The Unions have been much in the news this week. There has been debate in the Commons about the government’s proposal that there should be some independent check on the accuracy of their membership lists used when balloting members on industrial action and other matters. There has been discussion of Mr Miliband’s  attempts to negotiate a new settlement with the Unions for the Labour  party.

           I welcome Mr Miliband’s proposal that Trade Union members should have to opt in to the Labour party political levy if they wish to do so. It will give everyone a clearer view of the true level of individual member support for Labour. It is a pity members cannot choose to opt into membership of other parties if they prefer, if the movement stays with a political levy at all. It should be up to the members to decide this matter.

            If a large number of people currently paying the political levy to Labour no longer opt to do so, the Unions will be richer and the Labour  party poorer as a result. The one advantage of the old system of the levy was it gave Labour money direct without the Union leadership deciding on the gift. Under the new system Mr Miliband will have to negotiate with or at least talk to the Union leaderships about sending him larger lump sums from the Unions themselves.

            I would be interested in your views on whether  you prefer the new system to the old, and what you think should happen about large grants from Unions to Labour. In the interests of fairness it is also important to discuss the receipt of money from rich individuals and companies, something which all 3 main parties enjoy.  Money these days mainly comes from entrepreneurial companies where the owner/Director is in effect giving his own money. Large quoted companies tend to be international, avoid making UK political donations, and understand if they wished to they would need wider shareholder support.

               I strongly favour private money from volunteers rather than state money from taxpayers to fund political parties. Clearly there have to be rules, and each party has to ensure it cannot be said to have traded policy for money. If a rich person gives money because they like a policy you have adopted and generally agree with your stance, that is fine. If a rich person says I will give the party money if it changes its policy in a way which clearly benefits the donor that is wrong and probably illegal.

 

 

On Tuesday David TC Davies held a debate on global warming and government policy in Westminster Hall.  A DECC Minister replied.

It was well attended for a debate in Westminster Hall, as an increasing number of MPs are concerned about the impact of dear energy on household budgets, industrial development and our economy generally.  Andrew Tyrie, Peter Lilley, Philip Davies and Christopher Chope who had disagreed with the Climate Change Act in 2008 were joined by some newer colleagues who spoke about the damaging impact dear energy can have on industrial jobs. Just two Labour MPs, the Minister and the front bench Labour spokeswoman defended the UK legislation and the EU framework of anti global warming measures.

Graham Stringer, a thoughtful Labour MP with a scientific background was critical of some of the so called science published on the subject of global warming. Several MPs sought to establish that there has been no global warming this century, and asked at what point the government would expect scientists to revise their models in the light of this evidence. Mr Davies pointed out that as the proponents of global warming stress climate change is a long term business, shouldn’t they show graphs going back hundreds of thousands of years and not just concentrate on the last 150 when there are better records?

The global warmists were asked if they accepted that there were plenty of other potential causes of global warming than manmade CO2, which had caused past periods of global warming? If they accepted this obvious truth, how could they be sure any recent warming was down to human CO2 and not one of these other factors. They were asked why they concentrated on CO2 and not on water vapour.

The so called “deniers” roundly rejected any idea that they denied the fact of climate change. All said they accepted the climate has changed a lot in the past and will doubtless change again in the future.  They accepted that CO2 is a greenhouse gas and can have an effect, but that in order to model and predict accurately all sorts of other influences on climate and weather need to be taken into account.  They asked why we did not adapt as and when the climate changed, as a cheaper and more effective option than trying to prevent it.

To me the most powerful part of the sceptics case was the practical one. How can  making energy especially dear in the UK/EU help, when it leads to industry shifting its jobs and processes elsewhere rather than stopping them? If there is to be no global agreement to curb man made CO2 what is the point of a relatively small producer putting itself at a massive competitive disadvantage?  The US, Japan, China and others do not accept the Kyoto process. Australia has just voted down the carbon tax. We want more and better paid jobs in manufacturing in the UK, so we need realistic energy prices.

 

 

There have now been four occasions when a Commons debate and vote has decisively changed Coalition policy and actions and one when a letter signed by 81 Conservative MPs changed the government’s approach. It shows that this Parliament is a stronger Parliament than its last few predecessors, willing to challenge and if necessary defeat the government.  We need to ask why this is happening. There are lessons for government, for Oppostion and for everyone else interested in  the evolution of our democracy.

On 24th October 2011 81 Conservatives voted for David Nuttall’s amendment seeking an EU referendum, with 19 more abstaining.  The pressure for a referendum from Conservative MPs finally resulted in the Prime Minister’s Bloomberg speech and the offer of a referendum should there be a majority Conservative government next time.

On 10 July 2012 91 Conservative MPs voted against Lords reform, in a rebellion against coalition policy led by Jesse Norman. In  August the government announced it was dropping its Lords reform Bill.

On 31 October 2012 53 Conservatives supported Mark Reckless’s amendment to cut the EU budget. Labour also voted for his amendment, and the government was defeated. The Prime Minister then successfully negotiated a reduction in the EU budget.

On 5 June 2013 Andrew Bridgen sent a letter to the Prime Minister signed by 81 Conservative MPs urging him to hold a debate and vote before making any further commitment to Syria. The Prime Minister accepted this advice.

On 29th August 2013 31 Conservatives voted against the government’s motion on Syria with Labour, defeating the government after it had in effect accepted it had no majority for military action and would not  be bringing forward a second vote to approve a  missile strike as required by the amended motion.

This pattern of rebellions against the recommended line of the whips is unusual. Firstly, the rebellions bring far more MPs to vote against the government than in previous Parliaments. Secondly, they tend to be on the really big fundamental issues. Thirdly, they are not made bitter by personal rivalries or by people seeking to become leader. Fourthly, each one has been organised by a different MP. Everyone has been organised by an MP of the 2010 intake, not some  former rival of Mr Cameron . The Syria vote did not require a leader, as there was no amendment or rival motion involved. Nick de Bois, the Secretary to the 1922 Committee and a member of the 2010 intake, was one of the more active in the media on it.  Fifthly the personnel  varies considerably depending on the issue. It’s not just a hard core of anti leadership people.   Sixthly, the 2010 intake, whipped more energetically than more experienced MPs, is usually half the rebellion, reflecting their proportion of Conservative MPs overall.

I think much of this behaviour can be put down to the coalition. Too many talented Conservative MPs are free to think their own thoughts. They think the coalition has not pushed through enough Conservative measures and they remain truer to the Conservative Manifesto they fought on. The EU is the biggest source of disagreement, as most Conservative MPs want a new relationship with the EU as soon as  possible, and deeply resent the continuing increase in EU powers and laws, as more Directives and court judgements rain down on us.

The Syrian motion brought out some surpising rebels. Fiona Bruce, Tracey Crouch, Anne Marie Morris, Phillip Lee would not be head of most people’s lists of likely rebels.  When  usually loyal representatives of the middle of the Conservative party feel they have to help vote down the government, it should be time for a rethink on how whipping works and policy is formed and approved.

The modern Conservative party wants its Ministers and leaders to work with it, to persuade, to listen, to discuss. Most sensible MPs know that if MPs treat every vote as a free vote and object to anything that might be unpopular, you end up with anarchy. The party which opposed the Syrian war strongly, has given the governemnt good majorities so far for the Lobbying Bill, even though there are criticisms of it flying from both sides.

Anyone wishing to get a measure through this Parliament has to remember the arithmetic. If the coalition speaks for both its parties, they have a good  majority. If coalition ministers agree with Labour’s line they have a majority, regardless of Conservative backbenchers. If  Labour votes with rebel Conservative backbenchers on a measure Conservative MPs do n ot regard as sensible, they have the majority, as the larger rebellions see more than 50 Conservatives in disagreement with the government.

 

 

When Mr Kerry let slip that putting the chemical weapons out of use could prevent a US military strike, the Russians went into overdrive. They made a proposal to Syria to put their chemical arsenal under new supervision. Syria has a made a positive response to the  idea. We n ow learn that Mr Obama had also discussed this with Mr Putin at the G20.

I would urge the President and his Secretary of State to take this offer seriously, and sit down and discuss what it means,  and how it might be implemented.  The rest of the world will not be pleased if an apparently fair offer to deal with the issue that the US has highlighted is not properly examined.

Of course the US can  seek proper guarantees and assurances.  The UN might wish to make an independent and useful contribution, seeking to find a way forward which reassures all who do not wish to see chemical weapons in use that the Assad regime’s stockpiles cannot in future be used in this conflict.

It may be difficult to resolve this offer fully before the vote in Congress. It is a complication over the debate and vote. As the US administration says it sole concern prompting military action is the future use of chemical weapons, any sensible Congressman or woman would want this offer to be fully explored before thinking of  military action.  It argues for delay to the vote, or argues for a  conditional vote  in Congress, with Congress considering  later military action if the latest diplomatic initiative does not produce a negotiated settlement of the chemical weapons issue.

Meanwhile the Congress also needs to weigh the heavy news from Syria  concerning some rebel attacks on Christian settlements.The BBC has highlighted the plight of the Christians driven out of Maaloula,  reminding us that not all the anti Assad forces are benign democrats.

 

             If President Obama’s idea of a fast and furious missile assault on the Assad regime was to have any chance of working it was best done quickly, in the heat of anger at the chemical weapon massacre.

             Some might say revenge is a dish best served cold. In this case I disagree. I think in these circumstances revenge is a dish best cancelled. It would have been more understandable  if it had been done immediately after the chemical weapon incident. US missiles could have hit more military targets more easily. Hot revenge is more passionate and maybe more forgivable than cold calculation.  It would still have left open the three crucial issues of proof, legality, and the consequences.

             Now Assad has had many days to hide and disperse his military high command, to replicate or shift computer and communication systems, and to place strategic military hardware in inaccessible places or close to those no-one should wish to harm. Anyone bent on revenge should not have too much of the Hamlet about him.  A possible military action later this week or next still faces those very same big issues  that the President doubtless agonised about, leading to his delay.

              We still do not have incontrovertible proof of who was to blame. The UN still refuses to give legal cover to a military strike, so the legality rests on arguing that a strike will prevent a future atrocity. The US still cannot be sure  how the regime and others will respond to a missile campaign, and cannot know just how much weaponry to let off to change the dictator’s actions without allowing a worse regime to take over.

              In yesterday’s Sunday Telegraph I set out in an open letter why I think the US Congress should refuse to vote for military engagement.  If the motion seeks approval for the use of  force they should vote it down. Those of us who oppose the use of force by the UK are not appeasers, people wishing to turn our backs on the world. We are realists, who recognise that sometimes venting fury with missiles from a distance cannot remodel a dictatorship or ensure smooth transition to a working liberal democracy in a country as heavily armed and as divided as Syria.

               The case against military action is that a limited volley of firepower is unlikely to make the position better, and could make it worse. Those who think the use of force is essential have a duty to tell the rest of us in general terms what is their military aim, how they think they carry it out, and why Syria will be  a happier place afterwards. Bombs and missiles kill people and destroy buildings and equipment. The aim, I thought, was to protect the lives of more Syrians. The weapons would have to be very selective to kill just those  who intensify the massacres, and to create all of a sudden a political dynamic in this war torn country that could assert peace.  Where the west before has wanted to support or create democracy, in Afghanistan, it has had to expend much blood and treasure with many troops on the ground, fighting to impose and uphold freedoms that otherwise people would not enjoy. Why should Syria be any easier?

 

         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.