Later this week the government will ask Parliament to vote again on the issue of  prisoner votes. I thought Parliament’s view was quite clear last time. Parliament voted against implementing the European Court of Human Rights requirement that we give votes to prisoners. The votes may be much delayed, as the draft Bill will need extensive scrutiny before coming to a vote.

         Apparently this time we will be asked to vote for a new law on the subject, which could be drafted to make it clear again that prisoners will not get the vote in the UK. The government has to avoid looking as if it is doing what is so often done in EU referenda, when a country votes against the views of the EU power brokers. They are asked to vote again, with the intention of getting them to change their minds. The new law must set out that Parliament decides, and the UK will not pay any fines if the ECHR disagrees on this matter.

         This issue is now about far more than votes for prisoners.  It is about whether Parliament can still make  laws without outside interference from foreign judges. Whilst this is not the decisive test of strength with the EU over jurisdiction, it is nonetheless an important moment in the evolution of our constitution. Parliament has to show itself resolute. Government has to show it meant what it said, when the Prime Minister said he was against giving prisoners the vote. This now is a fundamental constitutional issue.

 

         I am very tolerant of UKIP commentators on this site. I regularly post their comments.  They are the one group who are often partisan, and regularly post exhortations to vote for their own party. Contributors from others parties are usually more restrained. UKIP supporters here also often make big claims for what their party can and will achieve. Again other  party supporters rarely do the same.

         Following their defeat in every one of the 24 Police Commissioner elections they fought, without even a second place to their credit, they tell us they made a big breakthrough. They give no credit to the English Democrats, who achieved a creditable 15.56% of the vote and second place in the South Yorkshire PCC election. There are  two  reasons I sometimes highlight the poor electoral showing of UKIP in successive elections. The first is because some of  their supporters here are unpleasant in what they say and write about fellow Europsceptics in other parties, and the second is because they are always claiming that they are doing well electorally or are poised for a breakthrough. Their main case for others to vote UKIP is that they will win, and then miraculously take this country out of the EU. To do that they would need to win 326 seats in Parliament in a General Election. So far they have never won a single seat, even in by election conditions when they can concentrate their efforts, or in a seat where the 3 main parties withdrew their candidates at the 2010 election. To win 326 they would need of course to win seats from Labour and Lib Dems as well as from the Conservatives, yet they always seem to concentrate on fighting against Conservatives.

            Every day in Parliament 100 plus Conservative MPs watch the measures and agendas from Brusssels. We highlight issues of concern. We vote against measures we think unacceptable. We urge Ministers to negotiate us out of various measures, or seek to see them voted down in the EU itself. Many Conservative MPs voted for a referendum, and voted for a lower EU budget, against 3 line whips.  We feel we do the work and take the arrows of opposing the growing powers of the EU day  by day. There are no UKIP MPs to help us or to swell the vote against extra EU power in the Commons.

              We are sometimes successful in persuading the Coalition government to withstand Brussels pressures. The Prime Minister did veto a Treaty for the UK, which would otherwise have bound us into EU controls over our budgets and tax policies. Instead of getting thanks from UKIP, this is misrepresented as a non veto. The  government has said it will veto any move to increase the EU budget, something the former government would not have dreamed of doing. We have persuaded the government to adopt as its policy the need to negotiate a new relationship with the EU, making it clear the UK has no intention of being bound into a political and monetary union. The Conservative leadership has now accepted that there will need to be a referendum at some future date. We are now discussing when and what about.

               I have no wish to waste time criticising people or policies in UKIP. I appeal to all Eurosceptics of good will to see we are stronger working together instead of some fighting petty feuds, seeking to split the Eurosceptic movement  for their own personal advantage.        

           We need votes in the Commons now. We need to carry on influencing the government in a Eurosceptic direction now. It is not  UKIP that is driving this process, but Eurosceptic MPs, and the mood and commonsense of the British people. We need more Eurosceptic members in the Conservative party to help us with our cause. We need any party that wishes to fight EU federalism to direct its fire at the federalists, not at fellow Eurosceptics. Smaller Eurosceptic parties may develop a stronger negative capability from time to time and in various locations, to be able to damage other Eurosceptics more. This does not help solve the EU problem for our country.

 

Judging from the results of 3 by elections and the Police Commissioner elections there has been a shift in opinion in the last two and a half years from Lib Dem and Conservative to Labour. The Lib dems have suffered the bigger drop in vote share from being in a Coalition government than the Conservatives. Labour achieved a 16.8% swing from Lib Dems in Mancheter and an 8.4% swing from the Conservatives in  Cardiff South.

The Corby result came from the one serious by election contest, where Conservatives put in their  biggest  effort of the 3 by elections. Labour won it comfortably, with Conservatives in second place. The swing was  12.67% from Conservative to Labour. The Conservative win in Dyfed Powys in the PCC election was a good result for the Conservatives, as was the Conservative win in Humberside against Prescott. The loss of Dorset to an Independent should worry both Conservative and Labour.

There has been no UKIP breakthrough. They came fourth after the 3 main parties in Manchester Central, and did not contest Cardiff South. They came fifth in the Wiltshire PCC election after the 3 main parties and an Independent. They did not get into the run off in any of the PCC elections where they stood.  They did not contest 17 of the PCC elections at all. They did best with their third place  in Corby, despite English Democrats and BNP also contesting it. The size of their vote was not sufficient to claim sole credit for the defeat of the Conservative candidate, though that seemed to be their main aim.

The low turnout in the two Labour seats at the by elections probably reflects the feeling there that Labour was likely to win. Turnout was best in Corby, where there was clearly going to be a closer contest. The low turnout in the PCC elections reflects feelings about police independence, the lack of understanding of the role or disagreements with it, and the failure of the parties to deliver leaflets to every door to explain the position and put forward their candidates.

It is now especially important that the new Commissioners work hard to offer great value for money, and to show how they can choose good Chief Constables, and influence police budgets and priorities in helpful ways.

Some have asked about spoiled ballot papers. There were more than usual, with some from people who are against these elections. In the Wokingham,  there were 516 spoiled ballot papers on top of the 16,250 valid votes cast. This was not nearly enough to undermine the result, but a higher level than normal reflecting concerns. “None of the above” was effectively outvoted thee arch of the  other candidates.

 

             Strikes in Spain, dissent in Greece. The noises of protest are becoming all too familiar in Euroland, as people complain about the policies their governments are following. Euroland as a whole is in double dip recession.

              Euroland democracies no longer function well. Voters can change the people in office, but they cannot change the main economic policies.  The incoming Spanish, Irish and Greek governments, replacing the ones the electorates sacked, have to follow the same rules and live with the same loan terms as the government displaced.

              One of the oddities is the electorates tend to blame their national government and politicians rather than the EU government and the Euro scheme. In part this is because the national governments are better known and easier to protest against. In part if is because the EU offers the struggling member states some money from its budgets, and claims that the national government is making the main calls when evidence suggests the main calls are now made at the centre.

                  Policies designed to protect and preserve the Euro are now producing deep and long lasting recessions in several Euro countries. As a result these countries have a growing deficit as employment falls, reducing tax revenues, and benefit bills rise. Individual countries cannot devalue to improve the competitiveness of their exports. They cannot themselves print more money to try and stimulate more activity. They are locked in to the austerity packages.

               They are often attracted more to higher taxes than to lower spending. This can compound their difficulties. If they attack high income earners and profitable companeis too much they relocate elsewhere. Instead of raising the tax revenues, this lowers it by reducing the tax base. They also probably are encouraging more tax shy activity, with growing black economies.

                     We should expect more frustration with the austerity policies and the lack of progress in restoring growth. The extent of activity that is undertaken without paying tax or done through barter and other systems will act as some dilution to the anger.

 

            Yesterday the latest Bank of England Inflation Report told us that they now expect inflation to stay  above target “for a while”. A “while” seems to mean until the second half of 2013.

             In february of this year the Bank told us “Inflation should continue to  fall sharply at the start of 2012…..inflation is likely to decline further thereafter….inflation is judged somewhat more likely to be below the target than above  it for a good part of the forecast period”.

              That’s quite a change of forecast, from optimism to pessimism. It follows, of course, the hard facts that inflation stayed higher for longer, and is rising again now.  The Bank clearly thinks it could rise further this winter as the energy price rises kick in.

                The Bank is also forecasting now that output “may shrink” in the fourth quarter of 2012, after the third quarter spurt in growth thanks to Olympic ticket sales and the as always unmentioned increase in public spending. Does the Bank not read the GDP figures and see public spending made the largest increase to the Quarter 3 growth  figures  or is there some conspiracy to suppress the truth about this? How did the Bank miss the further fall in output in Quarter 2?

                  In February the Bank was forecasting an increase in output this year, with an acceleration of growth thereafter. It is another big change in forecast this autumn.

                       The Bank confesses to being puzzled b y the continued improvements in the labour market with a million new jobs since 2010, and the poor performance of productivity. Why can’t the Bank appreciate that the sharp declines in output in financial services and banking, and in oil and gas, have of course hit productivity, as these are highly productive areas, with substantial value added per employee. The growth is occurring in more labour intensive areas of activity, with the obvious results on jobs and productivity.

                           It is worrying that the Bank so struggles to understand the modern UK economy. Its doctrine of unused capacity preventing inflation has shown strains, and the Bank has not yet found a new way of analysing and understanding the reality. Wages and prices in the traded private sector are under substantial competitive pressures to keep them down. There has been some relief from the devaluation, where manufacturers have often taken the benefit on margins rather than pushing for higher export volumes.  Public sector fees, charges and regulatory interventions in areas like  energy are pushing prices up.

                                  As the Bank say, “We face a rather unappealing combination of a subdued recovery, with inflation above target for a while.”  That is what you get from bank nationalisation, a failure to sort out damaged banks and  stressed provincial property markets, from a tax based strategy for cutting the deficit and from quantitative easing.

 

             City am has recently reminded us that there has been a big fall in City employment, down by 100,000 to 250,000. There has been an even bigger fall in bonuses paid, down from a peak of £11.6bn to an estimated £1.6 billion this year.

               In the wild anti City atmosphere that followed the Credit Crunch many people and politicians said they wanted a smaller City. They wanted an end to excessive bonuses and high levels of remuneration. They have now got what they asked for.

             The government has done half of what it set out to do in its search for a better balanced economy. They wanted a smaller proportion in finance and a higher one  in industry. The City has contracted. We now need faster growth in industry, to give us the complementary “march of the makers” the Chancellor conjured in one of his speeches.

                I am not persuaded the country is happier for this. Many of us would like less inequality of incomes, but some of us want that to happen by people on low incomes earning more, not by people on high incomes leaving the country or working less.  The politics of jealousy may attract socialists, who just dislike rich people, but it does not make anyone else better off. Indeed, it makes the country worse off.

                   The collapse in City earning has led to a sharp fall in tax receipts from the City. At its peak the City contributed a massive £70 billion to the Treasury. Today that is down to £40 billion. The government has to try to find that missing £30 billion from somewhere else. That means taxing people on lower incomes more, through VAT, fuel duty and the rest.  It also means the state borrowing more, so we have higher taxes to look forward to for longer to service the debts. The state still wishes to maintain and increase its level of spending, despite the pressures on revenues.

                 Why has the City fallen like this?  Some of it reflects well paid  people relocating to competing centres with lower tax rates. Some reflects the demand for banks to hold much higher levels of cash and capital for any given level of busienss, which makes them much less profitable. Some of it reflects the end to excessive activity based on too much credit prior to 2007. Some of it results from the growing costs of regulation which cuts into profits and bonuses.

                    The UK needs to be careful. The City was its great economic success story of the last three decades. It generated a lot of wealth and income for those who worked in it, brought other business in its wake to the UK, and paid a large amount in taxes to contribute to our wide ranging public service provision. Most countries with a success story like that would want to nurture it and develop it. Circumstance, political rhetoric and regulatory decisions have in the last five years shrunk the City.

                 Maybe now we should stop shrinking the City, and recognise that it can still provide jobs for many and tax revenue in abundance. Is anyone happier now there has been such a huge fall in bonuses and tax revenues?

 

            Yesterday I received an email letter from Eton College. It was a letter I have come to dread.

            It was well written and confident. It came from a sixth form boy. He invited me to speak to their Keynes Society.

             He explained that the Society invites people like me to address their Economics Club on a Thursday evening. He recited the impressive list of recent speakers including the Governor of the Bank of England. He asked me to join them for dinner before the lecture. He praised my work in my book “After the Credit Crunch” to demonstrate they have a serious interest in the issues I raise in public debate. He understood where I come from on  the issues of banks and Europe and will doutbtless wish to cross examine me with his fellow students after the lecture.

               He did not know that I have been a speaker at their Society before. I was greatly impressed when I went. The lecture was very well attended, though delivered in the evening with no teachers involved in organising it. I gave  a fairly demanding lecture. They listened in rspectful silence and then asked a searching  series of  relevant questions.

              So why should I dread the invitation? I am of course  delighted that there are able young men wishing to discuss these matters of great importance to our joint futures. My worry is the letter reinforces the sense I have of the large gap between the approach of the best in the independent sector, and the typical approach in the state sector.

                I have not had any invitations from economics societies organised by students in state school six forms. If the state sector does not offer the Governor of the Bank of England or leading figures in the UK economics debate the chance to go in and discuss with students, but Eton does, Eton will get more help and the state schools will not. Therein lies the rub.

There were not many positives in the replies about what the Coalition government has done for you. So let me see how I can do an equivalent for the past Labour government, where I found plenty to criticise, particularly in the later years of credit crunch and crisis. There were things about the Labour government that I thought were good:

1. Accepting the Eurosceptic view that we should not go into the Euro, and using the opt out the Conservatives had negotiated.

2. Cutting standard rate income tax to 20% and keeping top rate tax at 40%

3. Controlling public spending in the first Labour Parliament, and paying back some debt.

4. Cutting CGT to 18%

5. Providing incentives to enterprise and business

6. Launching Academy schools

7.  Making some improvements in hospitals and health care

8. Widening the M25 and improving J 11 on the M4

 

           Some claim that we need more independent candidates in elections, especially for Police Commssioners. Those who are disillusioned with party politics think that we could find judicious wise independents who could do the job just as we want.

          As a democrat I have no problem with “independent”  people offering their services to the electors. Freedom to stand and to put a different point of view is vital to life in a democracy. So is choice between serious candidates who can win. There is nothing stopping an independent candidate becoming a serious rival for power, if their message is popular and the other competing  parties are unimpressive. Occasionally this happens.  Often in Council or General elections people want to choose between the major parties, because they want to influence which party will end up running the body concerned.

          However, I do think we need to examine what we mean by “independent”.  An independent can be genuinely independent of all political parties. That means that they will not take a party whip once elected to a given body. They can make up their own minds, unguided by colleagues in the same party. Some will think this an advantage. However, on a Council or in a Parliament it also has some disadvantages. It means the independent cannot form a government or a majority group to run the Council. The independent cannot guarantee to introduce anything they offered in their manifesto, as they may not even have a seconder for their proposals, let alone a majority. Thay may become inadvertent or unintentional liars or promise breakers. In office they discover they have to change their minds or broker deals with others to try to get anything done.

           Police Commissioners are  different. They are single people who can build their own little office and run the job as they see fit. The Labour and Conservative Police Commissioners likely to be elected will be pretty independent themselves. There will be no whip to suggest what they should say and do.

                 They can make their own agendas. If they became persistently hostile to their own party in Parliament and  went out of their way to disagree with its fundamental beliefs, then they could lose the right to fight again to retain their job as a member of their stated party. If they  fail to  live up to reasonable standards of conduct they could be thrown out of their party in a public gesture of annoyance by the party leadership.

                  There is no similar hygeine mechanism for an independent. If they misbehave no-one will take their party membership away. It is only if their misbehaviour becomes gross that the police and  courts become involved. They too, of course, would need to curb bad habits if they want to be re-elected.

                   The question of independence from a party should not be confused with true independence of thought. An independent might be more ideological than a party candidate. They might have clear and strong prejudices, but not declare them before the election. You do not know how an independent will decide matters or what is likely to be their view of a common problem, unless they tell you in their manifesto. Often their manifesto is very thin on detail.  With a Labour or Conservative candidate you have more idea of what you are likely to get.

                               Nor should the idea of independence be confused with the important issue of the independence of the police. All serious candidates for Police Commissioner and all main party candidates agree that they will not try to mess with the independent right of the police to investigate and to charge people for offences without fear or favour and without political interference. The law establishing Police Commissioners was also very clear on this important matter.

 

  Lord Patten, on behalf of the BBC Trust said:

“At the heart of the BBC is its role as a trusted global news organisation…. (George) offered us his resignation because of the unacceptable mistakes and unacceptable shoddy journalism which had caused so much controversy…. He’s behaved as editor with huge honour and  courage…George had set on putting in place a number of changes, which will be required in this great organisation and it’s a tragedy that he was overwhelmed, as we all were to a great extent, by these events….”

 

Lord Patten has subsequently  suggested that there needs to be substantial change and reform of the BBC, and has attacked its top heavy management structures.

The questions posed by the BBC news and current affairs coverage include:

1. Why did they have   a long record of failing to offer reasonable air time  and fair treatment to Eurosceptics? Why did it take external studies to reveal the shortage of airtime given to critics of the EU, the adverse way they were introduced and treated, and the more frequent interruptions they suffered?

2. Why are critics of global warming theory either ignored or treated as cranks, when there is still serious scientific and economic debate about the causes of climate change, the extent of it  and the best way of responding to it?

3. Why does the BBC normally interview people from a left of centre perspective – demanding more expenditure, higher taxes, more government  intervention – rather than from a right of centre perspective, asking people why they don’t cut taxes, control spending and reduce the role of government? Shouldn’t a balanced broadcaster do a bit of each?#

4. Why are losses, unusual tax arrangements, financial engineering in the public sector treated more leniently than similar things in the private sector?

5. Why did all the layers of BBC management fail to instill into Newsnight after the Savile crisis the need to investigate thoroughly and present a case with evidence to back it up where there is plenty of evidence, and to cancel an enquiry where there is insufficient evidence?

6. Why, after  the failure of the Newsnight team on the Savile issue, did management not require stricter reporting and higher standards for future work?

7. Which managers approved the Macalpine piece? Had anyone on Newsnight read the Waterhouse Report which had looked at these allegations years before? Had they seen the comments on their witness? Why did they fail to put the allegations to the person they were  falsely accusing? Why did they tweet out that they would be revaling a top tory paedophile, only not to name one? Why did they not expose again the actions of Labour Clwyd County  Council, which was responsible for the children’s home and the social service department in question? Why did they not remind us of the 7 people who were successfuly convicted of crimes in the North Wales abuse tragedy, none of whom were prominent Conservatives?

8. What changes did Mr Entwistle wish to put in place? Why did he not tell the Select Committee or the Today programme about these?

9. If Mr Entwistle “exemplifies the highest sdtandards of public service broadcasting” why did these obvious errors occur on his watch?

10. What is the BBC going to do about its top heavy and clearly ineffective management?  Shouldn’t the editors of flagship programmes be responsible for their journalistic output, discussing it with lawyers and others where necessary? Isn’t the only other person who must have a view in difficult cases, the Editor in Chief?

 

12. Why does Mr Entwistle get such a large pay off when he has done the job for such a short space of time and decided to resign because he did not think he had done or could do the job well enough?

          The BBC Trust needs to tell us what value we are getting for the all the expensive layers of management in the BBC. They need to tell us who is responsible for controlling editors whose journalistic standards are not high enough, or who is responsible for appointing them.