The BBC and Channel 4 present the partial shutdown of the US government as evidence of a malfunctioning democracy. They seem to mainly blame the Republicans for daring to oppose the President. Clearly Mr Obama’s spin carries a long way. They spread scare stories that the US will renege on some of its debts by failing to pay interest on money it has borrowed.

          I am neither a Republican nor a Democrat. I occasionally comment on US  politics, but am not a partisan, as it is not my country. I do expect UK public service broadcasters to give a fair and balanced view, to explain both sides properly.

           The Republicans would say that the temporary partial shutdown is the result of an administration that cannot live within its means and needs to cut more to control its debts and deficit. The Democrats raise the spectre of debt interest going unpaid, bringing the US credit rating crashing down. They suggest the poor will go without their Federal pay cheques. The Republicans point out that n either of these bad events need happen.

          Over the weeks ahead tax revenue will pour into the Treasury in large enough quantities to pay the interest on the debt and make the necessary and most deserving payments. If there is no deal to raise the debt ceiling, then the Administration would have to cut back on less essential spending to live within its means. The President can also negotiate with the Republicans controlling the Congress to find a way forward so he can borrow some more, as that is clearly his wish.

            It takes two sides to achieve a breakdown. It is shows how vigorous and dramatic politics can be in the US, where the executive and legislature are different bodies and the Congress is controlled by a  different party with a different view on safe levels of borrowing to the President.

            The US has had partial government  shutdowns before. Doubtless there will be a deal in due course. The Republicans are highlighting the huge debts and deficits the US has built up and are forcing change to tackle them. UK observers could at least seek to understand the reasons on both sides. This is not commonsense and decency against a group of extremists,. This is a gripping battle for the soul of America between its two major parties. The Republicans want the deficit down more quickly and are using Congress to try to achieve that. They see Obama’s health care proposals as the extra spending  the US cannot afford.

On Monday at the Selsdon Group meeting I set out the case for lower taxes for all.   Fewer people facing benefit withdrawal as their income rises should be paying any Income Tax. To make it more worthwhile to work we need a smoother progression at lower income levels. The policy of inceasing TaxThresholds to take more people out of Income Tax altogether has boosted family incomes, and is likely to be extended in future budgets. The Benefits cap also helps to limit high marginal rates of tax and benefit withdrawal at higher income levesl but needs to be allied to tax cuts to assist with living standards.

Making work more worthwhile means less tax  allied to  realistic levels of benefit support and sensible rates of withdrawal of support as income rises. A combination of tax cuts and benefit reform is desirable to cut the numbers of people who have to pay for their own benefit top up by Income tax, a wasteful money go round employing officials to take the money off people in tax and give it back to them in benefit.

We need to raise more money from taxing the rich to pay for all the public services and bring the deficit down. The way to do this is to impose tax rates the rich will pay, and set internationally competitive rates which means they will come here and stay. The rate of Capital Gains likely to maximise the tax revenue from the tax is under 20%, as studies of past changes to CGT in the UK and US show. The rate of Income Tax should be brought back to Mr Brown’s 40% maximum. As a socialist who liked taxing the rich, you can rest assured Mr Brown would have set the rate higher when Chancellor if he thought it would have raised more revenue.

In discussion people drew attention to the high rates of tax created by the withdrawl of the Personal Allowance for the higher paid, and to the low starting point for the 40% tax rate. These are also issues which need addressing. We want tax cuts for all. That will yield more revenue to pay the state’s bill’s, unleash more jobs and enterprise, and make it more worthwhile to work and set up businesses.

Today I am inviting you to send it good ideas of how the government could help get the cost of living down and the standard of living up. It was welcome yesterday to learn that the Chancellor can freeze fuel duty for the rest fo this Parliament. Every little helps, as they say.

I have recently blogged on ways to cut the costs of energy. More gas fuelled electricity generation, shale gas extraction, more competition in the main energy markets, lower government fuel taxes, calling a halt to highly subsidised and expensive ways of generating power would all help.

The costs of housing also need attention. Stamp Duty should change to a system where the higher rates only apply over the thresholds which trigger them. The Energy certificate, the residual from Labour’s HIP, should no longer be compulsory. Money laundering regulations should be enforced by strong scrutiny of cash and money from poorly regulated jurisdictions, removing the need for the passport and utility bill procedures for cleared funds from regulated UK/EU bank accounts. Local authority search charges and planning permission fees  should be reviewed to make sure they are not exploiting their monopoly position, but just recouping reasonable costs.

A wide range of government fees and charges should be frozen for a couple of years whilst real wages catch up.

What would you like to see done to cut the cost of living?

It goes without saying that people keeping more of what they earn would also help boost living standards. We want more people in work, and less tax on work – it should be a combination which is mutually reinforcing.

               Conservatives want more people to be homeowners. We are the homeowning party. We have a proud record of extending ownership to many more. We have done this in the past by Council house sales, by creating conditions for affordable mortgages, and by tax breaks.

               Some write into this site to say we need to get house prices down, so more homes are affordable. Labour tried this – inadvertently no doubt – with a big house price fall at the end of the last decade. It did not price more people into home ownership, because there was too little mortgage money available to buy the cheaper homes. The number of new homes built slumped to new lows.

               The sharp downward adjustment may help in the future, but whilst it is happening it puts people off wanting to buy, plunges people into negative equity and undermines the banks who have lent against homes at higher prices. Why would people want to buy a home if they thought it could be 10% cheaper in a year or two? At some point the authorities have to say enough, and stabilise the position. That is happening now.

               The overall fall in real and in many cases cash house prices has also changed relative prices a lot. The most desirable districts of central London, Sandbanks, parts of Oxford and Cambridge and a few other hotspots have risen whilst elsewhere there have been falls. In the northern towns most damaged by the Big Recession of 2007-9 there are more empty homes and larger price falls were experienced.  The  big movements in relative prices might help in due course rebalance the economy. When more people see that homes are better value  out of London, and see there can be lifestyle improvements for them by moving, the market may start to assist the areas with more and cheaper homes.

             It is far too early to call an end to this housing “boom” which a few commentators already claim is happening. They should get out of Belgravia and Chelsea more. There is no boom in much of the country. We need to see more housing transactions. They generate income for those involved, and usually lead on to work for builders, decorators, home improvers, furniture suppliers and the like.

                        Some  who want lower house prices bemoan how much money and activity the UK expends on housing. I think it is good we do, and want to see more spent in the years ahead. A person’s home is a vital part of their lifestyle and their comforts, an important determinant of whether they can enjoy their lives or not. Modern technology can transform a home. Many more will want to reach for the better heating installations, better insulation, improved labour saving devices, more stylish bathrooms and kitchens that money can now buy.  There is plenty of room for more home improvement, to cut running costs, to make life easier and cheer people up. This also creates plenty of work for the many trades and professions involved in  housing activity.

                  We have to live with the fact that expensive flats and houses in the centre of London are now largely the preserve of the international rich set. It would be stupid to try to stop them coming to London, spending their money with us and setting up businesses and investments here. As they drive the price of prime central London to ever giddier heights, the rest of us can see the charms and attractions of cheaper locations which need our money and our support.

                  Conservatives believe in tax cuts for all, and decent benefits for those who cannot work for their living.

                 One of the worst lies put round by critics is that Conservatives want to do down the workers. On the contrary. Most of us came into politics to help more people succeed, to get on in the world, to enjoy a higher standard of living. Far from wanting Labour’s mantra of “tax cuts for the rich, benefit cuts for the poor”, Conservatives want jobs for the unemployed, and better paid jobs for the employed. We want lower taxes for the many. We want to raise more tax revenue from the rich by setting rates that makes them stay and pay.

                     I am glad the Conservative leadership has in public accepted  that living standards fell too far under Labour from 2007 and have continued to fall at a slower pace since 2010. They have agreed that reversing the fall in living standards is an important next task, now that good progress has been made with creating many more private sector jobs, and with reversing the big fall in output in 2008-9.

                            So how can it be achieved? For those who have moved from benefits to work there is a rise in living standards as a result. We need to help more make that journey. That requires Income tax cuts, benefit reform, help with training and skills, and more progress with general economic recovery.

                             Many have benefitted from the large increase in the tax threshold, introduced by a Conservative Chancellor with the vocal support of the Lib Dems. More could be done by way of cutting Income Tax, to leave people with more of their own money to spend.

                             Price rises have been too fast over the last five years. In particular energy prices have risen, partly owing to fuel duties and to the cost of renewables. Those elements of fuel cost which are government imposed need to be reduced further. This government has cancelled Labour’s planned rises in Fuel Duty. It needs to overcome Lib Dem objections to shifting energy policy towards more cheaper energy generally.

                             The costs of doing business have been driven up by government fees, charges and regulation. Another attack upon the way government interferes and complicates too many things would be welcome. Mr Pickles is leading his own crusade to try to cut some of the costs government,especially local government, imposes on motorists.

                           Over the next few months expect to see a number of measures to make improvements to the cost of living. Expect also to hear more of tax reductions as the next phase to make it more worthwhile to work. Getting living standards up is an agreed aim  of all political parties.

               I will be making speeches at three meetings at party Conference. The main event will be my speech on Economic growth and taxation at 1pm on Monday 30 September for the Selsdon Group.

               The meeting will take place at Manchester Town Hall (outside conference security) in Committee Room 3.

I will also be speaking  on housing policy, and on the general political background post Coalition at other meetings.

             I will blog tomorrow on economic issues as an introduction  for the speech.

              What a difference a Parliamentary debate can make!. When many of us Conservatives  made clear we would not vote for a cruise missile attack on Syria, we were granted a debate and a vote before action. Labour late in the day joined our opposition to a military attack. The government agreed to offer a second specific vote before any military action, followed by  acceptance  it could not win a majority for such a vote so would not hold one.

             Mr Obama then decided he had to consult his Congress before embarking on the military strike which the US, UK and France had been planning. He cited the UK precedent as part of his reason for asking Congress. It soon became clear to him that winning the vote in Congress was going to be difficult. Meanwhile Mr Putin offered a diplomatic opportunity to the west.

             The west was at first reluctant. However, we now have progress with an agreed UN line which Russia and China as well as the US, UK and France can accept. The Syrian dictator has agreed to reveal and then destroy his chemical weapons. The Inspectors start their work this week.

               Even more remarkable, Iran has now decided she wishes to negotiate a new relationship with the west, saying she has no wish to develop nuclear weapons.  Iran wants to end the sanctions against her, and start to benefit from some of the technology, advice, goods and contacts the west can bring.

              Of course when dealing with people like Assad, the Iranian leadership  and Mr Putin the west needs to be careful and seek sensible guarantees. There could well be bumps on the way to more peaceful relations. However, it is good news that diplomacy is now possible. It is  better news that there are some signs that some dangerous weapons can be removed from the Middle East and some friendlier relationship can be established with Iran.

             The UK Parliament played its part well on the world stage. We showed the world that a democracy can challenge its leaders and advise them to adopt a new course. That new course will be very popular if successful. So far it has proved much better than letting off missiles from a distance without having the intent or unleashing sufficient power to change the regime. As some of us argued at the time, the problem with regime  change if you escalated to achieve that , is how do you then create a peace loving and settled democracy out of the ruins of a toppled dictatorship and on the foundations of the lethal hatreds of a civil war? Now it appears we are getting some welcome changes in the Middle East through alliance building and persuasion rather than through bombing.

     The Today programme this morning suspended rules of impartiality once again when it came to the climate change debate. There was no spokesman to put a sceptical view. The interviewers were all primed to constantly repeat the assertion that climate change scientists (unspecified) are now 95% certain -which is apparently “more” certain” – that most global warming (recent presumably) is man made. Past prolonged periods of global warming were clearly not man made.

 The scientists they interviewed were not repeatedly interrupted as politicians are. Nor were they asked the same question more than once when they failed to answer. They were allowed to say that they should not be expected to have to face a critic or enter a debate about the “science” because the “science” was 95% settled. No-one asked where the 95% figure came from. It is 100% certain that global warming prior to the last few centuries had nothing to do with man made CO2. What is the  95% certainty about recent years based on?  Why has it risen  5% since last time?  What has happened to the forces of nature that caused global warming prior to mankind’s arrival? 

       They do now accept that the warming has slowed in recent years. They claim this is due to the warmth being absorbed by the oceans, something they did not forecast before. According to the BBC they also now forecast that whilst the world as a whole will get warmer, the UK is going to get colder. They tell us warming will shift ocean currents,  so we will no longer get so much benefit from a warm current.

           It strikes me that this change of forecast for UK weather is another hostage to fortune. It was not so long ago some were forecasting hot dry summers and droughts for the UK, with mild winters. This proved wrong in the short term. We had a series of cool wet summers and cold snowy winters. Given the variability of the climate we may now experience a milder winter or two. It is fascinating that the scientists are said to  have nailed their colours to a new mast, and threatened us with colder winters from here. We will watch with interest to see  if these latest forecasts work better than the last lot.

                 As they now think that ocean currents and ocean warming and cooling are more important influences on climate than before, will they be changing their climate forecasting models to take these factors into account?

            Germany’s PR system has delivered uncertainty and a log jam at the heart of Euroland. Mrs Merkel is way short of a majority in the Budesrat, where the SPD still have a strong position. She has 311 seats in the Budestag, compared to the 319 seats majority of the Green/red/ left, were they ever able to act together. Today the SPD debate with themselves whether they could consider a Grand Coalition with Mrs Merkel.

            The price of coalition for Mrs Merkel, whether she tries the SPD or the Greens, is similar. They both want a Minimum wage and greater labour market regulation. They want a continued drive towards dearer energy and renewables. They want higher taxes on the higher earners. They want higher domestic state spending at federal and especially lander and  local level.

               The German election has broken the FDP, followed by the resignation of its leader. It has led to the resignation of the leaders of the Green party. The leadership of the SPD contains people very unwilling to enter coalition. They are apprehensive about being very junior partners.

              Meanwhile the EU seeks approval for higher spending than planned, despite the political pressure of a smaller budget. It seeks more assistance to broken banks in Euroland. An impecunious union, supported by some states that are themselves financially very distressed only knows one song – higher taxes.

                The tax, regulation and energy plans of the EU, buttressed by the left of centre German parties, is bad news for Germany’s motor and manufacturing industry. It means they will want to cling to the Euro for longer, as  a weak Euro from Germany’s point of view will offset some of the competitive damage done by the other policies.

                 The UK has to reassert its position that it will not help pay for a higher future EU budget, and will certainly not provide bail out money for Euroland banks. The Germans have been paying a 5.5% tax surcharge or “solidarity payment” for the expensive currency union of East and West Germany. They have no wish to start paying an even larger extra tax as a solidarity payment for the Euro. Nor will many of them welcome the idea of bailing out Euroland banks.

                    The truth is, in a single currency you do have to help the neighbours, as you share a bank account with them. The UK has wisely stayed out, so we must make sure not a penny of our money goes into trying to support such an uncomfortable structure.

Mr Miliband is right about one thing. Energy bills are too high.

He should know why. It was his Climate Change legislation which underwrote EU energy policies to push the price of energy up in the UK. The EU/UK policies of pricing and taxing carbon dioxide emissions, requiring substantial generation from very expensive renewables, and making it difficult to exploit local carbon based energy resources have helped force up domestic energy costs.

One of the architects of dear energy did not go  to Brighton to recant. He did not apologise for creating dear energy. He did not  say we should make it a priority to have affordable energy to heat our homes, and affordable energy to price industry back into business. He did not hail a shale gas revolution, so we could drive our energy prices well down as the USA is curently doing so successfully. Instead, he decided to blame someone else, and attack the energy companies forced to carry out his policy will.

It is all too easy to whip up popular hostility to large companies who report large profits. It may look inviting to suggest those profits should be given back to the customers, to hide the impact EU government policies are having on  bills. It does, however, reveal a fundamental misunderstanding of the role of profits.

Companies providing large scale facilities for electricity generation or for collecting and distributing gas need to generate profits so they have money to pay for the maintensance, renewal and expansion of their facilities. They also need to have some money to pay interest and dividends on the investment monies others have put into their businesses. Many of the providers of capital are the same people as the customers, placing their pension and insurance savings in to these companies.

Announcing  a long freeze in prices could do considerable damage to supply and future investment. If raw material energy prices rise – the gas/coal/oil needed to drive electrical plant for example – the companies could be badly squeezed and lose large sums, undermining their financial stability. The threat of frozen prices will put off anyone from making a new investment in energy provision in the UK, at a time when we badly need more capacity. The prime duty of government is to set an energy policy which can keep the lights on. The second duty is to help create a competitive market which can turn to the lowest cost solutions to keep energy affordable. Labour’s new policy fails on both these counts.

         It is difficult enough as it is with EU policy controls and Lib Dem renewable enthusiasts in the government. The UK needs to change energy policy by building a new generation of gas power stations, whilst bringing the plentiful gas supplies beneath our feet to the surface.  That may require both a majority Conservative government and a renegotiaiton of our relationship with the EU to bring about. Mr Miliband in office made sure we faced high and rising bills for the future.