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Mark Field MP: Tales from the front line

Mark Field is MP for Cities of London and Westminster and reflects here on how his constituency is being affected by the current economic woes.

Few in the financial services industry will mourn the end of 2008, which will rank as its most tumultuous year certainly since 1974, or perhaps even 1931. Few wise men (or women) would dare predict how the year ahead will shape up.

One thing seems for sure, however. The gloss on the Prime Minister’s much-vaunted global recapitalisation of the banks is already wearing off.

As much as Gordon Brown has relished his portrayal as a grand Keynesian economic genius whose lead the United States and Europe follow, the political weather may be about to turn stormy for our Prime Minister. In his international showboating, he has sought to take the credit for the government’s display of apparently bold and swift action to save the nation’s economy. Household name banks have been provided with an injection of cash so colossal that the UK’s already spiralling levels of debt seem like small change, allowing the Prime Minister to continue the conceit that he has been a steady hand on the economic tiller for the past debt-laden decade. No doubt he will try to elaborate a similar fantasy when the wheels come off the recapitalisation plan. The banks will offer a ready scapegoat.

For now as fear stalks the land, people are understandably desperate to believe the government has the answers. Indeed back in November I wrote here that the broader economic crisis had not yet bitten and people viewed the implosion of the financial sector as a problem that had been contained. But sentiment is changing swiftly and in painting himself as an all-powerful global saviour, Gordon Brown will surely find it ever harder to escape blame when the fear turns to pain and then to anger. Now that the season of goodwill is behind us, harsh reality will assert itself. It will not be a pretty sight.

Mark Field MP: Time to tell it as it is

Mark Field is the Conservative MP for Cities of London and Westminster and an occasional contributor to CentreRight.com.

The state of the public finances is a national disgrace. Over eleven years of Labour administration too much government borrowing has funded current consumption. Instead of building a secure future we are borrowing from it and condemning future generations of Britons, some still to be born, to pick up the bill for the cost of current welfare, healthcare and pensions expenditure.

It is an approach which is neither prudent nor sustainable. It falls to Conservatives to condemn this cavalier approach to public expenditure and show the nation that there is a better way forward.

The recent banking bailout following the credit crisis has provided the government with an alibi for exorbitant levels of public debt which were already spiralling dangerously out of control. Public sector borrowing was due to reach £43 billion in the current financial year – we shall now be lucky to avoid doubling that sorry figure. Next year the total may well exceed £100 billion; that is around £300 million spending in excess of tax receipts each and every day of the year.

Just as it has been difficult for a bewildered public to grasp the true meaning of the wild fluctuations in the stock market in recent weeks, I fear that it will now be unaware of the seismic implications of the unprecedented level of government debt now locked into the system.

We must ringfence the billions accrued for the banking bailout from the enormous sums that were already on – and indeed off – the balance sheet. The new spirit of the age should be for value for money out of the public pursue – instead the idea of big government as an ever benevolent cash cow seems to be entrenching even further.

Mark Field MP: A brave new world for bankers and the City

Mark Field is the Conservative MP for Cities of London and Westminster and an occasional contributor to CentreRight.com.

Amidst the bewilderingly swift developments of recent weeks in the financial services sector, many in the City can be forgiven for failing to appreciate the extent of change in the landscape that lies before them. Some complacently regard the recent turmoil as a short-lived upheaval and that business will ‘return to normal’ before long. I fear this will prove wishful thinking.

The decision to launch a full-scale rescue of the domestic banking industry need not have required nationalisation. The enforced recapitalisation of a relatively healthy bank, Lloyds TSB, has – to date – met with only muted opposition from ordinary shareholders whose investment has been largely destroyed. Once the dust settles, pension funds, reliant upon dividends, are unlikely to be overjoyed by the government diktat that deprives them of this crucial source of income for up to five years.

One key area the government has failed properly to address is that of competition law. The extreme circumstances that prevailed in early October meant the Lloyds TSB buyout of HBOS was given the go ahead even though in less turbulent economic conditions it would have fallen foul of anti-trust legislation. In such extreme circumstances it appeared supportable. However by the time the government’s bailout package was unveiled – seeing £37 billion of taxpayers’ cash being pumped into RBS and the new Lloyds TSB/HBOS entity – it was no longer clear why it should be exempt from these considerations. Competition law is designed to protect the public - not as an extra layer of bureaucracy, but as a crucial guarantor of choice and diversity in the free market.

Mark Field MP: Ian Blair has led the Met to the brink of disaster

Mark Field is MP for Cities of London and Westminster and an occasional contributor to CentreRight.com.

When one thinks of the Metropolitan Police these days, what description comes to mind?

A dynamic, united and responsive police force known primarily for its robust crime-fighting?

Or a bloated, divided organisation, paralysed by political correctness whose name seems synonymous with scandal?

To the dismay of many of my constituents (or at least those living in the Westminster part of my seat) the latter description rings true. I well know that the Met is composed of many hard-working, dedicated – and very frustrated – men and women. But the antics of its upper echelons have degenerated into a soap opera with its leadership unable to take a grip. The inquest into the shooting of Jean Charles de Menezes at Stockwell in 2005 begins today and will almost certainly be followed by fresh calls for the Met’s Chief Commissioner, Sir Ian Blair, to resign.

A Government Worth Having... Needs To Increase Economic Growth

We asked a few friends of ConservativeHome to offer 100 word thoughts on how George Osborne might prepare to lift Britain's economy.  Our contributors didn't all keep to the word limit but their responses cover a wide range of economic policy angles.

Nicholas Boys-Smith, Consultant Director of Reform: "George Osborne is the most successful Conservative Shadow Chancellor since Geoffrey Howe. He has turned the debate on an iconic right of centre policy (inheritance tax), stymied plans for a 2007 election, prised open important new debates on tax complexity and green taxation and even managed to win the favours of the Prime Minister’s erstwhile mistress, Miss Prudence. Now it gets really hard. He has five key challenges;

1. Radically simplifying the tax system so that Britain is once again internationally attractive – merging National Insurance and aligning the accounting and tax systems would be a start;
2. Devising green taxes which can be implemented without increasing tax or complicating the system all over again – no easy task in the current climate;
3. Making sure that the Treasury can support the wealth of ideas now emerging to channel private funds and voluntary energy into mending our starkly broken society and benefits system (this means taking on debt and risk – again not easy);
4. Judging how many ideas to reveal in advance of the election (he needs substance) and how many to keep in reserve (he needs surprises and not all ideas will necessarily be election-winners); and
5. Perhaps hardest of all, devising the 200 day plan which will effect most of his programme – politics being the art of the possible and electoral honeymoons being short..."

Michael Fallon MP: "We will probably inherit public finances in their worst state since 1975.  The public are ready for honesty: they know that, like any household, government has to cut its costs and its borrowing. We can protect frontline public services but will have to be much tougher elsewhere: too many shadow ministers seem to assume that the current department budget is theirs to spend.  We also need to make in-work benefits more effective: tax credits are fine in principle but poorly administered and go too far up the income scale."

Mark Field MP, CentreRight contributor: "The Party needs to make a strong case for reduction of personal taxation paid by the lowest earners. I believe that far more attention now needs to be directed on the lowest paid in our communities. At the moment you barely have to earn £105 per week in order to start paying income tax.  Rather than institutionalising the complexities of tax credits, I should like the Conservative Party promote a system whereby no one earning less than £200 per week pays any income tax at all. Similarly by raising slightly the thresholds of those paying tax at the higher rate, the better-off in our society would not benefit from this long overdue extension of the zero rating."

Oliver Marc Hartwich, Chief Economist of Policy Exchange: ""How could an incoming Conservative government increase economic growth? On the one hand, of course, increasing economic growth should not be too difficult. If the experts are correct, there will hardly be any economic growth, maybe even a recession at the time of the next election.  On the other hand, and more seriously, these tough economic conditions require an adequate policy response. It is easy to say that Britain's structural deficit will leave little room for manoeuvre. True as this may be, the party should still find the courage to do the things that will make economic growth more likely in the long run: shrink the proportion of GDP that the state is consuming, keep taxes low, lower barriers to market entry by reducing regulatory burdens.  Conservative economic policy has always been best when it was economically liberal."

Andrew Lilico, Managing Director of Europe Economics and CentreRight contributor: "For an incoming Conservative government to increase long-term growth, I would recommend (a) the introduction of a robust price-level (average inflation) target; (b) enhanced use of market mechanisms in public services.  A price-level target would increase certainty over the long-term inflation rate, leading to more investment and less loss in inflation-proofing contracts, and hence to more growth.  Productivity growth in public services is very low, and so this very large portion of the economy contributes little to overall economic growth.  The use of more market mechanisms (especially on the demand side) would lead to higher productivity growth and more innovation, adding materially to the overall growth of the economy."

In the next part of this series, which will be published in a few days, we'll turn to foreign policy.

Mark Field MP: Yet more parliamentary expenses woe

Mark Field, MP for Cities of London and Westminster, criticises most MPs for failing the understand the strength of public feeling over issues like the payment of mortgages with parliamentary expenses, and concludes that MPs are no longer fit to have any say in their remuneration.

How can Parliament credibly regulate and legislate when it so palpably fails to put its own House in order over MPs’ allowances and expenses?

In the aftermath of high-profile revelations about the blatant misuse of public money by MPs, the Speaker set up a Committee in February charged with a “root and branch reform” of allowances.  After four months of deliberation this committee of senior MPs has come back with a programme of proposals that is little more than a cosmetic exercise in “business as usual”. 

It substitutes the discredited system of an Additional Costs Allowance (ACA) (tolerated only so long as a lack of transparency and public scrutiny could be guaranteed) with a new system that locks in the culture of secrecy. 

Almost miraculously, by this sleight of hand, the Speaker’s Committee has contrived to propose a new “Overnight Expenses Allowance” that represents even more of a rip-off to the long-suffering tax payer.  The most important thing lacking is transparency.  In essence, this Committee of senior MPs has firmly stuck two fingers up to the general public.

Mark Field MP: Northern Rock has been nationalised in all but name

Mark Field is MP for Cities of London and Westminster.

For sure there have been more spectacular banking crises than that which has affected Northern Rock in recent months. The phenomenon of a ‘run on the bank’ was almost commonplace in Victorian times. More recently the collapse of BCCI (1991) and Barings (1995) show that even a highly regulated banking sector is never immune to mismanagement and fraudulent activity.

The fiasco of Northern Rock is a modern day sorry catalogue of poor judgement and woeful indecision. Understandably the Conservatives have been keen to point the finger of blame entirely at the actions of the Treasury and especially the inaction of the erstwhile Chancellor of the Exchequer. In truth, responsibility for what has happened at Northern Rock should be more widely spread.

First, and foremost, the senior management of the Bank – in particular its former chief executive,Adam Applegarth, and the array of non-executive directors. Collectively they should have realised that the aggressive growth in turnover strategy being adopted by Northern Rock depended upon continued economic blue skies and liquidity in the money markets. Northern Rock’s strategy was so diametrically opposed from any of its competitors that alarm bells should have been ringing amongst the well-remunerated non-execs (a roster which included some well known City names) about its sustainability.

Second, once the credit crunch hit in early August the Bank of England should have been far more fleet of foot. In particular its Governor, Mervyn King, ought to have been more amenable to the proposal by Lloyds TSB to take over Northern Rock before the crisis became public. No doubt this would have required substantial Treasury guarantees, but almost certainly UK taxpayers would have been in a considerably more favourable position than they now find themselves. Mr King’s reappointment should not be regarded as automatic.

Mark Field MP: It's time to create a federal parliament for the United Kingdom

Mark Field is MP for Cities of London and Westminster.

The time has come for comprehensive constitutional change in the United Kingdom. Carried out precisely without partisan political consideration, I believe that we are capable of producing a solution which will benefit Britain for decades to come. My immediate proposal is for the creation of a new federal parliament.

It is an elegant solution designed to resolve effectively the four main domestic constitutional uncertainties of the United Kingdom, which have plagued the political arena during the last three decades. With a federal UK parliament and four elected national parliaments we would maintain the Monarchy, strengthen the Union, resolve the questions raised by an unreformed House of Lords, and give independent and equal parliaments to England, Scotland, Wales and Northern Ireland.

There would be no extra MPs, no extra costly buildings or staff and our democracy would be strengthened not weakened as a result.

The British Constitution has been one of the success stories of modern politics. It has kept this country together, united under a common Crown and a common parliament, for over three hundred years. Not for us the coups, revolutions and counter-revolutions that have plagued Europe over that period. So successful has it been that we Britons had stopped thinking about it.

Mark Field MP: Some urgent lessons from Ealing Southall

Mark Field is MP for Cities of London and Westminster.

The Conservatives under David Cameron have made tremendous progress to encourage and engage our Party members in community cohesion projects across the UK.

However I believe that our by-election campaign in Ealing Southall may have done lasting damage to the Party’s outreach work in the British Asian Communities.

For a start I fail to understand why MPs such as Dominic Grieve and Paul Goodman whose constituencies are within ten miles or so of Ealing Southall and who have worked enthusiastically with their local Muslim, Hindu and Sikh communities over many years, building trust and support, were not brought in to advise on the  strategy of this campaign.   

The centralised imposition of a Sikh candidate, who first became associated with the Party ten days before the by-election was called and whose most recent political activity had been attendance at a Labour Party fundraiser in mid-June, always had the makings of a fiasco.  The way in the sensitivities of local Tory activists were bypassed amounted to contempt towards our supporters and the electorate at large. Building trust and support amongst ethnic groups can never be a quick fix - it has to the culmination of consistent work and commitment.

Mark Field MP: The problem with grammar schools is that there are too few of them

Mark Field, MP for Cities of London and Westminster, argues that our education system needs more elitism and choice to achieve excellence.

At our best the Conservatives are the party of aspiration, opportunity and hope. We believe in choice because choice helps raise standards for all. Conservatives promote excellence, rather than equality. We want to see standards driven up to make the best available to all. This is in stark contrast to the Left, whose obsession with ‘fairness’ manifests itself in the levelling down of standards and opportunities to the lowest common denominator.