It is simple: we cannot allow the offensive and malicious Ken Livingstone back into City Hall

Craig Barrett 11.39am

Polls polls polls! “Boris lead narrows!” “Ken less popular than his party!” “Boris more popular than Tories!” “Only 12% of people believe that Ken is honest!”

While opinion polling has become much more sophisticated, anyone who watched the 1992 general election coverage on Easter Monday would know that only one poll matters: when you enter your booth and wield your pencil (unless you live in Tower Hamlets, of course).

With just one week to go until the election for London’s mayor, the current polling serves only to allow campaigners to twist and spin to whatever advantage possible and to remind people (like me) that we should be doing more to help.

I feel a bit sorry in some ways for the London Labour party. They have had a candidate forced on them who seems to owe no loyalty to them barring the right to campaign under their banner and deploy their activists for his own ends.

Had Labour picked someone else, Mr Livingstone, who believes the mayoralty his divine right, would have run as an independent candidate as he did in 2000.

Mr Livingstone’s campaign is a goulash of undeliverable policies, bold but inaccurate pronouncements about his Tory opponent, and craft attempts to shift the media’s focus away from his own activities. It is not so much that Mr Livingstone is a stranger to the truth, it is more that lying and smoke-screens come easier to him.

To Mr Livingstone, it matters not that he has no power to restore the EMA, or that the TfL ‘cash mountain’ is intended for investment rather than fare giveaways. To Mr Livingstone, it matters not that the only experience he has to validate his comments on Boris Johnson’s tax affairs comes from his own hypocritical tax avoidance. To Mr Livingstone, it matters not that what spews from his mouth is offensive to one group of Londoners or another.

Mr Livingstone has given us no compelling reasons to vote for him; no policies on which any Londoner can be certain of his delivering. His crony-aplenty, wasteful record in City Hall speaks for itself.

Contrast that figure with Boris Johnson, who has actually delivered on his promises - whether policing, sustainable housing, tax freezes and others - and whose plans are both costed and practical.

But above all else, consider two vital points. First, I am not old enough to remember Mr Livingstone’s reign as leader of the Greater London Council but I know enough to understand it for what it was: a publicly funded one man crusade of self-justification, with money poured down the drain to embarrass Mrs Thatcher’s government or to challenge its actions in the courts.

The Mayor of London must speak for the city with an independent voice, but they must also be able to co-operate with central government to ensure the best for the city. For at least the first three years of the next mayor’s tenure there will be a Conservative politician in 10 Downing Street and while Mr Johnson and Mr Cameron may not be close personally, they do at least have a mutual understanding and interest.

Boris Johnson is a doughty fighter who has regularly exercised his inherent independence to seek the best for London. Mr Livingstone’s egomania and pathological hatred of the Tories will mean that were he to be elected next week, it would be the start of at least three years of pitched battles on meaningless fronts, all paid for by London’s rate payers.

Second, and perhaps most important, Mr Livingstone’s public utterances over the past few months demonstrate the type of man he is.

Whether suggesting that a councillor in Hammersmith & Fulham ought to “burn in hell…and…flesh be flayed for demons for all eternity”; whether suggesting that gay bankers in the Middle East could be mutilated; whether suggesting that London’s Jewish population is too rich to vote Labour; or whether simply another cheap insult at a critic, Mr Livingstone appears oblivious to the effect of his own words.

It is not good enough for the Labour party to say “Ken is just being Ken”, or words to that effect. Mr Livingstone is no Jed Bartlet, and the fact that many in the Labour party are doing their best to distance themselves from their own candidate shows the whole strategy is a farce.

In a few months, the eyes of the world will be on London and other cities around the country as Britain hosts the Olympic & Paralympic Games. Boris Johnson may be gaffe-prone but unlike Mr Livingstone his gaffes are rarely offensive and certainly not malicious. We in this great and historic capital city cannot afford to have as our mayor a man who appears to set his stall deliberately to offend others.

For this reason, above all others, I urge you to back Boris Johnson as Mayor of London.

Follow Craig on Twitter @mrsteeduk

Labour’s hypocrisy over knighthoods, bank bonuses, railway bonuses and the vilification of success

Craig Barrett and Nik Darlington 10.42am

Given some of the recent hysteria about bankers’ bonuses, Mr Fred Goodwin and Labour’s leap on to the let’s-hate-the-wealthy bandwagon, people might be forgiven for thinking that this Government was guilty of misunderstanding of that famous misquotation of Calvin Coolidge: “the business of America is business.”

I do my best to avoid burdening readers with statistics but I should like to echo the wise words of Fraser Nelson, who pointed out over the weekend that the so-labelled “1%” earn 13 per cent of wages but pay 28 per cent of all income tax.

In the light of the Labour party’s apparent belief that it is fine for those of us who work and pay taxes to subsidise those who do not work to the tune of an equivalent of £35,000 per annum, it is easy to understand why the middle might be feeling a little bit squeezed.

The middle has neither the luxury of a substantial guaranteed income for being idle nor do they have the stratospheric income that some people would have us believe is commonplace in financial services.

In fact, bankers’ pay appears to be falling and pay increases among FTSE 100 directors are close to 3 per cent, rather than the misinformed reporting of figures like 49 per cent.

The outrage at bonuses at RBS betrays a fundamental misunderstanding of the nature of the Government’s involvement in the bank.

RBS was effectively nationalised by the last Labour government in order to bolster the bank’s balance sheet. However, unlike the nationalisations of Rolls-Royce in 1971, British Leyland in 1975 and (to a certain extent) Railtrack in 2002, RBS remains a public company listed on the stock exchange.

It represents an investment for the British taxpayer, not an exercise in the Government in-sourcing financial services, as some seem to believe. The hope is that sensible management and some vision will steer RBS back to prosperity, at which point the Government can sell its stake and perhaps make us all a profit.

Referring to RBS constantly as being “taxpayer owned” gives it something of the status of a Government department, which is to confuse entirely what the RBS rescue was all about.

Everyone would be rather shocked to see Arsenal being sponsored by the Department for Energy, for example - naturally, because it has no commercial role to play and no need to attract business. RBS, on the other hand, will only recover if it remains competitive and is able to attract business, hence its continued presence as a sponsor of sporting events and other marketing activities.

In the same way, it will only be able to recover if it is permitted to run its internal management like any other commercial organisation.

Stephen Hester is not a civil servant subject to a pro-forma contract of employment, sanctioned by countless HR executives and trade union representatives. He is a successful businessman hired on a negotiated contract to work his socks off turning around a failed financial institution. Mr Hester’s contract was negotiated on the basis of normal industry practices. Like it or not, those industry practices include performance-related bonuses and, like it or not Edward Miliband, it was your party (and a Cabinet of which you were a member) who signed off on the deal.

What is more, the Labour party has since leapt on the bonus payments to executives at Network Rail. Its chief executive, Sir David Higgins, was set to receive a bonus of £336,000. Another five senior colleagues would have received up to 60 per cent of their standard pay in bonuses.

But Labour is the political party which, when in Government, was quite relaxed about Network Rail paying its board of directors bonuses of £437,000 in 2004, £871,000 in 2005, £1.1 million in 2006, £648,000 in 2007 (lower as awards were partially deferred because of investigations into the Grayrigg derailment), £1.5 million in 2008 (normal services resumed) and £1.2 million in 2009.

In those six years, Labour ministers did not bat an eyelid at Network Rail paying its directors approximately £5.75 million in bonuses and incentive schemes on top of their already sizeable salaries.*

The attitude of the Labour party - whether directed against Mr Hester, Mr Goodwin (the man knighted by Gordon Brown) or others - does nothing for this country’s credentials as a serious player in the world economy.

The politicians responsible for deregulation and setting up plans for growth remain obsessed with executive pay - something Nick Boles highlighted in his recent Macmillan Lecture.

And worst of all, the cowardly behaviour of the Government over the Stephen Hester bonus furore sends out a signal to the rest of the world that success is no longer appreciated in Britain. In particular, the notion that employees should somehow have the right to sit on remuneration committees misunderstands completely the entrepreneurial spirit that made this nation great.

The correct Coolidge quotation is: “the chief business of the American people is business.” This is correctly linked to the people. It applies equally to ‘UK plc’ because our country will only grow if we can go back to being a business-friendly environment, where companies like RBS are able to get on with things without the need to satisfy baying blood-lust through embarrassment, shame and meek hand-wringing.

Success benefits us all - a rising tide lifts all boats - and a strong financial sector will stimulate growth.

Bruce Anderson, channeling the past once again, yesterday resurrected the phrase “brain drain”, recalling a time when Labour’s perverse taxation drove so many smart and industrious people out of this country.

Stop and think. With 1 per cent of people paying 28 per cent of income tax, that means it shall take a lot more of us to cover the deficit if just one of that 1 per cent leaves. We must not allow this country to become one that appears to tolerate uncapped benefits for those who don’t work, yet vilifies those who do.

*Incidentally, the Office for Rail Regulation (ORR) has begun criminal proceedings against Network Rail for breaching health and safety law preceding the Grayrigg derailment. The first hearing in the case is in a couple of weeks. If Network Rail is found guilty, will the directors who deferred bonuses at the time of the derailment return the bonuses they received in subsequent years?

Follow Craig on Twitter @mrsteeduk

Follow Nik on Twitter @NikDarlington

Macmillan Lecture 2012: Nick Boles sets out ‘national mission’ for improving Britain’s competitiveness

Nik Darlington 7.01pm

This evening at the Tory Reform Group’s annual Macmillan Lecture, Nick Boles sets out what he describes as a “new national mission” to improve Britain’s competitiveness.

Mr Boles, who was elected MP for Grantham & Stamford in May 2010, is a former director of the Policy Exchange think tank and has been at the forefront of efforts to modernise the Conservative party in recent years.

Given his proximity to David Cameron and Number 10, the speech and the policies proposed in it are being closely watched as possible indicators of current thinking at the top of the Government.

The weekend just gone has been dominated by arguments over bankers’ bonuses. The chief executive and chairman of RBS, which is 82 per cent owned by the Government, renounced this year’s share amid significant public pressure.

In his lecture, Mr Boles warns:

“The obsession with the incomes of the wealthiest…is blinding us to the biggest challenge our country faces.”

“As much as we all enjoy the thrill of the chase when our prey is a feather-bedded banker, we in the political pack must not duck the really hard economic question - which is, why have people in the low and middle-ranking jobs not been able to secure a real increase in their pay for nearly a decade?”

“And we must not dodge the really hard answer - which is, that the productivity of people in those jobs is falling behind that of their competitors.”

Though honest about the country’s failings, Nick Boles is upbeat about Britain’s chances for the next twenty years if we are “clear-sighted and quick-witted”.

We have heard much about London’s fledgling web-tech community at the ‘Silicon Roundabout’, and lately the Prime Minister described the M4 corridor as Britain’s very own ‘Silicon Valley’ of high-tech industry.

And the first of Mr Boles’ policies to re-energise Britain’s competitiveness is the creation of a new economic cluster, the ‘Oxbridge Brain Belt’, through the construction of a motorway between Oxford and Cambridge funded by the building of a new garden city along the route.

Such a motorway could link up with as many as four existing motorways but it would have to be careful to avoid the Chilterns AONB, through (and under) which the controversial HS2 line is intended to run. Once bitten, twice shy and all that. But with high-speed rail, Crossrail and possibly the much-heralded ‘Boris Island’ airport, this Government is proving to have a penchant for big infrastructure projects.

Secondly, Mr Boles also wants to introduce a Land Value Tax (LVT) to fund a permanent cut in employers’ National Insurance contributions. A form of LVT was suggested by current shadow health secretary, Andrew Burnham, during his failed Labour leadership bid. It is an idea backed by the Lib Dems and some of Mr Boles’ fellow Conservatives who advocate a rebalancing of the taxation of wealth versus income, such as Tim Montgomerie.

Exempted from the LVT, however, would be farmland (a common point of contention) and people’s main homes. Mr Boles criticises Nick Clegg’s proposals for a ‘mansion tax’ to fund an increase in personal tax allowances because it misses the target and won’t create jobs.

Thirdly, Mr Boles wants to see new foreign students excluded from the Government’s immigration cap and the introduction of a £5,000 immigration bond, to be repayed by foreign students when they leave the UK on completion of their studies.

Mr Boles advocated some radical policies for immigration in his quietly acclaimed 2010 book Which Way’s Up?, including a 50,000 cap and surety deposit for non-EU migrants. The Government’s tightening of immigration policies has drawn some criticism from business leaders and universities, so this could be the first sign of some relaxation as the Government tries to boost economic activity.

Above all, says Nick Boles, this must be treated as our “new national mission”.

“If we want our economy to grow again, if we want our national income to be honestly earned and fairly shared, if we want to take home more in wages than millions of equally qualified people around the world, if we want to hang on to paid maternity and paternity leave and protect our rights to an annual 28 days’ holiday, if we want to benefit from healthcare that is high quality and free, if we want to live comfortably in retirement, if we want all these things, we need to ensure that we are all a lot more productive than our competitors.”

“And right now we are not.”

It isn’t promising little more than blood, toil, tears and sweat, but it’s not far off it. It is a national growth agenda for little platoons. Through individual endeavour we may collectively prosper.

Transport problems: Heathrow is the solution that dare not rear its head

Stuart Baldock 9.38am

The Government has put itself in a difficult spot with regards to solving the South East’s airport capacity problem - or more accurately the capacity issue at Heathrow.

Prior to the election, the Conservative party - it could be said foolishly - ruled out building a third runway at Heathrow. The Liberal Democrats - perhaps even more foolishly - have ruled out any capacity increase in the South East, including a new airport or additional runways at Stansted or Gatwick. Both policies are enshrined in the Coalition Agreement. Both Parties should reconsider.

Airports are as important to the modern UK economy as maritime ports were between the 18th and 20th centuries. At a time when growth in the economy is desperately needed, ignoring this fact is misguided at best, or reckless and incompetent at worst.

Success in this globalised world depends on one’s links to current and potential markets.

No matter how good teleconferencing has become, business is still done in person. Indeed, a report by Frontier Economics, an economic consultancy, found that UK businesses trade by as much as twenty times more with economies that have direct daily flights to the UK compared with those that have fewer or no services.

Lack of capacity is already estimated to cost the UK economy £1.2 billion each year. Heathrow is operating at nearly 100 per cent capacity.

The UK is far behind competitors when it comes to direct flights China. As shown below, the UK has significantly less flights to the main Chinese cities than Frankfurt and Paris. In the case of Guangzhou, the leading manufacturing region in China, there are no direct flights from Heathrow.

BEIJING:

Frankfurt – 1032 

Paris – 964

Heathrow – 698

SHANGHAI:

Frankfurt – 1110

Paris – 1323

Heathrow – 621

GUANGZHOU:

Frankfurt – 211

Paris – 290

Heathrow – 0

There have been a number of solutions put forward to rectify London’s airport capacity problem:

• Build extra runways at Gatwick and/or Stansted. Both schemes would be relatively cheap – at around £2.5 billion. But Stanstead is unlikely to attract a significant number of airlines due to its distance from London. The Stansted Express train connection could be up-graded but at significant cost. Also linking it with HS2 would be prohibitively expensive due to its distance from the intended high-speed route. The main issue with expanding Gatwick is a planning agreement with West Sussex County Council prohibits the building of a second runway until after 2019. Not ideal when the Heathrow is already operating at capacity.

• Build a ‘Thames Estuary Airport’ – Lord Foster’s Isle of Grain scheme, the so called ‘Boris Island’, or an airport at Cliffe in Kent. The main issue with these schemes is the cost. The cheapest proposal is Cliffe at £14 billion. The other schemes are estimated in excess of £20 billion just for the airports, while another £30 billion may be necessary for associated transport infrastructure. There are also environmental and safety issues to consider: birds and airliners are not compatible. A 2003 report found that the risk of losing an aircraft to bird strike around a ‘Thames Estuary’ was between one in 100 or 300 years – significantly more than any other UK airport.

Heathrow is the best option from a point of view of speed, cost, and environmental sustainability.

An additional runway could be built relatively quickly and could cost around £9 billion - a substantial investment, but not as much as other schemes.

The question has to be asked, is it really ‘sustainable’ to close one airport in a suburb (which is what it would take to make many airlines leave Heathrow) and move it to ecologically important marshland? No.

Heathrow can - as indeed is planned - be easily linked with HS2 so that the benefits of a world class airport can be shared with the rest of the UK, not just the South East. A third runway may not be the most staightforward option politically, but it is the best option.

Follow Stuart on Twitter @stuartbaldock

Are ministers risking life and limb to be ‘greenest government ever’?

Nik Darlington 9.47am

“The Greenest Government Ever.” It was a pledge of the boldest order and it seems that David Cameron’s ministers are willing to risk life and limb to achieve it.

Sources tell me that Theresa Villiers, Minister of State for Transport, has broken her collar bone in a cycling accident.

How this unfortunate turn of events came to pass is unclear, but Egremont can confirm there are currently no reports of Ms Villiers having been hit by the Prime Minister halfway through a three-point turn.

While the quango Cycling England hit the scrap heap in April last year, the Government has made available £560 million for the Local Sustainable Transport Fund, which covers cycling.

In November, Ms Villiers said that the Government is “committed to encouraging cycling as a healthy and enjoyable way of getting around.”

The Prime Minister, a keen cyclist himself, will undoubtedly applaud ministers for taking up cycling themselves as part of encouraging healthier lifestyles and lower carbon footprints.

Whether failing to deliver is a sackable offence in this instance will only come to light as more details emerge, however Egremont thinks it a trifle harsh if so and wishes Theresa Villiers a speedy recovery.

Railways should be seen as a public good like education or health

Stuart Baldock 11.28am

The average the cost of a rail journey has increased by 5.9 per cent. The price of some tickets has increased by as much as 11 per cent.

The Government allows train companies to raise ticket prices by Retail Price Index (RPI) +1% but it could have been more drastic still.

In the autumn statement, the Chancellor, George Osborne, scrapped plans to increase fares by RPI +3 per cent. Had this decision not been taken, ticket prices could have increased by an average of 8 per cent.

The ‘relief’ may only be short lived - unbeknown to many passengers, rail companies also have the opportunity to increase ‘non-regulated’ fares, e.g. off-peak tickets, in both May and September.  Additionally, in January 2013 and January 2014, it is anticipated that the Government will revert to the RPI +3 per cent formula to calculate fare increases.   

Passengers are entitled to feel aggrieved. Travelling at peak time is often an unpleasant experience. Even if the service they plan to join is not too overcrowded to board – there is unlikely to be the ‘luxury’ of a seat.  

It is not hyperbole when rail passenger advocacy groups note that for many commuters such increases are unaffordable - particularly at a time of stagnating wages. Research by the Hay Group has highlighted that for many workers the cost of commuting by rail already accounts for around one-fifth of yearly earnings.   

The rationale for increasing fares is a simple one. Taxpayers who do not use the rail network should not have to shoulder the burden of financing the much needed investment in the UK’s rail infrastructure. But everyone can benefit from a good rail network.

Every commuter on a train is one less person driving a car on the UK’s already heavily congested roads. A recent report by Churchill Car Insurance calculated the per annum cost to the UK economy of lost working hours due to traffic congestion at £752 million. Why allow unsustainable increases in rail fares and possibly make this worse?

Additionally, there are environmental benefits that rail travel has over other means of transportation – particularly cars. For example, if we take an average journey in the UK to be approximately 10 miles or around 600 miles per month, one person commuting by car will emit 3.96 tons of CO2 per annum. The same journey undertaken by train would emit only 1.62 tons of CO2 per annum.

It is time we started viewing our trains very much like we view education, health, or defence. The railway is a public service that all taxpayers can benefit from. Passengers directly contribute £6.5 billion to the running of the railways. Taxpayers contribute £4 billion. There should be a rebalancing.

Research by the Campaign for Better Transport (CBT), has found that in some instances rail passengers in the UK pay up to ten times more for their tickets than on the continent. The CBT compared the cost of travel between Woking, Surrey and London Waterloo with similar commutes on the continent.

• A season ticket between Woking and Waterloo costs £3,268 per year.
• Between Ballancourt-sur-Essone and Paris the cost of a season ticket is £924.
• Between Strausberg and Berlin the cost of a season ticket is £705.
• Between Collado-Villalba and Madrid the cost of a season ticket is £653.
• Velletri and Rome, the cost of a season ticket is £336.            

In response to the CBT’s research, the Association of Train Operating Companies notes accurately:

“In many other countries, the state chooses to subsidies the railways more heavily than in Britain.”   

If we want to stimulate the UK economy and help lower paid workers we need to increase state rail subsidies.

If ticket prices increase along the current trajectory then we risk reducing our workforce mobility; particularly for the lowest paid.

Rail fares as a proportion of salary for a Senior Manager, based on a 17-30 minute commute, are between 1-2 per cent; for a Production Operative it is 8-11 per cent. Based on a 50 minute commute the figures are an even more disparate 2-3 per cent and 16-20 per cent respectively.

When the economic situation improves, the cost of commuting to jobs should not be an impediment to taking work.

Might Osborne give green light to Thames airport to keep Boris in City Hall?

Nik Darlington 11.35am

The Times (£) leads this morning with another story abour the Chancellor’s heavily trailed Autumn Statement, in which he will commit the Government to a ‘global hub’ airport in the south-east of England.

Mr Osborne will say that “all options” are under consideration, which raises the possibility of the Mayor of London’s pet project - an entirely new airport in the Thames Estuary - receiving official backing.

Mr Osborne will…use the Government’s new determination to spend on infrastructure to argue that Britain will emerge better equipped to grow. The proposals for a Thames Estuary airport, either on a man-made island or the Isle of Grain in Kent, will not be among 40 projects spelt out today.

But Mr Osborne’s Treasury documents will commit the Government to maintaining a global hub airport in the South East and will state that “all options” will be given full analysis next year. Despite doubts about how such an airport could be funded, it marks the first time that the Treasury has said that the idea would receive a full hearing.

Last year, David Cameron appeared to rule out the option of building a new artificial island - dubbed ‘Boris Island’ - but this would appear to be back on the table. An alternative, built on an existing island, has been sketched out by the architect Lord Foster of Thames Bank. Estimated costs range between £40bn and £50bn.

The first important point to make is that such an airport, if it went ahead, would be a stunning demonstration of British innovation and ambition. Striking an emotional chord should not rule the entire operation, but it matters. At a time when the world’s economic axis is spinning eastwards - though it seems hackneyed to say it - this project would be a sign that Britain at least hadn’t given up the ghost.

The second important consideration is of course cost. Fifty billion pounds is an awful lot of money that Britain, on the surface of things, can ill afford. Ministers already appear determined to push full steam ahead with the embarrassing High Speed 2 railway at a cost of more than £30 billion. Small price to pay to get from London to Manchester a few minutes quicker.

HS2 will gobble up the lion’s share of British domestic infrastructure spending over the next couple of decades. So where, as the Times asks, will the money come from for a new airport? A report published last week by Boris Johnson showed how a new hub airport, properly designed, could begin to pay for itself by attracting inward investment. My expectation is that the private sector would be approached to meet some of the upfront costs, perhaps in the form of special infrastructure bonds, or even with a direct contribution (as with Crossrail).

A new airpot has been criticised by some environmental groups, such as the RSPB, who have concerns for the unique birdlife in the estuary, and by some local MPs. Their defence is as justified as the one I often give myself when opposing HS2. I do not refute it. But I agree with Sir Simon Jenkins, chairman of the National Trust, who wrote in the London Evening Standard that a new airport offers “the least harm for the greatest gain”.

Might there be another, more political reason, why George Osborne is increasingly willing to entertain the Mayor of London’s imagination?

The plans will not be analysed by the Government until next year. That puts off a decision, in all likelihood, until 2013. Building would be unlikely to commence until shortly before the 2015 General Election, if not afterwards. The Thames Estuary Airport Feasibility Review in 2009 suggested it could take until 2030 to complete.

Boris Johnson hopes - indeed, according to most polls, should expect - to be re-elected Mayor of London next year. He insists that he will serve another full four-year term, though gossip persists that he will seek a safe Conservative seat midway through that term in order to be in the House of Commons prior to the election in 2015. The overriding ambition is to be in a position to become Conservative party leader ahead of Mr Osborne.

But how would Boris feel if his grand projet was just getting underway? Boris is ambitious, of course, but he is also, by his own admission, a man with a “healthy dose of sheer egomania”. Having already lent his name to the capital’s bicycles, how could he resist overseeing the foundations being laid for his own island?

Boris Johnson believes passionately in this new airport. By giving it the green light, George Osborne might just manage to keep his rival in City Hall for long enough to keep his nose in front.

Back Boris Again for a Better London

David Cowan 6.00am