Let me make common cause today with the labour movement. Wages in the UK are too low. Instead of spending so much time complaining about the pay of a minority who are well paid in the private sector, maybe we should spend more time asking how more people can enjoy higher pay. I am not one of those hypocritical commentators on a good salary always urging pay restraint on others.

               Before the labour movement gets too excited, however, I do believe a couple of other things about pay. I do not think you can legislate successfully for higher pay. It has to be earned. The problem with minimum wage legisaltion is if you set it too high you drive jobs away, and if you set it too low it has no benefiical impact. If you get it somewhere in the middle it does not deliver great living standards, and may still encourage  non compliance and a larger black economy. Labour’s minimum wage has left many people on low pay and in receipt of benefit top ups so they have a more reasonable income.   The UK’s problem is we do not have enough companies with enough power in the marketplace to command the prices and sell the volumes we need to pay more people higher pay. This is what economists call our productivity problem.

               Sensible people in the Union movement accept that we need a culture of “something for something” or “more for more”. It may not mean working harder or longer hours, though that does usually  bring forth higher pay. It may mean working smarter. Our best manufacturing businesses in the UK know and do this already. They put the machine power at the elbow of their employees. They train their staff. The treat them with respect and pay them well as the factory achieves its targets.

                 The Chinese economy is advancing rapidly with large increases in real wages fuelling more domestic consumption, which in turn pays higher domestic wages. It is a virtuous circle. In their case it it is still taking place from a base position of much lower  average wages than we enjoy. There is no reason, however, why an advanced country cannot also create a virtuous circle. It is about training and motivation, about reward that people want and believe they can achieve.

       I understand the need to counter terrorism and mad violence by evil people.  As a survivor of the Brighton hotel bombing and of other terrorist threats in previous years, I do grasp the serious risks there can be.  I sympathise with the authorities as they seek to place enough barriers to  extreme action as possible to protect big international events in the UK.

        What I find curious is the risk analysis that seems to underly some of this security thinking.  Large sporting events these days attract physical security checks and scans for all entrants. Airport security is especially strong, as there have been past attacks mounted by bombers of airplanes. Yet there are no security checks of any kind if I go by train or bus.  This is despite several bad attacks on public transport both in the UK and abroad.

        The evidence of  past security service successes is that the best way to stop terrorists is through eavesdropping and infiltration of their networks and communications. The UK security services have been successful at intercepting several bad terrorist plots before they got to the day of terror. There is less evidence of major finds through individual security scanning, though its defenders would doubtless say it acts as a deterrent.

         What is strange is the idea that we need comprehensive and strong screening at events, but not at stations even where those stations are being used by large numbers of people going to the events. Some of the events I have been to seem far less likely to be at risk than say a busy London terminus station, as they do not have the same visibility or ability to do so much damage.

            I think the securitty forces should review what they do, and look again at what is actually working. We seem to have all or nothing when it comes to security checks. Maybe there should be random checks at places that do not normally get checked, and more risk based checks at places where they currently check everyone.  Part of good security can be varying what you do, to keep the terrorist planners guessing and uncertain.

                     In all the discussion of the failure of G4S to recruit all the promised guards, there has been no discussion of how many guards do we really need, and what they are going to do to make sure we are safe. Sometimes greater intelligence and quality is the better answer than sheer weight of numbers.  If everyone does need to be searched on entry there have to be many entry points, and sufficient  people well trained to spot any problem.

         I wish to make it clear at the outset that this site does not wish to associate itself in any way with an important sporting event soon to happen in the UK, as I have no wish to infringe brand rules. I will not of course even mention the logo, let alone seek to reproduce it to illustrate this piece. Five intersecting circles are rightly  the proud possession of the movement concerned. Their award of special coins in various coloured metals with ribbons are  theirs alone.

         I understand that this sporting event is being supported by Acer,Adidas,Atos,BA,BP,BMW,BT,Coca Cola,Dow, EDF,GE,Lloyds TSB,Macdonalds, Omega,P & G, Panasonic,Samsung and Visa. I understand that there are a number of banned words, that only these noble official commercial supporters can use. I am trying to write this piece while observing the brand requirements. I would like to say a big thank you to these public spirited companies for putting up some money to help organise this event, alongside UK taxpayers who will be putting in rather more.

        I want this big event to be a great success and to bring pleasure to all those who watch it or are involved.  I wish to point out that I have received no free or discounted tickets, and have no privileged access to any part of the festivities. Like many members of the public I applied for tickets. I was turned down for my first choice, the sailing, but did manage to buy a couple of seats for one morning of rowing near Eton.

          It was not easy receiving the tickets, as they were delivered one day when I was not working at home but for some unknown reason needed to be signed for.  They  had to be retrieved from the local Post Office. I have received several communications telling me I must on no account seek to go to this event by car. There will be no parking near the site. I have also been told not to  ask friends to drop me off or to splash out and take a taxi, because there will be no set down allowed. The event takes place about thirty minutes drive from my home. When I last attended rowing at Henley, they used nearby fields to allow car parking close to event and that seemed to work well.

         When they sent me my tickets, to my home address, they included a railway ticket to the event from the centre of our capital city. That was not very thoughtful, as I would have to spend a lot of time and money getting trains into the centre of that city in order to get more trains out again. Indeed, as they wish me to be at the venue by 8.30 am I would have to travel the night before to carry out this double train journey.

        If I go by train from the station nearest to my home I will need to leave home at 6am in order to get to the venue by 8.30, with a long walk, three changes of train and a shuttle bus needed to complete the journey. I am told I need to allow one hour to stand in the queue they plan at the venue prior to  getting to my seat. When I last went to Lords to watch some cricket the queue mangers promised us that we would have a maximum wait of fifteen minutes for security, and they kept their word. People with tickets to the main stadium are I hear told to be there two and a half hours before. This either assumes dreadful queues, or gives them more shopping time before the games begin.

       I intend to enjoy the event despite the strange rules and arrangements. I do not plan to buy any product from a supporting company when at the event, as the brand rules do  seem a touch over the top. I will spend a happy morning without eating and drinking. After the event I will let you know how I got on, to the extent that the rules allow.

(PS I do not think they ban you using the banned words in your replies)

We all know Network Rail needs loads of subsidy to run a railway. What has gone unremarked is how good they are at losing money on buying and holding financial derivatives. In the year to March 2011 Network Rail reported a loss of £251 million on these instruments by marking them to market, and in the year to March 2012 another £93 million. At their last annual balance sheet date they showed total liabilities of £1.2 billion in derivatives, as if they are running their own investment bank.

So what is the case for the defence? They say they are not taking speculative positions. They say they are hedging their currency and interest rate risks.It’s part of their financing. It is difficult to see why a national UK railway company with predominantly sterling revenues and sterling grant paid by the taxpayer should have currency risk problems. They seem to arise mainly because the company has a penchant for borrowing in foreign currencies. It has chosen to borrow in Swiss francs, US dollars, Norwegian krone, yen, Canadian dollars and Australian dollars. It is difficult to know why it needs to tap these more exotic bond markets, when there is a large and fairly reliable sterling bond market which would avoid all the hassle.

The Group has also had a wish to borrow using index linked bonds. This tends to be a dear form of financing given the persistently high inflation rates experienced in this country. They may have lost money on interest rate hedges because interest rates have been low or falling rather than rising. Most longer term borrowers protect themselves against rising interest rates by borrowing at a fixed rate, and borrowing long if rates are low. This apparently is too easy an approach for Network Rail.

So it all means the poor old taxpayer has to pay for the costs of an investment bank type operations as well as the losses on the railway. Surely someone could get a grip on this, and take Network Rail out of the derivatives business?

To sort out Wokingham’s traffic problems and to cut the risks on the railway we need a bridge or underpass in place of a level crossing. That would be small beer besides the costs of these exotic financings and hedges. It would also be a much more popular way of spending the money, if replicated around the country.

The day before yesterday we looked at the different approaches to the health and financial sectors when large companies make mistakes. I agree with those who wrote in to say one of the worst features of banking was the way the state bailed them out instead of making them pay their own losses and sort themselves out, whilst protecting depositors rather than bondholders and shareholders. You may recall I was against the bail outs at the time. One of my reasons for opposing the equity bail out was the likelihood it would fuel resentment at bankers on a large scale. Today I want to look at the different approach we take towards serious error in the public and private sectors.

This week came confirmation that a young man died of thirst in an NHS hospital. Instead of responding to his expressed need for a glass of water, the hospital overrode his wishes and he died. Apparently they did not understand his condition which left him short of fluid, and failed to monitor it. The hospital has apologised profusely for its mistake, and accepted much of the blame.

I suspect if such an event had happened in a private sector hospital we would be now be in the midst of a huge row. There would be some who demanded that the Chairman and CEO of the hospital company resigned. There would be others who argued that that the hospital company should lose its licence. Some would expect tough regulatory or legal sanctions to be applied. Others would say it proved that we needed to regulate the private healthcare industry more, or even nationalise it.

Because it happened in the NHS there has been an eerie silence. Parliament has not taken up the matter in a big way. There is no demand for a show trial of the hospital managers, no demand for resignations of top staff, no demand for more regulation of the sector.

Meanwhile, a private sector security company has let it be known it has failed to recruit all the people it needs for a future contract. Fortunately they told the governemnt, the client, in advance. They have said they will pay the bill for troops to make up the numbers, so the job can still be done. Parliament will investigate how well the contract was constructed, how long they had to meet the extra numbers, and how well the failure has been managed.

The political and media response is much more intense and condemnatory. This is after all a private sector company which has let us down. So far no harm has occurred in the security case. There is time to plan our way round any shortfall. The young man did die in the hospital. Some media reactions are different because there always seems to be more condemnation if it is a with profit company rather than a public body at the bottom of it.

I am all in favour of the security company paying for its mistakes. The troops who have to be drafted in to help should be well rewarded for their trouble, at the company’s expense. Their shareholders must decide what to do about the management of the Group, as they I am sure will be worried about the reputational damage done, and the failure to impress one of their most important clients, the British people.

The hunt is on to find a solution to the “Lords reform problem” which could command a majority in the Commons based on Conservative and Lib Dem votes.
Based on the 2nd reading vote, the Coalition commands 57 Lib Dems and 197 Conservatives, a total of 254 votes. To have a majority of one overall they would need to persuade 72 Conservatives who either abstained or voted against to vote for revised proposals. 91 Conservatives voted No to the bill, and another 19 abstained, against the advice of a 3 line whip.
The government’s task is made more difficult because the MPs voting against are not a solid bloc, a party within a party, or defined group with a single view of the world. Some are small “c” conservatives. They do not think the Lords is broken, and see no need to fix it. Some are big “C” Conservatives. They see Lords reform as a Lib Dem idea to ensure an elected upper house always requires coalition politics there to get government business through. They see it as a backdoor way of changing first past the post voting, despite the electorate’s decisive rejection of AV in the recent referendum.
Some would like a reformed House of Lords, but do not think this is the right reform. Some are more democratic than the government, and want any scheme put to a referendum of the people first to make sure it is wanted. Some dislike the idea of a stronger Lords, creating a log jam for a future government when decisive action may be needed. Some think the changes will create a weaker Lords, replacing people of experience and knowledge with more party hacks. Some just do not want Parliament to spend many days on this issue at a time when the public wants us to fix the economy and public services.
All this means there is no one simple fix that would win over 72 MPs to the cause. I do not think electing fewer people would take the trick as hoped. That is one thing I have never heard any of the antis ask for. A referendum would probably win over more than most other ideas, but that could not be guaranteed to convince enough.
All the colleagues I have spoken to about this have strong and well argued views. There are as many opinions as there are MPs. Some think the Lib Dems have had too much influence over the Coalition already and want to make a stand. Some think politically and do not see how this proposal helps the Conservative party. Many more try to reason it from the national and public interest.

Today I wish to contrast the way politicians and some in the press respond to bad conduct in banking and in healthcare. It seems to me that we overdo the allegations and the expression of revulsion when bad bankers are revealed, whilst taking an altogether more relaxed attitude to healthcare errors.

Barclays has recently been fined £290 million. It has admitted that some traders acted in a way designed to promote the bank’s and their own personal interests which sought to distort an interest rate in the markets. The traders have all been fired and are the subject of regulatory and criminal investigation to see if further action should be taken against any of them under the law.

A general hue and cry has led to the resignation of the CEO and the COO. The bank is the butt end of endless bad comment and jokes, and the preferred subject for many a Parliamentary debate and enquiry.

Meanwhile Glaxo Smith Kline has just been fined $3000 million by the US authorities. They have admitted to selling drugs to people under the age of 18 when not allowed to do so by the regulators, to offering payments to doctors to help promote these drugs, to not setting out all the side effects of the drugs, making claims about the favourable impact of the drugs on conditions other than the one for which they were licenced and other regulatory infringements and bad practice. Some of the US journalism about the consequences of their poor practice is worrying, as individuals bring their own cases setting out what happened to them or their loved ones from taking Paxil or Wellbrutin.

The company has apologised. Politicians and press have accepted that mistakes can occur in the largest of companies. There is no demand for the replacement of any of the top executives, no witch hunt against the sales teams involved in the errors. There have been no debates in the Commons, no demand for Parliamentary enquiries, no show trials of the top executives. I am not calling for a witch hunt either. I am merely asking why we take this grown up approach to serious errors with a drugs company, and yet take such a different view with a private sector bank that managed to avoid requiring large injections of taxpayer cash in 2008?

Errors and malpractice by bankers can result in higher charges or losses of money for clients. Errors or malpracice in health can have far more serious personal consequences.

According to the Department of Transport’s figures people travelled around 680 billion km by car van or taxi in 2009, and travelled 50bn km by train. This gave private sector vehicle travel 85% of the total passenger kms, and rail just 6%. This demonstrates that people overwhelmingly prefer car to train , or find they have no choice but to use the car for many journeys owing to an absence of train services for their needs.

Previous contributors to this site have explained why cars are so much more popular than trains. They go when you want, where you want. You can be late for your car but your car is not late for you. You can often go door to door, as most people park their car very near to their home, and can drive a car to a park next to the shop, lesiure facility or workplace of your choice. You can take heavy luggage, work tools and belongings with you by car which you could not carry when walking to the station or bus stop. You can stay in the dry when it is raining, and keep warm in winter with the heater on. You can drive the shopping home, however much bulk you have bought.

It is true you cannot work in the car if you are also driving. You can listen to a radio programme or music of your choice, receive a call on a hands free phone or talk to a fellow passenger. The train may allow you to eat and to work, but limits your freedom of conversation and noisy entertainment.

The Department of Transport in its most recent Business Plan sets out to spend £13.1 billion this year compared to £12.7 billion last. It is talking of rail projects totalling £69 billion over the years ahead, with HS2 the dearest, followed by Crossrail which is now underway.

In the current year the department plans to spend just over £2 billion on national roads, and £4.3 billion on railways. In other words, the mode of transport that is used for 85% of the journey miles is getting less than half the money spent on the travel mode that accounts for just 6% of passenger miles. So each rail mile attracts thirty times more spending than each road mile. If you add in the relatively small sums spent on local roads, the imbalance is still very great.

The reason is of course rail travel is very heavily subsidised. The comparison is even less favourable to motoring if the high motoring taxes are factored into the equation. Some rail fans like to claim that motoring does not pay enough to take account of road damage and pollution. The evidence abounds that motorists pay many times over the costs they make the state and the neighbours incur, whilst trains are generously endowed with public subsidy.

The last government spent little on expanding and improving the road network. More needs to be spent, preferably raising private capital, on new road capacity. We also need improved junctions, and more bridges over railway lines and rivers in busy areas. We need to make roads safer by learning from railways that you need to keep other users away from fast moving vehicles. We need trains to learn from cars that better brakes, better adhesion to the track or road, and safety belts, increase safety markedly.

I voted to reduce the number of MPs by 50 when it last came up, and am willing to do so again when the boundary review is complete. I read that some Lib Dems are no longer happy about this Coalition policy.

I voted for it because I think public spending has to be reduced and it seemed like a good idea to start with a cut in Parliament, to show we can do more for less. We need to raise public sector produtivity across the board, so Parliament should show how.

The press comment these days makes out that the main purpose of the change is to help the Conservatives win the next election. This turns the argument into a grubby dispute between Lib/lab on the one hand, who resist boundary changes for ignoble motives because it makes their electoral task more difficult, and the Conservatives, who reckon it makes their task easier. On the merits of the case there is justice in moving to more equally sized constituencies, which does favour the Conservatives. On current boundaries it takes more Conservative votes than Labour votes to get an MP elected. All this gets lost when the public just think it is political parties “in it for themselves” squabbling over the issue.

It is wrong for Conservatives to argue the main reason for the change is the electoral impact. The main reason must be to get a better value Parliament as part of general public sector reform. It is also quite wrong for Conservatives to think the boundary changes will win them the election. The government needs to concentrate on solving the nation’s problems. To win the next election well the Conservatives need many more votes than last time, whatever the boundaries.

The best way to win the election is for Conservative policies to be applied to turn the economy round. The public are primarily worried about the cost of living, jobs and living standards. If the government shows good progress in improving the economy, and can say in 2015 they are well on the way to restoring good growth and prosperity, the Conservatives may well attract the extra votes they need. If the main problems of the nation are not being solved, no amount of boundary change will create a majority Conservative party in the Commons. The Prime Minister will also need to set out in that election how he intends to create a new relationship with the EU that frees us from the tentacles that bind us against our will and interests.

The government was wise to withdraw its timetable motion last night. It would have lost it.It won the main motion easily, but it is a case of I feel like I lose when I win.

The reality of the Lords Reform Bill is simple. The Coalition has no majority for it, because so many Conservatives oppose it. To get a bill through the government has to amend its proposals so that Labour continue to vote for it as they did last night, or amend it so Conservatives will back it.

Labour’s likely price for supporting the Bill is a referendum, to allow the public to be the final judges of the reform. The government seems reluctant to grant this, despite saying that Lords reform is popular with the public.

The 91 Conservatives who voted against the current proposals last night do not have a united view of what would be better. They are united merely in saying that the current proposals are not right. Some dislike the voting system chosen for the proposed elected peers, some dislike the 15 year single term, some dislike the whole idea of elected members in the second house. Many prefer Lord Steel’s proposals. They would like to slim the upper house with new rules on attendance, on appointment term limits and similar improvements.

By removing the timetable motion the government wisely acknowledged that it needs to seek a wider consensus to carry reforms through both houses. The Conservative manifesto made clear it wanted elections to Westminster to be first past the post, and made clear that a consensus had to be found before there could be any question of Lords legislation. The Conservative Manifesto did not promise to legislate for Lords reform, and ruled out the chosen voting system in the current Bill. That is why many Conservative MPs are struggling with these proposals.