Incisive and topical campaigns and commentary on today's issues and tomorrow's problems

Yesterday we learned that the official figures for inward migration from the EU had been understated in the last decade. An additional 356,000 arrivals have been added to the numbers for the period 2001-10, with 10,000 fewer in 2011. Apparently they undercounted children and people arriving at regional airports.

It is always unfortunate when official figures need substantial revision. Honest mistakes or careless compiling can look like something more sinister to those who worry about the underlying reality the figures seek to capture.  In this case the errors were all ones of understatement, at a time when many people were worrying that the figures were too high anyway.

Similar problems arise if economic figures for growth, jobs and wages have to be revised down, or numbers for unemployment, inflation and other bad news have to be revised up. We learned this week that in an effort to harmonise our economic numbers with the rest of Europe we will witness upwards revisions to our apparent savings rate to reflect those in final salary pension funds, and to our output to credit us with the benefits of R and D being undertaken. It serves as a reminder that all these figures are approximations dependent on assumptions about what you count and what you leave out. All are also prone to understatement as it is difficult in a complex economy capturing all the activity for inclusion in official figures.

What does emerge is the casual way the past  migration figures were compiled, relying on surveys and not on counting people in and counting people when they left. It will come as a surprise to many that when you have a border system with everyone having to show a passport and visa where necessary people have not  not been counted in and logged. The government is trying to remedy this defect so our border control system can have more ability to furnish us with accurate data, and to remind people whose visas expire that they should leave.

Having accurate data is important for a variety of sensible purposes. We need to know how many people need housing, how many children need school places, how many people may need to visit a Dr or hospital. In the last couple of years Wokingham and other places have been playing catch up, trying to add to the school and surgery provision to deal with the extra people we now have in our community. More accurate figures sooner from our border system might have helped make provision earlier, as well as informing a better debate on numbers.

I spent last year ignoring the forthcoming vote on Scotland’s future, as the opinion polls showed strong support for no change to the current position. More recently I have taken an interest, as the polls have narrowed. I  have also commented that the “Better together” campaign is a bit  negative  in some of its content and tone, and might be more successful if it was positive and sought to ally feelings to “facts” about economic matters.

So maybe today I should ask what will happen and what should happen, if the unlikely event occurs and the Yes campaign wins for splitting the UK.

The first thing that should happen is all MPs representing Scottish seats in the House of Commons should withdraw from all business relating to the rest of the UK, especially business relating to the negotiation between the rest of the UK and Scotland. The government should pass a Bill excluding Scottish MPs from rest of the UK business if there is no voluntary agreement to this

The second thing is a negotiating team of senior Ministers should equip themselves to negotiate on a wide range of matters that need settling between the two new countries. This will include splitting the state debts and assets, sorting out responsibility for banks and money, the transition to a new currency for Scotland, the transfer of benefits, pensions and other state liabilities to Scotland for their people, and the trade and border arrangements which will apply following the split.

The third thing is to notify the EU of the need to change our relationship with the EU. Our partners will probably deem the rest of the UK to be the successor state to the UK, but they will want to cut our number of MEPs and our votes around the table. The rest of the UK will need to cut our financial contribution, and may as well regard the exit of Scotland as triggering  a much more fundamental renegotiation of our relationship. There will have to be Treaty changes anyway. It would accelerate the task Mr Cameron has set himself for a future Conservative government, and give rise to an IN/Out referendum on possible rest of the UK membership of the EU. Whilst as a Unionist I would prefer a willing Scotland to stay with us, as an Englishman I can see advantages in being able to sort out this wider EU relationship sooner and from a different bargaining position where England’s view is more central.

In 1999 I wrote a book asking this question. I hear that people are reading it again. I stand  by my conclusions then, now tested by 15 years passing.  When I wrote the summary I said

“Can the UK survive devolution, European integration, reform of the Lords, slimming of the monarchy, proportional representation?

Will Scotland  now seek to shatter the Union by demanding full independence? Will the new House of Lords be anything more than a rubber stamp full of the friends of the PM? Would the abolition of the pound mean common taxation and political union with France and Germany?

….Viewing the Blairite revolution as the agency for wider changes  coming from the agenda of France. Germany and the European Commission, I  ask the questions: are these changes inevitable, are they desirable, and what will they mean for us here in Britain? In the name of the people, the people’s right to a voice and justice is being damaged. More and more decisions are being made behind closed doors, in quangos and in Brussels. ”

I enjoined people to fight the battle to save the pound, the one part of the scheme we could prevent because we were offered a referendum. The last decade and a half was not in vain, because we won the battle of the currency. If we had lost that Britain would have been well and truly dead and buried.

Commenting on devolution I said ” The end result will be a more divided, more factious, more overgoverned, more overregulated UK…It will not reconnect the people with the politicians. It will confirm the public in their view that politicians by and large do not solve problems, do cost too much and are good at misleading the public in their own interests”

I concluded the book by saying  ” Labour’s constitutional blueprint is nothing more than a plan for the destruction of UK democracy. It threatens splits within the kingdom. It threatens transferring far too much out of democratic control. It gives far too much ground to the federal plan on the continent. It dares to do all these things in the name of democracy, when the result will be less.”

Today we are facing the consequences of those bad decisions. We are trying to resolve the question of Scottish independence, because devolution did unsettle not solve the problem. We have to tackle the problem of excessive powers passing to Brussels. We are living with the consequences of quangos like the Environment Agency controlling large parts of our lives. We need a new settlement, which gives people back their power to sack accountable MPs and so change the government. In turn MPs need to take responsibility back for governing the country so they can serve the country well. .

           The Commons Environmental Audit Committee is not reknown for its sense of humour. So when they said in their recent Report into HS2 that they would like “the government” to “examine the scope for requiring a reduced maximum speed for the trains until electricity generation has been sufficiently decarbonised” they were definitely not joking.

           A High Speed train that goes slow? Now there’s a novel idea. The government, after all, could say it has recently switched its case for HS2 away from speed towards “capacity”, so agreeing to put some speed limits on the new trains would not upset that aim too much.  So why has the Committee reached this conclusion?

                We are told that trains travelling at 225 mph use three times as much energy as a train travelling at 125 mph. We know from using our cars on motorways that cruising at 70 mph  uses more fuel than cruising at 50mph, but we of course are stopped from doing anything like  current train speeds. That’s partly a safety judgement, and partly an environmental one.

           It’s no good saying these are electric trains, so that makes them just fine for environmentalists worried about CO2. A lot of our electricity is still generated from fossil fuels that emit substantial CO2. The more fast trains we run, the more CO2 we will let out into the atmosphere. The Committee also worried about the impact of the new train route on ancient woodland, but did not press on the question of the environmental impact of this railway on urban areas, especially in London. That too could be quite considerable.

            People who had not thought through their CO2 accounting rashly assumed trains would be better than cars and planes from the environmental point of view. They had also failed to consider carefully the impact of a new line and the carbon cost of the construction.  The CO2 output of the finished railway  all depends on how many passengers use the trains, how much energy people use up getting to and from stations, how heavy the trains are and how fast they go. Trains like cars and planes require energy to drive them, and much energy to build them. CO2 accounting is not a simple case of trains good everything else bad.

           Nor is the safety case as overwhelming as some believe. Trains travelling at very high speeds are dangerous. As a result the lines have to be completely isolated from any external intervention by people, plants  or animals, to avoid items on the line and to avoid any clash with pedestrians, cycles, children playing and anyone else who would be at risk. Motorway carriageways  too are segregated from cycles, children playing,and  traffic coming in the oppposite direction so they like railway lines are a lot safer than general roads. The speed limit placed on cars at 70mph, allied to rubber tyres with grip and steering systems to avoid collisions means cars have a better chance of keeping safe if a motorway is disrupted somehow. Trains are more likely to plough to disaster at high speed if a train track gets disrupted, as can happen at level crossings or through unplanned access to the tracks by others. Speed limits help reduce accidents on roads, we are told. The same must be true for trains.

In recent years there has been an avalanche of new regulations from the EU governing banking, financial services and insurance. I attended a seminar last week to catch up with the latest developments. It was a long meeting.

We are witnessing the early developments of regulation from the main European Supervisory Agencies (ESAs).

UCITs V has been developed to regulate investment funds. CRD IV is to regulate bank capital. The EU is working on a Bank Resolution and Recovery Directive, and on proposals for bank structural reform. The banking ESA is undertaking stress tests on banks and is seeking extra powers including binding arbitrations.

The Single Resolution Mechanism (SRM) will propose  a resolution mechanism to be approved by the Commission, to be triggered by the ECB. The Resolution fund will be paid for by all the Euro member states, but will be 60% mutualised within two years of its establishment.

The EU is working on changes or improvements to its anti money laundering legislation, on payments, benchmarks, and KIDIP consumer protection. It is backing the Asset Quality Review (AQR), and will allign EU leverage ratios for banks with Basel III international agreement.  The SSM, the new banking supervisor in the ECB, plans 1000 staff to supervise the main EU banks.  There will be a single rule book for banks across the single market, not just the Euro area. The system of living wills for  banks will be incorporated into the new system.

The aim will be a comprehensive system of consumer and professional market regulation in all financial areas. Every area will need to conform to the general rules against financial crime and money laundering. There will then be differing individual requirements sector by sector depending on the type of business and the nature of the customers.

Increasingly the UK regulators will be enforcing EU requirements. I mention this in a neutral spirit, but if we wish to have a well informed debate about the relative powers of the Uk and EU governments it is always now wise first to ask what are their respective powers and responsibilities. In the area of financial regulation the EU is clearly now in charge.

The EU is also  keen to increase its involvement in taxation. The UK has declined to join the scheme to introduce a Financial Transaction Tax, but other countries will go ahead without us. The EU is also planning to require more exchange of information over savings taxes, extanding the range of current proposals, as they wish to move closer to common savings taxation.

The UK says that as it is not in the Euro area it can still have its own distinctive system. Yet developments show that in so many ways membership of the EU as a non Euro member still sucks us into the general movement towards EU control.

Some of the comments coming in about the behaviour  of the European  governing class remind me of King Lear’s discovery:

“Even a dog’s obeyed  in office…

Plate sin with gold,

And the strong lance of justice hurtles breaks;

Arm it in rags, a pigmy’s straw doth pierce it…”

I think things have improved a bit since Lear’s day, but at least it shows it is not a new problem.

Imagine the howls of protest from the left if a pro free enterprise group had taken over the government of the EU and were presiding over mass unemployment on the current scale. Yet today, with the big government brigade in charge of the EU, it is apparently acceptable that 18,965,000 people of working age are unemployed in the Euro zone.

No-one in the EU government seems to get cross about it. They do not seem to do any of the obvious things you would do if you wanted to bring unemployment down. Instead of making it easier for business to generate jobs they think up new ways to  tax and regulate. Instead of mending the banks and easing money policy they prolong the agony brought about by broken banks and demand they lend less. Instead of creating an energy market with prices that match our leading world competitors, they happily pile on more and more cost and tax to energy to make us as uncompetitive as possible.

The prospects have been even worse for the young. Almost one quarter of people under the age of 25 are out of work in the Euro area. In places like Spain and Greece half the young generation are workless. Still no-one seems to wake up in the EU government and ask why, let alone propose doing something that might make a difference to this lamentable state of affairs.

The EU goes about its business of feather bedding the governing class and leaving the many to fend for themselves in  a malfunctioning economy and currency union that sensible people warned them could not work. When we hear from this elite that letting people vote and have their say, as in Switzerland on migration, is dangerous, it is no wonder so many people in the UK have had enough of their arrogance and incompetence.

The Treasury have been too optimistic about how much extra revenue they will get from a big hike in the rate of Capital Gains Tax. Indeed, it is coming in this year £1.2bn down on last year’s forecast, or a whopping 23% shortfall.  Just as they underestimate the extra revenue you get in from Income Tax rate cuts, so they exaggerate the extra revenue you get from tax rises.

In 2011-12 Capital Gains Tax brought in £4.3bn. This fell to £3.9bn in 2012-13 with   the continuing  higher rate, as I predicted but as many sought to deny. That was  a fall  of 10% in revenue. Not to be downhearted, the Treasury decided this was a one off event. They forecast a healthy rise in CGT this year to £5.1bn in the 2013 budget. A year later, in Budget 2014, the forecast for the year just about to end slumped from £5.1bn back to the previous year’s £3.9bn, still 10% lower than 2011-12.

The Treasury do not seem to understand CGT. People with assets have considerable scope to delay or cancel sales if the prospective  tax bill is too high. Sometimes they can find offsetting losses to take if they do wish to sell something sitting on a profit. People with flats in London they do not use very much any more decide to keep hold of them as they do not want to pay all the CGT. People with shares sitting on good gains delay sales, and phase them when they have offsetting losses and allowances to cushion the tax bill. Assets which could be better used by others are not sold on.

The rate at which you would maximise CGT revenue is likely to be a low rate because it so easy for people with assets to avoid this tax quite legally. It is not tax avoidance to sit on an asset you no longer need because it stands on a big gain. Gordon Brown seemed to understand this, and took CGT down to 18% which may well be near the optimum rate to maximise the revenue. People wanting the public sector to spend more should worry that CGT is too high to maximise revenue at the moment. The Treasury needs to improve its model to forecast this tax more accurately.

The second EU debate was bad tempered and  repetitious. The strange thing about it was the posture and tactics adopted by Nick Clegg.

Like the other small band of vocal pro EU politicians in UK politics, Nick promised us he would make the case for the EU but spent most of his time minimising  the EU’s importance and playing down or denying the EU’s main strategic aims and direction of travel.

There will be no EU army , he promised us. What about the 60,000 troops available as a Rapid Reaction force already? What about the call for the EU to have drones and border protections? What about all the features of the Common Foreign and Security Policy?

There will be no more big transfers of power worthy of a referendum any time soon, he assured us. Has he not noticed the big transfers of power to complete the EU’s control of banking and financial services going on on his watch? Has he not seen the latest moves to extend and strengthen the EU’s climate change and energy policy? Has he forgotten that he is advocating within government a big transfer of power over our Criminal Justice system through a series of proposed opt ins? Has he not understood the significance of the ECJ gaining power over European human rights?   Why do none of these warrant a referendum?

He told us he is against so much EU red tape. When did he last secure the repeal of any of it? Why has he gone along with a big increase in the volume of Directives, Regulations and consequential UK Statutory Instruments, if he thinks there is already too much red tape?

Just like last time, he concentrated on the big lie that we would lose jobs if we left the EU because they would deliberately damage their trade with us. He does not explain why he has such a poor opinion of our EU partners that he thinks they would spite themselves to do us harm, yet he wants to be in ever closer union with these self same countries. There is no way Germany will want to stop exporting to us as they sell us so much more than we sell them, so their Finance Minister has already said there would have to be a good trade agreement between the UK and the EU.

He added the extraordinary claim that just 7% of our laws come from Brussels. I guess he gets to that very low figure by leaving out the bulk of EU law which is implemented in the UK by means of Statutory Instruments under the 1972 Communities Act. No-one sensible accepts his definitions, and some will also querying his counting. The majority of UK law comes from the EU these days on most definitions.

I could understand someone with passion making the case for the full blown political, economic and monetary union that will be the completed EU. I would not agree for the UK, but could appreciate the vision. They would want the Ode to Joy to take precedence over the UK anthem, want the European Parliament to make most of our laws on the advice of the Commission, want there to be a common foreign and security policy which we supported and helped, want there to be s single currency and economic area, and would accept free movement of people. That agenda is the agenda of most of pro EU Europe.

Mr Clegg tried to make out such an agenda does not exists. He should get out more, and travel to the continent more often. Then he might find out the true nature of the cause he claims to support, and might then come home and make the case for the EU as France and Germany  wish it to be. It is no good the pro EU people continuing to disguise it as some greater trade area, when it has gone far beyond that in design, ambition and even in execution.

Until he does that, I and many others will not believe him.

I do not think the issue of Scottish independence should be determined by whether in the next few years Scotland might be marginally better off or worse off financially. It should certainly not be determined on the say so of a few large companies, either telling the Scottish people they will cut jobs  if Scotland votes Yes, or telling them that an independent Scotland could make a few tax concessions to companies which would make things better for those companies.

The vote should be about whether most Scottish people want to remain British, or whether they feel they can only express their sense of identity by backing an independent nation. As a Unionist myself the last thing I want is to keep Scotland in the Union against the hearts and feelings of a majority of the Scottish people. We need willing  and loyal supporters of our union if it is to thrive. Nor do I want to see a highly marginal vote, with maybe just 52% in favour of the Union, with demands in a few years time to do it all over again. The Union needs stability and support from all parts. This referendum somehow has to be used to secure that support from most Scots, or has to provide them the moment to leave.

I hope we hear more emotional appeals for both an independent Scotland and for the Union. I hope one of those appeals reaches out to enough people to give us a clear answer. It is no good pretending this fundamental question of identity is not emotional. It is not a matter of fine accounting calculation. You do not enter a successful marriage by working out how you might get the better of the merger of your working lives and bank accounts. A successful partnership does not come from thinking how you can live off the other parties, but comes from energy, effort and thinking of  others as well as yourself.

A union of two countries is not just for a few years. You should not unpick it when you think you might have a few more years of higher tax revenue, or seek to put it together if you are down on your luck. It is about how you feel, how you define who you are, and what you think of the neighbours. A union of countries means sticking together during good times and bad. It means going to the aid of each other in war or financial disaster. Becoming independent means wanting to do for yourself what before the Union did for you. That is the fundamental  question.