Dear Ed Miliband,
A few themes have developed over the past few days & I have listened to people from all walks of life in various parts of the Country, to the point that I feel compelled to write to you & ask for your views on a few issues. If you become Prime Minister, how do you answer these points?
1. I met a hard-working family (you know, that label of which you are so fond) in the West Midlands who are not at all sure if you're on their side because they are such hard-working people or if you're against them because they happen to be worth a million quid & earn a couple of hundred grand a year.
The chap went out on his own a few years ago, mortgaged the family home to borrow working capital for the new business, worked his proverbial butt off & the family put up with tight family finances for a few years. The business has done well, making clever stuff for the Country's world-class automotive sector, & some forty women & men are employed, including some young apprentices.
I am confused Ed. Surely this is exactly what we want as a Country! So why does that family feel you're attacking them? Blaming them for being aspirational & wanting to do really well & earn a lot of money. You call them rich & never include them in your description of "hard-working families". Not once have they heard you say that earning profit is a "good thing". You can't really suppress the sneer when you talk of putting up taxes for the likes of them. You appear ignorant at worst & disinterested at best about what they do or what is involved. And they feel it! Through various ways they pay a shed-load of tax, from vat on what they spend, to Corporation & Income Tax on what they earn. They are probably part of the 1% of this Country that pays 30% of the tax. You have no time for them; you don't care.
And they are beginning to wonder if it was all worth it; you're not on their side are you Ed? Not really, whatever you say. You take for granted all they have done & the fact they keep doing it, the jobs they create, the training they provide, the taxable profits they deliver.....& you tell people that this "hard-working family" (as opposed, I presume, to the ones who work for him) are "at it", to be suspected, fat cats who should be paying more so you can spend it how you see fit. You are creating division in hitherto harmonious workplaces; you are fuelling a sense of entitlement & you are killing aspiration.
Please don't say that you are on the side of businesses like these Brummies, that it's all the others you're after. It won't wash Ed. You have created an anti-business mood music where profit is a dirty word; where spending comes before earning.
The real pity Ed is that the people who will pay the price are the very people you effect to help. Next time around, that same sort of risk-taking flair & sheer hard work might still happen.....but probably in the USA or China or wherever the next generation will leave this Country to go & succeed elsewhere. And those forty jobs won't exist, nor the apprentices Ed.
Or, as another self-made small businessman said to me, "next time round I'll get a job in the public sector; safe, thumpingly good pension & Ed will create loads more of those jobs; no risk, regular hours." A bit of a problem there Ed; who'll pay for that if the wealth isn't being created by my chap from Birmingham?
2. So you're going to cap the profit on any private sector NHS supply contract to 5% are you Ed? Quite how precisely? Can you define profit for this purpose please? And if a business can get 3% on long-term money at the Halifax why would it put up with the risk, the effort & all your regulation, hassle, suspicion & vitriol for just a couple of percentage points? I guess that's what you really want Ed isn't it; a monopolistic, unproductive, very expensive NHS which is ideologically socialist & pure......& unaffordable &, again,letting down the very people you want to help.
3. Your good, old-fashioned socialist market interventionism rolls on! From fixing energy prices to capping rail fares.....& we are going to be faced with a National Minimum Wage of £8 are we? Why £8? Why not £7.50 or £9? I don't know what it should be & neither do you. That's why we have experts on the Low Pay Commission to make recommendations. Leave it to the experts Ed. If it is fixed at too high a rate, you end up with a decline in productivity & competitiveness (& thus greater unemployment) & large inflationary pressures on wages right through the rest of the workforce who rightly want to maintain pay differentials.
4. So you will intervene in the private letting market! A three year minimum term Ed? Rent increases capped to inflation? God help us! Don't you guys ever learn?! Does this mean that the tenant is bound to a three year fixed term as well so if they want to leave they have to pay up the remaining part of the lease? Where's the flexibility in that Ed? And why won't a landlord (& so many are just simple aspirational members of the public Ed, not those 'orrible Rachman landlords you seem to think make up the property-owning class) just leave the property empty, wait until a shortage of available lettings forces up localised rental values & then go back into the market at higher rents, causing additional (possibly unaffordable) costs for the very people you're trying to help?
5. I had breakfast the other day with a guy whose financial position puts him & his wife in what, Ed, you would call the stinking rich. He earns a few hundred grand a year & owns a house worth over two million pounds. He works incredibly hard. He & his wife have a policy of giving some 20% of their joint income away to charity every year. He told me, with more resigned frustration & sadness than anger, that every additional penny of tax he would end up paying under your Government will be deducted from the charitable donations he makes. So the pot from which his philanthropy comes will be the same size, it's just that you will get a slug of it & the charities will get less; appreciably less Ed. You see, he says that if you feel you can spend his money on Society more effectively than he & his wife can, then have it Ed but (in an observation that seems to have passed politicians by) you can't spend the same pound twice & the charities will be the poorer by the exact same additional amount you take off him.
6. Across England (& Wales.....& amongst the substantial proportion of the Scottish popular vote who won't be voting SNP; remember that some 20% of the popular vote in Scotland vote Tory in a General Election) there is a growing resentment & serious concern at the thought of a Prime Minister who can't carry England, being propped up in the delivery of a legislative programme that more people in England voted against than for, by a party who not only will have some 50 seats from only 4% of the UK-wide popular vote (the Greens will have only one or two seats from twice that share, UKIP possibly four from twice that again) but whose very reason for existence is the destruction of our Country. Yes Ed, remember the SNP do not want the UK to exist, yet will have a disproportionate influence in your legislative programme.
So there you have it Ed. As you know, I don't do party politics. I am the only Minister who served without being a member of the party of Government. This is not a Tory rant. Indeed, I am in favour of the reinstatement of the 50% higher rate of income tax, but I would have it hypothecated so that the sum raised (nowhere near as much as people think) is used totally on taking more of the lower-paid out of taxation altogether.
This Letter is a reflection on what I have picked up across the Country, your Country Ed. We have the most successful economy in the Developed World right now; don't sacrifice it on the altar of socialist ideology; don't intervene in well-intentioned ignorance to the point that you end up hurting the very people you want to help........& don't give an inch to anyone, from anywhere, who wants to destroy our Country.
Lord Digby JonesDirector-General of the CBI 2000-2006 Minister of State for Trade & Investment 2007-2008. =