How should Cameron respond to Brown?

In the first of a series of exchanges between Tim Montgomerie, Editor of ConservativeHome, and Matthew d'Ancona, Editor of The Spectator, Tim suggests some first steps for Project Cameron in 'the Brown era'.

I'm glad to be doing this exchange of thoughts with you again and many congratulations on the Coffee House blog.  It's quickly become essential reading.

Brown has had a good few days and it's beyond doubt that he should not be underestimated.  I think David Cameron should expect some tricky opinion poll ratings in the next couple of weeks.  If the party can hold its nerve over the coming period, however, I am hopeful that Project Cameron can still succeed.

What should the Tories do next?  First of all, I no longer think Mr Cameron should undertake a major reshuffle.  I expect the 'big beasts' - Hague, Osborne and Davis - to keep their jobs.  There is a case for some changes and for talent like Michael Gove to be promoted.  The best course of action for David Cameron is to maximise the number of people who stay in position.  Brown has undertaken a massive reshuffle in order to reinforce his change message but moving ministers and reorganising departments is distracting and not without perils.  Having Tory spokesmen in command of their briefs - opposite Labour newbies could be useful.  I'm hearing that the Tory reshuffle will be early next week.  Have you heard the same?

My main recommendations for next steps are as straightforward as ABC...

• A is for authenticity: Labour is determined to portray Cameron as weak and superficial.  Oliver Letwin's policy review process presents the party with a great opportunity to show that it, not Labour, has done the long-term thinking about Britain's deepest problems.  In studying these reports David Cameron should not be afraid to embrace some tough recommendations.  I'm sure he'll get them from Iain Duncan Smith on the family and John Gummer/ Zac Goldsmith on the environment.  The worst position for the Conservative leader to end up in is to have said the family and the environment are important and then be afraid to adopt policies that will actually make a genuine difference.  Authenticity in policy isn't enough.  If David Cameron is going to insist that air travel isn't good for the planet he needs to stop taking so many domestic flights and start holidaying in Cornwall.  He needs to walk the walk or at least take the train!
• B is for breadth: The need to keep the Conservative coalition together is being recognised a bit more.  Many traditional Tory supporters - offended by the grammar schools row - will have been reassured by this week's clear leadership on the referendum on the EU Treaty but we need more of the same.  Last night's remarks by David Cameron that he's committed to the 'And theory' and that crime, family values and Euroscepticism are as part of his mix as the NHS, greenery and tackling the causes of crime is very welcome.  Again, the summer policy review should be used to prove that we are not a narrow party of the centre or of the right - but a broad party - embracing a broad coalition.
• C is for courtesy: This may seem an unimportant third point but I think it might be the most important one.  A lot of traditional Tories feel quite bruised by the Cameron project.  Telling supporters of grammar schools that they were "delusional" was incredibly unhelpful.  I'm hearing rumblings from Ealing Southall that the local Association were hardly involved in the choice of the candidate.  There are party candidates all over the country who hardly receive any information about selection processes.  Quentin Davies (for whom I have zero sympathy) might - just might - not have defected if Team Cameron had spent time listening to his concerns.  The Whips Office need to stop their hamfisted attempt to frustrate the work of the Cornerstone Group of Tory MPs.  The circle around the leader needs to be more open and friendlier.

Anyway, that's enough for the moment.  Over to you,

4.45pm: MATT HAS NOW RESPONDED ON THE COFFEE HOUSE BLOG.

Comments

[Mark Wadsworth]

A is also for aggro.

Let's see George Osborne wind up Brown mercilessly in the Commons.

[John Clegg]

An ABC for Cameron should be:
A is for Awful pretence, B is for Botched policies and C is for Clumsy comments.

[Rachel Joyce]

I must stop agreeing with you like this Tim.

[EML]

Sounds good to me, Editor. Brown is going to struggle to get his "change" and "trustworthy" messages across, he's not going to have too much time to attack Cameron and the Conservatives now.

Likewise, Cameron has done the attacking bit, with recent speeches and articles laying out what's bad about Labour and how the Conservatives will be different. What we need to do now is outline why exactly people should trust us to govern - the positive things about us that will make people elect Conservatives.

[John]

Mark Wadsworth:

Winding up Brown will be David Cameron's job now!

George Osborne will have to satisfy himself with Alistair Darling.....

[John Coles]

Rather a pity, Editor, that you should have classified George Osborne as one of the "big beasts". He isn't, he's a man of limited intellect, one of life's lightweights and his presence in the Shadow Cabinet is a permanent weakness.

[Old Hack]

S is for sacking - Maude, Browning, Maples and any other frontbench has-been who has cluttered up CCHQ.

Put in some fresh blood who don't have a sackload of scores to settle, oversized egos/insecurities and preconceptions about what it takes to win elections.

Someone like Grant Shapps perhaps?

[Simon Denis]

I quite agree about courtesy. It is, however, even more important that the leadership avoid sounding as though it has embraced socialist assumptions. Over grammar schools, for instance, they should have said that although the destruction of these excellent institutions was regrettable, a full, immediate restoration remained unlikely and that a more swift, efficient reform would be to ensure a proper degree of streaming within comprehensives. That way the remaining grammars would have felt reassured; the principle of selection would have been upheld and the concession to the class warriors avoided. It would also have left the way open to more grammars some way down the road and allowed for a degree of localism. This is more or less the position we've ended up with but only after bruising rows and the impression of weakness. Mixing the matter of "social disadvantage" with education is pure Old Labour and an intellectually disreputable way of looking at schools. They cannot undo the damage done to a child by his upbringing. Properly, they are barometers of social change, not its immediate agents and above all not that blunt instrument of social levelling which is the comprehensive. We on the right can accept many changes of tone and style. We can even allow - as a strictly emergency measure - the A-list. If, however, our representatives deny those arguments and principles which lie at the very core of our outlook, then they are implicitly rejecting us. Can they be surprised that in a range of angry tones we point this out?

[Scotty]

I agree with you on just about all the points you raised Tim, but a little confused by the comment about the whips and the Cornerstone group.
Are they working on a separate agenda of their own within the party?

[bluepatriot]

An alphabet for ConservativeHome commenters:

B is for Brown. Brown is our real opponent.

L is for loyalty. 70% of members voted for Cameron. He is the leader and noone should try to change that.

M is for mad and it is mad to keep repeating core vote messages that lost us three elections.

N is for nightmare. It would be a nightmare to wake up to another Labour victory. Let's work to defeat Brown.

P is for public criticism: Stop it. It only helps our opponents.

[Scotty]

"He isn't, he's a man of limited intellect, one of life's lightweights and his presence in the Shadow Cabinet is a permanent weakness."
Why do people insist on underestimating Osborne when he is one of the main strategists in the Cameron team with two successful campaigns under his belt already?

[HF]

Regarding your point about Ealing Southall members complaining about lack of involvement.

THEY HAVE HAD 2 YEARS TO SELECT A CANDIDATE AND FAILED TO DO THEIR JOB. The election day is only 3 weeks away.

Frankly the constituency "whingers" have lost the right to complain as they have clearly dragged their heels over selection.

We look like to have chosen a strong candidate so well done to those who pulled their fingers out and got it done.

[malcolm]

Don't disagree with any of this Tim. The Shadow Cabinet have been given very little opportunity to shine as every new initative has come from Cameron himself and that really has to change soon.
The most important point is that the Conservative party has to fight as a united body or lose. That means DC has to give shadow ministers their head and perhaps accept policy recommendations that he might not be entirely comfortable with but in return should be able to expect total loyalty from his ministers and parliamentary colleagues too.
On a cheerier note at least for the party if not the country Brown has certainly fluffed his first opportunity to deliver 'change' with this cabinet reshuffle.

[Sean Fear]

"M is for mad and it is mad to keep repeating core vote messages that lost us three elections."

That illustrates Tim's point C, very well. Treating core Conservatives as the enemy, rather than Labour and the Lib Dems, is the short cut to disaster.

[HF]

Regarding your point about Ealing Southall members complaining about lack of involvement.

THEY HAVE HAD 2 YEARS TO SELECT A CANDIDATE AND FAILED TO DO THEIR JOB. The election day is only 3 weeks away.

Frankly the constituency "whingers" have lost the right to complain as they have clearly dragged their heels over selection.

We look like to have chosen a strong candidate so well done to those who pulled their fingers out and got it done.

[Tapestry]

Mary Ann Sieghart wrote -

'Brown hates criticism and is likely to lose his rag at Prime Minister’s Questions. His reluctance to take decisions will be the despair of his officials. His colleagues will stop telling him home truths when they see how badly he reacts. As a result, he will quickly become out of touch.

This is the opportunity that the Tories will be able to exploit. Brown won’t be stupid enough to give them openings on policy. But – like anyone else – he cannot easily change his personality. If we elect a Conservative government next time round, it will be because we are fed up with Brown the man, not the Labour Party he leads.'
(Todays)

I think this is good analysis - bar the fact that inflation is rising and the RPI is already 5%. Interest rates should have risen faster but were kept down to assist Gordon's coronation. Once they hit 7%, the popularity of David Cameron, who already polls ahead of Brown ahead on economic management will go up.

Brown is pleanty stupid enough, Mary. Even good journalists who write with clarity, are so used to crawling to Downing St, they begin to wilfully not see what is actually happening, preferring not to challenge the gloss/dross they have to crawl to receive, by writing the Government's narrative - or they get dropped.

Our crime rate is through the roof with daily gang murders from children in London. Schools are controlled by bullies who cannot be touched.

Inflation is far higher than anyone is admitting, and interest rates are about to go through the roof.

All the schmaltz surrounding Blair's departure and Brown's 'arrival' is like another universe to the one we are all actually live in. The media does not dare to look at reality.

Only in the media will Brown offer no opportunities on policy. One galance at the real world offers endless opportunity. Reality hits home eventually - especially when it's interest rates! That communicates to the pocket.

[Andrew Lilico]

In my view we need to:

1) Have our own positive story. We need to offer an optimistic Conservatism, and not become tempted into fruitless attacks on Brown to the detriment of offering our own story. Being always negative would us look nasty.

2) When critiquing Brown, play the ball, not the man. I do not believe that there will be anything like the same distance between Brown and Labour as their was between Blair and Labour. The way to damage Brown will be to damage Labour. Being personal would makes us look nasty.

3) Fight him on his strong ground. Even if we don't seem to win such battles, it is better to fight Labour there than to concede defeat by default - it will minimise the loss. Avoiding engagement would make us look irrelevant.

4) Argue for what we believe in, employing the reasons that we believe in it. Brown will look authentic. We cannot afford to look less. Arguing for things we do not believe in, or offering reasons we do not agree with, would make us look shallow and opportunistic.

5) Truth and integrity are one's greatest political allies, and one's closest friends when looking in the mirror. If you are right, don't panic or despair when things seem to go wrong. If you are not right, change.

[Tapestry]

For a view that thinks US inflation is 10%, not 2.5% according to government statistsics there -
see http://www.shadowstats.com/cgi-bin/sgs/data

The inflation in the euro area has been around 15% since launch with the euro's value more than halving. This has been reported as 2-3% inflation by the ECB.

In the UK inflation has been much higher also. They can lie about infaltion, but not about interest rates. Those are now heading North - which kind of proves that the CPI inflation rates are a fabrication craeted by Gordon Brown to hide the truth.

He instructed the Bank of England Committee to observe only the CPI. Brown cannot pretend it's nothing to do with him...but of course he will.

[passing leftie]

John said:
"George Osborne will have to satisfy himself with Alistair Darling....."

This conjured up a horrifying mental imagine.

[Traditional Tory]

Andrew Lilico - We need to offer an optimistic Conservatism

What exactly is 'an optimistic conservatism', Andrew?

Most commentators agree that conservatism as a philosophy or even simply a 'mindset' is premised upon an essentially pessimistic view of human nature.

The truth is that the 'optimistic' fare currently on offer is a species of liberalism, oddly ranged under the banner of conservatism.

The 'optimistic' facet of Thatcherism was essentially liberal and the 'pessimistic' facet 'conservative'. Both had their place. Now all we are left with is a degraded version of a quasi-Thatcherite liberalism which has already passed through the sieve of Blairism.

I agree with most of the rest of what you say. Some posters here seem to have taken leave of their senses. They need to calm down and get a grip.

Hysterical personal attacks on Brown and his team will inevitably prove counter-productive.

[michael m]

Andrew- I agree entirely, I would add just one more:-

6) Show in everything you do and say your absolute determination to win the next election and get all your colleagues and MPs to show the same commitment

I am fed up with hearing from the BBC that Brown's obsession is winning the next election. I have heard seen very little evidence from the Conservative Front Bench that they have the same commitment.

[Andrew Lilico]

Traditional Tory@17:29

An optimistic Conservatism is one that says "If you go with us, the future can be pleasant and sunny." This contrasts with a Conservatism that says "The present is dark, horrible, and decadent, and unless you go with us matters will only get even worse."

Reagan was a sunny uplands Conservative. The Marquis of Salisbury was not.

You point at a "pessimism" about human nature inherent in Conservatism. But that "pessimism" is supposed to generate humility, not despair. It is supposed to say that we recognise Man's fallenness, and his inability to produce perfect institutions or to perfect himself, and that our policies and institutions must recognise that reality. But it does not deny that life here, today, can be sweet, that people can love each other and make sacrifices for one another, or that we can produce works of beauty and honour.

Happy? (Or at least no more miserable than before...?) :-)

[Dr Johnson]

Bluepatriot @16.41: you forgot:
A is for Arsekissing
B is for Brownnosing
C is for Crawling

[Rosario]

They should not be afraid of radical change at central office.

eg Coulson's appointment is a good one but he will be hampered if he has to work with low grade second raters who have been running the press office. He should be allowed to hire and fire at his own discrtion to shape a team in hos own image. As a former Editor he will be aware of the severe limitations of Cameron's press operation at first hand.

[Scotty]

"Hysterical personal attacks on Brown and his team will inevitably prove counter-productive."

Brown cut his teeth in the bear pit of the Scottish Labour party so I don't think he is going to be a shrinking violet when it comes to attacking Cameron and the tories. In fact the clunking fist will try and smash Cameron and us in that order, he has plotted and waited to long for this and the only player dirtier than Blair, Campbell & Co was Brown.

[Traditional Tory]

Reagan was a sunny uplands Conservative. The Marquis of Salisbury was not.

The problem is that Reagan was American.

Possibly the very nature of American democracy has always excluded the possibility of native conservatism taking root. That's why Hamilton appears so untypical and unAmerican, while Calhoun, who really did have a mass following, was simply a brutish reactionary with a talent for sophistry.

A conservative politician may cynically propose 'optimistic' policies to gain favour with the masses, but it is to be doubted that those policies can truly be described as conservative.

But that "pessimism" is supposed to generate humility, not despair.

Indeed, but that humility should best be deployed in the spiritual field rather than the world of politics. As you have already noted, there is precious little humility on display at present.

But it does not deny that life here, today, can be sweet, that people can love each other and make sacrifices for one another, or that we can produce works of beauty and honour.

The beautiful offers balm to all who are afflicted by life. From Burke's Essay on the Sublime to Schopenhauer's theory of art as a window upon the transcendant, cnservative thinkers have appreciated the extraordinary value of great art.

What, one wonders, would they have made of Tracy Emin's soiled knickers? I think perhaps they would have judged them a fit icon of that 'Modern Britain' Dave constantly enjoins us to embrace.

[ACT]

Look, let's cut a deal between traditionalists/dissidents/whatever and the pro-leadership chorus (Scotty, HF, bluepatriot, 'Tory T', et-not very varied-cetera): you keep telling us to shut up and not rock the boat. Okay, we'll do that - we'll toe the line, knuckle down, obey the leadership whatever it does, and not say one single word in public. The only thing we ask in return is - Steve Hilton has to invent a time machine, then travel back and actually vote Tory. Otherwise, if he doesn't, you can take your petulant demand for us to do what your lot couldn't be bothered to (support the Party, come what may) and, well, you can stick it somewhere dark. Probably the room the Board met in to sign off on Hilton's contract.

[Bradford]

So we get Caroline Flint as a Minister for Yorkshire & Humber.....not bad....better than anything William Hague ever did in his great efforts for the North........

Caroline looks like she could be could be appealing...

[David Sergeant]

Brown is probably the most dishonest, ruthless and shameless Chancellor we have ever had, if he was the finance director of a private company he would be in jail by now. The man has demonstrated repeatedly that no gimmick is too low or uses too much tax payer's money to score points over the Tories. OK he bungles a fair number of them and his obsesion about the Tories makes one wonder if Mandy was right about mental stability, but, why are we so polite about him, why can't we use the words the Enlish language has supplied to call this dispicable little man what he is?

[Edison Smith]

The shadow cabinet need to shove their heads above the parapet a bit more.

At the moment it's a one-man band.

We need guys who are articulate and savvy - promotions for Duncan maybe, and Vaizey - and Justine Greening to ensure the shadow cabinet has female balance.

'Young guns' like Greening and Greg Clark are fresh and gagging to have a go at Labour. People like Theresa May and Hague often don't look like they want it enough.

[Patsy Sergeant]

Tapestry @ 16.51 - I think broadly speaking your synopsis is right, however when you say 'Brown is pleanty stupid enough' - (I presume that you mean 'plenty'?), I must disagree with you, Brown has many faults, but stupidity is not one of them. I suppose one has to say it depends what each individual means by 'stupid'! Mr. Brown has appeared to have very fixed ideas, and doesn't like criticism - as people with very fixed ideas seldom do! This leads him to make ill-judged decisions, such as selling off all the gold, when the price of gold was really low!!!!!! That was a stupid act, but does not make him 'stupid'.

[cleo]

Placing much emphasis on Europe will just play into Brown's hands. Polls may say people want a referendum but voters want a government concerned about health, education, economy, environment- not a party obsessed by everything European

[TomTOm]

if he was the finance director of a private company he would be in jail by now

Can you name the Finance Director of a major British company who is in jail ?

[Andrew Lilico]

Traditional Tory@18:20

I doubt that anyone as elegantly spoken as yourself can really think he is "afflicted by life".

Look: As you yourself have rightly noted previously, Conservatism per se cannot really be called a political philosophy (at least, not in its British incarnation), except insofar as it would mean the Burkean Conservative "new Whig" position. Rather, the Conservative Party is a political organisation, a coalition of interests and ideas, not a single Idea. But it does seem to me to be true that, in any era, there will be some element, within the coalition of ideas that is the Conservative Party, that will dominate, and that it will be appropriate to project to the public. In our era, the appropriate combination of elements are the Whiggish tradition allied with the Paternalist tradition. We need Paternalist votes. To win Paternalist votes we need to tell a positive story of what it is that we will deliver for Paternalists - how we will make the world a better place by addressing their concerns.

That will be the song of victory, when eventually victory comes. And it will have a sweet melody to my ears.

[city trader]

Tapestry, you are spot on as usual; and for the rest of you on here, before you become preoccupied with froth and trivia remember what Clinton said: "It's the economy, stupid".

Clinton was right. It's the economy which wins and loses elections and Brown has drowned ours in debt and turned it into the national equivalent of a pyramid selling scam as will become increasingly apparent over the next 12 months and more.

[Traditional Tory]

In our era, the appropriate combination of elements are the Whiggish tradition allied with the Paternalist tradition.

Interesting points Andrew but if I may be 'optimistic' for a change I'll give you one good 'pessimistic conservative' reason why Thatcherism succeeded, and why Cameron's take on Blairism will fail.

Thatcher and her disciples may well have been more 'Whig' than 'Tory' but their approach went to the heart of the human stupidity - let's call it socialism - which had brought this country to its knees under successive governments.

In that sense Thatcher was truly conservative. She restored the mechanisms of the market and started to dismantle the socialist state. She replaced failed rationalism with tried and tested tradition.

However much people foam at the mouth about Brown and Blair, the country has not yet been brought to its knees economically. I certainly believe it has been debauched morally, but Cameron has sold the pass on that one anyway.

There will be no commonsense revolution now. All that is promised is more of the same 'But, hey! We might do it better'.

A dubious proposition at best and one hardly calculated to inspire.

[Andrew Lilico]

city trader@20:07

As is widely known, my view is that the MPC has been slow in raising rates. But we should not become carried away into thinking that the MPC's slight errors of fine judgement are anything close to a political issue as yet. Doom-laden predictions of 10% or 15% inflation, of the sort Tapestry is wont to offer (as if of course his right) are, in my view, unlikely in the extreme to resemble the actual turnout.

There are two matters in this area that seem to me to be of potential political interest. First, we should be urging that the MPC's target should not entirely exclude housing costs - some one fifth and more of costs on the all items RPI - for the decision to employ a monetary policy target that entirely excluded interest rates was Gordon Brown's alone (and indeed done so only as a tid-bit chucked to Europhiles went he announced we wouldn't be joining the euro). It is plain silly that the Bank is not able to offer its interest rate commentary on housing.

Second, the debate in monetary theory has moved on, slightly, from inflation targeting (the regime we have had since 1992), to various forms of price-level targeting or average inflation targeting or hybrid price-level/inflation targets. The problem with these regimes from Gordon Brown's perspective is that they are all medium- to long-term monetary policy regimes, and it is still the government's theoretical aspiration that in the medium to long-term we should not have a UK monetary policy at all - for we should join the euro. That enfeebles progress in our monetary policy framework, and could, I think, be steered into a political issue.

[Andrew Lilico]

Traditional Tory@20:46

In my view, Mrs Thatcher's key attribute, that allowed her to unite otherwise disparate elements within Conservatism (classical Whig and traditional Tory) and also to speak to her age, was statecraft. Union power, local authority Trotsky-ite lunacy, weak control of public expenditure, no control of inflation, loss of Empire, and so on had created a sense that Britain could not be governed. The counsels offered were those of despair, and it is not impossible that, without her, Britain might have gone the way of Argentina (10th richest country in the world in 1910). She granted the Tories their order, and the Whigs the supremacy of their Parliament and their secure medium of exchange so that their markets could function.

Hers are not the problems/challenges of our age, and we do not need to hope they are repeated to hope to win again. Our era faces new challenges, which require us to call on different elements within Conservatism to form our winning coalition.

[houndtang]

Willets, Fox, May, Lansley - all have been in the Shadow Cabinet for nearly a decade and have made zero impact in that time. They have to go and be replaced by younger, hungrier guns.

[Liberal Tory]

I expect the 'big beasts' - Hague, Osborne and Davis - to keep their jobs.

Hague and Davis yes, but he HAS to get rid of Osborne.

Fox should be shadow chancellor (actually, Hague would be better, with Fox as Foreign Sec, but it seems Hague can't be bothered).

In the new structure there's a perfect alternative job for Osborne - shadow Secretary of State for Children.

Let's get the grownups back at the top of the shadow cabinet.

[Umbrella man]

Good points Editor.

Getting rid of the short-termism at CCO would also be useful.

[richard]

Osborne was on BBC News 24 commenting on the Brown re-shuffle. He was absolutely PATHETIC. Get rid of this man NOW.

[Tapestry]

Andrew Lilico. The rate of inflation in the Western world is probably far higher than government statistics are showing. People in all eurozone countries will tell you that the value of money has at least halved. That makes a 10-15% rate of inflation. Property and other asset prices are surging across many parts of the Eurozone. How Trichet still claims 2.5% is laughable.

The USA has a shadow statistics academic, who makes a convincing argument that inflation has got to about 10% now since Clinton did similar to Gordon Brown and excluded things like housing cost from inflation index.

In Britain assets prices have surged since 1997. House prices have trebled. Interest rates are nearing 6% and will probably go up a fair bit more yet. Taxes have ballooned and so have all household bills, so have food prices. It seems likely that government statistics here are as hopelessly out of kilter with the real rate of inflation as they are in the USA and the EU.

Gordon Brown abandoned the RPI which shows around 5% inflation against the CPI which he introduced which shows half that. But even the RPI seems to be a severe underestimate of the true rate of inflation.

There is an untapped political bonus for Cameron if he opens up on this weak flank in Gordon Brown's armoury - inflation.

[Tapestry]

Patsy - I'm sorry but I have always believed Gordon Brown to be fundamentally stupid. His actions merely confirm my opinion.

[Serf]

Can you name the Finance Director of a major British company who is in jail ?

No, probably because no Finance Director would dare cook the books like he has.

Andrew Fastow, may not be British, but he is most certainly in Jail last time I looked. Yet his creative accounting is nothing compared to Gordon's.

http://en.wikipedia.org/wiki/Andrew_Fastow

[TomTom]

Yes Andrew Fastow shares his time in gaol with his wife as part of a plea bargain so one parent could stay with the children. You quote the USA which has a far better record on fighting White Collar crime than does Britain.

Enron was an extremely simple scam and if Jeff had recalled the Equity Funding case at Harvard Business School he would have had the script.......Enron was nothing new, it has been going on in every cycle for at least a century - Goldman Sachs was the specialist at this in the 1920s with its retail mutual funds and a reason for the SEC being created.

You make out that off-sheet funding is new and scandalous - it has reached large dimensions because of greed but it is such an obvious trick which is why the rules on consolidation were changed.....if you get bored with Enron try Parmalat

[TomTom]

There is an untapped political bonus for Cameron if he opens up on this weak flank in Gordon Brown's armoury - inflation.

Hardly. It is not hurting enough people yet. The whole game is to use the property market to increase asset values after Y2K and the Dot-com debacle and float the economy on credit.

The British economy has only two drivers - Financial Services and Public Sector - with housing being simply an asset class in the financial portfolio for asset-backed lending. The export sector is shot and Britain exists by creating services to cater for householders in terms of builders, joiners, PVC windows...and licensed lenders to fund the show backed with appreciating asset values which are simple a surrogate bond market

If you treat the property market as a Bond - which is in effect what CMOs do...and then use this as an asset-class to provide an equity base for speculative trading you have the Bears Stearns problem in a nutshell. I would hate to se what Fannie Mae and Freddie Mac look like at present.

China has funded its industrialisation on booming property prices in the Anglo-Saxon world + Spain.......Germany has had falling house prices for a decade but a manufacturing export boom

[Traditional Tory]

The whole game is to use the property market to increase asset values after Y2K and the Dot-com debacle and float the economy on credit.

This is simply conspiracy theory at its worst.

The main engines powering domestic property price hikes are free availability of loan finance (which once was certainly not the case) and - although I suspect this tends to be exaggerated - the size of City bonuses.

The market is overwhelmingly 'made' by secondhand property so the availability or otherwise of new housing has little to do with high prices. Not that New Labour has been remiss in arranging for the concreting over of SE England.

So tell me, Tapestry, how would you tackle the situation?

[Traditional Tory]

Sorry, I meant Tom Tom.

[Tapestry]

Tom Tom, peoples' disposable income is being squeezed by tax rises, rising household bills, and higher prices.

Incomes are not keeping pace, either with asset prices or with retail prices and taxes. Interest rates are moving into the red zone, as inflation is inevitably hitting home. Rail workers and Postal workers are planning strikes.

Trying to float the economy on an endless housing boom requires a determination to keep housing capacity short, immigration and divorce rates high, and of necessity keep the poor poor as they cannot join in the house price bonanza.

It's an artificial market, and creating imbalances. Something will have to give. Watch out for interest rate rises, repossessions, striking workers and financial businesses in distress, and finally a collapsing consumer economy.

It's started in the USA in the sub-prime sector. The trauma is moving on from there to affect financial institutions. Interest rates are rising, and consumption is falling. It's all on its way here soon enough.

The difference politically is that the boom-makers in the USA - Clinton and Greenspan have quit the sinking ship - as has Blair here. Brown will collect.

[Tapestry]

Trad T. cut taxes. cut money supply. increase supply of housing - not as suburban sprawl but as City Centre high rose condominia and park homes in rural areas. allowing the market to craete 1 million condominia and 1 million park homes.

[Tapestry]

rose = rise

[Traditional Tory]

Trad T. cut taxes. cut money supply

Cutting taxes (although I'm in favour of it) won't help here.

It is the supply of credit that needs to be controlled but with EU and international agreements now governing such matters how can it possibly be achieved?

I would take my hat off to Cameron if he had the courage to tell the public (and particularly younger homeseekers) that it is time they cast off their obsession with 'owning' their home at forgot the media drivel about the 'housing ladder'

Whether they like it or not, coming generations are going to have to get used to renting, just like their grandparents and great-grandparents.

It's perfectly acceptable to millions of Europeans. Only in Britain (and England in particular) are we afflicted by this rather greedy obsession.

[ToMTom]

It is the supply of credit that needs to be controlled but with EU and international agreements now governing such matters how can it possibly be achieved?

Very easy and I should think the ECB would applaud Britain if it restores Special Deposits, SSDs, and started redefining eligible assets in bank Reserve Asset Ratios plus demanding Daily Reporting of balances at ALL financial institutions to the BoE

[Andrew Lilico]

Traditional Tory

The supply of credit would fall as interest rates rose. It is likely that we need a period of broad money growth of under 7%. Under an other-things-equal scenario that might require interest rates in the 6.5%-7% range. But it is quite plausible, yet, that 6% will be high enough, if it is co-joined (as it might be) with other factors, such as a self-generated degree of housing market slow-down, some change in policy in China, higher taxes, or other factors.

You are quite right to point out that new housing supply is irrelevant to the short-term debate, mainly because it represents such a tiny portion of the market, but also because it has risen dramatically over the past two years, and because the growth in the number of households has not, so far, lived up to expectations when actually counted - the political debate in this area is somewhat behind the facts.

You also mention renting. Of course, rents have not risen nearly so fast as purchase prices (we only have a really good index for the past five or six years, but it seems that rents have been rising in line with average earnings, as per standard models of housing costs - e.g. those that predicted house prices falls from 2004). Many of us pontificated in vain over the housing market. Now, it seems to me, the correct position is Socratic wisdom - the positive recognition of one's ignorance. No-one knows why house prices have risen as far and as fast as they have, no-one knows how much of these rises might prove sustainable over the longer term, and no-one knows if house prices will rise or fall from here. All we know is that the best models (those that predicted falls) were wrong.

[ToMTom]

This is simply conspiracy theory at its worst.

Not it is not. It is Central Banking explained..it explains just why Alan Greenspan ran a loose credit policy as a Monetary Economist - they were fearful of an IT collapse in 1999/2000 and flooded the system with liquidity in case ATMs and computers crashed. This fed the Dot.com boom - when that crashed they were afraid the banking system would go under.....so they repaired bank balance sheets with cheap credit and these in turn looked for property-based lending and LBOs.....the public then decided to be mini-property speculators and housing values inflated increasing collateral for loans.

It is simply Credit Multiplier stuff...in fact it is an exaggerated form of the stimulus proposed by Keynes in the 1930s when the exact opposite policy was pursued causing Depression

[Jake]

Why is it that Cameron persists with the self denying ordinance ?- namely that he will not commit the Conservative Party to an English Parliament .

Quite apart from the fact that this is likely to be as least as beneficial to the Conservatives and not at all beneficial to Labour it should be clear by now that representation for England is a considerable factor in politics 2007 .

Basically , England doesn't have any and EVOEM will not come close to providing it .

It is very odd . Historians will study the attitudes and antics of the politicians of 2007 . The dogged refusal by the British political classes and the Conservatives in particular , to accept parliamentary equality for the English and yet to rush to grovel and slobber - yes , slobber - over anything celtic , is one of the nauseating wonders of our age .

The United Kingdom which those same , ever so British politicians inluding Cameron et al , profess to be committed , is decaying away fast . Virtually by the day .
The decay is , in fact , not so much in Scotland and Wales , but in England .

Time and a crystallising of quiet disgust in English minds for all the systematic anti-English inequalities of the latter day British state, is doing its work .

Don't leave the obvious step too late !

[NMiller]

Compared to the big beasts lined up behind Brown, our front bench looks youthful and shallow - brilliant strategists and Oxbridge debaters but where are men and women of real depth and achievement in business. If there's one travesty of the week it's that Damon Buffini of Permira is battling for, not against, Brown! This should worry thinking conservatives (and Conservatives). Let's look in the new front bench and in candidate selections for real achievers.

[malcolm]

Which big beasts are those NMiller? I strongly suspect that Buffini,Digby Jones et al will have very little real power in their jobs and are there for window dressing purposes only. Blair did something similar with his 'Czars' none of whom really achieved anything. I do hope I'm wrong about this however as I think bringing people of talent to help government is a good idea and like you think that there are too many lightweight professional politicians in the House Of Commons.

[Louise]

Labour Cabinet ministers are NOT newbies. They have had ten years of productive government behind them, all of them are well-versed in government whereas much of the Shadow Cabinet are at best journalists who have landed a job in Parliament and are bringing the baseness of media spin to what should be a more coherent, more policy-focussed and less badly spun message. The Tories won't win an election on propaganda alone. Make William Hague Shadow Chancellor by all means, but get someone in at the top who knows how to respond to the immediacy of the situation.

For example I have not yet had my local association yearbook, which came out like clockwork every year in January. It's now July. Where is it? Why is my membership money being spent on what is largely hate propaganda against a good solid Prime Minister who has shown himself to be a good uniter after the terrorist attacks this weekend while Blair himself made things worse? There are far too many questions to ask Cameron on style and substance to face another tinkering at the edges.