Steve Hilton, David Cameron’s former Policy Adviser, has set the cat amongst the pigeons by saying that only 30% of the Coalition government’s time and effort goes into doing what the Coalition and Ministers want. He tells us  40% is taken up implementing EU government directives, and 30% absorbed with what officials think they need to do. We are told by Mr Hilton that there is simply too much of this official government material  for Ministers to control or direct it all.  Steve Hilton’s comments about how government works need to be taken seriously.  It implies that Ministers are not sufficiently in charge. Parliament in consequence becomes a rubber stamp for Brussels and the civil service. He tells us that Number 10 often wakes up in the morning to hear on the radio or tv what the government is doing. Quite often what the government is doing is not to the liking of the Prime Minister.

When I was Chief Policy Adviser to Margaret Thatcher at Number 10 we knew what each department was doing. All major items of policy and new law had to be cleared through  the Cabinet and its committees. Matters within the control of individual Secretaries of State were  reviewed by the Prime Minister in a series of bilateral meetings that I recommended, so that colleagues could be assured of Prime Ministerial support for what they were doing.  Number 10 did not like surprises and made sure it was well briefed on all the main things, and the contentious things, that were going on. Prime Ministerial speeches were cleared with all departments, giving them a chance to warn us of any difficult developments. The twice weekly Prime Minister’s Questions briefings were detailed so the PM knew all the issues from each department likely to come up in the House.

In the 1980s there was some of  the same tension between the official government and the political government that Mr Hilton describes. The main disagreements were hammered out at the time of the compilation of the annual legislative programme. The official machine would trot out dozens of bills they wanted for the sake of “good government”. They always wanted a new Criminal Justice Bill, a new Companies Bill, a new Finance Bill to update and improve the law as they saw it. The political government would want various Bills to pursue its agenda – maybe a privatisation Bill or a Deregulation Bill. Some Cabinet members mainly supported the development of the political government’s agenda, others assumed the views of their departments and argued the case for the official government’s legislation. All accepted we could not do all that the original list set out, as Parliamentary time and the country’s capacity to absorb ever more laws and ever changing legislation is limited.

Those who favoured the civil service bills would argue that they were not “contentious” and were necessary for good government. Sometimes friendly Ministers argued  through for such a bill, only to find  it turned out to be very contentious with Parliament for some reason that no-one had bothered to study. The danger with the civil service bills was that they did upset some people, but had no great political advocates if they started to go wrong.  They often appeared in Cabinet and even in Parliament with insufficient political analysis and discussion. When they received their second reading in Parliament they did not have marked on them “uncontentious civil service bill” and the opposition did not necessarily let them   through easily. All Ministers did accept that the Bills became theirs, and there was a political process to adopt or reject them. Ministers were regarded as responsible for the policy and the bill, and expected to master it before appearing in the Commons with it. The Policy Unit at Number 10 was especially keen to read and draw out the consequences of the official bills, as they were political orphan bills if they started to go wrong.

Brussels legislation did not figure nearly so prominently then as now. The Margaret Thatcher government did end the veto for so called single market measures, the first crack in the dam of UK Parliamentary sovereignty over new laws. They turned down my advice to revert to the veto on all matters after an agreed group of single market directives had been approved under qualified majority voting. The Coalition government has arrived in office after the  dozens more vetoes have been surrendered in the Nice, Amsterdam and Lisbon treaties signed by Labour. As a result it is very difficult now for UK energy,financial regulation, agriculture, fishing, transport, trade and industry, and environmental Ministers to pursue a UK domestic policy, given the large amounts of law that come from Brussels. Mr Hilton is quite right to recognise that Ministers simply have to put through large amounts of new law at the request of Brussels, where they may have lost the vote or failed to amend it in the way they wished when it came up for decision in the EU.

Parliament enacts large quantities of legislation by Statutory instrument. These devices usually pass after 90 minutes of debate on a take it or leave it motion. The House cannot amend them. Statutory Instruments are now widely used to implement Brussels law. This short process avoids too much public gaze of just how much of our law is EU derived, and prevents most of it ever becoming a matter of political or Parliamentary dispute. Labour is especially reluctant to oppose measures which emanate from Brussels. None of the three main parties in opposition have wished to highlight the vast array of new law that is EU based. Coalition Ministers have continued with Labour’s practice of putting this all through in Statutory Instruments, and playing it down as much as possible. The press have gone along with this, rarely bothering to report the new laws coming out from this process.

The EU has become  an important impediment  to Mr Hilton and his like minded Ministers because it now regularly stops Ministers doing what they wish in big areas of domestic policy. Let us take an apparently UK based area, that of welfare benefits. This was meant to be a national issue to be paid for by national taxpayers. Now today welfare Ministers find that the EU has considerable influence over benefit eligibility, ensuring that recently arrived migrants from the rest of the EU do receive the same benefits as people long settled here who have been paying Income Tax and National Insurance over many years. The UK government is now engaged in expensive and complex court cases to try to establish what discretion it has left over who to pay benefits to.

So what can Number 10 do to deal with the problems of policy development and enforcement which Mr Hilton describes? Some of the problems are easily fixed. The Prime Minister does need to have carefully prepared bilateral with his leading Cabinet members to ensure there will be no surprises from their departments in future. Senior Cabinet members can in turn do the same with junior Cabinet members and Ministers of State in their departments. Number 10 can use the weekly Questions briefing to ensure they know all the politically sensitive things that are going on.  The Prime Minister and Cabinet need to use their ability to settle the legislative programme and their ability to determine which Statutory Instruments should  be taken to Parliament to get a better balance between what they want to do and what has to be done.

Tackling  the problem of too much government from the EU is altogether more difficult. Mr Cameron’s forthcoming  speech is a  big opportunity to explain to the country just how much of our government now comes from Brussels. He needs to set out how he would like in future to regain more control over how we do govern our own country. If he wants a UK energy policy, a UK criminal justice policy, a UK regulatory policy, even a UK welfare policy, there does need to be a change in our relationship with the EU legislative machine.  If there is not, there will be ever more frustrated Ministers having to do things they do not wish to do, and ever less consent from Parliament and the UK voters to  how they are being governed.

(This article was commissioned yesterday by the Daily Telegraph who then decided not to run it.)

 

         The latest figures show a further fall in manufacturing and construction output in November 2012. An improvement in oil and gas output provides some modest offset to the bad news. Many forecasters now think the UK economy fell again in the fourth quarter of 2012.

           This is quite a contrast to the USA. There they have made bigger cuts in public spending at the state level and have agonised over the fiscal cliff at the Federal level. Levels of debt and deficit are not that different between the two countries. They have continued to create more money through the Fed, just as the UK has done through the Bank of England. The US economy is growing at around 2% per annum.

           There are three big differences between the two economies that probably account for the better US performance. The first is the state of the banks. The second is the price of gas and general fuels. The third is technology.

          The single most important reason why the US is making more progress rests with the banks. The US banks took more action sooner. US property prices fell further faster. More of the bad debt was sorted out and cleaned up. US banks were made to take more capital, and most have now repaid the special money they received from the authorities. US money supply and credit is growing at a better pace as a result. Property prices have started to rise again after a very large correction. There are more mortgages available.

                 The UK has still not worked through enough of the bad debts and the difficult property lending. RBS is far from fixed. Such a large bank in such a condition retards the UK economy.

                 Cheaper energy is giving a big boost to US industry which is lacking in the UK with dear energy baked into EU and domestic policy. Quicker exploitation of shale gas is also adding to US output.

                 The US is still the world leader at applying the technology of the digital revolution to the products and services of the world.

                  The UK needs to catch up. Mending RBS would be the single most important thing to speed that up. Asset sales and controlled break up, creating new better financed banks that can compete and offer loans would provide a big boost to the UK economy. Cheaper energy is also vital for success.

 

 

If the USA, Germany and Ireland all think it’s worthwhile lecturing and hectoring the UK to stay in, we must be onto something with our proposal that we need a new relationship.  The change of government language seems to be waking the rest of the EU up to what a smashing deal they get out of  the UK’s current membership. They are understandably very reluctant to lose it or see it changed.

The EU gets large sums of our tax revenue to send to other parts of the union. They get great access to our fishing grounds. They make our companies follow detailed rules for everything they sell not just in the rest of the EU but also at home and in every other world market, whether those markets want those regulations or not. They get access to our labour market for anyone from the continent. Continental companies can have good access to our lucrative consumer market, and use it to sell us more than we sell them.

We are used to be threatened and being sent the bill.  I have lost count of the number of times I have been told “You will not have any influence” if the Uk demands some changes. My response is that we have no wish to tell Germany or France what to do, but we do wish to govern ourselves without EU controls on so many areas of policy.

I am sick  and tired of having to counter the lame threat that they will not trade with us anymore if we dare to ask for better terms or if the British people  vote to head for the exit.  They have no counter to my polite reply that I am sure the UK will wish to carry on buying BMWs and Mercedes after we have left the political, fiscal, banking and monetary union which is the new EU. Of course France and Germany will want to protect their trade with us and will understand that that requires mutual agreement and co-operation.

The government is right to point out that the UK cannot possibly join the banking, fiscal and political union now being created. We are not in the Euro and have no intention of joining it. It is in the EU’s interest to find a way of permitting good trade between the Euro area and the UK without expecting the UK to join the political union. The EU has to understand that there are two different types of member, Euro members and non Euro members who do not plan to join the currency. They have created the divide by making the EEC into such a centralised powerful international government. The UK never voted for that and most in the UK have no wish to belong to a United States of Europe.

The British people will ultimately decide this. In the meantime the UK government is right to explain the problem to the  other EU members and suggest it is in our mutual interest to sort it out amicably and sensibly. Lecturing us, hectoring us, or threatening us, is not the way to win the UK people over  to full membership of the EU. It is the way to drive a further wedge between Euroland and us.

         The Met Office lacks no certainty when it comes to climate change. It tells us that it now offers “weather and climate change forecasts for the UK and the world”. It seeks to forecast short term weather, ten year general climate, and 100 year climate cycles. It belongs to the school of thought which says that we are living through a period of global warming, and argues that has been brought about by human generated CO2.

          To reinforce the message the website is punctuated by the symbols of dangerous climate change.  There is a picture of a baked landscape, clearly suffering from excessive heat and no rain.  England in 2012 did not look like that anywhere. There is a thermometer obligingly showing 30 degrees C, a temperature we so rarely experience here in the UK. Today I thought I would share with you some of their more interesting forecasts  and statements from 2012.

February 2012   “Climate change and drought video”. The Met Office was warning us abouta serious  UK drought.

23 March   “The forecast for average UK rainfall slightly favours drier than average conditions for April-May-June  as a whole….the water resources situation in southern, eastern and central England is likely to deteriorate further during the April-May-June period”

 

End 2012   ” the second wettest year in the UK dating back to 1910 … with April and June being the wettest on record.”

“Throughout the year (2012) accurate forecasts and warnings from the Met Office have helped everyone…”

The mean temperature for 2012 was 0.1 degrees C below the 1981-2010 average.

On December 24th they lowered their ten year temperature forecast based on a new model.

This record invites a few questions:

Do the Met office agree there has been no warming for the last decade?

Do they agree that  world temperatures can be increased or diminished by solar action? How do they model that?

Do they agree that the move to  the Medieval Warm period and then back  to the Mini Ice Age was unconnected with human CO2? How do they model for similar changes in the future?

Is their current forecast for mild wet winters and hot dry summers in the UK as global warming progresses? That was what they were saying in their general climate change views.

Could the change in currents and winds that gave us cold winters and cool wet summers recently affect future years?

What is the role of water vapour as a greenhouse gas? What influence can human conduct have on water vapour and cloud formation?

Wouldn’t it be a good idea to concentrate their money and research on weather, and try to improve the accuracy of the forecasts for the next few months, rather than attempting ten year and 100 year forecasts?

 

 

 

           The USA was founded through a popular revolt against foreign rule. Many UK citizens admire the American revolution, and the mighty statements of democracy the founding fathers made in their cause.

           It is a crowning irony that the Obama administration now thinks the UK should be subservient to Brussels rule in many areas, just so the US has a more acceptable lobbyist at the EU court.  The US stance will probably recruit more UK citizens to the cause of new and different relationship with the EU for the UK. We wish to be self governing.

           We have no wish to be told that  we should lose our democracy in the cause of advancing America’s.

 

            Hammersmith and Fulham Council are proposing their sixth reduction in Council Tax in seven years. They are also freezing parking charges.  Council Tax in the Borough is down 17% since 2007. How many other bills have done that 0ver that time period?

               The Council has not pulled off this great improvement in tax bills by slashing services.  All its schools are rated excellent or outstanding, one of only 9 Education Authorities to be able to say that. Crime is down, and the Council has improved its law and order performance. The streets are kept clean, and the parks are highly rated.

              Nor has it done it by adding to borrowing. Instead, borrowing has been slashed, with £70 m out of the £168 m total debt paid back in recent years.

              So what have they cut?  They cut the interest bill by cutting debt. They have cut the bill for office space by one third, streamlining service management and delivery. They have pooled back offices and management with Kensington and Chelsea and Westminster, making substantial savings. They have cut  senior management by 50%. They have done more for less, and performed better whilst being economical.

               Central government and less successful Councils should study their methods. They prove that the answer to high levels of public spending and taxation can be better management.  They show that you can make good improvements in services without spending more. What matters is how well you spend all the money that is available. If you can cut the debt you can also cut the costs.

                 They have established central priorities – high quality education, good social service provision for people, a decent environment – and have shown how to deliver at realistic cost. The message is keep it simple. Concentrate on how you do spend the money, rather than concentrating on how to get more money to spend.

 

On both sides of the Atlantic 2013 begins with the hang over from 2012. Just how much more debt will the US, the UK and Euroland take on this year? Can they go on adding to borrowing at the frantic pace of 2009-12? What do they all mean when they say they are cutting the deficits? Can they achieve it?

All main political parties in the US, UK and Euroland agree that the deficits have to be brought down. All understand that faster growth would help bring that about. By their deeds, all acknowledge that the huge deficits being run are not in themselves able to bring about the faster growth they crave. Some parties of the west speak with forked tongues on the deficits. They both claim with the rest that they need to be brought down, but also claim that prolonging a larger deficit for longer would somehow help speed growth.

In the USA the row over the so called fiscal cliff arose because the last time the US had to confront its excessive debts the politicians put in automatic tax rises and spending cuts in case no-one got around to making some necessary changes. These came back to haunt them. Neither the Republicans nor the Democrats wanted the combination of tax rises and spending cuts they had enacted to trigger  at the end of 2012. Both parties had every incentive to find a different way through. The Republicans wanted no tax rises at all. The Democracts only wanted tax rises for the rich. The Democrats wanted very few spending cuts. Even some Repuiblicans were uneasy about defence cuts. Compromise entails borrowing more, the easy way out. That is why they are bound to end up doing just that. The US will borrow more, and will raise its borrowing ceiling. We have seen the first compromise to keep most of the Bush tax cuts. Now there will be a row about the spending, before they solemnly decide to raise the permitted borrowing ceiling.

What was  bizarre in the USA was to see a Democract President claim credit for renewing Republican tax breaks from the Bush era, whilst increasing taxes on the highest payers to fulfill a campaign pledge, whilst the Republicans came over as split and part of the “problem”. They did not get across to much of the media that the tax cuts were originally Republican, and that Obama care entails higher taxes and charges offsetting some of the benefit of the tax cuts.

In the UK the Chancellor towards the end of 2012 admitted he would not start cutting the state debt as a proportion of our output by the end of this Parliament as originally promised. The UK is likely to end up borrowing more. In the second half of the Parliament Ministers are likely to want to relax spending totals. The big welfare reform package starts to come in and will doubtless need large sums to pump prime the changes.  The government is itching to boost capital spending, the one area the outgoing Labour government and incoming Coalition did make large cuts.

In Euroland they will carry on cutting in the distressed countries. Continuing recession will undermine revenues more, forcing more spending cuts. The German economy will recover as the emerging markets improve and take more German exports. Their recovery will be assisted by the German government’s own spending cuts, as they are more determined than most to control their deficit.  There is also some scope for extra private sector domestic demand in Germany. Meanwhile, the weaker countries will struggle with the iron discipline of the Euro, and without the ability to offset it individually by the kind of national monetary action the US and UK are taking.

 

   Today the government invites MPs to vote to peg increases in benefits to just 1% a year  for the rest of  this Parliament.

   The government does not propose to limit increases to pensions, nor to disability benefits this way. They will continue with the triple lock on pensions to ensure a better uprating each year.

     The idea is to limit the rise in benefits to make it more worthwhile to work, at a time when  pay rises are low or non existent. In recent years out of work benefits have gone up by more than average wages, making it less worthwhile to work.

      Labour’s criticism of the proposal points out that the 1% will also apply to in work benefits going to people on low pay, as well as limiting increases in out of work benefits. The Coalition government counters by saying that the lower paid will benefit from the more substantial increases in tax thresholds, reducing or removing their income tax liability.

       I will vote with the government. However, I think the best way of cutting benefit bills is to remove eligibility from recent arrivals in the UK, and to be clear that someone out of work who can get a job should do so. The biggest problem with the benefit bill is that there are too many people on benefits. We need positive ways out of no pay and low pay, and better controls on who has access to our benefit system.  UK citizens suffering disability or now retired deserve to be treated decently.

 

           When Mr Cameron makes his speech today welcoming the Coalition’s decisions so far and saying what they wish to do next, he intends to tell Conservatives that they should  be happy with what is being achieved. We are told  he will acknowledge ” Conservative frustrations” about the Coalition, but say that this is a radical reforming government which will do many good things.

           It is true they are busy reforming welfare, schools and some other public services. So why are some rank and file Conservatives so unhappy that they are worth a special briefing by the Prime Minister’s team to reassure them? The Prime Minister’s own message to Conservatives who say they now do not want to vote Conservative   is “I think I understand why you’re frustrated and I want to try and win you back”.   Will this new speech do the trick?

          There are two main reasons why some Conservative grassroots members  are unhappy or have gone elsewhere – Europe and money.

          Conservatives  want to be out of the EU altogether, or want a new relationship based on trade and co-operation where the UK can always say “No” if it disagrees with a proposal.  They are unhappy that many more powers have gone to Brussels thanks to the ever more energetic legislative programme pouring forth from the EU, unhappy with decisions of both the ECJ and the unrelated European Human Rights Court, unhappy about unlimited EU migration, concerned about EU judicial powers, dislike the scale of the EU budget and much else besides. They want a referendum now on whether to stay in or not.

           Here Mr Cameron is in no position to deliver what they want. As leader of a Eurosceptic party without a majority  in a more federalist Parliament, he does not have the votes for decisive action over the EU. Much is riding on his speech. He has to strain to use what power he has as a Coalition Prime Minister to point the country more rapidly and firmly towards a new relationship with the EU, and set out how as a Conservative Prime Minister after 2015 he would rapidly bring this about.

            When it comes to the money, he has much more scope to do as Conservatives wish. Many in the party feel the government needs to do more to be on the side of the strivers, the prudent, the hard working. If you drive or go  by train to work you are taxed and charged to death for daring to travel. If you earn more you are taxed heavily on your success. If you make a  capital gain you pay 10% more than under Labour. If you are  in the middle income you move more rapidly from 20% to 40% tax, and more rapdily lose your in work benefits. When you need to burn energy you have to pay the price of the energy policies being pursued.

          The government can say it is now cancelling Labour’s fuel duty rises, seeking to exploit  cheaper energy,has taken many people out of Income Tax altogether, and has kept the cap on train  fare rises the same as Labour’s.

        If the deficit had been removed and the debts were under control Conservatives would be happier. Some  Conservatives are worried at  just how much extra current spending continues under this government. The government  promised to eliminate the deficit in one Parliament. Now it will take almost two Parliaments. They said in opposition Conservative MPs would be queueing up by mid term to demand an end to the cuts. Instead Conservative MPs are queueing up to demand cuts to overseas aid, cuts to EU budget contributions, cuts to automatic   benefit entitlement  for recently arrived EU migrants, cuts  to public sector employees earning far more than the Prime Minister, cuts  to the still over mighty quangos and nationalised industries, cuts to expensive energy generation, and much else besides.

       Mr Cameron is right to want the Conservative party to be proud of the government he leads. Some grassroots members of  the  Conservative party and some defectors  say in response they want the government to do as it promised – eliminate the deficit, promote a vigorous recovery, and create prosperity based on private sector revival. That will take mended banks, a tax system that rewards enterprise, and a benefit system that is generous to those in need but not open to all regardless of their circumstance. I wish him well with the task. I am sure it is one he wishes to bring about, so his critics should understand he does want what they want.  Following his  speech about the Coalition,  the speech on the EU and a speech on the future  has to start to set out how a Conservative government would make a bigger difference faster.

 

 

 

           It is difficult holding modern nationalised industries to account. The Coalition has accepted much of the protective mumbo jumbo inherited from the previous government  that makes it difficult to get at the losses and excesses of state owned enterprises.

             The first is denial that a state owned enterprise is part of the public sector. Many questions about RBS are parried with “it’s a private sector company”. It just happens to be a company with a dominant taxpayer shareholding, dependent on taxpayer money for its very protected existence. Network Rail is said to be a private company! Some private copmpany, when the shareholder representatives are all chosen by  the state, and the whole thing is in effect  taxpayer owned and taxpayer subsidised. Even the Post Office, still technically a nationalised industry, fends off reasonable questions with a refusal to answer on the grounds of  “Commercial in confidence”.

           I tried to make the Post Office accountable for its decision to make huge increases in stamp prices last year. My questions as to how many first class stamps they sold before the price rise, and how many since, are blocked. Surely, as a representative of the taxpayer owners we are entitled to know how successful or otherwise this business strategy of huge price rises has been? As customer owners, are we not due some analysis of what impact pricing policy has had on our use of this important service? I assume my question was blocked because there has been a large decline in first class mail use, as you would expect with such a price rise. It was probably  big enough to lead many users of first class post to consider switching to second class or to some other way of communicating.

            I am seeking to make Network Rail accountable for its purchase of derivative products. Parliament does not apparently wish to investigate the £1 billion plus of marked to market losses at Network Rail, when MPs can get agitated about much smaller sums. Any discussion of the current rail fare rises is incomplete without exploring the foreign borrowings and the derivative positions of the leading rail company which happens to be in public ownership.

               I want to know more of the total cost of the bridge “improvement” programme which is gobbling up huge sums of money at the behest of the railway. Near  my own area the A4 Woodley bridge has been replaced at considerable cost, and now the Duffield Road bridge nearby is also being completely replaced. Why is this necsssary? What is the alleged return on capital? Why don’t they put in more road capacity at the same time so it would be more useful spending?

               I want to know why RBS is still such a large congolmerate. Why hasn’t the disposal programme continued more rapdily? Why has the bank been so persistently loss making since being in public ownership?

                Ministers should summons executives from these wayward baronies of the public sector, and start to instil value for money and cost control to save the taxpayer the continuing drain on our pockets. There is big money to be saved or earned for taxpayers  in these titans.