Recession’s over? There will be a sting in the tail.

It’s good news that the rate of decline is slowing. It makes sense for the government’s spin doctors to be trying to inject some confidence, claiming that we are at the bottom, or near the turn. No-one sensible wants the downturn to go on for a day longer, and none of us want to see unemployment climbing sharply.

It’s important, however, to maintain some sense of reality. In recent months there have been two big changes that have led to the current change of mood. The first is, that on both sides of the Atlantic they have been printing money, which has found its way into markets for riskier assets. This has generated some more favourable comment, and given some investors and speculators some hope. The second is, that the new Administration in the USA has moved from criticising the Bush legacy to talking up the Obama measures. In the UK the Chancellor has shifted from talking things down to a more neutral position.

There are several difficulties ahead. I have commented before on the problems they face when taking the economy off the monetary drip of quantitative easing. Unemployment is likely to go on rising, even if this is the bottom of the output figures, let alone if it is not. Most forecasters in the UK assume unemployment will go up to 3 million. At some point the public sector has to stop expanding its workforce, as part of the measures to cut the deficit. That will on its own make quite an impact on unemployment numbers. The public sector has created many of the extra jobs in recent years. If the public sector attempts to raise its productivity at anything like the rate that is common in industry, then there will be a furher impact on public sector employment numbers.

UK consumption will be affected by the future increases in interest rates which will be necessary to create more normal banking and monetary conditions,and to curb future inflation. A lot of present spending on goods and services by individuals has been made possible by substantial mortgage interest rate cuts. There is still a pressing need for many people and companies to repay debt, against the background of weak banks and the need to calm down after the credit binge of 2003-7.

The reality ahead will be much slower growth. There remains the need to adjust to curb the twin deficits. We have to export more and consume less to curb the balance of payments deficit, still very wide in the UK. We need the public sector to spend less to curb the public deficit. We need both individuals and the public sector to borrow less, as part of the move to live within our means. It is going to feel like recession as the squeeze intensifies, even if output is rising.


  1. charles
    June 15, 2009

    According to the Daily Mail “More than 1.3 million of the 2.2 million jobs created between 1998 and 2006 were in public sector areas, including public administration, health, education and social work.

    Astonishingly, 90 per cent of all jobs growth for women was funded by the taxpayer.”

    So, maybe getting women back to the kitchen could help us cut public spending!


    Seriously though, would not encouraging marriage save us all a fortune given also, for example, the positively enormous negative consequences of fatherlessness?

    1. Amanda
      June 15, 2009

      Charles, be a little more clever about it. Change the word kitchen to community.

      Women are needed to put a boost back into community life to get local democracy going again – women are good at working together, promoting neighbourliness, social responsibility, championing causes.

      Women also need to be with their children and grandchildren more, to get them out of the clutches of state control: so they are not brainwashed into being mindless, green, zombies who join organiztions like UAF. And, so they get a decent education, and develop enquiring, questioning minds that will help boost the economy again.

      The issue of course, as it always has been, is the value that society puts on ‘womens’ work.

      But I don’t think encouraging marriage through tax incentives is a bad start.

      And whilst we are at it, we ought to start thinking about our menfolk, and young men in particular. How are we going to give them a sense of purpose back?

      1. Allison
        June 15, 2009

        I couldn’t agree more.

      2. Steve Tierney
        June 15, 2009

        What a very refreshing comment. Thank you.

      3. Dave
        June 15, 2009

        Good points, well made Amanda. The role of women in society has been largely overlooked, and very much to our detriment, in the UK for many years now and it won’t get better with Labour. You see, they have figured out that they collect twice as much tax from working couples; and there is no incentive for women to get back into the community. Moreover, the state does not like the horizontal bonds that tie local communities, prefering instead that we all have strong vertical ties (read dependency) to the state.

        You need only take a look at Europe and principally southern Europe to see how “community” works. Families staying together with Matriarchal bonds, civic pride in abundance, villages and communes with little evidence of crime or petty vandalism. I could go on…

      4. Robbie
        June 17, 2009

        Great post Amanda.

      June 15, 2009

      “According to the Daily Mail “More than 1.3 million of the 2.2 million jobs created between 1998 and 2006 were in public sector areas, including public administration, health, education and social work.”


      We’ve never seen an analysis of just how many of these jobs were part-time. Anyone know please?


      1. The pathetic ‘Mr 10%’ tag will stick to David Cameron as long, and be just about as effective, as the Chameleon moniker…remember that?

      2. Staying with God’s creatures, Mr Brown has just about cooked his goose with his backbench after his decision and abrasive Commons performance today on holding the Iraq enquiry in private.
      As in the recent Speaker debate Gordon Prentice’s remarks were extremely pertinent in putting to the sword any concerns of Caledonian cronyism!
      A good man. Watch out GB!

      3. Mandy’s prediction of a further challenge is surely an opening thrust in a manoeuvre to switch horses mid-stream. Remember 1994 Gordon? Watch out even harder…

      4. Now the press, universally, have intimate first-hand experience of GB’s lies on the ‘Great Chancellor Switch’ and ‘Heartless Tory Cuts’ he can expect no respite in the reporting of every slip and slide in this slow political car crash. To whom can a chap turn?…Milliband, Johnson? Mmmm…

      Despite our good holiday intentions no doubt we shall be inexorably drawn to the hotel’s internet facility to stay abreast of JR, his disciples, Guido and Dale !

  2. Mick Anderson
    June 15, 2009

    I can’t wait for the real end of the recession. Sensible interest rates on my savings, less money being wasted on interest payments on spiralling debt.

    As a taxpayer, I want to start clearing this debt immediately, without running any more up – I don’t want to pay a single penny of interest that I don’t have to. Unlike the Government, I have to work hard for my money. The only piece of borrowing I ever personally took on was a mortgage to buy a house, and by hard work (and not wasting money) I managed to pay it back in full in just over seven years. I accept that some debt is necessary, but it is a necessary evil, not something to take delight in running up.

    If you have to borrow money, you are also taking on a responsibility to pay it back. Unfortunately, because this Government does not expect to be around when that particular bird comes home to roost, they appear to believe that they have been absolved from the responsibility. It’s similar to those students who ran up a massive debt at university and were then encouraged to declare bankruptcy, starting again with a clean sheet. It might be legal, but it’s morally indefensible. (Where have we heard that recently….?)

    Perhaps (some of) this debt does need to be taken on in my name. However, I want restraint to be exercised, and to pay back my bit as soon as possible. I’m responsible, even if those accumulating this debt are not.

  3. Colin D.
    June 15, 2009

    ‘The reality ahead’ includes paying off the multi-billion debts that Brown has saddled us with. Since our future has been mortgaged, we need to be told how much each of us must pay per year for the interest and how much each of us must pay per year to pay off the debt, and how many years it will take. Both parties are being dishonest in not spelling out the bleak future.

    1. jean baker
      June 15, 2009

      Not so ….. Labour continues to borrow as the deployment of PFI ‘box tickers’ increases. Conservatives aim to rein in on over expenditure and wastage.

      1. Colin D.
        June 16, 2009

        True, but to ‘reign in’ is not the same as paying back the debt.

        1. jean baker
          June 16, 2009

          I didn’t say it was ! A return to sound economic control is the first step.

  4. APL
    June 15, 2009

    News flash from the most EUroskeptic shadow minister in the much vaunted EUroskeptic opposition:

    “If the Irish referendum endorses the treaty and ratification comes into effect, then our settled policy is quite clear – that the treaty will not be reopened … I don’t think anybody in Europe … is in the mood for any more tedious debates about treaties, which have gone on for far too long, which is why this needs to be resolved.”

    In other words, let the Irish people (who are to be forced to get the ‘correct’ decision this time) make the decision on our self determination for us. Neither the government nor the official opposition think the British people deserve to have a say on this matter. Much too complex for the British voter.

    We now see that all John Redwood’s assurances that ‘Cameron is not a EUrophile’ are mistaken, the issue is does JR know he is mistaken or ‘what’?

    Given that on just about every other issue Redwood is pretty smart, could it be that this is the only one that he is adrift on a sea of confusion?

    No, I don’t think so either!

    Reply: I have been assured by the high command that there will be renegotiation if Lisbon has been ratified by any chance. The leadership has said clearly it wants powers back and will not let matters rest with a Treaty we opposed. More importantly, Conservatives are encouraging the non ratifying countries to hold out until we have a Conservative government in the UK- then a vote of the British people could torpedo Lisbon once and for all.

    1. Cliff.
      June 15, 2009

      Problem is though John, many people don’t believe a word any politician says these days.

      I personally can’t see what we have to negotiate with, well other than our continued membership payments and therefore, perhaps if the “treaty”(sic) is ratified before we get back into government and the United States of Europe is formed, perhaps we should then ask the question that every politician for some reason appears to fear the most; Should we stay part of the superstate or not?
      The other question that I still haven’t had answered is this; Given that politicians seek election to form a government and thus run the country, why do so many seem intent on giving the powers they crave away to a third party? Surely they can’t all be traitors; John, I know you don’t come into that category as you are almost as Euro sceptic as I am!!

      Trade with Europe…Yes….. Ruled by Europe…NO NEVER!!

    2. Publius
      June 15, 2009

      Sounds like we’re being softened up to accept yet more EU rule. Thus far but no further… oh, ok, just a little bit further, but this time I mean it… oh, please no further… pretty please no further….

      Sorry. I’m losing faith.

  5. Stewart Knight
    June 15, 2009

    I agree completely John, but I have a sneaking suspicion that curbing the public service job market, and actually cutting it, allied to rising interest rates and the end of printing money (tell it like it is…quantitive easing indeed) will mark the beginning of a second recession of a smaller but deeper kind, and with nothing left to fight it with.

    1. alan jutson
      June 15, 2009

      Also when interest rates rise, many will see a massive increase in mortgage repayments from the unrealistic present level.

      Average mortgage rates for the last 50 years has been around the 8% mark, how many families have this factored into their accounts.

      Those who have just been able to tread water recently will eventually sink, house repo’s will rise still further and cause more misery for many.

  6. Brian Tomkinson
    June 15, 2009

    May I suggest that what we don’t want is “government’s spin doctors trying to inject some confidence”. Who believes a word they say? We have had enough of their lies and deception. What we do know is that this government has no appreciation of value for money and has saddled us with massive debts.

    1. jean baker
      June 15, 2009

      It’s the means by which socialists perpetrate re-distribution of wealth.
      As opposed to capitalism, Nulabor borrowed historic sums against taxpayers – without their knowledge or consent – and continue to do so without taxpayers consent – oppression of the first order.

      Nulabor works only for fellow socialist benefactors under the guise of ‘free enterprise and democracy’ – the spinning and manipulation this entails is also, of course, funded by taxpayers.

  7. Stuart Fairney
    June 15, 2009

    Is Ken Clarke right? Is it now official tory policy ~ No referendum if the Lisbon treaty is ratified elsewhere?

    If so, no-one can ever again vote for a major party as they all promised a refendum last time around, and (if Clarke is right), they have all now betrayed their promises.

    Say it’s not so…

    1. Jerry
      June 15, 2009

      Ken Clarke (assuming he was speaking officially) might well have said that the Lisbon Treaty won’t be reopened but that doesn’t mean that the question of our membership and relationship of the EU won’t be reopened…

      1. Stuart Fairney
        June 15, 2009

        If you are saying the question of our EU membership should be re-opened I agree. If you are saying Ken Clarke is the man who will challenge the EU, with respect, I do not believe your argument is supported by his history

        1. Jerry
          June 16, 2009

          For clarification, I was indeed suggesting that the question of our EU membership could be reopened, and most certainly should be if and once the Lisbon Treaty come into force. I also agree with your (earlier) suggestion that all the time there isn’t clear water between the Tories and the other two main parties on the subject of the EU there will be a haemorrhaging of support from all three main parties.

    2. jean baker
      June 15, 2009

      Perhaps Kenneth Clarke defected and is posing as a ‘Tory’ ?

      1. Stuart Fairney
        June 15, 2009

        Yes, in 1981?

  8. oldrightie
    June 15, 2009

    The mess we are in is so huge hardly anyone grasps the enormity of Labour and Brown’s failure. One of those people that does is Voldemort. This is the reason he has taken over the steering of Labour’s rickety, one wheeled vehicle, heading for a cliff. Sadly, only the place we go over the precipice is in doubt.
    We Conservatives can only wait below to attempt to salvage the wreckage. Now how on earth do you spin that disastrous scenario?

  9. NickW
    June 15, 2009

    The problem comes when Governments start believing their own spin and base policy decisions on fiction not reality.

    I have been taxing my brains to try and come up with an occasion when Brown and Mandelson knowingly and deliberately told the truth, but I have not been able to find it.

    1. jean baker
      June 15, 2009

      You won’t, save yourself the bother ! The pied piper of Brussels was despatched to Britain to further the cause – Federal Europe – Browns’ a ‘puppet – spinner and manipulator. Many believe Bliar has been lined up as next President. Brussels rewards it’s own handsomely – as does Nulabor with peerages.

      Socialist totalitarianism entails the ruling party controlling all public sector services, policing, teaching, healthcare and banks – increasingly government controlled.

      Nulabor’s habitual use of ‘trial by media’ – the vilest means of eliminating the ‘non complaint and challengers of their (reportedly) fascist aims. They appear to loathe the word ‘England’, it’s history and democracy – hence the police raid on the ‘Mother of All Parliaments’ shortly after Sir Ian’s untimely ‘trial by media’ sacking.

  10. Stronghold Barricades
    June 15, 2009

    Hasn’t QE only stabilised the fall in asset prices?

    Our banks are still effectively refusing to lend, and the various Government schemes appear toothless and unfunded

    What is the occupancy rate of commercial property?

    What effect will the Chancellor’s Business Rates increase have?

    Why isn’t the “empty property” stealth tax driving down rents? I regularly see swathes of boards advertising empty properties in towns I visit

    Why are current Commercial property contracts written with “rent increase only” terms?

    We are in deflationary times, yet rates are holding up, something must “give” soon to stimulate demand or there may be a risk of double dip

  11. Steve
    June 15, 2009

    What on earth is this country going to look like when the oil runs out (pretty soon now) and we have nothing to sell anymore(finance will be a dead zone for a decade or more imo) and we’ve been saddled with generational debt by the Socialist moron Brown that would shackle any possible growth anyway.I hate the idea but I think we will have to hide under the skirt of the Euro when the sky begins to fall.

  12. Demetrius
    June 15, 2009

    The Recession ain’t over until the Fat Man collects the taxes and the bankers are paid off. I have less money to spend, just about everyone I know has less money to spend, and most of us are going nowhere. So what does the government want us to do, start borrowing everything we can again?

  13. Acorn
    June 15, 2009

    The interesting bit now for those amateurs, like me, who are trying to learn how macroeconomics works, is this.

    How will the BoE pull back all that quantitative easing? Assuming it wants to pull at least some of it back. We are advised that if it doesn’t, the commercial banks could start blasting their excess reserves, at the BoE, into circulation, via the fractional reserve banking system. This will, we are told, results in a cup of coffee at Costa costing £10, or some such.

    In the ONS Financial statistics (see link, big file), which is hard for an amateur to read (no pictures) there is a table 3.1B; this lists the velocity of circulation of the money stock M4. You will see that this is gradually dropping; now down to 0.76 from the 1.1 – 1.2 a while back. (I am assuming that GDP = M4 times velocity of circulation in this table).

    We are told by various experts that the commercial banks are s**t scarred of lending to anybody at the moment, on the basis that they won’t get their money back. Also, said banks still have tonnes of toxic assets that have yet to have any market value put on them and all those QE crispy notes will be needed to flush them away into the taxpayers sewer.

    So JR, you are the Banker on this page, so please explain the exit strategy for the above; and, when is anyone going to show me my bill for it all.

    (Sorry to be nerdy today, but Westminster politics has gone back to being dull again)

    1. Sally C.
      June 15, 2009

      The bad news is that the Bank of England does not have an exit strategy. The only good news is that in a year’s time, we should have a Conservative government that knows it has to deal with Labour’s addiction to credit, debt and money printing. Only at that time will there be any chance of an exit strategy being formulated and the results are not going to be pretty. It could be a rerun of the miners’ strike x 10 with all sorts of public servants striking around the country. Add to that a big rise in personal and corporate bankruptcies as interest rates hopefully start to rise to more normal levels. Any talk of a ‘recovery’ is far too premature while Bank rate is at its lowest level ever.

  14. Neil Craig
    June 15, 2009

    World average growth has been 5% & if the recession is “over” then we may expect it to continue at that rate because technology continues to improve. By that measure we have been in comparative recession since the world average reached that. Politicians of all parties share responsibility for failing to point this out back when ordon was claiming our continuous 2.5% growth as wonderful.We are back in the era of “managing decline” but it need not be that way.

  15. Robin
    June 15, 2009

    The decline in marriage would continue unabated even if the Labour Party had the same message os the Conservatives. One of the most senior family law barristers in the country told me last month. Word for word.

    “There won’t be any divorce lawyers in 20 years time. By 2030 nobody will be getting married. It’s not … an area of law… something I would encourage anybody to go into. It’s a straight line decline. The line goes from here to here [signalling with his hand]. The only people who will be getting married are religious … well you’d have to be a nutter.”

    I asked what’s the main reason.

    “Men have cottoned on marriage is nothing … nothing but a financial contract. If men knew the Ts&Cs they would never do it. No financial adviser in their right … well they’d get sued. Well … Divorced fathers warn their sons that the ex will screw them .. well they see it for themselves .. they see their Dads getting screwed over and realise it would be …. well they’d be crazy. If you want to get married tell the girlfriend you [just] want a blessing, then there are no financial implications .. you can control your own finances. If she gets all stroppy … and tries … goes on about security and getting marrried you know she’s only in it for the money and you can then make a decision to find someone else who loves you … not for your money.”

    So that’s it straight from the horse mouth. Stop worrying about marriage its not going to be around in a few years.

    1. Chris H
      June 16, 2009

      So sad, that marriage has become something merely about money, possessions and terms and conditions. So “easy” to hop from one relationship to another if you’re not married. No committments, no strings attached, all the signs of the typical modern attitude. Marriage is the one thing that many women (and many men) still desire in their soul, even though they won’t admit it publicly, for fear of ridicule from their liberal-minded peers. It’s a spiritual thing. Society and modern life have killed spirituality. People dont want to make committments to anything these days, no matter what it is; marriage, payments, friends, whatever. It’s too much bother. That’s why many things in life in this country are so unstable, impermanent and totally unsatisfying.

    2. Adam Collyer
      June 16, 2009

      I hope and believe that you, and he, are wrong. Marriage is not easy but it is vital as the bedrock of stable families. Yes of course if you are only concerned about money, then marriage doesn’t make sense. But in fact the unconditional commitment it represents is about much more than money.

      The trouble is that people who live together but are not married are much more likely to bunk off when the going gets tough, which it will any any relationship. That rips the kids apart, as well as causing major pain for the couple involved.

      By the way, he’s not quite right about the marriage figures either. The statistics are here

      As you can see the decline really only set in in around 1990. Until then, the figures were roughly stable with a blip upwards in around 1970. Also, the decline does appear to be levelling off. Perhaps we should be asking ourselves what happened in 1990 to trigger off this decline?

      1. Robin
        June 17, 2009

        I think that if you want to stabilise relationships its to educate young people into what marriage really means.

        The failure (and yes it is failure) of marriage is that the state is not up front about what divorce involves. People take marriage too lightly. If they knew what divorce is they would be less like to get married. I believe you need to do some tests to look for potential issues before you get married. 40% of people fail at marriage. It would be better to get the failure rate up to below 20% before you start advocating it.

        At the moment most men (I work on a trading floor) are strong advised by their older peers and fathers not to get married. Traders work long hours. Millionaires are 60% likely to get divorced and the law courts will take 75%+ of their assets that they have sweated for because the court believes they can build their assets back again. So why would a friend not say that all that hard work they are doing could be taken away from them – because they are working hard. Men aren’t getting married because the contract sucks. The result is women’s biological drives mean that have children with an insecure partner in their 30s when they get desperate rather than with a husband in a secure relationship.

        There is a lot of academic work done into understanding why marriages fail. You may think it is nannying to advise people on the probablity of their marriage failing, but I would welcome a diagnosis of potenital problems up front. When you get married you are in love and often ignore the problems. Imagine signing a contract to buy a beautiful car that you have fallen in love with and not being told what the contract is?

        The “marriage contract” should not be hidden from young couples. It needs to be writ large. There needs to be a legal document published every year telling you quite what your spouse can get away with. Couples should be given profiles and warned about potential issues. This is not nannying this is good advice for you to take or leave.

        For example the day after you get married your spouse can sit on their hands and spend all your money and have many affairs and you are still obliged to then give them half your house and savings and they can even claim spousal maintenance – so you have to look after them for the rest of your life. In fact it gets worst because the better you treat them and lazier they are then that will be what the courts say that is what they should expect.

        You complain about rewarding failure well in that case you should not agree with marriage law. Because it rewards laziness – simply because as you do progressively less you will get progressively more than the amount you put into the marriage.

        You honestly can’t expect to have a punitive damages to discourage divorce and not give best advice to those getting married? Marriage is to a large part a finanical contract and you never get to read the contract. You can lose hundreds of thousands of pounds even though you have tried your hardest and done nothing wrong. Family law is by and large secret. Cases are not published. Tell me of any other contract where this applies?

  16. David Logan
    June 15, 2009

    Brown lies and lies and lies. Nothing new there. But it is true that just like someone who has maxed out on a credit card cuts in Government spending will be a significant drag on growth over the next 5-10years until the economy is rebalanced just like it has artificially boosted it over the last 10. It is also true that taxes will have to increase as well even although expenditure is being cut. The deficit is unsustainable and damaging. The example of Government and the apprehension about the future will increase the savings rate. This is a good thing as reductions in consumption are essential if the balance of payments is to improve. All these factors indicate lower growth. The next Parliament is going to be the toughest since 1979-83, possibly worse. A battle with public sector unions is inevitable. To coin a phrase “There is no alternative” but how much “reality” can the British people take?

  17. Mike Stallard
    June 15, 2009

    The problems with cutting the public sector (including the pensions) is that I don’t think the Labour Party can see that there is a huge difference between front line staff and hangers on.
    I am also very aware of the fact that the Trades Unions, which alone fund the party, are utterly against unemployment.
    Add to that a lot of televised street activity with banners etc and this will soon end any attempt at cutting back on staffing in the public sector (remember the panic over Northern Rock).
    Meanwhile, the country will slide deeper and deeper into (invisible and undiscussed) debt.
    The government line at the time of the election will, of course, be: “We have overcome, through the genius of Gordon, the world crash!!!!!!!”

    PS George Soros does not see inflation happening because (mainly) of the unemployment which will inevitably hit us. I think this is what he said on the Money Programme last evening.

    1. figurewizard
      June 16, 2009

      Inflation is already with us and at a far higher rate than we are being told and have been told for many years. Food and fuel; two unavoidable costs continued to rise during the first three months on this year, even as the economy was shrinking by 4%. The price of oil has continued to rise ever since, now standing at double the price it stood at in January.

      A surge in inflation in the UK will become a real and present danger once the US begins to come out of recession. The Fed has already made it clear that financial stimuli will have to be rapidly reversed as that happens which will inevitably put pressure on Sterling. Axel Weber of the Bundesbank said much the same on Germany’s intentions last month.

      The choice we are ultimately going to be forced to make therefore will be between a surge in inflation or higher interest rates. Unfortunately, as the 1970s demonstrated the two generally go hand in hand unless tough and effective action is also taken to restore stability to the fundamental value of the pound. This is something that the present government is both unable and unwilling to contemplate.

  18. LEV
    June 16, 2009

    So ken clarke thinks it ok to have ‘sensible discussions’ about certain issues that concern member states including employment law,(ie tinkering round the edges) despite being a big fan obviously of the lisbon treaty and the eu in general. He doesnt want us to become another switzerland,( and pick and choose as we wish), so whats the point of further integration if we then have to argue the details, wheres the supposed benefit in the lisbon treaty why does noone tell us this?

  19. Robert George
    June 16, 2009

    John, the sting in the tail of this recession is called INFLATION.

    It will start to bite in the third quarter and price increases plus incresed interest rates will have people screaming blue murder by Christmas and through 2010.

    This will be the final straw which will destroy Nu Labour and will go some way to bringing President Obama back to reality. Neither Brown nor Obama can blame anyone but themselves for wrecking their own currencies through the foolish policy of printing money.

  20. Man in a Shed
    June 16, 2009

    Sadly I’ve just sat in a public sector meeting where the talk and action is all about employing more people into new posts.

    I can’t get over the idea that this is a deliberate trap being shamelessly laid by Labour, using peoples lives as pawns in their own desperation to extend their careers.

  21. Steve
    June 16, 2009

    These Labour rats will sacrifice eachother without mercy:

  22. Brian Gilbert
    June 22, 2009

    The changes needed are vast and will be argued against on the grounds that they will cause widespread suffering. New Zealand faced up to it in the early 1980s and found that the swings generally made up for the roundabouts.

    The story is contained in ‘New Zealand’s Remarkable Reforms’ The fifth IEA Annual Hayek Memorial Lecture by Donald T Brash 1996 (56 pages)published by the IEA who hopefully will make it available again as a PDF download.

    I don’t think the Conservatives have got the stomach for it but UKIP might. Perhaps Mr Redwood should make a move?

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