Tomorrow at conference I will be part of a panel discussing how public spending could make a bigger contribution to cutting the deficit. I will have very limited time to tackle such a big and important topic. Let me sketch a bit of the background in this post, in advance.
The first thing I have urged the government to do for the last two and half years is to avoid large external commitments at a time when we are fully stretched at home. For that reason I voted against the Ā£20 billion of extra money being made available to the IMF, primarily because I fear that money will go to the unworthy cause of trying to avoid changing the Euro scheme to let it work for those countries who can live with it. I voted against the Ā£3.2 billion special loan to Ireland and against the UK Ā£8bn contribution to the European Financial Stability Mechanism for the same reasons.
The second thing I have done is urged the government to transform RBS. RBS is too large for the UK state to back comfortably. It has been loss making and failing to deliver enough support for the UK economy. I have tried to get the government to speed its break up, sale of assets, reduction of taxpayer risk, and creation of new working banks out of its assets and liabilities. Getting the taxpayer out of majority ownership of a Ā£1.5 trillion bank would be the single most important step it could take to cut potential risks and losses for taxpayers, and to improve the UK state balance sheet rapidly.
The third thing I have done is to set out case after case where the Uk government could spend less without damaging services or entitlements. There is the issue of the large derivative losses at Network Rail; the Ā£800 million research programme of DFID; the Ā£500 m overseas aid to nuclear weapons powers; the Ā£1.3 bn of aid channeled through the EU that is not universally well spent; the large operating losses and inefficiencies of state owned Network Rail; the high level of subsidies to inefficient and expensive ways of generating energy; the persistence of high overheads at departments like DFID and the Energy department and many others;the high costs of legal aid owing to long winded and repetitious court processes for terrorist extradition, for example.
The fourth thing I have argued is that we spend far too much on UK membership of the EU. I have been pressing the governemnt to use its veto over the forthcoming 2014-2020 financial settlement. I have supported colleagues seeking a major cut in expensive and badly targetted EU regional assistance; pressed for a big reform of the CAP to cut its costs to taxpayers and food buyers alike; sought a general reduction in what the EU does in the UK and how much it spends.
The fifth thing I have highlighted is “soft touch UK”. With others I have asked the government to charge overseas users of the NHS for their treatment. I have proposed charges on foreign haulage firms using our roads. I have supported moves to curtail illegal immigration, and to tighten eligibility rules for benefits so they go to legally settled people.
PS I Am pleased to hear the Prime Minister is willing to veto an unacceptable EU budget settlement for 2014-2020, but disappointed that the government finds a “real terms freeze”acceptable when we need deep cuts to the EU outgoings.
October 7, 2012
Perhaps in discussing these topics and whilst advocating the laudable and sensible changes which are needed, you might care to comment also why it may be so hard to achieve these changes – the dead hand of the Civil Service seemingly has most government Ministers in thrall, and it is only by tackling this root cause that any real success may be found.
October 7, 2012
Civil servants do what governments tell them to do. It isn’t the FDA causing DFID’s budget to go up.
October 7, 2012
This point was sensibly raised in the House of Commons by Mr Carswell. Cameron, with typical Flashman quality, put Carswell down with a rude arrogant comment that he ought to find a sense of humour. My sense humour has run out with Flashman and all the taxes I pay for him to waste, literally waste. He could not run a proverbial drink up in a brewery.
Flashman and his politically correct green EU fairies will never get my vote again. On promises he made, how about the one regarding cleaning up politics? Kelly report sitting on the shelf and people like Laws back in Cabinet. The same applies to Clegg.
October 7, 2012
John
Your Post today would be music to so many ears, but your Ministers seem deaf !
Had your suggested actions taken place from day one of Government, then perhaps the coalition may have had a chance for a second term, by at least saying they produced what they promised “To get the deficit under control”
At the moment the deficit is nowhere near under control, indeed the opposite is true, it is out of control and growing.
Your Ministers appear clueless as to what to do next.
I hope they take note of your suggestions, and indeed of many others suggested on this site over the past few years, but I fear they will remain deaf and clueless.
October 7, 2012
Alan, I totally agree.
I think Cameron has become deluded like Brown. What on earth is he talking about keeping promises after so many U turns and broken guarantees. As for his EU comments, what contempt he holds us plebs in. His comments can only be for the stupid or ignorant. Sheer arrogance or shameless deceit. The Lib Dems do not even need to put a minister in the Foreign Office to keep an eye on Hague changing the Pro European stance the department has because they have silenced him through personal failure.
Does Cameron honestly think we will believe a word he says on his track record ie include the European arrest warrant when there was no compelling reason to do so, increase the EU budget as one of his first actions, bail out EU countries when there was no compelling reason to do so and against what he said, 3 line whip to vote against an in/out EU referendum last October and when he says he will not leave the EU. He then claims he does not want to discuss his negotiation strategy!! Loony tune stuff from the PPE kid. He and Hague have confirmed in the last two days he will continue with overseas aid and gay marriage, despite your recommendations, John, he is not listening. He appears to me to be a con man and not a very good one at that.
October 7, 2012
Cameron is conning everyone but a lot of intelligent people are alive to his behaviour and deceipt.
I agree with all your sensible suggestions for cuts Mr Redwood. We really need the Government to get a grip on immigration. It appears all talk and no action as we are still receiving over 650,000 people into this country every year. This is neither wanted or sustainable. When will we here there are repatriations on a similar size or scale as I can’t afford the taxes that your Government impose on me for these peoples health, housing, education and other service needs. The Country is full. We the English have a right to an indigenous home, just as any other nation on Earth or do we have to put a case to the still unreformed EU HCR or Human Rights Act?
Cameron simply hasn’t delivered on the important issues and won’t. He is still promoting foreign aid, gay marriage and the EU when everyone knows he is simply wrong! He is a dead man walking as is your party unless you remove him.
October 7, 2012
Timeaction
Interesting that Mr Cameron on the Marr show this morning agreed that something needs to be done about the EU free movement of labour.
Perhaps the penny has dropped at last, but I will not hold my breath
Apparently he recently has visited two companies and actually asked the question,
“how many foreign workers do you have working here” ?.
The answer he got from one was 60% from the second 50%
He seems to have now come to the conclusion that perhaps our own population could have filled some of these positions and that this in turn would reduce our unemployment figures.
Amazing !!!!!!!!!!!!!!!!!!
October 7, 2012
No the penny has not dropped, they are just making political noises for the conference, to be forgotten a week later.
October 7, 2012
And what prospect is there that immigration will be cut to ten of thousands in 2 years? Little or none. The number is is still soaring.
October 7, 2012
” He appears to me to be a con man and not a very good one at that.”
Snake Oil Salesman more like…
October 7, 2012
All very laudable but why on earth are Cameron and Coalition on the opposite side of nearly ever one of these very sensible positions you put? Are they mad, what are the real forces making them act so irrationally?
October 7, 2012
What they are doing is driving their former supporters literally mad. I say this because I find myself (who used to sign himself Truebluechap) hating the things the government has said and done and the way they have said and done it (the confounded impertinence of Cameron’s shouting out that there is he says to be homosexual marriage “because we are Conservatives” for a start) so much that I find myself thinking irrationally and knowing that I am doing so but being unable to prevent myself–like saying Good whenever they do a pratfall and, horror of horrors, thinking maybe Miliband wouldn’t be so bad in comparison. I of course resigned some time back. And of course I am miles from being alone. Trouble getting activists to (the) Conference? Who’d a thought it??
One little idea I put forward on cutting expenditure is a very simple one that worked very well in my absolutely certain experience, albeit on a much smaller scale, is for a hot moment to stop trying to pick specific cuts but instead to announce as a fait accompli a small (has to be “small” else won’t work) percentage cut in all budgets across the board, effective immediately with no exceptions at all under any circumstances. I have in mind perhaps 1%. This would work and there is even a hope that the Liberals might regard it as “fair”. It would be a strike against the tendency everybody knows is there to use up one’s budget even if don’t need it. Absolutely essential that there be no exceptions so they don’t get themselves tied in knots justifying this that and the other. If too lily-livered for 1% then 0.5% better than nothing.
October 7, 2012
All the departments are so bloated they could all save 10% without even trying.
About half of what they do is totally pointless or counter productive after all. Get rid of the whole nonsense green energy and carbon tax agenda for a start.
There is no statistically significant warming relative to perfectly normal variations any way the solution they push do not even work if you do accept their carbon dioxide, devil gas religion.
October 7, 2012
Good afternoon Lifelogic, Agree your 10 % but unfortunately with these merchants no hope of that. Don’t write off my little proposal–it would work with absolute certainty. The way it would be done (bit underhand in a way but we are desperate, right?) is to “agree” all the budgets, beating them down in usual budget negotiations, and only then, as a complete surprise, declaring that a decision has been made that there is excessive padding in all budgets so literally every budget will be reduced by x%. This is what my (American) bank employer once did across the whole of Head Office and all its branches (home and abroad) and of course it worked, because room for leeway always gets built in to budgets. In the case I am talking about it was 3%. The only major grumble was in the various Accounts departments who had to submit new Budget sheets with everything changed and this was before modern spreadsheets at least it was in our shop.
October 7, 2012
Any saving of the appalling waste would be most welcome.
October 8, 2012
The worst greenhouse effect substance, is water vapour. Shush though that’s a secret as nothing causes this except large bodies of water in the sun and that can’t be taxed.
October 8, 2012
Indeed. The real disaster is the absurd and huge government waste to “prevent” something that is just not happening and certainly not to the exaggerated degree the scare religion endlessly claims.
October 7, 2012
They should also abandon the 100 new HMRC staff to harass millionaires. They will almost certainly raise less money than their wages and overheads and will inconvenience and annoy many honest, productive, job creating people. Distracting them for their work and reducing their future taxable profits and any incentives to work.
Fortunately I have left already.
October 7, 2012
Lifelogic – You are indeed lucky if you have already left the clutches of the sclerotic HMRC. I see elsewhere that the HMRC is on the point of moving their databases and files up into the blogosphere known as ‘the cloud’. Be very afraid, people, it can only get worse when that happens.
John – an admirable set of starting points to set us on the road to recorvery. Sadly, your leaders appear to have all grown cloth ears and remain content to keep on spending our money and printing and borrowing more and more without regard to the very obvious consequences of doing so…..
October 7, 2012
Into the cloud. Ye Gods, what (fool ed) cooked that one up? Wait a moment… Doesn’t this administration have a slavish admiration for Google and all its works?
October 7, 2012
Sebastion
Google
Ah yes
Is that the same Company that has reduded its UK Tax Liabilities to a minimum
Now, how much as a percentage did they pay last year on their profits.?
I wonder if anyone has yet made a connection, increased profits, increased investment, company growth, more employment.
October 7, 2012
Don’t worry, that’s bound to end badly. They will lose the data….oh no, they already did a couple of years ago….
zorro
October 7, 2012
Well some countries do support tax transparency and publication of all tax returns? Particularly key movers and shakers.
October 9, 2012
That would be an outrage, I would never live in such a country.
October 7, 2012
Yes this is indeed ridiculous. Leave the hard working to work, the creative to create and the already rich to employ people.
October 7, 2012
Indeed they will certainly do it far better than government ever will.
October 7, 2012
Well you haven’t quite left already have you as you often write about the state of London and the problems of business in Britain don’t you. If you have left then many of the extreme proposals you put forward will not have to be suffered by you. Same old same old.
These millionaire you like to defend might be just the idle rich kicking back under Britains lax tax laws such as the non Dom rule and many others allowing them to live in often a virtual tax haven. The undeserving rich. Have you heard of them? They re like the undeserving poor…
You assume that there is very little talent in the private sector and they are all wasters waiting to collect their pensions and picking up their easy pay cheques as if this does not exist in the private sector. The problem and this may be part of your plan is that the talented and dedicated public servants who just do the daily grind helping individuals and the state might just tell us to ram it when made to sign for worse working condition and lower contracts and as you say go and do something else more or less useful like fishing. For sure these individuals are not going to listen to some witless manager telling them about customer satisfaction and targets. They heard that in the public sector, but at least had some leeway and a sense of helping the state not the idle rich needing a new tax haven account and wanting to pay for it from tax breaks and scams. Ram it.
October 7, 2012
Alas you are right for once. I still have some UK interests and still even have to pay some UK taxes, but I try my best not to (legally) out of a sense of moral duty. But not for much longer. I even see I have to do my UK tax return a month early this year, just to spoil my Christmas I assume.
I go to London and the South East about once a month just for a few days.
October 7, 2012
LL
Just out of interest as I have seen you slag off the NHS in the past on which country’s health service are you reliant on at the moment?
October 8, 2012
Not the NHS as I do not live in the UK having left a few years ago. I rarely use any at all thankfully I but have used it in France.
The NHS has its good points it tends not to over treat as the US system does and has some top class hospitals. But it could be far, far better with some payment at the point of use and some far better organisation and administration which is abysmal.
The-NHS-kills-130-000-elderly-patients-year reported in the Mail.
http://www.dailymail.co.uk/news/article-2161869/Top-doctors-chilling-claim-The-NHS-kills-130-000-elderly-patients-year.html
Start by getting rid of quack and vanity treatment and get some water and food to patients who need it – for a start.
October 11, 2012
Having no personal experience of the NHS somehow gives you a personal view as to how bad it is. How is this so?
October 7, 2012
Given that since taking power the Coalition have fired 1,500 tax inspectors I doubt that hiring 100 will cause any problems to the millionaires who do so hate paying taxes.
October 7, 2012
The main reason we hate it is because we see the appalling and endless waste of government and know, for sure, that the money would be far more effectively spent/invested by ourselves directly. Rather than pissed away by Osborne, Clegg, Cable and Cameron on green tosh, the EU, the PIGIS, the west cost main line farce, HS2, the Olympics, pointless wars …………….
October 8, 2012
Good the more fired the better, on balance, for all.
October 9, 2012
More mindless fatalism and fantasy.
October 7, 2012
The same rationality that keeps the EU striving for more Europe even though thousands of people are suffering and all the facts demonstrate the EU is causing the suffering. The political elite are fanatics and want to rid individual nations of their identity, sovereignty to become the EU superstate. Mass immigration, financial calamity that allows a single banking union to unfold, dispense and/or dilute any religious affiliation of any nation state that binds culture and society together. They are dismantling the structures and cultures that holds nations together as individual states. This includes coups of governments if necessary ie Greece, Italy and Ireland. Spain next if they can pull it off.
October 8, 2012
Since when was there a coup in Ireland? Also given that all the countries you’ve mentioned have held elections and elected Governments that support the EU it seems that the people of these countries actually support the EU.
October 7, 2012
This morning on Andrew Marr (in another pathetically, gentle and wet BBC interview) Cameron said the deficit is the annual government overdraft. Could someone explain to him it that it is just the annual increase in the overdraft. He is as bad as Miliband with his deliberate confusion of Millionaires with Earning a Million PA. Also thinking the governments write cheques to tax payers when it is clearly the other way round.
October 7, 2012
It’s not even the annual increase in the government’s “overdraft”, as under Article 123 TFEU the Bank of England is legally constrained in its ability to extend any overdraft to the government on its accounts, despite the UK’s treaty opt-out from ever having to join the euro …
My CAPITALS:
“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.”
What a hilarious joke this would all be, if it wasn’t all so deadly serious.
October 7, 2012
The treaties, protecting the BOE from an overspending Cameron?
I knew there was something good in these treaties š
October 8, 2012
No it just means the creation of money is done in a circular fashion and with banking middleman costs? Nice work for the banks. Bankers and politicans looking after each other..nice one.
In any event it favours the favoured special interest at the time. The rest get the resulting change in purchasing power.
Whats this Lagarde list ?
October 7, 2012
Oh yeah….like QE and bailouts are verboten in Europe…..rule of law eh?
zorro
October 7, 2012
All perfectly sensible and valid points as usual Mr Redwood.
In respect to NHS treatment for foreign tourists, they’ll probably say that invoices are being sent to the overseas health tourists, but the problem is that they just don’t pay them (shock, horror).
(I wonder how private firms manage to do business with overseas customers?)
According to the Panorama program last week, the system is corrupt, and they have video evidence to prove it, which was so convincing that even Anna Soubry the Under-Secretary of State for Health said something along the lines that “this needs to be reviewed”. Tough talk indeed!
I’m afraid that all the conference talk of cutting the deficit and vetoes of the EU budget is about trying to sound tough to win back disgruntled Tory supporters, which he wouldn’t do by talking about gay marriage (which is probably why it was never mentioned in the Tory manifesto).
The problem is that his actions contradict his words and he canāt fool all of the people all of the time.
October 7, 2012
The government writes cheques to tax payers when the company is the only one supplying the government or the majority of profit in a company comes from the government as this is in an increasingly number of cases especially the service industry and benefit checks. Sorry! we missed your response to this in the past and I’m sure you would want not to be seen as a propagandist for the Tory right?
October 7, 2012
Miliband was taking about a Ā£40,000 cheque being given to Millionaires (he actually meant people earning Ā£1M PA but is a bit simple). The people actually pay the government about Ā£440,000 PA so it them paying HMRC actually not the reverse. This is about 44 times what the government actually spends, per person, on the second rate “public services” delivered – as they like to call them.
October 7, 2012
Vote winning proposals , so they have no chance of being implemented by your current leaders.
October 7, 2012
It’s alright cutting these labour northern council workers and yes, even in education, social services and adult care, if it means we can keep what we own. But I don’t want to pay for their benefits once they thrown on to their ‘dole’ queues. How much provincial unemployment can we go to without then cutting their benefits to feel the ‘feel good’ effectof cheap easily sackable minimum wage fodder to business? We have to be realistic as much as these soviet jobs did give people money to spend and ethically I have no qualms about creating unemployed hinterlands in the norther provinces, but can the working south east afford their benefits?
October 7, 2012
I wonder if sacking these workers is a quid pro quo for almost simultaneously throwing 8000 trained service men and women onto the scrapheap as is planned for early 2013?
Benefits? Easily affordable, the government can simply print and borrow more money to keep the drones quiet with little or no thought as to the future.
October 7, 2012
We can’t keep printing money Martyn, the economy is like a household shopping account. Draw the purse strings in. We can create unemployment upto 4 million without hurting traditional Conservative voting areas. Rebalancing is necessary. I don’t want to pay for Northerers benefits if we reach 5 million say. Unless we also cut drastically unemployment benefit. This will create the necessary business conditions for small businesses to thrive.
October 7, 2012
And most of these 8 thousand jobs are office based, superfluous back office staff anyway.
October 7, 2012
Brenda – of course we cannot keepp on printing money, ’tis madness to do so, but that doesn’t seem to apply to the current way the country is being run. A sort on gigantic Ponzi affair both here and across Europe.
I have long thought (and here I may get shot down in flames) that if we were able to hand the economy over to the national WI to run, things would very soon get back into better balance.
As for the 8000 backroom Service boys and girls, I am not at all sure they will make up the whole number, but we shall see in due course no doubt.
October 7, 2012
I support all your plans. Opposition to the weakness and the direction the Coalition is going is growing, with more open criticism evident. It will be interesting to see how much media coverage these views get and how they are treated by the leadership. They should be treated seriously, without action like this there is danger ahead. I was pleased to read of the warnings of power black-outs to come. One or two big power cuts may bring people to their senses, they may see how money is being wasted by the madmen in charge.
October 7, 2012
One or two blackout in early winter 2015 will kill stone dead any chance of the Conservatives being elected in the following election. Blackouts and presumambly 3 day weeks will have a much more serious consequences than the ones in the 1970s. Fast broadband? – no broadband at all – the country will come to a complete stand still without electricity dependent computers. Successive governments have neglected to look after the security of power supplies and now it is too late. This is the most serious problem the Government has to deal with – deficit or no deficit and a few windmills willnot solve it..
October 7, 2012
Liz.
I agree this may be the case, but they would be only any good if they followed Mr Redwood’s outlook. To be clear, it is Socialism and Labour that has once again left us with infrastuctures weaknesses after their period in power. I’m have two points in mind, one of course being the need to stop wasting money generally, but secondly that the green agenda must be ended, and if this is how it might be damaged, then so be it. Any government will be forced to act and build conventional power plants or nuclear, and abandon the lunacy of windmills etc.. If this government continues with them after this they should be certified. Start planning now at home for the effects of any cuts; but maybe we will get cheap shale gas too!
October 7, 2012
The solution exists – extend the artificial hours limit on large coal plants.
They have done it with some of the nuclear fleet.
October 8, 2012
You do realise that the life of power plants can’t be extended indefinitely. Sooner or later they’re going to break down.
October 7, 2012
These are all good and necessary proposals, given the UK`s financial predicament. I can only conclude that,despite their talk, the Coalition government is not taking the deficit and the National Debt as seriously as it should.
October 7, 2012
So lets see. A few million here, a few million there.
Meanwhile the state debt of 7,000,000 million is rocketing.
Perhaps MPs should take up the violins and start fiddling whilst the rest of us burn.
October 7, 2012
Good sensible ideas. They won’t listen to you of course, the items you have picked out are far too logical for Cameron and his cronies.
You could add to that, the millions of government quangoes that lobby the government to make our lives a misery.
Or, the various EU Schemes that are part of Camerons beloved “single market” like HS2.
And why are we being sued by others for alleged crimes that our forefathers are accused of?
If such cases are allowed to go ahead, surely some of our veterans can sue the Germans or Japanese for crimes against their human rights? A statute of limitation must be set on these things.
Perhaps you should be Prime Minister?
October 7, 2012
Yes I think you do need to analyze and tackle the reasons why all these sentiments are freely expressed by you and your colleagues and yet little is achieved. You need to set out how we get from here to there, or at least what is stopping us, rather than repeating as nauseam where “there” is.
Cameron (even) says that the number 1 priority of the government is to tackle the deficit, and yet progress is minimal. Maybe he’s looking for the path in the dark without a torch too.
October 7, 2012
Jim,
I agree but think it is more serious than that.
It seems that we are now embarked on a tax and spend policy just like Labour and the Lib Dems.
Perhaps they see Japan with a debt of 200% of GDP and still functioning and feel well we can do the same and remain ‘popular ‘ with the electorate.
No one seems prepared to say ‘unless we get rid of the deficit and stop running up the National Debt we will be unable to operate with the freedom of action and living standard befitting an independent country.’
It worries me that this may well be the outcome as a future govt appeals to be saved from unaffordable debts by the IMF and the EU’.
The dangers are never spelled out so most people press on ,grateful for what govt gives them.
Let’s have some realism,state the facts and the Country will give all the backing necessary.
October 7, 2012
These are all ideas which we have discussed over time….but in the spirit of practical politics which of these do you think you can muster a ‘coalition of the willing’ to support in Parliament and possibly have a snowball effect as they are seen to be effective? Perhaps I have been taking too many happy pills, but the sense of wanting to at least see something positive must be strong today!
zorro
October 7, 2012
I admire your perseverance, John but I feel your are speaking to deaf ears and blinded vision in our Government.
Why Cameron and co plod on with their wasteful agenda – the one clearly outlined by your blog, is beyond comprehension. The man has lost his Tory marbles and most surely will lose Number 10 for ignoring exactly what the electorate want and not want he thinks is ‘the right thing to do’. He has forgotten that it is only the electorate that maketh the Prime Minister. He can be leader without public support but he can never be PM without it.
Why is it that Number 10 turns an otherwise popular, practical leader into a totalitarian one? He is not listening to us and in consequence, is despised by many of the true Tory faithful and most the previously “undecideds”, too. Following his current agenda is as writing his own political obituary. Please tell him he needs to wake up to our concerns and act like he cares for Britain and the British peoples.
October 7, 2012
Popular eh? If that was the case he would have obtained a majority at the last election. Practical? A PPE degree, brief stints as a PR flak and as Lamont’s SpAd (presumably he was feeding Norm those great one liners about “greenshoots” and “unemployment is a price worth paying”) and thats his CV. I really cannot imagine having a Labour government as being anymore worse than this.
October 7, 2012
Is there an overlap between DFID and the FCO? We support the UN, so presumably also its various aid programmes. We provide aid through the EU. Should not the DFID be merged with the FCO? The FCO already has a presence abroad. The concept of a government dept charged with spending its budget on more or less anything within very broad parameters does not sound conducive to good husbandry.
October 7, 2012
Best of luck with this, Mr Redwood, but I doubt that you will carry the day. All will agree that cuts must be made, but only as long as the cuts are not made in the policy areas that they support.
My passion is Defence and Security and I have hated the cuts to the armed and police forces but have understood the financial need for them. We must stop spending more than we are earning. Why can’t the people who support the EU, overseas aid, and other social expenditure also understand the need to retrench? But then there are none so blind as those who do not want to see.
Please remember that when you are talking at the Conservative conference you are talking for many, many other people.
October 7, 2012
As Cameron is not taking too much notice of your sensible if rather limited plans and views, do you think that there is going to be any change? Frustration is setting in a big way for most of us I think and when red herring questions are floated to soak up the gullible and easily corrupted press just before conference ones suspects the worst, eg abortion.
I suspect we will not hear good news from the PM and his lacklustre team during the next few days. Not hurting us is not good news it just delays the obvious facts that there is no good news.
I want a big change with big results that will make a difference in my lifetime not my kids.
Such as:
New Thames airport, concurrent with a temporary third Heathrow runway.
No cash to the EU project.
Immediate withdrawal from Afghanistan
No Foreign Aid whatsoever for 5 years at least.
New Parliamentary organisation
Multiple referendums for National big issues
Immediate destruction and repeal of EU laws until subject to referendums eg Swiss model.
A bit too strong for you John, we need a war time government right now, not hug a hoodie week.
October 7, 2012
BMW’s “Efficient Dynamics” is based on the premise that any change which improves efficiency is worthwhile, however small it may be. The results can be seen in their cars which in comparison with others are much more fuel efficient, not least because often a series of small changes are synergistic. (I don’t have one; too expensive).
What has been missing from deficit reduction is the same degree of focus;
Any and every measure which can reduce the deficit should be considered and employed if the downside is not too great. There should be no ring fencing and no charitable giving with other people’s money.
Any action which will increase the deficit should be avoided.
The coalition is not taking deficit reduction seriously; unless they do we will end up with others making the choices for us.
In order for deficit reduction to be taken seriously by those who make the spending decisions and forgiven by those who will suffer the consequences, the obvious items such as foreign aid and others listed by Mr Redwood have to be eliminated.
One final measure; Whenever a politician is interviewed on the BBC, that politician should interview the interviewer about his tax arrangements. Being preached to by a socialist media which studiously avoids paying tax is one hypocrisy too far.
October 7, 2012
Re-arrange the following into a well-known phrase or saying :
” Head A Your Against Are Brick You Banging Wall”
Time to stop bothering about the big things and just concentrate of key local issues for your key local constituents. Anyhting else is just a waste of your time and energy.
In three years Cameron and Osborne will be history, the mess – Debt & Deficit – will be bigger still and about to get bigger. The economy will be in freefall and nobody, except Boris will be planning to doing anything about it, or able to do anything about it, until 2020.
October 7, 2012
What is Barmy Boris going to do about it that is anything different to what is happening now? As far as I am aware he is in favour of the status quo with the banks i.e. continual money printing to prop them up, no prosecutions for any future or past misdemeanors,and no serious regulation to stop them again destroying the health of the economy. The person you should be looking for is the one promises a Terry Beckett like “bare knuckle fight” to defend of the non financial services related parts of British business.
October 7, 2012
Trevor C
Ah
But you see if you bang enough heads against a brick wall all at the same time, it will eventually fall down, because whilst a brick wall has high compressive strength, it also has low lateral strength, that is why high winds can knock them over.
The problem is, no one is counting how many deaths (amount of debt) will be caused by so many heads (borrowing policies) failing first.
Thus the true cost of knocking over the wall (if ever it was calculated) is out of all proportion to the value of a demolished wall.
That is why learning from history is so important.
October 7, 2012
Just read this again, all rather confusing.
But:
Guess we will still be banging heads against walls in 10 years time as our debts grow from bad to worse.
Politicians never seem to learn lessons properly do they !
October 7, 2012
Alas true, and by 2020 the EU will be fully in command.
October 7, 2012
How are additional haulage charges going to help Britain? This would make us uncompetitive. Surly the answer must be to level the taxation of British haulage firms to stop them from leaving the country and taking their business elsewhere in Europe? It’s a bit rich to accuse the EU of high taxation and then penalise them for being cheaper. France is only a ferry ride away and many must be on the edge of leaving to enjoy cheaper employment costs and taxation?
October 7, 2012
Given that all haulage firms coming to the UK are bringing goods to the UK any increase in charges will be passed onto the UK consumers.
October 7, 2012
Bazman,
I am so pleased to see you are finally realising, that high taxes and other higher added costs drive away jobs and prosperity to other countries with more competitive rates.
Well done!
October 8, 2012
Firstly the jobs haulage jobs never left the UK, they were just performed by foreigners who would charge a lower fee.
Secondly the UK companies benefited from cheaper haulage, so they became more prosperous.
October 9, 2012
Work for less in effect, with the rest of the population supposed to compete with them. This is the competition the fantasists talk about, but not for themselves. The unskilled are supposed to compete at an even lower level and they wonder why many don’t work?
October 8, 2012
So you will be able to tell us why the haulage companies are still here then. Are they doing us a favour?
October 7, 2012
JR, on the subject of public spending I hope you will touch upon the moral hazard which inevitably arises when a national government can collude with the national central bank to rig the market in the government’s bonds using potentially unlimited sums of newly created money, and without the national government finance minister even bothering to ask the nation’s elected representatives to approve his decision on the next tranche before he sends the letter of authorisation, and without the exact legal basis for his action being clarified.
Like this last letter that Osborne sent to King on July 5th:
http://www.hm-treasury.gov.uk/d/chx_letter_050712.pdf
“I am therefore writing to authorise … ”
As the creation of large sums of new money is akin to taxation, shouldn’t he need prior approval through a Commons vote before sending any such letter?
Reply Such action can of course be the subject of a Commons vote. The fact is the Opposition and the government b oth support this measure.
October 7, 2012
So they would probably win the vote, but at least there would be a debate and a vote and the rights of MPs would be upheld rather than ignored.
October 7, 2012
If there is a possibility of Scotland voting for independence then the R
If there is a chance of Scotland voting for independence then who has ownership of the assets and liabilities of RBS will be very important. It might be best to have this settled before the referbndum. Doviding it up now into parts might even bring a certain dash of reality into the debate now.
October 7, 2012
A politician once said ‘It’s one thing to give a dog a bone…quite another to take it away’.
Mr Redwood your response seems to validate this remark as it shy’s away or tip-toe around the main issue – the entitlement culture. Too many entitlements to houses, cash, services etc. and not enough people in productive jobs to pay for it all.
It’s too tempting for politicians to display a misplaced sense of virtue (for understandable electoral reasons) ahead of the national interest. I know that the welfare bill needs to be cut back, most of the people reading this blog know it needs to be cut. So why not mention it in a serious discussion about ‘cutting the deficit’ ?.
Has decades of giving the people more and more ‘free money’ made them kinder to each other , happier, less likely to commit crime, more enterprising, better parents ?. So where is the virtue in sustaining a system that doesn’t work and harms people?.
As I have said before, tinkering with the system will not work, a few billion here and there. A step change is needed in how government works.
By all means, go for the un-popular targets first, the faceless and unpopular institutions . But this alone wont solve our problems – the Uk entitlement culture needs to be tackled.
The welfare system was never designed to furnish the workshy with flat screen Tv’s and foreign holidays but that’s what it now does. Will there be people shoeless and starving on the streets of we return to say 2004 welfare spending levels ?. Family credit , the crooked motability scheme and the disability living allowance should be scrapped and MORE money channelled to the genuinelly sick and needy only .
But overall very sensible measures …but are these enough to add up to the 50 – 100
billion needed in annual savings ?. I note your support for curtailing illegal immigration…but what about the 200,000+ that arrive here every year completely legally ?.
October 7, 2012
It’s actually nearly 650,000 legal long term immigrants but some people leave too so net migration is close to 250,000 according to official statistics.
zorro
October 8, 2012
As long as there are 2.59 million people unemployed (1 million of them aged between 18-24) and only 450,000 jobs it’s no surprise that so many people remain on benefits. Until there are enough jobs for everyone reducing benefits won’t result in more people getting jobs that don’t exist.
October 7, 2012
Cameron seems to be suffering a lot of opprobium at the moment, at least he can be removed at the next election, because we still live in a democracy. The point contributors need to realize is that when Cameron goes he will be replaced by Milliband and do you honestly think he will be any different, I doubt it. The 3 main parties are all basically singing from the same hymn sheet, I suppose politicians would call it the centre ground. This is very important to take in because it basically means when you next vote, there will be no change at all in the major policies such as the economy, health, education and the EU also the green movement. I honestly think that this is deliberate and there must be an alternative way forward, and that must be UKIP. Although in its early years UKIP is radically different from all 3 main political parties and is the only party that in it’s manifesto states that it wishes the UK to completly withdraw from the European Union. You cannot negotiate with the totalitarian EUSSR, the only thing that they understand is non-negotiable deliberate action by an individual nation state. Always rememeber:-
1) Conservative party pro eu with a 100 anti eu members
2) Liberal democrats euro slaves
3) Labour euro slaves
4) Completely anti EU
bear the above in mind next time you go to the ballot box as a country we are slowly losing our democracy and freedoms which have been with us for over a 1000 years.
October 7, 2012
Not even very slowly!
October 7, 2012
A “real terms freeze” is what a 2.5% year on year increase? How much is our economy growing by?
Many countries realistically needs to make 20% cuts in many areas. A 20% cut to the budget should be the starting point for negotiations.
October 7, 2012
A very good list of priorities – I hope your contribution to the discussion will be heartily received and acted on ; I suspect that what Cameron is prepared to cough up to the EU will be way beyond what is reasonable and realistic , like all of your responses , I have little to no faith in our leadership . Best of luck !
October 7, 2012
If we could get a quarter of what you list ā Iād be happy.
The suggested break up of RBS ā now a tarnished name. I think would be great ā your idea ā not being sycophantic here ā of making new high street bank out of the existing model ā going to the market for funds sounds just whatās needed.
Lending to small and medium sized business is a problem and the banks donāt want to know ā itās too expensive and time consuming for them. Better to make gig loans to FTSE companies.
There needs to be competition in lending for small medium business.
Mr Cableās solution is too little, needs tax payers money and too far off.
October 7, 2012
Agree with all your points ,keep up the good work !
October 7, 2012
John, we met when you came to talk in Robert Walter’s constituency and I was then, but not now, a branch chairman.
Your excellent ideas will not be listened to by the present ConDem administration. Why not use your considerable intelligence and parliamentary experience in a party where your talents would be appreciated? Sensible men like Roger Helmer have seen the light and joined UKIP. If you were to do the same surely many like minded people would follow you and you would have a chance of taking all the necessary measures you propose to save our country.
At the moment the ConDem policy would seem to be set by the Policy Exchange, set up by Michael Gove and Francis Maude; they lost Conservative votes at the last election and have so far alienated 60% of Conservative supporters at the most “conservative” estimate.
October 7, 2012
Francis ‘Jerry can’ Maude hasn’t got his finger on the pulse of popular opinion – he is an electoral liability to the Conservatives.
October 7, 2012
Mr Redwood
Your analysis of the economic situation is good, as always- and there are certainly substantial savings that can be made to go towards making good the budget deficit and to cut taxes. But Britain is in a much more parlous state now than it was even just a few years ago when Gordon Brown started throwing Ā£Ā£Ā£ 100 billions at banks to bail them out and save the economy.
The Budget Deficit is still over Ā£100 billion and our national Debt continues to escalate at terrifying rates. If you include all the PFI/PPP debts and the cost of unfunded pensions the National Debt is somewhere north of Ā£ 3 TRILLION. There is also the urgent need to get 20 or more new power stations- coal, gas, nuclear- in short order to prevent power blackouts by 2015 (if these happens millions of lives will be made a misery and Britain will be back in recession).
Britain also needs big tax cuts- cuts to the top rate and to business taxes, and we also need to leave the European Union so we can be rid of 120,000 plus economically-stifling directives- to help the economy grow in the face of the much-needed bigger fiscal retrenchment required to prevent Britain going bust. About Ā£100 billion annually will be needed to pay down debt, Ā£70 billion to cut business taxes and reduce the top rate down to 25% and Ā£ 30 billion for getting lots more power stations built.
So another Ā£200 billion annually realistically has to be freed up- within the next few years. This will require Britain to leave the European Union, cut Foreign Aid, end green subsidies, and then to make deep cuts to benefits (how about slashing benefits to the work-shy, the unmarried single mums and all yobs- unpopular but vital); to slash quangos by 90% and then cut the size of Whitehall in half. You might even have to consider selling off all the motorways too- yes that’s how serious it has got!!
Yet there is no big sense of the real gravity of the situation Britain is actually in- just a few years away from the British Government receiving a complete loss of confidence from the Markets, whilst serious power cuts start to happen.
Together these events could well plunge Britain into a far worse recession than anything we have seen to date- think about GDP falling- in nominal terms- by 10% or more in a few years; then the International Markets would really panic (as Government tax revenues would dry up and unemployment benefits soar)- and the British Pound will really drop in value (possibly by up to 50% in a few years). The outcome of that will be years of inflation and continued recession- with half the working age population unemployed: It really does not bear thinking about.
Deep cuts- much deeper than anything seen so far- will be vital to help safeguard our nation’s future. The Debt must be paid down faster-much faster and Ā£ 30 billion must be spent getting new power stations up-and-running, and there still needs to be big tax cuts for businesses. Very serious problems lie ahead for Britain unless these issues are addressed sharply.
Unfortunately the Liberal Democrats wont let the Tories even consider such policies, even if the Tories wanted to implement them- and they don’t! But the Conservatives do have to face the enormous reality of the problems facing Britain- rather than worrying about their unpopularity.
Even if Labour do get in- it looks like the lights will really start going out on their watch and Mr Miliband’s high-spend ways will lead to a major gilts strike (or inflation if he falls back on more Quantitative Easing)- so Mr Miliband’s Government will be a one-term affair in all probability! And then, Mr Redwood, your Party will need some convincing solutions to deal with what are certain to be economic problems much worse than today’s. Promising to keep all the benefits and entitlements that millions will have become used to will not be possible- massive MASSIVE cuts to benefits and Public Sector pay will be required in those circumstances to restore fiscal solvency.
In addition it will be necessary to sell off roads, motorways, railways- and removing all VAT exemptions on food, fuel, etc. If inflation is at 20% in 2020 you cant have more Quantitative Easing to help the economy, instead you might need to look at removing the Income Tax-Free Allowance and cutting the Minimum Wage in order to fund a flat tax of just 15% to attract back major PLCs to these shores- something like this will be needed to get Britain out of a very deep recession when conventional “easy” options run out.
You may then have to consider selling off the Channel Islands to some Chinese billionaires to raise money to pay for the 500,000 extra Armed Police that will be required to cope with the massive civil unrest arising from implementing such severe “unfair” policies.
***************************************
I’m do not believe anyone- bar a few bank-benchers in the Conservative Party and in UKIP- has even the smallest inkling about just how much trouble this country is: Huge problems lie ahead and there seems to be a collective unwillingness to face up to them right across the “Westminster Village”- because none of the political Parties want to alienate the voters.
A lot of folk, alas have little time for politicians that duck difficult decisions for short-term political reasons. Many of the more-intelligent conservative-leaning voters know public spending remains “out of control”, they worry about the obsession with “Green Energy” meaning future power-blackouts and they think taxes on businesses are too high: More and more folk are drifting towards UKIP.
I’m one of them, as I believe that the Tories are so infused with Modernisers that they will ever collectively have the policies of big spending cuts for anything- whether tax cuts, debt reduction, infrastructure- ever again.
In a few years time I believe the Tories will face an experience like Canada’s Progressive Conservatives did in the 1990s- unless they radically re-discover a major “raison d’ ĆŖtre”, and rise to the challenge of our times. This won’t happen with the Tories trying to be another “in-between-y” Party or socialist-lite because Labour Voters will continue supporting Labour (the most left-wing will support the high-tax Green Party), and former Tories will go mostly to UKIP (with some of the lefty Tories going to the Lib Dems).
I am sorry about the bad forecasts, they are I’m afraid also true!
Ian Pennell
October 8, 2012
So the Conservatives need to give the wealthy tax cuts and the poor benefit cuts. Don’t expect the majority of the UK to willingly suffer so the wealthy don’t have to make sacrifices.
October 7, 2012
We need to look at the things we borrow money for – both Private and Public debt.
Allowing excessive borrowing of money to buy pre-existing Assets (non-productive) and reducing borrowing for future investment and production is a mis use of resources. By favouring lending to buy preexisting Companies – using the target businesses Assets as Collateral, and not favouring expansion of businesses is causing unemployment.
Focusing on the Deficit by reducing Government Spending, protecting Private Bank Reserve Accounts, Increasing Taxation for productive work while allowing Tax breaks and loopholes for the super rich is not working. Trickle down economics through bailing out Banks does not work.
If the purpose of QE was to put more money into the hands of the public at large to generate spending and demand – it has not worked, it may have only slowed the decline.
Isn’t Taxation and Public Spending (as well as the BOE setting Interest Rates) a way of slowing or increasing the flow of money in an Economy?
There seems to be a contradiction with Government Policy – QE and very low Interest Rates would suggest that we need more purchasing power in the System. If that is so, why is the Government Increasing Taxation and reducing Public Spending at a time when unemployment is increassing?
During an Upturn in the Economic Cycle it would be wise to increase Taxation and Decrease Treasury Bond issues, so why is the Government acting like we are in an Economic Boom ? Will the Government ever run out of Treasury Bonds ? It’s true that the Deficit is Big, but our money is FIAT, we do not owe any Gold on it. There is no restriction to the Government just spending money – except through Inflation.
Isn’t it time that Government policy focussed on preventing Banks from doing anything other than lending and carrying out financial transfers for it’s customers rather than the Las Vegas style use of Credit Default Swaps, Mortgage Backed Securities and Collateralised Debt Obligations which remain in place and are now being expaned upon with Vince Cables new Ā£1 billion SME scheme which is going to use the same type of “Selling Debt on to Investors” which helped casue the Financial Crisis.
Does the Government want the Financial Crisis to end or are they trying to extend it by a few decades – like Japan?
As for the EU, why not create Treasury Bonds and charge them greater interest on them than the Tax Payers. Is the EU Credit Worthy enough? Would it be irresponsible of the UK to lend to a Country that cannot afford the repayments?
October 7, 2012
Don’t quite see why the EU needs our money – the ECB can just create as much as they like.
Their Banking system is out of Control and misallocates loans for non-productive uses, just like ours; seems to me that the blind are looking for direction from the blind.
All these bailouts that have not fixed the problem points to one conclusion – that the funds are being diverted away from businesses into non-productive Assets at the expense of employment.
Why is it seen as ok to see Government’s maintain subsidies for the Housing Market and Housing Benefit Cheats, while Students – who are a real investment for the Future, are encouraged away from Universities through excessive Student Debt.
It’s easier to get Housing Benefits than help with Education – this will eventually lead to a Fat and Lazy Economy living off Government Handouts with people who wish to study and work, having to pay for the privilege.
You only have to ask a Landlord about Tenants who receive Housing Benefits and a Free Deposit paid for by the Local Council; do they care about the Property when they leave or not?
The problem with the Economy – Mr Redwood; is not the Deficit; it’s the misallocation of both private and public resources. Government Policy is promoting this misallocation.
Do you want fat, lazy people on benefits or people who are encouraged to study and contribute to society. Parasites or Graduates ? At present, the Government has chosen Parasites and Housing rather than Students and Jobs.
October 7, 2012
The current Government seems to be merely an extension of the previous failed Labour Government. Labour stood by and watched the excessive mis-allocation of lending – then rushed to the assistance of the Big Banks when it all went bad with Gordon’s Bailouts. Instead of “Education, Education, Education”, Tony Blair should have said “Location, Location, Location”, it would have been a more honest indication of where Labour was going to focus it’s attention, or turn a blind eye.
October 7, 2012
You are right: keep trying for our sakes! Do not, whatever you do, give up.
October 7, 2012
It all sounds good to me, let us hope someone listens to you and does something, good luck.
October 8, 2012
When I read this blog I was amazed at the amount of money being wasted and spent. To the ordinary man and woman in the street, they are unaware of the amount being wasted. Yesterday, Cameron discussed the need to cut, again, from the very poor in this country, many, who are already on the ‘breadline’ and pushing them further will create tensions. While this amount of money is being spent its a disgrace to make our own suffer more. To allow a government to spend, and borrow more, to furnish ideas and policies is asking to be dumped at the next election.
After listening to the other two parties at their discussion group gatherings, I refuse to call them conferences, has theres no debate anymore; I dispair what this country will do. Cameron needs to be stopped, his mad ideas, and lack of clarity are making it harder for people to really believe him anymore. Mr R, you should seek to speak to has many fellow Conservatives as possible and give them the facts, on the waste of money that is going on. Rock the boat if necessary, and make them see what a waste of money many things are doing. Yesterday’s news said we have to fill a 16 billion hole in the deficit, well with your suggestions you might just do that. Getting Cameron and Osbourne to see that is the difficult bit, therefore you must seek support from within your party for commonsense to prevail. I despair, I really do; am disgusted that a Conservative government allows all this to happen without restraint. No wonder UKIP are gaining strength, this lack of monetry discipline will be your downfall.
October 8, 2012
IAN PENNELL really does spell out the facts as they are. My only query is whether his assessment of Ā£3 trillion debt is government debt, as he would seem to imply, once costing in all the off balance sheet liabilities, but does it include private debt? This, taking into account mortgage debt, credit card debt and all the other private commitments, in itself is around Ā£1.5 trillion, in which case the true national debt is Ā£4.5 trillion.
Now the question is how on earth do we pay this off without leaving it as a legacy to our children and grandchildren?
October 8, 2012
“I have supported moves to curtail illegal immigration”
The main problem isn’t illegal immigration.
UK passports are now doled out like confetti. This is no longer a country in any real sense and the lower middle class and working classes are worst affected.
October 10, 2012
The EU expenditure that we should refuse to finance relates to unnecessary and overused institutions. The Lisbon Treaty created a āpermanent presidentā (to go with the 6 monthly Member State president and Barrosso ā just a touch of overkill) and an EU foreign minister, together with all their support staff. The European Commission and EU courts are overstaffed in order that they can more thoroughly interfere with the internal affairs of Member States.
Our approach should be to quantify these unnecessary costs and refuse to finance them. Yes, there would be a bust up; so what.
January 20, 2013
First of all I can’t understand why people that have found themselves in the unfortunate circumstance of being unemployed being treated worse than people who are disabled. Why is it that the Disability Living Allowance exists? The people I know who get this spend the whole amount on Gambling, Alchohol and fags – time to get shot of this unfair benifit! Cut the disability benifit!