Author: johnredwood

In recent years there has been a strange vogue for give more government decisions and executive action to so called independent bodies. Apparently this has polled well. Why not trust the experts, instead of asking an amateur Minister to preside over the policy area and sift the professional advice in the Ministry and from outside?  Surely, people have argued, the experts acting in a non political manner in a quango will do a much better job?

It is high time more people questioned the logic of this. The truth of course is that in a democracy no area of policy or government action can be given permanently to an independent body. A free Parliament and Ministers always have the right to intervene, to demand a change of policy from the body, to change who is on it, to change the law it enforces, or even to wind it up. Leaving aside the vexed issue of the EU and its powers, no quango in the UK is sovereign. All know that Parliament and the elected government has many ways of influencing them or changing their personnel and powers. The EU of course presumes to direct both quangos and Ministers, but that is a different subject we have often discussed here.

It is also true, however, that all the time the main political parties are agreed that a given area should be run independently, it can be. This independence can continue for quite a long period. It is only interrupted if there is a serious crisis brought on by the way the quango acts, or if there is political change which requires the elected Ministers to intervene or change the way the quango operates.  Public opinion may be the catalyst for forcing change to the Agency, because the public may get fed up with the consequences of the actions of the independent body. Parliament is then the public’s safety valve, able to intervene and change things.

Two of the biggest examples of so called independent bodies in recent years have been the Bank of England and the Environment Agency. I have often commented before on how the Bank was overruled at the height of the banking crisis it and the FSA had managed to preside over and exacerbate. The elected officials intervened to get interest rates down when the Bank was not going to lower them quickly enough. The Labour government changed the powers and duties of the Bank, and so did the incoming Coalition government, reflecting the public disquiet about the conduct of policy. It was during the period of maximum independence for the Bank between 2001 and 2008 that we had the worst banking and boom/bust crisis of the modern era. The Bank, far from being able to manage and dampen the cycle, made it worse.

Now we see a similar problem with the Environment Agency. It turns out that it has been following a policy of allowing flooding to occur in parts of the country where elected politicians wish there to be a policy of managing and controlling the water. Recent Ministerial intervention is seeking to secure the change of policy many members of the public want. Far from taking politics out of water management, the Environment Agency seems to have put them in with a ferocity we rarely see about this topic.

The Environment Agency should have more technical expertise than Ministers on how to manage water and the environment. Ministers are still needed to tell them what the priorities are, and how big the  budget is. Allowing them to be independent for too long has produced an Agency following priorities that are not the priorities of all those with drowned homes, roads, schools and farms.

Some critics on the site claim that I along with other MPs fail to point out that many policies which miscarry or do damage are required by EU regulations and directives. I find this a most curious criticism when I spend a lot of my time pointing to the EU underpinnings of the way we are currently governed.

It is clearly true that EU requirements limit any UK government’s ability to control our borders and to limit migration from other EU countries. It is self evidently the case the Labour’s dear energy policy based on windfarms , the closures of cheaper generating capacity and high taxation of “carbon” was embedded into EU law during the last decade which  now gets in the way of the UK following a  cheap energy policy. It is also true that the Environment Agency have used various pieces of EU legislation as a reason for their policy of retreat from protecting rural areas from flood. The fact that the Dutch have behaved differently under the same laws implies the EA’ s interpretation of these laws is not the only one.

It is not the case that EU law requires the government to build HS2, though there is a “European network” of fast trains with lines on the English map as well. It is disputed the extent to which European law prevents us from having the benefit system of our choice, and the extent to which the EU makes us keep terrorists here under the articles of the European Convention of Human Rights.

What is certainly true is that the tentacles of the EU now stretch into many parts of government. It is possible for people to erect a case against any particular course of action in any given field based on EU law. Even well intentioned policies that are thought to lie outside EU prohibition or influence may be turned by the European Court into EU matters. Modern Ministers have nothing like the power of their predecessors, because they are constantly having to see if what they want to do is compatible with EU rules. It is not a great way to govern a great country.

Ministers should have more freedom of choice, and the electorate should decide whether they have exercised that power well or not. The trouble with so much bureaucratic power in the EU is that electors feel more and more impotent to change things. Voters may disagree with what is being done in their name. They cannot kick out the officials who designed the EU legislation. Any given country is unable to force change in laws we do not like. It is a very undemocratic model.

This week Labour was in full cry again demanding an end to zero hour contracts and part time jobs. They regularly now denounce employers who offer anything short of a full time job at a decent rate of pay. There is nothing wrong with that an as ambition. Worse is their wish to imply that Conservatives do not want people to have good jobs and decent pay, and their suggestion that somehow we can legislate to ensure that everyone has a full time job at a good rate of pay. They often seem to condemn all part time jobs, without accepting that some part time jobs are good and sought after.

As a Conservative I am as keen or keener than Labour MPs to see more people in work with good jobs and decent pay. We do not, contrary to their suggestion, disagree about the aim. What we disagree about is the means of getting there, and the  complexity of life which means not everyone wants a full time job.

Labour, of course, did not live their current brand on this topic when in government. In thirteen years they did not legislate to ban zero hours contracts or part time work.  More interestingly, some Labour Councils and Trade Unions themselves have used zero hours contracts, cheap interns and part time workers for their own purposes. When I asked the Labour front bench spokesman last week  to assure me no Trade Union or Labour Council – and I might have added Labour MP- uses zero hour contracts, offers of part time where people want full time,  or cheap interns – he was unable to give me that assurance.

Let’s take the issue first of all of part time employment. Some people want part time employment because they have family or caring responsibilities that take up the rest of their time. Some want part time as part of a partial retirement package. Some fortunate people have a series of well paid part time jobs as part of an interesting life based on a portfolio of interests. Some part time work is well paid. If you challenge Labour they have to agree that  not all part time jobs are badly paid and held by people who want and need to work full time but cannot get such employment.

If we then narrow down the issue to the harder cases, I accept that some people have lower paid part time jobs who would like better paid and full time employment. Sometimes starting off with an employer part time enables you to work your way up to a better paid and fuller time job. If the poorly paid part time job is a passing phase, a  step to a better job, it may be part of a necessary process. A poorly paid part time job can be a better step towards a decent job than staying on the dole. Under new rules it should also always be better to take such a job financially. All political parties accept some element of public subsidy to poorly paid employment through the benefit and tax credit system.  The benefit system has put perverse incentives in place in the past discouraging fuller time employment.

If we look  at zero hours contracts, again there are bad ones and good ones. Some taxi drivers belong to a  marketing company or central business which gets them jobs. They wish to work the hours that suit them, and only earn when they are out and about collecting fares. The marketing company could probably not afford to put them all on a full time salary, and would have difficulty rostering them and making some work late shifts or very early shifts. The earn as you work approach can solve the phasing of taxi availability and  gives the driver more control over when he works. Should this be banned? The issue with zero hour contracts is one of contractual power. If it is a single employer, and they are bad at the  number of hours they allow you to work, but insist on your availability, that may be a very bad deal. Surely then anyone in such a position will be spending time trying to get a better job as soon as possible. It is quite difficult defining in law bad contracts which we ban, whilst not denying flexible contracts which both parties willingly enter.

The issue of interns and work experience is even more difficult. Increasingly young people need to show they have done something like this to improve their chances of a job offer. The system can be open to abuse, if an employer expects too much of a work experience person or intern and pays them little or  nothing. The system also favours young people with good family connections who may get the better offers from family contacts. How do you regulate that to allow sensible work experience, to avoid exploitation, and to level the playing field for those without family keys to golden doors?

When Nick Clegg says he wants to “keep Britain propserous, safe and strong” I say I agree. When he says he wants to stay in Europe because that “means in work” I ask  has he looked at the unemployment statistics in much of the EU recently?

He trots out the old fib about keeping 3million jobs in our export industries by staying in, as if we would lose our trade with the EU if we have a new relationship or simply left. Germany is very keen to keep the same arrangements as at present for trade so she can continue to export so much to us, whether we leave or stay in.

He should ask why so many of the Euro area countries are blighted by very high unemployment. Why are Spain and Greece cursed with unemployment of around a quarter, more than three times our rate? Why is youth unemployment at the shocking rate of 50% in parts of the zone? Why has Euro growth been non existent for the last three years, when the UK has managed 3% and the USA 8%?

It is good to see the Liberal Democrats coming out to  explain their views. Whilst they do so in ways which are often unflattering about their Conservative partners in government, it does confirm that this Coalition has been riven by major disagreements, especially on the question of the EU.

The Liberal Democrats may not be good allies. They do seem now to want to stress just how many disagreements there are.  There is no sense of Ministerial unity or common purpose in a series of statements from senior Lib Dems in recent days.  There is none bigger than over the EU. The biggest disappointment for most Conservatives about the Coalition is summed up in the juvenile defence of our membership sent out this week by Mr Clegg. He is wrong that prosperity and stability have been assured in Euroland, when the opposite has been the case thanks to the Euro crisis, mass unemployment and lack of growth. He is wrong to say the EU offers and guarantees us jobs, when the decline of the EU market has adversely hit our exports, and when countries outside the EU have been offered as good or better terms to trade with the EU than we have as an inside  member.

There is indeed, Mr Clegg, a big disagreement between the two parties on the EU and our future in relation to it. It is a huge pity Mr Clegg stands in the way of getting on with renegotiating  our relationship immediately. That could lead to more jobs and more stability for us, backed as it is by the option of leaving if a sensible relationship is not on offer.

The total liability the Environment Agency and the taxpayers share for the future pensions of Agency staff is now at a massive £2.5bn. There are assets, leaving a £380million deficit on these numbers. The Pension fund is valued on the assumption that staff salaries will rise by 4.6% per annum from 2015.

The Agency does not seem to be a good manager of its staff, nor able to raise productivity. Last year it increased staff numbers by 900. Despite doing this it also agreed redundancy packages for 43 people, costing us another £2.6milllion. In other words it makes bad recruitment decisions, changes its mind, gives people a pay off, yet is at the same time expanding the overall numbers considerably. Having gone to the expense and trouble of recruiting someone, why can they then find nothing for them to do, fire them, and hire twenty other people with all the costs that entails?

The Agency has seven Directors on salaries in excess of £130,000, with the best paid on nearly £200,000. That is well above the Prime Minister’s pay. It would be good to hear from the Directors of this body what they are going to do to get better value for money, and to ensure more of the £1200 million a year spend goes on flood prevention and water management. Perhaps the BBC would like to call in the Chairman or CEO and ask them, based on the figures?

In recent weeks we have seen the old truths reassert themselves in international economics. Countries that are running large balance of payments deficits in the emerging world have suffered substantial falls in their currencies. This has of course made imports dearer, which may cut their deficit a bit, but it reflects the doubts some in markets share about how they will be able to borrow enough to carry on living beyond their means.

When the currency falls too far too fast for comfort, inflation starts to accelerate in  the country affected. The authorities then respond by putting up interest rates. They also sometimes reach for controls, seeking to stop people in their country taking so much money abroad, or preventing them from buying foreign products. Quite often it is the most socialist of governments that resorts to the highest interest rates and the most draconian controls. They clearly do not do this wanting  to hit the living standards of the poor, though that is what it does. They do it because they feel they have no alternative.

If their country is at the same time heavily in debt and the state os overspending, it adds to the agony. Argentina has suffered a large devalaution, and there are worries over when and how she will repay her debts. Argentina defaulted on her debts in 2002. Now the government has doubled public spending over the last 11 years, only to set up another debt and inflation crisis. Far from being kind to the poor, the new squeeze is unpleasant. It includes curbs on internet purchases.  Inflation is around 30%.

Venezuela is also in deep trouble. Turkey now has had to increase interest rates by 400 basis points – an extra 4% on a loan – to try to buttress its position. The Argentinian peso has fallen almost 20% this year, the Turkish lira 5% and the South African rand 7%.

So to all thsoe who say a country can carry on borrowing, spending more in the public sector  and printing as much as it likes, I just ask why isn’t that magic formula working in emerging market countries these days? If socialist policies of spending much more in  the public sector worked, Argentina would have one of the most successful economies, along with Venezuela.

It is difficult to believe that there is so much fuss over Mr Gove’s decision not to reappoint a Labour peeress to a Quango on expiry of her contract.  It is even more bizarre to complain that he is trying to politicise these appointments, when the outgoing person is a Labour politician.

As we have now read, Labour made many more Labour appointments to quangos than the Coalition has made Conservative appointments, adjusted for the periods of time involved so far. I saw nothing wrong in principle with Labour Ministers appointing Labour supporters to these important jobs. Doubtless they wanted people running these arms of the state who shared their general world view and aims. Of course they needed to undertake fair recruitment process and ensure that if someone was a known Labour supporter they had the qualifications and experience to justify the appointment. So why then do they dare to complain if occasionally Conservative Ministers take the same view about their supporters? Should a known Conservative who is qualified now be banned from a quango appointment because he or she is a Conservative?

This row raises some wider issues. Why is so much power concentrated in the hands of these quangos, when Ministers maybe should take more control and accept more responsibility for what is going on.  There is no evidence that so called independent bodies are better at judging matters than elected Ministers acting on good professional advice. Just look at the mess the independent Bank of England and the FSA made of banking regulation, bringing on the worse crash in more than century. Previous Chancellors who had more direct control did better. Or look at the Environment Agency’s decision to allow  floods in  large parts of the country.

Can we really believe there are truly independent people in areas of great contention? The global warming theory supporters would not regard an appointee to the job of Environment Agency Head  as properly qualified if they   did not believe in global warming theory . Anti global warming theorists regard the appointment of a pro theory person as  folly or treachery. These are political minefields, and no-one is in this case “independent”. A School Inpsector who believes comprehensives are best might set different standards from one who thinks the best grammars and private sector schools are the ones to match. This again is political territory.

I favour bringing more powers back from quangos to Ministers. Better still let’s find more powers quangos have which we could return to people and  businesses, leaving them freer to do as they see fit. And let Mr Gove choose who he will. It will be his results that we judge in 2015, so he should have the helpers he needs to do the job.