A manufacturing led recovery?

I spent yesterday visiting Converteam, who are a large employer in Rugby. Converteam are a world leader in power-conversion engineering manufacturing electric motors and generators used in a variety of applications. They have particular expertise in wind generation and are well positioned to take advantage of the move to "green" power. As a company making things and supplying world markets,they are the kind of business that the country will be looking towards to lead us out of recession as. It was a concern, therefore, to learn from Nik Pocrnic my host and who is the company's Director of Sourcing that currently a large proportion of their component supply and sub contract work is sourced from abroad. It appears that many UK firms don't currently have sufficient capacity to supply and this is at a time of recession. It begs the question that if we don't have the capacity now, how realistic are our hopes for a manufacturing led recovery once the world market recovers? Given the reliative weaknesses of financial services and the housing markets, this is the sector we will be relying on! It isn't too late for Government to address this issue and our loan gurantee scheme supporting loans to business is a start. Given the current weakness of manufacturing, it will be a tragedy if manufacturing businesses continue to fail and shed staff meaning that we will be in no shape to profit from the upturn when it eventually comes.

St George's Day

At the weekend I spent Saturday at the Party's Spring Conference, missing David Cameron's speech on Sunday in order to join Rugby Scouts at their annual St George's Day Service and Parade. It was great to see St Andrew's chuch full of enthusiastic youngsters. I enjoyed the march past, finishing at the newly redeveloped Caldecott Park where I met up with Dave Barclay, County Development Manager and Tony Marsella, District Commissioner for Rugby.

Leadership

As a Rugby player I played with some excellent captains who led a team on and off the field; in my business career I worked for some great managers before starting my own business when people in the company looked to me as their leader. So I think I have pretty fair appreciation of what makes a good and a bad leader. The Prime Minister is the leader of both Parliament and the country and so naturally should be a figure of authority and have good leadership skills. Two issues today have shown how these are lacking in Gordon Brown: the first is the discourtesy shown to the Pakistani authorities by making remarks aimed at a good headline at home just before his visit there which were bound to cause offence; the second is the handling of the MPs second home allowance when having said he would consult, he failed to do so, tried to impose his own preferred policy and now is abandoning the proposals though lack of support, not only from his opponents but also his own side. Is it any wonder the country's in the mess it is?

Savings & Pensions Campaign

Rugby joined in with the Conservative Party's national campaign on Saturday with a stall in the town centre. we gathered signature on a petition calling on the Government to abolish income tax on savings for basic rate taxpayers and increase the pensioners personal allowance by £2000. Well, we didn't get either of these in the budget but the message of support for these groups partly got through. The amount people can put into ISAs goes up from £7,200 to £10,200 although whether this will restore a savings culture remains to be seen. Pensioners will get a higher basic pension and additional allowances but there doesn't appear to be any extra real incentive for people to make their own provisions for their retirement. People need encouragement to do the right thing during their working life rather than being penalised for it.

Budget comment

Budget comment

Good news for labour’s class warriors

The main headlines from today’s budget are all about the rise in the top level of income tax to 50%. This is what Labour wanted and is something they pledged not to do when as New Labour they came to power in 1997, and double the increase they spoke about a few short months ago in November at the time of the pre-budget report. Given their approach to the business of politics, the breaking of promises is unlikely to worry a party led by Gordon Brown. Income tax increases will do very little to increase the Government’s overall tax take, at a time of a massive black hole in its finances. It is generally accepted that higher taxes drive the bigger earners away to other more welcoming countries and reduce people’s incentives to earn more. So it was all about appeasing their traditional wing, keeping the class warriors happy and setting a political trap for us. Darling and Brown’s aim is to drag us into a debate about tax rates rather than exposing the complete and utter financial mess the country is now in and this is something we will avoid.

Also why was the U tube announcement by Brown on MP’s expenses made the evening before the budget? Was it a distraction from the main event because the Government doesn’t want the attention on the serious economic issues facing the country?

There has been no real attempt to deal with the stark problem facing us. Borrowing this year will be £175 billion, massively up from the £125 billion anticipated those few months ago and as a consequence of the Chancellor’s over ambitious forecasts. His forecasting hasn’t improved and today continued to be wildly ambitious. Growth is now a negative 3.5% yet is expected to be a positive 3.5% by 2011. Such a turnaround is unheard of, will lead to continued massive borrowing on the assumption that there will still be people around willing to lend to the UK Government.

Again in this budget there is no real attempt to deal with the problem of the huge difference between Government spending and income. There is the sop of unspecified efficiency savings, which are a sort of cuts by stealth and without stating where they will fall. There are supposed to be £50 billion worth of these, which beg the question that if they’re there, why haven’t they been uncovered before and taken advantage of during the past 12 years of Labour rule? Those who work in our public services tell us all the time about the massive waste and inefficiency that exists, but that it is inherent in a system that relies on control from the top with targets, directives and initiatives changing all the time with constant reporting back to the centre. At some stage the huge growth in public spending that has taken place over the past twelve years will need to be confronted. Labour Governments almost always run out of money and again it will fall to the Conservatives to get Britain out of the mess.

Elsewhere there is tinkering and not very effective tinkering at that. As an example, the vehicle scrappage scheme, copied from the Germans and disliked by many Germans as many sound vehicles are being scrapped, will benefit the Germans amongst others as people benefit from a discount provided by the UK Government on cars manufactured in other countries including Germany. Iain Dale asks why stop with cars, why not include all sorts other products? Surely it makes sense to at least target such a scheme to things produced in the UK?

There is no mention of VAT because any change would mean having to apologise for getting it wrong when the rate was reduced from 17.5% to 15% and, as we know, this is a Government led by a man who will only say “sorry” through gritted teeth. The reduction has done nothing to stop the recession and we might as well revert to the original rate now before it needs to go higher in a year or two’s time.

The next few years will be painful. We are in the deepest recession since the Second World War, with the biggest budget deficit and the fastest rate in growth of unemployment. The situation is serious and deep rooted. We face problems that will take courage to resolve. It’s clear that Labour don’t have the determination and conviction to deal with them. We have and we will.

Emmaus Shop Opening

On Saturday I attended the opening of Emmaus' new shop in Rugby Town centre. I first became aware of Emmaus about three years ago when I was Housing Portfolio Holder at Rugby Borough Council; they are are charity supporting the homeless whose objective is simply described by their slogan "Providing a bed and a reason to get out of it." I visited their site in Carlton Bedfordshire where they provide not only accomodation for homeless people but also a workshop repairing old furniture and a second hand shop with a restaurant. All of the work is done by residents and this provides a sense of self respect and purpose for people who circumstances have caused them to be without a home. In Rugby things are just getting started with the shop the first stage. The opening was by Terry Waite who is a supporter of Emmaus, who told a great story about his time in captivity in the Middle East. His captors told him that they would be moving him and tied him up with packaing tape and blindfold, he was put in the boot of a car. He was surprised to feel the arm of another person already there. He exclaimed "not much room in here for two of us!" and the reply came back, "it was all right until you got in!" That was his inroduction to John McCarthy.

Trees Update

I have spent most of the weekend working in the area of trees that we planted late last year. Almost all of the trees seem to have taken with many showing new growth. The photo shows an Alder. I have spoken to a friend who planted her field a few years ago who tells me that we have done well because of a damp winter and spring so far. Ironically the real test will come during the summer when, if it is dry and hot, we can expect to lose a few trees. We have created a footpath, built a couple of benches and built a bridge. I'm looking forward to seeing more progress over the next few months.

Easter Weekend Smear Revelations

I have been following the revelations of Labour's blogging proposals with interest. On a daily basis I read Conservative Home, Iain Dale and Guido Fawkes, and so the personalities & issues involved are very familiar to me. It seems to me that the “blog sphere” is just another area where Labour doesn’t get it and where in trying to build a presence they have just got it completely wrong. In doing so, they have offended many innocent people who deserve the greatest sympathy, apology and recompense. In any organisation, responsibility ends at the top and I can’t believe that Gordon Brown was unaware of what was happening in his office. The revelations of who they intended to smear, and how, have caused me to ask myself the question whether I want to subject myself and my family to the risk of this kind of personal attack. On balance the answer has to be a firm yes because I want to play my part in ensuring that there will be a better future for our children and there is so much to be done, but there are times when anyone could be forgiven for wondering whether it is all worth it.

Hillmorton Mast site

A couple of weeks ago I attended a briefing on the early stages of development proposals for the mast site at Hillmorton. It's generally accepted that the fight to oppose large-scale housing here has been lost as a consequence of the requirement for Rugby to accommodate thousands of new homes imposed under the government's regional spatial strategy. The challenge now is to make certain that we have a development which is compatible with and enhances the town of Rugby. I was pleased to see that the development proposals include recognising the heritage of the site which played a significant part in the national communication strategy of the 20th century. There are few buildings on the site but of those that are there, some are to be included as public facilities.

Old Laurentian Dinner

People who know me will know how proud I am at having attended our local grammar school Lawrence Sheriff. I was more proud when my son Will made his way there to do his A levels, partly because it meant we would be able to go as father & son to the Old Boys Society Dinner. That took place on Saturday. Speaker funnier than last year!

Bankrupt Britain

The headline from the Sunday papers to catch my eye at the weekend about the number of individuals & companies predicted to go bust this year. According to The Sunday Times 35,000 companies and 125,000 people are expected to be declared bankrupt. Having run a business I know how tough it can be to make sure the money owed comes in to enable suppliers and staff to be paid on time. There are clearly plenty of businesses where this isn't happening and where there will be problems. And the human cost of personal bankruptcy will be massive with homes repossessed and families breaking up. The money the Government has put into the banks isnt finding it's way to business to stave off these problems. The claim about ending boom and bust is now very hollow.