Britannia Radio

The battle lines are being drawn and various papers look at the 
Tories and their plans, which remain more tentative than one would 
wish.  But the truth is that the situation is deteriorating so fast 
that Cameron -Osborne are fearful of providing too many hostages to 
fortune.

However, in an interview today in the Sunday Times  Osborne gives 
some clues as to his thinking - - - "I am not writing my 2010 budget 
now, but my priority is to try to reverse the increase in National 
Insurance because it is a tax that affects the vast majority of 
people in Britain. It is a tax on jobs at a time of high 
unemployment. It is a tax on incomes at a time when people will be 
under severe strain," he says.
He has two further measures up his sleeve to help savers and 
pensioners, whose incomes have been the collateral damage of the 
recent interest rate cuts. "They are innocent victims of Gordon 
Brown's incompetence," he explains. "These are the people who did the 
right thing in the age of irresponsibility. They behaved responsibly. 
They get penalised by the understandable reductions in the Bank of 
England base rate."
He does not want to go into the details of his plans, but it is 
understood that among the proposals being considered are the 
abolition of the basic rate of tax on savings - which would cost 
upwards of £2.4 billion - and an increase in tax allowances for the 
over-65s, allowing retirement incomes to go further. Each £100 
increase in the threshold would cost the Treasury £75m.

However, others are less reticent.  Today we learn "Bishops launch 
damning attack on Labour.   Five Church of England Bishops warned the 
country was suffering from family breakdown, debt and inequality"

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SUNDAY TELEGRAPH   28.12.08
1. Brown has brought Britain to the brink of bankruptcy
Labour's lax attitude to public spending, to soaring debt and shady 
dealings has led to disaster. Now the country must have responsible 
capitalism and responsible government.

By David Cameron

Almost exactly three years ago in The Sunday Telegraph, the 
Conservative Party published an advertisement that signalled a new 
direction. It spoke of our commitment to tackling poverty and climate 
change, our backing for the NHS and our belief in a free enterprise 
economy. But we also made clear - to much criticism - that the modern 
Conservative Party would "not only stand up for big business, but 
stand up to big business when it's in the interests of Britain and 
the world".

That was an important change. I wanted to establish right from the 
start that the fundamental value on which my Conservatism is built - 
my belief in responsibility - is something I intended to apply 
without prejudice, to all parts of our society. So if it is right to 
demand personal responsibility from the welfare claimant, the absent 
father or the career criminal then it is right to expect corporate 
responsibility from the chief executive, the hedge fund manager and 
the City fraudster, too.

We also made clear that modern Conservatism meant fiscal 
conservatism. We said that the already worrying state of public 
finances under Labour made it irresponsible for the Conservative 
Party to go into the next election promising up-front, unfunded tax 
cuts. Many, especially on the Right, disagreed. But George Osborne 
and I were determined to stand by our belief in fiscal 
responsibility; and I believe that events, in particular the 
appalling deterioration of the public finances, have endorsed the 
wisdom of that judgment.

Fiscal responsibility and corporate responsibility are both pillars 
of social responsibility. And they combine to create a much-needed 
riposte and rallying cry in these turbulent economic times.


A riposte because, to those like Gordon Brown who argue that our 
present economic troubles demand a return to big government-knows-
best arrogance and 1970s-style subsidy and state control, I say: you 
couldn't be more wrong. The fact that, thanks to Labour, Britain is 
once again on the brink of bankruptcy shows that the last thing we 
need now is Labour's bigger government. We need better, more 
responsible government: government that lives within its means 
instead of spending like there's no tomorrow and borrowing until the 
money runs out - as it always does under Labour.

A belief in responsibility is a riposte, too, to those on the Left 
who have positively relished this crisis for the stake it has 
supposedly driven through the wicked heart of capitalism. Wrong 
again. The greatest failure has been regulatory failure. The system 
established by Gordon Brown completely failed to identify and deal 
with a borrowing boom that ran out of control. This was little wonder 
when the man responsible claimed to have "ended boom and bust". 
Labour itself was so determined to prove its business-friendly 
credentials that it has not dared to say boo to a corporate goose for 
over a decade. Instead, it is the modern Conservative Party that has 
spoken out on the need for corporate responsibility.

Sceptical of that last claim? Well, try this New Year's quiz. Which 
party: a) first set out how to ensure that non-doms [= foreigners 
mainly living here but with a claim to be regarded as nnon-residents-
cs] paid a fair share of tax; b) suggested that in the private equity 
industry what looks like income should be taxed like income, in 
response to concerns that multi-millionaires were paying less tax 
than their cleaners; c) spoke out about a range of irresponsible 
marketing - from Lolita beds to padded bras for children; and d) 
called on the Financial Services Authority and other institutions to 
prosecute financial crime with the same gusto as in the US? The 
answer in each case is the Conservative Party.

So as we look to the future, it is not Labour's turbo-capitalism we 
need, where a blind eye is turned to every corporate excess, nor the 
Left's unthinking anti-capitalism, but the modern Conservative Party, 
which believes in responsible capitalism and is not afraid to make it 
happen.

Responsible business and responsible government: that is a rallying 
cry for 2009 and beyond that will win the support not just of 
Conservatives but of those across the political spectrum, 
particularly Liberal Democrats and Greens, who want to see the back 
of this tired, incompetent - literally hopeless - Labour Government 
that has allowed irresponsibility to do so much damage to our economy 
and our society.

That's why we need a change of government so badly. Far from 
acknowledging its regulatory mistakes and correcting them - in 
particular the disastrous decision to strip the Bank of England of 
its vital role in calling time on debt levels in the economy - Labour 
is doing nothing to prevent an irresponsible lending boom happening 
all over again. Far from admitting that they've overspent and over-
borrowed, unbelievably, Labour is actually making the public finances 
worse with their pointless VAT reduction that will cost billions, 
mean higher taxes in future and therefore make the recovery more 
difficult to achieve.

Allied to this irresponsibility is a giant confidence trick - that 
all of this is caused not by Gordon Brown but by someone else, 
somewhere else. So let us all resolve in 2009, whatever our political 
affiliation, not to allow Gordon Brown to get away with his talk of a 
global downturn, made in America, which has infected an otherwise 
healthy British economy. No, Prime Minister: this is your crisis, 
caused by your Government's encouragement of irresponsible lending 
and the failure of your regulatory system. Your Government's 
borrowing has not only made things worse, it has left you virtually 
powerless to help. Next year, Britain will borrow more than 8 per 
cent of its GDP - more than any other developed country and more than 
Denis Healey was borrowing when he went cap in hand to the 
International Monetary Fund in 1976. It is a disgraceful state of 
affairs.

It is not America, but Labour's debt crisis that is stopping 
businesses getting the money they need to keep going; Labour's debt 
crisis that is throwing people onto the scrapheap of unemployment and 
that will be to blame as the recession here becomes longer, deeper 
and more painful than elsewhere. And it is not more 1970s-style 
subsidy and state control that is the solution to these problems, but 
more responsible government. How can the answer to Labour's debt 
crisis be still more borrowing?

If "Iraq" is the word that Tony Blair's famous "hand of history" 
chisels on his political tombstone, then for Gordon Brown the words 
"Debt Crisis" will serve as a suitable epitaph. From now until the 
election at which Gordon Brown is thrown out of office for his 
economic crimes, we will make sure everyone knows that it is Labour's 
debt crisis that is to blame for our economic problems, and it is 
responsible government and responsible business that offer hope for 
the future.
========================

2. What the Tories must do to show they are ready to lead

As we enter 2009, what economic policies should the Conservatives 
propose?

By Liam Halligan

Messrs Cameron and Osborne certainly need to say something. Given the 
mess Gordon Brown has made of the economy, it's astonishing the 
Tories aren't miles ahead in the polls.

National income contracted 0.6pc from July to September - the largest 
quarterly drop for almost 20 years. Year-on-year growth slumped to 
0.5pc - the weakest since 1992. House prices are falling and 
unemployment is sharply up. Yet still, Labour is "more trusted" on 
the economy than HM Opposition.

Polls suggest the Tories are good at attacking Government policy - 
but so bereft of convincing alternatives Brown and his ilk remain in 
front. If an "alternative government" can't sustain a poll lead 
during a crisis, the impression takes hold they're simply not fit for 
office. The Tories need to start sounding like they know what they're 
talking about on economics - not just criticising Brown, but saying 
what they'd do instead. Would they reverse his 1997 banking reforms, 
which ended the Bank of England's ability to monitor commercial 
banks? Brown switched that role to the Financial Services Authority 
while also curtailing the Old Lady's controls on bank lending. I'd 
say both moves were misguided, contributed mightily to the current 
crisis and need to be reversed. I'd like to know what the Tories think.

Government spending is wildly excessive and borrowing is out of 
control. The Tories have (finally) pointed out some of these 
realities. But have they got the courage to limit expenditure and get 
our finances back on track?

The early signs aren't good. Of all excessive spending, the bill for 
gold-plated, index-linked, final-salary, public sector pension 
schemes is among the hardest to justify. As the realities of our 
ageing society kick in, and private sector pensions crumble, state 
workers remain cosseted while the rest of us pick up the £1,300bn bill.

Cameron recently hinted the Tories would tackle this outrageous 
"pension apartheid". But when the public sector unions growled, Tory 
spin doctors denied the story.

The Tory leader should have said to the unions - "Actually, the 
public sector pension bill is immoral, detached from financial 
reality and I'm going to do something about it".

The vast majority of punters would have (silently) cheered. The Tory 
High Command doesn't get that - which casts serious doubt on its 
ability to lead.
======================

Never a saver or a pensioner be under Labour 

If 2008 was the year of reckoning for the economy, the Tories hope 
that 2009 will be when the chickens come home to roost for Gordon 
Brown's government. The financial eruption this autumn had 
consequences for British politics that David Cameron and his team 
never saw coming.

One minute the Tory leader was milking the applause of the faithful 
at his party conference in Birmingham, the next he was defending his 
party's tumbling poll ratings. Mr Brown, for whom the political 
obituaries were being written in the summer, enjoyed one of the 
biggest comebacks since Lazarus. Only another comeback kid, Lord 
Mandelson, comes close.

For Mr Cameron and George Osborne, his shadow chancellor, it has been 
too much to bear. They cannot believe the prime minister is getting 
away with it. Yes, he acted promptly in putting in place a government 
rescue of the banks, but any responsible leader would have done the 
same without claiming, if only in a Freudian slip, to have saved the 
world.

What the Tories find hard to stomach is Mr Brown's penchant for 
changing the rules of the game. As chancellor he insisted he was tied 
to the mast of his fiscal framework. As prime minister he threw it 
overboard, floating free on waves of government debt. It took 
centuries for public debt to reach £500 billion. In five years it 
will double to more than £1,000 billion.

The task for the Tories as the recession bites is to make sure normal 
laws of politics apply. Mr Cameron saw at first hand the one notable 
occasion when they did not: John Major's 1992 victory as incumbent at 
the end of a long, home-grown recession. Ensuring Labour does not 
repeat that in 2010, or even in a snap election in 2009, is the 
Conservative challenge.

In an interview with this newspaper today Mr Osborne sets out some of 
the party's stall.
He thinks voters are feeling a simmering anger about Mr Brown for 
"bankrupting" Britain and that there is a silent majority which 
believes first, that none of this is its fault and secondly, that it 
is going to have to pick up the bill for the mistakes of others.

These "innocent victims of the prime minister's incompetence" save, 
yet have seen interest rates on savings cut to almost zero. Mr 
Osborne will promise tax breaks for savers and pensioners. [ Yes - - 
but savers can't live on zero interest rates !  Income tax cuts don't 
work when there's no income! -cs] This silent majority will also see 
its taxes rise if Labour is reelected, hence Mr Osborne's pledge to 
reverse these plans.

The shadow chancellor is on to something. People did not ask for the 
vast increases in public spending that Mr Brown decided were 
affordable when he was at the Treasury, but got them anyway, along 
with inevitable waste and inefficiency. Bank boards, regulators and 
rating agencies were paid handsomely to ensure that lending was done 
responsibly; why should customers and taxpayers have to bear so much 
of the burden?

Life is unfair and politics recently has been unfair as far as the 
Tories are concerned. Will these initiatives tilt the balance back? 
Part of the problem is that it has been easy for Mr Brown to portray 
them as the "do-nothing" party. Partly, however, it has to do with 
youth and inexperience - occupational hazards for opposition 
politicians on the rise.

There is another potential trapdoor. In his new year message Mr Brown 
will criticise those who label the country as "broken" and will claim 
that voters will react against those who talk Britain down: attack me 
and you attack the country. The Tories and Mr Osborne in particular 
have to guard against stridency and appearing to relish the economy's 
woes. Voters want the opposition to be sharp. But most of all they 
want constructive ideas.