Nov 21 2009
A seismic shift in politics this week
Underneath the crude politics of the Queen’s speech were two great watersheds. This week was the passing of an era.
The government seems to have moved on from any idea that we can win a war in Afghanistan by pitching troops into battle to win and hold territory. The impossibility of putting in enough troops to garrison that vast and difficult country has at last dawned on Ministers. Whatever they may say, the hunt is now on for an honourable exit that can leave us with some reason for past sacrifice and with some hope for the future. Even if reinforcements are sent in the short term, the remit will be fundamentally different. The aim will be to support the civilian power and to reinforce a political strategy rather than to win and hold territory. The West needs to talk more and fight less in the Middle East. It now also needs to pursue its own self sufficiency in energy to curtail the power of King Oil.
The second even starker watershed was the one on public spending and borrowing created by the government’s Deficit Reduction Bill. This Bill has two origins. The first is the Treasury led market imperative. The deficit sums are so implausible that it is only a matter of time before the markets force up interest rates on government debt. Even this government will have to stop the printing presses soon. The Treasury is seeking to reassure that sometime soon the government will take its deficit in hand and start to return it to more realistic levels. The second is the manic politics of this dying administration. Labour strategists think it would be a good idea to force the Tories hands, to smoke them out, to put them in a straightjacket for a future Parliament should they win. The government wants Conservatives to have to run on Labour spending plans for the next Parliament so they can portray them as the party of cuts.
It is one of the stupidest attempts at digging a poltical trap I have ever seen them attempt. No incoming Conservative government need feel bound by Labour spending plans, even if they are set out in law. All would expect a Conservative Chancellor, if one is victorious, to review the public finances urgently and produce a new set of spending plans tailored to the needs of the economy, the fears of the markets and the priorities of the new Parliament. It would be a minor matter to repeal or amend any Budget Law he inherits as part of his first Budget, with the Finance Bill offering the obvious legislative route to put things back on a more normal budget footing. There is no need for a Tory to walk into Labour’s trap. It can be sidestepped by behaving normally.
It will instead prove to be a trap for Labour. Now the Opposition does not need to have its own answer to the question how big need the cuts be. It will be able to say that halving the deficit by spending cuts is a necessary good start recommended by the government to its successor. These can rightly be seen as Labour cuts on Labour spending plans. Some of the balance of the deficit may be curbed by economic recovery. The Conservatives may wish to shift the priorities when they see the small print of the Labour plans in the Pre Budget statement. They need not incur Labour’s wrath by suggesting a different total, as Labour itself is proposing almost £100 billion of spending cuts or tax increases.
John Redwood has been the Member of Parliament for Wokingham since 1987. First attending Kent College, Canterbury, he graduated from Magdalen College...
A change from “halving the deficit” to “halving overall spending” would change everything. An entire culture change from waste, indulgence, inefficiency, dependency and bureaucratic folly to a self reliant, can do and dynamic outlook.
Not that there’s any chance of that with all the vested interests in control. What will actually happen is the ruination of the British economy and subjugation of it into the Belgian empire.
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Ross J Warren Reply:
November 21st, 2009 at 6:40 pm
Captain Baines. I note that you say “Belgian empire.” , I would have said reborn Roman Empire, as it is founded on the treaty of Rome.
“An entire culture change from waste, indulgence, inefficiency, dependency and bureaucratic folly to a self reliant, can do and dynamic outlook.”
In other words a Conservative revolution, which I believe is absolutely possible Two key ideals, can help with this Localism, and letting the right people rise to the challenge. Central Government cannot micromanage the whole economy. Labours attempt to do that, has been the exact opposite of your above comment, and extremely
expensive. The Third Sector is waiting on stand by for the day, a good and decent Government takes on the mantel of the rule of law. We have so much talent sitting waiting to encouraged into action. After Food and Drink, Shelter and fuel, it has always been culture that has been the single most valuable asset a nation could possess. Yes maybe we are now part of a New Empire, so is it not time to start enjoying the fruits of this union rather than assuming it must drag us down. Our economy needs product, and we have often led the world forward. If we look to government to encourage the freedom to act in confidence and we make it possible for
Organisations like charities to branch out, we can find much work for willing hands.
Rather than mico-management Government, should be in the business of Macro-encouragement.
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Captain Baines Reply:
November 21st, 2009 at 9:54 pm
Sir, you are an optimist and as such sadly doomed to eternal disappointment I fear.
The Roman Empire is an apt comparison as that eventually collapsed because of the weight of central bureaucracy, over regulation and incompetence/corruption from it’s leaders coupled with resource depletion.
All empires do collapse and ours (i.e. industrial society) is well on the way. I give it 10- 20 years at best. I’ve been described as a doom monger but reality is unavoidable and doesn’t care if we like it or not. Better to face it and try to mitigate it’s effects rather than deny it and not be ready.
I recommend reading Jared Diamond’s work.
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Ross J Warren Reply:
November 22nd, 2009 at 10:34 am
“I recommend reading Jared Diamond’s work.”
I will, but of course despite my optimism, which is a gift of the spirit I believe. I know we are in deep shi* in the west. Oil running out is of course by far the most pressing concern and is why I have never owned a car, and relocated to a pleasant suburb of Swindon. Indeed by empowering the third sector today and by being honest that any Oil boom 2, will be the last, we can indeed start to mitigate and put in place the Right thinking that will allow us to prosper in the longer term. Those irresponsible folk who attack the CO2 theory are dangerous in my opinion. Not that I believe CO2 explains the rise in temperature that dates back to the end of the mini-ice age, but it makes very great sense to conserve Oil and its derivatives as long as possible. As a Child I was told that our Oil reserves would last 300yrs, of course it would have had the rest of the world not caught up and over taken us in the use of this fruit of the earth.
I do note that Right minded people have always prospered and have often enjoyed a very high standard of living relative to the two-minded majority. My optimism is based on my personal experience of life, which has been sweet and pleasant, because I have always been two steps ahead in the important art of enjoying life. People often do disappoint me, but reality is a constant joy. Have a good Sunday Captain, I have some leaflets to deliver, for the local party.
The “Deficit Reduction” Bill comes straight from “Yes Minister”. in one of its more outrageous episodes.
You omitted to mention the seismic changes at the EU.
With a new High Representative from the junior ranks of the Labour “quangogracy” with absolutely zero Diplomatic experience the EU, post the Lisbon treaty, has become a laughing stock.
Brown & his gang are now beyond parody. They will not stop until reality bites. Either a call from the IMF or a General election. Or both.
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Off topic, but none the less seismic in its implications, … if true.
Looks like UEA Climate Research unit may have been falsifying date to support the unsupportable.
Also it is alleged they may have been destroying data subject to a FOI request.
http://blogs.news.com.au/heraldsun/andrewbolt/index.php/heraldsun/comments/hadley_hacked
Back on topic:
JR: “The second even starker watershed was the one on public spending and borrowing created by the government’s Deficit Reduction Bill.”
All I can say is that it is a pity and a shame that the Tory party has only been offering to match the Labour party spending for the last ten years.
If they had been making a solid cast to cut spending just imagine how much more credible a Tory party might be today.
The Tory party has been Absent Without Leave in the political battle ground.
Reply: Some of us have been warning for a long time about excess spending and borrowing. The Shadow Chancellor made it very clear in his last conference speech that we need to cut.
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APL Reply:
November 21st, 2009 at 12:24 pm
JR: “Some of us have been warning for a long time about excess spending and borrowing.”
Yes, Mr Redwood, some of you have. But those that have been are unfortunately not those who appear to be in the ‘inner circles’ of the party.
Instead we have Cameron who could just as easily be a member of the Liberal party, Kenneth Clarke, who has to all intents and purposes spent the first five years of Tory opposition in the Labour party opposing the Tories, Teresa May who probably still considers the Tory party ‘the nasty party’.
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Doomsday book of debt.
Labour tax to pay for it on every receipt and on every payslip.
If you constantly remind people in black and white of the cost, then there will be a huge groundswell of opinion to fix it.
In reality the problem will be in stopping it going to far
Nick
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Acorn Reply:
November 22nd, 2009 at 7:14 am
Nick; having filled up my motor yesterday at 109 pence / litre (R95), I checked the pre-tax and duty market price when I got back. 30.8 pence / litre. Now, if the receipt had that number at the top in big font; then plus duty, plus vat on the duty; plus vat on the retail price of the product. This way to the riot!!!
Imagine if the idea was extended to pay slips and P60s. Besides the gross pay; NI and tax the employee pays, we add employer NI and employer pension contribution. Plus, in the case of the public sector, taxpayer top-up contributions to non-funded and under-funded pension.
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APL Reply:
November 22nd, 2009 at 9:54 am
Acorn: “I checked the pre-tax and duty market price when I got back. 30.8 pence / litre. This way to the riot!!!”
Well yes.
Acorn: “Imigine if the idea was extended to pay slips and P60s ..”
That is of course one reason why they introduced PAYE, because now that the citizen is not required to estimate his tax and put the money aside, he just manages on what is left over and carries on his merry way.
Now if the tax payer had to make provision for his tax and calculate the tax then send it to the tax man each year, if the majority of the population were treated in the same manner as the self employed, well, this way to the riot!!!
Which of course is why the government doesn’t do it that way, divide and rule.
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Nick Reply:
November 22nd, 2009 at 2:03 pm
Well, if there is a labour tax to pay for the debts, then there may well be riots.
However, what preasure are the public going to put on politicians?
Thank then for the tax that produces no services?
Nope there will be huge preasure to either reduce the debt, or default on the debt in some way.
The problem for the Tories is that even though the cause of the problem is Labour, they will get the blame for implementing the solution.
Far better to constantly remind people of the cause.
Nick
Let’s remember that, when Mrs Thatcher moved into Downing Street in 1979, she soon learnt that the black hole in the Callaghan Labour government’s finances was much worse than the public had been told. Is there any reason why things would be different this time around? As far as I can see, with the incessant lies and deceit of the current administration, it will be even worse. At the end of the day, old Sunny Jim was a decent and honourable man. Nobody can say that about Gordon Brown, with his visceral hatred of the English middle class. I wonder what cover-ups we will find next year, assuming NuLab are turfed out? Untold billions of unrevealed liabilities, I am 100% certain. And don’t forget about all those PFI agreements and public sector pension liabilities that don’t even appear on the books. The Conservatives cannot possibly say what needs to be done in the coming years because the true scale of the financial problems in the public sector simply aren’t published by this corrupt and inept administration.
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Mike Stallard Reply:
November 21st, 2009 at 4:36 pm
New Labour IS the middle class. I am fed up with their pretence to care about “the poor” “the disadvantaged” and “the vulnerable” It is all about making their leaders in politics, quangos and the Meeja rich.
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Have you been reading Iain Dale’s Blog John? I said the same thing on it a couple of days ago.
“Why should the tories repeal it? They can use it to justify all sorts of cuts and then blame Brown. “We are following his fiscal responsibility bill” they can say. Cue outraged silence from the Labour benches.”
http://iaindale.blogspot.com/2009/11/what-if-theres-no-growth-emily.html
I agree with you John – what a phenomenally stupid attempt at political manipulation. I’m no political wonder-whizz, but even I saw through this one as soon as I heard about it.
Reply: No, I did not take this idea from another blog. If I do repeat someone else’s comments which I have seen I always give them the credit.
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Hawkeye Reply:
November 21st, 2009 at 2:43 pm
John said: “No, I did not take this idea from another blog”
You sound a bit offended John. My comment was not meant as criticism or an attempt to establish credit or priority.
Maybe I should have put a smiley after it?
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On the surface, a bill passed by Labour requiring future governments to reduce the deficit would give said future government the opportunity to blame Labour for any hardships involved.
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I would seek to implement the CBI £120 billion cut back agenda on the public sector in the next Parliament.That could finance paying down the PSBR as could monies raised from selling bank shares and the cash repaid to the taxpayer by the banks.
VAT could rise by 7.5% to 25% to get the deficit down by about £37.5 billion right away and the economies from the said public sector reforms would appear ASAP.
That could cause deflation/depression and so the Bank of England could just keep the printing presses going a bit longer to offset that.The money printed could fund a rebate for all basic rate payers of say £1,500.That would get £33 billion into the economy which might cancel out the deflationary impact of an instant £25 billion spending cut & the VAT hike.
The threated crunch on credit cards in 2010 and the need to cut the deficit as well means that a major reduction in public spending is needed.But some fiscal activism by printing money to get to taxpayers might be needed as the situation could be grim enough without the effect on demand of fiscal tightening.
Making most taxpayers £1,500 better off by printing money could permit a drastic fiscal tightening while not causing a double-dip recession.That could avert a wave of people going broke on the back of credit card debts being called in.But equally the loss of the AAA credit rating could cause a collapse in sterling,soaring interest rates & inflation and a depression.So urgent action on public spending & borrowing is needed too.
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Can we not stop paying 100 people at the BBC £20 million and ax the £47 million of bonuses to MoD pen-pushers ?That could fund £67 million to get more equipment to our troops and hopefully reduce casualty rate.Sounds like a common-sense use of public money to me…
It is an outrage that money is wasted on BBC parasites and office boys & girls while our under equipped troops die in this dreadful war.
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Alan Reply:
November 21st, 2009 at 3:18 pm
Actually the Army has always been quite reasonably equipped, and its equipment is being improved as the special needs of the Afghan war become clear. Some of the credit for that is due to the civil servants in the Ministry of Defence. Civil servants who have worked hard to bring in new equipment as quickly as possible deserve bonuses.
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[Steve Cox - 12.18pm] You are absolutely correct about the horrors which will be revealed – in my belief it is one of the reasons why Brown simply will not contemplate defeat at the GE and will use ANY device to avoid it. It will be one of the conservatives jobs – should they win – to relentlessly keep pointing these out to the public to gain support for the more drastic action required due to the situation being much more serious than anticipated – serious though the anticipation is. I read that Portillo is predicting a conservative govt would raise taxes and not cut spending! It is not what I would have expected. He bases this prediction on the fact that the conservatives are reticent about it now and the fact that they did not succeed in doing so when last in govt. I believe the sharper the measures on spending the faster the recovery and infinitely better prospects for this country [and therefore for its people too]. But very hard it would be. It is why we need intelligence and courage from Cameron and the conservative govt.
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alan jutson Reply:
November 21st, 2009 at 2:27 pm
Brian
Certainly agree with you (after examination of the books) about listing the financial debt this lot have got us in.
Have also been posting for more than a year now about listing all of the tax increases which have been loaded onto us as well.
All of this extra money going into government coffers and we are in record debt, still havemassive and growing pensions liabilities, massive PFI contract costs, increases in EU subscription.etc etc
Now a devalued Pound as well
What a waste of 12 years, this Government has been spending our money like a drunkard. But still many of their own MP’S do not undersrtand the scale of it.
IT HAS TO BE MADE PUBLIC so that they do not ever get in again, They have been totally and utterly incompetent.
Shame on the media as well for allowing themselves to being hoodwinked by spin and lies for 12 years.
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brian kelly Reply:
November 21st, 2009 at 8:55 pm
Correct in every respect. It is a disgraceful story from a disgraceful govt. And now, in the twilight of their tenure, they tiptoe along, avoiding the drastic measures so desperately required in the hope they can creep through, under a veil of spin and lies, to the next election whilst painting the conservatives as a slash and burn party. All this while the country is burning and they know it is burning. These are shocking acts of deceit and negligence. But they run the danger of miscalculating… it is quite likely that each day the public’s hatred grows and that some calamity occurs [like the downgrading of our credit worthiness] and will then be totally decimated at the GE.
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Enshrining the need to pay off the deficit in law is so utterly pointless and stupid, as you say, that one has to wonder just how bad the books actually are.
Only Labour knows this, at the moment.
Once the Tories are in power, their first job should be to analyse the state of finances and immediately publish the figures and their implications, so that people are in no doubt that this problem was caused by Labour.
Should they fail to do so, the Tories will find that Labour will use their deficit bill to beat the Tories over the head with spurious cries of profligacy and economic incompetence.
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I’ve just discovered this blog site. It is superb. I will now read this in preference to all others. Thank you Mr.Redwood.
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Afghanistan: where is President Obama? I got this from this week’s Spectator. He is nowhere to be seen. He is not in touch with Mr Brown who, apparently, he cannot stand (a chase was mentioned). Meanwhile, there is drift while he goes round chumming up with the Russians and Chinese who, at the end of the day, aren’t that interested in American ideals of jeffersonian Democracy, anti racism etc etc.
The Debt: Harriet Harman put it best today. She said that the debt was needed to inflate the economy. If this meant supporting the public sector while the private sector was struggling (or words to that effect) then, that was best for this country. It was all only temporary in the world crisis until the storm was past. then normality would quickly be resumed.
I reckon that words which the left uses could be trotted out here. What about “swivel eyed”. Allow me to suggest” Debt Denier” (that could be made a criminal offense, perhaps?) what about “Reality Sceptic”?………
PS Jacqueline (just above) is so right – well done!
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When asked didn’t Brown indicate that rather than spending cuts he was planning tax increases? That is his way of pretending to halve the deficit. The “dividing lines” Labour’s propaganda machine will push will be Tory spending cuts and inheritance tax relief for the few, against Labour’s protection of public services paid for by more taxation. They will also attack you for planning to cut spending in 2010 which they will say would stifle any recovery and lead to a double-dip recession. Just what they expect tax increases to do to any hopes of economic recovery is an open goal which you and your colleagues need to score as often as possible before the election. Your colleagues on the frontbench need to be more decisive and confident in explaining your remedies for recovery without sounding too arrogant or appearing to take the result of the election for granted.
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I never actually thought about this Bill from the viewpoint that you have (and I’m sure you are correct).
I had thought that Labour introduced this Bill to try and give some reassurance to the public that they do know that the policy over the last twelve years of massively increased public spending due to Gordon Brown having mastered ‘boom and bust’ and keeping the economy in permanent ‘boom’ mode was shown to be the Emporer’s clothing that it was and that they are now willing to eat a large portion of humble pie and start cutting their cloth according to their means.
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Off topic
Have you any views with regards to the exposure to the Global Warming Scam which the Government has largely funded via the now discredited Climate Research Unit (CRU)
Parliamentary majorities or not, someone with real integrity needs to ask some very serious questions in Parliament.
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It’s both a crying shame, and a mark of Tony Blair’s disordered arrogance, that he never paused to wonder why Alexander the Great looked at the area now known as Afghanistan and thought “perhaps not”.
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[...] John Redwood looks back on a seismic shift in politics this [...]
I agree with what JR and most say but the really seismic shocks need to happen after the next general election, to the Labour lot so the stupid experiments they have perpetrated on this country don’t happen again for a very long time.
At the least reverse the damage to parliament. Whilst I have become impressed by the stalwarts of the debating chamber such as Mr Redwood and others, attendance needs to dramatically increase on all sides of the house. No matter how great the majority, surely government needs to be reporting and justifying its actions and proposals. Perhaps pass a bill to that effect
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Strikes me that the Conservatives are setting their own traps and walking into them.Go ahead with promising cuts ,curbs on public sector employment or actual redundancies,tax rises and nothing to stimulate the economy beside hand flapping about making banks smaller and more competitive (their innovations have been so successful!) and the Conservatives could still lose the next election.
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This was before reading The Observer and its headline about poll lead narrowing. You cannot expect the electorate to vote for a hard time ,especially when they do not feel they were responsible for the economic collapse which they rather blame on the smoothies in the City: the class of person epitomised by the Conservatives’ choice of leaders.It is too late to oust the Bullingdon Club contingent,but the Tories need to find a few token
working-class spokes people.Or anybody that fits the serious people for serious times bill.
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