Category: Blog

 

          I have never had so many responses to stories as the numbers that came in concerning the looting, arson and violent attacks on our streets. I have done my best to keep up with the flow. I understand that some of you wish to discuss race and immigration issues. I have edited these for two main reasons. Firstly I do not think we have just witnessed race riots. Secondly, my understanding of the UK – and of England – is that we are a country made up of many migrants from many places who came at various times in our history.  There is no simple tale to tell, and I do not wish to help divide communities or libel groups who have their share of  criminals, their share of hard working and responsible people and their share of  saints like all the rest.

England was settled by Angles and Saxons, by Celts and by Picts, by Jutes and by Jews, by Hugenots and other Protestant refugees from the continent, by Indians and Pakistanis, by West Indians and by Africans, by Poles and Czechs, by all manner of people from many parts of the world. I have no idea where my ancestors came from or when they came, nor will many of you, but we too ultimately  are the sons and daughters of migrants.

 

               We should not seek to divide all those legally settled here by reference to race or creed. We should be working towards common goals and creating a common life which draws on our great island story. We have democratic institutions founded on fine principles. All are equal beneath the law. The law applies to all, however powerful or rich. Everyone is innocent until proved guilty, and all charged with a crime have the right to prove their innocence in  court. There is  trial with  a  jury for the more serious offences. The state does not make windows into men’s souls, and permits all religions and beliefs, unless they preach hatred, violence and intolerance to others.

The one thing which defined and united those who broke windows, threw bricks, stole goods and torched other people’s property is that they are all criminals. Most if  not all of them were UK citizens, legally settled here, many born here. The issue is what should the government and the wider community do to prevent such misconduct in the future. The elephant in the room is too many criminals. The problem is the spirit which took so many into crazy behaviour, which if unchecked would have made normal commercial life, jobs and incomes impossible to maintain.

 

The government recognises it needs an agenda to improve its response to any possible break down in authority. In recent days  the police have changed their response to such an outbreak of criminality, with the support of the government.

The government has stated that the police can insist on people revealing their faces, to make them more relucant to commit offences.

It has stated there will be enough prison places available to put those who committed serious crimes into jail.

The police moved to putting more  officers on the streets, and to arresting more at the time of the crimes being committed.

The government confirmed that the faces of those believed to have committed offences  can be posted on the web to locate them for questioning.

The courts met continuously through day and night to handle the rush of cases expeditiously. Some magistrates and judges have handed out exemplary sentences. Others have been criticised for alleged lenience.

The government says it intends there to be enough police available in future for front line duties. There is an argument between the polticial parties over whether future budgets are sufficient. The government  claims there is plenty of scope to divert resources from back office and paperwork to more active policing.

There does seem to be a move towards more active policing at the time of the event, and less reliance on CCTV images and subsequent arrests.

My first question is what else would you like the authorities and the police to do? Does the law need strengthening? Are the new police tactics correct?

Several of you have written in to say that you think the behaviour of thieves and yobs is similar in nature to the bahaviour of bankers and politicians who have taken large bonuses or generous expenses. Some of the yobs, far from beign campaigners for higher public spending on youth clubs, were saying taxes were too high leaving them insufficient cash to buy what they wanted, as if that excused taking it for nothing.

I fundamentally disagree with this way of thinking. Where MPs stole public money they should be condemnded as roundly as the looters, and sent to jail – which indeed is what has happened. An MP who is found guilty of theft loses job, reputation, and liberty. An MP who claimed sums under a generous scheme for expenses which was legal at the time was guilty of misjudgement in the court of hindsight, but was no thief. The subsequent row led to a tighter scheme as befits the mood of the times. The fact that MPs are allowed to charge for secretrial support, other office expenses and overnight accommodation when they are working late is no justification for others to steal. Most people in executive style jobs can claim overnight and subsistence costs when working  away from home. Most have secretaries and office supplies provided to do their jobs without having to submit claims for audit.

 

A banker who earns a very large bonus because he and his bank have made large profits of course attracts jealousy, but again is no good reason why others should go looting. The profitability of the banks should have produced more competitive challenge, and may now do so to compete away high profits. If the bank has risked private capital and chooses to reward it employees or its shareholders well, that is no more unacceptable than the wages very good footballers earn because many people want to see them play. The rest of us benefit from the high taxes they pay, assuming they are onshore.

I agree that the state should not  subsidise the banks to pay such bonuses or to bail out their losses. I was the one MP who disagreed with the nationalisation of the banks. I proposed breaking them up,  only protecting the depositors, handling them through a controlled administration.  I think it was a huge mistake that the government  did not make it a conditon of support for nationalised banks that they had to  cut high salaries and ban bonuses until the banks are profitable and back in the private sector.

The fact that Messrs Brown and Darling confirmed many generous contracts and signed up some more of their own still does not justify others going looting.

We also need to continue the substantial work going on to get more young people into work, and to teach and train more to see the value and virtue of abiding by the law and taking responsibility for your own life.

 

          Amidst all the UK turmoil on the streets, world markets have continued to plunge on the back of fears about banks, government debts, and slowing growth.

          So far markets have believed the UK government’s oft stated intent to get the deficit down and to control its finances. The UK government can now borrow at some of the lowest sovereign interest rates in the world. No-one doubts the UK’s commitment to meet all the payments, or her ability to do so.

          That good news does not mean the UK economy is running to plan.  The Bank has been forced into yet another reduction in its forecast growth for 2011 and 2012. Slowdown in the USA, turmoil in Euroland, and attempted slowing in the emerging economies, make an export led recovery that more difficult. The Bank has also drawn attention to the big squeeze on real incomes in the UK, a squeeze made far worse by the Bank’s failure to keep inflation down to the target level or anything like it. This squeeze cuts domestic demand.

             The Bank’s figures for the first quarter of 2011 show that the public sector contributed a positive 1.1% to growth. The government increasd public spending significantly, leaving it growing more quickly than inflation. The extra money needed was all borrowed. The private domestic sector cut output by 2%, thanks to the real income squeeze. The overall positive outturn came from net exports added to the public  sector. Net trade contributed plus 1.4%, giving overall growth of 0.5% despite the large fall in the domestic private sector.

            So the UK economy followed a course  rather different from that described in much of the media. Public spending and borrowing added to output, the private domestic sector subtracted from output, thanks to inflation, tax increases and the debt overhang.

              Looking forward, the OBR and the Bank are now saying there will be less output and therefore less tax revenue in the early years of the 5 Year Plan. The government has to decide whether this is a temporary phenomenon, allowing them to borrow a bit more and await fast growth in the second half of the period, or whether it is likely to persist. If the latter, then the government has to look again at the way it is going to get the deficit down.

               Either way, it would be wise for the government to go easy on hiring new staff, on adopting new projects or signing up to new commitments. This is not a good time to expand spending further. It would give the government greater flexibility and more protection if spending started to undershoot targets.

               For every 1% undershoot on the growth forecast the government will lose around £6 billion of annual revenues. If the government loses 1% of growth this year, and does not recoup that, it will lose more than £25 billion of revenues over the Parliament and the period of the recovery plan.

 

           I am grateful for the big response to my request for comments on the looting and arson in our cities. Many of you want tougher policing, and have specified how.  A few have warned against reactions which damage the liberties of the rest of us, or undermine the tolerance and consent of British society at its best.

         Some of you do not like the fact that I have removed some of your comments. I have done so in accordance with my request for facts, evidence and analysis. I do not wish to have to spend time defending this site for posting material which offends innocent people because it falsely brands too many with the stamp of criminality.

           A few posters are infected by the Ken Livingstone approach. He condemns the looters whilst at the same time claiming it is the result of cuts, social exclusion and other mistaken policies. He does not pause to think it is mainly an indictment of many years of Labour rule nationally and in London, if public policy is at fault. No-one can claim Mr Johnson or Mr Cameron have made much difference yet to levels of spending or the general approach to the public sector, other than to put spending up a little more.

          I reject the proposition that we have been witnessing the spontaneous political outbreak from a dispossessed underclass reacting to draconian public sector cuts. To start with, overall spending has gone up.  Consider three types of people we have seen or heard about involved in these criminal activities.

           There are the schoolchildren. They are attending well financed state schools, whose budgets were increased substantially during the Labour years, and whose budgets have been protected by the Coalition. Those who attend inner city schools receive substantially more cash per head for their education than the schoolchildren in  Home Counties suburbia. Their schools may well be getting double the amount per pupil.  Both past and  present governments are dedicated to improving their life chances through their reforms. The consistent message has been there is a decent life for you too, if you behave and perform well at school. The fact that too many of these children do not respond, may not get support at home, and get to the position where they wish to drop out from the mainstream argues for changing the way we do things but does not prove a lack of concern or cash.

           There are the employed twenty somethings who have now been charged with theft  and violent entry into shops. Listening to the roll call of oocupations, they did not sound like the dispossessed. They are not the frustrated unemployed. They were greedy people who thought they saw an opportunity to have something free that they could probably afford to buy from their incomes in the normal way if the budgetted sensibly. Those who have been caught have just made a mess of their lives. The danger is their criminal record will then get in the way of them taking responsiblity for themselves and their familes and continuing in worthwhile paid employment.

           There are, we hear from government sources, the gang leaders and organisers. These are people who make a living out of selling misery to people by trading in drugs, protection and other illegal activities. Gangland culture is not a healthy part of some of our urban areas. It is run by people who show considerable entrepreneurial skills, but choose to exercise them in dark ways on the wrong side of the law, often with dreadful consequences for those caught up in their activities.

         It is difficult to conclude from the tv pictures that this is a revolt of the very poor. Many of them went looting in cars, or were  directed to the crime scenes through their  blackberries as they raced there in their designer trainers and tops.

       As many say, we have created a society where this type of behaviour is possible. There are too many children without parents controlling and encouraging them, too many school pupils who are not motivated and  disciplined within the walls of academy, too many young people who know their rights but do not accept their responsibilities. We have concentrated on the politically correct at the expense of old fashioned virtues and orderly conduct. The last government encouraged the police to to spend more time and energy on  thought crime and less on anti social behaviour or worse.  People have been encouraged to worship the cult of celebrity, to think the possession of branded products is what matters most, and to think that almost any means are justified by the end. Civility, courtesy, moderate language, mutual respect, consideration for others and efforts to improve the social fabric have been regarded as old fashioned or middle class. Everyone else has been told to look to the state, to insist on their entitlement, and to think more public money will solve all ills and create fine lives. Deprivation, past hardship, low income beginnings have been advanced as excuses for criminal or self defeating behaviour. Ambition has been set low or snuffed out for those from poor backgrounds.

         In a later post  I will look at the kind of policing many of you would like to see to prevent this happening in future.

 

 

              I am glad Parliament will meet again tomorrow, if only for a day. When I called for it to meet yesterday, I also sought assurances that we could discuss the economic situation as well as the wave of criminality. I am glad we will have a statement both on law and order and on the economy.

             I am hoping the Prime Minister and Home Secretary will be able to report that with much larger numbers the police now can control  the streets. I hope they will also tell us if changes to the law are needed to act more decisively  to prevent breaking and entering and damage to property when police see it about to happen. Can with the extra police the force now arrest more at the scene of the crime, often with the proof of their crimes in their hands? Can threatening gangs be broken up or detained before they do damage to people and property? What is the appropriate level of force to use against violent looters? How can you distinguish readily between violent gangs of looters, and people just out on the streets for peaceful purposes? What is the appropriate sentence for those who destroy homes and businesses, and help themselves to other people’s goods? What did the PM mean when he said if you are old enough to commit a crime you are old enough to take the consequences? Is he thinking of changing the age of criminal responsibility?

                The Chancellor needs to tell us about the Euro crisis and the fear that has gripped markets about slowing growth or worse. He now has an opportunity to flesh out his recent press article about bringing in more measures to stimulate growth. He can tell us what the UK wants in return for allowing the Euro member states to press on with greater union, as he proposes. He can say what the Euroland members are wanting to do to control wayward deficits and to inject confidence in what they are doing.

 

 

           Most of  us get our daily bread and milk from Tesco or Waitrose, Morrison, Asda or the Co-op. Just a few large chains provide most of our daily diet. Few people think of the organisation and activity that lies behind providing such a wide range of goods at competitive prices,  making sure it is all fresh and safe to eat daily.

          Small bunches of anarchists or violent criminals unchecked can break into a store and plunder it, or burn it down. If they do this, they can steal food and drink for a day or two, but that store will not be available to them a few days later. If the community is lucky the company will rebuild or repair, and restock. It will take time.  The local community meanwhile has to look elsewhere for its food supply. The community is damaged, jobs will be lost. Everyone is worse off.          

              Watching the tragic scenes last night in disbelief, it was obvious how fragile free enterprise and democracy are. They only work if the overwhelming majority accept they need to work. They only survive if those invested with authority to keep the peace and enforce the law do so with firmness and commonsense. Good policing, from the Home Secretary downwards, rests on a unique blend of authority and understanding. The authorities have to show that they have the power to prevent violence, to protect property and people, or to catch criminals promptly and deal with them in a way which deters others. To do that they need the goodwill, support and intelligence from the rest of us. Yobs, unruly children, and looting adventurers, can undermine the rest of us if unchecked. They are a problem for us all. The police have special duties and powers. The rest of the adult law abiding  community also has to contribute  by creating an atmosphere against violence, and co-operating with the police to intercept, prevent and deter.

                As I sit writing this in my  Westminster office I feel the need for Parliament to be in session. It is strange that I cannot table a question, hear a Statement from the Home Secretary, table a motion or discuss with colleagues what we should debate next week at such a time. The MPs I would normally want to hear on these huge topics are not around. The Tea Room, the source of so many important conversations,  is closed.

            The Euro crisis is worthy of the recall of Parliament. The lurch of world Stock markets, raising the spectre of slowdown or worse in the world economy is worthy of Parliament meeting.The state of the streets in the UK requires debate and action. If any one of these three needs Parliament, the coincidence of them together surely means Parliament should be back in business?

 

            “Told you so is not a policy”. I think the Uk is right to say that if Euroland wants to go ahead with a proper single country union to back up its single currency, we will not stand in the way. I just want us to use such a moment to get a very different deal for the UK. We could not possibly lose more power to Brussels now, and need a lot of power back to run our own affairs democratically at home.  My critics tell me this is wrong.

               Losers do not like a smartie pants. The Euro area is the loser. The critics have so far been proved right. They put too many currencies into their scheme. They did so before those countries had controlled inflation, controlled their budgets and learnt how to limit their debt.

                Worse still they went ahead without having a proper interventionist central bank to regulate the cash and capital of Euro area based banks, and without the means or permissions to run a co-ordinated sovereign debt funding scheme. As a result they now have a twin crisis, a banking problem and  sovereign debt problem.

                 I have always said the least costly and least damaging option from here is to break up the union before it does more damage. I have also always said this is not the UK’s call, and it looks as if Euroland still wants to make a go of it. In which case, they need to do much more to put right the fundamental weakness of their scheme. In a phrase, they need a single sovereign to stand behind their single currnency. It has to be all for one and one for all. Their leaders have to seek to secure democratic consent to a huge leap, from national identities and democracies to European identity and democracy.

                The problem is two and two can equal three. In a united Euroland, the rich countries will clearly be worse off. They will have to raise extra taxes, to send money to the poorer parts of the union. Transfer payments within successful currency unions like the dollar and sterling areas are many times the current level within the Euro zone. If Liverpool needs higher Council spending or more benefit cheques, London sends them the money. If Athens needs more cash to pay the wages and more money for the unemployed, Berlin will have to send them the money. If Germany wants to know what it will be like, it will be a longer and deeper and dearer version of what they experienced in West Germany when they entered their  currency union with East Germany.

                   The trouble with currency unions that are too big, or include areas that are too divergent, is they may not even work in the long term interests of the poorer areas receiving the extra taxpayer subsidy. The price for Greece receiving the additional aid will be more European control over her democracy, and no ability to devalue to kick start her economy from higher exports. The send them aid model of economic development often does not work, leaving the poorer countries permanent pensionsers. They divert their political energy to demanding more cash from the centre, instead of using it to earn a more prosperous living by their own efforts.

        I fear the Euro area would be a case of two and two makes three. I doubt if any area within the zone would be better off in the long term, to say nothing of the  problems of identity  in making people feel they belonged to a new state they belonged to. European union could become the most disuniting force of all.

 

            The riots cannot be ignored. It’s not a subject I have a ready answer for. I invite all who are interested in this topic to write in about what you think has caused them, and what the authorities should do about them. Libelling  the police or specified groups in society will not  be welcome. Analysis, facts, argument will be.

 

            The riots cannot be ignored. It’s not a subject I have a ready answer for. I invite all who are interested in this topic to write in about what you think has caused them, and what the authorities should do about them. Libelling  the police or specified groups in society will not  be welcome. Analysis, facts, argument will be.

 

            First, the good news. The Chancellor, published in the Telegraph this morning, states he will now produce an autumn policy to promote growth. This needs to include many of the ideas we have been discussing on this site to free the UK  economy to perform better.

           Next the bad news. Looting and rioting in London is bad for jobs, business and investment. You can make a poor area poorer by criminal behaviour.

          Last night the ECB came up with more of the same. If markets persist in thinking Italy and Spain are borrowing too much, the ECB is going to have to  buy a lot of bonds. They are being driven towards the QE route, as the ECB already has a strained balance sheet. The bond buying decision is helpful, but does not solve the problems. The Ministers need to meet and to answer the list of questions posted here on Sunday.

 

               To me the biggest single political issue that angers and worries people is energy prices.

               Every time you go to the pump to fill your car, every time the Gas and Electricity company sends you a statement or quarterly bill, you get a nasty shock. Super greens may tell us to wear thicker woollies, or to get on a bike. For many busy families there is no option but to take the car to work,  to use the boiler for hot water and central heating  and the  cooker for daily household chores. Paying the bills leaves many short of cash for other items. It is an important part of the squeeze on spending we see in the shops.

         The impact on industry is at least as bad. If you make cement, fire iron and steel, bake tiles and ceramics, run extensive automated plant, produce chemicals, forge parts, manufacture glass and a host of other manufacturing processes, you need to use loads of power. Of course leading firms work away at less fuel intensive processes. They find ways to cut kiln times, ways to insulate and to  reuse waste heat. They seek out  methods which cut their power bills as much as possible. They would do all that even if our energy prices were lower.

         The problem is the EU green and renewable policies, and carbon tax policies do not apply to competitor companies in places like China, Korea and India. The EU may succeed in cutting fuel use here, but at the expense of exporting manufacturing jobs elsewhere. The fuel still gets burned, but not in our part of the world. More employment and value added has been lost. Goods may be produced with less fuel efficient processes as a result.

          I am glad the government wants to encourage more manufacturing here. It is depressing in our shops to see just how many things we once made here are imported from emerging economies. Tempting companies and entrepreneurs back, or persuading new ones here to challenge the new masters of industrial output will require amongst other things a more benign energy policy.

                  More than ten years were lost recently  by a government which would not make up its mind and define an energy policy which works. This government needs to get on with it. We are told they are trying to find a way of allowing cheaper energy for manufacturing. Why not look for cheaper energy for all?  Politicans rightly worry about fuel poverty, people who find fuel costs are too high a proportion of the total. Wouldn’t it be better in our current situation to solve that with chepaer energy, rather than offering more benefits taxpayers can scarce afford?

                    The EU wants us to scrap all our old coal stations. Domestic pressures will lead to the closure of many of our older nuclear stations. That means there is a lot of  capacity to replace. Combined cycle gas is the cheapest and quickest way of doing that. Isn’t it time to get on with it? Some I am told is now going to be commissioned. Wouldn’t that send a message the UK is open for business? Wouldn’t  it also reassure a little the elderly and those on low incomes who now dread the arrival of the  fuel bill?

            The UK needs to earn its living in an increasingly competitive world. Let carbon prices, high renewable obligations and all the rest be global agreements, not pioneering increases in UK costs that simply transfer the jobs elsewhere.