Dec 04 2008
The Prime Minister and this blog
I learnt two important things yesterday in the debate on the Queen’s Speech. The Prime Minister is an up to date reader of this blog. Unfortunately he does not seem to understand it.
I ask my other readers to allow me to make just a few things clear to our PM thirsting for knowledge from the wonderful world of the web.
1. The main point of most of the posts on this site for the last couple of years has been to advocate more freedom and higher living standards for the UK.
2. The last thing I want is lower living standards or a downturn.My posts explaining that we are now living through a sharp downturn in living standards is describing the results of the PM’s economic policy and banking crisis, not describing what I want or what would have happened if he had taken better advice.
3. In 2007 I offered advice which if taken could have avoided the run on the Rock. I then offered advice after the run which could have avoided the need for nationalised ownership and the big cuts in the business which followed.
4. A year ago I offered advice to cut interest rates substantially, which if followed could have avoided some of the severity of the downturn we are now entering.
5. My advice- offered by others as well – on more liquidity to money and banking markets was taken too late, and my advice on interest rates was followed months too late.
My advice now, just to remind him is:
1. Don’t cut VAT. It gives very poor value for all the borrowing.
2. Start selling assets off from the nationalised banks, to reduce taxpayer risk and to cut borrowing.
3. Then cut interest rates further.
42 Responses to “The Prime Minister and this blog”
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
JR: “Unfortunately he does not seem to understand it.”
No surprise! He is a socialist totalitarian (redundant I know). He couldn’t begin understand**, to do so he would have to discard so much mental furniture it would be like moving to in an unfurnished bedsit in Clapham. The shock after the plush comfort of Downing street would bring on such cognitive dissonance I fancy he could hardly function.
As to your points:
1. Yes. But he can’t comprehend see **.
2. Yes. Ballooning public spending at a time of already excessive and accumulated (over a decade) mis-allocated public resources will if unchecked lead to a Sterling crisis, and soon there after we will be able to trade with Iceland again at parity.
Just now, it might be a good idea to have a few extra bars of gold hanging around the Bank of England’s vaults. Whoops! Mr Brown with much foresight you sold the gold at the bottom of the Gold market. Well done.
1oz in 1996 £175
1oz in 2008 £525
How prudent Mr Brown. Sell an asset at the bottom of the market. Just like all those home owners who you fooled into thinking the price of their houses will always go up. Many of them will be forced to sell an asset at the bottom of the market. The bottom is not it yet by a long chalk.
JR: 1. Don’t cut VAT.
I agree, a 2% cut is a gimmick, like all this government says and does it is designed to garner votes. It is the worst ‘rotten borough’ politics.
Mr Brown, if you do read this, we are still reeling from your abolition of the 10% tax rate, we know YOU arranged it and we know YOU are responsible for it. Not that poor fall guy you have currently installed as Chancellor.
I was livid when I heard GB misquoting what you said Mr Redwood, and couldn’t wait to put the facts straight as you describe them. i.e. You referred to living standards lowering as a direct result of Government Policy and events in the financial sector and have never mentioned ( ever ), that it is your “own desire” to see lower living standards.
You were misquoted but I have to wonder why it was intentional because I’d argue no one could misunderstand what you’ve said about this, as I pointed out earlier this morning on your “$1″ topic.
Personally, I welcome GB’s Homeowner package but I am seriously wondering about the media’s inaccurate reporting of it which could if not corrected put confidence even further at risk of rising and that is not something which could be good for the country as a whole. ( see other post on this too ).
As for Mr Brown’s lame attempt to shove the argument on to yourself for wanting living standards to drop, he has to be “joking” and I expect to see you make a point of order or a question on this at your next appropriate Commons attendance.
But really, I think GB is grabbing straws here at any means possible to show Labour as caring and Tories as “The same as they always are” to quote what he says, and I suppose in that respect, he’s doing what any politician would do but doing a bad job of it.
Lastly, I again wonder here when I see the Prime Minister can read and interpret incorrectly your words, why he is not also capable of misinterpreting the terms of the Lisbon Treaty ( if he read them ), and whether he has also misinterpreted public opinion on that or the polls regarding his own performance as Prime Minister ?
If the Lisbon Treaty has been read by a blind incompetent oaf who cannot understand it, then we are in serious trouble I feel, but I’m happy if he thinks he has mass support for his performance because that opinion is just as likely to be as flawed as his understanding when he’s reading your blog.
Perhaps if we write backwards we yam teg a lareneg noitcele morf eht emirP retsiniM ?
Reply: I did rebut his accusations in my speech which followed in the debate yesterday
rugfish Reply:
December 4th, 2008 at 11:06 am
I’m glad to hear that JR but when everyone piled out of the commons and the place looked like there were only 3 individuals left in it including the Speaker, I went for tea.
Sorry I missed it.
That’s quite a compliment from the PM, though I doubt it is intended as such.
Though JR, I fear you now bear a heavy responsibility, There is surely a list somewhere in number 10 headed potential troublemakers/threats to national security as follows: APL, marksany, Acorn, Tim Almond, mikestallard, Adrian Peirson, Rugfish, Bazman, Tony Makara, Donitz, Not an economist….etc
All to be picked up in the second round of arrests.
I would like to hereby pledge my personal loyalty to the dear leader ~ ha, ha, ha
rugfish Reply:
December 4th, 2008 at 10:57 am
I wouldn’t worry too much Stuart, Brown probably thinks an ISP is an “Instant Supply of Popularity” so you’ll be safe as long as we have him as PM as obviously he omitted to tell us he was dyslexic ‘when he didn’t ask us to vote for him’ .
Good advice, and it’s disgraceful how the media will bend your words to try and fit a stereotype.
On a point of order, though, you have two item number 2’s on your list…
Don’t be flattered by the knowledge that your blog is attracting Brown’s attention. Far from his wishing to read and follow any of your advice his motives will be quite malign.
jean baker Reply:
December 4th, 2008 at 3:55 pm
Nulabor’s 24/7 IT pa’troll’ers monitor all forums (at taxpayers expense). Opinions considered to be a threat always result in mass attendance for ‘rebuttal’.
I am still not convinced that cutting rates is going to solve the problem of collapsed consumer demand. Cutting rates and weakening the currency also weakens purchasing power. Given that so much is imported a weaker Pound will mean more costly imports and less spent in the shops. Personal debt isn’t going to be affected by rate-cuts and until that debt is ironed out of the system disposible income isn’t going to increase in volume, even with mortgage relief. The current policy of the government and MPC run the risk of a weak, inflationary Pound in place as we move out of recession, meaning interest-rates will have to go up with the inevtable drain on liquidity. As Mr Redwood has pointed out so often the MPC is now in a game of catch-up and is well behind the curve.
reply: The 2.5% off VAT is certainly not going to trigger recovery
You say of the PM about your blog:”Unfortunately he does not seem to understand it.”
I think he understands it enough to quote it selectively and out of context – as he did yesterday. He may even believe what you say but just wants a decent (indecent?) interval to pass before he nicks it and presents it as his own. According to Mr Cameron a good chink of the Queen`s Speech proposals are Conservative ideas from the past few years.
Reply: What a wicked suggestion! I couldn’t possible say that.
To that list, I add;
1. get rid of the NHS and replace it with a voucher scheme for private medical insurance
2. get rid of the State schooling system and replace it with a voucher scheme for private education
3. absolish *all* taxes and *all* concessions and replace them with a single tax on private income
4. absolish *all* existing benefits and replace them with a negative income tax
5. pass the defence budget fully into the hands of the army, navy and airforce and let them use it as they see fit
Bazman Reply:
December 5th, 2008 at 10:15 am
6. Let the markets decide whatever the outcome?
Blank Xavier Reply:
December 5th, 2008 at 2:28 pm
You have a choice – the market or politicians.
It’s not so desperate though – the market will always make the best choice. I came to that view after reading Wealth of Nations, On Liberty, Civil Disobedience and Capitalism and Freedom.
Bazman Reply:
December 5th, 2008 at 10:41 pm
Read a book Huh? Check this one out.
http://en.wikipedia.org/wiki/The_Gulag_Archipelago
By penguin books no less. This is mind blowing.
Third runway at Heathrow decision delayed…..DNA Database in tatters after EU ruling…..90 offices and 3,500 jobs to go at HM Customs…..House prices fall at greatest rate in 25 years…..pound drops lower…..
Just some of today’s news headlines (and it’s only 11.15 am).
GB may be reading your blog John but he ain’t listening and learning from it.
My advice to the PM would be
1) to immediately allow the building of as many nuclear power stations as the market wnats. Brown has spoken in favour of 5,000 new plants worldwide so it is clear he personally understands the need. Unfortuntaely muchn of his party doesn’t. He should face them down, in which he would have the active help of the unions in the engineering & productive industries. That would give him a more hardheaded & realistic policy than Cameron who has dithered even more on the subject. I believe the short shrift he gave to Stearns suggests he is unconvinced by the whole eco-scare industry – as are an enormous number of people currently unrepresented by politicians & media.
2) drastically cut housing regulations (& regulators) & encourage modular production. The Barker Report he commissioned while Chancellor was a useful first step.
3) drastically cut regulations & regulators generally, particularly the 200,000 strong Health & Safety industry. Such regulations cost society 20 times what they cost in inspectors.
Do all 3 & we would be well out of recession.
I heard Gordon Brown (mis)quoting from your ‘website’ yesterday. He certainly doesn’t get it, does he? He sounds like an elderly uncle trying to keep up with modern trends, and failing.
…and, Mr Brown, if I might add my two’pennorth, cut Government spending as well.
The question of the moment is whether the Prime Minister reads this blog for your articles or our comments.
Hi Gordon,
Since you’re dishing money around left, right and centre, how come you never raise the repayment threshold on student loans like you do the tax thresholds and your tax credits?
Your PBR did nothing for me or any other single twenty-something renter on average income so all next year I’m hoarding every penny I can.
Merry Xmas to you, Mrs Brown and the kids.
Regards,
StevenL
I have been asked by Gordon to reply on his behalf.
Thanks John for the advice. I will get my people on to it as soon as they have finnished taking all the inocent people off the DNA data base. I told them years ago it was wrong but they would not listen to me.
Sorry John, Peter has just come in and told me to ignore your blog as he has some better ideas.
Keep the ideas comming so I know what not to do and can compleatly **** mess up things for the next Tory government.
It was good to see you in the house yesterday, sorry I could not stay and chat but I had to rush back to No 10 to change my trousers.
It has always been a puzzle to me why so many people commend the PM’s intellectual ability and judgement. Vernon Coleman’s little book, “Gordon is a M…. ” seems so much nearer the mark. Why were they all dazzled by the folly of those first few weeks in office back in 1997, let alone the succeeding years?
adam Reply:
December 6th, 2008 at 3:09 am
For socialists, anyone who can give their failed economics policies a few years of success will, predictably, be hailed as a god.
If the PM reads this blog it proves he has a command of the English language.
Obviously, this does not apply to the economy.
Cameron’s speach was excellent. Brown’s response was politically well paced / judged ~ although his position is completely wrong ie his initiatives will cost, will set the country on completely the worng path, and if the economy bottoms sooner rather than later it will be through luck than planning. And should that happen ~ the mess we had before the recession arrived in 2007 and the subsequent adding to that mess with all these initiatives will still be with us. It will take decades to fix.
However — who provides the questions for the back benchers. Or are the questions thought up on the spot ?
You were made to look a chump.
He misquotes you. He tells parliament (the electorate) that you supported Rock going bust and that you want the economy to collapse. ie plays on the fears that some voters will have on the tories. You did not even stand up and correct him.
Yesterday, no one cared about regulation … yesterday should have been nailing general labour mismanagment.
“Government debt is at record levels, (quote a good source) and this built up after a period of global growth (quote a good ssource). Inevitably debt will increase in a recession. And given structural problems with labour budgets (quote a good source). this debt has not aided in this recession. And now you are adding even more debt. So thats debt in the good times, debt in the bad times ~ so when and what conditions can ever exist to repay it ?”
And get ready to start any question with a one line explanation of your view that there was a private sector solution to Rock. And start any sentance with .. as the world economy slows, with the resulting contraction in gdp ….
And … why do the whips allow any back bencher to ask such a poor question … “Does the pm now accept that he caused the recession” ?
Expected Answer ? … “Hoots, yes it were me and my mates”
Actual answer … “its a world recession, don’t you know ~ next”
Question .. “The rate cuts won;t work because the banks have not passed on …can you accept that its all failed?”
Answer ..”We saved the banks from collapse, now we’ve legistated to make them lend. you would have let them go bust. we do things, you don’t .. next”
You’re missing open goals.
Bank nationalisation = British Leyland
Government intervention = masses of paperwork (quote sources)
Alternative Economic Action = Germany .. Australia
Debt = Japan is the future ?
Jobs = real jobs, not quango jobs, sustainable
Newtons Law = what is propped will come down (when the prop is removed)
Tax cuts = let workers keep their own money. Trust them, they can make good decisions. they can repair their own balance sheets.
Middle management glogs government performance = read Fiat restructuring and apply it.
VAT = 2% here or there is nothing to get worked up about .. either up or down.
Funding / currency = lower currency broadly helps, the benefit of a floating rate ~ but at what stage will that effect our ability to fund debt
Free markets work best when
and the mp asking about equitable life .. tell him to keep on pressing and asking about pension holders … but not on a day when you should be smashing holes in every idea presented by the govt.
and that goes for all you back benchers .. have a meeting before the day in parliament ~ get a plan of attack .. and make sure yyou make a point when asking a question, giving him only the chance of a chumpish answer.
Reply: On the contrary I replied in full to the PM in my speech which followed and is on this website. I always think of my own points or questions in the Chamber in response to the situation.
Jon Taylor Reply:
December 5th, 2008 at 7:13 am
Read it again … you have to nail them with a sound bite at times like these. By the time you’d got your reply in ~ the chamber had cleared .. we turned the tv back to cnbc after brown finished .. probably like the rest of the country. brown had gone.
Mr. John Redwood (Wokingham) (Con): Will the Prime Minister re-examine the £487 billion banking package, because surely he shares our disappointment that more lending is not taking place to decent businesses in our country?
The Prime Minister: The right hon. Gentleman signed the report that said that we should give up regulation in mortgage finance. I criticised a Conservative Member last week for saying that the recession should take its course, but what the right hon. Gentleman said yesterday on his website is even more amazing:
“Living standards in both the public and private sector have to be brought down.”
That is the Conservative party’s answer to the problems that we face, not taking the necessary action.
~~~~~~~~~~~~~~~~~~~~~
Own Goal ….. what’s the point in asking him if he’s dissappointed banks are not lending …. of course he is ~ that’s why he passed legislation to force them to lend. thats why he’s telling them they have to lend .. and have to allow mortgage defaulters time to resolve their financial issues (which they pretty much do anyway).
he scores a point off you on regulation ~ even though nulab made the terrible decision to shift all (mm/banking) regulation to the fsa.
and if you’re trying to say £487bn is alot of debt for not much return … then say it .. and ask how it will be paid back. and how better to spend £487bn / or why its unnecessary.
they are mismanaging & over managing & laying problems for the future …. you have to use every opportunity to make this message clear ~ and the electorate sort of know it/but also hope that throwing money at it will avoid the worse of it.
Before these televised key speaches, prepare 10 questions for back benchers to ask.
Reply: I always ask my own questions – asking someone else’s question could leave you ill equipped to handle what happens next. I did ask if he would re-examine his banking package – I did not ask if he shared my disappointment which would obviously be a weak question. The fact that he did not wish to answer it shows it was a good question. It is now a question that is being put forcefully by the Shadow Chancellor, I heard today.
Did he Read Lisbon before signing it,
most didn’t.
http://www.telegraph.co.uk/news/main.jhtml%3Bjsessionid%3D2V4OJ542O2YSDQFIQMFCFGGAVCBQYIV0?xml=/news/2008/01/20/nbooker120.xml
Death Penalty for civil unrest hidden in a footnote of a footnote.
Presumably for when the Proletariat realise that we are now merely a province of their EUSSR.
http://secretperson.wordpress.com/2008/04/14/the-eu-reintroduces-death-penalty-full-details/
adam Reply:
December 6th, 2008 at 2:58 am
we already have it in the (unfortunate death of the Brazilian-ed)
but without, trial, without investigation
look at De Menezes
no human rights for him.
just the convicted terrorists/criminals get human rights.
it was probably authorised for the arrest of terrorist Green
I think that to cut interest rates again is wrong, all it does is drive the pound down. The excuse is that our exports will be cheaper, what exports? Additionally it increases the cost of living and that has to stop at some point, people are just not going to be able to pay their way especially as we know that large price increases are already on their way.
I also noticed a letter in the Telegraph today saying that a teacher in France had told a child that Britain would be in the “Euro” by 2010. Coincidently, I’m sure, the interest rate drops to 2% and sterling falls again, rapidly approaching parity. Does the teacher and Barroso know something we are not being told? Don’t forget Mandleson is back. Three coincidences, seems a lot. I have long said that destroying the economy could lead down that path, the crisis calling for an answer. We all, I hope, know that that is not an answer but do the powers that be?
Tony Makara Reply:
December 4th, 2008 at 5:26 pm
“The excuse is that our exports will be cheaper, what exports?”
Exactly right. What this crisis demonstrates is the need for a viable export capacity, to ensure that our economy can still grow when domestic demand is oversupplied or slack. The shift to a top-heavy service-sector economy has disabled our major export turbo, namely, manufacturing. A nation with the population of our size needs the safety-valve of exports, not only to balance the economy, but also to create the million plus jobs needed to reduce the huge numbers on welfare.
Derek W. Buxton Reply:
December 5th, 2008 at 4:19 pm
The manufacturing jobs are not going to happen. It requires investment, a product at a price people will pay, a market and light if any regulation. The amount of regulation now has killed that sort of activity, gee, thanks EU and our politicians, grand job. They are incapable of making any thing themselves and make sure that no one else can.
Derek
Dear Mr. Brown (if you are reading this),
In the longer term, assuming Labour can keep winning elections, how will you resolve the national debt?
It seems to me the choice is basically more tax or less spending. I don’t think the public will is there for more tax and the economy can’t handle it. I don’t think the Labour party is ideologically capable of spending less.
And of course, very little has been made of the fact that he sold our gold reserves at rock bottom prices. SHAME ON THE MAN
adam Reply:
December 6th, 2008 at 3:07 am
does not know what he is doing
What everyone is saying seems to me to be this:
“If only, Mr Brown, you would listen to commonsense!”
But, no, instead he is out to win an election: the great economist knows better than anyone else. And – be honest – his chances are actually improving.
And let there be no mistake: if he wins, we can probably look forward to Icelandic melt-down.
A hopeful note: quite a lot of Tax Offices (full of bureaucrats?) were closed in our “Eastern Region” today, involving a lot of (government?) jobs. A man in a toupe appeared, though, to tell us that it was a “consolidation” with fewer and better centralised offices set to replace smaller inefficient ones………
Sarah Reply:
December 6th, 2008 at 11:15 am
Let’s put it this way, its his and Mandelson’s spin that is trying to win the election. I was feeling like you a few days ago that their chances, most surprisingly were looking better. However when you get a poll one day showing Tories 11 points ahead and another the very next day showing only 1 you start to realise that these polls become a nonsense. But I am now thinking that the tide is turning as the Economists are very gradually starting to speak out. Yesterday we had a Directror from the Institute of Business, or something similar -(sorry so many I forget!), talking on Channel 4 on what’s gone wrong and another useful person is Fraser Nelson. Even looking at Question Time on Thursday from N.Ireland, it was interesting to see the responses from the audience and the panel, though not, of course Alan Johnston. How sad I have become is that I avidly read all the Political Comments online and more and more are now speaking out that Brown’s tenure is indeed coming home to roost.
He might not be following the advice on your blog, but on the plus side that means, while reading it, he’s distracted from buying another overpriced bank to add to his portfolio of brands
Brown mentions comments from your blog and The Daily Mail run a story on it. Coincidence? (Obviously I’m not expecting you to reply)
Watching News Night tonight, the report by Robert Preston seemed to me to be saying that JR has got it right. So perhaps someone is listening!
Alan Wheatley Reply:
December 4th, 2008 at 11:16 pm
For Robert Preston read Paul Mason.
Check your logs of reader’s IP addresses. When the PM’s office reads your blog it’s quite clear because a lookup shows “Prime Minister’s Office”. I know this to be true from experience. I bet if you check your logs you’ll find you’re mistaken on both accounts (that he reads it but doesn’t understand it). Remember “the surest cure for vanity is loneliness”!
Reply: I know he reads it because he refers to it in the House. Or are you suggesting he quotes from and comments on things he hasn’t read?
Labour Matters Reply:
December 5th, 2008 at 1:26 pm
You will be well aware that many of your comments are referred to by others. One doesn’t need to read your blog first hand to reference to what is said in it.
Reply: It is very bad practise to comment and quote from something one has not oneself read or checked. When I advised a previous PM, she always checked every quote and nuance to make sure we did not misrepresent. Are you telling us the present PM is prepared to make allegations and allege interpretations without having seen what he is talking about?
I fully understand why people would like to borrow at 2% but I cannot understand why anyone would want to lend money at that rate.
If they wanted to properly help people and business they should pull back from the ridiculous carbon taxes which have recently pulled in £54 million via the energy companies and our energy bills with billions more to come in the future. Has anyone looked out of the window lately and seen the effects of CO2?
Reducing energy cost would benefit everyone whereas low interest rates punish the thrifty and reward the profligate.