Britannia Radio

This is a perceptive piece by Matthew Parris with a curtain-raiser 
from James Forsyth.

Originally I was going to add the Ken Clarke interview which is 
extremely good about the man rather than about his present political 
stance ,   However, I thought it was going to make this posting too 
long and that I would only give the extracts that deal with the 
present political crisis.  But that didn't shorten it all that m uch 
so the result is here!!!
Those who would like to be amused by it all can find it on:-
http://www.timesonline.co.uk/tol/news/politics/article5209367.ece

xxxxxxxxxxcs
===========================
SPECTATOR - Coffee House  22.11.08
The coming Tory attack on Brown
JAMES FORSYTH 10:35am

We can expect to see a lot of Ken Clarke over the next few days; the 
Tories know that he is still on of their most convincing voices on 
the economy. His interview in The Times today is helpful to the Tory 
cause. But it is worth noting that he breaks with the leadership in 
endorsing the idea of a stimulus package albeit one of a very 
different stripe from the one Brown and Darling are said to be 
planning, Clarke favours a temporary reduction in VAT to 15 percent.

One line from the interview, though, could be the basis of an 
effective Tory attack:
"We keep having 'this is going to save the world' moments and they're 
all useless."

After the PBR, the Tories have a chance to change the political 
dynamics, to focus the debate on whether Labour's expensive measures 
have actually worked or just got the country deeper into debt. 
Matthew Parris puts this point with his typical eloquence in his column:

"But if summer comes and still the recession bites, Mr Brown's 
sorcerer's reputation may dim. With the stimulus spent and still not 
stimulating; the seed corn eaten, not sprouting; the grind of the 
pistons as the engine refuses to spark, a Prime Minister hunched over 
the ignition, still bragging that he knows how to start this thing, 
could annoy mightily.
Remember, Mr Brown's claims to cosmic leadership rest on what he says 
his measures will achieve, not on what they have achieved. The boasts 
will finally grate, and a Conservative message that if he can't 
whistle up a recovery, at least he should stop running up bills, 
should feel timely."

Once the PBR has gone, Labour will have little left in the locker. 
Brown will have to hope that events vindicate him.
=============================
THE TIMES   22.11.08
Good housekeeping is a gamble that may win
If the Prime Minister's seed corn doesn't sprout, the Conservative 
alternative will have real appeal to the voters
Matthew Parris

A helpful rule of thumb for assessing the fanfare that habitually 
precedes a Gordon Brown initiative, is that there will be less to it 
than meets the eye. Under scrutiny, these things tend to come apart 
in our hands, shot through with failures of nerve and riddled with 
second thoughts.

So there is a chance that Monday's Pre-Budget Statement will prove a 
mouse, and that George Osborne and David Cameron will skid from 
attacking a monstrous irresponsibility to grumbling that it won't 
make much difference.

But the heralding - with however much exaggeration - of a big, 
unfunded tax giveaway has had the effect of flushing out the 
Conservative front bench. We now know that Mr Cameron and his Shadow 
Chancellor don't believe that big new borrowing will lift Britain 
from recession faster. They fear that it may even dig us deeper in.

In switching to this attack, Mr Cameron gambled three times this 
week. First that a substantial new fiscal stimulus, in the form of 
tax cuts to be paid for later, really is about to be unveiled. 
Identifying the Conservative Party firmly with scepticism about the 
idea, he gambled secondly that the plan will visibly fail. But the 
third and biggest risk he takes is that "good housekeeping" Tory 
scepticism will resonate with the country. He did not, after all, 
have to pin his colours to the mast.

We will know soon whether his first gamble was right. If No11's 
statement does row back from No10's pre-puffing, Mr Cameron's dire 
warnings may look off-target; but he can ride that.

On his second gamble - that the plan will fail - I, though no 
economist, do raise an untutored eyebrow at my colleague Anatole 
Kaletsky's confidence [he's not the onky one.  Kaletsky has been 
wrong so often that he's a media joke! -cs] that Mr Brown really has 
"become a leader of global stature" with a plan so luminously 
effective that he can now trace a clear forward path to recovery. 
There is a Brown swagger that the Opposition is entitled to question.

Is Anatole right to assert so unhesitatingly that "a government that 
spends and borrows in a recession can usually repay much of this 
borrowing without raising tax rates, because recovery automatically 
yields higher revenues and reduces spending on the unemployed"? 
Doesn't that presuppose that recovery actually happens: fast and big 
enough to yield these happy outcomes? Can no borrowing be too high in 
a recession - or why wouldn't chancellors just think of a number and 
double it? Surely there is a point when the cost of debt undoes the 
benefits? And isn't that all that Mr Osborne and Mr Cameron are saying?

And even if Anatole is right (and is he? [NO!] ) that it is simply 
our low interest rates that have caused sterling's fall, does it end 
debate to remark that by making exports more competitive "the pound's 
decline is not a problem but a solution"? Then rejoice, Zimbabweans; 
prepare for boom-time, Iceland. Surely Anatole's argument is too 
strong. In a steep devaluation there must be a critical gradient 
beyond which problems grow. Again, isn't that what Mr Osborne is saying?

A Tory can accept Anatole's core Keynesian argument - that when a 
frightened population locks up its wallets and stashes its savings 
under the mattress, the State may have to borrow and spend to break 
the paralysis - yet still insist that there must be limits to this, 
and that timing matters, or the thing may go off half-cock and then 
have to be paid for. Isn't this, too, what Mr Osborne is saying?

The Tory leadership thinks that Monday's unfunded package may 
undermine confidence in our solvency and raise the spectre of higher 
taxes later. The Government (and Anatole) think that Monday could 
give the push we need, and that, in due course, the economy should be 
bowling along so merrily that we can pay for it then. There is a 
third possibility: that the stimulus will fail, but not because it is 
unaffordable but because it is too timid. The Brown-Kaletsky logic 
admits no restraint.

The logic of Tory hostility to an "unfunded" stimulus is confusing 
too. A "funded" stimulus is undermined as a stimulus - by robbing 
Peter to pay Paul. Mr Cameron's talk of future cuts in projected 
extra spending plays nicely to Conservative instincts about state 
profligacy but sits oddly in a debate about how to get out of 
recession now.

I suspect that the Tories are not being frank about two key planks 
beneath their position. The first is that they don't love state 
spending anyway, recession or not. Secondly, I doubt that Mr Cameron 
and Mr Osborne really think that, beyond stretcher-bearing for the 
worst casualties, there is much that a British government can do to 
reshape a global economic cycle. During Commons exchanges on the G20 
meeting this week, John Maples, a senior Conservative, voiced this 
candidly: "The recession has to take its course... [or] there will 
not be a solid base for recovery. [Mr Brown] risks endangering 
that... [and] will leave a legacy of debt and taxes into the future." 
To put it crudely, Monday's annoucement may amount to pissing 
expensively into the wind.

If that's what Mr Osborne thinks, he should say so. Which brings us 
to the third gamble. Could the new Tory position resonate with 
voters? Yes. It anticipates a change of weather already sensed: a 
coming chill of resignation if not despair. People are hunkering down 
for a period of austerity that they begin to doubt politicians can 
unwind.

On Monday, expect excited squeaks at giveaways that some still hope 
will do the trick. The language of "jump start", "pump prime", 
"injection", "stimulus" and "seed corn" (like Mr Brown's favourite 
word "invest") - implants a subliminal suggestion of prudence and 
good value: not really spending at all; something you can't afford 
not to do; a little money to (dare we say?) leverage more. In 
politics nobody seeking a bung calls it subsidy; it is always a one-
off, kickstart or tide over.

But if summer comes and still the recession bites, Mr Brown's 
sorcerer's reputation may dim. With the stimulus spent and still not 
stimulating; the seed corn eaten, not sprouting; the grind of the 
pistons as the engine refuses to spark, a Prime Minister hunched over 
the ignition, still bragging that he knows how to start this thing, 
could annoy mightily.

Remember, Mr Brown's claims to cosmic leadership rest on what he says 
his measures will achieve, not on what they have achieved. The boasts 
will finally grate, and a Conservative message that if he can't 
whistle up a recovery, at least he should stop running up bills, 
should feel timely.

That is what the Opposition gamble on. For the moment Labour is 
incredulous at what it sees as the Tories' strategic blunder. Less 
spending? They've actually been stupid enough to call for less? Mr 
Brown, high on sleeplessness, pumped up on global status and 
intoxicated by one of his intermittent rushes of furious, precarious 
invincibility, thinks destiny is moving his way.
It is a mirage.
==============================
2. I wish I were Chancellor now, says Ken Clarke  [shortened to give 
extracts relevant to present crisis!]

Alice Thomson and Rachel Sylvester

As we arrive for our interview with Ken Clarke, he is groaning about 
having to squeeze into his black tie for a dinner. The Conservatives' 
man of the people is more comfortable in shirt sleeves and suede 
shoes.  [etc - - - - -]

There are some who think that this big beast should be dragged out of 
the Tory jungle to replace George Osborne. But Mr Clarke insists that 
it would be a huge mistake for David Cameron to dump his Shadow 
Chancellor. "The attacks on George are foolish and I don't agree with 
them. I think he is very good. It would be bizarre for David to move 
George. Politically it would look weak. People keep using me as a 
stick to beat George with. I'm not particularly flattered. I've 
realised it's just Bash George fortnight."

Mr Osborne is not, in his view, too young for the Treasury. "People 
always used to say I should acquire more gravitas. And I don't think 
he is too thin. I thought the modern fashion was to be stick-like - 
although some of us rally to the cause of obesity."
[ - - - - - - -]
He defends the Shadow Chancellor's decision to issue a warning of a 
run on the pound. "I was amazed anybody bought the idea, being spun 
by Gordon's people, that there was some convention that you don't 
talk about the pound - that's daft. I remember Harold Wilson used to 
get frightfully upset about people selling sterling short but that 
didn't stop people talking about the pound because the pound was weak."

Although he has been surprised by the vociferousness of the attacks 
on Mr Osborne, he says: "You'd better get used to it, George - 
there'll be a few more before you've finished. As a veteran I say, 
'Been there, done that', and it will happen to him again."

There may, he believes, be a political motivation behind some of his 
own party's criticism. "David and George have made us look like a 
potentially governing party again but the message has not quite 
spread to some of my colleagues. These are the people who think 
you've got to promise tax cuts to win any election.
We've fought elections on tax cuts when you can't afford them and 
usually we've lost - we did actually win one in 1992, which was a 
considerable embarrassment to me when I was Chancellor because there 
wasn't the slightest chance of any tax cuts."

He admits that it could be difficult to resist a return to Government 
if he were offered the job of chancellor in a future Cameron 
administration. "It's rather fanciful to go down that route, but 
everybody who is offered the chancellorship thinks about it and of 
course I wouldn't just turn it down peremptorily."

Having steered Britain through the end of one recession, he would 
relish the chance of fighting another. "It's a pity I'm not 
chancellor at a time like this because I like a crisis. It gets the 
adrenalin going. This one really is tricky, so it would be fun to be 
involved."

Joining the front bench in opposition, though, has no appeal. "Dave 
asked me to be Leader of the House when he took over and I said no. I 
prefer to be a backbencher. It's tedious being an opposition 
spokesman.  [- - - - - - - - -]

Despite his loyalty to the party leadership, he is not afraid to put 
forward his own ideas. The Government should, he says, consider 
cutting VAT to 15 per cent in the Pre-Budget Report on Monday - an 
idea that is certainly not Tory party policy. "If it's possible to 
afford a fiscal stimulus I would go for VAT because the only case for 
a fiscal stimulus is to stimulate spending and consumer demand, so 
the tax on spending is the one to go for. But it should be temporary."

Mr Osborne is opposed to a tax cut funded out of borrowing, but Mr 
Clarke says that such a fiscal stimulus should not be ruled out. 
"There's no point in being ultra-orthodox. A lot of people are going 
to be hurt by a dreadful recession. If you think a fiscal stimulus is 
going to do any good then you could strive to see if you can afford it."

However, he says: "If Alistair Darling borrows a lot of money, 
sterling will nosedive and the long-term interest rates will go up. 
If that's the case, you can't afford it." There are, he detects, 
tensions between No10 and the Treasury.

"Alistair Darling could be quite a good Chancellor if Gordon ever 
gave him the job. Gordon is rampaging around, talking about public 
works and tax cuts and giving a completely spun version of the G20 
meeting, claiming it virtually instructed him to go for a big fiscal 
stimulus when it didn't at all. Then you get Alistair giving far more 
cautious Treasury-laden words about having to pay for these things."

The voters will, he thinks, tire of the Prime Minister's superhero 
rhetoric. "Gordon Brown's banking package, the one that saved the 
world, hasn't worked any more than Hank Paulson's buying toxic debt 
has worked. We keep having 'this is going to save the world' moments 
and they're all useless."

The priority should, in his view, be small businesses and mortgage 
holders. "The country is full of small companies that can't get the 
ordinary credit to keep their business going. If I was in the 
Treasury I'd be concentrating on getting the lending going again."

There is no point in demonising the bankers, he says. "I don't 
denounce these spivs and fat cats. People make mistakes. But if you 
were taking an extraordinary calculated risk motivated by personal 
greed, you tend to get unpopular."

He does not know whether we are about to enter a depression, but 
says: "I think this is going to be the longest, hardest recession of 
my lifetime. There's no one alive who's seen anything like this 
before - it's the worst banking crisis for 100 years or more."

The country, he says, needs to be ready for a long haul. "It's very 
nice that we're all saying to each other that it will be better in 
2010, but there's no factual reason why that should happen. Once 
recovery starts it will be quite feeble. You have to nurture recovery."

In his view, there is no point going on a Keynesian spending spree. 
"That's useless. It's pork barrel. It takes two or three years for 
any money to get into public works. The recession is long over by the 
time your useless road or runway is ready."

The Government should instead be going through its expenditure with a 
fine-tooth comb. "I don't think the new Labour Government understands 
what a proper spending round is like. They have increased expenditure 
beyond the capacity of departments to absorb it. Much of the money 
has gone on the payroll and a proliferation of useless quangos 
carrying out useless activities. I don't think it's the duty of the 
Government to tell me how to eat and shop."

The public will see through any lavish spending and tax-cutting 
plans. "When the Government has got itself into a mess like this, I 
would despair if people were just prepared to take bribes. I shall 
get more weekly fuel payments. I will take the bribe but it will not 
affect my judgment."

This is why Mr Clarke is still prepared to squeeze into his dinner 
jacket two or three times a week, to spread the word that "Gordon's 
not working". As the man who got Britain out of the last recession, 
he wants to make sure that his voice is heard.