It is difficult to believe that there is so much fuss over Mr Gove’s decision not to reappoint a Labour peeress to a Quango on expiry of her contract.  It is even more bizarre to complain that he is trying to politicise these appointments, when the outgoing person is a Labour politician.

As we have now read, Labour made many more Labour appointments to quangos than the Coalition has made Conservative appointments, adjusted for the periods of time involved so far. I saw nothing wrong in principle with Labour Ministers appointing Labour supporters to these important jobs. Doubtless they wanted people running these arms of the state who shared their general world view and aims. Of course they needed to undertake fair recruitment process and ensure that if someone was a known Labour supporter they had the qualifications and experience to justify the appointment. So why then do they dare to complain if occasionally Conservative Ministers take the same view about their supporters? Should a known Conservative who is qualified now be banned from a quango appointment because he or she is a Conservative?

This row raises some wider issues. Why is so much power concentrated in the hands of these quangos, when Ministers maybe should take more control and accept more responsibility for what is going on.  There is no evidence that so called independent bodies are better at judging matters than elected Ministers acting on good professional advice. Just look at the mess the independent Bank of England and the FSA made of banking regulation, bringing on the worse crash in more than century. Previous Chancellors who had more direct control did better. Or look at the Environment Agency’s decision to allow  floods in  large parts of the country.

Can we really believe there are truly independent people in areas of great contention? The global warming theory supporters would not regard an appointee to the job of Environment Agency Head  as properly qualified if they   did not believe in global warming theory . Anti global warming theorists regard the appointment of a pro theory person as  folly or treachery. These are political minefields, and no-one is in this case “independent”. A School Inpsector who believes comprehensives are best might set different standards from one who thinks the best grammars and private sector schools are the ones to match. This again is political territory.

I favour bringing more powers back from quangos to Ministers. Better still let’s find more powers quangos have which we could return to people and  businesses, leaving them freer to do as they see fit. And let Mr Gove choose who he will. It will be his results that we judge in 2015, so he should have the helpers he needs to do the job.

          Yesterday morning I heard a patsy interview of a senior manager of the Environment Agency. It started with sympathy for the difficult time they are experiencing, went on to ask them if they needed more money to do their job, and ended with the usual invitation to express the helplessness of the Agency before the force of climate change.  I can only assume the BBC are  colluding with this body, as I know they can give tough interviews if they wish. You would have thought they would pick up the public anger. Don’t they think it unacceptable that people have flooded homes and businesses?  Isn’t the main point of the Agency to do what it takes to protect us from floods and ensure we are supplied with clean water and a good waste water service? Where did the £1200 million spent last year go?

          What should they have asked?

          They should first have explored the issue of whether it is a deliberate policy of the Agency to allow large parts of the country to be flooded, as they seem to wish to restore old landscape prior to the draining of the land to create homes and farms for people. It appears from various EA statements that they do hanker after more wetlands and fewer farms and homes in certain areas. It also appears from the Chairman’s recent article that they think they can only protect urban areas, and will sacrifice rural ones. Clearly it is government policy to protect people and farms from flooding wherever possible. The Agency may be at variance with this aim.

          They should have asked where all the £1200 million spent last year went. Why was only £20 m spent on maintaining ditches and culverts? Why so little on dredging? Have dredging machines been sold off for scrap or allowed to rust without use in some places as has been alleged?  Why did the INCREASE in the staff budget, £30m, exceed the total spend on essential maintenance?

           They should have asked why the Agency seems to think it is sufficient to warn people of impending floods, rather than putting in place the bunds, barriers, pumps and other methods to divert the water from homes and businesses?

             I want Ministers to bring  this quango to account. It will probably need a new Chairman to give it a sense of urgency, to sharpen its priorities in the way most people want, and get value out of the huge sums its spends.

The French have often briefed against the Anglo Saxon way. They dislike our success at banking and financial services, disagree with policies that allow more freedom and flexibility to set up in business, to take a job or find a new employee, to encourage enterprise. President George Bush was not completely wrong if  he did famously say the French have no word for entrepreneur!

President Hollande set out on an interesting economic experiment. He was cheered on by socialists and bien pensant commentators on both sides of the Channel. Where the UK cut the top rate of tax he would increase it. Where the UK cut the tax rate on business, he would squeeze them harder to get them to pay their fair amount. Where the UK would curb the rate of increase in public spending, he would promote growth through a bigger public sector. Mr Miliband was egging him on, and used to refer favourably to the French experiment. Though he no longer is so keen on the French model as an example to us, he seems keen to copy parts of the policy  nonetheless.

So how has the French leader got on? He is now  very unpopular. The French economy hovers around another recession. Unemployment stays stubbornly above 11% compared to 7% for the UK. Youth unemployment is especially high. France has many areas of high deprivation in the big cities. The gap between Paris and the rest remains very large. 400,000 talented and hardworking French people are now working in London. Those recently interviewed by the BBC have told us they love the greater freedom, flexibility and positive environment London gives them to start up and grow a business.

It would be wrong to write Paris off. It is the only other great city in Europe besides London in terms of scale and prosperity levels. It still has many fine businesses and brands and many talented people who have not left. Similarly, it would be wrong to be complacent about London’s current success. Hidden in the figures is a decline in London as a financial centre relative to New York, thanks to tax and regulatory policies followed by the EU which are having more and more influence on the UK. Paris has lost a lot to London, London has lost high earning business activities to Switzerland, Hong Kong and Shanghai.

However, today France has deeper social and economic problems than the UK. Mr Hollande says he does not want fundamental reform of the EU or any Treaty change. The UK is pressing for it. If Paris wins this battle, as some expect, then that might merely hasten the UK’s exit when the people vote. Outside the EU the UK could pursue an agenda more friendly to business, jobs, success than we currently can achieve inside the EU. Then the gap between London and Paris would grow much greater in London’s favour. Does Paris want that outcome?

The Environment Agency last year received a £723m grant from the taxpayer and spent in total £1207m, the rest paid for by charges.

The staff costs of the Agency rose by £30m or 8% compared to the previous year, reaching a total of £395.3 million. The Agency employed 12,252 people including  temps and contractor personnel.  Pension contributions cost £56 m , with a loss on the fund recognised that year in the accounts bringing the total pension cost to £197.4 million.  The total cost of pensions was almost as high as the capital works, where they spent £219million during the year.

Within the capital works just £20.3 million was spent on improving or maintaining culverts and channels to ensure free flow of water. That is a mere 1.7% of their total budget, or 3.4% of their staff and pension costs. A further £69.6m was spent on improving embankments.

It looks as if the Agency has got the balance of its budget wrong. It clearly needs to spend more on keeping culverts, ditches and rivers in a good state to be able to handle large quantities of water when we have heavy rains.  The Agency spends a lot on people to warn us of approaching hazards, and to map and discuss the problems as they arise. It needs to do more and spend more of its large budget on works on the ground, probably using contractors not on its own payroll, to keep the water flowing.

It is an interesting to note that under the Coalition this quango has continued to be chaired by a senior Labour person. There does not seem to have been any attempt to remove the Labour Chairman, and he has clearly not made sufficient attempt to get value for money nor to ensure the Agency’s priorities are our priorities – keeping people and property safe from floods, and ensuring a good supply of clean fresh water for households and businesses. There is no evidence here to support Labour Lady Morgan’s claims.

Labour and Liberal Democrat MPs mainly stayed away form the Referendum Bill in the Commons. They clearly recognised that a referendum is popular with their electors and they did  not want to be seen opposing it and voting it down. In the Lords Labour and Liberal democrat peers did vote it down by refusing it the extra time last evening it needed, and refusing to speed up consideration of their many needless amendments.

It is strange world where two parties love the EU and all its works, want us to stay in, yet are determined to deny the rest of us a say in a  referendum. The stealthy way they killed the Referendum Bill tells us a lot about their approach to this most important of issues. Mr Cameron intends to try again in the next session, and may also use  the Parliament Act.

I welcome the Conservative decision to have more free votes. Far from creating a split party, this encourages better debate and more thought by individual MPs. The Conservatives offered a free vote on the Raab Amendment to the Immigration Bill and will be offering another on the issue of smoking in cars carrying children.

I see the mythmakers are back saying that a  divided party cannot be elected to government. This is complete nonsense. Margaret Thatcher led a very split party. She was constantly subject to attacks from the group of MPs who disagreed strongly with her economic and social policies. Called the wets, they briefed against her, ran rebellions against her in Parliament, and encouraged Michael Heseltine as an alternative leader or challenger. She won three election victories in a  row despite this strong internal opposition.

Tony Blair led a  very disunited Labour party. A group of left wing Labour MPs were never reconciled to his leadership, regularly rebelled against it and made clear their general displeasure. More importantly, that government was riven with a huge split right at the top. The Brown and Blair factions fought each other over many issues, and regularly briefed the press against each other. This did not stop them winning three elections in a row.

It is true there were splits against John Major from the Eurosceptics, and against Gordon Brown from a  range of ambitious people who wanted to bring his leadership to an end, and these 2 leaders did lose heavily in subsequent General Elections. Most sensible commentators should surely recognise that John Major was  defeated  by the recession and crisis brought on by his decision to enter and stay in the Exchange Rate Mechanism. Gordon Brown was brought down primarily by presiding over the debt , borrowing and banking crisis of 2008.

Spare us the nonsense that independent thought by MPs leads to election loss. I do not expect the polls for the Conservatives to move downwards because Mr Raab dared to move an amendment. The polls under John Major did not move much with acts of rebellion, and when they did it was not always down. They slumped on exit from the ERM and on the economic problems that caused.

There has been some very odd coverage of yesterday’s events in the Commons. Mr Raab’s amendment was decided by a free vote on the Coalition side, and a whipped vote to oppose it by Labour.  Those of us who voted for Mr Raab’s amendment were not therefore “rebels” as described in parts of the press. Conservative  Coalition Ministers abstained, presumably because there was no agreement between the two parties in the Coalition.

Labour opposed it on the grounds that it would be illegal. They were joined by Liberal Democrat MPs.  Mr Raab, a lawyer, had a different view and argued that it would not be illegal under the European Human Rights Convention. Had it been passed – and had it also passed the Lords – it might have been tested in court. Who can be sure what the outcome would have been? The UK government is 0ften these days tested in European courts for decisions they have taken.

Many MPs voting for the amendment, which would have made it easier to deport serious criminals from the UK, felt that anyway Parliament ought to have the power to be able  to change the law in these important matters, and that this needed to be re-established by Statute law.

Public sector net debt when Labour came to power in 1997 was running at 40.5% of our total national income. In the early days of Labour, following Conservative spending plans, they took it down to 30.4% by 2001-2. They used to say wisely that they wanted to spend more of the tax revenue on services for people and less on debt interest. Thereafter, they greatly increased spending, and later acquired holdings in large banks. By the time they left office, in 2009-10, national debt had reached 151.7% of our national income.

At the end of last year this figure had fallen to 134.5% of GDP. Reductions in other public sector liabilities, primarily those held by the banks in public ownership, and the increase in nominal GDP, more than offset the impact of increased borrowing by the central government. Sale of the banks will make a further large difference when that is accomplished. The four years 2010-2013 have seen the public sector banking liabilities cut by £78bn.

These figures do not include the value of future pension liabilities under the state pension scheme, though the government has published separate numbers for this for those interested. Nor are these larger numbers, provided by this government, in common use despite many people requesting more accurate overall statements of government indebtedness. Most commentators and politicians still concentrate on the narrower definition of public sector debt which excludes the banks and trading businesses in the public sector. Here in 2005 net debt was just £475bn- – on both definitions as the state owned no banks. By 2010 the narrower definiton of debt had reached £984bn, hitting £1254 bn by the end of 2013. This is 75.7% of GDP, compared to the 30.4% in 2001-2.

Some contributors to this site persist in saying the total level of debt does not matter. I disagree. If the state owes £1250bn and has to refinance this, being unable to repay it, it is vulnerable to rising interest rates. If over the next decade the average cost of state borrowing rose by just 2%, that means an extra £25bn of public spending every year on interest charges. That will require either £25bn of spending cuts or £25bn of extra tax revenue. That is why controlling the debt and deficit matters. Getting rid of more of the banking risk is an important part of this process. Even the UK state is stretched by the size of RBS, and the potential it still has to lose money. The sooner that risk is reduced and removed from the national balance sheet, the better.

Today the Chief Secretary to the Treasury has explained how Labour’s proposed rules for the next Parliament should they be in government would allow them to borrow substantially more than the Coalition proposals over the next Parliament. Labour contests the £166bn figure of extra borrowing  which assumes they use all their available flexibility to 2021, , but has not come up with a revised figure of their own. So far interviewers have not pinned down how much extra they would be likely to borrow for capital projects.

(The figures come from December 2013 Statistical Bulletin Public Sector Finances ONS)

The Governor of the Bank of England’s speech yesterday was well researched and well phrased. He leaves the issue of Scotland’s future to the Scottish people. He accepts that were Scotland to vote for Out of the UK, the question of the currency would be a major issue for the political negotiation that would follow between the two governments.

His research reveals, however, that an independent Scotland would have a much larger banking sector relative to the size of the economy than the Uk currently enjoys. This opens the question of could Scotland have afforded to stand behind HBOS and RBS in the way the UK did, during the crisis? Any agreement on a common currency would need to make it clear that Scotland would have to stand behind Scotland’s banks. But would that work? What would happen if Scotland was unable to stand behind them? Would Scotland agree that a common currency must mean common banking supervision? How would the rest of the UK be sure we would not be expected to mount an expensive rescue? How could Scotland be sure the full currency union and the Bank of England always stood behind her banks?

He also points out that if Scotland keeps all the oil the Scottish economy is materially different from the rest of the UK. Scotland’s output per head and tax revenue would be very affected by the oil price, and by the likely secular decline in the Scottish oil province, which is now well past its peak output. The more diverse two countries in a union are, the more the pain of adjustment without the mechanism of the exchange rate to take some of the strain.

I am not myself a Scottish nationalist, but if I were I would want my country to have its own currency. You cannot be independent, with your own economic and tax policy, if you belong to a currency union. Members of the Eurozone are discovering this as the Euro crisis rolls on. Belonging to a currency union, you are forced into internal devaluation – cuts in wages – if you cease to be competitive at the common exchange rate. Greece and Spain could warn Scotland about that. You are forced into increasing tax and benefit transfers around the union. The Rest of the Uk and Scotland would need clear and fair rules about the extent of these transfers and the limits on mutual financial assistance.

Today the sterling currency union works because there are very large transfers of money from the richer to the poorer parts of the union. The labour market works fairly well, with common levels of benefit payments and pay top ups from the state, and similar wage levels. A so called independent Scotland would need to mirror much of the rest of the UK’s approach to benefits, wages and fiscal policy for the continuing currency union to succeed.

From the point of view of the rest of the UK it would be easier if Scotland did decide to quit the UK if she left the currency union at the same time. Political union and currency union are two sides of the same coin. Take one away, and the other collapses or buckles under the new strains.

In a way I was one of the first modernisers. In 1995 I told the Conservative party it was a case of “No change, no chance”. I had in mind especially a change of policy and approach.

So when people tell me the Conservative party has to change or modernise, I do not automatically disagree. It is one of the ironies of conservatism, that a doctrine that wishes to preserve the best and keep some of the continuity of our lives, has always had to embrace change. Indeed, some of the most successful Conservative governments have been some of the most radical. Maybe we are at our best when we are boldest.

Conservative radicalism is based around delivering to the many the advantages of the few. Just as enterprise capitalism retains support and gains friends by ensuring that the luxuries of the rich in one generation become the commonplace of the many in the next, so Conservatism at its best brings the rights and duties of the privileged few of a previous generation into the lives of the many. Conservatives have in the past campaigned to abolish slavery, to  extend the franchise to all,  to encourage the many to own their own home, and to seek an ownership revolution. It has supported more generous welfare and health provision for the many paid for out of taxation.  We want higher living standards and more civil liberties and see no contradiction between the two.

I was surprised in the early opposition years after 1997 to read that Conservatives were split between mods and rockers, between libertarians and authoritarians. It seemed like an artificial conflict, as most Conservatives seek a balance between liberty and the rule of law. I was also surprised to see some advocate a modernising agenda which meant moving closer to Labour’s positions just in time for the implosion of Labour’s model of more European integration, more migration, more public spending and debt, and the eventual inevitable financial crisis.

There is nothing wrong with the underlying principles of Conservatism – belief in the individual, the family, the small platoons, the independent charities and companies, the wish to spread ownership and property, to defend the individual’s liberty against the overmighty power of the state, the wish to conserve the best of our institutions and countryside, the wish to see the inherited tradition improved and developed by the present, and the wish for the state to help those who cannot help themselves. Of course these need updating, with policies based on the modern context, on a regular basis. The ideals and values do not need overturning. Most Conservatives do not lack compassion, charity, decency or belief in  liberty. We just do not believe these things can simply be bought by the government spending more of other people’s money. There needs to be money and oxygen left for the many to provide for themselves, to work for family and the common good, to profit the nation as they profit themselves.