I find many people still want to talk about crypto currencies. There is a line of thought amongst entrepreneurs and radicals that wants a crypto currency to emerge that is free of the controls of governments and Central Banks, reflecting their distrust of these organisations. There are two main lines of criticism of national monopoly official currencies. The first is the way most of the countries backing these currencies allows or even encourages some inflation, reducing their real  value over time. The second is the way national monopoly currencies give the authorities greater controls over people’s money and their way of life.

It is true that most Central Banks aim for a gentle devaluation of their money by around 2% per annum, as they think a little inflation helps growth and economic change. Sometimes they lose control and end up with considerably higher rates of inflation.  Individuals in a free country which allows its citizens to buy and own real assets and other national currencies can protect themselves against an undesirable inflation in their national money by owning inflation proofed assets like local currency index linked debt or by holding other currencies less exposed to inflation. Inflation linked bonds, property and shares have some inflation beating characteristics.  The so called crypto currencies have so far not proved to be a low risk way of protecting yourself against inflation in your national currency. There has been extreme price volatility, producing either an excess return well above the inflation erosion of your base currency, or days of large price falls  reminding you that in the wrong one of these  vehicles you could lose the lot.

It is true people can design crypto currencies with clever ways of restricting supply of them. All the time there is an increasing  number of people willing to believe in their properties, this can create substantial upward pressure on their  value. However, there is also a central paradox. To create the magic ingredient of pressure for the price to rise requires tough restrictions on the issue of new crypto currency. This means such a currency will struggle to be liquid enough and universal enough to meet the test of effective money that  is freely and widely accepted in payment. National currencies are  very flexible in response to demand for more money for legitimate uses. The very flexibility that allows too much money to chase too few goods, leading to inflation, is also a crucial feature to allow money to expand as economic activity expands to permit growth and business success. Judging the right amount of money, as Central Banks have to do, is a difficult task to get right.

Some of the advocates of crypto currencies I have listened to are even more concerned about the way commercial banks holding our deposits in national monopoly currencies are increasingly the regulated creatures of the state allowing the state to exert substantial control over our finances. The answer to this is not to create a new  non government currency which allows people to break the tax and financial laws. The main reason states are so suspicious of crypto currencies is they fear they can and will be used by drug traffickers, terrorist organisations, large scale tax evaders who want a currency that is not reported to the authorities  and which allows them to do as they wish without trace. Some people used to like bearer bonds, gold bars and other stores of value that avoided direct reporting to tax authorities, but gradually governments brought these under regulatory control. Anyway people often found they had to use the normal banking system and monopoly currencies at the end of the process when they wished to spend their wealth.

The case for crypto currencies has to be made for reasons other than the dislike of tax that a national authority seeks to impose. If there are too many taxes or they are at too high a rate there has to be democratic pressure to change, or the person who objects strongly has to move to a lower tax jurisdiction to live and work permanently.

There seems to be a widespread misunderstanding about our railway. The tracks, signals and stations are all in public ownership and are run as a nationalised industry. The private sector train companies bid for a monopoly franchise on a single route, and have to meet detailed specifications for timetables and services laid down by the government and rail regulators. There is little scope for competition, innovation or adventurous uses of private capital.

The great frustration of some commuters with their rail service is understandable. Some lines are badly affected by poor labour relations leading to a series of strikes which interrupt the service. Many lines are suffering from a  lack of capacity, as the nationalised rail company is unable to provide the capacity commuters need on busy routes to the train operating companies. Train operating companies would often be willing to run more peak time trains if only there was line capacity to do so.

That is why I have been urging the nationalised Network Rail for some time to adopt better signalling systems that would allow more trains to run on the same track compared to the 20 an hour which is the common experience with today’s signals. If they adopted new  systems that allowed 30 trains an hour we could enjoy a 50% increase in seat capacity and trains running for a modest outlay of public investment.

The idea that we should complete the nationalisation of  the railways means cancelling the train operating franchises, probably as they expire, and arranging finance to buy up trains to run as the train operations rejoin track provision and maintenance in the public sector. This would impose an additional  financing strain on the state, but would not lead to much change in train services. As the timetables, fare regulation and the provision of the bulk of the railway assets is already in state hands it is difficult to see there would be much change for passengers. How would a nationalised railway resolve the disputes with employees that currently disrupt some of the private sector franchises? At least the periodic advertisement of franchises provides some modest competitive stimulus to better performance that would disappear with a wholly nationalised monopoly.

Network Rail last year (to March 2017) lost £990  million. Its outstanding borrowings were £47bn on a small equity base.

It was a moment of honesty from John Mc Donnell reminding us of Labour’s struggle to get elected to government in the 1980s and 1990s. Post war Labour governments in 1945, 1964 and 1974 all suffered badly from market dislike of their high spending high borrowing policies, which led to sterling crises in each case.  It is etched on the memory of older Labour figures that market disciplines have previously prevented socialist policies being followed, and have created political tensions within Labour governments to be followed by loss of office as electors lose confidence in their ability to manage the economy.

The first two Labour governments inherited and kept a system of managed exchange rates. They were forced to devalue the rate. In 1949 Labour devalued the pound by 30% against the dollar, taking it down from $4.03 to $2.80. In 1967 Labour devalued the pound again, from $2.80 to $2.40, a fall of 14%. In 1974 they inherited a floating pound. Over their five years in office they allowed it to float down from $2.30 to $2.08, a fall of 10%. In 1976 there was a sterling and payments crisis leading to a visit to borrow money from the IMF to stabilise the pound and the financial position. This crisis sealed the fate of the Labour government which lost power for a generation. Only the John Major  decision to join the damaging European Exchange Rate Mechanism and its economic impact changed the electoral position back in their favour.

The Blair government came to office in 1997 determined to avoid a fourth devaluation and sterling crisis for post war Labour governments. They adopted Conservative spending and borrowing plans, and spent the first few years moving the accounts into surplus. The economy continued to perform well. Labour then decided to make substantial increases in public spending, to increase public borrowing and to follow a very accommodating money policy which allowed large debt build ups. The end result was a bad  recession and banking crash. Over their time in office with a floating pound there was a modest devaluation of 11%. This crisis is likely to keep Labour out of office for a considerable time period.

In total Labour spent around 30 years in office and presided over the bulk  of the fall of 64% that occurred in the sterling/dollar rate between 1945 and 2015.

In government the Conservatives kept the fixed rate of $2.80 throughout their period in office from 1951 to 1964. In 1970 to 1974 with a floating pound the Conservatives presided over a 4% fall against the dollar. Between 1979 and 1997 with a floating pound there was a 22% decline.  This included the Exchange Rate Mechanism fiasco which damaged the currency value and much else in the economy and led directly to the loss of office by the Conservatives.  It  kept them out of office until Labour presided over a worse economic crisis. Over  the Coalition years 2010-2015 there was no change in the pound. If you average the rate of fall to an annual figure under Conservative governments the devaluation has been at a rate of 0.6% and under Labour at 2.2%. The Conservative devaluation was largely  the result of the ERM disaster. a single policy error not to be repeated.

Floating rate policies are better than fixed rate policies. They give countries a bit more financial leeway. They do not, however, exempt a country from all the disciplines of the market. Mr Mc Donnell is right to worry about the market constraints on policies. The sorry history of Labour devaluations are a reason why I think a Labour win at the next election is unlikely. The constant resort to devaluation to deal with the consequences of the spending and borrowing policies shows the inherent tensions in their policy mix.

I have charted the pound in relation to the dollar as this has been the crucial rate throughout the period, with the devaluations formally expressed in terms of the sterling/dollar rate. The pound has also fallen against the DM and  Swiss franc. Since its creation the Euro has had periods of both strength and weakness against the pound.

The favourite pastime of some economic commentators and broadcasters is to say  such and such a figure about the economy they think is disappointing  is because of Brexit. Often they are wrong to blame the Brexit vote for the figure they do not like. So let’s have a look at some of the figures that must be in their  view owing to Brexit, as they made forecasts of how the Brexit vote would hit these  very figures.

1. The FTSE 100 Index. Before the vote they said it would fall if we voted Leave. Instead it has risen strongly from 6138 on 24 June to 7687 at the end of 2017. This rise is about the same as the French Index, a bit better than the Italian Index and massively better than the Madrid Index over the same time period.  It is less than the US index.  After the vote when they saw it was rising they shifted their forecast and said it would be the FTSE 250 of more domestic companies that would fall.
2. The FTSE 250 has instead risen from 16088 on 24 June 2016 to 20726 at end 2017. This is a bigger rise than the FTSE 100 , which they said would only go up owing to its overseas earnings and currency effects. That’s a 29% rise because of Brexit.
3. House prices. They forecast they would go down. They have risen gently since the referendum vote.
4. Employment. They said it would fall. It has gone up by  half a million comparing the August to October 2017 figure with first quarter 2016  before the vote.
5. Unemployment. They said it would rise. It has instead fallen from 1.67 m in the first quarter of 2016 to 1.42 m in the latest ONS figures.
6. Economic growth. They forecast a recession in the winter of 2016-17. Instead the UK economy continued to report good growth of around 1.8-1.9%.

So we can now say that thanks to Brexit unemployment has fallen, employment has risen, share prices especially for domestic companies have gone up and house prices have risen modestly.

It is true that they forecast a fall in the pound. It did fall against the dollar at first, but has put in a good performance more recently rising 12% off the lows. If it fell because of Brexit presumably it is now rising because of Brexit.

Wouldn’t it be good if forecasters and commentators went back to thinking about what truly moves these  numbers, and come to see the impact of Brexit has been greatly exaggerated. All the reasons why the pound went down or up before Brexit still apply!

The endless and repetitious debate about the consequences of Brexit put out before and after the vote by Remain campaigners is depressingly narrow as well as wrong. They concentrate all the time on alleged short term economic losses. They have been comprehensively wrong with their gloomy short term forecasts for the aftermath of the vote, and are busy revising the timelines for the same old false forecasts. They are unwilling to engage in the much bigger issue of how we can now restore our democracy and reinstitute our freedoms.

Fortunately we do not have to choose between economic loss and freedoms gained, as Brexit can secure economic gain with the right domestic policies. We need to remember just how important our vote and voice used to be, and h0w they can again count for more when we have  cast off EU lawmaking.

The history of England and the United Kingdom that came together in 1485,1603,1707 and 1800 is the history of the long march of every man and every woman to gain voice and vote. As we work to restore the sovereignty of the people and to give powers back to the UK Parliament  and to devolved administrations and Councils we would be wise to remember the struggles to get us our democratic system.

Freedom from the tyranny of a monarch who ignored Parliament was the cause of the Parliamentarians in the civil war. The 1660 settlement entrenched rights and powers for the limited franchise of voters and their MPs to control a wayward King. The 1688 settlement when a new King and Queen were invited to assume the throne added  to these limits on arbitrary power further. The early nineteenth century saw popular pressure to widen the franchise to all men, leading through the Reform Act to later completion of the task. In the early twentieth century the cause of female suffrage took to the political stage and finished the revolution.

These gains were hard fought and should be  valued. The campaigners  were right to dedicate their lives to ensuring all adults had voice and vote, that governments had to heed public opinion and needed the approval of elected representatives who could demand redress of grievance and improved conduct of public policy.

Membership of the European Union reversed part of this process. The country was signed up to a system which meant laws could  be created and taxation raised and spent without the UK public and their directly elected representatives having the final say or even an effective voice. The proponents claimed that the European Parliament met some of the democratic deficit, but in truth a single country block of MEPs was never strong enough to assert the UK public will when this was at  variance with the EU wishes. Nor does the European Parliament have sole or even at times any sway on things that matter.  They claimed that Ministers and the  Prime  Minister represented us at the Councils of the EU,but they were often outvoted or persuaded not to oppose something the UK public did not want.

The UK Parliament became a bystander, watching large volumes of law passing through which Parliament could neither amend nor reject. The voting public became powerless to change any of that law. If they voted out of office one party who had allowed the EU  laws and taxes to pass, they voted into office another party that would do the same and uphold the EU laws and taxes.

When we leave the EU our vote to choose an MP and a governing party will once again have more power and authority. Government will no longer be able to say we have to tax green products and domestic fuel  because the EU demands, or have to organise our fishery in a way which is damaging both local  fishermen and fish. We will take back control. Either the elected government then changes things as we please, or it will be replaced by another government that will.

UK governments will not always  be wise or get things right. What Brexit brings us is the ability to press them to change, or to change them if they refuse. The thing I most want to change as we leave the EU is to nurture this precious flower of freedom.

2018 teems with opportunity.

Technology is driving amazing change. Robotics, artificial intelligence, social media and the internet are the children of today’s digital age. They offer us scope to achieve more, understand more, relate to each other better. They offer the UK the chance to be a digital pioneer and a global   exploiter of the scope for positive change these ideas allow.

The UK is well set to be a leader of the knowledge based businesses that are the hallmark of the digital world. With world class  universities, a capacity to set up small businesses easily and quickly, with flexible entrepreneurial people and a willingness to experiment, the UK can prosper from innovation.

Restoring our ability to govern ourselves and to provide the legal and social framework we need to succeed in this exciting era is part of our mission for 2018 into 2019. Brexit offers us scope to grow more of our own food, to control our own fishery, to make laws that support and help entrepreneurs whilst ensuring high standards, and to develop our global role with Agreements and Treaties as we see fit. The UK will return to the top tables in areas like Trade, the Environment and business regulation, expressing views and helping shape the global standards that increasingly dominate.

Across the Atlantic the Republicans in Congress are aiming to speed their economic gr0wth and to make the USA a magnet for investment by lowering tax rates. This will provide a welcome boost to world activity, and act as a reminder of the need to set competitive tax rates to allow jobs to grow and prosperity to flourish.

The world is a better place for less military intervention in the Middle East by the western powers, and for the planned withdrawal of Russia from Syria. It will not of itself stop all the Middle Eastern civil and religious strife, but it will remove some of the complications in the conflicts. I would like to see a period of relative peace when the west turns swords into helpful  robots. We can help transform the world by economic growth, technology and greater investment.

I wish you all a peaceful and prosperous New Year.

Prince Harry did well setting out his causes and campaigns as Guest editor of the Today programme.  He made good use of his slot.

The choice of some of the other Guest editors has left a feeling that the whole week is yet again unbalanced, and designed to prevent any Guest Editor being appointed who might try to shine light on topics and viewpoints the BBC prefers to ignore or criticise.

Here’s a few that might make for good radio.

1. A piece on why and how the economic establishments of the Treasury, IMF, World Bank and others could be so wrong in their economic forecasts of the consequences of the Exchange Rate Mechanism, the big build up of credit and derivatives prior to 2008, and the short term impact of the Brexit vote on the UK economy. This could include interviews with representatives of  the  handful of experts who did get all three of these big issues right.
2. A piece on security and price of energy, and the impact EU and UK policies have had on both this century. Can the needs of plentiful and cheap energy to deal with fuel poverty, keep people warm and ensure a decent manufacturing  base be reconciled with other policy objectives? Is current US or EU energy policy more helpful to the world economy?
3. A piece on whether the Trump Administration is serious about promoting peace by means other than constant military interventions in the Middle East, and whether the consequences of less military involvement over the last year have been better or worse than the Bush/Obama wars
4. A piece on the damage high taxes can do, and an examination of when and how revenue increases when rates are cut
5. A piece on what is a reasonable rate of migration to allow the provision of decent accommodation, school places, health  care and the rest to the new arrivals and the settled communities they join.

I had hoped with Guest editors the Today programme would seek to reconnect for just a day or two with the taxpayers, motorists and Eurosceptics it regularly castigates the rest of the year. I should have known better. This morning they have just given an interview with an “expert” who told them that people voting for “populist” parties threatened the underpinnings of liberal democracy in Europe. So there we have it. People voting against the EU and Euro establishment in their countries are anti democratic forces. Why wasn’t the expert asked why in the EU you are only allowed to vote for what the Establishment thinks is right?  Why do voters have to vote again when they get the answer to referendums wrong according to the Establishment? What should voters do when traditional parties remain wedded to Euro austerity policies?

There’s a surprise! The release of government documents includes delays to the release of European Exchange Rate Mechanism papers and a block on  the release of certain Euro papers relating to 1992 when we dropped out of the European Exchange Rate Mechanism. This was the biggest economic policy error of the last quarter of the twentieth century in the UK. The Establishment and main political parties united to visit this disaster on us. It led to falling house prices, a big rise in unemployment, closed factories, bankrupt businesses, all in the name of European integration. The irony is it delivered what Project Fear wrongly said our vote to leave the EU would deliver in the winter of 2016-17!  No wonder the Remain establishment is shy about revealing more of what happened then.

I was surprised by the way several contributors misread yesterday’s post. It was a piece about how technology and changing lifestyles might affect personal transport in the future. It was not  an attack upon personal choice or on the motorist. Use of a car is essential for most people today to get them to work or their children to school or to go to the shops. It is only in large cities like London where public transport offers a frequent and flexible service that more people find it practical to do without owning a car.

The government does need to do more to improve road safety and reduce congestion. I have sought to show how these twin aims can be mutually reinforcing and need not be in conflict in the way some suggest.

Short term and relatively cheap options include permitting and encouraging more off road parking, optimising phasing on traffic lights, creating segregated right hand turning lanes, and creating more pavements and cycleways away from main vehicle carriageways.

Dearer options include bypasses, more bridges over railway lines and rivers which act as barriers cutting road capacity especially into towns and cities.

The highways authorities need to offer safer and better solutions for school set down and pick up instead of encouraging parking on busy roads close to schools at peak times of day. They need to use more roundabouts  and fewer light sets. They should require replacement and new utility pipes and cables to be laid away from the main highway in accessible conduits to stop the need to dig up the road for naintenance and replacement.

The government is asking each Highways authority to identify and improve a local strategic road network. This is a good initiative with money for suitable improvement projects.