Author: Phil

I was in the conference hall this morning to hear David Cameron’s emergency address (full text here) to the Tories.

As Iain Dale says he hit the right note offering to assist the government in any emergency legislation required to deal with the financial crisis.

Dale thinks he even hinted that a form of national government might be necessary. I can’t say I read that into anything Cameron said.

I am sure that we are going through a worrying, albeit temporary, crisis but I can’t help thinking I have seen it all before. I remember the secondary banking crisis of the early seventies because my Dad lost his job in ’74. Do you remember it? Remember the Latin American debt crisis in the late eighties that almost broke Citibank? I was doing business with Citibank just after that so I do. How about the $60 billion bailout of the US savings and loans (building societies) in the late eighties – the US government made a small profit out of this transaction. I’d almost forgotten that one not having been even remotely involved.

This crisis will all seem very distant and unimportant before too long. It is worth remembering that Labour keep going on about Black Wednesday and 15% interest rates. I was visiting the Treasurer of Co-operative Bank that day at 11am when it all kicked off; he very politely disappeared after popping in to tell us what was up. That headline rate only applied intra-day and from September 1992 until recently we have enjoyed relatively benign economic circumstances, engineered by Norman Lamont. No Labour figures like to remember their support for the ERM that led to that crisis. About the only people who were against our ERM entry were a few lonely Eurosceptic figures on the right.

We might have called Gordon Brown’s gold sales in 1999-2001 a crisis, they cost about the same as Black Wednesday, but did you even notice them?

Our current government could have used Norman Lamont’s nice decade to rebuild the public finances but instead Gordon Brown spent 10 years as chancellor trashing them.

PS I wonder if anyone will notice that I forgot to mention the dot com crash.

The biggest news for West London coming out of today’s Tory conference sessions was Theresa Villers’ announcement that the next Conservative government would not go ahead with the third runway at Heathrow. Instead the next Conservative government would go for high speed rail as a way of reducing the demand for air travel around London. See Conservative’s announcement here.

The Evening Standard reports a negative reaction from businesses.

The overall mood at the conference is pretty sombre given the financial news this morning. Grant Schapps, late of the Ealing Southall campaign last July, made much of the slump in mortgage lending announced today by the Bank of Englnad.

Whatever your political persuasion if you want to understand what drives the public spending disparities between the so-called nations that make up the United Kingdom the guide published today by the Taxpayers’ Alliance is indispensable.

Even of you don’t like the TPA’s point of view writer Mike Denham, who writes the Burning Our Money blog, is an ex Treasury economist who knows his stuff and writes well.

No doubt the key points below will be picked up widely in the media but I would recommend the whole paper.

• Identifiable public spending per head in England is £7,535 pa (2007-08). But in Scotland it is 22 per cent (£1,644) higher, Wales 14 per cent (£1,042) higher, and Northern Ireland an extraordinary 30 per cent (£2,254) higher.
• Just over the last two decades (since 1985-86), higher spending in the three devolved territories has cost UK taxpayers a cumulative £200 billion (£102 billion in Scotland; £43 billion in Wales; £57 billion in Northern Ireland).
• North Sea Oil has not funded the Scottish spending gap, despite Scottish Nationalist claims to the contrary. In only five of the last 23 years have North Sea Oil receipts exceeded the cost of higher funding paid to Scotland. Even with current high oil prices, the income from the Scottish share of North Sea Oil only just covers the spending gap, and North Sea Oil output is projected to fall by 50 per cent by 2020.