and recognised that its primary purpose was to ensure that the Labour government could carry on with its over-spending during the year leading up the election, then the outcome of that election would have been very different, and there would now be far fewer than 257 Labour MPs.

        • Posted January 5, 2014 at 9:21 pm | Permalink

          Denis,

          ” it would have been much simpler and therefore more transparent if the two arms ……”

          Well, it would be even simpler, if the Government conducted both jts fiscal and monetary policy under one body instead of two arms – having them write huge IOUs to each other, causing lots of confusion as to who owes who what – whereas in reality it’s nothing at all. Unless you include the nonsense accounting of claiming things like your left arm owes your right leg £X billion !

          Yes I agree that it would be good if electors had a better understanding of economics generally. If they did they would know that the £10 notes in their purses and wallets were part of the National debt, and that therefore the National debt was, in the main, quite natural and a good thing. That same £10 note was issued, at some time, by the process a government running a deficit via its central bank.

          They would know, which hardly anyone does, that government surpluses equate to private sector deficits. And vice versa.

          They would then know that inflation, and only inflation, and nothing else but inflation, is the only potential problem of running too large a government deficit. They would then be able to decide, in the normal way through the democratic process (preferably free of EU interference), if current inflation levels in the UK were sufficiently high to warrant such tight fiscal policy whereas monetary policy is about as loose as it can possibly be.

          They would understand, or at least understand the case for saying, that the two need to be brought into a better balance.

          • Denis Cooper
            Posted January 6, 2014 at 6:53 pm | Permalink

            We can’t carry on like for ever, but at least we seem to have reached a common understanding of the details of what was done to the tune of £198 billion in 2009 when the Labour government faced the imminent prospect of running out of money to pay its bills, and then done again by the coalition government to the tune of another £175 billion.

            As I believe that our government has to be both limited and democratic I’m not in favour of allowing the Chancellor to arrange for the creation of as much new money as he wants without any effective democratic constraint.

            That would be the case whether it was done under in the same convoluted way of the Bank of England creating new money and passing it to the Treasury via the gilts market, or by the Bank buying bonds direct from the Treasury, or by the Bank extending an overdraft to the Treasury, or indeed by the Treasury starting to issue its own new currency as was done with the Bradbury pound in 1914 when the Bank of England was still a private bank and not so amenable to pressure from the Treasury.

            Even though many people may not immediately understand what is meant by the government’s “budget deficit”, let alone appreciate its magnitude, I think that most would agree with the simple formulation that just as they have to live within their means so too the Chancellor should have to live within his means, and that not include enlarging his means by just printing more money, inevitably devaluing the money that they earn and possess.

            As I have said before, as nauseam, MPs have sat back and allowed the two Chancellors of two successive governments, between them involving all three of the major political parties, to authorise the creation of £375 billion of new money without any proper debate on the implications and without a single vote to approve any of the tranches; and while JR replies that there was never any need for a Commons vote because there was strong cross-party support for it being done in my eyes that merely confirms that there has been no proper democratic constraint and it is unlikely that will ever be any proper democratic constraint if money printing becomes a normalised practice of governments.

      • bigneil
        Posted January 3, 2014 at 6:58 pm | Permalink

        many years ago while having a cup of tea at a friends house he pointed through the window to one of his female neighbours -(words left out ed) -walking up the pavement to her house – -sky high stillettoes click clacking away- – she was carrying 2 bulging carrier bags from the local supermarket about 300 yards away – on each arm

        after I had closed my mouth again -(words left out ed) – he said

        she has a mobility car – -because she cant walk !!!

        I know she was reported – -but she still had cars for many years.

    • alan jutson
      Posted January 3, 2014 at 10:17 am | Permalink

      Arschloc

      Do not forget that the person claiming does not have to drive, only their carer.

      Here is another example.

      Recently returned from a Cruise with one of the larger cruise Companies, (late booking due to good offer) chatting to passengers as you do, found out that a couple on board who’s wife was very seriously disabled were living on board the cruise ship, and had been for nearly two years, but their stay was fully funded by the taxpayer.
      Appears it was supposed to be actually cheaper for them to live on board (about £40,000 per year) than to have care arranged for them at home, or in a nursing home, thus this solution was chosen as one of the options put forward and requested.

      Whilst I would not consider a ships cabin to be the best place for someone with the difficulties this lady had, her husband said, that as he did not have to do any shopping, cooking, cleaning or laundry, he had more time to look after his wife without outside help.
      If she was ill then the ship had a Doctor and Hospital, she was constantly stimulated by meeting new passengers on each cruise, and was entertained by the ships entertainment teams with shows, quizes, talks, and the like, and could be taken ashore in her wheelchair at certain ports of call.

      Difficult to believe this would be a solutuion agreed and paid for by the State.
      If we had not spoken to the couple ourselves, as did others during the cruise who were dining on our table, I would not have believed it.

      How have we got to this position where care at home, could be more expensive than living on a cruise ship ?

      • Bazman
        Posted January 3, 2014 at 12:52 pm | Permalink

        The disabled person has to drive? Why? If the can they are not disabled and if the cannot they should not be driven? Do tell us your reasoning alan?
        Outsourcing of health care and paying minimum wage for the workforce whilst bleeding the taxpayer for everything and then off shoring profits by sovereign wealth funds. Sound about right? It is. Only this time the disabled are ‘offshored’ too to save costs. LOL!
        The point of these posts being to now blame the sick and disabled along with the poor, working poor and immigrants for the financial crisis which along with high taxes and to much banking regulation they caused. Yeah right. 2015 will see how far that one goes. Whitewash hopefully as these lies are enough to justify this.
        Ram it.

        • alan jutson
          Posted January 3, 2014 at 3:04 pm | Permalink

          Hi Baz

          Only report the facts, as I understand them.
          So no one is infallable including yourself.

          Plenty of people who are disabled drive themselves, so if a car needs adapting and they are registered disabled I have no problem with paying for an adaption (like hand controls) but why the cost of a brand new car ?

          Cars for carers !
          Most carers I would suggest who have a driving licence, have a car already, so again why would they need another brand new one ?
          Why not pay simply to adapt the existing one ?

          Are you seriously suggesting when carers have full access to the motability car, they still keep their own, and do not use the brand new one for personal use and so derive no benefit from it !.

          From my posts over the years you should know full well that I have absolutely no problem with helping genuine disabled (mentally or physically) people, and to suggest otherwise is a rather cheap shot.
          Indeed I have done voluntary work for the past 24 years at my own expense to help such people, and they are not family members if that was in your thoughts.

          You know this scheme is open to abuse, what we need to do is not just cancel the whole thing and disadvantage those who need help, but put rather more controls on it, because I do not wish to be taken for an expensive ride so to speak.

          • alan jutson
            Posted January 3, 2014 at 3:10 pm | Permalink

            John second post made because note informed me first had not gone through and also did not appear on screen as normal.
            Think I may have double clicked in error when submitting !

          • Bazman
            Posted January 3, 2014 at 6:43 pm | Permalink

            You cannot realistically adapt old cars and the car is for the benefit of the disabled person not the driver. Why should they be driven around in someone elses car and how and why should this be restricted? Often the carer does the shopping and many other things. You suggest Taxis only if they are unable to drive. Fifty quids not much for a Taxi journey. Cost me a tenner for a 2 mile drunken ride on boxing day at 3.30 am. They should stop at home?

          • zorro
            Posted January 3, 2014 at 10:33 pm | Permalink

            Alan,
            I wouldn’t waste your fingers on him….. He reminds me of someone I have to deal with in work/business…rather malevolent and rude and always wanting to ram it….very odd.

            zorro

          • Bazman
            Posted January 4, 2014 at 10:19 am | Permalink

            And you are very wrong so are now resorting to personal abuse. Shaking your head and telling me I do not understand will not help your argument and having the facts explained to you but still holding the same views is telling. Have I told you to ram it before? Ram it.

        • A different Simon
          Posted January 3, 2014 at 4:18 pm | Permalink

          Bazman ,

          Thanks for one of the few sensible comments on today’s blog .

          Seems that some topics seem to bring out the worst in people .

          No amount of squeezing people at the bottom or the middle will make Britain more competitive .

          I might be inclined to believe John was serious about wanting Britain to be more competitive if he started campaigning for much lower accommodation costs rather than for greater indebtedness on behalf of the lenders .

          • zorro
            Posted January 3, 2014 at 10:35 pm | Permalink

            I agree and always have with regards to housing. The government is making a big mistake with its housing boom policies and drive to further indebtedness…..

            zorro

      • JoeSoap
        Posted January 3, 2014 at 1:09 pm | Permalink

        Damn, you might have scuppered my the other half and I’s plan for retirement and a long and happy life! Now the secret is out everybody will be doing it! We really don’t need the state unloading the great unwashed into our corridor, thanks!
        Seriously, though, you have to ask why somebody in the DHSS or whatever it’s called isn’t looking at this and scratching their heads.

      • Posted January 3, 2014 at 1:20 pm | Permalink

        Usually cruise ships insist that you have full health insurance, which is why we are now finding it more difficult to travel. A quote of £950 for us, with extra because of my wife’s heart condition, was equal to about half the cost of the cruise for the two of us in the Caribbean.

        • alan jutson
          Posted January 3, 2014 at 6:41 pm | Permalink

          EP

          “Cruise ships insist on full insurance”

          Indeed they do as we had to prove before we were accepted for boarding.

          I can only assume these people were covered by either their own (perhaps limited) insurance, or it was being underwritten or topped up by the taxpayer.
          Certainly the Cruise line would not have allowed them on board and treated them for free if their services were ever used used.

    • ian wragg
      Posted January 3, 2014 at 10:56 am | Permalink

      I too marvel at the Motability scheme. My brother was in a care home for several years. His wife who knew her way around managed to get a Motability car ( Merc 200 series) on the pretext of visiting him. It was a 20 minute walk from her house to the home.
      My wife works in the voluntary sector and one of her assistants have sold their house and moved into a council bungalow because the chap has some obscure condition.
      After paying off their daughters debts they have applied for a Motability car and been granted one. They have a top of the range Astra Estate and think the scheme is great.
      Meanwhile I work at 68 and have to pay top dollar for everything.

    • A different Simon
      Posted January 3, 2014 at 8:59 pm | Permalink

      Arschloch ,

      Aspiring to own a BMW car is the sort of very , very low ambition which unfortunately characterises the UK loser mentality .

      In a global race , the winners are going to be the people who have the imagination to aspire to own a new Cadillac every year and Bentley’s for a bit longer .

      Winners are quite likely to have a BMW motorcycle in their collection but a BMW car would only be for their wives , girlfriends and daughters

      • A different Simon
        Posted January 4, 2014 at 12:08 am | Permalink

        We should also ask what parents expectations and aspirations are for their children .

        As for expectations most parents are coming to realise that their children aren’t going to be able to afford to live fulfilling lives in their own accommodation , procreate or even enjoy the dignity of financial security in old age .

        As for aspirations , the middle class (or remnants of it ) want their children to get a “good job” in a “big company” .

        The middle class in the UK doesn’t have an entrepreneurial hero like the working class’s white van man .

        In America and increasingly in China the middle classes aim to start their own businesses .

        Britain’s preference for employment over establishing founder-owner businesses is confirmation that we are not even at the races , let alone in the running .

  6. rick hamilton
    Posted January 3, 2014 at 9:38 am | Permalink

    It’s not exactly an original observation that we are in a global race. But I wonder if we have the right attitude to be winners any more.

    What’s new in my lifetime is the shackling of the UK to the bureaucratic dead weight of the EU. When I started in exports 40 years ago the British were a common-sense people who laughed at the incredible bureaucracy in some other countries. Our officials often took the view that something that was obviously ok didn’t need belt and braces paperwork. Now it seems you can’t do anything without endlessly proving who you are and where you live etc, looking over your shoulder for some imagined health and safety peril, or attending to the sensibilities of some vocal grievance group.

    I recommend the revival of two old sayings:
    - Rules are for the obedience of fools and the guidance of wise men.
    - Sticks and stones may break my bones but words will never hurt me.

  7. Brian Tomkinson
    Posted January 3, 2014 at 9:41 am | Permalink

    JR: “The UK also suffers from the political attacks of those who dislike any success.”
    A strange party political statement from you in which you mean your party “suffers”. You may consider the UK and your party as indivisible but millions don’t. Just because some of us are critical of the basis and sustainability of the economic recovery doesn’t mean we don’t want a successful recovery but quite the opposite.
    As for the EU’s deleterious effects Cameron isn’t listening and your referendum ploy seems destined for the scrapyard – the Telegraph website: ” The Conservative Party’s bill committing Britain to a referendum on European Union membership is “unlikely” to become law because of delays in the House of Lords, peers have warned.” I doubt that Cameron is concerned, as the global race, to which he refers, is from within the EU in which he is determined to keep the UK entrapped and its people subservient.

  8. Anonymous
    Posted January 3, 2014 at 9:48 am | Permalink

    30 million people could turn up on our shores this year and demand what we’ve got.

    My point is not to say that they will, but that there would be bog all that any of us could do about it if they did.

    Talk of ‘managing’ our economy takes place only to give the illusion that our political class is relevant and still worth paying.

    Our economy cannot be managed – the numbers are unkown – and is run entirely on the hope that those 30 millions of people don’t turn up in one go.

    We are well aware of what a difficult world it is out there but the political class – including the Tories – dismantled the one unique protection we had against it.

    Most definitely not ‘on our side’.

    PS There is nothing wrong with high house prices where it isn’t based on overcrowding, scary lending multiples and overly complex mortgage arrangements – otherwise it is not based on wealth but on debt. And where it is based on debt it is wrong to go on to claim that high house prices are a sign of wealth and success.

    • Anonymous
      Posted January 3, 2014 at 9:54 am | Permalink

      Add artificially low interest to that list of reasons I have given for high house prices.

      I am not against success. I simply cannot see how the path we have chosen is going to lead to anything other than hardship, crime and conflict and a polarisation of wealth.

      • ian wragg
        Posted January 3, 2014 at 10:59 am | Permalink

        I see the first wave of busses from Bulgaria and Romania are on the way. Will Mr. Vaz be at Victoria coach terminal to greet them> I doubt it.

    • bigneil
      Posted January 3, 2014 at 7:13 pm | Permalink

      in a way it would be nice to see ALL 30m turn up – - -and don’t forget – -Turkey wants to join as well— -is there any wonder the bedroom tax came in – -to force people to have their houses full – leaving others space for when they arrive on our shores – to be crammed in because the govt knew what was coming – - -wonder if a certain Mr Blair will be offering his spare rooms out to rent to any of them ??

      etc

  9. margaret brandreth-j
    Posted January 3, 2014 at 9:48 am | Permalink

    Yesterday ,I was driving along in the car listening to Beethoven’s piano concerto no 3 . It struck me that this typified the German psyche. The power , passion , construct and lyrical nature of this and his other works are supreme. Hitler’s similar misdirected cruel passion underlines the intensity of a longing to capture power as does Nietzche’s philosophy .This psyche is embedded deep into generations of the Germanic being. The UK is not going to be able to compete against this positive power force and would be totally sucked under should we integrate fully into the European union.
    Of course the playing fields are wide and varied , but we don’t have the bubble of protection anymore that the navy and the sea awarded us. Globalisation means cyber communication. The UK does not project the passion it needs to make our Country successful into cyber space. We do not seem to have the same love for our Country as say the Germans do. The emphasis seems to be on the churches who by reputation have not particucularly worried about boundaries.
    We must work for our own

  10. oldtimer
    Posted January 3, 2014 at 9:49 am | Permalink

    We live in a world of global competition would be a better definition. We are unable to compete very well so long as government spending and taxation remain so high, and the country is burdened with excessive regulation and extremely high energy prices. Unless and until these balls and chains are reduced in size there is not much hope for winning any global races that Mr Cameron talks about. The ball, and the chain, are in his court.

  11. alan jutson
    Posted January 3, 2014 at 10:25 am | Permalink

    Yes its a tough World out there.

    Those who have never had to fight for business in a competitive enviroment do not realise how competitive and tough it really is.

    Business can be lost for the sake of just a few pence.

    Yes know well the arguments about quality, service, reliability etc, etc but you still have to be competitive, and if your costs are higher than the opposition, then you are at a disadvantage.

  12. Alan Wheatley
    Posted January 3, 2014 at 10:27 am | Permalink

    I propose that one thing we should not do in an endeavour to do better in the global race is to respond sympathetically to the annual chorus of complaints about the increase in rail fares. Rail is already heavily subsidised. There is nothing inherently good about commuting, so there is no sense in using yet more tax payers money making it more attractive.

    The best response to the cost of commuting becoming too high is to reduce commuting. Probably the best way to do this will be to move some jobs out of the city centres and closer to the people. This is an adjustment that will take time, but will lead to reduced costs and improved lifestyle.

    • Roger Farmer
      Posted January 3, 2014 at 12:45 pm | Permalink

      I would submit that a high proportion of jobs in the City that entail daily commuting and sitting in front of a computer screen for hours on end could just as easily be done from home. It should not be that difficult to introduce systems that would allow management to manage. Spending up to four hours a day on the railways seems insane.

    • Posted January 3, 2014 at 1:14 pm | Permalink

      My elder daughter has done just that. She took advantage of voluntary redundancy, and has now found a local job, saving herself (following the fare rises) about £5000 pa which would come from her taxed income. She now has a local job at less pay, but not significantly less after taking the fares & tax into account. She also has about an extra 3 hours a day, no longer needs a gardener and is enjoying time in the garden rather than being crushed in a train.

    • Anonymous
      Posted January 3, 2014 at 10:39 pm | Permalink

      Alan – One of the complainants on the Jeremy Vine radio show yesterday stated that he’d joined the ’5000 club’. That is he pays £5000 pa for his annual rail card to London.

      The journey he takes is 75miles in each direction. The fare works out at £10 each way.

      He then went on to say that McNulty reported that Italian commuters travel a similar distance to Rome at a tenth of the price and without government subsidy. That’s 75 miles for a pound – without subsidy ???

      How did they get it so right and we so wrong ?

      PS, Why isn’t commuting tax deductible for ordinary people when it is for politicians ?

    • uanime5
      Posted January 4, 2014 at 12:36 am | Permalink

      There is nothing inherently good about commuting, so there is no sense in using yet more tax payers money making it more attractive.

      All that will do is result in a huge increase in rail fares. Would you be happy with a huge number of people leaving their jobs because they can no longer afford to travel to work.

      Probably the best way to do this will be to move some jobs out of the city centres and closer to the people.

      What about people who work in stores in the city centre? How will their jobs be moved somewhere else?

      • Alan Wheatley
        Posted January 4, 2014 at 10:30 am | Permalink

        On the basis of supply and demand, less commuters should mean lower fares. And in any event, there is only so much public money for government to throw around so it makes no sense squandering it on something that has no inherent benefit.

        And I did say “some” jobs. Your specific example does not make a valid point agains the principle.

        • uanime5
          Posted January 4, 2014 at 1:50 pm | Permalink

          On the basis of supply and demand, less commuters should mean lower fares.

          No less commuters will mean higher fares so that the same amount of money will be raised or more bailouts to cover the losses.

          And I did say “some” jobs. Your specific example does not make a valid point agains the principle.

          Your principle is only valid if the majority of jobs can be done without commuting. If they cannot then it’s incorrect.

  13. David Tomlinson
    Posted January 3, 2014 at 10:38 am | Permalink

    JR – you might like to comment on this article in Der Spiegel – German problems with EU Commission affecting their competitiveness (interestingly the UK not mentioned – we are now an irrelevant sideshow apparently – good!). Of course the EU Commission trying the usual socialistic levelling-down approach of saying to the Germans – you are too competitive – this must be stopped!

    http://www.spiegel.de/international/europe/relations-worsen-between-angela-merkel-and-european-commission-a-941243.html

    Reply Indeed, there is more tension between Germany and the bulk of the other member states, and between Germany and the EU Commission. It gives Mr Cameron the chance to build a stronger UK/German alliance over more independence for member states.

    • Denis Cooper
      Posted January 3, 2014 at 3:55 pm | Permalink

      It is folly to suppose that Merkel will ever be an ally in any efforts to undo what has been done with the EU. An ally in efforts to deceive the British voters, maybe, but only in that.

  14. acorn
    Posted January 3, 2014 at 10:49 am | Permalink

    Fine sentiment JR but what exactly are we going to sell to the rest of the world? We all can’t get jobs in banking; finance and insurance. Selling dodgy financial products that don’t work, so we can bet on them failing, minutes after we sold them to some mug punter.

    There is little or no innovation in mass market goods in the UK. We now file less patents than the world average. The vast majority of the earth shattering technological inventions world wide, originate in public sector government labs and public sector sponsored research in universities. Both have been heavily degraded in the UK, and that has nothing to do with the EU. Five other EU nations prove that. The UK car industry was being praised recently, but nobody mentioned that 50% of the components to build those cars are imported. In the seventies it was circa 17%.
    BTW. JR, assuming it passes moderation, this chart is going to need some spin, fortunately most voters won’t understand the concept of “lost output gap”, (area below the trend line). (HT: Mainly Macro) http://3.bp.blogspot.com/-b0fPhIZMI_A/UqimM1uyYZI/AAAAAAAAAc8/RLhyh71_mDc/s1600/Labour+Chart.jpg

    Reply The concept of the output gap depends on selecting the correct trend rate of growth and applying it from a neutral starting date. I wrote a piece in 2007-8 in opposition for the Economic Policy Review we published explaining that the then level of output was distorted and stretched upwards by excessive borrowing, and the underlying trend rate of growth of the economy was considerably lower than the post war trend had been. So it has proved.

    • acorn
      Posted January 4, 2014 at 9:18 am | Permalink

      “The main central banks worldwide have opted for low interest rates, the ready creation of credit, and tolerance of innovatory means of financing public and private sector activity through big increases in debt”. (2007 report)

      Which I seem to remember you described as “massively favourable trend“ and your main criticism being Britain’s growth since 1997 had not been strong enough given these benign conditions?

      The consensus among the number crunchers is there is, as you say, a decline from trend growth of 3.5% post war decade to 2.1% in the last two decades. Within a decimal place of that used on Prof Wren-Lewis’s chart.

  15. Kenneth R Moore
    Posted January 3, 2014 at 11:01 am | Permalink

    We are indeed in a global race – albeit one in which we have been ordered by David Cameron’s ruling elite to ensure most of our best runners race for our rivals whilst we are left to train with worn out and out of date equipment.
    David Cameron and other spineless and unpatriotic leaders have been busily exporting our knowledge and oil for decades to make a fast buck…and now he’s suddenly realised we are in a global race with our hands tied behind our backs with EU regulation. Laughable!.

    I have said it before and I will say it again – our ruling elite despise us (in particular the English) so don’t ever expect them to work in your interests.

  16. Neil Craig
    Posted January 3, 2014 at 11:16 am | Permalink

    If I were Cameron I wouldn’t have used the term either, but then he has managed to be wrong on almost every decision he has made.

    He was unwise to use it because, while he can make a modest claim that we are doing better than most of the EU, which is in recession, he is drawing attention to the rest of the world which is growing at an average 6% a year. By that comparison the current “end of the recession” here, still has our economy receding by about 4% annually, with no hope of improvement so long as the Luddite policies of our old parties are pursued.

  17. Bert Young
    Posted January 3, 2014 at 11:34 am | Permalink

    Success in the global race is an important objective . It implies putting in place a long term strategy and following up with effective monitoring – correcting where need demands . If we do not produce high added value goods and services , we will not survive . Education and training is the key demand together with well founded research programmes . The political system is not geared to these requirements ; it is far to inclined to the short-term and ego satisfaction . I do not see the seed change happening from a ” top- down ” approach ; the skills and experience in our present political leaders are not there for it to occur . The initiative must come from our business and service leaders who must apply pressure ( and , if necessary , threat ) to put things right . A 20 year plot is the sort of time frame required as a minimum starting point . The Parliamentary system needs a drastic overhaul and must work hand in glove with industry and commerce .

  18. John B
    Posted January 3, 2014 at 11:59 am | Permalink

    We are in a global market. In free markets we become more prosperous by learning and engaging in cooperation through competition.

    That means a serendipitous process of trade and exchange, directed by nobody which produces and outcome nobody foresaw or intended but is beneficial to all.

    If it is truly a free market, when an individual gets wealthier they make others wealthier too as a consequence not by design. It is not a race because there are no winners as that implies there must be losers.

    Free markets mean minimum regulation and free trade.

    When people start talking about races, and picking best educational pathways, picking winners to help them export, then clearly they have no concept of free market activity.

    They speak of command and control economy… like the USSR and its successor the EU.

    They arrogantly believe they can collect and process sufficient market data, quickly enough, constantly updated, to know what educational skills will be needed in ten or twenty years time, and what foreigners want to buy in the near future.

    The way forward is to keep politicians out of anything to do with the economy… or anything else really.

    • uanime5
      Posted January 4, 2014 at 12:53 am | Permalink

      If it is truly a free market, when an individual gets wealthier they make others wealthier too as a consequence not by design. It is not a race because there are no winners as that implies there must be losers.

      No in a free market you can’t get richer unless you make someone else poorer because there’s a finite amount of resources. Your claim would only be true it there was an infinite amount of money which would enable everyone to constantly get richer.

      Free markets mean minimum regulation and free trade.

      Which is why people oppose them because minimum regulation means that people have no sick pay, they can be forced to work in unsafe environments, and children can be forced to work for a pittance.

      They arrogantly believe they can collect and process sufficient market data, quickly enough, constantly updated, to know what educational skills will be needed in ten or twenty years time, and what foreigners want to buy in the near future.

      Actually that’s pretty easy to predict by examining current trends, such as the increase in electronic devices (more electrical engineers will be needed). You can also predict it by calculating how many people will retire in 10-20 years (so if 1,000 teachers will retire in 10 years and the demand will remain the same you’ll need to train 1,000 more teachers).

      • Edward2
        Posted January 4, 2014 at 11:04 am | Permalink

        The idea that if one person gets richer another gets poorer because there is only a finite amount of resources is a bizarre comment Uni.

        Plainly wealth can be created and is not finite.
        Otherwise the world would be the same as it was centuries ago.

        • uanime5
          Posted January 4, 2014 at 1:54 pm | Permalink

          Edward2 inflation isn’t creating wealth in real terms. As a result many people who had thousands of pounds in the past would be millionaires if you increased their wealthy by the rate of inflation.

          • Edward2
            Posted January 4, 2014 at 10:31 pm | Permalink

            We are not talking about inflation but about wealth creation and your ridiculous idea that it is finite.
            What year did we reach maximum wealth Uni?

      • Mark B
        Posted January 4, 2014 at 12:46 pm | Permalink

        A free market is about freedom of opportunity and to make the best use of such an opportunity. What you fail to understand is, that people in a free market run the risk of losing whatever little wealth they may have and by so doing, further impoverish themselves. Classic risk and reward.

        What a free market economy provides is the opportunity to make wealth and share part of that wealth through employment. Even in a controlled economy, you have leaders and followers. But if the leaders get it wrong they do not have to take the blame or responsibility for their mistakes, since it is not their wealth that is at stake. And since this is a collective responsibility, the collective suffers and not the individual.

  19. Iain Gill
    Posted January 3, 2014 at 12:22 pm | Permalink

    We need to protect our national intellectual property a lot more, and enforce our copyright and similar rights internationally. At the moment a lot of the best UK intellectual property is handed over to other nations with little thought.

    We need to protect the skilled techniques of our workforce, and not just allow developing nation nationals in to work alongside them and take the most hard won techniques straight back home.

    We need to actually enforce a few laws, starting with the data protection ones where they are massively abused by some obvious multinationals.

    Yes we need cheaper power.

    It should cost no more in tax to employ a Brit as it does a foreign national here on a work visa, at the moment all the tax perks go to those employing the foreign nationals.

    We need to learn a lot more who we can trust internationally, some massively corrupt countries have supporters at top tables here in the UK.

    And so on.

  20. Mike Wilson
    Posted January 3, 2014 at 12:27 pm | Permalink

    Sorry, off topic – article on our host on the Telegraph web site today.

  21. David Hope
    Posted January 3, 2014 at 1:00 pm | Permalink

    Agree with everything with the exception of the last paragraph, not sure of the relevance of this.

    It strikes me you often display a characteristic on this topic that Daniel Hannan writes about – that if your political opponents dislike something you must like it and vice versa.
    Free marketeers should be highly suspicious of rapidly rising prices in a sector or massive allocation of resources to one location (in our case London). To me such things are often a sign of intervention be it regulatory (e.g. causing supply restrictions), tax or central banking.

  22. Posted January 3, 2014 at 1:06 pm | Permalink

    How am I doing in the Global Race?
    Not to well, if I compare my situation with friends who chose to emigrate to Australia in their thirties. Two families that I know where the men had similar qualifications to myself and worked in a similar type of job are now, in retirement, better placed than I am, and in respect of the one thing that is of concern to us oldies, health care, they appear to be significantly better off.
    My daughter, comparing notes with her husband’s cousin in Australia who has a child of the same age as our grandson, concludes that the education in Perth appears to be far superior that in Marlow.
    So Australia seems to be ahead of us in the global race, but who else is ahead, and perhaps more to the point, who is just behind us trying to overtake?

  23. Richard1
    Posted January 3, 2014 at 1:43 pm | Permalink

    You have modestly not drawn attention to today’s FT report identifying you as a leading force behind the big Bang reforms in the City in the 1980s. Undoubtedly these were a key component in transforming the competitiveness of the UK during that decade. Without them London could have slumped to a financial backwater, as almost happened in the 20s and 30s and again after the War. It is extraordinary that the protectionism and parochialism which characterized the old City survived as long as it did.

    Time for a knighthood.

    • lifelogic
      Posted January 3, 2014 at 6:08 pm | Permalink

      Indeed.

    • Electro-Kevin
      Posted January 4, 2014 at 2:28 am | Permalink

      Humbled.

  24. A.Sedgwick
    Posted January 3, 2014 at 2:27 pm | Permalink

    I have just finished General Dannatt’s autobiography and apart from it being an excellent read a lasting impression is Government slow, wrong and non decision making and the wilful blindness of their ineptitude. This is indicative of Government in general and Cameron is a muddler through and through. Our democracy is creaking and it is very difficult to see evolution resolving the myriad of escalating problems which are largely ignored or at best given lip service. A sample of these are debt and its long term servicing, NHS, pension cost (both public and private), EU, local government financing, balance of payments deficit, population increase, FPTP unfairness, democracy for England, BBC and as you say paying our way in the world.

  25. Vanessa
    Posted January 3, 2014 at 2:51 pm | Permalink

    A race for what ? Usually there is a winner and I see none. What is the prize ? Cameron obviously has no understanding of the words he uses and this phrase is totally inappropriate. Need I say more ?

    Evidence of immaturity and arrogance and incompetence.

    • zorro
      Posted January 3, 2014 at 10:37 pm | Permalink

      He probably needs to chillax a little more…..

      zorro

  26. Antisthenes
    Posted January 3, 2014 at 3:14 pm | Permalink

    “There is no global social security system to top up our incomes to the levels we want.”

    Is that not what foreign aid and the EU (the EU milk the richer members to pass on to the poorer ones) is all about transferring wealth from richer countries to poorer countries. So there is the beginnings of a global welfare system. I am not against redistribution of wealth as long it is proportional and does not overburden the givers and curtail their incentive and ability to produce the wealth that is given. And it does not curtail the incentive of the receivers to produce more wealth of their own. The left of course have no idea of proportionality and are slowly destroying the wealth creators and turning the receivers into a society of dependants and entitlement believers. When RedEd and his mob, the EU and eco-loons are finished and they have destroyed the UK economy and the people of the UK put out the begging bowl who will fill it with largess. Will it be continental Europe no because they will also be skint. Will it be the USA no not if another Democrat becomes president after Obama they will have enough problems of their own. Will it be Asia and Africa no because they are more pragmatic and they will say thank you for the leg up but you have problems of your own making so tough. A rather extreme view perhaps but not that far from reality I think.

  27. Dennis
    Posted January 3, 2014 at 5:03 pm | Permalink

    More exhortations to compete in the global race? When will these never ending pleas to be ever more greedy stop?

  28. Mark
    Posted January 3, 2014 at 5:38 pm | Permalink

    Today we have the news that the Nationwide house price index increased by 1.4% on a seasonally adjusted basis in December – an annualised rate of over 18%. Looking at the annualised rate of increase over 2, 3 and 4 months it is consistent at just over 13%. A rise in real house prices might be good news in an area where prices had fallen below rebuilding cost, because it would signal renewed confidence that the area was no longer being abandoned. However, the UK has long had overvalued housing, and this is only good news to those planning to sell up and emigrate, or who are landlords invested in property (many of them now overseas investors who will not spend their gains in the UK).

    At the same time, the BoE has announced a £4.7bn contraction in lending to business in November, which hardly suggests that the economic boom is widely based. Its figures on mortgage lending show a rapid acceleration in number of loans and the average size of loan granted. This applies also to remortgages and particularly to “other” lending secured on dwellings, where the average loan is now almost £50,000, up from £37,500 a year ago, and around £30,000 two years ago. This strongly suggests consumer spending being financed by equity withdrawal.

    It would be nice to think that the economy was recovering because export industry had fuller order books and because we were substituting imports with domestically produced goods. The balance of payments data do not suggest any such improvement, with a record deficit of goods trade in Q3. However, remittance payments abroad remain high, due to a combination of the EU, aid and net worker remittances.

    • Denis Cooper
      Posted January 4, 2014 at 12:29 pm | Permalink

      13% pa nominal house price inflation, about 11% pa in real terms, is insane.

  29. Colin
    Posted January 3, 2014 at 6:20 pm | Permalink

    “The UK also suffers from the political attacks of those who dislike any success. Now the economy is recovering critics are out and about … and objecting to any house price rises.”

    John, this doesn’t make any sense to me. Of course rising house prices are objectionable – housing is the largest single item in most people’s budgets. If fuel prices go up, it’s a bad thing. If food prices go up, it’s a bad thing. If rail fares go up, it’s a bad thing. Why is it a good thing if the cost of putting a roof over your head goes up?

    • zorro
      Posted January 3, 2014 at 10:39 pm | Permalink

      I’m afraid that it’s John’s blind spot….. If it can get his party elected next time, he’ll support it……

      zorro

  30. uanime5
    Posted January 4, 2014 at 1:00 am | Permalink

    The idea behind welfare reform is to ensure people who cannot get jobs are looked after, whilst there is a better incentive for the many who are capable of work to get a job and contribute to producing the output the nation needs to earn its living standards.

    As there has been 700,000 3 year long benefit sanctions handed out, a massive rise in the number of food banks, the bedroom tax, and a huge number of successful appeals by sick and disabled people who have had their benefits cuts I’d have to say that the government isn’t looking after those who are unemployed.

    Workfare and the Work Programme have also failed to get the long term unemployed into employment and making these programmes last longer won’t help. If the government wants to help the unemployed they have to provide them with training that will either make them more employable or retrain them so they can work in area where there is a skill shortage (teachers, engineers, etc). As long as the government continues to send them to pointless courses or force them to perform menial tasks that provide them with no useful skills simply because it gets them off the unemployment register the number of long term unemployed will continue to rise.

    Given that the Universal Credit is going to make those who work worse off by nearly £1,000 per year I can’t say that the Government is encouraging people to work.

    http://www.independent.co.uk/news/uk/politics/george-osbornes-stealth-cuts-will-force-millions-to-miss-economic-recovery-9038023.html

    He has led the way in showing the opportunities in the large Asian markets, at a time when the UK’s traditional goods markets in Euroland have been under pressure from falling demand.

    The USA and other European countries, such as Germany, are also looking towards the larger Asian markets. However due to the low GDP per capita most of the population are not able to afford out products. For example in India most people are buying the cheaper Indian mobile phones, rather than the US or European ones. Though once their GDP per capita increases they may be more willing to purchase UK goods or purchase them in larger numbers.

    Though I guess the Commonwealth in theory gives the UK an advantage when trading with parts Africa and Asia.

    Now the economy is recovering critics are out and about condemning the rise of London, disliking the recovery of financial and business services, and objecting to any house price rises.

    Well when the recovery is mainly happening in London it’s no surprise that people living everywhere else aren’t happy that their situation isn’t getting better. Especially if their living costs keep increasing because politicians have declared that the country is recovering.

    People aren’t going to be happy about the financial sector recovering if it’s at the expense of all other sectors.

    People aren’t happy about rising house prices because it means that families will not be able to afford a decent home, the young are forced to take on more debt, housing benefit costs will increase, and trying to improve GDP figures by creating another housing bubble isn’t going to improve the economy.

    • Edward2
      Posted January 5, 2014 at 7:20 pm | Permalink

      Are you really sure your simple policy of taxing the rich more and then increasing State spending will cure all the national problems you keep moaning about Uni?

  31. PT
    Posted January 4, 2014 at 11:41 am | Permalink

    It may surprise you John, but not all of us own a BTL property or two, or not all of us are set to receive a nice property inheritance.

    Some of us can see that house prices racing ahead is socially destructive. I’m saddened that you continue to massively undermine your otherwise coherent blog.

  32. Posted January 4, 2014 at 11:45 pm | Permalink

    I would suggest that the ‘global race’ shouldn’t be all about GDP. But of course GDP is important to be able to provide the resources necessary to provide goods and services that everyone would like to use.
    Just as it is important to look at who is doing better in terms of providing a higher GDP, and learning from their success, so it pays to look at who is doing better at other things too.
    According to the WHO Britain spends 26th in the world in terms of capita but is rated at 18th place overall. So on that basis you could say the NHS isn’t doing too badly.

    http://en.wikipedia.org/wiki/World_Health_Organization_ranking_of_health_systems_in_2000

    Of course it could be better, but the difficulty is coming to a consensus on how it can be improved. One way would be to put ideology aside, look at who is doing better but spending about the same, or not too much more, and copy their methods

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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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