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  1. Wealth
September 12, 2011

Down and Out in Paris, Berlin, Athens…

By Spear's

London has a chance, not a great one, but only because we are not saddled with the euro straitjacket

We have had Jackson Hole, Lago di Cuomo and Marseilles, but we are none the wiser, just like the political leaders, central bankers, treasury secretaries, economists and other soothsayers: one by one they opened their mouths, but nothing came out that made the slightest sense.

And what about London? London has a chance, not a great one, but only because we are not saddled with the euro straitjacket and because the Conservatives, despite being hobbled by the coalition with the euro-frenzied Lib-Dem nutters, have done the right thing by cutting the unsustainable spending of what was heralded as New Labour, a party now entirely discredited by its own former leaders’ has-been memoires, which reveal there were more absolute pricks in it than an old second-hand dart-board.

The Coalition, however, is facing two seemingly intractable problems, which are bedevilling the entire G7: zero growth in real terms, and stubborn and continuing unemployment. The US does not have an answer, other than to go on kicking the same old can down the road: Obama’s $447.0 billion Keynesian stimulus is absurd, a drop in a holed bucket, and Bernanke’s QE will stoke inflation and not much else. So, what can the UK do which is different and could make a difference?

First of all, defy the EU and renege on the EU’s 6 per cent budget increase, and fail to implement the Agency Workers Directive. That would keep 325,000 existing part-time jobs from going away. Next, reduce NHI and Corporation tax for small companies, those say with less than £1.0 million turnover. Abolish the 50% higher rate of income tax immediately. Reduce VAT except on luxuries. Bring in The Treasury’s fuel stabiliser. Cap councillors salaries and extend the local rates freeze. Offer fiscal incentives to start-up companies. If 26 Enterprise Zones are a good idea, why not have 36, or 46? And no doubt there are 100 other positive things to be done, ‘but if t’were done, t’were best done quickly’.

It’s time for a radical set of Conservative forward-looking policies, as the old ways are not working and are ill-suited to the new economic order, the era of the G20, with one half in decline and the other half growing: revise our membership of the EU, bring in the new pensions and welfare legislation, and have a budget for jobs and growth.

If the Lib-Dems get in the way, call an election – just invoke the old rule of Res Pactae Sunt, or ‘Fings ain’t wot they used to be’ – and let the people vote on a real Conservative recovery manifesto: they would win hands down, as Clegg and Milliband are both natural-born losers, and Milliband has the further disadvantage of having that brainfree pedagogue Ed Balls playing on the same side, as if he were a Wayne Rooney only capable of scoring own-goals.

Mme Christine Lagarde of the IMF told the Coalition at Chatham House last week to think out of the box and to be “nimble”, and she is right. And if another warning was necessary, the resignation of Jurgen Stark, an ardent promoter of the failing euro dream, as Chief Economist at the ECB, was indeed a stark reminder of the need to rethink the whole EU project.

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Now is the time for Britain to reinvent itself and show Europe the way forward – in fact, business as usual! It’s a time to be bold or end up a failure, and risk waking up in Great Depression 2.

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