Redwood and Randall are on the money - not the BBC
The financial crisis is just about the only thing that the commentariat can talk about at the moment. Perhaps unsurprisingly.
Yet I can think of only two commentators who have been consistently perceptive and up to speed; Jeff Randall and John Redwood. Almost everybody else has been playing catch-up. The BBC's coverage - especially regarding the Hank Paulson bailout - has been disgraceful.
Jeff Randall gave good reason to question the Paulson package – yet I’ve yet to hear the points he makes given airtime. More impressively, Randall has warned about the sea of cheap money and debt for months. He saw this coming. His explanation, is the simplest and the best; too low interest rates for too long, meaning governments and people piled up too much debt ....
Redwood too has another brilliant insight on his blog. He points out that this financial crisis is not really just an American problem. Actually, it could be more of a problem for the EU. As I suggested back in mid-September, this financial crisis will hit Europe hardest.
If I was still working in fund management, I'd switch off the BBC and listen to Redwood and Randall instead.
Posted on 29 September 2008 by Douglas Carswell
A plan to fix the economy
How should the Conservatives respond to the financial downturn? Meeting in Birmingham today for our party conference, what should we say about the looming recession?
Firstly, our tone needs to be one of humility. No smug, self-regarding Tatler-pose, please! Many of the most vulnerable folk across Britain face real difficulties with rising costs. We need to show we're on their side.
Secondly, we need to show that we're a serious alternative government, capable of fixing the nation's finances and economy.
Some have suggested that we set up an independent Office of Budget Responsibility to oversee public finances. I'm not sure that's entirely enough.
Setting up a new independent panel of experts to oversee public finances, akin to the Bank of England's Monetary Policy Committee is okay. Sort of.
Alternatively, some might suggest that it was the independent MPC that got us into this mess in the first place. Those independent experts gave us a decade of low, low interest rates, which meant too much cheap money for too long. The result? Government and individuals got into debt. And there was an asset bubble.
Set that aside though, isn't it the job of those we elect to the House of Commons to provide oversight of public finances? If the legislature is so monumentally inept at scrutinising the expenditure of the executive, then surely its time for more far reaching reform, not just another Whitehall quango?
In The Plan: 12-months to renew Britain, which I've co-authored with Daniel Hannan, we propose a number of rather bolder reforms to fix our broken economy
Public finances are a mess because since 1997, £1.2 Trillion additional in taxes have been spent - largely by unaccountable quangos. In The Plan, we propose making every single quango in the country obtain specific annual approval for its budget from the relvant Commons select committee. Doing so alone would immediately reduce vast waste - and allow tax cuts over time. We might also get fewer monumental cock-ups (remember the SATS test fiasco? Whitehall IT disasters? Defence procurement farce?)
Promising tax cuts alone is simply offering to deal with symptoms. It's the cause of high taxes - unaccountable quango government - that we need to tackle first.
Secondly, this economic downturn must put radical deregulation at the top of the political agenda. Politicians all talk about "cutting red tape". Then they become ministers.....
When the economy was booming on a tide of cheap money, it was possible to ignore the way red tape was making the UK progressively less and less business-friendly. No longer.
In The Plan, we propose a Great Repeal Bill, a list of 30 specific laws to repeal. No equivocation. No new quango to consult on "better" regulation. No regulatory impact assessment. Just less regulation.
The Plan: 12-months to renew Britain is available at www.Renew-Britain.com
Posted on 28 September 2008 by Douglas Carswell
Politics and the Simpsons
Is there a "Simpson's law" in politics? Could it be that anti-Simpson leaders are those on shaky ground. Pro-Simpson leaders, on the other hand, tend to keep on winning.
Remember how George Bush snr attacked Homer and his family before going on a crushing defeat at the hands of Bill Clinton? As Daniel Hannan has noted, dictator Hugo Chávez has barred Venezuela's citizens from enjoying the show. Now Russia's nasty little government wants the Simpson's banned, too.
Tony Blair - never a man I voted for - went so far as to feature in a Simpson's cameo roll. He hardly ever lost an election. (As I learnt on election night in Sedgefield in 2001).
Coincidence? Maybe.
Alternatively, it could be that there's more to the Simpson's than Bush snr or the Kremlin grasp. The Simpson's are actually a rather wonderful family. For all their ups and downs, they stick together. Homer's greed and idiocy know no bounds. Yet he always manages to redeem himself - or else Marge does it for him. In their chaotic way, they pull through.
Indeed, after almost two decades, Homer has outlasted his strongest critics. He'll be with us long after Russia's nasty little autocrats are eventually ousted.
Posted on 25 September 2008 by Douglas Carswell
Australia gets defence procurement up-side down
An independent review of Australia's defence procurement suggests giving responsibility to a new defence procurement quango, according to the Canberra Times. Oh dear.
Apparently, this is to try to prevent budget overruns and delays. Sound familiar?
Alas, if the Aussies go ahead and give a quango control, they'll do what we did when we set up the Defence Procurement Agency. It'll simply make things worse.
An unaccountable quango is no better a ensuring value for money - and perhaps worse - than an inept government department.
The only effective way to guarantee better value for money from the defence budget - here or in Australia - is to break the strangle-hold of the contractors.
In any market, when you restrict supply, the seller sets the terms of trade. In defence, a few contractors are able to give consistently dreadful customer value to the armed forces because they are able to frighten politicians about job losses and "appropriate sovereignty".
Surely, if the Aussies face a similar problem with their defence contractors that we face with ours, our governments should group together to obtain greater power as consumers? If we widen the base of acceptable suppliers, we could shop around, and ensure that we got the best kit in the world - not just the stuff that the contractors want us to buy.
Posted on 24 September 2008 by Douglas Carswell
Gordon Brown has run out of ideas
The Prime Minister was strutting his stuff in Manchester today. Lots of politician-speak about building a new "fair society" for all.
Yet it's all just guff and drivel. Brown has entered the "John Major phase" of the political cycle. Decline and division. Rhetoric rather than direction. Zero vision.
Brown has simply no idea of how to "build a fair society". Every time we face a public policy challenge, Brown simply reverts to his tried and failed position of trying to give us more Big Government.
Big Government in my constituency spent £15 million on a brand new hospital that's been lying two thirds empty for three years. Big Government spent £16 million on a brand new school in Clacton that they then tried to shut. Big Government pays the wrong amount in Child Tax Credits to one in three local families.
As our Prime Minister these past 12 months, Brown has doubled 10p income tax and hiked up vehicle excise duty so that pensioners driving a second-hand car pay more than a city financier driving a brand new Audi. Building a fairer society? Brown doesn't even know where to begin.
Gordon told his Labour party members "I believe in Britain". Indeed you might, Mr Brown.
The problem for you, though, is that Britain no longer believes in you.
Posted on 23 September 2008 by Douglas Carswell
Lunch with Mark Steyn
I've just been at a lunch with Mark Steyn. It's the first time I've heard him speak, and he's as lucid and funny in person as he is on paper and pixel. Yet he has a serious message.
He was talking about the massive change in demographics taking place across Europe - and some of the cultural changes that they might bring. He discussed the rise of political Islamism and the response of our politicians.
Mark highlighted how a mixture of self-censorship and self-doubt has denied us even the proper language we need to address the issue - let alone review our public policy position. The charge of racism, he suggested, has prevented people from even discussing issues like assimilation frankly and openly.
Steyn should know. He's just defeated some absurd charges brought against him by a "human rights tribunal" in Canada.
One example Steyn mentioned was that apparently 56% of British people of Pakistani heritage are married to their first cousins - vastly more than was the case a generation ago. Yet, he said, this fact is rarely mentioned. Is what Steyn says really true? If it is, then how come it's never mentioned? How come the BBC never seems to make programmes about it and what it might imply?
Steyn was most interesting when talking about the need to "end one-way multiculturalism". He suggested that our current obsession with multiculturalism is a dangerous fad which is already beginning to give way to a creeping and intolerant uniculturalism.
Sitting on my right, was the Danish newspaper editor who had published images of the Prophet Muhammed – and been at the centre of quite a rumpus.
Also at the lunch was Ayaan Hirsi Ali. She is a brave woman, and as a Somali by birth, has some interesting insights into the freedoms that the West offers women.
Walking back from the lunch, I pondered Steyn's central argument that a self-hating Western intelligentsia (the Guardianistas) lies at the root of the problem.
As an MP, I believe it’s vitally important that my constituents are able to hear what Mark Steyn has to say about key political issues. Yet when was the last time that you heard him on Radio 4 or the Today programme? When last did smug, self-regarding Newsnight invite Mark Steyn on the programme to have a say?
Indeed. Perhaps that rather proves Steyn's point.
Posted on 22 September 2008 by Douglas Carswell
The trouble with John McCain .....
While bowled over by Sarah Palin, I've always been highly suspicious of her running mate, John McCain. I've never quite been able to put my finger on it, but Alex Singleton's excellent post here comes close.
I believe in free markets and small government. I distrust politicians who don't for a simple reason. It means that they have an exaggerated faith in state intervention and end up trying to run things for us. No matter how wise or well-intentioned, they invariably mess things up.
In my view, there's only one thing worse than a leftie politician who expands Big Government; a conservative politician who expands Big Government.
If you're going to have a politician give you more government, please let it be a non-conservative. That way, when things fall apart, there's going to be someone able to come in to sort the mess out.
Yet McCain seems to have jumped on board the anti-capitalist bandwagon.
We should be worried about the anti-free market position of many US Republicans leaders.
As I warned
, the Bush administrations decision nationalise Fannie and Freddie was going to cause big problems. Indeed, it has. Nationalising Fannie and Freddie said it was okay to take a punt on mortgage lenders going south. Hence the share price of Morgan Stanley, HBOS and other institutions with mortgage debts on their books went down ("short selling" was a consequence, not a cause). That in turn then prompted the US administration last Thursday to de facto nationalise enormous quantities of private debt.
Thus do the unintended consequences of Big Government beget more Big Government.
Making poor Americans pay higher taxes for the errors of a few Wall Street bankers may be ethically dubious. It's probably also economically daft.
Hank Paulson's "rescue package" is simply not the end of the matter that sections of the media portray it to be. Fridays' record rally is fool's gold. My bet is that the market will be lower in a week's time, and a month’s time, than it closed on Friday.
Why? Because nothing the US government's expensive game of pass-the-debt-parcel has actually solved the problem. Private debt has simply been converted into public debt. The position of the government of China as America's lender of last resort has been reinforced. The only difference is that before the end game of this debt created crisis unfolds, $ billions more will have been spent.
How can a Republican administration have ended up in this position? Putting the former head of an investment bank - Paulson - in charge of the Treasury is perhaps a little like putting a kid in charge of a sweet shop.
But more profoundly, it suggests that key US decision-makers simply don't get Hayek or Adam Smith. McCain's comments do little to suggest he'd be any better.
Posted on 21 September 2008 by Douglas Carswell
Donal Blaney on Palin and the BBC
That bastion of conservative soundness, Donal Blaney, makes an interesting point here.
How come when Sarah Palin addresses an audience of 60,000 our state-funded BBC makes no mention of it? Had it been Barack Obama, we'd have heard no end about it.
The more that the blogosphere grows, the more obvious it becomes that the BBC license fee has got to go.
Posted on 21 September 2008 by Douglas Carswell MP
Essex Chief Constable should answer to Essex people, not remote officials
Chief Constable of Essex, Roger Baker, has been criticised by HM Inspectorate of Constabulary for sending officers out every time a crime is committed. It's not Essex police that need criticism for doing their jobs properly, but the notion that officials in London know what's best for Essex.
According to the Inspectorate, "While attending every crime is a highly effective method of engagement, it is felt by a number of staff interviewed that taking a statement at each crime is not always necessary and can be time-consuming".
Maybe. Maybe not. But it should be for Essex people to judge if the tactics employed by Mr Baker are any good. And ultimately, it’s not even for the police, but for the communities they serve, to decide what is and what is not "necessary".
As an Essex MP, it's my view - and the view of a lot of local people - that things have got better in terms of policing since Baker arrived. Not perfect, but better. The bigger failings with the local criminal justice system in Essex lie further up stream - with the public prosecutors and offender management, and perhaps even the courts.
This report illustrates perfectly why there needs to be radical change in terms of policing under the next government.
At present, police chiefs have to answer to remote inspectorates and Whitehall officials. The current system of police authorities and remote target setting does not work. Law and order demand change.
In place of police authorities and Home Office officials, the Chief Constable must answer instead to single individual justice commissioner - elected by Essex folk. The police must continue to be 100% operationally independent, but the justice commissioner of Essex (I prefer the term Sheriff) would set local priorities and make decisions over what the police should do.
Do statements need taking each time there's an offence? Is it effective engagement or time-wasting? Let local people decide on the basis of results.
Incidentally, once Essex people have the power to set local police targets themselves, perhaps we could scrap the remote Inspectorate, and spend the extra money locally. On what might it be spent? Ask the justice commissioner. That's how local policing should work.
Posted on 20 September 2008 by Douglas Carswell
What planet do the human rights lobby live on?
Andrew Dismore MP is quoted in the Telegraph this morning talking about Islamic terrorists being "without fear of being put under a control order".
It's absurd to think that terrorists are likely to fear control orders - whether or not they are put under them.
Control orders are a bit like sending them to the naughty step. So what?
Do we really think that extremists willing to entertain the notion of suicide bombings are going to fear a glorified probation regime?
It is a measure of how enfeebled the British state has become that we issue control orders on those who seek the destruction of our way of life - and somehow think that those under the control orders are fearful.
Control orders came into existence as a messy compromise. Activist judges have deliberately used human rights laws in order to prevent dangerous foreigners from being removed from our country (They have largely done this for ideological reasons, not because of what the law actually says).
At the same time, the state knows that it can't really be seen to just let these individuals roam freely (Islamic extremists, that is, not judges). So we all have to pretend that the extremists are in fact under some sort of supervision. The reality is that those under control orders are not controlled nor subject to any orders.
Islamic extremists do not fear control orders. Control orders merely serve to reinforce them in their belief that the West lacks the resolve to defeat them.
Until we scrap the human right laws and deal with the activist judges, who is to say that they are wrong about our lack of resolve?
Posted on 20 September 2008 by Douglas Carswell
This financial crisis will hit Europe hardest
Since the credit crunch began, Gordon Brown has implied that its a "made in America" crisis. Yet are we just innocent global by-standers injured by the greedy of US sub-prime lenders?
This financial crisis isn't made in America. It might have manifested itself there first, but it's been caused by debt. And when it comes to debt, the UK and European as guilty as anyone.
Years of low interest rates in the EU and Japan - as well as America - meant too much money was too cheap for too long. As a result, governments and individuals borrowed more than they could afford.
The US lived beyond her means by giving China IOUs, or US treasury bills. (Tellingly, three month US treasury bills yesterday had yields of almost zero - no one wants them).
Yet despite all that, US public finances are arguably in better shape than our own. America's total public debt is still only 48% of her GDP. The figure for Germany is almost 60%, and around 100% for Japan and Italy.
In other words, if the US government was reckless enough to do so, she could nationalise almost all the bad debt in her banking system - and probably still have less public debt than the Europeans. We, on the other hand, have much less room to move. Our public debt is so high that it’s difficult to see how private debt might be nationalised without dire consequences.
If we've not fallen as far as the US, it's because we came off the cliff a little later.
It's not the US that caused this financial crisis. Its years of living beyond our means and trying to defy the laws of economic gravity.
Posted on 19 September 2008 by Douglas Carswell
From hubris to nemesis ... ?
Remember those Labour election posters in 2001? They boasted an end to "boom and bust".
Since the Greeks, nemesis is never too far behind hubris.
Posted on 18 September 2008 by Douglas Carswell
Government lies about immigration?
So it's true. "The public has been mislead by ministers" over how many foreigners are settling in Britain, according to today's Telegraph.
What is so shocking is that we're not more shocked.
Apparently the Home Office issued a press notice that mislead and misinformed.
The top civil servant, Sir David Normington, at the Home Office has apologised. He shouldn't just say sorry. He should get a P45 and get out of public policy making.
Almost regardless as to which Westminster clown we call Home Secretary, this serially inept department is out of control.
The conventional system of accountability via ministers to Parliament simply isn't working. As a consequence, no one in public office - be they MPs or civil servants - has got a grip on mass, uncontrolled immigration into our country.
In a book I've co-authored with Daniel Hannan, which is published next week, we show how we can sort this sort of problem out. It means not only a new government, but a whole new way of holding the David Normington's of this world to account.
Watch this space .....
Posted on 18 September 2008 by Douglas Carswell
Missing the barn door: UK National Defence Association report
"More public money for our special interest!" demands another lobby group. Except this time it’s the UK National Defence Association.
I have a good deal of sympathy for the aims of the UK National Defence Association. Having visited our troops in Afghanistan, I know that our armed forces have not been well supported with the best equipment in the world. It's a disgrace.
But when I hear the UK National Defence Association demand that expenditure on defence be increased from £34 billion to £50 billion, I wonder if all that extra money would actually solve the problem.
If a lobby group demanded £ billions more for health and education, many of us would say that such additional new expenditure needs to be accompanied by reform. We'd recognise that Labour has hosed vast amounts of extra money on schools and hospitals with little to show for it.
To make sure that didn't happen with defence, we need to know that the extra £16 billion won't just end up on the balance sheet of a few defence contractors.
Nowhere in the report - Overcoming the Defence Crisis - is there any serious attempt to address the points Lewis Page, bestselling author of Lions, Donkeys and Dinosaurs has raised. Instead, the report simply screams "more money!"
For instance, the report lament how poorly equipped the RAF is, with the partial exception of the Eurofighter. They mourn that much of the what the RAF has are "legacy aircraft from the Cold War".
It seems not to have occured to the report's authors that the RAF is in the sorry state that it is precisely because all the money has gone on the Eurofighter - the biggest Cold War legacy of the lot. This £20 billion cuckoo-in-the-nest has killed off the ability of the RAF to do much else. As a result,
the RAF is well equipped to fight Soviet MiGs in Europe. It's a little thin on the sort of UAVs, for instance, that we actually need in Afghanistan.
Worse, the report then calls on us to spend more on Eurofighters. If anything, we should scrap the entire programme tomorrow. Finding an extra £16 billion, only to then spend it on more Eurofighters, would be Homer Simpson-esque - and in the interests of BAE and almost no one else.
Disappointingly, the report seems to be little more than a costly shopping list. There is nothing in it to suggest how we might - in these economically straightened times - get better value for money.
There is no mention whatsoever of the cause of our procurement problems - the Defence Industrial Strategy. In fact, the only mention of industry I could find was a reference to use defence contracts to prop up failing UK ship yards. Oh dear ....
This report contains much that will please large defence contractors. When so much new thinking on defence policy is required, it is disappointing that this report didn't do more to question why it is we don't get better value for each tax-pound spent on defence equipment - no matter how many tax-pounds that might be.
Posted on 17 September 2008 by Douglas Carswell
Big Government made the credit crunch
Margaret Thatcher was fond of saying that if you try to buck the markets, the markets will buck you. As the financial crisis deepens, it’s important to remember that the events unfolding are not a failure of the markets - it's the market response to a problem created by Big Government.
For years, central banks - particularly the US Fed and the European Central Bank - have kept interest rates lower than they might otherwise have been. The industrial revolution in China gave us lots of cheap goods without inflation rising.
But it meant too much cheap money for too long.
Governments and people had more incentive to spend and less to save. That meant that public and private debt in the West grew horrifically - and with people thinking themselves richer than they were, there was an asset bubble (think house prices).
All those years of low, low interest rates will now be matched by higher costs of borrowing.
There's still a Neanderthal-tendency - notably the Confederation of British Industry - demanding an interest rate cut. Those calling for the Bank of England to cut interest rates simply don't get it. When it comes to the cost of borrowing, it's not going to really matter a fig what the BoE does. There ain't enough money to lend out. Banks that can still lend money will charge more for doing so.
Demanding that the Bank cut rates is like demanding that the television weather man forecasts lots of sunshine for tomorrow in order to prevent it from raining. The Bank today now needs to set rates on the basis of what is going to happen - not on the basis of wishfully thinking that it's in a position to change the economic weather.
Not only does the BoE no longer set the cost of borrowing the way it did a generation ago, but I’m starting to wonder – as a monetarist – if it can even control the money supply. The past decade has seen an explosion in the new financial instruments of liquidity. I don’t think that the conventional levers of economic control once available to officials can work anymore. We’re about to find out.
Posted on 16 September 2008 by Douglas Carswell
Is Future Lynx about to be axed?
The Guardian today reports that defence chiefs are about to make cuts to fill a large black hole in the MoD's budget. This could mean "abandoning a £1bn plan to buy 70 Super Lynx helicopters".
If this turns out to be true, there must be a full, independent inquiry into the circumstances surrounding the awarding of this contract in the first place. Why?
1. Our armed forces are paying a very heavy blood price in Afghanistan for the shortage of helicopters. The tax-pounds spent on helicopters are somehow not being converted quickly and economically into helicopters. We need to understand why this keeps happening?
2. In a letter from Lord Drayson dated July 31st 2007, he admitted to me that the MoD decided not to hold a full competitive tender process before awarding this contract. Why was the decision made not to have a full competitive tender process?
3. In his letter, Drayson stated that "it was the judgement of the Department that a competition" to decide how to award this contract would cause "delay". Who in the department made that decision and on what basis? Can the person who made that decision now be held to account for the even longer delay caused by awarding, and then cancelling, this contract?
4. Sources close to the rival US helicopter company, Sikorsky, have told me that Sikorsky wrote to the MoD last year offering to supply 20 plus helicopters to our forces in Afghanistan. They offered to do so for considerably less than the cost of the Super Lynx. The MoD took months to even reply - and took longer to do so that it would have taken Sikorsky to supply the said helicopters. Was this deliberate delay or merely MoD incompetence?
If Future Lynx were to be scrapped, it would be big news. It will be a massive blow to those working on this project. It will be a massive blow to our armed forces who lack the right kit.
If the contract is cancelled, we need a full investigation into how our defence procurement is run and how these key decisions are made.
As an MP, I have found that deliberate obstruction by senior civil servants within the MoD makes it almost impossible for me to get honest and reliable answers. In addition, massive lobbying by defence contractors is used to cloud the issues and prevent accountablity for what goes on.
A future government needs to establish a full inquiry into defence procurement in order to flush out the deceipt and bring the full facts to light. The big defence contractors might not like it, but we owe it to our armed forces.
Posted on 16 September 2008 by Douglas Carswell
The Defence Industrial Strategy is indefensible
China already spends the same amount on defence each year that we do. India, apparently, isn’t that far behind.
Given that the Chinese economy is about the same size as ours, we shouldn’t be that surprised.
What should give us pause for thought is the fact that China gets vastly more for its £35 Billion. While the UK has 27 warships, China has three times as many. We have 340 combat jets, China has over 1,700.
Of course, I hear you say, our British equipment is of much higher quality. Maybe that’s the case. Yet after the SA80 fiasco, I’d never assume it. Besides, history is littered with battlefields on which quantity prevailed over quality.
Others might like to reassuringly point out that £1 spent in China or India or “the third world” will, of course, buy you much more than it would if spent in the UK. Purchasing power parity, and all that .…
I agree. £1 spent overseas buys much more kit that £1 spent in the UK.
So why, then do we insist on spending the lion’s share of our defence budget in the UK?
Obviously we’d be daft to purchase too much kit off potentially hostile countries. But why not at least purchase some kit from our friends and allies who can make it for less money than we can?
If the United States or France or Australia, or even India, could make us a jet fighter, or aircraft carrier, or UAV more cheaply, why not buy it “off-the-shelf”?
Present defence procurement policy is better at putting money on to the balance sheet of a few favoured contractors than it is at equipping our armed forces.
Posted on 15 September 2008 by Douglas Carswell
Suranational government is no solution to the credit crunch
Dan Roberts writing in the Sunday Telegraph complains at the way that large multinational companies are now fleeing the UK. It's certainly the case that Gordon Brown's decade of stealth taxes means that the UK is today a far less attractive place to do business than it was.
Yet Roberts advocates precisely the wrong answer. He suggests that globally "politicians work together to build a new global consensus about what corporate citizenship means". In other words, we have some sort of standardised corporation tax from which no business will be able to escape.
It is quite something that a serious newspaper should print such a piece, and doesn't bode well for the future of liberal economics.
Mr Roberts might want to first ask why it might possibly be that those parts of the planet that have not regulated, taxed and frustrated trade and commerce have been those that have historically tended to do rather better.
When in early modern Europe some princling or other taxed and regulated, trade and innovation simply moved to neighbouring territories where the local big wigs were more understanding. As a result, Europe as a whole became dynamic and innovative.
It's a good thing that over-regulated businesses (and indeed people) can escape from one political territory to another. Indeed, its how capitalism - and indeed the United States of America - got going in the first place.
Globalisation and the internet now mean that the mobility of trade, commerce and people has never been greater.
The UK and France set taxes too high? Business shifts to Ireland and the Netherlands. US authorities over-regulate Wall Street, the City prospers. The EU allows remote officials to transform capitalism into corporatism (via all those thousands of directives), we lose our share of world trade to China and others.
Roberts talks about the need to clip the wings of businesses. It's the wings of Big Government that need to be clipped.
Posted on 14 September 2008 by Douglas Carswell
Send for the Sheriff
Three cheers for Liz Truss, deputy director of Reform! She’s penned a first-class article in today's papers.
She outlines how the criminal justice system no longer seems to work (look at the latest nonsense with Ian Blair at the Met). The solution? Liz advocates that "the police should be made directly accountable through the abolition of national targets and controls". Absolutely.
She goes on to explain that we need "the election instead of local justice commissioners, responsible for policing, prosecution, legal aid and correctional services within a local authority area. These commissioners would be directly elected every four years, with operationally independent forces accountable to them."
I couldn't agree more. In fact, I claim the idea as originally my own, having published a policy paper on it back in 2002.
The Conservatives have been feeling their way towards this policy ever since. But even now, party policy is only for directly elected police commissioners.
The criminal justice system is failing local communities not simply because of over-centralised management of the police by the Home Office. Public prosecutors are monumentally useless. The probation service is riddled with leftist assumptions about human behaviour and criminal conduct. I stuggle with the idea that they are on our side.
In order to improve not only local policing, but the criminal justice system overall, we need a system of direct democratic accountability.
It's time for the Conservatives to be much bolder in calling for direct democratic accountability for local policing - and prosecution and offender management.
Posted on 14 September 2008 by Douglas Carswell
Gove against Balls
Three years on the House of Commons education select committee has taught me something; politicians can't run education.
Take a look at the evidence. When Ministers try to run national testing, the country gets the SATS fiasco. MPs decide on "inclusion" for special needs, yet kids needing speech therapy end-up without. With officials deciding what's in the curriculum, a large slice of kids leave school unable to read or write properly.
If politicians ran supermarkets, we'd have catchment areas for breakfast cereals and waiting lists for bananas. So how come we let these people mismanage our children's future?
Education Minister, Ed Balls, like most politicians, is not able to grasp this basic lesson. He still seems to think that he - and his wise officials - should decide what's right for the rest of us. That's why today he's suggesting that government might well decide that A levels should be replaced with something else.
If Mr Balls proved incapable of running SATS testing without disastrous cock ups, how can he be taken seriously about whether we should have A levels? He can't. We need an education system where it simply doesn't matter what politicians like Ed Balls thinks.
Compare Balls "politicians-know-best" approach to the one taken by Michael Gove.
Gove has just returned from a trip to Sweden brimming with ideas
to transform our failing school system - by getting politicians out of it. He's talking about 3,000 new independent schools, free from central control. These privately-run schools would be completely free to send your kids to - they'd be paid for by taxpayers not through any sort of fees.
This is an immensely exciting set of ideas. It transcends the narrow questions as to whether teaching should be by synthetic phonics, or if, how and when schools should encourage more discipline. If we get this right, the correct answers to all those things will be attainable. The education debate need not be split between discussion about "standards or structures". Get the right structures - independence from officialdom, accountability to parents and localism - and the standards will be achievable.
If it was left to teachers, as respected professionals, to get on with teaching. And if it was up to parents to decide where their children went to school, we might at long last create the sort of schools that we so desperately need.
The "government-knows-best" approach to education - epitomised by Ed Balls - has been tried for decades, and has failed. It's time to give the Gove approach a chance.
Posted on 13 September 2008 by Douglas Carswell
The Last Days of Gordon Brown?
I'd avoided commenting on Gordon Brown's mounting difficulties with his own party until now.
My assumption was that Dan Hannan had got it about right back in May when he predicted that Labour MPs lacked the resolve to despatch Brown, keeping "him in place while constantly sniping at him". After all, if Labour MPs lacked the courage to challenge him for the top job when Blair stood down, they'd not find the grit to do it subsequently. Right?...
I'm starting to think otherwise. Why?
Take a look at the kind of Labour MPs now breaking cover and demanding a leadership contest.
Fiona McTaggart, Joan Ryan, Siobhan McDonagh. None of them is exactly a household name - perhaps not even in their own homes.
But they're not your usual rent-a-quote Westminster rebels. In fact, Fiona McTaggart - with whom I've sat on committee - is rather a serious-minded, thoughtful and considered person.
My guess is that if a Big Name were to come out calling for a contest in the next few days, it's Game Over for Brown.
Perhaps like in the Wizard of Oz, behind all the buttons and levers of office, it turns out that there sits a very ordinary man, without much of a clue of what to do for our country.
Posted on 13 September 2008 by Douglas Carswell
Just how independent will the Bank of England remain?
We're all familiar with how Gordon Brown made the Bank of England independent four days after Labour's 1997 landslide victory.
Lazy BBC-types have spent the past decade assuming that Mr Brown’s brilliant decision was the end of the matter.
Yet, is the status of the Bank quite such a settled question? How will the idea of independence hold up when boom turns into bust?
We’re about to find out.
When the late Nick Budgen MP first mooted the idea of independence for the Bank, his 1996 Private Members Bill advocated privatisation. He wanted to reverse Labour's 1946 nationalisation of the Bank.
What Mr Brown actually did in 1997 was rather different. Mr Brown's "independence" meant that the Bank gained a sort of "controlled autonomy" from politicians like Mr Brown. The Bank's Monetary Policy Committee was able to set its own interest rates in accordance with narrowly defined targets – set by Ministers.
While the good times rolled, all that seemed academic. There was little debate over policy - and low interest rates seemed the solution to everything. Asia flu? Russia defaults? Dot com bubble? Cut interest rates.
While oil prices remained low, and China kept giving us cheap goods in return for IOUs US Treasury bills, all was good. Exceptional deflationary factors meant the Bank’s Monetary Policy Committee could do an Alan Greenspan; keep money cheap.
Ooops! That doesn't look to have been such a smart move now.
Too much cheap money for so long, and now we've a property bubble bursting - and lots of IOUs that’ll need to be settled.
Not surprisingly, the first pressures are starting to grow on the Bank to cut interest rates. Yet if the Bank is serious about its independence, it may need to hold them – and it’s not inconceivable that it may even raise them. There's likely to be a gap between the low rates some demand, and the rates that the Bank sets. Higher rates could make this increasingly controversial.
High interest rates, Carswell! In a downturn!
, I hear some people cry.
Don’t get me wrong. I’m not advocating higher rates. I’m merely saying that with a credit crunch caused by too much cheap money, you’ve got to contemplate that more costly borrowing could be on the cards – like it or not.
And that, surely, is the point. If the Bank is now truly independent, it matters not what elected MPs like me think. It’s up to those officials at the Bank.
Something tells me that we’re going to hear more on this theme in the months ahead. Who sets interest rates, what rate they set, and how “independent” they are, are going to be sensitive subjects in the months ahead …..
Like Mr Brown's relationship with Prudence, we've not yet heard the last word about his Bank of England policy.
Posted on 12 September 2008 by Douglas Carswell
Immigration - the issue the Westminster elite don't want discussed
At last! Some fellow politicians are starting to say what needs to be said about immigration.
I've just been reading Frank Field and Nicholas Soames' excellent new paper on balanced immigration. They're right - not racist. They don't rant or rave – and they don’t frame the debate in a socially divisive way.
On the contrary, they seem rightly respectful of the fact that many fellow citizens have different backgrounds and heritages.
But Field and Soames do explain that it's time to limit the number of people given the right to settle in our country. They look calmly and dispassionately at the consequences of things carrying on as they are. They question the orthodoxy about the supposed economic costs and benefits.
They address openly the need to stop net non-EU immigration.
Most importantly, they look at how we might actually achieve a proper system of immigration controls.
Having read the paper, part of me wonders if the UK Parliament actually still has the power to control immigration, other than at the margins, without first dealing with the activist judges and with unaccountable EU institutions.
But despite that, Field and Soames need to be saluted for dealing with this sensitive subject so intelligently.
Posted on 11 September 2008 by Douglas Carswell
Ken Boston should quit as head of QCA
Today, the Schools select committee heard evidence from the company at the centre of the SATS fiasco, ETS. The government would dearly like it if we all blamed ETS for what went wrong - but I just don't think that that is fair.
Having heard evidence from ETS, and asked straight questions, I think its government officials that are largely to blame.
From what ETS chief, Dr Philip Tabbiner, said, my view is that the government's Qualifications and Curriculum Authority was pretty impossible to work with. Officials dithered and changed their mind over key details. They implied that key concerns had been passed upwards - when it seems they hadn't. Or if they had, nothing got done about it.
Ultimately, ETS - which manages to work with governments all around the world - felt forced to quit the contract. Government dither and indecision meant that what they had signed up to do, and what they were forced to do, were two different things.
Ken Boston, head of the QCA, cannot get away with blaming the contractor. He must quit.
The thing I really blame, however, is not Sir Ken - an affable and well-meaning official. No, the real blame must rest with the idea that we should have a state-run exam system. This episode shows that exams are best run by civic institutions - universities, professional bodies and schools themselves.
Posted on 10 September 2008 by Douglas Carswell
Don't think the credit crunch ends here
The markets surge on the news that the US government will bail-out mortgage giants Freddie Mac and Fannie Mae.
But, if I was still working in fund management, however, I'd be ultra cautious. This isn't the "problem solved" story its being portrayed in some sections of the media.
What's happened is this; low, low interest rates meant too much money was too cheap for too long. The result was a US property bubble. Having begun to burst, one in ten US mortgage holders is now in trouble.
Each time a US mortgage holder defaults, Freddie and Fannie had to pay up. With so many defaulting, Freddie and Fannie are sunk.
Except now they're not.
Every US taxpayer - rich, poor, old, young and probably the not-yet-even-born - will now be paying to keep afloat Freddie, Fannie and lots of people who over reached themselves financially. Just because the taxpayer is now bailing folks out, it doesn't mean people will stop defaulting.
Some say the alternative to nationalisation was "unthinkable". Just like it was once never thought about for British Leyland and PanAm? Others claim the government had to act to "avoid catastrophe". You mean like the 25% to 30% drop in US house prices that's going to happen anyway? Some feared that if Freddie and Fannie weren't taken over, it could have ramifications for the way US debt is financed. What makes you think China will be happy to accept American IOUs forever?
And that's the point. The end result is not going to be fundamentally different, just more costly to arrive at.
This measure will bring short term comfort. But the cause of the current economic woes is debt. Nationalising Fannie and Freddie doesn't reduce debt, but adds to it. It will add to economic woes.
Posted on 9 September 2008 by Douglas Carswell
NICE is no way to run our NHS
The Daily Express reports that the health quango NICE "spends more on spin doctors than assessing new life-saving medicines". Last year, apparently the National Institute for Clinical Excellence spent 10 per cent of its budget – £3.4million – evaluating drugs but £4.5million on communications.
I have a number of constituents who have been denied precious new medicines by NICE. The quangocrats refused to sanction the treatment on the grounds of cost. Now we learn that they are hosing our money at PR.
Remember this next time you hear someone say "Let's leave the NHS to the experts" or "The NHS is too important for politics".
Left to these particular experts, and without meaningful democratic accountability, look what happens.
It is time for a little realism and honesty in the political debate over health; there will always be finite resources for healthcare. In order to allocate these finite resources, you can either leave it to a planning quango to ration resources (see above for the results), or you allow some sort of insurance system to allocate resources on the basis of medical need - NOT ability to pay.
It's one or the other.
Personally, I'd prefer it if people got the treatments they needed on medical grounds, not because of how an unaccountable quango decides to ration them.
Posted on 9 September 2008 by Douglas Carswell
US government to nationalise mortgage giants
The US government is to nationalise failing mortgage giants Freddie Mac and Fannie Mae.
As with Northern Rock, what is it that nationalisation is going to solve? If the business models of these two mortgage giants are broken, how will state-ownership fix them? The answer is it won't. With or without state control, these institutions will almost certainly fail.
The only thing that will be different as a result of nationalisation is that $ billions will be spent before the end-game is played out.
The real danger in this financial crisis is not that government doesn't act. The real damage will occur if governments begin to believe that they should intervene.
It's not the threat to Fannie Mae and Freddie Mac that should alarm us, but the threat to liberal economic ideas and free markets.
The US Fed allowed too much money to be too cheap for too long. The US government spent a decade hyping the housing market. Having created a massive bubble, they now want to spend future generations earnings trying to hold back the inevitable. Thus do they throw good money after bad.
Nationalising Freddie Mac and Fannie Mae is an act of lunacy. However terrible the fall out would have been had these two institutions been allowed to go belly up, the consequences will now be even greater - and spread out much longer.
Posted on 8 September 2008 by Douglas Carswell
Further proof Parliament is rotten
When MPs voted to allow themselves a £10,000 a year Communications Allowance, many objections were raised. Some felt that politicians shouldn't be using taxpayers’ money to promote themselves. Others felt it created an unfair advantage for incumbent MPs.
In order to try to ensure that this wasn't the case, House of Commons officials drafted a set of rules. As a result, MPs must now have their newsletters vetted by a House of Commons official. That's right. In order to communicate with their electorate, MPs need permission.
Alas, once an official is called upon to adjudicate, there are all sorts of unintended consequences.
In my latest newsletter, for instance, I was forced to take out a press cutting from the Mail on Sunday in which I called for Speaker Martin to go. I wasn't even allowed to have a photo of Mr Speaker.
I discussed it with a terribly nice and decent Commons official. He felt he "couldn't allow it". He explained that I may well have been campaigning to reform Westminster politics. He didn't dispute my point about the need for a properly elected Speaker (rather than a Whips office nominee). He didn't disagree about needing a Speaker able too ensure that our elected legislature was up to the task of holding government to account.
The point was, he said, MPs can't use their Communications Allowance to be beastly about other MPs. If that was allowed, the Communications Allowance would simply be used for electioneering.
While I understood his reasoning, I can't help thinking that this is a disgraceful scenario;
the political class in Westminster uses your money to "communicate" with voters - so long as one doesn't use it to attack another member of the political class. No wonder voters increasingly despise Westminster MPs.
So, I hear you say, why don't you just stop using the Communications Allowance? If you feel so strongly about it, Carswell, why not set an example?
As with an arms race, it would be perhaps a little fool-hardy for me to unilaterally disarm and refuse to spend what every other MP in the land has access to. Especially, coming from a marginal seat.
The answer must surely be to scrap the Communications Allowance en block. David Cameron has given a clear commitment to do just this.
With YouTube and the internet, the costs of communicating with the electorate have never been lower. As with everyone else, politicians need to adapt and use innovation and imagination to get their message across. If they can't, let them make way for citizen law-makers who can.
Siphoning money off the taxpayer to pay for politics is no longer acceptable.
Incidentally, in case you were wondering, it’s precisely to avoid having to get permission from the men-in-tights that I pay for this blog site out of my own pocket.
Posted on 7 September 2008 by Douglas Carswell
Chris Huhne is no localist
Liberal Democrats like to think of themselves as being the localist party.
And in fairness, some of them talk a great deal about reforming local government - perhaps unsurprisingly for a party confined largely to district and county level. It’s also true that Lib Dems have been banging on about a local income tax for as long as anyone can remember.
But do they have a real plan to devolve power away from remote and unaccountable officialdom to local people?
Not if Chris Huhne has anything to do with it. As their spokesman on policing, Huhne was yesterday responsible for producing a comically incoherent policy. He says he wants to "decentralise control over police targets". At the same time, he proposes a new quango - a National Crime Reduction Agency - to "assess police policies on evidence and to spread best practice".
Presumably the quango's role would be to ensure that should any local police force actually begin to tackle crime in a way that the leftist elite who run our criminal justice system don't approve, then
best practice can be "spread" to stamp it out.
Huhne goes on to promise real local democratic accountability over local policing by ... um ..... well, you know .... making sure that a few more of those who sit on existing Police Authorities are actually elected. Gosh.
If Huhne believed in empowering local communities, why not do what the Conservatives propose and have a directly elected individual overseeing local policing. As I put it when I first published a policy paper calling for directly elected police chiefs in 2002, it would be like having a Rudy Giuliani in every town. Huhne's proposals would give us permanent Iain Blair.
Posted on 6 September 2008 by Douglas Carswell
EU dinosaurs plans to regulate the internet
Daniel Hannan has an interesting piece on his blog today about the Eurocrats' plans to regulate blogging.
EU officials apparently don't like the unregulated blogosphere because "the internet has largely been a space left to anti-European feeling." Those opposed to the European Union are apparently able to "reach an audience at a much lower cost".
When the printing press first arrived in Europe, various political authorities tried to control it. Like the Eurocrats, they felt threatened by the newly discovered ability to disseminate ideas and information.
Fortunately, Europe then lacked any single political authority capable of stifling the new innovation (China, which did have a single political authority, was able to stifle the innovation that their own invention might otherwise have brought about).
The technocratic elite who preside over the EU don't get it; the internet will help create a world that will regard them and their super state as an anathema.
Posted on 5 September 2008 by Douglas Carswell
Why does America produce better politicians?
There is a certain tendency amongst BBC / Guardianista-types, to sneer at America's drawn-out system for electing Presidents. As I wrote in the Sunday Times, I believe America's democracy works better than our own. America's Presidential race generates real enthusiasm, passion and colour.
Just watch Sarah Palin, John McCain, Joe Lieberman, or Michelle and Barack Obama.
Then listen to Alistair Darling. Or the stuck-record called Hazel Blears.
Exactly. Monochrome. You get my point.
Perhaps, it has something to do with the fact that at some stage in their careers, Palin, McCain, Lieberman and Obama without exception each had to contest elections not just as the Republican or Democrat candidates. They all had to fight open contests in order to be - or simply to remain as - the candidate.
Having your career trajectory determined by the folks back home, rather than in the party whips' office, helps keep those US politicians on their toes. Not having "safe seats" encourages those with a certain passion and verve. As the Americans say,
go figure.
Posted on 4 September 2008 by Douglas Carswell
Crash Gordon - hat tip to Guido Fawkes
Posted on 4 September 2008 by Douglas Carswell
Sarah Palin - the anti-politician
As an ObamaCon, I've been attracted by what I've seen of Barack Obama. In part, though, I've been pushed away from some things about the contemporary Republican Party that I dislike; there's too much authoritarianism, too much Big Government and Big Business. A party of "insiders" - be it Westminster village or Washington beltway - can never speak for my brand of centre-right politics.
All of which makes the appointment of Sarah Palin so inspired. It's her very ordinariness, her folksiness that is part of her appeal.
Is it too late for them to switch it round from a McCain-Palin ticket, to a Palin-Mccain one?
Posted on 4 September 2008 by Douglas Carswell
Watch Alex Salmond carefully
Alex Salmond unveiling his government's proposals for Scotland might trigger knee-jerk hostility from some.
Maybe it's because on my first day in the House of Commons he bought me a drink, but I can't really bring myself to dislike him.
While there's much to criticise in Salmond's plans, we should think about them carefully.
Salmond wants to scrap council tax and replace it with a local income tax. I'm not convinced by a local income tax. In a paper I wrote for the ASI, I identified a number of problems to do with local accountability. Moreover, my much preferred option would be to have a local sales tax in place of both the council tax and VAT (see details of how it could be done here).
But the key point surely is that Salmond recognises that the status quo is not sustainable. I agree. The council tax must go. Could any defenders of the council tax out there please stand up?
Many of Salmond's other proposals - dealing with violent offenders, plans to prevent flooding - could be seen as a distinctively local Scottish set of solutions to particular issues.
Whatever the merits of these ideas, perhaps the new Conservatives should be asking why it is that only Scotland has the power to apply such localist solutions. Why not give every county and metropolitan council in England the kind of localist powers that today only Scotland enjoys?
Too much of the critique of Salmond seems built on an implicit assumption that Scottish devolution is somehow a Bad Thing. Surely we should be looking instead to devolve decision-making power even further, and to every part of our country?
Posted on 3 September 2008 by Douglas Carswell
Cameron on defence procurement
In today's Sun
, David Cameron highlights the shortage of helicopters in Afghanistan. Apparently, "The Tory chief said it is forcing [our soldiers] to brave improvised explosive devices and road mines."
Crucially, Cameron points out that the problem isn't just a lack of cash. Its a failure of "political will". For all the squillions hosed at the defence contractors, somehow they've not delivered.
Slowly, but surely, the Conservatives are formulating the right critique;
Defence procurement is run in the interests of the big defence contractors - not our armed forces. The protectionist Defence Industrial Strategy is better at transferring MoD money onto the balance sheet of a few contractors, than at kitting out our armed forces. We need to ensure our armed forces are properly equipped - by procuring on the basis of our actual foreign policy needs, not on what big corporations can lobby for.
Interestingly some defence contractors appear to have organised a debate at the Conservative conference in Birmingham on whether we need an "off the shelf" procurement policy. Too little, too late, chaps.
It’s good to see that the contractors sense this is no longer a settled political question. But until they're prepared to modify their behaviour, they're not really going to have much input into the real debate now taking place beyond their reach. No matter what their expensive teams of lobbyists might be telling them .....
Posted on 2 September 2008 by Douglas Carswell
The EU is puny
The tiny technocratic elite driving the EU project likes to Think Big. They see their creation as an international player to rival America, and on a par with Russia, China and India.
Being largely the creation of professional diplomats, the EU has many of the trappings of a great power; a flag, anthem, corp of officials, grandiose language and high self-regard. Yet, occasionally, something happens which shows quite what a puny player the European Union actually is.
At the EU’s crisis summit in Brussels called to address the Russian invasion of Georgia, the mighty EU decided to … um, well …. issue a tough statement …. impose sanctions … do nothing.
I’ve not made up my mind what the free world can or should do. But I am absolutely certain that the European Union is not the forum to do it – nor to speak for us in world affairs.
If Russia is to be faced down, it is a task to be undertaken by free and sovereign countries – led by the United States.
The EU might be a “superstate” when it comes to bossing around its own citizens. Out there, for all its legions of diplomats, the EU has the strength and resolve of the 1930s League of Nations.
Posted on 1 September 2008 by Douglas Carswell
Wrong-headed Home Office
Much attention yesterday focused on a leaked Home Office memo, and what it had to say about the economic downturn. However, it is what the memo revealed about the mind-set of Home Office officials I find most disturbing.
According to the memo, "there is evidence that grievances based on experiencing racism are one of the factors that can lead to people becoming terrorists".
Did I read that right? Does the Home Office seriously think that terrorism is caused by racism?
To me, this seems like further evidence that many top public officials have unconsciously absorbed various leftist assumptions. Ideas that came out of 1970s university sociology departments now seem to prevail.
I recently read Saayed Qtub's Milestones. I did so in order to better understand the nature of the threat posed by extremist political Islamism. I don't recall anything in Qtub's extremist manifesto that would support the Home Office view.
But then, perhaps rather than seek to grasp the true nature of the threat we face, Home Office officials are incapable of doing anything other than regurgitate leftist assumptions. Until public officials are made properly democratically accountable, perhaps we should not expect anything better.
Posted on 1 September 2008 by Douglas Carswell