Author: johnredwood

Labour should know all about austerity. They plunged the UK private sector into the most severe austerity by their large mistakes in 2007-9. Not content with fuelling an irresponsible boom in credit in 2003-7, they decided to make the worse error of stopping it all so abruptly that they brought down several banks. They threw the UK economy into the worst recession since the 1930s. Many people lost their jobs. Incomes were squeezed. Businesses failed or became unprofitable. That’s austerity.

The Coalition have made a start to reversing Labour’s cruel austerity. Many more people are now in jobs, with unemployment down. UK output and incomes overall are now back above the 2007 level before the crash. Living standards are rising again after the sharp fall in 2007-9 and the squeeze thereafter.

Many commentators think austerity is a new word for public expenditure cuts. They need to realise that the bulk of jobs in the UK are in the private sector. 26 million people work for employers other than the state. It was this large majority that felt the full pain of the cuts. Public expenditure in real terms carried on rising in the Labour years, and rose again by a small amount in real terms under the Coalition. There were individual cuts in particular departments and programmes, but no overall reduction.

I am a strong critic of austerity. I opposed Labour’s credit binge and mega bank mergers on the way up before the crash, and I opposed Labour’s clumsy bank regulation and nationalisation which made the crash more intense and cast a long shadow over the recovery.

I want the current economic recovery to continue. To speed it we need tax cuts, not higher taxes. To fuel it we need policies that are positive for business and enterprise, not hostile to success. It was ill judged regulation from the state that brought the banks to their knees and damaged the private sector. It will be allowing people more freedom to set up and grow companies which will power the recovery.

The UK is close to the point now where the commercial banks can finance a recovery without further artificial public sector stimulus. Pursuing more anti bank rhetoric would not be a good idea. Whilst many people may  not like banks, if you damage the banks you damage the rest of the economy. What Labour does not seem to have learnt from its bitter experiences of 2007-9 is if you get the banks wrong, it is other people in many other sectors and businesses that lose their jobs or struggle to maintain their commercial activities. Sometimes politicians have to stand up for the unpopular, and explain to people why the politics of jealousy or revenge may make things worse, not better.

On this main part of the site anyone wishing to name individual seats or candidates has to supply a full list of candidates in that seat and comply with election rules. I am deleting all posts that do not conform.

Energy policy is Cinderella who should come to the election ball. A combination of EU policy and UK policy first established by Mr Miliband’s legislation leaves the UK with dear energy, and with greater uncertainty over supply. They have encouraged undue dependence on wind energy, and have closed too many power stations that burned fossil fuels. The next government needs to accelerate the new build of power stations. A wise government will cut our dependence on wind energy.

Conservatives have pledged to build no more onshore wind farms with subsidies. Labour, the Lib Dems and Greens wish to press on with more subsidised wind farms. To do so will just make our energy dearer, and less reliable. We will need to build more back up power for the days when the wind does not blow. That backup power will need to be very heavily subsidised, as no-one will build a modern efficient gas or coal station if they are not allowed to run it when the wind blows.

Green enthusiasts reckoned fossil fuel prices would go up, making the extra cost of wind energy less oppressive over time. Instead, fossil fuel prices have just halved, making wind energy so much dearer relatively. This problem means less jobs, less industry and poorer families. It means exporting activities to countries with cheaper energy, not burning less for the world as a whole. It is a foolish policy. I want the election to discuss it, and for voters to vote against all candidates who are pledged to dear energy, more de-industrialisation, and  more fuel poverty.

The Conservatives have seen the choice for the election as a simple one. Do you want the Conservative team to continue, who have presided over a decent recovery, with 2 million new jobs and now rising real incomes? Or do you want to hand the keys back to the people who crashed the car in the first place? Labour in its last period in government put up unemployment and brought down real incomes with a jolt.

Labour sees the election as being about the NHS, as we discussed before. Drawn into the economy, Labour has now pledged to get the deficit down, though by less than the Conservatives. Labour has pledged to avoid tax rises for most people, and has been imprecise about their public spending plans. Conservatives have been very clear about the overall pattern of spending, tax revenue and borrowing for each year of the next Parliament, but have not published details of how the extra cash public spending they are proposing  is divided between departments.

The polls show either a Conservative government or a Labour minority  with SNP support on a vote by vote basis. The SNP say they wish to end austerity, which they say means they wish to spend a bit more than Labour’s plans, and therefore borrow a bit more, whilst still gradually bringing down the deficit.

So there will be a difference- Conservatives will borrow less and get the finances on a stable and sustainable footing earlier.

The bigger difference will come in the attitudes towards enterprise and the private sector. More than 25 million people work in the UK private sector, more than five times as many as work in the public sector. The left of centre parties all see the private sector as needing more price controls, regulations, taxes and even state control and ownership. They have a range of policies to limit rents in housing, to control energy prices, to increase state control of the railways, to tax the banks more, to tax property and homes more, to tax foreign residents more and above all to tax anyone who is financially successful more.

This approach was tried by Mr Hollande in France, with very poor results. The French economy lost talent and money, the economy stayed depressed when the UK’s grew well, and in the end Mr Hollande had to moderate some of his ideas.

The choice on May 7th is between a policy which is delivering growth, more jobs and rising living standards, and a series of measures which however well intentioned will make the outlook worse.

Labour has proposed a number of interventions to control prices in the energy sector, for housing rents and certain kinds of lending. Such controls usually reduce supply and end up damaging those they are trying to help.

Everyone agrees the General election is no re run of the Scottish vote on independence. Even the SNP are making it clear they want a mandate to negotiate the best possible settlement for Scotland whilst still being within the UK. On this basis current polls show them attracting some voters who voted against Independence last autumn. It is unlikely Welsh nationalism will make much impact. The majority of Northern Irish MPs are likely to  be elected as unionists.

This does not mean the issue of the future of the UK is off the agenda, or that the next Parliament makes little difference. The next Parliament, it is true, is bound by its predecessor to honour the promises made to Scotland by all three main Westminster parties. These promises are likely to be interpreted in a pro devolution direction by the new SNP MPs who will probably be elected in some strength and may be the third largest party. In contrast the next Parliament is not bound by its predecessor to solve the English problem. Mr Hague as Leader of the House would not  put the matter of EVEN, English votes for English needs, to the vote, as Lib Dems said they would vote with Labour against the scheme.  The new Parliament has a blank sheet to resolve the question of England.

Many in the  SNP accept the justice of England’s case, but their party will doubtless bargain against it in any way they think will help their cause. The Lib Dems have some complex scheme based on votes in the UK Parliament for England calculated by some notional proportional representation, which is unlikely to get support from the  two main parties in the Commons. Labour wants to fob England off with devolution to cities and maybe counties, having no answer to the question why can Scotland chose her own income tax rate but England cannot chose hers? Conservatives have a version of English votes for English issues, which is a start to tackling the problem of England.

The Lib Dems and Labour want to delay justice for England as well as denying it. They favour a long and detailed Constitutional Convention to examine devolution for England, whilst hurrying through more devolution for Scotland with no such consideration. Conservatives wish to press on with proposals for England, after years of examination and thought which has gone into them.

The future of our union will be very affected by what the next Parliament does. As it legislates for Scotland, it is vital it understands the mood in England. Only one party seems to understand the need to do something soon for England. There will be a big difference between a Conservative led government and a Labour led one on the question of England.