China has responded strongly to this advice, telling the USA not to meddle in what China regards as her business. Premier Wen advises the USA to look to itself to sort out why it imports too much and exports too little. He managed a good side swipe at the hapless US President, by reminding the world that the uSA refuses to export some of her hi tec wizardry to China, items which China would like to buy.

The renminbi is a managed currency. There are tight restrictions on who can buy it and how much they can buy. It is not the official currency of either Macau or Hong Kong, relatively more exposed parts of the Chinese economy to world finance and trade. As Premier Wen explained, policy is to “keep the yuan (the highest unit of the renminbi currency) basically stable at a reasonable level”. The managed rate will only be changed if it suits China to change it. At the moment they think it adds to world recovery, as it enables China to grow rapidly.

There are two important questions for analysts to ask.The first is, could external events and US pressure lead to such a revaluation? The second is, might China wish to revalue the renminbi any time soon for her own reasons?

It is extremely unlikely that China will give way so soon after making a clear statement she has no intention of doing so. That would entail loss of face. China is also all too conscious that she owns large sums in dollar based investments, so any revaluation of the yuan immediately leads to a substantial loss on her holdings, as well as making it a bit tougher to export. The main thing she wants from the US – the cancellation of weapons exports to Taiwan – is unlikely to be conceded by the President, as that would entail too big a loss of face for him. US diplomacy is counter productive, delaying a revaluation which might other wise occur.

For there are domestic reasons which might lead to a revaluation. China has a growing inflation problem. The rate rose to 2.7% in February, and could rise a lot higher this year, following the explosive injeciton of credit and spending over the last year. China has started to rein in by ordering more bank reserves. She can do more of the same. A revaluation would also help cool the domestic economy, whilst cutting the prices of imports and helping a little with the inflationary pressures. She has not yet raised interest rates, fearing that could abort the recovery in a world where other economies are still struggling.

A revaluation of the renminbi is possible, but is not an immediate probability. The US could delay it further by overdoing the pressure on China. The USA does not have a very strong hand. The outside risk is the USA for internal political reasons overdoes the posturing against China and embarks on a course of tariffs or other restraints on trade. A more likely outcome is delay, followed by the inevitable revaluation of a strong currency for a country which remains super competitive at these exchange rates.

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The ferocious spin has been relentless. Anyone who believes, as I do, that more decisions should be taken democratically here in the UK and fewer bureaucratically in Bruswsels, is branded as extreme – even though voices on the left and of no particular leaning think the same.

Anyone who believes as I do there ought to be better rewards for hard work and thrift, and think tax revenues would be bigger if we set lower rates of tax, is also branded right wing. We are deliberately said to favour cuts in schools and hospitals, despite our view that our approach would expand the revenues, and our constant reminder that we did not come into politics to sack teachers or nurses.

Anyone who questions the wisdom of some new set of regulations on the grounds that they might not work, is said to wish the harm the regulations purport to be against. I have been accused of single handedly causing the problems in banking owing to my belief in deregulation, despite writing a report saying they needed to regulate cash and capital more strongly and intelligently than they managed.

So it is for the Conservative party as a whole. Labour’s surveillance society, its poltically correct agenda, its belief that every problem can be solved by some combination of new regulation and public spending has been the zeitgeist for too long. Too many interviewers conduct interviews from the proposition that all public spending is good and more is better. They ask questions based on the assumption that laws and rules stop bad behaviour, and that if you question their efficiacy you condone it.

Labour tries to set the agenda to stop the Conservatives speaking well on tax, on Europe, on social policy and on immigration. It is time to throw off this constraint, and to change the terms of the debate.

“Britain is in serious economic trouble. Not only have we just had the longest and deepest recession on record, but our recovery is one of the weakest in the developed world.

This has all happened on Gordon Brown’s watch. But now the man who promised “no more boom and bust” says he’s got us through the worst of the storm, and all we need is his hand on the tiller to steer us through the choppy waters.

That is 100% wrong. He didn’t steer us safely through the storm – he made it worse for us, by spending and borrowing so much.

So, we’ve had enough of Gordon Brown’s hand on the tiller. We need to change course – as I explain in this week’s video message.

We need to act now to show the world we’re serious about paying back our debts. We need to get more for less with government spending – just as families across the country are having to get more out of their money. And we need to make Britain the best place in the world to do business.

That’s the big choice on our economy today. Five more years of Gordon Brown – or change with the Conservatives with the energy, leadership and values to get Britain moving again.”

The irony is that UNITE are simply arguing in one company for the approach that Labour wishes to take with the national budget – to put off reform and keep on spending. We need to ask the PM why it is necessary for a company – or a family – to bring their costs into line with their incomes, but not for the nation.

The truth is that most of current policy is very old Labour. These are the bank nationalisers, the people who wantonly threw billions of public money into banks which had been brought low by a change of rules of their very own regulators, following the banks’ all too willing response to previous encouragement of too much credit by those same regulators.

These are the over regulators of our daily lives, the people who wish to force dog insurance on dog owners and spend hours thinking up new ways of taxing and controlling motorists. These are the men and women who sent in the thought police.

These are the people who think there is a public spending answer to every social problem, regardless of whether the nation can afford it or whether it works. This is a government of the control freaks, of borrowers, and of wasters of other people’s money.

It is true it is also a NULabour regime to the extent that it believes you can control what people think most of the time by superior spin, paid for by taxpayers.

Many people have fallen for bank nationalisation, because Labour allowed former Labour Councillor Vince Cable to front run the idea for them, with the government “reluctantly” giving in to this “moderate” lobbying. Sensible alternatives to avoid bank collapse and to protect taxpayers were carefully kept off the airwaves or airbrushed out of the official script.

Some may now fall for the idea that UNITE and the government are at loggerheads, and the government is not in favour of such strikes. The test of that proposition is will Labour give any of the money back to the Union which they have received, saying that they think it wrong to have taken money from people who behave in a way they condemn? Will the Union tell the governing party it will not be receiving any more in the future because the Union disagrees with Labour’s stance on its strike? I doubt it.

We will be told endlessly that public spending has to continue at full throttle all the time the recovery is so weak. We need to ask why Greece was brought up with a jolt by the markets for following Labour’s policy on spending and borrowing? We need to ask why is the UK so different from Iceland, Ireland and Greece, all of whom have been forced into bigger spending cuts and interest rate increases owing to their failure to take timely action?

We will also be told that taxing the rich is the answer to the deficit. This morning’s news that their changes to Non Dom taxation may end up losing us tax revenue should be no surprise to sensible people. Their 50% tax rate will also drive successful people and businesses away. The proof that this lot are old Labour is their belief that you maximise tax revenue from the rich by raising the rates, and that in itself is enough to pay all the bills.

As readers of this site will know, you maximise tax revenue from the rich by lowering rates – and you increase it from the not so rich by exactly the same means. We also know that the deficit is so huge, any additional tax from a tax the rich policy that worked would not solve the problem on its own.

Respondents fall into four categories.

Long term opponents of the Conservatives are critical of the messages. That is no surprise, and would have been true whatever had been put out.

Some loyal Conservatives are pleased with them, and will get on and put them to electors once the election gets underway.

UKIP supporters and sympathisers are critical. They want the Conservatives to speak mainly about the EU, sovereignty, immigration and related subjects. Time will tell how many of them carry out their threat and vote UKIP, knowing as they must do that it makes the election of a federalist MP in their seat and an overall federalist Lib/Lab government more likely.

Some Conservatively inclined voters are also expressing doubts, or sending in messages they would prefer the Conservatives to get across. Many will find that their concerns are covered in policy statements, available on the Conservative official website. The next few weeks are not just about how the swing voters swing, but how many traditional Conservative sympathisers do finally decide to vote for a change of government. There is only one realistically on offer, and that is change to a Conservative government.

Traditional Conservatives need to be reminded that their party has pledged to reverse some Labour policies they most dislike – the one way ratchet of powers to Brussels, the lack of proper border controls, the surveillance society and the ballooning deficit.

As a non Euro member it would give the UK a good opportunity to bow out of more of the needless EU government that we do not want, and would give us the opportunity to have a refererendum on the Treaty as modified. Clearly the UK should not be party to the bails outs or the rules imposed on Euro members. The EU would doubtless need to give us substantial powers back to make a new Treaty palatable to the UK public.

A single currency scheme either needs a single government which can make the calls on how much to borrow, how much to print, and how much to spend, or it needs a set of rules over how much each of the individual memebrs can spend, borrow and print. If I were a German taxpayer I would not wish to bail out Greece. I would not be satisfied they have done enough to cut their spending. I would be worried in case Portugal, Spain and others were in the queue for my support as well.

Why do these governments whinge and whine so much about the need to reduce their costs? Business accepts that in recessionary times you may need to cut costs by 10% or 20% to survive. You just get on and do it. You don’t do it by threatening your customers with a worse service, or by cutting back your front line service or best product offerings. You do it by working smarter and cheaper.

These EU governments – and the UK – have failed to make themselves efficient and to discipline their costs for years. That should make it easy to cut the costs of doing what they need to do. They should be told to get on with it, instead of seeking new ways to milk the taxpayer. Borrowing more is just delayed tax.

A 35 minute drive to Heathrow, a one hour flight and a thirty minute taxi journey were bound to be shorter, even allowing for the waiting and checking time at Heathrow. I estimated I could leave home at 7am and still be there for 10.30, and so it proved. Three and a half hours. Not good, but fewer links to go wrong.

I could have driven to Euston, but that would entail battling the congestion and heavy London traffic in the morning rush hour, culminating in a difficulty in parking no doubt. That would have taken the best part of two hours, still leaving me with more than a four and a half hour journey if fortunate.

The cheapest option and maybe even the quickest would probably have been to drive the whole way. There was parking at the other end.

We learn this week that after 13 years of dithering and failing to put in any significant new rail or road infrastructure (other than the Channel link which the previous government had planned) the Transport Secretary suddenly wants to slash journey times by train to Birmingham. Of course, on closer inspection he does not expect the government to do this any time soon. It looks like an announcement for an election.

As my journey indicates, for many of us the problem with train travel is getting to the right station to jump onto a faster train in the first place. The endless congestion in most town and city centres near to stations is the number one problem we all face when thinking of train travel. If I lived near Euston and if my meeting had been near Manchester Picadilly it would have been a no brainer to go by train, but few of us are in such a position.

We want easier, cheaper and more timely point to point jounreys of the kind we actually undertake. My journey to Manchester did not need a faster train from London, but easier access to local stations, and faster trains from local feeder stations to main termini.

The government is always talking of joined up policies and integrated transport policy. True integration would improve junctions and roadspace to allow us road access to main stations, and provide plenty of parking when we get there. Then people might switch more to fast trains, and the train might indeed take some of the strain. At the moment the anti motorist policies in many cities gum up the works, force the use of more fuel per mile travelled, delay and frustrate motorists and impede access to rail services. Instead of grandstanding about ever faster trains on a few routes, Ministers should think about real journeys made by people trying to work in this country.

The tripartite regulators led by the Chancellor made some very important judgements 2005-8. Between 2005 and 2007 they thought banks had more than enough capital and cash for their huge increases in lending and investment banking. They were wrong. They allowed the banks to bloat their balance sheets in a damagaing way.

Between end 2008 and today they have told the banks they have to raise or hold much more capital and cash relative to their lending. This has unsurprisingly proved very recessionary. Again they have been wrong – they should have asked for a more sensible rate of progress to more prudence, geared to the state of the economic cycle.

If the regulators wish to make more judgements, they should consider the next possible crisis, not the last.

They should ask, for example

Is it right for pension funds to be encouraged or required to keep so much of their asset in Uk government bonds? Markets think at these interest rate levels these are risky instruments. What happens if markets lose confidence in Uk government debt, or if interest rates have to increase substantially to raise all the extra money?

Is it right to encourage or require banks to keep so much of their liquidity in UK government bonds? What happens if they fall in price?

So it is with a government running a county. If you allow your spending to exceed your income each month, each month your debt increases. If you do this for short period when your tax income is temporarily depressed by a poor economy, that can make sense. When the economy recovers revenues bounce back and you can get your finances back into order. The trouble with the UK today is two fold. We went into the recession spending and borrowing too much, before we lost tax revenue. We also relied on massive tax revenues from banking and other City activities, and from buying and selling expensive properties. Some of this income has gone for ever, now the bubble has been punctured.

In Parliament we keep returning to this central problem. All parties now agree the deficit needs to be at least halved. That means an astonishing £90 billion a year less spending, if you do it all by cutting spending. No previous government has ever attempted anything like that. The remaining argument is over how soon you start. As my advice to an overborrowed constituent implies, I think the sooner the better. The sooner you start the less damage you do in the longer run. Every extra pound the public sector spends today is another pound we the taxpayers have to pay back soon. In the meantime it is another pound we have to pay interest on. If you tried to do it by increasing tax rates you could end up with less revenue, as people and businesses moved elsewhere.

There is no such thing as government money. There is just taxpayers’ money. Every penny the government borrows, they expect you and me to repay. Their debt is our debt. The advice I have been giving to the odd constituent I now have give to Parliament as a whole. If they carry on like this we all end up in deep debt, debt we did not want and debt we cannot afford.

The good news is much of the extra spending being undertaken is money not well spent. I do not wish to see Wokingham losing teachers, nurses, police and doctors from the payroll, and there is no need for that to happen if we act now. What I do want to see is less bureaucracy, fewer high paid quango heads and quangos, the end to unwanted South east regional government, the end to ID cards, and expensive centralised computer schemes. It is quite easy to do more for less in the public sector, and that is what all of us working in it have to do. The private sector in a cruel recession has had to work share, keep pay down, remove bonuses, cancel prestige projects and favoured new schemes, and work smarter. Now it is our turn in the public sector to do the same.

I wanted to get to Manchester and back as quickly as I could. For reasons I will describe tomorrow that meant I had to go by car and plane, rather than by car and train. It meant experiencing once again the security and customer handling at Heathrow. There are a few questions I would like to raise about physical security, as opposed to intelligence and policing work.

The main worry yesterday at airport security seemed to be women who might be concealing bombs in their scarves or boots. They all had to take these off and put them through a scanner. All of us had to remove our belts, any men wearing boots had to take those off but shoes were fine, and all had to remove coats and jackets. No-one was found with anything wrong whilst I was in the queue. Meanwhile at the station no-one was searched for anything, despite the fact that terrorists have attacked trains as well as planes in recent years. The first question I have is why do we treat air and train travel so differently?

Because it took each person time to take some of their clothes off, find enough trays to put it all in, and prepare for the scanners,there was a long queue. There were not enough scanners available and open. When you choose which queue to join it is not possible to see which queue is longest, owing to the way the queues were controlled, so some people had to wait longer than others depending on the lottery of the queues. Why can’t they provide more channels? Why can’t they have proper overall queue control so waiting times are fair?

Security also required three different checks on the boarding card of each pasenger. We had to queue to have the boarding pass checked before being allowed into the security check area, we had to queue again to have the boarding card re checked to get from the security check area to the gates, and then again to gain access to the plane from the gate. I see the obvious need to check everyone at the point where they board the plane, to make sure we know who is on the plane, to check they are on the right plane and have paid the fare. I assume they also want to have a check on every person first going airside, so they can make sure all who reach airside can be accounted for. Why do they also need a third check on the boarding card?

As someone who has urged splitting up the monopoly over London airports I hope that when these main airports are in different ownership we will see improvements in the way security checks are handled. It is, after all, taking time away from shopping at the airport, and putting passengers into a mood where they are less likely to be willing to spend.

It is: “We can’t go on like this. Vote for change”

Change includes:

“Change the economy. Back aspiration and opportunity for all. Gordon Brown’s debt, waste and taxes are holding us back and threatening the recovery with higher interest rates”

“Change society. Mend our broken society by encouraging responsibility and backing those who do the right thing.”

“Change politics. Give people more power and control.”

Any comments?

After a decline of almost one quarter in the currency, you would expect both a surge in exports and a lively increase in import substitution. The absence of both so far implies several problems.

First, a lot of capacity was clearly lost in the recession. Factories were closed, people were made redundant. The last twelve years have seen industry decline as a result of high taxes and high regulatory costs.

Second, manufacturers have been finding it difficult to get bank finance for their activities. In need of cash, they have favoured putting prices up in sterling terms, taking advantage of the lower pound to do so. They have been forced to raise their margins on lower volumes given the shortage of finance.

Third, the UK in recent years has lost great swathes of capacity. JCB recently told us how small a proportion of their vehicle components they can now source from the UK. If you go into most clothes shops there are racks and racks of Asian textile products because the UK industry has been cut to the bone. UK steel plant is closing as demand falls.

We need policies that will help industry recover and build new capacity. That requires changes to taxes, regulations, and bank regulation.

Labour sought to endow Thatcherism with five disagreeable features:

1. The economics of boom and bust
2. Belief in or acceptance of great inequalities
3.Run down of manufacturing
4.Intolerance of minorities
5. Cuts in “front line public services”

They also attempted to tarnish popular Euroscepticism with these alleged failures, branding the “old” Conservatives as too Eurosceptic, and seeking to associate this mindset with the rest.

The truth is, of course, the opposite of most of this. Thatcherism was based on

1. Honest money – economic policy was grounded on targets for the amount of money that could safely be allowed in circulation to fuel non inflationary growth. Boom and bust was introduced by shadowing the DM and by John Major’s policy of joining the Exchange Rate Mechanism against Margaret’s better instincts, a policy urged on him by Labour and the Lib Dems in a consensual act of folly. The one Conservative economic error was to become too Euro friendly and to join a European scheme of economic management which was bound to fail.

2. Encouraging a land of opportunity for all, where anyone could get on in life whatever their background, whoever their father was, wherever they went to school. High Thatcherism was based on shares for all, more small business activity,sharing wealth and income through hard work and access to opportunity.

3. Manufacturing was seen as an important part of our economy. It was in the Tory years that the motor industry was rebuilt in the UK by attracting foreign captial and management following the collapse of the nationalised UK industry. The pharmaceutical, aerospace and other leading industries flourished with appropriate government help.

4. I never heard Margeret Thatcher express any hostility to people on the basis of creed, colour, religion or lifestyle. We sought a Britain that used all its talents, whatever their background. We did not wish to make windows into men’s souls or to send in the thought police.

5. In the 1980s the government pursued a radical policy towards nationalised industry, but a very traditional cross party policy rowards Health, education and the police. Each year saw real increases in funding, and the PM regularly made speeches explaining how much extra the government was spending. She did not seek cuts to front line services and valued new schools, hospitals and the additional teachers, nurses, doctors and police which she recruited.

If we compare this with Labour’s recpord, the irony is that they have come closer to their caricature of Thatcherism than the Thatcher government ever did.

1. They followed a policy which created a far bigger boom and bust than the ERM
2. Inequalities rose under Labour
3. Manufacturing output fell under Labour , compared to growth under the Conservatives
4. Labour promoted some minorities, but attacked other groups in society which it did not like. Do not be a Nimby or a motorist under this government.
5. Labour continued with the policy of real increases in spending on most public services, yet it failed to fund the army properly for the wars it wished to fight, and allowed so much of the extra cash to be absorbed in administration and pay increases that some cuts did take place despite the record funding.

The changes Conservatives are calling for today are changes to the way the UK is run. We have been run by a government of spinners for too long. Their cariacture of Thatcherism is one of their successes. It is time we swept it away, pointing out it is a tissue of lies. If only we had had the same success with growth, industrial growth and rising living standards in the last decade that we enjoyed in the 80s we would be a lot better off. The Conservatives have “changed” from the caricature of Thatcherism – mainly because most of it is myth not reality.

His five clause Bill states “The sovereignty of Parliament is hereby reaffirmed”. It goes on to protect sovereignty from treaties, other legislation and the European Communities Act, itself the fount of EU power in the UK. It would send a clear signal to UK courts that they need to follow UK law, even if this is in conflict with EU law.

I look forward to William Hague telling us if this is the way he will propose his own Parliamentary sovereignty legislation which has been promised, or if he has some other way of doing it. The Cash short simple Bill looks good to me.

Today the business voice seems united in saying we need lower tax rates to allow more business and jobs to grow in the UK. I entirely agree. They could add to their case that that would be the best way to increase tax revenues. If we carry on with Labour’s tax and pillage policies more and more companies will go abroad, cut their activities in the UK, be deterred from new investment or will simply not start up. 28% is an uncompetitive Corporation Tax rate, 50% an uncompetitive higher income tax rate, and National Insurance is a substantial tax on jobs when we need to be encouraging jobs.

A government keen to promote jobs and growth, and keen to cut the deficit, would cut the rates of tax on earning and making profits.

It is the culmination of bad handling of recruitment, training, retention and dismissal in Labour’s public sector. The strike reflects badly on both sides. A good employer should not need to make too many employees redundant, because he would not have over recruited in the first place. Redundancies can be an unhappy necessity in a business where demand suddenly collapses, often owing to government financial and economic mismangement of the economy. It should not be common in the public sector, where traditionally spending goes up every year regardless of economic performance. This year again spending will rise.

It demonstrates that the public sector still does not get how grave the national financial situation is. The government needs to sit down with representatives of all its staff and hammer out how the total pay bill is going to be cut. Will it be done by work sharing, by recruitment bans, by pay freezes, by selective closures and redundancies in non front line services, or some combination of all these? After years of overexpansion of numbers and pay we need something new to the public sector – a fall in the total pay bill. Industry has had to do this on a big scale in the recession, and has done so without large strikes and with substantial co-operation between managers and employees. When will the public sector wake up to what it needs to do?

David Cameron yesterday said ” We will never forget there is no such thing as government money. It is taxpayers’ money – your money”. He pledged to root out waste, get better value, and concentrate spending on the important areas. He wishes to start cutting the deficit as soon as possible if elected.

The Conservatives are – amongst other things – pledged to abolish ID cards, centralised computer projects, and English regional Assemblies and RDAs. They have said they intend to cut the overhead and administrative costs of Whitehall and quangoland by one third, impose a pay freeze for all but the lowest paid throughout the public sector in 2011, limit top public sector pensions, cut Ministerial pay by 5% and then freeze it, cut the number of MPs and Spin doctors, cut the government advertising budget, cut regulatory costs through regulatory budgets, cut the overhead and supervision of Town Hall from Whitehall and scrap Comprehensive Area Assessments. They would require Town Halls to list all items of spending over £500, and to list all senior staff earning about £58,500 a year with full details of their total package. They will move to a higher pension age for all.

Recognising the need to cut taxes on enterprise and jobs, they have said they will cut the Standard rate of Corporation Tax to 25% from 28%, the smaller company rate from 22% to 20%, abolish NI on the first ten jobs created by a new business for two years,and make further cuts in NI a priority. They would seek a two year freeze on Council Tax. They would reform welfare to provide better incentives to work.

There is another argument critics of too much taxpayer borrowing should use as well. It goes like this.

Borrowing is deferred taxation. It damages output and demand. When the government borrows on behalf of taxpayers, it takes the money from companies and individuals who lend it. They no longer have that money to spend. The government spends it on their behalf instead. So the borrowing cuts private sector demand at the same time as it boosts public sector activity.

Worse still, people sense that whatever the government might say, taxpayers will have to help repay all that debt with interest in the years ahead. They know that means tax increases to do so. More borrowing can make people more negative about spending up to their current incomes, as they are always looking over their financial shoulders at the next increases in taxes and charges the government will place on them.

Under the current regime there is another negative complication. Much of the money the government is borrowing will be lent by banks. This is money the banks will not then be able to lend to the private sector. Instead of the banks’ deposits being available to lend out several times over to the private sector (through fractional reserve banking where a bank can lend out multiples of its cash and capital), the new banking regulations mean the money can only be lent out once to the government. No wonder money supply growth is weak, and no wonder the private sector finds it difficult to borrow enough at a sensible rate.

So far from being expansionary, helping pull us out of recession, all this borrowing takes money directly and indirectly away from the private sector. That is why the economy remains weak.

If they really wanted a strong economy they would change the bank regulations to allow more private sector lending, cut the deficit to take less money away from the private sector, and cut taxes on income and employment to encourage more enterprise. That would be a way of supporting the eocnomy and fostering growth. There seems no danger of them doing that any time soon. They would rather go on misleading us about the consequences of too much borrowing.

If they simply print the money to spend in the public sector it is a different matter. Even this government has stopped that, as I presume they now see that can have inflationary consequences. In the short term it can push up prices by lowering the pound. In the longer term it can trigger a more general inflation as too much money chases too few goods.