The Lib Dems seek to differentiate themselves from the Coalition’s policies. I have no problem with that. The two Coalition parties are different, and need to offer choice to the electors come another election.

              What suprises me is how they wish to be different. They think a benefits cap of £26,000 is too mean, when a large  majority of the electorate and a majority of their own voters think it is an important improvement in our welfare system.

              They think the UK should not stand up to the EU, but should go along with more or less any further transfer of power, tax imposition and other humiliation the EU should want to visit on us. Around 80% of the UK public disagree with them.

               They want a mansion tax , to tax people who live in the more expensive parts of the country, regardless of their incomes, mortgages and circumstances.

                Put this altogether and they end up with just 9% support in the latest polls. No amount of banker bashing rhetoric seems to work to make them more popular, but then they are in government and are paying RBS executives large sums whilst losing  they lose  taxpayer money. No amount of pro EU rhetoric seems to lift their poll ratings. Nor, I suspect, will voting for more benefits for people not in work as these matters are put before the Lords.

 

           There has been so much comment and debate about the Credit Crunch, bank collapse, large recession and inflation which happened in recent years, that attention has been diverted from the constitutional vandalism carried out by the EU and its collaborators in the last government.

           In 1999 I wrote a book entitled “The death of Britain”. It is time to revisit its predictions, bring the analysis up to date, and to go to ask how can UK democracy be restored to a country with a mangled constitution.

          I argued that devolution would “fuel nationalist movements in Scotland and Wales”. “It is helping create a Europe of the regions in the way the Commission wants”.  “The end result will be a more factious, more overgoverned, more overregulated United Kingdom… It will not reconnect the public with the politicians. It will confirm the public in their view that politicians by and large do not solve problems, do cost too much, and are good at misleading the public in their own interests”. Devolution is usually a stepping stone on the way to a break up of a union.

                The book concluded:

 “It is a crowning irony that, that following decades or centuries of success with the Westminster model and our belief in freedom, this government and this European Union should  now be uniting to destroy much of what is best in the Mother of Parliaments.”

               “What is the point of Parliament if a common foreign policy for Britain is hammered out by our partners on the continent? What is the point of Parliament if the most important decisions about economic policy are taken by an independent central bank in Frankfurt? What is the point of Parliament if many of the important issues of health and education and local government are determined by regional assemblies and not at Westminster? How much democracy will there be if crucial decisions are taken behind closed doors at Brussels meetings?…”

            “One day, however, the British people will collectively wake up to realise that Parliament, the fountain of so many of their liberties, no longer has much water in it….They will discover there are so many layers of politicians and bureaucrats from town hall through district council through county council through regional assembly through Westminster to Brussels, that they very rarely get a straight answer to anything and find it extremely difficult to work out who , if anyone, is to blame….The Scots will get restless for more independence…”

                       “Labour’s constitutional blueprint is nothing more than a plan for the destruction of United Kingdom democracy. It threatens splits within the kingdom. It threatens transferring too much out of democratic control. It gives far too much ground to the federal plan on the continent. ”

                         13 years on much of what I feared has come true. Devolution has unleashed nationalist movements.Devolution is not a stable settlement, but a constant series of demands for more. The Treaties of Nice, Amsterdam and Lisbon have transferred far too many powers to the EU, making the  UK powerless in many more areas and adding to scepticism and hostility toward politics as a result. The advent of more decision making in quangos, Brussels and further layers of government has added to cost, complexity. It  lacks  clarity and is increasingly unacceptable to electors. A so called independent Bank  of England presided over our worst economic and banking crisis since the 1930s, making many policy mistakes.  As I feared Labour got rid of the people it did not like in the Lords, but did not know how to reform it positively.

                       Some things I feared we prevented. We stopped the UK joining the single currency, despite Mr Blair’s enthusiasm. We stopped changes to the voting system for Westminster, though we have them for other layers of government.  We have checked regional government in England, defeating elected regional government and now starting to cut  back the unelected because it is a needless and unaccountable layer.

                      In future pieces I will examine what more we need to do to rebuild a proper Parliamentary democracy in the UK.

                     The BBC today reported  79% now support English votes for English issues – that’s a start. Then the BBC ruined it, by saying the answer to the sense of English injustice with the union was a bit more devolution to the northern cities! No, BBC, the answer is to let us English speak for England, and for England to be able to take its own decisions where such decisions are devolved in Scotland. If Scotland is united in its devolved kingdom, so must England be.

 

             Twice this week I have asked this question in Parliament. To try to win it more traction let me ask it again, at greater length. Who speaks for England?

              The Cabinet contains a Scottish, Welsh and Northern Irish Secretary of State arguing their case for money and laws that will help their parts of the country.  Each of these parts of the UK have their own Parliament or Assembly, taking many decisions which for England are taken by the Westminster Parliament.

              The English have for many years been relaxed about the  Union. There used to be  little English nationalism. Most English people have accepted that England, as the large majority partner in the UK, should pay more in ,  put up with more criticism and accept   less good terms than the other parts of the kingdom.

               Few English people complain that the Welsh are fierce in supporting their rugby team , or the Scots strong in backing their athletes and sporting heroes. It hurts a bit more if England is the only surviving Union team in an international competition to learn that some Scots will then back anyone but England. In times past support for Scotland from English fans would have been automatic if England had been knocked out.

                 Until recently few English people have complained strongly about the much higher public spending per head recorded in parts of the three devolved regions than in most of England. The advent of a more powerful Scottish Parliament, putting in different policies on student fees and care costs has started to upset the usually tolerant English.

                 England and Scotland have coats of arms that vary a common theme. Scotland has one aggressive lion rampant, flashing claws. England has three more sedate lions passant. Their claws are obvious, but they are not raised in anger. For years it has been thus. England expects flashes of Scottish anger. Scotland expects little English reaction, despite the superior controlled power.

                 Today the Union is at risk in a way unknown to the post war generations, and unknown to anyone born during the last eighty years. We need to go back to the break away by the Republic of Ireland and the stormy arguments over Irish home rule to find a period of greater stress and tension within the Union.  When I wrote “The Death of Britain” at the start of Labour’s long period in government in the late 1990s I forecast that devolution would endanger the kingdom, not unite it. So it has proved.

                  Devolution has given a great platform to the SNP, who have used it well to build support in Scotland for an independent state, or at least for a state with so much devolved power that it is more or less independent. The more aggressive Scottish nationalism becomes, the more a counter balancing English nationalism arises. Once Scotland raises the issue of independence it naturally focuses England’s mind on the deal both countries enjoy. It leads England to question whether and how an independent Scotland could still share an army, a royal family, a Central Bank, a currency and international representation with England.

           The English thought nothing of Scotland having her own football league and their results being reported on English tv and radio. Now as Scottish teams shun the greater competition that a UK league would  bring, some ask what this means?  If a Scottish tennis player wraps himself in the Scottish flag at Wimbledon rather than the Union flag, where an English player would  select the Union flag, how should the English in the crowd react?  Welsh football teams play against England in the same league, and Welsh players join the English cricket team. Scotland plays it very differently.

           Many Scots acknowledge that it makes no sense for English MPs at Westminster to have no say over Scottish health, environment, local government and education, yet Scottish MPs at Westminster have both vote and voice over all those matters for England. Isn’t it time that we had English votes for English issues? Isn’t it time that the English Secretaries of State – for Health, Local Government, Education and Transport – not only worked for England but spoke out for England?

 

 

 

 

           It was good news to hear confirmed that the USA is not going to make more money available for the Euro. Apparently the US position, as reported again on today’s BBC, is that Euroland needs to sort its own problems out and pay its own bills. As the UK government has said it would only contribute to the IMF if all the main players do so, that looks like a helpful development. I guess China will also be reluctant to put money up for the Euro.

             Douglas Carswell restated the main arguments against IMF attempted bail outs of the Euro  well this morning on the Today programme. If the countries receiving IMF aid cannot devalue and default on some debt at the same time as cutting spending and borrowing more, the medicine cannot work. The IMF should stick to bailing out sovereign countries, not regions in a very badly constructed currency area that are being strangled by the very set up of the currency and the economic policy.

 

David Cameron’s speech was the best of the three party leaders’  discussions of what kind of capitalism we want in the future.  They have made it a topical matter, as they press on with their attacks on bankers and bonuses, reflecting considerable public disaste for some of the extremes we have witnessed and are now paying for as taxpayers.

In 1988 I published a book entitled “Popular Capitalism”. In it I  sought to promote wider ownership – shares for everyone, property ownership for the many. I drew together the differing strands of policy. There was privatisation, allowing or encouraging the public to become part owners of some of the largest businesses in the land. There was employee ownership, at its best in the sale of National Freight to its employees. There were share incentive schemes for many private sector companies. Council house sales, homesteading, policies to promotote self employment, and pension plan investments with generous tax breaks were all designed to make owning the experience of the many rather than the privilege of the few.

This idea needs updating and developing for the era after the Credit Crunch and  bank collapse. We wish now to ensure  that some  future large bank cannot go down and end up with massive taxpayer subsidy. This government has adopted the ideas of living wills and controlled administration  should a large bank get into trouble. It’s a pity they did not do that last time round. More importantly, the government needs to pursue a vigorous competition policy for banks as well as for many other sectors of the economy. It was the mega mergers the last government allowed or encouraged which made the problems so much worse in the financial world.

The challenge today is to create a capitalism people are proud of and wish to work within. It is surprisingly difficult to sustain the merits of capitalism to some UK audiences. They say what did capitalism ever do for them. One could ask, do they not value the car and the plane, the new pharmaceuticals and the computers, the mobile phones and the televisions which competitive free enterprise in the west has designed and delivered? Don’t they value the staggering range of goods now being delivered to their doorsteps from the highly competitive factories of China and India?  What part of modern living standards do they regret compared with a hundred years ago. Which did not come from free enterprise?

They also caricature those  who support the creativity and flexibility of free enterprise as wanting a kind of lawlessness. This could never work. Any sensible exponent of capitalism knows there needs to be a strong rule of law, to make criminal acts difficult and to promote competition and fair dealing  forcefully. It is the role of government to write those rules that are needed and to enforce them. It is the role of markets to offer choice and jobs, investment and consumption, innovation and tradition. Of course some in markets get it wrong, make mistakes, go to excess, produce bad products or services. So do some in the public sector. The advantage in many cases of doing things in the private sector is twofold. There is choice, so you do not have to have the less good service. And there is a faster way of removing the shoddy and the poor performer. As customers go elsewhere so the business that is poor has to contract or die.

In my lifetime so far I have seen capitalism bring fridges and tvs, cars and washing machines, computers and phones into reach for most, whilst raising the quality and lowering the price. With an offer like that, surely capitalism can also be popular?

 

 

           Yesterday the Commons was asked to debate the massive Trans European Networks plans. As the super state lumbers on its way, they now set out grand plans to link the cities and states of the new EU empire by rail lines, roads, canals  and broadband networks. They mention subsidiarity in passing, but you can detect the bureaucratic impatience to complete the links and centralise the new Europe. There’s every wish to spend lots more money.

           The Coalition government tabled a suitably sceptical motion. It pledged to negotiate less spending on this area of work than the Commission wanted. There were plenty of Conservative backbenchers there to say or to cheer any idea of the EU spending less and leaving more to individual member state determination. Some also wanted to remind the Commons of just how expensive the surrender of the UK rebate by the last government is proving, and how there has been none of the  promised reform of the CAP in return.

           I used the opportunity to ask the Minister about the status of the UK’s HS2 project. He confirmed what I have been telling many of you. HS2 is a project which the UK can and does decide for itself. It is not mandated by the EU, and is not on the maps as a crucial part of the EU’s European networks. Critics of the scheme should attack it on its domestic merits and defects, not as a further illustration of too much EU power. There does not seem to be any wish by the EU to find EU money raised from member states to help this project.

              There was plenty of other material in the voluminous documents for TENs to display just how much power the EU already has in these areas, and how much it wishes to obtain. The request for a larger budget is one more manifestation of its power grabbing tendencies. You would have thought that after all its homilies to member states to spend less and to rein in budget deficits, it would have applied the message to itself.  It should see that this area of transport infrastructure is best left to the member states, who have to fight through the routes and find  most of the money. You would have thought that at a time of such necessary restraint on public spending throughout  the EU the EU itself would show a bit more restraint.

                   Yesterday’s debate also gave me the opportunity to ask Labour if it still opposed extra money for the IMF, given that it might be used to bail out Euroland countries. The Labour spokesman declined to answer. It feels as if Labour are going off the idea of voting against more money for the IMF. Meanwhile, we all wait to see whether there will be G20 agreement to more money for this institution. The UK government has made two caveats about possibly increasing funding. It has said it does not want IMF money bailing out a currency. It has said the UK should not commit more funds unless China, the US and other non EU G20 members are going to do so as well.

                  I am happy with the rubric that the IMF should not bail out a currency. I think that should mean no bail outs for Euro member countries who do not leave the currency at the time of the bail out. It is difficult to see conventional IMF remedies can work without a devaluation. I am not sure that’s how the government interprets that phrase.

 

           Yesterday morning a consultation letter turned up, asking for my views on a set of traffic lights.

            I was interested to see it came from an initiative of the Mayor of London to eliminate traffic light sets that are little used or badly sited, to try to help the traffic flow. He wanted to know my view about a set near Westminster.

             I am usually a pedestrian in Westminster. I find walking is the cheapest and best way to get around for most of the journeys I need to do. Given the traffic congestion it is often the quickest for short journeys. As a pedestrian I find there are more crossing points on the roads than I need. I find the all red phases for traffic at some light sets particularly odd, as rarely does a pedestrian need to cross in both directions at the same time. Meanwhile large numbers of buses, cars, lorries and vans are often held up in queues whilst the traffic lights work through their all red phase. I find drivers can get more aggressive in their attitude if they have been held up too often in too much congestion, which is an added hazard for walkers.

           The phasing  out of the bendy bus has been a big advance for us pedestrians. They can be  very dangerous, blocking too much of a road, getting in the way of sight lines to see other traffic. They often wedged themselves across places where you would wish to cross the road.

           The Mayor was first elected with a pledge to ease the flow of traffic, to improve safety, reduce congestion, and reduce needless emissions. He still has a lot to do to progress these aims. Ending all the all red phases on traffic lights would be a welcome start. His current plan to get rid of little used or badly sited lights is a good idea and deserves support.

           Meanwhile, the Leader of Westminster Council has resigned, following the huge row over the Council’s plans to remove more parking places and to charge for parking at evenings andweek-ends where it is currently free. These plans have been widely condemned by many in business trying to serve the public and by many people who want to enjoy the facilities of central London and are helped by free parking.

          If the Mayor of London and and the new Leader of Westminster Council can show us how to make it easier for motorists to drive in and park we will all benefit from the improvements. It does not help having so much traffic endlessly circulating trying to find a parking place, or trying to find affordable parking.  City centres including  London need all the help they can get to prosper. Taxing people for daring to come in is not a good model.

          The message then  needs to spread to other shopping and business centres. Clobbering the motorist is not the same as helping the pedestrian. Quite often they are one and the same person in different phases of their journey.

 

 

           I have been interested that some of you are keen defenders of  nationalised roads, supplied free at the point of use, but at huge cost if you add up all the motoring  charges and taxes we do pay nonetheless. Road supply is used as one of the main reasons for VED and petrol tax, yet they collect far more in taxes than they spend on the roads.

           To me, our road system has all the characteristics of badly run nationalised industry monopolies.  They are dear to the taxpayers that pay for them. They supply too little roadspace, artificially rationing it. They tell us it is our fault for wanting to travel too much, or wanting to travel in the wrong way  so that their roads are regularly congested. They delight in making using the roadspace more difficult, with endless state interventions with the carriageways, signs, controls, rules and regulations. They take special pleasure in working out new complex rules, then fining anyone who has not grasped them or failed to see the changes in time. It is common for the public sector  to say there is no point in adding capacity because people will want to fill it up. I am glad they do not make the same argument about health service capacity.

             The problem with nationalised monopoly roads is summed up for me in the case of the Hammersmith flyover. This crucial piece of infrastructure was built in 1961, fifty years ago.  It took 90,000 vehicles a day. It is the main route into London for those coming from the M4, A4, M3, A 316 and other western routes via the North and South Circulars. It is the main way out to all those primary roads, and to one of the world’s largest airports, Heathrow. That makes it the prime gateway to London and the UK for many visitors to our country, as well as crucial to the busienss and economic life of the nation.

             On December 23rd it was announced that it was closed for an unspecified length of time, as its owners had not kept up with maintenance and had not realised the poor condition it has got into thanks to salt water erosion of the main tensioning cables for the  construction. This is despite many a night when the flyover has been closed for maintenance.  This prime route remained completely closed until 13 January, a period of three weeks, covering the period of the Christmas and New Year holidays, the main sales in West End shops  and the Central London celebrations. It has now been opened for light traffic, one lane only in each direction, and is still the cause of  traffic jams in west London. We are told this may last for four months.

            Does anyone think for one moment a private owner of such a crucial asset would want it to be shut completely for 3 weeks,and mainly shut for another four months? Wouldn’t a private owner, under sensible  Health and Safefty regulatory pressures, have checked out the tensioning cables and taken earlier action? Wouldn’t they explore propping the bridge with suitably placed supports from beneath if it had got into such a state, whilst they repaired it? If it had been a private franchise holder that had behaved in this way, wouldn’t the government be jumping up and down, demanding compensation, threatening cancellaiton of the  franchise, and demanding a full investigation into poor management?  Wouldn’t they expect a better answer than five months heavily disrupted?

               The flyover story is just one of the biggest and most visible examples of how public sector management can  think it is just fine to inconvenience thousands of people every day because they could not maintain and control their own asset sufficiently well. The flyover is free at the point of use, but many cannot now use it. Meanwhile we taxpayers will doubtless have a huge bill for late remediation work.

                 How well does your local Highways monopoly perform? Is safe and smooth movement of traffic its main aim? Is congestion busting its daily concern?

 

             I am all in favour of a new royal yacht. I am not in favour of any public money going into its construction.

             The public mood is ambiguous about this project. Some who usually oppose austerity rush to condemn what they see as frivolous spending like this. Some neo Keynsians see it as another make work project, assuming it would be built in a British yard. Some see it with Mr Gove as a way to celebrate monarchy and the Jubilee. Some dislike it because they dislike the institution of monarchy or the UK state.

           The old Britannia was largely a working vessel. Used properly, a royal yacht is a great aid to extending the UK’s influence, winning friends, gaining contracts and promoting the UK’s aims and values.  The rich, powerful and famous of the world are regularly wined and dined in five star hotels, and Michelin starred restaurants to seek their cooperation for the nation. Dining on the Britannia was a more memorable experience that mere money could not buy.

             Were a new royal yacht to be paid for by voluntary gift and subscription there would need to be a clear and strong trust document establishing who could use the vessel and why. The way it was used and presented would need controlling to avoid damage to the royal associations. The UK government in one form or another would be a major buyer of its services, and would presumably pay for operational use as part of the diplomatic , ceremonial and promotional budget. Leading users are likely to include UK Trade and Investment organisations, the Foreign Office, and the royal family as part of State visits. Leading charities and great UK institutions also might wish to use  her when docked in a suitable adjacent UK harbour.  The vessel would be more for entertaining than cruising.

           I would be pleased to hear your thoughts.

 

              The ECB’s decision to lend very large sums of money to banks has for the time being quietened the Italian and Spanish bond markets, despite S and P downgrading various sovereign bonds. Meanwhile, trouble is blowing up again in Greece.

           Before Christmas one of the Euro crisis summits decided that Greece could negotiate a voluntary “haircut” with private sector Greek bondholders. The deal was advertised  that those companies and individuals that had lent Greece Euros would get back one half of what they had lent.  The aim was to get a voluntary agreement to this deal. That way the public sector owners, like the ECB, could be let off their share of the losses, and the banks and others that had insured this debt against default would be spared having to pay out, as it would not count as a formal default.

           Recently negotiations to agree the detail and tie in all the private sector holders of Greek debt have got into difficulties. Apparently when the full terms of the proposal were set out, the “haircut” turned out to be rather more than 50%. For every 100 Euros lent to Greece a private lender would get back just 15 Euros in cash when the debt fell due. Another 50 Euros would be cancelled. The remaining 35 Euros would be “repaid” in the form of a 30 year bond or promisory note. They are arguing over the interest rate on such a note. If you took the market rate you would be talking 30%. Some thought they would be offered 5%, but others think Greece can only afford 2-3%. No wonder the private sector creditors are none too happy. This is not so much a haircut, more a scalping.

          None of this is helpful to the stability of the Euro zone. I guess I am one of the few still shocked by the idea that a rich advanced western country can think it fine to refuse to repay its debts in full and on time.  It does not make it any easier for that country to return to the markets to borrow money in the normal way at realistic rates of interest any time soon. Looking at the market ratings, and the views of the Ratings Agencies, there are now doubts spreading about Portugal’s ability to repay all her debts on time and in full. Portugal needs to convincingly quell these market fears if she is to return to normal borrowing and get out of special measures and subsidised loans.

             The injection of large quantities of liquidity into the banking marketplace by the ECB can provide some temporary respite in some cases. It does not deal with the two underlying harsh realities. Many countries within the Eurozone are spending and borrowing too much, so they cannot borrow in normal markets at affordable rates. Many Euro countries are not competitive with Germany, or many other parts of the world, at their current level of costs and current rate of the Euro. There is no easy mechanism within the zone to route the German surpluses into the deficit countries to pay the bills.

               Until these two structural problems are solved, the application of liquidity can delay the crisis but not prevent it. Indeed, it just makes the debts and deficits larger when finally they do get out of control.  The policy prescriptions of higher taxes and lower spending do not help the economies recover. The  public sector retrenchment is not linked to policies to promote private sector growth. Instead the increasing tax burden and the growing regulatory burden makes it more and more difficult for the private sector to respond positively. When you add in damaged banks, it remains a toxic mix.