Gavin Maclure's Musings

My take on politics locally, nationally and internationally


Osborne’s economic plan is akin to the country standing still

Failing: Chancellor of the Exchequer George Osborne

Failing: Chancellor of the Exchequer George Osborne

Moody’s, the credit rating agency, has downgraded the United Kingdom’s triple-A credit rating to AA1. This is hardly surprising and is a direct result of two things: Gordon Brown’s monumental mess he made of the British economy before he was booted out of office in 2010 and Chancellor George Osborne’s complete inability to get a grip on the economic collapse he inherited from Labour. Three years into the Coalition, we are now at the tipping point between these two reasons and today the blame for the economic woes of our country should be firmly laid at the door of the current occupier of Number 11 Downing Street.

George Osborne for reasons I am not fully aware has decided to do almost nothing to reduce the deficit and more importantly, for the future of our children and grand children, completely nothing to reduce the debt pile which now stretches from the Earth, past the moon and into deep outer space (if it was paper notes stacked on top of one another!).

Chancellor Osborne blames the Liberal Democrats for not allowing him to cut faster and deeper. He blames Europe. He blames the last government (although he is right on that one – up until the Moody’s announcement).

Actually, the reason we have lost our triple-A credit rating and the reason it will cost you and I more to go on holiday (if you are lucky) is because George Osborne does not have public spending under control and has instead pretty much followed the trajectory Labour’s Shadow Chancellor Ed Balls would have taken and borrowed billions more on the international money markets. By the time of the next General Election, Mr Osborne will have borrowed an additional £600 Billion taking the national debt north of £1 Trillion. It has got to the point where the interest payments alone may mean we will never pay the debt off unless drastic measures are taken – and that means cuts, cuts, cuts.

The Left bang on about how the Coalition Government is making savage cuts but in reality Dave and George have dented public spending with a little pin prick: a grand cut of 1%. We were promised a bonfire of cuts by David Cameron, a holocaust of cuts. This would have saved us from the high taxes we will undoubtedly be paying for years if not decades ahead and the stagnant growth which comes with such an economic policy.

But we haven’t had any of that. You knew the game was up, even before Moody’s made their announcement on Friday, when Liberal Democrat Dr Vince Cable (a sinister looking man if there ever was one) stated during Thursday’s BBC Question Time that he was happy with the economic policy of George Osborne and agreed with David Dimbleby the Chancellor was being Keynesian in its approach to the fiscal woes of the UK. Keynesian economic theory is beloved by the Left.

I thought Peter Hitchens on the same programme had it spot on when he said of course no politician would get elected on a platform to cut NHS spending but it didn’t matter because sooner or later politicians will be forced to cut public spending, including the NHS. We can’t continue printing and borrowing money for ever. We’ll have to shrink the state drastically and, ironically, George Osborne is making this more of a permanent certainty.


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UPDATE: Ipswich Beacon Town Conference

As reported yesterday, the second Ipswich Beacon Town conference took place at the Corn Exchange on Friday with keynote speaker Sir Stuart Rose, former boss of Marks & Spencer.

Sir Stuart listed a number of ideas on how to improve the welcome to Ipswich and it’s town centre retail offering. First up was making the railway station more inviting and to erect clear signposts to the town centre from the station rather than visitors first being greeted by three lanes of traffic. He said: “The railway station would not be out of place in Siberia! It is a depressing station that you want to get out of – and there is nothing to say ‘Welcome to Ipswich.’ There is not even a sign to the town centre and when you get out you straight away have to dodge the traffic.”

However, he did praise the map-based monoliths implemented by the previous Conservative-led Borough Council which have popped up around and within the town centre.

Tatty: Ipswich Market

The retailing guru also reiterated what right-minded Tories and also a former Labour mayor have being saying for years: move that tatty market! The Cornhill is the last open space in Ipswich town centre (when the Del Boy market is not in town) and should be permanently liberated in the style of Exchange Square in Manchester, which was transformed into a continental-style piazza after the IRA bomb in 1996. Exchange Square also just happens to be outside the largest M&S in Europe…

As has been reported on Ipswich Spy, Michael Foot, aka Cllr David Ellesmere, went all starry-eyed in front of Sir Stuart and leapt up to say that moving the market was a great idea. Let’s see if he follows through now the conference has wound up. We don’t have to get rid of the market – well not the nice bread and olive stalls – but just move it up Lloyds Avenue, down Princes Street and Queen Street (which will be pedestrianised in the next year as part of the ‘Travel Ipswich’ project) or down the Buttermarket. But getting rid of it from the Cornhill and then transforming this space with tiered seatings and cafe style outdoor seating will do wonders for the town centre retail experience – we might actually get a tenant for the now-closed Clinton’s store.

We’re just fine: Cllr Carole Jones

Fellow bloggers and of course the Morning Ipswich Star seem to have conveniently forgotten something that happened at yesterday’s Beacon conference. My spy at the meeting tells me Michael Foot’s Labour party is still alive and well in Ipswich: cue Labour’s Economic Decline Development Borough portfolio holder. Once Sir Stuart had finished his speech explaining what was wrong in Ipswich and how it could be fixed, up popped Labour’s Cllr Carole Jones (and partner of council leader Michael Foot David Ellesmere) to say Ipswich “was fine” and Sir Stuart “just didn’t know it well enough”. My source tells me it was “embarrassing”.

So unlike Ipswich Spy, I won’t be dancing a jig to the bright new dawn just quite yet. Let’s remember Labour have form when it comes to the Council helping to kick start the economy. They moaned profusely about the Giles Circus development implemented by the former Conservative-led Council, which undoubtedly attracted Waitrose to Ipswich town centre. Are they really going to do one better and transform the Cornhill in the same way?
I hope so but I wouldn’t put money on it.


The Olympics won’t save you Dave

I’m an Olympics widower. I don’t really like sport (unless it is very exciting like Judd Trump smacking balls into pockets at the UK Championships last year as if he was playing down his local pub) and most Olympic sports are frankly boring.

Do hysterical spectators and people screaming “come on” at the telly realise these athletes do nothing else other than train all day? They have never had a real job or a life for that matter. We’d have a lot more world-class athletes if we didn’t have to work for a living too. Unfortunately, most people have to go to work to eat and have a roof over their head to pay for the taxes dished out in grants to these demigods the masses cheer on.

That’s not to say I am disappointed we bagged the Olympics Games. It is a geopolitical event extraordinaire. We had one billion eyes watching our Opening Ceremony on Friday evening and we were able to remind the rest of the world how much we have done for them: industrial revolution, saved their countries twice (thrice if you count the Cold War), export the best music in the world etc etc. And then of course the sheer brilliance of our engineering and technical skills shone through in the Opening Ceremony production itself.

But one thing the Olympics won’t do is save Dave and George’s skin. London, away from the Olympic venues, resembles a ghost town. Most workers have packed up for 17 days with reports hotels in the capital are having to slash room costs as it seems tourists have deserted the city along with the businessmen and women. And this isn’t even taking into account the skiving that is probably going on amongst the athlete-worshipping working population.

At this rate, we could be heading for a fourth quarter of negative growth within the current double-dip recession. This is terrible and is being caused by a) having a Coalition Government and b) poor and weak leadership: the two are not necessarily mutually exclusive.

There are many things George Osborne could do to kick-start the economy and reduce the debt, such as:

1. Bring the top rate of tax back to 40p: The Chancellor idiotically only moved it back to 45p at the budget in March thereby missing the chance to take one political hit – he blamed the Yellow Peril (yawn!)); this tax change would demonstrate the UK is open for business and encourage entrepreneurs to open new businesses and create more employment.
2. Cut public spending. We were promised by both Labour and Conservatives at the General Election in 2010 a bonfire of cuts, a holocaust of cuts, but instead the Government has barely scratched the surface with borrowing in this financial year targeted to be £120bn – more than Gordon Brown was borrowing in 2009/10. Bear in mind this is a worst case scenario (hence “targeted”) and actual borrowing is likely to be higher! In particular, local government spending should be cut further and why is NHS spending ring-fenced when it spends £17 on a pizza base (not even with topping)!
3. Use the savings made from the public sector to lower taxes for ordinary workers. Top of the list should be VAT – back down to 17.5% to kick-start the crippled retail sector. 
4. Reform planning laws to reverse rules which favour nimbys and instead make it easier for new housing to be built and dare I say a new airport to be built in the South East. This would help the other sector which is dying on its feet: Construction.

There’s four ideas. But it would require strong political leadership of the Thatcherite variety and when I look at the smarmy faces of old-moneyed David Cameron and George Osborne I really don’t think they would know how to act in Thatcherite manner if they tried.

The genius of Margaret Thatcher is she knew what it was like to strive and so knew what was needed to help the strivers in Britain and in turn wind the economy back up after the disastrous years of Labour in the 1970s. Dave and George can’t even imagine what it would be like. The sooner they are replaced the better (thankfully, if one goes, the other will follow!).

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Cameron caved into Clegg over top rate of tax decrease

There was a reason Labour didn’t touch the top rate of income tax until Gordon Brown finally allowed insanity to take a grip on him. Because they knew it fed economic growth and brought in the billions of taxes for them to spend on creating the client state with millions gratefully dependent on Labour handouts. However, this all changed when Gordon Brown in a stroke signalled to the rest of the world back in 2009 that Britain was not a fan of business when he raised the top rate to 50p.

Britain, along with Germany, was the financial powerhouse of Europe during the years when the rate at which the Government stopped taxing income was held at 40p. Gone were the days of Labour Governments raising income tax to 83p and Labour Chancellors saying the “tax the rich until the pips squeak”. Britain was open for business.

But after thirteen years of profligate spending during the Blair-Brown years the chickens came home to roost and the economy took a nose-dive. Gordon Brown saw his opportunity to whack up the top rate to 50p and thereby slammed the UK plc shop door firmly shut.

Labour were duly kicked out of office in 2010 and we then had a Tory Chancellor in George Osborne who instinctively knew he must reverse Brown’s decision and take the top rate back to 40p. It would put the open sign back on the UK plc shop door. It wouldn’t solve the financial crisis overnight but it would certainly turn us in the right direction. The proof is that low taxation grows economies as was seen in the 1980s and 1990s until Labour got their wrecking ball out in 1997.

But it seems, according to the excellent Tim Montgomerie over at the Conservative Home parish, George Osborne was scuppered at the last moment during this March Budget preparations by the smarmy and quite revolting Nick Clegg. The Liberal Democrat leader told David Cameron the top rate must only drop to 45p and Cameron said: “Yes, sir.”

Nick Clegg is a man who leads a party which has only 1/6 of the seats in the House of Commons but is treated by the Prime Minister as if he is the senior partner. What would have happened if Cameron had said “no”? Nothing. Clegg would have buckled and ordered his troops to go through the Aye lobby to rubber stamp the Budget. Because they will always put the ministerial limo before their principles and we would get a good Tory Government backed up by the Yellow Peril. But instead, Cameron caved into Clegg and we have a Liberal Democrat-led Government as a result. It’s working out, isn’t it?

I am still believe in the Conservative Party and our core values but I just wishe the Conservative leader would talk about them more. Tim Montgomerie said the same thing yesterday:

If staunch Tories like Tim are saying this openly, Cameron is in trouble. As I’ve said before, we should never have gone into coalition with the Liberals. If we had gone to the country again in October 2010, we would now have a Tory majority Government and if Cameron dared to behave like this in a pure Tory Government, he would be gone in that “sudden, unsentimental and brutal” fashion very soon indeed.


David Cameron quizzed on Ipswich

The Morning Evening Star had a meeting with David Cameron at their Lower Brook Street offices yesterday whilst the Prime Minister was in the region with his Cabinet.

The interview can be read in full here.

What always strikes me when David Cameron speaks in the provinces is how immaculately briefed he is. It also helps he has a memory like a sponge, as was witnessed in all its glory when he gave a “look, no notes” speech during the Conservative Party conference’s leadership contest in 2005 in Blackpool, which catapulted him to the finishing line and the rest, as they say, is history.

It was good to hear the Prime Minister talk about our dreadful railway line and rolling stock but it looks as if it is down to the rail operator who wins a new 15 year franchise to decide if it is worthwhile giving Ipswich commuters decent carriages and seats (it seems Government cannot force the monopoly operator to give us a decent service!). The East Anglian Daily Times editor, Terry Hunt, who was also present at the meeting with the PM, summed it up well when he said: “It is a deterrent to business growth at the moment. The line has a poor reputation. This town is just an hour from the city yet it can feel a lot longer.”  It certainly does!

I can’t help thinking that a lot of the problems we have in this town is a lack of confidence, not just the economic variety, but in local people as well. Ipswich has so much to offer but all you hear is moaning about the town. The town centre is not as bad as people make it out to be: there are new shops and there has been work done on Giles Circus which undoubtedly contributed to Waitrose choosing to set up shop in the Corn Exchange. And the Council officers have finally got round to launching the Town Centre Masterplan: the brainchild of the last Conservative-led Administration and the best effort so far to help integrate the Waterfront with the Town Centre.

Ipswich does have a problem with attracting businesses. So much so, that if BT pulled out of Martlesham, the impact on the town’s economy would be catastrophic. But why are businesses and employers not keen on Ipswich (even in the boom years!)? The mainline railway service certainly doesn’t help but that can’t be the only thing. When I chaired the Strategic Overview & Scrutiny Committee we did a piece of work scrutinising the effectiveness of the Economic Development department at Ipswich Borough Council. Three weaknesses stood out:-

1. A lack of political leadership required to drive the work of Ipswich Borough Council Officers but also sell Ipswich to potential investors. Cllr Richard Atkins was the Liberal Democrat Portfolio Holder for Economic Development at the time and he told my Committee he “steered” his department and did not “lead”.

2. An ill-thought out strategy by the Officers to sell Ipswich. Officers were quizzed by all three parties on the Committee, with Labour’s Cllr Martin Cook repeatedly asking what sales collateral (brochures, magazines etc) were being used to sell to businesses the benefits of locating to Ipswich. Time and time again there was no answer (most likely because there was no sales collateral). Civil servants by their very nature are lackadaisical but there was something fundamentally wrong with their responses to councillors’ scrutiny of their work. They just didn’t seem to get it.

3. Low educational attainment. Qualifications at NVQ Level 4 or above held by Ipswich residents aged between 19-59/64 years is 17%.  The regional percentage is 27.8% and the national (England only) percentage is 30.5%.  Businesses need skills and will only set-up shop where the skills exist. It’s up to local people to ensure they have the right skills to find work when they leave school. The opening of University Campus Suffolk is a great first step in helping to raise the skills bar in our town.

If local authorities do anything with our money, it should be helping to kick-start areas of the economy and then step back and let the private sector take over. This has been seen recently with the Giles Circus development and the way-finding maps around the town centre (both driven by Conservative councillors).

Today we need action more than ever and less talk from our politicians to get us out of the current economic gloom.

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Our economy needs an efficient mail network

Another chain around our economy’s neck was revealed today: the Royal Mail.

My wife recently posted a package on a Friday and paid extra, twice, once for Special Delivery then twice for Saturday Delivery, to ensure receipt of the package the next day. Unfortunately, the package did not arrive until Monday afternoon.

But you can get your money back. Just not easily. My wife duly returned to the post office she sent the package from and was told to fill a form out and send it to some obscure address. Instead of apologising for the lack of delivery at the paid time my wife was subjected to a diatribe by the post office staff about how “since TALK of privatisation” service at the Royal Mail had gone down and the number of missed deliveries had gone up. A friend of ours had the same issue and when she called Royal Mail they said: “We do get a lot of Special Deliveries you know?”.

So, instead of becoming more efficient in difficult economic times, like the growth inducing private sector, the staff at Royal Mail go in the opposite direction. Not that it is at the top of the Government’s agenda but should Royal Mail workers really be so surprised one half of the Government wants part privatisation of the service to sort their operations out.

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Credit Easing

The word ‘Easing’ is the operative word in my headline post. It looks as if it is related to Quantitative ‘Easing’. That’s because it is. Both are about creating money out of nothing. IOUs, printing money, bonds, whatever you want to call it. It will only end up (and has already) in inflation – but then, may be inflation is the only mechanism the Government has got to reduce the national debt.

This would certainly do the trick for them except it would push us consumers further into the economic gutter. Employers are certainly not going to increase your wages to keep up with inflation and food and fuel prices aren’t going to come down any time soon.

Whichever way you look at it, with the weak decisions being made by politicians in the Eurozone and by George Osborne back in the UK we are in a full scale Japan-style 1990s recession. Unofficially, we are not in recession as the economy has its mouth above water, just! This is because growth is at 0.2% or thereabout. But for all intents and purposes we are in a recession.

I can’t help thinking if we had some real Tories in the Conservative Party high command and we were relieved of the Yellow Peril things might be slightly different.

Guido Fawkes sums it up well:

When the government starts lending money to companies that no one else wants to lend to, you can be sure of one thing, they are going to lose a lot of taxpayers’ money. Billions.

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Chaos on British railways damages economy further

I was on business this week in Belgium and travelled back yesterday evening on the Eurostar from the centre of Brussels to the centre of London in two hours. The Eurotunnel, Eurostar tracks and rolling stock are a great feat of engineering and is something for British, French and Belgium people to be truly proud of.

However, the other side of British transport reared its ugly head about 15 minutes after my arrival in London.  I got to Liverpool Street station to find huge crowds at a time of day on a Friday I would normally expect to see thining crowds as most commuters had headed home. Unfortunately, someone had committed suicide by train on one of the lines in the Romford area of Essex, one of the mainlines heading out of London to the East of England where I live. Now, when a person is so depressed they kill themselves that it is a very sad event. But it is not unusual. 
The poor person’s death had a major knock-on effect on thousands of people’s lives. It had happened around two hours before I had even arrived at Liverpool Street and since then severe disruption to trains arrivals and departures had occurred. I arrived at the tail end of the long wait for a train out of London. My next train was due to leave at 20.00 but instead pulled out of Liverpool Street at 20.40 (not a big delay in the scheme of things). But the reason it was able to leave was because the earlier incident had been “cleared up” or so the announcements suggested.
The first question to our Government is why does it take at least two hours to remove body parts from the line and then to re-open the line? The second point is why, once the line has been cleared, did it take me two and half hours to get back to Ipswich from London, eventually pulling into Ipswich at 23.10, TWO HOURS later than scheduled.
I decided to ask my MP, Ben Gummer, from my packed train carriage using Twitter. This was the exchange:
My tweet to Mr Gummer:
@ben4ipswich could you tell my followers and I why we have to put up with such lousy railway services in this country?
Mr Gummer’s reply to me:
@gavinmaclure because a)it was nationalised for 50 yrs; b)Network Rail is useless; c)old franchises good for Treasury, bad for travellers
Firstly, I have to say Ben Gummer is now very responsive on Twitter and uses the tool well to communicate with his constituents. Those who criticise Mr Gummer for not being available to answer questions and give his view should take note.
However, he raised three points which might explain the horrific experience on the train last night but does not give solutions to the problems. All these points, raised by Ben Gummer, the Government has control over. 
Mr Gummer later said:
@gavinmaclure and don’t tell me about the pain – I am all too aware myself. It’s going to take an age to sort out, but we are making a start
Undoubtedly, Mr Gummer is right when he says the Government is trying to fix the dire state of our railways but I ask he elaborate on what they are actually doing. I am more than happy to provide a platform on my blog for him to write on this.
One area the Government should look at first are the processes around dealing with a suicide incident. This is inevitably going to cause disruption but the level of chaos it causes is wholly unacceptable when you are paying £70 for a return to London from Ipswich. In addition to my point on the length of time it takes to clear the line and re-open it (at least two hours!) why then are the same union negotiated rules on staff changeovers allowed to continue occurring as if nothing has happened and the public aren’t already climbing the walls. It took 20 minutes to get a platform at Colchester after crawling through Essex for two hours because staff changeovers had to take place. We then had to wait whilst they changed the driver!! 
For some reason, the same issues we have with our railway services are not replicated on the Continent. European trains run on time and they have plenty of capacity. I travelled twice in commuter time in Belgium and it was bliss – no overcrowding and a punctual service. I had a similar experience in Paris earlier this year.
With London and Thames Valley property being so overpriced, more and more people are having to travel longer distances to get to work. The economy is close to another meltdown but with the workers (yes the workers who pay all the taxes!!) not being able to get to work on time or being frazzled by the incompetence of Network Rail and the dreadful service of National Express and other rail operators we are just making matters worse. 
Unfortunately, as the country has run out of money as Labour so succinctly told us, we can’t build more capacity on the lines or buy better rolling stock. But what we can do is change police processes and re-negotiate rail worker contracts but has Cameron got the guts to do this?