« Cameron taunts Blair on his education reforms | Main | An early Christmas gift for David Burrowes MP »

Comments

Nice to see uncritical acceptance of Gordon's Golden Rules. I guess that's the ide they'll wait for the economy taskforce to report in, straight out of the window...

I'm also increasingly tired of how Cameron appears to describe public spending as "investment". Why not just surrender the argument?

If DC buys into this ludicrously Blairite notion that public spending increases="investment"=good, he will lose the economic argument because he can never outspend Labour.

Obviously, the key to success is the slogan "Investment without reform equals waste", and then show this week after week.

There is nothing wrong Brown's golden rules. The problem is that Brown has used every trick of underhand accounting to cover up the fact that he has broken his own rules again and again.

Rather than wasting our time attacking what on the face of them are perfectly reasonable 'rules' we should concentrate on the hidden problems like the massive liabilities hidden by PFI and the chicanery such as reclassifying road repairs as investment.

I would agree though that we need to start to move the debate away from the notion that public spending is a good thing in and of itself.

We should think about calling it what it is, taxpayer spending, i.e. the government dictating how our money is spent.

The trick of course is how to do this without sounding like we are taking a slash and burn approach to public services.

We need to suggest how we would provide higher quality public services, with the emphaisis on the increased quality that would come with de-regulated provision, rather than presenting the changes as a way to save public money.

"There is nothing wrong Brown's golden rules."

Apart from them being meaningless? The point is not that the accounting has been fiddled (although it has), it's that anything can be passed off as "investment".

Well, it's at least good that DC tackles the problem that he was present at Black Wednesday hands on.

The people around him are certainly not stupid.

He *has* to tackle that, or otherwise that clip will appear in every Labour PPB and PEB for the next four years!

Yes, exactly and this is a pretty good way of doing it, I think.

It is this vagueness and the fact that they seem to the layman to be perfectly reasonable things to say that make them a poor target for attack.

The two 'rules' Cameron addresses directly in this speech are only borrowing for investment and keeping debt below 40% of GDP. Vague as they are, they are at least a nod in the right direction. Put another way, which of those rules should the Conservative party disagree with? That is the simplistic way the debate would be presented.

Anything can be passed off as investment because no-one has held up to the proper scrutiny and ridicule the idea that filling a pot-hole is investment or the idea that the salary of yet another NHS manager is an investment.

I would say that there is no better form of attack than to hold Brown to account by the very standards he set himself. If we set our own, sensible definitons of investment, include the financial black holes of PFI agreements and public sector pension liabilities and present a true account of how badly Brown has performed by his very own 'rules' that will be a far more damning account than any questioning of the rules themselves.

"The two 'rules' Cameron addresses directly in this speech are only borrowing for investment and keeping debt below 40% of GDP. Vague as they are, they are at least a nod in the right direction."

They're also entirely arbitrary. Why cap borrowing at 40%? Why not less? What happens if the economy is on the skids, there's a greater demand for public spending, etcetera? What is investment?

Brown had to adopt the mantra of "rules" because nobody really trusted Labour not to return to their traditional tax and spend ways back in '97. The same spectre isn't haunting Cameron, and by adopting these rules he not only fights the battle on Brown's terms, but if elected could find himself shackled by them.

"or the idea that the salary of yet another NHS manager is an investment.

Most businesses would regard training their staff as "an investment". The problem is that the term makes no distinction between capital items (e.g. a new hospital) and revenue items (e.g. salaries).

James, I don't disagree with much of what you say. I just disagree with what our line of attack should be. Gordon Brown has set great store by his rules and his adherence to them. Showing the extent of his failure to meet even his own modest targets is, in my mind, far more effective than attacking the targets themselves. There is nothing wrong with fighting Brown on his own terms over this, because he has failed spectacularly on his own terms.

I disagree also that Cameron does not have the same problem with trust. We have a very similar problem. We are not trusted after Black Wednesday, we are suspected of planning massive cuts to public services. We can not pretend we still have a reputation for economic reliability. That has been shown in poll after poll to no longer be the case.

You can attack Brown's failure to meet his own targets without subscribing to them yourself. By subscribing to them, David Cameron is doing exactly the same as David Davis did with his growth rule: agreeing to be bound by rules that may or may not be applicable when its time to apply them.

"We are not trusted after Black Wednesday, we are suspected of planning massive cuts to public services."

And Cameron plays to that by referring to public spending as "investment"!

Now, the rules don't give people the impression of economic competence. Autonomy for the BoE was what did that for Labour.

What is the problem is that people think we won't deliver on our promises.

From memory, this is pretty much the platform on which we fought the General Election (or at least, what we were planning to do if we had won). Perhaps there are one or two items of detail which have shifted: I forget whether the fiscal audit role was going to be folded into the NAO rather than create a whole new agency along the lines of the American Congressional Budget Office. Certainly the ONS was going to go on an independent footing.

Basically, this is a commitment to a form of growth rule for public investment, four years out from a General Election. And a good thing, too. When we've sold this argument to the public, do we then move on to its elder brother, a growth rule for revenue spending?

It will be interesting to see how the limit on net debt of 40% of GDP is calculated if PFI and public sector pension liabilities etc are added in and revised total debt exceeds total GDP. We’re going to need a Tory version of the sustainable growth rule, and that gives us the space to argue about what constitutes an investment. Presumably the independent fiscal auditors will have to form a view on what constitutes capital as opposed to revenue (an issue that may be familiar to James H).

PS - Mr Editor: does this site believe it was "Black Wednesday" or "White Wednesday"? Perhaps – Black for the Party, White for the country, as it were 'good for my neighbour, awful for me'?

"Basically, this is a commitment to a form of growth rule for public investment, four years out from a General Election."

Precisely the sort of thing Cameron criticised Davis for wanting to do, you mean?

"It will be interesting to see how the limit on net debt of 40% of GDP is calculated if PFI and public sector pension liabilities etc are added in and revised total debt exceeds total GDP"

By 200% I believe!

"Presumably the independent fiscal auditors will have to form a view on what constitutes capital as opposed to revenue (an issue that may be familiar to James H)."

Indeed it is. The problem here is that you can argue that a revenue item is an investment (in retaining and training staff, for example), which is precisely what Brown did with the last public sector pay round IIRC.

"Mr Editor: does this site believe it was "Black Wednesday" or "White Wednesday"? Perhaps – Black for the Party, White for the country, as it were 'good for my neighbour, awful for me'?"

I think the answer may be here in Tim's Conservative dictionary.

I think it was actually 691 Wednesdays ago, but who's counting.

Atlast we have someone who isn't actively running away from the following facts:

1) That people want good public spending.
2) Conservatives screwed up in 1992. eventhough it turned out well in the long run
3) Gordon Brown or should I say..the MPC has been successful in continued growth and stability and low inflation.
4) Its VERY important DC continues to use words like "investment" as it doesn't sound as vile as "spending" or tax...

Image is everything nowadays...

"Its VERY important DC continues to use words like "investment" as it doesn't sound as vile as "spending" or tax..."

Yes, God forbid that the electoarate knows what he actually means...

I went to the speech, in the City today. I had imagined it was a party event and felt somewhat out of my depth as it was clearly a much more indepth briefing on macroeconomic policy for city specialists. However -- apart from the fact that you'll be glad to know I got a mention of Hackney in -- I thought it was very good.

Having a tight fiscal policy isn't aping Gordon Brown, it's been the essence of Tory economic policy from 1979 onwards. The step forwards here is to recognise that we lost our reputation for competency on Black Wednesday (however good it turned out to be for the country in the long run) and that to get it back we have to admit that the ERM policy was a disaster. And that we won't allow that to happen again. Concede, and move on, in other words. I think the three bullwarks set out today WILL help to establish that. Particularly the statutory independence for the National Statistician. That way no government minister - of whichever party - will be able to fiddle with the definition of "cycle" in order to stay within the limits of the rules. (The rules aren't arbitrary, and can obviously be changed according to which fiscal target the nation should be following, but deciding that the cycle started longer ago and will run for longer IS, and it it's a pity that the statisticians who work for the government haven't been more vocal about this, or felt free to be more vocal - they had plenty to say, or to feed to the Labour party, when Thatch changed the definition of unemployment in the 80s, I seem to remember!).

I missed PMQs in order to get to Bloomberg's for the speech, was it as good as last week?

PS I'm a statistician by the way :-0)

Graeme: if you missed PMQs, you can watch it on the BBC website, politics section.

I thought DC was weak, but this opinion doesn't seem to be shared universally. Certainly no one seemed to think he did better than last week.

"The rules aren't arbitrary"

They are! The 40% rule for debt is arbitrary.

James, I think the electorate do know "investment" means. Just because Brown is wrong about everything he does, it's not wrong to differentiate between spending for better outcomes (better schools n hospitals, in the ghastly vernacular) and spending on the results of poor outcomes (unemployment benefit). How you choose to guide that investment (through the state or by empowering individuals or, of course what always happens, a mixture of the two) is what's interesting. In the private sector, well certainly where I work, we make a big difference between internal spend on headcount etc - where we are always pushing for greater productivity, and "external" (not really external) spend on projects, where the spending is "better" because it's adding value to our raw product and hence to shareholder value and hence to our customers. I don't have a problem with that sort of language.

James is right -- I meant to say "the rules are arbitrary, and the targets can change over time, but what shouldn't be arbitrary is one's assessment of how performance is matching the objectives". Sorry - only one gin tonight but I'm Twigging.

"James, I think the electorate do know "investment" means"

I disagree. Just look at the comment made above by someone who couldn't see that paying an NHA manager could count as investment. The point is that its a weasel word that can be used to justify almost any spending. It also boxes us in, because any talk about efficiency and reducing waste can easily be turned into accusations about "reducing investment".

I'd also add that the term "investment" is a very dangerous one to use in our media environment. Already the BBC, for example, greets things like NHS deficits by blaming them on inadequate resources. This tem therefore implicitly frames any fiscal debate in left wing terms.

Most analysts agree that in the next couple of years Brown will be forced to raise taxes as his policies finally backfire. Then we shall see whether Cameron is so willing to publically endorse them.

"Just look at the comment made above by someone who couldn't see that paying an NHA manager could count as investment."

Sorry, chalk my lack of clarity in explaining my thoughts down to my eagerness to go home! (Ah, the joys of working in a school!)

Extra staff can of course be an investment, when those staff are productive.

Unfortunately this isn't the case with far too much recruitment in the public sector. There is a world of difference between investing in good quality, necessary staff and filling your organisation with layers and layers of unnecessary beauraucracy.

I think DC's three pledges are all good. And that's because they all limit the ability of government to give into its baser instincts.

What he really needs to add of course is that third Golden Rule- to limit government's ability to spend our money.

I think we're missing the importance of this speech, at the expense of analysing the nuance of economic language.
Cameron has addressed head-on what is likely to be a strong Labour line of attack and neutralised it in, effectively, apologising for Black Wednesday.
Short of saying entering the ERM was a mistake, I don't recall any Tory being as direct in acknowledging what a debacle the whole thing was for the country and (publically) how damaging it was for the party.
Sometimes, James, I wish you'd give DC credit for a bold strategic approach, instead of scouring his quotes for things to take issue with.

"Sometimes, James, I wish you'd give DC credit for a bold strategic approach, instead of scouring his quotes for things to take issue with."

Sometimes, Barry, I wish people would actually look at what people say, and what that tells us.

As for other Conservatives being direct about entering ERM, I recall Michael Howard being more forthright before the last election, notably in his solo BBC1 interview. Similar displays have been made by other Conservatives.

"What he really needs to add of course is that third Golden Rule- to limit government's ability to spend our money."

It doesn't spend it, Wat. It invests it.

It's a reallocation of resources...

The biggest failing for the tory party in 2005 GE was labours unrelenting campaign of cutting spending and going back the old days. And also reviving the Black Wednesday fiasco as Tory poor economic ideas.

Now DC has tuned the tables, accepts mistakes were made, is setting up a clear policy which will eliminate both of those problems.

"It's a reallocation of resources..."

Your commment grants that the products of my labour are the government's, without reservation, to do with as it pleases.

If you genuinely believe that description is appropriate, then I don't think there should be any place for youn in the Conservative Party. And I've never said that to anyone before.

"The biggest failing for the tory party in 2005 GE was labours unrelenting campaign of cutting spending and going back the old days."

Rubbish. It was the timid campaign, that focussed on strident immigration policies, because we dared not break from the turgid centre ground.


"Now DC has tuned the tables, accepts mistakes were made..."

As Michael Howard did, etcetera, etcetera

"Your commment grants that the products of my labour are the government's, without reservation, to do with as it pleases.

If you genuinely believe that description is appropriate, then I don't think there should be any place for youn in the Conservative Party. And I've never said that to anyone before."

Though I agree, that the resources are not the governments to give, its not what people are thinking, people WANT to pay high tax. It is a reallocation of the nations resources..into their healthcare and such. The resources are the people's. The problem remains that people WANT to pay tax for good public services and don't want to see the tax cuts of the Thatcher days that lead to a deterioration of public services. Though you might claim the 'resources' are not he governments, you can't stop people from wanting to give can you?

What's the point of being an opposition and trying to win an election if you're not listening to what people are saying. They are quite content with the way the economy is being run, public services are improved, they don't want to see further tax rises, and definitely don't want to see a deterioration in public services.

The situation will again be dire if we slap tax cuts in people saving and gives labour plenty of room for attack.

To be credible FOR government we need good economics, thats wide, considerate and moderate, we should not promise income tax cuts at all. We should promise corporation tax cuts etc. We need to show that we wont raise tax, but neither directly say cutting it. We need to get rid of crap in the system (eg New deal) to fund pro-business cuts and pro-public services.

It might be difficult to put up with this, but to regain the centre ground, its also an image problem..An image of tax cut and deterioration.

"To be credible FOR government we need good economics"

Undoubtedly so, so why are you talking bad economics?

"The biggest failing for the tory party in 2005 GE was labours unrelenting campaign of cutting spending and going back the old days."

The biggest problem was that the only thing we had to say about education was "school discipline" and the only thing we had to say about healthcare was "cleaner hospitals".

Add to that a tax cutting agenda drawn up on the back of an envelope and the campaign looked pretty paltry.

It seems to have been universally accepted post-election that we were wrong to have had such tough policies on immigration (we seem to have accepted that we *were* racist to talk about immigration, despite our pre-election claims). But it was *not* that our policy was wrong, or indeed unpopular; our immigration policy was our most popular policy, it is just that we had almost nothing else to say.

We had lots of good policies (especially patient's passports which Cameron has now abandoned), but we were afraid to defend them. This is because we've been boxed into a corner by the left-wing having framed the debate on their terms.

Labour have framed the debate to their benefit on immigration, on education, on health, on social justice. Moreover they have successfully inculcated the idea that more government is good and moral. We have never successfully dismantled this (or really even tried to).

If we accept the left-wing terms of debate then we are *always* bound to lose. This is why what James H has been saying about Cameron's use of the term "investment" is so sound and true. Cameron's acceptance of Labour's terms and definitions is very worrying indeed.

Yes, all true but so far so predictable, David Cameron's goal is for him and his entourage to run the country. Does he really care which party he happens to be leading provided that he gets there?

Nice to see Dave putting out and fleshing out some monetary policy for us. Bring on the fiscal policy when the time is right, at an election, not now.

The comments to this entry are closed.

#####here####

Categories

ConHome on Twitter

    follow me on Twitter

    Conservative blogs

    Today's public spending saving

    New on other blogs

    • Receive our daily email
      Enter your details below:
      Name:
      Email:
      Subscribe    
      Unsubscribe 

    • Tracker 2
    • Extreme Tracker