Category: Blog

It is an easy drive to Tesco, Asda, Sainsbury or Waitrose from my home. None of them are easy to reach by train or bus. I think we are well served by our competitive supermarkets – but not by our monopoly public transport.

It was typical of the OFT and the Competition Commission to pick on successful UK businesses for their latest set of press releases, and amusing to see a Judge stand up to the OFT and criticise it for its very New Labour failing of chasing headlines, without proper concern for due process and the impact of its populist remarks.

The Supermarkets stand accused of responding to the government and popular pressure to pay farmers more for the milk they supply. The Competition Commission apparently thinks we are short of quangos in this country, and wants the public to fork out for another one, this time to act as an overseer of all the supplier contracts supermarkets enter into. When will these people learn that we are not short of regulators, and that there is a price to pay for endless layers of supervision?

If the guardians of competition want to do something useful they should look at the exploitation of monopoly, with high costs and high prices, in some of our important services. Why don’t they investigate:

1. The surge in costs at Network Rail after nationalisation, and the high access charges to track
2. The high and rising costs of the postal service
3. The absence of cost effective and reliable train services in many places
4. The poor performance of many rubbish collection services allied to high Council taxes
5. The rising costs and poor performance of some water monopolists over flood control, with rationing when it’s dry weather for a bit.
6. The high charge for a BBC licence allied to its persistent pro bigger government and pro EU bias

If I don’t like one of the local supermarkets I can go to another or to the corner shop. I think they all do a fantastic job with sensible prices, They offer high quality, great choice, flexible hours. Tesco is the market leader currently,because more people choose to shop there than elsewhere. If Tesco ever lost its understanding of what we, the customers want, if it became too expensive or stocked the wrong things, it would lose its position. There is plenty of aggressive competition from others trying to take the first place away from the leader. Tesco’s record at running a profitable, socially accoutnable business is excellent. Its stores participate in their local communities,and the buyers flex the product range as they see customer tastes altering.

If I don’t like my rubbish service I still have to use it, and have to pay the bill under threat of prison if I withheld money for poor performance. If I don’t like the local train service, or find it is not convenient, I have to lump it. If I want a different water service I am out of luck. If I don’t want the additives in the water which are standard supply I have to put up with them.

It’s high time the government, the Competition authorities and the regulators got stuck into these real examples of poor service and high price. Meanwhile, the fact that so many of my constituents choose to go to Tesco shows they must be doing something right.

The Bank of England yesterday bowed to the inevitable and warned us that we will become worse off this year. Many people already feel worse off, after the huge increases in food and energy costs that we have experienced in recent months. There was no apology for leaving credit too loose a couple of years ago, and no public recognition that the Bank had kept conditions too tight last summer and autumn as the bakdrop to the Northern Rock crisis. There was no revision to the absurd line just before the Northern Rock crisis struck that banks had been foolish in their lending and there would be no bail outs!

The Bank is right that they are boxed in – boxed in by government spending that is too high, by a public sector whose productivity is too low, by past credit excess and rising prices, and by the more recent Credit crunch which is having a big impact on property. The Bank is partly boxed in by governemnt mistakes – the government should have reined back more on wasteful spending earlier, and cut public borrowing – and partly by its own erratic performance on money growth.

We now have a boom and bust approach to credit creation – boom in 2003-6, bust in 2007. We have had boom and boom in public spending. Now we see the government fighting to get to grips with the problem of over spending.

I am glad the Conservative leadership has responded to those of us who have asked that we should not match all of Labour’s spending plans in the future. We should keep all the teachers, nurses, doctors, police and armed services personnel, for they only cost under one quarter of publilc spending. We should not keep all the quangos, regional governments, ID cards, computerisation schemes, advertising budgets and management consultancy contracts. They do not represent value for money and they are squeezing the public needlessly.

The National Post of 13 December 2007 reproduced the text of a letter sent by 100 leading climate scientists and other experts to the Secretary General of the United Nations. The letter told him that “There has been no net global warming since 1998”. It urged the UN to concentrate on encouraging national and international efforts to adjust to whatever climate changes might lie ahead, rather than thinking UN action could stop climate change.

This winter has been particularly severe in large parts of the Northern hemisphere. China has been experiencing Artic conditions, with heavy snowfalls disrupting travel and economic activity. Temperatures have been falling to 20 degrees below zero in the mountains and on the steppes of the former Soviet Union. There are reports of frozen rivers and frozen hydro electric systems leaving people with no power and no heating in the appalling cold.. This is not proof of a new ice age – just a reminder that weather is difficult to predict and variations can be wild.

Here in the UK a wet summer has been followed by the occasional wet period in the winter. The flood threat is ever present. The government dashes around issuing press releases, setting up enquiries, promising more of our money in future years, but still does not get on with the jobs of clearing water courses, improving ditches and working with the water authorities and local authorities to strengthen our flood defences.

I have put in evidence to the Prime Minister, at his request. I have put the same evidence to DEFRA. I have given written and oral evidence to the Pitt Review. I have had meetings with people from the Environment Agency and the local Council, and have exchanged many a letter with water companies and all the army of regulators and governors in this area.

It is a prime example of massive spending on a lot of well intentioned regulation and administration, with all too little of the money being spent on anything useful. The final irony is the possibility that many of the government’s planned 3 million new homes will be built on flood plain.

The government has been struggling with Gordon Brown’s sweeping dictat that there will be 3million more new homes by 2020. When he announced it it was difficult to see how people would afford them, as house prices were soaring out of sight of the would be first time buyer. Now prices are weakening, it is difficult to see which housebuilders will be able to afford to build so many. Offering people homes on floodplains, after the images of last summer, will not be an easy sell. It will be even more difficult if insurers say they will not insure them, or if they want high premiums for taking the risk.

The answer to all this is simple. The government should spend more of its current huge regulatory budget in this area on practical measures to improve flood defences. It should not allow building on floodplain, unless the developer has a scheme which will ensure no flooding and make a contribution to better water management. Mr Brown should recognise that a 3 million target may be difficult to achieve in the current climate. Housebuyers are put off by the declines in house prices, and housebuilders are constrained by tight credit and shrinking margins on their work. The government should b e relieved if the housebuilding rate does not fall. They should not expect in these current difficult economic conditions to see a surge in housebuilding to the new higher levels of the PM’s imaginings.

It is typical of this government that Parliament should not be meeting on this day of all days.

On 13th February 1689 “the Lords Spiritual and Temporal and Commons assembled at Westminster” presented a declaration to the new sovereigns, King William and Queen Mary.

<a href=’http://www.johnredwoodsdiary.com/2008/02/13/the-government-tears-up-the-bill-of-rights/889/’ rel=’attachment wp-att-889′ title=’williamiii1.jpg’><img src=’http://www.johnredwoodsdiary.com/wp-content/uploads/2008/02/williamiii1.jpg’ alt=’williamiii1.jpg’ /></a>

This declaration, known as the Bill of Rights, established Parliamentary supremacy over the Crown in important areas, and guaranteed Parliament’s freedoms .It did so that the people could practise the religion of their choice, avoid arbitrary manipulation of their laws and require redress of ills before they had to pay taxes.
The Declaration included amongst other articles:

“That the pretended power of suspending the laws or the execution of the laws by regal authority…is illegal

That the levying of money for or to the use of the Crown ….without grant of Parliament…is illegal

That the raising or keeping of a standing army within the kingdom in time of peace, unless it be with the consent of Parliament, is illegal

That election of Members of Parliament ought to be free

That the freedom of speech and debates or proceedings in Parliament ought not to be impeached or questioned in any court or place out of Parliament

And that for the redress of all grievances, and for the amending, strengthening and preserving the laws, Parliaments ought to be held frequently”

This new settlement was designed to put an end to the rule of James II and of any other King who thought he could govern without Parliament, raise money without Parliamentary approval, suspend the laws and manipulate the army.

It proved effective. All subsequent monarchs had to acknowledge Parliament’s power, and seek accommodations with Parliament when they needed money, wanted to amend the law or wished to drive through important changes in the nation.

It is sad that today’s Parliament allows itself to be regularly suspended, to be timetabled into subservience on crucial matters, sidelined by Ministers who tell the media before the Commons, and overruled by Brussels. If Mr Straw wants a new constitutional document, he could do worse than enforce the provisions and spirit of the Declaration of Rights, one of the central documents to emerge from our predecessors’; struggles for liberty and free speech.

Why oh why do Labour MPs put up with it – their government is preventing Parliament meeting all this week. We cannot discuss the government’s climb down on the Non doms, the state of play on the Northern Rock bids, the inflation rate or anything else that matters. No wonder people are fed up politics – it’s a different world from the commercial one where people have to work every week to pay the wages.

On the eve of Valentine’s day we should ask Is love enough? There must be as many young men attracted to their sweethearts as ever, as many young women dreaming of their wedding day as ever. We also know that the rate of divorce is high, the hesitation about marriage is pushing it later for many couples, that all too many couples struggle to stay together when the cake and the honeymoon fades in the memory.

We have to recognise that there has been huge social change in recent decades. I was blessed to be brought up by parents who enjoyed – and still enjoy – a good marriage. I remember being surprised as a teenager by a surprise remark of my late grandmother, who opined that if she could have her time again she would never have married. I had taken it for granted that my grandparents, like my parents, had a good marriage as they were always together when I saw them. Her words made me reappraise, and see the heartbreak and the misunderstandings behind the institution of marriage.

In my grandparents day it was almost unheard of to think of divorce. There was shame in it. Contrived adultery often had to be arranged if there was no real adultery on offer to persuade the courts that the marriage had failed. Because divorce was unusual people felt the pressures of society to stay together.

There was also economic necessity. Most marriages survived – and some thrived – on the splitting of the work. The men took on the paid employment so their wages could pay the rent and the food bills. The women did the rest, washing the clothes, preparing and cooking the meals, making the home. Much of that was hard physical work, without the labour saving devices we take for granted. A man did not want to wield the broom or cast the needle – or thought he couldn’t – it was not his province. The woman did not expect to clean the shoes or earn the income – that was her husband’s role. This economic model forced the unhappy to stay together, depending on each other economically but building their own interests and circles of friends for the little leisure time they had. The man would go to pub or club, the woman to her circle of family and neighbours. It probably also encouraged more love and companionship between others, as they came to respect or admire what the other achieved in the male and female spheres. They were partners, not competitors.

My parents generation saw some shift in this. My father would help with home tasks that his father’s generation would have spurned. My mother did take a paid job outside the home when I became a teenager, to supplement the family income. The basic pattern still had a lot in common with the pre war generations, but it was on the move.

Subsequent generations have seen this old model pulled apart. There is no longer the same rigid distinction between man’s work and woman’s work. Men change nappies, run the hoover, stack the dishwasher, peel the vegetables. Women get well paid jobs, use the paint brush, drive the car. This very multiskilling which can bring lovers into closer friendship, can also teach both woman and man they can live on their own. They do not need “the other half” as they can be the whole article themselves.

A woman’s ability to earn a living, and a man’s ability to cook a meal and wash a shirt can make each party less tolerant of each other. There is less need to compromise when living together – there is another option. Some ask if the wife or husband does not live up to expectations, then why carry on?

Many politicians would like to save or strengthen marriage, but show some humility as many have found keeping their own marriages too difficult a task.

Some of my colleagues believe that offering a tax break for marriage can change all this. I agree it could help. It is a perverse incentive to create a tax and benefit system which makes people better off if they live apart or alone. We should not think however, that it will be a complete answer. Women’s economic freedom is a good thing, but it naturally increases the pressures against marriage or long lasting marriages, as it removes the need of their grandmothers and great grandmothers to grit their teeth and carry on for economic necessity. The saying “You’ve made your bed and now you have to lie on it” sounds hopelessly dated and unrealistic. Today many more people think that if they have made the wrong bed they will change it instead.

A consumerist world produces a culture of instant gratification. Some see their marriages through the distorting images of the rich and famous having the perfect day for their wedding, more than they understand the subsequent rupture of so many of those celebrity alliances.

If marriage is to be strengthened we need to think more about how it can work and what legal framework it needs in this very different society. It requires friendship as well as love, tolerance and understanding as well as passion and attraction. The very differences between men and women that make much of the excitement and romance, can become the sources of tension and disagreement later. Men like things, women are fascinated by relationships. Men want to talk about Manchester’s team tactics, or the performance of the latest car: women want to talk about feelings and moods. There needs to be give and take to make it work, and goodwill on both sides. There is no easy quick fix for politicians, as expectations of marriage have outrun the average experience of it. The attitudes towards income and property in family law when marriages are broken up seem dated, based on a different model of the roles of men and women.

Tomorrow there will still be many young men buying the roses and the chocolates, sending the cards, and summoning up courage to tell someone they love her. There will be many young women hoping for the invitation, and wanting to receive the gifts. I wish them a lovely day.

As Obama pulls ahead of Clinton in the race for the democratic nomination, there are signs of more people in the US wishing to get away from the alternation of the Presidency between the houses of Bush and Clinton that has characterised the last two decades.

The US Presidency is a curious amalgam of the ancient and modern. Like an old monarchy, the President is Head of the armed forces. In the more modern UK in this respect, the professional heads of the armed forces report to a middle ranking Cabinet Minister, the Defence Secretary, who in turn reports to a senior cabinet Minister, the Foreign Secretary, and to the Prime Minister.The UK has long enforced the seperation of the armed forces from politics, and has had a fear of standing armies.

Like a modern republic, the US President is Head of State as well as Head of government. He is also a modern King – the titular Head of the country and the unifying presence for times of national celebration or grieiving, as well as head of the executive.

It would not be healthy for this very powerful post – 3 jobs in one – to become hereditary. US politics has certainly been baronial if not monarchical during my adult lifetime. The Kenendy dynasty rose in the 1960s, the Bush in the 1980s and the Clinton in 1990s.

I have been criticised for changing my mind on Obama. I see nothing wrong with changing your mind if the sutuation changes, or if you learn something new of importance. I try to learn something new each day. On this occasion, however, I have not changed my view. From the beginning I said I thought his anti Washington anti politics campaign was great, and would represent a strong challenge. I always thought he could win but was not sure he would win. I still have the same view.

I also always said I did not like his policies to the extent that he had revealed them. I do not believe he would live up to his fine rhetoric in power, as I do not believe he knows how to make government smaller and more responsive, two essentials if we are to tackle the disillusion with big party politics on either side of the Atlantic.

There are good civil liberty objections to the government establishing a data base for young people’s qualifications, which is coming across on the airwaves.

There is also a simpler, financial one. When will this government stop dreaming up expensive centralised data computer schemes? Does it not realise, even today, that the extra spending has to stop? Does no-one in government know where the spending tap is, and know how to turn it down?

We need a a year of no new spending initiaiitves, a year of trying to get more out of what they are spending, a year of cancelling some of the stupid, wasteful and spiteful projects that are already running. Ruth Kelly could cancel some of the lorry loads of intrusive technology her department revels in at transport, the Home Office could cancel the ID scheme, and the Treasury can stand down the accountants who were about to march into the offices of the Non Doms.

Best of all, they could cancel the orders for more CDs to lose in the post, and fail to replace any ciivl servant leaving one of the jobs where all they do each day is dream up more ways of prying into our lives and putting us under surveillance. We are not only fed up with them making Britain into a kind of prison camp for all of us inmates, but for sending us the extortionate bill for it.

I do not go in for gesture politics. Prime Ministers apologising for events of over a hundred years ago, often with a patent lack of sincerity, with the media in full attendance to make a political point leaves me cold. I am fed up with people expecting England to apologise for battles fought centuries ago when standards and attitudes for so different everywhere. If challenged on such an apology, I usually say I will wait for the French to apologise for the Battle of Hastings first.

The Australian Prime Minister’s apology for the more recent treatment of native people in his country was different. It can help heal wounds that are of more recent origin. It was clearly wanted by people whose own childhoods were changed fundamentally when they were taken from their mothers at an early age. It does not lead to financial compensation and will be criticised by some for that, but it is recognition that modern Australia has a different approach, and wishes to unify its people.

I welcome that, and trust it will be reflect a spirit of apology and forgiveness on both sides of the divide.

All good things have to come to an end. The benign environment where China and India delivered an ever more stunning array of goods at fabulous prices is changing into an era when Chinese and Indian demand puts substantial upward pressure on raw materials. At the same time the West’s insatiable appetite for these goods based on leveraged credit has been hit by the Credit Crunch.

During an era of transition – from rapid credit led growth to slower growth, and from low inflation to higher inflation – there are always conflicting signals for policy makers. Some look resolutely back, seeing the build up of inflation that has come from past monetary excess: they demand the donning of a tougher hair shirt in the forms of high interest rates and more intense regulation. Others look forwards to the slow down, seeing that the credit crunch itself will in due course reduce inflationary pressures and slash asset prices, which in turn depresses demand more.

The latest inflation figures for the UK are poor, with RPI inflation running above 4% compared to the old government target of 2.5%, but they should have come as no surprise. The next couple of months will see further energy and food inflation flowing through. No one believes the 2.2% increase in the CPI reflects family experience of their daily budgets, and adds to the feeling that the government and the monetary authorities are out of touch.

Tne government itself is under pressure on the Non doms issue. Many in business now believe the government’s addition of more scrutiny and detailed rules on savings income to the idea of a flat fee will scare people away. If the government persists they will discover the hard way that there is one thing worse than having rich people here not paying full amounts of UK tax, and that is not having the rich people here paying any tax at all. The government needs more revenue to get closer to matching its bloated pattern of expenditure. It is not a good time to pick a fight with people who are making some contribution to the tax collected and to London’s successful economy. Sometime reality needs to take precedence over ideology or senses of fairness.

The government also eneds to tackle the obstinate problem of little or no growth in public sector productivitiy. Now we have such a large public sector it is more important than ever that its productivity should start to rise by at least the average growth rate for the economy as a whole. Manufacturers needs to raise their productivity considerably faster than 2.5% a year to stay in business in a very competitive world. It is high time the government found ways to use the new technology and better management techniques used widely in the private sector to deliver more public service for less.

The pound has been falling for some time against the Euro, and is now also falling against the dollar. Whilst this helps exporters to set more competitive prices, it means more imported inflation. The Gordon Brown devaluation is now shaping up to be bigger than the devaluation after the damaging Exchange Rate Mechanism experiment in European monetary co-operation, recommended by all three poltical parties and foolishly adopted by a previous Conservative government. The Bank of England will have to take into account this drop in the pound when it makes its interest rate decisions, as a falling currency does loosen monetary policy and relaxes inflationary disciplines.

The UK is going to have to pay a substantial premium in the form of higher interest rates than the USA, Japan, and Euroland for some time to come. That is the price of too large a government deficit, too much wasteful public spending, and a failure to raise productivity in the public realm. The UK is less well placed to offset the Credit Crunch than our main competitors because the government divorced Prudence many years ago. The government’s newer Valentine is its very own flexible friend, the Borrowing Requirement, as it continues to spend money it does not collect in taxes. Government borrowing is deferred taxation. We will all be paying the bills for years to come.