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That's more like it.

Brown can't blame the collapse of the GB£ against the USD and EUR on the global recession. I do hope Cameron uses this at PMQ's.

As I have been saying for a long time, the old rot was always lurking beneath the thin veneer of apparent respectability and decency.

Arthur Negus would never have been fooled by New/Old Labour!

This is not all doom and gloom.

1. It'll help British exports and
2. my income is based in dollars.

So, from me, a rare thank you to Mr Brown.

We said it eleven years ago and were ignored but its more true now than it ever was:

New Labour - Same old danger!

p.s. Did anyone see Hattersley on Question Time? Denying that Gordon Brown has sent debt spiralling out of control, denying that Labour is nothing more than an economic catastrophe. Proof that he and the rest of his rotten socialist lot are a bigger danger to this country than terrorism and the sooner the electorate realises that this mess is Labour's fault, the better.

There is no 'sterling crisis': the Pound is exactly where it has been against the Euro for an effective eternity now. All that has happened is that the dollar, from being artificially low, has strengthened against *all* currencies. And as far as sterling depreciating goes - if you asked the Government what their currency wet dream was, this is it. As the pound falls in value (against the global reserve currency), our ability to import inflation diminishes, our ability to cut interest rates increases, and as our exports become steadily more competitive so too do home-made goods become more viable for home-consumption. It really is win:win. The very last thing we should want is the pound back at $2. And as far as the taxes and borrowing goes - would anyone care to name to me the major, right of centre of opposition party pledged to reversing either of those things? If you want, I can name you an allegedly right wing political party committed to backing Labour's policy viz taxing and borrowing, but I'm damned if I can name you one opposed to it. Oh, and yes, unemployment is going to creep upwards in a recession. And just as it wasn't Thatcher's fault when that happened during her time, nor is it Brown's now. It's something called capitalism, and that's something really quite a lot of Conservatives used to believe in. Some of us are sufficiently perverse, eccentric and reactionary still to believe in it.

I do not think you even begin to understand how badly this type of "Tory tribalism" plays out in the real world.

You may happily discuss how Mr Cameron has "decontaminated" the Tory brand, but what you need to understand is that the greater "contamination" is with the generic politician brand. This is making it worse.

Cameron was right in his early days when he pledged to end "Punch and Judy" politics, but we are seeing more of this than ever before - this post is a classic example.

Iain Martin wrote an excellent piece in The Daily Telegraph yesterday pointing out that the impression with many voters was that the Tories were treating politics as a "game". I commented on this in my own blog, applauding him. He was and is right.

The mood of the country has changed – is changing. You won't see it in the opinion polls (yet), but it is there. The polls don't ask the right questions and, in any event, people are not going to admit they are scared to total strangers. Half the time, they won't admit it to themselves.

But people are worried, uncertain – afraid even. The mood is sombre, more than a little bit resentful and can quickly turn to anger.

To see this "Punch and Judy" stuff is not helpful. It comes over as lightweight and facile. We need "clinical" opposition – cold, dissection of the appalling policies of Mr Brown, and careful, sensible alternatives, delivered with gravitas and conviction.

In short, when times are hard – and they are going to get a lot harder – we need grown-up leadership. We can do without – as it comes over - a bunch of prattling, overgrown schoolboys scoring points off each other.

There is no 'sterling crisis': the Pound is exactly where it has been against the Euro for an effective eternity now.

You must be economically illiterate, ACT. Over the last year the Euro rate has gone:
down 15% on the Euro (1.48 to 1.26), 2% in last 5 days.
down 22% on the Dollar (2.05 to 1.59), 7% in last 5 days.
down 21% on the Taiwan Dollar (67 to 53)
down 36% on the Yen (235 to 150), 9% in last 5 days.
down 28% on the Yuan (15.25 to 10.9)

We are being caned by all the important currencies.

our ability to import inflation diminishes

You’re saying that being too poor to buy imports is a good thing. At the extreme end of your argument would be the starving in Africa, pleased that their increasing poverty diminishes their ability to import food.

This would only be a boost for the home economy if we were in a position to supply our needs from the home market. But the fact is we can’t, especially after the summer we’ve just had. We rely on imports to feed ourselves and our machines.

You realy do get over excited. Anyone would think the Tories and that inposter Cameron actually had answers to the very real crisis the world finds itself in. Ask yourselves this question; what exactly would the oik Osbourne and Cameron have done differently?

There is no doubt, that with 40% of our food supply coming from overseas, we are going to be importing inflation because we can not so readily switch to domestic consumption and are literally forced to buy imported food.

Some of us have warned about the dangers of becoming too dependent on imported food, and the effects for high street inflation if Sterling were to depreciate. Our warnings were roundly mocked by the free-traders who insisted that we should continue to rely on heavy levels of imported food, some even suggested that making Britain more self-reliant in producing its own foodstuffs was 'Protectionist' and according to their definition a 'Bad Thing'.

We can only hope that senior politicians are taking notes during this recession and will ensure that Britain is better prepared for future eventualities.

Hi Dave here nobody panic I am in full control and George says he can raise enough cash to keep the economy floating. He just needs to know when the boat show at the NEC is on? Any salty sea dogs ahoy?

Oh very funny Dave are you the guy I met at Birmingham who said Redood would be leader by spring after a suprise GE which Brown won by a margin of between 30 - 50 seats?

Woops! I met Redwood. Really should not come on here after visiting local ale house.

The very same Bill. If I remember you told me ( in the Tap and Spile pub, Broad street) that you hoped I was correct and that DC and GO were crypto socialists whose only use was winning power. Do you still desperately want to go to a 'Gentlemen's club'? Not sure how that woul;d help your parliamentary ambitions!!!

Night night

"This is not all doom and gloom.
1. It'll help British exports and
2. my income is based in dollars."

Thanks for your selfless concern for the £.

Only problem is our exporters won't get any orders because other economies are in recession. Oh, and it will increase our import costs so the hoped for fall in inflation will be lessened as interest rates will have to be higher than needed to dampen down the potential for inflation to rise. Bit of a roller coaster ride for all of us. One minute we're up - then we're down.....Good old Gordon - he's got it all under control.

"There is no doubt, that with 40% of our food supply coming from overseas, we are going to be importing inflation because we can not so readily switch to domestic consumption and are literally forced to buy imported food...

Posted by: Tony Makara | October 24, 2008 at 22:24"

1. We can still buy grain on the world market cheaper than we can produce it ourselves ... or would be able to if the EU had not just reimposed import tariffs to protect its domestic industries.

2. There is still (and likely to continue to be) a global grain surplus, so it makes little sense to produce all of our own produce when we can buy it in from elsewhere.

3. At least 60 percent of the grain harvest this year (and probably more) was below acceptable quality for bread-making, due to the lack of sunshine, and the wet harvesting conditions. We, therefore, need to import because we have not been able to produce it ourselves, and could not have so done even if we had wanted to.

4. A significant amount of our food imports comprises non-indigenous foods (not many bananas or oranges - or even rice - grown here). Unless you are suggesting dietary restrictions, the scope for import substitution is limited.

5. Other imports (such as high-value salad goods) come from high temperature/ high sunshine areas. Naturally grown, the "carbon signature" of these crops is significantly lower than it would be if grown here, while energy costs would make them uneconomic, putting them out of the reach of low-income families.

6. While we have a net deficit on food crop imports, we have a substantial surplus in trade in processed, high-value foods ... the one in many ways dependent on the other. We are thus importing low-value (relatively) raw produce and exporting high-added value products. That is not a bad deal.

7. Overall, commodity prices are nosediving. We are well past the worse on raw material prices and the lower costs are more likely to contribute to the expected downturn in inflation, when the higher prices drop off the index.

8. Agricultural capacity for growing foodstuffs is likely to be significantly impaired by use of land for biofuel production and for biomass (see Drax announcement - this also replacing domestically produced coal), to meet our EU "renewables obligation". This is likely to require, as a result, significantly greater imports of food.

9. As far as I am aware, Conservative policy is to support the renewables obligation.

So, yes indeed, we do hope that senior politicians are taking notes during this recession and "will ensure that Britain is better prepared for future eventualities."

We also hope that they will be properly briefed.

Richard, it will be interesting to see the effect on supermarket chains if, as expected the BOE starts slashing rates and the purchasing power of the Pound collapses pushing up the cost of imported food. We have to differentiate between food in its unprocessed state and the finished article sold in the shop with its added labour and transit costs.

I fear that Sterling is now in for a rough ride, the short-termism of the government, obscene levels of borrowing, and the many calls for cuts in interest rates will certainly lead to an inflationary environment. The only way around this in the short term is for the major economic powers to fix exchange-rates for a period, and to co-ordinate lending rates so that currencies are protected from damaging speculation.

There is one reason for optimism on fuel however, namely that the Dollar cannot maintain its rally for too much longer without it impacting on the US trade deficit. The United States has had severe problems with trade deficits since 2001 and will not want to hemorrhage Dollars for too long.

Tony - the raw material costs are the smaller part of the consumer price, sometimes as little as 10 percent. And much of the added value comes in Britain.

I agree with you entirely about sterling and your other comments, but I do not see that food imports are a significant issue.

Raising the matter is otiose anyway. We are part of the EU's customs union. We cannot restrict imports (even from third countries, since we have also ceded trade policy) while we have no mechanism in this country to promote increased production as we have also ceded agricultural policy.

Since EU policy is currently predicated on reducing production - to which our farmers have responded magnificently - it is hard to see what we could do to turn the policy round and incentivise increased production, without which any idea of greater food self-sufficiency is pie in the sky.

I don't agree there is a sterling crisis. The pound has been overvalued for many, many years. At last we are competitive. As for the rest of your tick marks - that's Thatcher, not Brown.

This would be a much better level to join the Eurozone.

And as for food prices - our farmers will be very pleased to be able to sell their goods at a decent price. And thank goodness for the EU, or we'd be in trouble.

We just had the most consecutive quarters of growth ever, and now there is a world recession. Stop blaming Brown.

"And thank goodness for the EU..."

Ah! Stockholm syndrome!

You poor man. It must have been really tough for them to have bent your brain that badly!

Yes, I agree - the pound is doomed.

Time to join the euro then.

Richard, the cost of basic foodstuffs has risen by 15% in six months. This coincides with the decline in the Pound relative to other currencies. This rise in the cost of food, which remember is bought on a daily basis, will continue as long as Sterling decines.

We can only measure the cost of food inflation by looking at the finished product, that is at the point of sale on the high street. The fact is that this food is becoming much more expensive as the Pound declines and the British agricultural sector does not have the productive capacity to provide import substitution.

You are certainly right that the EU is part of the problem and has been the prime mover in the decline in British farming. This is the fault of our politicians since 1973 who have caved in time after time to EU diktak.

Whether people consider themselves to be protectionist, free-trade, or somewhere in the middle, I'm sure all will agree that a nation ought to be able to feed itself and provide consumers with an alternative to expensive foreign imports at times when our currency is in retreat.

David Cameron spoke recently about developing a balanced economy and he rasied a crucial point. Economies that are too service-heavy do not have the capacity to feed themselves. We need to bring farming back, which is after all a sector completely suited to our temperate climate. Future generations will ponder in puzzlement as to why we were paying through the nose to import staples like bread and milk when we could have been producing these for ourselves.

Readers might consider these two news articles, only two years apart and reflecting the collapse in British farming and the problems created by depdendence on imported foodstuffs.

BBC NEWS 9th November 2006

"The UK may have to import milk from Europe within five years if more is not done to help dairy farmers, a leading retailer has warned.
Sir Stuart Hampson, chairman of Waitrose owners the John Lewis Partnership, said the sector would become unviable if no action was taken.

Government figures showed that England lost one dairy farm a day in 2005.

Sir Stuart told that Daily Telegraph that it would be "scandalous" if the UK had to import milk.

"There is a lot of scaremongering about tipping points, but we are reaching a point where unless action is taken we won't have a viable sector," said Sir Stuart, who is a former president of the Royal Agricultural Society of England"

And more recently:

Daily Telegraph 13th October 2008

"Two dairy farmers are going out of business in this country every day because of low prices and high costs, and the wet summer has also affected cows' ability to produce high yields.

But there are concerns that the quality of milk brought in from overseas could be substandard because of the time taken to transport it.

Retailers and processors are now buying a million litres each day from Northern Ireland, Holland and Belgium, but the increased cost of foreign milk is adversely affecting them as well as the customer.

One major cheese producer, First Milk, has already been forced to lay off a tenth of its staff because of the domestic milk shortage.

Meanwhile, market research published in The Grocer magazine showed that the cost of milk has increased by 14 per cent in the last 12 months.

The big four supermarkets - Tesco, Asda, Sainsbury's and Morrisons - have all put up prices in the past seven days from £1.44 to £1.53 for four pints, in response to higher farm gate costs caused by the rising price of fuel, feed and fertiliser.

John Allen, managing director of Kite Consultants which advises dairy farmers, told BBC Radio 4's Farming Today programme that 700 left the industry last year and the national herd declined from 2.1 million in 2005 to 1.9m last year. He said importing milk was not only detrimental to the home industry but also to consumers."

And how exactly do you want to "help" farmers in the glorious free market? The level of the pound in the past few months has done far more to help farmers.

Resident Leftie, we start by letting farmers keep much more of their money by awarding special-tax-status to agriculture. We can find ways to encourage our retailers, especially our supermaket chains to supply more Britsh grown produce, the more they sell, the less tax they pay etc. Those who work to strengthen an internal market should be rewarded.

The whole point of a 'free currency' is that it should be able to respond to changing market conditions. so for every negative of a falling currency, there will be a plus and vice-versa.

The question that will soon have to be answered is: if the Bank of England and the ECB work in concert over interest rates and the Pound and the Euro approach parity, then staying out of the Euro will be pointless.

Conservatives will have to face this problem, (when to restore some economic credibility to the shadow cabinet) Ken Clarke replaces George Osborne as shadow chancellor.

"Resident Leftie, we start by letting farmers keep much more of their money by awarding special-tax-status to agriculture. We can find ways to encourage our retailers, especially our supermaket chains to supply more Britsh grown produce, the more they sell, the less tax they pay etc. Those who work to strengthen an internal market should be rewarded.

Posted by: Tony Makara | October 25, 2008 at 09:55"

Tony - Resident Leftie is suffering from Stockholm Syndrome. Let the poor man be.

More to the point, [exasperation on] you CANNOT award special tax status to agriculture - or any other industrial sector - without EU commission approval. This would break EU state aid rules.[exasperation off]

For sure, if you're the banking industry and your goverment throws zillions at it, the commission falls into line, but under normal rules, the whole point of EU law is to prevent discriminatory subsidies and state assistance.

Furthermore, you CANNOT apply preferential (i.e., discriminatory) marketing assistance to British produce in supermarkets, as the NFU found to its cost with the little red tractor scheme.

You really need to wake up to the fact that we are in the EU ... you know, "In Europe and ruled by Europe...". I think that's what the man said!!!

"We just had the most consecutive quarters of growth ever, and now there is a world recession. Stop blaming Brown"

I'm sure that will come as a great comfort to the average voter.

Richard, we seriously have to question whether our membership of the EU runs counter to the best interests of our nation. It seems that everyone I speak to on the matter of Europe thinks we would be better off out. We really need a referendum on continued membership.

Tony - right now, I would just settle for our political elites admitting that we were actually in the EU and coming clean on the extent to which our policies are shaped by EU law and the treaties.

Instead, we get this hole in the corner stuff, pretending it didn't really exist or, somehow, it doesn't really affect us - with nobody talking about it.

You would think that all the europhiles would be proud to tell us all the wonderful things the object of their affections actually does, but they are the worst culprits.

I find it utterly bizarre that we are so much dominated by "the love that dare not speak its name", while we go gurgling down the plug hole.

Richard, there seems to be an intellectual rationale driving the EU rather than a logical one. If the EU had remained at twelve member states, and if those states were creating an internal European market, based on mutually beneficial trade without the political superstructure, we may well have seen the fulfillment of a worthwhile ideal. However what represents the European project today is little more than enlargement for its own sake, legislation for its own sake, the worst type of intellectual autotelism.

It never was going to remain at twelve. The ambition was always to "unite Europe". The ideals were set down by the founding fathers while the commission (the "guardian of the treaties"), with its Praetorian guard of a select group of Monnet professors, keep it true to those ideals.

Its core principle have not changed since day one.

Tony Makara @ 20.45 on 25/10 - 'Richard there seems to be an intellectual rationale driving the EU rather than a logical one.'

Thats right Tony, and an 'intellectual rationale' like 'ideologies' such as Marxism, Trotskyism etc: do NOT provide an adequate basis - that is a workable basis in the long term - on which to run/organise countries and economies! They are just ideas!

The rationale behind the EU is logical, rational, financial and diplomatic. I'm sure people also have an emotional attachment to the EU, but I've never met one. It's pure pragamatism.

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