The public sector still hasn’t got it. In the jobs pages this week of the Sunday Times there were the following:

Head of Corporate Governance, NHS London (Attractive executive package)
Chief Ombudsman Financial (substantial six figure salary) – why not promote an internal candidate and save a post?
General Secretary Association of School and College Leaders (six figure salary plus benefits package)
West London Mental Health
Director of Organisational development (Salary up to £110,000)
as well as the more useful
Director of Patient Experience (Salary up to £110,000) and
Director of High Secure Services (salary up to £110,000)
Newport City Council
Corporate Director (up to £106,000)
Head of HR (up to £76,000)
Qualifications and Curriculum Development Agency
Director for Curriculum Development (c.£85,000 Coventry)
Director of Policy and Strategy (c £80,000 Coventry)
Director of Operational delivery (c£80,000 Coventry)
Director of Support Services (c £80,000 Coventry)
Director of Finance (c £80,000 Coventry)
National offender Management Service
Head of Communications (up to £90,000)
etc etc

It beggars belief on the same day that the government says we may need to get rid of Head teachers to save money that the government advertises five posts at £80,000 a year each for an educational quango when it should either be thinking of scrapping that quango, or doing the work with just a Finance Director and CEO without the other four. And do we
have to have another spin doctor on a big salary for the Offender Management Service? Why can’t Home Office Ministers talk on the television if need arises to provide an interview about this.

They can’t leave your wallet or purse alone.

The Lib Dems are considering higher Capital Gains Tax. They want a “Wealth” tax – so don’t be a low income granny living in a two bedroom flat in central London. They like 50 p Income Tax.

Labour have already put through an increase in Income Tax. They want to charge people more for their pleasant homes through higher Council Tax. There are rumours around of 20% VAT.They have put through petrol tax increases.

What of the Conservatives? They say they want to make the adjustment on public spending, not by taxing. They have opposed Income Tax hikes, opposed the Council Tax revaluations, and oppose the Wealth Tax. They have said we need to lower business tax rates in order to raise more revenue from more business in the UK.

The pubiic sector makes such heavy weather of getting its spending into line with its large income. When I was a Minister departments spent so much less on themselves than they do today, but I always found the departmental overhead I inherited was way larger than anything I tolerated or managed in the private sector, relative to the size of the operation. If the civil service of 450,000 or so I helped direct was generous, the civil service today at 750,000 must be massively overmanned for any sensible government programme.

I cannot agree with the absurd language Messrs Brown and Clegg are indulging in. I cannot see any prospect of savage cuts – there are no overall cuts so far. Savage cuts are not a good idea. There is a need to administer the obvious cuts, the efficiency raising cuts, the termination of undesirable programmes, the cuts that would have many of us cheering in the streets. We want an end to the over bossy surveillance society, an end to the waste and fraud, to the needless industrial and financial subsidies, to the over regulation of local government, an end to enforced regionalisation and to national databanks. We want an end to roadworks which make the roads more congested and less safe, an end to the explosion of inspectors and thought police, an end to the consutlants gravy train and the culture that makes us pay three times over for anything the public sector attempts to do. I would like a year’s moratorium on glossy brochures, an end to bogus consultations, the termination of new jobs called Director of Strategy, Communications, networking ,Partnerships and all the other responsiblity evading twoddle they have invented to swell the quango Board tables.

So let’s have the easy and popular cuts for starters. There’s no need to start with culls of Headteachers. No one sensible is salavating about the prospect of cuts in needed core services. Talk of “savage cuts” is absurd given the current febrile and feeble state of the cuts debate in the Labour and Lib Dem parties. Why not start the proper cuts in the bloated nationalised banks? Why not split them up, slim down their staffs and paybills, make them compete and get them back into the private sector as quickly as possible? At the moment we have large subsidised zombie banks, that are doing us no good and putting the taxpayer at huge financial risk.

It is a relief that the media and other political parties are now catching up with the obvious need for the public sector to do more for less. In today’s Sunday Times there is reference to the Economic Policy Review we produced before the crash in 2007. Once again a journalist seems to be under the mistaken impression that Report was mainly about regulation, yet regulation was just one chapter of a ten chapter report. Chapter 8 was entitled “Public Sector efficiency: The government’s burgeoning wasteline”. I do not recall any journalist writing about it, yet in many ways it was the most important of the specific subject chapters of the whole Report.

We pointed out that the cost of government had shot up by 50% in 10 years, that the civil service had grown by 300,000 people, that there were 3259 press officers for Whitehall and the main quangos, 2500 small business schemes, an annual £2.6 billion loss from fraud and error on benefits, nine NHS reorganisations in as many years which cost £3 billion, the MOD had lost 200,000 sets of body armour, and there were many other examples of waste and overspending.

We recommended major changes in the way Whitehall works, and big cuts in the overhead costs. Our list of cuts included some now familiar items:
1. ID card scheme to be scrapped
2. Abolition of unelected regional government
3. Cutting the number of quangos
4. Recruitment freeze to cut the number of civil servants
5. Reduction in use of external consultants
6. Changing the culture of public sector management, with PM and Chancellor providing a lead for higher quality at less cost
7. Clarifying accountability so any higher paid staff that were retained had specific tasks and performance monitoring
8. More trials and fewer errors – always pilot new schemes before national roll out
9, Break public monopolies – competition will drive higher quality and lower cost
10. Reward best practise
(pp70-72 Freeing Britain to compete)

In the Review we also pointed out that the government’s then figure of £487 billion for public debt was a wild understatement. Today after lots more borrowing many in the media are using the figure of £800 billion. We costed public sector and liabilities at £1340 billion in early 2007. Add in the banks and more recent borrowing and you get to over £4 trillion at risk and in debt. People need to be realistic about the size of this problem. It is huge.

The west has intervened militarily too much in the Middle East. Governments always claim a high minded and good reason, but you cannot help thinking the presence of so much oil there lies behind some of the preoccupation. I am sure there have been nasty Middle Eastern regimes which we would prefer were replaced by democracies. So there are in places like Zimbabwe and North Korea, but it has not led us to military intervention.

It is true that we are not directly fighting over oil in Afghanistan. It is also true that there was a regime change war aim in Iraq, which just happened to have big oil reserves. The Allied war machine did want to secure the oilfields and get them back into full production, as part of the task set. The US preoccupation with the Middle East owes a lot to the dominant role the regional has in world oil produciton, and a lot of the politics is based around moderating and regulating the flow.

There is no doubt about it. The oil wealth gives Middle Eastern countries direct power, because they can sell their oil for larger sums which allow them to buy substantial weaponry. It buys them indirect power, as sensible western countries wish to avoid a break down in relations so the oil will keep flowing in their direction when needed.

None of this is very healthy, either for the exporting countries or for the importing countries. Visionary Gulf states are rightly trying to create flourishing diversified economies on the back of the oil wealth, aware that it will not last for ever. So why aren’t visionary western economies seeking to reduce their dependence on imported oil?

In place of strife, in stead of endless wars in oil rich countries and their neighbours, why don’t we redirect our efforts to replacing imported oil by other means of generating power? The UK has failed to plan and replace generations of nuclear and coal fired power stations. We should have been doing it earlier and faster, and considering adding more electricity to our energy mix at the same time. More space residential and commercial heating and factories could be powered by nuclear, clean coal and renewable electricity.

For those uses that will still require hydrocarbons, there is domestic oil, and the later opportunity to covert coal to a fluid, as they did during the second world war.

I have not had a phone call for a couple of weeks seeking my views on the NHS or Dan Hannam. The media have given up the Labour game of trying to split the Tories on Health.

Yesterday there was a new straw in the wind. Would I give an off the record interview on the EU, I was asked by a journalist. What rows and splits were there on the EU? Were we about to see a re-run of one of Labour’s favourit movies, Tory Euro wars? Is this the next Labour effort, or is this UKIP trying to stop the leading Eurosceptic party? Pursuing this line will not help stop the march to federalism through Westminster.

They are so stuck in the past these people, so unimaginative in their attempts to destabilise, and so predictable. I explained patiently that the Conservatives are the Eurosceptic party. I reminded him that even at the depth of our unpopularity in the late 1990s we won the European election, because people preferred our sceptical approach to the government’s enthusiasm for more integration. We have the overwhelming majority on our side to be against the Euro in principle, the overwhelming majority against English regional government, the strong majority against Lisbon. We voted against Nice and Amsterdam as well as against Lisbon etc etc.

But, no, wasn’t the party divided? I pointed out that the Conservative party was Eurosceptic, whereas Labour were more split on the EU. I pointed out that Labour had been a very divided party under the Blair Brown feud, but had been elected. I reminded him that Margaret Thatcher’s party had been strongly divided between wets and dries, but had been the party of government. Why do they persevere with two myths? It is nonsense that past governing parties have been united. It is a nonsense that federalists have any traction within the modern Conservative party. The party’s policy is anti Euro, anti Lisbon and anti integration. It’s high time the Eurosceptic majority in the country was reflected by a Eurosceptic majority in the Commons.

Cleggy is speaking out. The Lib Dems apparently want big cuts in public spending. They want to bring the public sector pay bills down.

A few days ago an “expert” panel I belong to was asked in one of its daily polls to offer advice to the Lib Dem leadership. The panel comprises political practitioners and commentators of all shades of opinion. The strong view was Mr Clegg needed to be more assertive compared to Mr Cable. The polling also revealed that Conservatives tend to see the Lib Dems as a more left wing version of Labour – more federalism, higher spending, more stealth taxes. Some Labour figures look enviously at Lib Dem policies, seeing them as more socialist. Doutbless Mr Clegg, looking at the current Opinion Polls, took fright. He has decided on a re-positioning. Who is now the biggest cutter of them all?

Mr Clegg makes an unlikely leader of the lower spending and lower taxing forces in our country. He and his assistants have spent most of their careers so far pushing up Council Taxes where they run Councils, hounding motorists, demanding a new array of levies and taxes and backing all sorts of extra spending projects. Their budget approach has always been Foggy at best, spendthrift at worst. They have urged onwards the European integration project, and have been great advocates of hated regional government. Europe is their Truelove. I struggle to find much that is either liberal or democratic in their approach. The fact that these sinners are now repenting shows the strength of public feeling on the out of control debt. It has taken time for the commonsense of the people to get to them, but at last the focus groups and polling must have caught up with the reality. If even the Lib Dems are trying to become compo on the big issue of debt, we must indeed be hearing the last of the summer whine.

Let me today venture an answer to the latest of the leftie questions designed to split the Tories.

The official party position is straightforward. Defence cannot be exempt from scrutiny to see if more can be done for less. There also needs to be a Defence Review to bring capability and tasks into line. This could be achieved by buying and hiring more, or by doing less, or some combination of the two. The party has not published detailed plans to cut defence spending in the way it has on welfare, regional government, the surveillance society and the like because it is not privy to important confidential matters concerning the nature of the procurement contracts the government has already entered into. It also needs to have the benefit of proper military advice on the Defence review to start to bring tasks and resources into line.

Some will say this is a cop out, because they are no friends of the Tories. Some will continue with their barrage of questions, often based around their own prejudices, asking if the Tories will have “the guts” to cancel Trident, or the aircraft carriers, or some other large procurement contract.

My own view is we should work towards an early exit from Afghanistan, to reduce the strain on our troops, to cut the loss of life, and to save some money. That would be my number one choice of defence cut. I do not favour plans which reduce the number of ships in the navy. I belong to the school of thought which thinks we should have more ships than Admirals and senior desk officers, and would want to right the imbalance by tackling both sides of the equation. You cannot have a serious international naval force without modern carriers. I would modernise the nuclear deterrent, as I have no wish to be blackmailed in an increasingly dangerous world where all sorts of forces might end up with nuclear weapons.

There is doubtless plenty of scope for smarter and cheaper procurement. Too much is adapted here at enormous expense over very long time periods, with too much redesign and complexity as an inherent part of any programme. It should be automatic that if we are sending our armed services personnel into a conflict anywhere in the world they should have the full range of equipment necessary to do the job. That has been sadly lacking in the Middle east in recent years.

Defence is the one budget that has been cut by this government. There are bigger and more wasteful budgets elsewhere where bigger savings will be found.

The future of the Wokingham District is being planned for us as you read this. Various schemes have been proposed to meet government targets to build more homes. The Council has felt it has to comply with the top down targets and the planning requirements that have increasingly come from central and regional government in recent years.

These targets and demands suddenly look rather dated. In the short term the building industry is in such a state that developers are not pressing to build hundreds of homes, for fear they cannot sell them. Housing finance is a shadow of its former self before the Credit Crunch.

Plans to provide new schools and other infrastructure that would be needed if we are to rush ahead with more development now have to be viewed against the background of the gathering clouds over public spending. Each of the main parties is bowing to the inevitable. After the election, if not before, any responsible government is going to have to cut spending. This government has indicated already in its forward plans capital spending will take some of the bigger cuts. It is will not be an easy background for Wokingham to bid successfully for capital money to build the facilities for large new housing estates.

Maybe the climate of opinion is also shifting. The Conservatives have unveiled new plans to give much more power to local Councils to decide on how much development they want. The Official Opposition is saying it wants to scrap regional plans and top down targets. Liberal democrats traditionally want more devolved power to local government. Could even this government start to respond to the demand by voters and Councils for more of the important decisions about the size and shape of local communities to be taken locally? That is less likely, but political fashions can sometimes prove irresistible, as cutting spending now seems to be.

I think we need a long hard think about how much extra development we can and should take in the light of these important changes. It is likely migration will be less strong, and that businesses will struggle to create large numbers of new jobs. This is a different background to the one we are used to. There is no need to rush to judgements on big new housing developments all the time there are so many uncertainties around. The priority should be to press on with the redevelopment of the Town Centre, as the Council I believe wishes to do. Financing this will be more difficult, but not impossible.

It is important to preserve or green gaps between settlements. We have to recognise all the time there is no money for extra road and rail capacity, transport constrains what we can do. The persistence of flooding is also a timely reminder that much of our area is low lying. It was or is flood plain. We need to leave some land capable of absorbing water from heavy rains, if we are to avoid more flash floods and persistent bouts of water invasion into more homes. In the meantime, have a look at the plans and send in your views to the local planners.

The Bank of England and many of the politicians are still mesmerised by past crises – the credit bubble, and the crash. They seem unable to look forward and see off the more likely future crises.

The Bank claim that because there is now a big gap between what we used to produce and what we now produce, there cannot be any future inflation. They believe all that capacity is still out there, just waiting for orders. As the orders come in, so the service providers and factories will deliver at no extra price. It shows the Bank have learned nothing from their sorry errors of the past three years.

There are three ways we can have more inflation without their so called output gap closing as much as they think.
The first is a sterling collapse. Last year sterling fell a lot. This year we have more inflation than they expected as a result. The price of imports has gone up.
The second is, businesses can destroy capacity in a slump and often do. They may no longer be able to produce all the goods and services they could in 2007. Have the Bank not noticed the factories closing, the for let signs above many a building, the redundancies from service businesses? Cranking all that back into life is not easy, especially when you still have banks unable or unwilling to lend to business. Rover is not about to make cars again in the UK.
The third is quantitative easing. You can have too much money chasing too few goods. There may not be any immediate danger of that in parts of the struggling UK marketplace, but there are plenty of signs of it already in commodity speculation, in share prices and other assets. The last inflation began with an asset bubble which the authorites ignored.

I am less concerned about the immediate inflationary threat than I am about the debt threat. It is a strange idea that you can cure a crisis brought on by borrowing too much in the private sector, by borrowing too much in the public sector. The government has got away with its huge overborrowing so far by printing the money to raise the money for the borrowing. The Bank has decided to keep long term interest rates low,by printing money and buying government debt. At some point they have to stop doing this. Then we will discover what the true cost of government debt will be.

So there are two possible bad devlopments, given present policy. The first is a further lurch down in the pound, as markets take exception to the monetary looseness and the excessive borrowing. The pound has been doing badly recently against currencies like the krone, the Euro and the yen. That will make us all poorer by raising the price of imports.

The second is a buyer’s strike over government bonds. Foreign and domestic investors may reach the point where they demand a much higher rate of interest to carry on lending, or demand changes to the fiscal policy before they will willingly lend more.

Both these things happened to a previous Labour government in the 1970s. They resulted in a trip to the IMF and the imposition of public spending curbs. Why don’t we get out ahead of that this time, by taking some prudent action now, before it is too late? There is no free lunch. Spending cuts are essential to avoid worse dangers ahead.

The government’s idea that all spending and borrowing is reflationary is quite wrong. If confidence in the currency and in the government’s finances is undermined, we will have less growth not more. Interest rates will be higher not lower. The Bank’s indicative short term rate hasn’t meant much in the last two years, because they have been unable to enforce it in the market. If the government’s own financial reputation suffers a further knock the Bank will lose what little control it currently has over interest rates. The last thing the private sector needs now is higher rates. That is what you get if a government borows too much and is too casual about its money and currency.

The CEO of UK PLC wishes to raise an important matter with shareholders.

Dear Shareholder,

I am writing to tell you that Lord Mandelson, recently appointed Deputy CEO responsible for our brand and communications, is making a big impact on our company and the marketplace. I am sure you will agree we have been getting over our messages much more strongly since his appointment, and have been making much better use of our media subsidiary, the BBC, to do so.

The marketing department has alerted me to a problem in the market research which I intend to address promptly. They say that some people are not giving the Board and the company the credit for the unique way we have conducted affairs during this global downturn. Some seem to think that it has been the interest rate setting and money printing of our main banking subsidiary, the Bank of England, that should be praised for the incredible ride we have given the public in recent years. Lord Mandelson’s department suggests we could overcome this presentational issue by changing the name of our subsidiary from the Bank of England to the Bank of Gordon.

He makes some very good points. The Bank of England is divisive as a name. The Bank operates throughout Scotland, Wales and Northern Ireland as well. We need a more inclusive name. As I gave them new instructions on which target to hit, kept in close contact through Mr Balls over interest rates, took a strong interest in who to appoint and reappoint, and more recently was the architect of the money printing policy, there would be some justice in sharing part of my name with the Bank. I have never wanted this before, as I dislike the cult of personality, but Lord Mandelson is right that sometimes you do have to flex your principles for the greater good.

However, this piece of advice just sums up why Lord Mandelson is Deputy CEO and I am CEO. I had to reject it, because they had uncharacteristically missed an important detail. The initials of the newly named Bank would be BOG, which could be crudely used against us by our main competitor company, Conco. I have therefore decided myself that we will rename the Bank, Gordon’s Bank. This will give it a friendlier and more inclusive feel, linking the old English associations with a more Scottish name to make all feel welcome.

I was pleased this week to hear the Governor of our Bank talking down interest rates, and reassuring all that they will carry on printing. This is crucial to the success of our borrow more strategy. Some have written to me recently expressing concern that I am wobbling over the aims of maximising our debt and spending. Please rest assured. Nothing I have said applies to this year. As we all know next year is a long time away, and things may change before we get there. I have had to face dreadful atacks from the Finance Director of Conco, so have had to reposition a little. It is just words. The spending goes on.

Yours ever more in your debt and mine

CEO

Some people might complain that Christmas comes earlier every year, but Wokingham primary school pupils are already getting into the festive sprit by submitting entries to John Redwood’s fourth annual Christmas card competition.

The Christmas card competition entails primary school pupils from the Wokingham constituency sending a painting or drawing about Christmas to John’s constituency office. The winning entry is chosen by a panel of judges and appears on the front of John’s parliamentary Christmas card, which is sent to MPs and local people in the constituency. Four runners-up will also have their pictures printed on the back of the card, and the winners and runners-up will receive a clean copy of the card to keep as a memento.

The winners are chosen on an individual basis, rather than a per-school basis. Last year some schools held art classes where pupils painted pictures and they were then all sent in by the participating school. Other schools simply promoted the competition to their pupils, who then sent in individual entries.

The deadline for entries is Monday the 19th October. The pictures and paintings should be sent or dropped off to Christine Hill at the Wokingham Conservative Association, 30 Rose Street, Wokingham, Berkshire RG40 1XU and must not be folded. If the picture is drawn it should be in bright and vivid colours so it can be electronically scanned and reproduced. Please write your name, age, and school in pencil on the back of your painting.

Speaking about the competition, John Redwood said: “This is a fun way for primary school pupils to see their work in print and be involved in an MP’s work in a small way. Last year’s competition was a great success and proved popular with everyone involved.”

Last year’s competition was won by Sam Pulleyn and in 2007 the winner was Connor O. S. Piper, both of Winnersh Primary School. JPEG graphics of their entries for press reproduction are attached, as is a PDF of the competition flyer. We would be extremely grateful for your help in promoting the competition.

For more information please contact Carl Thomson on 020 7219 4205

At last an answer –

“Thank you for your letter of 25 August to the Prime Minister on the issue of a recall of Parliament. Your letter was passed to the office of the Leader of the House of Commons and I have been asked to respond.

Your representations have been noted.

The recall of Parliament is entirely a matter for the Prime Minister and the Speaker of the House of Commons. The Prime Minister has not chosen to recall Parliament at this time.”

The sinner repenteth. Labour’s economics guru has joined the consensus. The Prime Minister has admitted that even a government run by him has to try to get spending more in line with revenues. Let’s enjoy the moment.

He wants to “cut costs, cut inefficiencies, cut unnecessary programmes and cut lower priority budgets”. He wants to sell off “unproductive assets”. He seeks “realistic pay settlements”. It is almost as if he has been reading this blog over the last two years!

Let’s leave aside the rhetoric of the false distinctions – Conservatives are not in the business of cutting crucial front line services, and they are not wanting to stop the recovery. The truth is Mr Brown has signed up to spending reduction, as some of us have been urging for a long time.

The media should now be asking some more questions about what all this means. Let’s see if we can help them ask the right things:

1. What is a realistic pay settlement, when RPI inflation is negative, and CPI inflation below 2%? Would the public sector be willing, as many in the private sector are, to take low or no pay increase in order to keep more jobs? The PM should offer a lead on this now, today. He needs to get expectations down, to make the public sector more affordable, whilst protecting the lowest paid and the most important front line workers.

2. What is an unproductive asset? Surely we need to be selling productive assets as well, starting with all those banking assets. How big a programme of disposals can he come up with? Isn’t now a good time to sell, as the Bank is pumping up asset values like crazy with its quantitative easing programme.

3. Which costs does he think he can cut? Why doesn’t he start with a freeze on new advertising, new consultancy contracts, new glossy brochures and bogus consultations, and follow it up with a destock of paper clips, computer consumables, stationery and other office equipment?

4. Which inefficiencies has he suddenly discovered which he has tolerated up til now? Will he start to raise labour productivity by imposing a complete staff freeze on all posts, exempting front line service providers in core services like education and health?

5. Which unnecessary programmes is he running? Would he include in that all the panoply of unelected reigonal government, which wastes millions and would be best swept aside? If not that, then what?

6. Which does he think are the lower priority budgets? Could they include the budgets of the Surveillance society, which Conservatives have identified today as ones to eliminate? If not those, then what does he have in mind?

We should expect a Labour barrage, backed up by the BBC, to demand instant lists of cuts from Conservatives. There are plenty of Conservative cuts around in policy statements. I have reproduced some of them again in this blog. The issue is what will this government’s cuts be? They have the twin advantages of being able to deliver them now, and having access to the books to know what each item will save. When are they going to tell us? When will the media start asking them?

I got my outing on LBC to discuss, after the BBC’s cancellation. Even they were telling me Conservatives would not list their cuts, after I had just done so!

I want the Vauxhall plants to stay open. The way to keep them open is simple. They need to make vehicles people want to buy at prices people think are fair. They need to make the vehicles at a cost which leaves some profit for the owners of the plants. If they do that, jobs will remain. If they fail to do that, with or without subsidy, the factories will close.

Just when all politicians are agreed that we need to save some money, many of them cannot get over the habits of a lifetime. They are passing their time considering more spending. They need to learn to say “No”.

Saying “No” to demands for subsidy for the two Vauxhall plants in the UK should be one of the easiest ones to do. We have a long history of subsidising car plants in England which have subsequently closed, because subsidies cannot save jobs other than in the very short term.

There is a complication. It appears that the Germans have offered large sums of subsidy in return for guarantees that the German factories will stay open. No-one seems to think the UK can and should win a bidding war, by offering more subsidy than the Germans. It is clearly true that if a firm has to close some but not all of its factories, a very large bung could influence that decision. It is also true that if other countries now offer bungs they cannot prevent some factories closing, so they may well be wasting their money.

Governments in a run up to an election are especially vulnerable to demands for more money. Weak governments are likely to do bad deals. We do not know what realistic guarantees the German government has received, but the truth is there can be no long term guarantee that even the German factories can make cars people want which make the owners a profit. Switching production from other factories to Germany could prolong the life of the German factories, and might result in their long term survival. They are still going to need good vehciles at good prices, as Rover demonstrated in the UK where after subsidy we still lost all the production.

The answer to the demand for cash for Vauxhall is “No”. It should be followed up by a vigorous complaint to the EU competition authorites about the German subsidy. The government tells us belonging to the EU is good for us, and tells us they have influence. Let them prove it. There is an agreed policy against subsidy, and against unfair competition by government intervention. Surely this is the time to use it. Do they have either the bottle or the influence to do it? I doubt it.

Some bank share prices, 12 September 2008 to September 15th 2009:

Royal Bank of Canada plus 15%
Standard Chartered plus 15%
Barclays plus 6%
Santander plus 1%
Lloyds minus 51%
RBS minus 76%

Who knows how to add value to a bank?

This afternoon I was asked to appear this evening on the World Tonight to do an interview on spending cuts. I agreed. I was asked if I preferred a pre-record or live. I said I preferred live. They agreed and made the arrangements.

I was then telephoned and asked in detail about my views. (They are on the website anyway). When I said they should ask the government where their cuts were coming, as I was happy to set out my proposals and Conservative proposals, there seemed a hesitation. I said if they did not want to do that I would naturally raise the question. They then confirmed the interview.

A few hours later they left a phone message to say they did not want to do the interview after all! Clearly they did not want me asking on air for Labour to explain where their cuts were coming under the new headings the PM has so wisely set out.

We have lost so many freedoms in recent years. We have been bamboozled, regulated, spied on, and made more and more dependent on the state. Central government has nationalised the local authority education service, introduced tax credits which extend high up the income scale, and micro managed so much of our lives.

It has also attacked independence where it found it. Savings for retirement have been taxed to the point where many final salary pension schemes have been closed. Car drivers have been pilloried and taxed for daring to use the freedom of the roads. More and more jobs have been provided in the state sector, as public spending has taken a rising proportion of our national income.

Far from tackling inequality, we have seen it rise further. Far from getting people into jobs so they can look after themselves and their families, we have seen a rise in unemployment and benefit dependency in recent years. Far from healing divisions in society, government seems to have gone out of its way to declare war on savers, entrepreneurs, independent schools, “elite” universities, motorists, bankers, small businesses and all those who value their freedom.

The economic failure has been the most breathtaking and the most damaging. We have lurched from an economy built on too much credit and borrowing in the private sector, through a deliberate credit crunch which undermined that model of economic development, to a model based on massive public sector borrowing on a scale never before attempted. People’s economic freedom has been undermined by higher taxes, more regulation, and the damage done to the economy by the boom/bust economic management.

In the period 2003-7 the authorities kept interest rates low to encourage a credit binge, and the regulators turned a blind eye to the ballooning of bank balance sheets and the build up of risk. In 2007-8 they lurched to a tight policy of higher rates, suddenly demanded more capital and less lending from the banks, starved the money markets of funds and brought parts of the system down. At the end of 2008 and in 2009 they panicked, slashed interest rates, printed money and tried to make the markets liquid again to rectify the wanton damage of their previous policies. The predictable result has been to drive many more people into unemployment and dependency on the state.

The current problem

Today we face three inter related crises. There is a public spending crisis, brought on by the overexpansion of the state, and by the colossal waste and inefficiency of so much of what it does. There is the broken society, where all too many people are without jobs, living in broken homes, with some prey to the evils of drug taking, enforced idleness, heavy drinking, random violence and lack of purpose. There is the damage being done to the world of enterprise, by the high taxes, needless regulations and a mean spirit which is ever ready to condemn those who venture and strive. If we are not careful the government will trigger a cycle of decline. Without good growth the public sector is unaffordable. If the answer to every problem is thought to be more public spending and further state intervention the bills will mount unacceptably. If we carry on with existing policies we will drive talent away from our shores, and snuff out more of the spirit of enterprise which is needed to get us growing again.

Getting people back to work

People need a hand up, not a hand out. The best welfare policy is a job. Government needs to be free to concentrate more on national security than on social security. One of the tragedies of the last twelve years was the missed opportunity to reform welfare. When Frank Field was told to think the unthinkable and Harriet Harman was in charge of the welfare department it looked as if they might at last adopt something like the Clinton reforms of welfare which had helped bring unemployment tumbling down in the USA. Instead they fell out with each other, achieved nothing and both lost their jobs. Tony Blair gave up the task before it was begun, and threw away the political credit he had in the bank to do just such a reform.

Labour used to say rightly in the 1990s that we spent too much on the costs of economic failure. They meant the welfare bills were too high. It is an enormous waste of potential talent and energy to keep more than 5 million people of working age on benefit without work. That is what Labour have done. To fill all the jobs that were created in the borrowing fuelled growth years of 2002-7 they opened our borders, inviting in large numbers of migrants to take the jobs available. Welfare reform has to centre around ensuring most people out of work are available for work and are looking for work, and on ensuring incentives to get a job and stay in a job. It also needs to be allied to controlled immigration, so more of the jobs that are available can go to people already settled here and otherwise on benefit.

It is a paradox that demanding more of people to get them off benefit is a way of freeing people. It is however true. They should be better off financially and in other ways if like the rest of us they gain a job and have to get up in the morning to earn their living.

Freeing people to look after their own families

As welfare reform starts to work, so public spending on the costs of unemployment and the interest costs on the borrowings to pay for the benefits will start to come down. At the same time we need to leave people free to save or spend more of their own incomes, and need to allow businesses the freedom to spend or invest more of the money they generate through their sales.

For most of the Labour years they lived with the 40% top rate of income tax that they inherited from the Conservative reforms. They even managed to get the standard rate of income tax down to 20%, which is a fair and competitive rate by world standards. It is a pity they did this by hiking other stealth taxes, but it has produced a rate which an incoming government can live with.

Unfortunately they decided to hike the 40% rate to 50% at the end of the current Parliament. 40% was already becoming a less competitive rate, as other countries around the world came to realise the need to attract talent and allow people to keep more of their earnings. 50% is an uncompetitive rate which will act as deterrent to new business starting up, to businesses coming to the UK and to some high earners staying. If we wish to free people to look after themselves, their families and their employees, we need set competitive income tax rates.

Company taxes too need to be competitive. Businesses do not have to locate in the UK. Most of our large businesses are owned by overseas shareholders in whole or part. Few have any strong attachment or loyalty to a UK base. If you wish to create and retain jobs in this footloose modern world you need to set tax rates which are attractive to the major world corporations when planning their investments, and attractive to the world’s entrepreneurs when placing their funds.

Our current corporation tax rate of 28% is no longer competitive and needs to be lowered. Countries which have set lower corporation tax rates, like Ireland and now the Netherlands, have been more successful in attracting new business and headquarters organisations of major companies to their shores. The Conservative Opposition has announced it wishes to get to 25% as quickly as possible, and thereafter would consider taking it lower. With a standard rate of income tax at 20% and a capital gains tax rate of 18% there would be some symmetry and poetry in getting it down to say 20% in due course.

The main argument against lowering either the top rate of income tax or the rate of corporation tax is loss of revenue. There is little evidence that over anything other than the very short term there is a loss of revenue from such moves in the ranges we are talking about. On the contrary, both the UK and the overseas experience demonstrates that lowering tax rates increases the tax take from the rich and from companies. The best way of taxing the rich more is to lower the rates.

With a lower top rate five things happen. Firstly, more rich people come to live, and spend money in the UK. Secondly, it is less worthwhile people already settled here spending money on good tax and legal advice to get round penal taxes. Thirdly, the rich will venture more, if they can keep more of their income and gains. Fourth, fewer people leave the country in search of a lower tax jurisdiction. Fifthly, more companies come to establish their headquarters or their base for expensive staff ion the UK, as they can reward them better for less cost if the tax rates are lower.

When the Thatcher government lowered the top rate of tax on earned income from 83% to 40% in two moves, the amount of tax the rich paid went up, and the proportion of total income tax paid by the rich went up. All five effects came together to increase the tax base and taxable income by more than the drop in the rate.

The same is true of corporation tax. When Ireland cut the corporation tax rate to 10% it was inundated with businesses coming to the country. The total tax take went up massively, by much more than the UK, through the impact it had on growth rates and general incomes.

Some people argue that high tax rates are necessary on higher incomes, in the interests of equality. They enjoy imposing high marginal rates to level people down. The problem with this policy is it may just drive people abroad, lowering incomes and job opportunities in the country and thereby making everyone a bit poorer. It is also based on the proposition that income belongs to the state, who kindly allow you to keep some of it, rather than on the belief that people need incentives to work and that income they earn is theirs to spend as they see fit. Taxation should take what is needed for important public services but should not take so much as to stifle initiative and snuff out self reliance.

Freeing people to choose their public services

Leaving people with more of their own money to spend is one of the most empowering policies any government can follow. Armed with more of their own money, people will be more self reliant, needing less from the state. To give people the opportunity to obtain good jobs and earn good money it is important that all have access to high quality education.

One of the many disappointments of the last 12 years has been the failure to translate extra cash for schools into better results from schools that serve the interests of the poorer parts of our country. Although comprehensives in inner cities, for example, have attracted the lion’s share of much increased funding all round, there has been no breakthrough in results and achievements at many such schools.

Indeed, in some ways the great divide in British society between those with rich parents who can afford to go to an independent school, and the rest, has grown bigger under Labour. The government is worried sick about the inability of enough young people from comprehensives to get into “elite” universities. It seems to think the answer is to lecture the universities about their admission procedures instead of tackling the underlying problem, which is the standards achieved by those leaving the state schools.

True freedom would come from allowing people more choice, and allowing a much wider range of schools to spring up. If parents and students had more choice, bad schools would shape up or drop out more quickly, and good schools would expand faster.

I would like to see everyone go to an independent school. We could invite the state schools to become not for profit trusts, educational charities, companies, teacher co-operatives or whatever structure they liked to speed independence and change. Parents would be able to choose a school from the whole gamut of independent schools then on offer, with the state paying the fees up to a prescribed limit, which ensured that everyone who wanted one had a free place. I would allow top ups, so some parents would buy a dearer school place partly with their state money and partly with their own money. The stark division between those with free places at state schools, and those with very expensive places at a limited number of private schools would be abolished. Pupils would be paid for by a variety of means including the state payment, scholarships and parental top up at the dearer schools. Everyone turning up to university interview would come from an independent school. Parent power would be far more effective at raising standards than armies of bureaucrats, reams of advice and guidance, and the top down test and target culture.

Freeing the traveller

Nowhere has the snooper and tax inspector society been so pervading as in the field of transport. Motorists have been treated as one remove from criminals. In the name of the good aim of raising safety standards on our roads a whole range of measures have been brought in which have failed to improve safety but have limited freedoms and created a nightmare world of rules, taxes and surveillance.

The evidence is strong that excess speed is the cause of a small minority of accidents. Yet in the name of safety the concentration has been on placing ever more varying speed limits on roads, and spending on technology to enforce them. The evidence also abounds that segregating traffic travelling in different directions, creating more space at junctions and providing safe separate facilities for pedestrians and cyclists is the way to improve safety. Instead we see more and more examples of road narrowing, junction narrowing, mixing vulnerable road users more with cars and lorries and ever more signs and instructions to drivers. For ten years there has been no attempt to ease congestion and therefore reduce pollution by improving our roads in a sensible way.

For most young people freedom is based on access to personal transport. We need to accept this, and try to find ways of accommodating that wish that is safer and less polluting. Technology and commonsense are both allies in this. The policies of the last decade have failed, and have left many people frustrated, unable to get to work, the shops or to an evening out in a friendly and easy way.

Conclusions

People yearn to be free. They have had enough of the snooper society, the bossy government society, the dependency culture and the political correctness which have characterised recent years.

Not only is government and society fractured, but it is now unaffordable. The government is borrowing ludicrous sums of money to try to keep its unpopular show on the road. The suggestions I have made would both free more people to look after themselves and their families, and reduce public spending at the same time. We have too much bad government, too much needless government , and too much wasteful government. It stops us doing what we need to do to look after ourselves and our families. It is designed to create a dependence on the state which we cannot afford. It reduces human dignity, removes much self responsibility, and undermines freedom Instead of a can do culture we have a I want culture. It is time for change.

The annual Wokingham Schools Debating Competition, organised by John Redwood, is just around the corner. The first round will take place on Thursday the 15th October at Luckley Oakfield School, and the second round will take place on Thursday the 22nd October at Bearwood College, from 7:00pm. The semi-final and final rounds will be held on Thursday the 12th November and Friday the 27th November at Wokingham Town Hall from 7:00pm, and will be chaired by John Redwood.

This is the sixth annual debating competition that John Redwood has organised for schools in his constituency. The competition has been won by the Emmbrook School for the last two years. All participants receive certificates and prizes from the House of Commons, with the winning team receiving the “John Redwood Cup” for debating. The John Redwood Cup is engraved with the winners’ names and presented to the school for the year. The winners and runner up team receive a trip to the Palace of Westminster, which includes lunch with John and a chance to watch Prime Minister’s Questions live from the public gallery. The winning school also receives an overhead projector donated courtesy of 3M.

This year’s competition has been kindly sponsored by 3M, Bill Clark and Clifton Ingram. The judging panel will be made up of local councillors from the Conservative and Liberal Democrat parties, reporters from the local press, and local businessmen. Further details, including the motions for debate, will be sent to the press closer to the preliminary rounds.

For more information please contact Carl Thomson on 020 7219 4205 or Christine Hill on 0118 962 9501

Notes for editors:

1. We would be grateful if you could publicise all four evenings and encourage readers and interested parties to attend.

2. The judges for the first two rounds will be Cllr. Beth Rowland (Liberal Democrat), Rebecca Johnson of the Wokingham News and Cllr. Pauline Jorgensen (Conservative). The chairman for the first round will be former Chairman of Wokingham Borough Council, Iain Brown.

3. The judges for the semi-final and final rounds will be Cllr. Norman Jorgensen (Conservative), Ian Graham of Clifton Ingram and Donald MacDonald of RBS. The chairman will be the Rt. Hon John Redwood MP.

4. The motions for debate will be sent to the schools one month before the preliminary rounds, and two weeks before the semi-final and final rounds.

5. The dates when each school will be participating is as follows:

Thursday 15th October, Luckley Oakfield School, 7pm

Luckley Oakfield (Team One) vs. Forest (Team One)
The Willink (Team One) vs. Maiden Erlegh (Team One)
Forest (Team Two) vs. Luckley Oakfield (Team Two)
Maiden Erlegh (Team Two) vs. Willink (Team Two)

Thursday 22nd October, Bearwood College, 7pm

Bearwood College (Team One) vs. St. Crispin’s (Team One)
Padworth College (Team One) vs. Holt School (Team One)
Emmbrook (Team One) vs. Bearwood College (Two)
St. Crispin’s (Team Two) vs. Emmbrook (Team Two)

Holt School (Team Two) vs. Padworth College (Team Two)

The government told us that after endless lobbying by Conservatives, regional Assemblies were to be abolished.

Yesterday a coloured brochure with lots of pictures thudded onto my desk – not an unusual event from this government. It said it was the Annual Report of the South East Regional Assembly (SEERA) 2008-9. So they can still spend money and send out brochures after death. The front and inside cover is a photo montage of pictures of people from SEERA.

It told me they were proud of ten achievements over their ten years of life. These were:

1. REGIONAL FRAMEWORK
2. CONSULTATIONS WHICH PEOPLE REPLIED TO
3. LOBBYING PARLIAMENT
4. SOUTH EAST PLAN (not to be confused with Regional Framework)
5. FIRST REGIONAL TRANSPORT PLAN (you can’t go to work on that)
6. LEADERSHIP OF REGIONAL HOUSING BOARD- “although we are currrently delivering only 60% of the affordable housing needed”
7. CONSTRUCTIVE SCRUTINY
8. PARTNERSHIP WORKING
9. CONSENSUS BUILDING
10.BUILT A REGIONAL PLANNING TEAM

So they do not think they had any achievements we might value – no success in building roads and railways, sorting out infrastructure shortages, or raising educational standards. The CEO of SEEDA, the Development Agency, said herself that they will not meet their targets for growth!

At the Regional Grand Commmittee we were handed half way through a Report of the Regional Select Committee. This told us amongst other things that though the Regional Assembly may have gone (One cheer), we have instead a Leaders’ Board, a Partnership Board, and a “virtual team” to re-employ some who might have lost out from the abolition of the Assembly. SEERA Ltd carries on despite the death of SEERA itself,and will be recruiting staff!

So abolition of SEERA, which we want to mean abolition of unelected regional government, just leads to a new alphabet soup and a continuation of the spinning, lobbying and planning by other means. The bodies seem to be preoccupied dealing with a few millions in a scheme here and a few millions in a scheme there – money that could help when seeking taxpayer savings – but which amounts to very little when pitted against the size of the South-east economy (itself an absurd construct as it leaves out London!) The debates seem to be about the economic benefits of schemes spending less than 0.01% of “regional” output.

Let’s get rid of all these unelected quangos and their penny packet budgets. Their passion for consultation and planning has paralysed public sector investment in transport and education instead of helping them. Their plans look more and more absurd ,as the Credit Crunch dominates the performance of the economy and renders useless all their targets.