The long running Euro crisis is set to run and run. This week’s summit of EU leaders is no more likely to fix it than all the previous ones, each billed as the crunch summit to save the Euro.

           This time on the agenda is the prospect of a Euro area Finance Minister and Treasury. The Germans are making the perfectly reasonable demand that if they are to back up the credit card for all the Euro nations, they want a say in how much they spend using it. Euro area countries are being  reassured that this is no great loss of power. After all, they are told, you the member states can decide how and where to make the cuts. All the EU authorities will wish to do is to set a limit on how much you can spend, and a total for you to raise in tax. The rest is your call!

           To do this properly will take Treaty changes. That is a long and arduous process, requiring ratification by all the states signing the new Treaty. It should trigger the odd referendum in a country like Ireland, and Parliamentary ratification everywhere involved. It does not sound like a quick fix.

          The last summit offered a banking union as the answer. We are told there will be more progress towards this. Here again, Germany will want some guarantees that she will be able to control or influence the policy of banks in faraway countries, if her credit card is to stand behind all the main banks of the Euro area.

            The truth is simple. Too many countries in the Euro area have spent too much, borrowed too much and have now run out of money. Too many banks in the Euro area have overexpanded their balance sheeets, are losing money on too many of their loans, and now need more capital.

              The rest of the EU would like the UK to put some money in to help deal with the cash shortfall. There is no reason why we should do any such thing. Nor should the IMF, but they are now fully engaged with a cause they should avoid. There are no signs that the Euro crisis is about to be solved. There is no evidence that the German people are ready to put the German credit card fully behind the troubled areas and banks of Euroland. If they are not willing to do so, why should we?

               The Euro remains an orphan currency in search of a country to look after it and support it. Creating a country called Euroland is taking too long for the good of its currency. The rich areas and countries are not willing to prop up all the poorer and weaker countries and institutions. There are now five countries needing special measures and special subsidised loans. It cannot go on like this. The UK government has a duty to ensure not a penny of UK taxpayers money is wasted on this scheme. It now looks as if the obligations of Euroland are also too big for the German state to taqke on, even if she wanted to.

           It’s good news that today the Chancellor has announced he will not press ahead with a 3p a litre fuel tax rise this August. He has listened to those of us who have warned about the impact of fuel prices on living standards and inflation.

           The May figures for public borrowing have risen from  £15.2 billion in May 2011 to £17.9 bn for May  2012.

            Spending is well up, rising by 7.9%. Income tax  and capital gains tax  revenue has fallen by 7.2% on the same month last year, underlining fears expressed on this site that the government has not set revenue maximising rates. The higher rates are yielding less revenue.

             The government says there might be one off items distorting these figures. However, the falling receipts from Income Tax is now a well established trend which should be worrying the Treasury. The spending figures confirm the arguments here that so far public spending  under this government has been rising in real terms overall, despite some specific cuts.

           I have been speaking in other constituencies in recent weeks, meeting Conservative members and voters. The overwhelming wish they have is to hold a referendum on the EU.

              I explain to them the ideas behind the government’s welfare reform proposals. I set out the government’s plans to cut the administrative overhead of government, and to tackle bureaucracy. I talk to them about the education and health reforms. I explain the latest proposals to try to get the banks lending to foster a private sector led recovery, which we need.  The questions will all be about Europe.

              If I spend more time talking about the EU, the questions will still be about Europe.Many Conservative members understand just how much the EU dictates to us, and how the EU is now a major part of the problem we face.

                Conservatives want the EU budget cut – not just the growth rate reduced, but big cuts in total spending. Many would simply like to be out altogether so we pay nothing.  They want an assurance that UK taxpayers will not have to pay a penny to bail out the Euro, as we wisely stayed out following a big battle mainly waged by Conservatives in the 1990s to keep us out. They want the government to spend less, and they think cutting the amount we spend on the EU is the best place to start.

                Conservatives want much less expensive regulation of our businesses. They understand that some steps have been taken on domestic regulation by the current government, but see also that the avalanche of new EU regulation overwhelms UK attempts to cut the overall burden.

             Conservatives want less interference in the way we handle our refuse, undertake our diplomacy, fish in our seas, run our criminal justice and work out  our environmental policy. The EU way for these things is rarely popular.

              Conservatives recognise that we were right about the Euro. They see that if the Euro area presses on with a political union to try to buttress their errant currency, the UK cannot possibly be part of it. They recognise the reality. This means we need a new relationship with the EU. They want their leaders to say so.

             Conservatives say that if we can have a referendum on the Alternative Vote, referenda on elected mayors, maybe a referendum on Lords reform, and if Scotland can have a vote on staying in the UK, why can’t the rest of us have the one referendum we want, a referendum on our relationship with the EU? Members in England want a better deal for England. They want the Conservative majority in England in the Commons to be allowed to make the calls for England in our increasingly devolved UK.

           I am delighted the Prime Minister wishes to define Conservative views and policies for the next election. He should understand that in the party there is just one overwhelming preoccupation amongst members, like it or not. They know the EU is going wrong for us, and they want a new sense of direction, a way out of the troubles the Euro and the EU are bringing us.

In June 2010 many would have said Labour was going to spend a long time in opposition. The Labour government that presided over the trip to the IMF and the recessions of the 1970s left such a legacy of distrust that Labour stayed out of government until 1997. The Conservative government that entered the Exchange Rate Mechanism leading to the recession of the early 1990s has kept the Conservatives from a majority ever since. Surely, many thought, presiding over the huge boom and bust of the last decade and presiding over bank bankruptcies that no-one had seen before in the UK, would mean something similar for Labour?

Yet Labour is now regularly 10% or more ahead in opinion polls, just two years after their bad defeat in 2010. They can thank the Lib Dems for that.

It has been traditional for Conservatives and many in the media to be dismissive of Ed Miliband. I have always advised colleagues to take him seriously and not to underestimate him. His campaign over Murdoch led to the Leveson enquiry which will do damage to the Coalition with the media. His wish to change perceptions of Labour’s approach to immigration is a necessary part of his journey to reconnect with lost Labour voters.  Mr Balls has  associated them  with a growth agenda, which  is shrewd political positioning given the state of the world economy.

However, the main reason he is riding high in the polls is that a large number of Lib Dem voters have defected in despair over the Coaltion. The Lib Dems as an opposition party always faced two ways. In Labour seats they posed as the more “left wing” alternative. They gently chided Labour for failing to spend enough public money, for failing to regulate enough, for failing to take up left liberal causes. They made some progress with Labour voters who disliked Blair’s third way spray paint to have some Tory colour. In Conservative seats they posed as Tories with a conscience, as a milder version of Conservative commonsense. They aimed to be to the bigger government side  of the Conservatives, but not too far away.  Their one principled stand in both areas was on the EU, where they were always the more EU party. It was one of the main reasons they always came a poor third.

Dr Cable’s strange decision to invent and back a scheme for tuition fees was probably the main trigger for the departure of a large number of Lib Dem voters to Labour, early in the life of the government. The fact that they joined  the party that first invented and introduced tuition fees was an irony lost on them. This has given depleted Labour a additional natural bloc of around 10% of the vote. It is the main change that has happened. It has more to do with the Lib Dems than with Labour, but it is a potentially tranformative shift in UK politics.

This would not matter so much to David Cameron’s Conservatives, if the Conservative vote was holding. There should be a good 40% plus body of Conservative votes to counter the newly united “left”. However, UKIP is busy trying to split the Conservative vote for the reasons many have often produced on this site. In the 1980s and 1990s there were Conservative governments partly because Labour and Lib Dems were fighting over the big state vote,whilst the smaller state anti EU vote was united.

Mr Osborne’s political strategy work has to deal with both these problems. Can Conservatives attract the wandering Labour and Lib Dem votes as they hope.? There is no evidence that Mr Hague is about to demand the new relationship with the EU that the Eurosceptics want. He does not wish to respind to the UKIP tactics.

I asked the Department for Environment, Food and Rural affairs how much they spend on their administrative overhead, and how this is coming down under goverment plans to cut it.

I was most suprised by the answer.  I was told that Defra’s overhead was £739.9 billion in 2009-10, £735 billion in 2010-11, and £732 billion in 2011-12, a modest decline. The problem with these numbers is they exceed total public spending for the years concerned!

I guessed when composing the written answer a mistake had been made, and that maybe I should divide all the numbers given by 1000 to get to the right figures. I decided to check the numbers against the published DEFRA annual report. To my surprise I discovered the same error in that. The table states quite clearly the numbers are £m, when they are probably £000. More interestingly, the Annual Report also records that the “Net resource outturn” (one measure of total spending) for 2010-11 was just 4,736,182, (no units given) yet elsewhere in the Report this appears as £4.736 billion which is the more likely figure.

If we assume the error is a mere factor of 1000 and the rest of the numbers are right, the DEFRA overhead has remained high in the period 2008-12, but is now forecast to come down more rapidly to £646m in 2012-13. What is worrying is that many officials were  doubtless involved in compiling the annual accounts, and more in drafting the answer to my question. Ministers signed off the figures. Cutting overhead costs is  a high priority of this government. You would have thought the Treasury and the Cabinet office would be cross examining the departments on their annual report figures. Despite all this, many wrong figures have been published.  It is also clear no-one reads these publications. If I mistype a figure or word on this blog as I can do, producing it on my own often at speed,  readers usually alert me within the hour to my error and it gets corrected. No-one seems to notice these wrong government figures for weeks on end.

More interesting is where the cuts occur.

“Championing Sustainable development” will lose all admin budget  this year. So will Championing Sustainable development (NDPB), and “Strong rural communities”.  “Sustainable Consumption and Production falls by more than half, to £4.4m from £10.39 m last year.  These seem sensible proposals. “Adapting to Climate Change” goes up from £2.9m to £10 m, a large increase.  It would be interesting to know why.  The Department does not on this plan cut its overall overhead by the 30% of the government policy by 2014-15, but does get it down by a useful 22%.

         Thank heavens for global warming say some who have organised summer events this year in the UK. Just imagine how cold it could have been without global warming.

          Meanwhile, on the other side of the Atantic at Rio the nation states assembled agreed to disagree. In “The Future We Want”, the “outcome document” for the summit there was much exhortation but little by way of new targets and firm global pledges.  The words urge governments to  develop the green economy, to promote corporate sustainability reporting, to go “beyond GDP to assess the wellbeing of a country” and to tackle “sustainable consumption and production”.

         As the Eurozone economy teeters dangerously, with more threats to the EU banking system identified by its regulators, Rio took second place in the minds of many in both the media and governments.

        The abolition of the O level and the CSE was designed to eliminate division in education at age 16. Many welcomed the revolution, delaying dividing pupils into an academic elite and the rest until A levels or university application time.

         Others disliked the changes. The advent of more high scoring GCSE pupils in sixth forms increased the pressure to change the A level. Out went some of the “tough” two year study programmes ending in  a set of strenuous exam papers. In came more of the modular courses, where you could study and be examined a few steps at a time. In arts subjects out went some of the free ranging essays, invitations to display your erudition or ignorance, and in came right answers and multiple choice. Teachers now spend more time teaching exam techniques and less time teaching the subject. Even at elite universities some students expect to be told what points they ought to be making in their answers, and want to know the details of the “scoring system” for the exams.

      So what do you all think of the experiment? Did GCSE and new A levels work? Did they end the unpleasant divisions? Did they produce a more democratic and modern education? Or did they dumb down standards?

       Defenders of the old system of O and A levels say that they were great for the intellectual elite. Others  might agree they were no good for all those who ended up with none of either. The defenders say the need was to find a convincing set of qualifications for those who did not wish to  specialise in academic subjects examined the old O and A level way. Those in favour of inclusion would say the GSCE bridged the gap for more children.

        Whichever view you take, there remains the big problem of what do we offer children who are not going to do well at either GCSE or current vocational qualifications?  The old O and A level was fine for the academically  successful. Technical schools were fine for those who wanted to be serious technicians of varying kinds.How good was education for the rest, and how could it be better?

         The bail outs are coming thick and fast now. Greece is about to request its third in a row.  Saying they just want to go a little slower with hitting their targets means they are asking for more money on easier terms. It is yet another loan request. It’s interesting that the junior partners in the Coalition, Pasok, do not ant any places in the Cabinet. It does not sound like a close and long lasting coalition relationship.

        Meanwhile Spain may now  formally request a banking bail out, which in turn means a state bail out given the way the state is expected to stand behind the banks. Cyprus also needs help. Isn’t it time the bail out fund got busy raising serious money? That too will all be borrowed. The politicians as always are good at thinking of many ways of spending bail out money, but less good at working out who pays the bills.