Forging ahead

June 17, 2010 — simonashall

The government today announced some more projects that would have to be put on hold in light of the economic circumstances we find ourselves in. Among them was the £80m loan to Sheffield Forgemasters, which sits very close to NC’s constituency.

Labour beatniks, keen to grab back Sheffield City Council from the Lib Dems and keep them out of the Sheffield Central constituency where the majority is now just 165 for Paul Blomfield, have already been condemning this move. But to say that it will cost jobs is just nonsense – no jobs currently exist; the postponement of the loan will mean that they won’t be created as planned. This money would be better spent avoiding cuts to the hundreds of other projects where cancelled government funding will mean private contractors losing revenue and having to lay off staff.

But as they are involved in the “leaching” industry of outsourcing away from union-backed in-house public sector workers, Derek Simpson doesn’t give so much of a monkey’s about them. Apart from anything else, £80m is simply far too much public money to spend on 150 jobs, whether in Sheffield, South Wales or Surrey.

Posted in Economy, Labour, politics. Tags: , , , , . No Comments »

The 180-degree turn

June 10, 2010 — simonashall

As a student at the University of Surrey just after Labour came to power, one of the few Labour policies that I supported was the introduction of tuition fees. I sent countless letters to the student newspaper in support  and – unsurprisingly – didn’t find much room for my view among the NUS establishment. My point then was that the fee structure as originally proposed exempted many of the less well-off students from paying the fees – but that the abolition of the maintenance grant as part of the tuition fee introduction hit poorer students far harder.

But the NUS didn’t listen to me and since then things have changed hugely, with the cost of a university education now unenviably massive. I cannot think that anyone would found a nation on the principle of leaving young graduates tens of thousands of pounds in debt as a price for their education and it’s utterly bonkers that we’ve got to the stage we have.

Even in 1998, it was obvious to me that there was a pretty simple problem here. The vast majority of young people educated to A-level now wish to attend university – yet the nation simply doesn’t have the funds to allow them to do this and support the swollen university corps needed to deal with the numbers. There are, it logically follows, only two ways to deal with this – to reduce the number of students at university or to increase the amount of money in the system.

Labour’s solution, typically, was to give students money from the future and postpone the resolution of the problem until some unspecified date. Today, David Willetts revealed that even this charade had now run its course and that resolution was now needed. There is no more money left to go in.

It would be great if everybody could have a university education but I have always believed that there are far too many students taking courses that don’t improve their life chances, too many students only at university for social reasons and too many who, even though committed and willing, don’t end up giving the nation back the value of their degrees. Conversely, the amount of money going into serious research in our universities is falling year-on-year. They have become places that cater for drinking and socialising first and research and academia second.

There’s nothing wrong with drinking and socialising - but not when it’s funded by the taxpayer. And if the Lib Dems are not prepared to U-turn and countenance further rises in tuition fees, we all need to do a U-turn and consider once again what the purpose of universities and their facilities is. I believe that there are much more imaginative and worthwhile ways that those facilities can be tied into higher learning without the need of three-year courses. I also think the nation needs to work out how many university places it can afford – and what it wants to use them for – and award that number, not have a show of hands who fancies a spot at uni and then try to squeeze them all in.

Higher education in this country isn’t working, similar to many of the young graduates it produces. It’s time that we had a cultural re-assessment of the role that universities play in our society and lives because the bare fact is that the good times of universal higher education are coming to an end. In future it must be a properly integrated resource available to the most able regardless of background, not a sellable commodity for anyone able to pay (or borrow).

PS I’m not exempting myself from this – I did an undergraduate degree in Music, which was very good and enjoyable. But was it necessary and could it be justified under current economic circumstances? Doubtful.

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Cutting with credibility

June 8, 2010 — simonashall

The PM speaking at MK

The PM’s speech in Milton Keynes was among the most important of his political career so far. It defined his position more clearly than anything previously on the defining political question of the decade – how to get Britain back into business.

We can take from it several things – firstly that the PM will lay it on very thick about the economic crisis being Labour’s fault. I think that’s no bad thing – particularly because they are starting to come out with some pretty outrageous criticism of the coalition on a situation they helped, at least, to create. But I think he’s got to be careful and not get too free with this tactic. He needs to be the consensus man, the leader, the unifier and the solution, not the “new” problem.

Secondly, the PM is happy to tell us just how bad it is, unlike Labour. Not everyone will agree with him but it is obviously in his interest to make things seem as bad as possible. I don’t think a great deal of exaggeration is necessary – things are very, very bad – but the openness he is in a political position to afford could be something of an advantage. I think if played well, far from Mervyn King’s prediction being correct, the public could be sympathetic to the Coalition for some time to come. Honest actions go a long way in politics nowadays and the public recognise favourably politicians who are prepared to do the right, if not popular, thing.

Thirdly, Danny Alexander will be right next to him – all the way. There’s no way that the Liberal Democrats are getting off the hook with this one as full members of the Coalition and I don’t think they want to. NC has said that there will be a “cut with kindness” policy that will shield some of the most vulnerable from the worst of what needs to be done but that can only do so much – they can’t be protected from council cuts in many areas.

Nor do I think it’s a good idea for George Osborne to widely consult the public on where to save money. This is a very risky strategy that could puta very considerable rod in his back when Labour organises a Twitter campaign to get people to respond in a particular way. The results could then be FOIed and may not be where the final decision needs to be made. It could look like the public has been consulted and ignored – not great PR.

The simple answer here is that, a bit like Masterchef, this new economic future is going to “change our life”. There are opportunities for efficiency, yes, and looking at different ways of providing services. But the bottom line is that we need to get a £170bn deficit down and there’s a lot of money to hack off budgets. It must be done, it must be done quickly and there is a certainly amount of political risk that is going to come as the pay-off of winning the election (sort of).

I think the Coalition needs to remember that the public has a great deal more of a problem with dishonesty than ineffectiveness. If the government tries to mask the problem, if it breaks its promises over what it is going to cut, if there is a suspicion that certain groups are being unjustly protected or if there is any underhand treasury regulation as with the last government, the considerable goodwill that the public holds will drain quickly.

If the government is straight, calls a cut a cut and acts responsibly for the best interests of the nation, it might just find itself laying down a legacy of decency – if not prosperity – and a chance in 2015 to lead the country properly back into the new world economy with its head held high.

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A Classless stunt

May 29, 2010 — simonashall

A grim day for David Laws but also the relationship between the media and government

When the PM decided to make his big, open and comprehensive offer to the Liberal Democrats, it was done because he recognised the necessity in forming a strong government in the wake of an ultimately indecisive election. He knew that the British public didn’t want to be at the polls again in October, he knew that the country couldn’t afford – and probably wouldn’t accept – Labour being kept in power and that in order to form the only coalition government that could claim a mandate he would have to talk seriously, sensibly and flexibly to a party between whose activists there has at times existed a genuine hatred.

No matter – that quite rightly has been placed aside in order to get the best people into government. And if you look at the excellent line-up of the cabinet – the PM and NC working together, William Hague, Iain Duncan Smith, Ken Clarke, Vince Cable and others, you understand that the sacrifices both parties have made in their hearts and minds have been worth it.

David Laws has, for me, been the stand-out performer of the coalition. His handling of the announcement of the £6.2bn cuts last week was first-rate both in the house and in front of the media. His boss George Osborne was there with him but said very little and one hopes was watching carefully to see how it should be done. The point is it doesn’t matter whether he’s Lib Dem or Tory; if he’s got a mandate from the electorate and can do the job, the country needs him in place.

Enter the Daily Telegraph, whose view of the country is somewhat different. For them, the agenda is foxhunting, family values, favourable taxes and flag-waving. They don’t care much for Lib Dems – especially ones with secret gay lovers – and they’re not bothered about keeping the coalition together if it forces an election that could redress the result of May 6. Don’t get me wrong – I’m really disappointed that we didn’t secure an outright majority; but it was the failure to gain winnable Labour seats – not Lib Dem ones – that cost us victory.

The way in which the Telegraph has dealt with the David Laws story is bullying, immoral and reckless. What David Laws did was unquestionably wrong, although one can understand (just) why he did it. The money that he was taking from the taxpayer to pay his lover as landlord fell foul of regulations in 2006 that money could no longer be paid to “spouses” as “rent” (the fact it ever could be is bewildering). Had David Laws then not continued the payment, the question of why would have been asked – forcing him to reveal details of his private life.

Trouble is that £40,000 is a lot of money and he doesn’t need it any more than the PM. It creates the impression that a man asking the nation to make terrifying cuts across public and private fields is being less than austere with his own arrangements. For that reason, once the story became public, he has done the right thing in resigning – a very sad consequence of unjust parliamentary procedures in the first instance and social judgement in the second.

But for the Telegraph, there is no such mitigation. This angry, reactionary and backwards publication is an embarrassment to Conservatism and the nation it so very proudly wants to tell everyone it embodies. It represents exactly the kind of sneering, snobbish and bigoted values that the public reacted against in 1997 and brought Tony Blair into our lives. Why it felt it could not reveal the facts about David Laws during the original story is anyone’s guess and there is a rancid stench of spite and homophobia running through the decision to break it now – just as David Laws reaches the peak of his political career and achieves the platform to display his talents.

Who knows what’s behind it - there are of course powerful factions with an interest in removing a star in the making who wears the “wrong” colours (or the “right” colours in the “wrong” way) in both their political and private life. What amazes and disgusts me is that they, whoever they are, would choose to run so contrary to the national interest by fashioning the demise of potentially a key figure in the recovery and rebuilding of our economy.

The lowest nadir for UK journalism since the Sun decided it was in the public interest to publish topless pictures of the Countess of Wessex a few days before her wedding; and to trump the Sun on classlessness takes some doing.

Posted in David Cameron, Economy, politics. Tags: , , , , , , . 2 Comments »

Tip of the iceberg

May 26, 2010 — simonashall

One suspects that if Nick Clegg had decided after May 6 to take up Campbell and Mandelson’s grubby little offer and a Lib/Lab coalition was in power, the BBC would have reported David Laws – rather than Alistair Darling – delivering £6.2bn cuts. As it happens, no such favours are granted to the Conservatives by a corporation whose very skin has been saved by the votes that denied the PM a majority.

The savings identified by the Treasury include some really good things, such as the austerity measures put in place to stop ministers using cars all the time, the abolition of pointless quangos and renegotiating government contracts. The rest of the news emerging from the details is less welcome but regrettably necessary, not least because it goes further than the public sector. The £690m cut from the DfT means contracts put on hold, which has a knock-on effect in the private sector – the A23 scheme and the third phase of the Birmingham Box Managed Motorways project are both, for example, placed on hold and this means uncertainty for the consultants and contractors employed to deliver them.

So too Communities and Local Government, which loses £830m and will have less to spend on meeting its core objectives but also on schemes and projects that are delivered and help fuel a large – and growing – portion of the private sector. Companies like Atkins, Capita, Serco, Halcrow and Balfour Beatty are major employers and cutbacks in local government spending – further underlined by the £1.165bn in savings being expected of local authorities – will mean tougher times ahead for these businesses. The best, of course, will survive – but those who don’t can expect to shed jobs in addition to those that will be shed by the public sector.

And with an emergency budget in June and a Comprehensive Spending Review in October, the bad news is that £6.2bn is only the tip of the iceberg. The total deficit is £157bn and quite how this will be eradicated is anyone’s guess - even ten times what the government announced on Monday is only a third of what is needed. There is a great deal of pain to come and taking the decisions won’t be easy. Although there is a chink of good news in terms of a rise in GDP, the OECD is putting yet more pressure on George Osborne to raise interest rates and avoid cutting too quickly.

It all goes to demonstrate two things: firstly, that there has been – and will continue to be for a while – no real recovery, merely a plot by a Labour-staffed treasury to pump vast amounts of taxpayers’ existing and new money into the economy to delay the onset of recession and the necessity to make fiscal and spending adjustments until after the election. This may turn out to be more damaging than the recession itself.

Secondly, if you vote in a Labour government, sooner or later it runs out of money from which the only recovery is a Conservative government (or in this case coalition) to administer social and economic shock treatment. The only way Labour gets into power is when it promises to spend money - that is the central ethos of democratic socialism. In good times, it will always look more attractive than the more cautious Conservative within-means alternative. But there’s a catch; and we are about to find out exactly what that entails.

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All hung together

April 16, 2010 — simonashall

I'd rather have the Royal Mail deliver for me than this lot

I was stopped on the street the other day by someone who wanted to talk about the economy. “Do you know where the problem started?” he said. I started on about how the banks had mixed their High Street and investment banking functions for the sake of profit. “I know all that,” he said. “You’re wrong, let me tell you when it started.”

“The Bank of England used to get payments from the banks and could control money flowing in and out of them. If a bank wasn’t performing or was lending too much, the Bank of England could control the amount that it let flow to them or demand that they pay more money into them. Then Gordon Brown decided he didn’t want that to happen any more. He created this thing called the Financial Services Authority, which didn’t have any of those powers. And with their new-found freedom, the banks went off and did all the things that they had wanted to do but were stopped by the Bank of England.”

I listened – finally getting in with “so you support then the Conservative proposal to hand back regulation of the banks to the Bank of England?”

“Yes, but it’s not as simple as that. I’ve voted Labour in the past but I’m going to support you not because of the Bank of England but because the worst possible outcome for this country right now is a hung Parliament. I think you are the only party who can win outright and it’s important that we have a majority government for the sake of the economy. A hung parlimanent would be a disaster – the uncertainty could cost us our AAA credit rating, we wouldn’t be able to sell our guilts and bonds and repay the deficit. If that happens, we’ll be like Greece.”

It’s exchanges like this that make you think how important it is that we win this election. The Liberal Democrats want you to think that a hung parliament is a positive choice and will bring change. What it’ll actually bring is no change because the Civil Service will continue along the same course it’s been taking the country for years and the Lib Dems will run with it in order to stay in government. If anyone doubts this, look at what happened when the Lib Dems were in power in Scotland - not much.

If the Lib Dems go into coaltion, it will only be with Labour and Gordon Brown would remain as PM. Make no mistake, politics is a power game and all three parties are motivated by exactly the same desire for power and the enactment of their agenda, despite the ‘fresh approach’, the optimistic promises, the ‘plague on both your houses’ populism. Britain is in too fragile a place economically and socially to risk it on the Liberal Democrats.

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Let’s get technical

April 9, 2010 — simonashall

Barnes Wallis, inventor of the bouncing bomb, among other things

There’s a very interesting letter published in the Times today that sums up one of the big post-election questions and ties in to the Conservative Political Discussion Group debate that was held tonight at Churchill House.

Conservatives all agree that the public sector needs to be trimmed. We like to think that we can get this from efficiency savings and managed vacancies and possibly that is true. Carl Thomson and John Redwood’s excellent leaflet showed that there is waste all around. But for every time we abolish a Quango, scrap a government scheme or cut a swathe through a government department, there is a risk – although not necessarily a certainty – that jobs could be lost.

I think that the public would be quite approving of 40,000 civil servants and local government officers being stripped from the public liabilities if there wasn’t a recession and memories of redundancy or threats to their own jobs weren’t quite so raw. So the problem for spending-cutting Conservatives is this – how can we invigorate the private sector to create the jobs for those we need to cut from the public sector? Because unless that happens, there won’t be the cuts that some would like to see.

British manufacturing will continue to decline and our financial services sector – the powerhouse behind the 1995-2007 economic boom – looks to have blotted its copybook and is now the target of government ire. So what do we have left? What can Britain give the world? We have a long and established tradition of innovative and creative thinking, invention and a slightly different perspective on a problem. If Britain has any hope of still being great in 2050, this hope lies in science, technology and the support services that surround it.

We can no longer export goods as cheaply as other countries and our services sector will soon be swamped by the rigours of increased scrutiny. But what we can export is patents, ideas and technology – but only if the funding is put into the necessary research.

In Churchill House, we were debating the differences between Labour and the Conservatives in the long and short-term. Labour would maintain and increase the state economy to 60% of GDP or above. Only the Conservatives can challenge this. It’s a risk; but it could change the position of Britain in the world and be the bang that echoes through the next century of our history.

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The penny’s dropped…

April 1, 2010 — simonashall

No bodge job - David Cameron at B&Q today

I think, just think, that they might have got it. After a good amount of faffing about, it looks like the Conservative leadership have grasped the fact that this election will be about five things.

Those five things are the five seconds between when people put down their polling card at the booth and pick up the pencil on a string and when they mark the X in the box on the card. During those five seconds, a lot rushes through people’s minds. They will be considering the campaign to date and which party has “won” the campaign. The images in their minds will be the leaders of the two main parties and possibly one or two other figures like PM or George Osborne.

They’ll consider the parties locally, whether there’s a sitting MP or new candidate that’s impressed them and who runs the local council and whether it’s successful. They’ll also be thinking about how they’ll feel in 10 minutes’ time, having cast their vote, a once-in-five-years opportunity, about the decision they are making now.

But most of all, they’ll have their own killer question, the thing that will swing it for them and in 2010, that question – allowing for variation – will be this:

“Who is going to get things back to how they used to be in 1999 as quickly as possible?”

It’s a lot to go through your mind in five seconds. But the Conservative Party has got to own those five seconds and not make pondering over Gordon a feature of them. That means firm and credible talk about the economy – and after what has come before, I’m ever so heartened to see how the NI debate has gone today - it is the first day in ages that we have had PM and the PM on the rocks.

Yesterday, I was a bit impatient about the Big Society idea because the economy is what will win or lose the election. But having read Ben Brogan’s analysis of this, I reacted too much in haste. The important thing though is that DC feeds other policy areas into this overarching idea so that voters can see how the bigger picture (DC would make a good PM) fits in with the smaller picture (why DC wants to be PM).

Together with the genius of an April Fool in the Grauniad of all places - hats off to everyone behind that – it’s been a good day for the Conservatives. But we need at least another 30 of them – and Labour will be anything but a pushover.

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You don’t con, Vince

April 1, 2010 — simonashall

It's Yoda from Star Wars - no, not really, it's Vince Cable

Just a few words about Vince Cable. I watched the Chancellor’s debate the other evening and I’m not going to claim that George Osborne wiped the floor because he didn’t.

But given that he was being ganged up on by both Alistair Darling and Vince Cable, I think he came across well enough for me not to be persuaded of the case for him being replaced by Ken Clarke. The party is lucky in Phillip Hammond and Clarke to have two minds with plenty of economic experience to back George Osborne up and Osborne himself is made of far sterner stuff than I believe is immediately apparent.

Darling, on the other hand was an utter bore. His budget speech was more interesting and yes, although he did land a hit on the Conservatives over the NI part-reduction, subsequent events may  be more significant in this regard. He wasn’t nearly commanding enough for the man holding all the aces.

Vince Cable won the debate and that’s easy enough to understand. He was able to stand in the middle and come across as the voice of reason, hopping (albeir deftly) onto the “plague on both your houses” feeling that currently pervades. But did anyone notice a policy in there? At least Darling and Osborne were discussing whether or not an extra 0.5% on NI was a good thing to do – Vince was only bashing the other two. The debate may be politics; but politics isn’t necessarily the debate.

Frankly, anyone could have done what Vince did. And I think underneath it Vince doesn’t have any more in the way of policy than anyone else. Which is less forgiveable because the Lib Dems aren’t constrained by having to say things that will ever come to pass.

Standing in the middle with nothing to lose isn’t difficult (and will no doubt be repeated by Nick Clegg in the leader debates). But sooner or later, the waiverers that the Lib Dems are hoping to attract will catch on.

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Whatever happened to savage cuts?

March 17, 2010 — admin

Nick Clegg describes how big the savage cuts are now he's had time to reflect

Having spoken at length on Conservative economic policy below and how we need a more cohesive and better communicated philosophy on how to achieve recovery and longer-term prosperity, it’s worth considering that the other parties don’t have a universally stable position on this either.

They may have St Vince of Twickenham in their ranks but the Lib Dems have been equally confused on the issue. A few short months ago in September last year, Nick Clegg announced to a somewhat bemused audience, who believed they had turned up to the Lib Dem conference, that “savage cuts” might be needed to safeguard important budgets.

Although that message was officially given support by the party at the time, Nick Clegg has increasingly turned away from that position to the point where, seven weeks out from the probably election – and the possibility of a hung parliament stronger than it was – he now won’t have anything to do with spending cuts.

Well, call me a cynic but either a) the Liberal Democrats have conducted a fairly direct U-turn on the biggest question of the election within the space of six months or b) they are changing their economic policy according to polling data. Neither inspires a great deal of confidence and I suspect the matter would be thrown into greater relief by the media were their prospects in the election better.

Getting us to a point where the deficit or borrowing requirement is neutralised so that we are not piling on more debt year-by-year is only a part of the problem. We also have a substantial standing national debt as well, which needs at some point to be paid back. That’s pretty long-term and the pain needed to achieve that is considerable. I’m not sure I want someone as changeable as Mr Clegg taking a tough decision like that, nor the PM, who got us into this position in the first place.

Nor, one might say, someone as inexperienced as George Osborne. But he has Ken Clarke and a good shadow Treasury team behind him and the strength to withstand the criticism that will surely be directed from the people who got us into this mess towards those  attempting to get us out of it. I’m not convinced the others are prepared for the political cost.

Posted in Economy, lib dems, politics. Tags: , , , , , . No Comments »
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