All those who claim to be wise in politics tell you that a leader and his party must seek the centre ground to be successful. In one sense this is obvious,if it means that a party may have to extend its coalition of support well beyond its comfort zone, its original idea or  heartlands in order to construct a winning majority.

              There are, however, at least two major flaws in the proposition that a party should always seek the centre ground. The first has been pointed out by those who think instead a party should seek the common ground. It may be that the centre ground is not as popular as some ground to the right or left that is much more popular. These advisers say the leader should seek out that common ground, and not worry if it is to the right or left in common parlance. What matters is to satisfy majority opinion, or build a wider coalition of support for popular policies.

            The second flaw is that the party and the country  may not be starting out from somewhere near the centre. A winning party may inherit a situation where the centre has been wrenched to the left or the right as conventionally described. To get back to the true or mean centre ground may require a sharp move to right or left, depending on the starting position.

             I do not think left and right mean very much any more. Certainly right wing is a much abused term, forming part of BBC and Guardian demonology. They tend to lump Hitler, anti German neo Nazis in Greece, fundamentalist clerics, and UK  Conservatives they don’t like all under the same term of abuse, as right wing. They seem to think there is something in common between authoritarians and free enterprise Conservatives, between Eurosceptics and religious social Conservatives, between tax cutters and those who think the state should spend more on law and order and defence. It’s all a great meaningless muddle.

            I suggest instead the better terms to capture the debates and disagreements in modern UK democractic politics are these. There is an argument between those of us who want many more things to be decided by UK democracy rather than by EU bureaucracy, and those who want the UK to adopt more and more EU laws and controls. I have never understood why a belief in UK or English democracy is right wing, as it is a view I share with Tony Benn.

               There is a disagreement between those of us who  think economies and societies work better when individuals and families are left more of their income after tax to spend on looking after themselves and their loved ones, than if the state takes more of the money off them and then gives some back as benefits, and those who think the state should take more and give back more.

                 There is a disagreement between authoritiarians and libertarians. Some of us think we should have more of our freedoms back, whilst others think the state  should control more to protect us from ourselves and our neighbours.

                            In each of these cases, finding  the centre ground is not easy. Some of us would argue that the current state of play for the UK and England in the EU is now at an extreme. Successive treaties and years of transferring powers means the UK has lost a lot of its capacity for self government. We would say the centre ground lies way in the Eurosceptic direction. This would also seem to be the same for the common ground, judging by the polls of people’s attitudes to the extent of EU power. Having more democracy in the UK and England is popular.

                          Tax levels are at a high in the UK. Never have so many paid so much to partly pay for such a record high level of current public spending. You could argue that returning to the centre meant relieving the squeeze on individuals and companies that very high public spending has generated in recent years. Maybe we should regard Gordon Brown’s income tax and CGT rates as the centre ground? His top Income Tax rate of 40% was well below the current level, and far fewer people were in the 40% band. His CGT rate of 18% was well below the current 28%.

                          Many civil liberties have been taken away in recent years in the name of counter terrorism and being tough on crime. Is the current level of surveillance, detention and restriction really  the norm or the centre ground?

 

          The “wise heads” of the EU establishment think the Greek New Democracy (Conservative light) party should join forces with Pasok (Socialist light) party yet again in coalition and carry on with business as usual. These parties were rejected by two thirds of the Greek electors. What part of “No” does the EU establishment not understand?  Once again they do not get this democracy idea. The two parties themselves decided not to undertake this task, but more negotiations lie ahead.

           Yesterday morning I listened to a Greek commentator saying the people had elected a Parliament of clowns and worse. He objected fiercely to the people not knuckling down and voting for candidates who were prepared to tell them that the European dream meant  the continuing reality of austerity in the form of ever higher taxes and further attempted  reductions in state spending. He should understand that the people voted as they did because they think the Euro dream has become a nightmare, and they want change.

               It is true that many Greeks think they can  have both the Euro and less austerity. I presume they think the EU authorities should send them more money on easier terms to pay the bills. That is unlikely to occur on a big enough scale to save the day. The best answer the EU authorities could give to the Greeks is this. They should make it crystal clear that they have understood the Greek people hate the current EU imposed policy. They should be told they can change the policy as they wish, if they leave the Euro. The EU should facilitate early exit of Greece from the Euro, by undertaking the necessary secret planning to bring this about.

               Greece has to form a new government. It would be best if that new goverment was a government of politicians who oppose current EU austerity policy. They after all collectively won the election, which was a decisive rejection of EU austerity. They then need to be talked to firmly by the EU authorities with a simple choice. Either accept EU austerity and go back and tell your voters you were wrong, there is no alternative, or work quickly and confidentially with us to achieve the exit from the Euro the country needs as soon as possible.

            Once Greece is out of the Euro then it can follow its own policies to put recession behind it and to show some growth. It can at least make more rapid progress in righting its balance of payments deficit.  It will not, of course, mean the end to the need to cut the state deficit, as Greece’s borrowing will depend for some years on the IMF, as it does already. If they print enough but not too many drachmas  and stabilise their banks after the devaluation, they might have some growth, which would help. They will still depend on a fairly lethal mixture of reneging on debts and presuming on international organisaitons to lend them more money to pay the bills for excess state spending.

            Mrs Merkel’s vision of a German disciplined EU with strict control of budget deficits is merely producing a no growth Europe with very high taxes. Rich and enterprising people are leaving the most stressed countries, or sending their money abroad. The tax base is falling. The private sector is being squeezed too much. People are voting against it, and against incumbent governments. The cash economy is thriving as people run shy of the tax collectors.  Just like the Exchange Rate Mechanism before it, European monetary ideology is taking too great a toll of people’s jobs and living standards. I recommend my scheme for early exit of Greece, available as the third download “The future of the Euro” on this site. The Euro area has now reached the point where even if they fix the banks in the main countries and print some more Euros, the money is not going to circulate in Greece to stimulate the economy there.

             Germany and France should want Greece out of the currency. Far from worrying about contagion spreading if Greece leaves they should worry about contagion spreading if Greece stays. For Greece to remain in the other states have got to provide a lot more money for Greece. That in turn will weaken the other states’ finances even more.

 

           Over the next few weeks democracy in Euroland is on trial. Most pundits and commentators agree that French electors voted in Mr Hollande to end austerity. Most agree that the massive swing against Pasok and New Democracy in Greece was a swing against austerity policies in the Euro and EU. The problem is, the voters may end up with little changed austerity policies come what may.

            Part of  the reason is the voters’ own mistake. Many French and Greek voters who want an end to austerity think they can have that without withdrawing from the Euro. I fear that is very difficult if not impossible. Voters in Euroland seem reluctant to accept that the whole architecture of the single currency is founded on austerity all the time the huge imbalances between Germany and the rest persist. If the rich areas refuse to send much money to the poor areas – as they do – the poor areas have to deflate, cut wages and costs severely, until they can compete. This cruel economic logic is not popular, but voters are reluctant to conclude that the currency is at fault.

             Part of the reason is the way the Euro area is governned. It  has been governed in recent years by a Franco-German alliance. The European Central Bank was part of this agreement, with a German home and constitution, and a French Head. Now it has an Italian Head it has started to have more of a mind and a printing press of its own. That has kept the unstable system afloat, but it has not remedied the defects of the whole system.

                The Franco-German alliance put in place a Stability and Growth Pact. The Stability part came from Germany. It was a set of rules to make countries cut back if they have too large a deficit, or if their debt is excessive. The Growth part came from France, and amounted to some modest scale EU spending programmes. In recent years the Pact has delivered neither stability, nor growth to the poorer regions of the Eurozone.

                  Mr Hollande would  be right to demand a rethink. I suspect he will settle for a few extra public spending programmes from the EU as a “Growth package” and a pledge by Mrs Merkel to respect his position and to work with him in their joint interest for the stability of the currency. He will soon be brought into Euro line, by plenty of advice telling him that France being too argumentative, negative or spendthrift will destabilise the banking system and upset the currency system.

                 In Greece it looks likely it will take time to form a Coalition government out of the fragmented results. The new Coalition may contain some angry MPs who do wish to speak out against the austerity policy forced on them by the loans. They will be told by the bureaucrats that they have to accept the terms of the loans if they wish to carry on paying the large public sector bills. They will probably under protest go along with it, fearing to rupture a precarious and unsatisfactory agreement.

                  European voters in two Euro countries will discover that they have very little power left to change economic policy all the time their country is in the Euro. Taxes will stay high and public spending  will prove difficult to cut in a downturn. The governemnts will pretend to squeeze the deficit down in order to qualify for EU support in the case of Greece, and EU approval in the case of France. Meanwhile, economies will suffer. Expect the informal economies to flourish, as more people decide to take the illegal course of opting out of the world of accurate tax returns and audited performance. Expect more to leave countries that are floundering under the Euro austerity scheme. The governments themselves will carry on failing to hit Euro targets whilst talking tough and pretending to deliver.

 

           There will be all manner of calls in the next few days for a change of direction by Conservative Ministers, in the wake of the big swings to Labour in the local elections. The main feature of the elections was a swing to the left as conventionally described. Labour took many votes off the Lib Dems, and some votes off the Conservatives. It extended its hold on many northern towns and cities, and showed an ability to win some seats in the south as well.

            Less remarked was the big surge in support for the Greens. It did not translate into many extra Council seats, but it did propel the Greens into the challenger role in more places. In my local Wokingham contests the Greens rose from 1% (2010 General election)  to 7.9% of the total vote, whilst not contesting all the seats available. In its best ward performance the party shot into second place with 31.4% of the vote.  The Greens came third ahead of the Lib Dems in the London Mayoralty, though only managing  4.5% of the total first preference vote.

            If you believe politicians have to follow the votes that implies the Coalition should move in a Green and Labour party direction to reconnect with voters who have detached. That I think would be a mistake.

             I think most people want to feel that their own living standards are rising. They want to know there is hope and opportunity for their children and grandchildren. They want some relief from the daily pressure on family budgets from higher taxes and higher prices. The Green party’s insistence on much dearer energy to try to make people use less of it is not a policy I can recommend. I want us to reduce what Labour calls fuel poverty. I want us to have cheaper energy so industry can stay and grow in the UK, as energy costs are crucial to manufacturing.  I would like to see the Coalition government introduce more competition and a better climate for gas as a cheaper fuel, so we can get fuel bills down.

          Labour did well apart from the Mayoralty in London. They are the first to admit they have much more to do to persuade people to trust them to run the economy again. It would be an unwise move to want to go back to Mr Brown’s massive levels of extra state borrowing, or to think we can ignore the deficit and let it increase. It might be a good idea to go back to the tax rates on enterprise and effort favoured by Mr Brown as Chancellor, though today’s Labour party does not seem to support these any more.

           Some say the government should move in the opposite direction to the voters – it should become more “right wing”. As I have often commented before, “right wing” is a term of BBC abuse for a wide range of views, many of them conflicting.  You are said to be right wing for believing people need more freedom from the state, or for wanting a tougher more authoritarian state. You can be right wing for wanting less regulation of economies, and right wing for wanting more regulation of media, pornography and the like. You can be right wing for backing the views of the Churches  on a range of moral topics.  Strangely you can be right wing for wanting more democracy in the UK and less power exercised by  the EU, though this kind of right wing view is popular with Labour party Bennites as well. You can be right wing for wanting the reintroduction of tougher sentences , and right wing for wanting more of our civil liberties returned as David Davis has argued.

          I would not recommend a lurch to the “right” as an smart ideological move. I think the governemnt should concentrate on the tasks in hand. It needs to get the deficit down. It will find that easier to do if it can speed up growth.  It should be pragmatic about how it does that. This site has set out many of the means to do so in recent weeks and months.

Labour won 2158 seats, Conservatives 1005  and Lib Dems 431. Congratulations to Labour on their success. Thank you to all those outgoing Councillors who have worked hard and who now have been asked to stand down.

SNP and Plaid came fourth and fifth, with the Greens picking up 40 seats in sixth place, or fourth place amongst UK wide parties. The English Democrats lost their  2 Councillors and UKIP made no net gains, staying with 9.

This leaves Labour controlling  75 Councils, the Conservatives 45, the Lib Dems 6 and SNP 2. No other party controls a Council. Turnout was a very low 32%.

All parties and anyone who believes in democracy should be worried that 68% did not think it worthwhile voting. There was plenty of choice on the ballot papers in many places. If people still did not think there was sufficient choice they could have stood themselves. So why was there such a mass abstention?

As readers of this site never tire of explaining, they do not think the current generation of politicians are up to much. Some think it will not make much difference who wins. They fear that a combination of EU and UK bureaucracy leaves little scope for political decision making that can make a positive difference. People on the left think all the main parties are signed up to too much capitalism. People on the right think they are signed up to too much big government. Some think that despite localism, Whitehall still calls a lot of the shots for Councils.

Many people feel squeezed. They associate politicians with taxes and higher public sector charges. Hearing of the debts and deficits, there is a sense of helplessness or a shrug of acceptance that most politicians will end up charging them. This explanation is supported by the resistance in all but Bristol to the introduction of new elected Mayors. The most common reason given to vote “No” was that they would put the costs of government up, leaving us with bigger bills.

Others just say they are not interested in politics. In some areas  they do not see that they can have any influence, or they do not want to spend any time finding out if there are any important differences. Some  people will say they know nothing about it or are not interested.

Politicians want to believe there is an easy fix for all this. They hope that a change of voting system, or a change of titles and powers, or some other constitutional reform will make a difference. So far the introduction of differing voting systems for European and devolved elections have not boosted voter turnout. The elected Mayor of London has stimulated some interest, but still more than half the voters do  not think it worth bothering. Only postal voting has made some difference to how many people vote.

Of course it is up to all the parties to find a way to show people voting does matter, and it can make a difference. Labour were the overall winners on Thursday, but even they did not  poll that many votes and found it difficult to get big numbers out to back them.

The Conservatives in Coalition need to wrestle with the main problem that was present on many doorsteps. People feel their living standards have been squeezed too much over the last four years. They want the government to reverse this, to tax them less and take some of the inflationary pressures off their budgets. Labour’s better results in 2012 as they admit do not guarantee them an election victory in 2015. Their gains were no more than other parties made in Opposition prior to losing the next General Election. Nor should the Coalition think that this is automatically just a mid term dip. Economic recovery is what the public rightly want. The next couple of years will determine whether we have a sufficient one. That will have an important impact on how people vote in 2015.

 

         The story of yesterday’s local elections is of a big swing to federalist Labour. The Labour party that landed this country in the Nice Treaty, the Amsterdam Treaty and the Lisbon Treaty had a good night in many English and Welsh local Councils. I do not think people voted for them because they want more EU, but the fact remains that a leading federalist party has polled well and gained many Councils.

         I will try once again to explain my thoughts about UKIP, as several here write in in shrill tones. They claimed that UKIP is about to make a break through. They claim it has all the right policies. They argue that the Conservatives are not worthy of support. They say that someone like me has to join UKIP, as UKIP now share some of the views I have argued for over many years.

          This morning is a good morning to review progress. Most would agree that yesterday was an ideal day for a newer party to make a break through. Voters had plenty of reasons to be disenchanted with the three main parties. Yet break through came there none. There are today no UKIP Mayors, no UKIP controlled Councils, just as I forecast. Just as the disenchanted electors of Bradford turned to George Galloway, not to UKIP, just as the voters of Buckingham backed the Speaker and placed a Euro enthusiast ahead of Mr Farage in 2010, just as UKIP failed to break through in any Parliamentary eleciton since its formation, so again yesterday there was no great UKIP  victory. The Conservatives can probably celebrate the Mayoralty of London today, Labour can for sure  celebrate many new Councillors and Councils.

In the Wokingham constituency contests UKIP polled fewer votes than in 2008, whilst the Green vote rose sharply from a low base, pushing them up into fourth place behind Conservatives, Lib Dems and Labour.

          I have always argued that the only way to get the UK out of the current dangerous embrace of the EU’s political union is to stay within the Conservative party and to argue from inside. UKIP supporters deride this approach. They fail to see that this approach got us the opt out from the Euro at Maastricht – Labour and Lib Dems if in office would not have negotiated that or even asked for it. It got us to the point  where the Conservatives are the only one of the 3 main parties which rules out ever joining the Euro – Lib Dems and Labour still have joining the Euro as their ultimate goal. Conservatives in office negotiated us out of the common borders, out of the social chapter, and out of the currency. More recently Mr Cameron has vetoed the planned Treaty of the 27 for greater austerity and has kept the UK out of it.

          Is this enough? Of course not. It just shows, however, that we have gained some important advances, and  many of us Conservative MPs intend more. Meanwhile, how has the policy of forming and promoting UKIP got on? They do not have a single MP, and have just a handful of Councillors. UKIP has no power. They do have some MEPs, though they have had a chequered history in some cases. There is no evidence that UKIP MEPs have ever been able to protect the UK from any planned EU power transfer to Brussels.

          So now UKIP try to claim that the Conservatives have only been as Eurosceptic as they have because of UKIP pressure. This is complete nonsense. Conservatives were Eurosceptic in the 1990s, well before UKIP was formed. Many of us have been Eurosceptic from well before UKIP’s birth. Our electors are too, and we seek to represent them.

              There may well be a Eurosceptic majority in the UK. Polls say there is when it comes to issues about extending Bruseels power, or joining the Euro. Once again , however, the electorate has kept it below the surface. UKIP’s intervention in local elections has been no more successful than its involvement in General Elections, in bringing out this natural majory they claim to be there. Instead, they target Eurosceptic Conservatives, seek to split the vote, and so damage the cause they claim to believe in. If UKIP delivered  50 UKIP MPs in place of 50 federalist Labour MPs, that would be helpful. They show no sign of being able to. Worse still they never seem to want to do that, preferring to attack fellow Eurosceptics.

           Neither my strategy nor UKIP’s has yet got us the new relationship with the EU that so many of us want – trade and friendship, not common government. I still think the route I have chosen has delievered more so far, and can deliver more in the future. It would help to have some more support.

         I will discuss the meaning of the big swing to Labour when we know the full results. I will of course be reinforcing my view that the Coalition needs to change its approach to the economy, with policies that give priority to faster economic growth.

     Whilst we await the public’s verdict at the ball0t box, it is fortunate that I have another leak from Dame Lucy about how the true government of the UK is going.

 

Letter to Dr. Roy Spendlove from Dame Lucy

 

Dear Roy,

             It is useful to take stock whilst our political masters are off campaigning for their elections. As I suggsted to you at the beginning of the Coalition government, I thought it right to play the austerity question long. Ministers saw the wisdom of signing up to two more years of real spending increases overall in 2010-11 and 2011-12. I think now we do have a duty to point out to them that the tighter spending settlements they signed up to for 2012-15 are going to cause some pain.

             In our cross cutting role we can point out that the troubles with border security partly stem from cuts. We need to highlight that if the government really wants us to exercise a level of control over our borders we have not exerted for more than 10 years, they will need to put a lot more resource into the system. We also need to remind them that  none of this can apply to our borders with the rest of the EU, where the previous government made changes to promote a common policy with our partners.

             We need also to warn them that their bold plans to computerise PAYE so real time information passes to  the Revenue and Customs, and then to add to that Treasury calculation of the tax of each individual weekly or monthly, is going to take a lot more effort and spending to get it right. As you will understand, Ministers have signed up to savings on welfare that depend on successful implementation of the new single purpose benefit, coming in around 2015. This of course, can only happen if the Treasury have successfully implemented their real time PAYE system, as the universal means tested  benefit is the back end of the income and tax calculations for all in work. I fear Ministers may have underestimated the complexity and potential cost of all this.

           I do detect that Ministers would like some way round the substantial capital spending cuts that the last government bequeathed to them. So far the Treasury has reinstated just a small proportion of the cuts.I know you were unhappy at the time that these were conceded, but it seemed to some of us more  important to protect the current spending base. I had hoped we would find an opportunity to reinstate many of these projects.  I would like you to look again at ways that could be used to redeploy deferred purchase, private capital and the like to bring forward some of this spending. Ministers will not wish it to look like the previous government’s PFI/PPP programmes, which they have in the past criticised. I would like you to find ways of presenting these new methods of financing that would be acceptable all round. Ministers seem especially keen on items that result in construction contracts soon.

             I am pleased to report that Ministers have been very understanding of the substantial limits on their freedom for independent action placed by the many Directives and Treaty commitments past governments have made in the EU. The EU position has led to a diminishing interest in deregulation, always something oppositions prefer to governments. Many Ministers have come to accept that the regulations they most would like to remove or amend are European in origin. I think some key Ministers have also been surprised by the frequency and intensiveness of much EU business,and are finding that it absorbs a lot of their energies that might otherwise lead them to ask more questions about domestic business.

            Given the current state of public opinion and the recent GDP figures, I think you will find Ministers are now more willing to look at your various ideas for more public sepnding. I would like to see a list of items in the “Spend to save category”, which is how we have programmed the computerisation schemes at Treasury and Welfare. I think we could also relaunch such schemes for revenue collection, benefit fraud reduction, and border enforcement. These schemes would, I think, rightly take priority over any crude idea of cutting the overall government overhead.

 

Yours

 

Lucy

 

                  It’s the voters turn to say what they think.

                   In France it looks as if an other incumbent who has presided over the Euro crisis, another supporter of Euro austerity, is about to lose office. Latest polls shows Mr Sarkozy trailing Mr Hollande by between 6% and 11%. If Mr Hollande wins, expect rapid moves to bring him on board for the austerity treaty of late last year, sweetened by some kind 0f Growth package to be agreed with Germany and the Commission. Do not expect a radical change in the EU’s approach to the Euro.

                   In Greece the two larger parties of past elections and the last Parliament saw much lower poll ratings in recent months.  Pasok, the current ruling party, saw its rating slump from 38% in January 2011, to around 14% in the last permitted polls.  New Democracy has had a smaller fall, from 30% to 23%. They do not allow polls close to the election. There is speculation that the two main parties, who both broadly support the loan and EU policy, will neither win a majority, and may not be able to form a coalition together to supervise the EU agreement.  Expect uncertainty if as expected there is a Parliament with a variety of parties represented, as they seek to establish a new government and maybe  form a new policy in relation to the EU loans and requirements.

                     In London it looks as if Boris will win the Mayoralty. It will be a triumph for him personally, running on his lower tax ticket with strong messages on law and order, and the EU.  It will be  consolation for the Conservatives on a night when they themselves have forecast losses of Councillors elsewhere.  Labour is expected to pick up a good number of seats around the country. In 2008 when these Councils were last contested, the Conservatives polled 44%, the Lib Dems 25% and Labour 24%. Current pollls show Labour doing much better, at the expense of both Coalition parties.

                  However, Labour’s night could be spoiled if they lose London again, and if they also lose Glasgow to the SNP, where pundits say opinion is shifting against Labour, the incumbents. In 2008 nationwide  the three main parties shared 93% of the vote.

                 Some think Greens, UKIP, English Democrats, Independents and others may poll better this time. At the moment they only have a handful of Councillors. The English Democrats are defending the position of one elected Mayor, in Doncaster. They achieved that breakthrough following  conduct of a Labour Council which was criticised by Labour itself  in a traditional Labour area.  I do not expect the  English Democrats and/or UKIP to win control of any Councils.

 

         Some of you have commented that London has grown faster because it has taken a disproprtionate share of the infrastructure investment. It is difficult to square this with the reality.

           The truth is that much of the UK is short of transport capacity. The country is gradually benefitting from a big expansion of digital broadband capacity, with major investment in all regions. London, the south-east and the east are  suffering more than the rest of the country from a failure to invest in enough reservoir capacity for water demands. Electricity is delivered by national grid, and gas and oil are shared around the whole country.  There is, it is true, only one high speed train line from London to the Channel tunnel. The rest of the railway  network was shared around by Victorian entrepreneurs who put substantial capacity into the then prosperous industrial regions.  Modern subsidy perpetuates the broad shape of the Victorian railway, as adjusted by Beeching. 

          If you look at road investment the south of the country has received less motorway investment than the Midlands, Lancashire and Yorkshire. East Anglia, Devon and Cornwall, Lincolnshire and Northumberland have all been left out of the motorway age.

          All four major urban complexes, London, Birmingham.,Manchester and the Yorkshire urban area have their motorway boxes. The M 25, the M42, and the M60 are ringways for London, Birmingham and Manchester. The  Yorkshire motorway box links Leeds, Sheffield, Doncaster and the other main cities.

           The London ringway is fed by the M1, M11, M2,M20, M23, M3, M4 and M 40.  Despite the varied links, there is no motorway link from London to  anywhere on the south coast between Folkestone and Portsmouth, no motorway to the crucial ports of Harwich and Felixstowe, no motorway or continuous dual carriageway link along the route of the A303 to the west country. The south has no motorway or continuous dual carriageway along the south coast. The capacity on the main routes west is poor for the heavy  traffic volumes, especially in the M4 corridor. 

           The Birmingham ringway  is fed by the M6, the M40, the M5, the M 54, the M45 and the M 69. There are good Birmingham motorway links to London ( 2 options), the west country, Lancashire and the north west, and to the M1 north. The A14 haul road to Felixstowe is of reasonable standard.

              The Manchester ringway is fed by the M62, M56, M61 and M 66. There are motorway links to all the main towns and cities in Lancashire, across the Pennines to Yorkshire and north to the Lakes and Scotland, as well as south to London.

              The Yorkshire broader ring  has links to the A(1) M, the M62, the M18, the M 180 and the M1. This links the cities to each other, to the East Midlands and London  to the south, Lancashire across the Pennines, to Kingston upon Hull and Scunthorpe.

               The government has stated its wish to expand transport, broadband, water, electricity and other energy capacity. Much of the investment can be made by the private sector. Electricity capacity is urgently required, and will be available nationally. Water capacity is needed in the south and east, where water companies have failed to keep pace with growing demand. I would be interested to hear from contributors about what expansion of road and rail capacity they would like to see, and how much of any additional capacity  could be privately financed.  Getting more out of  our existing railway is a story for another day, but an important one. Having enough airport and seaport capacity is also a crucial issue, as economic development normally flows from proximity to a good port.

 

           Many of you have pointed out in your responses to yesterday’s blog that London has always been richer than the rest of the country. There have always been rich people who want to congregate near to the royal court or to the seat of government, rich people who want to enjoy the culture and society of a large city, people who come to London as it is by far the best known city in the country. There used to be many Englishmen who did well out of royal favour by being at court.

          London has always been more than the capital, drawing benefit from that. After all, Washington and Brazilia are governing centres, but they play poor second fiddles to New York and Rio. London has managed to be a large commercial and business centre, as well as a capital city. It used to have a great deal of industry. As a contributor has reminded us, 1930s London saw flourishing light industry in iconic buildings along the great arterial roads into the centre.  It was the UK’s number one port, with plenty of wharves and port related industry and distribution. It lost its lead to better located places with deeper water  like Felixstowe and Dover. Industry declined or migrated.

                More recently it has transformed itself into primarily a business services and financial service centre. Indeed, so successful has this development been, that on most measures it is the best of all such centres in the world, or runs as joint top with New York. It also sports an important media, fashion and cultural hub, and offers great facilities for leisure and tourism. In other words, London the port and London the industrial centre have passed over to London the world business centre. London has reinvented itself, has moved with the times, has allowed thousands of entrepreneurial changes to completely transform the landscape and the nature of the jobs on offer.  

             Instead of much of the UK being proud of London, and enjoying her success, it all too often produces jealousy or demands that London be taxed  into changing her ways. Jealousy is a powerful political emotion at the best of times. It can become an all crushing political emotion at times of stress or recession. The current jealousy of financial services, banking and the leading centre of them in the UK is driven by the fact that rewards now are so much higher relative to the rest of the country, than were the rewards of the light industry and port activities, as well as of the smaller business services of previous eras. I of course agree that the banks should not have been bailed out, and that bankers in bail out should not be paid large salaries. Most of the financial services industries and other business services sought and received no bail out, and paid good incomes out of their own revenues and profits.

              Today the same money will buy someone a bedsit flat in the centre of London as buys a five bedroom detached house in my constituency just 40 miles out of London.This is a bigger gap than there used to be in property values.  The latest Sunday Times Rich list shows that a person now needs to be worth more than £72 million to qualify  in the top 1000, whereas the top 100 in Scotland goes down to £50 m and the top 250 in Ireland to £33 million. All these figures are considerably higher than a decade ago, whereas UK GDP is still 4% below the 2007 peak. The level of income of the top 50 has risen from a minimum of £600 million ten years ago, to £1400 million today.

                  726 of the top 1000 made their own wealth. The rest inherited. There are computer entrepreneurs, fashion success stories, popular artists and musicians, hedge fund founders, and industrialists.  London and the south east accounts for 529 of them , including all but one of the top ten. The only one not in London in the top ten, the Duke of Westminster, owes much of his fortune to the 300 acre family Mayfair and Belgravia estate.

                  The picture we see of London through this snapshot is of a world city attracting some of the richest and most entrepreneurial people there are. Because there are now world brands and world markets for successful artists, footballers and the like, they make so much more money. London acts as a magnet for talent and cash. It then becomes very dear for anyone on a  normal UK salary. Does the UK wish to carry on hosting the world’s rich and successful, or do we wish to turn our back on London’s success as a world city? Is dislike of riches a necessary driver of policy in a democracy? Should it be directed against pop stars and footballers as well as against hedge fund managers and top lawyers?