Although the F1 team is having a tough time at the moment, McLaren Automotive, the sports car production arm of McLaren Group, indicated yesterday that the future was bright. Since the launch of its first roadcar in 1992, the aptly named F1, McLaren has continued to develop models, with over 20 prototypes now in its stable, including the P11 (pictured above). Yesterday’s anouncement that it was seeking a further £250 million investment with a view to increasing car production to 1,000 vehicles per year, was welcome news for a sector that has recently undergone a dramatic fall in sales (some 30.5% fall just in March). To my mind, it the type of ‘high technology’, niche engineering business that should have a bright future in Britain. It relies upon being the best, having honed its work practices and attitudes in the very competitive environment of F1 racing. Sadly, the days of mass car production being a long-term viable business model in Britain have probably passed. Not only are cars likely to become seen as luxury items as a consequence of the increasing price of oil, the worsening problem of congestion and the undoubted adverse environmental impact, makes mass car production a far from attractive investment for the future.

What is clear is that the business of mass car production is better suited to those parts of the world with low labour costs. That is why Tata Motors of India recently commenced production of the World’s cheapest production car, the Nano. Top-end cars, however, do have a future in the UK, as they are, by definition, a luxury item requiring the input of specialist engineers. And this is where England, in particular, is in a strong position. It has always taken a very active part in F1 motor racing, and hence, many teams are based here, not least of which McLaren, who are situated in Woking, Surrey. Although there have been many recent redundancies in the F1 sector, including from the newly successful Brawn team, the expertise of F1 racing remains predominantly in this country. We should not waste this talent. Britain’s long-term economic prosperity will be aided by nurturing and protecting the intellectual capital of engineering firms like McLaren. Suffice to say, Britain would be better off supporting the Brawn of the future rather than the brawn of the past.

With the recent spate of so-called ‘regulatory failures’ in the public sector, from the dreadful case of the Mid-Staffordshire hospital, through the harrowing case of Baby P in Haringey, to the national economic disaster overseen by Mr Brown’s tripartite regime, it appears easy for ‘informed commentators’ to now call for more regulation. This appears all too simple for me. Having worked within the NHS for a decade, the one thing I have learnt is that good management has more to do with having good people in place rather than more regulations.

To take the Staffordshire Hospital case for starters, there were three authorities with regulatory responsibilities to guarantee that proper healthcare standards were maintained – Healthcare Commission, PCT, Hospital Trust. Seemingly, they all failed.

In the appalling case of Baby P, despite repeated warnings about the threat to that pitiful child, social services, and by default the Labour council, failed to protect him.

And finally, the on-going banking crisis was overseen by the Bank of England, the Financial Services Authority and the Treasury. Judging by the state of the books, it’s fair to say they also all failed.

My first question in each case would be: which individual(s) failed in his (her) job? My second question in each would be: who should pick up the bill for the disasters that ensued? And my final question would be: were they ‘good’ enough to do their job in the first place?

Without doubt the next Conservative government has a pretty dreadful inheritance to look forward to next year. If it was just about spending (AND saving) money, the challenge would be large, but not insurmountable. My fear is that it is more to do with people and the culture that exists within large swathes of the public sector. How many of the people employed to be regulators in the three examples I have mentioned have remained in post? How many of them have been financially penalised for failing to do their jobs properly? I suspect very few in each case, if any. And that’s the challenge we Conservatives face. To make significant changes to improve the working culture of these regulatory authorities will take a real strength of purpose and significant political will. I expect that it will involve removing (in effect, sacking) quite a few senior public sector employees. I just hope that the British people, rather like in 1979, realise the tough job at hand and give David Cameron a strong mandate to sort out this dreadful mess. For he will need all of the political capital he can muster. Our country now needs talented people able to implement effective regulations, not average people failing to implement unnecessary regulations.

	Oh! Darling, please believe me I’ll never let you down
	Believe me when I tell you I’ll never do you no harm – ‘Oh! Darling’ by Paul McCartney

Judging by the front pages today, the most important financial news story from yesterday involved a former Beatle. The decision to award Ms Mills £24 million in a divorce settlement involving Paul McCartney appears to have overshadowed the announcement that Bear Stearns had been sold to J P Morgan Chase for £116 million, less than one per cent of what it was worth a year ago. Yes, Heather Mills, if she had been given the opportunity, could have purchased 1/5 of Bear Stearns over the weekend. The message is clear: invest time in wealthy husbands not in (previously) wealthy banks.

America is heading into recession, and sadly, Britain appears to be following. The lack of access to credit, both for banks and individuals, will lead to a substantial fall in consumption and a reduction in what people (and businesses) are able to repay on debt. Consequently, there will be a fall in mortgage applications and an increase in the number of mortgage defaulters which, undoubtedly, will lead to a ‘correction’ in the housing market. The ‘boom’ of the last 12 years will now be followed by a relative ‘bust’. So much for Brown’s oft repeated claim of our economy being placed beyond the ‘boom and bust’ of past Tory administrations.

Labour supporters will claim that the British government has been left with few options in what they claim is a global economic slow down. Not true. The handling of the Bear Stearns situation is in stark contrast to the debacle over Northern Rock. The dithering and delay displayed by Mr Darling has lead to a greater exposure of tax-payers money. Remember, Lloyds TSB offered £2 per share for Northern Rock if the Bank of England guaranteed £30 billion of the ‘debt’. Gordon Brown and Alistair Darling turned that offer down last Autumn, no doubt with an eye on the outcome of their planned November election, i.e. the Labour party put their chances of electoral success ahead of what was best value for the British tax-payer. We are all left hoping that the government gets our £110 billion back.

If only it was just the Northern Rock disaster we might be prepared to give Mr Darling another chance. Sadly, it does not stop there: rising debt (£43 billion next year alone), rising inflation, 5 million out of work (and increasing), rising taxes, excessive personal debt, falling house prices, etc., etc..Oh! Darling…So, as Ms Mills counts her cash today she probably feels secure in the knowledge that at present cash is king. For who would invest with confidence in property and shares at the moment. The only good thing one can conclude from this mess is that the economics point towards a change in politics. Thank goodness for that.

As with the late Russian dictator, the Chancellor’s regime has been characterised by its reliance on central planning, social engineering, suppression of debate and the annual showpiece parade – of welfare policy gimmicks rather than ballistic missiles – The Spectator (on-line)

This afternoon the Chancellor announced another tax-raising budget. The targets for his fist this year have been low earners and small business; one group in no position to pay more tax, the other the economic heart of the nation. No mention of cutting the waste in public services, such as the £500m alone spent on management consultancy fees for the NHS. No mention of the PFI contracts that essentially are mortgages on my generation’s future. And furthermore, he announced more government borrowing to pay for all of his continued largesse.

The detailed assessment of the budget, I am told, will come over the next few days. Why does a budget have to be so complicated? Why do low-income families have to pay more tax up front and then go through the laborious procedure of reclaiming it via a tax credits system? Would it not be better to remove these people entirely from the income tax system in the first place? Or, would that result in the state having to employ less people to administer the tax system? This Chancellor appears to love complexity, particularly when it creates more public-sector jobs.

A reduction in Corporation tax is welcome. An increase in defence spending, though undeniably rather late in the day, is also to be congratulated. But that is about it on the positive side. To have headlined with a reduction in the basic income tax rate and then proceed to claw the money back by removing the 10% rate is a cynical ploy. Furthermore, to increase tax on small business is quite simply stupid. Small business plays a major part in the British economy, both in terms of revenue generation and job creation. To hamper small business success is to hamper British economic success. And finally, he made no mention of the dramatic increases in council taxation rates over the last ten years. The total tax take in this country is now at an historic high.

Yet again, we have been privy to a political sleight of hand. The Chancellor is an unreformed, centralising Old Labour politician. Today’s budget is a ‘con’. It is more about pleasing his back benches (particularly those members in the South of England with wafer-thin majorities) than about improving this country’s economic position. If Comrade Gordon can deliver such a misleading representation of his economic performance as Chancellor, what sort of Prime Minister will he make?

Yesterday evening on Radio 4, The World in a Briefcase told another story illustrating the brilliance of British scientific research. In 1940, a team of British scientists left these shores carrying information about a number of British scientific discoveries. Their destination was the USA. In return for this valuable information, the Americans were to supply financial and industrial help to us to fight the Nazis. One of the inventions, the cavity magnetron, has since been described by military historians as one “that changed the world”.

The cavity magnetron (pictured above) was developed by John Turton Randall and Harry Boot at Birmingham University. It was the first practical device for producing microwaves. It allowed for the development of radars that could produce clear images of distant objects. These devices were then to be placed on ships and airplanes. Their widespread use clearly played a decisive part in the outcome of World War II. The device was also the ancestor of the microwave owen beloved by most of us today.

I mention this story as it illustrates the power of ideas and inventions. The British have a proud history of innovation. That innovative prowess is dependent upon an education system that discovers, nurtures and financially supports the great thinkers of each generation. Britain’s position in the global order will not be maintained by concentrating solely upon services and what we have left of a manufacturing base. It will be supported by continuing to compete in idea development. It is consequently in the interest of all Britons that our education system finds and educates the brightest to their full potential. The success of these men and women may very well underpin the future British economy. Without a vibrant, competitive economy we can forget about more hospitals, prisons and schools. I believe that discovering and nurturing talent is the key to future British economic success.