Month: May 2008

Gordon Brown’s “tractor production statistics” do not persuade a country which is unhappy about the current situation to suddenly break into joy and applause when he recites the “achievements”. The latest list on the Labour party website is instructive, as it shows just how big the gap is between what we are all experiencing, and what Labour thinks we ought to be grateful for.

The top fifteen items on Labour’s list of “achievements” is given below, along with a commentary on why they do not bring “feelgood” with them:

1. “The longest period of sustained low inflation since the 60s.” This is presumably based on the heartily distrusted European measure of the CPI. Have they visited a petrol pump, been to a food shop or read a council tax bill recently? At least indexed contracts are still linked to the RPI which gets a bit closer to the galloping price increases we are experiencing on day-to-day items.

2. “Low mortgage rates”. They don’t mean people feel better off, because those who have mortgages have to pay them on much inflated house prices, while those who would like them are finding they are now severely curtailed by the Credit Crunch. Either too much of your income goes on the mortgage, or you cannot afford your first flat.

3. “Introduced the National Minimum Wage”. Because there is – and always was – a cat’s cradle of in work benefits, many people on the Minimum Wage are little or no better off – especially after the tax increases hitting the lower paid. It is popular with some trade unionists, but it did not transform the lives of those on low incomes, because it did not give them more spending power.

4. “Over 14,000 more police in England and Wales”. These have been needed – and more besides – to handle all the extra paperwork and to tackle the political correctness agenda which has been Labour’s hallmark in office – and , oh yes, needed to offer security to certain Ministers when they want to go to the shops or visit their constituencies.

5. “Cut overall crime by 32%” – but not some of the types of crime people fear most.

6. “Record levels of literacy and numeracy in schools” – as assessed in the endless tests Labour has introduced, so pupils now are good at passing tests but have little time left over to receive an education.

7. “Young people achieving some of the best results at 14, 16 and 18”. Why then is the proportion of state school pupils going to the elite universities still so poor, when those universities are falling over backwards to welcome more state school pupils of a suitable standard?

8. “Funding for every pupil in England has doubled” Gordon’s favourite lump of money fallacy. What matters is what you can buy with the money. Gordon’s public sector pounds have been devalued by rotten spending.

9. “Employment is at its highest ever”. Yes, the government has been very good to the large number of migrants that have arrived to work. Pity there are still 5.5 million people here who have lived here for longer of working age living on benefits.

10. Written off up to 100% of debt owed by the poorest countries. A good thing, but done by further huge increases in the UK debt.

11. “85,000 more nurses”. You need more nurses in part to cater for the growing population, but more are welcome. All governments employ more nurses.

12. “32,000 more doctors”. Is that all? These would be needed to compensate for the reduction in doctors hours.

13. “Brought back matrons to hospital wards” Why then do so many people die from MRSA and C. diff in our hospitals?

14. “Devolved power to Scottish Parliament”. Is that why we now have an SNP administration in Scotland seeking full independence?

15. “Devolved power to Welsh Assembly”. A further part of their policy of breaking up the Union, creating a lop-sided devolution which is grossly unfair to England.

The result of the Crewe by election was worse than Labour’s efforts to spin it before the defeat. Even the Labour spin machine could not bring themselves to say the Conservatives needed a swing of over 20% to have a “good night”, and were suggesting the Conservative majority needed to be over 5000 to show progress. Well it was.

Labour’s candidate made a dignified speech on hearing the result, sounding as if she wished to fight the seat again at the General Election. In her subsequent interview she showed she had not understood. She told us the Labour vote had stood up well: all that had happened was more Conservatives had come out to vote. My experience – and indeed the experience of most others who went to Crewe and talked to people there – was very different. Labour voters switched to the Conservatives in significant numbers. On a similar turnout to the General Election Labour’s vote was well down.

The most remarkable thing about the election was the size of the turnout. Normally in a by election to a Parliament where the government has a large majority turnout falls, as voters do not think they can make any difference to the national situation by their vote. On this occasion voters wanted to send the government a big message that they are fed up with the way it has been running the country, so they voted in large numbers. They decided by a big margin that the Conservative candidate would make a good MP, and decided that only the Conservative party could defeat Labour. These are all worrying developments for a party in government that has survived so far by helping keep the opposition split between Lib Dem, UKIP, Green and others to make it more difficult for Conservatives to win, and by vilifying the Conservatives in crude and personal ways. On this occasion none of these strategies worked. Support for minor parties fell as people realised they needed to vote Conservative to change the ruling party in Crewe.

The issue today is what will Labour learn from all this – and what will the Conservatives do next, based on this positive development for them?

If Labour is to “Get it” as the new MP for Crewe would say, they need to understand both the message of the voters, and to appreciate the changing social and economic structure of a place like Crewe if they want to be in contention there in the future.

The message was simple to grasp, and the media have understood it. People feel far too squeezed. High food prices, surging petrol prices, high Council taxes, the ending of the 10p tax band and rising energy bills have left people feeling badly off. They now fear the family bills and are short of cash to pay for the basics for themselves. This affects people on incomes above the average with commitments, as well as hitting those on below average earnings especially hard. They understand that the government is not to blame for all of this, but they cannot stand the government’s high tax and waste policy which the government could change. They do blame the government for the tax rip off at the pumps, for the Council taxes and the 10p band fiasco. They do understand that the government is making the squeeze on them all the tougher, because the government itself will not cut its claims on people when incomes are under pressure.

The changes in the constituency are more subtle, but in a way more important for future elections. I am pleased to say the big gap between north and south is notably closing on the new private estates of Crewe, let alone Nantwich. Out on the doorsteps yesterday in the suburbs of Crewe I could just have easily been out and about in my own southern constituency. I found many pleasant owner occupied homes lived in by house proud people who want to be able to do things for themselves. They put up with the manic round of by election leaflets and political visitors and gave me a friendly indication they had already voted or were about to when I called. Like my constituents, they expect government to be kind and generous to those in need, but to leave the many capable people with enough of their own money to go about their daily lives with an independent spirit. Far from worrying about Tory toffs, many wish to be upwardly mobile and see nothing wrong with people like their new MP being well educated and well spoken, wishing to devote their lives to public service. Prosperity is the death watch beetle in old Labour’s timbers. It is the threat which led to Blair’s Tory lite NU Labour image making. Prosperity damaged or spurned by a tax and waste Labour government will turn on that government and demand something better from the alternative party of government.

The Conservatives too can learn from this welcome change of the political climate. The new MP made a generous and inclusive acceptance speech, paying full tribute to the deceased Labour MP and pledging himself as he should to work for all the voters of his new constituency. Nor did he mince his words over what needs to be put right by the government. The Conservatives now can show they have learnt from the dreadful years of 1992-2005, by showing a passion for public service and a sane humility in victory. As more policy announcements are made in the long run up to the General Election, people will be watching carefully to see how the Conservatives can contain the public debt, gain much better value for money from each pound spent by government, and leave sufficient of the proceeds of growth for tax reductions. Technically it is not difficult to do all three, as the waste and undesirable spending is so large. Politically it is more difficult as there is still cynicism about politicians’ ability to do these things, and there will be endless Labour disinformation telling us that every pound they currently spend is well spent. The voters of Crewe have told us what they think about that! Therein lies the Conservatives opportunity to help make people’s lives better. Conservative Councils can do that already on a modest scale. We look to them to help prove the case.

The spinning and the recriminations have already begun over the result of the Crewe by-election, before a vote has been cast. Labour is trying to persuade people that anything other than a big win by the Conservatives will be a poor result for David Cameron. They want the media to accept that losing Crewe would be just one of those things, a mid term blip for the government. All that would be more credible if the Conservatives had won Crewe in their days of electoral success in the 1980s, and if Labour were tackling the problems of 2008 in a credible manner.

Instead, we see Labour divisions over the Crewe campaign spilling into the newspapers before the result. Some Labour MPs and organisers are livid that their party has run a campaign based on old fashioned class antagonism. People on the doorstep want to know what the government is going to do about surging food and fuel prices, the petrol rip off, the mortgage squeeze, and the never ending tax grab. Labour tells them that their candidate is “one of us” (a phrase they used to attribute to Margaret Thatcher and criticise strongly), and portrays the sensible and well educated Conservative candidate as a “Tory toff”. Now trying to say it was a one off joke or stunt, the campaign literature they are putting out contains frequent reference to this personalised attack. Someone blogged in to say they had even seen me called a “Top Tory toff” as I had been seen in a garden with a statue. My response was I was delighted to have made it to such status in Labour’s new demonology, and was chuffed as I started out my life as a young child in a Council house. Clearly the realms of “toffdom” are wide ranging. It can lead Labour itself into difficult questions from the media, as Harriet Harman found out when she was defending the Labour campaign and had to answer about her own public school and family background. Tamsin Dunwoody herself could be accused of living in a larger house than the Conservative candidate, and is making her main appeal to the electors of Crewe the fact that she is her mother’s daughter, the third generation of active Labour politicians in her family.

Labour should accept they have made a big mistake with this miscued campaign. The electorate is not against a candidate because they have worked hard and made some money, or because they have a good education. What matters is what the candidate stands for, what commitment they would bring to the job of MP, and how their party would tackle the problems of today and tomorrow. Labour has been strangely silent about the ever climbing petrol and diesel prices, and the big increase in tax take they get from it. Yet today the oil price has surged again to another new high, meaning more misery ahead at the pumps. They have been silent about why they have let inflation go up so much, and why their measure of it understates most people’s experience. They have no answers on how to get the tax burden down. They have come up with a partial reimbursement, for one year only, for their tax snatch from the lower paid through the abolition of the 10p band.

What the public want to hear and see is a strong government response to the problems of an overborrowed public sector, a squeezed private sector, and a set of taxation measures which has hit those on lower incomes. They want to know what Labour will do about its large housebuilding targets and fine words about more homes for more people, when we see the housebuilding industry in free fall and builders laying off employees. It is all very well for Labour to respond during this by election campaign to offer one year of help to those they have hit by their income tax hike, but it leaves people asking Why did they want to put our tax up in the first place? More importantly it leaves people thinking the relief offered is just a political dodge to see them through the by-election, and next year they will be taking the tax as if the electorate had not spoken.

Whatever the result at Crewe tonight, this has been a bad couple of weeks for Labour. They have failed to understand the seriousness of the public mood, and the degree of pressure on people’s budgets. They have thought that a nasty campaign tackling the main opponent personally would be a good substitute for having something to say about how they will make people’s lives better. On the doorsteps of Crewe the public are hitting back. If Labour ignore the message, and carry on regardless with their high tax high waste approach they will stay out of favour in the country at large.

The full list of candidates in today’s by-election is as follows:
The Flying Brick – The Official Monster Raving Loony party
Tamsin Dunwoody – Labour
Gemma Garrett – Independent
Mike Nattrass – UK Independence Party
David Roberts – English Democrats
Elizabeth Shenton – Liberal Democrats
Robert Smith – Green Party
Paul Thorogood – Cut Tax on Petrol and Diesel
Edward Timpson – Conservatives
Mark Walklate – Independent

The Dalai Lama today set out his position to the UK Parliament. He told us he is dedicated to democracy. He sees himself as an advocate of human compassion, as a Buddhist who believes in religious harmony, and as a Tibetan.

He wishes to preserve and uphold the unique language and cultural traditions of Tibet, whilst claiming that he seeks politically an autonomous Tibet within China. When asked how this might work, he wishes China to control Foreign Policy and defence, leaving other matters to an elected democratic Tibetan government. To those who would hail him as a God King he says “Nonsense”, and to those who would demonise him as a “wolf in monk’s clothing” he says the same.

He explained his approach to the Tibetan-Chinese dialogue. He extends his right hand to China, seeking autonomy for the Tibetan culture and traditions, whilst extending his left hand to his supporters. He says he would withdraw his left hand from the Tibetan people as soon as something good was placed in his right hand by China.

China held talks with the Dalai Lama’s team on 4th May and have scheduled a second meeting for the second week of June. Listening to what he did and did not say, it sounded as if there is still a big difference of opinion between the two sides over what is best for Tibet and how Tibet should be governed.

China believes in modernising Tibet, transforming its economy by injections of capital, new projects and a substantial increase in the number of Chinese settlers. They see the future revolving around the Chinese language and the cultural and political approach of the Chinese government.

The Dalai Lama and his supporters see this as an attack upon Tibetan language, culture and values. They seek a democratic answer to the government issue, an answer which China is unlikely to adopt anytime soon.

The Prime Minister this week is showing signs of trying to rebuild bridges with his unhappy Parliamentary party, and with his dwindling band of supporters in the country. We have witnessed an announcement about new rights for temps, ticking a box on the Unions’ agenda.

If he is to govern well (for a change) he will, however, continue to be at variance with his Trade Union base over the whole vexed question of public sector employment and pay.

If he is to have any chance of pulling the UK economy out of its many troubles in time for the General Election in May 2010 he needs to curb public spending. Cutting the benefit bill – the “costs of economic failure” as he used to call it – is going to prove difficult in the sharp deceleration we are now experiencing. Curbing the costs of employment in his rambling public sector is essential, if he is to control the ballooning deficit, give some scope for the interest rate and tax reductions the economy and the voter needs, and to restore some balance to a very unbalanced economy.

We are now entering a phase of significant private sector redundancies in the sectors most exposed to the credit crunch. We can expect more lay-offs in the house-building and construction industry. Last night, at a meeting with the NHBC, some MPs were taken through the bleak figures, with a likely 40% decline in new house-building this year. The retail sector is entering tough times, which will force some stores into cost-cutting redundancies, or worse. Any business handling discretionary spending by consumers will find there are fewer and fewer discretionary pounds left after people have paid the Council Tax, the Income Tax, the petrol and the gas bill. The banking sector too will need to slim down its staff numbers, led by the major redundancies from the government’s very own Northern Rock.

So if the government is serious about controlling inflation, and curbing its own over large deficit, it has to curb the growth in public sector pay costs. The Prime Minister knows this, and for a year has been telling the public sector that we have to accept pay awards below the current rate of inflation. MPs have voted for just such a low increase, accepting we should take less than the Pay Review awarded. Other public sector workers will not be so understanding of the need for restraint.

It is particularly odd that the government should have decided to pick a fight with the police over this very issue, when the Pay Review Body award was perfectly sensible. The police perform a difficult task and do not go on strike. The least a government can do for them is to honour the independent Pay Review conclusions when they come up. The Home Secretary has shown her inexperience by allowing this battle, and the Prime Minister has once again shown a failure of judgement over which battle to fight, and with whom.

So what could the Prime Minister do to curb the public sector pay bill? He should grasp that the problem is a compound of two errors – too much recruitment in recent years to quangoland and the bureaucracy, and some very generous pay awards that cannot now be rescinded. He needs to apply a steady but realistic downwards pressure on settlements, being tougher on the overstaffed bureaucracy than on the hard-pressed front-line public servants in the police and armed forces. Above all, he needs to start reducing the numbers by an across-the-board policy of natural wastage, exempting front-line employees in schools, hospitals, public protection and the armed forces.

In a public sector of five million employees at least 250,000 are likely to leave their jobs this year alone. If half of those leavers are not replaced, that would take a useful 2.5% off the pay bill. Making the bureaucracy an additional 2.5% more efficient would be a doddle. It would save taxpayers £7.5 billion in a full year assuming a total cost of just £30,000 each for their employment.

There are obvious savings a sensible government could make that probably do not appeal to this Prime Minister. Cutting out much of the regional bureaucracy in England by abolishing the Development Agencies, Regional Assemblies, government offices, strategic health authorities, regional housing quangos and the like would get the slimming process off to a good and popular start. Slimming down the 3000 different grant schemes at the Department for Business (rather than re-presenting it as the government is doing), simplifying the tax and benefit system to stop so much of the expensive money go round where people pay tax to pay their own entitlements, and stopping so many quangos pamphleteering against each other at the public expense would help.

Picking a fight with the police is one of the dumber things this government has done. Not controlling public sector employment and pay is one of the main reasons the UK economy is now in such a weak position compared to many of our competitors. It is preventing the lower interest rates and lower taxes the economy needs to compete, and individuals need to balance their budgets. Of course, there has to be a fall in living standards to adjust after too much borrowing. The way the government is doing it, too much of the adjustment is falling on the private sector, which means fewer jobs and greater unhappiness ahead.

I have been trying to find out from the Treasury how much extra money they are taking from us through their highway robbery at the pumps. It is quite obvious that with oil at $127 a barrel, up from the $84 a barrel used for the budget forecast, they are coining it in.

A great deal of ingenuity has gone into not answering my simple questions about the windfall. Meanwhile, the British Chambers of Commerce have been busy with the tax tables and the calculator. They have come up with the stunning figure of an extra £505 million of tax in just six weeks from oil and motor fuel – a mixture of North Sea tax and extra VAT on the fuel price.

With tax now taking more than 70p a litre at the pump, it is a huge money-spinner. I do wish the oil companies would put, on the pump or on the receipt, the split between the price of the fuel and the take of the govenment. Too many people still believe most of the cash goes to fabulously rich oil companies, rather than understanding that the bulk of the cash lifted from them goes straight to the government. On top of the pump taxes there are also the taxes on oil-company profits and production.

The very least the government could do now is to announce it does not need to add an extra 2p to the tax on fuel this autumn, and to cut fuel duty back so that the revenue it collects is more in line with the budget forecast. This would have a welcome impact of helping to reduce the inflation rate modestly at a time of runaway energy and food prices.

There has not been a lot of point in writing about the Lib Dems and Mr Clegg. Since the Clegg and Huhne race ended, a tired Mr Clegg, who had been slowing throughout the Leadership campaign, has had an even worse period as Leader. Occasionally, he comes up gasping for the air of publicity by stating something over the top, or self serving, only to disappear breathless.

It was typical to see that some Lib Dem source recently informed a press report that they would wish to support a Conservative government in office. I understand that Nick Clegg’s office has denied this is the position. This was said around the time the polls told him his party was in a poor third-placed position at Crewe, and around the time of the May 1st Council results, where the Conservatives had performed strongly. Someone must hope that showing sympathy for the newly popular Conservatives would lead to some of the stardust rubbing off.

It is a bizarre thing to say strategically. It would tell everyone that even the Leader of the Lib Dems does not think they have a prayer of doing well in a General Election. It would show Lib Dems have no principles, because he and his colleagues have spent much of the last few years in the Commons criticising just about everything the Conservatives say and do. It would be odd to pledge to support Conservative budgets before we are in a position to work out what those budgets might look like after 2010.

Today, we are asked to believe that, by some extraordinary metamorphosis, the Lib Dems are a party of lower taxation! They do not know how to spell it, let alone back it or implement it in local government, where they still control a few Councils.
They claim they would like to cut Income Tax to 16p in the pound, but only to accommodate a local income tax which would take it straight back to 20p in the pound, or higher. Meanwhile, many other new and higher taxes would be needed to replace the lost revenue from the fall in national income tax.

I will believe the Lib Dems support lower taxes, only if and when their Councils do what Hammersmith and Fulham, a Conservative-controlled Council, are doing – cutting Council Tax one year after another as a result of better control over spending. If I heard their spokesmen on radio and TV arguing for less public spending, I would be more inclined to think the leopard was changing its spots. I usually hear them supporting higher spending on all manner of causes, good and bad.

All the Lib Dems’ “conversions” to lower taxes tells you is that it now polls well. I am delighted to learn that all three main parties now want lower taxes. For Labour, we have seen they cannot deliver – those on lower incomes have to pay for the tax reductions for the rest through the abolition of the 10p band. Motorists, too, have to pay to allow a headline-catching income tax rate reduction. For the Lib Dems, by the admission of their own briefers who want to spell out which main party they would support, they do not expect to be able to form a government, so they can make foolish tax promises without ever being tested.