CentreRight

New EU Treaty

Told ya so, several times.

Presumably there are those that would want to insist that any Treaty must result in a referendum.  I don't see why there needs to be a referendum if he renegotiates.  And if he doesn't renegotiate, we shouldn't ratify.  It must surely be unthinkable that Cameron could simply pass by the opportunity that a new Treaty obviously presents to renegotiate.  Would he really have become Conservative leader if he hadn't been committed to renegotiation?  And if he doesn't seek to ratify on this occasion, why would anyone believe he would ever again have any desire for renegotiation?

Conservative MPs need to spell this out in black and white letters three metres high so that Hague and Cameron are left in no doubt: IF YOU DON'T RENEGOTIATE, WE WON'T RATIFY.  It's as simple as that.

Good news on the RDAs

It’s always worth delving into the Budget to find things that slip under the radar. A quick scan through the document this afternoon for information on the Regional Development Agencies (RDAs) threw up something worthwhile: they are to be abolished through the Public Bodies Bill, for which a White Paper will be produced later this year. Of course, we will be keeping a close eye on it to ensure that this Budget promise is not reneged on or fudged in any way.

This is a real win for the TPA, as we have called for their abolition for some years now. We produced a paper in 2008 which outlined a strong case for this, and followed that up at the weekend with research showing how most of their grants go to the public sector. They have not corrected the regional disparities that they were supposed to. Indeed, our research showed that that they’ve actually increased under the RDAs’ watch.

Of course, it remains to be seen what shape ‘Local Enterprise Partnerships’ will take – but the removal of these unelected and unaccountable quangos is a huge step in the right direction. Combined with a sustained decrease in corporation tax it could help breed private sector-led growth that will boost jobs and wealth.

Bad news for localists (and perhaps for justice?)

I have it on good authority that the closure of 150 Magistrates' Courts shall be announced tomorrow (approximately 40% of the courts still open nationally, a total which has of course already been cut many times).

No-frills Budget - the return of the Red Book

Can you judge a book by its cover? The design of today's Budget text (online and hard copy) tells us something important (and welcome) about the new Government. Labour had long abandoned the plain red covers that traditionally wrapped the budget statement, in favour of a glossy brochure advertising its achievements; in 2009 it was shamelessly entitled Building Britain's Future. Today we see a welcome return to tradition. Plain red, no hype, it's called Budget 2010. With a minimum of fanfare, the text carries clear, descriptive headings and sub headings. No pictures. Great.

OK, so there's still a message the Government wants us to receive: austerity, honesty, no more waste. But it's a good message and if this new style permeates every department, every government announcement and consultation, so much the better. Every enthusiast for smaller government should be pleased about this.

The compulsion to buy a pension annuity at age 75 has finally been scrapped

By Iain Anderson, Director of Cicero Consulting.

It's gone... I just can’t believe it's gone.

Many people will be asking themselves that question after today’s Budget about a whole number of things.

But for me this marks the end of a long and hard fought campaign to scrap the compulsion to buy a pension annuity at age 75.

Tucked away in the section of the Budget Statement around pensions tax relief is the commitment from the Coalition to end compulsion, following a consultation this summer, from April 2011.

For over ten years I have worked with my friends Dr Oonagh McDonald and Sir Nicholas Goodison to campaign for the right of people to make their own choice of retirement income needs. A free choice as long as people meet an minimum income which ensures they do not fall back on the State.

We took five Private Members Bills through the House of Commons. We spoke to every Secretary of State and every Pensions Minister along the way – and in the past 10 years there have been quite a number.

We secured backing from the then Equal Opportunities Commission and both the Conservative and Liberal Democrat parties to have this commitment in their last two manifestos.

But until I saw this commitment in print from HM Treasury today in the official Budget book, I scarcely believed it would happen.

Given the Chancellor’s removal of the planned tax on cider – I might just have a glass or two of scrumpy to celebrate.

Defamation reform - the role of juries

This afternoon, I attended Lord Lester's talk on his draft Defamation Bill, hosted by the Index on Censorship / English PEN.* The proposal has significant support and would have important ramifications for public discourse in this country, and I recommend that anyone interested in this area (including those who write online) have a quick look at it (it has the admirable virtue of brevity). All I want to talk about today is the significantly altered role Lord Lester foresees for juries in the process.

Lord Lester explained that in his Bill he had reversed the presumption that trial is by jury rather than by judge in defamation proceedings because, in the present situation, the prospect of jury trial supposedly makes it more likely that parties hold out for the prospect of argument before juries rather than settling the case early, which would generally be in the interests of the parties (and, incidentally, save the state costs). I question whether the practical consideration about the likelihood of cases settling earlier is worth changing the principle of trial by jury, but - regardless of the accuracy or merits of that decision on its own terms - I would highlight the great risk involved in this approach.

I think I can guarantee that this brief and collateral aspect of the Bill will demand by far the most significant media attention the Bill will attract. It is the most obviously contentious part of the proposals and it is the one which any critics of the Bill (in the House, and in both broadsheets and tabloids) will grasp. The Conservative Party's pledge to halt the erosion of trial by jury, enshrined by both Government parties in the Coalition Agreement, will be invoked against it.To the extent that Lord Lester thinks that people in the general media sphere will overlook this aspect of his proposals and focus on the merits of the Bill's effect on defamation more generally, he is wrong.

Worst of all, this part of the Bill is unnecessary. The thrust of defamation reform (which is greatly needed in this country, so overweening has the power to gag become) stands or falls entirely without it. If it really is worthy of legislative change, then that change can come later and separately, preserving the clarity of this process rather than muddying it. Why make the actual purpose of the Bill a hostage to this point?

It is a draft Bill, on which the good Lord has invited discussion and suggestions. Mine is to delete the sections which produce this change. The work of this campaign, of these organisations, the general direction of this Bill, to both protect free speech and advance one's interests in protecting one's reputation, are all to be admired. There is still time to rethink this decision which is by no means a core element of what they wish to achieve but could, if left unaltered, derail the process of this reform altogether.

*With admirable certainty in the attractiveness of their cause, the event was held to clash exactly with the Emergency Budget. They still packed out the lecture hall. Cojones.

Budget gives with one hand, takes away with the other

There are some important and very sensible announcements in the Budget:

• A two-year public sector pay freeze.  Recommended in our report with the IoD last September and book this year.  We'll find out more about pensions when John Hutton's review reports back.
• Abolishing the Child Trust Fund.  It is great news that the Emergency Budget confirms that very sensible move.
• Cuts in welfare spending, particularly limits on individual housing benefit claims.  That should put a stop to some of the worst housing benefit outrages.  Hopefully the announcements today will be followed by thorough welfare reform to improve incentives to work, cut costs and stop people falling through the cracks by simplifying the system.  We have a report on how to do that coming very soon.
• Avoiding overemphasising cuts in capital spending.  Again, in our report with the IoD and the book we noted that the Government was already planning quite ambitious cuts in capital spending while planning a number of major infrastructure projects.  At this stage it is far more helpful to identify cuts in spending, like those which infringe civil liberties that Big Brother Watch looked at yesterday.

The problem is that they have loaded a lot of the fiscal adjustment, particularly in the early years, on tax hikes.  At the TPA we've been warning for some time that the Conservatives were leaning toward a VAT hike that would hit the poor twice as hard as the rich.  Yesterday, we released this video:

Chart A2 in the Emergency Budget shows that over most of the income distribution the cash impact of the measures announced will be pretty similar.  Poor and rich families pay a similar share of their income except the top ten per cent.  A lot of money is being taken out of the budgets of poor families, the Government are making it a lot harder for millions of Britons to stand on their own two feet:

Whaling: trying to find middle ground between two diametrically opposed positions

The International Whaling Commission is meeting this week in Agadir, Morocco, to discuss a possible lifting of the moratorium on commercial whaling, which entered into force in 1986. Few subjects evoke as much emotion and bitterness as whaling, so we can expect this week to see some fierce debates and probably quite a lot of discord, even among supposed allies.

I have always been a staunch defender of animal welfare, both before and during my career as an elected politician. I have no enthusiasm for whaling and I consider it to be of limited scientific value (science being the guise under which Japan has avoided the moratorium). Like many people, I am distressed by TV pictures of highly intelligent sentient mammals being harpooned and hauled onto ships. I certainly don’t find it an edifying spectacle. I would prefer for IWC member states to vote to maintain a moratorium on commercial whaling.

However, I am rarely an absolutist on any particular policy. And in the case of whaling, I think there is a case to make that it is fundamentally a matter for sovereign states to decide. In particular I advocate this view because in the case of the main pro-whaling nations – Japan, Denmark, Norway and Iceland – whaling has been part of their culture, heritage and identity for centuries.

It’s something we can’t really understand if we haven’t been part of that culture ourselves. The Conservative approach has always tended towards ‘live and let live’ rather than seeking to impose our own values and outlook on others. We should also bear in mind that the aforementioned pro-whaling nations are stable and successful democracies, whose voters would presumably force their governments to act if they felt sufficiently strongly opposed to whaling. I take some comfort from the fact that most young Japanese apparently now find eating whale meat distasteful.

At the moment, three countries catch whales. Norway never agreed to be bound by the moratorium; Japan uses the get-out clause of ‘scientific’ whaling, even though much of the whale meat its vessels catch ends up being consumed; and Iceland, having initially accepted to be bound by the ban, has since resumed whaling – no doubt a complicating factor in future negotiations to join the European Union.

Denmark and Sweden are the only EU member states to support a lifting of the moratorium. The European Union has been trying, and has failed, to agree a common position ahead of the Agadir meeting. However, the EU is not a member of the IWC. Therefore, EU member states will either vote individually or will vote to abstain as a negotiated compromise to accommodate the position of Denmark and Sweden.

However, the EU has, in the past, shown itself able to find common ground on such issues. Last year the EU banned the import of Canadian seal products over the delicate issue of seal clubbing, a practice largely confined to Inuit communities that depend on it for their livelihoods. The EU justified the ban by saying seal clubbing was inhumane, although – and perhaps we should remember this in the context of the whaling debate – it does not seem to have saved the life of a single seal pup.

Last week in the European Parliament session in Strasbourg I found myself speaking on behalf of the ECR Group on whaling. I explained in my speech that I was opposed to whaling but that states have a sovereign right to hunt whales for food, particularly if they have done so for centuries and the species of whale being hunted is not endangered.

If we are to ban whaling in the EU on animal welfare grounds we should surely also ban bullfighting and fox hunting across the EU. The fact that we allow these activities to continue, albeit subject to tight regulation at EU member state level, suggests to me that we ought to allow countries with an unbroken history of whaling to continue to catch whales commercially under certain tightly regulated conditions.

There is also the issue of sustainability to consider. The successful and evocative campaigns launched by Greenpeace and other environmental organisations deliberately made little reference to the difference in the numbers of various species of whales because this would have distracted attention from their argument of a total ban. But scientists concur that certain species of whales are abundant in our oceans, and could be caught sustainably if the catch was monitored, regulated and limited appropriately.

Sustainable whaling would appear to be viable in particular if the creatures are not threatened with extinction as is the case for the minke and sperm whales – the former being the sole species the Japanese hunt for so-called ‘scientific’ purposes, although as mentioned most of the slaughtered whales end up on the menu in up-market Japanese restaurants. On the other hand, the magnificent blue whale is an endangered species which, in my view, would fall under the CITES convention if there were no IWC moratorium, and therefore deserves a very special level of protection. The other issue to be discussed in Agadir is whether to preserve the Southern Ocean Whale Sanctuary, a vast expanse of sea adjacent to Antarctica where all whaling has been banned as part of a settlement.

In my speech last week I also argued that the whaling industry must be able to show that it is progressively developing more humane methods of killing whales, particularly in terms of speed and painlessness, and that any resumption of commercial whaling must be subject to rigorous tests in this regard. We have insisted on more humane methods of rearing and slaughter for farm animals and we should do the same for all animals killed for a commercial purpose or otherwise. Having said that, personally I think that killing these animals is only really justified for food – the scientific reasons seem to be more to do with honing the skills of Japanese whalers in the hope that the moratorium will be eventually lifted.

Mike Nattrass, a UKIP MEP, made in my view an excessively emotive and absurd speech during last week’s otherwise reasoned debate in which he equated whaling to ‘murder’, called the Japanese ‘inhumane’ and said that the UK would ‘vote to leave the EU in uncontrollable anger’ if the EU was to force the UK to abstain, rather than vote against, the lifting of the moratorium. For the record, the UK cannot be forced to do anything – this is a matter for member states to decide in Council by negotiation. It struck me as slightly ironic that a sovereignist UKIP MEP should seek to undermine the rights of sovereign countries like Japan or Norway to pursue their own interests.

It’s just that kind of emotional language that we need to avoid as we debate the future of whaling, because it merely strengthens the determination of those who wish to see it continue. I will repeat: I am no personal fan of whaling and I would rather it did not happen. But I also recognize that there are other factors to be considered, and they should be considered fully, carefully and without emotion. The risk of provoking a schism in the IWC is that some countries break away completely and all efforts by the UK and the EU to maintain a reasonable international coalition in favour of restricting whaling as much as possible will come to nothing.

As I post this, news is leaking out from Agadir. A compromise deal appears to be on the table whereby there would be a return to a strictly regulated regime of commercial whaling for a period of ten years (South Korea is also apparently interested in a resumption of whaling), so those of us interested in this conservation issue will be eagerly watching the outcome of negotiations.

On the longest day...

... should we consider having the clocks an additional hour forward all year round, with BST in winter and double summer time in summer?

No.

But wouldn't it "bring the hours of daylight more into line with the hours we are awake", as Tim Yeo argued on Newsnight this evening?

No!  Why would it?  The thing it's trying to achieve is to make us all rise an hour earlier every day.  If the government wants us to do that, then it should open government offices an hour earlier.  But why do you assume that people would continue to work the same "clock hours" as today if the clocks changed relative to the daylight?  Do you imagine that farmers, for example, would be guided by the clock rather than the daylight?  What makes you think that private companies would continue to commence work at 9am rather than 10am?

Would it save enormous amounts of CO2 as we all kept our lights on less time?  No!  Why would it?  Tim Yeo et al are assuming that we would all continue to go to bed at the same clock time as now, instead of adapting our clock-time bedtime to the daylight.

I say it again: if the government wants us all to get up an hour earlier every day - which is the only purpose of putting the clocks forward an hour permanently - then it should pre-announce a date from which government offices will begin to open from 8am instead of 9am; publicly funded news programmes in the evening (e.g. on BBC1) could commence at 5am and 9am instead of 6 and 9; and other such measures.

The economic choices on the table tomorrow

A new research note from the TPA today uses the Beacon Economic Forecasting Quarterly Macroeconomic Model of the UK and International Economies (BEFMOD) to look at the likely economic effects of a relatively rapid fiscal consolidation.  It forecasts the effects of the kind of spending cuts that we have outlined in a report with the Institute of Directors and updated for the book How to Cut Public Spending.

While the model does expect a hit to growth in the short term, the improvement in the public finances would be so dramatic that it would make room for tax cuts by the end of the Parliament.  By the end of the forecast period, in 2020, with spending and tax cuts unemployment would be lower; GDP would be higher; the public sector debt stock would be far lower and the public finances would be in surplus instead of still being in deficit.

Here are some of the key results, click for a bigger version:

And there are reasons to think that the economic effects of spending will be particularly positive at the moment.  First, because if businesses think that their returns tomorrow will be taxed to pay for today's borrowing then that will put them off investing and hit the recovery, there is good reason to think people are particularly aware of the need to pay for deficit financed spending at the moment.  Second, because high spending has an impact on the trend rate of growth that often does not come through in economic models but has been found by a number of academic and official studies.  An earlier TPA research note found that higher spending over the last decade could be depressing the trend rate of growth by as much as 1.53 percentage points.

After tomorrow's Emergency Budget we'll be furiously working away at the TPA offices to analyse the measures announced.  On Wednesday at 10.00am, we'll be going through our findings, and commentators like John Redwood MP and City AM Editor Allister Heath will give their take, at our post-Emergency Budget Briefing with the IEA.  You can still register to attend here.

The NHS budget should not be sacrosanct

Dr Patrick Nolan is Chief Economist of Reform.

Tomorrow afternoon the coalition government will have the opportunity to change the direction of fiscal policy in the UK. As Reform noted in our alternative budget last week, while this will require making the toughest spending choices for a generation, history will judge the government right if they do this in the right way and reduce costs through structural reform.

International experience shows that the right way to cut spending is for this to occur over as broad a base as possible. No areas of spending should be off limits. Areas that account for the greatest shares of government spending, and in which spending performs most poorly, should bear the largest cuts. Signs are, however, that the health budget will be ringfenced from cuts, although this is the largest area of departmental spending, has poor rates of productivity and accounted for 40 per cent of the increase in public sector spending between 1997 and 2007.

Whether the NHS budget should be sacrosanct was a topic for debate on The Big Questions yesterday morning. On this show I argued that the NHS budget should be cut as this would not just save money but help encourage a better health system. I noted that “the NHS doesn’t need more money, it needs reform” and that the public needs to provide more funding for health out of their own pockets through user charges. Julia Manning of 2020 Health also opposed ringfencing the budget and argued that people need to take more responsibility for their own health.

If tomorrow’s Budget is to begin to start the process of rescuing the UK’s public finances it will need to take tough choices. Easy options, such as cutting consultancy budgets or gimmicks such as free swimming for pensioners, will only scratch the surface of what needs to be done. The risk is, however, that the Budget will fail to go beyond these easy options and public services like health will remain unreformed. Rather than rescuing the public finances this will simply be saving trouble for the future.

Warm Homes & the Emergency Budget

Simon Less is Head of Policy Exchange's Energy and Environment Unit.

The Emergency Budget tomorrow has the task of finding huge cuts in public spending.  The Government faces difficult and unwelcome choices.  The Treasury will be seeking to find those areas of spending which offer lowest value in terms of what they achieve, as well as spending which goes to those who need it least. 

In March, Policy Exchange published a report on one substantial area of spending which appeared, on both of these criteria, to be a prime candidate for cutting.  This is the Winter Fuel Payment, which cost taxpayers around £2.7bn in 2009/10. 

The purpose of this policy, as the name suggests, is to help pensioners who struggle to heat their homes in winter.  To achieve this, the WFP gives all pensioner households a lump sum of between £250 and £400 each winter.  However, a crucial fact is that only 18% of households in receipt of the Winter Fuel Payment are classified as ‘fuel poor’ - i.e. spending more than 10% of their income on energy and therefore most likely to struggling to heat their homes.  Moreover, 49% of all fuel poor households receive no Winter Fuel Payment, as they are not pensioner households.  So the policy appears to offer poor value for money as a way of supporting those who need help heating their homes.

The Winter Fuel Payment also goes to many relatively well-off households.  For example, at the extreme, 100,000 households in receipt of Winter Fuel Payment have an annual income in excess of £100,000.  Most of the Winter Fuel Payment spending goes to those who do not need it.

Overall the Winter Fuel Payment would appear to be a strong candidate for cutting, compared to many other, more valuable, areas of spending. 

Poverty which makes it hard for households to afford winter heating is a serious concern.  But the Winter Fuel Payment policy does not address this problem in a remotely cost effective way.  Fuel poverty is most cost-effectively addressed by installation of household energy efficiency measures, where the Government has proposed a new Green Deal, as Policy Exchange recommended in its Warm Homes report. 

Some of the current £2.7bn spending on the Winter Fuel Payment could be better focused on helping the poorest pensioners, for example, by means-testing the payment, or by raising pensioners’ minimum income guarantee.  This would still leave substantial scope for reducing overall public spending.

Kaczyński: back in the game!

Despite opinion polls showing former Prime Minister Jarosław Kaczyński trailing Bronisław Komorowski by as much as thirty points in the race for Polish President, the first round held yesterday produced a much closer result.

With nearly all votes cast, the interim President Komorowski leads Kaczynski by a margin of 41% to 36% - a remarkable comeback for a politician whose campaign was mocked by the British media, amidst expectations of a first round Komorowksi victory.

In so significantly underperforming expectations Komorowksi is, despite scoring a narrow victory, the real loser in the first round of voting.  It is a mark of Komorowksi's weakness as a candidate that Jarosław Kaczyński, often described by even the most loyal of his own supporters as an awkward man who ill at ease while on the stump, is widely believed to have run the most dynamic campaign. 

Crucial to the chances of both Kaczyński and Komorowski will be the votes of third-placed Socialist candidate Grzegorz Napieralski who secured a better than expected 14% of the poll.  While Kaczyński is as far removed from being a socialist as it is possible to be, his conservative message sits far more comfortably with the largely elderly and agrarian voters who backed Mr Napieralski. 

Kaczyński still faces an uphill challenge as he heads into the second round on July 4th but it should be remembered that his late brother Lech had trailed Donald Tusk by a 36%/33% margin in the first round in 2005, only to later win the second round by an 8% margin.

There can be no doubt that this election is going down to the wire.

Good luck to Jarosław Kaczyński and our excellent Prawo i Sprawiedliwość allies in the European Conservatives and Reformists Group!

Don't hike VAT

It is thought that the Emergency Budget tomorrow might include a hike in VAT.  That would take more money out of the pockets of ordinary families and be bad news on two key fronts:

1. VAT hits the poor twice as hard as the rich.  Hiking it would mean more poverty and more benefit dependency.  That would be hard to square with David Cameron's statement before the election that a Conservative Government would "make sure the system always considers the effect of any policy response on the position of the poorest in society."
2. While the Conservatives and the Liberal Democrats pointedly didn't rule out increasing VAT, they went out of their way in the election campaign to argue it wasn't part of their plans.  The Liberal Democrats even had a poster accusing the Conservatives of having a black hole in their plans that would mean a "VAT bombshell", a charge the Conservatives denied.  Neither party has any mandate for this measure at all.

Here is a video we're releasing today about a VAT hike, how the coalition has no mandate to put it in place and shouldn't impose a big new tax on the poor.

There are alternatives.  Even if the rate is hiked to 20 per cent that will raise around £12 billion according to the HMRC ready reckoner.  Just yesterday, the Think Tank blog reported 2020Health's report about how to save £12 billion in the NHS budget that the coalition are currently protecting.  In our research and for the book How to Cut Public Spending we've set out how to save £50 billion and there are plenty of savings left from tackling specific budgets, cutting back on middle-man organisations and restraining public sector pay and perks that the coalition could take up.  Even the Regional Development Agencies have only been cut and not abolished so far.

Spending cuts, not tax hikes are the way to deal with a fiscal crisis caused by massive increases in spending over a decade in which taxes were increased, not cut.

Politicians' promises

Do we care if it turns out that politicians break their promises and construct their lives around cheating and lying?  Sounds like an odd question, doesn't it, and I suspect that most of you are pretty sure you know the answer.  But let's see...

Labour's legacy is a choice between unpleasant cuts in public spending, a sovereign debt crisis or currency debasement

The new MP for Wycombe, Steve Baker MP, writes his first CentreRight contribution.

Since my arrival in Parliament, the Chamber has been characterised by a torrent of self-righteous indignation from Labour and their thoroughgoing lack of remorse about the state of the public finances. There is a sense that Labour think they are on the side of the angels.

Giving our opponents the benefit of the doubt, I can think of two premises which might support their attitude.

The first is that the government has an inexhaustible horn of plenty which could be forever poured out, if only the Tories had the will.  The second is that the crisis was an automatic feature of the global economy which the Labour government could not have avoided.

The Government does not have an inexhaustible horn of plenty. Government has nothing to give without first taking. Government funds itself by taking today, by borrowing against a promise to take a greater sum tomorrow and by debasing the currency. We have reached the limits of all three.

Thanks to something called the Laffer Curve, it now seems likely that increasing taxes will reduce revenues. People, especially people with plenty of choices, adjust their behaviour to pay less tax. This is reasonable and predictable.

We are at the limits of government borrowing. As Liam Halligan wrote in the Telegraph in November 2008, Gordon Brown’s borrowing was “reckless in the extreme”.  Furthermore, as John Redwood argued recently in the Commons, "The reason we have not yet got into the Greek situation is that the whole of last year's massive borrowing requirement was simply printed."

Churchill painted, Blair played tennis, Macmillan famously went to bed with a Trollope (as did all of the Kennedys)

Martin Sewell thinks Obama's Chief of Staff is wrong to attack BPO's CEO for spending a day, sailing, with his son. Martin writes occasionally for ConservativeHome's Platform.

The media today carries comments by President Obama’s Chief of Staff, Rahm Emanuel, castigating BP Chief Tim Tony Hayward for taking time out from working on the Gulf of Mexico oil leak to go sailing with his son.

Emanuel is well known for his bullying of friends and foes alike, and follows in the tradition of Democrat attack dogs like Paul Begala and James Carville, from whom the likes of Alastair Campbell learned some of their darker arts. Whilst some may justify this kind of behaviour when dealing with US domestic politics it may be appropriate that our Government raises the issue with the Obama White House when the target is one of our own citizens going about a lawful activity in his own country in a quiet and responsible way.

Emanuel is not a private media commentator. He is Obama’s right hand man and widely seen as the sotto voce echo of his master’s thoughts.

A very publicly placed attack coming from one of the President’s closest aides is not casual or insignificant. It is congruent with the President's own carefully chosen characterisation of BP as “British”. These are folk who calculate the impact of the colour of the President tie. They are carefully following Emanuel’s principle of “never letting a crisis go to waste“ and whilst the President is taking time out, Emanuel is taking care not to allow the insidious pressure to slacken.

The President is a man who has sought approbation for his regular Friday “date nights” with his wife Michelle, and has played more rounds of golf in his short Presidency than George Bush did in eight years.

I have no problem with this. Show me an unremitting workaholic and I will show you a man with poor priorities and one prone to making mistakes. Rest and recuperation is a key element for maintaining the effectiveness of combat troops, and highly stressed sports stars alike. Bill Clinton had his own idiosyncratic ways of getting away from the most stressful job in the world and the Democrats lined up at the Impeachment hearing to defend him for lying about it.

Churchill painted, Blair played tennis, Macmillan famously went to bed with a Trollope, as did all of the Kennedys.

HMV Scotland withdraws Anyone But England posters after "racism" complaints

HMV stores in Scotland have withdrawn shop front posters advertising 'ABE - Anyone But England' merchandise.

Although the HMV stores will still sell the T-shirts to customers they have faced accusations of racism from the Campaign for an English Parliament. "The Campaign for an English Parliament will challenge any company that incites racial hatred towards the English," the CEP's Stuart Parr said. "Racism is unacceptable no matter who it is directed against, including English people."

I think it's pathetic that so many Scots cheer anyone but England but Mr Parr needs to lighten up.

A HMV spokesman told the Press and Journal:

“If we thought the shirts were in any way racist then we certainly wouldn’t have stocked them. In our view the shirts are not against England nor the English, but are simply about some Scottish fans expressing a view that they want any team other than England to win this year’s World Cup."

George Osborne's frenetic start

George Osborne’s month of frenetic activity at the Treasury has provided welcome reassurance to many in the City of London.

The creation of the Office of Budget Responsibility is the sort of thing that gets promised in Opposition and conveniently forgotten once an election is behind us! So full credit to the Chancellor for seeing it through. However, such has been the sorry state of economic forecasting over the past couple of years – from independent as well as Treasury sources – there can be no guarantee that the OBR will fare much better. The true test of the OBR’s much vaunted independence will come when it is no longer possible to blame a previous administration for current economic woes.

Wednesday’s Mansion House speech signalled the recasting of the UK model of financial services regulation. In truth, not all the blame for the international financial crisis should sensibly be laid at the door of the tripartite system. Global imbalances and the unsustainable level of public and private debt (helped on its way by the former government’s misguided inflation targeting and the Bank of England’s keeping to excessively low interest rates) were primary causes here. The main danger associated with the effective abolition of the FSA now is that this much maligned organisation has over recent times developed momentum and stability in its consumer protection and market activities. As sovereign default in the Eurozone reaches crisis point over the next year the inevitable lack of focus as reorganisation of the UK regulatory regime gathers pace may prove costly.

Clearly the big winner of this reorganisation is the Bank of England. The Chancellor rightly identified that in the run-up to the September 2008 crisis no one appeared to be in charge. The buck now assuredly stops firmly at the door of the Old Lady of Threadneedle Street.

I reckon there is one small missed opportunity. While I can see the attraction of an over-arching Economic Crime Agency, working closely with the City of London Police’s Economic Crime Directorate, I should have preferred that this was now overseen by BIS rather than the Treasury. As I have written before, robust competition policy should lie at the heart of future economic strategy for both the financial and general corporate sector. The activities of the erstwhile Serious Fraud Office should ideally be more integrated into the OFT and Competition Commission in implementing a radically improved system of investigation and prosecution of economic crime.

José María Aznar rallies support for Israel - for the sake of the West

In today's Times, José María Aznar, Prime Minister of Spain between 1996 and 2004, has written a brave and important article about the future of the West, entitled "If Israel goes down, we all go down". 

I understand that the online Times is now subscription-only but the following should give you the gist: 

"For far too long now it has been unfashionable in Europe to speak up for Israel. In the wake of the recent incident on board a ship full of anti-Israeli activists in the Mediterranean, it is hard to think of a more unpopular cause to champion...

... For years, the focus of Western attention has understandably been on the peace process between Israelis and Palestinians. But if Israel is in danger today and the whole region is slipping towards a worryingly problematic future, it is not due to the lack of understanding between the parties on how to solve this conflict. ...

The real threats to regional stability, however, are to be found in the rise of a radical Islamism which sees Israel’s destruction as the fulfilment of its religious destiny and, simultaneously in the case of Iran, as an expression of its ambitions for regional hegemony. Both phenomena are threats that affect not only Israel, but also the wider West and the world at large."

He concludes by saying:

"The West is going through a period of confusion over the shape of the world’s future. To a great extent, this confusion is caused by a kind of masochistic self-doubt over our own identity; by the rule of political correctness; by a multiculturalism that forces us to our knees before others; and by a secularism which, irony of ironies, blinds us even when we are confronted by jihadis promoting the most fanatical incarnation of their faith. To abandon Israel to its fate, at this moment of all moments, would merely serve to illustrate how far we have sunk and how inexorable our decline now appears."

Read it in full if you can get a copy...

Update: The World Jewish Congress have a full transcription of the article on their website.

An allegory

A cautionary tale...

The English aren't Irish, and the Irish aren't English - except when both are

Everything that could be written about the Saville Report has already been.  But yesterday's reactions on both sides of the water said much about both countries. Or did it?

To a certain sort of Irishman, there's nothing more English than an Old Etonian Conservative Prime Minister speaking at the Dispatch Box of the House of Commons. As David Cameron did yesterday when responding to Saville.

To a certain sort of Englishman, there's nothing more Irish than a crowd marching through a city on the island to protest about a past atrocity.  As people did yesterday in Londonderry (as that certain sort of Englishman would call it) when responding to Savile.

Cameron wasn't unemotional.  But he was impersonal, rational - and he kept his stiff upper lip.  The relatives of the dead weren't unreasonable.  But they were, understandably, personal, fervent - and, well, whatever the gaelic term for the opposite of stiff upper lip is.  The House of Commons, with its clipped questions and responses made to a third party (the Speaker), might almost have been designed to embody a certain English formality.  Yesterday's Bogside crowd, with its banners of the dead carried like icons of the saints, might almost have been composed to illustrate the wounds of nationalist Ireland's past.

Whatever one's view of Saville, it can surely be agreed that yesterday will have done nothing to diminish mutual stereotypes.  Which is why it's worth remembering that there's another Ireland, another England.  I declare an interest. I'm a Unionist, who was opposed to much of the "peace process" (that slippery term), and married into an Irish family.

To that certain sort of Irishman, the English are perfidious, repressed, murdering snobs. To that certain sort of Englishman (oh, and Scotsman), the Irish are manipulative, idle, devious, paddies.  But how typical are either?  England is dotted with fake Irish pubs. They're presumably marketed to English drinkers - for their supposed warmth, informality, "craic".  Ireland is targetted by UK media outlets.  This is presumably because Irish consumers, inter alia, watch Sky Sports, follow Corrie, and read News of the World.

And if the English are so inhibited, how are the X Factor, Ann Summers, and Diana's funeral to be explained?  If the Irish are so useless, how come a Fianna Fail government cut taxes with a relish unknown since...well, since Lawson and Thatcher? How come the Irish economy was, until recently, out-performing ours on many measures?  (Don't blame Irish enterprise if it isn't now; blame the Irish politicians who joined the Euro.)

Irish soldiers fought in the UK's wars.  Ireland's national poet was an Englishman.  (OK, he wasn't: but Yeats' family probably came to Ireland from Yorkshire at the end of the eighteenth century.)  England and Ireland aren't separate, but intertwined by generations of trade, friendship, marriage, and the intermingling of bloodlines.  Yesterday's scenes weren't the whole story, or even the greater part of it.

Just by sounding serious about the deficit, the new government has saved us £6.6 billion

By Neil O'Brien, Director of Policy Exchange.

Before the election, there was a big political argument about how soon the government should start to reduce spending.

Labour said early action would "risk the recovery". The Conservatives said getting the deficit under control was essential to protect the recovery.

At the time a Policy Exchange report argued that that early spending cuts would promote recovery. We pointed out that delaying action would increase debt interest payments for the government, and threaten a spiral of rising tax and rising debt. We noted that there would be higher interest payments for households too, perhaps adding £700-£1400 to mortgage payments.

Who was right?

Well, a new report from the Institute for Fiscal Studies suggests that just because the coalition is taking deficit reduction seriously, Britain will waste £6.6 billion less on debt interest payments.

The IFS notes that: "gilts prices probably incorporate an expectation that the new government will adopt a more rapid fiscal tightening" In other words, although it might not entirely be due to the Coalition's tougher stance, the fact that they are serious about reducing the deficit has definitely reassured the markets, who are demanding lower interest payments as a result. There have of course, been other factors, and eurozone debt has looked relatively less attractive as the continent struggles with its own debts. But taking the deficit seriously has been a really important factor.

You can't be too careful...

The precautionary principle is a dominant theme in modern society, notwithstanding the setback it suffered yesterday on vetting and barring. It is not only present in the cloying, crushing clamps on anything that might conceivably "harm" children - it has also found a willing partner in the days of *black special* terror scareathons, and it's still on the march.

Just by way of example, the proliferation of body scanners at airports. Yes, there are all manner of concerns about whether they work, whether they might harm those going through them, the vast expense... but if it saves one life...

How about scanners at railway stations, too? That's what's planned now in Italy. After all, you can't be too careful...

What next? How about in schools? Just in case...

Then in shopping centres, perhaps? Well, if it saves one life...

And so we become conditioned to such control everywhere, ad cottonwoolum. And what have you got to complain about? It's for your own good! And if you've got nothing to hide, you've got nothing to fear...

Eliminate the deficit in one Parliament

Dr Patrick Nolan is Chief Economist of Reform.

In six days George Osborne will release the coalition’s Emergency Budget. As an early contribution to the debate on this Budget, today Reform released its own Budget for the UK, Taking the tough choices. Two key questions that the Reform Budget raises for the coalition efforts are whether they will be ambitious enough in their timeframe for reducing the deficit and whether they can credibly claim to be restoring the public finances while refusing to cut the largest spending areas.

The coalition Budget will be likely to set out a plan to eliminate the bulk of the structural deficit in the term of this Parliament. Yet a target along these lines will not be ambitious enough. It will mean that the UK will only take half measures to face up to its deficit and problems with debt. The target should be to completely eliminate the deficit and return spending to 36 per cent of GDP within a term.

Moving slowly makes fiscal consolidation harder. The choice is some pain now or greater pain in the future. Unless reform to programmes and entitlements begin in next week’s Budget then the growing costs in areas like health and pensions will swamp any savings identified. The Office for Budget Responsibility has already noted that the cost of public sector pensions will increase by around £5 billion by the end of this Parliament, but even this will be dwarfed by the growing costs of pension and health entitlements more generally. The costs of benefits to pensioners alone will have grown by £12 billion by the end of this Parliament.

Countries that have successfully reformed their public finances moved quickly. In New Zealand in the 1990s the government went from a large deficit to running surpluses in 3 years and in Canada in the 1990s the process took 4 years. This meant that these governments stopped accumulating debt and were able to begin the task of repaying debt sooner. Indeed, as Rt Hon Paul Martin, former Canadian Finance Minister and Prime Minister, noted in a foreword that he wrote for the Reform budget: “because the cuts were sharp and deep they worked – the vicious circle turned virtuous and the positive payback was not long in coming.”

International experience also highlights that fiscal consolidation should occur over as broad a base as possible. No areas of spending should be off limits. Groups who argue for cuts in other areas while trying to protect their own patch fail to grasp the scale of the problem. The hole in the public finances is so deep that every cut in spending that can be made should be made. Further, areas that account for the greatest shares of government spending, and in which spending performs most poorly, should bear the largest cuts. This includes spending on health and middle class welfare, like the Winter Fuel Allowance and the Child Benefit.

As Hon Ruth Richardson, a former New Zealand Minister of Finance, who also contributed a foreword to the Reform Budget, said: “Imposing a lid on increases in public spending, eliminating waste, and salami slicing existing budgets tend to be the politicians’ stock answer, but none of these approaches go to the heart of the problem.  The problem is systemic.” The systemic nature of the problem means that the real drivers of government spending need to be addressed. This will require taking some tough choices, such as cutting the healthcare, schools and police budgets, means-testing the Child Benefit and abolishing other benefits such as the Winter Fuel Allowance, and increasing VAT on food and children’s clothing.