The Bank of England has caught up with the rest of the economic forecasting world. Yesterday it acknowledged that its previous UK growth forecasts were too optimistic. 2012 is going to be a disappointing year.

           There is almost universal agreement amongst the political parties, Central bankers and the rest of the UK financial establishment, that the UK economy needs to grow again.  Envious eyes are cast across the Atlantic to the USA, experiencing slow but sustained growth since the Credit Crunch. Their combination of lower tax rates, bigger cuts in public spending at the State level than the UK is attempting, and  mended banks, is working better than our policy mix for the time being.

          This autumn the Coalition will relaunch itself, shorn of the large problem of Lords reform. Instead of using up political capital and a lot of Parliamentary time on a reform which had many critics, they have a chance to revisit the economic policy and do what it takes to push the economy into growth. So what should they do?

        Readers of this site will know I have long favoured the strategy of cutting the deficit primarily by spending reductions. The government said this would be their approach, but they put up overall public spending  instead.  This needs to be  allied to sorting out the problem banks quickly and setting competitive tax rates that people are prepared to pay.  This still makes sense. Income tax revenues have fallen too far, thanks to the higher rate. New enterprise and business has been put off by the tax and regulatory regime. Private sector demand has been weak owing to high tax rates and higher inflation than was desirable. The government said it planned to squeeze the public sector, but squeezed the private sector instead.

           I have not been a great fan of the Bank’s Quantitative easing  programme. I have always argued that with broken banks there is no easy transmission mechanism to get the money created into the private sector to fuel the recovery. If there were then they would need to be careful about overdoing it and triggering inflation. Keeping the state’s borrowing costs down is marginally helpful but it does not send a signal that we need to shift resources and activity from public to private sectors, to tackle the deficit problem. It has allowed the state to go on spending well beyond its means. It has not lifted us into growth despite the positive contribution to growth as officially defined by the rise in real public spending. Nor is it right to say it is loans and credit, rather than money we lack. The private sector is squeezed of cash, but parts of it remain highly borrowed.

          As the Bank clearly  wishes to address the shortage of money by creating large quantities,why doesn’t it  use  the newly printed money  in the private sector instead of  providing cheap funds indirectly to the public sector? I hasten to add I am not advocating this policy.   Did they look at the Japanese experience both of QE and of giving money directly to voters to spend?           Tomorrow I will look again at a tax based stimulus, the approach I favour. This would lead to a lower, not higher, deficit.

           The Bank of England’s  downgrade of UK growth prospects is not surprising, but leaves it at variance with the Treasury forecasts published in the last Budget.  The Treasury forecast 0.8% growth in 2012, 2% in 2013, 2.7% in 2014 and 3% in 2015. This made a total of 8.7% for the four years.

            Looking at the Bank’s fan chart, they have growth well down for each of those four years, with  a total of around 5% and a peak level of around 2% not 3%.  If the Bank is right and the Treasury have to lower their forecasts next time, that will mean a further addition to state borrowing levels, as the automatic stabilisers will mean less tax revenue and more benefit spending than the Treasury forecasts.

                  As I sit in my Westminster office I can look out at a Central London where many people have decided to work from home, fearing they cannot travel in  easily to their usual place of work. It means I can get in and out of the centre much more easily than normal.

                   To many work is still defined by the old factory pattern of the industrial era. People still think a full time job entails attending a factory or office five days a week, and working around 8 hours there each day. The day starts at somewhere between 8 and 9.30 am.  Shift working means doing the same at “anti social”hours, so you might need to start earlier or finish later than the typical 9-5. Remuneration patterns may still reflect this sense of “normal” hours and abnormal hours, with “compensation” for working outside the “working day”. Overtime is paid if you need to work more than the specified hours.

                     The truth now is far more complex for many of us. Highly automated factories need far less labour, but they often need to work the machines round the clock with a three shift pattern. There is no magic to the 9-5 period.  Many service sector businesses need to provide service in the evenings and week-ends. It’s no use wanting to be a retailer but having an aversion to working on Saturdays, the biggest day of the trading week.  It’s no good being in the aviation business if you want to be back home by 6pm every evening.

                     Many executives and professionals work far more than forty hours a week, but may do so “flexibly”, having some choice over where and when they get through the pile of work they have to do. My job as an MP is a good example of how work can be carried out at many times  and in many places.  I offer a reply service to emails and calls seven days a week, and regard myself as  being on call at all times if there were to be a local disaster or serious problem.  I work considerably more than forty hours, but do not sit down in my Westminster office five days a week between the hours of 9 am and 5 pm. I probably do most of the computer and email work from home, but do not have time or the wish  to keep records of how long I spend each day doing it. Indeed, how do you account for time reading newspapers or watching the news? Is that relaxation, or part of the job?  Is attending a local event work, if I go in an official capacity, and pleasure if I go of my own accord?  The dividing line between work and lesiure breaks down in busy and interesting jobs. Do Directors and senior business executives hosting corporate hospitality boxes regard that as work or pleasure?

                More and more people are now taking jobs which require this kind of flexibility. More and more jobs require professional standards and continuous training or striving for improvement. More jobs can now be carried out remotely, away from the office.  More jobs have features which people enjoy and would wish to do anyway, as well as drudgery or unwelcome tasks which have to be done.

                It is time to rethink what we mean by work, and to ask more questions about whether homeworking can become a way of raising productivity and relieving strains on the peak hour transport systems. There will always be those who think homeworking is skiving, and for some it can  be another way of being unproductive. For others it can be a way of raising concentration levels, free from office distractions, and cutting out the wasted time of travelling to a segregated place of work. We need to concentrate more  on getting the tasks done and the work performed, and less  on the hours and place of work.

          There was much grand drama, technical wizadry and fine moments in the Olympics opening ceremony.  There was also a look at history, contrasting a rural Merry pre industrial  Britain with the powerful dark satanic mills and forges of the industrial revolution.

          The UK’s attitude towards the Industrial revolution has always been complex and bitter sweet.  The Labour thesis has roundly condemned enterprise capitalism for industrialising on the grounds that factories  exploited labour, paid poor wages, and ignored health and safety. At the same time the Labour tradition has praised the emergence of unions and collective action, made possible by large scale factory organisation, and wants the UK to be a strong industrial power with more factories than we currently sport. Wiser heads in the Labour movement accept that industrialisation raised overall living standards and permitted the creation of more better paid jobs. They acknowledge that there was a big problem of rural poverty and poor living standards before the first  factories sprung from the rural landscape.

              The Conservative side was more often than not defensive of the agrarian society and critical of the new men of industry who became the new rich. Conservatives had to make their peace with the industrial interests as they became successful. There was always a strong  strand of Conservative social action wanting improvements in the regulation of working conditions and urging the abolition of child labour and other abuses, to match the work of the Trade Unionists.  

               The truth is, however, that many people volunteered to leave the land and travel to the cities to find work. By modern standards the wages were poor, the hours too long and the housing conditons unacceptable. They were, however, an improvement for some on the poverty and poor housing in rural areas.  Britain became the workshop of the world, and with it one of the richest countries on the planet, with living standards on average much higher than in the many agricultural societies abroad.

                 Today, as we survey the progress of countries from poverty to better living standards, it is normal for the successful ones to have to undergo their own industrial revolution, producing a vast increase in homes in cities and usually starting with long hours and low paid jobs in factories. If you wish to have a balanced view of the process of idustrialisation it is important to remember that many came to the cities to better themselves and raise their incomes. Industry did produce many good cheap products, to allow the poor to enjoy some of the goods and services of life that were once the prerogative of the rich.  It was not all dark satanic mills and exploiting mill owners getting rich whilst suppressing everyone else. In the UK there is a proud tradition too  of the garden city, the enlightened employer, the cleaner and more humane factory, the movement from low wages for low output to high productivity and better pay.

              To understand modern Britain we not only need to celebrate social progress through campaigns and Parliamentary action to raise standards and guide conduct. We also need to understand just how important industrialisation was to advancing living standards and giving the UK a leading place in world markets. It was not just dirty chimneys but also china plates, metal cutlery and colourful clothes for all.

           When I stepped out of my car to pay the car parking charges in Windsor on Saturday morning I was full of apprehension. There was a person in LOCOG clothing watching me. I had ringing in my mind the many officious emails I had received as someone who had dared to buy a ticket to go to the Olympic rowing.

          I had been told on no account to go by car. I had been told there would be nowhere to park and nowhere to drop off by the games. Was I going to be sent back to the Maidenhead park and ride?  I had been told to buy my railway tickets early, even though there was no obvious way for me to get there by train at the early hour in the morning they told me I had to go. Indeed the railway website routed me via London the night before.  The railway company of course stayed silent, failing to contact me as a potential passenger. Probably they failed  to do so as they knew that as they were putting on no specials from anywhere near me there was no point. I would explain patiently if asked that I had examined the train option and found there wasn’t one which worked.

            I had in my mind that I could not take a large umbrella even though it was clearly going to deluge.  Surely the umbrella I had selected was small enough to squeak by? Had I perhaps offended against the rules on what I could take with me?  I had made sure there was no bottle of more than 100ml with me, but was she worried about the bulge of the binoculars in my pocket?  Perhaps taking a mac as well as a jacket was against the regulations? I readied myself for the questions and the likely official mind seeking to find fault with my preparations to be a spectator.

             The first suprise I had was the empty car park and the absence of any prohibition on parking there for the morning. I did not have to retrace my drive to Maidenhead as I had feared. The second amazing surpise was the lady in the official clothing  smiled at me, and called out that I should walk following the pink signs to get to the rowing!  She wanted me to have a nice day, did not object to my way of travel or dress, and was trying to help. It made my day.

             It made me realise just how cowed we have all become by the endless petty minded officiousness in our daily lives in  the snooper society.  The Locog emails and literature had seemed just like that – the worst kind of airport bossiness, treating  spectators out to have a good time as possible threats to the planet if they dared to use a car, and possible threats to security if they came with a bottle of water in their bag.  Instead I found an army of volunteers helping us spectators on our way to the games, as we walked the thirty minutes from Windsor to the venue. They were cheery, encouraging, friendly. They did not voice a single criticism of how we were turned out. There were people with big umbrellas and large bags filled with all sorts of things that probably offended against the email holy grail, but no-one seemed to mind.

               As we got nearer the venue the trickle of walkers became a torrent, a happy flow of people out to have an enjoyable morning watching great athletes at the top of their game. We watched empty buses rushing by, with no stops along the walk to pick any of us up. We walked past an enormous car park, presumably reserved for officialdom, and past the car and taxi drop off point which did not exist for us.   I thought the walk was an enjoyable start, given the friendliness of it all. The security post was well manned and allowed us through easily, making the necessary checks. Despite the large number of people, the security posts did not create a queue when I went through, as there seemed to be plenty of entry points, personnel and scanners. The army personnel manning them were polite and efficient.

               We endured a downpour in the early races, but everyone remained good spirited. The volunteers were everywhere trying to help the visitors,  were polite, happy, positive and informative. Instead of criticising spectator choices, they told you where the queues for food were shorter if you needed to know, told you how far you were from your destination, or helped you find your seat. The spectators were happy and in good voice. I was close to Australian and New Zealand supporters, who cheered their teams strongly to the general aproval of the many Brits in the crowd.

                The sun came out just in time for the four big medal winning races. Team GB was in the first three, and  powered to two golds and a silver. It was a great event, with the sport well managed and the competitors in good form.

                 Please can officialdom learn from the volunteers? They made the day happier and easier for all concerned. It was such a relief to be allowed to enoy yourself, instead of feeling you were competing in  the compliance hurdles.

           I read speculation in the press about a Ministerial reshuffle. I think Mr Cameron has been wise  not to hold an early one, or to make them annual events. Ministers need to time to master their brief and to learn to work well with their departments.  For everyone a Prime Minister makes happy by promoting, he makes another miserable by sacking them.

         Clearly Mr Cameron is aware of the difficulties of managing the party and the expectations of many MPs when he does not have a majority and when Lib Dems take a larger share of the Ministerial posts than their Parliamentary strength would justify on its own, to ensure they have representation in every department. 

          Some people have been briefing the press that there will be a September reshuffle, but only Conservative MPs who have always voted with the government will be considered for promotion. Some have also suggested that there could be a further reshuffle before the 2015 scheduled General Election.

           In the past Prime Ministers have appointed a mixture of loyalists and more independently minded people to government. The old idea was that a government needed to reflect the broad forces of opinion within the governing party and in turn in the wider country. Margaret Thatcher appointed “wets” to her Cabinet though she disagreed with them. They did vote against her when not on the payroll. Tony Blair invited Gordon Brown to be Chancellor, only to see him running a domestic government within the wider government, and building a Brown faction within the Labour party.  Both Margaret Thatcher and Tony Blair appointed some rebels to the government. John Major appointed Michael Heseltine to prominent roles, knowing he wanted to be Leader.  They took the view that they needed to listen and argue with some they disagreed with, around the Ministerial table.It also meant those particular rebels had to vote for the agreed government line once it was settled.  What is the point of a Cabinet if all agree on the main issues of the day?

            Mr Cameron has a particular problem in managing the votes and ambitions of the 2010 intake. As this accounts for half the Conservative Parliamentary party, it is a very large voting group. The government has expected loyalty from them, because they are new and because many of them have legitimate ambitions for office in due course. It has not worked out quite like this, with many of the best of the new intake of Conservative MPs showing early independence of mind and spirit, and voting against the government on important issues like the EU, a referendum,  and Lords reform.

            I think it is a strange idea that the possibility of office can buy the full support of most MPs. People come into politics with views and  campaigns in mind. They wish to represent their constituents, and to stay true to promises they made their electors. They are swayed by argument and by policy circumstance. The best way for the government to get its business through is not by offering possible jobs at some unspecified time in the future, but by adopting popular policies and persuading MPs to vote for them on their merits. The main reason this government is at odds with many Conservative backbenchers is its refusal to demand a new relationship with the EU. If they would change that they could make the Conservative party much happier with its leadership.

           There is another reason why the patronage approach to party management is difficult to make work in this Parliament. The reduced number of Ministerial posts available to Conservative MPs is compounded by the government’s stated policy of a substantial increase in the number of women Ministers. Bright men MPs can do the sums, and see they have little chance of preferment. If preferment is a constraint on free thinking and independent voting for some, the poor arithmetic of gaining it offsets this feeling. 

           I would be interested in your thoughts on a reshuffle and the composition of the government, but please do not write in about me as I have no wish for this to be about me.

             Many policy roads lead to the EU. The Treasury blames the Euro crisis in no small measure for disappointment over UK growth. Our dear energy policy is partly fashioned in the EU, with all sorts of requirements placed on the UK to prevent UK industry having low bills like the USA or Asia. The EU controls immigration to the UK from the rest of the EU, now has a chain of EU embassies to flex its  muscles in foreign policy, is moving in on criminal justice matters, and of course regulates and regulates again across wide swathes of industry and services.

           Many writers on this site simply want to leave the EU. The issue they never seem willing to discuss is how this would come about. Either the present UK Parliament has to vote for a referendum on In/Out, and then the public have to vote in sufficient numbers for out, or at some future date the public has to elect a Parliament with a majority government pledged to pull out come what may. Neither of these eventualities looks very likely at the moment.  When I and just over a hundred other MPs voted to give the UK public a referendum, we were voted down by  a huge majority, as Labour, Lib Dem and Coalition Conservatives united against a public vote.  Only if the official Labour position or the official Conservative position shifts is a referendum at all possible.

          The reason I argue for a new relationship with Europe, is that we are closer to building a majority for renegotiation than we are close to the point where public and Parliament are going to demand pull out. The official Conservative position favours renegotiation were the Conservatives to have a majority. Conservative Ministers would make demands for repatriating powers if they were not currently in coalition with Lib Dems. Their backbenchers would push them further.

          Some of you say it is pointless seeking  powers back or seeking a renegotiation, as you think one is impossible. I say, what is there to lose? If the EU is as inflexible as you say, then, surely that will radicalise the UK people.  If we  see no commonsense and no acceptance that we the UK have simply put up with too much power and money grab from Brussels, wont that persuade more people to demand Out and vote for Out? If Brussels gets it, they will offer us substantial powers back, with a view to rescuing a relationship which has gone horribly wrong and is no longer wanted in its current form by  a majority of the UK electorate.

          Some of you ask what have Eurosceptic MPs  achieved by staying in  the Conservative party and fighting from  within? I would say we Conservative Eurosceptics did much of the work to keep the UK out of the Euro, a crucial victory, and have now persuaded Mr Cameron to veto the latest integrationist Treaty. There is much more to do, but UKIP are not in any position to help, because they have no votes in the Commons. It’s votes in the Commons now that are needed to block an increase in the budget, to demand powers back, t0 vote against any further transfer of powers, and to require a referendum.

          Parliament is having a long and needless break until September. Clearly the government is not desperate to crack on with Lords reform, which might take a lot of debating time, as they are not shortening the summer holiday.

          I expect the Lords Reform Bill worked out by Mr Clegg to be quietly dropped this autumn. I would imagine government business managers have realised that they cannot rely on Mr Miliband to vote it through promptly and unamended. Though Labour may well wish to see a Bill carry in due course, they would also wish to see as much divisive debate and damage to the Coalition is possible before it passed. They would also doubtless vote with Conservative opponents in favour of a referendum on the issue.

       Business managers would also shrewdly work out that the Bill could be voted down in the Lords. Even some of the Lib Dem peers are against, let alone the Conservatives.  That would mean waiting a year and then trying to force it through the Commons under the Parliament Act, with the Lords complaining long and loudly that the use of the Parliament Act to abolish the Lords was an extreme measure. I cannot see them having the stomach for such a protracted and hazardous fight.

         Mr Clegg could then respond in the wider interests of the Coalition he helped form. He could see the Lords Reform delay for this Parliament as a parallel act by Conservatives to the Lib Dem slowdown and enforced changes to Mr Lansley’s  Health Reforms and their refusal to vote in support of Mr Hunt, and accept that these things happen in coalitions. Or he could seize what he thinks is his party’s interest, and demand that the boundary changes to reduce the number of MPs and make seats of a more consistent size be dropped. If Mr Clegg and the other payroll vote Lib Dems will not vote for the boundary changes then they too are dead, as Labour is strongly against them for party reasons as well.

           This will leave the legislative programme light . That is not necessarily a bad thing. The UK is not short of laws.  It would allow a repeal Bill to be put in, if the government wishes to increase our liberties and cut out some of the vexatious laws and regulations that bind us. Now there’s an idea that should appeal to Ministers from  both Coalition parties, but I  don’t see them limbering up for it.

             Those of us who want government to do less with less, and those who want government to do more with less, have a common interest. We want a more efficient and effective government.

             The best way to provide impetus and discipline for such an approach is to have a small number of simple rules which departments of government just have to accept. The government has promised some of them, and talked about others. Now would be a good time to reaffirm and reinforce these precepts:

1. Any job vacancy in the public sector should normally be filled from applicants within the public sector. Any job falling vacant has to be reappraised to see if it is still needed, or can best be combined with some other post.

2. Departments and quangos cannot add any more floorspace to their property portfolio. If they want a new building, it has to replace larger and dearer space, with a profit on the switch for taxpayers.

3. Any new regulation should only be permitted when regulations of greater or equal burden have been identified for repeal, concurrently with the passage of the new one. This should include all regulations resulting from EU legislation.

4. Every budget should entail scrapping at least one tax, to start to simplify the complex tax system.

5. Every time the EU takes more power UK regulators and government departments in that area should shed staff and controls to compensate. We have two governments for the price of three in many areas today.

          We are chronically overgoverned. The advent of a huge EU government has acted as an overlay to UK administration, and as a kind of misplaced spur to more UK government as well. As this Parliament wishes to remain in the EU, the least it could do is to put in some rules that mean there is a cost to UK government of signing up to so much EU government. They should be seen as alternatives, not as mutual reinforcers.

         The government has kept its promise to increase the amount of our money it spends on overseas aid.  Last year saw the Department for International development increase its spending to £7.87 billion from £7.48 billion the year before.

          Just under half was spent on country programmes administered by the Department, or £3.4 billion.  £1.8 billion was spent through its international finance programme, sending the money to the World Bank, regional development banks and global funds to spend. A further £1.7 billion was spent under the heading  “International relations” where the bulk went to the EU and the UN to spend for us. £0.8 billion was spent on research, including £0.2 billion on climate research.

           The Department mainly talks about the good work it does under its direct programmes. It is making progress getting children into school in poor countries, vaccinating  against disease, and tackling the scourge of malaria. Many of these are good programmes with noble aims.  It talks less about its reseach work and the money it sends via the EU.

            Under its country programmes, the biggest include India ( £268m), Pakistan (£216m), Nigeria (£172 m), Somalia (£103m) and Kenya (£94 m). Some of it is dangerous and difficult work. Last year £300,000 was written off for the loss of 5 trucks of aid in Southern Somalia from problems over authority for the mission. The Department is strengthening its anti corruption checks and systems, as it is aware of the dangers of misappropriation of these very large sums.

              What do you think of the priorities and the totals? Should the list of countries be shorter?