Category: Uncategorized

I naturally agree that Labour’s policies would be bad for business. Their energy price freeze policy threatens normal pricing behaviour, annoys the companies, creates investment uncertainties and now also ironically means dearer energy when world prices are falling.

Their policy of more intervention and taxation of financial services and banking hits an important UK revenue earner, following their disastrous period regulating the industry badly in the previous decade. They want higher Corporation tax which is never a crowd pleaser with big business, higher individual income tax, not popular with the higher paid, and often use anti business rhetoric. Labour regards business as either the source of social problems, or the agent that must be made to remedy social problems which others might think the government should fix.

I have no problem in a democracy with anyone with an interesting view expressing it. The Acting Chief Executive of Boots made some good points – and one or two points I do not agree with. That makes a political market. He has also illustrated exactly what I predicted when I explained to senior business people that if they used the name of the company they work for but do not own to make a highly political point, it will drag the company into politics and may result in reputational damage to that company.

The shareholders, other employees and customers of Boots may not like this. In what sense does the Acting Chief Executive speak for them? Is it wise to venture the company’s reputation in this way, when the Acting CEO does not know the views and voting intentions of all the other stakeholders in the company? By all means let’s hear from Mr Pessina as an individual with his anti Labour views, but let’s hear less from Boots. Labour now sees it as an opportunity to put the boot into Boots, as they are stung by the criticism. Neither Labour nor Boots will gain from these rows.

As the Euro area lurches into another phase of its rolling crisis, with the EU authorities taking on the voters of Greece and Spain, the relationship between the UK and the EU is also shaky.

The UK is like the poor husband who can never get anything right for his wife. He buys her presents but is told they are the wrong gifts. He gives her money but is told it is not enough.There are always new bills that are said to be extra above the regular housekeeping. He never knows how much it will be from one month to the next. His wife thinks him a cheapskate, the husband thinks he is spending far too much to keep the relationship going.

The husband agrees not to watch the cricket, a game he loves, because it is not an EU game. He is then criticised for not being enthusiastic or attentive enough when the couple settle down to watch the Eurovision song contest instead. He every now and again asks for a bit of freedom, some deregulation, to relieve the domestic pressures of a life measured out for him. He is told he is not pulling his weight and should be lucky the rules are so light.

When he complains that he is being asked to give money to too many of her nephews and nieces, he is told family matters. When he says he wants the spare bedroom back as a study he is told that her cousin has every right to lodge their rent free whilst trying to find a job.

His long suffering wife sees it very differently. She just wants a husband who loves the common European home, respects it and the other family members, and accepts its rules and behaviours. She cannot understand why he is always wanting to change things, pull out of common agreements, and demands more time for himself. He is just selfish. She hates him penny pinching, and still can’t understand why he doesn’t trust her and the rest of the family with a joint bank account.

He would feel it if they broke up. Who would do the washing and ironing then? She doesn’t want a break up, as she secretly accepts his DIY, salary, and home maintenance come in handy. She accepts now she did go a bit far in banning his roast beef dinners once, and now quite likes them when he does the cooking. She just wants him to knuckle down, show a bit more give in the inevitable give and take.

The strange thing is he is not so sure about the break up either. He hasn’t worked out that the Chinese laundry would do all the shirts and sheets very cheaply and well, without all the aggravation. He would be free of the house rules save when he went back to visit. He doesn’t feel he has much say over them at the moment, so what if he was not in future part of the row over what they should be?

What is going to happen to this odd couple? And why did the Governor of the Bank of England venture a criticism of Germany recently, for not sending more money to the poorer countries in the Euro? Does this mean the UK negotiating position is shifting away from concentration on Mrs Merkel?

We are fast approaching a statement from Mr Hague on how the government, and the Conservatives, will carry forward the work on English votes.

I have long argued we should not be plotting evil – English votes for English laws – but English votes for English issues. Why not adopt the cross party word of needs, so the mnemonic can be EVEN – English votes for English needs.

I expect Mr Hague to accept that more is involved than a few votes on a few bills that are England only. Once the Union Parliament has decided the total grants to local government in the four parts of the UK, for example, surely all the detail on how the English money is divided up are matters for England and English MPs, just as Scotland’s detailed settlement is for the Scottish Parliament? Once the UK Parliament has settled England’s NHS budget, then surely English health policy under that budget is a matter for England, just as Scotland’s is a matter for the Scottish Parliament.

Similarly we should want English MPs to decide England’s Income Tax rate as Scottish MSPs will be deciding Scotland’s. Welsh and Northern Irish MPs would also take part at Westminster all the time their Income tax is settled with England’s.

I also expect Mr Hague to agree there needs to be an early debate in this Parliament, when the parties can set out their differing approaches.

I want him to sign up to the first proposal in his White Paper, English votes on any English matter. That is the simpler way, and the fair way. The other remaining proposal he is considering does not allow English MPs to settle English matters, as it retains a vote for Scottish MPs on any proposal England wants. That is not fair to England and does not keep the promise to deliver English votes for English needs.

There is no complexity on deciding which is an English (or English, Welsh and Northern Irish issue) as it is one settled in Scotland by the Scottish Parliament. They seem to have no difficulty deciding which they are for the Scottish Parliament, so it should be equally easy to decide a non Scottish issue.

The Greek government is discovering quickly how imprisoned they are by all the accumulated debts and the Euro they inherit. Being part of the iron discipline of the Eurozone makes things worse. Argentina, Venezuela and others show that whilst having you own currency can help  with devaluation  staving off disaster for longer, you can also come badly unstuck as a country if the state spends and borrows too much even with its own currency. If you devalue too much overseas debt becomes very expensive, and imports too become much less affordable.

There are some who think it is always caring for the state to spend more. There is always more poverty to relieve, more good works the government might like to undertake, more public service to increase and improve. The problem is if you overdo it, far from being more caring, the government ends up making brutal cuts at the insistence of its creditors. I doubt Greece wanted to cut public sector wages and make large cash reductions in what they spend on their health service, but they were driven to that by poor financial management.

There are others who think that it is always good for an economy for the state sector to run large deficits. They argue that the private sector or the overseas sector can easily lend a surplus to the state, so isn’t it better if the state deliberately overspends so there is more spending and activity in the economy? Unfortunately this doesn’t work out either. Greece has just shown you can have a recession which loses you 25% of output whilst continuing throughout that period to run much larger deficits than more successful countries. If running up large state debts produced good growth and wealth increases, then we should expect countries like Greece, Argentina and Venezuela to be amongst the richest in the world.

I hope the UK is reminded of the lessons of prudence by the parlous Greek state. Borrow too much and you reach the point where no-one wishes to lend you any more. Borrow too much and you have to spend more and more of your income on interest charges, leaving less for what you need. Borrow too much and you end up having to cut drastically as your creditors insist.

In each case there is also all the spending which is not as advertised. Governments spend too much on themselves very often, and are commonly inefficient and badly managed. In a country like Greece tax collection is very difficult, as so many people scorn the state they live in, regarding the taxes as unfair or avoidable.

I read that European Commission President Jean-Claude Juncker believes there’s no question of writing down Greek debt. The other Eurozone countries will not agree to that.He reasons that there can be no democratic choice against the European treaties. One cannot exit the euro without leaving the EU.

These brutal statements do at least have the virtue of honesty – assuming they stick to this no bail out position. I quite understand why they have to say there can be no bail out just because Greece has voted for less austerity. Had Mr Juncker said “Greek voters can change the Greek government and its policies, but they cannot make the rest of the EU send them more money” then I would have thought that a tough but understandable stance.

Mr Juncker goes wider, and simply asserts “there can be no democratic choice against the European treaties”. That does not just mean they cannot vote themselves another country’s money or change of policy, but they cannot vote for their own change of policy if the custodians of the treaties disagree with them. That is much more worrying and is why some of us do not like the current treaties and think they go too far in controlling countries and throttling democracy.

It is also interesting that the Commission now asserts that continued membership of the Euro is part of the deal, and any country leaving the Euro would also have to quit the EU itself. I am not sure where he can find that explicitly stated in the treaties, though again I see the logic of it. Clearly he thinks it is another threat to Greece that might worry them. We do know, however, that the EU does think it possible for a country to be in the EU but not in the Euro, as the UK and Denmark legally do and as the candidate members of the Euro do.

Mr Juncker’s harsh words imply a growing impatience with all who want special deals or who stand in the way of a uniform policy and discipline for the Euro area. Greek democracy is worryingly unruly and at variance with the Brussels view. The EU has now hit out and told the Greek voters they are wrong and have to think again.

As we watch the collapse of many of the traditional governing parties of the centre left and centre right in the Euro area we can expect more of these conflicts between countries struggling to be democratic again and a Commission telling them they can have any policy they like as long as it is the EU one. The irony is that in a way Mr Juncker is right. For the Euro to work they all have to accept its cruel discipline and live under its rules. That is why some of us said in the years before its launch they should first create a democratic government of Euroland so the public could have their say and have a choice. To have a single currency people and governments of the founder states have to accept financial and moral obligations to each other. Leaving democracy at the level of the Euro states, but taking much of the power to the centre denies effective democratic change, busts open the old party system, leaves many feeling very dissatisfied with politics, and may in the Greek case do considerable damage to the economy and banking system of the Euro area.

Last week my Conservative Parliamentary colleague Andrew Bridgen tabled a 10 Minute Rule Bill to abolish subsidies for future windfarms. I supported him. We won the vote 59-57 in favour of the abolition.

Ten Minute rule bills do not usually become Acts of Parliament. They are backbench initiatives. Government does not make time available to enable them to become laws, though the better ideas are sometimes taken up by government and incorporated into one of their bills or future executive action.

The advantage of the format is the short debate takes place in prime time after questions, can attract publicity, and may highlight an important issue to government for their consideration.

This bill meets all those requirements. It highlights the hugely expensive cost  of renewable electricity, at a time when plunging gas and oil prices are making power generated from fossil fuels so much cheaper. The advocates of windfarms have often told us the large subsidies they attract will vanish in future years as the price of fossil fuel energy surges. They did not usually explain just how much dearer renewable power will become in conditions when fossil fuel prices plummet.

The presence of large windfarms in Scotland will be a burden with escalating subsidy levels to keep them turning. Conservatives wish to call a halt to expensive onshore wind, and many of us wish to eliminate all new subsidies altogether.

It is high time we made affordable energy our priority, and used more methods to generate power that keep the lights on even when the wind is not blowing. Total subsidies to renewables are around £2bn a year already, paid by electricity consumers. The burden gets bigger the more they build, and the cheaper the alternative way of generating power becomes.

Greece and Germany have two different visions of their shared currency zone and common government.

Greece, the debtor, claims that Germany must write off substantial sums which Greece owes her. In the name of solidarity within the zone, the rich country should come to the financial aid of the poorer country. In the name of common humanity Germany should allow Greece to spend more, offering free energy and food to the poor by increasing public spending. The extra spending will need to be borrowed.

If there are further troubles with people withdrawing money from Greek banks,. the European Central Bank should provide the money the Greek commercial banks need to pay out their departing depositors. Greece cannot cover the interest charges on her large debts out of tax revenue, so she thinks Germany should accept a lower interest rate or deferral of the charge on that part of the debt which is to remain.

The Greeks point out Germany has run a large trade surplus within the Eurozone since its birth. Germany has sold many cars and other products to Greece. She has had to lend Greece the money to cover the deficit. The gap cannot be closed by devaluing the Greek currency, as would happen if they still had their own money systems. So say the Greeks the gap has to be closed by writing off debt.

Germany says the opposite. When she joined the Euro she made it clear that Germany had no wish to stand behind foreign banks and foreign states within the zone. They all had to show similar discipline in their finances to Germany’s. They all had to cut their costs and raise their productivity so they could compete with Germany at the locked in effective exchange rate when they joined the Euro. Germany explained it would be a tough discipline with no bail outs.

German public opinion is against money printing by the ECB. The German economy does not need it, and Germany sees it as a soft option to help weaker countries borrow  more at low interest rates, to finance deficits which Germany thinks are too high. German public opinion is also against a Greek debt write off, as this time it will be the main creditor countries like Germany which will lose out. Last time it was the private sector that took the cuts, with states protected.

Germany lost the battle of Quantitative easing. It is gradually losing the battle to keep each country’s commercial banks apart, as the responsibility of the sponsor member state. Will it now also lose the battle over Greek debt? If so, will more Germans wish to leave the Euro? Many Germans remember just how dear the enforced merger of the Ostmark and the DM was to West Germany. They do not want the same again on the much larger scale of the Euro. The fundamental flaws in the Euro’s construction are becoming all too visible in the row between Greece and Germany. Germany has the money but it does not have many allies.

I do not see an obvious way of squaring this painful circle or reconciling these two very divergent views. Trying to resolve the two visions means deciding between a transfer union that might work, and a disciplined Euro which means more austerity and more bankruptcies.

In the late 1990s when Labour decided to offer considerable devolution to Scotland and a little devolution to Wales I wrote a book warning that such changes would fuel Scottish nationalism, not undermine it. “The death of Britain?” set out how Labour’s constitutional revolution would damage our democracy. I wrote it as a Unionist, wanting to keep our country together.

During the bruising referendum on Scottish independence last year I explained that my view now is I only support a Union of the willing. I wanted Scotland to have a good debate and make up their mind. Instead they had a huge debate, but have not really made up their mind. I fear the offer of more devolution powers has unsettled the Union further.

Labour and some others belong to the appeasement school. They believe that if they keep on offering new and greater powers to Scotland for more self government, they will keep the union together. I wanted the parties of the Union last year to say to Scotland ” We would like you to stay. You are most welcome as part of our joint country. We only want volunteers in our union, so of course you are free to leave on fair terms if that is your wish. You know what the union is like. We wish to keep it broadly the same”.

That would have prevented what happened – the outbreak of a bidding war to see who could offer more powers to Scotland. It would have told moderate SNP voters and politicians that they could not endlessly play the game of demanding independence, asking for a back up position of more home rule, and getting more powers from such a tactic. Offering more powers has reaffirmed that the Union is very fluid, that the parties of the Union lack confidence in it, and has given every reason to people in Scotland to keep seeing how far they can push it without leaving.

Appeasement has not worked as a political strategy. Far from making Labour the regular choice in Scotland, Labour’s devolution settlement created a platform for the SNP, who seized it and became the majority government in Edinburgh. Now Labour’s appeasement policy in the referendum campaign – led by Gordon Brown – has undermined support for Labour in Scotland even more. Instead of gratitude for Gordon’s Home Rule cocktail, there is a spirit abroad that too little too late was offered and there is more to be had by voting SNP.

When it comes to considering English votes for English issues, some think we should go for a watered down version for fear of upsetting the Scots. I find many Scots agree with English votes for English issues. They do not want their UK MPs to be spending time on English issues. They just want them to secure a better deal for Scotland. There is no need to appease Scotland by giving England a rotten deal. The looser federal union which Labour has brought on us has to be fair to both Scotland and England. Being unfair to England will not solve the problem of Scotland, nor win anyone any extra votes north of the border.

I understand why Greeks voted in large numbers for an anti austerity party. They did so out of desperation with the misery inflicted on their lives and living standards over the last five years. A fall of one quarter in national income, massive job losses, and pay cuts for those still in work should drive any electorate to want radical change. Both their old main parties offered more of the same – sticking with the cuts, the debt control packages, the large interest bills from past excess.

The problem for them is the cruel logic of the Euro, and the imprisoning austerity of their huge debts. If the voters had chosen a party which recommended leaving the Euro it would have been better, with more hope for the future. Instead they voted for a party which both says it will not accept Euro austerity, and that it plans to stay in the Euro. How will that be possible?

Syriza hopes that Germany and the others will willingly cancel some debt and grant easier terms on the rest in the name of preserving the Euro. But why should they? How could they refuse doing the same for Spain, Portugal, Italy, Ireland and the other countries that have played by the rules and have too much debt for comfort? If Syriza is determined to stay in the Euro there is no need to offer them anything to save the currency. If Syriza works out that leaving would be better then the rest of the Euro area should help them to the door.

The Euro area may I suppose realise that this political shockwave could happen elsewhere, and may think they need to show some modest understanding of the Greek feelings. It is unlikely, however, that they could cancel enough debt or cut the Greek interest rate sufficiently to resolve the problems. Any such move may destabilise other countries, rather than calming things down.

If Greece left the Euro, devalued in line with market movements, and had access to her own Central Bank to decide how much money to create and have in circulation, she would have more chance of rebalancing her economy and meeting her large obligations. If Greece stays in the Euro and threatens default on her debts, she helps undermine the very currency zone she wishes to belong to. Without the power to create Greek money, and in the bad books of the ECB and the major countries in the zone, it could mean an even worse future for Greece than sticking with the old austerity medicine.

The joy on people’s faces when they saw the victory of Syriza was understandable. They felt they had dealt a lethal blow to austerity. The problem is, by wanting to stay in the Euro they either have to carry on with the Euro austerity policies they do not like, or follow a lonely and defiant course which will damage the Euro. Voters may think once in the Euro they can have a genuine choice if they sweep aside the conventional parties that took them in and back the scheme. In practice the challenger parties too are imprisoned by the Euro unless they want to leave.

Amidst all the arguments about the EU in the UK there is rarely much attention to what the EU really does and what people like or dilike about it. All we hear is from people who like trade who wrongly claim our trade is dependent on EU membership, when we can see many non EU members trading very successfully with the EU. So I am offering people for and against to tell us what they like and dislike about the EU.

I will start this debate by explaining the things I most dislike about the EU.
1. Its unqualified support for the Ukrainian government, which has been busy killing some of its citizens as its response to losing control of the east of its country. The rebals have resorted to violence, but the government kills too many with some of its indiscriminate violence.
2. The mass unemployment, particularly of young people, which EU policies have created in several countries. I think the disinterest in the consequences of the Euro for young people in Spain, Greece and elsewhere is a moral outrage. 50% youth unemployment is not a price worth paying for their integrationist dream
3. Dear energy. The EU’s crazy energy policies have driven more people into fuel poverty, as Labour calls it, and have driven many industrial businesses with their jobs out of the EU altogether.
4. The lack of democracy. There is no effective opposition to new proposals and laws in the EU – they proceed by cosy consensus, with the unelected Commission initiating and drafting the laws. The laws should be initiated by the elected Parliament, and vigorously opposed by parties and individuals there.
5. The lack of democracy in my country that flows from the way EU rules and laws accepted by one government cannot be repealed by a new government after an election. The EU has gravely damaged our democracy, especially because one Parliament does now bind future Parliaments if it accepts EU laws.
6.The overweening arrogance of the EU, poking its nose into all too many features and facets of our lives for no good reason.
7. The high cost of government in the EU, with too large a financial contribution placed on the UK.
8. The lack of control over our borders.