Portillo at the BCSC conference
BCSC conference: Portillo declares a 'phoney recession'
Published: 25 November, 2009
Speaking at the BCSC conference, former Cabinet Minister Michael Portillo listed some of the Conservative party’s proposals that are likely to have a major impact on retail and retail property after the next election. And he warned that the economic storm is far from over.
The economic crisis has so far only been a “phoney recession” – where Government borrowing has soared and financial institutions have suffered, but the average employed person has benefitted from a higher standard of living thanks to lower interest rates.
But reports of increasing consumer confidence are a false dawn according to Portillo, who points out that expected post-election tax rises and public sector spending cuts will have an adverse affect. “There is a huge public finance problem to be addressed, and the next Government, whether it is Labour or Conservative, faces massive challenges to address this. We need to be more honest about the gravity of the situation – it’s not what people want to hear, but it’s what they need to know.”
Portillo, who believes a change in Government is likely thanks to the media and “Labour party defeatism,” cited plans to allow 12 cities in England to hold referendums for elected Mayors. Other strategies include offering financial incentive for local authorities to bring forward extra housing, by allowing them to keep 100 per cent of future tax revenue for six years. He mentioned a similar plan on interest rates.
Another key Conservative proposal gives local authorities a new general power, allowing them to undertake any lawful activity, as well as plans for councils to raise their own bonds, which could be used to fund infrastructure, he said.
“But economies are much more dynamic than we give them credit for, and when you are emerging from a recession the amount of income coming in from additional taxation will provide an enormous boost to recovery,” Portillo concluded.
