Category: Blog

There has been a large response to the main Conservative messages.

Respondents fall into four categories.

Long term opponents of the Conservatives are critical of the messages. That is no surprise, and would have been true whatever had been put out.

Some loyal Conservatives are pleased with them, and will get on and put them to electors once the election gets underway.

UKIP supporters and sympathisers are critical. They want the Conservatives to speak mainly about the EU, sovereignty, immigration and related subjects. Time will tell how many of them carry out their threat and vote UKIP, knowing as they must do that it makes the election of a federalist MP in their seat and an overall federalist Lib/Lab government more likely.

Some Conservatively inclined voters are also expressing doubts, or sending in messages they would prefer the Conservatives to get across. Many will find that their concerns are covered in policy statements, available on the Conservative official website. The next few weeks are not just about how the swing voters swing, but how many traditional Conservative sympathisers do finally decide to vote for a change of government. There is only one realistically on offer, and that is change to a Conservative government.

Traditional Conservatives need to be reminded that their party has pledged to reverse some Labour policies they most dislike – the one way ratchet of powers to Brussels, the lack of proper border controls, the surveillance society and the ballooning deficit.

The proper way to bail out a Euro member would be to amend the Treaty to allow a formal system of loans and grants to Euro members who get into trouble. The Treaty could provide for suitable controls over the member state’s conduct in return for seeking and being granted aid. I would favour that approach, as I think the Euro area needs a better system of transfers.

As a non Euro member it would give the UK a good opportunity to bow out of more of the needless EU government that we do not want, and would give us the opportunity to have a refererendum on the Treaty as modified. Clearly the UK should not be party to the bails outs or the rules imposed on Euro members. The EU would doubtless need to give us substantial powers back to make a new Treaty palatable to the UK public.

A single currency scheme either needs a single government which can make the calls on how much to borrow, how much to print, and how much to spend, or it needs a set of rules over how much each of the individual memebrs can spend, borrow and print. If I were a German taxpayer I would not wish to bail out Greece. I would not be satisfied they have done enough to cut their spending. I would be worried in case Portugal, Spain and others were in the queue for my support as well.

Why do these governments whinge and whine so much about the need to reduce their costs? Business accepts that in recessionary times you may need to cut costs by 10% or 20% to survive. You just get on and do it. You don’t do it by threatening your customers with a worse service, or by cutting back your front line service or best product offerings. You do it by working smarter and cheaper.

These EU governments – and the UK – have failed to make themselves efficient and to discipline their costs for years. That should make it easy to cut the costs of doing what they need to do. They should be told to get on with it, instead of seeking new ways to milk the taxpayer. Borrowing more is just delayed tax.

I promised to explain why I did not go by train to Manchester. My local station is a twenty five minute or so walk from home. The first available train to get me to London Waterloo leaves at 6.06 in the morning, and after a change of train gets me there at 7.31 if it is on time. I needed to be at my destination in Manchester by 10.30 in the morning. That meant catching the 7.35 from Euston to get to Manchester Picadilly for 9.49. There was no way I could cross London in four minutes. Even if I had caught the later Euston train, the 8 am, and ran the risk of being late for my speech, I would only have had 29 minutes to get the Jubilee to Green Park and the Victoria line from there. So the train offered me the prospect of setting out at 5.30am but not guaranteeing I could be at my destination by 10.30. It would also have given me five hours of worry that all five trains would work and be on time.

A 35 minute drive to Heathrow, a one hour flight and a thirty minute taxi journey were bound to be shorter, even allowing for the waiting and checking time at Heathrow. I estimated I could leave home at 7am and still be there for 10.30, and so it proved. Three and a half hours. Not good, but fewer links to go wrong.

I could have driven to Euston, but that would entail battling the congestion and heavy London traffic in the morning rush hour, culminating in a difficulty in parking no doubt. That would have taken the best part of two hours, still leaving me with more than a four and a half hour journey if fortunate.

The cheapest option and maybe even the quickest would probably have been to drive the whole way. There was parking at the other end.

We learn this week that after 13 years of dithering and failing to put in any significant new rail or road infrastructure (other than the Channel link which the previous government had planned) the Transport Secretary suddenly wants to slash journey times by train to Birmingham. Of course, on closer inspection he does not expect the government to do this any time soon. It looks like an announcement for an election.

As my journey indicates, for many of us the problem with train travel is getting to the right station to jump onto a faster train in the first place. The endless congestion in most town and city centres near to stations is the number one problem we all face when thinking of train travel. If I lived near Euston and if my meeting had been near Manchester Picadilly it would have been a no brainer to go by train, but few of us are in such a position.

We want easier, cheaper and more timely point to point jounreys of the kind we actually undertake. My journey to Manchester did not need a faster train from London, but easier access to local stations, and faster trains from local feeder stations to main termini.

The government is always talking of joined up policies and integrated transport policy. True integration would improve junctions and roadspace to allow us road access to main stations, and provide plenty of parking when we get there. Then people might switch more to fast trains, and the train might indeed take some of the strain. At the moment the anti motorist policies in many cities gum up the works, force the use of more fuel per mile travelled, delay and frustrate motorists and impede access to rail services. Instead of grandstanding about ever faster trains on a few routes, Ministers should think about real journeys made by people trying to work in this country.

The FSA says today it will in future monitor more and make judgements about the safety of various financial products and activities.

The tripartite regulators led by the Chancellor made some very important judgements 2005-8. Between 2005 and 2007 they thought banks had more than enough capital and cash for their huge increases in lending and investment banking. They were wrong. They allowed the banks to bloat their balance sheets in a damagaing way.

Between end 2008 and today they have told the banks they have to raise or hold much more capital and cash relative to their lending. This has unsurprisingly proved very recessionary. Again they have been wrong – they should have asked for a more sensible rate of progress to more prudence, geared to the state of the economic cycle.

If the regulators wish to make more judgements, they should consider the next possible crisis, not the last.

They should ask, for example

Is it right for pension funds to be encouraged or required to keep so much of their asset in Uk government bonds? Markets think at these interest rate levels these are risky instruments. What happens if markets lose confidence in Uk government debt, or if interest rates have to increase substantially to raise all the extra money?

Is it right to encourage or require banks to keep so much of their liquidity in UK government bonds? What happens if they fall in price?

Yesterday was another successful day for anti terrorism. I was especially grateful as I was travelling to and from Manchester by public transport in order to make a speech there. We should not tempt providence or take things for granted. The anti terrorist police and Intelligence services are to be congratulated for all the networks and plots they have intercepted to make us safer.

I wanted to get to Manchester and back as quickly as I could. For reasons I will describe tomorrow that meant I had to go by car and plane, rather than by car and train. It meant experiencing once again the security and customer handling at Heathrow. There are a few questions I would like to raise about physical security, as opposed to intelligence and policing work.

The main worry yesterday at airport security seemed to be women who might be concealing bombs in their scarves or boots. They all had to take these off and put them through a scanner. All of us had to remove our belts, any men wearing boots had to take those off but shoes were fine, and all had to remove coats and jackets. No-one was found with anything wrong whilst I was in the queue. Meanwhile at the station no-one was searched for anything, despite the fact that terrorists have attacked trains as well as planes in recent years. The first question I have is why do we treat air and train travel so differently?

Because it took each person time to take some of their clothes off, find enough trays to put it all in, and prepare for the scanners,there was a long queue. There were not enough scanners available and open. When you choose which queue to join it is not possible to see which queue is longest, owing to the way the queues were controlled, so some people had to wait longer than others depending on the lottery of the queues. Why can’t they provide more channels? Why can’t they have proper overall queue control so waiting times are fair?

Security also required three different checks on the boarding card of each pasenger. We had to queue to have the boarding pass checked before being allowed into the security check area, we had to queue again to have the boarding card re checked to get from the security check area to the gates, and then again to gain access to the plane from the gate. I see the obvious need to check everyone at the point where they board the plane, to make sure we know who is on the plane, to check they are on the right plane and have paid the fare. I assume they also want to have a check on every person first going airside, so they can make sure all who reach airside can be accounted for. Why do they also need a third check on the boarding card?

As someone who has urged splitting up the monopoly over London airports I hope that when these main airports are in different ownership we will see improvements in the way security checks are handled. It is, after all, taking time away from shopping at the airport, and putting passengers into a mood where they are less likely to be willing to spend.

Yesterday the Conservative message for the next couple of months was unveiled to some of us.

It is: “We can’t go on like this. Vote for change”

Change includes:

“Change the economy. Back aspiration and opportunity for all. Gordon Brown’s debt, waste and taxes are holding us back and threatening the recovery with higher interest rates”

“Change society. Mend our broken society by encouraging responsibility and backing those who do the right thing.”

“Change politics. Give people more power and control.”

Any comments?

This week’s poor balance of payments figures for last month revealed two worrying facts. Despite the sharp falls in the pound, there has been no surge in exports to show us gaining market share as we become more price competitive. At the same time, imports have increased sharply as destocking ends, with no sign that UK industry is about to replace imports with home produced goods. Trade volumes both ways are up as the world economy recovers a bit, but there is no encouraging sign that we are about to improve our relative position.

After a decline of almost one quarter in the currency, you would expect both a surge in exports and a lively increase in import substitution. The absence of both so far implies several problems.

First, a lot of capacity was clearly lost in the recession. Factories were closed, people were made redundant. The last twelve years have seen industry decline as a result of high taxes and high regulatory costs.

Second, manufacturers have been finding it difficult to get bank finance for their activities. In need of cash, they have favoured putting prices up in sterling terms, taking advantage of the lower pound to do so. They have been forced to raise their margins on lower volumes given the shortage of finance.

Third, the UK in recent years has lost great swathes of capacity. JCB recently told us how small a proportion of their vehicle components they can now source from the UK. If you go into most clothes shops there are racks and racks of Asian textile products because the UK industry has been cut to the bone. UK steel plant is closing as demand falls.

We need policies that will help industry recover and build new capacity. That requires changes to taxes, regulations, and bank regulation.

One of the triumphs of Labour spin over the last twenty years has been to caricature Thatcherism. Because they so feared its success, economically and electorally, they set out to associate it with a set of unpleasant characteristics so we would “never go back to it”. Their presentation of Thatcherism was a tissue of lies, but quite successful with some people.

Labour sought to endow Thatcherism with five disagreeable features:

1. The economics of boom and bust
2. Belief in or acceptance of great inequalities
3.Run down of manufacturing
4.Intolerance of minorities
5. Cuts in “front line public services”

They also attempted to tarnish popular Euroscepticism with these alleged failures, branding the “old” Conservatives as too Eurosceptic, and seeking to associate this mindset with the rest.

The truth is, of course, the opposite of most of this. Thatcherism was based on

1. Honest money – economic policy was grounded on targets for the amount of money that could safely be allowed in circulation to fuel non inflationary growth. Boom and bust was introduced by shadowing the DM and by John Major’s policy of joining the Exchange Rate Mechanism against Margaret’s better instincts, a policy urged on him by Labour and the Lib Dems in a consensual act of folly. The one Conservative economic error was to become too Euro friendly and to join a European scheme of economic management which was bound to fail.

2. Encouraging a land of opportunity for all, where anyone could get on in life whatever their background, whoever their father was, wherever they went to school. High Thatcherism was based on shares for all, more small business activity,sharing wealth and income through hard work and access to opportunity.

3. Manufacturing was seen as an important part of our economy. It was in the Tory years that the motor industry was rebuilt in the UK by attracting foreign captial and management following the collapse of the nationalised UK industry. The pharmaceutical, aerospace and other leading industries flourished with appropriate government help.

4. I never heard Margeret Thatcher express any hostility to people on the basis of creed, colour, religion or lifestyle. We sought a Britain that used all its talents, whatever their background. We did not wish to make windows into men’s souls or to send in the thought police.

5. In the 1980s the government pursued a radical policy towards nationalised industry, but a very traditional cross party policy rowards Health, education and the police. Each year saw real increases in funding, and the PM regularly made speeches explaining how much extra the government was spending. She did not seek cuts to front line services and valued new schools, hospitals and the additional teachers, nurses, doctors and police which she recruited.

If we compare this with Labour’s recpord, the irony is that they have come closer to their caricature of Thatcherism than the Thatcher government ever did.

1. They followed a policy which created a far bigger boom and bust than the ERM
2. Inequalities rose under Labour
3. Manufacturing output fell under Labour , compared to growth under the Conservatives
4. Labour promoted some minorities, but attacked other groups in society which it did not like. Do not be a Nimby or a motorist under this government.
5. Labour continued with the policy of real increases in spending on most public services, yet it failed to fund the army properly for the wars it wished to fight, and allowed so much of the extra cash to be absorbed in administration and pay increases that some cuts did take place despite the record funding.

The changes Conservatives are calling for today are changes to the way the UK is run. We have been run by a government of spinners for too long. Their cariacture of Thatcherism is one of their successes. It is time we swept it away, pointing out it is a tissue of lies. If only we had had the same success with growth, industrial growth and rising living standards in the last decade that we enjoyed in the 80s we would be a lot better off. The Conservatives have “changed” from the caricature of Thatcherism – mainly because most of it is myth not reality.

Recently I was keen and happy to support Bill Cash’s proposed legislation to “reassert UK Parliamentary sovereignty.”

His five clause Bill states “The sovereignty of Parliament is hereby reaffirmed”. It goes on to protect sovereignty from treaties, other legislation and the European Communities Act, itself the fount of EU power in the UK. It would send a clear signal to UK courts that they need to follow UK law, even if this is in conflict with EU law.

I look forward to William Hague telling us if this is the way he will propose his own Parliamentary sovereignty legislation which has been promised, or if he has some other way of doing it. The Cash short simple Bill looks good to me.

I do not always agree with business lobbies, who often argue the case for larger and well established businesses at the expense of innovation and new competitors, and who often favour bigger government than is ideal.

Today the business voice seems united in saying we need lower tax rates to allow more business and jobs to grow in the UK. I entirely agree. They could add to their case that that would be the best way to increase tax revenues. If we carry on with Labour’s tax and pillage policies more and more companies will go abroad, cut their activities in the UK, be deterred from new investment or will simply not start up. 28% is an uncompetitive Corporation Tax rate, 50% an uncompetitive higher income tax rate, and National Insurance is a substantial tax on jobs when we need to be encouraging jobs.

A government keen to promote jobs and growth, and keen to cut the deficit, would cut the rates of tax on earning and making profits.