Five principles that should guide the Tory response to Brown's debt hangover

As today's frontpage reveals the newspapers are delighting in coverage of Tory confusion on tax.

Looking forward I propose five principles which should guide our party's response to dealing with Gordoin Brown's debt crisis:

1. There should be a recognition that the debt crisis is largely one of excessive public spending and that Britain is NOT lightly taxed. Malcolm Offord has calculated that Total Managed Expenditure has risen - after inflation - by £219 billion over the last fifteen years. Only when we've addressed the wastefulness of public spending and unreformed public services should we be talking about tax increases.

2. Public spending cuts should be delivered by a programme of decentralisation to public servants. Although there are some obvious public sector economies - scrapping ID cards, abolishing Regional Development Agencies, reforming the ineffective New Deal - it is very difficult for the Conservative Party to identify robust savings from the opposition benches in the Commons.  We don't need another James Review although some of its recommendations remain valid.  In the spirit of decentralisation an incoming Conservative government must incentivise local public service staff to find economies in their budgets.  Every family and business in the land is having to do this - so can the state.  After all, its income rose faster than the average during Brown's boom years.  We need something like 1.5% annual cuts for at least the next three years.

3. The pain needs to be felt by the Tories and the political class.  Julian Glover uses his column in today's Guardian to urge 'Tory cuts for Tory causes'.  It's fair advice and repeats what ConHome first recommended four weeks ago and then two weeks ago.  The Conservatives must cut into things that are uncomfortable for us.  We must be seen to be making sacrifices too.  I am now persuaded that means at the very least delaying Trident (although Julian Lewis MP disagrees).  It also means sacrifice by the political class.  I suggest a 5% temporary cut in MPs' pay (learning from the 1930s) and elimination of ministerial perks.

4. Any tax rises mustn't hurt economic recovery. If, after devising a programme for public sector savings, there is still a need for tax rises the Conservatives must first avoid raising taxes that will flatten the recovery.  At the moment we have our policy on tax the wrong way round - seemingly protecting the inheritance tax cut but conceding on the 45p tax band.  The 45p tax band - the revenue benefits of which are highly questionable - has much more serious implications for incentive structures than inheritance tax.

5. Don't retreat on the social reform agenda. The costs of social failure were enormous in the good times.  They are unaffordable in these times.  For reasons I won't rehearse now - I set them out last week - David Cameron must become even bolder on social reform if he is to reduce the demands on the state.

Tim Montgomerie

Comments

[HF]

Tim is right. It must start from principles. Why can Tim and others see this but George cannot? Why?

That is the elephant in the room. He was given the benefit of the doubt last year, this current debacle is frankly the final straw.

[David Belchamber]

Cameron is absolutely correct in highlighting the level of government debt. This can only get higher the longer Brown remains in office. As he is unlikely to go quietly - or quickly - we have to assume that government debt will be enormous by the time we get in to sort it out out. As Michael Howard put it so splendidly last week:

'It is what we exist to do: to clear up the mess that Labour always leaves behind'.

That being so, all bets are off; we should tell the public now that we are no longer able to promise anything because of Brown's credit boom and bust and the impact of the 'global downturn' on top of it.

We can only promise that when we have got the economy under control, we will work to fulfill the pledges we made before this economic disaster struck. We are in for a tough five years or so but it does give us the chance to make swingeing changes to create a much fairer and more soundly based society.

[Malcolm Dunn]

Would agree wholeheartedly with 4 out of your five recommendations Tim. I also take your point that from the opposition benches it is very difficult to get an accurate picture of the public finances.
For that reason I do question point 2.Many 'decentralisations' in the past have not saved any money at all but rather added to expenditure as many public sector empire builders have, er, tried to build their empires.The government will still be blamed if anything goes wrong.
Personally I do believe that a much more far reaching 'James Review' is absolutely essential.

[michael m]

Not one mention of the word "FAIRNESS"
It is vital that any policy carries the public with it. If it is seen to be unfair or favouring "Tory friends" then any hope of implementation is doomed.

At the moment no- one really knows what a new goevernment will be facing- to make any kind of promises now 12 months ahead of an election is ridiculous and foolhardy

[HF]

Malcom, if we shift responsibility to the councils we will end a large amount of govt dictats and they can get on and decide how they spend the money that they have.

We also need to reduce the span of control at the centre to enable it to focus better on the major spending issues.

Too much sits at the centre. Issues such as setting how many houses a council should get built, should not be decided in Whitehall. Or what the density of housing should be or what % should be affordable etc etc.

[Tim Montgomerie]

@michael m
Point three is all about fairness - about sharing the pain of adjustment. And it includes the very word "fair"!

@Malcolm Dunn
Perhaps I'm naive but I do believe that if local public sector staffers are trusted with finding economies - and rewarded if they find them - then that is a better way of seeking economies than by doing so from on high. The local staffers know best where the shoe pinches.

[pp]

Tim

Is point 4 going to put taxes up or down?

If down then I can support it - anything that isn't going to cost me anything is fine - otherwise I can't.

When times are tight, people need the freedom to decide how to best use their own resources in their own unique situation. 'Empower' people by all means, but not by spending their money for them just because someone else thinks they know what's best for everyone.

[Graeme Pirie]

The state income has doubled since Labour got in. We need FAR more than 1.5% reduction.

We accept that the countries in a mess and that the debt needs to be reduced in the short term. However what we need right from the start is a map of where the conservatives want to be and their plan to get there.

A small state (including councils!) and low tax burden would be a good start.

There's absolutely no doubt that the public sector needs significant "pruning" - by a huge percentage. Initially I thought it was best to leave this alone until the economy recovers then "transfer" jobs to the private sector. I've changed my mind. We can't afford these bloated departments one second longer.

We need a government that gets "back to basics" & stops spending money where it has no business. We need a blanket 50% reduction in beaurocracy together with a firm promise that no nurse, doctor or teacher is in any danger.

Nothing will stimulate innovation and the economy more than people looking for jobs and low taxes.

[Michael McGowan]

Very well put, Tim. I agree entirely about the IHT cut versus rises in income tax. It shows the Tory Party at its anti-meritocratic 1950's worst when it chooses to attack those who earn income; while protecting the upper middle classes' untaxed unearned gains from the housing market. The best that can be said about cutting IHT is that it is small beer in budgetary terms and at least it levels the playing field with the super-rich (Osborne springs to mind) who can avoid IHT with ease anyway. However, cutting IHT is hardly a priority. Keeping wealth creators here and encouraging saving is a high priority.

[Tommy]

If we can't find 8 billion for 4 submarines then we don't deserve a nuclear deterrent.

[Doug]

From no 1 it looks like Tim has given up on the poor. Cutting spending as a first priority is nothing short of an attack on the poor who disproportionally rely on government services. If the pain really is going to be spread then spending cuts and tax increases go hand in hand. This isn't the seventies where taxes would reach into the 80th and 90th percentile there is room for latitude especially in what most people would describe as extraordinary times with extraordinary pressures on public finances. And I'd hardly describe delaying Trident as having any direct pain or affect whatsoever on either the wealthy or people who vote Tory. Since when did sharing the pain with 'Tory causes' relate to actual hardship that spending cuts will have on poor PEOPLE (not poor causes).

The Inheritance tax cut was suppose to be funded by non-doms. Doesn't the same 'incentive' and investment arguments used against the 45p rate apply. They've already got one foot out the door. In which case the IHT cut may soon become unfunded and pile more debt on to already huge debts.

[Tommy]

Why don't we scrap county and parish councils? They serve no purpose other than to second guess borough councils. We could also scrap benefits for the middle class, state funded 'charities', quangos, 2 thirds of the cabinet, state-subsidised railways, the london assembly, etc

If we were to sell the bbc, that would not only generate revenue but also allow tax to go up without people being any worse off.

[Michael McGowan]

So let's gte this straight, Doug: the poor "need" wasteful public spending and unreformed public services?

[Tim Montgomerie]

@Doug.

That's unfair. If you read points 3 and 5 I'm very clear that every section of society must bear the costs of the adjustment and that the social reform agenda of improving schools, strengthening the family and empowering the voluntary sector - all pro-poor policies - must be protected.

[Tommy]

"Cutting spending as a first priority is nothing short of an attack on the poor who disproportionally rely on government services."

What government services? The british potato council?

"If the pain really is going to be spread then spending cuts and tax increases go hand in hand."

I keep pointing this out but nobody seems to listen:

We don't have anymore money!

Taxes will have to increase in order to pay off debt. We can't pay off the debt and maintain spending at a level anywhere near what we have gotten used to over the past 12 years. This level of public spending was not even sustainable when the public finances weren't in the terrible state that they are now.

Debt repayments for 2007 were higher than the entire defence budget for the same year, what are they going to be like in 2010?

The conservative party should point out that the cuts aren't David Cameron's fault, he wasn't the one that mortgaged our country.

[resident leftie]

"it is very difficult for the Conservative Party to identify robust savings from the opposition benches in the Commons"

Why? The whole basis of this small state philosophy is that the State is enormously bloated, with money being spent profligately. Surely is should be easy to identity departments, list quangoes and point at wasteful public expenditure even from opposition? If it really is "difficult to identify" - how do you know it is there at all?

As for the 45p rate, it will most likely be in place when the Tories get into power. The difficult question isn't whether the Tories will implement it, it's whether they will get rid of it.

Osborne will want to balance the books. Let's say he slashed public expenditure. He will probably also need to raise taxes. Does he really want to cut the 45p rate first? Does he want to help the tiny proportion of estates who pay 40% on the a proportion of their estates, the beneficiaries of who are almost entirely wealthy middle aged people?

If there are to be tax cuts, the first group to target are the poor, who massively and disproportionately benefit.

If he starts helping out those on £150,000+ first, he'll get the electoral trouncing he deserves. Therefore, he won't do it.

[pp]

"Cutting spending as a first priority is nothing short of an attack on the poor who disproportionally rely on government services."

Well lets phase out the poor then - let them get jobs and join the rich (or at least the non-poor)...

Or is there a class/caste of people whose role is to be poor all of their lives?

Where will these jobs come from? from the new private companies created by the senior public sector businesses geniuses currently denied to the private sector by employment with useless quangos and other wasteful bureaucracy.

If these high paid civil-servants are so great at business they should be creating wealth not consuming it, and if they aren't so great then they shouldn't be employed at all.

All hands to the pumps - get those in first class to go below decks and help too - the private sector is solution and needs all the resources available.

[Steve Tierney]

I've got no problem with tax rises in a dire situation (such as this) but before I could accept them readily I'd need to be sure that (a) they are fair, and (b) we have stopped wasting the money we currently have.

When I say 'fair' I mean taxes that "treat everybody equally" not "take a huge cut from the wealth-creators to pay for the lazy".

The genuine poor and disadvantaged must be helped. But the "I'm too good for that job" and "I can't be bothered to get off the couch" crowd cannot be catered for at the expense of people who work. That just leads to a country full of the former and the loss of the latter.

Although it may seem that the British Potato Council, ID cards etc are trotted out too often in this debate - there is a reason. The reason is, they are still going on!

In all honesty, how can those who think we must commit to tax rises reconcile their view to this? When we demand more money, then keep pouring huge chunks of it down the shredder! Are we really going to delay renewing our nuclear deterrant in favour of employing an army of Quangos because "you can't start laying people off in a recession"? Priorities all wrong, in my opinion.

[Bishop Swine]

"1. There should be a recognition that the debt crisis is largely one of excessive public spending and that Britain is NOT lightly taxed."

I don't imagine many people think Britain is under taxed. That is nobody on low to middle income can be in any doubt, that we are taxed almost to the hilt. So over taxed are we that taxation has become a roadblock to the world of work for far to many people.
However, we could do much to redress the balance between pay and tax, if we closed the tax loopholes which ensure that those who can afford to pay more, are provided with many and varied ways to hide money out of reach of the taxman. Towards this end, we should be seeking to end tax havens and other artificial devices set up for the sole purpose of avoidance of lawfully sanctioned taxation. In short, if we close the loopholes we may be able to reduce the tax burden which has been increasing at an alarming rate, for exactly the people who can afford it least. Perhaps we should also be considering an end to PAYE, as it offers the least scope for creative accounting, if we still bulk at ending the tax cat and mouse game the rich currently engage in, we should at least allow the poorest to claim their full share of tax breaks. PAYE was always an unfair burden on the low paid, as it avoids many allowances the rich enjoy. Such a radical idea maybe will not be so appreciated when applied to the poor.

"2. Public spending cuts should be delivered by a programme of decentralisation to public servants."

A large saving could be made by simply ending the Scottish Parliament along with the Welsh talking shop. More money could be saved by ending the expense account culture of Westminster.We should increase MP's pay a little, but in return end almost all of the perks which are clearly being abused systematically.

"3. The pain needs to be felt by the Tories and the political class."

Of course and whats more the better off will have to dig deep into their pockets to rebalanced our accounts. I would go for a Ten Year plan to sort out our accounts and pay off the National debts. If we are honest with the public they will support some considerable pain. As long as they are assured that a day will come when we can start to reduce taxation for all.

"Any tax rises mustn't hurt economic recovery"

Which is why they must for the most part be income related, rather than very large tax's aimed at the profits of the corporations.
As you will realise there are no Tax's which do not impact the economy in one way or another. However, we must not damage the ability of companies to thrive when the upturn comes. This is another reason why it will take at least Ten years to recover our position. Going any faster would undermine recovery.

"5. Don't retreat on the social reform agenda."
At this time it is important to keep the unemployed focused on work. So we will have to work that much harder on our Welfare reforms. I distrust make-work schemes but in some areas they may become necessary. What we do not want is a return of the disgraceful divide between the well off S.E. and the unemployment black spots of the North. Not all of our social reforms come with large costs. Many like a return of civic duty and national pride are down to setting the right tone in our dealings with the public.
Expecting single mothers to return to work when their youngest child is 5 years old will save money. Little things like a campaign against spitting in public would do much to restore a sense of community. I feel that we should not be shy about setting limits to the service a subject can expect from the NHS. The bottom line is we will never be able to afford every possible treatment tha could be offered. Those who can afford to go private should be encouraged to do so. Whilst the NHS should provide a good but limited service to those who can only afford NI contributions. I believe there is room for a great deal of cost cutting in the NHS without it impacting the very important work that it does.

[HF]

Why has Letwin's policy coordination failed to come up with a long list of savings that will follow when there is a Conservative Govt?

Is he as useless as he sounds whenever interviewed?

[Anthony Scholefield]

Look,1.5% is no good as a reduction in public spending. Public spending is £630 billion p.a.exclusive of the banking subsidies and it is estimated that the excess of spending over income will total £450 billion over the next three years-so take £150 billion as an average. So thats quite easy to work out,we need to save £150 biilion a year out of £630 billion so we need a 25% reduction.
The May committee in 1931 which was facing a much smaller public sector c alled for a 10% cut in public spending.
Lets start with stopping the £2plus billion extra which Blair agrred to pay to the EU to compensate for their promised-but never made-reforms to the CAP.
AS to how you cut government spending by 25% this is how you do it. You tell say the House of Commons that they will be getting 25% less and it is up to them how they spread it among their expenses,second homes,salaries,gofers,travel etc. Its called'cash limits' and was used by a Conservative Primem Minister in the 1980s.

[Schlieffen Plan]

Res Left @10.28

"I left my last job making $400,000 a year, which means I paid twenty-seven times the national average in income tax. So I think I've paid my fair share, and the fair share of twenty-six other people.

And I'm happy to because that's the only way it's gonna work, and it's in my best interest that everybody be able to go to schools and drive on roads, but I don't get twenty-seven votes on Election Day. The fire department doesn't come to my house twenty-seven times faster and the water doesn't come out of my taps twenty-seven times hotter.

The top one percent of wage earners pay for twenty-two percent of this country...

Let's not call them names while they're doing it, is all I'm saying."

Sadly not me...but Sam Seaborn (Rob Lowe)from the inestimable West Wing. As true in fact as in fiction.....

[Denis Cooper]

I suggest that at this critical juncture the first principle should be replaced with the following, the others being re-numbered:

"We shall not propose anything which, if implemented, could turn the present economic crisis into an economic catastrophe."

I realise that few people here would agree, but the inevitable corollary of that is:

"We shall not propose significant reductions in public expenditure at this time".

because trying to reduce the government budget deficit by reducing public expenditure would almost certainly have the opposite effect.

Why?

BECAUSE THE BANKS ARE SEIZED UP.

It's hard enough for existing companies to get enough credit to stay in business, let alone for new private enterprises to get capital to start up; consequently, anyone who is displaced from a job which is directly or indirectly funded by public expenditure is likely to remain unemployed, not redeployed into more productive work; consequently, demand for goods and services will fall away, precipitating further failures of existing businesses, causing further falls in tax revenues and further increases in social security payments, pushing the government budget deficit back up; and defaults on mortgages will rise, further undermining the lenders, and further restricting the availability of credit; and we could fall into a downwards spiral leading to state bankruptcy.

I'd like to see the tax burden reduced from ca 40% of GDP, to ca 30%, but ultimately that would involve redeploying roughly 10% of the labour force.

Maybe if we had a command economy a redeployment on that scale could be accomplished in a matter of months, but with a free economy it could take the best part of decade - even if the banks weren't seized up, and capital for new private enterprises was freely available.

[resident leftie]

For comparison. As of 2006, UK tax revenue was 37.4% of GDP (including SSC), slightly below GDP weighted average for the EU. Generally, the wealthier and more succesful the countries, the higher the tax percentage. This percentage was 35.5% in 1997.

This is much higher than that in the US or Japan.

GDP is shrinking so we must do one or more of the following:

1. Shrink public expenditure to match the tax take.
2. Increase taxation.
3. Increase borrowing.

For Tories, surely number 1 is the first target. For Labour, it's a little of 1 and 2, but primarily fiscal stimulus and quantitive easing - effectively 3, hoping to grow GDP quickly enough to bring things back on track.

[oldrightie]

Tim, I agree with much if not all you say. Let us remember, however, the nastiness behind Labour. A passion for power that will lead them ever deeper into unpleasant and devious manipulation of the media and polling. Have the Glenrothes documents been found? I doubt it. Paranoid? Yes, I am, with good reason.
All our ambitions and hopes cannot be addressed until we gain a good, healthy majority. ConHome has a big responsibility to make it happen. I'm sorry to say but at this stage in the cycle loyalty and support for our team is essential in fighting a ruling elite comparable to the darkest regimes in history and the present day.

[Rod Sellers]

There are several straightforward ways of balancing the books at a stroke - all of them well aired on this blog.

Scrap all the costs arising from the dodgy Climate Change agenda.

Scrap University Funding - if you want to go ,you pay

Pull out of the EU - for every pound we get back ,we pay in three.

Cut Foreign Aid -which is largely ineffective.

There - sorted !

[Marjorie Baylis]

Why don't we say that people who are on the minimum wage should not pay tax and do away with most of the tax credits? Double whammy - more interest from the unemployed to work and a complicated tax credit system dispensed with. Yes, I appreciate the minimum wage will need some topping up for some families, but lets make it simple! It could be tax neutral by putting it on the top end. We would also gain popularity with people who might not normally be considered to be our supporters.

Let's do away with the Scottish Parliament and the Welsh Assembly - they are over represented in Westminster anyway, so, we should make the Welsh and Scottish MPs work in their own parliaments on matters to pertaining to them and the English MPs to meet at Westminster to discuss English Matters. Every fourth week or so, they could all gather in Westminster to discuss British matters (cats? pigeons? oh yes!)

And being really contentious, what about giving County Councillors the full budgets to manage our Health, Education and Police. (And please let them be qualified and suitable to run the budget!) They can then be run to the benefit of their local demographics. Devon probably has a higher proportion of retired people making different demands on the Health Service than say somewhere in inner London which might have a high proportion of immigrants with young children. Westminster could then have the joy of managing our security (border/food/energy etc) and foreign policy.

[William Blake's Ghost]

Tim,

How can you say:

The Conservatives must cut into things that are uncomfortable for us. We must be seen to be making sacrifices too.

And then precede to set various personal pre-conditions (restrictions) on how that is done. I'm sorry this is nothing more than riding your hobby horses and quite frankly, I suspect we need a Conservative government that will be far more open-minded than you, or perhaps any of us, are.

I agree with Oldrightie, interventions like this are now unwelcome and are just doing Brown's work for him!

To get this country out of the potentially terminal mess that Labour has got us into and to get rid of Brown and his dreadful government, we must have faith that the party leadership has a better idea of the way forward and we must recognise that everything must be on the table and heartfelt beliefs and 'principles' may need to be temporarily suspended.

Now please stop this obsessive navel gazing and show some faith!

Because if we don't then there is one potential outcome none of us want. 5 more years of Brown.........

[K L Walker]

I am concerned by Tim's suggestion that defence spending should be one of the areas to suffer cuts. It has already suffered too many cuts under the present government and too many brave British soldiers have died because of inadequate equipment and poor infrastructure. The British public will not regard putting their lives even further at risk as an acceptable proposition.

HE asks why Tim and others can see that it must start from principles but Gordon Brown cannot? Tim and Gordon Brown can both see that; they just have different principles.

[Oberon Houston]

Bit gimmicky, but what about making it clear that a cut in services is being made because of Labour when they were in power. e.g., these services are being cut to pay for xxx spent in 2006 by Gordon Brown?

Whatever, would be good to remind people that its not us that caused it.

[Mastiff]

1. Identify ALL the debt that this Government has - bring in any PFI, crystallise all pension liabilities, off-balance sheet financing, etc.

2. Have a hypothecated tax - the "Labour debt tax" - so it is very clear exactly what the money is being used for.

3. Increase the employee contributions into Local and National Government Pension Schemes (including any quangos).

4. Political - remove the option for councillors to join Local Government Pension Schemes and close the scheme for existing councillors.
Change the scheme for ALL MPs, not just new ones, to be money-purchase.
Existing benefits will be kept. If necessary, give a phasing out over say 5 years.

There are many more - some small beer but directional/principled. Not all our plans need to be public before the election. Sometimes you have to think of this as a company takeover - take it into new directions, bring in your measurement scheme, stop pet projects, look at appropriate reward & remuneration, restructure if appropriate.

[michael m]

Tim

I did notice the "Fair"

The point I was trying to make is that there must be a universal perception that we all have to pay the price for the excesses of the Brown era and we must ensure by how we act and talk that this pain is spread between everyone in society. The public must also be assured that the vital public services will be protected and this is where the balance of trying to make cuts and not harming the NHS, schools, policing etc is not going to be easy to achieve.

I just wish that we all show real anger at what this man has done to all of us, particulary those he claims he has protected during the past 12 years. The people I know are absolutely outraged at the state of afairs and we should reflect this.A lot could and should have been avoided

[Freddy]

Don't agree with principles. What we need are concrete examples of government, or Labour local council waste.

[Henry Mayhew - ukipper]

Tim, you're on the money. Well done on your de-fetishisation of Trident.

We can all see in the public sector job ads, which have almost replaced private sector ones in the Sundays, how much inappropriate profligacy there is. Feel free to bear in mind the long-term pension liability of each job.

I would like to see the Conservatives start to act as a government in waiting, as Tony Blair did. Ignore, but mock, what Mr Brown is doing and set out a sensible stall of your own.

Ron Paul, as always, is worth studying at the moment. He is predicting a 15 year 'inflation depression' Zimbabwe-style. How do those who disagree with his analysis suggest that we are going to pay public sector pensions and other legal commitments while continuing to provide current 'services'? Can't be done, not even close, so time to get real Mr C and Mr O.

[Tim Montgomerie]

I'm far from happy with delaying Trident Henry but I think it's the kind of sacrifice that we need in order to be able to afford debt reduction and some investment in the capacity and welfare of our conventional forces.

[Mark Hudson]

Tim

I think the bigger issue for the Party is to define its economic philosophy, agree the approach and communicate it. At present, Cameron and Osborne just look spectaculalrly confused and inept.

[William Blake's Ghost]

[email protected]:58,

I agree.

Philip Johnston has just posted this on the Telegraph Blogs:

Beyond the privacy issues there is the cost. According to the trust, the government spends £16bn a year on databases and plans to spend a further £105bn on projects over five years but does not know the precise number of the "thousands" of systems it operates

Let people control their own data

Now this is the sort of thing that should be being debated and there is not a sign of it on Conhome. Now IMO, this is a far more relevant and constructive topic of debate than this thread.......

[Martin Cole]

As I blogged this morning:

"Kenneth Clarke, Boris Johnson, David Cameron and George Osborne have been tying themselves in knots over the weekend on the question of taxation and public spending, because they have refused to confess their crimes in endorsing New Labour policies over many years and joining the fools paradise of an entirely illusory one-time boom economy. Their dilemmas over inheritance tax, the top rate of income tax, priorities for drastic public spending cuts etc., etc., will continue until they collectively experience a genuine "Road to Damascus" conversion, if they believe they cannot win an election after such a publicly confessed change then they will continue to under-estimate the sound common sense of Britain's active electorate and any victory enjoyed on the back of continuing untruths will likely prove Pyrrhic."

[Freddy]

I don't agree. I can identify an example of government waste that frittered over £1 million pounds.

British Waterways who run the canals are, for all practical purposes, a government department. Most of their funding comes from the government.

They recently spent £1 million pounds on square wooden bollards without consulting boaters. When ascending a lock you have to restrain your boat by putting the centre rope around a bollard - otherwise the boat will ram the top gates. As the boat ascends the rope slackens - so you have to tighten it. You can't tighten the rope if the bollard is square. To make matters worse the bollards weren't in the right place. You couldn't make it up, could you?

Concrete examples like this are good teaching aides and get your message across to the voters better than any set of principles. Do you remember the cheaper plastic skeletons that featured in Conservative party broadcasts before the 1979 election?

As they say in the North of England - "Think on't."

[Sally Roberts]

Tim, I believe you are right about Trident and I am reluctantly coming round to your argument on MPs pay - if only to set a good example to others.

[Freddy]

How do you convince the MPs to reduce their own pay?

Many of them think they are underpaid!

[Freddy]

@William Blake's Ghost

Hear! Hear!

And there has been no mention of the possible bankruptcy, through government gross incompetence, of 79 further education colleges! This was, however, aired by the BBC on the "Today" programme.

Something on wasteful defence procurement would be useful too!

[Henry Mayhew - ukipper]

Tim you can be as reluctant as you like, but you have come to the right decision.

There is going to come a point at which you are not going to be prepared to agree with me on wars, guns, killing and certainly Israel, but do you draw the line at Trident or could you see yourself considering doing without the massive new aircraft carriers?

Betting on military intelligence to make decisions on this stuff can be expensive and foolish. Can you see the justification for their argument at multi-£bn? Can you see a time when we will be able to afford a carrier-based war? If not, scrap it and save the money. If we kept Harriers they could operate off container ships quite happily.

[Freddy]

@Tim

You may well be proved right about the need to postpone Trident.

No postponements to any defence equipment programmes would be necessary if the MOD managed things a little better.

Did you see that article in the Sunday Telegraph a few weeks ago about their recent failures?

For example the 8,000 trucks ordered from MAN which proved unsuitable for some British army use and had to be modified at great expense.

Then of course there were the Panther command vehicles that were so bad that they have never been fielded.

Did we do what many other countries seem to do ie:- extensively trial the equipment before orders were placed and buy existing equipment off the peg with few modifications?

[David Belchamber]

The extent of our economic problem suggests the possible need to scrap one or more of the really costly items in the budget (not the NHS, of course), such as Trident or membership of the EU, together with many of the other savings in Labour's waste already mooted.

I would like to see us investing in R & D projects in areas such as alternative energy sources and spin-offs from space travel, which would benefit the country in the years to come.

A lot of bureaucrats and others are going to lose their jobs over the next few years; perhaps we could spend a bit of time thinking more about job creation than we do currently on taxation and cutting back.

[Goldie]

I'm sorry, Tim, but "We need something like 1.5% annual cuts for at least the next three years."

1.5% bl**dy percent?? This is what a tough line in the Tory party represents these days?

How about 5%, 10%, 15% or the 55% that Labour actually increased spending by????

[pp]

If MPs think they are underpaid, they can go and find different jobs. They aren't obliged to run.

Show me an MP who says they are underpaid, and I'll do the job.

A higher turnover of MPs may give us more young, fresh, new people who are grateful for the opportunity to serve the public.

[Tommy]

"No postponements to any defence equipment programmes would be necessary if the MOD managed things a little better."

The replacement of the trident submarines will cost 13 billion over the next 25 years!

Why does nobody understand that this is a pittence?

"No postponements to any defence equipment programmes would be necessary if the MOD managed things a little better."

The MOD does the best it can with its instructions from downing street. The problem the MOD has had over the past 15 years is that it has beeen forced to buy 'european' equipment.

[Tommy]

Not sure why I quoted freddy twice.

[Freddy]

To ensure that there is less waste in government and local government we need better trained and selected senior civil servants and local government personnel.

Perhaps something on the lines of the French Ecole Polytechnique and Ecole National d'Administration might be appropriate.

In the C21 we need highly trained professionals not Oxford or Cambridge trained generalists.

There also seems to be a great deal of grade inflation going on with public sector posts. This needs to be stopped as soon as possible.

Certainly any post advertised at £100,000pa, or over, should have to be approved centrally, as regards the rate of pay, the duties involved, and even the desireability of establishing the post in the first place.

[Wacked]

A ten per cent cut back to most services and then a bit more of course we winch at such a figure but manage it we must. The quicker we cut our material accordingly the better. We could be generating a surplus within 10 Years. This is a slog the other option is a remnant culture which would generate thick pickings for UK, we can build Arms and Russia is obliging us to do the very same.
Meanwhile the sleeping Dragon sleeps no more.
We will have little choice because Russia still has a superpower Arsenal. We would be neive to assume that the Bear isn't back and may still head the pack. Oh Russia with your Brave hearted Aryan's out in the open and ready for the fight. Do we fear Russia?
I want a strong Russia it upholds our ways and it knows the value of a man. We should send some of their billions back. and with gold cuffs too. We are going to have to cope with Putin and his radical plan for europe.
Now I wonder were the man with the beastly touch is coming from. Ignored and advoided marginalised and cast out indeed both rejected and shyed away from. Unclean unfit and unwanted the product of social injustice.
This fate may befall many people over the coming weeks, lets not get in to Taliban for now, but what a prickle we have there. How are we to cope with the much publicised and largely ignored data that suggest we approach a cliff front. For now build on we must but we need some other plan than Armageddon, it would as you well know be a
deafeat for us all. Bush oh burning blind bush with his petrol can and matches, what have you done! (sobs) We need a master plan that don't end up carbonization us all.

[Freddy]

@pp

I am in total agreement with you!

@Tommy

Yes, I know they do their best and I know it's down to buying European equipment. Rules can be changed, however, and if the equipment they are buying is not up to the mark, the rules need changing! In view of the amount of money being frittered surely this state of affairs cannot be allowed to continue indefinitely?

No pun intended, but buying a fleet of trucks isn't rocket science! Didn't they trial these lorries before they bought them?

When they bought the MAN trucks couldn't they have bought some other trucks for African and Asian operations? The French TOM and the South African SAMIL range of trucks spring to mind.

[Man in a Shed]

An incoming conservative government should issue each citizen with a annual statement with their share of the national debt and how much of their tax went to funding it.

We could then assign a certain proportion of income tax as debt repayment, and allow it to reduce as the debt is paid off.

That should inoculated the electorate against a future Brown debt fuelled borrowing binge for at least two decades.

[Denis Cooper]

I've got an idea.

Whenever the Tories talk about reducing public expenditure, Labour asks which services they would cut.

That's always been quite a good question, but under the current economic circumstances this one is even better -

"So, how many people do you want to add to the dole queue?"

Here's a rough guess - if you successfully cut £1 billion off public expenditure this coming year, you'd add 40,000 to the number of unemployed workers.

That's 20,000 to save £1 billion upfront; but part of that £1 billion would be needed for the costs of sacking the people, and another part would have to paid out in social security benefits after they'd been sacked; so it would need to be more than 20,000 who were originally sacked in order to get a net reduction of £1 billion off public expenditure, and let's say that it needed to be 30,000; but the loss of consumer demand from sacking 30,000 people would inevitably result in some further job losses elsewhere in the economy, and let's say that would be another 10,000, so that would make 40,000 added to the dole queue for each £1 billion taken off public expenditure.

On which simple basis, to cut public expenditure by £180 billion, the predicted government budget deficit for the coming year, it would be necessary to make about 7 million workers unemployed.

Have you got the stomach for that?

Because you believe (correctly) that many of the sacked workers wouldn't have been doing anything useful before they were sacked, and you resent paying taxes to keep them employed but not doing anything useful?

But even then you wouldn't have balanced the budget, because with an additional 7 million unemployed tax revenues would be lower, so that would mean making more cuts in public expenditure, and making more workers unemployed.

OK, so maybe it wouldn't be 40,000 added to the dole queue for every £1 billion cut off public expenditure; maybe that's a gross over-estimate, and it would only be 30,000, or maybe even only 20,000.

Nevertheless, would you really want to start down that road?

[Anthony Scholefield]

.Depressions end when the cost of labour falls so that business activity again becomes possible and profitable and can expand.
One of the tricks in this is getting labour out of the workforce as was done by the Nazis taking advantage of the birth declines in 1915 which produced smaller labour cohorts in the 1930s plus of course booting women and Jews out of the labour force.
Similar results occurred in 1946 in the US to stop the depression returning after 15 million people suddenly became available to the labourforce after demob.Women left the labourforce in several million.
The critical point in each case was that the labourforce was reduced without accepting welfare costs. This will happen in well run countries like Singapore today where the unemployed foreign labourforce has to leave or the Gulf where they also have to leave or want to leave.In India or China there is no question of sitting about and getting doles so the cost of labour goes down in a recession.
An obvious move is to encourage or force foreign labour out of the UK and with draw welfare benefits from those who have been drawing them for years. At present there is no prospect of any party reducing the standard of living of the welfare classes so they will continue to increase their number despite the recession.
So our labour costs may fall but our welfare costs will increase so we will fall further behind the better run rising stars.