Month: May 2009

Part of the surveillance culture and the oppressive style of some public authorities is the trigger happy approach to prosecution. Locally I receive many complaints about heavy handed parking enforcement, leading to large fines and clamping fees where honest mistakes have been made because the rules are complex. I hear this week that someone is alleged elsewhere to have falsified their address to try and get their child into a better school, and faces fraud charges. It is all over the top.

I do not condone deliberate misrepresentation to try to get in to a better school. If that occurs, surely the correct punishment is no priority for the better school, no good chance on the waiting list? It cannot make sense to throw the book at the hapless parent, who wrongly went too far in trying to secure a place at one of the better schools. It just shows the frustration of parents with a system which is meant to deliver choice. In some areas there are not enough places at the better schools. People cannot accept the standards of the poorer schools.The local authority should spend more time trying to improve standards, so there are enough places at schools where parents are happy to send their children.

The money spent on investigating and even prosecuting the parents who try to play the system would be better spent on sorting out the underlying problem. Parents understand that they will obtain priority for a place only if they meet certain criteria the Authority lays down. They can’t just say they want their child to go to School X because they think it is better. That starts the search to qualify. The better off can move to get into the right catchment. We do have allocation of better school by postcode. If a single sex school has better results, parents suddenly become champions of single sex education. They believe the authorities will listen to that argument, whilst they fear that simply saying they want their child to go to the school with better results will not cut any ice. Systems of bureaucratic rationing force people to think and say things they think will be within the allocation rules.

When it comes to parking, we all see the need to keep people from parking in ways which block junctions, driveways, or impede the free flow of traffic. It is more difficult to fathom why some places where parking is allowed have such complicated rules that it is not always clear when and on what terms you can park there. In Wokingham the largest number of cases arise from a split car park, where part is available for all of us and some is reserved for private parking. In parts of London you need to ponder long and hard to find out when and if you can use parking places,. Sometimes the attached signs simply do not cover all the cases, being unclear for example on bank holiday or Sunday rules. That’s why people think the authorities are unfair, and often too trigger happy when it comes to minor offences.

I have been spending Saturday mornings walking and talking in support of European Parliament candidates. Today was a particularly pleasant sunny walk.

I found the usual mixture of local and national issues. Many voters are confused by the voting system. They want to vote for their own local Euro MEP, and dislike the regional list system when you explain it to them. Those who want to pull out of the EU are frustrated, seeing there is no way to achieve that even though these are EU elections. I rarely meet anyone who has raised an issue which the EU Parliament handles, and wants the candidate/MEP to do something. No-one I spoke to wanted the EU to do more, or said anything positive about it.

On the doorsteps today I was lobbied about school places, speed limits, planning, some MPs expenses, Council Tax and the state of the economy. I had to spend a lot of time explaining how many candidates there were, how the votes were cast and counted, how the party list system worked. I was usually told the public didn’t like that system! I have news for you – nor do I!

The takeover of Opel – which includes Vauxhall – by Magna (Canada) and Sberbank (Russia) relies on E1.5 billion of bridge loans from the German state. We learn that the four German plants are to be kept open. We await detailed information on the futures of Ellesmere Port and Luton.

At current exchange rates the UK plants should come out well from any business analysis of costs and productivity. Whether that will be sufficient to save British jobs is more doubtful, given the close involvement of the German government in the answer.

The sad truth is that there is far too much motor manufacturing capacity in the world. Some of that surplus is going to lead to closures in the EU. On both sides of the Atlantic governments have intervened. Their actions will not save more jobs or plants in the medium term – indeed they might lose more. However, they will influence the pattern of closures. The UK needs to be aware. Having a cheap currency will not necessarily take the trick.

I have been asked to mention the snub to the Queen from France, who failed to invite her in time to attend the D Day Remembrance this year. Apparently the French also delayed and were less than fulsome with their invitations to Uk veterans from that heroic liberation of France.

The French President may well have eyes only for President Obama and all the TV pictures their meeting can generate. I do not suppose for one moment our veterans – or our Queen – would have stood in the way of the TV shots he wanted.

Uk troops made a crucial and vital contribution to D Day. We will remember them.

There are huge quantities of oil in store and afloat. Russia is pumping more as OPEC tries to throttle back production. Western and Eastern demand has been hit by the collapse of manufacturing output.Yet the oil price climbs and climbs, now almost double the low point reached earlier this year. There is plenty of investment or speculative demand.

Banks are still struggling to deal with all the past excesses in their lending books. More of the mortgages and corporate loans they advanced have been brought into question by mounting job losses and corporate profits declines. Bank shares have risen sharply from their lows.

The most violent phase of the de stocking may be over, but there is not yet any sign of output rising again. Confidence for the future is higher, but many businesses are still finding it tough to gain the custom they need.

All this could just be that phase of a normal cycle where financial markets move ahead of the real economy. The real economy will follow later, as the extra money percolates through from the purchase of financial assets into economic activity more generally.

There remain more than a couple of worries. Quantitative easing is an extreme reaction to extreme conditions. All the time the authorities are creating more money, it can sustain higher asset prices. When they stop it might look rather different. The extent of the borrowing needs of both the US and UK governments tower over markets. Despite quantitative easing, government bond prices are not roaring ahead. Investors are nervous of their future prospects, and aware that there will be no shortage in the months ahead. When QE stops, it will be much more of a strain on all markets as investors struggle to come up with all the money big brrowing governments seek.

The imbalances of the main economies have to be corrected. Lower sterling – and now a devaluing dollar – will help cut the balance of payments deficits. Only reducing governemnt spending, preferably by improving government efficiency and productivity, can tackle the major imbalance of some Western economies trying to borrow far too much. Extra government borrowing is not the answer to recession, but at the crux of the problem that needs sorting out between the high borrowing and the high saving countries.

The surveillance society is in full flood. We are more watched than ever. We have to live under an ever larger array of regulations and laws, governing how we park, where we drive, what rubbish we throw away, how much tax we pay, and what we think and say. Even the most law abiding find it increasingly difficult to keep up with all the laws you have to obey. It is a compliance society with a box ticking culture.

Much of it is as ineffective as it is oppressive. Making everyone xerox copies of passports and gas bills before undertaking simple transactions does not stop well funded big time crooks from operating. Setting and enforcing tight speed limits does not stop accidents which are often caused by something other than excessive speed. Picking on individuals for saying the wrong things and going in for public denunciation does not stop all nasty thoughts. All this and the rest does spawn ever larger bureaucracies, and makes it more difficult for the energetic to do things that might make life better.

The need to control public spending will reinforce the mood to sweep away more of the needless bureaucracy. We have no need of unelected reigonal government, as we have often agreed on this site. An incoming government needs to look at the satrapies of the public sector, the large quangos, and cut them down to size. It needs to simplify the tax system drastically, by removing taxes that raise very little and making the principal taxes more straightforward – lower rates and no reliefs.

In areas like education and health, more of the money needs to go to the individual schools, surgeries and hospitals. There should be more diveristy and choice, less central control and fewer instructions, advice and guidance from Whitehall.
Every facet of government activity should b e looked at to see what contribution it is making to better services, to sensible regulation or to transfers of income to the less well off. If it is not making a decent contribution to one of those, and providing good value, there is no need of it.

Individuals want access to medical care when and where they want it. They want to be able to choose a good school for their children. They want their rubbish collected regularly, roads to be able to drive on and decent care for the disabled – all at a sensible price. If the government tightens the surveillance, keeps on increasing the complexity of comnpliance, raises the taxes and delivers poor services, they should expect a big backlash against them.

The UK government has spent more money than it should on supporting some banks. Now it comes to the car industry the cupboard is bare, and competition rules are applied.

Meanwhile, the German government is in the drving seat on the General Motors discussions, apparently willing and able to assist.

If there are fair rules to prevent subsidy and intervention in the EU, they should have the same effect on the German and the UK governments. As a long standing critic of government equity support for UK banks, I am not suddenly an advocate of equity support for Vauxhall. As a believer in avoiding subsidy and finding solutions to industrial and banking problems which will produce stronger businesses in the longer term, I am worried that one government is leading the way on the GM Europe disposals and ours is fighting from the side lines. The UK government must make sure a Vauxhall factory is not lost through politics.

Grants and aid for new technology and for green purposes are allowed within the common rules. Short term support against proper security may be permissible in some cases. If there is any kind of common market that works, both Germany and the UK should have a place round the table, and should be operating under the same pro competition framework.

It is good news that David Cameron wants to tackle the feeling of alienation from politics and government that so many people share. He is right to say we need power back from Brussels, we need to transfer more power to people away from bureaucracies, and need a stronger Parliament to challenge and influence government.

Dan Hannan and Douglas Carswell set out a radical agenda for much of this earlier in this Parliament. I praised it at the time, and many of you thought their agenda contained good things. It is time to them to get it down from the shelves and use it to inform debate, as they are doing. I wish them every success.

I myself have set out an agenda for less government on this website, in the Economic Policy Review, and elsewhere. Today I will look at how we could transfer power from Brussels. Tomorrow I will look at how we can reduce the power of UK government and make it more accountable.

The origins of greater EU power came through the introduction of qualified majority voting. If we still enjoyed a veto on every measure Brussels proposed, a sensible UK government could avoid all new EU law that was damaging or unwanted. The first task is to make clear the UK will not accept any more erosion of the veto, and that the veto does have to apply to all Foreign Affairs, defence and taxation as a bare minimum.

This government has given away so many vetoes, that simply stopping the rot is not sufficient. We need our veto back over employment and social law, over immigration and Home affairs, and over other areas central to the tasks of self government.

Restoring the veto for future laws is no longer sufficient, as too many laws of a kind we do not want have been passed already. A renegotiation for powers back has to encompass the right to remove EU laws we do not like in areas where the veto has been restored.

Two big areas of spending are fishing and agriculture. Neither of these policies have worked well. We need our own control of our fishing grounds, as I have often argued. We need agricultural reform, which should include more being done nationally and locally.

The loss of part of our rebate was one of the worst features of recent hopeless negotiating by the UK government. If we cannot reach general agreement on a lower budget for the EU overall, we willl need to raise again the issue of our contribution.

Some of you will have items of your own you want to add to the list for renegotiaiton. Some of you just want to pull out of the whole thing. That would still require negotiation, as the UK is now so interwoven with the EU that all sorts of issues would need to be decided for a new bilateral relaitonship between the EU and an independent UK. Those who think it best to call for immediate withdrawal need to tell us what kind of arrangements they would want on tariffs, market access, transport links and rights, competition policy and other areas requiring agreement across borders and how these can best be secured.

I think it best to have a renegotiation, and then to put the results to the people. It is high time the people could express a view on the value of our relationship with the EU. We might get that on Lisbon, if it remains unratified and there is a change of government. If not, let’s have a referendum on any renegotiation. That will concentrate Brussels minds on the need to give us real power back, if the people are going to judge the outcome. As a minimum we need full control of our social and employment policies, taxation, foreign and defence policy, and of Home afairs.

Yesterday there was good news for Wall Street with better consumer confidence numbers, and bad news with further falls in house prices. Some pundits used to tell us the government had to find a way of stabilising home prices before the banks could be steadied and the markets coaxed back to life.

That does not seem to matter so much at the moment. Wall Street looked at both sets of figures,and decided to concentrate on the Confidence numbers. The index headed upwards again. That must be the wonder of quantitative easing.