A sterling meeting

I attended a meeting with John Redwood and Tim Congdon last night. They on the platform - me in the audience.

It was absorbing and revealing.

Tim Congdon is an economist who prefers to speak the truth: even when it's uncomfortable.

On measures to overcome this recession he says there's just one answer. The government or The Bank needs to spend money on us.

Note: that's spend, as in buying, not just giving money away.

And that's just what the government is doing - at last.

According to Congdon, 'printing money', as the tabloids describe quantitative easing, is no great shakes: as long as the Bank knows when to stop. And buying Treasury gilts and bonds is the most practical type of purchase.

As for encouraging banks to lend: it isn't a priority. What is important is to increase the amount of money in the system.

Congden also says (as many have thought) that if the government had adopted quantitative easing in the first place there would have been no need to inject all that taxpayer's money into our banks.

However, in Congden's view, the government's investment in bank shares on our behalf will pay handsome dividends. From which we may assume he believes UK plc will ultimately survive, and prosper.

John Redwood expressed frustration. With Alastair Darling for refusing to debate his economic measures in the House. With pointless junior ministers making pointless points instead. With the absence of any briefing papers on Lord Turner's FSA plans. And with the government's failure to get any of its recession-softening schemes running.

Most of all, he was frustrated at the government ignoring the need for banks to sort out their finances themselves. Plugging every hole with taxpayers' money was no incentive for the banks to reorganise, recapitalise with sell-offs and get themselves into downsized shape for future business.

As for new regulation, the need wasn't to import tons more useless rules from Europe. The need was to focus financial regulation where it counts. As ever, John Redwood was in witty and spirited form.