Category: Blog

What a difference an election makes. When Kraft were bidding for Cadbury the government said they were powerless to stop it. They did not propose any legislation to give themselves the power to stop such deals. We know, as they proved with the Digital Economy Bill and the Finance Bill, that they could push unwanted legislation through all stages in a matter of hours when they wanted to. So why didn’t they put something to Parliament about take-overs when it mattered?

There are several possible explanations. The first is they may have been told that Company law measures to block foreign take-overs might not be legal under EU law. Much of this area of work is a power taken by Brussels and given by this government in their legislation. The second is that their new proposals may not prevent a single take-over, so it was best not to put them to an early and real test. The third is, that this idea has been subject to discussion with UNITE, one of its leading advocates, and the politics have only just reached the point where it needs to be announced.

The leaks – which are not being denied and may even be inspired – suggest the policy has two features. The first is to require a two thirds majority to approve a takeover. Maybe that does get round EU law – we will find out. It does not guarantee a block on any given foreign take-over. If the bidder offers a good enough price most shareholders might want to sell out anyway. The second is to stop “hedge funds” voting if they have just recently bought the shares with a view to exploiting the increase in price over the bidding period. In practise I doubt they will be able to single out “hedge funds”. It is more likely they will have to ban any recent buyer of the shares from voting, which could include new shareholders they like. This would include a voting ban on shareholders deliberately buying into the company to help keep it independent. The “White Knight defence” is a well known City practise where sympathetic shareholders buy up shares to thwart an aggressive bidder. Intervening can often have perverse consequences.

There is also discussion of a “public interest” ground for turning down a merger. The Competition authorities always used to have this reserve power. When I was Competition Minister, acting for the Secretary of State, we could invoke this public interest clause in a number of areas if we wished. The irony is that it was Labour who swept away the old and perfectly good Competition Law in order to impose a complete European system on us. Now it appears they regret their European enthusiasm and are thinking of going back to the future.

Promoted by Christine Hill on behalf of John Redwood, both of 30 Rose Street Wokingham RG40 1XU

As a blogger pointed out, the Input and Output price inflation is going up just as we feared. House prices are also on the rise.

The government may see this as a kind of success, with an election in the offing. The deflation they wrongly feared has not come to pass. Others see it as a sign of how weak the Uk economy has become, with rapid inflation in some assets and prices at a time when output is still very depressed, and when there are more than 5.5 million people of working age without a job.

The Chancellor and the Bank are silent on why this happening, just as the PM was when I asked him about inflation last year when it seemed likely it would go up. Could it be that their lop sided moneypolicy is to blame? Could it be that their policy of expanding the public sector and starving large parts of the private sector of cash is causing this poor performance?

Promoted by Christine Hill on behalf of John Redwood, b oth of 30 Rose Street Wokingham RG40 1XU

Why can’t Labour and Lib Dems spare us the false allegations and the crocodile tears. Today they claim to have discovered that Tory plans for a more efficient public sector mean fewer public sector jobs. So do Labour plans, if they knew how to implement them and if they were honest about them. The whole point of doing more with less is to employ fewer people to deliver the given service, and to buy fewer items from outside to provide the service.

This does not mean compulsory redunancies.In a 6 million strong public sector workfoce it is likely 300,000 a year will retire or resign for one reason or another. Some, like teachers, nurses and doctors, need replacing. Other posts can be abolished and more efficient weays of working introduced to start to control the costs. It’s scarcely rocket science, or worthy of “Shock, horror” headlines. The aim is a smaller public sector delivering a bigger service where needed, and doing less where it has been pursuing the wasteful, unpopular or needlessly interfering.

The Conservative plans to cut to pay in the public sector in the interests of greater equality should appeal to Lib dems and Labour. It is one of those strange ironies that a Labour government which talks the language of more equality should have presided over such an explosion of top pay in the public sector. Those would be both easy and popular cuts.

As feared, the Lords did not seek to prevent the passage into law of the badly drafted and ill thought through Digital Bill I spoke about earlier in the week. Only the Lords could have stopped this Bill, given the determination of Labour to use its majority to put it through.

Some people seem to think that in the wash-up the government cannot get its way. This is only true if the government behaves well, and starts to restrain itself. If a government, which still has a large majority in the Commons, can avoid losing any votes in the Lords, it can still carry its legislation on a much shortened timetable, as we have seen this week.

A more democratic government would have understood the public anger about some of the measures, and understood the wisdom of those of us who urged more debate and less legislation, voting against the government’s steam roller timetable motion.

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Yesterday the government presented a Business motion to the House which allowed just one hour to “complete” consideration of the Digital Economy Bill, and a mere 3 hours to consider and pass an entirely new 71 Clause Finance Bill. It summed up all that has been wrong for the last five years. It was the final denouement of a government which hates, sidelines, marginalises and trivialises Parliament. This government has undermined Parliament by its actions and its inactions.

I and a few others opposed the government’s Motion. The government moved to close down debate on the shortage of time for debate. We forced a division and voted against, but there were too few of us. We then called another division to try to stop the steamroller on the Finance and Digital Bills, but again we lost by a wide margin. We also wished to salvage the motion to ensure backbench involvement in future timetables for House business, but that was brushed aside by an arrogant government machine. Then we were in to the shortened debates.

I decided to use my share of the little time available to speak against the Finance Bill. It is normal for there to be a short Finance Bill to allow revenue to becollected prior to a May election. It is not normal for there to be a blockbuster 166 page Bill with just three hours for Second Reading,. Committee and Third Reading. In the time available we just managed a short 2nd Reading and the beginnings of a commitee session. I had spoken against the Digital Bill the day before. I will post the Finance speech as usual. The main burden of my comments was to highlight the lack of any enterprise strategy, the failure to reduce tax and bureaucracy on those who work hard and create jobs, at a time when we need hard work and new jobs to fuel the recovery.

So what should we call this miserable Parliament as it limps to a sorry conclusion today? Should it be known as the Bad Parliament, for all the damage it has done to itself and the UK economy? Or as the Bankrupt Parliament, for the huge sums it has spent on banks, the public sector and itself, forcing the country into huge debt? Or the Crashed Parliament, to remidn us of the massive Boom and Bust it helped fuel? Or as the Failed Parliament, for its inability to hold a bad government to account owing to the refusal of Labour MPs to vote for proper Parliamentary scrutiny of most things, and its refusal to see the damage the failure of Parliament was doing to itself and to the country? Or should it just be known as the Hopeless Parliament, the Parliament that gave away yet more powers to the EU, to quangos and anyone in sight, and couldn’t even work out its own expenses? I am opting for Hopeless as the best description, but you may wish to make other suggestions. Please remember to frame them for a family audience!

On the ropes over taxes and the deficits, Mr Brown is trying to change the subject today. He wants to talk about a new democracy.

He does so without a hint of irony and without a moment for self reflection. Yesterday he could have instructed the Ministers in his government to try a little democracy for a change in the Commons. Instead they opted for their well tried and tested steam roller approach to all other opinions but their own.

The Digital Economy Bill had been 13 years in the making. Apparently over those 13 years they had discovered how important the creative industries are, and how they need new regulation. The government against all precedents decided to hold a second reading of a major new bill after announcing the end of the Parliament!

Worse than that, they time limited debate with a vicious timetable. We could have stayed later and spent more time on the Bill last night, but that did not suit Labour. Instead those of us who did get to speak were time limited. Today all of one hour will be given over the committee stage! A proper committee stage needs a minimum of 20 hours. The bill in its current form is ill thought through, badly drafted, and will have unpredictable consequences. Last nigth when I sought to expose one of the problems with it, the Minister seemed unaware of any of the impact the Bill might have and was left defending some other Bill in his imagination which he had not presented to the House.

Democracy is in your heart. A democrat respects the opinions of others, considers them carefully, and allows full debate to expose the different views. This government has always done the opposite – it has scorn for its opponents views, seeks to misrepresent or stifle them, usually kicks the person and not the ball and allows as little debate as possible. You should judge this goverment by its actions, not by its fine words on democratic reform. The method of handling the Digital economy Bill sums up all that is bad in this government’s approach. They are not democrats in their hearts, when it comes to handling other people’s opinions.

Wow! What a response to my questions on housing. As a good number of you say, it is a crucial issue for many. There are two nations, the haves and the have nots, when it comes to home ownership.

As many of you also rightly say, homes are very expensive for people starting out on average or below average salaries. Now the banks require a much larger deposit it is doubly difficult.

That produces a paradox. If the government follows policies to cut house prices more and more quickly, that entails rationing mortgage credit even more strictly That makes it in the short term even more difficult for people to buy their first home. If the government relaxes mortgage credit too much more people can start out, but the homes absorb an ever bigger proportion of people’s incomes. Ultimately it is self defeating. The main driver of high house prices in the period from 2002 to 2007 was excess credit flowing from weak regulation of the banks and the low interest rate environment. That leaves first time buyers today in great difficulty.

We need to work towards a better relationship between average income and home prices, without a violent shake out which will damage existing owners too much and will put off or prevent first time buyers from starting out on ownership. Ideal would be a period of no rises in house prices coupled with a resumption of real income growth, leading to a better balance over a few years. That is easier said than achieved.

One of the main drivers of high or sustained house prices in the last eighteen months has been the big fall in the pound. This has meant that central London property prices which are very high for any normal tax paying UK earner have become a lot cheaper for overseas buyers buying from a stronger currency base. This in turn has enabled more UK central London residents to sell at good prices and then pay higher prices than otherwise for alternative property elsewhere in the UK. The continued strong flow of migrants into the UK has also created a strong demand for housing of all kinds, against a background of relatively low build rates.

So, to get prices and incomes into better balance we need a number of measures, each inadequate in itself but together helping to move the balance:

1. Lower Stamp duty tax on purchases
2. Aboliton of Seller’s packs, which act as a deterrent to putting your home on the market
3. Deficit reduction and monetary policies designed to stop further falls in the pound
4. Re balancing of the credit available to private and public sectors through the banks – credit for mortgages has lurched from being far too easy to being too tight
5. Incentives for local homeowners and their Councils to accept new development – compensation for affected neighrbours, developer contributions for infrastructure and extra Council tax receipts for Councils
6. A Simplified planning system capable of giving quicker answers – whether Yes or No – without the cumbersome regional level interfering. Local people need to feel more in control of whether and where new development should go.
7. Proper controls on borders and migration rates.

They say charity starts at home. In that case public spending cuts should start abroad.

The Uk does not just have a problem of overspending in the public sector. It also has a big balance of payments problem. The UK needs to buy too much expensive overseas currency to pay its bills abroad. This is helping drive the pound down, making us even worse off.

So if the public sector can cut its spending in foreign currencies, that provides a double help to the struggling economy. Fortunately, it should not be that difficult to do so, as some of the more wasteful or less desirable spending is the spending the government does abroad.

Here are some examples:

1. Withdraw the army from Germany, and house them in UK barrracks. Follow the suggestions on this site to allow soldiers to own their own married quarters whilst in barracks, and to sell them back at market values on leaving, using private finance. This will save large Euro based spending, allow disposal receipts of assets in Germany and provide extra private capital for much needed improved housing.

2.Cut the wasteful and often undesirable expenditure incurred by the EU. Much of the non agricultural spending is at best marginal and at worst undesirable. All EU states are wrestling with budget problems, and the EU itself says they should all cut their budget deficits to 3% of National Income. Shouldn’t the EU lead by example and slash its own spending to make that easier? That’s more hard currency cost for the UK. The government says it has influence in the EU – now’s the time to use it. Would Labour rather cut the NHS than the EU budget? If so, why?

3. Transfer spending on reconstruction and development in Afghanistan and Iraq to the Overseas Aid budget where it belongs, removing aid to richer countries from that budget whilst continuing to meet the international targets that both main parties have agreed. Overall betweent he Defence and Overseas Aid budgets there would be a cut, but the overseas aid budget would go up and be better targetted on need.

4. Pull the army out of Afghanistan as soon as possible. We should not commit ourselves to an intensification or prolongation of the war in a situation where the effort needs to be put into the politics rather than the fighting.

5. Review all the imports of goods and services within the public sector and hold competitions to see if domestic suppliers can provide a good alternative as contracts come up for renewal. Every transfer of a service or good from overseas to UK will help relieve pressure on the currency, and will help cut the benefits bill as more UK people go to work to service the state.

The UK has to earn its way out of this mess. It is importing too much, and that includes the public sector.

Mr Farage appeared on “Have I got news for you”. His main political message was that Vince Cable is the best of the three “Chancellors”. He was fulsome in his praise of Mr Cable, and gave him strong support against his main rivals.

This just goes to show that UKIP are not dedicated to combatting federalism in the UK. Mr Cable is one of the leading Lib Dem Euro federalists. He not only wanted and voted for all the transfer of powrs that have happened under Nice, Amsterdam and Lisbon, he not only voted against a referendum on Lisbon having promsied one, but he wants the EU to take more of our powers of self government away. He supports the Uk joining the Euro in principle. He is a keen advocate of regional government which represents Brussels remodelling our democracy in a European burreaucratic way. He was the leading advocate of the ruinously expensive and unsuccessful bank nationalisations. He is against cutting National Insurance. He is a strange cheer leader for UKIP

Indeed, UKIP”s whole strategy for this General Election is more of the same. They promise not to stand against strong Eurosceptic other party candidates that can win, yet they are busily putting up UKIP candiates in seats with Conservative candidates who have voted against Nice, Amsterdam and Lisbon, who have voted for a refererendum, and think the UK would be better off out. As expected you can’t trust their word. They are determined to split the Eurosceptic vote in a way which doubtless delights Mr Cable.

Mr Farage is himself standing against the independent Speaker, himself a former Conservative Eurosceptic. This is against the convention of the UK democracy Mr Farage sometimes claims to hold dear. More importantly it means Mr Farage himself, the most newsworthy of the UKIP slate, is not taking the fight to a leading federalist MP and putting him on the spot as to why he has sold the UK down the river and done so much damage to our democracy by giving away so much power. Surely UKIP should be tearing into Lib Dem and Labour federalists who led the charge to damage our democracy by such huge transfers of decision making? Why isn’t Mr Farage standing against Mr Cable, for example?

Judge people by their actions. Mr Farage and his party are just another anti Conservative party. They are not furthering the cause of Uk democracy and independence with their interventions in this UK General election.