Tuesday, 24 March 2009

Who will put out the fires...

Today I am going to Norfolk to meet firefighters - and find out from them how the EU rules on working time could put lives at risk especially in rural areas. I wrote about the impact on doctors a few weeks ago.

I've already spoken to firefighters in Cambridgeshire who have told me about the deep uncertainty in their profession caused by the debates raging in Brussels.

If the European Parliament does succeed in forcing the UK to comply with the 48 hour week and, as is being suggested, they include "on call" hours in the time limit then we will have a serious shortage of firefighters. The retained firefighters who do other jobs during the day but fill the rota in the evenings and weekends will be forced to give up one or the other. Either we will have a worse fire service or the tax payer will have to pay more... and which of us can afford that?

Labour MEPs voted for this suggestion. Conservatives did not. More later ....

Monday, 9 March 2009

Trains not Trucks

Overcrowded roads is a big issue. On the A14 and across the East of England we often hear of accidents involving lorries. We need local freight but I would love to get some long distance trucks off our major trunk roads and give containers the option to travel by rail... OK, I may be turning into a bit of a train spotter but I hope that today's meeting moved this a step closer.

The upgrade of the main East-West railway for freight from the Eastern port of Felixstowe all the way to Nuneaton in the Midlands, would give container traffic the ability to intersect with East and West Coast mainlines as well as Midland mainlines.

Two years ago this didn't even seem on the political agenda- and the Department for Transport allowed bid deadlines for EU funding to slip by into sidings. Many local politicians have now said they would like to go full steam ahead with the upgrade but only 4 local councillors attended today's meeting (were they not aware of it?). Geoffrey Van Orden, Conservative MEP, sent a representative to help shunt the project along with some EU cash.

In the UK we are more than entitled to bid for EU funds (after all its our money). I want to see this project happen - but if the British tax payer is going to fund most of it then lets get our fair share of the EU funds to help.

This is not an expensive project (at least not compared to a new road!). Today's meeting was with Network Rail, Department for Transport and various others. £50 million pounds has been committed by DfT for the bridge improvements- (so the trucks can get under the 30 affected bridges...only 30 in hundreds of miles). Bridge work will be completed within 2 years. There are still pinch points... how to navigate Ipswich... (we were promised an answer on that next month) and signaling problems in Leicester - this could take 5-6 years... surely if this was a real priority it could happen faster?

A bid will go into the EU in June but only for the bridge works. Yet again bidding for EU grants for infrastructure seems pretty low on the UK government priority.

Next time you are stuck behind a slow moving foreign container lorry on our ludicrously over crowded roads think about the computers in the signal box in Leicester.....

Friday, 6 March 2009

Ask the audience....

I asked a crowded room in South Norfolk tonight whether yesterday's decision by the Bank of England to push more money into the economy had made them feel more confident in their financial future or less.

Not a single hand went up for "more confident" - every single hand went up for less.

Nuff said....

A large quantity of unease...

Iain Dale writes this evening about "quantitative easing" saying "I'm horrified that Conservative politicians haven't spoken out against this potentially disastrous move. In fact, no one has. It's about time someone did."

I've been pretty quiet about blogging about what I think about HMG's economic policies recently but I just can't let this one lie.

I'm not easy about this easing... and I'm not alone. I've just got home from a very well attended Conservative constituency dinner in Welwyn Hatfield, home of Grant Schapps MP. The members present certainly were speaking out about quantitative easing.

Here are my views.

I want it to work.... I really want to see the green shoots in my garden start to reappear in the economy, for consumers to have returned confidence in their income, employees to have confidence that their jobs are safe, my unemployed friends to find work and businesses to again be able to ask banks to finance future expansion not just struggling for day to day survival.

I understand that the Bank of England is trying to do something to help. Interest rate cuts have been tried to the end and whilst this has put some money in mortgage holders pockets - its not been enough to kick start spending... partly because cuts have not been passed on, partly because many people were on fixed rate mortgages so didn't benefit, and partly because confidence is so low that even those with more money in their pockets don't have confidence to make substantial purchases...in the meantime savers have really suffered. I understand why the BoE is trying to help.

In theory the announcement that the Bank of England is going to pump £75 billion into the economy should inspire the consumer to believe that the corner is going to turn and they should go and buy a new car at these discount prices. (As a point of reference, £75 billion is 75% of the NHS budget for England this year) We are also told that the money that banks and investors make from the great bond buy-back will encourage banks to lend more to our companies.

However, the reality is much more complicated.

We have already seen the government pump billions into the banks. In the past few months I have found that, from Hertfordshire commuters to Norfolk farmers, people are deeply aware that every penny of government money is their money. They know this "easing" uses their tax-payers money. Even though QE (although it sounds seductively simple) is hideously complex they know they as tax payers, will have to pay for the consequences in the future - either through increased government debt or inflation... I'm not convinced that this announcement will bring confidence rushing back to the British consumer.

So will it encourage banks to "lend more"? That's a more complicated question - before the credit crunch many many non-UK banks were lending to UK companies and many have retreated back to home turf. I don't foresee them returning in a hurry. If the BoE uses the money to buy back gilts then its not only UK banks that will benefit. (Perhaps someone else will let me know the % of Gilts held overseas- even with the fall in the pound it will be significant) If, on the other hand, the BoE uses the money to buy corporate debt - pushing down interest rates for companies - then the UK taxpayer is taking on yet more risk. Either way it will take some time for the money to trickle back into UK bank lending... and incidentally the last thing I want is for banks to start making ridiculous lending decisions again.

I hope I am wrong, I hope this works. But I am deeply uneasy.