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Heseltine comes up with sensible interventionist ideas to boost growth – so Osborne briefs against him
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28 October 2012
Michael Heseltine will be sitting with a cup of coffee at his country pile, thinking about when to take a tour of his fabulous gardens, whilst flicking through the Sunday papers, a ritual through the many decades of his business and political career. It is likely to please him that he is in them, still making waves at an age many have long given up, though the content will displease him, because it is pretty clear that those old sources close to the current Cabinet have been briefing against Hezza's growth plan.
Not least because of his own considerable experience, he is an astute reader of anonymous briefings and by the time he is onto his second coffee, he will have concluded that George Osborne, or at the very least some of the young whipper snappers around him, is at it.
Heseltine was asked by the government to produce a plan for growth. Anyone who knows anything about his views and his career could have made a reasonable guess as to what he might recommend - cuts to red tape and some business taxes (so far so good for Osborne) but he also wants government departments, quangos and councils to do more to stimulate economic growth. He will argue for reforms in tax credits to encourage businesses to spend more money on R&D as well as measures to boost the skills of British workers; a dramatic boost to the Regional Growth Fund; expanding the role and funding on offer to Local Enterprise Partnerships; and scrapping dozens of district councils to create a simple structure of local goverment.
According to some reports, again believable given Hezza's history, he wanted to recommend the reinstatement of Regional Development Agencies, a sensible move but one which, given it was an idea of the last Labour government, will be seen as a non-starter in Downing Street, 10 and 11.
According to the Sunday Telegraph, a paper Lord H reads particularly closely when looking for signs of ministerial briefing, 'ministers are also adamant that the peer’s hopes of shaking up local government may also be ignored. It is thought the peer will recommend replacing county and district councils with more tightly-focused “unitary authorities”. One source close to the Cabinet said: ‘He can recommend this if he likes. It won’t happen’. Oooh, rough stuff.
Unsurprisingly, he wants more mayors and he wants to send more Whitehall civil servants out into the provinces to foster economic growth. But the scale and scope of his ideas has led to more negative briefing, with one 'Whitehall source' saying the government became worried the whole operation would become 'a soapbox for Lord Heseltine to espouse his world view.'
But the real reason for the opposition may be found in another anonymous briefing over in the Sunday Times, where Hezza will read that his proposals have been met 'with dismay' by Osborne and Co 'because they appear to echo the previous government's policy.'
There you have it. Cameron and Osborne wanted Hezza's input because he is a big beast, with lots of experience, and a good mind. Oh, and it gave them a clutch of good headlines at the time, showing them to be inclusive of the old guard and the left of the Party. But now that he has come to the obvious conclusion that a growth plan will require the kind of intervention Labour believe in and Cameron-Osborne don't, including help for regions which has been slashed as part of the Plan A austerity programme, then they have responded by creating a different clutch of headlines.
I suspect Hezza will not take it lying down. But worse, does it not show once more than both the PM and the Chancellor are more driven by short term politics than the long term economic needs of the country?
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Hezza has always been my kind of Tory, even if he is the son of a rich coal shipping merchant family from Swansea, so culturally nepotistic of me. I have always listened to what he has had to say, even with the tory built-in arrogance necessary for the old fella.
And this blog above reinforces my view of him, in that he has a positive mental attitude to UK industry, which is mostly lost with his peers (with a small p), with my memory of him swinging the mace in the HoC over the Westland helicopter company affair years ago, or is that one of these urban myths? Lost in time it is.
And he stroked the Thatch up the wrong way, which is nice too, and helps.
There is a small number of Tory politicians that those of the electorate who are not natural Conservative supporters actually respect. Heseltine is one of them. Clarke is another. In sidelining these characters, Cameron turns off a big wedge of those non-tribal voters capable of voting for either main party. This will not achieve the longed-for majority Conservative Government next time around.
End of growth.
Socialism has failed. Capitalism is bankrupt.
The future belongs to the mixed economies.
Economic growth and affluence must be means not the end.
Cameron and Osborne support NEOLIBERALISM. Unfortunately it went bust in 2008.
They now believe that economy is “healing”! But Q3 “growth” was due to extra bank holiday in Q2 and Olympic ticket sales.
Britain is now heading for triple-dip recession. Britain is still in DEPRESSION as the output is 3% below the 2007 peak.
For model economy Britain must learn from Germany, the Netherlands and Scandinavia.
Germany, Sweden and Switzerland run near-balanced budgets.
Prosperous contries like Finland emphasise EQUALITY, SOLIDARITY and DEMOCRATIC accontability.
Unless we rein in global capital, the crisis will continue.
There are structural flaws in global economy.
Before the financial crisis consumers, companies and banks borrowed too much.
Globalisation is real, but government is national.
We need to fix global economy and finance.
THE PURPOSE OF ECONOMIC POLICY IS TO STIMULATE GROWTH.
Growth means more consumption. More consumption of goods and services.
Growth comes from increased productivity.
Our present money system can only function in growing economy.
Money is created as INTEREST-BEARING DEBT. Therefore there is always more debt than money.
When growth slows, indebtedness rises faster than income.
Central banks used to buy securities on open market driving down interest rates. Low rates would stimulate a flood of credit jumpstarting the economy.
This tool is not working now.
Quantitative easing has meant little leakage of new money into the real economy.
We need a transition to STEADY-STATE or DEGROWTH ECONOMY.
We are at the end of an era. We will NOT grow out of debt again.
State spending to boost growth needs to go beyond mere investment.
Austerity has been a failure.
But STIMULUS SPENDING must face future technological, environmental and economic challenges.
Green industries, energy-saving technologies, biotechnology and advanced manufacturing are the future.
We need now both GENERAL STIMULUS SPENDING in healthcare, education and infrastructure plus DIRECTED INVESTMENT in STRATEGIC NEW TECHNOLOGIES.
Investment MULTIPLIER is higher when public investment is directed to GROWTH AREAS.
We need VISION!
Or should I have said “the necessawy awogance fow the owld fwella…”. : )
What? so he has a speech impediment. SSSay ssssony, do something about that ssssspeach impediment. AAARRRR it is Michael, rrrroll it, roll, oh I give up! Human rights it is, not human whites! oh give me strength!
Looking forward to Basil,,,, FECK, hold on, it started, oh pants!
I haven’t read your posts in about 3 months Olli but you are becoming more juvenile rather than more mature.
You’re buying the “money is debt” conspiracy theory, really?
As for your suggestion that we copy Germany, Switzerland etc BRING IT ON! I would much rather we leave British socialism behind and embrace Swiss capitalism or German Uber Capitalism!
State sponsored economic growth? Mmmm…. mmmm and more mmmm. I suspect Regional Development Agencies would accommodate friends of a friend that haven’t got a clue about business and create phantom jobs that amount to very little and end up being extremely expensive.
The mace-swinging stunt happened long before Westland (1986) and before the flak jacket stunt (1983) when ‘he led the army against the Quakers at Molesworth’, to quote Tony Benn. He likes self-publicity and amateur dramatics, but one of the best stunts was not his – when NUM members dumped a lorry-load of coal in the drive of his mansion in the midlands (1992). When we get to praising people like Heseltine it shows what a bunch are currently in the ascendant!
I don’t understand what you mean when you call it a ‘conspiracy theory’. I thought it was a pretty ordinary aspect of economic theory. Could you explain further, please?
No, I have done so SO many times and those who believe the conspiracy keep believing it, you can’t convince a true believer. Check out Tim Worstall or Katie L on the guardian, check their comments, this subject comes up about every two weeks.
Money need not be debt. If you have gold, you have value, you have money, there is money but there is no debt. If the government creates money either by digging up gold, or printing notes, there is then gold or printed money, but no debt. Only if they give it someone else straight away, which they needn’t do, is it debt, ie if I print £1000 or dig up a bars worth of gold and give it to you, then you owe me it.
Its the same with those who talk about all the debt in the fractional reserve system. If I have £100 and lend you £90, then you lend someone else £81, the conspiracy says “There is now £271 of debt but only £100 of money” but in reality, the sum total of money is £100 and the sum total of debt is £100. All rather simple.
Living Elvis or green aliens down silos in New Mexicos are actually more credible theories!
Thanks for clearing that up Dave Simons – I knew he swung the mace sometime. And there is nothing wrong with me playing divide and conquer tactics is there? I hope not. Hezza only got where he got to by going to the “right” school after all, school-tie contacts then helping him make his money in publication (Haymarket).
Germany is started to drown, reaguns, in this Euro debt shenanigans. The euro was good while it lasted, until simple economic control, or should I say lack of, has hit home. The Euro is a fantasy utopian currency, not in touch with reality.
…and the US sent robots to the moon, Capricorn One style. Thank god the pound is still a pound reaguns, and a swiss franc is still a etc..
Dave Simons, have a look at John McDonnell using the mace what it should be used for, a bit of manhandling, when he gets heated in Westminster, and becomes a Westmonster,
http://www.youtube.com/watch?v=cdUcImZXhNg
And Hezza and Prezza classic clip here, when they met each other across the dispatch box, back in ’96 – classic clip, and I like the way it slowly boils up,
http://www.youtube.com/watch?v=BloOv3Gbhfk
You are right Ehtch, in that it will bring either economic ruin and misery for millions, or authoritarian subjugation for millions, both of which you and I would consider a disaster, but the powers that be don’t agree, their vanity to save their precious euro project knows no bound. Stalin and Mao didn’t allow starving millions to put them off communism, and neither will this lot.
I wouldn’t go that far reaguns. That’s all the euro needs is central tax raising powers and much stronger unified banking regulation across those countries/states, with the Euro countries having local tax raising powers, as per US states, for local issues.
But the Euro has dug itself an humungous deep pit – it has to get out of that first, and it doesn’t seem to be happening, with all this feet dragging they are doing at the moment. They have still got their fantasy blinkers on, and yes, don’t like to admit how foolish they have been, with their constant blind bravado