A few weeks ago I argued that the British government treatment of Gurkha’s who had left the army prior to 1997 was immoral and unfair: http://www.power-to-the-people.co.uk/2008/09/immigration-policy-farce/ In effect, the government argued that Gurkha’s that had retired from the army prior to 1997 would not have an automatic right to stay in the UK.

Today, instead of the government acting with honour, it was left to the judiciary, The judge, Mr Justice Blake, said the Gurkhas’ long service, conspicuous acts of bravery and loyalty to the Crown all pointed to a “moral debt of honour” and gratitude felt by British people. I could not have put it better myself. He went on to say that the advice given by the Home Office to the immigration department was unlawful and required urgent revision.

I cannot but wonder, in light of Jacqui Smith’s statement, why it was necessary for this to go to court. Jacqui Smith said in a statement “I have always been clear that where there is a compelling case, soldiers and their families should be considered for settlement,” she said. “We will honour our commitment to the Gurkha’s by reviewing all cases by the end of the year.” Actions speak louder than words, but this type of response and intransigence has become typical of this particular government. The public will be watching to ensure that the government does not attempt to get out of this commitment.

Today, David Cameron provided what, for all intents and purposes, could be described as a ‘presidential’ address to conference, albeit the intention was to address the nation. Although this may described as political opportunism, he did, actually pull it off, at least insofar as to make it look as if the conservatives want to be an ally of the Labour government in this time of crisis, rather than an adversary.

What was interesting was, that Cameron came across as mature, thinking and determined, even though the content lacked real meat. However, he has promised to elaborate on this tomorrow. In his speach, he announced that he was going to drop his party’s minor objection to the current Banking Bill, in terms of who has the final say on the event that the Bank of England needs to intervene to save a bank, the BoE of the FSA, the conservatives originally favoured the former, whilst the Labour party the latter. He has also vowed to support the rapid introduction of further guarantees for savers money.

Finally, he suggested that he would support the government in its endeavours to address the complex issue of “marking to market”, a process whereby banks price daily their assets which, it is argued, is causing bank stocks to fall even further. The proposal is that this practice should be suspended. Quite how this would work, Cameron did not explain, therefore, we can assume that it will be challenging or perhaps, not even possible.

What is perhaps more important, is that the conservatives in general and David Cameron in particular, have, throughout this crisis, remained in the shadows, so to come out and make this type of statement is significant, if, perhaps underwhelming. Nonetheless, what was important was that Cameron emphasised that the conservative party was not a subsidiary of the CBI or the city, two areas where they are seen as possible lapdogs. One other very significant point, was that he made clear, that there must be a day of judgement for the bankers, not now, whilst all this turmoil is going on, but once the dust has settled.

Yesterday, I argued strongly, that the bankers and executives that have presided over this chaos and brought many very powerful, established and well-known companies to their knees, or worse and should be investigated. Further, this should be done quickly, in order that their assets can be frozen, less a small allowance, pending a criminal investigation, which could lead to the permanent sequestration of their assets. [Banking Crisis, a time for reflection and payback]

What I would like to see now, is David Cameron come out further on this issue, by providing a direct challenge to the Labour government to make a commitment, here and now on the issue of their ‘day of judgement’. If the government and other parties want the ongoing support of the public, they must agree to mount criminal investigations, into the actions of the bankers and city executives and they must not allow those same people the opportunity to salt away their assets through uneccessary or avoidable delays.

Well done David, timing was good, the tone was excellent, now you need to keep the pressure on and come up with tangible solutions, because of course, the offer of rapid passage of two acts through parliament is not going to fix things, more, much more needs to be done. Time to turn words into action and if necessary, show the government wanting if they fail to act quickly and decisively.

When the dust settles, governments around the world need to reflect on precisely how a situation arose, where taxpayers were required to bail out struggling banks and insurers. This should be wide ranging and lead to both regulation and prosecution.

It is insufficient in the extreme to state that the stock markets require regulation, the truth is that executives of some of the largest banks and insurers in the world have acted recklessly and in return, have profited through bonuses and dividend payments. They have manufactured products that could be traded for profit, even though 10 years or so ago, these types of trades did not exist, in fact, some are so complicated, that even financial experts and city observers have struggled to explain how they worked.

It must be remembered, that the executives of these banks and insurance companies were charged with a fiduciary duty to look after their shareholders interests and act responsibly. From what I can see, they have created products that allowed them to make short-term profits on traded mortgage securities and the like. In many cases, shareholders have lost everything, many of whom are pension companies, which means that the ultimate losers will be all those that have invested their hard earned money in a pension fund and of course, the taxpayer.

Few can argue, that the actions of many of these top executives has been reckless in the extreme, because previously solid businesses have now had to be bailed, whether through nationalisation or central bank loans. With the position, salary, share options, dividends and bonuses, must come the responsibility. Anyone who has been party to the decisions that have lead to the failure of the business they were responsible for, should be required to forfeit any profits they received.

During these tough times, there is a need for cool heads, particularly from government, but we will come out the other side. The government’s however, must act now, by freezing the assets of all executives who are believed to have been party to this reckless behaviour, before they are allowed to salt away their assets, as they surely will. The public will not forgive government, for allowing these people to protect their assets and avoid paying the price for their reckless behavior.

This is not about starting a blame game, nor is it a witch-hunt, both of which may even be justifiable. It is a method by which government, on behalf of the people, can make clear, that reckless behaviour, for short-term profit, which leads to business failure has a price. In the UK, company directors can already be held personally responsible if they have continued to trade whilst insolvent, based on some of the recent examples of spectacular business failures, it is difficult to see how some of the banking executives could claim that their business was solvent.

Government must use existing legislation to investigate and if necessary, charge reckless company executives. If necessary, they must introduce further legislation to increase their powers in such circumstances, but in a first move, they must seek to freeze most or all of the assets of these failed bankers and their cronies. It does not matter if they have been donors to party funds, politicians responsibilities are to the electorate, not a few failed bankers. The predict, that the first party to promise to freeze the assets of these bankers, pending an investigation, will receive a massive boost in the polls, so even if they don’t do it because it is right, they could try it for the poll boost!

News that the Liberal Democrats have been ordered by the Information Commissioner’s Office to halt their automated phone calls and Nick Clegg’s subsequent reported response to this decision pretty much sums up the arrogance of relative youth, specifically in relation to politicians, who should know better.

Anyone that has ever received an automated call will know just how infuriating they are. The Liberal Democrats, seeking to be a party that embraces new technology, went ahead anyway. Of course there are rules, because companies are not allowed to use automated calls for direct marketing purposes, unless the recipient has specifically opted in. The Liberal Democrats tried to argue that it was not direct marketing, but the Information Commissioner’s Office did not agree. The LibDems said that because they were also asking people questions on what they thought about the party’s policies, it should not be considered direct marketing, this was evidently a way to circumvent the rules. We should all be asking ourselves if this can truly be a party for government, if they go ahead and do something that they know we all find irritating in the knowledge that it was likely to be against the rules. Surely they could have asked first, before they embarked on this programme, at least that may have been more responsible. 

Worse still was Nick Clegg’s response. He apparantly denied that the evening calls were likely to anger people or disturb them when they are trying to get children to sleep or are relaxing watching TV, he is reported to have said “I rather hope it won’t disturb. People don’t have to pick up the phone if they don’t like the time at which the call is made.” What an arrogant response, how are we to trust someone that has such little regard to the voters right to avoid unsolicited calls from a machine?

For anyone that may believe the Liberal Democrats just made an honest mistake, it is worth noting the comments made by Tricia Marwick, the MSP for the Scottish National Party who said: “The hypocrisy of the Lib Dems in making these calls knows no bounds. Having reported other parties for making similar calls and having run a campaign against unwanted telesales calls themselves the Lib Dems were well aware of their actions.”

I believe the statement from Deputy Information Commissioner David Smith, pretty much summed it up when he said: “The ICO has consistently made clear that the promotion of a political party counts as marketing.

“We have previously issued detailed guidance to all major political parties on this subject.

“Many people find unsolicited automated calls particularly intrusive and annoying so it is important that any organisation making such calls ensures that individuals have given their consent before they are targeted.”

Nick Clegg would do well to stop trying to embrace technology that satisfies only the instigator at the expense of the recipient, particularly when he will be relying on these same people to elect his members of parliament at the next election. The party may also do well to note, when challenged, Nick Clegg;s dismissive approach in relation to the people who may have been subjected to these unsolicited calls.

For those that support green taxes, or to use the government’s jargon ‘environmental taxes’ it is worth noting just how much of the money that is collected in taxes, is actually reinvested into the environment and into reducing emissions. Given the numbers, it is little wonder that there are so many sceptics in the UK, in fact it is something of a scandal. This government is forever telling us how they value the environment, how they are leading the word in the reduction in carbon emissions and why it is so important that those that pollute the environment should pay. The reason I looked up the latest available figures was because the government offered so little new money to help those in fuel poverty in terms of saving energy and ostensibly, to reduce emissions.

According to The Office for National Statistics, the government collected £35.6bn in environmental taxes, that’s right, billion. This is equivelent to 2.7% of our GDP, a huge number by anyone’s reckoning. But how much did they reinvest? According to the ONS, in 2004, the latest year for which figures are available, the government invested £5.9bn into environmental protection measures. That is just 16.5% of the taxes collected. As we all know, since 2006, there have been further stealth taxes, sold as environmental taxes, which means that the figure collected in likely to surge in 2008, perhaps to £40bn.

How can anyone reconcile the platitudes and rhetoric spouted by this government regarding why we must pay green taxes, when they invest so little of what is collected in terms of green taxes, back into environmental protection measures? Green activists would be right to be angry, but so to should the tax payer, given we have been sucked into believing we were being taxed to the hilt in order that the government could introduce measures to protect the environment for the sake of our children.

The government have claimed that people can save up to 25% on their fuel bills if they follow a few measures in terms of insulation, low energy bulbs etc. Yet when the government told us they were investing £1bn to assist those in fuel poverty, it transpired that £910m was coming from the energy companies and just £90m from the government. This figure should also be considered in context, because the government reduced the Warm Front budget by a similar figure, so in fact their contribution was at best, neutral.

If you are angry, then consider this, our green government reduced spending on measures to prevent the atmosphere and climate change from £313m in 2003 to just £250m in 2004. This is hardly what we would expect from a government that claims to be leading the way. To be fair, the expenditure may have increased in the past 4 years, but as we all know, we cannot believe the figures provided by this government, so we will have to wait until the ONS can tell what the actual figures are. This is because, in case anyone has not noticed (we aren’t supposed to), whenever there is a tax rise, it is immediate, but when there is an investment to be made, we are told the total cost, over a period of years and there is always a delay before it is implemented. For example, “we will spend £900m over the next 10 years, starting from 2011“, you know what I mean. They will then repeat this number, making it sound like new money, every 12 months or so, or when they feel they need good headlines. Sorry, I am prevaricating.

I am not arguing against green taxes, but if they are labeled as environmental taxes, then the money should be reinvested into programmes which help the environment, reduce emissions and improve our planet. To ‘profit’ from this tax insults our intelligence, it devalues the whole green agenda and it demonstrates an indifference by a government claiming to care.

Two of Gordon Brown’s cabinet colleagues have offered some excellent advice for the party and therefore, one can assume, for the party leader. Gordon Brown, not renowned for listening, should take heed, because in spite of where the advice came from it is both critical and relevant. In fact, if I didn’t know better, it would imply that the party is trying to reconnect with the British public, even though it is likely to be too little, to late. In fact, because of where the advice came from, I suspect it may be more about the speech writers wanting to make political headlines, rather than a new political style or commitment.

David Miliband was quoted as saying, “We’ve also got to be honest…this is a political point rather than a policy one,” he said, “We’ve been good about talking the language of priorities but how good have we been about setting and sticking to them?”

Very true David, but you could have added that when you put policies in place, you should also include a way in which the priorities can be measured, with timesscales, so that the public can measure how good you are at achieving your objectives. Of course, honest politics also means keeping to your word, such as the issue that sticks in the craw of most voters, and that is the failure of the Labour government to provide us with a referendum on the EU Constitution as promised in their manifesto.

What is interesting however, was that in spite of this statement by Miliband, just a few hours later, in an interview with Jon Snow of Channel 4 news, he kept responding to questions by re-stating what the Labour party policies were, he repeated the same statement, 5 times! On each ocassion, he ignored the original question.

Hazel Blear said “We’re not going to win the next election by reading lists of achievement. They mean nothing. Nor will we win by denouncing the Tories record in government, because memories are fading and people have moved on.”

Spot on Hazel, the British public is tired of the same old rhetoric, of self-gratulation, of the Labour party carefully selecting which ‘achievements’ to tell us about, whilst carefully avoiding the many, many failures. And, after 11 years in government, the constant harping on about what happened under the previous conservative government. It is not relevant, but perhaps you should share your views with Gordon Brwn, whi in a later television interview kept telling us how much worse it was under the “Tory” government, made worse by his use of selective and in some cases, downright false statistics, what have become known as “Brownies”.

We are also tired of the prime minister at PMQ, side-stepping difficult questions by attacking the record of the opposition or LibDems, we want answers to the questions, not a game of ping pong that has no relevance to the original subject matter.

Gordon Brown has an opportunity at the Labour Party conference to re-launch himself, but I don’t think he will. If I were to predict what would happen, it will be the Labour party moving to familiar ground, old Labour if you like. A move to the left with Gordon Brown trying to secure his core voters with promises of freebies, paid for by me and you!

Okay, okay, so this statement would be typical of New Labour, an attention grabbing headline and little of real substance below the line. But I will try and make up for it!

For the past 6 or 8 weeks and more specifically in the last two weeks, this country has faced one of its greatest challenges in a generation or perhaps more. The present Government has been further weakened by internal feuds and the leader looks as if he is on another planet, in fact, when he speaks, it serves only to confirm this notion. In this turbulent period, the government has shown no leadership and provided and there has been little or no suggestion that they event know what is going on, least of all how to steer this country through the maze.

There is increasing evidence that the people of this country are far more politically savvy than a decade or so ago and they are being far more vocal and expressive about there feelings. With the ban on smoking in the pubs and clubs around this country and the reduction in the cost of broadband, more and more people are expressing their views online. The people are saying, get it together man, you have failed, us, redeem yourself, show us leadership, confidence, depth and honesty. The leader, Gordon Brown, and his cabinet have scurried around at a great rate of knots but achieved nothing.  

The government even resorted to their old tricks of ’smoke and mirror’ soundbites with the promise of help for all, on energy saving measures. But when the announcement was unravelled, it turned out that the nearly every penny was being put up by the energy companies and even then, they clearly had not agreed, because the government was threatening legislation if the energy companies did not comply. Worse still, the government sought no assurance that we would not pay for these programmes through higher future bills and they put less into the overall initiative than they deducted off the Warm Front budget. Evidently this is a government in turmoil, a rudderless ship, but with no other captain on board.

So what better time for the leader of the opposition, David Cameron to ride to the rescue, to show himself and offer up creative, tangible solutions and ideas? But the amazing ‘invisible man’ is nowhere to be seen. Here was a prime opportunity to set politics aside and come up with proposals, new ideas and the people to drive these initiatives forward. Programmes that could offered all party support, a united front at a time of crisis, after all, this country is at war, albeit of a different type to the conventional description. A self-deprecating speech, accepting that whilst New Labour was the primary entity responsible for our current predicament, he felt that all members of parliament should share in that responsibility.

So, here was a perfect opportunity for David Cameron to demonstrate true leadership and maturity, by offering to assist the government in any way he could, by coming up with alternative ideas, initiatives, programmes and interventions. Rather than using the opportunity to kick a man whilst he was down, the British public just don’t like that, he could have offered a helping hand. Allowed, the British public to see that he wasn’t simply a silver spooned, old Etonian, but a person with substance, initiative, depth and commonsense. A person ready to help when needed, to unite under the flag and tackle the issues head on for the sake of the British public. The so called ‘leader’ of the opposition has shown no such skills, he has become the amazing invisible man and in doing so has demonstrated political cowardice, something that is unforgivable in the current climate.

He is so worried about dropping in the polls, that he has said virtually nothing, he is so scared of getting it wrong, he hides in the corner and he is so petrified of New Labour stealing his ideas, that he prefers to see this country suffer, rather than affect his poll results. This suggests a shallow man, one that lacks the maturity and gravitas to lead this country and above all, one that is driven by polls, rather than actions. Well, the latest polls indicate that his strategy is failing, he has fallen in the polls and the LibDems have picked up the slack and quite right to. Those guilty of political cowardice should not be rewarded. Perhaps we should all be grateful that we found out early enough to do something about it.

Cameron might argue that he is keeping his powder dry for the Conservative party conference, perhaps, but this is akin to a life saver watching a drowning man struggle, whilst he puts his swimming cap on, to ensure that his carefully crafted hairstyle does not get wet! History tells us, that in a crisis, it is often the most unlikely people that end up being our saviours, with those that talk to the talk, rarely proving that they can walk the walk. Because a guy is relatively young and talks posh, does not mean he will be a good leader or for that matter prime minister. In fact, most of our better leaders have not been oil painting, so pretty boy needs to think on!

David Cameron, you need to come out of hiding, show yourself, stand up and be counted. Whatever the polls say at the moment, when the time comes, we will either remember your political cowardice, or the other parties will remind us, so when you need the British public the most, they may just desert the coward. I have always considered the Conservative party to be something of a powerhouse, but now, all I see is a quivering wreck.

There is an inevitability in politics that your unguarded, or newor that matter your carefully delivered words will come back to haunt you. Here are some of Gordon Brown’s.

During his Labour Party conference speech in 2000, Gordon Brown said “We will not put hard won economic stability at risk. No return to short-termism. No return to Tory boom and bust” and he went on to say “why did the Tory party give Britain twenty years of stop-go, twenty years of boom and bust. It is Labour that is now the party for stability and growth.”

Now we know that whenever anything goes wrong, Mr Brown always blames the “Tory party” or now, he prefers to say that our problems are as a consequence of “world economic issues and the credit crunch”. Okay, for a change, there is some truth in that statement, but that is only a recent phenomena, it does not really answer the question of how we got into this position of boom and bust.

On Gordon Brown’s watch, we have seen house prices rise some 200% (23% in 2003 alone) from 1997 to 2007, we have seen a massive increase in the availability of credit and people have felt relatively wealthy as a consequence of the increase in value of their homes. Easy credit meant that many people could remortgage their homes so that they could buy a new car or go on a fancy holiday. During the same period, 1997 to 2007, average wages rose by just 52%, so it was quite obvious that consumer spending had nothing to do with increased wealth through rising wages.

People were offered interest free credit for car and electronic purchases, 125% mortgages, equity release programmes and would receive credit card offers through the post every day. Because many people considered that the increase in their property value was a one way bet, they continues to borrow, believing that they could release equity as and when they needed to. Experts were telling us time and again that the level of consumer debt was at record levels and wasn’t sustainable. Gordon Brown chose to ignore this advice, in spite of the assurance he gave in his conference speech and on numerous occasions since, that he would not allow a return to boom and bust, what he termed a Tory disease.

Gordon Brown knew that the consumer boom was financed by debt, much of which was secured against property prices, which he knew could be volatile, he know that savings were down and debt has spiralled. But he did nothing, previous governments had put in credit controls to address these issues and risks, he sat there preening his feathers and claiming credit for growth figures, yet ignoring that one day it would all come to a dramatic end. It is unlikely he understood just how dramatic that would be, but he knew it would end up is a “bust”.

Gordon Brown’s relationship with prudence was a mere dalliance, personally, I am at a complete loss as to why political commentators and the tabloid press continue to refer to him as a good chancellor, an iron chancellor or one who places prudence first. At the same time as this country was experiencing an economic boom, financed on credit, he himself was, in spite of the fact that he had increasing tax revenues, on a government spending and borrowing spree. Fancy footwork ensured that the PFI initiatives, which will cost us £170bn between now and 2032, did not end up recorded as government debt, but it is still there and it has to be paid. In the good times he should have been repaying government debt, to place us in a better position when the inevitable “bust” came, he did not, he ignored it and continued to spend.

Rising commodity prices and the credit crunch have exacerbated the problem, but ask anyone with a little understanding of basic economics and they would have told you that the crunch was going to happen anyway, debt financed growth was not sustainable even in dreamland that was New Labour. Gordon Brown inherited, whatever he says, a steady and sustainable economy, he just blew it!

It is also worth noting, that manufacturing in this country has been in decline, yes, even under this government and our economy is heavily reliant on banking and financial services. Two areas that are under significant and sustained pressure. It remains to be seen how this will affect employment, tax revenues and our balance of payment deficits. With many banks and financial institutions making substantial losses, these will transfer, not just into an immediate loss of tax revenues, but, because they can accumulate these losses, a further reduction of tax revenues in the coming years.

Gordon Brown’s economic credentials and reputation for prudence is in tatters and we shall be paying the price long after he has left office.

There is an inevitability in politics that your unguarded, or for that matter your carefully delivered words will come back to haunt you. Here are some of Gordon Brown’s.

In his 1997 Budget speech, Gordon Brown said, “I will not allow house prices to get out of control and put at risk the sustainability of the future”. He went on to say that he did not want a return to ”instability, speculation and negative equity” of the 1980’s and 1990’s.

Now lets remind ourselves of what has actually happened. In the 10 years from 1997 to 2007, the average house price rose by some 200%, even higher in some areas. During the same period, average earnings rose by just 52%. The price rises were as a direct consequence of the free flow of easy credit, low interest rates, an explosion in ‘buy to let’ schemes pushing limited housing stock even higher, lenders taking much higher risks with loan to value (ltv) mortgages often approaching 125%  and multiples of 6 or 7 times salaries used to calculate a homeowners ability to pay.

Gordon Brown knew what was going on and in spite of his assurances that he would not allow it to happen, that is precisely what he did. Everyone was telling him that is was not sustainable, he had studied the effects of the same problem experienced under the previous Tory government and he still chose to do nothing. A sceptic may surmise that he knew the economic growth, for which he claimed credit, was built on the back of easy credit, reckless lending and property equity releases.  

Now we are witnessing monthly falls in price prices, often of 2%, a return to negative equity and rising house repossessions. Furthermore, with the rise in inflation, the bank of England are virtually powerless to do anything for the borrowers in terms of rate cuts. The bottom line is the so called ”iron chancellor” failed in his commitment to the people of this country.

Gordon Brown and some of the press would argue that Gordon Brown is the best qualified person to sort out this mess. I would argue, that unless, or until he can admit his responsibility in this fiasco, rather than blaming everyone else, he is probably the least qualified. The public can forgive mistakes and take account of incompetence, but they will never understand delusion.

If you have heard him say it once, you have heard him repeat it 100 times. Gordon Brown keeps telling is that the UK economic fundamentals are strong. Now I am no economist and that will become self-evident when reading this blog, but I am blessed with a little commonsense and logic. My conclusion, the so called fundamentals don’t look so great from where I am sitting, so common Gordon enlighten us.

At the CBI Scotland Annual Dinner, Gordon Brown outlines what he considered those fundamentals to be, they are;

“First, Bank of England independence has given us low interest rates founded on sound macroeconomic management and so despite increases in the prices of food and fuel - and I understand the impact this is having on families and businesses - the sound framework for monetary policy which we have established means inflation remains far below the double-digit levels we saw in the earlier decades. And this will help ensure that interest rates remain similarly low by historical standards.

Second, the most flexible labour market in Europe means that even though unemployment has risen in recent months, employment remains close to record highs - and wage pressures are subdued, led by our own responsible decisions on public sector pay. And with the investment in the New Deal and our latest welfare reforms there is more support than ever before to help people back into work and to fill the 600,000 vacancies still in our economy. And a balanced approach to migration allows businesses to benefit from the specific skills that economic migrants can bring to our country and improves the responsiveness of our labour market to fluctuating demand.

Third - the underlying financial strength of British business reflects its improved efficiency - driven by your hard work in achieving the fastest growth in average productivity in the past decade across the whole of the G7. Britain remains a magnet for overseas investment and our export performance is improving, with our manufacturing productivity growth strong.

Fourth, low debt. The significant debt repayments we made since 1997 mean we have cut public debt as a share of national income from 43 per cent in 1997 to today’s 37.3 per cent. This means that, unlike in earlier economic slowdowns, we can sustain our ongoing commitment to investment in fixed capital infrastructure - up 58 per cent in real terms in the last decade. In 1997 we invested £144.5 billion. Today it is £229 billion. Even after inflation a 58 per cent rise.

And - while  no government can hope to protect people from the full impact of the global credit crunch or the worldwide spike  in commodity prices - I am determined that we should do what we reasonably can to help families and businesses through this difficult period of adjustment. So we will back up our investment commitments with careful interventions designed to provide targeted support for hard-pressed families - such as this week’s home-owners’ support package and the £120 a year tax cut for basic rate taxpayers that will start to feed into pay packets later this month.

Fifth – we are making all the long term decisions, difficult as they are, to boost our competitiveness; on energy, planning, transport, housing, digital technology, science and skills. And the 2002 Enterprise Act has given us one of the most robust, independent competition regimes anywhere in the world. The support for British enterprise - strengthened over the last decade with the launch of Enterprise Capital Funds, the Small Firms Loan Guarantee and administrative burden reduction targets. Britain today has four and a half million businesses - more than ever before. And the OECD says Britain has the lowest barriers to entrepreneurship of any OECD country. ”

Now lets have layman’s take on this, as I said, I am no expert on economics, but I am one of the people that is expected to understand what the government is telling us.

Fundamental One

One of the primary movers in determining interest rates is inflation and as we have seen over the past few months, Gordon Brown is limited in what he can do to control inflation. Yes he can keep public sector wage deals low, but he cannot control commodity prices such as fuel and food, which can have, as we have seen, a significant impact on inflation. Furthermore, government borrowing can also affect inflation, but Gordon Brown’s fancy footwork has managed to keep long term debt such as the PFI initiatives off the government balance sheet. This may have the affect of massaging government borrowings, thereby providing a knock-on affect in terms of lower interest rates.

Fundamental Two

Gordon Brown goes on to lecture us that the second part of the fundamentals is a flexible workforce, low unemployment, low wage settlements, economic migrants and welfare reforms. Really? Firstly, there is no explanation of what a flexible workforce is, but whatever it is, the government cannot claim the credit for it. The low unemployment figure doesn’t stand up to close scrutiny either. There are now 1.7, people out of work and on top of that those claiming disability benefits have risen to 2.5m, many of which, under the old system, would have been classed as unemployed. So, once again, this would appear to be a deliberate manipulation of the true jobless total.

Granted, the government can be credited with reaching low wage settlements with the public sector, although their ability to maintain these agreements may be questionable given the increasing militancy of the the public sector unions. But there is something else that Gordon Brown has omitted to include here. Many public sector employees benefit from excellent, final salary pension schemes and, even though many of these have been withdrawn in the private sector, Gordon has not had the courage to likewise in the public sector. Therefore, whether Gordon Brown likes it or not, it is an inconvenient truth that pensions are a cost of employment and it is estimated that our public sector pensions deficit is some £890bn, yet the government does not include this obligation anywhere in their figures.

So what about economic migrants, who do they benefit? Well yes, they benefit private companies that cannot or more likely, will not offer a wage sufficient to get ‘local’ workers to join their business, even though we have 1.7m unemployed. But what about the hidden cost, economic migrants can bring their families if they wish and many do, so when they are here, we must provide them with, at the very least, free education and free healthcare. So, in effect, by offering these benefits free, we, the tax payer are effectively subsidising employers looking for cheap labour. As the government knows only too well, these economic migrants could not possibly pay enough in tax and national insurance to cover the cost of these free benefits. If I was Mr Brown, I would be keeping my mouth shut, unless of course, he thinks we are all too stupid to work it out.

Fundamental Three

Gordon claims that we have the fastest growth in average productivity in the past decade across the whole of the G7. This may be true and therefore I will accept it at face value. But, can he really claim that their is an underlying financial strength in British business? Over the past few months, we have seen a high street bank have to be rescued by the tax payer, we have had a series of profit warnings from major retailers and manufacturers, we have had a number of high profile companies having to go to the stock market for more money to shore up their balance sheets and we have seen the failure of several airlines and the UK’s third largest travel companies. This doesn’t look strong.

In addition, we are now starting to see the highest level of business failures in over a decade, particularly small and medium sized businesses. Gordon Brown would do well to be remember that it is the SME market that has created many of the new jobs that he takes credit for, but also, because they cannot afford to go offshore or look at fancy methods of tax avoidance, they loyally pay their taxes. So what has he done for them?

Despite promised to the contrary, he has saddled them with a mountain of red tape, punitive fines and penalties for even the smallest misdemeanor in respect of tax or VAT returns. He has ensured through legislation that, the SME employer now has to have expensive experts on hand either as employees or consultants to advise on health and safety issues and employment issues as they have become one of the largest burdens on any small or medium sized business. In doing so, Gordon Brown, his cohorts and civil servants have demonstrated that they know nothing about running a business of this size.

Further, as a result of reduced central government funding to local authorities, business are having to pay ever higher business rates, even though they are getting less and less in return. Typically business rates now equate to 50% of the SME’s lease or rental costs. That is not business friendly, it is punishment. Far from taking credit for the business sector success, certainly in terms of the SME’s, he and his penal policies have made it increasingly difficult for them to survive as will be demonstrated over the coming months with a disproportionate number of SME business failures. You mark my words Mr Brown. This government also withdrew tapered tax relief a few short years after it was introduced to encourage entrepreneurship.

Fundamental Four

This takes the biscuit, Gordon Brown claims that government debt, as a percentage of national income has fallen from 43% in 1997, to 37.3%. As I have mentioned before, this is not a true figure, it is massaged. Mr Brown has become adept at using fancy footwork to ensure that government obligations do not end up on the government balance sheet. Now, I am not suggesting that he can’t do this, because he has, but what is the point in kidding himself, unless of course, the plan is to kid us? Between now and 2032, we will have to pay back some £170bn through the various PFI schemes used to pay for our schools, hospitals and other infrastructure projects. This doesn’t appear as a borrowing, so what is it? Then there is the debt from the failed Network Rail project and Northern Rock, as well as countless other obligations, why don’t these show up?

This man, even claimed in his speech, that he is using government intervention to assist families and business, bragging that basic rate tax payers will receive £120 a year in tax cuts. Have I missed something, this is the man that though he could rip us off using a classic trick of smoke and mirrors, got caught out and had to back down, Then he is trying to claim that it is some gift from the government. What an arrogant, deluded little man he is. 

Fundamental Five

This is really a more detailed repetition of Gordon’s ‘Fundamental Three’, but there are many more grandiose claims that do not bear scrutiny, but I haven’t got the time to analyse them one by one, so perhaps Gordon can enlighten as all be telling us how many of the 4.5m businesses he alludes to have actually been able to benefit from the Enterprise Capital Funds and the Small Firms Loan Guarantee? Precisely what red tape burdens has he removed and does this assessment include the new red tape this government has introduced.

I would also be very keen to hear precisely how this government can claim credit for boosting our competitiveness; on energy, planning, transport, housing, digital technology, science and skills. I don’t remember any of the companies operating in this sector thanking the government for their contribution. He also claims that our exports are improving, could this be anything to do with the fact that Sterling has weakened against all of the other major currencies, one of the primary reasons that our bills and inflation is rising, given we are a net importer of goods.

There are also other things that a government should be doing, such as planning. Gordon Brown makes no mention of the fact that as a direct consequence of his government’s prevaricating over nuclear power stations, there is a very real risk that we could suffer major power shortages in  3 or 4 years few years time, as the older power stations are de-commissioned and new one’s which take 10 years to build, are not ready. We could be reduced to third world levels of power shortages, with an estimated reduction of some 35%, affecting every family, every home and every business in the country. There is your legacy Mr Brown.

As I have stated at the outset, I am not a financial or economic expert, but when I analyse what Gordon Brown has said, against what had actually happened, I see a massive gulf. Therefore, this man must be deluding himself, or attempting to hoodwink the public. Either way, it is not good for us or our country. Step aside Mr Brown, before it is too late.