The recent reactions to Mr Cameron losing a vote in the EU sum up one of the main reasons so many UK people do not like the way the EU  works. It is not democratic. Opposition is  condemned and public disagreements are unacceptable to the true believers. What we need is an open and active opposition within the EU constantly challenging the need for new laws and the form those laws take. Instead we have a conveyor belt to federal control, a machine for putting all of human life under EU law.

In the UK the Labour minority in Parliament regularly disagree with the government, push it to a vote and lose. The media do  not then run endless stories saying “Labour isolated” or ” Labour a pariah”. When Labour do it they are simply doing their job of providing opposition. Often I think them wrong in their view, but I think them right to press it to a full argument and vote. Occasionally  I agree with them. Opposition gives MPs choices day by day, and gives the public choices election by election.

The UK’s view that we want to trade, be friends and have scope for political co-operation with other EU countries  happens to be our view as a country. No serious party now recommends joining the Euro or stands on a platform of more EU law and more EU control of our affairs. It is therefore imperative that our leaders put the UK view in EU Councils. It does not make us a pariah. It simply means the UK is a democratic country which wishes to be largely self governing. Judging  by the comments of others after the Juncker vote we are not alone anyway. There are forces within all the main EU countries that think the EU presumes and does too much, and there are forces within other member states governments that recognise the lack of democratic accountability in the way decisions are often taken by the EU.

I understand those parties peoples and countries that want to create a United States of Europe whose democratic accountability will come from its own elected Parliament. We are not there yet, as member states governments and Heads of government still have more democratic legitimacy and accountability than the various blocs of votes in the European Parliament.  We are arguing over how the hybrid structure we have today can work, and how it can straddle the wishes of those who want a United States of Europe and those people and countries like the UK who do not.

 

The government is struggling to collect enough CGT. Maybe the 28% rate is a turn off. Maybe they should have listened to those of us who argued to keep labour’s lower rate of 18%, as the best way to maximise CGT revenue. The government should ask itself why is CGT the vanishing tax?

You would have thought CGT should be surging. After all the Stock Exchange is at a new high, and property prices especially in London have been booming. Instead CGT revenue has been falling – from £4.337 bn in 2011-12, to £3.927 bn in 2012-13 to £3.908 bn in 2013-14.

The Treasury and OBR forecasting models are clearly far too optimistic. Just look at the way they accelerated the forecasts for CGT revenue for 2013-14 as the economy started to recover more rapidly:

June 2010   estimated £3.3bn

March 2011   estimated £3.7bn

March 2012   estimated £4.9bn

March 2013   estimated £5.1bn

Current outturn  £3.9bn

In other words the CGT revenue actually received on latest figures (after the year end) is down £1.2bn or 30% of the achieved total compared to last year’s forecast. It is still under half the level reached in 2008-9 with a lower rate.  (£7.852bn)

The Treasury do now accept a Laffer effect on CGT. They agree that a higher rate than 28% could lead to lower revenues. It looks from the figures as if 28% yields less than 18%. It certainly shows their forecasting model is way off beam, as they think a stronger economy and higher asset prices leads to rapid growth in CGT, when it is still leading to a fall.

The reason the optimising rate for CGT is low is people can easily put off taking gains, or can find offsetting losses, when they think the rate is too high.

 

 

I am glad David Cameron has highlighted the system for choosing the next President of the Commission, and has tried to get others to see this is an important choice for every member state of the EU. It  will have substantial effects on how they are governed in the next five years.

As a result of his intervention there has been horse trading about the policies which the EU should follow. France and Italy have demanded less austerity from Germany as the price of their agreement to Mr Juncker. The centre left will demand one of their people for the next big post.  These compromises with what any given country wants, and the permanent erosion of national democratic accountability are all part and parcel of belonging to the Euro and the EU. The new President of the Commission will be very powerful, because he will be the master of compromises between individual member states and between the Council and Parliament, driving relentlessly forward with the usual centralising agenda. At the end of this new Commission, like its predecessors, member states will have lost more  power and the EU will have gained it.

Mr Cameron has reminded every other state that the UK needs a new relationship with the increasingly centralised and EU controlled Euro area, We should not worry that the UK is “isolated” on this. It would be surprising if we were not , as the UK is in a unique position of not wanting to go into the Euro, not having to go into the Euro, and wanting a far less intrusive way of trading and being friends with the rest of the zone than is currently on offer.

To those who say Mr Cameron should not have sought to block Mr Juncker because he could not win, I say you are wrong. This episode has reminded all in the UK that the EU is not “coming our way”, the new Commission is not about to respect national Parliaments and governments, the EU is not about to become the mere  trading area some UK people thought they were voting for in 1975. The  battle over Mr Juncker was but the first skirmish in a long negotiation of a new relationship for the UK with the rest of the EU.  If the rest of the EU continue to be so unsympathetic to UK requirements, more UK voters will draw their own conclusions about the desirability of our continued membership.

 

The free movement of workers was a central plank in the original EU idea. It is now at the base of much of the discontent and antagonism towards the EU manifest in big minority votes for anti EU parties in many parts of the region.

There are three different elements to free movement. The first is the deep unpopularity of free movement for the small minority of crooks, terrorists and criminals that attract considerable attention. It is bad enough for a country to have its own home grown crooks and criminals, but even worse if you have to allow them in from other places without sensible border controls to tackle the issue. Many people in the UK want the UK government to have more control over our borders, and to have our own criminal justice powers to deal with cross border crime issues as well as with home grown.

The second is the widespread opposition to benefit tourists. The original idea was the free movement of workers. Few think someone should be able to travel around the EU to find the parts of the region that offer the highest benefits for being out of work and then settle down to a life of living off the state. Surely the EU countries could come to an agreement that benefit tourism is banned?

There remains the related issue of workers moving to countries with the most generous benefit top ups in employment. That too is against the spirit of the free movement of workers. A member state which has to pay the bills for subsidised housing or top up benefits should be free to make its own rules of whether it wishes migrant workers to qualify or not. If it has a skills and labour shortage it may wish to be generous. If it has a lot of home unemployed it may not wish to offer migrants such generous terms.

The third is the issue of migrant labour under cutting home employees. This has become an issue since a number of countries with much lower wages joined the EU. Free movement of workers is easier to  manage and produces less mobility where a group of relatively rich countries with high employment levels form a grouping. As soon as you allow low wage countries in, or countries in the area develop very high unemployment levels, then rates of pay for migrants becomes an issue with established workforces. The EU partially recognised this by allowing countries to delay opening their labour markets to new entrant countries – a freedom the Labour government did not use in the UK. The next development could  be to have restricted  opening of the wider employment markets, geared to levels of average earnings in their own countries.

 

 

 

For the umpteenth time parts of the media cover today’s rehash of the 3 million jobs at risk lie about the EU. Why? If the UK left the EU  there would be a trade deal, as the rest of the EU has always accepted, as they sell us more than we sell them.

3 million jobs to go is not news. It is not even interesting olds. It is simply a lie.

 

I did not see England draw with Costa Rica yesterday as I was working at the time. The edited highlights did  not take long on tv and mainly revolved around Mr Rooney failing to score after he came on to add some experience and  dazzle. I did see the interview with Mr Hodgson who denied this was a bad result or another bad performance. He found plenty to admire in the way our team played, and was full of hope for the future. Apparently Costa Rica 0 England 0 is fine,a  work in progress, a sign we might have some better players at some date in the future.

Nor did I watch England’s cricketers nearly save a match against Sri Lanka that they had thrown away on the previous day. There was a genuine highlight in that with a century from a new player. I did hear on the radio the post match interview with the Captain. At least that was forensic and honest. The Captain admitted his own poor form with the bat. He accepted the English bowlers failed to bowl the line and length the plan required and everyone agreed they should have bowled. He accepted that this defeat was bad news and showed the team had to learn winning ways again. He recognised that to win the team has to apply pressure when they are ahead, and learn to win the crucial sessions or big moments.

So there we have it. The soccer team did just fine by drawing. The cricket team knows it has done badly for six of the last seven tests and wants to do better. I suspect it is easier to do better if you first admit the scope and depth of the problem.  I found Mr Cook’s interview more realistic than Mr Hodgson’s.

It comes to something when a leader of the Opposition reads in papers usually friendly to his cause that senior figures in his party do not want him to stay on after he has lost the General Election. It is particularly strange to see this when most polls still put Labour ahead for 2015 and some show Labour winning an overall majority. So why is this happening?

In part it is the arithmetic of the polls. To be sure of winning an opposition party needs to be well ahead at this stage, as the run up to a General Election, particularly with an improving economy, may see a swing to the governing party. In part it is Mr Miliband’s defensive and unambitious strategy. Most of what he is trying to do is geared to reassuring core voters rather than winning new support.

Mr Miliband’s main problem has been his approach to the economy. He spent the first two years in opposition claiming that the government’s economic strategy would lead to further recession. He had no plan B for when recovery broke out, and looked upset that things are now improving. He spent the next period defining a new campaign about the “cost of living crisis” as he called it, just in time for inflation to slump, employment to pick up, and some wages to start to rise more than prices. Again his timing was poor and his ability to predict was faulty.

His main aim has been to run a series of linked campaigns against big business. Rightly seeing that big banks, big oil companies, big energy companies and others are unpopular, he sought to boost his popularity by threatening them. Each individual policy polled well. Who wouldn’t like a cheaper energy bill, cheaper fuel or a more attentive bank? Taken together, however, these policies have probably also weakened Labour’s rankings for economic competence. People are canny enough to know we do need big business, warts and all, and a government could make things worse by the wrong kind of intervention. Say it produces an investment strike? Say the big companies find ways round the price control?

Mr Miliband has to woo people who run businesses, who set up for themselves, who take risks, who save, who have decent jobs. He needs more of them to vote for him. His current strategy sends out the message that only the poor are safe voting Labour. That was not the way Mr Blair or Mr Wilson won elections.

 

As someone who would never be considered for the EU Commission Presidency, coming from the wrong country and holding the wrong views, let me enjoy the privilege of the interested outsider and sketch what needs to be done.

Any incoming President has to be wedded to the success of the Euro area, and aware of the remaining dangers to it. He or she would also be wise to want a solution to the British problem, where the UK wishes to reinforce its absence from the Euro by avoiding political union. Solving the two problems together is easier than regarding the British problem as a nuisance or a different issue. They are in fact two related problems. The British wish for more distance from the EU core has grown as the core has centralised more to make the Euro work.

It is fashionable to think the only way to make the Euro work better is to centralise everything more. One possible answer to the recurring Euro crises would be to create a country called the USE. Political union would mean not just a common criminal law, open borders, free movement and a common foreign policy. It would also need large transfers of money from rich to poor. Bavaria would need to pay the unemployment benefit bills of Greece. German taxpayers will need to stand behind Spanish banks and be willing to  bail them out if they fail. I am not sure German, Dutch and Austrian taxpayers are ready for that amount of commitment yet.

The other way to allow the Euro to survive is to build on the compromises and concealed assistance apparent  in the current scheme, but to add policies to the EU generally which promote greater growth and more employment. This would ease some of the tensions and cut some of the bills for economic failure in the countries which are struggling within the Eurozone. Such policies might also be more attractive to the UK.  Today the richer countries stand behind the weaker banks of the poorer countries via the ECB. They allow transfers of money through the cheap credit lines the ECB extends to banks in struggling countries. They may end up allowing money printing in some form or other to try to get the value of the Euro down and the levels of economic activity up.

So what are the policies which the EU could pursue which would promote more growth  and reassure moderate Eurosceptics from the UK? They would have to be policies which cut the amount of legislation and regulation from the EU. We need actions which return control of activities to national governments from Brussels, or give national Parliaments more say over which proposals from the EU any given country adopts. Failed common policies like fishing and agriculture need reform. Many laws and regulations can be removed as you do not need to force everyone to make and do things the same way to be able to trade with each other.

More importantly, the EU needs to see that its biggest mistake in recent years which is doing great damage to the potential of industry across the continent, is the energy policy. EU countries cannot sustain the industry they have or increase the industry they generate all the time the EU imposes much higher energy prices on economies than the USA or Asia. This still leaves the vexatious issue of free movement of workers  and benefit seeking , which I will return to in another post.

 

It is an odd idea for the EU to hold an important meeting at Ypres and then to say the participants cannot have a good row there because of the past tragic history. Surely the whole point is to pursue disagreements by words and politics rather than by shells and machine guns?

Mr Cameron has every right to dig in over the appointment of the next EU President of the Commission. This post is not the same as choosing a new Cabinet Secretary. The President is more than a very senior official. The President has direct powers to act, and will help shape EU policy and laws for the next five years. He will also have a face and a voice in  EU politics like a senior politician. The fact that he is digging in when he may well lose the vote just shows how far apart the EU establishment is from reformers and the UK.

Mr  Cameron represents an important country in Europe which has no wish to go the federalist centralising route. In the recent EU elections more than half the UK voters voted deliberately for anti EU or anti federal government parties. The socialist/Labour federalist party deliberately avoided all discussion of the EU agenda and  future EU laws, and of their candidate for the EU Presidency. They realised to talk about them  would make them more unpopular. In no sense did the UK vote for or against Mr Juncker or any other candidates for the Commission Presidency.

The problem for the UK is the European Parliament was given co decision powers at Lisbon which mean that if a majority of the Parliament agree about who should be President of the Commission they can hold out until the Council has to propose him. They have a veto on any candidate they do not want. Mr Cameron wishes to defend the right of the Council to propose and decide the Presidency of the Commission, on the reasonable grounds that the Heads of government have a better mandate and more popular support than the MEPs. The trouble is, that view requires the modification of the Treaties to reflect it fully in legal reality.

All this just goes to show the UK cannot be part of the emerging superstate. The rest of the EU is a single currency busily creating a country to back its adolescent money. The UK needs a new relationship with this grouping as soon as possible. We want to trade with them and be friends with them, but we do not wish to be part of their political union. Lisbon was the wrong Treaty for us.

 

Apparently Roy Hodgson is the right man for the England manager’s job. He is paid an estimated £3 million plus, and is eligible for various bonuses, making him one of the best paid national managers. The FA did not stint in their cash or verbal support for their man.

In his last four managerial posts his teams have struggled to win enough games. Finland won 27% of their matches under him, Fulham 39%, Liverpool 42% and West Brom 37%. He collected no silverware during  any of those assignments.

The manager’s role includes selection of squad players and of teams, training of squad players, and leading the team on their formation and tactics for each match.  Clearly things have gone wrong in each of these areas in Brazil, with many armchair pundits having their own views on which were the worst errors.

The less well paid Uruguay manager worked out how to inspire or allow Senor Suarez to show his aggression in running into space, his skill at controlling the ball and his devastating ability to shoot when in range. Senor Suarez has not been the easiest player for the Liverpool manager to manage. Mr Hodgson did not have the same success with his chosen celebrity player, Mr Rooney.

I would be interested in your views on whether Mr Hodgson is the right man for the job. I would also be interested to hear your thoughts on his remuneration. I fully understand the idea of paying the England manager multi million bonuses if the team wins lots of games and gets into the more advanced rounds of the World Cup. Had England done so then there would be big increases in fan base, shirt and memorabilia sales revenue and tv audience for the English and domestic league  games.

I wonder what would happen if the FA said an England manager should have a basic around 10% of the £3m figure mentioned in the press with  most of his possible  pay performance driven. This would still leave the manager well paid earning many times the average fan’s income with no money worries to divert him from doing everything needed to get England into winning ways. It would give him every incentive  to win the big bonuses that would then be justified as milestones were achieved.

The winning English rugby team that lifted the World Cup considered so many things that could add the extra bit to performance. They had an eye coach, who apparently told them their eye muscles were the most important muscles they had. They needed to train them to see the game position, find the space to run and kick into, and see their support players. The English soccer team need great ball control skills, need to read the game and create space just like the rugby players. Winning is about  detail and dedication. It is about practicing for the opportunities and circumstances that a game may create.