I do not want the UK to play New York State to Euroland’s USA. I would rather we played Canada. The Euro area is rushing towards political union. It has to take more powers to the centre, and redistribute tax revenue more fairly around the zone. The UK does not wish to join that. That is why we need to negotiate a new relationship, based on trade and friendship, that excludes us from political union

I have one simple requirement for the negotiation of a new relationship. I wish to restore the sovereignty of  UK voters, so that their UK Parliament can make the important decisions they want.

The Prime Minister rightly said in his Bloomberg address that national parliaments are the fount of authority and the bodies to whom government must be accountable. I agree.

I do not favour a negotiation based on a list of items where we currently do not like EU laws and common decisions. Even if we could get all of the worst ones right this time, there will be occasions in the future when existing EU laws prevent us governing as the people wish.

Today people want us to restore control of our own borders, and reduce the numbers of new migrants to lower the pressure on homes and public services. In future it might be the EU’s dear energy policy, or their foreign or criminal justice policy that causes us trouble. In some case we have opt outs, and we have the right to veto future proposals. In other cases we do not. Our veto has been under remorseless erosion for many years.

Now is the time to build a new relationship based on trade, co-operation and a series of mutual agreements about things that cross borders. The rest of the EU will not want to damage their profitable trade with us. They might like to be free of our reluctance to sanction further deeper union.  There is a new relationship to be forged, as the Euro turns into full political union for its members.

We should restore our national democracy whilst they create their political and monetary union, based on benefit and tax transfers around it as they clearly  need. The UK will be part of the trade system but not part of the common government.

 

At its simplest productivity is the  value of output produced per hour or  per year by the average worker. The Bank of England is said to be worried because UK productivity is lower than the USA and some countries in the EU, and has not been going up as quickly as before the crash in recent years.

The Bank has struggled to explain why. Let me have a go to help them. It is not all bad news.

The first reason is the sharp decline of North Sea output – which is bad news. Oil production is one of the most productive types of activity as conventionally measured, as oil output has a high sales value, and uses relatively little labour to achieve it, once the wells and platforms are in place. The North Sea is now a province in sharp decline, so we have just lost a lot of highly productive output.

Pre the banking crash, the UK also had a lot of very  expensive banking and financial output. This too appeared to be achieved at very high levels of productivity, as each individual investment banker or trader could undertake very large turnover with modest supporting labour input. The fact that some of this output turned out after the event to be loss  making does not require the past productivity figures pre crisis to be rewritten, which are flattered by the apparent high turnover and profit announced at the time. Since the crash there has been a deliberate run down of bank balance sheets and activity levels, and the loss of some high end business to centres like Switzerland and Hong Kong where taxes are lower. This has also depressed UK productivity.

The third more positive reason UK productivity has fallen is the success of the UK economy in adding a lot of more labour intensive lower priced service sector activities to its high end manufacturing, commodity extraction and expensive service activities.  The French  barrister may go to the office and get a coffee from the workplace drinks dispenser. His UK equivalent may stop off for a coffee from a coffee shop produced in a labour intensive way by a barrista. The French may be more productive at getting their coffee, but the UK employs more people and produces a better served product in  this  example. UK shoppers  now expect a much higher proportion of cafe, pub and coffee shop space in their preferred retail centres, with a higher staff ratio for delivering the service.

To the extent that UK productivity has stagnated because we have added a lot of extra lower productivity labour intensive services, that is good news. It means we have much lower unemployment than Spain  or France. On OECD figures for 2012 (last I could find)  the UK generates $48.5 worth of output per hour worked, compared to $50 in Spain, $59.5 in France, $58.3 in Germany and $40.1 in Japan. The UK is just a little above the OECD average.

However, if you adjust these figures for the levels of unemployment, the  Spanish figure drops to $38.5, the French figure to $53 and the UK to $46, as by definition the unemployed are making no contribution to output but  do not get included in average productivity.

The Euro area as a whole has similar productivity to the UK. US productivity remains considerably higher than Europe’s. Norway has the highest of the Europeans, thanks to a large oil and gas sector. Switzerland is also high, with a large financial sector.

Raising output per hour is a good thing in most cases. The UK’s very average productivity figures tells us more about the new balance of our economy. It does not mean our best industrial companies are uncompetitive or themselves have poor productivity.

 

 

 

 

Some of you are complaining about delays or even wrongly suggesting censorship. I am exceptionally busy at the moment with a new Parliament, a new government to influence and a backlog of cases to take up for constituents. During an election there are no MPs, so MP  cases have to await re election.

My constituents’ cases take priority over moderating this site, and influencing the new government also takes precedence. I hope to catch up with the longer recent contributions this evening if my other work is then done.

If you want faster moderation then please follow these rules

1. Only submit  short contributions

2.Do not add supportive links which I have to find and read

3. Do not libel others or  make allegations about individuals that are contentious. I have no libel lawyer to read my site in the way a newspaper does.

 

One regular contributor who normally supplies interesting and well based material with official sources (which are fine) has for example complained that I did not publish allegations against the Conservative candidate in Thanet South before the election, and implies bias or unfairness in my editorial policy. As I made clear during the election I did not take comments on any candidate, positive or negative, in an individual contest, without a) a full list of candidates in the election and b) good proof because of election laws. I have incidentally often vetoed allegations against Mr Farage and UKIP to protect them, just as I have vetoed allegations against Labour or Conservative figures.

 

I would like to believe in public service broadcasting. Some part of me is heir to the grand tradition of Lord Reith. I helped educate myself by listening to Radio 4  or the Home Service. At its best the BBC can still produce interesting documentaries, good discussions and good educational programmes.

The idea of public service broadcasting has however been much stretched.  Aware of the need to keep popular consent for its poll tax to pay for it, the BBC has long decided to undertake a lot of popular programming which competes directly with free to air commercial tv. Can we really call soaps, old films, light entertainments, pop music, quiz shows and home improvement advertorials  public service broadcasting, distinct from other broadcasting?How do they differ from what free to air commercial tv serves up?  If the programme is very popular, then financing it will be easy without a poll tax. Of course people want popular programmes, but they get them paid for by ads on commercial tv, and paid for by subscription on other channels.

The  case for tax based subsidy is clearest for the World Service. Part of the UK’s presence in the world is to provide news, documentaries and educational programmes for  world audience. I have no objection to this being part of the government’s budget – maybe part of Overseas Aid or the Foreign Office costs. The World Service can be an important ally and source of information for people in oppressive regimes, and for all those worldwide wanting a good English language source.

The first task of the review should be to establish a modern definition of public service broadcasting. Then they need to decide how much of it we want.

The review also needs to look at the differing ways people can now gain access to BBC content. All the time BBC material is free to air there remains an issue on how to collect the revenue owing from those who manage to watch or listen to it. They may conclude that it will become too difficult to make people pay a licence fee, when there is plenty of non BBC content around, and when delayed BBC content may be available free anyway.

Perhaps the most important issue is competition. The large and subsidised website service offered by the BBC may be making it difficult for other providers to develop their offer. BBC publications has an impact on other publishers of material. The Review may like to ring fence the subsidised areas more, and make sure that the commercial parts of the BBC are free standing and have to compete on level terms.

 

I thought it would be unfair to spend a day on both Labour and Lib Dems, and ignore UKIP which polled 3.8 million votes. Today seems a good day to offer our UKIP bloggers a chance to give us their thoughts on their party, as there is suddenly an active and lively public debate within UKIP about the leadership, style and policies of their party.

The first question we would appreciate UKIP views on is the leader. Was the Executive right to ask Mr Farage to tear up his resignation, or are Messrs O Flynn and Wheeler right that UKIP now needs a less contentious and softer voice to take it forward?

Why has Mr Farage proved so incapable of winning a seat in Westminster, even after generating so much coverage for himself?  Was I right to say some time ago that if a party candidate these days wishes to win a seat, they need to move in and show they are committed to a given local community, and empathise with local opinion?  Why did Mr Farage think he could represent Buckingham in 2010 but then switch to Thanet South, a very different place, in 2015? If he carries on where would he stand next time? Why did he come a poor third in Buckingham, with a pro EU independent in second place?

The second question is what is the prime purpose of UKIP now we have elected a government which will give us an In/Out referendum?  As most of UKIP’s distinctive policies are based on getting us out of the EU, the sensible thing for UKIP to do now is to concentrate all its resources and political action on contributing to the Out campaign. If we vote for Out then UKIP’s purpose has been achieved. If the UK votes to stay in then UKIP will have to judge the mood and decide if it accepts the democratic will of the people or not.

The third question is was Mr Carswell right to say UKIP should not accept a large annual sum of public money to run an opposition in the Commons, or was the leadership right to say they should take the money and employ staff with it?

The fourth question is why did UKIP fail to break through in it target seats? Why did some of you tell me I had to switch to UKIP to get elected? Why did Mr Reckless fail to hold his seat? What has UKIP learned from its failure to win a single seat in the election, other than to hold a seat won by a Conservative who defected?

 

 

 

 

 

The government is right to argue that we should not be part of the EU’s new quota system for migrants arriving in Italy. It is right to help with the humanitarian task of rescuing people from the seas, and to stress the need to track down and prosecute the cruel traffickers who charge for people to embark on poor boats and risk their lives.

The government is also right on the broader policy issue. Many of the new arrivals in Italy are economic migrants, not asylum seekers, If the EU gives all of them who make it citizenship it becomes a reward for the traffickers, a green light for the expansion of their business. Economic migrants we help rescue should not queue jump or be given EU rights on arrival, if we wish to stop this lethal trade.

Fortunately the UK does have its opt out from Criminal Justice measures so we can decline to be part of any quota scheme brought forward under this legal base. It just shows how important it is to opt out and to keep our veto.

It also, however, reminds us of the continuing problems over the free movement of people. If other countries in the EU do decide to increase their  acceptance of new migrants and grant them full rights, then in due course they become eligible for the EU movement rights. It is a timely reminder of how we need both a government that will use an opt our or veto when needed, and will then seek a new deal to  tackle the underlying problem of free movement.

I have written a post on the BBC for tomorrow, which wrongly triggered today. Those interested in the BBC should revisit  on friday, as we have enough to talk about under the centre ground post today. I have delayed it another day as something more urgent has come up.

A few of you have criticised me for spending a little time on opposition  parties after the election. This is not a diversionary strategy, but the Conservative government is spending the next couple of weeks finalising the Queen’s speech which will then be the main topic of political debate. In the meantime it is important to consider the state of UK politics now we know more of the views of the voters. I did keep off the opposition parties unlikely to win any or many seats in the pre-election period as I could not see their relevance. I also spared you endless analysis of possible coalitions, both because everyone else was doing that and because I believed the polls which rightly predicted the total collapse of the Lib Dems as a party of MPs. Their collapse meant a victory by one of the main parties was much likelier than most thought, and it later became clear the Conservatives had moved ahead.

Many political commentators and strategists are stuck in a twentieth century time warp. They still believe elections are simple contests between Labour and the Conservatives, that they can be described by a two party swing, and that the one of the two main parties that most closely camps in the centre will win. They believe there are millions of swing voters who want something mid way between so called right wing Conservatism and so called left wing Labour.

Welcome to a twenty first century election. The last one was a contest between six parties, Labour, Conservative, Liberal Democrat,UKIP, Green and SNP, with other nationalist parties also playing a part. There was an important battle between Conservative and Liberal Democrats in the south west and parts of London, a crucial fight between Labour and the SNP throughout all of Scotland, a battle between Labour and Liberal Democrats in some northern urban seats, and in a few seats a UKip/Conservative battle or a Green/Lib or Lab battle, as well as the traditional Lab/Con marginal seat contests.

On conventional analysis “red tories” and blue labour are the centre ground, along with the Liberal Democrats. UKIP, SNP and Green are left or right according to taste, so they should not score well or be relevant on traditional analysis. Recent results and votes shows how out of date this all is.

I have never myself seen the Liberal Democrats as centrist or moderate. They have an extreme position on the EU, welcoming  any transfer of power or money to Brussels.They have views on energy that are far from the mainstream, favouring dear energy for price rationing to cut people’s usage. They tend to be anti car, when most people rely on their cars for work, shopping and the school run.

Nor do I think it helpful for these same analysts to simply see UKIP or Green as extreme, given how many people vote for them. These parties have strong views that only appeal to a minority, but as noted that is also true of the Lib Dems views on energy and Europe.

I would suggest analysts and commentators go back to the drawing board. We need models of behaviour that reflects our multi party modern democracy, and understands the passions in the politics of identity which lies behind the SNP, Plaid, UKIP and others. In a later post  I will suggest a better way of analysing modern UK politics, and talk about how a party can build a strong voting base. If moving to the conventionally defined centre worked, surely the Lib Dems would have won by now?

The main reason the Lib Dems fared so badly can be summed up in two words – tuition fees. The change of their policy on fees was so fundamental because it opened up the whole issue of trust. The only campaign pledge most of us can remember from their campaign of 2010 was the one to abolish tuition fees. They said it so often and so successfully. I can remember the uncomfortable meeting with students they encouraged in Wokingham, when I said I thought any future government was likely to keep fees and put them up. We were all awaiting the Brown review on how to proceed. The Lib Dems pounced and made their very popular offer to the student audience.

When they entered government the Conservatives were generous to them in many ways, treating them as equal partners in the all important Quad at the top of the government and giving them important Ministerial positions throughout Whitehall. Their man was the Secretary of State responsible for tuition fees. Conservatives were willing for the senior Conservative HE Minister in his department to make the decision on fees, and for the Lib Dems to speak against and abstain. Instead Dr Cable handled it himself and proposed himself a 3 line whip for higher fees. I could not understand why he did this, as it was bound to be deeply damaging to the reputation of all Lib Dems.

The Lib Dems compounded their problem of trust by the way they repeatedly sought sole credit for the tax cuts and higher spending on the pupil premium in schools, whilst seeking to lay the blame for any less popular joint policy onto the Conservatives. The truth is all the policies that went through were joint, with the exceptions of the changed boundaries – a Conservative wish – in exchange for an AV referendum – a Lib dem wish. We got the latter but not the former. It all created a portrait of unreliable allies, people who only wanted coalition when it suited them.

The Lib Dem catchy slogan that they would provide heart to a Conservative government and head to a Labour government was a nasty slogan. 68% of the voters supported Conservative or Labour, yet the Lib Dems could arrogantly assert their moral and intellectual superiority to those parties. The electorate decided otherwise, not liking this approach. Their claim to be a moderate policy of the centre was belied by their strongly pro EU and green stance.

They also suffered from the rise of the Greens. If you want a pro EU pro green party that is clearly left of centre the Greens are the purer version. The Lib Dems could not work out whether to shift more towards the Green position, or to attack them.

In permanent opposition as an ideas and protest party it is possible to face left and right at the same time. In government you make choices which define you, and you are meant as Ministers to defend the common line. The new leader of the Lib Dems will have a difficult task to define what a new Lib Dem party stands for, and a further challenge to get people to believe it. I am not sure there is room for two pro EU green parties, as they enjoy a small voter base together, let alone divided.

Let me surprise those of you who do not know me well. I do not wish to see any cuts in benefits paid to those in need. In some cases I would like us to be more generous. In that sense I am like Mr Cameron a One Nation Conservative. I accept the UK cross party tradition that people who are better off pay more in tax to provide incomes for those in need.I do not wish to see people who require welfare made worse off. I do wish to see fewer people needing welfare.

So how then can we find the welfare savings Mr Osborne talked about in the run up to the General election? The main way is by getting to the happy position where fewer people need the benefits. If we tackle poverty by helping the creation of more jobs for those who are out of work, and better paid jobs for those who are in work, so the need for benefits declines. IN the last Parliament many people moves from being unemployed to being employed, cutting their need for state income. Some people got promoted or found better paid jobs, reducing their need for top up income from the state.

If we stop paying any benefits to European job seekers who have been here for less than four years, that will save us money. If we ask unemployed Europeans looking for jobs to leave after six months if they have found nothing, that will reduce some of the pressures on the jobs market which keeps some wages down. If we say to all European migrants they do not receive benefits for children who live in another country, that too will save money.

In this Parliament it is the government’s aim to create conditions where many more jobs are created. This should drive unemployment down further. We also want to raise skill levels, and see more higher paid jobs, which cuts the need for benefit top ups.

Most jobs are in the private sector. Tax cuts for all will help boost living standards and will reduce the need for top up benefits as growth in the economy boosts in work incomes. Wage rises based on gains in productivity are also needed, so that more people have a good income from their employment.

When Conservatives argue that welfare cuts come from better economic growth they are right. It takes good growth to generate more jobs for the unemployed, and higher wages for the employed. That is how the welfare bill will be cut.

It is also important not to be mean to people in need at a time when welfare is being reformed. Reform requires sufficient money so there are no unfortunate loers.