Sunday, 19 August 2007

Responding to Redwood (and friends)..

It's 211 pages long, much of it borders on the unreadable and there's more than a faint hint of polemic about the whole thing but the document "Freeing Britain to Compete" produced by the Economic Competititiveness Policy Group chaired by John Redwood is a document that all Conservatives and non-Conservatives ought to try and read.

I've ploughed through it and, to be honest, much of it is re-hashed thinking or half-thinking from five or six years ago. It is Redwood's critique of where Britain has gone wrong under Tony Blair and Gordon Brown and I think the documnet spends too much gleefully diagnosing the problem (and taking every opportunity to blame the Labour Government and sometimes forgetting that the previous Conservative Government had either exacerbated or caused the problem) and too little time coming up with solutions (possibly through fear that Gordon Brown will take the solution and call it his own).

It's re-hashed because the old Redwoodian idea (from his Transport days) of allowing traffic to turn left on a red light (Page 28) gets another airing and it is written from a very pro-business perspective.

The structural issues affecting and distorting the economy are well known but Redwood re-hashes them all. The growing economic power of China and India is something that we can do little or nothing about. We will never be able to compete with Chinese or Indian wage rates so we have to compete on other levels. Redwood claims (without much staistical evidence) a figure of 5.4 million economically inactive people claiming benefits which I find extraordinarily high if true.

The diagnosis of transport problems is well known but to imagine that the transport infrastructural crisis left by the Major Government in 1997 could be solved in just a decade is woefully unrealistic. The Labour Government has made a start of sorts but recent developments do show a worrying reluctance to commit to further investment.

However, the main thrust of the Redwood report is about "regulation", the abolition or reform of which would (apparently) save £14 billion per year. Among the thirty-three proposals are the abolition of both the Best Value regime AND the Audit Commission based Comprehensive Performance Assessment (CPA) for local Government. While this might be welcomed by some local Government employees. the fact remains that the CPA assessments have been valuable in showing how Councils compare against each other and making clearer to local council tax payers the areas in which their local authority might be lacking and it gives Members some evidence for the setting of priorities.

The news has been made by the proposal to scrap the Inheritance Tax (IHT) which has been vociferously supported by the right-wing tabloids like the Express and Mail. Twenty years ago, IHT was something that most people knew little about and cared less about. The sharp rises in property values, in particular, have brought many hundreds of thousands of people into IHT. Now, let's be honest and a wee bit morbid. For many individuals and their families, the proceeds from the sale of a dead relative's property may be tantamount to a mortgage pay off or a pension boost. It's unearned income for the most part so it's almost free money. IHT takes the gilt off that (so to speak) so "Middle England" protests.

I'm not that enamoured about those who protest about IHT but I'm not that enamoured about IHT either (why should the Government tax the dead so to speak ?). I think it's time to scrap IHT but there's also a debate to be had about whether people should be able to avoid paying tax on unearned income of this nature.

The Redwood report is ultimately disappointing. After the scrapping of IHT, the most interesting proposal is rubber wheels on trains. The proposals on Money Laundering are (according to Mrs Loadofoldstodge) meaningless platitudes. Redwood makes the case for less car journeys (50% of all car journeys are under two miles) but fails (apart from the usual distribe against Government regulation and diktat) to make a convincing argument about how these journeys can be reduced.

That said, the problems are clearly diagnosed and while the Right may be unable to come up with convincing solutions, the baton has to pass to liberals to find the answer. It remains to be seen how the Liberal Democrats, in particular, will respond.

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