Mervyn King - finally someone in power talking sense!

Mervyn King, Governor of the Bank of England, is not one renowned for interfering in government policy and yet he has publicly criticised the Prime Ministers desire for further economic stimulus.

In short, Mr. King is saying that UK Plc simply cannot afford any more debt. With the total liability of the taxpayer now more than £2 trillion, when you include our liability for part nationalised banks and current economic stimulus packages, it is clear the Bank of England believe that any further government financial stimulus that requires us to borrow more as a nation will essentially mean we go bust.

And the reaction of government? Well that is difficult to tell. Gordon Brown says there is no disagreement between his Government and the Bank of England, Harriet Harman refused to answer any question put to her on the subject when she stood in for Mr. Brown at Prime Minister's Questions today and the media report that the Chancellor is in general agreement with Mr. King.

That the Prime Minister still believes further economic stimulus is affordable shows just how deeply entrenched within him the feeling of denial has become. If British families have to live within their means so must the British government. What's good for the goose is good for the gander. So it's time to face up to the consequences of our actions as a nation and to admit we are on the brink of bankruptcy as a nation and must stop trying to spend our way out of trouble and get real for the sake of future generations.

Hold On Tight For A Bumpy Quantitative Easing Ride

I am no longer sure the Government have any idea what they are doing!

Just a few weeks ago it would have been inconceivable, and considered bad practice, for us to be borrowing as a country at 10%, more than twenty times our national base rate. It would have been inconceivable, and considered bad practice, for interest rates to be at 0.5% providing no incentive for people to deposit money in banks that need to be better financed. And it certainly would be inconceivable, and considered bad practice, for the Bank of England to be printing £75billion of new money to buy questionable assets.

To make printing of money more palatable it is given a fancy name - quantitative easing! Sounds okay, means little to most people, but if we get this wrong the risks to every single one of us are massive.

If the additional money in our economy is too much, or the assets it buys prove to be worthless, we risk massive devaluation of Sterling on the international money markets, which in turn could lead to hyper inflation. Imagine the difficulties ordinary families would face in the midst of a recession if the cost of goods starts to shoot up because we import so much and our currency devalues every day. That is the threat posed by quantitative easing if it goes wrong in any way and yet no one is talking about this and warning the public of the risks Labour are taking with their way of life.

The United Kingdom is no Zimbabwe and yet that is exactly what Labour are turning us into, minus land grabs and police brutality. Labour are taking huge risks in the hope of saving their own political skins and what they are doing to us all is delivering an economic policy that is simply too risky and irresponsible to make any sort of sense.

Labour Luvvie Sir Fred Continues To Benefit

During the good times when RBS were making billions from taking massive unregulated risks, New Labour was in love with Fred Goodwin and he in turn in love with New Labour. Of course his Knighthood was a reward for services to banking not any association with the Labour Party but as the wool has been pulled over the Government's eyes in relation to the massive pension pot he is being paid by the taxpayer questions really have to be asked about how cosy Sir Fred and New Labour really are.

When Sir Fred was asked to resign he apparently made it clear to Government Ministers that a condition of him agreeing to do so was retention of an overly generous pension pot. Today we hear that Sir Fred is to receive £693,000 per annum for the rest of his life as a reward for failure because the Government were told this was a contractual requirement and did not ask for proof before agreeing to his resignation on this basis.

There is of course the possibility that someone in Government did know that it was not a contractual obligation but a condition of resignation and that they decided this was a price worth paying in order to get Sir Fred out the door and a new more competent broom into RBS. I would not agree with this but if this is the case the Government should say so.

If, instead, the truth is that Government Ministers did not check whether they were obliged to allow Sir Fred to retain his pension pot then the Ministers and their officials are incompetent and they should resign for failing the UK taxpayer so spectacularly. Sir Fred is only 50 and we can expect to be paying him millions and millions of pounds as a reward for taking risks with a well respected institution to the verge of bankruptcy.

Turning one of our largest banks, one of our largest employers and a company that bares the Scotland name with pride into a basket case is simply not something the taxpayer should be rewarding. If we cannot challenge paying Sir Fred his pension in the courts and Sir Fred is not prepared to give up his entitlement to his pension voluntarily then we must legislate to ensure that nothing like this can ever happen again - even if it is a contractual obligation.

We all need to tighten our belts and being ripped off by someone when it was avoidable is a national disgrace. Had we simply sacked the man he would have been entitled to £1.5million up front (one years salary) but would not have been able to claim a penny of his pension pot until he hit retirement age - a saving of nearly £8.9million by my calculation.

Labour have failed the taxpayer here and someone must take responsibility and resign. If Sir Fred won't set an example of taking responsibility by giving up his pension pot someone in politics must set an example for him by taking responsibility and resigning. The taxpayer deserves nothing less!

How Bad Could It Really Be?

When the governments own regulatory watchdog predicts that our economic slump might be worse than feared you know things are going to get really bad.


The Financial Services Authority warned today that Britain's recession could go deeper and last longer than expected, despite the government's fiscal stimulus and multi-billion pound economic rescue plans. Possibly more telling they say, about their own bosses, the impact of measures like reduced interest rates and the government's £12billion VAT cut remained unclear, and advise businesses and consumers to "plan for a greater degree of uncertainty than normal".


If this is the assessment of our own FSA you can only wonder what the OECD, IMF and World Bank are thinking. My greatest fear is that Labour are ignoring any economic forecasts they don't want to admit to favouring a scorched earth policy designed to leave the next government with nothing to work with. The only good news is that I am in doubt the energy, ingenuity and dedication of the British people will see us through to a prosperous future despite the actions of the current government!

Interest Rates At 1% Won't Make A Blind Bit Of Difference!

The Bank of England cut their headline interest rate by 0.5% today to 1%. In times gone by, when our economy was managed by cuts in interest rates that were designed to manage the inflationary trend of our economy, this sort of intervention would undoubtedly have done the trick and an almost immediate benefit to our economy would have resulted.



The problem we have today is not that interest rates are in any way the problem. Quite the contrary, and today's cut will only serve to penalise the millions of prudent savers with money deposited in banks and building societies - many of whom rely on interest payments to make ends meet.


Across the UK the problem faced by our economy is not the cost of borrowing - it is the reluctance of banks to lend!


Despite the taxpayer owning many of our banks it appears our government are unable to get them to relax lending criteria so that businesses can borrow to invest in our future.


Why? Simply because it is government policy that tells banks to pay us back as quick as they can and to reduce their exposure to bad debt as they do so.


So what are banks actually doing instead of lending to viable businesses? They are foreclosing on businesses in trouble and in homeowners struggling to keep up payments in compliance with government instructions.


In conclusion, today's interest rates cut will damage those who have done the right thing by saving and do very little to help those who need to borrow, because none of our lending institutions will take any risk. So despite hundreds of millions of pounds spent on bailing out our banks cuts in interest rates are simply not doing anything to help our economy recover.

Would You Believe It?

The devil, they say, is always in the detail.

Even though the UK is in dire economic straights, of our own making, it appears a little-known clause in the European Union treaty may force Britain to chip in billions of pounds to rescue countries in economic crisis because of their membership of the Euro.

This clause gives the Commission in Brussels the power to propose bailing out a state in 'severe difficulties'. Such help could be agreed by a majority vote of states and Britain would NOT have a veto.

With countries such as Ireland, Spain and Greece plunged into economic crisis, largely as a result of being unable to devalue their currencies, there is the prospect of British taxpayers having to help fund expensive rescue packages - despite the UK never having joined monetary union.

An EC report last week highlighted the major problems facing some eurozone members, and ratings agency Standard & Poor's downgraded Spain's credit rating. The Commission report said of Spain: 'Deteriorating labour market prospects, further tightening of credit conditions and adverse wealth effects are set to lead to a significant contraction in private consumption.'

It added that Ireland was 'particularly exposed' to the international economic crisis and that Greece is expected to be 'significantly affected'.

Under the Nice Treaty, signed in February 2001 and incorporated into the combined EU treaty, huge rescue packages can be approved on a majority vote. Britain disliked the proposal when it came up for negotiation and the Conservatives opposed it, but the Government gave way and agreed.

And the moral of the story? You can't trust Labour to get it right at home or abroad.

The SNP should call it Quits on LIT

News that HM Revenue & Customs are to write to John Swinney to inform him they do not have the power to collect Local Income Tax on behalf of the Scottish Executive should surely consign LIT to the political dustbin!

The Scotland Act allows the Scottish Parliament to vary the level of income tax set by Westminster by 3%, up or down, but it does not make any provision for HMR&C to collect any other form of taxation on behalf of the Scottish Parliament.

I am, in principle, opposed to a Local Income Tax replacing Council Tax for a very great number of reasons. Not least of these is that it will be yet another disincentive to work, alongside many of the current UK governments schemes.

What Scotland, and indeed the UK, needs is government that makes people pay for the services they receive and leaves the public with as much of their own money as is possible. Ordinary people can then decide whether they want to save their money or to spend it on their own personal priorities.

It has been the policies of politicians and the personal greed of individuals that has got us into this recession and it will be the actions of individuals that will get us out of it. For me politicians must now facilitate the role of the individual and not make matters worse for generations to come by consigning them to never ending debt in the form of permanent tax increases to pay for the folly of endless state spending in the good times while keeping nothing back for bad times!

Good News - Bad News

The news that Gordon Brown is to spend up to £200billion to bolster our ailing banks is very bad news indeed unless you believe it is 100% guaranteed to work! While it is right to do everything we can to avoid complete disaster it is wrong to take risks and gambles and to accelerate our national debt by an additional £200billion given he already intends to leave us owing £1.1 trillion by the end of 2011.

Could we be looking at bankrupt Britain? I very much fear we might be if the true level of toxic debt held by our big four banks is greater than the money now on offer. If it is they will surely go down - rendering our shareholding in them worthless.

If Plan B fails, (given this is his second attempt to bale out our banks), we should prepare ourselves for the IMF to declare us a basket case and to take over the running of our economy. The thought of external influences setting our levels of taxation, deciding how much capital and interest we repay to the world before spending anything that remains on the NHS, eduction or defence is simply frightening as a British patriot.



And what is the good news, I hear you ask? Well ,if there is nothing else to cheer me up before the Summer, I am to become a father for the first time in July - thanks to my beautiful wife Elaine. So, no matter how bad Gordon Brown makes the economy of our country and how difficult it becomes to make ends meet, I know there is something worth working for on the horizon and someone for whom I must fight to make our country better in the future!

Too little, Too late!

Given the position our economy is now in, it is not with any glee that Conservatives will welcome the business loans guarantee scheme the government are set to announce tomorrow. After all we have been calling on Labour to introduce such a scheme for months!

The real pity is that Labour are apparently to announce the value of this scheme will be less than £20billion over its lifetime. In contrast, George Osborne is calling for a £50billion scheme because we can't afford for this scheme to fail because government are not prepared to do what it takes to get credit flowing to businesses once again.

The truth is that no one really knows what it will take to get credit flowing to the business sector, but surely it is sensible to offer too much than too little if you are in government and really want to make sure you get the job done!

Helping Those Who Want To Work

Shadow Secretary of State for Works and Pensions, Chris Grayling MP, visited Edinburgh today to announce a whole range of measures Conservatives intend to take to help businesses stay afloat, to help individuals survive the recession and to help those who find themselves made unemployed get back to work as quickly as possible, should they win the next General Election.

A wide range of business organisations were present and I think they went away encouraged by the breadth and depth of proposals Chris put forward. It is clear that David Cameron and his team genuinely understand the pain people are feeling across the country and have a very positive and definite approach to helping those most in need.

To play my part, in East Renfrewshire I propose to set up a new "East Ren Jobs Club" as a self help and support group for those struggling in difficult economic times. Whether it is help with writing of a CV, tips on interviews or simply providing someone to listen to those frustrated by the length of time it takes to find a job the East Ren Jobs Club is something I can do to help minimise the impact of the recession on East Renfrewshire.

David Cameron Giving A Little Bit To Those Who Need It Most - And Setting An Example To Those Who Need One Most!

When David Cameron announced new economic policy today I believe it was very much about doing two vital things.

First of all his announcement that everyone who is a basic tax payer will not pay any tax on interest derived from savings gives those who have been prudent a little more in their pockets as a reward for doing what is right and saving. The same applies to his proposal to increase the tax allowance of pensioners by an additional £2,000 as it is people on fixed incomes who suffer most when interest rates plummet.

Secondly his announcement sends a message to everyone that there is a real difference between Labour and the Conservatives. Labour believe the State should spend more, put everyone into unprecedented levels of debt and innocent bystanders who suffer as a result of government policy are an acceptable casualty. David Cameron believes that the State should reward those who have done the right thing in order to demonstrate, to those who have not, that saving and not spending excessively is the best way to a successful country and economy.

So many East Renfrewshire pensioners have told me that income from interest on savings they had been relying on has dried up and that they feel it is immoral that the State demand they pay tax on interest on money they paid tax on when it was genuine income. I have always agreed with this and will happily campaign alongside David Cameron for those on the lowest levels of income and pensioners on fixed incomes to be exempt from paying tax on their savings. Britain must be a fair country if its economy is to recover and in David Cameron we have a leader who clearly understands what needs to be done.

Loss Of Bank Of Scotland Is A Travesty!

I believe in the free market and in the right of individuals to work hard and to prosper as a result of their hard work. But the shenanigans surrounding the purchase of Halifax Bank of Scotland by Lloyd's TSB leave me thinking our Government and their financial regulatory structures leave a lot to be desired.

Today we discovered that Gordon Brown personally knew that HBoS was in talks to be bought out by Lloyd's TSB a week ago and took personal control of ensuring the regulatory authorities approved the purchase given the current economic climate and despite potential monopolies concerns.

Knowing all this the Prime Minister then did nothing to stop the run on the banks shares over the past few days even though he knew there was no cause for concern about the banks liquidity. This means he knew that those attacking HBoS shares were doing so in order to make large "personal" financial gains and given the coordinated and sustained nature of trading he must have suspected there may have been an element of insider knowledge attached to these sales.

The loss of the Bank of Scotland brand from UK high streets and to Scotland's corporate and social life is a disaster. Scotland's second largest company had the right to expect our Government would protect them from unwarranted attack, but Government and its regulators let HBoS down. It's time for a Government who believes in protecting our great Institutions and that ensures fairness across our economy - clearly that rules the current Government out!

Give Us A Break Gordon!

Today's newspapers are full of the Prime Minister promising to tackle the countries big problems in the same way as he has overcome big challenges in his own personal life.

No one has more admiration for the way Gordon Brown has tackled his partial blindness than me. As someone who was so active in sport at a young age the loss of sight in one eye and the partial loss of sight in the other must have been devastating. It takes someone of particular character and courage to be able to put this aside and battle to achieve in other fields and Gordon Brown's achievements, both academic and political, speak for themselves.

Nevertheless to be making claims of preparedness to take action in tough economic times and to be feeling our pain leave us with one big question. Where have you and your government been for the past 12 months?

The 10p tax debacle was of your doing, the credit crunch and failure to deal properly with Northern Rock was of your doing and the fact that inflation is crippling households and need an interest rate rise when the housing market needs an interest rate cut is of your doing.

It is very admirable to give us kind words and big promises but it you do want to help us there is something you could do for us NOW - CALL AN ELECTION!

Emergency Housing Measures A Waste Of Time

The CBI describe them as "largely symbolic". The Royal Institution of Chartered Surveyors say "the Government has failed to listen to the property industry". The Council of Mortgage Lenders say "it is questionable whether it will incentivise buyers who wouldn't have entered the market anyway". And senior figures in the property industry call them "a political sticking plaster" that won't make "one iota of difference".

So why has the Government rushed through a £1.6 billion package of measures for the housing industry that no one seems to think really address the route cause of the current housing downturn?

Quite simply, it is because they don't understand the reasons for the current downturn and have insufficient funds left in the pot to really help out now we are experiencing 'a rainy day'.

And the one thing missing from yesterdays announcement? How are Chancellor Alastair Darling and Prime Minister Gordon Brown proposing to pay for this state handout? The mind boggles when you consider the irresponsibility of it all!

Zoom Doom!

With thousands of Brits stuck abroad and thousands of Canadians stuck in the UK, following the collapse of low cost airline Zoom, it appears there is little hope for many more airlines in the current economic crisis.

The business model of low cost carriers is fundamentally reliant on the price of fuel and it appears most budgeted this year based on the cost of a barrel of oil not rising above $80 a barrel. When the cost of fuel rose above $100 a barrel things looked bleak but as it rose further still, to more than $140 a barrel at one point, 26 airlines have found it impossible to stave off the inevitable and have gone out of business.

Everyone likes a bargain but you know what they say - "if something looks too good to be true it usually is". Low cost airlines may seem attractive with low fares on desirable routes but the truth is they take huge gambles on what the trading conditions of the day will be months in advance and those buying tickets early, at the cheapest rates, leave low cost carrier airline hugely exposed to unacceptable business risk.

Thousands of people will soon return to recount stories of woe. They will tell us there is no obligation for an airline that has gone under to provide them with any help, any food or any accommodation. Those with travel insurance will get home without any additional cost and those without will be left considerably out of pocket just to get back to their port of dispatch. It almost makes you grateful for British Airways and their full fare service, doesn't it!

All Work And No Play!

The Bank of Scotland's study of small businesses, released today, suggests that Scotland's small businesses work the longest hours in the UK and are preparing for the credit crunch by gearing up to work even harder! Not that this comes as any surprise to those of us in business.

All too often we forget just how hard our fellow Scots work and fail to recognise that the work ethic our upbringing instills in our workforce stands us in good stead for the challenges life throws up from time to time.

While our public sector workers form an essential part of our way of life it is our private sector who create the new wealth required to pay for investment into services and that ensures our country is able to maintain the highest standards of living.

So, today's figures should provide us all with a sense of comfort that the entrepreneurial spirit of Scotland lives on in our business community and that we will work our way through the toughest of times thanks to our nations spirit!