Margareta Pagano: Now's the time for Cameron to set the battle lines
Tories need to take on Brown the class warrior
Sunday 26 April 2009
I have in front of me a letter from the waste and recycling officer at Uttlesford District Council, my local authority. Russell Clark asks us to fill in the questionnaire about the kitchen caddy for food waste which the council has been trying out on householders, as the brown kitchen bins, which they gave us a year ago, were proving too big. So Uttlesford ordered smaller bins for us, which sit beside the redundant big bins.
Mr Clark wants to know if householders prefer the smaller bins, informing us that introducing them would cost £200,000 – on top of the £400,000 which the big bins cost. Add to that the cost of the letter, Mr Clarke's time, the dustbin men's time carting around all these bins, and you soon top the £600,000 mark. No wonder Tory-controlled Uttlesford plunged to a £1.8m deficit last year.
While the bin money is a small example of waste, it goes to the heart of Britain's sickness; we spend too much taxpayers' money on useless, unproductive services, and too little on reviving our industrial base and encouraging wealth creation. Multiply Uttlesford's caddies, and you can see why we are heading for bankruptcy and need to borrow more than £700bn over the next few years. Is this what we want our councils to be doing, and is it what we want our taxes to be spent on? I don't think so, nor do I believe anybody else does, certainly not after this Budget.
Gordon Brown and Alistair Darling made some overtures towards efficiencies in public spending, but they were puny. Absolutely no attempt was made to see how we can get more out of our public services for less money, nor even to open a proper debate about reform. Never mind measures to encourage someone to set up their own caddy manufacturing business. The reverse was true: the Government plans to increase public spending by an extra £17.7bn this year and by £19bn next year.
To fund more spending, the Government needs to issue around £220bn of gilts this year alone. But it will find it tough to persuade investors to buy them, as the rise in gilt yields as bond prices were falling last week showed so dramatically. This was another reason the Treasury is getting investment bankers to help sell gilt issues through syndicates, as they do for firms raising equity.
But this won't be enough. It's now inevitable that the Government will soon be forced to put up interest rates. Economists are already talking about rates rising to 5 per cent over the next few months – the public knows this too, as they fix their new mortgages.
So there couldn't be a better time for David Cameron to fight Labour on public-spending cuts. Brown laid down the gauntlet before the Tories last week with his 50 per cent tax rise, and Cameron was smart not to rise to the bait. But that doesn't mean he need get caught in the other trap that's been set for him over spending cuts. Brown wants a punch-up over cuts; he wants to show the Tories are still the party of slash and burn. But this time, Brown has got it wrong, as he doesn't have the public on side.
The Budget showed that Brown is still very much the class warrior: now Cameron needs to be the one to set the battle lines and prove that he's got the guts to fight, cut spending, and let us choose our own caddies.
Primal urges Shoppers flock to Debenham's website
Debenham's deputy chief executive, Michael Sharp, has said the stampede for the animal-print was by women chasing cheap and cheerful designs to lighten the mood. It certainly lightened Sharp's mood as profits rose by 10 per cent and sales are once again growing. Higher margins came from the popular in-house ranges – like those from Macdonald. A similar story can be heard at H&M, the Swedish retailer, where shoppers cleaned out the Matthew Williamson range within an hour of its launch at the Regent Street shop last week. When the going gets tough, the tough really do go shopping; but let's hope the rekindled appetite is being fed by cash not credit.
A grasp of Orwellian doublespeak will not charm Barclay's shareholders
George Orwell would have turned in his grave if he had heard Sir Richard Broadbent, the senior independent director of Barclays, speaking to shareholders at the bank's annual meeting last week. This is what Sir Richard told them: "If I was asked now what might be the likely direction of travel across the industry, I would say this: the metrics against which remuneration will be delivered will be more broadly based and will give priority to both returns and risk adjusted profit. Overall levels of incentive remuneration will be responsive to new regulatory capital requirements, balance sheet leverage and risk tolerance. Levels of deferral will rise, particularly for the higher paid. Deferrals may become subject to performance hurdles."
What Sir Richard meant was that bonuses are going to be overhauled, but bankers will still be paid juicy ones if they perform well. At least, I think that is what he meant. If that is what Sir Richard was trying to tell Barclays shareholders, who have seen their shares collapse and their dividends cut, why was he so frightened of spelling it out simply? This sort of dreadful jargon makes people even more suspicious of motives. As Orwell's use of doublespeak in his 1984 novel showed so vividly, governments slip into this language when they are being manipulative.
Since Barclays has narrowly avoided being controlled by the Government, it should make a pact that it will avoid ever using such language. Sir Richard and fellow directors, including its Chairman, Marcus Agius, also avoided being voted off the board by investors still furious over the terms of its Middle-Eastern fundraising. The worst moment for the board, however, was not at the AGM, but when it heard that the Qataris had trimmed their stake by 35 million shares to 5.8 per cent. What would Orwell have made of that?
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