From the early days of the Labour party and the Union movement its leaders faced a conflict. They said they wanted greater equality, but their Union supporters wanted higher pay for higher skills. Those who wanted to create, extend and defend differentials, higher pay for more skilled working, won the battle of ideas.

The Union movement became a means to defend craft and skill levels and to ensure that they gained extra pay for them. At times these were good, ensuring skill and quality in the work. At times this acted as a restraint on innovation and competition, preventing others from offering their labour without the qualification or Union membership to back their search for work.

Today the Labour movement lives with its contradictions. Labour does not wish to see the professional restrictions on legal or medical work pulled down, accepting the need for long training and up to date skills. In turn they accept the case for much higher pay for people who have these qualifications. They accept the need for higher pay for shop floor and senior management, and pay their own Union bosses well above the average of the workers they represent.

It is true the Labour and Union movement wishes to move lower pay up – as do many of us who are not part of their political movement. It is also true that in office, like any other government, Labour accepts they have to do this at an affordable pace for taxpayers. As lower pay moves up, they are also normally keen to increase higher pay as well, as the doctrine of the differential is engrained in their thinking.

It is wrong of Labour to claim they are the party of equality. They are more truly the party of differentials, the very opposite approach. They usually support more and more regulation of jobs, requiring more training and qualifications. This in turn restricts the supply of labour to these chosen occupations, and forces the differentials up compared to people in low skill jobs.

During Labour’s long recent period in government income inequalities in the UK went up. Now they are back in opposition most Labour MPs say that crusading for equality is one of their main motives for being in politics. Why would it be any different next time they are in government, than last time? Why should we believe them that they now both know how to increase equality and will do it?

They could start by saying the Labour MPs will no longer take three times the national average wage as salary for being MPs but would be happy with average wages. They could go on and say that in future their party will put a three line whip on them to turn up every day Parliament is in session, so they have to be more like a factory or office worker who has to come to work every day the office or factory is open. At the moment there are many days when Parliament is in session when Labour does not whip their MPs to turn up and some do not turn up.

They could move on to saying that a future Labour government would show in the way it ran the public sector how income inequalities could be reduced or eliminated. It could promise not to appoint new management, Directors and other senior personnel on salaries offering a many times multiple of the average wage. Indeed, if they really believed in equality they should say that being a manager or Director of a public service is a privilege which people would want to do, whilst still earning the same as the average of those doing the work in the organisation concerned.

They could say that to create a more equal country they need to stop richer parents being able to buy a better education for their children. They could promise to prevent UK children attending the excellent independent schools, leaving them to be export only, inviting in fee paying foreign students.

They could say that inherited wealth is one of the main causes of inequality in modern Britain. Instead of increasing the threshold before paying IHT, and leaving the rate where it is, they could promise to cut the IHT threshold and put up the rate.

They could abolish the state lottery, on the grounds that people should not become very rich overnight for no effort because they have bought a lucky ticket.

In practice Labour will offer to do none of these things, and will do none of them should they return to office. I am certainly not advocating any of these policies myself, but I do not go round promising to do what it would take to enforce greater equality on a complex society. I believe in greater equality of opportunity, and helping people to become better off, not in trying to tax people out of the UK. Tomorrow I will look at why Labour rightly does not even believe in income equality at work.

Shortly we will see the Coalition offer on our energy bills. Current briefing suggests we can look forward to a £50 cut in the bill from the Coalition. This outbids the promise of a freeze from Labour should they win the 2015 election. Their promise does not explain how they would stop big rises before and after the freeze.

The Coalition is unlikely to offer the full £100 plus of green costs off the bills. The Lib Dems have been fighting hard to keep the bills up, as they like the green costs and charges and wish to make lower carbon emissions one of the main aims of energy policy. A compromise will be brokered as a result.

Based on this exchange, I would rather have the Coalition offer, and will vote for it accordingly. Around £50 off is progress. Slowing down, revising or making cheaper some of the green programmes will help at the margin to control the power bill.

All this is, however, modest progress compared to the largest part of our electricity costs. The truth is these are firmly driven by EU policies which Mr Miliband signed up to when in office. A £50 cut in costs will be eroded over the years ahead as the full costs of many more windfarms, and the impact of the plant closures of the cheaper power stations comes to be felt in full.

The only way in the future to get lower energy bills is to generate electricity in cheaper ways. The USA has cheaper energy than us because it is embracing the shale gas revolution. For those who are preoccupied by carbon dioxide outflows, the US policy is even cutting their CO2 output at the same time, as gas displaces other fossil fuels.

Our renegotiation of our relationship with the EU has to include as a central plank the need to control our own energy policy again, so we can pursue cheaper energy. Dear EU energy is one of several unpopular issues which will persuade more people to vote to leave the EU when we finally get a vote.

The European Scrutiny Committee of the Commons, a cross party body, has just produced an excellent report. They recommend that the government restores the veto over all current and future EU laws.

The Chairman, Bill Cash, has long held this view and has worked out the legal niceties. So have I long believed we need to restore the veto on everything. What Parliament would do under this scheme is amend the European Communities Act 1972 which is the source of all EU power in the UK, disapplying EU powers or laws where Parliament does not agree with them. The form of the legislation would provide UK courts with every reason to obey UK law, and not to appeal it to the ECJ.

I recommend the Committee’s report to the government.

I am for once reproducing the government’s words and analysis as I think readers might find it interesting:

“The independent migration statistics for the year ending June 2013 were published (yesterday) by the Office for National Statistics. They show that our reforms are working, and that immigration is continuing to fall. Net migration from non-EU nationals is down 19 per cent year-on-year, and 36 per cent from its peak in 2010. Last year there were nearly 100,000 fewer people immigrating to the UK than in 2010.

However, whilst net migration is down by nearly a third since its peak in 2010, today’s statistics also show the challenges we still face. In the year to June 2013, annual net migration stood at 182,000. This is a reduction of nearly a third since its peak in 2010, when it stood at 255,000, but it represents an unwelcome increase in net migration in the last year – and it is still too high. So it is important to look in detail at the statistics to see why the successive falls in net migration appear to have stopped.

What is clear is that where the Government can control net migration – i.e. immigration from outside the European Union – our policies are working. Net migration from outside the EU continues to fall sharply. It is down from 218,000 since its peak in 2010, and from 172,000 last year, to 140,000 this year. And it is driven by consecutive reductions in gross immigration.

But the statistics also show that emigration – not just of British people but of foreign nationals who have come here legally – has fallen dramatically: emigration is now at its lowest level since 2001. There has also been a rise in immigration from Western Europe. Net migration from the ‘EU15’ countries[1] increased from 32,000 in the year ending June 2012 to 52,000 in the year ending June 2013. More than half of this is accounted for by an 11,000 increase in the number of Spanish nationals immigrating to the UK for work purposes (up from 7,000 to 18,000).

Other key points to note from today’s statistics:

• Net migration from outside the EU continues to fall – it is down from 218,000 since its peak in 2010 (and from 172,000 last year) to 140,000 this year. This has been driven by consecutive reductions in gross immigration from outside the EU, which now stands at its lowest level since 1998.

• We have tightened the rules for family visas, and family immigration is down – by one fifth since 2010.

we are cracking down on abuse …

• We have ended the industrial-scale abuse of the student visa system we saw under Labour. We have closed down hundreds of bogus colleges, strengthened the English language requirement, and brought in new restrictions on the right to work and bring dependents. As a result, student immigration is down – by almost a third – since 2010.

… whilst attracting the brightest and best:

• At the same time, we have protected genuine students. University sponsored applications are up 7 per cent compared to last year – with an increase in the number of study visas issued to Chinese citizens (up 8 per cent) and Malaysians (up 27 per cent).

• There is no limit on the number of students who can come to the UK. All those who can speak English, have sufficient funds and qualifications, and can get a place on a genuine course can come to study in this country. And those who can get a graduate job earning more than £20,300 can stay to work after their studies.

• We can see strong growth in tourist and business visitors, with an increase of 15 per cent in visitor visas granted over last year, and rises of 40 per cent or more for China, Kuwait and the United Arab Emirates.

• Our immigration reforms are supporting British jobs and growth. Under Labour, in the five years to December 2008, more than 90 per cent of the increase in employment was accounted for by foreign nationals. But the labour market statistics released on 13 November show that the total growth in employment since the beginning of the parliament was 1,167,000 – 79 per cent of which is accounted for by UK nationals.

The Immigration Bill continues to build on our reforms

As today’s figures show, it will take time to clear up the mess we inherited from Labour, and we need to continue the reforms we have introduced since 2010. The Home Secretary and I are working with our Ministerial colleagues across the Government to protect public services and to ensure that our welfare system is not open to abuse.

The Immigration Bill, which is currently before Parliament, will make it more difficult for people to live in the UK unlawfully, ensure that immigrants make a fair contribution to our key public services, and make it easier to remove people who have no right to be in this country.

Fixing EU immigration

This week, the Prime Minister set out his long-term plan to fix EU immigration – and to control immigration from Romania and Bulgaria.

In 2004, the Labour Government made the decision that the UK should opt out of transitional controls on the new EU member states. They had the right to impose a seven-year ban before new citizens could come and work here, but Labour refused it. And when Romania and Bulgaria joined the EU, Labour had not learned the lesson. The other major lesson they didn’t learn was that failures in immigration policy were closely linked to welfare and education – if it does not pay to work, or if British people lack skills, that creates a huge space in our labour market for people from overseas to fill. As the Prime Minister announced this week, the Government is:

• training British people to fill those jobs by providing record numbers of apprenticeships, demanding rigour in schools, and building a welfare system that encourages work;

• changing the rules so that no one who comes to this country will be able to claim work benefits for the first three months. If, after three months, an EU national needs benefits they will only be able to claim for a maximum of six months unless they can prove they have a genuine prospect of employment;

• putting in place a new minimum earnings threshold, below which migrants cannot access to benefits such as income support;

• not allowing newly-arrived EU jobseekers to claim housing benefit;

• removing people who are not here to work and are begging or sleeping rough: they will be barred from re-entry for 12 months unless they can prove they have a proper reason to be here, such as a job; and

• clamping down on those who employ people below the minimum wage with a fine of up to £20,000 for every underpaid employee – more than four times the fine today.

As the Prime Minister also said, we believe it is time for a new settlement which recognises that, although free movement is a central principle of the EU, it cannot be an unqualified one. So, as part of our plan to reform the EU, we will work with others to return the concept of free movement to a more sensible basis. We will then let Britain decide by putting that reformed Europe to the British people in an in-out referendum. ”

(Based on a brief to MPs)

Opponents of the Conservatives have always sought to make out that the 1980s were a unique decade for greed and envy. They have sought to imply that it was deliberate policy of Mrs Thatcher to encourage and support greed.
I can assure you that as a sincere Christian Mrs Thatcher regarded greed and envy as sins. She wanted to encourage self reliance, self help and the protestant work ethic, not excess. Subsequent decades under other governments have had their fair share of the deadly sins as well.

I have not spent much time writing about Scottish independence, because I do not think the Scottish people are likely to vote for it. The latest polls show flagging support for the cause of independence.

As an Englishman I accept that the vote will be for the Scottish people to decide. As an Englishman I will become more engaged should Scotland vote to leave. I will want to make sure that the negotiation which follows the vote is fair to England.

I am writing today on this topic to give you, my readers a chance to set out your views if you wish. The fact that the vote is for Scottish people only does not prevent the expression of opinions or invalidate the views of voters elsewhere in the UK. It is our union too, and we have every right to a view without a vote.

Were the polls to turn round, and were Mr Salmond to win, certain results follow naturally. Warship building and maitenance for the Royal Navy would not continue in Scotland, as Labour and shop stewards in Glasgow have explained. I do not see how Scotland could continue to use the pound as her currency. Why should the Bank of England stand behind Scottish banks, if they got into trouble again? Surely we have learned from the troubled experience of the Euro that it is dangerous to separate political control from monetary control. The Chancellor has said he thinks it would be very difficult for the two countries to share the pound under the Bank of England, and that looks like an understatement.

It is true the two could share a monarch. The UK does not have exclusive use of the Queen at the moment. The two countries could not share armed forces, especially as the SNP part of Scotland has different views on weaponry from the rest of the UK.

I would expect that both Scotland and the rest of the UK would negotiate new arrangements with the EU in the event of a split. It is clear the EU would want to change our arrangements, as the rest of the UK would be over represented in the EU where representation is related to population. There would also need to be budget changes, to allow for the smaller tax base of the rest of the UK. Scotland will surely have to negotiate a new membership, as the smaller partner leaving the union of the UK. Will Scotland have to sign up to Euro membership in due course? Will she lose all benefit from the current UK rebate on contributions? She will presumably lose all the opt outs the UK has obtained.

The rest of the EU might see the split as a way to worsen the deal for the rest of the UK at the same time. I would hope that with a stronger English Eurosceptic representation in Parliament we could use it to have a very different and far less intrusive relationship. If, however, all this came to pass under a federalist UK government it could spell more EU control over the rest of the UK.

Whilst the Judge did not grant the petition to stop the planned construction of a High Speed Train from Los Angeles to San Francisco, he did make the State work out a new financing plan to cover the full high costs of the project before they can issue the bonds they wanted to sell to pay for part of it.

High speed rail in the USA is highly contentious and becoming very expensive. Will construction get underway next year as planned? Will the state find new ways of paying the very big bill?

Running a good business requires good housekeeping. Good modern factories are spotlessly clean. The best shops have well arranged goods, empty aisles and sparkle with their cleanliness. If you fly into Heathrow you see a busy airport around you, but you are not confronted by parked broken and decaying planes, piles of tarmac to repair the runway, or weeds growing high by the side of the taxiway.

Yet when you take a train into some of our town and city stations, you may see out of the window a railway wasteland. There may be sidings with weeds growing high, showing they have not been used or looked after for months. There are often piles of old timber, sleepers awaiting a use and other maintenance materials and parts stored carelessly in the outside weather by the tracks. There may be old and rusting carriages or waggons on abandoned track nearby. There may be substantial track that does not look as if it is much used.

All this gives the impression of a badly run business. Stocks cost money to buy and to keep out of use. Stockpiles held in all weathers out of doors will deteriorate more quickly than if properly warehoused. Disused equipment should be taken for refurbishment and reuse or sold for scrap, rather than hanging around in a siding.

There is also a lot of railway land that is not fully utilised. The land in or near to our major stations should have considerable development value. Of course the railway should keep routes it might need and space it may require for growth of its business, but at many stations it has more than this. It could remain the freeholder where development is a profitable prospect if it wishes.

The railway has access to such huge sums of state guaranteed borrowing and state subsidies, that it clearly does not think it needs to look after stocks, supplies and land. It does not make the capital work as hard as in most businesses. Many railway journeys show you through the carriage window that the railways, primarily Network Rail, are a long way off the pace of being a world class high quality operation. The capital base is very large and badly used and maintained. There are no profits before subsidy.

The press release from the Warsaw climate change conference under UN auspices was exceptionally thin. Only 37 states out of the 195 potentially involved now have “legally binding emission limitations and reductions” for CO2 under Kyoto. Warsaw was remarkable for how little most countries do want to do, and for how good many countries are now at getting out of any future binding commitments. Green is very much the last decade’s colour.

The press release said they had done preparatory work to take to Peru, and then finally to Paris in 2015 where they hoped countries would have something to offer for post 2020. However, the ambition is now for countries to offer “contributions” not commitments, and to police them themselves. Emerging economies have declined to join in as they see the need to expand their economies using fossil fuels without hindrance. They also think the advanced countries should send them money as compensation for the CO2 the rich countries have produced in the past, and they favour rapid transfer of technology on favourable terms to assist them.

Meanwhile the USA remains unenthusiastic about binding targets, Australia has opted out, and Japan no longer has the enthusiasm it had in the first Kyoto agreement. It looks as if the EU is largely on its own now when it comes to setting binding targets and to pushing through dearer renewable energy to replace cheaper fossil fuels. The USA is cutting its CO2 output by its new dash for gas, but this is the result of a policy based on exploiting a new carbon based fuel which offers cheaper energy, not based on binding commitments to cut CO2.

The climate change issue has become very bound up with the arguments over wealth and income transfers from the richer to the poorer countries. The UN hopes the advanced countries will offer substantial sums through a new international mechanism for “loss and damage”. They are also looking for routes to accelerate and enlarge financing to assist greener development.

It looks as if only the EU is going to press on with dearer energy and tough targets to cut CO2. As a result the world will not be saved from an excess of carbon dioxide, but industry and activity will continue to relocate from the EU to elsewhere in the world.

This morning’s announcement that they are not going ahead with the large offshore windfarm in the Bristol Channel is good news for energy users, as the power from it would have been dear and intermittent. The question remains, however, what new capacity is going to be built instead.