Category: Blog

Whilst many of you have written in support of withdrawing our army from Germany, some have expressed the conventional objections that we need to use the housing in Germany, and we need the tank training that the German facilities permit. These responses ignore the most important point that I was arguing – we should give up our commitment to helping police or enforce the borders of European continental states, which has caused us so much grief in the past. Surely it is time to leave this to the continental countries themselves, and the UN and NATO led by the USA? Of our four main military tasks, (European,maritime,expeditionary,home defence) this would seem to be the obvious one to remove.

This would allow us in due course once our forces are out of Afghanistan and current soldiers have completed their full contracts, to have a smaller army suited to our current needs. It should also allow us to improve the forces housing position. I have written before on how we could encourage and support soldiers in buying homes of their own whilst in the army, so we do not make them homeless when they retire at a relatively early age from the service. Soldiers should have a UK home base for their families, just as sailors do.

Coming out of Germany would stop the costs in Euros we are incurring, and put that money into circulation into the Uk economy. We would be spared the costs and be able to release the cash from facilities in Germany which the UK rents and owns. There is land and opportunity to train with tanks in the UK as well.

The UK does need to provide the manpower and the military equipment for its maritime and expeditionary roles. Helping police the world’s sea lanes is important to a maritime power so dependent on overseas trade and investment as we are. The naval and air force resources could also be used in home island defence if ever need arose. The expeditionary capability – which has been used too much in recent years – requires good joint working by all three services. There needs to be a well equippped and trained army to move into trouble spots quickly. There needs to be naval and air support, and good heavy lift capability for a speedy transfer.

Any serious naval power needs aircraft carriers to be part of its fleets to provide air cover. Our current policy of ordering two large ones leaves us limited in what we can do, especially if there has to be a lot of down time for refitting and maintenance. Getting the right balance between naval and air power will be crucial to success in the future. Defence of the home islands should always be the overriding priority. That requires good air cover to prevent or limit aerial attack, and good naval and air cover on the seas around our shores to prevent seaborne invasion. More of the capabiliy can be provided by drones and other remotely controlled devices, to lower the risks to manpower, and to cut the costs of some of the machinery needed. Procurement of weaponry and transport needs to be sharpened up so we buy more with less. The Uk ends up redesigning the wheel at great cost on too many programmes.

The extreme difficulty of having a sensible debate about public spending in the Uk thanks to Labour’s unpleasant, personalised and biased approach to the topic has been revealed by the case of free school milk.

If you listen to the debate you would think that Baroness Thatcher alone abolished free school milk, leaving it just for under 5s. Ann Milton and David Willetts came forward to query the costs and value of the last vestiges of free milk. David Cameron seeing the political danger intervened to stop them becoming heirs to the mantle of “milk snatchers”.

What we need to do is a little detective work. The biggest “milk snatchers” were Labour. In 1968 they took free school milk away from all 11 to 18 year olds. The Conservatives did not dub Harold Wilson a milk thief, but accepted this economy as part of the package to cut the excessive borrowing of that Labour government. No subsequent government, including the Labour governments of 1997 to 2010 thought free school milk worth reintroducing. Most people cannot remember that Edward Short was Education Secretary for most of 1968 (I looked it up) the year when the free milk was withdrawn, because no-one ran a campaign claiming he left us short of free milk.

In 1971 Edward Heath’s government took milk away from 7 to 11 year olds. This was opposed by Labour, who personalised it to the Education Secretary. Labour have always treated Mrs Thatcher in a mean and personal way. They dubbed her “Milk snatcher” rather than coming up with a phrase like “Edward Heath, milk thief”. Doubtless if the Education Secretary in the 1979-1990 governments had cut free school milk they would still have personalised it to Margaret Thatcher, then Prime Minister.

The BBC website tells us free milk for 5, 6 and 7 year olds had gone “by 1980” without telling us which Minister removed it. Nor did they name the Labour Ministers responsible in 1968 for the main cut. There’s bias for you, after the account of how Margaret Thatcher had done her bit to cut it. People were so untroubled by the removal of free milk for 5-7 year olds that few can remember who did it.

Labour in office did not restore milk to primary school children, despite finding money for everything else, and despite still reminding people from time to time of their “Milk snatcher” jibe.

It is high time we moved on from these lurid lies and silly soundbites. The truth is all three parties in power from 1968-2010 went along with the phased removal of free milk in schools. Presumably they did so because they recognised there were better ways of helping children from low income families with dietary needs. I am prepared to say I support the results of both Harold Wilson and Edward Heath’s decision to remove free school milk as an economy measure, though I disagreed with many of the things both these Prime Ministers did in other fields. Any truthful politician should say the same, as no mainstream politician in living memory has campaigned to restore these “brutal cuts” from a long-gone era.

The intervention of the Prime Minister to save the milk also confirms what you have been reading here. The increases in cash spending allowed for in the next four years do not require as much pain and as many difficult cuts as the publlic sector wants you to believe. If we can keep the free milk for the under 5s it cannot be that eye wateringly tough out there. It will still require some good management of course – and there will still be public sector managers who choose to cut things we would rather they didn’t, even allowing for the cash increases in the totals.

There have been lively exchanges between Mr Fox and the Treasury over paying for the renewal of Trident, according to the newspapers. I do not quite understand all these briefings. The outcome looks clear.

The Coalition government is committed to renewing Trident. Trident is a main programme of the MOD. The final settlement of money for the MOD will have to take Trident and all its other necessary commitments into account. Fortunately no-one plans to spend a penny let alone billions on missile replacement this Parliament. Any preliminary spending on new boats will build up gradually. The main spend will be spread over several years in due course.

A nuclear deterrent is a necssary evil. Mutually assured destruction (MAD) worked as a doctrine throughout the tense cold war. Huge arsenals of weapons remained unused. Now they are being reduced and dismantled by successive rounds of disarmament agreement between the main nuclear powers. The UK has been in the forefront of reductions.

Unfortunately as the main traditional nuclear powers become more enamoured of a sensible and desirable reduction in these weapons, the technology of mass destruction spreads to ever more states, and leaves open the possibility that it could also spread to terrorist organisations or informal armies in search of a state.

As the range of states with nuclear weapons enlarges, the main parties running the UK will conclude they need to keep an up to date deterrent. It will be accomodated somehow within the overall MOD budget and is not the main issue we should be concentrating on when reviewing MOD spending.

Today I wish to start a debate about why we have armed forces, what we expect of them and how they should be shaped, deployed and supported in the future.

The last guidance from the outgoing government came in its vague document “Adaptability and Partnership”, a Green Paper published in February 2010 to hold the line prior to a major defence review. The new government has embarked on that more fundamental review.

The main questions in February were thought to be “What contribution should the armed forces make in ensuring security…within the UK”; “Should we further integrate our forces with those of key allies..?” and “How could we more effectively employ the armed forces in support of wider efforts to …strengthen international stability?”

The whole bias of the doucment was on Iraq/Afghanistan type conflicts, as it gently steered people to the conclusion that more integration of our command and communications structures with the US would make things better and easier.

The new government has rightly warned that the next challenge to our armed forces may be very different from the US led Middle Eastern wars of the last decade. Mr Fox has said that we need to examine our commitment to Europe, maritime defence and the expeditionary capability which has been so important in recent years.

So let’s begin the debate today with a modest proposal that could save money. Why don’t we withdraw the army from Germany?

There is good news. On this issue EUsceptics and EU enthusiasts should be agreed. EU enthusiasts tell us that the EU has and will keep the peace in Europe. There will be no more recourse to arms. Many of us agree that the advent of peace loving democracies in Europe makes war between the main countries over borders unlikely. The UK could say that it no longer sees its own role as in any way responsible for enforcing or helping determine borders between continental European countries as it did in 1914 and 1938-9. If there are disputes then the UN can determine them, and NATO led by the US is available with force should the UN need any backing. Russia remains a major European power, and her views will also be important to and through the UN.

In practise in the run up to 1914 and again in the years before 1939 the UK did not build an army for intervention on the continent. The brave small force sent to France in 1914 was ill equipped for the trench warfare that followed, without machine guns and motorised transport. The much larger army to help win the war had to be recruited, trained and equipped in wartime. In 1939 the UK had no large army to help protect France from invasion. The force which was subsequently sent was too small to contain the might of the German advance, and is best remembered for its heroic and successful retreat from Dunkirk. Most of the equipment and transport was abandoned. Again most of the winning army had to be recruited, trained and equipped in wartime for the invasion of 1944. There was no victory in either war until the US started pouring men and material into the conflict.

This does not in my view argue that we should learn that we need a bigger army to intervene on the continent. Modern more peaceful conditions and the history of 1914-18 all argue in favour of the Uk not becoming embroiled in continental conflicts or keeping an army on the continent. The army in Germany should be the first saving and the first change from a past of European conflicts. We need the people and the cash elsewhere.

The government was right to go to India to carve out a new relationship based on the changing balance of economic activity and power in the world.

The world Stock market index still reflects the world as it was in the last century. The USA is dominant at 42% of the total, the EU next with 27%, whilst China has just 2% of the total value and India 1%. This is the comfortable world of old fashioned diplomats, who want the UK to cosy up to the US superpower in a special relationship, and strengthen her links through the EU with the continent.

It is a very different world from the one we see based on population. China with 19.5% of the world’s people and India with 17.3% each dwarf the USA with 4.5% and the EU with 7.3%. Both India and China have more people each than the total in both the USA and the EU . Taken together, India and China have three times as many people as the USA and the EU combined.

As the Indian and Chinese economies grow at three times the rate of the EU and USA, their GDPs are catching up fast. All the time most of the people in these two large countries were poor, and all the time China was an inward looking communist state keen to keep out western influences, the west could proceed on the assumption that it was dominant. Today it looks very different.

At current exchange rates the US accounts for 24.6% of world economic activity and the EU 28.3%. In contrast China commands 8.3% and India just 2.1%. In conventional GDP terms the USA and the EU still account for five times as much world output as China and India.

However, if you examine the origin labels of products in many shops in the UK today, you get a rather different feel. So many of the products have made in China or other parts of Asia on them. You have to ask, do these overall output figures reflect accurately the new reality? Attempts to allow for different price levels and for undervaluations of eastern currencies produces so called purchasing power parity figures for world output. In these figures the US has 20% of the total, the EU 21%, China 13% and India 5%. These are nearer to the truth, with India and China approaching half the level of output of the USA and the EU. In some industries China is now dominant, and determined to achieve the same in a range of other areas where the west and Japan were once unchallenged.

My feeling is that India and China will continue to outpace the west and these figures will continue to change rapidly in their favour. That is why we need to reorient our economic and diplomatic thinking. Asia has the people. She now has a lot of the world’s money. Europe is mired in slow growth and population decline. The future lies in the east.

There has been much written about the decline of the Liberal party during and after the First World War.

The facts are stark. In 1914 the Liberals were running the government under Prime Minister Asquith, and were used to being one of the big two, often in power. In the October election of 1924 they were reduced to just 40 seats, and stayed at such low levels as the third party ever afterwards.

The biggest drop occurred in the 1918 election. 426 Liberals stood for election. Of the 267 who stood as independent LIberals, only 26 were elected. Of the 159 Liberals who stod in support of the coalition government, 134 won. In 1922 they won 117 seats, and in 1923 159.

Various theories have been offered for the collapse, based on social change, the rise of organised Labour and the Unions support for the new Labour party, and the damaging split between Asquith and Lloyd George to run the LIberal party.

I normally disagree with those who argue that factions and divisions in great parties prevent them from winning elecitons or from being in government. Nearer our own time the war between wets and dries in the Conservative party did not prevent Margaret Thatcher from winning three elections in a row. There was no shortage of anti briefing from her party throughout most of her tenure. Nor did the deeply damaging and public rows between Mr Blair and Mr Brown prevent Labour from winning three times in a row. Most majority parties in government have people challenging the leader and have rival views of what is the best course of action. Some degree of division and debate is healthy to ensure the governing party is alive and thinking. Even undesirable levels of vituperation as with the Thatcher and Blair critics need not be terminal.

However, the fact that Lloyd George was prepared to press his claim to run the Liberal party to the point where two parties fought the 1918 election under different Liberal banners, and the fact that Asquith did not acdept the passage of power from himself to Lloyd George did take leadership struggles to new public levels which was electorally damaging.

I think the other distinguishing fact about the background to the Liberal collpase is that the Liberals under Asquith had taken the UK into such a dreadful war. The slaughter, and the sense of incompetence at high levels – “lions led by donkeys” – especially in the eartly stages before the coalition was formed and got to grips with issues like shell supply and how to fight in trenches made a huge impact on the public consciousness. The war is in my view the main reason for the collapse of the old Liberal party. Why did they take us into it? Why did they prosecute it in the way they did? Why did it take such huge slaughter on the western front? Why did many of them not see LLoyd George as he saw himself, “the man who won the war”, and just get behind him?

History does not repeat itself. Reading some and understanding it helps people and parties avoid making the same mistakes.

Some Lib Dems are currently worried that belonging to a Coalition will lead to unpopularity. As the party which has argued long and loudly for coalitions and has told us they can be better than majority party governments, they could not avoid picking up the burden of coalition government in the difficult circumstances of 2010. No-one said government is easy, and governments rarely inherit the legacy they would like from the outgoing team. Few have inherited such a strong economy as Labour in 1997. The debt and recession legacy of 2010 is more common, a bigger version of 1974 and 1979. The Liberals had a period in coalition with Labour in the 1970s doing unpopular things, but survived it with no obvious damage from the fact that they had been in government.

Today I wish to argue that belonging to a coalition is not of itself likely to make a party unpopular. Tomorrow I will look into the resons for the collapse of the old Liberal party as a governing party between 1914 and 1924.

From May 1915 to July 1945 the UK was governed by a coalition for 21 out of the 30 years. In the early period it was largely a Liberal/Conservative coaliton, in the later period a Labour/Conservative coalition. During this period we had a coupon election, where Liberals stood as pro coalition candidates or stood as independent Liberals, with the Conservatives not standing against the coupon Liberals, and later elections where candidates made clear their adherence to a “National” government to tackle the 30s crisis. In wartime there was general acceptance of the need for cross party government, and no elections.

Coming out of those coalitions, both the Conservative and the Labour parties in their turn were able to win convincing majorities to govern in their own right. Being associated with a coalition government was not terminal for them, even where the coalition government had had to do difficult things or was not especially successful. Coalition governments like majority governments need to govern well to woo the public. They are not of themselves bound to lead to the demise of a party in them.

After the Coaliton government formed and made clear its intention to cut the deficit further and faster, the pound has risen. This will start to cut the high inflation rate the old policy of devalue, print and borrow was bringing about. The main inflationary force was the falling pound.

It is true there remain two other inflationary forces at large. Rising taxes will add again to price rises when the new VAT rate comes in – but we did have the same effect this year which is already in the figures. There is also some inflation developing in manufacturing, as the world’s supply lines and capacities are already stretched a bit by the surge in Asian activity over the last year. It is now in many areas a global market.

I do not recommend any more quantitative easing as some of you seem to think I want. I criticsed the way they did that last time and forecast it would lead to a weaker pound and faster inflation. I do want functioning banks that lend to smaller borrowers on the High Street. The international regulators have started to back off, as I hoped. They do seem to be realising that demanding more cash and capital too soon will prevent decent recovery and impede the restoration of bank balance sheets as well.

Boom and bust are largely manufactured by governments and monetary authorities. The last boom was made from lax cash and capital rules and easy money policies. The last bust was made from too sharp a tightening of money markets and expecting too rapid an improvement of bank balance sheets after the excesses. Now we need to get it right to have the right pace of recovery. That requires the authorities to move on from austerity mode, but not to pump up more devaluation and inflation from simply printing public sector money and spending it on more quangos and CEOs.

So many of you do not grasp the reality of the situation, and then lash out against people most likely to sympathise with your views. I voted No in the referendum of 1975, and have ever since tried to get the political classes to accept that British people only voted for a common market, not for an ever more powerful EU government. That is why I support powers back, a sensible set of trade arrangements, and a referendum to ensure the popular will is affirmed. As a democrat I have to accept the will of the people in a referendum, unless and until that is reversed by another referendum. This has all proved impossible in recent years because we have had a succession of Parliaments with Euroenthusiast majorities, chosen for whatever reason by the British electorate.

There are UKIP supporters and other strong Eurosceptics who still do not seem to grasp the voting arithmetic and the reality of the modern House of Commons. It is no good writing to me to say you want out of the EU or want major powers back, because the British people have once again voted for a Parliament that does not want that.

In the General Election the large number of UKIP candidates got less than one million votes, or 3% of the total. It did not win them a single seat. They put up in Buckingham where the three main parties withdrew to allow the Speaker to stand uncontested. Ukip not only failed to beat the Speaker, but were driven into third place by a Euro enthusiast. This was a major blow to their cause. If there are a large number of people in the UK who want immediate withdrawal from the EU they do not turn up and vote for that in elections.

I believe the majority in the Uk wants considerably less costly government from Brussels than we now get. Unfortunately, in the Commons today there are 650 MPs, with a majority for more EU not less. If you take away from the total the four Deputy Speakers and Speaker, and the five Sinn Fein it gives you a possible voting total of 641. The majority needed to carry a proposal is therefore 321.

There are just 306 Conservatives. The party fought the election on getting powers back from the EU and saying No to new transfers of power. There are 258 Labour and 57 Lib Dems, giving them a pro EU total of 315. There are also Nationalists who favour more EU power who could give the pro EU forces the majority.

Now you can rightly point out that the Lib Dems are in coalition with the Eurosceptic Conservatives, so that prevents them creating a pro EU coalition. It also comes at the price of meaning the Conservatives have dropped their plans to bring powers back, as they could not get the agreement of their new allies to such a policy.