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Sunday, October 04, 2009


Cameron, Osborne & Clarke

The Conservatives celebrate their reunion with the Sun by a Blueprint of 10 promises. Mark Wadsworth is writing negatively in detail on them. My opinion is positive. This may be because I had lower expectations or because I recognise this is a sales brochure & thus bound to contain a certain amount of fluff. The promises are in bold with my comments following:

1. We will work with councils to freeze council tax for two years - saving more than £200 for the typical family. Since it doesn't say how this is fairly fluffy. "How" should include cutting all the rules & advice central government imposes on them.

2. We will reassess 2.6 million people on incapacity benefit to see if they are fit for work. every out-of-work claimant capable of doing so will be expected to work or prepare for work. Everybody knows most of them are & that incapacity has been used by both this & the last government to hide unemployment figures. "reassess" & "or prepare for work" is not setting the bar high but it gives the potential to do so.

3. We will replace the Human Rights Act with a new British Bill of Rights to strengthen Britain's traditional liberties. I am in favour of this. The fact that Britain didn't have written constitutional limits on government has always been a potential weakness & an increasing actual weakness in recent years. The European Act is a mess of apparent good intentions extending state power. As always the devil will be in the detail.

4. We will cut the number of MPs by five per cent, and ministers' pay by five per cent and reduce the number, size, scope and influence of quangos. The first part is tokenism. Quangos do need to be drastically slashed & I am seriously disappointed that the promise is simply to "reduce" them & that it is the tail end of the promise.

5. We will honour the Military Covenant we have with our brave troops and make sure they are properly equipped to do their jobs. We will also introduce a free sports and entertainment Tickets for Troops programme. Who could be against this. It is up there with motherhood & apple pie. The free tickets thing should be done just by government telling the cinemas they should do it, not by any sort of subsidy, after all the marginal cost of a cinema ticket in a cinema that isn't full is zero.

6. We will cut corporation tax to create jobs, reform inheritance tax to encourage saving and build a stronger society by rewarding families in the tax and benefit system. OK admit it this is the one. I have been trying to persuade people on CT for more than 6 years. It, plus the cutting of regulations, is what got Ireland its 7% average growth rate. CT is the single most economically destructive tax since it targets investment & within that disproportionately targets the most successful businesses. It takes courage for the Conservatives to promise a tax cut to big business when the pressure will be upwards elsewhere. I would suggest to them that they do a 20% cut (5.5p in £)(cost £10 billion) in the budget immediately they come in, which can be sold as a better stimulus than the things they are going to have to cut & make a promise that they will not allow the CT tax take to rise above present levels. The Laffer curve suggests that any cut in CT leads to sufficient growth that the take rises to at least the same level. That plus the fact that recession artificially depresses the current take suggests that within the Parliament a reduction to Ireland's 12.5% would take about the same amount. Since investments now decided on will take a few years to show a profit that sort of cut would be nearly as effective as cutting to the Irish rate immediately, & much easier. I note that this, which is a new policy, has been put ahead of the promise on cutting inheritance tax which was previously their standard bearing policy (on the Marr show today Cameron promised the latter only "within the length of the Parliament". This means they are serious about CT.

Cutting Inheritance Tax does have an economically beneficial effect & encouraging married families has a beneficial social effect.

7. We will get to grips with national debt and public spending, to keep interest rates lower for longer and boost investment - this is vital for recovery. It is indeed vital & "get to grips" is not exactly a promise of success. However I would be happy to see the deficit grow if it meant cutting CT & thus achieving growth. Better both the economy & the deficit growing at 7% than that neither are, & I suspect easier too. If the economy were growing at that rate then lenders would be reassured & thus interest rates kept down. 6 & &, if taken together, suggest that growing the economy is indeed the priority.

8. We will help restore discipline to schools by giving heads the final say on exclusions. Our NHS is special so we will protect its budget. Absolutely. Bring back the belt too. Interesting that discipline in schools takes priority over the HNS. However I am disappointed that there is no specific mention of the Tories introducing the voucher system in schools which is one of their most radical & beneficial ideas & one which should be, on balance, popular. "Final say on exclusions" may be code also implying that they, not local authorities, decide that people can come there which is the voucher system.

9. If the Lisbon Treaty is not yet in force at the time of the next general election we will suspend ratification, hold a referendum and campaign for a No vote. More on this re the Marr show.

10. We'll double magistrates' sentencing powers from six month to a year and make sure knife offenders can expect to go to jail. And we will get more police officers on the street by slashing paperwork, including the stop and account form. More motherhood & apple pie but note that Labour did manage to greatly increase police paperwork.

So nothing I think silly, which alone puts them well ahead of Labour & LibDims & a promise to do the thing which, I have been saying for years, would fast track the economy & seriously raise our standard of living.

Compare this with my 16 point plan to get into maximum growth. They are promising the CT cut & less clearly the regulation cut. I would have liked some specific promises on cutting those regulators with negative economic benefit (elfinsafety, building planning, all the committees & reviews whose only function is to make buiding anything from reactors to golf courses slower & more expensive) & something about the need for getting on with nuclear building - however I can see why that is not shop window stuff. And yes I would like promises on the tech stuff as well but those are not for primary promises. I have noticed that in most of Palin's speeches & articles she mentions "economic growth". I think this is both tactically wise of her & shows she really gets it. I would like to see David Cameron doing the same.

While the party are now officially pro-nuclear they are not so with the necessary enthusiasm. Even the government have acknowledged blackouts are coming by 2018 & that assumes no economic growth. Labour have been officially pro-nuclear for 3 1/2 years though, while that is long enough to build a reactor, they have allowed nothing to be done. Nonetheless it means supporting it & promising real action, is hardly risky. Particularly against the LibDems this is something to mention because their policy of a "renewables revolution" at all costs, now quietly unmentioned, is grossly irresponsible & can be seen to be so.

Cameron Interviewed on Marr Show

This morning Cameron was interviewed on Andrew Marr's show.

He was questioned on the EU referendum (point 9) & interestingly finessed his position. He said that he was not going to say whether he would or wouldn't have a referendum if the treaty was ratified before the election because he didn't want to make it easier for the Czechs & Poles to choose not to delay it. Now maybe he is just whistling but the only logical way that works is that, if driven to it, we will have a referendum but he doesn't want them to rely on that. It also strikes me that if it is ratified before the election, which seems most likely, he will have to make a decision.

My opinion is that the Conservatives have little to fear from going for a referendum. Whatever ructions it would cause would be less than the damage to Labour/LibDems from the repeated reminding the voters get that both of them made manifesto pledges to support a referendum & cynically broke their word as soon as the last election was over. Voters don't like such contemptuous behaviour.

If the constitreaty is ratified the Conservatives should adopt the official LibDem policy of having a referendum on membership. Because it is, officially, LibDem policy it is difficult to call it extreme & they would be in a cleft stick. It should be a 3 option referendum - status quo with treaty / leaving / associate membership like Norway & Switzerland. I think the party should, as a party, be neutral & Conservatives, like Ken Clarke totally free to campaign as they wish. I would very much like not to put Clarke in a position where he felt he had to resign because he was a very able Chancellor who could, several times, have become party leader if he had been willing to curb his Euro-enthusiasm. I think he is on the wrong side there but politics is not overly endowed with people willing to put their principles ahead of their ambition & I respect that even when I disagree with the principles.

Cameron was quite clear that the economy was the issue & made a point of saying that current unemployment is 5 million (including those hidden on "disability" payment. This suggests he is setting a high target & serious about doing something. Marr harped on "how many jobs will your cuts cost" to which Cameron properly replied that he didn't accept the premise of the question. On this he is certainly right & Marr/BBC wrong. Marr suggested 2 million which is everybody added to government under Labour. This would certainly be ambitious & produce savings which slightly exceed the £180 bn deficit. However the point is that for every job "created" by government money 2 or 3 are destroyed by that money being taken out of the productive economy. This is simply fact & Conservative politicians should be willing to say so.

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