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Douglas Carswell's Blog

28 JUL 2016

Let's break BT's monopoly - and Ofcom's

BT Openreach delivers woefully slow broadband in much of the country. Its customer service is, by many accounts, sub-par. It's a classic state-backed monopoly. So why has Ofcom chickened out of breaking it up?

By owning the network as well as acting as a service provider, BT has an obvious unfair advantage over its competitors. That can only be bad for consumers – which is why I joined a cross-party group of MPs in signing a report calling for BT and Openreach to be broken up.

But instead of a real change, Ofcom have instituted only a 'legal separation.' BT will still own Openreach, but Openreach will now get a new board of directors ...with the non-execs appointed by BT. It's a façade.

Removing BT's artificial market advantage would have been a start. But even that wouldn't have come close to solving the fundamental problem: the fact that Openreach has a monopoly over the broadband infrastructure.

For consumers to get cheaper, faster broadband, it's that monopoly which has to be broken. We need more broadband networks. Why not allow other companies to run their cables alongside Openreach's?

Ofcom's soft touch points to a deeper issue in the way regulators relate to the market. Too often, Big Business seems to get off lightly, while consumers lose out.

Why?

Partly because there's a revolving door between the regulators and the companies they oversee. It's the crony corporatist cartel at work again.

We don't just need producer competition. We need regulatory competition. Instead of unaccountable, public regulators, we should be looking to create competition between private regulators. The better the regulator at serving consumers' interests, the more it - and the companies it oversaw - would be trusted by the public.

State monopolies are a recipe for failure. To put consumers first, disperse power.


27 JUL 2016

It was "Taking back control," not immigration, wot won it

Since the referendum, some Remain campaigners have made out Leave's victory was solely driven by angry nativism, and Britain is now radically polarised. Their narrative has been uncritically repeated in parts of the broadcast media. But a new report by British Future – a genuinely neutral observer – with polling by ICM suggests these articles of faith are really nonsense.

Here are some of their most interesting findings:

  • Sovereignty was the top Leave concern: '54% of Leave voters said that "taking power back from Brussels" was the main reason they voted as they did, more than double the 24% who cited immigration as their number one reason.'
     
  • There is a broad consensus on immigration control: 'Three quarters (74%) of people agree that "Immigration brings pressures as well as gains, and our decision to Leave the EU gives us a chance to change the system."'
     
  • And an even broader consensus on the status of EU nationals already in the UK: '84% of the British public supports letting EU migrants stay – including three quarters (77%) of Leave voters.'
     
  • But voters on both sides disliked the tone of the immigration debate: 'A majority of Leave voters (52%) and UKIP supporters (53%) agreed that the debate on immigration in the campaign became dangerously overheated, with 80% of Remain voters feeling this way.'
     
  • Britain isn't necessarily an 'increasingly divided nation': 'In 245 out of 395 electoral districts the average person could easily expect to meet approximately the same number of people who voted differently from them in their main local high street.'
     
  • Continuity campaigning is holding Britain back: 'If the 48% tribe stays mobilised – and thinks it might ask the same question again – then the motley coalition of the 52% would have to stick together too, ready to refight the last war.'
     
  • A Brexit consensus is possible. If we transcend the tribalism, we can start to have new, productive debates: 'Many people will want to engage in the debate about what changes after Brexit could mean for the causes they care about.'

Have a read.


26 JUL 2016

Western guilt won't defeat terrorism

Nice, Munich, Ansbach, Würzburg, Reutlingen. Not a day seems to pass without a new act of terror in Europe, almost always with an Islamist motive. Security in our cities can no longer be taken for granted. Yet too many lazy assumptions remain unchallenged.

Europe is gripped by cognitive dissonance, writes the Spectator's Douglas Murray. He's right. Facts are being ignored because they conflict with predetermined narratives. That's a bad recipe for effective public policy.

After every terror attack, we still hear it argued that the victims are really the perpetrators.

The September 11th attacks were blamed, in some quarters, on American imperialism. The July 7th bombings in London on the Iraq war. Military adventurism didn't quite hold as a motive for the spate of atrocities in France over the last few years, so instead it was pinned on enforced deprivation in the banlieues.

What supposed oppression will be scapegoated for the recent attacks in Germany?

In some minds, only the West is capable of proactive violence. Non-Westerners only act with justifiable provocation. This is absurd inverse racism. Post-colonial guilt offers no protection against terror.

The only thing that Germany can be accused of is generosity. With several attacks perpetrated by presumed asylum seekers, Angela Merkel's magnanimous decision to admit so many people so quickly from Syria and elsewhere looks increasingly misguided.

It should be clear by now that mass immigration from a warzone where terror groups are ascendant poses security risks. Yet many remain unwilling to admit it. No matter the reality, the idea that all immigration is always beneficial is still considered sacrosanct.

Lone-wolf terrorism is difficult to eradicate. It can, however, be contained, and its effects mitigated. Israel, which has a far lower mortality rate per terror attack than Europe, shows how we might do it: a combination of low-tech defence mechanisms – e.g. concrete blocks around street targets – and high-tech tools – e.g. cyber-monitoring of radicals on social media.

But first our basic assumptions need to change. Self-loathing won't keep us safe.


25 JUL 2016

Boris can build a new consensus

Theresa May's decision to make Boris Johnson Foreign Secretary prompted howls of outrage in some quarters. But already the appointment looks inspired. Boris is showing that Brexit Britain will be optimistic and outward-looking. That's exactly the message we need.

As Foreign Secretary, Boris is delivering on the vision he presented as one of the leaders of Vote Leave. He envisaged a Britain that didn't wall itself into an outdated political union, but looked outward to new markets and global opportunities.

That message came across very clearly during the campaign. I saw it first hand when I joined Boris on Vote Leave's battle bus. His charisma may have drawn the crowds, but it was his message - Project Hope - which inspired them.

From the start, the received wisdom conveniently ignored the internationalism of the Leave campaign. Before the referendum, Brexiteers were smeared as parochial little Englanders. Now we're told the vote wasn't even about the EU, but just a bitter rebellion against globalisation. It's a narrative solely aimed at delegitimising the result.

Most people don't want to see Britain cut off from the world. Britain has always been a maritime, trading nation. Leaving the EU won't change that. Self-government doesn't mean isolation.

As the United States retreats from its role as global policeman under the current President, and perhaps even more so under the next, Britain may need to play a greater role in foreign affairs. European countries may have to put more resources into NATO. Cooperation with our allies will be increasingly vital to our national security. It's clear the new Brexit Government intends to deliver that.

Rather than provoke hysteria, Boris's appointment should actually reassure Remainers. The global outlook he is bringing to his new job offers the opportunity to both sides in the referendum for a new consensus. Let's help him build it.


22 JUL 2016

Labour voters deserve a better choice

Who represents Labour voters best? The unreformed Blairite who wants to ignore the referendum result? Or the unreformed Trotskyite who wants to scrap our nuclear deterrent? Don't they deserve a better choice?

In too many seats, voters have had too little choice for too long. Safe seats have made it too easy for candidates to get elected just because of the colour of their rosettes, and then ignore their constituents once the election is over.

Parliament has become a self-selecting cartel: instead of being chosen by voters, MPs are selected by – and loyal to – the party machine.

But cartel politics doesn't just undermine democracy. It also stops innovation, and entrenches bad ideas. Especially on the Left.

Successive Labour leaders have complacently assumed that Labour voters supported not just the EU, multiculturalism, and immigration, but also welfarism and fiscal irresponsibility.

What was once the workers' party has become paternalist and patrician: believing that all the masses want is more handouts bestowed upon them by the ruling elite.

The Left is disconnected from the times we live in. This isn't an era of passive receipt. This is the age of Twitter, Amazon, and Airbnb - where self-expression is expected, choice is normal, and disruptive innovation is progress.

In the modern world, one-party monopolies should be an anachronism. At the next election, I believe there will be huge opportunity for another party to give people in Labour seats still considered unlosable a real choice.

That party will need to offer a genuine alternative. It will need a plan to tackle both the rigged system that keeps political elites in power, and the rigged market that keeps corporate elites in the money. It will need to offer not handouts, but control.

I hope that party will be UKIP.


21 JUL 2016

In experts we trust?

Remember the post-Brexit economic Armageddon the 'experts' told us to expect? It's taken less than a month for them to admit they got it wrong.

Yesterday the Bank of England – which told us growth would plummet if we voted Leave - reported there is 'no clear evidence' of a slowdown. The IMF – which warned Brexit meant a recession – said, actually, it doesn't.

In reality, the economic data since the referendum is encouraging. The FTSE 100 is back in a bull market. The domestically oriented FTSE 350 is up too. ONS figures show unemployment is at record lows.

Yes, the pound has fallen, but - as Moneyweek's Merryn Somerset Webb points out – Britain's massive current account deficit suggests it was overvalued before.

It's tempting to believe some of the 'experts' now eating their words were deliberately dishonest during the referendum campaign. I suspect the truth is more prosaic. It wasn't a masterful conspiracy. Just groupthink.

The bogus Brexit predictions reflect a herd mentality. The 'experts' all produced the same conclusions, because they started from the same – false – assumptions.

They made out that a UK-EU free-trade deal wasn't possible. It clearly is.

They claimed we didn't know what Brexit looked like. In fact, our proposal was clear from the start.

'Experts' aren't infallible oracles. They can be as tribal as anyone else. Davos types don't think alike because they're great minds. They agree because they don't listen to the dissenters outside their bubble.

Is it any wonder they're out of touch with voters?

It's striking that the economic insiders who rejected the groupthink – Neil Woodford, Nick Train, Jim Mellon – are some of the top investors. People who made fortunes by ignoring the received wisdom, and separating themselves from the herd.

Trusting the 'expert consensus' can be high-risk. That's why I prefer to trust the people.


20 JUL 2016

Britain should welcome foreign investors

We were told Brexit would discourage foreign investment. The takeover of Arm by Japan's SoftBank shows what a fiction that was. Investors abroad want to keep buying into Britain. The question is: will our new government let them?

Theresa May welcomed the Arm deal. But she has also said she will assess foreign takeover bids on a case-by-case basis. She has now created a department for industrial strategy. The signs are a little ominous.

Asset stripping can of course be damaging. But there's also no reason why a foreign corporation should be more predatory than a British bidder. Attacking foreign investors would undermine the broader post-Brexit message that Britain is open for business.

More fundamentally, blocking takeovers is an assault on private property. Imagine your pension was invested in a British company that sparked foreign interest. Imagine the takeover bid made the share price spike (like Arm's), offering you a huge financial boost for your retirement. You'd probably want to sell. Why should the Government be able to stop you?

There's also the question of our investments abroad. British pension funds rely on foreign markets to diversify their portfolios. Emerging markets need British capital, and British investors can make good returns. If we put controls on foreign investment, what's to stop other countries doing the same to us?

The idea of 'industrial strategy' has a bad pedigree. It didn't work for Labour in the 1970s. It doesn't work in Defence. Government attempts to pick winners invariably produce losers – George Osborne's horrendous Hinkley Point deal being a case in point.

Micromanaging the economy from the centre is bound to fail. Concentrating control is the problem, not the solution. The PM is right to want to spread wealth. The way to achieve it is to disperse power.


19 JUL 2016

Trident is about sovereignty

I campaigned for Britain to leave the European Union because I believe in British sovereignty. Last night, I voted to replace Trident for the same reason.

The rationale for our independent nuclear deterrent is the same now as it was sixty years ago. When hostile powers and rogue states have nuclear weapons, we need them too.

The arguments against replacing Trident don't stack up.

It's too expensive, some say, as if surrendering a key pillar of our national security would be an economy.

We can shelter under America's nuclear umbrella, argue others. But in recent years the US has retreated from its role as global policeman. We can't just take its protection for granted. Nor would it be right for us to expect American taxpayers to pay for our security.

Then there are the resurgent Labour unilateralists. Jeremy Corbyn says we have to abolish Trident to create a 'nuclear-free world.' Anyone would think Britain were the only nuclear power on the planet.

Unilateralists are always conspicuously unconcerned about the nuclear capabilities of non-Western states. Who seriously believes the world would be a safer place if Russia, China, and North Korea were the only countries with nuclear weapons?

Mutually assured destruction has actually been remarkably effective at preventing nuclear war. The fact that no nuclear weapon has been used in anger since World War II, in spite of the Cold War, must be testament to that.

But Trident is not just about security. It's about independence. We don't need it only to deter a nuclear strike. We need it to stop another nuclear power holding us to ransom.

Preserving sovereignty requires the capability to use hard power if necessary. If we want to be a self-governing country, we can't give our nuclear deterrent up.


18 JUL 2016

The end of Osbrown?

The old Downing Street clique is out. We've got a new PM, and – perhaps more importantly - a new Chancellor. But will the new man at Number 11 ditch the Osbrown orthodoxy? Or will we just get more of the same?

In opposition, George Osborne styled himself as the radical alternative to Gordon Brown. In office, it was impossible to tell the difference.

Like Brown, Osborne borrowed during the boom years – doubling the national debt. Like Brown, he backed massive credit creation by the Bank of England. Like Brown, he tinkered incessantly with the tax code, and filled his budgets with political gimmicks.

Worst of all, like Brown, he now pretends to have saved the economy.

Eight years since the financial crisis, we're still facing the same problems. The big banks remain insolvent. Economic growth is still far too dependent on credit-fuelled consumption. Our huge current account deficit shows we're still spending far beyond our means.

Eight years of record-low interest rates haven't fixed the economy. Quite the reverse. The national debt is now so high, it's not even clear the British government would be able to bail out the banks if and when they collapse again.

Policymakers aren't prepared to do more than apply a short-term sticking-plaster: keeping zombie banks on life support by churning out credit.

The long-term solution requires the whole model of fractional reserve banking to be reined in - as I wrote several years ago in After Osbrown.

George has one advantage on Gordon: he got out before the storm. His dismissal by Theresa May might turn out to be a blessing in disguise for him.

Now Philip Hammond will be left to pick up the pieces. To fix the financial sector, he'll need to be radical.


15 JUL 2016

Cameron's legacy could be more direct democracy

I disagreed with David Cameron on a lot – which is why I left his party. But there is one aspect of his premiership which I think deserves praise: on three occasions, he called referenda, and let the people decide.

I'm a big believer in direct democracy. In a world where digital technology makes it easy for voters to be instantly clued in to current events, there's no justification for entrusting major national decisions to the political elite alone.

Since Britain's first referendum – Northern Ireland's vote on whether to join the Republic – in 1973, there have been a dozen others. But most have been local or regional. We've only ever had three national referenda. Two have been held in the last six years.

David Cameron called three significant referenda: on the Alternative Vote, Scottish independence, and Britain's EU membership. Yes, he did so under pressure. But the fact remains, he staked his political career on them, and ultimately lost.

Politics remains a cartel. Far too much power is still concentrated in a tiny clique at the top. Bringing back power from Brussels, under the new Brexit government, is a huge first step toward progress. The next will be bringing back power from Westminster and Whitehall.

That requires a government - and a party - far more radical than David Cameron's. But, intentionally or not, he has unleashed the momentum for change. Reformists now need to seize it.


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The End of Politics and the Birth of iDemocracy

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