Conservative MPs and the “cuts”


           In the later months in opposition, when I and other economically minded Conservatives were giving advice to Shadow Ministers, we were often told that our tunes would change a year or two  into government. Wise Shadow Ministers knowingly explained to us that we might accept the  necessity of spending cuts in opposition,  but it would be very different in government. You will, they said, be demanding that we cut less and spare the spending. They expected our brave words to vanish like the melting snow.

             We are fast approaching the two year mark of the government. What is fascinating is that the position is the very opposite of that predicted by some Shadow Ministers. Many backbench Conservatives are uneasy about public spending, but for the opposite reason. There are a variety of areas where the backbenchers want it cut, where Ministers refuse to co-operate.

            Last week-end the unhappiness about taxpayers financing energy subsidies came to the fore. Most Conservatives would like the market to be allowed to operate, to provide more cheaper energy for constituents. Such a policy would spare taxpayers excessive subsidies for windfarms and the like, as well as delivering lower household and business bills. MPs think that is a double win.

             Then  there is the running sore of overseas aid. Many backbench Conservative MPs want the overseas aid budget to be targetted on the really poor and needy. Many of us are happy to be generous to those in great poverty, but do not think the fast expansion of the current budget is doing that. We pressed for China and India to be dropped from the list of aid recipients in 2010, and the money saved. The government  did not agree with us about India. This decision has now come back to bite it, with stories that the Indian government agrees with us backbenchers, and does not want the aid we send.

            Many backbenchers would dearly love to see the end of the HS2 project. Some agree with me that it should be deferred whilst we sort out the public accounts. A £33 billion project looks like an extravagance given the state of the budget, and given the running losses the new trains will make when they eventually run. It is true not a lot of money is going to be spent on its this Parliament, but every £750 million helps. It has also become a kind of symbol of how serious people are about controlling spending. Adding such a large new project before the national accounts are anywhere near stabilised looks rash.

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† Then¬† there is the vexed issue of public sector pensions. The backbenches have been¬†sensible about accepting that MPs pensions, like the rest of the public sector, need to be cut. They have been resolute about the threats to industrial action that have resulted from the government’s plans. The bigger worry for quite a few backbenchers is we are going through the political pain for not enough gain. MPs ask Ministers to stand firm over changes to the ¬†higher pensions in the public sector, and were surprised by the concessions already made.

¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬†¬† There is the ever present question of the EU. Most Conservative backbenchers favourite spending cut would be a big cut in the EU budget and the UK contribution. Ministers have been reluctant to press this too far. Backbenchers are also worried¬† by the demands to put more money into the IMF. If we are short of money at home, they reason, how come we have all this largesse¬†to give to Euroland and the EU itself? Surely austerity should begin in Brussels, not in my local Council office? As the EU is currently preaching austerity to its members, couldn’t it lead by example and show us how to do it?

                It is hard yet to find examples the other way of backbenchers wanting more spent. Partly that is because we have so far had so few cuts, but partly it tells you the mood of the party. They get it. They understand the need to curb spending after a decade when it let rip. Most of us warned and steadied our electors for the cuts. Most of us want the cuts out of the way now, as our appetite for them may well dull nearer the election.

                      It is true some MPs  are concerned about the withdrawal of children related benefits planned soon. However, the worries do not amount to a full scale demand that the policy be cancelled, merely that the government looks again at some of the anomalies which leave the person on lower pay worse off than a couple on jointly higher pay, which seems unfair. Most MPs accept this is an area for savings, but want a different approach to how they are delivered. They would like to see the couple with one parent staying at home and the other higher rate tax payer not disadvantaged compared to the two earner couple with the bigger total income.

                        Many Conservatives think the defence budget has been cut too much, but there is no move to reinstate extra spending.  All this just goes to show that the party, far from in panic at the scale of the cuts is willing the government on to save the billions that are still being borrowed.


  1. norman
    February 6, 2012

    I heard some talking head last week talking about public pensions and the state of the negotiations.

    I didn’t know too much about it, and who really wants to learn the minutiae of such matters even if it is our money being spent, but the long and short of it is that the government are giving way over every medium to long term measure in return for keeping the short term measures intact, such as the increase in contribution. Far from being a settlement that is going to stand for a generation the problem is being postponed for someone else to deal while the govnerment furiously spins that they’re acting tough and getting a ‘fair deal’ for everyone.

    I fully realise the vast majority of policy is formed by this short term mindset but this one example sums this government up perfectly, I thought.

    As far as overall spending goes, I often think along the lines of Labour increased spending by 50% in real terms over a little under a decade, imagine the outcry if this government were to reduce it by 25% over this Parliament and yet this is what has happened to taxpayers and yet we’re still continually being told we need to stump up more and more until at some undetermined point it’s decided we’re paying our fair share.

    We’ve certainly fallen a long way in the last 20 years. Bottom will be coming up to meet us soon though.

    1. Disaffected
      February 6, 2012

      The reality is if the Government (both parties) is serious about the economy being its number one project why does it act in contrast on so many fronts and by most Government departments?

      It will not help the economy to:
      *Give the EU over £17 billion each year and handicapped by rules and regulation to grow our economy and society as we want.
      *Overseas aid- taxpayers’ money thrown away to wealthy countries and countries who will not change their dislike for the UK ie Argentina.
      *Energy policy that costs a residents and industry a fortune and will not provide cheap energy for industry to be competitive or for enough energy for an increasing population.
      * Immigration- mass immigration continues. Birth rate four times higher than in 1980. The social problems will increase ten fold- pure socialist stupidity.
      *Welfare- It does not pay to work if you earn under £35,000. The LibDem and Labour parties confirmed this two weeks ago by their voting in the Lords.
      * Education- university free to our EU competitors and at a small cost to Chinese competitors who are already an industrial power house. Does this Government plan for the future?
      *Schools-1 in 4 pupils in school are directly from immigrant families. All inclusive policy for every disruptive pupil further dumbs down our education and deprives those who want to study (from all social classes),as the lefty socialists want to label them with a syndrome of some kind rather than put them in a school by themselves allowing the rest to flourish. Changing the name of a school to an academy will not make any difference.
      * NHS/WHS- our free health service provides free health care to all Eastern European countries and immigrant families who visit. No checks being made. Utterly ridiculous.
      * meanwhile £32 billion being spent on a single rail line that will make one journey 30 minutes quicker when the country will face problems with its water, energy, waste and housing because of mass immigration to the land of the free. Do the Coalition have a clue how to run the country??

      1. Graham
        February 6, 2012

        Well put my friend.

      2. lifelogic
        February 6, 2012

        Do the Coalition have a clue how to run the country? Clearly not – nor will the train save 30 minutes as it will make fewer stops and thus many passenger will travel further door to door – for the next ten years it will delay everyone during construction disruption.

      3. Martin Ryder
        February 6, 2012

        Your comments are absolutely right (in both senses of the word).

        However if Mr Cameron were to read your comments (unlikely I know) he would no doubt mutter ‘bigot’ and move on to more important things, such as ensuring that the vast sodden wet blanket of the Metropolitain Liberal Elite Establishment that governs our country so badly, both centrally and locally, is well recompensed from our taxes and allowed to flourish. Local councils have said that they have so many of them earning ¬£58,000 pa and over that they cannot afford to count them. Yet another ICT fiasco.

        1. A different Simon
          February 7, 2012

          Don’t forget that that ¬£58,000 is equivalent to a private sector package of over ¬£70,000 when you include pensions benefits .

        2. A different Simon
          February 7, 2012

          Re £58,000

          If we properly accounted for the true cost of pensions then we’d be able to state someones true remuneration rather than understating it by reporting their gross salary .

      4. uanime5
        February 6, 2012

        * The net cost of the EU to the UK is £3 billion, not £17 billion. Thanks to the rebate and EU policies we get back most of the money we give to them. Also as the GDP of the UK is £1.4 trillion even £17 billion is just over 1% of GDP.

        * The energy policy cannot rely on coal, gas, and oil as these will run out sooner rather than later. So the only alternatives are renewable energy or nuclear power.

        * Immigration is high because businesses want cheap labour. Don’t expect this to change unless the minimum wage increases to a living wage and immigrants have to compete against local people for jobs.

        * Were benefits to be withdrawn in a sensible way then working would pay even if you were on benefits. Introducing an arbitrary cap on benefits will not fix this problem, especially for those working low paying jobs in high cost areas.

        * Education in the UK cost the same whether you’re from the UK or another EU country. It’s even more expensive if you live outside the EU. Though the Government’s plan to raise tuition fees will actively discourage those from poorer backgrounds to going to university while encouraging others to receive their education in other EU countries.

        * An immigrant child will learn English far more quickly if they’re in a class where everyone speaks English. Disruptive pupils can either be educated, or they can remain uneducated and remain on welfare because they can’t get a job.

        * People from the UK can also receive treatment in other European countries.

        1. forthurst
          February 6, 2012


          We are not about to run out of ‘fossil’ fuel, even if the government pretends we can’t use our own shale reserves. Furthermore, it would be extremely foolish to anticipate science at a distance greater in the future than the start of the industrial revolution is in the past. As to your anthropogenic CO2 belief, here is a summary of a book on ‘climate change’ reported via WUWT:

          “‚ÄĘ Climate change is happening faster than we realize and it will have catastrophic consequences for mankind.

          ‚ÄĘ There‚Äôs very little we can do to stop it at this late stage, but we might be able to save ourselves if we immediately take these necessary and drastic steps:

          – Increase our reliance on alternative energy sources and stop using so much oil and other carbon-based fuels;
          – Adopt energy-efficient practices in all aspects of our lives, however inconvenient;
          – Impose punitive taxes on inefficient or polluting activities to discourage them;
          – Funnel large sums of money from developed nations like the U.S. to Third World nations;
          – In general embrace all environmental causes.”

          In other words, more of the usual. In fact, the only salient difference is that the book was published in 1977 and is titled, ‚ÄúThe Coming of the New Ice Age”.

          Do you see now that you have succumbed to a grooming exercise, sadly as with many of your beliefs? There may be pure evil in the world, but you haven’t fingered it yet. It’s time to follow the money.

        2. Disaffected
          February 6, 2012

          Inaccurate socialist drivel, once more.

        3. Iain Gill
          February 6, 2012


          your analysis of immigration is wrong. for instance we have tens of thousands of Indian nationals here on work visas, its much easier for them to get work visas here than it is for a Brit to get a work visa to India. They can vote here we cannot there. They get free schooling for their children here we do not there. They and their families get free healthcare here we do not there. They get large tax and national insurance discounts which helps them undercut the native workforce, we do not there. They are getting paid much more than the minimum wage but much less than the market salary especially in the South East. More than 30% go on to get indefinite leave to remain in this country and British citizenship it is unheard of for Brits to gain Indian nationality no matter how long they live in India.

          And so on. Its organised social manipulation by the political classes. The people know its wrong but the state backed media and ruling classes dont listen to the people.

          “Education in the UK cost the same whether you‚Äôre from the UK or another EU country.” unless youre English trying to study in Scotland! yes discrimination is alive and well against the white working class English males of this land…

          Your analysis is wrong from top to bottom

        4. Winston Smith
          February 7, 2012

          Your EU figures are wrong. You are propogating the old marxist mantra of repeating a lie over and over again, some peopel will believe it. The true figures, as per the Govt accounts have been put on here enough times. Your figure deliberately leaves out contributions to the EU from levies and duties. ONS reports a net contribution of £10bn. The cost of administering the EU and its legislation varies from £45bn to £125bn, according to various studies.

        5. Robert Christopher
          February 7, 2012

          “The energy policy cannot rely on coal, gas, and oil as these will run out sooner rather than later.”
          But not in 50 years!!! What has happened to global warming? Too much snow? China is still finding the carbon to burn; we have gas, coal and shale gas. Huhne may have gone, but the decarbonisation of Britain agenda is still in place; it is still the law. If we cannot get through the next 20 years, what is the use of worrying about the following 30?

          “An immigrant child will learn English far more quickly if they‚Äôre in a class where everyone speaks English.”
          But they are not in classes where everyone speaks English! There are schools with over 50 ‘first languages’ and not many second languages!!! And some are not even potty trained when they start school!!!

          “People from the UK can also receive treatment in other European countries.”
          The ‘other European countries’ claim the costs back from Britain, while the NHS does not (in the main) bother to fill in the forms to claim the costs back from the foreign patient’s country! (as reported recently) Must be something to do with the public sector not understanding what money is about.

          “Immigration is high because businesses want cheap labour. Don‚Äôt expect this to change unless the minimum wage increases to a living wage and immigrants have to compete against local people for jobs.”
          I thought that we had had an election recently and that the new Government was responsible for the good management of this nation’s interests. I must be mistaken! New Labour, blue Labour, there is no difference.

      5. Barry Sheridan
        February 6, 2012

        Well said. Of course this government has no idea. Look at who the Prime Minister is, then consider his deputy. Unfortunately for us David Cameron is totally out of touch with what is wanted, as for the Liberal Democrats, well they have always been fantasists.

    2. Robin
      February 6, 2012

      Disaffected, you have put it in a nutshell and our out of touch blairite PM would do well to take onboard what you say. But of course he will not. I fear his decisions are founded on an unhealthy disregard of, if not contempt for, the good people of this country.

      Thank you for another wonderful article John. Nothing will improve until cameron sees the error of his ways and engages your services.

    3. Andrew Smith
      February 6, 2012

      There is a very easy way of solving this problem of high (and unexpectedly high) public service pensions. Instead of breaking private contracts there is another way which would also yield a beneficial financial result now and not only in 20 years time, which appears to be the profile of the government’s minor tinkering.

      The answer is to tax defined benefit pensions under a different tax schedule, just as interest, rent and overseas income are taxed under different schedules with different rates. Employment income, income from a trade and capital gains are all taxed differently so there is no objection in principal to my proposal.

      The way this could help solve the problem is that income above (say) average wages in the UK would be taxed at a higher rate than the current income tax rates and no set-off would be allowed with other schedules of tax. At (say) three times average income the tax rate on these tax-payer funded pensions could be (say) 60% and at five times income it could be 75%.

      Ig also taxed at source, even overseas residence would not avoid it.

      I can see nothing wrong with this in pronciple.

      While seeking lower average and marginal tax and benefit reduction rates generally, this solution fits the current fashion for selectively penalising sectors of the community whose expectations or good luck cannot be afforded any more.

      As a final persuasion to all readers (except JR), MPs pensions would also be caught!

  2. colliemum
    February 6, 2012

    It is encouraging to read that MPs are looking at costs across the government, with a red pencil in their hands.
    One hopes that they will take on the Whitehall Mandarins who still seem to think that government is about printing money exclusively, and to rain largesse upon the electorate, like the kings of old.

    One area where MPs could and should proceed with energy (forgive the pun) is the cutting back of civil servant, i.e. the entrenched bureaucracy.

    It is surely unsustainable to cut back on those who put their lives on the line in defence while keeping the pen pushers in the comfort they have granted to themselves. The same goes for the NHS, where bureaucrats outnumber those who do the work, medical personnel and nurses.

    It is a huge mistake for the Tory party, inside and outside government, to try and appease the left-wing vested interests.
    The electorate is not stupid. Many of us know that when there’s not much money, one’s got to retrench. Many of us know that having a job is better than no job at all. Many of us know that charity begins at home.
    So if the MPs wish to succeed in reining in spending, they should publish proper numbers, proper costs of savings, and let us make up our own minds if it is fair and just that we, the tax payers, have to support e.g. the unions who try and bring this government down.

    1. uanime5
      February 6, 2012

      The NHS needs bureaucrats so that nurses and doctors can spend their time looking after patients, rather than doing paperwork.

      The unions represent their members, who are all taxpayers. So union action is synonymous with taxpayer action.

      1. Bob
        February 6, 2012

        The public sector do not contribute to the tax pot. They are paid from it!

        1. APL
          February 12, 2012

          Bob: “The public sector do not contribute to the tax pot. They are paid from it!”

          Yes. Can’t be said too often, not something you will hear on the BBC either.

          Must be the unique way they are funded.

      2. alan jutson
        February 6, 2012


        You would be right if nurses were spared the paperwork so they could nurse, hands on so to speak, unfortunately they do not because they are flooded with paperwork as well.

        How do I know

        A family member works in a hospital, and a close friend is a Ward Sister, others who used to work in Hospitals as nurses, are pleased they have now retired.

        The system is out of control, not my words, but theirs.

      3. Mark
        February 6, 2012

        In a well designed system there would be less paperwork and fewer bureaucrats without in any way compromising on patient care – indeed the saving would allow better care for the same money.

        Not all taxpayers are union members – in fact union members are now a small minority in the UK workforce of some 23.9% according to the latest statistics. There are of course yet other taxpayers who are retired. There is a marked disparity in the degree of unionisation of the public sector – some 56.3% and the private sector, where it is only 14.2%. Thus unions overwhelmingly represent public sector employees, who depend ultimately on taxes for their pay packets – rather the opposite of taxpayers in the private sector or who are retired.

  3. Steve Cox
    February 6, 2012

    WRT the defence budget, I suspect that many non-Conservatives would agree that the cuts have been in the wrong areas (front line defence forces instead of civil service pen-pushers and overpaid featherbedded senior officers, we have more admirals than warships, etc.). There was an interesting and informative article by Andrew Gilligan in the Telegraph yesterday:

    What strikes me is that our government has again shot itself (and us) in the same foot twice. Firstly, they are wasting a billion pounds in foreign aid to India at least partly with the hope that it would secure the fighter deal. Well, that evidently didn’t work very well. Secondly, we have a state of the art aircraft in the Typhoon which we are unable to arm properly due to the defence budget cuts. Given the history of delays and cost over-runs in the Eurofighter project, it is hard to blame the Indians for being sceptical about our ability to deliver what they require. So we throw money at the Indians to no good effect, while crippling our own defence forces by excessive cut-backs and at the same time effectively damaging our own chances of winning this contract due to the cuts. If this is planned government strategy, they really do need to employ a few decent strategists. The game’s not over yet, of course, and so no doubt the government will ignore India’s ungrateful comments about our aid – there’s always some half-baked excuse not to cut the feel-good, left wing parts of spending, after all.

    1. MickC
      February 6, 2012

      The Typhoon is not a state of the art combat aircraft. It is an aircraft designed to fight in Central Europe if the Cold War became hot.

      Once the Cold War ended, it was effectively obsolete-although it has been bodged up a bit to try to make it relevant.

      India has probably chosen wisely-but it seems unlikely that was by intention rather than “other considerations”.

      1. backofanenvelope
        February 6, 2012

        And what do you think the Rafaele is?

        1. Mark
          February 6, 2012

          Perhaps the Indians had a grandstand view of both aircraft and associated weapons systems in action in Libya.

      2. Bob
        February 6, 2012

        I think other considerations has a big part to play. We’re outclassed by the French in that field.

  4. lifelogic
    February 6, 2012

    The reason cut are needed is to release the private sector from the burdon that prevents them competing, let the economy grow, get and people and our youths back to work. Tax borrow and waste is a disaster and is continuing two year into this coalition.

    Perhaps on pensions the approximate cost should be included on pay slips, so the state sector appreciate what they are actually getting. Many have not idea РMPs might say salary £65,733 and state contribution to cost of pension PA perhaps £40,000. Or at the top of the BBC salary £700,000 and pension contribution perhaps £500,000 PA then perhaps print the average in the private sector. Pay something like £26,000 pension contribution £2,600 Рor often nothing at all.

    The real way to deal with these pensions is a special state sector pension tax of about 90% above say £25K and the removal of the G Browns private sector mugging tax on dividend to redress the balance somewhat.

    But clearly Cameron will not do this and our youth, and the economy will pay the price.

    Reply: I have n o objections to knowing accurate figures for state top up of public sector pensions. Pay slips do of course take off the employee contribution to the pension, and the idea should be in the case of the MP scheme is to secure the pension from future contributions.

    1. Disaffected
      February 6, 2012


      Pensions can be afforded. If Government can throw away billions of pounds of taxpayers’ money to EU, overseas aid, mass immigration etc then it can afford better pensions for the elderly and public sector workers. The Government want people like you to moan about this to gain support so it can throw away the money on other stupid projects that might grab a one off headline in the paper.

      We all should be striving for better pensions, private and public, so none us will be a burden in elderly life. Brown/Blair wrecked private pensions. What the public tend to forget is that not only do MPs get a huge pension, but they also a furnished second home on the taxpayer they can sell or rent out to supplement their pension. Scandalous. On top of this a lot will end up in the Lords, for no deserving reason, and get a further top up. In the Lords some still have the cheek to fiddle,some have even served a term in prison and are then allowed back to claim more!!! What company or organisation, private or public, would allow this??

      Reply: MPs cannot buy a flat on the taxpayer and rent it out or sell for a profit. These days an MP can claim rent on a rented property used to stay near Westminster up to a limit, or claim the maintenance bills only on a flat they pay for themselves whilst using it on Parliamentary business.

      1. lifelogic
        February 6, 2012

        Average state sector pension fund is nearly ten times the average private sector fund, Indeed many in the private sector paying taxes to cover the state ones have no pension at all.

        1. uanime5
          February 6, 2012

          Then the solution to dealing with the lack of private sector pension funds is a special private sector pension tax of about 90% above say £25K. After all lifelogic you did claim it would work in the state sector.

          1. lifelogic
            February 7, 2012

            The private sector pension have already been mugged by Browns tax so they are already only about 1/10 of the state sector ones. Many have non at all.

      2. JimF
        February 6, 2012

        MPs shouldn’t be setting tax laws which the remainder of the population have to obey but they don’t.
        The same goes for the European gravytrain MEPs & C0.

        When a salary is provided, taxed and with expenses allowable and benefits-in-kind taxed under exactly the same rules as though those MPs/MEPs were UK residents working for a UK business, then I think you can talk from a high place!

        Reply: Other workers working away from their main home are allowed to claim the costs of overnight accommodation without paying tax on it as a benefit in kind. Other workers have secretaries and support staff provided, and are not expected to pay personal income tax on the otherwise taxed salaries of their staff on the grounds that those staff are part of their income.

        1. JimF
          February 6, 2012

          I agree. But I understand that attendance allowances, for example, are still paid on signature without receipts being required.
          Until there is a clear and unequivocal understanding that HMRC rules = House of Commons Rules = House of Lords rules = European Parliament rules there will be scepticism out here, believe me.

        2. Iain Gill
          February 6, 2012

          your reply is not the full facts though is it John?

          other workers can only claim expenses for accomodation when away from the place of normal work named on their employment contract which is mostly not their home address, many people live in Wokingham (say) and are contractually based in London and cannot claim expenses for travel between home and their main office or indeed overnight expenses near that office. only if people are contractually based at home can they expense everything like this. if you try you will find the tax man round rather quickly. and then of course normal people dont get 2 GP’s one at home and one near their London office like MP’s do, or prioritised queue jumping on the NHS which must be a perk worth a few pennies and totally untaxed. And so on and so on.

          Reply: Yes, but the MP is regarded as having- and has – two places of work, one in his constituency office and one at Westminster. If someone working for a firm has a home abnd an office in Town A, but also has to work from time to time at an office in town B, travel and overnight accommodation (when working late)in Town B is an allowable expense. MPs are nmot allowed to claim overnight allowances unless the House is sitting late.

          1. lifelogic
            February 8, 2012

            To reply: this I understand does not apply to someone who does some work at home and some at the office travel between them is not usually allowed. Not does it apply to someone with two or more different jobs – travel between home, office 1 and office 2 is not allowed.

            HMRC do sometimes allow a derisory tax deduction of £2 pw or something similar I think rather less than goes in heating alone I imagine.

        3. Steven Granger
          February 6, 2012

          That is not quite right John. If an employee is provided with a house in connection with a permanent workplace then this is normally subject to tax and the employer has to pay national insurance. If the employer is then generous enough to provide widescreen tvs, duck moats, food, free porn or virtually anything else then this is also subject to heavy tax. Yet again you demonstrate your ignorance or are you just wilfully misleading your readers?

          Reply: You are confusing an employer providing a first home, which is taxable, with an employer providing away from home accommodation which is not taxable. The duck house claim was not allowed – indeed was not even formally requested, and the porn was clearly outside the rules. Under the new scheme mortgage interest is not allowable. Under the old scheme the MP of course had tomeet the capital repayments for a mortgage out of taxed income.

          1. Steven Granger
            February 7, 2012

            No what I am saying is that, if an employee is provided with any permanent home then it is taxable whether a first or second home. If I were an employee and had a job that entailed me permanently working part of my time in London and part (lets say) in Manchester were my main residence was, if my employer provided me with a home in London for the day’s I was there then the home would be taxable as would be the value of any free tv, microwave or anything else that was bought for me by the employer. The situation that you are confusing is that if I am away on business temporarily (eg on a one week training course in London) for which my employer pays for accommodation then I am not taxable on that. If it is a permanent arrangement (and generally anything more than 2 years is treated as permanent) then it is taxable. You are trying to defend the indefensible using incorrect interpretations of the law that you supposedly help make.

      3. Disaffected
        February 6, 2012

        So is Mr Cameron going to give back the ¬£21,000 interest payment he claimed for his second home before the changes?? No wonder there is not much will at Westminster to cap welfare benefits at ¬£26,000. What happened to Mr Martin after he was forced to resign over the MP expense scandal? Was his pension reduced or cancelled or was he elevated to the Lords at the next sitting? What happened to family employees who worked as “researchers” John? Or those employed as live in nannies/child carers?

        Moreover, could you point me to the Hansard record(s) reflecting how many times MPs demonstrated leadership before the expense scandal broke and said this must stop it is wrong.

        Reply: All now agree the old scheme was too generous, and after the revelations Parliament introduced a less generous scheme. Any sensible MP knows this episode was damaging to Parliament.

      4. Barbara Stevens
        February 6, 2012

        Again, I’m as strong believer in paying your own citizens only, and immigrants should have worked and paid into the system for 7 years before getting anything. There are far to many taking out and not enough putting in. On child benefit it’s about time we stopped paying women to have children and limited the number of children we pay for, I think the first three should be the limit. Those with more children could have it phased in over time, to prevent hardship. As for the NHS, which I’ve worked in, health tourists should be made to pay for treatment, and again emotional blackmail should be igored in the ‘national interest’ and save the country ¬£55 million per year. Whitehall should be reminded it works for us the public not it’s self who pay the taxes, their waste is terrible. In fact these people waste more than what some benefits cost for people in real need.

    2. lifelogic
      February 6, 2012

      To reply – I agree at least the public sector might then be aware of the excellent pension deal they do receive relative relative to the private sector that funds it. Clearly it needs to be an average as it varies by age of employee but some are getting nearly as much in pension funding as they get in salary but do not even realise it.

    3. Mark
      February 6, 2012

      The cost of pensions depends crucially on the projected real investment return. In an environment with 5% inflation and 0.5% interest rates the sum required to finance a £10,000 p.a. inflation proof pension to last from age 65 to life expectancy of 87 if you reach 65 (i.e. 22 years) is about £360,000. If there are real investment returns of just 2%, then the sum required is less than half at around £170,000. It is noteworthy that in the current environment you have to survive until age 101 to get your money back.

      The difference in these actuarial sums illustrates two points: the great uncertainty in the real liability that pensions represent, and the imperative to sort out the economy so that we get positive investment returns, instead of the negative ones we are getting from current energy and higher education policies, among others.

      1. A different Simon
        February 7, 2012

        Mark ,

        Great point on possitive investment returns on annuity rates .

        Any system which is completely reliant on continued possitive returns is inherently unsustainable . Any system like public sector pensions which then seeks to get others to underwrite the shortfall of those returns is immoral .

        What made me laugh/cry was when John Hutton said that the “financial crisis” invalidated his proposals . Heck people starting work now may live another 70-80 years and John Hutton tells us after 10 months that his report has been blown out of the water !

        As soon as you aim to sanitise life/finance and take all risk out of it the returns go through the floor .

        As well as aiming for positive returns , we have to put risk back on the table and make beneficiaries responsible for sucking up the shortfall .

    4. A different Simon
      February 7, 2012

      Lifelogic ,

      What get’s me about all this public sector pension malarky is that they get high returns (notional inflation plus 3.5%) at virtually zero risk .

      As anyone knows , you cannot get good returns at zero risk in the real world .
      – the stock market has flatlined for the last 12 years and is not capable of delivering inflation adjusted returns of an annualised real 3.5% over the long term any more .
      – annuity rates reflect a real zero risk return and they are pitiful
      – the best inflation linked performance you or I can get at low risk is less than 1% real growth , eg National Savings products .
      – why should the Govt pay interest at a higher rate than it borrows ?

      Where (I think) we disagree is that I believe accomodation costs have to be slashed so that people have the money to save for our age .

      The FSA is still insisting insurance companies use absurd rates of return for illustrative purposes . How about they use -2% ,-1% , 0% , 1% , 2%,3% ,3.5%, 4% for illustrative purposes ?

      The bottom line is that public sector workers have to accept risk if they want to retain their high return or accept a lowering of the return .

      As we know “risk” is an anathema to the a Govt who must brainwash kids that “risk is bad” and must do all they can to protect us against ourselves .

      1. lifelogic
        February 8, 2012

        The only way to get housing cost down is to build more houses or get reduce demand. The cost of building them is going up due to higher heat loss standards disabled access regulations, expensive utility connections, planning and building control fees and inflation in building materials and labour.

  5. lojolondon
    February 6, 2012

    John, most of your constituents agree with the backbenchers. One more area you haven’t mentioned is that we want the army to be protected, fire the useless MOD!

    But the anomalies in the budged is the bizarre thing!! Wasting ¬£15B on the EU, ‘ringfencing’ spend on the NHS, foreign aid and the silly windmills – this is EXACTLY where resources are not required.
    Labour doubled NHS spend without materially improving services, so we know that we can cut and yet improve.
    Lastly, words fail me with the BBC. The pro-Labour, pro-global warming, pro-EU and pro-rioters bias is clear for all to see, they are abusing their position and yet we spend more and more on them. Strong cuts made on the BBC would be a very, very good thing, and make it easier to make other cuts.

    1. lifelogic
      February 6, 2012

      I agree. On the BBC issue РI cannot see why anyone at the BBC should earn more than about £150K . The arty, lefty, ever bigger tax and waste state, global warming religion, pro EU bias of the organisation needs to be tackled.

      Start by replacing Lord Patten. He is not likely to do much, he is “BBC think” to the very core.

      1. Johnnydub
        February 6, 2012

        Anyone see the latest report regarding “right wing extremism”?

        The report clearly stated that Islamic Extremism is the number one threat followed by Northern Ireland…. but the BBC report is focusing on “right wing” extremism..

        1. lifelogic
          February 6, 2012

          Anything unpleasant is always deemed by the BBC to be “right wing extremism”. Things like Hitler’s “National Socialist German Workers’ Party” and anything racist. In fact these tends so often to come from the left.

          All this is evil has to be “right wing” to the BBC as they are “left wing/progressive” and do not want to be tainted by it. I am surprised that the old USSR is not referred to as right wing – it soon will be no doubt.

          1. uanime5
            February 6, 2012

            The ‚ÄúNational Socialist German Workers‚Äô Party‚ÄĚ wasn’t very socialist and even outlawed trade unions.

          2. Bob
            February 6, 2012

            The ‚ÄúNational Socialist German Workers‚Äô Party‚ÄĚ wasn‚Äôt very socialist and even outlawed trade unions.

            Yes, communist states tend to neutralise the unions one way or another. The PRC cleverly nationalised and therefore controlled the trade union movement. Lefties and totalitarianism – two cheeks of the same bottom.

          3. A different Simon
            February 7, 2012

            Surely thats a deficiency of the outdated left , right wing terminology ?

            At the extremes it becomes the same thing – a totalitarian tyranny .

            Perhaps clockwise and anti-clockwise would be better ?

          4. APL
            February 12, 2012

            lifelogic: “Anything unpleasant is always deemed by the BBC to be ‚Äúright wing extremism‚ÄĚ. ”

            Didn’t Eric Blair work for the BBC?

      2. Disaffected
        February 6, 2012

        The Coalition did a lot of CEO bashing recently when it is none of their business, but the question they ought to be addressing is what are they doing about capping CEO pay and pensions in the public sector?? Eric Pickles has not made any significant policy issue to change to the huge pay of local authority CEOs, merged local authorities to make savings or improve services. Still waiting for highly paid quango’s to be got rid of. BBC is a scandal, it receives money from the EU, as does it chairman, therefore there is a conflict of interest to its impartial broadcasting policy. When is something going to be done about the funding stream to the BBC Mr Hunt??? it needs to act within its original remit and it is time for it to be commercially funded.

        1. uanime5
          February 6, 2012

          Given that the BBC receives most of its money from the UK the EU contribution is unlikely to influence it.

          Also who are these local CEO’s? Council leaders?

          1. Disaffected
            February 6, 2012

            1. Drivel 2.Look them up they are on line.

    2. Bob
      February 6, 2012

      The state should stop paying for TV licences for the over seventy fives, and instead these people should just be outright exempted for the need of a licence, (let the BBC suck it up). Oh, and reduce the age of exemption to 65.
      Better still, phase out the licence fee altogether!

      Child Benefits
      The Tories seem to be kow towing to socialist dogma in withdrawing them from anyone on the higher rate. The threshold for the higher rate is also being lowered to parity with the benefits cap level (26k net / 35k gross). Ludicrous! Just limit the number of children that will be paid for regardless of the parents marginal tax rate.

      LBC radio reporting this morning that the NHS spends ¬£64,000 per day on providing translators. That’s ¬£64k that can’t be used for medical treatment.
      Have “NICE” approved this expenditure? How many life saving drugs could be afforded for ¬£64,000 per day?

      1. Bazman
        February 6, 2012

        Another Bob A Job. What happens if the family have more than the ‘legal’ number of children? Should they have then taken away or should they suffer?

    3. nicol sinclair
      February 6, 2012

      “…foreign aid and the silly windmills…”

      Now that we have lost Don Huhne Quixote, perhaps he will disappear into the sunset to tilt at his windmills and we can hope for a more realistic energy policy from Huhne’s replacement?

      1. Mark
        February 6, 2012

        I have been trying to read the original Cervantes – a real stretch for my Spanish:

        Y, en diciendo esto, y encomend√°ndose de todo coraz√≥n a su se√Īora Dulcinea, pidi√©ndole que en tal trance le socorriese, bien cubierto de su rodela, con la lanza en el ristre, arremeti√≥ a todo el galope de Rocinante y embisti√≥ con el primero molino que estaba delante; y, d√°ndole una lanzada en el aspa, la volvi√≥ el viento con tanta furia que hizo la lanza pedazos, llev√°ndose tras s√≠ al caballo y al caballero, que fue rodando muy maltrecho por el campo. Acudi√≥ Sancho Panza a socorrerle, a todo el correr de su asno, y cuando lleg√≥ hall√≥ que no se pod√≠a menear: tal fue el golpe que dio con √©l Rocinante.

        No prizes for awarding the roles of Dulcinea, Rocinante and Sancho Panza…

    4. Alan Wheatley
      February 6, 2012

      As to the BBC, it is not all gloom and doom.

      At a recent meeting of the Select Committee Thompson and Patten were challenged as to the BBC’s pro EU bias. There are sign of some rebalancing.

      For instance, the three BBC Radio 4 programmes broadcast at 13:30 on Sundays (one more to go) provide a clear explanation of all that is wrong with the Euro concept and all that led up to it. They are providing a very strong case against the EU.

      1. lifelogic
        February 7, 2012

        They are slightly back tracking on the EU and the green issue. But this is only because they were getting so out of line with reality and current public opinion. The still have a big state, quack green, pro EU, socialist agenda that they are trying to ram down people throats. They just think it is better to be a bit softer on it at the moment and pretend to some balance.

    5. Bazman
      February 6, 2012

      And the rest of the TV channels reporting this? What is to be done with them?

  6. Iain Gill
    February 6, 2012

    didnt you miss the massive tax and national insurance discounts to foreign workers here on work visas from the list of things that need cutting?

    1. A different Simon
      February 7, 2012

      All we need now is for India to reject our banks like they rejected our defence industry .

      Then we can have a level playing field for British workers .

  7. Antisthenes
    February 6, 2012

    Europe let alone the euro-zone is suffering from a three pronged problem 1) sovereign debt 2) banking crisis 3) economies crisis. Central banks are largely containing the first two but cannot do so indefinitely and without dealing with the third it is a wasted effort. Although there is containment in dealing with one and two it is being done by artificially rigging interest rates and by producing money out of nothing in the hope that future growth will pay for it. Without addressing three that is very much a forlorn hope. Certainly austerity helps and in the UK that is not happening at a pace or degree that will be truly effective enough. To properly solve the problem of the current economy crisis a much more radical approach is needed to that to which is happening now. Currently much of the economy is predicated on subsidy and protectionism resulting in much misaligned investment. We are protecting and investing in services and industries that we should not be and starving those that we should be. We are taxing and regulating in a way that is not viable whilst being part of a globalist trading community it cannot continue if we are to regain competitiveness. The EU, euro-zone and social democracy are the greatest barriers to solving the economy crisis and while they prevail this crisis will never be solved. The future outlook for growth is much more precarious than many realise as this is not just the normal economic boom and bust cycle that occur frequently . This is a society boom and bust cycle that general only happens once.

  8. alan jutson
    February 6, 2012

    This time the tail (backbenchers) should wag the dog, as the Ministers have yet to be seen to engage their brains.

    I wonder what Alan Duncan thinks of recent press reports after his staunch defence of our foreign aid programme last week.

    It now appears that the Indian Finance Minister calls our £1 Billion aid PEANUTS by comparison to what they themselves are spending, and if reports are true, asked us not to send any financial Aid, as they did not want it any more.

    What a fiasco, it seems Fiasco is the common theme of so many policy ideas.

    Windmills, HS2, Carbon Tax, Airport tax, Feed in Tarriffs, prison sentences, Benefits, The EU, High tax rates, increased spending, Immigration, Airports, Quantititive easing (money laundering) to name but a few.

    You name it, they can cock it up.

    Never mind workers on Pay Boards, we need ordinary workers on Government policy Committees..

    Another Problem, the Opposition is clueless as well.

    1. Kevin Dabson
      February 6, 2012

      We need the Gold Standard. Pure and Simple.

    2. Bob
      February 6, 2012

      What do you expect from career politicians ?

      Will Alan Duncan now concede that we should not be sending money to India?
      That would reduce our deficit by 280,000,000 pounds per annum!

      1. Quietzaple
        February 7, 2012

        Duncan is one of the very few politicians to have had an extremely Market based business career. If he says hundreds of thousands – perhaps more – people’s lives depend on our aid there is a better case for believing him than for believing Gilligan (who betrayed Dr Kelly by ignoring his wishes) of tge tax exiled Barclay brothers.

        1. Quietzaple
          February 7, 2012

          Sorry, shld read Extremely successful.

          1. zorro
            February 7, 2012

            I am currently in the far east and was watching a news report which showed that the Indians were spending at least 10 billion pounds per year on new roads. Enough said……The money the government gives to India is to assist business interests as well as supposed poverty relief, and facilitate access to the Indian financial market.


    3. Electro-Kevin
      February 6, 2012

      It appears that the Conservative leadership is not Conservative at all and that the back benchers (representing millions I hasten) are viewed as some sort of eccentric fringe to the right of the party.

      The situation seems such that the administrative establishments of our country and the BBC set the limits which define the ‘centre ground’ of politics.

      In no way are politicians who voice majority opinion allowed to be afforded appropriate weighting in broadcast debate. In fact I believe that the PM and his Cabinet is chosen based on their acceptability to the State and the BBC.

      A minority representative (not speaking particularly of race or sexual orientation) may be able to win an argument but surely the majority’s feelings must be taken into account when deciding how to define what is ‘fair’ and which way to go forward on any issue.

      This is why so many people are shocked and dismayed at what is being done to their country.

  9. Brian Tomkinson
    February 6, 2012

    Those shadow ministers betrayed their true colours to you before the election. Not surprisng that so little has been done to reduce spending whilst so much hot air has been spouted; but of course taxes have been increased. At the end of this parliament it will be argued that cutting spending didn’t work (the argument is already being made) when in fact little attempt will have been made. Cameron has lured you into his trap. There will be no rebellion by disillusioned Conservative backbenchers out of either blind loyalty or fear and his plan is for a further period of coalition government. It might suit him but what about you Conservative MPs and the public?

    Reply: There have been more rebellions this Parliament than in previous Parliaments, reflecting the wish of many Conservative MPs to move policy in a different direction.

    1. Brian Tomkinson
      February 6, 2012

      Thanks for your reply. Have any of those rebellions actually resulted in any change of policy?

      Reply: Probably. Mr Osborne now takes a more realistic veiw of climate change policy. Mr Cameron has refused to sign a new EU Treaty.

      1. APL
        February 12, 2012

        JR: “Mr Cameron has refused to sign a new EU Treaty.”

        Except he didn’t as there was no treaty to sign.

        So that throws into doubt your other assertion that Osborne takes a more realistic ( noted the qualification ) view of climate change policy.

        Will the government you support, repeal the climate change bill?

        You know, we only want a tangible measure of how realistic Osborne is?

        Reply: There is a draft Treaty and Mr Cameron did refuse to sign

  10. Magnolia
    February 6, 2012

    The inequality and downright discrimination against single income families in the tax system is an issue that needs to be aired.
    Nick Clegg dismisses the stay at home mother as some sort of revolting 1950s throwback in order to tarnish the Tory brand but it is his ideas of equality and fairness which need to be questioned.
    I have worked out that the single income family on £80,000 per year pays more tax than a dual earner family on £100,000. If NI is added in then the higher income family only pays a little more. The single income family might be a widow with children or a mother who works to support a stay at home father or it might be any adult who supports a sick or disabled family member of working age.
    A single income family on £70000 pays about 4.8% more tax and NI than a dual wage family with the same income.
    The removal of Child benefit will create a ‘cliff edge’ in a tax system that already charges single income higher rate tax payers much more.
    There is another ‘cliff edge’ already in place with the removal of any tax free allowance for those earning ¬£100,000 and this absolutely wallops single income families.
    Nick Clegg is using a trick when he tells House Magazine that “the threshold for starting to pay tax must be raised before Tory hopes of a married couples tax allowance can be considered” as was reported on the Daily Telegraph.
    He lumps the two issues together to discredit the Tories but does not address the more general issue of inequality for single income families. It is not for Nick Clegg to make judgements on how families may be constructed or sweeping generalisations about them.

    1. alan jutson
      February 6, 2012


      Osbourne does not need a married tax allowance, all he needs to do to rebalance your example on tax, is allow the married non working partners tax allowance, to be passed onto the working partner, as in many years past.

  11. Brian A
    February 6, 2012

    The total disconnect between what many Conservative backbenchers want and what the Coalition is delivering is striking. The early comments on this article are spot on, the problem is that you and your like-minded colleagues represent, in general, the voters’ concerns over government overspending and waste, while the frontbench seems to have been captured by producer interests in, for example, the NHS, MoD, and in the case of pensions, the whole public sector.

    It is apparent that the government believes that continuing with a big, highly regulated state is the solution to the country’s problems and, not coincidentally, offers the best hope of re-election. I am not so sure, the current economic problems have presented an opportunity to push for radical structural reforms, beyond the efforts of Gove and IDS, that may be unpopular in the short term, but which offer huge potential in the medium term as the state leviathan is brought under better control. The alternative to such a radical approach is the the present drift and decline which will result, as noted by norman above, in the ‘Bottom coming up to meet us soon’. Do we really need to reach rock bottom, as in the late 1970s, before radical action is taken?

  12. Alan Wheatley
    February 6, 2012

    £750M not spent on HS2 this parliament would be much better spent on speeding up the roll out of high-speed broadband.

    This capital infrastructure project would give a return on investment far more quickly. It would not upset anyone. As a nation-wide project it would have far more impact on reducing the North-South divide than a rail link focused on London; it might even persuade some Scotts that a government in London cares about those north of the border.

    The only fly in the ointment is, as I commented previously, the government must first change the way it deals with the telecommunications infrastructure, else this will be yet more money inefficiently spent.

    1. Mark
      February 6, 2012

      Can we withhold a bonus for Greening if she goes ahead with wasting the £750m?

  13. frank salmon
    February 6, 2012

    This is a process of appeasement. Cameron has already had a number of Chamberlain moments – on the EU, on pensions, on benefits, on the NHS, on bankers, banks and bonuses. Sorry, but as an ex economics teacher I was able to point out how bad a state the economy was in at any time over the past 20 years. So could my students. So why is this government, like the last, still going through the learning process?
    How do we get you back on the front benches?

  14. Alison
    February 6, 2012

    It goes to show how far we are down the road to bankruptcy that a comment that £750 million is not a lot of money could be written by a Conservative MP, particularly one as intelligent as you, Mr Redwood.
    As it’s such an insignificant amount perhaps it could be transferred to my account where it will do a lot more good for people that are more deserving than the bureaucrats, quangocrats and assorted hangers on that are due to get it now.

  15. ian wragg
    February 6, 2012

    Cuts, what cuts??
    Osborne continues to borrow more than Brown and the national debt spirals out of control.
    We continue to waste vast amounts of money on stupid windmills, HS2, EU and aid.
    The only real cuts are to the front line of the armed forces. I see Chavez will help Argentina if they invade the Falklands. If we lose them you will be consigned to the dustbin of history for 100 years

  16. Atlas
    February 6, 2012


    I hope these defence cuts will not give the Argentinians any silly ideas.

  17. Roger Farmer
    February 6, 2012

    Well put John Redwood, but don’t you think the vast array of like minded Torty MPs should begin controlling their Prime Minister and Cabinet. It would seem that the Clegglet manages this quite disproportionate to his numbers. If you aspire to carrying the public with you to the next election, then it is time to stand up for what you believe in.

    reply: MPs regularly do – there are currently two letters with more than 100 Conservative MP signatures demanding change to windfarm policy and repatriation of criminal justice powers from the EU. The 100 plus only win if Labour votes with them against Lib Dems and Coalition Ministers.

    1. Atlas
      February 6, 2012

      Quote: “there are currently two letters with more than 100 Conservative MP signatures demanding change to windfarm policy and repatriation of criminal justice powers from the EU.”

      I’ve already contacted my MP asking that he support the intent of the letters.

    2. Roger Farmer
      February 6, 2012

      Have the remaining 205 been bought off with promises of office. Remember that almost every Tory MP was voted in by constituents who expected that all those subjects, that you show disquiet about, were going to be tackled with vigour.This has not happened even though the 101 might wish it. It begs the question as to who the remaining 205 think they are representing. Do they have access to a font of knowledge that convinces them that to talk the talk, but do nothing will extract us from the appalling position the country has been left in.

      reply: More than 100 hold Minsiterial office or are PPSs to Ministers, preventing them from voting against the government at any time.

      1. alan jutson
        February 6, 2012

        Reply to Reply

        Perhaps we need secret ballots then, they were deemed good enough for trade unions.

  18. oldtimer
    February 6, 2012

    Feeble and ineffective are the words to describe the Coalition programme to control the deficit and the rise in the national debt. Farcicle is the word to describe the Coalition`s reasoning (such as it is) for the rise in the aid budget, confirmed by India`s opinion of the contribution it receives from the UK; I am only surprised they did not call it patronising peanuts. Incompetence and failure to get a grip sums it up.

  19. Neil Craig
    February 6, 2012

    My feeling is that most of the public, though not the sort of people the Beeboids interview, agree with the obvious necessity of cutting. Indeed I have seen evidence that, when the question is asked, the median popular opinion on how much GDP the government should be spending is about 20%. Currently it is 50%.

    What a pity we have neither a Conservative government nor Conservative Opposition to say so.

  20. backofanenvelope
    February 6, 2012

    To sum up- your piece, Mr Redwood, large numbers of back bench Tory MPs share the views of the electorate. But the government doesn’t. What the Tory back benchers and the electorate need is a boost in morale. How about a really inexpensive idea? The next time Mr Clegg announces taxation policy, Mr Cameron steps up and says that taxation is a matter for the Chancellor, not the Deputy Prime Minister.

  21. Matt
    February 6, 2012

    I think the concern of some backbenchers is justified.

    The government is being portrayed as making huge cuts, yet as Isaac Newton may have determined, they have achieved only a deceleration in the rate of increase of spending.

    Taken as a whole ‚Äď there are no cuts.

    This government ,like so many, only tells people what they want to hear.

    On the other side of the coin is economic growth and what is the government doing to stimulate this? Not too much I think.

    How about three bold moves

    – Divide the state bank into three as you suggested ‚Äď go to the market for funding and compete for business, allow good small businesses to grow.

    – Reduce employers NI ‚Äď allow more people to get into work

    – Reduce the top rate of tax to 50%

    1. Matt
      February 6, 2012

      I meant to 40%!!

    2. Jose
      February 6, 2012

      You missed out:

      Reduce the civil service headcount by 10% per annum for the next 3 years!

  22. Philip
    February 6, 2012

    Building HS2 will not be additional spending. The money stream that is currently used for Crossrail, the current big rail project, will instead be used for HS2 when Crossrail is completed.

    1. Alan Wheatley
      February 6, 2012

      It will be additional to not spending it on HS2.

      Of all the things the money stream could be spent on HS2 is way down the bottom of the priority list. Judged as an investment it scores poorly. Judged on grounds of need it is a folly.

    2. Kingsbury Lad
      February 6, 2012

      For “money stream” read “more borrowing”. The exact thing that has got us into this mess in the first place!

  23. Philip
    February 6, 2012

    But would add I agree with much else you say here, but suspect some defence spending needs to be restored (e.g. so we can have Harriers (or other aircraft) on the carriers?)

  24. Steven Whitfield
    February 6, 2012

    Well said John Redwood – I hope you and your colleauges continue to make the case for a credible economic policy. It seems that the deluded plan from the beginning of the coalition was to create an illusion of ‘cuts’ while quietely inflating the depts away by printing money.
    The rules of political correctness followed by Messr Osborne, Cameron and Clegg would forbid any real cuts in public spending – it’s always framed as an attack on ‘the most vunerable people in society’. Faced with such stupidity It’s not surprising we are in such a mess.

    Just to rub salt into the wounds of true Conservatives, the coalition have increased benefit payments in line with RPI inflation to punish thrifty savers.

    Redmeister for PM!

  25. David Saunders
    February 6, 2012

    What do you expect with a Prime Minister who is closer to the Lib Dems than his own backbenchers? No change, no chance.

  26. Johnny Norfolk
    February 6, 2012

    “All this just goes to show ”

    That it is not a fit government.

  27. David John Wilson
    February 6, 2012

    Cuts! What cuts? All the government has done is moved the money around. We need to see some efficiencies that really save some money. Get rid of:
    The TV licence. Collect the money through the council tax.
    VED. Collect the money through fuel duty and let the insurance companies do most of the rest with Swansea maintaining the central database.
    Winter fuel allowance. Add it to the old age pension and in doing so make it taxable.
    This idea of a mansion tax and replace it with some higher council tax bands.
    Airport passenger taxes. Replace them with a duty on aircraft fuel at a similar rate to that on petrol and diesel.

    1. Mark
      February 7, 2012

      Putting duty on aircraft fuel would just mean planes filled up outside the UK, and we’d have to go to the continent or Ireland to get a long haul flight. It’s already getting that way with APD.

  28. uanime5
    February 6, 2012

    John perhaps the reason why ministers are unwilling to reform public sector pensions is due to the high levels of employee turnover among senior civil servants. The Government cannot effectively run a department when the senior civil servants are changed more often than the minister.

    1. Tedgo
      February 6, 2012

      I don’t think pensions has much to do with it, its having to do some work for a change which is frightening them off. Seriously its a good thing that there is change at the top of the civil service. How can someone enthusiastically get on with a policy under labour, like unfettered spending on some project or other, and then be enthusiastic about a completely opposite policy of cuts and belt tightening.

    2. Mark
      February 7, 2012

      Perhaps the reason why there is a high turnover is that the staff are not willing or able to implement government policy. Remember that Labour stuffed the Civil Service with its supporters while in government: they treated it much like the administration in Washington when a new president is elected. What goes around comes around.

  29. Phil Richmond
    February 6, 2012

    The one area of Goverment that needed increased spending (Defence) has been cut. Everything else is no different to Labour.
    I despair the day I voted for Cameron over Davies in the Tory party elections. I hope this cancer can be removed asap. Britain has no chance until Cameron & Osborne go!

  30. Barbara Stevens
    February 6, 2012

    For India to say it does not need our aid is an eye opener. For the minister to say their are still areas of poverty in India is an insult to us, who provide the taxes for such aid. If the Indians have poverty and a nuclear policy and arms policy, they can afford to give to their own people. We are not the world’s benefactors or policeman, and the sooner all MPs get this into their heads the happier this nation will be. Aid should cease, full stop. If this continues we’ll need aid here. The Conservatives should know better, charity begins at home and with those who provide the funds taxpayers. Debt is a problem here, and all money should be spent here until our debts are paid. We owe countries nothing, and it’s emotional blackmail to keep spouting about the poor, while their own governments do nothing but spend recklessly. People here are sick of hearing it; and ask time and time again, why are we in dire straits if we can afford such aid? Its a fair question. The fact is ministers want to pontificate on the world stage, and the mandrins in Whitehall, with our money, and we’ve had enough. Even Whitehall it’s self needs an overhaul. The money they waste is terrible, they should be held accountable. We are a rich nation, so we can afford to look after the sick and the disabled, and those who fall on bad times, its the waste, the greed, and policies that throw away our money, not it’s citizens. Its time all MPs woke up to this fact before they are dumped and another party is voted in. Think UKIP, and you get my drift. What you sew we will reap.

    1. sm
      February 7, 2012

      Indeed £1bn, would build 20 thousand modest flats or houses at a build cost of £5ok. Problem is too many fingers in the pie.

      These policy funded by QE(as is the fashion) could then be sold at a fixed price to private working tenants who can privately fund a mortgage who have not purchased previously and have rented for + 5 years. This would (if we stabilize immigration) push down rents, house prices and enable security and engender a little more confidence and spend into the economy. No doubt the private rents currently paid far exceed way build costs.

      Alas vested interests would scupper that or be undone by yet more population growth.

      1. Cornad Jones (Cheam)
        February 9, 2012

        “This would (if we stabilize immigration) push down rents, house prices and enable security and engender a little more confidence and spend into the economy. ”

        We need to establish what caused House Prices to increase so much before establishing a solution to bring House Prices down. Remembering that the money supply is directly related to debt, and the Boom in House Prices created a boom in the Economy due to the increased money supply, how can we get House Prices down while still increasing the Money Supply inorder to create enough growth to get out of this recession? Immigration is a factor but it was not the main factor behind unaffordable housing. House Price / Salary Ratios at about 6 when the Historical norm was 3 means that the only way house Prices will be affordable quickly is for a massive depression, or a slow 20 year decline in the ratio.

  31. Jon
    February 6, 2012

    Granted, I do see cuts that don’t directly affect the public sector being passed quickly such as the transport, the rail subsidy, the education subsidy. I sense that they feel its easier to pass those than to tackle the public sector head on.

    The pensions issue was a strange one. My view was that they kicked half of it into the long grass for Labour to deal with when/if they are back in power. Its the only way I could explain it. That they wanted to leave them with a problem. By that time the cost of public sector pensions will increase by the billion each year, money they will need to find from elsewhere every year. I understand there is a cost ceiling on it implemented but I don’t have confidence that it would get implemented at the time, a year on year reduction to accrual rate that that time?

    I never understood the £825 million Gordon Brown gave to India in aid, I never expected this government to continue the aid!

    However, this government in infinitely better than the last one and I don’t want to see it tear itself apart. I want it to govern for atleast 3 terms before the idiots get back in and destroy it all.

  32. Jon
    February 6, 2012

    I began watching our total debt liability from 2005 when it was near 20% of entire world debt. High interest rates would be carnage right now and mean a one term government.

    Is the question not how you get all of what you want now whilst in a coalition but how you can win outright in 2015?

  33. Quietzaple
    February 6, 2012

    So fewer nurses doesn’t mean cuts, and 40,000 more nurses undress Labour didn’t mean growth.

    Less is more, more or less …

    A clue:
    [Irish Gaelic tóraidhe, robber, from Old Irish tóir, pursuit; see ret- in Indo-European roots.]

  34. Peter Lloyd
    February 6, 2012

    This article is spot on. People are well aware of the overspend in the public sector (and in the personal sector) and are ready to accept deeper cuts, but would like them sooner rather than later. Ministers are not in tune with this. It is not too late to review the 50% increase in public spending in real terms since 2000 and try to cut harder those areas that have been ballooning, particularly pay. If we can get through the worst by 2015 we’ll be on to a vote winner. Let it fester and the situation will be very similar to now – a slow walk through treacle and no prospect of a balanced budget. Even if the private sector does well it might be too little without a full re-assessment of spending priorities.

  35. John Whitehead
    February 6, 2012

    The ¬£280million a year that the Indian Government doesn’t want could be better used to extend beyond just one year the grants offered to local councils to freeze council tax.

    1. Robert Christopher
      February 7, 2012

      We could give the £280million a year to Indians living in Britain. At least it would help our economy.

  36. Derek Emery
    February 7, 2012

    If rail infrastructure such as HS2 is a good guarantee of GDP growth then how come Italy with its much superior investment in rail infrastructure (see is close to bankruptcy? Its low GDP growth for years means it cannot fund its sovereign debt. Surely Italy should have been booming for many years and sporting a balance of payments surplus from this investment?
    If you compare the countries that have high GDP growth what they have in common is continuing investment in business to produce tradeable surplus goods and services. That is why Germany has productivity that the PIIGS cannot match.

  37. Helen
    February 7, 2012

    I have many colleagues who are Labour voters, and they all believe that the public debt is isn’t particularly large, and that the Conservatives have exaggerated the scale of the problem for political ends. Unfortunately, HS2 reinforces that impression. As an enormously expensive vanity project, it creates the impression that we still have money to burn.

    Personally, I’d cut benefits and public sector pensions much further, abolish child benefit, but also abolish the TV licence, paying the BBC by direct grant half of what it currently gets. And to get the economy going, I’d spend more on the roads. Finally, let’s get out of the EU.

    1. Robert Christopher
      February 7, 2012

      There needs to be more clarity around the pensions of public sector workers.

      As annuity rates have dropped, the defined benefit pension is becoming more valuable, or should I say, more expensive to fund, and has all but disappeared in the private sector, yet public pensions are not adjusted to take this into account. Also, my understanding is that some public sector pensions are near enough fully funded, while others are hardly funded at all and will eventually need to conjure up the money from nowhere, aka the taxpayer.

      Some sections of the public sector appear to believe that it has an unquestioning right to what it was promised, without any regard to the state of its pension fund, currency fluctuations, inflation or the state of the nation, while the private sector has face up to its pension failures. It wouldn’t be so bad if the private sector wasn’t paying for it!

      Not only does this mean that many in the private sector are contributing to pensions for wealthier public sector workers, when they cannot fund their own pension, it also means that the public sector knows that taxes, such as the Tobin tax (thankfully vetoed), would not affect their pension, unlike a private pension.

      The changes to the tax rules on pensions by Brown are still in place, so no change there then.

  38. Quercus
    February 7, 2012

    ‘Thousands of businesses are wasting millions of pounds by keeping outdoor signs, vending machines and computers on overnight, data from more than 6,000 smart energy meters show.’ Daily Telegraph 7-2-2012, B6
    Yet in many towns and cities up and down the land street lights burn unnecessarily between midnight and 5am, night after night, year after year. The need to save money and cut costs has yet to filter through to many local government officials, who ought to be setting an example.

    1. Bazman
      February 8, 2012

      This is when street lights are needed. When it’s dark. What do you propose plunging all the streets into darkness during these hours? Just stupid.

  39. Lindsay McDougall
    February 8, 2012

    Surely it’s not difficult to reduce public expenditure by 10%, which is what is needed in the UK and most European countries. There is so much low hanging fruit. For example, India says that it doesn’t want our foreign aid. Good, stop giving it aid. Another example: the cap on benefits will work well in London and the Home Counties but is set too high in other parts of the country where average salaries are lower. So vary the cap by location. A third example: the proportion of over 65s in the UK began to rocket in 2011, so we need to raise the retirement age by one year in each parliament – we ought to be able to get bipartisan support on this.

    Of course, it helps not to have too many sacred cows. The Prime Minister is at fault on this.

    In 2014, we can start on the nice stuff – tax cuts. Example: deliver the LibDem’s ¬£10,000 income tax threshold a year early. Another example: get rid of stamp duty, which is a tax on transactions, not income.

  40. Bazman
    February 8, 2012

    In keeping with the governments idea of capping benefits to 26k whilst cutting welfare by 18 billion. Council taxes on band A to C properties should be raised as these are mainly housing for working people on average incomes. The ones who are in receipt of benefits do not pay council tax as they are exempt in the main. Tax relief could be given to mortgage payers on average incomes in average houses to offset this rise. Thus the ones who have paid off their mortgages and have more money pay more without disproportionally taxing the rich who pay much more anyway for no extra and without pitting the working poor against the poor. Increasing the councils revenue too.

  41. Bickers
    February 8, 2012

    We need a law passed that Government cannot spend (outside of War) more than 35% of GDP. Planned taxation has to be based on GDP forecasts and taxation adjusted year on year to keep spending in check.

    I know this will limit politicians in what they can splurge out on, but funny enough, it’s what every taxpayer has to do i.e. live within their means. We have to stop Government over taxing us and borrowing our children and grand children’s wealth.

    NuLabour tested to destruction the mantra that all problems could be fixed just by spending more money. The reality is that Government is extremely inefficient at spending our money, so we have to restrict how much they can have and introduce very tough controls over expenditure and productivity. Private companies have to do this if they’re to survive.

  42. Conrad Jones (Cheam)
    February 8, 2012

    Mr Redwood,

    We spent £33.2 billion on Education (Fiscal Year 2011 )
    We spent ¬£45.6 billion on “Defence” (Fiscal Year 2011 )
    We spent £43.7 billion on Interest Payments on the National Debt (Fiscal Year 2011 ) Рdebt servicing, with revolving credit.

    If I was an Alien Accountant from another planet and viewed these figures as a way of determining the priorities of this newly Found Planet Earth – what conclusions would I come to and how would I regard the amount of money spent on borrowing something that the Government could just create for Free? Not only are they idiots, they are violent idiots.

    Would I not come to the conclusion that greater ethasis was placed on “blowing stuff up” than Education. Once returing to my home planet and making recommendations to my Superiors, I probably wouldn’t recommend returing by myself or without a very large Military Support Contingent.

    The very word “Defence” and “Ministry of Defence” is misleading as it has very little to do with Defence.

    Also, we are spending 10 billion pounds more on Interest Payments than we spend on Education.

    I read recently that many British Based Banks had Invested large amounts with Arms Manufacturer’s who make Cluster Bombs. These cluster Bombs (Made in Europe), were sold to Libya in 2007 and used in Misrata against Civilians. While Labour were openly meeting with Gadaffi, fellow European Countries were selling Arms to Gadaffi that would later be used to kill Civilians creatiing the need for NATO Armed Forces to be sent into Libya to prevent more carnage. Would it not have been better to vote in Parliament to Regulate against British Banks Investing in European Arms Manufacture rather than allow Bank Finance to reach to Factories where the Bombs were made, and then wait for them to be sold to Gadaffi, then wait for Gadaffi to use them on his own people? is it because we’d all forgotten about a PAN AM 747 being blowned up in 1988? Would we not have saved lives voting against unregulated Finance going towards Arms Manufacturing? Or is cluster bomb Manufacture part of the Maastricht Treaty Agreement?

    How’s this relate to the Government Cuts ? well,. you might remember that we were spending approximately 3 million pounds a day flying RAF sorties over Libya under NATO. that’s how it relates to saving money – and that’s not taking into account the numbers of civilians who were killed and the chaos that now resides in Libya – yet another mess that future Generations will have to pay for with even more austerity merasures.

    Despite this European Financial and Moral Mess, the United States appears to be even more depserate as their Dollar fights for survival, resulting in the US’s aggressive and violent behaviour in it’s Foreign Policy. “Well, we got it wrong about Iraq, but we’re definitely right about Iran. Definitely WMD there for sure?”. Well, definitely Oil there for sure.

    In Summary:
    Uk Bank Finance => EU Arms Manufacturer => Middle East Dictator => Civilian Carnage => UN outrage => UK MPs Vote on Humanitarian Action=> More Violence – etc. etc .etc.

    If MPs are so upset about people being killed by cluster bombs – why were British Banks Financing these cluster bomb Manufacturuer’s in the first place? Why under the noses of the European Union – in Europe?

    Or have I missed something? Peak Oil Perhaps.

    Reply: You understate spending on education. The state cannot simply print all the money it needs to pay the bills.

    1. Conrad Jones (Cheam)
      February 9, 2012

      Mr Redwood,

      Thank you for your reply.

      The £33.2 billion represents total Central Government Spending. there is Local Government Spending on Education, the amount that the Central Government spends on Education is £10 billion less than Central Government Debt Refinancing. It is the priorities of Central Government to maintain this debt refinancing, draining Tax Payers money away from more productive spending. This priority of Central Government spending on defence rather than Education. and the issue of Treasury Bonds (making Tax Payers liable for interest on this deficit spending) rather than issue the money directly at no cost to the Tax Payer.

      ” The state cannot simply print all the money it needs to pay the bills.” – yes, I agree with you. It cannot just print inifinite amounts of money and hope that the increased money supply won’t drain value from existing money.

      What we could do is allow the MPC to determine the current inflation rate (using RPI and not the CPI figure which does not take into account Housing costs, Energy costs) and use this to determine how much money is required to be added or removed from the money supply. This will prevent the current cataclysmic reduction in the Money Supply created by restrictions on current Bank Lending.

      No doubt you agree that there is a worrying collapse in the money supply which could get worse – which is why the Bank of England just announced a further ¬£50 billion of QE (bringing the total to ¬£325 billion) . This would not be happening if we had a monetary system that worked. I have not witnessed this type of panic by so called ‘Financial Experts’ within the last forty years. I agree with your comments from a few months ago concerning a Gold Standard, I too – do not believe that would solve anything. But Government created money and a restriction of Banks to create money using Fractional Reserve Lending is exactly what the economy needs. The injection of Government created money directly into the economy, rahter than sitting around in Private Bank Reserve Accounts at the control of Private Banking CEOs. The desire of a Bank to maximise profits – no matter what; is against the National Interests of this country, given that a Bank can just create the money from small reserves. We need to start the transitional phase, from Bank created money to Government created – gradually phasing out Fractional Reserve Lending – unless you want to see the kind of scenes we’ve be witnessing on Greece’s streets come to Britain. Banks will still charge interest and loan money out, even charge deposit account users for service, but they should not drain away so much money in interest payments on something that didn’t exist until they created it.

      The other reason for preventing Banks from creating moeny – through lending – is that they are able to direct this money to some very unsavory parts of the economy. Arms Manuafacturing – specifically Cluster Bombs manufacture was possible in our current system, and the decision to invest in this destructive investment was made by a few CEOs. As a Politician I would imagine you are in favour of democratic decision taking regarding where money is directed. It is clear that unrestrictive investments into Arms manufacture directly lead to the problems we recently witnessed in Libya. You abstained from the Libyan Intervention vote, and you were right to do so.

      1. Conrad Jones (Cheam)
        February 9, 2012

        From the BBC:

        “UK bank lending to shrink in 2012, says Item Club”

        No – what this really should say is:

        “UK MONEY SUPPLY to shrink in 2012, says Item Club”

        “The four biggest British banks (RBS, HSBC, Lloyds and Barclays) plus Santander committed to make ¬£190bn available to business in 2011, of which ¬£76bn was for smaller businesses, an increase of ¬£10bn or 15% compared to 2010.”

        You – Mr Redwood, have no say in how to fix the economy anymore – I wish you did, but as the comment from the BBC illustrates: RBS, HSBC, Lloyds and Barclays run and control the Economy – whether they want to or not, the system has shifted control to them, not you.

        They may very well lend to businesses, but given the types of Arms trade Investments they’ve done in the past, that’s not going to help very much.

      2. Conrad Jones (Cheam)
        February 9, 2012

        My apologies for my rather lengthy comments. I just have one more point to make… I will be brief.

        It’s important to make the Distinction between the Bank of England creating money and a Private Bank Creating money. There is one thing that is reassuring about the Bank of England creating money – nobody is trying to hide the fact. It is just a shame that they hand the money over to Private Banks instead of giving it to us – the Public; to spend through our Government. I have a big problem with Private Banks creating money. My other comments should explain why.

        It is also odd that the Economics Editor at the BBC, Stephanie Flanders does not seem to know that Private Banks CAN create money electronically as she seems to think that ONLY the Bank of England can. Also, the Bank of England has not Injected money DIRECTLY into the Economy, they’ve injected it directly into the reserve Accounts of Private Banks. There’s a difference.

        This is disturbingly msleading or just shows a surprising ignorance. Robert Peston (Business Editor) has heard of Fractional Reserve Lending so perhaps she should learn the basics from him.

        Sorry Stephanie. If Ms Flanders thinks my criticism is incorrect then I would graciously accept her reply.

  43. Andy
    February 9, 2012

    Glad to see that the unfair nature of the proposed changes to the child benefit system is still on your mind. If the question “Is anyone in your household a higher rate tax payer?” can be asked and child benefit removed based on the answer, surely the question “Is the total income of your household greater than ¬£X?” could be used instead?

  44. Anne Palmer
    February 11, 2012

    There is absolutely no need to go ahead with the HS2. The HS2 is to be on UK soil so put it off for now until about 10 years time say. We should be out of the dol-drums by then. It would not even provide work for British Workers would it? For we know that to our cost. Quite apart from which we ordinary folk would never be able to afford the fare to travel on it.

    WE could and should -without any doubt at all-stop UK payments to the EU Defence Agency. It is a disgrace to continue paying that while our forces are still fighting without ALL the equipment they need, and I am thinking of that soldier that gave his protective vest to his freind, only to get killed because of his kind action.

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