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I totally agree with focussing on waste reduction and finding savings. I just wish that Cameron hadn't given that speech in May rejecting any such approach outright, as it once again leaves him open to charges of short-term opportunism, rather than displaying this to be a deep-held belief.

Cameron does make it very difficult for us to understand what he really believes in rather than what he would like us to think he believes in this week.

""...Daniel Finkelstein - very close to George Osborne""
And therein lies a significant part of the problem that leaves the Conservatives without a coherent economic policy.
The sooner that Finkelstein's SDP-style ramblings are tossed in to the same waste basket as that awaiting for Oliver Letwin's tired musings, the sooner the party will be free to establish a truly Conservative economic policy.

It's a shame that Gordon Brown didn't find this £5bn five years ago. With an extra £25bn he'd be in a stronger position to cut taxes.

Anyway, doesn't this blunt his line that balanced tax cuts are no stimulus?

the tories have had 11 years to sort this kleptocratic collective of Marxist thugs out - the TaxPayers Alliance Bumper Book of Government Waste would be a good primer - that alone could save 110 BILLION a year of State theft - but drizzle and drip are socialists so don't expect much - and Oliver Leftwing aint gonna help - and we pay the EU 55 BILLION a year to have out heads kicked in.

If the government was a company then they would have faced the bankruptcy court by now. Of course there are savings across Whitehall both for tax cuts and better public services. yes that is right public services where resources are allocated to the front line rather than form filling bureaucratic positions this government has created. One only has to look at the nhs budget of £90 billion and see rather than providing a first class service, cuts and hospital closures are accelerating. And this from a chancellor not so long ago who raised the national insurance on employers and employees by 1% to provide a world class service.
On top of savings is the fact that the form filling agenda of the last 10 years needs to be halted in its tracks if we are to have a low tax, low regulation and low debt society to compete with the emerging economies of the far east and middle east.
for twenty years we have relied on other countries savings and monies, living beyond our means. Now this age has finished and governments like the general public must cut its cloth and live within its means.

The groundswell of opinion is that the Conservatives have something very large and noticeable at the centre of their economic policy. A big VACUUM. While NuLab do all the running on recapitalisation, announcements on capital spending, the need to borrow to kick start the economy (all of which might be a waste of time), the Conservative leadership just says, "Well we wouldn't do that". So, just what WOULD you do?

As a party Ifeel we are not being hard enough to tell the electorate that Brown was the cause of the economy in this country ,our country.Why not rerun his budget speeches.The Boom /bust and the predictions every year when he said growth would be big and better every year.
Beware STALIN Brown now wants to take our organs when he decides.
We must be more aggressive if the boot was on the other foot imagine what the Cambells and Lord Mandies would be telling the electorate.

There is no doubt that cuts can be made, but let us be frank, there are certain areas where more expenditure may be required, eg defence, roads and infastructure to cope with CO2 reductions. Why can Scotland afford luxeries which Englant cannot afford.
A massive reveiw is needed and this is unlikely to come from this government

Hang on folks we have said we will find savings because the country is in debt and that those savings will be targeted and not on frontline services and that savings will be used to make targeted tax cuts to help the ecomony. Sounds pretty Conservative to me and also sensible compared to Brown and Labour who are going on yet another spending spree when they are upto their eyes in debt and don't have an economy in a position that is best able to ride out a storm.

"The race to 'own' the economic issues"

That can only be done if the Conservatives have the personnel with the ability, determination and passion to argue their economic case that the public can identify with. When Conservative MP's comprehensively failed to rubbish Brown's claim that debt to GDP was 37% and when the Conservatives have a dysfunctional Shadow Treasury team, then there's not much likelihood of that.

I feel that David and George are coming across as opportunistic with their pronouncements on the economy. The new message of not borrowing to spend is lost while the world seems to be at it.
Stop trying to grab headlines - lets analyse how we got to this point with the economy how Brown is managing the crises and the consequences of his management now and in the future and compare that to the performance of our major competitors (Germany, France, Japan, USA).

I have no doubt that Brown will do anything that might seriously improve his popularity - including switching to funded tax cuts - anything he floated before the Pre-Budget report is out will be brushed off as 'just an option that was considerd, it is right to consider all options'. So be prepared to have to congratulate Brown on coming to his senses and taking the Tory line...

As for managing the economy, I thought this was a stunning statement from robert pestons blog:-
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/11/can_darling_kickstart_lending.html

para 3:
Or to put it more bluntly, the transfer to our banks of so much of our cash wasn't designed to kickstart lending by our banks - although it's unsurprising that many of you think that's what it was all about, because ministers created that impression.

Robert has been firmly in browns pocket for some time - to see him casually say that the government deliberately misled the public is pretty stunning to my mind.

I think we need to be careful with this approach. A classic example of how NOT to approach this subject was helpfully provided by the hopeless Edward Heathcoate Amory in the Mail. Merely putting up the same vague bogey men 'NHS bureaucrats and 'public sector middle managers' is not only lazy, Notting Hill-ite thinking, it also leads to certain electoral defeat.

We tried this approach in 2001 and 2005.

Of course our policy is best. Brown is borrowing now in order to wory about the bills later. The problem is, this is what people have been doing for the past ten years themselves.

The people answering "Labour" in all the opinion polls are the people who took out 125% sub-prime mortgages they couldn't afford, the same people who have 10 credit cards at 19% each, the same people who will probably put Christmas on the plastic and worry about it in the New Year to avoid telling the children they can't have what they want from Santa.

Well here, we are playing the role of the miserly parents telling the kids times are tough and not to expect that Playstation, whereas Brown is playing Santa Claus, which he likes to remind the voters of ("We will help the British people, while the Tories will stand by and do nothing") and herein lies the problem.

While our policy of living within our means, not getting further into debt, making modest cuts in spending and paying down some debts is the sensible one that any sane person would agree with, people look at Brown's promises and think "I could do with that money NOW" Large numbers of the electorate are not emotionally intelligent or mature enough to see the bigger picture.

London Tory

Merely putting up the same vague bogey men 'NHS bureaucrats and 'public sector middle managers' is not only lazy, Notting Hill-ite thinking, it also leads to certain electoral defeat.

We tried this approach in 2001 and 2005.

I don't think one can say that this is the exclusive territory of "Notting Hill-ite thinking", though you may not have been implying this. I think this view has been the domain of traditional Conservatives for a long time.

But you are right that it is dangerous to assume there is endless scope for efficiency savings. Eventually you cut so deep that you harm the very bodies which need to deliver policies.

For example, are the immigration services in trouble because they're bloated or because they're overworked and understaffed? I'm sure lots of old Tories would love to say it's the former, but that's because they generally hate all public-sector employees and don't work there. Really amongst those staff who work on immigration cases it's the latter.

So this is a risky strategy. Cameron and Osbourne need to avoid making sweeping statements about cutting "waste" and think about specific things that can be reformed.

+++

Warhawk

TaxPayers Alliance Bumper Book of Government Waste

I hear a lot about this, but people never go into specifics. Could you list some specifics about what it proposes to change? Identifying areas where waste occurs is all very well, but if it doesn't say how it can be replaced and how much that will cost, how it will be more efficient, etc then it's just a rant against taxation.

They should also be setting up a new global financial investigative body to gather all the toxic assets, strip them back to the core, reassemble them into valuable and non-valuable assets and then refinance them in accordance with what they are worth in actuality.

Until that is done, we will have prolonged recession or slump, no banking to speak of, no loans to speak of and confidence to speak of which will devastate all functioning of business and society as a whole including government spending plans and essential state services.

The alternative is to print money in the hope banks themselves can take the initiative, eventually build balance sheets and restore profits and thus begin to lend again.

But saying as that is full of unknowns and totally lacks any conscious effort to stem the effects of this being realised by businesses and the populace, it will lead to worsening lack of confidence, jobs losses, closed businesses and ongoing slump from which it will take twice the time to recover.

Banks cannot be left to decide if and when they are able to lend, and government needs to act with urgency as well as seeking out to destroy over or unnecessary spending by government.

The Bumper Book of Government Waste 2008

Bbgw_2 ** Buy your copy from the Politico's Bookshop **

It's back and, depressingly, the figure is even bigger than last time.

Welcome again to the world of waste. In this new edition of The Bumper Book, Matthew Elliott and Lee Rotherham have unearthed a staggering £101 billion of government misspending - all paid for by you, the taxpayer.

It's such an enormous figure it is difficult to get one's head around it. What could be done with £101 billion? Well, you could for example, paper the entire East Midlands and London with £5 notes, and still have a few billion left over to build one hell of a crane from which to admire your handiwork. Or even convert the £101 billion into one penny coins, pile them on top of each other, and reach the moon and back five times.

But perhaps more usefully, the government could cut the tax burden of every household by over £4,000 a year.

Mind blowing isn't it?

Here are just a few examples of where all of that money has gone:

* £280,000 on a conference addressed by Blair and Brown on value for money in the public services.
* £400 million on 'cost control' for the Olympic Games.
* £3 million by tax inspectors at HM Revenue and Customs on flights, including £2.1 million on flights to Scotland.
* Over £16 million on the creation and upkeep of VIP lounges in Heathrow and Gatwick despite the fact they are not government-owned.
* £100,000 on assessing whether £400,000 reportedly spent on modern art for seven hospitals was money well spent.

But then it's hardly a surprise that they don't have a tight grip on our finances when you see an official statistic from the government, claiming that an impressive 102% of all 3 year olds are in nursery school. With this level of numeracy, no wonder we're in trouble!

If you're a British taxpayer, you need to read this book - even though it will hurt.

** Buy your copy from the Politico's Bookshop **

It is time for a revolt.

Large numbers of the electorate are not emotionally intelligent or mature enough to see the bigger picture.

If that is the case then the Tories must respond accordingly. It's no good saying "we know best so just trust us" and certainly not "the reason people won't back our policies is that they're stupid" - you have to convince people you're right. It's sad, but spin and presentation is everything.

The message must be about Labour Lies - lying about tax cuts, lying about tax rises, lying about Conservative policy, etc. Stress that a Tory government will not cut services but control the increase of government spending to ensure the country won't be dragged down by higher debt in the coming years. As I've said before, talk about the future and the debt Brown would leave the next generation.

Here are just a few examples of where all of that money has gone

Many of those are one-off examples, not long-term spending plans. A more frugal government may save money but that doesn't mean there is £100 billion worth of savings to be made in 2009, 2010, etc.

This is the problem with people who say that reducing waste can solve everything. You must look at where the money goes on a regular basis - moaning about money spent on conferences and VIP rooms is just crying over spilt milk.

I hope there are better examples than the ones you quoted Warhawk.Most of the sums are in the grat scheme of things insignificant and the £400 million for cost control of the Olympics unbelievable.

There certainly is massive waste of the examples given,
and they are a disgrace.
We should cut them.

But they are, unfortunately, still relatively small beer with the kind of big big debts we're now talking about, and we could see a rather grim period with the next government having to increase taxes and cut spending.

Before I get shouted down by all the angry people, it is what we had to do in 1979-81.

That said, we should cut the most urgent taxes aswell, and I would even consider a cut in the basic rate and further rises in VAT to 20%.
Properly done, it doesn't need to be regressive.

Train trip - no VAT on that.
Food - no VAT.
Kids clothes - no VAT.

These are tough times, and if we face it we can get our line straight, because we mean what we say, and the public will realise it's important.

I am changing my mind from thinking Cameron-Osborne the lesser of two evils at the next election to thinking they should be opposed even though that might mean 5 more years of Labour. If they don't have serious ideas to cut public waste and to increase economic freedom, they are too dangerous to put into government.

We need to build a strong, principled Conservative Party. Cam has destroyed it.

@ Raj

Mr Heathcoate Amory of the Mail, he of the helpful 'cut waste' hints, is married to Alice Thomson from the Times.

Alice helpfully suggested in her column that one way readers could save money in the recession was to follow her example, and buy Sainsbury's own brand muesli, rather than Alpen.

She also recommended that sharing a chalet with friends was a good way of cutting costs for the winter skiing holiday this year.

RAJ
HERE IS HOW TO SAVE 55 BILLION A YEAR LEAVING THE EU
* By 2008 Britain will have made total contributions to the European Community (EC) Budget of £230.4 billion gross or almost £68.2 billion net.
* By the end of the current EC budget period Britain will have made estimated total contributions to the EC Budget of £315.4 billion gross and £101.4 billion net.
* By 2007 Britain had an accumulated trade deficit with the other EU member states of £383.7 billion.
* The Common Agricultural Policy costs Britain at least £16.8 billion per annum.
* The Common Fisheries Policy costs Britain at least £3.275 billion per annum.
* Over-regulation on business costs Britain at least £28 billion per annum.
* In 2008 membership of the European Union costs Britain almost £65.675 billion per annum gross or almost £55.775 billion per annum net.

Mr Heathcoate Amory of the Mail, he of the helpful 'cut waste' hints, is married to Alice Thomson from the Times.

You missed my point. You complain about the Notting Hill Tories as if they are the only reactionary ones in the party. In truth I have come across Tories who both complain about the "Notting Hill set" and say that we could have a flat tax if only "bloated" spending were dealt with.

That's the point I was making, that it doesn't matter where people live (or who they're married to) - people with duff policy suggestions live all over the country.

Regional Development Agencies(RDA's) are a prime (but not exclusive) example of the bloated state - they are undemocratic and they do very little to regenerate communities in my experience....Mandelson's useless whim...

They are good at paying executive salaries for things like Knowledge Transfer Executives and Executive Partnership Managers - can anybody define those jobs for me, please...

These are the real villans of the piece not nurses,teachers and frontline civil service staff like JobCentre+....this is where we need to make huge cuts and reasonable savings.

We don't seem to be able to get this simple message over - and we scare the electorate who think we are talking about nurses, police officers and teachers

And speaking of waste (Bumper Book of & etc) one has to ask why it is that Dave and Osborne have yet to target the waste of British taxpayers money by the shed load to the European Union.
The blog quotes :-

"
Mr Cameron has ordered his Shadow Cabinet to consider radical options to find billions of pounds of savings, including reductions in some services, as well as hunting for "waste".

REPLY: But its so easy! All he needs to do is look no further than our payments to the EU budget - a Danegeld of enormous proportions - i.e. £55.775 Billion p.a. or put more dramatically, £152.8 million every day, of every week/month/year.
Howzat for criminal waste of OUR money in the midst of the recession, being GIVEN to the corrupt EU?

graham, you neglect to mention the money that is spent on agriculture, grants to cities, projects, etc in the UK by the European Union (and the rebate). I think you'll find any net loss is much lower after that is factored in.

John Redwood's blog on this subject today makes excellent reading [as usual].

He says more of interest in 3 paragraphs than Osborne has in 3 months on the subject.

"The race to 'own' the economic issues"

We have never properly pinned ownership of "Brown's Boom and Bust" or "Brown's Recession" fairly and squarely on Gordon Brown.

That it is, helped quite a lot by America, should by now etched in the minds of voters.

What we should now be dealing with is another important point that Iain made at 10.54:

"Conservative MP's comprehensively failed to rubbish Brown's claim that debt to GDP was 37%".

This will certaily be disputed on Monday next and again we have not anchored the point securely in voters' minds.

What we also need to be doing is to articulate a sensible alternative startegy to Brown's further profligacy (though it now looks as if he will come up with some savings to try and confound us).

What about: restoring to the BoE the oversight of all the banking sector, giving the MPC complete responsibility to set interest rates (within Treasury guidelines), nominating certain top (British) banks and purging them over a period of their toxic debts in order to restart lending between banks again?

Of course we all want to see a massive cut in spending and the size of the state, but I have to say that at this time we have to very careful what gets cut.

Reduction of spending within the UK would at this point be counterproductive as it would somewhere along the line result in the loss of jobs.

What we have to identify is spending outside the UK and squeeze that right now (I include EU costs!). It's not hard, I'm pretty sure the ID card contractors are in France for example.

Then once the "downturn" eases spending IN the uk has to be squeezed so that the jobs can be taken up by the private sector. And of course it will then be time to turn the benefit state back into a welfare state again

The only real long-term way to reduce taxes and spending is to reduce what governments do. Everything else is simply salami slicing.

#1 As Andrew Lilico reported, Osborne publicy takes credit for the bank recapitalisation plan just after it was introduced.

#2 Cameron tells Brown that the recapitalisation planning is failing.

#3 Loyal Roons forget that Osborne took credit for the plan and attack Labour for incompetence and highlight how brilliant Osborne is.

You couldn't make it up.

Eh Chad?

#1 As Andrew Lilico reported, Osborne publicy takes credit for the bank recapitalisation plan just after it was introduced.

#2 Cameron tells Brown that the recapitalisation planning is failing.

#3 Loyal Roons forget that Osborne took credit for the plan and attack Labour for incompetence and highlight how brilliant Osborne is.

Those statements aren't incompatible though. Cameron's point is not that it's failing because it was a bad idea just that more could/would/should be done to make sure that it works.

Maybe it was Osbourne's idea, but there's a long history of Labour stealing conservatives plans then implementing them badly.

It was an absolutely terrible idea, that will clearly fail to achieve its objectives.

The problems that are already manifesting themselves are just the beginning, and will encourage more and more authoritarian socialist-style intervention to achieve the goals that this course of action simply cannot achieve.

This was possibly Osborne's worst idea. It was so bad, no wonder this clueless government pinched it from him.

Can we please present some credible alternative to this rotten government?

Osborne really must placed a long way from any economic based decisions.

Norm, Osborne claimed credit after the implementation not before, and raised no objections to the way it was implemented.

He clearly took the short-term market stabilisation as a sign that it had worked before jumping in with the 'me me me, it was my idea'.

Well having watch Question Time last night, the explination of Conservative economic policy from Hammond was muddled, confused and incoherant, which would suggest the Conservatives aren't going to be owning any economic issue.

In many cases higlighting specific savings is counter-productive.

Just listing what will go, without explaining the complete new vista just leaves you open to misrepresentation.

A quango maybe doing something that just doesn't need to be done but more likely it may be doing something that is done better elsewhere - in this case it may be clear a saving can be made, but until the re-allocation of responsibilities is fully detailed, announcing it would be taken up and misrepresented by your opponents.

FWIW: I think one of the most insidious part of quangos is where they pretend to be 'self-financing' by levying charges on their 'clients' -- if the charge isn't optional then it should be recognised as a tax - it maybe a strictly hypothicated tax, but its a tax none the less, and at the end of the line (like all taxes) it can only be financed from the private-sector where the wealth is created.

Its particularly disappointing to see Labour own the 'action against banks' issue.

There is plenty that Labour have not done, or failed to do/achieve, which the Conservatives could use to seize back the mantle of fiscal competence.

Unlike GB£ and Simon Heffer I think the time to move Osborne has passed - to act now would reflect very poorly on David Cameron. Should Osborne foul up again with another adventure in Corfu, Cameron should seize the moment, but in the meanwhile Osborne has to be constantly looking to do MORE to regain pre-eminence on this issue rather than just keeping up or playing catch-up. Proactivity not reactivity should be his religion.

To win this debate on borrowing Osborne needs to outflank Brown. He needs to seize the public imagination and keep it. Banks are now pretty much wide open to regulatory reform, their business models are shot and the party that promises to do more than just bail them out has it in the bag.

Likewise the whole issue of consumer credit could be looked at. There is far too much predatory usuary and its a big part of why society is 'broken'. Fix that and give people a fairer deal on credit and insolvency and you'll win a lot of votes.

Instead we seem to be content with a bit of tinkering and chest beating about small business.

Let's mark the events of the last month as a possible tipping point. If Cameron loses the next election having been so far ahead with Brown on the ropes, this was the time when his leadership failed to take tough corrective action and things started to slide.

Where it ends is still not decided - one way or the other. We could still defeat Labour with a substantial majority, or it could end up looking like the mother of all upsets with Brown grinning broadly as he entered Downing Street.

Listening to the Today programme this morning it is clear that Labour is going to pursue the populist cause of bashing the banks. I fear this could win them a lot of votes.

Great minds think alike Old Hack. I had not seen your comment when I posted mine!!

"Eh Chad?"

Thanks Malcolm, I wondered, but resisted the temptation to ask outright.

Oh look, another idiotic idea from George:

"George Osborne, shadow chancellor, on Thursday called on the government to consider acting as a bank – offering direct loans to business as a “radical” last resort if banks continue to starve companies of credit."

Now, is the quickest way to get lifeline funds to struggling small companies:

a) Don't take their own money off them in the first place by introducing massive corp tax cuts to release funds set aside to pay the govt.

or

b) Pour billions of taxpayers money into banks then set up a state bank to lend money.

There seems to be no end to this new socialist madness from Labour or the Tories.

"Unlike GB£ and Simon Heffer I think the time to move Osborne has passed "

Old Hack there is never a wrong time to move a person who is not up to the job, its just less painful to do it earlier than later, and as I pointed out above, with the confused economic message still coming from the Conservatives, as we saw on Question Time last night, the damage Osborne is doing to Conservative prospects hasn't come to an end with the Corfu issue fading in peoples minds.

Conservatives across the land must be groaning and holding their heads in their hands. Urgghh- Hammond on Question Time last night.

1. Lightweight.
2. Ineffective.
3. Garbled.
4. Confused.
5. Incoherent.

Did any viewer finish that programme any wiser, or more convinced, about our economic programme. Indeed, have we got one ?

Come on Mr Cameron, get the right people in the Shadow Cabinet. We are supposed to be a potential Government, for gods sake.

What is going on ?

"What is going on ?"

Indeed, its a disaster, and what the hell is this 'WE'VE MADE OUR CHOICE' that they keep trotting out all about ? A more accurate phrase would be to say 'We've leapt out of the frying pan into the fire' !

Urgghh- Hammond on Question Time last night.

Wasn't it when he appeared on Daily politics I thought he did well and others didn't.
I thought he was clear and calm; not rising to the bait when the labour guy was saying "you're making party politics of this" (they think it's ok now as their leader did it) but managed to get his voice heard with what was clearly an 'away' crowd when other conservative people on question time have let labour lies pass as they are too polite.

..but maybe it's only me that likes him and that doesn't help as I'd be voting conservative anyway (unless I decide to move to corby, but that's unlikely)

Can anyone clear up for me - are the tories against a 'fiscal stimulus' or just against funding it by borrowing ?

Is everyone using the same interpretation of 'fiscal stimulus'?

What is going on ?

i saw him on paxman when he was with ruth kelly and he got ripped to shreds.

pp there just against NU_Lab's fiscul stimulus, watch NU_Con announce their own 'fiscal stimulus' after Monday

pp said:

Robert has been firmly in browns pocket for some time - to see him casually say that the government deliberately misled the public is pretty stunning to my mind.

A typical load of contradictory nonsense from you. "Peston is in Brown's pocket" against "Peston accuses government of deliberately misleading the public". If he was in Brown's pocket, he wouldn't be accusing ministers of misleading, would he?

I challenge anyone to come up with an explanation what the Conservative economic policy is all about.....

Hammond makes his response to the question about 27 minutes into the program..


http://www.bbc.co.uk/iplayer/episode/b00fm6kl/Question_Time_20112008/

Now, is the quickest way to get lifeline funds to struggling small companies:

a) Don't take their own money off them in the first place by introducing massive corp tax cuts to release funds set aside to pay the govt.

or

b) Pour billions of taxpayers money into banks then set up a state bank to lend money.

If the prevailing view here is that tax cuts must not be unfunded, how are you going to pay for a)? A loan means the money will eventually be repaid, whereas a permanent tax cut of such size would cost an enormous amount of money and invalidate the position that spending must be funded.

You can't have your cake and eat it. Either you must accept that business has to repay money given to it by the State or you back Brown's unfunded spending spree.

Besides, anyone who knows about this problem knows that business doesn't need free money, it needs loans at reasonable rates.

As for Cameron - his opportunism has him holding incompatible views simulataneously.

1. The economy is likely to shrink for a while, particularly with no fiscal stimulus.

2. Cameron is committed to increasing the size of the public sector, no longer just "sharing the proceeds of growth" but in fact guaranteeing to grow the public sector, but by less than Labour.

3. If the economy is shrinking, and the public sector is growing, then the tax take will decrease.

4. With a lower tax take, any efficiency improvements will be eaten up to reduce borrowing.

5. Therefore, no funded tax cuts.

So Cameron is promising a larger public sector with no tax cuts.

Labour is promising and a larger public sector, with the internationally coordinated, IMF, IoD, CBI agreed tax cuts causing a temporary fiscal stimulus to counteract the shrinking economy, thus increasing GDP and eating up the borrowing required for the stimulus. It think they will also offer up some efficiency savings and bring forward capital projects where possible.

It's always good to find waste and efficiency savings to fund tax cuts, but you'll never shrink the state unless you actively cut real budgets for services you don't think the state should provide.

If I were Cameron I would go for:

1. A freeze in public spending, combined with efficiency savings which will remain in the public sector, ensuring that the most important sectors have real spending increases.

2. Any growth in the economy to be released as tax cuts.

3. This to continue until the public sector is an appropriately small size for fiscal conservative. 35%, maybe? So, the public sector resources would remain absolutely the same, but smaller in comparison with the private sector.

Posted by: Raj | November 21, 2008 at 10:49

You can't have your cake and eat it. Either you must accept that business has to repay money given to it by the State or you back Brown's unfunded spending spree.

Besides, anyone who knows about this problem knows that business doesn't need free money, it needs loans at reasonable rates.

The way it works is that a temporary fiscal stimulus increases GDP, even if just means it decreases a little less during the recession. The idea is that the growth in GDP more than compensates for the cost of borriwing, so by the time the amount is paid back, you would be in a better position that you otherwise would have been.

So much of this is about confidence. Media worries about recessions can be self-fulfilling, so it's more than just "here's some money, buy stuff with it" - confidence can kickstart the economy.

It is of course possible that the growth in GDP will not compensate for unfunded tax cuts, but Cameron is practically alone in thinking this (apart from the The Sun and Daily Mail editorial writers). Economists of the left and right. the IoD, the CBI, many bankers, the governments of most major economies and the IMF all agree that it's necessary.

The fiscal stimulus policy is not sustainable in the long term; it's a one off measure for extraordinary circumstances.

Even if you think it won't work, I hope you can now see the logic behind it.

And as for businesses not needing "free money", I think a temporary low tax regime would help some of them immensely.

Finally, businesses frequently borrow money to grow their business, make a profit, then repay the loan.

Wake up Raj,

The Tories support the recapitalisation funded by billions of borrowing. Osborne is now happily claiming to have invented the idea.

Most ltd companies will not yet have paid their tax bill for the more profitable year apr 2007-mar 2008 before the real pain kicked in.

This is not a permanent cut, but a temp one, as for 2008 onwards, few are likely to be making profits!

It would have cost the taxpayers much, much less to have avoid the recapitalisation completely and to have reduced the corp tax rates for 2007-2008 and it would have got much needed funds directly to the companies who need it.

So that would have meant less borrowing, and the aid would have hit the target.

But Osborne supports borrowing billions for recapitalisation, and with his new 'state bank' plan, where does he intend to get the money to fund these loans if not more borrowing?

So Cameron is saying one thing and Osborne is proposing the other.

So please Raj, just simply tell me how Osborne plans to fund his state bank loans plan?

It would have cost the taxpayers much, much less to have avoid the recapitalisation completely and to have reduced the corp tax rates for 2007-2008 and it would have got much needed funds directly to the companies who need it.

It's too late now. You seem to have this obsession with proposing policies that assume you can jump in a Tardis and rewrite history.

So please Raj, just simply tell me how Osborne plans to fund his state bank loans plan?

How should I know that? I wasn't praising his policy, I was asking you how to fund a big corporation tax cut as it was your idea. The fact is that the recapitalisation has already happened. So how much money would your super tax cut cost?

"It's too late now. You seem to have this obsession with proposing policies that assume you can jump in a Tardis and rewrite history"

Wrong again Raj.

Ltd company tax is due 9 months after the end of the company year. Many who tie their year-end to the end of the financial year will not yet have paid the bill for that period.

And for those that have, it will take their accountant a few hours to calculate a refund.

All of which would (ie looking forward) get assistance direct to struggling companies now and make a lot more sense than setting up a 'state bank'.

So you see, you can think of solutions for *now* that don't involve Comrade Osborne's national bank plan and if he had thought like a conservative instead of a socialist before, would have saved billions in the recapitalision/nationalisation plan.

Your beloved Osborne has just come out with an uncosted proposal and that doesn't seem to trouble you at all.

@ Raj

Your posts on here in recent days lead me to think that you are some form of political ostrich. As you appear to enjoy both semantics, and crunching numbers, here are a few more for you [although no doubt you will dispute them]...

In the last 8 weeks;

Unemployment - UP

Public borrowing - UP

National debt v GDP - UP

Redundancies - UP

Mortgage defaults -UP

Home repossessions UP

Labour lies to explain the above - UP

Conservative poll lead - errr....DOWN


Now I, and many others, would contest that at a time of such disadvantageous political and economic circumstances , the Conservative Party should, to coin a phrase, be fixing the electoral roof whilst the sun is shining on us. Yet quite the OPPOSITE is happening. Why do you think this is ? Nobody rates Brown, the least sympathetic and likeable PM since Heath. I, and many other genuine Tory members, would contest that our poll lead has all but disappeared for the following reasons;

1. A chronic lack of leadership by David Cameron ['proceeds of growth', Yachtgate etc]

2. A Shadow Cabinet stuffed with lightweight, part time political dabblers [how many jobs have Hague, Letwin, Maude and Hammond got, and WHY ?]

3. The Osborne Problem, which won't go away now matter how much Con Home and Iain Dale amongst others think it will.


One thing is clear. If Brown calls a snap election in Spring 2009 and we don't win it given these circumstances, there is going to be hell to pay in the Conservative Party, and a row which will make the Major years look like a teddy bears picnic.

resident leftie, you're really beginning to spook me with your thoughtfulness on issues, its not something I am used to from someone who claims to be of the political left.

Firstly in regards to contradictory policies, this I think all political parties can be accused of at the moment, after all its Labour's policy to grow the state by 2.3% in 2010/11, which in current economic conditions its difficult to figure out what will happen next week let alone 2 years out.

This fact makes the Conservative announcement about abandoning Labour's policy and going for a cut in 2010/11 a really odd move. Why make 2010/11 a totem issue? I really don't know. A more rational approach for the Conservatives would have been to say they are withdrawing from the 2010/11 spending commitments as the current situation has made it an impossible pledge to be held to, and concerns about Brown's spending spluge could seriously damage the countries finances. So putting the spot light on the affordability of Brown’s current spending plans, instead what they have managed to do is raise the spectre of Conservative spending cuts and having to field questions about how many schools and hospitals they cut. Tactically stupid!


GB£

Wrong again Raj.

Actually I'm right. I'm going to quote what you said.

"It would have cost the taxpayers much, much less to have avoid the recapitalisation completely...."

The recapitalisation HAS ALREADY HAPPENED. What part of that do you not get? I didn't say it was too late to waive some of the tax, I asked how you're going to pay for it given you can't undo the recapitalisation without causing more harm.

Your beloved Osborne has just come out with an uncosted proposal and that doesn't seem to trouble you at all.

And your blind hatred of him means you don't even bother to read what people say when they're discussing something with you.

+++

London Tony

Labour lies to explain the above - UP

Sometimes lies work, otherwise no one would ever tell them.

Conservative poll lead - errr....DOWN

And? Labour didn't go into meltdown when the lead was in double-digits, so why should I be in favour of culling Osbourne and/or Cameron now?

Nobody rates Brown, the least sympathetic and likeable PM since Heath.

Just because you don't like him doesn't mean the public doesn't. He was unpopular because he wasn't doing anything - the financial crisis has given him something to do. Like when he first became PM, his honeymoon in the polls was helped by things where he could appear "Prime Ministerial". If you didn't have your head in the sand (your criticism of me was the pot calling the kettle black) you would see that Brown's approval ratings have increased - this isn't a case of them staying more or less constant but Cameron dropping behind him.

Also the polls show that the Conservatives are STILL at 40% or above - ComRes actually had the Tory share of the vote go up. The trend shows the Lib Dems with a low score, which would be worse than anything they've had at a general election for a long time. Possible, but if I had to stake my life on it I'd say that they'll get more votes in the end and be taking them from Labour.

My view is that once people have opened their eyes having run to the government for shelter, they'll realise that it caused most of the trouble in the first place and in the long-term the Tories would be best for them. And if Brown does call a Spring election it will be oh-so-easy to slam him for trying to take advantage of a temporary up-turn in the polls whilst work needs to be done to sort out the recession.

One thing is clear. If Brown calls a snap election in Spring 2009 and we don't win it given these circumstances, there is going to be hell to pay in the Conservative Party, and a row which will make the Major years look like a teddy bears picnic.

Not least if it's because the leadership had to spend more time trying to deal with people who wouldn't unite behind it and preferred to spend their time doing Labour's work for them. Perhaps in such a scenario it will be akin to what happened to Brutus and his mates after they knifed Julius Caesar.

Thanks Raj, you provide a very valuable service here as it is always useful to understand this week's roonatic point of view... ;-)

resident leftie, you're really beginning to spook me with your thoughtfulness on issues, its not something I am used to from someone who claims to be of the political left.

Oh, it's not a claim! My interest is in decent choice for the electorate, with a principled stand by both parties, but I am of the centre left. I would like to see a proper centre right and centre left program on offer.

I think that the current balance between state and private sector is fine, even with room for growth to 1997 levels of 53% of GDP, that PFI is a bad thing, that many things are better done by the State, that tax at the top end should be increased to increase the tax-free threshold for everyone, that tax havens should be closed down that the rich should pay their share, that the steady encroachment of the private sector into health is damaging our finest institution, that the EU is good for the country, that now would be a very good time to join the Euro, that so-called "political correctness" has been a force for good and that private education in this country is a poisonous influence on society as a whole. I could go on.

Firstly in regards to contradictory policies, this I think all political parties can be accused of at the moment, after all its Labour's policy to grow the state by 2.3% in 2010/11, which in current economic conditions its difficult to figure out what will happen next week let alone 2 years out.

The government is obliged to plan ahead in spending rounds, and claim Delphic wisdom in their predictions. They simply can't say "we really haven't got a clue what's going to happen", to be anything other than definitive.

I can see why you think this policy might be wrong, but I fail to see where it is contradictory.

If you want contradictory, I've just read Osborne's comments on the state setting up a special lending bank, and I am completely baffled how that ties in with the policy of avoiding fiscal stimulus. It would be a nationalised industry funded by government borrowing. Isn't that just a tad left-wing?

Thanks Raj, you provide a very valuable service here as it is always useful to understand this week's roonatic point of view...

So glad that you're still resorting to snide comments to avoid discussing how you would pay for your policy suggestions.

LoL Raj.

Take a look at the sensible comments made by Resident Leftie who has also picked up on Osborne's socialist and unfunded state bank proposal.

The official Shadow Chancellor is proposing an unfunded state bank no doubt funded by more borrowing, and also proposed the nationalisation(recapitalisation) of private-sector banks again funded by more borrowing.

It's going to be hard to criticise the government if they introduce borrowing-funded tax cuts when Osborne also wants to borrow, but for a state bank and not tax cuts, isn't it?

So what is the roon economic policy right now? More intervention and borrowing it seems, based on Osborne's proposal. Roonacy.

Raj

London Tory is 100% accurate in his assesment.

The Tory Poll lead SHOULD BE 20%

Brown should now be facing a Leadership Vote in HIS OWN PARTY and we should be looking at an election in Febryuary 2009 because of this.

WE SHOULD BE PLANNING FOR GOVERNMENT.

Instead due to the political and moral ineptitude of 2 juveniles wiith no experience of Office,no experience of real politics and ego's that make them look like pinky and perky on speed - we are looking increasingly at a 4th STRAIGHT ELECTORAL DEFEAT - that would sadly DESTROY our Party.

We CANNOT afford this to happen - somewhere somehow the membership of the party - the majority of whom over the past 6 weeks have realised whatw e are saddled with HAVE TO ACT NOW before it is too late.

We should change Leader - TERRIFY BROWN WITH THE DREAM TAICKET - DAVIS AND CLARKE - make Hague,Letwin et al commit to the Party 100% or stand down - we need 100% committed politicians especially in those rock-solid seats...

SHOW THE BRITISH PEOPLE WE ARE SERIOUS....

I fear that within 2 weeks,certainly if Mondays PBR puts cash in peoples pockets, we will be looking at opinion poll defecits that WILL GROW as pinky and perky look increasingly like Rabbits in the Headlights...

COME FORWARD NORMAN TEBBIT - YOUR PARTY NEEDS YOU ONE FINAL TIME - COME FORWARD AND LEAD THE REBELLION - BRING THE PARTY BACK TO ITS MEMBERS - Not an elite boys club!...

GB£, you still haven't answered my question about how your corporate tax break idea will be funded. Seems to me like you're a hypocrite for complaining that Osbourne would borrow yet you aren't offering anything different.

+++

Ian B

I fear that within 2 weeks,certainly if Mondays PBR puts cash in peoples pockets, we will be looking at opinion poll defecits that WILL GROW as pinky and perky look increasingly like Rabbits in the Headlights...

If that doesn't happen, will you apologise on this blog for writing the leadership off and promise to not criticise them again until we've had the election?

COME FORWARD NORMAN TEBBIT

HAHAHAHA, you really are mad!

Raj - now you sound like Ann Widdecombe

"you will apologise" etc.....LOL

I WILL GLADLY APOLOGISE IN 2 WEEKS TIME IF WE ARE'NT BEHIND IN THE POLLS - WHAT i WILL not DO IS CONGRATULATE A LEADERSHIP WHO IN THE FACE OF THE MOST DESPICABLE,DISGUSTING,PATHETIC,MORALLY BANKRUPT GOVERNMENT IN HISTORY,IN THE MIDST OF THE WORST GLOBAL ECONOMIC CRISIS IN 70 ODD YEARS,HAS PALPABLY FAILED TO OFFER THE BRITISH ELECTORATE AN ALTERNATIVE AND OUR GREAT PARTY LEADERSHIP.

We need Norman Tebbitt as he is the kind of personality to give it straight to those 2 clowns who are destroying our party!

@ Raj

Can we all agree on one thing which would improve our electoral prospects ?

Between now and polling day, whenever that may be, Cameron must INSIST that every member of the Shadow Cabinet devote themselves full time, 100% to politics, and the removal of Labour.

No half measures, no rushed speeches, no merchant banks, no company directorships, no book deals or after dinner speeches.

100% politics.

That goes for Hague, Hammond, Letwin, Maude, Duncan, Mitchell. The whole lot of them. If Hague for instance is unwilling to do this, he should be sacked from the Shadow Cabinet, and the Richmond Association should be pressured to deselect him next time. I am sick of these people.

We are not playing at it anymore. We are sick of losing with effette public schoolboys and greedy part timers.

The message from the Conservative Party to the Shadow Cabinet should now be clear- after 12 years of fruitless opposition- shape up, or ship out.

Raj - now you sound like Ann Widdecombe

I asked a question, no more. You're too sensitive - lighten up.

I WILL GLADLY APOLOGISE IN 2 WEEKS TIME IF WE ARE'NT BEHIND IN THE POLLS

First, find your Caps key and learn to notice when it's turned on.

Second, what are "the polls"? I take it you mean the polling average that the blog uses, yes?

We need Norman Tebbitt as he is the kind of personality to give it straight to those 2 clowns who are destroying our party!

Ian, with all due respect I think that comment shows you're not with us in 2008. Norman Tebbitt does not have the sort of influence or respect that means the leadership would listen to him.

Raj, I opposed the recapitalisation at the time, and supported corp tax cuts *at the time*, so my plan would have been funded with billions less borrowing than the recapitalisation plan.

However as that has now passed, I would fund it in the same way that Osborne intends to fund the 'state bank' but again, it will cost billions less and be more effective at solving the problem.

On the back of an envelope, I think my borrowing requirements would be 5-10% of those that Osborne has endorsed.

OK?

London Tory

I would agree that Shadow Cabinet members should be devoting most of their time to their official duties. However, we do not know if there is going to be a snap election (or if so, when) - if one is called then I am sure they will volunteer all of their time, make extra time to fit in both or be required to do so.

At the moment if people can do their jobs I wouldn't put them up for the chopping board just because they do other things as well. Some people work hard so they can squeeze a lot into their lives. Just because someone is always at their desk doesn't mean that they're productive.

Of course if you feel that they're not doing a good job then that's a different kettle of fish and they should do better regardless of the reason why.

GB£, thanks for confirming. Of course Osbourne would probably see most of that money come back to him later as it's a loan, possibly with interest.

By the way, again can you please drop the use of words like "roon"? You direct it towards myself and others, and I don't think you're using it in an affectionate way. I'm more likely to listen to what you have to say if you don't label me - I'm sure you'd agree the opposite is true.

Raj, the namecalling will end the day Cameron apologises for publicly insulting ukippers. 'Roonies' is a simple retort to his 'loonies' line.

Until then, it is just responding in kind. I agree it is not always helpful, but Mr C decided it should be that way.

Respect is a two-way street.

(not currently a ukipper but very supportive of Nigel).

Grow up Ian Bennett AND STOP SHOUTING. You've got nothing to say and you're saying it too loud.

I apologise for the unintentional capitals - a genuine error on my part!

Raj

The leadership might not respect Norman Tebbit - the Party accross the Country MOST certainly do!

The is the issue with the Cameroons - they have absolutely no respect for the history of our party or the people who made in great!

@lefty

It is not contradictory at all - the government did mislead the public, and it would seem their own back benchers. Noone (not even the BBC) could deny this.

However to minimise the impact of this Robert acknowleges it in passing and moves rapidly on.

I would prefer for it to be dwelt upon and for a government explaination to be forthcoming.

Odd that mandleson could spare time to talk about come dancing, but still noone has followed up on the russian admission that EU tariffs were discussed (wood tariffs). That is a real story that the BBC could spend time on, instead of the obsession with far less relavant minutae.

Oh dear. This has all got very unfriendly. Please address each others' arguments and not refer to others as roons/ loons etc. I will take action against anyone who continues to play the man, not the ball.

GB£, I don't call you or anyone else a UKIP loon so there is no need to address me or others in that way. However, as Ian B has made it clear he wasn't talking in CAPS deliberately I withdraw my earlier comment towards him.

[Ian, the point is that if you want someone to intervene with the leadership you need someone who they respect and would listen to.]

As Tim says, we should all refer to each other and indeed in my view all members of the Conservative Party with respect. We may not agree with what they all say, but we should not throw labels down - they divide, rather than unite.

If someone is unpleasant to another on the blog, we should report it to Tim. If someone is unpleasant in real life then criticise him/her for it but again don't start labelling anyone who may generally support them.

I am not at all surprised by Cameron's and Osborne's weak performance on the economy. Nothing has surprised me since Cameron's chocolate orange comment. The Tories are paying the price for electing Cameron instead of Davis whom I voted for.

If there are people who are funadmentally opposed to cameron/osborne - why don't they leave the party until they change?

Complaining doesn't add anything - ok you don't like them, will criticise every thing they do saying that they are wrong, or they should have been even better.

Who are you making these comments for?

I left when howard came out in favour of ID cards -- now I am back. If the euro-tories don't leave the EPP I'll leave again. I couldn't imagine any other party moving far enough to be of any interest, so I'd be unattached unless another reason arose to rejoin the conservative party.

Constant whingeing about the leadership is beautifully crafted by our opponents and the weak and incapable of long term patience members frequently posting here are not helpful.
A General Election is due between now and 2010. Fact.
Our Leadership has to fight against an unscrupulous, decitful and lying opponent.Fact
Most of the population are spoonfed a diet of "Labour is great" through Sky and The BBC in particular. Fact.
The Country is well and truly broke. Fact.
None of us bar Brown and his mob know how bad things are. Fact

Our only chance of defeating this bunch is to put petty squabbles aside and concentrate on examining the reality of awfulness and despair around us. The only message required is that we offer hope for a decent future. Labour have had their chance and look where that has got us.

Re "If there are people who are funadmentally opposed to cameron/osborne - why don't they leave the party until they change?": I am no longer a member.

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