I am glad to see the civil service did their job and alerted the government to the problems with their tax on pension investments in the July 1997 budget.

So did we in the Opposition.

I said in the 1997 Budget debate for the Opposition:

??"The tax measures will have a swingeing impact on all the large companies that have employee-employer pension schemes. They will undoubtedly have to increase their contributions… That is a savage attack on companies and pensioners. It is a great pensions takeaway…"

Labour is deeply split between Blairites and more traditional tax and spenders. Gordon Brown is trying to straddle the two wings, hinting deeply to the left ??that he has been the architect of tax and spend, centralised public services, resistance to the wilder parts of the Blairite programme, whilst at the same time saying he supports Tony Blair in his wish to modernise and reform as well as spend.

It is not clear how the battle will end in Labour, especially as it is still most likely to be a struggle within the mind of Gordon Brown, the Prime Minister in waiting. It is still more likely Milliband will not stand than he will, still more likely Labour will accept their fate and welcome Gordon than plan a successful coup against him.

This does not mean the battle is over for the modernisers. The new Prime Minister will inherit a position where there is less extra money available for public spending than in the past, and will understand the public mood that we are fed up with paying so much for so little. He will need to have some prominent Blairite modernisers around him. They will be generating more of the ideas, trying to push the new PM in the direction of greater choice within the public services, more use of the private sector and more emphasis on personal and family responsibility.

It is difficult to see, however, that Gordon Brown will be able to push through choice and the private sector based reforms that Tony Blair was unable to achieve. He will need Union funding for the next election, and his own instincts are for centralisation and government control rather than for the freedom of the marketplace.

??

Labour will in practise be the monopoly public sector tax and spend party, with the new added ingredient of much smaller increases in spending.

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The Conservative party in the country,stimulated ??by more success at the polls, will come to understand the modernising purpose of David Cameron more than it has done so far. They will come to appreciate that "hugging a hoodie" before he goes off the rails does not mean their Leader is soft on crime, that sharing the proceeds of growth does mean lower taxes allied to economic prudence to avoid high interest rates, and seeking powers back from Brussels whilst keeping trade arrangements with our partners is the mainstream view in the UK. The Conservatives are currently the most united party of the three. It is the only party where the leadership question has been settled. The modernisers will be able to push ahead and produce a mroe radical manifesto that will offer much more personal freedom and responsibility, fewer laws and regulations, more decentralised decision taking.

??The Liberal Democrats are deeply split, between the minority of modernisers who want to make the Liberal Democrats more like the Conservatives, and the left wing majority who think Labur’s mistake is they have not spent enough in many areas and have not regulated and taxed enough either. They are worried about the performance of their leader.

??When you look at what modernising means in both the Labour and Liberal democrat parties, you realise it is similar to the agenda many of us Conservatives have had for many years.

They are beginning to realise a high tax Britain will be a less successful Britain.

They are coming to understand that monopoly public servies controlled by Whitehall do not work well, and waste a lot of money.

They want to harness the private sector in the NHS and education.

The see that the comprehensive school and the council estate in the inner city are letting people down – they understand the damage less social mobility is doing.

It will be an exciting time as the battles are fought out within the parties.

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I had taken his many denials that he would run against Gordon Brown at face value, until I heard his extraordinary contortions on Any Questions today.

He is clearly a man who is giving serious thought to the pressures building up amongst the?? band of Blairite modernisers in the Labour party that they need a candidate. He refused to rule himself out in all circumstances from a?? contest against Gordon Brown.

He seems to be a man who is ready to take up the mantle of candidate if the May elections results are very bad for Labour, and if there is then a groundswell of opinion that Labour needs a choice. I could hear him saying:

"I have always said I was not a runner and rider. To have said otherwise before the Prime Minister announced he was standing down would have been wrong. It was most important to get on with the job we were elected to do, under the leadership of Tony Blair.

Now the Prime Minister has told us when he is leaving, and following the poor election results in the May elections, I have been approached by a number??of senior colleagues asking me to stand. They have assured me there is considerable and growing support for??my candidature.?? I have therefore decided to make the forthcoming election a real contest etc etc"

??When asked why he previously said Gordon Brown would make an excellent Prime Minister he would doubtless intone:

"I have the highest regard for my friend the Chancellor, and had thought he could take over from Tony. In the light of recent election results and polls which show he is associated with the problems we have as a party, I have come to realise that we do need to move on. Our principal opponent is a younger man with new ideas. Labour has to move with the times. As a representative of a younger generation I will set out a new agenda for Britain, which Gordon would find impossible to do."

<p>Three Cabinet Ministers – three cases of incompetence – three bills for the taxpayer.</p>
<p>1.??Margaret Beckett presided over a complete mess when trying to pay farmers under the CAP. The farmers did not receive the money on time. The taxpayer has to pay for expensive computing and remedial work. The UK gets a large fine from the EU! Total cost – around ??500 million of wasteful expenditure.</p>
<p>2. John Reid cannot run the Home Office competently. Taxpayers have to pick up the bill for a major reorganisation, splitting the job so John Reid has a better chance of understanding the isssues and controlling the work. Cost – still to be revealed.??Doubtless we will be asked to pay for fitting out new offices, new stationery, consultancy exercises, and a great deal of effort wasted on internal matters rather than on running the services.</p>
<p>3. Tessa Jowell not only wastes a great deal of civil service effort on a Gambling scheme which Parliament rejects, but her department presides over an empty Dome at direct cost to the rest of us.</p>
<p>??</p>
<p>What should they do to make amends?</p>
<p>Better than sacking Margaret Beckett, she should be asked in her new job to work out a way to stop us having to pay a fine to the EU for her incompetence in a previous job. It is ridiculous that the UK taxpayer has to pay a fine to the EU because its government has made a mess of dishing out more taxpayers money under an EU scheme. She could do this by agreement, or legislate to disapply this imposition on the UK
If John Reid cannot do the whole job of Home Secretary he and the new Secretary State for Justice should at least pledge not to charge the taxpayer for an expensive reorganisation. They should have to use up all exisitng stationery, not allowed any new offices and not hire consultants.
Tessa Jowell should be required to find a profitable use for the Dome before she does anything else.
</p>

I want to see all unelected regional government abolished.

The Conservatives will not be abollishing the three elected regional governments in the UK that have been endorsed by referendum, nor the elected tier in Northern Ireland if that is in operation.

The fact that Brussels likes regional government is no argument for keeping this unwanted??layer of government, which has been rejected by the people of the North-east, and would be rejected by others elsewhere if given the chance to vote on it.

There is no Treaty obligaiton or legal requirement to have it – and if there were it would still be necessary to change it.

A few budgets ago Gordon Brown was keen to encourage people to incorporate their business activities as small companies. He set out a very generous tax regime for them to do so.

Since then he has been whittling away the tax advantages. This year he announced most of the next Chancellor’s budget for 2008, and at the same time pushed small business tax up to 22% compared to the 20% standard rate for sole traders. It’s typical of this government to encourage people to do things, then to punish them when they do!

??When David Cameron asked the Prime Minister about this today he seemed unable to answer even the most basic points about this. Why are small businesses going to have to pay more tax, when the government has at last realised business needs lower rates at the bigger end of the spectrum?

Why was it a good idea idea to incorporate a few years ago, and why do people now have to be hit for doing so?

Why doesn’t the government understand that lower tax rates procude more businesses, which in turn produce more tax revenue?

Margaret Hodge has just sent me – and doubtless many others – a coloured brochure entitled "Creating prosperity in every region: England’s Regional development Agencies".

She tells us the RDAs help to bring prosperity to all parts of England. Nowhere does she point out that the reigonal disparities have grown substantially during Labour’s period in office, with the regions that have least government interference growing much more rapidly than the ones with?? most. Her brochure lists a series of small initiatives which entail the RDA getting hold of some public money which some other branch of government could have spent, influencing conduct on the ground a little with the money, and then spending more of our money endlessly claiming credit for spending some of our money!

There is no sense of the??small scale??of most of the projects highlighted in the case studies in the brochure. For the South-east as a whole, an economy turning over more than????400,000 million a year, they mention the following:

??63 million for Hastings, mainly spent on a new University centre

??3.6million extra innovation expenditure in six months of a new scheme

Advice for 1500 businesses through the Hub system

??23.6m investment in University facilities in Chatham

??100 million spent in such a huge economy has little overall impact. It is difficult to see why the money for universities could not have been routed direct through the usual channels for the public sector to finance Higher Education. If you want to have an impact on the South-east economy you need to be talking in billions – and best to leave it to the private sector which invests billions every year.

Margaret Hodge’s brochure did one good thing. It reminded me how important it is to abolish these insignificant bodies. The money spent on their??administrative and PR budgets shoudl be returned to taxpayers, whilst any sensible expenditure on development or education should be sent with all the other monies to HE or local Council’s development departments.

Today the government put through large increases in fees for those wanting to stay in this country.

When we asked the Minister what the reason was for the large increases (100% and 200% in some cases) he told us they are going to spend the extra revenue on improving controls at our borders.

??Let’s hope they do just that. I asked that we have a system which can

a)keep terrorists out

b)can tackle serious crime rings and rackets

c)can interview women and children privately to make sure they are?? not the victims of trafficking

The Lib Dems objected to some of the stronger borders measures, and voted against the fee increases.

The English soccer team??were right to follow??no goals against Israel with no words as they boarded the plane.There was nothing they could say about the lack of passion and success in their latest overseas adventure that would have helped.

We are told we have one of the best competitive leagues in the world, where good games are often played with great skill and commitment. When it comes to the performance of England, I am left wondering if:

1. They play together often enough as a team to get used to their differing styles, and to hammer out a way of understanding between the different players.

2. If the huge sums they earn from club football blunts the motivation to play well for their country. They know that their fame and fortune rests on the club contracts, and the commercial contracts which flow from that.

3. If the fact that the English clubs now have so many foreign star players means that there are not enough good English players who have regularly played for the very top clubs that have the best coaching and the strongest competition.

Of course when there are too many poor performances in a row we should ask if a different coach and/or captain would make a difference. It maybe time to look at the whole organisation of the game and the league in England to see if an overseas player rule would give English talent more chance – and curb the costs for clubs.

The old BAA have done it again – a day of misery for the passengers of their airline customers. A power cut in an airport which claims it has standby facilities put the baggage handling out of operation for a morning, and created a backlog which still looks dreadful this evening.

If Gatwick had to compete with Heathrow more effectively, and was not owned by the same company, I doubt people would be treated as badly as they have been in recent months during the security changes and now thanks to a power cut.

Everyone who is fed up with the level of service at our leading London airports should send in their views to the Competition authorities, who may decide we need to introduce some more competition to get a better answer.

Thanks for the information that the BBC itself avoids currency risk by operating in the currency futures market, and for the reminder about the BBC’s use of European money.

One of the interesting features of sterling since the launch of the Euro is that it is has been more stable than either the dollar or the Euro, reflecting the mid Atlantic positioning of the UK economy subject to dollar pulls and Euro pulls given our pattern of trade and transactions.

The BBC still struggles to accept that the Uk is a Eurosceptic country, with 80% against the Euro and further EU political integration, and an emerging majority wanting to take powers back. The dreadful performance of the EU in agriculture and fishing, where it has very strong powers, have warned people off the idea that it should have more power in other fields.

The BBC now accepts that some people want to leave the EU altogether, and has to allow them some air time.??It is poor at allowing the majority who want to get back to a common market and get rid of the endless interference in criminal and civil law, foreign affairs and general legislation to have a voice commensurate with the popularity of this position.

I had assumed the massive anti Euro majority would flood the phone lines to Any Questions??? Instead the pro Euro minority (under??1 in 5 and falling) made a number of specious comments which the BBC aired instead.

I argued that no business need run currency risk in the modern world. For a very small premium it is possible to protect yourself against adverse changes in currency values for the year ahead. My critics tried to claim this is currency speculation, aided by the BBC! It is the very opposite of currency speculation. If a business knows it will have a stream of revenues in pounds or Euros or dollars, and wishes to ensure no loss in its own currency, then it can arrange this. You can sell the revenues forward at a specified rate, or you can simply take out protection against the currency falling.

I argued that if someone wanted convenience when travelling they could use a credit or debit card rather than having to change lots of bank notes. My critic argued that this would mean large banking commissions which would not be payable if we all worked in Euros. Someone should tell him that there are transaction charges in Euro to Euro transactions just as there are in sterling to Euro transactions. Indeed, the EU has been so upset by the scale of these cross frontier??charges it has been trying to get them down.

??I argued that the Exchange Rate Mechanism experience for the UK had warned the public off wanting the ERM version you cannot get out of called the Euro. My critic argued that the ERM was obviously flawed because it invited speculation against the currency, in the knowledge that the?? central banks would bail out the position. As he was a proponent of the Euro shouldn’t he have first apologised to the British people for the fact that the EU got its European Monetray system so wrong? As one of the few critics of the EMS at the time I was well aware of the lunacy of guaranteeing inetrvention at given rates. It is important to understand, however, that the ERM was necessary preparation for the Euro. A country that cannot keep its own exchange rate in line with the others is not ready to join the single currency. A fluctuating exchange rate shows the economies of the currencies concerned have not come together, and need differing exchange and interest rates.

The pro Euro people still concentrate on the relatively trivial issues and ignore the big issues. They still cannot understand that it gives countries the wrong interest rates, which will either?? destroy jobs or create more inflation. They seek to attribute any favourable trend in Euroland to the currency, and make excuses for all the unfavourable ones. They fail to see that it exerts much more strain on the economy if the rate camnnot adjust, and ignore the removal of democratic accountability for the sinews of economic policy.

Any Questions last night came from Dublin. We discussed several aspects of the European problem in front of an invited Irish audience hosted by the European Commission’s staff in Ireland.

If you judged by the audience reaction they were strongly in favour of European integration, clapping the Euro and booing some of my comments in favour of more member state decision making and democracy.

However, after the show there were some dissenting Irish voices. One 35 year told me he blamed the Euro for his inability to buy a home in Dublin. He pointed out that interest rates set by a German based central bank were too low for Ireland, driving house prices out of many people’s reach. Another told me they wanted to see powers returned to a government they could kick out if they did not do things in the public interest.

The latest poll of people in all of the member states shows there is now a majority for preventing the EU getting any more powers, and the largest voting block wants powers back from Brussels. The EU Commission may try to organise debates to give the impression that more political union is the future, but the peoples of Europe are determined that the future will be based on more national democracy and less centralised power. The rejection of the Constitution in both France and the Netherlands, founder members of the EEC, should be accepted and understood by the European elite. If they carry on ignoring it, they will find there is no consent??for what they want to do.

One of my aims in politics has been to talk the rate of income tax down to 20%. So why didn’t I crack open the champagne last night? Why doesn’t it feel better this morning?

The reason is simple – we have had to buy our own tax cut.

One of the reasons I wanted 20% tax was to provide a better incentive for enterpising people and small businesses to take a risk, invest their??money, employ others. The increase in small business tax from 19% to 22% put paid to that part of the package.

I also wanted cuts in Corporation Tax, because they are the way to increase the revenue from larger companies. Lower rates keep more companies here and encourage more to visit. It was becoming essential to do something to stem the flow of businesses leaving for more favourable tax jurisdictions overseas. 28% is better than 30%. 25 % would have been better still – once you start to lose tax competitiveness you need to??make a strong statement to show you have changed.

The government needs to understand one other important thing. The Revenue has become very aggressive, reinterpreting the tax codes to get more money out of companies and individuals. This is?? making a number of important companies ask if they want to stay here. The tax system has to be fairly and consistently enforced otehrwise the footloose will go.

So whilst I cheer a 20p standard income tax rate, and cheer a lower Corporation tax rate, there is much more work to do to create a proper lower tax culture in the UK which is essential for success in a highly competitive global world.

Amidst all the self congratulation about the UK’s economic performance there will be little interest in a sober appraisal of the weaknesses as well as the strengths of the UK economy.

We should ask these questions:

Why has Ireland grown three times as quickly as the UK over the Brown years?

Why are the Irish now enjoying higher living standards than us?

Why are companies leaving the UK to establish head offices elsewhere?

Why has UK productivity fallen over the Brown years?

Why do we now have higher inflation than our main competitors?

Why do we have such a large balance of payments deficit?

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The answer to all of them is the same. It is because Mr Brown has taken far too much money off individuals and companies in tax, and wasted far too much of it on ill judged spending in the public sector.If he had spent some more money on extra nurses and teachers it would have been fine. Instead billions have been hurled to buy in computer systems, consultants, administrators, PR machinery, glossy brochures and?? to give large pay rises without asking for improved working practises.

Ireland has grown faster because it set much lower business taxes than us, and has a higher standard of living because the overall tax burden is lower.

Companies are leaving the UK to pay lower taxes in places like the Netherlands.

Productivity has fallen here primarily because the public sector has wasted so much of the money given to it. In some parts of the public sector productivity is falling – under this government you have to keep putting more people and money in to achieve the same output.

We have higher inflation than elsewhere partly because Mr Brown has hiked public sector taxes and charges – student fees and motoring taxes figure in our cost of living.

We have a large balance of payments deficit because so much resource has been diverted into the public sector, away from export earning businesses. Over 1 million manufacturing jobs have gone on Brown’s watch.

I will welcome moves by Mr Brown to start to put right his mistakes. If he carries on reducing the overall public sector workforce, as he did in the last quarter, that will help. If he now seeks improved output for more pay that would help. If he cuts Corporation Tax that might defer the departure of more companies to lower tax countries.

It is time for change. Is Mr Brown up to it? Can he remarry Prudence?

Once again I have been blocked on a freedom for information request.

I asked to see the KPMG report into the costs of the Olympics. We are paying a lot for all this advice and it would be good to know what we have been buying for?? our money.

I wrote on 19th December to DCMS. In?? February I was told that KPMG had indeed been working on this issue for almost a year from October 2005 but there is no"report".

So I then asked to see the working papers they had produced.

On 14 March they sent me a reply. They have decided this information is "exempt" under the Act – i.e. we will not be allowed to see it!

What a disgrace! I suppose the only good news is that at least it shows they are ashamed of their lack of grip on Olympic costs, and they clearly don’t want us learning anything more about how they have gone so wrong.

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Last night??I was invited to oppose the motion, with the help of Michael Spencer (Chairman of ICAP) and Ruth Lea of the Centre for Policy Studies.?? Peter Sutherland (Chairman of BP), Sylvie Goulard (President of the French European movement) and Chris Huhne MP were there to thank God for Brussels.

The audience included a number of continental enarchs and ??European journalists, representatives from Denmark, France, Ireland and other EU countries, British civil servants and some very sensible Londoners. A vote was taken prior to the debate, with?? 114 voting for the motion, 60 against, and 43 don’t knows.

??After a couple of hours of hard pounding away at the Brussels citadel, we shifted the balance to 99 against, 121 in favour??with no-one remaining unsure.

The EU’s 50th birthday is a time to review why it has all gone so wrong from the UK’s point of view. The main arguments last night centred around three issues:

1. The claim that the EU has kept the peace in Europe for the last 62 years. The proposers of the motion just kept asserting this nonsense. They were unable to answer the question which country would have invaded which country if they had not been in the EU, and silent on the point that anyway NATO forces led by the USA stayed in Europe for most of the post war period to gurantee the peace settlement. They ignored the fact that many European countries were outside the EU for much of this period but they did not go to war either. They ??were unable to deal with the EU’s warlike activities in the Balkans in recent years which shows that the EU itself wants to become a military power capable of military intervention.

2. The claim that the EU has been good for the prosperity of European people. The proposers were unable to counter the fact that the USA and several of the English speaking countries have grown faster than the EU. They ignored the E600bn cost imposed on EU business by EU regulation, the waste and inefficiency of the EU bureaucracy, and the tendency of the EU to be anti enterprise and pro high tax big government.

3. Our claim that the EU is undemocratic. The proposers were scornful of the people of Europe, complaining that they did vote wrongly in referenda when they turned down the Euro or the EU constitution. Peter Sutherland believes the people – and the UK – should catch up with the European elite, and come to understand they know best.

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Yesterday evening some of my colleagues took over the task of trying to secure a proper debate on these contentious regulations. Repeated Points of Order to the Deputy Speaker gave us the ruling that the government has obeyed the letter of Parliamentary law, leaving the rest of us thinking they had done so in a very undemocractic spirit.

Their decision to pass this matter as a Statutory Instrument rather than as a Bill limited debate to only 90 minutes, when the Official Opposition had called for the more extensive and thorough process of examing a Bill. The decision to rush the committee to limit the scope for people to attend and complain backfired, as many of us did do just that. It also guaranteed?? them another set of complaints on the floor of the House last night.

It will leave a nasty feeling amongst many that Parliament is being badly treated by this government, so the legitimate concerns and arguments of people in our society cannot be expressed and properly considered.

Many people are afraid of the Council Tax bill. In many places it is now too high, and in some places it goes up too quickly.

The government should understand these fears and immediately rule out

1. New higher bands

2. A general revaluation.

People need some relief from threats of more taxation. Your house value may have gone up, but that does not mean you have extra income to pay more to government.

I woke up this morning to hear that Gordon Brown has refused to rule out air travel to go on holiday, whilst David Cameron’s rubbish has been investigated.

Recently I was criticised in a local paper when they examined my expenses last year as an MP for driving rather than going by train. They did?? not point out that?? it was cheaper for the taxpayer, nor did they consider how much CO2 I would have produced trying to get to Reading Station, 10 miles from my home,??on congested and inadequate roads??instead of driving, avoiding the main town centres on the way. Nor have I ever lectured anyone else to take the train rather than the car!

I am not surprised journalists now see this as huge sport. If the political classes are going to lecture everyone else about cutting their carbon footprints, of course journalists are going to examine the political boots as they trudge across the landscape.

I have a number of suggestions for them to follow up, to show just how this government lacks commonsense – or concern over wasting our money – when it comes to running their own activities.

1. How many government buildings have controls on lighting which turns the lights off when no-one is in the room?

??2. How many government buildings have seperate thermostat controls for different rooms and areas, and concentrate use during cold periods to minimise heating requirements?

3. Why do quangos and government departments send out so many glossy brochures and documents in hard copy form?

4.How many government buildings have up to date fuel efficient boilers?

5. Does the government insist on setting the thermostat to a higher level in winter than in summer, where air con is fitted?

6.What is the policy on the introduction of air con into government buildimgs?

7. Why are so many street lights left on all night on roads where there are no pedestrians?

8.Why do so many Ministers drive to the Commons from the offices when they could walk there?

9. Why do so many Councils narrow the highway, dig up the roads, and design traffic control systems that restrict the flow of traffic, causing more congestion?

10.Why has the government failed to provide enough new capacity on the railways if it is so sure they are the answer?

Conservatives are thinking of switching some??of the tax burden from pay as you earn to pay as you burn. Under this government the tax burden goes remorselessly up – with them it’s a case of we pay as they burn and earn.

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