Keynes is not the solution

All of the talk about returning to Keynesian economics reminds me how I felt at University when I first learnt about his theory. I haven’t heard Keynes’ name for years which itself is perhaps an indication of just how serious the current economic situation is. His is the idea that the effects of recession can be reduced and the recession brought to a halt more quickly by the Government spending money on public works, even to the extent paying people to dig holes in the ground and fill them up again. Alastair Darling has been speaking about bringing forward capital projects and allowing spending to carry on unrestricted. The weaknesses of the theory include the time lag to get new projects under way; the fact that sucking in imported raw materials and labour for these projects can have an inflationary effect and ultimately that the extra expenditure has to be financed by either more borrowing or additional taxation. It’s my view that if the economy needs a boost it’s better to provide it through personal spending since individuals will make better decisions than the state by spending on what they need to maintain, or remain as close as possible, to their choice of lifestyle. This can be achieved through reducing personal taxes and such a change can be implemented quickly. With the decline in our manufacturing base the danger of imports being sucked in remains, although a significant proportion of household expenditure is on services, which are almost entirely provided locally. Nowhere is the need for reductions in tax more needed than for those on the lowest incomes who have seen the proportion of their income taken in tax increase massively over the past ten years. In many case low earners pay tax only to claim it back through tax credits. Change the system and not only will there be additional incentives to work, there will be a major simplification of a system that only qualified accountants and tax inspectors fully understand. Of course this won’t happen under Labour as the chief architect of tax credits was Gordon Brown and this Government are hell bent on a high tax, high spending strategy.

Half term break

This week has been half term and for something different we hired a VW campervan for a couple of nights on the Isle of Wight. Definitely life in the slow lane and great fun, even if not the best time of year for this type of accomodation!

Sir John Major in Rugby

Former Prime Minister Sir John Major was our speaker at Rugby Conservatives Annual Dinner on Friday evening. Sir John said that The Conservatives should look forward with confidence to the next General Election as the current Government had dashed the hopes of a generation through their mismanagement, false claims and their evasion of responsibility. He also spoke about broader issues including the effects of population growth in their future affecting the world's food supply, climate change and a shift in world power from west to east. He took a variety of questions including the current economic situation and (predictably) correctly answered a test question about the laws of cricket to enable a bet to be won between two guests. He was personable and mixed freelyamong those attending who enjoyed really good evening. Photos to follow!

Canvassing my first home

I was out on the doorstep with our survey on Saturday in Binley Woods. It was great to have my Mum out with us and to be in the street where I spent my first few years. We stopped outside the house my parents owned when they were first married, and I walked up the footpath to meet the current owner who has lived there since the 70's. It felt as though I was in a scene from the family history programme "Who do you think you are?" I was interested to look around the house and listen about how the village has changed over the years. One change every resident is delighted about is the decision by the main operator at nearby Coventry airport to cease operations which will return to Binley Woods the peace and quiet it deserves.

Back to school

As part of my appeal for soccer shirts for Rwanda, I have now visited several schools. On Friday, I went to my old school, Lawrence Sheriff, and spoke to full school assembly, around 600 students, in what is for me the new sports hall. This was probably my biggest local audience who listened attentively, no doubt due to the presence of school masters in the aisles. However, it was nice to discover that the place hasn't lost it's sense of irreverence. As I left, unaware that I was behind him, one of the older lads called across to his mate, "Hey, Noel, didn't you think that was a waste of time!" I thanked him for his support to which he replied, "Well you did take a while to get to your point!" Perhaps a fair observation & a general one that I should remember in preparing speeches. Anyway, I look forward to receiving his shirt to send over to Africa.

Questions & answers

pTotal Politics is a fairly new publication with a strong on-line presence which describes itself as "a lifestyle magazine for the political class" publishing items of cross party interest. I bought a copy before attending conference and found several articles worth reading, both light hearted and more serious. A week or so ago I was invited to respond to a Q&A they have given to various candidates, MP's, comentators and other politicos. The article is at: http://www.totalpolitics.com/politico.php They've secured at least one new regular reader!

Survey Question

Our survey this month is inevitably about the economy. One question concerns trust in Gordon Brown to deal with the current economic difficulty. Interestingly we only get as far as “Do you trust Gordon Brown……” before people instinctively say “no”.

House Sales or the lack of them

If I needed reminding about the fragile state of the economy, I saw it yesterday while out with our survey team in Brownsover. In one road there is Estate Agent’s board after Estate Agent’s board with the market jammed by a lack of mortgage finance. As a consequence, many people’s lives are on hold unable to move to the larger house a growing family needs or to take up a new job offer. Added to this, as I remember from the early 90’s, there is a growing anger about negative equity, the inevitable consequence of falling house prices. And things will get worse before they get better.

School visit

I spent this morning at Oakfield Primary School where I had been invited to address the entire School about what has become known as my "Football Shirts for Rwanda" appeal. The school already has an understanding of issues relating to overseas development, having a link with and having sent books to Ghana. I found the children receptive about what I am trying to achieve with an interest in how the facilities for youngsters to play football in Rwanda. I was asked whether they had nets on their goal posts and when I explained about a dirt pitch with wooden sticks for posts and a ball made from plastic bags tied up with string there was real concern & understanding. Less understanding, however, about my support for the local league side Coventry City! I enjoyed speaking with the Headteacher about the challenges facing the school and the excellent progress they have made in recent years.

Conference Wednesday - Leader's speech

I joined candidates on the stage for David Cameron's speech bringing conference to a close in the grand setting of Birmingham's Symphony Hall. Not his best speech as some suggest, as that was his claim to the leadership, but the statesmanlike presentation of why we are the party to deal with today's problems that the country wants (and needs) to hear. As someone whose first experience of the general election process was 1979 when the former Chancellor, Home Secretary, Foreign Secretary & then Prime Minister Callaghan was replaced by a new Conservative leader, I enjoyed his rebuttal of Labour's claim of inexperience. It will be interesting to see how the polls react now that the conference season is over and all parties respond to the economic turmoil we now face.