Category: Blog

At a time when the full extent of Labour’s politics of hatred is revealed, let me say something positive about others toiling in the political vineyard.

For some time I have admired the work of the Taxpayers Alliance. They have brought to life the dusty subject of public spending. They are helping us win the argument that there is a lot of waste and unwanted spending in the figures. They have got people interested in the public sector rich list, the tip of the iceberg of excess.

Yesterday it was good to appear alongside their comments in a full page written by the Sunday Times on just how you could start to get to grips with over spending. Cuts do not have to be taxing. Indeed, I could find a lot of cuts that would be popular.

It was also good to see George Osborne, on a day when Labour were out to hurt him, getting on with the job of explaining how he would want to change public service management and delivery, so we could do more for less. It was good to see the Sunday Times helping lead an important debate that the Chancellor should be having with his colleagues, to start to curb the gross deficit which will leave us all with our children in huge debt for years to come.

Positive politics is about creating or joining a coalition for change, and supporting each other. Labour’s politics is based on the politics of dislike. They seek to create or exaggerate divisions between themselves and the rest. They seek to call everyone who disagrees with them a “Tory”, and to paint the “Tories” in the worst possible light, falsely claiming we came into politics to cut essential public services to the poor to give tax cuts to the mega rich. As we can now see they also run dirty tricks departments to try to character assassinate any Conservative who is effective at putting over an alternative view the public might like to hear or vote for.

Conservatives – and other opponents of this government – have to get better at helping each other and supporting each other. We must not allow our discourse to be dragged down into the gutter of Labour’s politics, or to fall for their wish to divide and rule.

Labour’s pathetic efforts to counter the power of the blogs that criticise this ghastly regime has now done them grave damage. Those of us who deal with this government day after day know that senior figures who should be devoting most of their time to running the government devote disproportionate amounts of time to trying to trip up, misquote, or twist the words and actions of their opponents. I have had to waste a lot of time trying to correct false interpretations of what I have said and written about handling the banking crisis and financial regulation. Senior Ministers waste their time misquoting and spreading false accounts.

Now we see that this conduct is also there at the centre of the Downing Street operation. The resignation of a senior aide may deal with this specific set of problems, when they went over the top in thinking about trying to create a Labour website people might want to read by peddling malicious gossip about senior Conservatives.

It should lead to questions about how the dividing line between raw politics and government is drawn at the heart of this government. All officials paid for by taxpayers other than elected politicians should not be undertaking any political work, and should not be trying to twist or trick the Conservative opponents of their bosses. They are paid to design and implement policies that can improve our lives, not to design anti Tory websites or fuel the juvenile soundbites which they think is a fair substitute for being properly accountable to Parliament.

It is good news this time they have been found out. There are many more cases where they have failed to observe the traditions and conventions of British government, and have failed to perform their duty to tell us what they are doing and to defend their actions without resort to unpleasant and misleading spin.

This time it appears the way they smear individuals has gone too far and at last the media might shop some of the backstairs briefers who dare not go on the record with the lies and misleading statements.

One of the problems this government has is with the word discrimination. They fail to distinguish between bad discrimination and good.

Let me hasten to reassure all those researchers and spin doctors for Labour who are out to get me that I do strongly condemn racial and religious discrimination as they do. I have no more wish to live in an intolerant society that discriminates against people because of their ethnicity or religion than they have. Regular contributors to this site will know I am very cautious in what I allow on these sensitive subjects, as the thought police under this government are always active in trying to twist anything written or said on these topics. We live under an oppressive regime which seems to think thought crime is more serious than crime against property.

The problem is Labour does not seem to like selection in many areas, when that is good discrimination. I want the England selectors for our national teams to choose the very best team players over the merely very good. That way we have a chance of winning. I want the elite Universities to choose the most successful and most energetic students, who will get most out of the freedoms and resources of those institutions. I want the brightest and most hard working schoolchildren of whatever background to be given a rigorous academic education, so those in state schools have a chance of competing with those at the best fee paying schools.Why do you have to have rich parents to get a grammar school style education? I want the criminal justice authorities to discriminate between the violent minority who seek to disrupt a protest, the peaceful protesters, and the general public wishing to go about their daily duties in the area of a protest. I want our border staff to discriminate between the majority of overseas students and other visitors who are welcome, and the handful who mean us harm. We do not all need ID cards because a handful of people are evil. The ID cards are not going to identify the evil ones anyway.

Labour does not agree with all these forms of good discrimination. It probably agrees with the first, accepting the need for tough selection criteria for top sporting teams. It cannot accept the results of rigorous academic selection at our top universities, and blames them for the inability of enough state school pupils to reach the standard required. It fundamentally opposes enough academic selection in schools to give more state school pupils the elite academic education they need to compete successfully with top public school talent.

More complaints about the use and abuse of state power are being brought on by the mistaken political direction of the Home Office we are experiencing under this government. I had expected a Labour government to be more careful about our civil liberties. Instead we have had a succession of Home Secretaries who have taken delight in wielding state power against the liberties of the citizens. They have at the same time failed to keep proper control of our borders, and now wrongly think ID cards will be a substitute for making decisions wisely when people first arrive in our country.

Mr Brown’s decision to put himself at the head of the attack on terrorism is symptomatic of the government’s wish to gain media headlines from sensitive and difficult tasks of the authorities. Some of these difficult tasks are best performed outside this spotlight of media attention, as Mr Quick can now tell them. The nation as a whole is united in wishing to root out terrorism. It is not united in accepting that important civil liberties are destroyed in the process.

For a decade now we have been sold the mantra that public spending is investment and that every penny of it is well spent and well judged. If any of us suggested some of the spending was wasteful, or inappropriate, or not a priority we were immolated in the fire of rhetoric claiming wrongly we wanted to sack teachers or throw nurses out onto the streets.

It took an 88p basin plug to help undermine that. It’s unfair on both the inoffensive plug and the Home Secretary. If Parliament allows MPs to claim for the costs of maintaining second homes, then the odd plug will qualify for the careful and bureaucratic MP who remembers to keep the receipt and fill in the form. If only all public sector claims were so small and practical. One has to assume the MP or her assistant installed the plug themselves on that occasion, unlike normal practise in the public sector where procuring and installing a new plug would be a complex and expensive task involving the expenditure of much more than 88p. I wonder how much a new basin plug in the executive loo at the local Council costs to buy and install? It would be a lot more than 88p, and would not appear on the list of personal expenses of the Chief Executive.

The passion and anger over basin plugs and the like reflects the public mood that MPs, along with much of the rest of the public sector, just does not offer vaue for money. If you look at the full extent of the £93 million MPs claim you will soon realise that the main cost by far is the cost of employing people, not the cost of plugs or even patio heaters.

Some of my fellow MPs think it is grossly unfair that all these figures for our total expenses get published. They point out that when the local Chief Executive of the Council gets some adverse publicity for being on a large six figure salary no-one also adds in the salaries of his or her deputy,assistants, secretaries and other hangers on. When some quango head gets done for his exotic travel at the taxpayers expense or for his energetic wining and dining for the public good, no-one adds in the cost of running his private office in the quango, yet that office spent time and our money organising the trips or the jollies.

I think they are missing the point. The anger directed at MPs is a good sign that there is some health and life left in our democacy. People think it is worth being angry about MPs, because they might be shamed into spending less or changing the rules so they are less offensive to the public that pays the bills. People do not think they can make other public sector bosses responsible for larger abuses elsewhere in the public sector accountable in the same way. Everyday items bought at the public expense for second homes are bound to touch a raw nerve when others on lower incomes are struggling with the bills for similar items themselves for their first and only home, because people no longer believe the overall system is giving good value.

The searchlight of public opinion needs to be well directed to start to get us some value for money out of this vast increase in public spending the government has presided over. If MP s together are claiming too much by way of expenses, then so is the whole public sector. There is a generalised culture in quangoland and Whitehall of travel, eating and drinking at the public expense, of employing more staff to do your work, and contracting out anything difficult or risky. The biggest cost by far is the cost of employment. It is the surge in the numbers of administrative staff, spin doctors, secretaries, case workers, regulators, glossy brochure writers,press release authors and the like which characterises the poor value public sector.

This culture is obvious in Parliament, in quangoland and in many a local Council. Some MPs have staff to write press releases, to produce blog text, to write speeches, to draft questions, to attend meetings about important issues. Surely an MP wants to ask their own questions or make their own speeches? If we can’t find 645 people who do want to do that and are capable of thinking for themselves, let’s have fewer MPs. The same is true of many quangos and Councils. I am often approached by paid staff at these bodies urging me to send out a press release they have already drafted for me, complete with a quote from me! This is from people who have never met me, let alone taken the trouble to find out what I think about the issue by reading my website or books.

The best response MPs could make to the criticism of the £93 million is to do it for less next year. My expenses were £40,000 below the average in 2007-8, and I intend to reduce my costs further. That’s what private enterprise is having to do. Why should we assume we can tax them more to pay the extra? We do need a wind of change to sweep through the public sector, concentrating money on the public services and transfer payments people want, and reducing the rest. I am happy to pay for the basin plug, but not so happy to pay for all the spin doctors and quangos that have multiplied like crazy in recent years.

The hapless MPC members are still drawing their huge salaries, and not a whiff of an apology for failing to hit their inflation targets for months, nor a hint that they recognise they contributed to the crash through their boom-bust monetary policy.

Now they are firmly back in boom boom mode. This time they have not only pressed the interest rate accelerator flat to the floor, wrecking returns for savers in the process, but they have put a couple of turbo chargers on the vehicle in the form of quantitative easing.

With these novice drivers at the controls, here are some questions they should answer in public this month as some kind of justification for their super salaries.

1. How much money are you going to print? Is it £75 billion, or £150 billion, or as the Governor suggested, less than £75 billion?
2. What do you want to achieve from printing all this money? How will we judge your success or lack of it?
3. Should we assume you are no longer worrying about inflation? Or do you have some plan to improve the value of the pound, to stop the imported price rises? Can you stop the incompetent government putting up all the public sector fees charges and taxes in an inflation busting manner?
4. Are you trying to get down to a specified level of longer term interest rates for the government to borrow at? If so, why have these rates been rising over the last month?
5. Are you trying to reach a specified level of corporate borrowing rates? If so what are these? How are you doing?
6. Do you have a target for monetary growth? It has been fast in recent months. Is it fast enough for your liking? If not, how much more monetary growth do you want?
7. Why should we believe that longer term inflation will be under control? We all know measured inflation will be seen to be falling over the next few months, but the issues you settle today will affect inflation in 2010-11.

We learn today the government wants to give some taxpayers money to charities for political campaigning.

Surely the government could hold some meetings with charities to find out what they want, without giving them money to run ads to tell them?

I am now being asked if we should join the Euro to have stability and more financial discipline! Have people learnt nothing? The Irish experience shows why the answer is a thousand times “No”.

Ireland joined the Euro with an Anglo-Saxon economy in very different shape from the German. For several years it gave her interest rates that were too low for Irish conditions. That felt great whilst it lasted. House prices rocketed. There was a construction and financial services boom. It meant an even bigger credit bubble in Ireland, relative to the size of the economy, than the UK got from a misguided MPC. The MPC kept our rates too low, but at least they were higher than Euro ones. Now it means a bigger bust, as the exchange rate is too high for Irish inflation. They have to make the adjustment by cutting wages and trying to price themselves back into world – and UK -markets by cutting costs.

The UK is also pursuing a government policy of cutting living standards after the huge policy errors, and after official encouragement to live beyond our means. So far that is happening through devaluation, making us all poorer as the price of food and other imports soars.

What do we need? A monetary authority which understands how to calm rather than augment the cycle. Would we get that from the Euro? Of course not. We would have been on an even bigger roller coaster than we were from home made mistakes. That should not be difficult to understand. It would be the Exchange Rate Mechanism experience all over again, if you have any history. It would be the Irish experience if you have any geography.

PS: Thanks to BBC Newsnight for a sensible interview last night on an important topic.

Wow! If you add Obama spin to Brown spin you get quite a movement. Between them their spin machines helped lift world markets and get people talking of green shoots of recovery.

Now the spin machine has moved on. The spin was just for the summit. They leave investors with their losses and companies struggling for orders. The reality is that the underlying economies are still mired in recession. The UK industrial output figures have just got a lot worse. Why would you expect anything else? The huge monetary stimulus from lower interest rates was administered around one year too late. It did not start until the autumn of last year. You should not expect any great results from it for at least a year from its commencement.

The Obama machine has gone into overdrive both to tell us the US wants to be friends with Muslims,and to tell us he admires US soldiers fighting in the Middle East. In his honeymoon with the European media he can probably get away with that sort of thing. The Darling spin machine has started to tell us maybe we are overdoing the borrowing. Even Mr Brown seems to have backed down this morning, and agreed with his Bank Governor and Chancellor that pumping up the deficit more as a result of new policy action would not be a smart move. Let’s be grateful for small mercies.

I

Offering another drink to an alcoholic because he promises to sober up next year is not necessarily a kind thing to do.

Offering too many loans to a debtaholic just puts off the day when he has to start paying it all back, and makes that task more difficult.

One of the ideas behind quantitative easing was to get the interest rates down that the government has to pay, to take some of the pain out of being addicted to debt. So how are they getting on?

Over the last month the interest payable by the government for borrowing one year money has risen by 31 basis points (up to 1.06%), on five year money has risen by 42 basis points (up to 2.61%), on ten year money gone up by 10 basis points (to 3.45%) and on 39 year money by 20 basis points (to 4.33%). Quantitative easing is not working in one of the ways intended.

Indeed it is now dearer for the government to borrow long term money than it was a year ago before all the interest rate cuts, showing that markets now fear inflation a bit more and will make the government and taxpayers pay more for it.

Of course the main strategy to avoid a debt crisis is still in place. The banks are going to be made to buy loads more gilts in the name of “Prudence”! This will enable the government to be less prudent. It now appears that despite all the printing, it will be against the background of dearer money. The failed gilt auction was a fixed income bond. The next successful one was an inflation linked bond, which went a lot better. The markets don’t buy the deflation scenario. They are rightly worried about excessive debt and persistent inflation in food and public sector prices.