If Osborne succeeds in killing Brown's economic reputation, it's all over for Labour

On New Year's Day we identified George Osborne as the Conservative to watch this year.  He has the task of eroding Gordon Brown's reputation for economic competence - the one thing keeping Labour afloat in a sea of broken promises.

In a speech to the London School of Economics today, Mr Osborne will begin his campaign to kill Brown's reputation once-and-for-all.  He will accuse the First Lord of the Treasury of squandering ten good economic years and of failing to prepare Britain for the tougher times now arriving:

"Our competitors used the fat years to prepare for the lean years. Britain did not.  We are the least prepared country in the developed world to cope with the current financial turbulence.  [Gordon Brown] didn't fix the roof when the sun was shining. His 11 budgets have left us with the worst public finances in Europe."

In advance coverage of the speech the Daily Mail reports that Mr Osborne wants Mervyn King, Governor of the Bank of England, to have his appointment reconfirmed immediately.  The Mail suggests that Gordon Brown only wants Mr King to have another three years as Governor rather than the customary full five year term.  Mr Osborne thinks reappointment now will help settle jittery financial markets:

"There is plenty of uncertainty out there. There is plenty of uncertainty about inflation, there is plenty of uncertainty about the turbulence on the financial markets. One area of uncertainty you could end today would be to simply say Mervyn King is going to be reappointed."

According to The Times, "The Shadow Chancellor will issue an explicit pledge that a future Conservative administration would not run a deficit on the government’s current account during sustained periods of economic growth. “We must reform the failed fiscal rules so that never again do we borrow in a boom.”"

Related links: George Osborne was interviewed at 7.17am on this morning's Today programme.and yesterday, on Platform, 'Voice from the City' asked if the end is nigh for the lender of last resort.

11.30am: Download a PDF of George Osborne's speech.

This is the key quote: "Britain is not prepared if rainy days lie ahead.  And the blame lies squarely and fairly with Gordon Brown.  His eleven budgets have left us with the worst public finances in Europe. The system of financial oversight he personally insisted on left Britain as the only country facing a run on the bank. His taxes and regulations have left the British economy more inflexible and less competitive. Gordon Brown likes to quote the Bible.  But he obviously doesn’t know about the story in Genesis of the Pharaoh who was warned to use the seven fat years to prepare for the seven lean years – and did.  Well our Prime Minister was also warned in the fat years to prepare for the lean years – but he set nothing aside.  Now most say the lean years are here, the cupboard is bare and Britain is vulnerable. We’ve got used over the last decade to Gordon Brown boasting about his reputation for economic competence.  But his actions betray him.  It is his economic incompetence and fiscal incontinence that have left Britain more exposed than any other developed economy to the current crisis."

Comments

[Tony Makara]

Gordon Brown has now got us into a situation in which our economy has ground to a halt. Yet because of over-dependence on imported fuels, foodstuffs and manufactured goods it has become close on impossible to cut interest rates without the knock-on effect of weakening the strength of Sterling, which in turn will drive up the cost of every import in this country. So thanks to Brown we are faced with a trade-off, a stagnant economy or inflation.

The fact is Gordon Brown built an economy on the tick. He used debt-financed spending to fuel growth and placed all his cards on the demand side of our economy. Now that the credit has dried up the artificial demand has also dried up. Yet if more artifical demand is created through cuts in interest rates it will lead to inflation. In fact many financial experts believe that inflation is already with us. Gordon Brown from the off promoted himself as an economics guru. Now however he has been exposed as a plastic chancellor who build a plastic economy on plastic credit cards.

[David Belchamber]

Thank goodness that at long last George Osborne is going to attack Brown's credibility. It beggars belief that he has got away with it to the extent he has over 10 years.

As Tony says at 09.03: "The fact is Gordon Brown built an economy on the tick".

That include all the borrowing off-balance sheet (the PFIs and the Railtrack debt).

As I posted yesterday all those low earners (between about £5,500 and £15,000 p.a.) are in for a rude shock in April when their 10% tax rate is doubled!

Fraser Nelson in the Spectator pointed out Brown's duplicity in using his CPI index of inflation (about 2%) to compare with the old RPI (now 4.3%) that was used by the tories.

The real rate of inflation that is hitting the old and the middle classes is now probably over 7%.

Brown was nothing more than a typical socialist tax and spend Chancellor.

[James Maskell]

Its all well and good killing Browns reputation (which in itself was a matter of time) but Osborne needs to show that he wont make the same mistakes... He needs to show that the Conservative Party has distinctive plans to avoid that. This is something Osborne has not done.

[Iain]

"Mr Osborne will begin his campaign to kill Brown's reputation once-and-for-all. "

Good, about time too for this should have been done two years ago as the writing was on the wall before the last election, it was also clear when Brown staged his own coronation, but better late than never.

If Osborne is going to kill his reputation he has to revisit Brown's tenure as Chancellor and systematically rip it to shreds pointing out the errors, and reminding people of the decisions Brown made which were so disastrous, decisions people might not have noticed at the time when no one was holding him to account, remind people he said he would borrow £29 billion between 2001-6 but actually borrowed £129 billion, which makes a joke of Brown's tarnished Golden rule, or £182 billion he says he is going to borrow to 2012, which if his last margin of error is anything to go by it will be £800 billion . Remind people of the 700 PFI deals getting us £43 billion in services but will cost us £150 billion Brown has put off balance sheet. Remind people of the Current account balance of payments deficit which at 6% of GDP is larger than the US's and only likely to be corrected with a massive devaluation of the Pound, which of course will import inflation, and likely t lead to stag flation.

But at least it’s nice to see a beginning, let’s hope it’s not a flash in the pan and Osborne holding Brown to account for his economic record is a consistent event from here to the election.

[johnC]

I don't think it's all over for Labour until
Osborne drops the lunatic mantra 'stability before tax cuts', and his commitment to match Labour's spending plans, and adopts a clear and unequivocal policy of supporting business and enterprise, less government, less spending, and lower taxes, with Cameron's support. It was a clear and unequivocal tax cut pledge which caused the Tory revival last year, not woolly liberalism.

[HF]

The test is whether George can get a ministerial casualty from the Treasury.

David Davis has gained many from the Home Office.

George has none.

[Editor]

There is a difference, of course, johnC between "it being all over for Labour" and a Tory victory. I have sympathy for much of what you say on GO's mistakes.

[Tony Makara]

"Osborne needs to show that he wont make the same mistakes"

James Maskell, good point. Mr Osborne needs to stress that a Conservative government will support the supply side of the economy. A complete reversal of Gordon Brown's emphasis on creating artificial demand.

[Letters From A Tory]

Labour are very entrenched due to people's view that despite all their many, many, many, many failings, our economy is doing ok. The Conservatives will have to mount a sustained, well-informed and punchy campaign to dislodge this idea from the minds of voters. Soundbytes and cutting facts are going to be needed in large quantities over the next couple of years.

[Mike]

Good. The offensive begins.

There was little point in starting much before now as the population wouldn't have been listening. Unfortunately great swathes of people have been lulled into the belief that they can borrow their way to prosperity.

The alarm bells are now starting to ring and people are begining to worry about the economy (and with good reason).

If Osborne can hit some very obvious targets with some force then as the economic situation deteriorates people will have not only an explanation but a culprit.

I also think that Osborne will get an opportunity to rescind his pledge to match Labour's spending plans as before the year is out the government finances are likely to look awful.

[Tony Makara]

What makes things worse is that the debt-fuelled high-street spending has gone on imports, which means there has been no incentive to generate our supply side and no jobs created. The only jobs have been in the service sector and many of those now look to be under threat from internet shopping. The economy is badly structured and a complete change of direction is needed. This would fit in well with the Conservative party's agenda for change.

[Martin Cole]

David Belchamber pointed out at 0924 that:

Fraser Nelson in the Spectator pointed out Brown's duplicity in using his CPI index of inflation (about 2%) to compare with the old RPI (now 4.3%) that was used by the tories.

The real rate of inflation that is hitting the old and the middle classes is now probably over 7%.

But both parties have for years chosen to ignore house price inflation and its effect on the economy.

As I have been too polite to point out to my various visitors from the UK over the past year or so, a family home worth several hundred thousands is all very well, but when the time comes to downsize and a sale is eventually possible, a loaf of bread might well cost some hundred pounds or so, then any gain is clearly illusory.

I think some of Mr Osborne's target voters may be coming to realise this painful truth for themselves but I have yet to see any evidence that he has the ability or policies to cope with such a problem that he seems daily more likely to be eventually to inherit.

[Politico]

Browns incompetences in the economy are legendary - interest rate cuts wont solve the economy. The boost spending which is the problem, and cutting rates boosts inflation - we cannot underestimate how this stack of cards could collapse (after all - all GOP candidates support tax breaks - but this is one occasion when nation state conservatism must win out to make sure the economy stays on track. The dollars value needs to recover to boost american spending and revenues to combat the slow down (linking the dollar to gold could solve this....)

On another note, i implore all to watch the Fox New debate for South Carolina (its on their news page) and please blog for Ron Paul - he could be a isolationist president and has a total opposite message of peaceful change rather than global uncertainty - we shouldn't have been in a war - bush has succeeded in turning them into long term issues that will affect us for generations - its time to pull out and pursue an agenda of peace and democracy. Bin laden was in tora bora....but the whole islamofascism thing may not have occurred had America dealt with the jewish/Muslim issues first and the image that America is pro jewish, and sought resolution and democracy before jumping to war (we have forgotten that the war was on a false pretence and the fact that the US is now engadging with North Korea destroys the argument for getting rid of Saddam. Also, what message does that send to Iran. NK gets all the attention after getting the bomb - doesn't that show Iran that to get American attention it needs the bomb, also think - why are American ships there in the first place if not for provocation - why should it police the world - just think of the ramifications - its a travesty that this is not reported more - it truly is complete change..

Just look at how they tried to spin the Iran boat thing..the economy is in dire straights and he wants another war ..the BBC news was getting it, but no one else.

[London Tory]

After Northern Rock, Alistair Darling is ripe for the taking, so I agree with the previous post comparing Osborne to David Davis. Darling was ridiculed in the House this week following a clever question by Crispin Blunt MP. His tenure at the Treasury and public demeanour increasingly resembles that of another Chancellor out of his depth- Norman Lamont.

The Party should now be focusing all of its efforts on forcing the resignation of Peter Hain. Newsnight had a devastating piece on him last night. Where was the Tory spokesman to back it up ? Ditto Martin Linton MPs defence of Hain on BBC radio this morning. Can Party HQ pull its finger out on this one, please ?

[Tony Makara]

London Tory, yes, Alistair Darling has been a disaster as chancellor and Peter Hain should go on principle. Who do you think Gordon Brown would replace these two with? Ruth Kelly has an economics background, would Brown risk her as chancellor? Who would take over Hain's remit, Benn perhaps? It certainly won't be Frank Field thats for sure!

[Iain]

"After Northern Rock, Alistair Darling is ripe for the taking,"

More so that just as Blair gets his a £500k salary from JP Morgans, JP Morgans gets a £2.25 Billion mortgage placement from Northern Rock, in this one must ask if JP Morgans is getting to cherry pick the best of the mostgage debt leaving the British tax payer with rubbish collateral.

[Malcolm Dunn]

JP Morgan 'a pretty straight kind of bank'.

[Joe James Broughton]

The government's chickens are coming home to roost.
People feel their money has been wasted.
It gives the Tories a real chance.

But we still have more to do to convince people we can do a good job - and there remains the risk that if the economy avoids a recession (I hope it does) Brown could still play the "stood up to events" card.

But credit should be given to the economic shadow team for sharpening up their attack, particularly from Sept 2007.

[David Belchamber]

Please don't misunderstand me if I say in frustration:

"where were GO and his merry men over the last ten years when we really needed them? How was Brown allowed such free rein over that period to build his self-proclaimed reputation for stability and low inflation?"

Also tactically, was it wise to give out an advance copy of this speech ("He will accuse the First Lord of the Treasury of squandering ten good economic years...)? Would the impact not have been even greater had it come out of the blue?

However, having got that off my chest, I am delighted to see GO now getting down to the job in earnest. At least in Alistair Darling he has a much easier target to try and knock off his perch.

[Mike]

Joe James Broughton, I cannot see how a recession can be avoided given the current circumstances. If you can see a way out for Uk Plc then I'll gladly listen to it.

I am SO glad Brown bottled the election in the Autumn. My fear at the time was that we'd win it and get the blame for what is coming. As things stand the blame will be laid where it properly belongs.

Osborne needs to be thinking ahead as well as taking some carefully chosen kicks at Brown's reputation.

There will come a time in the none too distant future when people will be saying 'yes, we know it's bad, we can see that. Now how would you fix it?'

[David Lane]

This is a well-timed move by Osborne as the writing is now increasingly on the wall for the UK economy. Stagflation is on the way, it is unavoidable now, and the incompetent, dishonest, and wasteful Brown must take the lions share of the blame.

After the house price bubble bursts, and repossessions, bankruptcies, and unemployment rocket, Brown will take his rightful place as the most despised politician in Britain.

[James Sproule]

Barring being caught with a dead girl or a live boy, Darling is safe. Brown is certainly not going to sack him as and when the economy turns down, for if the problem is structural, it is obviously Brown’s fault and if it is cyclical, Brown wants us to believe he has put the best team possible in charge (eg, himself). The good news is that a badly wounded and hanging on Darling is probably as damaging as a sacked and replaced Darling.

Labour’s line is clear. We are on the brink of an international slowdown and our economy is pretty good. You can almost hear the Downing Street Press Releases in the news as it is being reported by the BBC, but George Osborne’s is increasingly pushing at an open door in his fight to change public perception.

[Joe James Broughton]

Method of measuring inflation -

Crucual, and
I'm interested in David Belchambers point which is valid -

"Fraser Nelson in the Spectator pointed out Brown's duplicity in using his CPI index of inflation (about 2%) to compare with the old RPI (now 4.3%) that was used by the tories.

Posted by: David Belchamber | January 11, 2008 at 09:24
"

I have heard some things about this before, but I don't understand why he doesn't get picked up about it.
Surely the Bank of England panel (whose remit is to target inflation) would advise the Government that it's an inappropriate tool.
Does anyone know more on this?

[Iain]

"You can almost hear the Downing Street Press Releases in the news as it is being reported by the BBC, "

As Brown has taken all the credit for the good economic conditions which has been the result of benign global economic conditions, something the Conservatives have been poor at pointing out, Osborne and company should not let him now get away with blaming the downturn on global conditions when things turn bad.

[Griswold]

The Enron Chancellor as was and now PM always falls back on the ERM Boom and Bust bluster to derail any attack on his handling of the economy. Osborne/Coulson need to employ a one-liner as the first response. Something along the lines of "Yes our ERM policy, the one you voted for as shadow chancellor, was flawed. The exit from which policy You voted for provided you with £38 bn to waste in addition to your early attempts at gold trading".

Yet Conservatives have allowed Brown to embarrass and shame them. Attack is the best form of defence. Campbell would have worked out a telling standard reply.

[gezmond 007]

George Osborne is a boy trying to do a mans job , he gets too hysterical and sounds like a spin machine. Good PR but no policy.

Knocking Labour is not good enough it,s too easy and people see through it in the end.

He has to supply coherent policies that dont turn off the electorate , I cant see any ! Both him and Cameron need to grow up !!

[Tony Makara]

"Now how would you fix it?'"

Mike, a good question. Seeing as Brown got us into this mess by encouraging the overvaluation of Sterling, which in turn has made us dependent on imports, which in turn now makes us vunerable to inflation every time there is an interest cut, perhaps George Osborne ought to look at giving tax cuts to business that produces for the home market, to encourage manufacturing and to make us less vunerable to the fate of the pound. Sterling may well be about to do a Dollar and collapse in value, if it does our reliance on imports is going to be a big problem, because we won't be able to cut rates to boost the economy.

As I argued before on ConHome being dependent on imports would lead to severe economic problems if the pound were ever to decline in value. If we are not producing for our domestic market we will not be able to shift our custom away from imports because there will not be an alternative. This is a realistic scenario that could happen given our current economic position. Therefore I believe George Osborne should promise special support for entrepreneurs who want to supply our home market.

[Dave Lane]

Osborne is right to attack Brown on his appalling handling of the economy, the consequences of which are now coming to light. I wonder, though, whether his speech will get any airtime, particularly from the BBC.

There still seems to be a concerted effort from much of the media to continue the spin of Brown's "prudent" economic record though this will evaporate throughout 2008, as the economy deteriorates, sterling and house prices collapse, and unemployment and bankruptcies go through the roof.

[Gezmond 007]

Tony , I,m not the Shadow Chancellor . I,m just a voter looking for inspiration but don,t see any coming from the Tory front Bench.

Just adults acting like spoilt children.

[Mark Fulford]

Therefore I believe George Osborne should promise special support for entrepreneurs who want to supply our home market.

I thought we believed in the free market (IMO, one of the most effective tools in peace-making)?

Subsidising home-market producers (and, by the same logic, exporters) has the same effect as taxing imports. Both distort the free market and fuel trade wars.

[Tony Makara]

Gezmond 007, we need to get our supply-side right. Gordon Brown has only been interested in demand, in spending, because he has been looking for the feelgood factor at election time. He has allowed the supply-side to wither on the vine. Basically Gordon Brown has set up the economy to buy votes from people who don't see that borrowing and spending only lasts as long as the credit is good. The fact that such free spending has mostly gone into imports has done our country no good at all. If that spending had gone to producers here at home we would have been in a much healthier position, plus our internal market would have led to a more sensible and more stable pricing which wouldn't have been subject to the yo-yo effect of imports.

[Gezmond 007]

Tony , I,m not the Shadow Chancellor . I,m just a voter looking for inspiration but don,t see any coming from the Tory front Bench.

Just adults acting like spoilt children.

[Tony Makara]

Mark Fulford, I believe in a free market and free trade so long as it is in Britain's interest. When such open trade creates problems for our macroeconomy we have to act in the national interest.

[Iain]

"Now how would you fix it?'"

Well I wouldn't start from here, unfortunately the Conservatives have failed to put down any markers on the economy or the handling of it for the last few years, so they haven't build up any reserve of credibility on Brown’s the mishandling of the economy, in fact it was only the other month when Cameron said the next election would be fought on social break down and not the economy, which perhaps goes a long way in explaining why Cameron has been content with the low profile Shadow Treasury team. So lets hope her Majesties opposition have seen the error of their ways and will now give the economy their undivided attention.

But as to what to do, unfortunately what Brown has constructed is the perfect economic storm, where every economic lever there might be available to pull to correct matters is busted as a solution. For in needing to clamp down on consumer spending and boost savings you need to be able to free up Government spending, but Brown has put us in the position of needing to clamp down on consumer spending/borrowing and Government spend/borrowing at the same time. In addition we also need to clamp down on inflation which needs a tightening money supply ( something else Brown has let rip) but we also need a much lower pound to try and correct the record current account deficit, and anyway Brown has constructed an economy which is highly sensitive to imported inflation. So which ever way you look at it we are screwed.

Essentially we need to restructure the economy, from one which is bloated on debt, housing debt, unsecured debt, and Public debt and structure it to an economy which pays its way, rather than expecting a free lunch on the back of a property bubble, consumer spending and imports. This is going to be difficult for the reasons I have outlined, but what ever the difficulty the Conservatives need to be out there pointing out the problems, making the arguments and lay out a plan of doing it, which has to revolve around incentivising savings rather than spending and property speculation, and putting forward a plan to get value for money out of public spending, in this the Conservatives need a James character going through the books as they had for the 2005 election, something I thought was very good, which should have got the Conservatives more credit at the last election than they did ( may be people will be prepared to listen this time)!

[David Belchamber]

Hear, Hear, Griswold at 14.35: all tories should be able to bat away Brown's assertions about Black Wednesday with a comment like yours:

"Yes our ERM policy, the one you voted for as shadow chancellor, was flawed. The exit from which policy You voted for provided you with £38 bn to waste in addition to your early attempts at gold trading".

Yes, Black Wednesday occurred, just as the run on Northern Rock occurred and various other Labour debacles. They are expensive for the taxpayer and embarrassing.

The only thing is under Ken Clarke our economy recovered and we handed over a pretty good legacy, out of which - as George Osborne has soo rightly pointed out today - George Brown did not make proper provision for the inevitable rainy day.

[GLOY PLOPWELL]

The Lib dems have really good policies on the economy - its a real pity they havent been tried.

[Iain]

"The Lib dems have really good policies on the economy - its a real pity they havent been tried."

What public spending, more public spending and join the Euro? Hmmm I need some convincing that the Libdems have anything worthwhile to say on the economy.

[Tony Makara]

I think its interesting that the BOE decided to hold rates, in expectation of the ECBs decision to hold. It seems that the BOE has in effect pegged our rates to that of the ECB for fear of a widening differential between Sterling and the Euro.

[London Tory]

We should not underestimate that over 650,000 "jobs" have been created in the public sector by Brown since 1997. The real worth of these non jobs very often speak for themselves, Adult Cottaging Advisory Officers for instance (pay circa £40k p.a). However, the majority of these new supplicants to Brown's client state can reasonably expect that the gravy train will come to an end under a Tory Government. They may yet be persuaded to vote accordingly- to protect their own interests.
We also need to make clearer the link between rocketing council tax bills, and the funding of the Worthless Bureaucracy.

[Iain]

"We should not underestimate that over 650,000 "jobs""

I heard it as 800,000 public sector jobs which have been created under Brown, so if you take the 1.2 million private sector jobs which have gone to immigrants the rest of the 2 million jobs Brown boasts of creating
are all in the public sector.

As for Councli tax, I understand some 30% ( i think) of our council tax bill goes towards paying for Council staff's pension schemes.

[David Sergeant]

All good stuff but part of the problem that needs to be addressed is that Brown and co. have been able to skate over difficulties by comparing themselves to assorted, claimed, happenings during the 18 years.

He has sold people on the idea that the Tories cut public services. He has sold people on the idea that the Tories hugely increased unemployment. He has sold people on the Tories leaving a mess he sorted out. He has sold people on the post Black Wednesday "stability" as his achievement.

To just knock him now won't do any harm but it will still leave Brown with some credibility and, if things get bad, might not some people prefare Brown to untried Cameron and Osbourne. It is worth pointing out that the Tories have attacked Brown from the start, Portillo was making all the points above in 1999/2000 with no effect.

[Tony Makara]

David Sergeant, the fact that Brown keeps referring back to black wednesday actually shows how vunerable he feels he could be on the economy. I though George Osborne's speech today was very good but he must keep the pressure on. Too often there is a burst of exciting activity from shadow cabinet members but that is then followed by long periods of silence. Labour are claiming that we have full employment on their website, why aren't senior Conservatives kicking up a fuss in the media about that. If it was the other way around you can bet that Labour would be screaming from the rooftops. I really liked the commitment to supply-side economics today. We've got to take the chains off business and let it break free.

[Yet Another Anon]

Yet because of over-dependence on imported fuels, foodstuffs and manufactured goods
The dash for gas in the early 1990s didn't help, nuclear power should never have been run down both for environmental and stable power provision. There has been too little investment in renewables by successive governments, by definition non-renewables will run out at some point on the earth and most of the more easily extractable supplies have already been obtained, best to maintain reserves and as quickly as possible be ready for when the big remaining gas, oil and coal supplies run down.

Manufacturing industry was going down in the UK over successive decades, the heavy regulation of the labour market and toleration of Trade Unions - indeed subservience to Trade Unions in the past hasn't helped - a successful future for industry would be one of a de-regulated labour market, no minimum wage, low taxation and no unions.

[Richard Calhoun]

It is important that the Tories now unveil their tax cutting agenda to re-vitalise the economy.

It will be far more effective to attack Brown's record when it is entirely clear how the Tories will tackle the economy.

If they do that Brown's a goner!!

[Moral minority]

Could someone point out the real life experience on Osborne's CV that would demonstrate that he has the qualifications and skills to be Chancellor?

Criticing Darling and Brown is easing. The real test is demonstrate that you are a credible alternative. Making Osborne Chancellor is like appointing the receptionist to be the new Chief Executive of a footsie firm.

[Tony Makara]

Yet Another Anon, a school of thought leading up to and during the 1980s was that the switch from a manufacturing base to a service sector economy would fee us once and for all from the likes of Derick Robinson and Mick McGaughy. However I feel it was a case of throwing the baby out with the bathwater. The end of manufacturing did get rid of the union barons but has left us with a permanent core of a million unemployed. A high price to pay.

The trades union question is interesting because I don't have a problem with non-political unions who represent the shop-floor, the problem lies with politicized unions, and when unions donate to a political party its fair to say that they have a political agenda. If we are to bring the hard industries back as the mainstay of our economy they would have to be privately-owned and union-free. Thats a must.

[David Sergeant]

I understand that in the last 3 years of the Tories manufacturing employment increased by 400,000. These debates are not going anywhere when we are just waving vague perceptions around as a basis for decisions. Worse we seem to accept the information passed down by Labour spin to have a debate. We are not going anywhere without facts.

[Tony Makara]

David Sergeant, the facts are that China has shown the world the power of manufacturing. It is the way forward and the only way we will ever eradicate the crippling burden of the welfare state. The service sector has its place of course and what it does is very good, but manufacturing can employ so many more people, and, very importantly make us less dependent on imports. The old adage 'use it or lose it' applies here.

We as a nation are at a crossroads, are we still a great nation? For great nations export and dominate markets around the world. Lesser nations are passive and live by importing from great nations. There is a Darwinian perspective to all this. Are we to be hammer or anvil? Leaders or followers? What sort of a nation are we? There is still time for us to turn our nation around, but we must act soon because we are fast fading into history. I for one do not want my country to be a second-best also ran. We should look for inspiration to our forefathers who dominated world trade through exports.

[Joe James Broughton]

I'm afraid I agree with Moral minority.
I think we've all been encouraged by the sharpening up of the tax attack from September 2007 onwards, and hope it's enough. George Osborne deserves credit for that.
But personally, I'd like to see someone like Dominic Grieve, Michael Fallon, or perhaps even Osborne's deputy, Phillip Hammond, as (Shadow) Chancellor.

These are people with dry economic views, but are also realistic - they've been out in the real world.

But I don't think this will happen, so we'll have to do our best to sell it.

[Yet Another Anon]

David Sergeant, the facts are that China has shown the world the power of manufacturing. It is the way forward and the only way we will ever eradicate the crippling burden of the welfare state.
Non-unionised as well of course with little labour market regulation, no minimum wage - n China strikers would be met with tanks and soldiers. What the UK needs is it's own equivalent of Deng Xiaoping, he certainly knew how to get things done and he'd sacrifice anyone to do it.

The service sector has its place of course and what it does is very good, but manufacturing can employ so many more people
That used to be the case, now so much is automated - already warehouses entirely automated, only people who work in them being technicians who repair the machines. One day it will be possible for machines to repair other machines, maybe even design machines, factory lines could well be entirely automated. I expect only further reduction in numbers employed in manufacturing regardless of whether there is a manufacturing boom or not.

That still leaves service industries, although who knows - it's not inconceivable that eventually cafes\restaurants could be staffed by robots thus avoiding labour market regulation and problems with sickness and pregnancy, robots don't take paternal leave either.

[Tony Makara]

Yet Another Anon, one day I was looking around my home and decided to note the origin of everything. It was shocking to see how many things were made in China, from a small bathroom mirror to lamps, radios, clocks etc. All the sort of wares that we could be producing for ourselves. I accept that there are some things we need to import, but most items could be produced here. A national economic strategy is called for, one that rewards business for supplying our home market. We should make it clear to entrepreneurs that if they are willing to set up and produce goods for the domestic market they will receive substantial tax breaks to make it worth their while. Once we have driven the cheap shoddy imports out of our country we will have a ready made market which in turn will provide us with jobs. Why should our money go to the Chinese when we can use it to support British industry and thereby increasing the wealth of our nation?

[Joe James Broughton]

I disagree with Yet Another Anon on the robots for services that are more personalised.

Human beings are fallible, and even younger people often need to discuss things in a non technical way, and/or need help. That will change slightly - but not fundamentally.

It is credible that entire production lines could be automated though.

Machines repairing other machines would have to be for fairly simple tasks though - the BETA test could be in a nuclear power station.

[Tony Makara]

Joe James Broughton, the new world certainly has some chilling aspects. Almost enough to turn one into a luddite. One of the most kitsch things I find is having to talk to a machine over the telephone. I instinctively find that debases me as a person. Reduces my worth as if I too am becoming automaton. Much of the stress of modern life comes from advances in technology. At one time we only had to worry about the child molester in the park, now he has a direct line into our children's bedroom. At one time we would simply ask "Whats on the other side?" now we are faced with a choice of over a hundred TV channels, where do we begin to look? At one time we could find space for ourselves to unwind without being disturbed, now with mobile phones and the internet people seem to be literally on top of us, encroaching on our body space. The pressure at times seems relentless and I know what David Cameron means when he says he finds pleasure and escape in playing a simple game of cricket on an English sunday afternoon.

[Yet Another Anon]

I disagree with Yet Another Anon on the robots for services that are more personalised.
There are already robots that can dance - there is even a plan to develop a robot tp store folk dances from around the world that are dying out.

Work is going on on creating machines to respond to human conversation with some success.

There have been cyber pets, it may be that even at the point it still is cheaper to employ people that automated bars\restaraunt start up that people will go to for novelty value. Most of the resistance to such things is cultural in nature, all it would require once it is possible is for the culture to have changed for it to be culturally acceptable.

Who knows? Virtual receptionists, virtual classroom assistants? Old employment programmes have no place in the future.

[Joe James Broughton]

Yet Another Anon - You have some valid points but I just think you are over-estimating how technical people really are. Some are people are very, but most are not.

It may change - but not fundamentally.

I work in a programming job, and most people want these things just done for them - they don't want to get involved in it. When it comes to things that people like to be personalised service, the ghastly automated answer machines that large companies/utilities use show the limits, but I supppose you could design a much better call centre script - who knows - voice recognition to have arguments with you - the lot...!

You are right about production lines - probably a lot of that has already happened.

[Yet Another Anon]

You have some valid points but I just think you are over-estimating how technical people really are. Some are people are very, but most are not.
They don't need to be that technical, indeed many non-technical people are far more easily impressed - it's still relatively early days so far as voice recognition systems go and things such as simulating bipedal walking are improving.

Given the rate of cultural and technological change, it's hard to say in what sector most people might be employed in - could even be in product research as paid guinea pigs.

Part of the reason why employment is best left to employers to sort out - public, private or third sector and why any attempts to mass organise job creation as a thing in itself is probably futile.

[Tony Makara]

Yet Another Anon, the fact that the massive burden on welfare hasn't gone away in thirty years just goes to show that if this problem is left alone it won't go away. Government has to be proactive in dealing with it. Shifting people from one benefit to another or introducing workfare will not get rid of the problem. The only solution is to create a million new jobs. That requires a different economy from the one we live in today. Those at the top of the party need to think about this very seriously. So far all governments have only dealt with the effects of mass unemployment rather than the causes. The sad thing is that politicians have come to accept one million a low unemployment, how on earth can one million be low! Something has to be done.

[Yet Another Anon]

the fact that the massive burden on welfare hasn't gone away in thirty years just goes to show that if this problem is left alone it won't go away.
During this time though there has been a continuation of high public spending and high taxation, and throughout every government an extension in the regulatory burden on business, reversing the post war consensus more radically by actually being ruthless in cutting business regulation, ignoring requests by the Civil Service to add new regulations and by finding cuts in public spending and using those cuts to cut the Budget Deficit and in the longer term to cut taxation are the main solution.

Spending on the NHS was 4.5% of GDP in 1948 and down towards 4% of GDP in the 1950s, it is 8% of GDP now and rising. Education spending similarily is far higher now than it has ever been - both can be cut by replacing universal funding with low interest loans repayable in the same way as Student Loans are now and by transferring all state provision to private companies limited by guarantee and allowing them to charge to cover costs, even to cross subsidise services for children, the elderly and severely disbled.

Welfare can be restructured making housing costs and other variable rate costs, and relief on Local Taxation fundable by low interest loans assessable for repayment along with medical and education loans.

There needs to be a simplification of the rest of the benefits system - abolishing National Insurance credits for non-contributory benefits, stopping using money from the National Insurance Fund for those who have not met a contributory eligibility requirement, if any money from the NI Fund is to go on health it should only be for those who have met contributions for Pension or benefits such as Incapacity Benefit.

There needs to be a move towards greater universality, but with if anything lower benefit rates relative to wages and with assistance for those who have overspent and used up their benefits removed - there has to be a far more intransigent attitude limiting help to any one person regardless of consequences for that person.

So far as benefits for the disabled go, they need to be based on degree of physical disability, there needs to be a significant narrowing of what is considered to constitute disability especially mental disability which is difficult to measure and much easier for someone to fake. People who have caused their own disability whether deliberately to get benefit or through carelessness need to be disqualified from receiving any assistance for what is a self affliction. Those who fail to attend required medical tests, required interviews on other matters, or who have refused prescribed medical treatment should also face sanctions on any monies or other benefits provided for their disabilities.

Residency requirements in benefits also need to be tightened up significantly, prisoners need to be required to pay for their lodging costs and cost of any legal action against them, low interest loans can provide for this for those with insufficient funds. In prison they could be required to work to pay off these debts, and debtors prisons could be established (as they have in Texas) where ex-cons and indeed anyone else with an undischarged debt can be required to work to pay these off.

There needs to be a streamlining of government departments and a greater focus on the police, military, security & intelligence services and on the public infrastructure including energy, transport, water & sewerage & communications.

Jobs can only be created where there is a purpose in the creation of that job, this will largely be known because there will be signs that things need to be done that are not being done. Even so, there has to be reason to suppose that anyone employed in those positions is up to the job and that any money spent is justified by social or financial returns and does not distort the labour market with welfare priorities.

[David Sergeant]

I know this blog is running out of puff but I would go back to my comment about the substantial increase in manufacturing employment in the last three years of Tory government which no one has disputed. In other words an ongoing decline in manufacturing employment is not a safe assumption. We need to ask what Labour have done to end up destroying so many manufacturing jobs even if there would have been some decline if Tories had been in power since 1997. I won't insult your intelegence by stating the obvious but would point out that the increase in GNP going to schools'n'hospitals has come from somewhere. I remember the French beefing about "social dumping" because we were doing so well. Robots are not the only answer.

[Serf]

Tony

You are barking up the wrong tree once again. Your approach has been tried and failed every time. State involvement in industry, favouring domestically produced goods, is not only ineffective, but is effectively stealing from consumers, as it does not allow people to use their money in the way they wish. When someone is forced to buy an inferior or more expensive product, it effectively makes them poorer.

Britain's manufacturing industry is suffering from government regulations, high taxes and an artificially high pound, designed to keep imports cheap, and Mr Brown in number 10. That is where a Conservative government needs to make changes.

Unfortunately, many of the changes that need to be made, are impossible without permission from the Boss in Brussels.

We have a long history of free trade, something that we should be proud of. Get rid of the weights that hold back our companies, and we can once again benefit from our trading ability.