When Labour launched their cost of living campaign fuel and energy prices were higher than today. A price freeze on energy was one of their main demands. They also wanted to see an end to prices rising faster than wages, something which happened on a grand scale in their last two years in office.

This week’s figures show inflation down to 1% and likely to fall further. Private sector pay has been going up by 2%. Fuel prices are down by 5.9% so far, with clear signs that the lower oil price will now lead to lower prices at the pumps for petrol and diesel. Retail sales were up 6.4% in volume terms in November for the last year, an impressive rate of growth.

The employment figures were also good. Unemployment is now down by 552,000 since May 2010. The economy has created 1.75m new jobs over that time period. Labour predicted rising unemployment and widespread job losses, something they had created in 2007-9.

Of course what we need are yet more jobs to cut unemployment further. We need more better paid jobs, for people to gain promotion and have a sense of progression in their work lives. We need many more months of pay outstripping prices. It is however welcome news that the UK has a relatively high rate of growth, that this is creating many more employment opportunities, and that the real value of average pay is on the rise.

Just as Labour’s forecast of another recession was wide of the mark, just as their forecasts of rising unemployment were wrong, it looks as if their cost of living crisis to be remedied by an energy price freeze is also being overtaken by the real world. It is much better that oil, gas and motor fuel are falling in price so consumers have more money left over for other items.

Labour first refused to come to any talks about tackling the problem of England. Then they refused to put their solution into the government White Paper. When it came to Scottish devolution they both attended the all party talks and contributed to the White Paper. Clearly Labour doesn’t like England.

Now they tell us that if we go ahead with English votes for English issues there will be two classes of MP. It was their devolution mess at the end of the last century which created four classes of MPs. Scottish Westminster MPs can do least for their constituents, as they received the greatest devolution. Welsh and Northern Irish MPs can do more than Scots, but they too have variable items devolved to Assemblies so they cannot carry out those tasks for their constituents. Only English MPs have the full range of powers with no English devolution.

The injustice came by allowing Scottish MPs to vote on English health, English education and English local government when they cannot influence or vote on Scottish health or education or local government. Labour need to explain why they ever thought that made sense.

Now Labour want to pretend that allowing England some of the devolved power Scotland enjoys will mean they could not govern the country as a whole!. It means nothing of the sort. Just as a Conservative UK majority government could not now govern Scottish health or schools or local government, so a future Labour majority government without a majority of seats in England could not govern English health or education or local government without the consent of English MPs. What’s unfair about that?

Labour needs to learn that the union matters it left to Westminster for all the country are the economy, defence, foreign affairs and most of welfare. Why on earth they campaign about health for the General Election in Scotland and Wales I have no idea, as of course next May does not settle anything about Welsh or Scottish health anymore. Once Income Tax is a devolved matter for Scotland England will expect to settle our rate without the help of Scottish MPs.

Mr Darling was wrong to say asking for English votes for English issues fuels the SNP. The SNP is the one Scottish party that sees the logic and justice of English votes for English issues. What fuels the SNP is understanding that every time they push hard for more devolution they are given it. The SNP will always want Home Rule as they call it. Justice for England will not alter that.

This year most forecasters assumed oil would stay around $110 a barrel. They correctly saw that US output would rise, but so would demand. Those who pondered more deeply reckoned Saudi would cut her production a little to offset any surplus that emerged. I did not myself expect to see a major price collapse, against the background of raging civil and religious wars close to major oilfields in the Middle East.

Instead oil fell to $95 a barrel, the level market professionals thought would be the Saudi target support price. Instead the OPEC meeting announced no production cutbacks, and the price collapsed to around $60.

For oil consumers it is great news. It means lower inflation and higher real incomes. We all have money to spend on something else that would have been used to fill the car tank and warm our homes. The UK is now a net importer of oil again, so it will make a modest improvement to our balance of payments.

The SNP have been very quiet about the impact it will have on the Scottish economy and revenues. It will show more neutral Scots the value of belonging to the UK. As the oil revenues decline rapidly, so Scotland can still draw on the other tax revenues of the whole UK to make up the shortfall. An independent Scotland would by now be looking at what taxes to raise and what expenditures to cut to offset the fall in oil revenues.

It will worry Labour, as it is a major blow to their “cost of living crisis”. With pay now advancing in real terms for all those in work for longer than a year, this fall in petrol, diesel and other energy costs will give a further boost to the value of take home pay. Generally it will transfer income and spending power to the oil consuming countries, away from the Middle Eastern oil producers, and at the expense of countries like Russia, Nigeria and Venezuela who remain very dependent on oil revenues. Overall it is a boost to consumption and output in the world economy.

This week we expect the government’s White Paper on justice for England.
Labour declined to attend the talks and failed to file a contribution stating its approach for the White Paper. It reminds us just how much Labour scorns England, and how Labour will fight to stop England having her own voice and her own votes. Now we hear they are cobbling together a pathetic offer of English only MPs doing the hard work of the committee stage of English Bills, only to see their work overturned by the whole House on Report. That adds insult to injury.
The Lib Dems have come up with some convoluted approach which seeks proportional representation on some English committee of the House of Commons They are clearly thinking of their vote share at the last election, rather than their likely lower one at the next. They seem to have put their own party interest well ahead of England’s interests. They will not vote for simple justice for England, English votes on English issues. Like Labour they do not want to keep England whole, and want to find a way of seeing off the movement for English votes.
The Conservatives assure me they will propose English votes for English issues. May they keep it simple and comprehensive. We do not want English votes limited to just some issues or some parts of the legislative process. An English Grand Committee, or English votes just at committee stages of bills is not the answer. We want England (and/or England, Wales and Northern Ireland) to be in charge of all relevant issues, from new laws to matters like Income Tax rates and tuition fees.

The US contortions over how they treated suspects and prisoners post 9/11 are unfortunate for the leader of the western world. Republicans see the report into the CIA as partisan, partial and unhelpful. They both argue that the practices the US adopted were not torture, and that they needed to be tough to find out what might happen next to keep the US people safe from further attack. Many Democrats think the report is fine, and reveals a wrong culture at the CIA authorised by a previous administration.

Democrats have to remember that they did not make large objections at the time, and remind themselves that there was considerable continuity of policy on transition to President Obama. We were promised the closure of Guantanamo Bay, with all to face a fair trial or discharge. That did not happen. The Anglo Saxon system and values of habeas corpus, a suspect knowing the charges, and having the right to his days in court to defend himself did not materialise for some detainees.

Of course the west has to be firm in defence of freedom, and cannot be starry eyed or too idealistic in a far from perfect world. Nor, however, should the west descend to the standards of those who pose the greatest threat to our freedom and way of life. Our ancestors banned slavery, banned torture, demanded fair trial and evidence to prove guilt before punishment for good reasons. If the USA departed from these values she has to apologise and promise not to repeat the mistakes in the future.

It is true there are many evil governments and some brutal regimes around the world, and some very unpleasant political movements who resort to force to get their way. Sometimes we have no choice but to confront them. Sometimes we can confront them successfully to improve things for others. As we do so, we need to demonstrate the superiority of our belief in respecting individual’s freedoms and establishing guilt before appropriate punishment.

We also need to know what part the UK played in this worrying story. Our senior officers, armed service personnel generally and representatives need clear instructions about our belief in following the rule of law and sticking to appropriate rules of engagement and rules governing prisoner treatment.

I am being asked again why certain contributions have been deleted. I have explained before the posting policy.
I delete references to external sites which I have not read or do not know, or delete the whole post if it depends on them.
I delete posts which make unpleasant or inaccurate generalisations about named groups of people, and or references to individuals or named institutions which might be libellous or hurtful to those people.
Long posts are likely to be delayed as I am very busy and need to find additional time to read and moderate them.
I offer similar protection to all political parties and political leaders, and allow more latitude in criticising all of them including the Conservatives than in the case of other people and institutions.

The biggest change to the government’s financial position announced in the Autumn Statement was the good news that the OBR now expects much lower debt interest payments in the years ahead.
They lowered their forecast of likely debt interest from £52.1bn this year to just £35.9bn, a reduction of £16.2bn. Next year falls from £59.1bn to £40.4bn. By 2018-19 the decline is from £75.2bn to £57.5bn, a fall of £17.7bn. These falls occur despite including the debt interest on the borrowings of Network Rail into the official government figures for the first time, which increases interest payments by £2.2bn in 2018-19.
So how have these reductions come about? The forecast interest the government will have to pay has been reduced as government bond yields have stayed lower for longer enabling the government to borrow more cheaply. Inflation has fallen further and faster, cutting the cost of the indexed gilts which the government has to service. The government has also recognised that it is paying some of the interest to itself through the bonds owned through the Asset Purchase Programme. It now assumes it will continue to own those bonds and receive the interest on them. The new idea is that the APF bonds will only start to run off through redemptions once interest rates start to rise.
This amounts to good news for taxpayers, as the costs of borrowing too much in the past have just got a lot cheaper. However, taxpayers need to remember that what goes down can also go up again. Now the state has so much borrowing, rising interest rates and rising inflation rates could prove very expensive. Labour’s idea that it need not balance the budget anytime soon but could carry on borrowing more to finance its capital spending carries a substantial risk. If they won the election and embarked on spending more than the current plans, markets might make them pay more for their debts. With the present huge levels of borrowing that could prove to be very expensive.
Government and forecasters come to accept very low interest rates and expect them to remain low. They will only do so if the government is prudent with its future spending and borrowing, and if inflation stays low. I understand savers want higher rates, but they want higher real rates. Higher interest rates because inflation has taken off might help no-one and would leave a future government in great financial difficulties. At current levels of debt interest rates at pre crisis levels would mean many cuts in other programmes to try to keep the deficit under control. Labour’s spending plans do not recognise the reality of a highly indebted country.

BRITAIN AND THE EU: A SOLUTION

Reforming Britain’s relationship with the EU could boost trade, reveals Daniel Hannan MEP in a new report Britain and the EU: A Solution, published by the Centre for Policy Studies on Friday 12 December.

Pointing to Switzerland, the MEP explains that despite the country not being a member, Swiss exports to the EU in 2013 were 450 per cent per capita what Britain’s were.

Hannan writes:

“There is no reason that the British couldn’t do even better than the Swiss. Britain is 63 million people to Norway’s 5 million and Switzerland’s 8 million. Britain runs a massive trade deficit with the EU (but a surplus with the rest of the world). On the day Britain left, the country would become the EU’s single biggest market, accounting for 21 per cent of its exports – more than its second and third largest markets (the US and Japan) combined.”

With UK opinion polls increasingly favouring a free trade relationship with the EU that does not involve political amalgamation, the author sets out nine objectives for the Government:

1. Fiscal freedom from the EU
No financial transactions taxes, no green levies, no EU airport duties and no harmonisation of VAT.

2. UK citizenship
Britain should disapply the EU Citizenship that was created by the Maastricht Treaty in 1992. There should be no automatic assumption of mutual voting entitlements, residence rights or social security claims.

3. No Common Agricultural Policy (CAP)
Britain is penalised both positively and negatively by the CAP, paying more into it and getting less out.

4. No Common Fisheries Policy
Around 60 per cent of North Sea fish are in British territorial waters. But, under the CFP, Britain’s quota is equivalent to 25 per cent by volume or 15 per cent by value.

5. Independent diplomacy
Britain should pull out of the European External Action Service – the EU’s diplomatic corps. Close intergovernmental links with European neighbours should of course be retained, as well as the military obligations that go with NATO membership.

6. Common law, not EU law
Britain should withdraw from the EU’s Area of Freedom Security and Justice – that is, the common judicial space created in 1998, within which a shared legal code is enforced by a European magistracy (Eurojust) and police force (Europol).

7. British social policy
All employment laws and social policies from the European Union should be returned.

8. Supremacy of Parliament
Sections 2 and 3 of the 1972 European Communities Act should be repealed or amended so that EU law no longer has automatic precedence over UK law on UK territory.

9. Reform of Immigration Policy
New European immigrants should not receive unemployment benefit until they have been in the UK for a minimum of one year.

 

On Monday in Parliament we debated the government’s infrastructure Bill.  It sets out three main changes in the name of improving the country’s infrastructure.

The first is to speed improved roads and get value for highways expenditure. The Highways Agency is being turned into a company owned by the taxpayer. It will be more independent of government, will have five year  budgets with the government pledging money for the whole period, and will be under the surveillance of two quangos to monitor the cost effectiveness and the customer performance of its activities.

I welcome the decision to spend more on road building, after a prolonged period of spending too little to too little positive effect. I would prefer the  accountability of the new company  to be directly to Ministers and Parliament. This would save money and ensure tougher scrutiny. I do not want another body which affects my constituents lives where I have to correspond with a quango that can avoid direct exchanges, where Ministers would have to  resp0nd directly in Parliament.

The second is to permit drilling for shale gas and other hydrocarbon at depths of 300 metres and lower. This is part of a package of measures the government is taking to try to stimulate shale gas exploration and development in the UK. It should be seen in the context of the establishment of a new regulatory office for shale setting standards of safety and environmental protection, and in the context of the general planning framework.

The third is change to encourage more sale and re-use of brownfield public sector land. Most people prefer new development on land which has been developed before. Despite various attempts by past Ministers to get a bigger flow of underused and unused public sector land back into use, it has proved slow going. The question is will this new attempt be more successful?

The Bill also contains powers to allow a community to buy into local  renewable electricity developments, to control animal and plant species that represent a hazard, and to raise a levy on certain energy industry licence holders.