The Pre-Budget Report (From the archive)

November 21, 2008


All the talk is that Alistair Darling will spend heavily in the Pre Budget Report to try to give a boost to the economy and take some of the edge off the coming recession. So tax cuts and benefit spending will be the order of the day. But is this wise and will it work? I don’t think so.  

Many say that the President Bush tax rebates of 2001 showed that a weakening economy can be stimulated this way. But the difference this time is that the bubble of personal debt is so much bigger. In the USA, President Bush tried giving tax rebates this year, but the money is not being spent, but rather saved or used to pay off debt, so there is no stimulus there. The increased borrowing to pay for the rebates will come back later in tax rises.

If Alistair Darling is going to bet the shop on tax cuts and benefit increases, he runs the risk of building up even greater future UK tax rises for no immediate gain. We have already seen a potentially large stimulus to the economy from unprecedented interest rate cuts, yet the Government wants a giveaway budget without seeing if they work. This is politics rather than economics and the latest news is a slimmed down Queen’s Speech. Gordon Brown is opening up the option to “cut and run” for a General Election before the full severity of the recession bites. 

At the time of the Budget, I argued that we needed low interest rates and lower taxes and I attacked Government plans to increase tax and abolish the 10p income tax rate (Hansard 13/3/08 col 488).

Since then the economic outlook has deteriorated sharply. At that time the Treasury predicted growth in the economy next year of 2.5 per cent, now independent forecasters expect it to fall by 0.9 per cent. Inflation is down as demand for commodities falls. Unemployment is predicted to double with long term unemployment likely to quadruple.

Government borrowing is going to soar, not only because of changes to compensate for the loss of the 10p rate and further fiscal measures, but tax receipts are below forecast levels and benefit bills will rise in line with higher unemployment and as they are linked to September’s RPI of 5 per cent. The Institute for Fiscal Studies (IFS) predicts borrowing this year almost 50 per cent higher than forecast at Budget time.

As the IFS has stated, “the underlying level of debt was already perilously close to the Government’s ceiling. Mr Brown did not leave his successor… with the fiscal room to cope…”

A political Pre Budget Report followed by an Election in the Spring is a gamble, but Gordon Brown knows that as the recession takes hold, his past will come back to haunt him – an end to boom and bust? Not yet.

Post Office Card climb down (From the archive)

November 13, 2008

I am pleased that the Government has seen sense and announced that the Post Office will keep the Post Office Card Account (POCA), even though they voted against it earlier this week.

It should not have been so difficult for the Government to see that this is a vital service for vulnerable people and vital to the future of post offices.

Many constituents have written to me about saving the POCA and I am delighted that our campaign has paid off.

Buntingford Youth Council (From the archive)

November 11, 2008

After asking my Question to the Foreign Office Minister about Afghanistan (see speeches), I had a visit from 7 members of Buntingford Youth Council and Town Council Clerk Jill Jones. We met in a Committee Room in the new Parliamentary building, Portcullis House, and I explained about the debate that day on expanding Heathrow. We discussed lots of excellent questions on state education, student finance, the Smoking Ban and other points. Buntingford has had a good history with its Youth Council and I invite them to Westminster regularly. The group clearly enjoyed seeing Parliament in action.

I then showed the group round the ancient Westminster Hall, St Stephen’s Hall (original site of the Commons’ Chamber), Central Lobby and then arranged Gallery tickets so they could watch part of the debate. A good visit.

Remembrance Day in Royston (From the archive)

November 10, 2008

As I predicted, this was a marvellous service on Sunday at the War Memorial with the Royal British Legion well marshalled as usual. We were lucky to have representatives from the Barracks present. As well as Town Mayor Paul Grimes, it was good to be able to welcome the Chairman of the District Council Allison Ashley and many of our local councillors. Also present was Deputy Lord Lieutenant – and Royston resident – Neville Reyner, who is current National Chairman of the British Chambers of Commerce. Vicar Les Harman conducted the Service as well as ever and Hertford Archdeacon Trevor Jones gave an excellent address pointing out that this was not just a 90th celebration of the end of World War One and a chance to remember the fallen of the two World Wars, but also a time to honour more recent sacrifice and he gave a poignant example from the 1991 Gulf War. I was talking to officers who had served in Iraq and Afghanistan. Royston did a marvellous job in showing that we do care for and support our armed forces and honour the memory of those who lost their lives serving their country. I thought the Remembrance was very smart and well done and the group of young buglers were excellent too.

It was a very well attended service this year, reflecting our concern for those currently serving overseas.

Bishop Christopher’s retirement service at St Albans Abbey (From the archive)

November 10, 2008

After my surgeries at Jackmans and Great Ashby on Saturday, it was off to St Albans with Christine for Bishop Christopher Herbert’s retirement service. Our local clergy paraded through the Abbey and there was a good turn out of supporters from North East Hertfordshire. Christopher has been excellent at keeping in touch with local MPs and every Christmas he has invited all MPs over to his home at the Abbey for morning coffee and some of his wife Jan’s mince pies as we discuss the great ethical issues in front of a roaring fire. Christopher has taken a big part at Westminster in the House of Lords, where he was known for his careful scholarship and kindly manner, as well as working very hard in the Diocese. I was glad to be there and the Bishops of Hertford and Bedford gave excellent tributes and Christopher made a moving speech thanking all who had helped him over the past 18 years.

We will miss Christopher and Jan. The presentations included a new bike and I hope he enjoys the ride ahead.

Sunday’s Remembrance (From the archive)

November 7, 2008

I am looking forward to Sunday’s Remembrance Service in Royston. It is a time to remember and honour the service and sacrifice of our magnificent armed forces. But in Royston it is also a celebration of our close ties with Bassingbourn barracks. The presence of serving soldiers at the Parade gives the occasion added significance and makes us realise that generation after generation has fought to protect us and make Britain what it is today. As a Royston resident, I always think that our Remembrance Day is very well organised by the Royal British Legion and the Town Council. It is also very well attended and a credit to the Town.

I will be placing my wreath at the Memorial on behalf of all residents of North East Hertfordshire constituency. In other years I attend the Parades at the other three towns of Letchworth Garden City, Baldock and Buntingford. These are always special occasions and I believe that this Sunday will be even more so as we think of our forces in Helmand, Basra and across the World.

Afghanistan (From the archive)

November 7, 2008

There has been nothing but praise at Westminster for the magnificent work of our armed forces in Afghanistan and I have been lucky to meet some of our local soldiers who have served, but all year we have been receiving gloomy reports from well respected Generals, Think tanks and those returning from visits. It is not that we are losing the War, but there is a feeling that we need our troops to have better equipment, better support from our NATO allies and that reconstruction and relief work needs to take place more quickly after tactical military victories so that local people see some benefit on the ground. There is also concern that more needs to be done to encourage Pashtun tribal leaders to take part in Government rather than aligning themselves with the Taleban.

I recently called a debate on this in the House – the link is in the speeches section. The USA is undergoing a major review of its efforts there ahead of the new Presidency and I intend to continue to press our Government to review its coordination of efforts between our military, relief and diplomatic efforts.

Indeed next Tuesday 11th November, I will be asking Question 9: What discussions he has had with the Secretary of State for Defence and the Secretary of State for International Development on co-ordination of policies relating to Afghanistan.

Obama’s win (From the archives)

November 6, 2008

The stunning victory of Senator Barack Obama in the US Presidential Election shows what democracy can do in changing the face of a nation’s government overnight. This was a vote for change at home in the USA – particularly with the economy – and abroad in Foreign Policy. There is no doubt that this will make life difficult for those who cannot stand democracy and freedom and who love to do America down.

For those of us who remember Martin Luther King and the great civil rights’ struggle of the 1960s, it is a truly remarkable result. In many ways “The Dream” has been realised.

We are seeing the emergence of a new generation of World Leaders to meet the great challenges which face us. They will need our support and a greater spirit of bipartisanship. President-Elect Obama and the defeated Senator John McCain, who was so gracious in defeat, have made a good start on this