Category: Blog

The government is worried about the persistent inflation rate in this country, at a time when we really need to cut interest rates to stimulate the economy and take some of the pressure off borrowers.

It has the answer to the problem under its own influence, as much of the high inflation rate is coming from public sector taxes and prices. Today we hear of the campaign to resist the 2p extra tax the government is proposing this April on petrol and diesel. This follows a totally unnecessary extra 2p on fuel last autumn.

These increases are vengeful against motorists and hauliers. The government’s tax take on fuel has soared anyway, thanks to the big increases in market prices which gives the government more revenue automatically from the ad valorem tax. If the government still believes fuel burn by travellers is the only part of the carbon dioxide problem it wishes to curb, it should recognise just how far its taxes and the Middle East oil situation have jacked prices up. People now need to be given time to adapt, to buy their more fuel efficient vehicles and scrap the older ones. They cannot afford to change their vehicles because the government is squeezing them too much, and they cannot afford the sky high train fares either.

The government has also stoked the inflationary fires by its mismanagement of the nationalised industries. Postal charges have surged, as a result of the government taking so much other government business away from the Post office. The very well paid management they have put in has decided that using monopoly pricing power is the easiest way to pay their bonuses, so the rest of us are suffering.

The nationalised railway track company has pushed up its costs and charges hugely since it came into public ownership. This is now being partly passed on in much higher fares to passengers for many journeys. The nationalised railway is no longer thought a suitable means of carrying much of the post around the country. We have the ridiculous sight of one nationalised industry refusing to use another on grounds of cost and efficiency, with the Minister when I last asked explaining to me that was the reason! You would have thought a government which defines being green as going by train would at least make the nationalised post go by train.

A whole series of fees and charges are regularly shoved up by more than inflation as the government seeks back door ways of taxing people. Local government too is on to the same trick, with its planning, building regulation and other fees. Council taxes are just about to go up by much more than the 2.1% inflation rate of the government’s official figures.

So what should the government do, to curb inflation? Instead of penalising us with high interest rates for its own inflationary actions, it should have a period when the costs government imposes go up by less than 2.1%, not by more. They could start by:

1. Announcing no further 2p increase in fuel taxes this spring.
2. Cutting fuel duty by the amount needed so the total tax take came out in line with the original budget figure, before the huge increases in prices we have seen in recent months swelled the total.
3. Telling Post Office management they should cancel the postal price increases and make up the money by efficiency gains. If they cannot, they should change the management to someone who can. It would not be difficult to do so in such a badly led organisation.
4. Putting the railway track company back under private sector discipline, to grapple with its bloated costs and inefficient use of contractors. In the meantime tell the regulator to prevent the above inflation fare increases, and stop the attempts by Network Rail to charge the rail operators too much for its poor service.
5. Reducing the costs imposed on local government, by cancelling much of the performance and best value regime, which in total cost Councils much more than £1 billion a year. Then demanding that they get their Council Tax increases down.
6. Putting a freeze on all other costs and charges imposed by the public sector for the next thirteen months to assure people the public sector is turning off its inflation machine.

Only if the government takes action like this can we regard it as serious in its stated wish to curb inflation. Only if it does this will the Bank of England have sufficient scope to lower interest rates, as it needs to do to tackle the Credit Crunch. We live under a rip off government. Please give us a break.

Tomorrow the Synod of the Church of England meets.
It has the power to change its agenda to deal with topical matters.
It should organise an early debate on the remarks of the Archbishop.

The Archbishop himself should suggest this, and should lead it. It would give him the chance to explain his "nuanced" positon to the Church, and to correct the more extreme claims of his critics. He after all wanted this debate, so it would be strange not to use the Church’s very own Parliament to further the debate.

The Archbishop could show wisdom if he apologised for allowing many of us to think he wanted to introduce features of Sharia law here with a parallel legal system, and could withdraw the phrases and statements that led to that belief.

Alternatively, he could use the platform to make his case in his own way, explaining why he thinks he was right all along, whatever his critics may say.

I fear the Synod instead will ignore this. That will lead to more fevered speculaiton in the press. It will lead some to ask why did he start this debate if he does not mean to carry it on? And why complain that the debate is not being conducted in the way you would like, if you yourself are not prepared to join in?

It is time for Dr Williams to emerge from hiding behind websites and spin doctors, and to take to the airwaves himself. The Synod would give him a fine platform – I bet the cameras and microphones would turn up if he agreed to put on a show. The Church should grasp such an opportuntiy with welcoming hands.

The Archbishop has got himself into a fine mess. It is curious that despite this I read and hear everywhere that he is intelligent and wise. Intelligent he may be, but he lacked judgement and wisdom on this occasion. It is strange that someone is such a senior position, with access to good advice, should have made such elementary errors in handling the media.

The hostile interpretation of his speech began before the speech was made. It was obvious from the first briefings about the speech both that the Archbishop wished this speech to attract attention, and that it was going to attract the wrong type of attention. Why didn’t the Archbishop review the way it was being presented before he made it, and adjust the text to make it safe?

Why did he allow himself to "assent" to a question which drove him further in the direction of appearing to recommend alternative law codes, when it must have been obvious by that stage how such proposals were going to be received by press and public?

Why did he then refuse to give further interviews the next day when the press had torn into his remarks? Wasn’t it time to come out fighting, to defend what he had said in person, or better still to withdraw the offending comments and end the storm?

Any politician or person in the public eye knows that journalists love to push you further than you wish to go. They understandably want good copy, and good copy is extreme or whacky copy. If you are an opposition politician every day you are faced with a cruel dilemma. Do you say very sensible things that most agree with – in which case you are unlikely to be reported – or do you say something that challenges, that takes the debate on – in which case you will be reported but with the danger of massive retaliatory spin against you from the affected interest groups or the alternative party? Oppositions have to choose their ground carefully, but they have to take risks to be heard.

Government Ministers and Archbishops are in a stronger position. Some of the things they say and do have to be reported, even if they are sensible and boring. They need take fewer risks. Their words reflect actions that affect many people’s daily lives, so they are newsworthy anyway. They also do not need to be in the media in the way an Opposition needs to be in the media. They have power to do good and make changes without reference to the media. Oppositions need media coverage to try to win people over to gain power. Establishments can get by without coverage, or with the lower level coverage that comes with doing the job sensibly.

It makes the Archbishop’s decision to want to lead a public debate on the issue of Sharia Law particularly strange to understand. You would have thought the Archbishop would be working away behind the scenes, out of the limelight of the national media, on how to unite the Anglican movement worldwide during a difficult time. You would have thought he would plan his use of the national media aorund Christmas and Easter, when the Church has more ready access to the news,to find new and better ways of communicating a positive Christian message. The Anglican Church is in retreat, losing communicants and struggling for a role in many communities. Some leadership on why Anglicanism matters would be appreciated. Some moral leadership on the big issues of the day might help. There is an important role for the leader of the Established Church, but he needs to first to secure his base rather than taking such risks as he took this week.

I spent the morning yesterday talking to people on doorsteps in my constituency, as I often do on a Saturday. It reminded me of the appeal of Barack Obama, sweeping to victory in three more states this weekend, taking his tally to 18 out of the 28 contested so far. Hillary Clinton is still in the race because she has won in the more heavily populated states by the sea in both the east and the west, where there are more delegate votes for the Convention. Obama’s appeal is that he is the anti Washington, anti establishment candidate – the man who tells the USA that unless they vote for change politics will remain as frustrating as it is today.

On the doorsteps in the UK there is a feeling of powerlessness. Here people are fed up with their government. They are resigned to having to put up with another couple of years of its tax grabbing, it wasteful spending, its crude authoritarianism, and its unwillingness to be honest about everything from the EU to the wars it makes us fight. I was told by several that their incomes are badly squeezed by high taxes. I heard a litany of complaints about waste in the NHS, in quangoland and in other public services. Some said they did not vote when there was an election on and saw no point in talking about political matters when there is no election. The growing army of single people are often out when you call, scurrying around to do the shopping in between their time at work or with friends.

People here hate big money politics. They hate the way the main political parties raise their money, and they hate the way they spend it. They are fed up with slick spin doctors making politicians play back to them their own views, sieved through polling and focus groups. They are fed up with people in power saying some of the right things but delivering nothing. They doubt the politicians are in charge, and are not sure any longer they care about them being in charge.

Here in the UK we want lower taxes, so we get higher taxes. We want the money to be spent better on our priorities in health and education, only to wake up to find so much of the money has been wasted on Metronet, Northern Rock, cancelled computerisation schemes, ID cards and Network Rail. We want our local Post Offices to be available to serve us, only to find that after the government has taken much of their government business away so they have to close. We want the best of our institutions preserved and cared for, only to find this government destroys so much of its inheritance in its desperate bid to bring us into line with the EU. We want fair minded and competent administration. Instead we get a benefits and tax credit system that lets so many people down –by overpayment and underpayment on a grand scale – and an amalgamated Revenue and Customs that seeks to maximise its tax take by any means.

The irony of the Obama campaign is that no doubt his fine words are crafted by expensive advisers. It is doubtless based on considerable polling and research. He can articulate the sense of frustration many Americans feel about the old firms, Bush and Clinton, who have dominated US politics for two decades as if it were an inheritance based system. He can point to the disillusion with Iraq, the anger with the sub prime crisis, the sense that there are still too many Americans who do not get the most out of the great society. He may be able to forge a coalition from the dispossessed and those who hate Washington, but he will be fighting apathy for many will think he too will become part of the problem should he be elected. I like his anti government rhetoric, but I doubt I would like his policies. The problem for the anti government campaigner is how would he make change stick? What changes would he make? Creating slimmer, better,more responsive government out of the huge bureaucracies the great democracies have now grown is not going to be an easy task.

It is a pity that the UK and Japan are both so over borrowed that they could not join in a concerted programme of tax reductions to get the advanced economies moving again after the credit crunch.
It is good news that the G7 avoided a public row, and understood the need to make soothing noises about slowdown, not recession.
It will take a combination of interest rate reductions and tax cuts to stimulate growth sufficiently. Both the Uk and Japan need to take aciton to get better value for money from public spending, and to curb their deficits.

It was ominous today to hear on the radio that the Archbishops own advisers at Lambeth Palace are briefing that they warned against his remarks on Sharia law.

The Archbishop’s current defence is that he was misunderstood – that he never wanted Sharia law to be a kind of parallel system in the UK. Yet if you examine the text of what he said, helpfully put out by the Church of England (which may undermine him further), it is clear. There are two important remarks:

1. In response to a question putting to him "the application of Sharia Law in certain circumstances…seeems unavoidable" he agreed.
2. He also said "Individuals might choose in certain limited areas whether to seek justice under one system or another".

It is difficult to say he has been misrepresented. Agreeing to a leading question – or failing to say "No" to it – counts as your statement. Any of us who have been through the media mill know that if someone tries a leading question the safest thing to do is to preface your response by "No", or "I can’t agree with that" or "That is not what I said" before exploring whether there are any words you could use that could bring you nearer to the questioner if you wish to go that way.
The statement on seeking justice under an alternative system was not sufficiently hedged. If he had said that everyone had to obey the same law, but religious groups could set up their own arbitration systems under the common law if all parties to the process were volunteers to it he would not be in the trouble he is now in.

I would suggest that he should withdraw these two remarks, and restate his position, making it clear that there has to be one common law agreed by an elected Parliament. There should then be maximum toleration under that law for different religious groups to act as they wish, where their attitudes and practises are compatible with the general law.

Digby Jones will be accused of making a gaffe today, for daring to speak out against the magpie tendency of the Chancellor. He should keep digging.

For Digby is right – if the government presses on with its greedier version of schemes to tax Non Doms more it will be bad for British jobs and British prosperity.

The British economy needs the organisational skills, the marketing flair and the investment backing from the overseas executives who have come here to run businesses. No-one can be sure at what point the tax and regulatory background becomes too stifling, but now is not a good time to test it to destruction.

The government has presided over two huge deficits – its own borrowing requirement, and the balance of payments deficit. Both need inflows of foreign capital to keep us going. That was why Gordon Brown took his begging bowl to China recently.

It’s not Digby in a hole, but the Chancellor. Digby is offering good advice – so keep digging Digby.

Dr Williams is in a hole. Everyone tells me he is a very intelligent man, but on this occasion he has made an elementary error in the way he thinks about law and society.

There can only be one law in a free democratic society. Everyone has to obey it. The only privilege that should extend to the government is the right to change the law, but only for future actions, not for past.

<a href=’http://www.johnredwoodsdiary.com/wp-content/uploads/2008/02/399px-rowan_williams_-001.jpg’ title=’399px-rowan_williams_-001.jpg’><img src=’http://www.johnredwoodsdiary.com/wp-content/uploads/2008/02/399px-rowan_williams_-001.jpg’ alt=’399px-rowan_williams_-001.jpg’ /></a>

Dr Williams has confused the need for toleration, with the need for a single law.

I am all in favour of extending toleration. It has worked well for the UK, which is a fairly tolerant society. There are many areas where we do not need to have an agreed single law or rule, where we can tolerate different practises.

We do not need to enforce a law to make people eat pork. We can allow people with religious objections to avoid it. Nor should we enforce a law to prevent others eating pork who have no objections to doing so.

We should not enforce a law to make all women appear in public with a head scarf, as many of us do not believe such clothing is necessary. Nor should we pass a law saying women must not appear in public in a headscarf, as some women would like to for religious reasons, and some for fashion.

A majority of motorists today think driving at 80 mph on a motorway is a safe thing to do. A minority do not, and accordingly observe the speed limit. You could say it is inevitable that we need a law which allows the majority to practise their belilef that driving at 80 mph is safe.

However, we could not move from a law which says 70 mph is the maximum to a law which says 70 mph is the maximum if that is your belief, but 80 mph is the law if you are not a 70 believer. The police need to know which is the law for all, so they can enforce it fairly. That is why our system is based on people arguing and lobbying for changes to the law, and on elected officials who have to gauge where the majority and commonsense lies and change the law accordingly.

Dr Williams should withdraw his silly idea, and understand the important distinction between toleration, which is good, and the need for a single law, which is essential. The Archbishop and the Anglican Church should help those of us who want less law – and therefore more tolerance – to identify the further areas where we can relax and remove the need to boss people about. That would get him out of the large hole he has dug himself into.