The BBC took this as a request for a few more academic type programmes to go wider than the news. It was instead a complaint that the BBC is too influenced by spin, to the exclusion of the audience understanding what is really going on.

Let’s take three examples. Readers of this site will know I have been a long standing critic of the government soundbite “We made the Bank of England independent and that guarantees economic stability”. The first half of this was never true, as any well informed Whitehall watcher should know. They did not make the Bank independent – they took away crucial responsibilities from it and interfered at crucial moments with the MPC. The second part is now unravelling – can you claim it is stable to have a run on a bank, a halving of mortgage activity, a halving of house sales and a collapse in property and housebuilding?

The second is the current soundbite “We must not talk ourselves into recession”. The sharp slowdown we are experiencing is not the result of idle talk, but the result of a shortage of money. It is the direct consequence of a boom-bust credit and money policy pursued by the authorities, who created easy credit in the period 2004-6 and tight credit 2007-8 through their handling of banking regulation, money markets and interest rates. Ministers will not be able to talk their way out of this one. They need to take action in markets to sort it out.

The third is the soundbite “The UK is well placed to ride out this international storm”. The BBC dutifully puts into bulletins that the Credit Crunch was made in the USA, and this is an international problem. They should instead ask some of the following questions:

1. Wasn’t Northern Rock a British collapse, based on the UK mortgage market?
2. Didn’t nationalisation of the Rock remove the most aggressive large mortgage lender from the market, intensifying the mortgage squeeze?
3. Isn’t the boom-bust in UK property prices and housebuilding a UK phenomenon brought about by British monetary policy?
4. Isn’t the UK government in a bad position, having borrowed and spent too much in the good years and now unable to reflate the economy with tax cuts?
5. Didn’t the UK government use off balance sheet vehicles and creative credit devices itself on a large scale, fuelling the credit boom of recent years?
6. Hasn’t UK competitiveness declined significantly in recent years, making UK adjustment more painful?
7. Why did the UK fail to add more to non fossil fuel electricity capacity during the good times, to ease shortages now?
8. Why does the UK impose some of the highest taxes on oil products, and increase them during a period of sharp upward movements in oil prices, exacerbating the squeeze?
9. Why did the government increase North Sea oil taxes, putting companies off from more exploration and enhanced recovery?

If they asked some of these, they might see that repeating uncritically the notion that this is entirely a US or international problem is just not the case. The UK dimension to this crisis reveals serious flaws in the conduct of policy in recent years.

I do not deny the long term case for higher oil and other commodity prices. Of course the arrival of 2,500 million Indians and Chinese at the western party will make a long term difference to the prices of commodities relative to other things – they will get dearer as these large countries get richer. Such changes rarely occur in a steady straight line, and we should expect interruptions to the upwards march when there is too much speculation in the market, or when there are pauses to demand growth owing to the trade cycle. We are likely to experience some reduction in demand from the west over the next year, as the economic slowdown has an impact. This would be reinforced by mild weather, and offset to some extent if there is a really cold winter.

The volatility of the oil price should act as a warning to the incompetent UK authorities that they should concentrate on fighting downturn more than on fighting inflation. No-one looking at the UK economy today can plausibly think its main problem is accelerating inflation. Its main problem is clearly collapsing demand and a weak banking sector which will keep growth well below trend for the foreseeable future. In such circumstances upwards movements in commodity prices are unlikely to lead to second round inflation in the UK – the higher prices do show up in the price indices, but just mean people have to buy less of something else, as consumers have no way of passing the price increases on. They are not going to get an inflationary wage increase.

If commodity prices do decline and stay lower the rises in the RPI will subside quite quickly. The downturn will not suddenly come to an end. Maybe if and when this happens even the ponderous and foolish UK authorities will see they have set interest rates too high for current conditions, just as surely as they set them too low for conditions a couple of years ago thanks in part to the UK government’s meddling with the targets, and in part thanks to the government’s passion shared with some in the banking sector for off balance sheet finance. Maybe the Treasury will speed up its review into the functioning of the money markets, and conclude what is obvious to most sensible commentators that the money markets are still short of cash and helping to throttle the economy. What do we pay all those salaries of Ministers, senior Treasury officials and Bank of England officials for, if they cannot see these blindingly obvious truths and need outside experts to come in a write reports as if next year would do for fixing this problem?

All the PM is able to do is to tell us the UK is well placed to ride out the international storm. Both parts of this idiot soundbite are wrong. This is not just an international problem. A large part of the UK housing and mortgage collapse was made in the UK. Northern Rock was not big in US sub prime, but big in UK mortgages. It was the Bank of England and Treasury that mishandled money markets last summer and led to the run on the Rock. The UK is not well placed. Thanks to its profligate government and hapless monetary authorities it is one of the worst placed economies to handle the downturn. If you want to cure a problem you first need some honest analysis of what is wrong. Until the UK government admits its past mistakes I do not hold out a lot of hope of it getting the next moves right.

There is a nasty squeeze underway on people’s incomes. Most wages and salaries are going up by less than inflation. The prices of food and energy have soared, putting the most intense squeeze on those on the lowest incomes, who spend more of their money on the basics.
The government says it feels our pain. It is doing nothing to alleviate it. Indeed, in many respects it is making it worse. Every time the price of oil goes up, the government increases its tax take on petrol and diesel because the VAT it charges automatically goes up with the price. I am glad the Opposition has suggested a sliding scale of tax rates on petrol, which would go down when the price goes up to help stabilise pump prices, and go up when the price goes down to maintain the revenue. We need a cut now in petrol and diesel tax to reduce the rip off at the pumps.
Electricity to heat our water, and light and heat our homes is also soaring in price. The last ten years have seen no major decisions taken to licence new power stations, so we are facing shortages as the older nuclear and coal stations are retired. We need an urgent programme of new works, to produce more and cheaper power, with less waste and fewer harmful emissions than the present.
The Prime Minister’s line at the recent G8 summit was to blame someone else and pretend he could nothing. He told us the slow down or recession was made overseas, refusing to see the policy errors made here at home that have given us first an inflation and now a slow down. He told us we should waste less food to solve the food price problem, and blamed OPEC for producing too little oil. What we need is a government which not only says it shares our pain, but does something to ease it.
If only Gordon Brown had said at the Summit:
“Today we face the twin problems of energy and food shortage, driving the world prices of both higher. This is damaging the prospects of recovery for the rich western economies trying to overcome the Credit Crunch. It is far worse for the poorer countries, where more will be forced into undernourishment and greater poverty by the surge in prices of these basics. We had planned at this summit to concentrate on the response to global warming and African poverty. We need to concentrate on African poverty, and to see that any attempt to ease this requires us to grapple more successfully with the world shortages of energy and food than we have managed over the last few years. We cannot solve the African problem unless we can resume faster growth in the West and supply them with better market opportunities for their goods. We cannot resume faster growth in the West unless we can get on top of scarcity and inflation in the prices of the basics. We cannot help Africa by expanding ourselves if we drive the relative prices of the basics so high they cut Africa’s effective income further whilst raising our own overall.
The cases of food and energy are different. The West needs to change its approach to food production and trading dramatically to be fair to the rest of the world. I will be pressing to dismantle the Common Agricultural Policy, which prevents poorer countries selling us as much as they would like at the same time as restricting our domestic output by encouraging set aside and non productive use of land. At current world market prices – and at lower ones than now – we should abandon managed prices and assume world prices, allowing free trade in food. The US should also dismantle its protectionism. The European system needs to be changed, to allow idle land to be brought under the plough where farmers have been subsidised to do nothing with it.
To ease energy shortages I will be bringing forward the permits and licences necessary for the UK to construct a new set of power stations that do not need fossil fuel, and I will be encouraging the development of clean coal technology and carbon storage as the UK has plenty of coal. I am also today reversing the tax increases I have imposed on North Sea oil in a way designed to encourage more exploration, development and recovery from existing fields. I am sorry I have wasted the last ten years in doing none of these things, and now wish us to catch up on the missing years of underinvestment in new energy”

There were Wall Street analysts telling us the US was in recession at the beginning of the year. Instead, so far we have just had a sharp slowdown. There have been doomsters calling recession for the UK this year, but so far we have had two quarters of painfully slow growth. I am holding to my forecast that we might get by without a full recession in the US, where they have taken action with low interest rates and tax rebates to try to turn the economy round. The UK is now wallowing from a monetary authority that is getting it wrong both ways - too loose on the way up, and now too tight on the way down, so it is a closer call here.

Within the overall pattern of no growth or slow growth, certain sectors will experience a very painful recession. In both economies property, building and construction are in freefall, and banking is going through a nasty squeeze. With a low dollar and falling pound both economies should see better export performance, as their manufacturers are priced back into world markets during an inflationary period.

The situation in the UK is both ameliorated short term by excessive public spending, and made worse in the medium term (two years) by the over borrowing of the public sector to pay the ballooning bills. Yesterday in the Commons it was Supplementary estimates day, when the government seeks Parliament’s approval for some of the overruns so far this year. We were only allowed to debate concessionary fares and the science budget. The more interesting estimate before us was the stonking £5,300 million extra cash estimate for Northern Rock resulting from the transfer of a Bank of England loan that previously had not appeared in the figures. No Treasury Minister was on hand to give us an update on how big the trading losses and redundancy costs are likely to be, and how long it will take to get the loans back that the Treasury and Bank have extended. You don’t get much explanation for £5.3 billion from this government! It is typical of a regime that spends other people’s money as if there were no tomorrow, and now thinks borrowing any amount it likes is fair game. They may discover the day of reckoning for their excess comes before the General Election.

In today’s Independent there are rumours of £7.5 billion of overrun on the public accounts. The way this government is spending, I think the final total above budget this financial year will be higher than that. The short term impact on activity will be far less than the medium term adverse impact from the higher interest rates and lost confidence as the government’s financial plans unravel. If only the PM would bring back Prudence, we would have some better options.

In the meantime there is action the government should take to fight recession. It should press ahead with the permits, licences and competitions necessary to organise large scale programmes to increase transport, energy and water capacity. It is an ideal time to do it, when the construction industry is facing large cuts in workload and workforce. That is something we could all agree about, and something which would help UK competitiveness in the next upswing.

Today we have the ultimate irony, that they now think the way to deal with food price inflation is to make it dearer, by appealing to the supermarkets to remove the two for three and the one for two offers! You could not write parody better than they write it themselves. It’s the Bogof answer to the struggles of the family budget.

Just look at the list of things that they want to sort out by making them dearer and by interfering with the supermarkets, dedicated to making things cheaper:

1. Some people binge drinking – government answer: cancel cheap drink for everyone at the supermarket, remove promotional offers, and abandon happy hours in the pubs and clubs. Only the rich can then afford lots of drink.
2. Too few roads for too many cars – government answer: congestion charges, so only the rich can drive in central London during the week. This answer will be rolled out elsewhere given half a chance.
3. Too much CO2 from vehicles – government answer: ever higher fuel duties, Vehicle Excise Duty and VAT – so only the rich can drive a car regularly
4. Rising food prices – government answer: get rid of the supermarket cheap offers to reduce consumption! Only the rich can eat well.
5. Too much packaging – government answer: get the supermarkets to charge for bags

Whilst I agree with the general point that governments cannot alone solve all the problems, and what each one of us does is in aggregate important, I do get fed up with a government which never wants to tackle its own contribution to problems, and which sees dearer prices and higher taxes as the way ahead in every case. Part of the reason we are adopting a more inflationary psychology in this country today is because the government is generating so much inflation of its own.

What I would like Gordon Brown to say and do at the Summit goes something like this:

“Today we face the twin problems of energy and food shortage, driving the world prices of both higher. This is damaging the prospects of recovery for the rich western economies trying to overcome the Credit Crunch. It is far worse for the poorer countries, where more will be forced into undernourishment and greater poverty by the surge in prices of these basics. We had planned at this summit to concentrate on the response to global warming and African poverty. We need today to concentrate on African poverty, and to see that any attempt to ease this requires us to grapple more successfully with the world shortages of energy and food than we have managed over the last few years. We cannot solve the African problem unless we can resume faster growth in the West and supply them with better market opportunities for their goods. We cannot resume faster growth in the West unless we can get on top of scarcity and inflation in the prices of the basics. We cannot help Africa by expanding ourselves if we drive the relative prices of the basics so high they cut Africa’s effective income further whilst raising our own overall.

The cases of food and energy are different. The West needs to change its approach to food production and trading dramatically to be fair to the rest of the world. I will be pressing to dismantle the Common Agricultural Policy, which prevents poorer countries selling us as much as they would like at the same time as restricting our domestic output by encouraging set aside and non productive use of land. At current world market prices – and at lower ones than now – we should abandon managed prices and assume world prices within the EU, allow the free movement of overseas produce into our market (subject to health and safety checks) and remove incentives to keep land idle. The USA too needs to tackle its agricultural protection. I will also encourage entrepreneurs and financiers in the UK to look at possible commercial and investment ventures in lower income countries in the agricultural sector.

The West has chosen to levy very high taxes on certain forms of energy, especially penalising its use for road transport whilst favouring it for other kinds of transport and some forms of space heating. When I pressed the Arabs to produce more oil they not unreasonably said I should also look at the UK government’s contribution to high fuel prices. I now do so, and accept that levying more than 60% of the retail price of petrol as tax is too high in current circumstances. I will cut the duty and VAT so I am only collecting this year the budgeted amount. I trust Middle Eastern producers and governments will as a result look favourably on further short term increases in production.

In the medium term many governments of oil producing areas need to encourage more production. I appreciate I have taxed the UK North Sea too highly at the margin, putting off the new exploration and investment we need. I am announcing today cuts in North Sea taxation geared to encourage money into exploration and into increasing production from enhanced recovery in existing fields. I urge governments in other oil provinces from the USA to Russia via the Middle East to do something similar.

Finally, I am conscious that we need to do more to find alternatives to oil based energy for the longer term. I will be going ahead with a much larger programme of permits for renewable and nuclear power in the UK, and will be exploring with industry how we could speed up carbon capture, oil from coal and clean coal technology. The UK has large coal deposits, and we need to find a way of bringing them back into use, meeting modern expectations of cleanliness and working conditions.”

Arguing that Breakdown Britain, or the poverty and drug-taking in some US cities, is the result of economic liberalism is as likely as arguing these phenomena are the result of living in a Christian culture in the UK and the US, a proposition I know David would reject. It is true that there is some poverty and unemployment in the USA, but less of the latter than in the EU. Relative US poverty is in relation to a much higher standard of living in the USA than in Europe. Both the US and the UK are Christian countries, so how can we be sure that the features of society we do not like result from the alleged economic policies rather than from a Christian framework marked by tolerance of other ways of life? I do not see causal connection in either case, but could make a better argument for the latter than for the former. You could argue that the lack of an agreed moral framework, and the lack of moral authority by the Christian Churches over many people in the society are, in part, the reason for different social mores and the presence of more anti-social behaviour than in say, Islamic societies where the moral grip of religion is greater. We value freedom more, and the Churches give a hesitant message if any on how we should live.

The UK, far from turning its back on Europe in the last couple of hundred years, has remained engaged so much that it has fought great wars to try to keep Europe free, and in recent decades has accepted practically every law code and power shift recommended by the EU. Over the last decade the government has taken public spending and borrowing up to EU levels, and has equated NHS spending to health spending levels on the continent. At the same time, France, deeply embedded in European politics and values has seen her suburbs disfigured by high unemployment, racial tensions, poverty and drug taking on a worrying scale. How on earth can you believe that if we were more “European” we would have fewer social problems?

There is a great misunderstanding by many on the left of the nature of free enterprise capitalism. It is not wholly individualistic, and it does not rely on competition to the exclusion of co-operation and community. I believe in free enterprise as part of my wider belief in a free society. I am against big government, but that does not make me a critic or opponent of collective actions, community values, or team work. I prefer team games to individual effort sports, where the individual has to co-operate with others and work for the benefit of all team members. I like enterprise capitalism, because like minded and like motivated people discover they are stronger working together than apart, and are able to serve their fellow human beings better by co-operating through companies.

I dislike big government, because it is so often clumsy and insensitive, damaging civil liberties in the name of security, and damaging free enterprise in the name of equality. It makes us collectively poorer. Taken to the extremes of communism it makes the society so much poorer that the poor are poorer as well as the rich are poorer than people in freer societies. Big governments under communism always favoured more spending on weapons than on improving the lifestyles of their publics.

Free enterprise societies have higher average incomes than other states organised along different lines. They enjoy more personal freedom than socialist states where government may command where you work, determine your income, decide your housing and control your thoughts. The freer the state the better the economy – the European model of limited free enterprise has been consistently outperformed by the freer USA, which has kept its unemployment lower and its growth rate higher than the EU.

A free enterprise society gets the best out of the individual and the family by allowing them to co-operate and work with others as they choose, by allowing thousands of flowers to bloom in the meadow of our plenty. It honours charities, welcomes Churches, encourages diversity in tackling social problems as well as in producing more and better goods. The main developments that have made life so much easier – the phone and mobile phone, the TV, the washing machine and the car have all been developed in free enterprise societies. Free enterprise works because it creates that natural balance between competition and collaboration, between team effort and individual initiative. Other societies are not so good at that, so they either have to copy the free enterprise ones and allow in their companies to do it for them, or accept lower living standards and greater poverty.

I had tabled separately a series of questions to find out if these performance awards are easily come by, and if there is any attempt to manage performance well. Looking at the results - the lost data, the falling or slow moving productivity, the error rates, the accounts that have to be qualified and the general delay throughout the public sector in answering letters and queries, management under this government is very lax.

I have asked how many people have lost their jobs for incompetence and worse; how many staff have been disciplined, and how many staff have been awarded no bonus or low bonuses under bonus schemes. If I get an answer - and full answers are rare to Parliamentary questions under this regime, I am expecting it to reveal that bonuses are not used as part of a tight management system, and are too easily granted and payments awarded at the end of the year.

The rows over MPs pay demonstrate the understandable anger of people in private sector jobs where bonuses vanish when performance declines, even if that happens through no fault of the employees and the company thanks to market circumstances, when they see the public sector casualness in its approach to reward and remuneration.

We need to revisit the whole question of public sector reward and its poor linkage to productivity and performance. Bonuses are used effectively in many parts of the private sector to drive ever better personal and company performance. There is no evidence they are well used or properly disciplined in the public sector.

If I get no answers to my questions it will be typical of the malfunctioning government. If I get honest answers I expect it will show one sided bonus schemes which do not deliver as much as they should by way of better performance.

I was invited to a meeting to discuss anti social behaviour in my constituency yesterday, sharing a platform with a local GP, an Inspector of Police and a charity worker specialising in tackling the problems of disaffected youth. I said something along the following lines:

“ Most of you in this hall today are used to getting up at a reasonable hour in the morning, washing and dressing, shaving or putting on the make up, and going out to make your contribution to our community life. Some go to work, as teachers or police, some to sell us goods in the shops or to make us things in the factories. Some retired people go out to lead local community clubs and activities, to run our charities and voluntary organisations. You have a sense of purpose and wish to live within the law.

“I was asked by David Cameron to produce an analysis of how we could make things better for all who wish to make their own way in the world, and want to contribute to our economy or voluntary activities. That work is now being adapted to manage the crisis in our economy that the Credit Crunch and its aftermath represents.

“My colleague, Iain Duncan Smith was asked to produce a report into Breakdown Britain. His task was the more difficult one of recommending how we tackle the problems of that other Britain. It is peopled by those who have no reason to get up in the morning and smarten themselves up, by people who are depressed, angry, lonely or out of sorts with the world around them. That other Britain throngs with drug peddlers and drug users, with the unemployed and the mentally ill, with those who failed at school and fear they will fail at most other things. It is full of people who cannot accept the rules of how the rest of us live, who see them as at best an irrelevance and at worst a tyranny they must break. Our prisons are full of the sad and the mad as well as the bad.

“Iain not only harnessed the talents and ideas of the many to write his analysis and proscription. He also plunged himself into the world of social entrepreneurship to gain first hand experience of ways of stretching out a helping hand to those down on their luck and to those who think the best thing in life is to look for trouble in gangs or idle time away on street corners. If there is one overriding conclusion from Iain’s patient work, it is that there is no top down answer government can impose or buy. He concluded that in the broken communities of Britain many of the dispossessed young need adults who will take time to cross the street to help, inspire or comfort before it is too late and they need the penitentiary. He recommended relying more on a renaissance of social entrepreneurship, letting a thousand flowers bloom in the unpromising concrete fields of our inner cities.

“Here in Wokingham we are blessed with fewer of these problems than you would encounter thirty five miles down the road in parts of inner London. But no community is free from drug abuse, drop-outs, mental illness, violent crime and casual damage to property. Here we have seen violent and casual knife crime, and syringes in children’s play areas. My message today is that all of us adults have a part to play – some small, some larger – in putting more of this right. Families can inspire and discipline, motivate and reprove. Where they can they should be encouraged to do so. Where parents are too busy to offer the love and time it takes, or where the families have been ruptured and the adults are themselves prisoners of emotional poverty, other adults from the local community need to be around to help. It is not financial poverty that does most damage. Some poor families make up in love and concern what they lack in cash, and some rich families may shower goods on their children for lack of time to do what matters more, to take an interest.Some will help by running voluntary organisations, organising sports, and by setting up social enterprise companies and not for profit bodies. Others will make their contribution through their excellence as school teachers, vicars, policemen and women and care workers. There has been tension and difficulty in talking between the generations from time immemorial. That should not stop us seeking to improve the dialogue of the generations. We, the generation in power, need to tell those who follow us what we are trying to do and how we are seeking to do it. The generation that follows will judge us, write our epitaphs and decide what to keep and what to ditch. The coming generation needs to tell us what they want from their future and how they see what we are striving to do whilst there is still time to modify or complete it.

“If there were a few silver bullets that government could fire to solve the problem this government or its predecessor would have done so. There is no party dispute over the need to mend our fractured society, and what disputes there are over means amount to very little. The truth is political parties have come to recognise it is not primarily a problem for new legislation or better benefit rules. It is a problem for all of us, to offer some leadership and to offer some inspiration to young people before it is too late and they have settled into a life of crime and futility.”

I said something along the following lines:

“You too can live your dreams. In this age of watching celebrity on TV, when the best performers in the world of sport, drama and song can be in our living rooms and bedrooms at the touch of a button, it is all too easy to think the successful are born with different genes. People think Johnny Wilkinson was such a good kicker of the rugby ball because he was born with that skill, or they believe Ronaldo can show poetry with a soccer ball because his parents so endowed him. They ignore the hours of practise both put in as youngsters before fame beckoned, when their friends were spending more time watching TV or engaging in a more active social life.

Somewhere in a hall like this is sitting a 15 or 16 year old who will lift a gold medal at the London Olympics. It is unlikely to be someone here tonight, because the best in the world today are so good, and make such a sacrifice. But it could be someone here tonight, if one of you really really wanted to be the best in the world at something which requires youthful muscles and hunger to be the fastest.

There may be many parents here tonight who have long given up on their dream. They may not be able to see their way past the mortgage payments and the school run. My message to you is the same. In a few years you will have no more school run. Eventually the mortgage will be repaid. Sometimes it pays to be brave, to say I am not going to just dream my dream, or let my dream fade into the cynicism of middle age – I am going to seize the moment and advance my dream. You might surprise yourself at what you can do, if you really really want to . Tomorrow you could make that first step to what you have always wanted to do - so why delay, why not start today?

If you do start to live your dream you will find in some ways it is so much better than the dream itself. Yes, there will be the rebuffs and the rejections, the days, weeks or months when it does not work. There will be times when you are not good enough, and other times when you may be good enough but others do not recognise it. There will be times when you are living your dream when it becomes a nightmare and you will wonder why you ever dreamt it. You will need to be your own best critic, constantly striving to do better and to learn more each day. If you want to be good, strive to be the best.

I always dreamt of one day representing people in Parliament. It took me 14 years to get there from the time I first became a Councillor, with many rebuffs on the way. Each time I wondered if it would be worth it. It was. Every day I walk into the magnificent Victorian building at Westminster and see our history in the murals, paintings and statues, I know it was worth it. Every time I make a speech, I am humbled by the thought of some of the great speeches that changed the nation, and inspired by the thought I too can make my contribution to our democratic traditions. Even though I am a well known critic of how Parliament is run and handled by the present government, I never doubt its importance to our liberties, and the need for those who believe to make it better. In a way the defects of the present mount a greater challenge to my generation to do something to sort it, so we can pass it on with greater lustre.

And when I manage to fit in a game of cricket and play well below the standard I would like to, I remember the great saying – my luck at sport always improves, the more I practise. You will find it difficult to live more than one dream!”

Both subjects were on my agenda in Parliament yesterday. At lunch time HBOS came in to tell any MPs interested what they thought was likely to happen in the UK housing market. Last time they had dropped by I had found them wildly optimistic, anticipating little change in house prices. This time they were gloomier, forecasting a 9% fall in the average price of a home in 2008. I still think that is looking on the bright side. HBOS argued that the supply of houses would remain tight, thanks to a collapse in housebuilding, against a continuing lively pace of immigration and divorce generating more demand for households. I reminded them that fewer migrants will come if the economy gets grimmer, whilst divorce and migration only translates into demand to buy homes if the mortgages are available so people can afford them.

Anecdotage tells me that some sellers of houses are now beginning to cut their prices by rather more in a desperate attempt to find a buyer. For several months the market has held its values better than might have been expected, because there have been precious few transactions. Sellers have held out for the original price, and buyers have simply stayed away. Gradually some sellers will decide they have to take whatever price is available, and a few more buyers will be tempted by significant price cuts. One friend of mine has cut the price by more than 20% and still has no takers. Another cut by almost 15% and found a buyer. Meanwhile mortgage offers have more than halved. Banks are understandably cautious, lending a smaller proportion of the price, expecting a more cautious valuation and seeking a higher margin through a higher interest rate. That’s what a Credit Crunch is all about, and that’s what the government and Bank of England said they wanted when they warned banks to be more careful last summer. Sometimes governments should be careful about what they ask for, in case their wish comes true. This blog said at the time the authorities would reap a bitter harvest from their approach to money markets last autumn. It is not going to make the banks more popular, but it will strengthen their solvency and repair some of the damage to their profitability.

Back in the Commons Chamber in the afternoon we had the opportunity to debate the government’s wish to charge people more for owning a car. The absence of most Labour members, and the fears of some of the few who came spoke volumes about their underlying concern. They must know that the plan to increase Vehicle Excise Duty substantially on older cars that emit too much CO2 is seen as unfair, and on their own figures is not a green policy as it achieves practically no reduction in CO2. Most people are stuck with their older vehicles, especially now the price of them is falling to reflect the higher running costs form the higher tax in prospect. The Conservative Opposition offered them a way out, seeking to stop the government from going ahead, but the Labour MPs declined the life line.

For most MPs it’s not easy being a rebel. You are pulled between remembering that your party allegiance accounted for a large part of your vote at the election, and the strong view that your party is making a big mistake which is letting down the voters. On 42 day detention more Labour MPs felt that the principle of the issue mattered and they should vote with their consciences. They had not signed up to eclipsing important civil liberties. On higher taxes they are uneasy because they can see how unpopular they are, yet individually they are drawn to support their party out of their instinct that higher taxes are good. On Tuesday the rebels over the abolition of the 10p band accepted a weak formula to look again at compensation for losers from the Minister and backed off their tabled amendment. On Wednesday the possible rebels on VED did not even table an amendment and returned to tribal loyalties as they queued up to distance themselves from the amendment the Conservatives had tabled.

In each case the rebels felt better for rejoining their party in the Commons – it makes for easier relationships with colleagues. A long summer back in the constituency may serve to remind them just how toxic these higher tax policies have become, bearing down especially heavily on those on lower incomes. Then they may remember why they felt they should rebel – the government is destroying their chances of re-election if they have marginal seats, and hastening the day they will be out of government if they have safe seats. It is now the economy, stupid, which will determine the government’s chances of re-election. If they do not do something soon to lower inflation and ease the squeeze on incomes, they are doomed.
So far the government seems set on intensifying the squeeze on all of us by increasing taxes, whilst spending yet more and more money they do not have in the public sector. Today sees at last the signatures on the contracts for two large aircraft carriers. It is doubtless a coincidence that this brings work for Glasgow ship yards at a time when we are fighting a Glasgow by-election.

People in the UK housebuilding and housing related areas are reporting a worse crunch than in previous downturns. This is the result of the badly managed credit and money policies of the last few years, and the result of the run on the Rock and its subsequent nationalisation. The most aggressive large lender of 2006 has been effectively withdrawn from the market by the need to get cash back for the government and because of the competition rules which rightly impede a nationalised subsidised concern making attractive offers to new borrowers.

In the House yesterday afternoon the government was still unable to tell us how it will compensate the 1.1 million remaining losers on lower incomes who have been hit by the abolition of the 10p tax band. The government declined to support a backbench Labour proposal to give them the money. Its promise to come forward with proposals at the time of the Pre Budget Report was sufficient to persuade the Labour rebels to back off. The longer it takes to solve the problem, the worse it is for consumer sentiment and spending power.

Today we turn our attention to Vehicle Excise Duty. Labour rebels are now concerned about the large hikes in VED planned for next year, which include increases on VED on older cars. The Opposition and these Labour MPs point out that hiking VED on them cannot affect behaviour over which cars people buy - if higher VED on high emission cars is a green policy it can only work by applying it to new vehicles.

Meanwhile the truckers will protest in London in an effort to tell the government that high diesel tax and other transport taxes here in the UK is another blow to the UK trucking industry. Far from maximising revenue, it encourages truckers to fill their tanks on the continent, and helps the foreign competitors to the UK businesses.

If the government feels the pain and wants to do something about it, it needs to bring the crazy increases in tax on fuel to a halt, and compensate those on lower incomes who have been clobbered by its tax changes. In this nasty squeeze every little relief would help.

They made a good case, urging that we expand production of domestic coal, both to substitute for the large quantities of imports currently coming into the country and to fuel a new generation of cleaner coal power stations.

They argued that there is a lot more coal for us to mine and quarry, that at present coal prices that production could be economic, and the government should accelerate the pace of development of clean coal technology and carbon capture.

Some looked back nostalgically to the age of the nationalised industry, without any great belief that the present Labour government would want to revisit that approach. It is curious how nationalisation still has a grip on their hearts, when the nationalised industry under governments of both parties so let down the mining communities. The 1970s Labour government was in the business of closing mines and sacking miners, just as the subsequent Conservative government was. Each of those governments did so on the advice and at the command of the nationalised industry, which systematically failed to make mining economic enough to sustain a decent sized industry in the UK.

The miners of Tower Colliery proved the Coal Board wrong when they took over their mine and worked it profitably when the Coal Board management had wanted to close it on the grounds that it was uneconomic. Why would we want to go back to management like that? Isn’t the future a more mechanised, safer industry where those who mine the coal share in the profits?

All of this looks absurd when you see the reality of the Credit Crunch. The first thing the government did to “help” implement its policy was to nationalise the most aggressive of the mortgage banks, and then stop it undertaking new lending! The Bank of England and the government failed to keep markets liquid enough, so credit dried up at many of the smaller lenders, and the larger banks all had to rein in their lending and raise new capital. As a result in the first quarter of this year only 32,000 new homes were started – an annual rate of a mere 130,000 if the first quarter’s activity levels can be sustained, or little more than half the government’s ambition.

At the same time the government decided it needed to speed up the granting of planning permissions for major projects. It has chosen to do so by legislating to set up a new quango to become involved in these decisions. In our recent debate on the subject Ministers were themselves unable to confirm it would be quicker to wait for the new quango if you want a major planning permission, whilst the Opposition pledged to abolish it and pointed out it was likely to delay matters with judicial review of decisions a distinct possibility.

Regional government - unelected, expensive and much disliked – is currently dividing up these top down government targets for more housebuilding. It is playing the part of a faithful retainer in this process of illusion – instructing Councils to make land and planning permissions available on a huge scale, as if the industry wanted to build all these homes, or people could borrow the money to buy them. I look forward to a Conservative manifesto pledging to abolish both these hated regional governments and the silly housing targets they generate. Planning applications should be considered on their merits by the local authority involved. If a company or a landowner wishes to gain a permission which greatly enhances the value of their land, they should make it worth while for the local community and the people who will be adversely affected by the development. They should not be able to rely on unelected regional officials, on Chief Executives of Councils keen to do the government’s bidding to advance their own careers, and on the idiotically optimistic government view of how many houses people can afford to build and buy.

I was pleased to hear Shadow Spokesmen sharing my view that top down targets, regional control and over optimistic plans are a bad idea. The planning system at the moment suits no-one. Developers think in better economic times they cannot get the planning permissions they want, whilst most people feel the system fails to take their views seriously and fails to protect communities against unwanted development or to provide the additional facilities needed to make a housing estate part of a thriving community.

So what should Councils about the pressures from the top to identify more greenfields to be bulldozed? They should argue, remonstrate and use every clause in the long manual to slow things down.It’s time for masterly inactivity. There is no need to identify new sites at the moment. This system cannot last. There is no need for more planning permissions this year, as the housebuilding industry is going through extremely difficult times. Land values are going to fall. There is too much land with planning permission around for current needs. Leading housebuilders need to sell land and finished houses to pay off some debt. The government is in a world of its own. The problem today is not a shortage of planning permissions, but a shortage of mortgages and people to buy the homes.

We all admire the heroism and stoicism of the many men who served in that army. My own two grandfathers fought in that long war. They were amongst the lucky ones, both surviving, and only one wounded. We should be more critical of the political and military leadership of the time. The Liberals in government presiding over mass slaughter would never recover as a governing force after the war. The decision to go to war over a dispute in the Balkans and over the neutrality of Belgium was questionable. We then fought the wrong kind of war for the UK. Our strength lay in our navy, kept substantially stronger than any rival, so we fought a static land war on the continent where we could not deploy our sea power to good effect. The men and money the war took damaged the UK’s subsequent position in the world and is part of its twentieth century relative decline. It reminds us how much blood and treasure in the past commitment to Europe has cost us, when the world’s oceans beckoned to a better future elsewhere for an island trading maritime nation.

It was depressing to hear the President of France lecturing us all on how important it is to get Lisbon through despite the Irish vote. It shows he has not got it, and is a fully paid up member of the Euro elite intending to carry on with their power grab however unpopular it is. The French threaten us – we will not expand the EU further if you do not let us centralise – as if that were a threat to Eurosceptics. They demand that 26 of the 27 nations go ahead with ratifying anyway as if nothing had happened. They tell us wrongly that the EU cannot function without this ghastly new Treaty, and seek to find out how to buy off or sideline the Irish, refusing to take “No” for answer.

At the same time they dare to say they are out to create a “Europe” that helps its “citizens” and takes them seriously. If they really meant that they would seek to base their “Europe” on the wholehearted consent of its prisoner people, by offering referenda through out the nations of the EU and accepting the verdicts of the national votes. They would find that different nations want very different levels of integration and common policy, but in many cases like the UK we want the EU to do less, to legislate less, to spend less and to allow us to get on with our own lives without its constant niggling interference.

The French government openly wants European defence – a European army. It wants agricultural reform of a kind which will continue to cut out imports from poor countries elsewhere in the world and costs the taxpayer and food buyer a small fortune. It wants more laws and regulations in many areas of life, as if we did not already have far too many of both. It wants higher taxes throughout the Un ion, to avoid “tax competition”. It’s a recipe for less enterprise, lower incomes, and higher unemployment.

The British government claims to want to put constitutional change behind us, knowing it is very unpopular with the public. It knows it is so unpopular that they dare not match their promise of a referendum on Lisbon, and then wonder why people feel cheated. They state that the EU can make important contributions to tackling the big international issues once Lisbon is put to bed. When I asked the other day what they wanted to push through the EU legislative factory post Lisbon that they could not get through under the current arrangements, there was of course no answer. Most of the problems they think the EU can help solve (like climate change and food and energy prices) require global agreement anyway.

If the Euro elite wants to know why they keep losing referenda and why their project is so unpopular they do not need to look very far. It is unpopular because they either deny us a vote or ignore the results. It is unpopular because the EU serves the political class that draw their salaries from it, not those of us who have to pay the taxes to keep them in the style to which they are accustomed. It is unpopular because all its plans entail more laws, more rules, more taxes. Many of us want fewer of both. That’s why we despair of this power grabbing overcentralised EU, living in the past and unable to grasp the sheer competitive power and energy of Asia.

All of this looks absurd when you see the reality of the Credit Crunch. The first thing the government did to “help” implement its policy was to nationalise the most aggressive of the mortgage banks, and then stop it undertaking new lending! With the Bank of England the government failed to keep markets liquid enough, so credit dried up at many of the smaller lenders, and the larger banks all had to rein in their lending and raise new capital. As a result in the first quarter of this year only 32,000 new homes were started – an annual rate of a mere 130,000 if the first quarter’s activity levels can be sustained, or little more than half the government’s ambition.

At the same time the government decided it needed to speed up the granting of planning permissions for major projects. It has chosen to do so by legislating to set up a new quango to become involved in these decisions. In our recent debate on the subject Ministers were unable to confirm it would be quicker to wait for the new quango if you want a major planning permission, whilst the Opposition pledged to abolish it and pointed out it was likely to delay matters with judicial review of decisions a distinct possibility.

Regional government - unelected, expensive and much disliked – is currently dividing up these top down government targets for more housebuilding. It is playing the part of a faithful retainer in this process of illusion – instructing councils to make land and planning permissions available on a huge scale, as if the industry wanted to build all these homes, or people could borrow the money to buy them. I look forward to a Conservative manifesto pledging to abolish both these hated regional governments and the silly housing targets they generate. Planning applications should be considered on their merits by the local authority involved. If a company or a landowner wish to gain a permission which greatly enhances the value of their land, they should make it worth while for the local community and the people who will be adversely affected by the development. They should not be able to rely on unelected regional officials, on chief executives of councils keen to do the government’s bidding to advance their own careers, and on the idiotically optimistic government view of how many houses people can afford to build and buy.

I was pleased to hear shadow spokesmen sharing my view that top down targets, regional control and over optimistic plans are a bad idea. The planning system at the moment suits no-one. Developers think that in better economic times they cannot get the planning permissions they want, whilst most people feel the system fails to take their views seriously and fails to protect communities against unwanted development or to provide the additional facilities needed to make a housing estate part of a thriving community.

So what should councils do about the pressures from the top to identify more greenfields to be bulldozed? They should argue, remonstrate and use every clause in the long manual to slow things down. There is no need to identify new sites at the moment. This system cannot last. There is no need for more planning permissions today, as the housebuilding industry is going through extremely difficult times. Land values are going to fall. There is too much land with planning permission around for current needs. Leading housebuilders need to sell land and finished houses to pay off some debt. The government is in a world of its own. The problem today is not a shortage of planning permissions, but a shortage of mortgages and people to buy the homes.

David Cameron’s Conservatives are in good shape on the back of election victories. There are many more women prospective candidates. Homosexual MPs and candidates are treated like any other, as their sexual orientation is not relevant to how they do their job. No-one thinks it wrong that there are women in the Shadow Cabinet, or that the party was once led by a woman. Indeed most Conservatives are united in thinking that the party’s most successful period until recently was under a woman leader. David’s strong support for liberty has persuaded most within the party – so much so that the one time leader of the traditionalists in the Shadow Cabinet has just resigned to fight the government more strongly in defence of more civil liberty and less authoritarianism. He did not have the leadership’s encouragement to make such a stand, but I am delighted they back him and want him to win, for his fight is our fight. It is in many ways the ultimate proof that the Conservative party has “got it” and has modernised under David. No-one I think could have written such a script four years ago of how the Conservative party would come together behind the cause of Magna Carta and Habeas Corpus, making them thoroughly modern causes, under threat from a punk modernising government with no sense of history or personal liberty. As someone who backed David Cameron for the leadership when others thought I should vote for the “traditional” candidates, I feel pleased with my choice, and pleased that so many in the party took the same view.

In contrast Rowan Williams’ Anglican Church stumbles over all these same issues. Where Conservatives appoint more women, the Anglican Church faces an internal revolt against allowing women to be bishops. They are miles away from having a woman leader. Homosexuality has rent the Church asunder, with much support in Africa for the alternative manifesto “The Way, the Truth and the Life”, and latent support from traditionalists elsewhere. The archbishop floats on the Church’s website the idea of having associated and constituent churches, where the associated ones will pursue a different approach to main issues, and look to bishops other than the archbishop for their leadership.The Anglican Church gives an uncertain message on the role of the family, their approach to sexual relationships and personal responsibility, often preferring to say nothing. Often they just demand some more British public spending for some other cause as the easy way out.

David Cameron knows that there is still much to do and that there is no reason for complacency. I guess Rowan Williams must have some sense of foreboding as the Anglican Church sets out to prove just like Brown’s Britain that devolution and alternative sources of authority and power do not bring unity back, but foment the forces that wish to pull an institution apart. The Archbishop has not found the words and the actions to unite his unhappy Church. His every word seems to widen the divide, encouraging the warring factions to push further and harder in the direction they wish to go. In contrast, on homosexuality, personal freedom, the role of women and the need to curb the excesses of the authoritarian state the Conservative party has found a new settlement under its Leader.

No sensible Conservative need doubt the Leader’s Conservative credentials. This is the man who led his party in its calls for a referendum on Lisbon and to oppose the whole Treaty. This is the man who led his party to advance cuts in Inheritance Tax for the many, as well as the man who has presided over most important work on how to mend Britain’s damaged society. Under Cameron Conservatives know what we believe in – we believe in opportunity for all, with reform of public sector housing and schooling to make that more of a reality for those currently excluded from home ownership and good education by Labour’s clumsy state. We believe in individual and family responsibility, with welfare reform to encourage and require people to work if they can and where work is available. We believe in looking to the security of our country, with appropriate measures to make the UK and its citizens safer. This includes action to reduce our dependence on imported oil and gas, to increase fuel efficiency, and to look after our green landscape.

There is unity around these central aims. There will be unity about the need to tackle the mess that Labour is creating with the economy, which is now the dominant concern of most voters. In contrast the Anglican Church can look forward to more disunity, as the rival archbishops and bishops set out their stalls. As an Anglican myself, am I to be offered a choice of styles locally? Will I be able to find a church which both values the fine traditional language of the Book of Common Prayer, the great anthems and choral works, yet be rooted in the modern world when it comes to personal freedoms? Watch this space.

Monetary policy is still too tight - the banks are still short of cash. The collapse of the mortgage market will mean further falls in house prices, a low level of construction activity, more losses of jobs in the building industry, more declines in commercial property prices and falls in land values.

The squeeze will primarily affect individuals and families. High energy prices, council taxes, the income tax rise and the impact of higher food prices are beginning to hit real incomes. This is going to get worse over the rest of this year, as relatively low wage increases meet rising bills.

Companies have so far been able to pass on quite a lot of their cost increases, with the pain mainly concentrated in financial and property companies. If volumes fall then the squeeze will affect a wider range of commercial businesses.

What could the government do? It could ease the squeeze by cutting out some of its own wasteful excess, and using the money freed partly to cut borrowing and partly to take fuel taxes down to offset some of the price rises. It could with the Bank of England provide more liquidity and lower interest rates to the money markets. Above all it could return what is left of Northern Rock to the private sector, so that once important mortgage bank could stop shrinking its loan book and the taxpayer could get more cash back.

What should the Opposition say? It should keep well ahead in the polls thanks to the economic worries and the gathering dissatisfaction with the squeeze. It could start saying in general terms what action needs to be taken to start to adjust the huge imbalances in the economy created by the wasted Labour years. Gordon has presided over his own version of boom and bust - today it is boom in public spending, and bust in many family budgets.We need some economic stability, which requires a different approach to running the public sector, to get us better service for less cost. We need a government which doesn’t just talk about making long term decisions, but gets on and takes them to provide more water, energy and transport capacity, and deals forcefully with an agricultural system which still does not encourage sufficient production.

The latest survey shows that all too many people in our country do not think they are making headway, and think class still plays an important role in people’s futures and achievements. The worst feature of the NU Labour years is the way that having a rich Dad has become so important to getting a good education. The growing gap between what the best public schools achieve, and what is achieved elsewhere in many comprehensive schools is alarming. The best public schools turn out well mannered self confident people capable of reading and writing to a high standard. All too many comprehensives struggle to achieve the necessary levels of attainment in the basics, and struggle to remedy a lack of success at the primary level in equipping young people for life.

The Henley by-election result reminds us just how Labour has lost the plot. I found so few standing up for Labour during my canvassing. The general view was the government had failed, was in its long death throes, and needed to be told again just how badly it is doing. People feel stretched financially, and dislike the bossy incompetence that is the government’s main hall mark. If the government could find ways to raise standards in schools, and raise the sights of the many young people who feel they do not have a chance because of their background, they would earn more respect. If they could apply the lessons of the army to other parts of their rambling public sector that too would help.The cruel irony is that because the services retain a quality which does work, and still have that ability to bring leadership out of people from humble backgrounds, they have been starved of cash whilst other parts of the public sector have been showered with it. Labour is reaping what it has sown. They have seemed to dislike the emphasis on discipline, training and politeness which characterise the armed forces. Instead, they should have applied those values in parts of the government where they did spend so much money.

The events of recent days are much easier to understand once you have grasped this cynical and futile approach to mass producing more law codes. We finished the Commons stages of the Planning Bill yesterday evening. I, along with several other MPs, wanted to speak on the Third Reading of the Bill. It makes much more sense to wait until Third Reading, as the government rewrites huge chunks of the original proposals during the course of proceedings, so it is only at Third Reading that you can have a proper Second Reading Debate on the overall structure and impact of the legislation. This government, of course, does not want that. Once again their anti democratic timetable meant we had less than thirty minutes for Second Reading, which allowed no time for a single Opposition backbencher to speak.

This Planning legislation was born of the correct perception that it takes too long to make decisions about major projects in the UK. Communities face years of blight from wanted and unwanted planning proposals before the state gets around to making up its mind on whether to allow them or not. Doubtless the business lobbies and the focus groups told the government this was a problem. Instead of improving the existing administrative framework, and setting meaningful deadlines for the different stages of a planning application, the government decided to legislate for a new system. Drawing on what they think of as their success with an “independent” Bank of England ,(see my blogs on why this is misleading) they decided to create an “independent” planning quango to take these decisions. It has been fun watching many MPs who have bought the nonsense of the so-called independent Bank of England lining up to say planning had to be subject to elected democratic control. We had the pleasure of watching as the government eventually buckled and put in a very complicated system of Ministerial statements of national planning policy on major projects to be followed by the so-called independent quango “taking” the decision! They did not seem to see the contradiction in their views.

I asked if someone wanted to build a new power station, how long would it take starting today to get a decision under the present system, and how long would it take under the new system. You would not have thought that a difficult question, as the main rationale for the new system is to speed things up. Indeed, I felt I was being kind to the Minister, John Healey, offering him a free hit to advertise his Bill. Mr Healey was unable to give any answer. He also failed to intervene or object when the Conservative front bench told me they think it would take longer under the new system than the old, and that there is a severe threat of judicial review of decisions under the new system!

It all goes to show that the purpose of the Bill is not to speed up planning applications, but to appear to be speeding up planning applications. In practise it will probably take the next couple of years to establish the Planning Quango, and to write the government statements of national policy. People and businesses planning major projects might well opt for the existing system to get their permission, or might decide to wait and see how it all settles down. I am pleased to report that the Opposition stated they will abolish the quango, as they see it as another spanner in the planning works,

Today we learn there will be new equality legislation. I am all in favour of trying to prevent discrimination on grounds of race, age and sex. I do see that having framework legislation in place can set the tone and avoid the more extreme examples of unpleasant discrimination. I am also aware that there are many subtle forms of discrimination which no legislation can ever prevent or ban. We have all been discriminated against for one reason or another at some points in our lives. One person’s unfair discrimination is another person’s criteria for choosing between candidates or deciding who to favour where choices have to be made. The government is perplexed by the fact that equal pay legislation for women has been on the statute books for years, yet the figures show men still earn more than women on average and there are doubts about the justice of pay between the sexes in certain walks of life. They have yet to show us the problem is the shape and nature of the legislation. If they cannot demonstrate that legislative change will fix this, their new Bill will be yet another in their sequence of posing Bills, well intentioned but ineffective.

Yesterday we heard one year after the floods the result of a government review into the floods. It is pathetic that it took so long to conclude the blindingly obvious – that our flood defences are inadequate and a lot of buck passing occurs between the different authorities and levels of government over who should do the work. Once again we are told there will be legislation to deal with the problem in the next Parliamentary year. Why on earth do we need legislation? We need women (or men) in JCBs to get out there and enlarge and cleanse the ditches and cut some new ones. We need schemes to build bunds and other means of retaining water in safer places, better conduits and cleaner pipes, with a few non return valves and bigger pipes to handle sewage in some places. We need these now, in case the rains come again as they did last summer. One school in my constituency has already been flooded again this year, as it was last. I doubt that a new law will make any difference. I showed the Environment Agency the other day what might solve the problem, and it wasn’t legislation.

There is a simple message for the government. Stop trying to pose as saviour by legislation, and start taking some practical action where action is needed. Stopping future floods would be a good thing to do. Getting your own recruitment and retention right in the public sector would go a long way to tackle inequality in the workplace. Let Parliament have longer to discuss fewer Bills, and you might also start to get some sensible legislation.

Having submitted concerns to the review regarding the planning process, John Redwood also welcomes the report’s emphasis on the need either to implement properly, or strengthen, existing planning legislation, in order to reduce the flood risks posed by new building developments.

He is concerned, however, that the lack of urgency in producing the final report will also characterise the implementation of its recommendations.

Speaking today, John Redwood said: “It has taken more than a year for the government to come up with a report, chronicling the obvious failures of the authorities’ responses to floods last year. Meanwhile some people are still not back in their homes one year on, and many still face the threat of floods if we have more heavy rainfall. It is vital that the government accept the main thrust of this report, and get on with accepting responsibility to carry out the works needed and to make the planning decisions that are required, to prevent so much flooding of people’s homes in the future.”

(1) Mr. Redwood: The hon. Lady is making some good points about the impact of food prices on her constituents. Can she explain why no other Labour Members want to hear about that? Do they not understand it?

Mr. Graham Stuart: Where are they?

Ms Keeble: They probably decided to leave it to me, in the sure knowledge that I would make a good job of it. This issue of is of concern to me because it is of profound concern to my constituents, and I think it right for questions about it to be dealt with. There is also the impact on family households of the credit crunch, which, although it may not be immediately apparent to some of them, is felt through pressures on house prices and house building.

I have to say that I disagree with the detailed analysis presented by the right hon. Member for Wokingham. Having sat in the Select Committee and listened to explanations from the Governor of the Bank of England and others, I have not heard them blame the restructuring of the Bank in 1997 for the credit crunch, although there have been arguments about the tripartite arrangements. Most of my constituents probably realise that whatever mistakes were made in that regard, much more profound mistakes were made by the board of Northern Rock and much more substantial problems arose in the sub-prime market in the United States, which continue to affect our lives and those of our constituents.
What my constituents probably want to know, much more than they want to hear tit-for-tat arguments between the political parties, is what will happen in the years to come, and which party has the policies to take them through what everyone knows, and what the Governor of the Bank of England has said, will be a difficult time for quite a while. He said it would be difficult until next March or April, and I am sure he is right. This has to do not just with how much the cost of living goes up but with what happens to family incomes, and ours is the party that provided a safety net for family incomes through the minimum wage.
(2) Mr. John Redwood (Wokingham) (Con): The Chief Secretary to the Treasury and the Government make a pathetic case. They say that the rising inflation rate is entirely down to world events that they cannot control, although occasionally the Prime Minister, in his Canute-like mode, goes into embarrassing overseas meetings fatuously to lecture people who are not as guilty as he is over the price of petrol and diesel at the pump. The Government also seem to resent the fact that many millions of formerly very poor Asians—Indians, Chinese and others—are at last able to get some purchasing power in the world so that they can have a greater fraction of the standard of living that we take for granted, by buying more energy and better food products.

We are saying to the Government that it was eminently forecastable over the past 11 years that there would be a big increase in demand for food and energy from Asian sources. That is very welcome. We were all extremely grateful that the Asian economies did so well in supplying us with an ever-increasing volume of very competitively priced goods, which kept our inflation rate down despite the errors being made in inflation policy in this country. Now, however, the Government are saying that it is all the Asians’ fault for daring to buy all these other things with the money that they have earned buy selling us those cheaper goods, even though the Government did absolutely nothing for 10 years to increase our capacity in agriculture or energy, when they should have been making a contribution to the world situation.

Mr. Simon: The right hon. Gentleman is noted for being an intelligent and erudite Member of the House. If he has a case to make, surely he can do better than to use Aunt Sallies and say that the Government are blaming everything on the Indians and the Chinese. That is ridiculous. If he has a case, why does he not put forward a proper argument instead of all that sort of nonsense?

Mr. Redwood: If the hon. Gentleman had been here for the Chief Secretary’s speech, he would have heard her say that the increase in demand was all down to world circumstances, and that it had come not from Europe but from India and China and other much more successful, faster-growing economies in Asia. The hon. Gentleman has failed to make his case.

Over the past decade, the Government could have made the decision to allow the private sector to develop the marginal fields in the North sea instead of taxing it to the hilt and putting it off. They could also have made decisions on renewable energy, nuclear energy or other kinds of energy that do not require carbon. Instead of having to have the great debate now on new power, we could have had new power stations already up and running. We have had 10 wasted years under this Government, and we now have higher energy prices as a result.

On agriculture, instead of constantly agreeing with everything that comes from Brussels, the Government could have put some substance behind their rhetoric of reforming the common agricultural policy. Instead of having years and years of big subsidies for set-aside to prevent farmers from growing the grain that the world needs,