Category: Blog

On his way to power at Number 10 Gordon Brown was keen to associate himself with the ever larger sums of public money the government decided to raise and spend on public services. I remember grasping just how single minded and professional he was about the use of public money when I went to a briefing on FE colleges one day.

I went because my local FE college had asked me to take up a matter for them. I was invited along with every other MP because Ministers wished to use the Civil Service to help them with the organisation of the meeting, so it could not just be a Labour party affair. I went expecting the HE/FE Minister or maybe a Junior Treasury Minister to take us through the detailed numbers of individual FE colleges and answer our queries. To my surprise we were greeted by no less a figure than the then Chancellor himself, who showed great grasp of the detailed numbers of each FE college constituency by constituency. Most of the MPs present were Labour MPs, and Gordon Brown was good at either showing them just how well their FE college was already doing, or promising them theirs would do better next year whilst thanking them for their interest and good work as constituency members.

It was a virtuoso performance which told you half of what you need to know to understand how Brown governs (The other half is when in doubt throw the kitchen sink at your opponents, never sparing the vilification). He believes that people vote for you if you associate yourself with spending large sums of money in their town or district. In this view all public spending is good. Big public spending is better. Lumps of money buy votes. Conservatives can be regularly condemned for not having spent as much, or for probably not spending as much in the future,whatever their true intentions.

Watching the PM I think we should expect more of this simple combination of bash the Tories and spend the money. The fact that the government has spent far too much and is getting such shocking value for what it is spending will not concern him unduly. The fact that the more he spends the more unpopular he becomes will not be a thought which crosses his mind. The fact that the hugely overborrowed public sector is now the main cause of poor UK economic performance will not occur to him. The limit on new debt and borrowing placed by the high levels of total debt outstanding and of new debt being drawn down will be ignored. Instead the PM will order Ministers to spend what it takes – in the naive belief that more spending will in the end win through.

First World War Generals in the first couple of years of the war, safely encamped well behind the front trenches and far back from the shellfire, ordered yet more men over the top and across No-Man’s Land in the belief that it was just a matter of time and numbers before they won. The PM takes a similar approach to public money in the face of adverse opinion polls. This week we have seen the offer of £1.5 billion to Manchester for public transport schemes, and £3000 a day to anyone wrongfully detained under the government’s lock up anyone suspicious scheme. In recent weeks we have seen £2.7 billion for the Crewe by-election problem of the abolition of the 10p tax band. The fact that Crewe did not say “Thank you” for the extra does not seem to have led to any rethink on the strategy.

This generosity is unlikely to extend to constituencies where Labour have no hope. Do not expect a generous package of infrastructure money for Henley this week to help the by-election there.

This morning we hear that the Prime Minister is offering more of our money to try to appease his backbenchers who disagree with him over extended detention without trial. Apparently people locked up for weeks who turn out to be innocent will be offered £3000 a day, as if that were sufficient compensation for the ignominy and frustration of being locked up for a month and a half, cut off from your job, your friends and your family. If you run your own business you would be bankrupt by the time the state had decided it had made a mistake. It shows how desperate the PM is to try to win over his own side. It illustrates that they do at last realise that innocent people will be treated in this disgusting way by the government. It also shows a wider point – that Mr Brown now squanders and throws money at any problem, in the mistaken belief that money can buy him popularity.

Many of us who will vote against 42-day detention without charge or trial do so out of principle. We believe in Habeas Corpus. We were proud to be born in a country which had developed strong liberties for the subject over centuries, and can scarce believe that this Labour government is so careless of them. We have hated the incoming tide of European regulation and Napoleonic law, debauching and overwhelming important parts of our law codes. We have loathed the ever more intrusive state, sending us form after form, demanding tax after tax, and expecting us to drop everything when the inspector calls or the government statistician wishes to record us in yet another data bank. We are spied on continuously, watched over by 4.2 million government spy cameras, and may now even have the contents of our rubbish bins analysed by over-zealous councils. There is no sum of money you could offer as compensation to the badly treated to persuade us that the state should have yet more power to boss people around and take its time with its investigations.

This government does not know the meaning of the word FREEDOM. Its ignorance of history means it fails to grasp the skilful English settlement based on the presumption that someone is innocent until proven guilty, and we all have the right to know who accuses us of what if we are dragged into the criminal justice system. It also means that the government does not understand the peaceful but doughty resilience of many English people to overmighty government. The opinion polls and the Sun may think the further erosion of Habeas Corpus to be a good idea, but I know of no true born Englishman or woman who thinks he or his neighbour should be locked away for 42 days on the whim of authority with no good cause shown and no case brought before a magistrates court.

This week sees the vote on 42 day detention without trial. The Prime Minister has managed to unite the Labour left, the Liberal Democrats, the Welsh and Scots Nationalists and the Conservatives against him. The DUP are still making up their minds. The PM thinks this is a sign that he is both tough and right. Polls show the British people have no objections to locking up possible terrorists before due process, but, if you asked them whether the government should have the power to lock up whoever it likes for 42 days whilst it goes on a fishing expedition for evidence of a crime, there might be a different answer. Brown clearly wants to be able to make Parliament vote for an extension of the detention limits to show he can do something Blair failed to do. It is pathetic gesture politics. If he wins we will then have to put up with days of spin. telling us he is strong, brave, consistent and on the side of the people. If he loses it is a further nail in the political coffin his party and policies are making for him.

On the other side of the Irish Sea an even more important vote is taking place. The latest opinion polls put the two sides neck and neck, after months in which the polls and the pundits assumed an easy victory for supporters of the EU Constitutional Treaty. Cynics say that even if the Irish vote “No” to the EU plan it makes no difference. The EU will carry on regardless, and in due course maybe Ireland will be required to vote again to come up with the answer the Eurolords demand. Listening to Peter Sutherland on the radio reminded me of the vacuity and laziness of the pro EU case. Sutherland just assumes that all enlightened people must want to “share sovereignty”, and will see the inevitability of the Union. He made no attempt to explain why it would make voters’ lives better. He was not asked by incompetent BBC journalists how you can “share” sovereignty, or how far he wished the Euro superstate to go – as so often he was just allowed to get away with a Euro rant. The big extension of powers of the new Treaty, and the remarkable similarity of the Treaty to the old Constitution rejected by voters in France and Holland did not trouble Sutherland or his interviewer.

There is a chance that in the current mood of displeasure with all established governments, because of the poor performance of many economies, the Irish voters will turn out and defeat the Constitution. If they do we must then join them in demanding proper consideration of the implications. Everytime so far the Constitution has been put to electors in a referendum it has been rejected. Surely all those of us who value and support democracy can demand that on this occasion the EU has to understand the meaning of “No”. If Ireland votes “No” the implementation of the Constitutional Treaty must stop, and the provocative advances to a European army which the Irish will be especially worried about should be reversed. Either way, we need to demand the right for UK people to have their say – for we doubtless would say “No” given the chance.

Manchester has decided to make itself a little less attractive to business and investment. It has added its twists to the knife this government places near the heart of every motorist, by imposing a £5 congestion charge to go into and out of the City centre by car each day. The charge, we are told, is to pay for more public transport. Don’t they realise the motorist already pays many times more than the cost of the service he provides? Where does all that money go? Why can’t they order decent public transport which is mainly paid for by fares? All journeys pollute – more public transport does not take us anywhere near zero carbon.

In a world where the rich travel more than the poor, where the government wishes to intensify the market signals to save energy by raising the price still further, and where both motorists and public transport users need public infrastructure to travel, I accept that there should be charges and taxes on motoring. I also think it would be better to charge those of who drive long distances more than the amount we charge those who drive less. The more you use the roads the more you should pay. The more you travel by whatever vehicular means, the bigger the fare or travel tax you should pay.

I am therefore proposing important reforms to the whole system. The principles of reform are:

1. No increase in the total taxes paid by motorists (In due course when spending is under better control they should come down)
2. More payment by use, less for just owning a vehicle
3. Better management of the roads
4. Reductions in public debt and public sector risk for transport investment

The scheme is:

1. Sell long leases on a substantial proportion of the principal highway network to the private sector.
2. Allow the private sector to charge tolls up to a specified maximum for use of this network.
3. Abolish Vehicle Excise Duty, making sure the total cost of VED foregone is the same as the first year’s toll charges on the highways.
4. Set contracts for the private sector to improve and maintain the highways to better standards than at present, encouraging them to expand capacity of the present route network.

A simple rough presentation of the kind of numbers I have in mind is:

1. Sell £110 billion of road leases.
2. Repay £110 billion of public sector debt, saving £5 billion a year of interest payments
3. Abolish VED, losing £5 billion of revenue
4. Allow private tolls of around £5 billion a year in the first year, rising as the private sector succeeds in making more capacity available and in setting flexi tolls to encourage better use of the road through out the day.

This scheme would save those on lower incomes more money, because they tend to have low mileage cars hit disproportionately by VED. It would charge people for use of the roads, improve the maintenance and performance of the roads as the leaseholders have an interest in maximising use, and act as some disincentive to each of us to drive more. Can you imagine a private owner of a road closing all or part of it down for long periods for maintenance as the nationalised owner does? Can you imagine them refusing to add an extra lane when they have a winner? There will b e more miles travelled whatever we do, so they might as well be less congested miles. It would help remoter rural areas where there are no main routes which would be tolled.

When even a Labour dominated Commons Committee concludes we are in danger of becoming a Surveillance Society, it shows the penny is at last dropping. 4.2 million spy cameras watch our many moves, especially when driving. Every government department you deal with demands all kinds of personal information, so it too has something it can lose or send around the country on a DVD. The government is ploughing on with its deeply distrusted and much disliked central Identity computer and associated cards. All this is done in the name of safety and greater security, yet there is precious little evidence it is disrupting terrorists or big time money criminals who have the organisation and the resources to get around the road blocks placed by HMG.

To most of us it seems they target the law abiding, tighten the rules to try to get some to make technical mistakes when following them, and send us a whopping bill for the trouble. It is possible now to commit offences by failing to remember all the information they demand or by making a mistake when filling in one of the many overlong forms. We are all expected to keep in mind a whole library of code names and numbers, to have ready recall of whether we had to offer our mother’s maiden name or the name of our favourite pet for a particular purpose, and have endless time available to offer all this information before carrying out simple transactions.
We would all like the government to back off a bit. It seems as if this government’s preferred bedtime reading is 1984, as they hone the thought police and design the forms around making our lives as difficult and unpleasant as possible. Far from offering us public service, so many departments interrogate us as if we were criminals, and set us tests that could make a criminal of the careless or the unsuspecting.

The ID card and computer is the big one, trying to link it altogether. If they would just stop that it would save us a pile of cash and would send a signal that at last the government’s Ministers as well as the backbench Labour MPs have got it.

As food prices surge worldwide a number of countries are looking to restrict their exports of staples to show their own populations they are doing something about shortages and food inflation. The more restrictions there are the poorer the world will be. International specialisation is a good thing. It means we can all benefit from production where the costs are lowest, the climate is most suited and the skills well honed.

However, when people get hungry or when populations get angry about food prices governments have to listen. They may often act in ways which relieve the temporary pressure on them whilst making the underlying position worse. In this case democracies like India, bureaucracies like the EU, and tyrannies can all act in the same perverse way, to “protect” domestic husbandry and impede world trade. One of the most worrying features of the Obama offering to the US public is the incipient protectionism.

In such a world the UK’s position is very exposed. Under the current government we have become ever more reliant on imported foods. We have always been dependent on overseas trade to bring us tropical and Mediterranean fruits. We are now also dependent on overseas trade for many temperate fruits, vegetables, meat and other basics. The EU’s Common Agricultural Policy, designed on the continent with a view to overcome World War style shortages, has succeeded in damaging UK agriculture substantially. The Common Fisheries Policy has been a hammer blow to our once flourishing and well stocked fishery.

The EU has conspired against the UK in several ways. The EU’s strong and clumsy responses to animal disease prevented UK meat trade for long periods and undermined the reputation of some British products at crucial times. The distribution of subsidies meant it was often better for a UK farmer to set aside the land for environmental purposes rather than to grow anything. The UK was left short of milk quota for its own purposes so ended up having to import milk products from the continent. Our fishery was opened up to predatory large trawlers from Spain, Denmark and other European maritime centres, leading to overfishing and damage to the sea bed.

Today the threat of world shortages should concentrate the mind of Ministers and policy makers. We cannot afford to be locked in to these failed and backward looking policies. At current market prices the UK should be able to produce a lot more of its grain, meat and milk without subsidy. It does not need EU interference making that more difficult. We need an independent fishery where we can pace the use of it to restore the stocks, supervising the kind of nets and boats used to limit the damage.

The UK is a relatively rich country, and will be able to import food at a price to meet its demands. Lower income families will be squeezed. However, the reason why our dependence on imported food has risen so much is partly the unfair and unsuccessful policies pursued by the EU in this field. In a world lurching to some more protectionism we need to be aware, and to be allowing the market to strengthen the amount we produce at home. There is plenty of land to bring back into production, and plenty of scope for more market gardening, orchards, vineyards and the rest.

The EU elite are on manoeuvres again. They really really want military power, so the EU can walk the world stage and stalk the world’s corridors of power backed by the ability to intervene militarily wherever they wish. We should not encourage them.

EU countries have more men and women in arms than the USA, but cannot exert this power for lack of heavy lift, lack of a large enough surface navy and enough transport planes. Relatively poorly armed troops are also relatively immobile. They can be sent by train or lorry to a small war in Europe, but find it much more difficult to exert influence on other continents.

The UK still has an important navy and airforce, despite the cuts. The UK has some expeditionary capacity to work alongside the US and other UN powers in conflicts well beyond Europe. The EU would dearly love to enmesh this, and the nuclear capability of the country, into its plans for a wider European force. I could think of nothing worse. The last thing the world needs is a new juvenile superpower trying out its new powers to intervene. It is going to be difficult enough watching the US and China size each other up and develop a new relationship as China’s economic and military power waxes. The EU will not spend enough on weaponry and military technology to catch up with the USA, but it is intent on making a noise by putting the unbalanced forces of the member states under a new bureaucracy.

The fall in sterling has been substantial in recent months. A pound bought 1.51 Euros in January 2007, 1.34 Euros in January 2008 and only 1.26 Euros in May 2008, a drop of 16.5% over the last 17 months. It is also beginning to weaken against the dollar after a long period of strength, falling from more than $2 to the pound in 2007 to $1.95.

Why is this happening?

There are the first indications that after a long period of US neglect of their currency they are now trying to stabilise it. The authorities seemed to favour a lower dollar in recent years to price US products back into the overseas market. Now they think the decline has gone far enough, and maybe they will now tighten their money stance which has been loose to deal with the Credit Crunch.(The publication of poor unemployment figures and a surge in the oil price led to a further dollar fall shortly after this was written, but that fact does not necessarily mean the sentiment of this paragraph is wrong)

In Euroland the Bank is firmly in inflation fighting mode, and has kept interest rates up at a time when the UK has lowered rates a bit to deal with the problems in financial markets. Markets are now more concerned about the impact this policy is having on the fragile economies of Euroland. Italian industry is being badly damaged by a Euro which is too strong for their exporters, whilst in Iberia a property crash is exacerbated by a monetary policy that has not suited local conditions, being too loose on the way up and now too tight on the way down. Markets think the next move in Euro interest rates will be down, although not any time soon. They think the Euro is quite high enough. Recently the EC Bank has sown doubt about this, suggesting rates have to stay up or even go up to control prices. This may just work for the stronger German economy, but will cause further trouble for the weaker peripheral economies of the Union. Markets are not sure which way the Euro will go for a bit.

The UK has experienced a move from boom to bust in credit markets. The money supply has been expanded quite considerably, first to fuel a boom on the basis that Asian competition would take care of price increases, and then to make markets more liquid to mitigate the crash. The volatility of sterling against both dollar and Euro shows the need for floating rates here in the UK, because the economy is not harmonised with either that of the US or Euroland. It remains stubbornly mid-Atlantic, and will need to become more Pacific oriented as the rise of India and China continues apace.

What does it mean?
The fall in sterling means higher inflation. We have relied for a long time on ever keener prices from Asia to curb inflation. We now have to look forward to dearer goods from Asia, both because inflation has taken off in India and China, and because the Chinese currency is likely to appreciate further.
We should also be able to enjoy greater growth of our exports, as they will be that much more competitive given the fall in the currency. There should also be more scope for import substitution from home production.
As people’s incomes are squeezed, so they will be able to afford even fewer of the imported goods whose prices are going up thanks to cheaper sterling. Manufacturers will be able to sell more abroad at keener prices, and will also probably increase their profit margins at the same time. This is a slowdown where the corporate and government sectors do not intend to suffer much, intensifying the squeeze on individuals.

Should we join the Euro?
Twice this week in meetings with seemingly intelligent business people I have been told we ought to be thinking of joining the Euro, as it is now a stronger currency and becoming an important reserve currency for the world. Why can’t these people grasp the enormous damage sterling’s entry into the Euro would do both for the Euro and for us? Don’t they see the volatility of the pound against the Euro tells us the UK economy is different from that of Euroland and would destablise the Euro area if joined? Can’t they see it is better if some of the adjustment is made by changing the currency rates, rather than all the adjustment having to be made by fewer jobs and lower wages here in the UK?

And why do they always suggest the Euro and not the dollar? If it really were the case that we could benefit from belonging to a bigger world currency with an important role in financing world trade, would not the dollar be a more natural choice? We are mid-Atlantic, but closer in important ways to the US cycle and experience than to the French and German.

Today the PM will have a knife summit.
He is right to be alarmed by the casual violence of young people against each other, often using knives. He is correct in thinking we all want something to be done to try to stop the woundings and the slaughter.
He should beware those who think there is an easy solution, or those who think it is a shortage of legislation which is the problem.
These horrendous crimes are already against the law. It is illegal to draw a knife to threaten or stab someone. The problem is that there are children and young adults in our communities who break this law as part of their sad, bleak, gang-based lives. They have been let down by, or have avoided contact with, the world of opportunities that free education was meant to bring them. All the adults in their lives have collectively let them down or failed to connect. They have not been brought up, as the majority are, to avoid fights with weapons and to find more constructive things to do than hanging around looking for trouble in town centres and on street corners. It is not easy to solve the problem of schools which fail to encourage or spark their talents, parents who fail to provide that love and discipline young people need, and other adults in their local community who avoid contact through disinterest or fear. These are the issues the PM should be tackling.
Instead we learn that the government are examining how, and whether, to make it more of an offence to carry a knife. The knife is not the guilty party – it is a dumb instrument which has many peaceful uses. The user is the guilty party when it is turned against human flesh.
Before legislating further, the PM needs to think about three issues.
Firstly, there are many legitimate reasons why people may need to carry a knife. I may be bringing home new knives for the kitchen from the shops, or old knives from the sharpeners. Many people need a knife as part of the tools of their trade, from carpet-fitter to roofer. You may want to take knives in your picnic hamper to cut the fruit, or have a knife on you to cut your lunchtime roll at the office. On a country walk you might want a knife to fashion a stick or toy for children in your party.
Secondly, banning people carrying knives may well succeed with all of us who try to be law abiding, but will it work with the lawbreakers we are out to hit? If they are prepared to break serious law by wounding others, they may not be deterred by a law which bans the knife.
Thirdly, if they are deterred by it, they could adopt different weapons. All types of solid object used for everyday purposes can be weapons in the wrong hands. Thugs could do a lot of damage with a stone, a metal pen, a bike security chain and much else.
I am afraid, PM, in this broken society there are no easy answers. Usually, this government produces legislation as if it were just another press release to try to grab the headlines for a day or two, leaving the underlying position untouched or worse. Legislation often makes the life of the law-abiding more difficult, but fails to tackle the true criminals. Please Gordon, do it differently this time. Start to work on what has gone wrong in the schools and on some housing estates, which has left us with some feral youths in gangs, with nothing better to do than commit casual violence

In two years’ time David Cameron could well be Prime Minister, and it is possible that Barack Obama could be President of the USA. Both have galvanised electorates with a message of change. Both are opposing unpopular and flawed administrations. Both understand the power of new technology and the way the web and the fragmentation of the media is changing politics.

There are, however, important differences. When the background is Credit Crunch, slowdown, and a long war in the Middle East, of course people want change. The question is, ‘What change?’ We now know David Cameron wants lower taxes, through cutting waste and sharing the proceeds of growth. Obama presumably has to accept higher taxes, as he has ambitious plans to increase state spending. David Cameron wants free trade and free enterprise to drive living standards higher. Obama has some protectionist and interventionist views. David Cameron is well advanced with major policy work, going into great detail in every area. Obama is travelling policy-light. David Cameron is currently way ahead in the polls, while Obama is still neck-and-neck with McCain.

There are important things we can learn from Obama, as I remarked very early in his campaign when I liked what I saw in terms of political technique. Obama has shown you can enthuse new people with politics, through the old-fashioned power of great words well spoken in public meetings, allied to words well written on the web. He has shown you can raise more money by seeking small donations from many rather than relying on large donations from a few. He has shown how a more personal appeal through web and email can grow an army of supporters for a candidate.

I think David Cameron would get on fine on a personal level with him. The policy disagreements on economic and tax matters would not, on the whole, matter, as they are largely domestic decisions in each country. I suspect an Obama presidency would end up looking more like a Bush presidency, once the Pentagon had sucked him in to their more warlike view, and once the Treasury and Commerce Departments had explained to him the advantages of freer trade. McCain still has plenty of room to push for victory, and the Mc Cain relationship has been developed by David Cameron in Opposition.

Obama showed an ability to master old combative politics when he needed to and he got rid of opponents by legal challenges to their nomination papers. He should not be underestimated, but we should remember that his message of change is so far spin and rhetoric. He has yet to build a solid policy platform in the way David Cameron is doing.