As news breaks of a large conservative victory by Tony Abbott’s Liberal/National Coalition in Australia the BBC sets about the task of retailing  propaganda from the losing Labour party. We are told Mr Abbott became Prime Minister  merely because Labour had been split and divided. We are assured his policies are not popular and played no part in his stunning victory. They underplay the magnitude of it, with the conservative  coalition on course for a large majority. They tell us his scepticism about climate change and his opposition to inward economic migration are unpopular. They will, they tell us, undermine Australia’s standing in the world.

           It doesn’t read like that in the Australian and world press.  Mr Abbott clearly stated his scepticism about global warming theory, questioning how much global warming there is and how much can be attributed to man made carbon dioxide emissions. He made opposing and then offering repeal of the carbon tax central to his campaign. He won a big victory despite his opponents showering him with disapproval for his climate change views.

          This makes it an important election and an important victory. It is the first time in an advanced country that an anti climate change mainstream party has ousted a pro climate change mainstream party, making it a central issue of the election. It shows that Australian voters want cheaper energy, and see its importance to living standards, competitiveness and jobs. I suspect hostility to dear and scarce energy brought on by climate change policies will spread to other advanced countries, as people see the damage dear energy does to living standards, and see how such policies simply drive the carbon producing activities elsewhere in the world.

           Mr Abbott also promised to take a tougher line on inward economic migration. The Australian  Labour party sought to match his rhetoric on this, as they came in office to see the unpopularity of their earlier relaxed borders approach.   He has also promised to balance the budget, recommending cuts in areas like overseas aid.

           It will  be interesting to watch how he gets on. Doubtless the BBC and their politically correct friends around the world will develop their attempts to undermine and belittle what he is doing. As of today Mr Abbott clearly speaks for the Australian people. They have endorsed his repeal of the carbon tax.  Some enterprising journalist should seek to ask Lynton Crosby what he thinks of Mr Abbott’s winning election strategy. The issues and the viewpoints were very different from those favoured by the EU, which continues with dear energy and rapid migration policies.

 

               We have rightly been asked to examine our consciences when it comes to the mighty subject of war and peace. There are times when the UK, a country with powerful armaments, a place on the Security Council and a member of NATO, does have to use force to stand up to evil. I am no appeaser or disarmer. Like most Conservatives I believe the UK should play an important role in the wider world. I am prepared to vote for the military expenditure we need to do just that.

             When a country acts illegally, as Argentina did in seizing the Falklands, or Iraq did in invading Kuwait, the UK was right to use its formidable arsenal to evict or help evict  the invader. There are times when the UN needs member states willing to use their forces for peace keeping or even for peace making. The UK should make its proportionate contribution as befits a Security Council member.

             As a leading member of the UN it is also important that the UK upholds the doctrines of international law, and only seeks to intervene where the use of military force can make things better or where our national interests are threatened. Sometimes a strong internationally committed country has to act for peace and strive through diplomacy, rather than resorting to arms.

              The immediate question before us is one of bombing. Bombing, which now includes unleashing missiles from remote locations as well as dropping bombs from high flying aircraft, has had a chequered history, both morally and in terms of effectiveness. Usually conflicts are ended through troops on the ground occupying territory, evicting tyrants and assisting new governments into place. It is difficult to do any of that from 30000 feet or from a missile platform hundreds of miles away. It is true that air power is an important adjunct of forces on the ground, and may be an important means to destroy and damage an enemy’s military force.

             Prior to the “modern era” fighting was normally confined to men in the military. There were conventions of war conduct, which included not killing women, children and the elderly. In the twentieth century governments introduced the idea of “total war”. Suddenly it was accepted that a country at war could unleash bombing attacks on women, children and the disabled at home, as well as using force on the battlefront. The war often  turned to the home front.

             Those who sought to defend this approach could argue that twentieth women joined  the uniformed services in support roles, and undertook much of the war material production in the factories. As the factories were a legitimate target, then why not the women who worked in them? They might argue that bombing the home population might bomb the country into submission, leading to less death overall by shortening the war. In practice the heavy German and allied bombing campaigns did not of themselves end the war in Europe, and only the use of A bombs ended the war with Japan. The devastating  German attacks on cities like Coventry and the continuous bombing of London did not break morale nor lead to a shortening of the war.

              Whilst I am full of admiration for the bravery and skill of the UK’s Bomber Command, and whilst I understand the  background to bombing in the Second World War, there has been debate about what general bombing campaigns can achieve in future conflicts.

              Today the issue is simpler. The west is not directly threatened in the way the UK was by  Germany in the 1940s. Syria is not threatening to bomb our cities. We are rightly appalled at the atrocities we see in Syria. It is difficult to see  how unleashing some bombs and doing damage to part of Assad’s military machine can make the situation better. There is always the danger of killing people we do not want to kill by mistake. There is the opportunity we would afford Assad to kill the innocent himself and fake the evidence to blame the west.

            I can see that an all out war to evict Assad from power would prevent him in future carrying out atrocities. But without boots on the ground and a US military takeover, who is to say who might then take power in Syria and how they might behave in the chaos that the intense  military onslaught needed to oust him  and the destruction of the regime had created? More likely the US wishes to do limited damage and to kill just a few people. I cannot see how that makes Syria a better place or how it removes Assad.

 

 

 

 

 

I promised to come back to Mr Carney’s “forward guidance” and Nottingham speech. I needed to undertake a long detour via Syria, given the run of news and the business before the Commons.

Mr Carney inherits a monetary policy badly damaged by successive misjudgements of his predecessor and Bank of England team. They first allowed too much money and credit in circulation. They failed to raise interest rates soon enough, and failed to work with the FSA to rein in banking excesses prior to 2008. They then held interest rates too high  for too long and assisted in squeezing the banks too hard, creating the worst crash of the last 80 years. Some of us warned about both these mistakes in good time, to no avail.

He inherits a monetary policy that is at last beginning to create enough money to finance a recovery. It relies heavily on the money created by the central Bank and given on easy terms to the banking system. The banking regulatory side of the Bank of England  is still applying the brakes to the commercial banks, necessitating the continuation of extraordinary monetary policies. These mean ultra low interest rates, which damage savers, and a greatly expanded Bank of England balance sheet. The failure to split up RBS and to get  all the semi nationalised banks back into shape more quickly has delayed rccovery and required more extraordinary Bank of England measures. I would have preferred them to fix the banks rapidly and do without the extra money printing.

If you take the monetary base  at the beginning of  2008, the UK’s monetary base has now increased fivefold. The US is almost the same, with a fourfold increase. Japan’s has merely doubled, but they plan another doubling from the end of last year. All these countries have resorted to money printing to offset the weakness of the commercial banking systems.  The total amount of  money amongst the leading advanced  countries has ballooned from $3trillion to $8trillion. The reason that has not caused a runaway inflation is the weak state of many commercial banks and the new extra tough controls placed upon them to stop them creating money and credit.

Mr Carney issued forward guidance to say interest rates will not go up soon, and probably not before 2016. The markets meanwhile have ignored his advice, and have driven government borrowing rates up. The 10 year cost of money for the government is now 2.99%, compared to a low of under 1.5%. It has risen more than 1% or 100 basis points since Mr Carney’s arrival in the UK. It rose above 3% yesterday.

The markets are doing this because the extra printed money is beginning to boost asset prices, and may in due course feed through into higher inflation as the banks mend. Mr Carney has responded by saying he will take banking action to stop another asset bubble. He wants to keep people believing interest rates will stay very low, so they commit to more spending and to investing in riskier ventures. I think he is right to argue that official interest rates will not go up for a couple of years. It is important for the strategy to work that the markets come to believe him. He will later need to demonstrate the ability to fine tune  through banking regulation to avoid a real  assets bubble. There is already a bond bubble, created by official interventions in the main  global bond markets.

 

 

 Those who say Mr Cameron has been marginalised by the Parliamentary vote on Syria are quite wrong. Mr Cameron could play a crucial role. He  should speak for peace. He should seek a way through the rows between the USA and Russia. He should speak out to get the participants in the crisis around a table.

He could also propose a different way of responding to Assad’s atrocities. Why not seek the agreement of the international community to outlaw Assad, telling him should he ever leave Syria he will have to stand trial for atrocities where there is evidence of his involvement, and taking further  action to freeze any money and assets he and his cronies may have abroad until they have  answered the charges against them. The very least the west should do is to proceed by legal means and establish the evidence.

 

                  Since 2008 the US Federal deficit has fallen rapidly, from 10% of GDP to around 4% this year, from a peak of $1413 billion to an estimated $607 billion for the year  to end September 2013.  That’s a big cut in cash terms, a big cut in real terms, and a big cut as a proportion of GDP.

                 At the same time the US economy has recovered well from the big recession in 2008-9, and is now producing more than at its pre recession peak. According to austerity theorists, this should not have happened. Whilst some of the deficit reduction comes from rising tax revenues as a result of growth, some also has come from actual cuts in overall public spending. This contrasts with the UK where public spending  has continued to rise overall.  This year US federal spending is down by 2.9% in cash terms, rather more in the much favoured real terms.

            UK total public spending is up by 7% this year (2013-14), (Red Book  2013 p 103) though  last year’s figures are a bit distorted. It is up 4% compared to 2011-12.  Borrowing is down on the peak levels of 2008-9 but still a higher proportion of GDP than in  the USA.

               Those who have argued that you can cut too far and too fast should study the US example. It shows that you can stimulate more private sector led growth if you cut spending and the state deficit fairly rapidly, whilst maintaining a loose monetary policy. The US private sector has performed extremely well, to offset the substantial  cuts in public spending.

                  In the UK where the  public spending growth rate has been brought down and the amount of extra borrowing cut, there has also been a recovery. It is picking up speed now, though during the frst two years of the Coalition when public spending was still growing more quickly there was little overall economic growth. The UK is showing  as with the USA  that starting to tackle the deficit, far from impeding recovery, assists it.

                It was interesting this week to see Rachel Reeves, one of  Labour’s Treasury team, given  the job of cancelling Labour’s policy of a VAT cut to give the economy an immediate boost. Apparently the UK economy is now growing fast enough for Labour to no longer think it needs a one off tax cut with extra borrowing.  Labour also needs to ask themselves why Mr Obama’s cuts strategy, cutting spending and borrowing more drastically than the UK, has delivered faster growth sooner. Some honesty on what the figures tell us would be a good starting point.

 

 Today Mr Hague will hold a meeting with the Syrian “opposition” to see how he can help without sending them arms.

I do hope during his busy day he finds time for a British priority – sorting out the juvenile  behaviour of Spain towards Gibraltar. I do not trust giving this task to the EU to do for us. I want the Foreign Secretary fully engaged, with a strategy to press Spain into better behaviour on her international border.

 

The lobbying bill before the Commons has upset 38 degrees and some other  campaigning groups. They argue that if enacted it will limit the freedom for charities to campaign about political matters.

Their arguments seem to be based on a misunderstanding of the current law and of the intents of the Bill. Under present election law a third party cannot normally spend money on promoting an individual candidate or political party during an election period, without the permission of the candidate or party. The  cost they incur in such a promotion rightly has to be part of the approved budget of that candidate or party, and properly reported like all party expenditure in an election period. The Lobbying Bill reasserts but does not change this fundamental point.

Nor does the Bill seek to change the rules on charities. Under charity law they are not entitled to give money donated for their charitable purpose to a political party. They cannot intervene directly in an election with charitable money, but they are entitled to undertake politcal campaigning relevant to and in support of their charitable aims and objectives. None of this is changed by the Bill. Some readers of this blog might want the Bill to make it more difficult for charities to be involved in politics, but this is not the aim of this particular piece of legislation.

If a third party  wanted to support my candidature, because they support my views on a topic or range of issues, they would have to approach my Election Agent and agree what they would spend and how that spending would be controlled and reported. Anything they spent for me would come off the permitted total I am allowed to spend.  Without such a rule campaign spending limits would be meaningless, as candidates and parties could simply operate through tame third parties and spend more. It is and will remain an election offence to spend money on promotion without authorisation and without reporting it to the authorities after the election.

The Bill reminds third parties of these rules, and reduces the limits they are allowed to spend on promoting  parties.  It is silent on the definition of charitable purposes, which will remain as before.  Many people who give money to charity think a charity should keep out of party politics altogether, and would not think it appropriate for a charity to back a certain party or certain candidates.  The Bill does not change charity law concerning charities involvement in campaigning politics. Again it has always been illegal for a charity to make its main purpose political, but it is and remains legal for it to try to influence government and Parliament on matters relevant to its primary charitable purpose.

I hope constituents who have written to me about this mater using the 38 degrees email will be reassured by the nature and intent of the Bill. I hope you will agree that charities should not be vehicles for promoting political parties and candidates in elections. I also hope people will understand there does need to be a  framework of election law which applies to everyone  so that campaign spending limits can be enforced. The Bill does reduce the amount a third party can spend on the campaign in England to a maximum of £319,800. It also increases the amount of permitted expenditure for a third party in an individual constituency from £500 to £700 without authorisation of the Election Agent.

 

The Foreign Office has always had a passion to give in to anything European. They seem to see more EU government as a good in itself, and the UK’s destiny. They have been overwhelmed by pessimism about an independent UK, and by a love of the power the EU gives to officials at the expense of electors and their elected Ministers.

The new UK foreign policy we need would be based around the construction of a new relationship with the EU. That relationship would be based on trade and mutual co-operation where it made sense to do so. It would be outside the federalist treaties. It would restore the UK’s right to an independent foreign policy, borders policy, criminal justice system and much else.

The UK would have a new financial deal which allowed us to keep more of our own money, and took us out of the financial obligations of the EU Treaties.  We would  regain control of our own waters and fishing grounds.

The new relationship would still see the UK seeking to influence the EU and building alliances with it on matters of common concern. We would meet their standards for exports of goods and services to them, but be free to choose our own which might be different for our own domestic market and for other overseas trade.

The policy would require us to rebuild a complete chain of embassies and Ambassadors for the whole world, no longer relying on some EU Embassies to represent us. It would also of course free us of our share of the joint costs of the EU diplomatic service.  Any common defence commitments and interests with our EU neighbours would be handled through NATO, not through the EU.

Negotiating this should be the prime task of the FCO for the next three years.

 

         There have been some absurd statements and articles about the way the UK will cease to have influence, now we have decided not to use force against Syria.  If anything, the contrary is true. We have a better platform now to influence the debate in the US, and to play a bigger role in diplomacy and peace brokering.

          The idea that we will lose influence is based on the preposterous Foreign Office and Chatham House doctrine that the UK only has influence in the world if it agrees with any proposal the USA puts forward, and only has influence in the EU if it agrees with everything the Commission wants. Clearly the authors of this dogma do not understand the meaning of the word “influence”. Were the US Congress now to turn down the idea of military intervention in Syria, that would indeed show the influence of the UK Parliament on world affairs.

          If the UK receives a phone call from the USA telling us what they plan to do by way of military intervention, and we agree to help, we have not had any influence over the decision. If the EU tells us we will turn up a discuss a new law on a stated topic when we have no wish for any such law, we have no influence. The establishment insiders confuse “influence” with “inside knowledge of an other’s intentions” which they like to have. It is easiest to get this inside information if you always agree with its impact on you and do not “make trouble” by disagreeing. The UK in the last decade just seemed to give in or go along with anything coming from either Washington or Brussels.

                  Some of them argue that if we accept the strategic decisions of the US/EU, we can then have some influence over the detail of how it is done. That may be possible, but it also may not work. We are either in the position where we have a little influence over the tactics, but none over the strategy, or in the position where we are simply taking dictation from a  superior power.

                If we want to have more influence over what happens in  foreign policy in the wider world then we need to have our own often distinctive policy, and argue for it through NATO, the UN, with our US ally and the rest. We will have influence when we have a good proposal backed up by good arguments. We will have influence when we command votes at the UN, or support within NATO, or persuade the US to our position.

                  When it comes to having “influence in and through the EU” that was made extremely difficult by the abolition of many vetoes over policy. It is far easier to influence an EU policy or law if you have a veto, than if you are inside and likely to be crushed by majority voting. The Foreign Office gravely weakened this country and its scope to influence events by so heavily backing Nice, Amsterdam and Lisbon. That is why we need to put a new relationship with the EU at the heart of  our policy. A new relationship with the EU is the only way to re-establish an independent UK policy.

 

            Mr Obama has shown wisdom in asking Congress for approval of any military strike against Syria. His words were well chosen. Correctly identifying the American public, like the British public, as war weary, he ascribed to them a good motive. He said they understood the USA cannot resolve the deep and ancient conflicts of Syria by bombing.

            That is exactly the main point some of us were making in the Commons on Thursday. Far from marginalising the UK or rewriting the UK’s future role as a non power, our debate has clearly sparked some new thinking in the Oval Office. The President referred to our vote. He either wants the US Congress to do the same, to get him off the hook, or for the US Congress to explain and define a military action he could take that could unite the American people again behind such intervention.

            I think the US Congress will find it difficult to overcome well based war weariness by the American people. It is now their shared political challenge with the President, who understands in a  democracy you need broad support if you are to visit death and destruction on other countries, however evil their governments.

            Those of us who did not support limited  cruise missile attacks on Syria did so for the best of reasons. Such attacks can kill the innocent as well as the guilty, they can harden the resolve of bad men, and they can get in the way of the eventual political process needed to resolve Syria’s internal conflicts. Sometimes you have to tell your “closest ally” just that, and sometimes he is wise enough to listen.