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Archive for June, 2009

Jun 22 2009

The Whips, plots and the Speaker

I heard this morning that there is a Whips’ stitch up to ensure Margaret Beckett becomes Speaker. I have no idea what the Labour whips are doing, but as it is a secret ballot they will not succeed in making their MPs vote for someone they don’t want. I do know what the Conservative whips are doing.

No whip has aproached me to recommend a candidate or urge me to vote for X. There has been no ring round. I have asked several Conservative whips how they will be voting, as I am trying to understand the election so I can tell you more about it. Each has even refused to tell me how they personally will vote, under orders from their office not to be seen to be influencing the election in any way.

Last week I told you why I would not be voting for three of the candidates. This morning I have decided that Michael Lord and Patrick Cormack are unlikely to receive my support, because I have to start eliminating more. I will attend the session to learn more of the other 5.

I find the endless public comment that one candidiate should be chosen because she is “clean” on expenses quite bizarre. All MPs went along with an expenses scheme which was too generous and too laxly administered. All made claims under it. No Speaker candidate stands out by virtue of being a campaigner for expenses reform, or for being in the fortunate financial position where they did not claim expenses. We need to judge them on what contribution they will make to putting in a new system of expenses which the public will accept, and which is affordable in the new parlous financial circumstances of the public sector.

This morning on the radio Ms Harman, Leader of the House of Commons, has sought to remove the expenses issue from all the candidates, by saying that the government will legislate to put all expense issues outside the control of the House. It will use its majority to set up an independent body which settles the terms of the scheme and administers it, so that means a new Speaker will have no role if the government has its way.

22 responses so far

Jun 21 2009

Expectations of a new Speaker

I am not surprised to hear that Ann Widdecombe is popular in the country for the job of Speaker. It just goes to show how large a role media image plays these days in people’s assessment. Ann has been on the media more than most of the candidates and is therefore “better known”. People have unrealistic expectations of what someone could achieve in say ten months in the job, when any change has to meet with the approval of a majority of the Commons, and to be tested in debate and with a vote.

The Commons needs a new system for expenses – new tighter rules on what can be claimed, and a better run administration and audit of the payments. All Speaker candidates propose waiting for the Kelly Report. A new Speaker will then have to decide whether to use what influence they have to persuade the main parties to accept Kelly and implement it, or decide that Kelly has got some of it wrong and seek to change and amend it. Whoever is Speaker, this issue is largely out of their hands, and is unlikely to be settled before the end of this year. The Prime Minister and governing party will have most say over this, as they control most votes. If they are sensible they will seek consensus with the other two main parties.

The Commons needs to assert itself against the executive. I doubt that any new Speaker this Parliament will be able to end the guillotines to give us more time to debate the important issues on Bills, nor will he or she be able to persuade this government to table motions in government time on the most important or embarrassing issues. The majority party largely controls the agenda of the House. The Speaker has little power to make the Executive table and debate things they do not want to debate. The best way the Speaker could flex the power of the office to improve accountability would be to grant more requests for urgent debates on topics which the government refuses to table. This is in the Speaker’s power, and the government has to field a Minister if the Speaker says Yes to an Opposition or backbench request for an urgent debate. None of the candidates have proposed using this power more as far as I am aware.

The Speaker for the next Parliament is highly likely to be a member of the present Parliament. Delaying the decision until the first day of the new Parliament by appointing an interim this time does not guarantee a better result. There may be many new MPs elected at the next Election. They are unlikely to know much about the merits and characters of the candidates on their first day. I still think it best that we appoint someone with authority this time round. An interim Speaker will always face the retort if wanting to make a change that she would not be around to have to live with the consequences or to supervise its full successful implementation.

The Commons needs to insist on Ministers making statements to the House first. A strong Speaker would make this a number one issue. Once again, however, the tyranny of the majority means that unless the Speaker can mobilise backbench Labour MPs as well as the rest of us, this can only be achieved by persuading the government.

Some have said I ought to stand. I have not done so for a variety of reasons. The most important is I do not wish to exclude myself from the debate on the big economic, constitutional and European issues. A Speaker must not have views, and must certainly not seek to express them.

An interim Speaker would in effect have just seven months of active service. The House will start too long a summer recess in July, not returning until October. This Parliament will end in April assuming a May election. Even a strong Speaker would be unable to impose a September session to hold the government to account, as the recess dates are decided by the government.

23 responses so far

Jun 20 2009

Wokingham News

The furore about MPs expenses is the tip of a very large iceberg of public spending. The MPs expenses scheme was too generous, and laxly enforced. It is important that Parliament puts in place a cheaper and tighter system for the future, that gives better overall value for money. No-one can now say that public spending has been cut to the bone, when you read of what has been spent.

Whilst MP expenses naturally attract more publicity, there is waste, undesirable spending and excess costs elsewhere in the public sector. The level of public borrowing is now very high. On current plans the government intends to borrow another £3000 for every man, woman and child in the country this year, on top of a similar increase last year. It is going to become more and more difficult to borrow so much without pushing up interest rates, and without taking too much money away from businesses and families who are already hard pressed by the recession.

The political battle usually revolves around claims that any call for less public spending means damaging cuts to essential public services. No-one I know goes into politics to supervise such cuts. We all go in because we want our communities to enjoy better schools, hospitals and public protection. The party divide does not extend to disagreement about the need to be generous to those in need, or to spend on decent services.

The divide is about how many other things governemnt should do, and how much it needs to spend to do it. In Parliament’s case, we could do the job with fewer MPs and fewer supporting staff. Do we need all those expensive computerisaiton schemes in the public sector, ranging from the Identity computer database through to the centralsied NHS computer system? Do we need unelected regional government in England? Do we need so many quangos? Does the BBC need to pay high six and seven figure salaries to people to appear on a public service channel? Do we need to expand the civil service further, as the present government has been doing? Do we need to pay for civil servants and for outside consultants to do the task that one of those could do alone?

We need to apply the techniques of audit and cost control more widely throughout the public sector. We can do more for less. We need to do more for less, as public borrowing is out of control.

One response so far

Jun 20 2009

Is 20/20 cricket?

I am a traditionalist who thinks that the 5 day Test match is a great game. Like all cricket fans I can be engrossed by the struggle of ball against bat, when to the non cricket lover “nothing happens”. A long period of no or low scoring balls can be a fascinating contest. I can go home after a Saturday at the Test not knowing who will win, well satsified if I have seen great bowling and skillful batting. I like to see the game played in whites on a lovely English ground like Lords.

I am also someone who thinks change and the future can be exciting. I do not wish to live in the past. I find 20/20 cricket is simply the most exciting, adventurous, brilliant team game the world has so far designed. In just three hours you will probably see more than 300 runs scored, around 15 wickets taken, and drama on each ball. There are frequent dashed singles, attempted run outs, big hits, and aggressive bowling. There is an ad break in the middle, different coloured clothes, and modern crowd participation. I love it too.

20/20 is a different game. We may need specialists in the two different types of cricket. Knowing how to play the long game with solid defence and classic strokes may still be a good grounding for 20/20, but the cricketer will need to develop and adapt from that if he is to succceed. 20/20 needs a very different approach to stroke play, bowling line and length and to risk taking. 20/20 is unlikely to be a good training for Test cricket, where patience and temperament are so crucial.

There is a place for both games. Many more people will enjoy the thrills and spills of 20/20. Many 20/20 lovers will never grasp why some of us can go and see a whole day’s cricket, see not many runs or wickets, come away still without a winner and think we have had a good time. Those of us who do love the long game should understand the immediacy and pleasure of 20/20. It will involve many more in a type of cricket. There is room for both. 20/20 could become the type of cricket that the US wants to play, and could become a cult global sport if the cricket promoters get behind it. It certainly has plenty of commercial potential.

21 responses so far

Jun 20 2009

Who do you want as Speaker?

I attended one of the hustings meetings, and have had conversations with several of the candidates. I would like to hear some views of what you think of the runners.

Some say the new Speaker should be without criticism on his or her expenses. That appears to be an unrealistic ambition, now that political opponents and other critics are commenting adversely on all MPs for one reason or another. The Telegraph has given their summary of the candidates expenses. According to the Times five of the ten candidates are paying sums back. (Alan Beith, John Bercow, Parmjit Dhanda, Alan Haslehurst and Richard Shepherd). I think it would be wrong to rule out Alan Haslehurst, for example, on the grounds of his expense claims as some have suggested. The truth is that all MPs supported or acquiesced in an expense system which was both too generous and too laxly administered, so it that we sense we are all collectively guilty of an important error of judgement which has done great damage to Parliament.

I myself will not be voting for Ann Widdecombe, because I do not want an interim Speaker who will only be around for less than a year. I think we need to make a decision about someone capable of chairing the Commons well and making a contribution to rebuilding its reputation, which will take longer than a few months.

Nor will I be voting for those candidates who want to take Parliament around the country, as Alan Beith and Parmjit Djhanda wish to do. Whilst I accept their view that we need to make Parliament more relevant and important to people, I think the best way to do that is to do the job of Parliament better. Trying to meet around the country will be costly and difficult. Just imagine the imposition of security on a city or town being visitied by Parliament. I doubt it would be very popular with those inconvenienced. There would be endless issues about how many staff could come, how the books and papers would be made available, and how the ceremonial valuables would be safeguarded. A fortune has been spent on adapting Westminster to modern technology and security, so let’s use it fully.

Some of my colleaguess will be voting tactically, at least on the first vote. If an MP knows who he or she does not want, and feels strongly about it, the PR system used for the voting encourages tactical votes to try to stop momentum for a disfavoured candidate by encouraging modest momentum for a rival. Instead of having a single open vote where the person with most votes wins, we will have a series of private ballots, where weaker candidates drop out until a candidate does get more than 50% of the vote.

MPs will remember the Parliamentary arithmetic. This is still a Labour dominated Parliament, so if Labour come to a unified view they will make the decision. It appears for the time being that members from both major parties are approaching the candidates correctly on their individual merits rather than in a tribal way. Let’s hope that remains true.

I suspect that the front runners are currently Margaret Beckett, George Young, and John Bercow. The contest seems to be wide open with no one candidate having a clear lead.

32 responses so far

Jun 19 2009

Parliament sinks again

The heavily edited publication of expenses has done more damage to an institution under fire.

Many people want an institution which does more, costs less, and is more open.

We have discussed – and by a large majority agreed – on this site that Parliament needs to stand up against both the UK executive and Brussels, and assert more of the rights, interests and views of the British people.

We also need a Parliament which is better at controlling the costs of the whole UK public sector. To do so, it needs to be able to show it can control its own costs and give value.

As an MP I am frustrated that there is no effective opportunity to review, challenge or help control the costs of Parliament itself. There is no annual event when someone presents the accounts, takes responsibiltiy for the budgets, and proposes the budgets for the following year, to be followed by a decent debate. Scheduled debates on the annual estimates of spending for the whole national budget rarely allow detailed investigation of the costs of Parliament, and if anyone tried to use time for this purpose there would be no-one responsible responding or prepared to change what was going on. There is no Minister driving value for money.

It is true that there are similar problems in applying effective scutiny to much larger budgets under Ministerial control, but at least with say the welfare budget there is a named Minister responsible and an opportunity during the year to highlight the departmental budget, with a special Select Committee which can also review it.

Parliament needs to get a lot better at controlling and challenging all public spending. The Speaker candidates have not so far addressed this crucial issue. It would be good if under a new Speaker new ways were found to show we are in charge of our own total costs, as a prelude to doing a better job at getting value for money from the rest of public spending.

49 responses so far

Jun 18 2009

Reform of Parliament

Reform is much discussed. It comes up at meetings to hear the views of the candidates for Speaker. What emerges when listening to them is that the role of Speaker is quite limited to push through reform, all the time the governemnt controls a strong majority and wishes to impede reforms which alow Parliament to challenge the executive more.

I would like Parliament to meet more often. At the very least we should have a September session, to interrupt the 80 day break from July to October. We need to hold the goverment to account in the summer as well as at other times of year. Too many regulations go through without debate during the recess. I doubt if any new Speaker will be able to insist on this. There should be more evenings when we can go on beyond 10 pm, if a bill needs more attention. There should be far fewer guillotines preventing debate.

I would like Ministers to have to tell Parliament first before telling others of their plans, so we can cross examine them on their intents with sufficient time to do so. A Speaker can urge and advise, but cannot demand, as the government has the votes. Will this government mend its ways for a new Speaker? Probably not.

I would like Parliament to have more time to debate laws and policies which are crucial. This year we lived through several months without a debate on the state of the banks and the economy. Week after week the government chooses for the topical debate a subject that is not central to the political controversies of the day. There are only the occasional exceptions when pressure builds up. Wy can’t opposition parties choose some of the topical debate subjects? This would not be the same as an Opposition day where we can table a critical motion, but a right to choose a general policy area for discussion.

Parliament needs to earn its keep. A strong Parliament will produce better government. Good Ministers relish Parliamentary scrutiny, because it can lead to sensible amendment of their plans. Bad Ministers leak and brief, try to avoid Parliament, and fail to answer the questions. For a good Minister Parliament is an opportunity to get things right by listening to other views and a platform to explain the policy. For a bad Minister it is a nightmare to be endured or circumvented.

22 responses so far

Jun 18 2009

MPs expenses

Today, finally, the Commons publishes the expense claims of its members. A few of us wanted this done a long time ago.

The BBC this morning criticised the Commons for deleting the addresses and making it impossible to work out if someone had sold a property without paying capital gains tax. It is right that the public should know that the properties concerned are located to allow the MP to carry out the job, and that taxes have been paid where appropriate on properties where taxpayer money is received to pay some of the bills.

This Parliament I claimed for a rented flat in St George’s Square Pimlico, and more recently for a bedsit I purchased in Grosvenor Road Pimlico. Both are in walking distance of the Commons , saving time and money on travel on busy and long days. I did sell a property at the time of the 2005 election. I did not claim for it, and did pay capital gains tax on the sale.

At the beginning of the 2008-9 year I decided to cut my total expense claims by 10% in each of the following two years, as I believed we needed to cut public spending without harming front line services. When they get round to publishing the 2008-9 figures they should show I achieved this target for last year. I stated in May 2009 that I would be making no further claims on the housing cost Allowance, which should guarantee cutting more than 10% from my total expenses again this year.

Most people in the Commons now agree the old system was too generous and too laxly administered. The sooner Parliament can agree a system which is fair and offers value for money to taxpayers, the better.

19 responses so far

Jun 17 2009

Wokingham Schools’ Debating Competition winners enjoy day out at the Palace of Westminster

On Wednesday the 17th June, pupils and teachers from the Emmbrook and Willink School were treated to a day out at the Houses of Parliament by John Redwood.

As a prize for winning the 2008 Wokingham Schools’ Debating Competition, Adam Connell and Florence Curtis of the Emmbrook School, along with their teacher Diana Collins, joined runners up Lawrence Hill and Dominic Murray-Vaughn, and their teacher Lorraine Gordon from the Willink, on a trip to Westminster where they enjoyed a guided tour of Parliament by John Redwood and had the chance to watch Prime Minister’s Questions.

Following a two hour tour of the Palace of Westminster, where John explained the history behind the building and also outlined in some detail the intricacies of how the Lords and Commons operate, the debating students from the Emmbrook and Willink were able to witness Parliamentary debating first hand by watching Scottish Questions and Prime Minister’s Questions from the public gallery. Amongst the political heavyweights the pupils were able to see in person were Gordon Brown, David Cameron, Nick Clegg, Scottish Secretary Jim Murphy and former Liberal Democrat leader Sir Menzies Campbell.

The day ended with lunch in the Adjournment restaurant, where the group was joined by David Wilshire MP, a seasoned Parliamentary debater and Vice-Chairman of the Political Affairs Committee in the Parliamentary Assembly of the Council of Europe.

Speaking after the visit, John Redwood said: “It was a pleasure to one again welcome Wokingham pupils to the Palace of Westminster, and, at a time when politics has a poor reputation, show them how Parliament operates and why our democratic traditions are so important”.

“In these challenging times employers are looking for people with the skills to succeed. Public speaking and the ability to think on one’s feet are important life skills that offer an advantage in a competitive job market. I am pleased that by organising the Wokingham Schools Debating Competition and bringing the winners to Parliament, I have been able to help Wokingham’s pupils develop these important life skills”.

Notes for editors:

The Wokingham Schools Debating Competition is an annual tournament organised by John Redwood and his office for secondary schools in his constituency. The competition aims to encourage sixth form pupils to develop public speaking skills, think on their feet and develop clear and concise arguments. The winners of the competition are awarded the John Redwood Cup and the winners and runners up receive the trip to the Houses of Parliament.

The 2009 Debating Competition will be held in October, with the final taking place at Wokingham Town Hall on Friday the 27th November.

Please feel free to reproduce the attached photographs. Photograph 1 shows Adam Connell and Florence Curtis with John Redwood. Photograph 2 shows Adam Connell, Florence Curtis, Diana Collins, Lawrence Hill, Dominic Murray-Vaughn, Lorraine Gordon and John Redwood. If you need the photographs in a higher resolution, please contact Carl on 020 7219 4205.

The sponsors of the 2008 competition were 3M, Classicstone Properties, RBS, Mr. William Clark, Clifton Ingram and Titcheners. We are grateful for their support. The sponsors of this year’s competition are Mr. William Clark and Clifton Ingram.

For more information please contact Carl Thomson on 020 7219 4205

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Jun 17 2009

John Redwood presses for referendum on Lisbon Treaty

Speaking in the European affairs debate in the House of Commons yesterday, John Redwood called for democracy to apply to the United Kingdom and pressed the Government to hold the referendum on the European Constitution, otherwise known as the Lisbon Treaty, that they promised in their last manifesto. John also said the Shadow Foreign Secretary should send message to countries that haven’t yet ratified the Lisbon Treaty, such as Poland, asking them to hold off on ratification until a future Conservative Government has the opportunity to put the treaty to the British people in a referendum.

The full text of John’s contributions, taken from Hansard, now follows:

Mr. John Redwood (Wokingham) (Con): The Foreign Secretary mentioned democracy: may we have some in Europe? Why do the Irish have to vote again, when their verdict was very clear? Why cannot we have a vote in Britain? And what did he not understand about the Eurosceptic majority in the European elections?

David Miliband: I am glad that the right hon. Gentleman has brought me on to this topic, because there is unfinished institutional business in the European Union. Since the Irish people voted no in their referendum on the Lisbon treaty on 12 June last year, the Irish Government have been deciding on their next move. In December, the European Council agreed, on the basis of Irish proposals, that the EU would give Ireland the legal guarantees it wanted on the issues of concern to its electorate. In December, as the Prime Minister reported to the House, the European Council conclusions set out what the Irish guarantees will cover—no change in EU competence on tax; no prejudice to national security and defence policy; and guarantees on provisions in the Irish constitution on the right to life. The December conclusions also record the high importance attached to the issues, including workers’ rights.
There are now detailed Irish proposals for these commitments to be agreed as legal guarantees, for a declaration by the European Council on workers’ rights and social policy, and for a national declaration by Ireland. We are assessing these texts against the two objectives that we have consistently set out to Parliament and to EU partners. The first is to ensure that the Lisbon treaty comes into force on the basis of support in all 27 member states. To do that, the EU collectively has to address the concerns of the Irish people to the mutual satisfaction of Ireland and other member states. The second is to ensure that the content of the Lisbon treaty as it affects the UK is not changed.

Mr. Redwood: I am grateful to the shadow Foreign Secretary for giving way. Will he use this opportunity to send a message to countries that have not yet ratified the Lisbon treaty? The message is that a future Conservative Government would hold an immediate referendum, and that the British people would be very likely to veto the treaty for them—so countries should hang on and not ratify, to give us the chance to do what they want us to do.

Mr. Hague: Those countries must make their own decisions; it is not for us to dictate to them what their decision must be. However, my right hon. Friend is correct in his description of the situation. The Lisbon treaty referendum, which all parties promised at the last general election, will certainly be implemented if the treaty remains unratified and is still on the table at the time of the next general election.

16 responses so far

Jun 17 2009

Mr Miliband speaks for the EU, not Britain

Yesterday I asked Mr Miliband if we could have some democracy in Europe, to mirror the democracy he says he wishes to support or introduce elsewhere in the world. I was wasting my breath. He is a keen supporter of the European project, which proceeds on its meddling centralising way despite the views of European people.

I pointed out that Ireland is given two referenda, because they did like the result of the first one, whilst the UK is not allowed one at all, despite the government’s promise. Lisbon is being forced upon reluctant peoples, with political elites refusing votes, ignoring votes, or changing the words to conceal the truth of the project.

I also said Parliament should send a message to the countries that have shown reluctance to ratify the Treaty, that the UK public is against it. Come a General Election and a widely forecast change of government, the UK will veto the Treaty for them. They should all hang on refusing to ratify so the British people can once again save Europe from its political classes.

57 responses so far

Jun 17 2009

Regulating financial markets

We are not short of regulators, nor lacking rules. The last few years have seen a crisis of regulation as well as disastrous central banking and greedy and incompetent banking.

We should expect less of regulators. They cannot guarantee us all against loss from financial transactions. We should also expect more of them. We should expect them to know when banks and other financial institutions are taking wild amounts of risk, and should restrain them. They do not need more powers to do this. They have the powers already.

Yesterday morning financial regulation was raised with me by the Chief Minister and others in Guernsey when I was giving a speech there on the Credit Crunch. Guernsey is worried lest the EU seeks to extend its regulatory reach to the Channel Islands in clumsy ways that will transfer the business to some other offshore centre well away from us. The topic came up in the Commons debate on Europe yeaterday afternoon and evening, when the Conservatives attacked the government for failing to have influence over the current draft of the hedge funds regulation. Today an unrepentant Chancellor says thank you to his boss the Prime Minister for keeping him in post by defending the indefensible tripartite system at the Mansion House this evening.

What should they do?

The UK government should say that the tripartite system failed its first big test. The lack of clarity over responsibility for banking risks between the Bank and the FSA was partly to blame. We need a unified command, with the Bank of England taking responsibility for issuing government debt, supervising banks and the day the day operations of the money market. We need people running the Bank who understand markets and are capable of judging the cycle better.

The regulatory system should aim to avoid violent swings in bank balance sheets and the amount of money in issue. The Bank should call for more cash and capital to be held by banks when things are going too quickly, and for less when things are slowing down. Discussion to get banks to strengthen their positions should always be held in confidence.

The government should tell the EU that as it falls to national taxpayers to bail out failing institutions or to pay compensation to victims of poorly regulated businesses, so it should be the task of national governments to do the regulating. The UK has a much larger and more successful fianncial sector than France or Germany. The government should not let the EU use regulation to threaten London’s business, which clumsy regulation can do. That would drive the business away from the EU altogether.

We did not have too few regulators. The Chancellor who is the chief regulator did not understand the system he presided over and apparently failed to read the balance sheets of the top banks, which were obviously over doing it. We need to change people, not build a new bureaucracy. Keep it simple and do it better should be the slogan. And tell the EU to keep out.

18 responses so far

Jun 15 2009

Examining the Arab wars

How many more of our young people have to die in Afghanistan? How are the US and UK going to prosecute this war, given the way the Taleban can operate over the Pakistan border, in a country that remains a key US and UK ally? What does winning look like? How many troops will it take to pacify the huge territories concerned?

How does all this marry up with President Obama’s wish to have a different relationship with the Islamic countries of the Middle East from that of his predecessor? How can we think Gordon Brown is different in his approach from Tony Blair, when he supported Mr Blair’s wars throughout,and when he seems to be prosecuting them much as Mr Blair would have done?

It is time for Mr Brown to offer us a proper enquiry into the rights and wrongs, successes and failures of his Iraq war. More importantly, it would be good to hear from him in a measured statement about what he is asking the military to do in Afghanistan, how he thinks they can achieve success, and whether he thinks there are enough people with the right equipment to do this huge job.

Every week Prime Minister’s Questions begins with tragic news of further deaths on duty. MPs of all parties are rightly proud of our military, and admire its courage and persistence as it tries to bring peace to a troubled land. MPs generally do need, however, from time to time to ask the government to explain the strategy,and to explain why so many are at risk. We have a duty to all involved to make sure the mission is correctly framed, the troops are well equipped,and success is a realistic outcome from the balance of the task and the ask with the numbers of troops and the firepower.

26 responses so far

Jun 15 2009

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

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

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

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

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

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

46 responses so far

Jun 14 2009

Number crunching and party politics

On Saturday the predictable calls came from Labour supporting papers. Would I like to confirm that the Tories will cut 10% from budgets? Would I like to send a message to the Conservative leadership that they need to spell out more cuts? They had all the finesse and subtlety of an elephant in a living room. They might have well have asked , would I like to help Gordon Brown smear the Tories with his silly Mr 10% campaign?

It is pathetic that we are still stuck in this idiotic sound bite culture, where Mr Brown seriously believes he can frighten people from voting Conservative by continuing to fib that Tories want to sack teachers and nurses.His main reason for wanting Balls in place of Darling apparently was to have someone as Chancellor who would spend his time rubbishing the Opposition instead of tackling the serious productivity and deficit problems in the public sector.

Mr Lansley was attacked for pointing out the logic of Labour’s own spending plans – cuts of 7% in real terms overall, which would be bigger on other programmes if health and education are protected. We have seen in great detail how much money is wasted in Parliament itself in recent weeks. Now we are beginning to see how this is the tip of a big waste tip throughout the public sector, with too much money spent on needless items or wasteful ways of doing things. As readers of this site will know, the government’s wasteline has expanded, is expanding and needs to be pulled in. Evidence abounds of many things we need not spend money on, without touching a single teacher, nurse, doctor or policeman. Let the real debate begin. I have set out my list of easy targets for less spending. Let others make their contribtion.

In modern manufacturing quality control can mean as few as 100 parts per million going wrong. In the UK public sector error rates of 10,000 per million are commonplace, and in some parts of the benefit administration error rates can be several times this high level. No wonder so much money goes walk about.

24 responses so far

Jun 13 2009

The Americans don’t get it

I spent the last couple of days in the USA,(not at the public expense) to see how the recession is affecting them, and to see if there is any tangible sign of recovery. I visited the Chicago area, to see if the rust belt is still rusting, and to feel the pulse of the heartlands of automotive country.

There were plenty of cars for sale, signs of job losses and short time working, and downward pressure on house prices. In other ways what was remarkable was how normal, how American everything was. The restaurants were busy and noisy. Huge helpings were sold for modest prices. The roads were busy. The freeways and turnpikes still are well worn by the procession of enormous trucks. Pick ups and large SGVs are still popular.

The great strength and enormous resource of the world’s superpower was still much in evidence. Land is used profligately. There is plenty of waste. Diets and energy use have not suddenly conformed to Mr Obama’s planet watch. Green remains a colour for the political and chattering classes, rather than a way of life for middle America.

Whilst there was some talk of hard times and job losses, some concern about recession, there was a general feeling that what goes down must go up again. There was no great dread of the extent of federal borrowing, no alarm about the size of the twin deficits, no expectation that anything serious would dent the great society. China may be the nation’s bank manager, but the people have yet to feel her wrath on their overdrafts. The US living standards may rest more than ever on the goodwill of the international community, and depend on the attitude of surplus governments and world savers, but there is no sense that people expect crisis any time soon. America will go on doing what it does well – going to the shopping mall and restaurant by car, parking right outside, and enjoying the rest.

This great continent of a country still sees itself as a world apart. Its economy, even in recession, even debt ridden as it is, shows vitality and breadth that is impressive. Meanwhile the dollar tumbles, the Chinese flex their muscles with the Treasury Secretary, and markets fret about the amount the USA still wants to borrow. The US does not fancy cutting it appetite for spending. It just assumes it can go on borrowing. Someday there has to be path out of public debt, but in the meantime the authorities want to create the impression that it is business as usual. Greenery is still greenwash, not a daily reality.

23 responses so far

Jun 13 2009

Wokingham Times

Parliament is badly broken. This Parliament feels as if it has run its course, with many people wanting a General Election. Unfortunately the Prime Minister and the Labour majority do not share this view, so we limp on.

There is an atmosphere of despair around the government. Business before the Commons is light. The government does not welcome criticism and scrutiny of its response to the economic and financial crisis. It time limits debates on the important matters. The Speaker has resigned, the Home Secretary has resigned, and as I write the Chancellor looks as if he has lost his job. All these changes create a sense of instability and drift.

When authority falls away from a government all Ministers find it more difficult to get things through, or they themselves start to wonder if it is worthwhile or sensible to try to do anything. It seems to many of them easier to put off a problem or to delay a new initiative.

So what should they be doing? They need to get a grip on runaway public spending and borrowing, to start with. MPs expense claims have given the lie to the idea that all public spending is under good control and is pared down to the essentials. Parliament needs a meaner and better administered system for MPs, and then needs to do something similar for the rest of the public sector. We need to get control of staff numbers in the civil service and the quangos, and control outside consultancy, travel, entertainment and other costs throughout the upper echelons of the public sector. We need to cancel undesirable and unwanted spending like regional government and ID cards.

We need to reform public services so the public has more say and more choice, and more of the money reaches the schools, hospitals and front line personnel who provide the service.

We also need to restore purpose and teeth to Parliament itself. Strong government should welcome a strong Parliament to cross examine it and keep it up to the mark. As a Minister I used to welcome regular and searching Parliamentary scrutiny of what I was doing, as Parliament often saw flaws I could correct or improvements that I could adopt to make things work better. We need Parliament to have more time to cross examine the government. We need longer and better debates on the main topics that matter most. We need less but better legislation, and more time for strategic debate and audit.

Parliament is at its best when it offers some menace to poorly performing Ministers and departments. Ministers are at their best when they listen to Parliament, and take its better ideas, and respond to its strictures. If Parliament cannot or will not do those things, it is failing the nation.

One response so far

Jun 12 2009

The property slide

I have been a pessimist about UK commercial and residential property.

Values of commercial property have been falling for months. Commercial rents are weak. There is a substantial overhang of space. Retailers have gone bankrupt, leaving empty shops. Considerable new space is being completed in the City when tenant demand is weak. Businesses under pressure find it difficult to meet rising rent demands, and are often looking to reduce their floorspace as an economy measure. There are some brighter spots, and there are some buyers about seeking to find bargains now there has been a sharp fall.

Residential prices have also fallen, though less dramatically than commercial prices. Some estate agents now say there is a shortage of supply, and think prices might now stabilise or even rise from here. Normally it takes rising real incomes, stronger mortgage provision and an end to rising unemployment to provide good upward momentum to house prices, but these are unusual times.

There are two arguments the bulls put forward that are worth examining. The first applies mainly to central London. The apparent fall in sterling prices can be doubled for a an investor coming in with one of the stronger foreign currencies. To the overseas buyer London property looks a lot cheaper than it does to sterling based buyers who live here. There are cash buyers around who have always fancied smart London base who think now is a good time to take advantage of the apparently cheap prices in their currencies.

The second consideration applies more widely. The supply of homes onto the market is very limited. Many people do not think they could sell their property for a decent price, expecting the market to be poor. Trading up is being delayed by people worried about their job prospects or expecting lower prices for the bigger home if they leave it for a bit. You might expect more distressed sales. With interest rates very low more people can mange the mortgage. More institutions so far are seeing through customers with temporary difficulties. This could change for the worse as unemployment climbs.

We have probably seen the biggest part of the falls in both commercial and residential property. There will be some who buy at a discount to current prices where there are distressed sellers or properties with potential and take advantage of current lower levels to find longer term value. We need to remember, however, that the existence of some foreign buyers for London property and the existence of some hotter spots within commercial property does not overnight solve the difficult credit conditions, the falling rents and the poor outlook for tenant demand. If the economy grows more slowly this decade as we fear, and if there is less credit around, we have to adjust to a different level of property values overall relative to incomes.

29 responses so far

Jun 11 2009

How well is your bank doing?

I hear mixed reports about the banks. Some people and businesses report great difficulty in getting a bank loan for a good purpose, high fees and charges, even difficulty in keeping what banking facility they do enjoy. Others tell me things are more normal, and there is money to borrow for those who have a good reason.

I do not detect any better service or especially different credit policy at the banks where the public is a large an forced shareholder, than I do in the remaining private sector banks. It seems to be business as usual, as attenuated by the Credit Crunch.

There is a lack of decisive action at the semi nationalised banks, to cut their losses, cut their costs, sell off their overseas and investment banking arms, and concentrate what resource they do have on the UK domestic and commercial banking activities. Yet that is why I thought the government stepped in, to try to ensure a better flow of credit to families and companies.

I would like to hear from you about how your banks are behaving. Is there credit available? Have your banks been cutting staff and cutting costs? What has been happening to fees and charges?

In current conditions banks ought to be able to make good money on new business they undertake. The gap between their borrowing costs and their lending rates is high. They still have a lot of past business to sort out, with more write offs possible, so they are going to need to improve their service, write better business and reduce their costs if taxpayers arte to be soared big new losses.

27 responses so far

Jun 10 2009

Changing the voting system will not save the government

The PM’s sudden interest in a different way of voting looks like the action of a man who is worried that Labour cannot carry on winning under the tried and tested system of first past the post.

Proportional systems have many drawbacks. They lead to more extreme parties with more chance of them securing elected representation. They break the link between some or all Members of Parliament and a constituency. They are more likely to produce weak governments, without majorities. They can give parties more power and people less power over who the elected representatives are. List MPs need to be obedient to party, and are less likely to stand up for the interests of those they represent.They can transfer the decision about who governs from electors, to parties negotiating with each other after an inconclusive election.

The alternative vote system which some favour is not a proportional system. It is a system which allows in any given constituency the backers of the least popular parties the effective right to vote twice, whilst supporters of the more popular parties only vote once. What’s fair about that? Why should the backers of the joke or single subject parties have the right to decide who ends up winning, when that may be someone different from the person who got most first votes?

What we need from the government is action to control the deficit, to get some value out of public spending, to scrap ID cards and regional government, to get powers and money back from Brussels and to cut the bossiness and waste that abounds in Labour’s governing machine. There is a rumour they might at last scrap ID cards – bring on the day. If they do want to get into constitutional reform, they should start with a referendum on the Lisbon Treaty as they promised, so we can all tell them what we think about the huge transfers of power they are making to the EU.

56 responses so far

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