CentreRight

Who are the deniers now?

By Roger Helmer MEP.

On Friday I went to Norwich at the invitation of the Vice Chancellor of the University of East Anglia (UEA), home of the Climatic Research Unit (CRU) which has been much in the news in the last twelve months.

I had been invited following a correspondence with one of UEA’s academic staff.  A couple of months before, I had asked if I could bring a couple of colleagues.  They said yes.  A week or so later, they asked for the names (and any special dietary requirements).  I replied Lord Monckton of Brenchley, and James Delingpole of the Daily Telegraph.  For the next week or so I held my breath, fearing that they might not like to receive two prominent sceptics, but there was no further response.  Not, at least, until a couple of days before the meeting, when I received an apologetic e-mail.  They had just noticed who my proposed companions were.

Apparently protocol would not allow the VC to meet “political activists”.  If Lord Monckton and Delingpole  had any questions, they were free to approach the UEA’s Press Office.  (In passing, I have to say it seems rather odd to describe Lord Monckton as a “political activist”.  An hereditary Peer of the Realm, a former adviser to Prime Minister Margaret Thatcher, a highly respected commentator on the climate issue, and Deputy Leader of the party that came in second place in the 2009 euro-elections.  In any case, I like to regard myself, in my small way, as a political activist, and the VC was prepared to see me.)

I replied that this was deeply embarrassing to me, as I knew that Lord Monckton had made extensive (and expensive) changes to his travel schedule, between a financial conference in China and a business meeting in New York, specifically to attend the UEA meeting.  In reply, they made an extraordinary proposal: Lord Monckton could not meet the VC with me, but he could have a separate meeting after my meeting was concluded.  I decided to invite, on my own initiative, another MEP, Stuart Agnew of Eastern Region.  They could scarcely refuse another parliamentarian.

Archie Manners: A look at the official list of gifts and hospitality received by David Cameron and the Cabinet

By Archie Manners, a student and Conservative activist from Hampshire.

It was reported earlier this month that the odious Mr Blair has taken a ‘hoard’ of gifts that he received whilst Prime Minister to his next life. Whether these gifts are now available on eBay courtesy of Cherie I don’t know, but it was reported that he paid just £200 for a pair of ‘watches’ from Berlusconi. Either they were not very nice watches, or Blair was not very generous in his payback. His Premiership was clearly more colourful than John Terry’s private life, and revelations are still coming out.

However, there is a fresh start with the new Government on the issue of ‘gifts’.  In this new ‘era’ of transparency, No. 10 has published lists of all of the gifts received by Cabinet, along with the pay and gifts received by special advisors. Even the webpage contains the word ‘transparency’ and it is refreshing that these are published – and will help to improve accountability.

Although lists have appeared for all of cabinet, including the Deputy Prime Minister, only the Prime Minister has received presents. Despite his ‘success’ at the Election, Nick Clegg has not declared any presents whatsoever: either that or they didn’t get through Revenue and Customs after his visit to the UN.

Meanwhile the Prime Minister has received an array of items from rugs to bowls. Berlusconi gave Cameron some ‘Ties’- perhaps that little yellow and blue number that we all know and love was an Italian idea. Unlike Blair who bought things on the cheap from the state (his ‘New Dawn’ was not what was originally thought) David Cameron has bought back an Apple iPad at £429 – the same price that it would cost if he had bought it straight from Apple. Indeed he has not bought many things – ‘books’ and the iPad, whilst Blair took home a vast array of goodies, including 8 timepieces and numerous items of jewellery.

The other document that has been published contains details about the ‘hospitality’ that ministers have received. The letters ‘BBC’ appear rather too much for my liking. There have been a number of ‘lunches’ and ‘dinners’ put on for politicians (paid for by us) by the BBC (er… also paid for by us). Lets hope that these took place in the restaurant in the House of Commons which is, yes – you guessed it, subsidised by us. Lord Strathclyde received tickets to ‘Over the Rainbow’ from the Beeb - but Nick Clegg had to watch that one on TV, he didn’t receive any ‘hospitality’.

The list may not be exhaustive. Ministers can keep certain ‘trivial’ items, and we do not know the value of these declared items, only that they are worth more than £140.

Anyhow, this new drive to transparency has to be a good thing. If nothing else it may mean that the Prime Minister won’t be given the same present twice (cough… Mayor of New York… cough).

Martin Sewell: Who is putting the positive case for an expanding EU Budget?

By Martin Sewell

In all the furore about whether David Cameron has or has not gained a “victory” in limiting the budget rise in Europe, we have had had presented to us various differing strands of opinion.

I have heard the plain “Better Off Out” view, and whether one agrees with it or not, the case has been robustly put.

Similarly those who argue the need to construct alliances to better address the fiscal irresponsibility of some Member States have made a less trenchant, but nevertheless coherent statement of their position. We may be treading lightly now to be more forceful later.

The more populist sceptics have done their work too, telling us how many aircraft carriers or nurses could be purchased with the money, and we are awash with contrasts between the suffering of the UK budget and the continuity of an upwards trend in the monies disbursed by Brussels.

Our Legalists and Constitutionalists have considered what this means in terms of present and future Treaty obligations, advising whether we could or could not refuse to pay.

In short, I have heard from almost everybody except one important sector of contribution to the debate. As far as I have seen - and I can doubtless be corrected if I am wrong - nobody has been out there in the media robustly arguing why the EU needs, must have, cannot do without, or ought to have a budget rise of 2.9%.

Is this the most under-rated blog in Westminster?

If you are interested in political campaigning I recommend James Frayne's Campaign War Room blog.

James is fascinated by effective, gutsy, grassroots campaigning and his blog is dedicated to bringing the best thinking to the UK, where political campaigning is amateur in comparison to the US.

On his blog today he lists the key features of a campaign war room. It is not simply an open plan office. It must, be blogs, be the place where key decisions are taken and implemented:

"War rooms are often created because prior decision-making structures failed, perhaps because there were too many people involved in discussions, or because no one knew where authority lay. These were reasons why the most famous political war room of all - Clinton's in 1992 - was created. They need be tight so that people don't get bogged down by endless people given their opinions, and they need to have clear lines of authority so that everyone knows who can make what decision... I remember one campaign where we worked in the campaign office but ultimate authority for decisions lay off-site. It was a debacle as you can imagine. War rooms must contain those people who can actually make decisions."

Yesterday James was explaining why Europe was not at the top of voters' list of priorities... but how it could be:

"Conventional wisdom in Westminster [eg Mike Smithson] is that the public don't care about Europe, pointing out that polls show it sits well down the list of public priorities and that recent campaigns that have tried to push eurosceptic arguments have failed. This is partly true. Ask if they want a referendum and they'll say yes, but the public don't follow the ins and outs of debates on treaty changes and potential reform. But it only tells half the story. The opinion research is clear - if you link Europe in people's minds with issues that they do care about then Europe becomes relevant and important. The research shows there are three issues above all that do this: the cost of the EU; free movement of people within the EU (ie immigration); and concerns over the EU's effects on national security."

Boris' passion-politics is good; piffle-politik is not

Natalie Elphicke is a housing and finance expert and National Director of the Conservative Policy Forum.

Boris’s passion and intelligence are perhaps his greatest strengths. Like an educated John Prescott, one forgives the hyperbole and enjoys the theatre. Not Yesterday. Yesterday’s hyperbole was pure piffle-politik – misinformed, dangerous and wrong.

His comments on the continuing availability of social housing in Inner London are extraordinarily ill-informed.  Particularly given that his office has only recently  published a factual report, “Inner London: Context for the Draft Replacement London Plan” in June 2010 which includes detailed analysis of comparative social housing in the different parts of London. Nearly 35% of Inner London’s housing stock is social housing (according to the Mayor’s own GLA report).  That is double the national social stock for England as a whole (which is 18.5%, according to the Mayor’s own GLA report). Outer London has 17.7% of its stock as social stock, slightly less than the national average but higher than the South East (14.4%) (according to the Mayor’s own GLA report).

And looking even more centrally, Westminster Borough has social housing stock of 22%, again higher than the national average.  In the parts of Westminster which are the most central in London, nearly half the stock is affordable, and the Council is, against all the odds, continuing to build new social homes, under the leadership of its very able Cabinet Member for Housing, Philippa Roe.

Driving the poor out of the Centre of the Capital. Hardly. A forced mass migration from the Inner Boroughs to the Outer Boroughs. To where exactly?  That’s piffle-politik for you.

Bad barter

Yesterday ‘Melanchthon’ had his Falling Down moment. Today, Tim Montgomerie quite rightly anticipates some familiar hollow Downing Street spin.

Yesterday’s European Council, on good sources, has endorsed something very close to the original text put forward by the working group on economic governance. We explored back on Monday some of the key problems in that document, ConservativeHome beating the newspapers on this occasion by a good 48 hours. It is now plain that a number of the evident issues of concern (including the weird precedent of ‘reversed QMV’) are clearly still in the end agreement.

Let’s put the events of the last two days into some form of context. The Council is looking at handing back to the UK a sum maybe, perhaps, in the order of £400 million. After the embarrassing confusion both from former Europe spokesman Ed Davey and former EU minister Chris Bryant last night on Question Time on how much the sum came to, we can allow ourselves the luxury here of a little ball park latitude.

That, of course, is not a rebate. Given the nature of the budget, it is effectively a one-off payment. It is, moreover, a one-off repayment of part of a surcharge.

Imagine you rented a house or flat where the rent kept going up, year after year. But your landlord was the worst sort. He never mowed the front lawn. The ornamental pond had lots of dead fish floating around in it. You had no locks on the doors and your co-tenants with impunity raided your fridge and your tool collection and never brought anything back. Then one day you came back from work to find that he’d gone into your flat and taken £100 out of your wallet to increase the rent. Getting £50 back would not, I suggest, be a triumph, nor for that matter a permanent solution to your housing issues.

£400 million of British taxpayer money returned is equally not a solution.

£3.4 billion is already being spent on the EU’s diplomatic pretensions. The CAP has a £10.3 billion price tag attached to the British economy. £2.81 billion is being squandered thanks to the CFP. Then there is the growing cost of the EU Defence bill, and the reality attached to increasing cooperation in JHA matters.  So while it is a positive move, and I would suggest even a significant policy change at Whitehall, for the British Government to attach a bill to other EU countries forming go-ahead groups where the UK has an opt out, the price tag falls short of what is both achievable and necessary to establish an enduring solution.

We have a Commission prepared to spend millions on open propaganda material (hat tip: the sterling England Expects blog). We have the Court of Auditors acknowledging (see box 10) delays in cutting red tape over EU legal obligations for businesses, that the Commission costed  five years ago at an incredible €123.8 billion, and of which at least a quarter has already been deemed excessive by Brussels itself. We have even gotten ourselves into the predicament that sovereignty has so flown from Westminster that ministers have to ask the Commission for permission to allow horses into the country in preparation for the equestrian events in the Olympic Games.

At least the recently-published ban on the use of alcohol in competition ten pin bowling was still just about within British ministerial remit.

This is so much Groundhog Day. Nine years ago, the heads of government set out a list of measures that should be explored to make a democratic EU work. The Laeken Declaration was a massive missed opportunity, the EU’s last chance for systemic reform, and only properly explored by the remarkable work undertaken by David Heathcoat-Amory during the European Convention.

We live now in an age of QMV, indeed now of new topsy-turvy reverse QMV. Opportunities for Britain to force reform will be increasingly rare, which is of course why we ended up with the budget increase  mess in the first place. If Laeken is to be finally dumped, if the last chance to implement reforms is to be cast aside, if no powers are ever to be repatriated, then patently we now live in an unvarnished new reality. If there exists neither the prospect nor the will for reform, there remains no other alternative than for this country to leave the European Union.

Most Whitehall departments don't know how much they spend on conferences.... and those that do spend a small fortune

In July 2010, I tabled a series of written questions to every Government department, asking how much they had spent on Government conferences since 1997. Most departments replied:

"This information is not held centrally and could be provided only at disproportionate cost."

In other words, their accounting processes are poor, and are not designed to promote cost control or transparency, for this kind of expenditure.

If the Minister and Permanent Secretary do not know centrally how much is being spent on conferences, how can they manage that cost?

Of those departments which did provide me with the data, some of the costs were astronomical.

For example:

• The Department for Work and Pensions spent £115 million on "management conferences" between 2000 and 2010.
• In the last six years, the Home Office managed to spend £43 million on "conference-related expenditure".
• The Department of Business, Innovation, and Skills, spent £28 million in just seven years.

Clearly there are two major problems.

1) Most Government departments apparently do not know what they spend on conferences.
2) If they DO know what they spend, the sums are astronomical

Yesterday, at the Public Administration Select Committee, I asked senior Mandarins Sir Gus O'Donnell and Ian Watmore whether or not such spending on 'conferences' could be justified.

I was astonished by what I was told.  Whilst there was acknowledgement of the need to cut costs, Mr Watmore argued that the amount spent on management conferences by the Department of Work and Pensions (£115 million) in the last ten years, was a very small part of a huge administrative budget of that Department!

Sir Gus then made the case for the need for conferences and for people in Government to get together. He then made a parallel with the amount of conferences companies like Microsoft may hold.

I replied that at least Microsoft was not using taxpayers' money.

And we wonder why costs within Government are so difficult to control.

Patrick Nolan: Anti-business policies delay recovery

Dr Patrick Nolan, Chief Economist, Reform

Tomorrow is 81 years since “Black Tuesday,” 29 October 1929, the day when prices on the US stock market collapsed and a range of events were set in motion that led to the Great Depression. This Depression devastated the world economy and some countries did not recover until the late 1930s or early 1940s.

The Great Depression provides lessons for the economic challenges we face today. Yet these differ from those we often hear. In particular, rather than purely being a failure in markets, recent scholarship has shown how policies that reduced competition and labour market flexibility made the Depression longer and more severe. This highlights the real danger of policy that damages the business environment and why, as Rt Hon David Cameron noted this week, encouraging private sector growth must be central to the Coalition’s economic policy.

To explain how government policy extended the Depression it is necessary to look at the detailed policy response in the US. The major policy response, the New Deal, created the system of Social Security in the US, contained steps to build confidence in the banking industry, strengthen banking regulation and curtailed speculation (the Glass-Stegall Act), and strengthen depositor and investor confidence (creating the Federal Deposit Insurance Corporation and the Securities and Exchange Commission).

However, the New Deal also included a National Industrial Recovery Act, which weakened competition laws and allowed industries to collusively increase prices. Although this Act was struck down as being unconstitutional in 1935, the policies of collusion it introduced continued. As Cole and Ohanian noted:

“There was no antitrust activity after the NIRA, despite overwhelming FTC evidence of price-fixing and production limits in many industries, and the National Labor Relations Act of 1935 gave unions substantial collective-bargaining power. While not permitted under federal law, the sit-down strike, in which workers were occupied factories and shut down production, was tolerated by governors in a number of states and was used with great success against major employers, including General Motors in 1937.”

The result was, as Cole and Ohanian go on to argue:

“a deepening of New Deal polices that raised wages even further above their competitive levels, and which further prevented the normal forces of supply and demand from restoring full employment. Our research indicates that New Deal labor and industrial policies prolonged the Depression by seven years.”

This can help explain why, as Milton Friedman has observed, “this was the only occasion in our record when one deep depression followed immediately on the heels of another.”

These findings are, not surprisingly, controversial. A range of other explanations have been given for the severity of the Depression, including the effect of government action following 1929 (or earlier inaction during the 1920s) on the money supply and the reduction in international trade and rise in tariffs following the Smoot-Hawley Act.

Yet what Cole and Ohanian highlight is the importance of the business environment and how a poor business environment can make the chance of a double dip more, not less, likely. To avoid the policy mistakes of the Great Depression we need supply side reforms that encourage competition and flexible labour markets. As Reform argued in our alternative Budget, “This requires broad-based and low rate taxation, deregulation and a flexible labour market. Targeted support for business should be time limited and focused on where the economic case is strongest.”

They'll call us Quislings

In discussing the government's decision not to seek any repatriation of powers from the EU - to let matters rest there where they lay post-Lisbon, despite the Conservative Party's having made undertaking after undertaking over the past thirteen years to repatriate powers in this area after that, Evan Davis asked the right question this morning:

Do you regret raising expectations on this issue as a party: going around, barnstorming around...talking about getting powers back - it's not really going to be achieved, is it?

Perhaps it's all some cunning ruse, and Cameron is secretly plotting how to draw our EU partners sufficiently far into committing to another Treaty that when he launches his demands for renegotiation they will not be able to refuse.  But, in reality, it appears that when Labour said our Eurosceptic promises were all hot air, they were right; that when Heseltine said that in government every Conservative Prime Minister is Europhile, he was right; that when UKIP said Conservatives were not to be trusted on Europe, they were right; that when I and others said that the Conservative Party had changed, and that Cameron and Hague were genuinely convicted Eurosceptics who understood what must be done and would not let us down, we were wrong.

There will be consequences.

Mark Field MP: Why Conservatives should support flexibility on economic migration

Mark Field is MP for Cities of London and Westminster.

The wisdom of the Coalition’s strict monthly cap on skilled immigration is the hottest topic for many of my commercial constituents. For multinational businesses, a liberal immigration policy is the litmus test for the proposition that the UK is ‘open for business’. Surely, my associates suggest, a cap is at odds with the government’s passionate commitment to economic growth.

The apparent softening of the government’s stance on the cap this week to reflect this widely-held sentiment has been subject to press criticism. Many on this website feel betrayed at the ease with which this apparently immovable pillar of May’s Coalition Agreement is being dismantled. However, I believe the Prime Minister should not feel overly hamstrung by his earlier pledge. We must think very carefully before we impose a permanent, artificial limit on those who seek to study or work here.

Nor, of course, should we ever accept blindly the undercutting of the indigenous workforce with cheap migrant labour. Few would support employers choosing an international worker over a similarly skilled Briton or welcoming with open arms each and every person who decides they would like to start a new life in the UK. However, flexibility in a country’s immigration system is now part and parcel of being a signed up member of the global economy. International businesses and business people, not to mention academics, expect to be able to move with relative ease between open, dynamic and flexible global cities, just as many mobile Britons would anticipate being able to work in Hong Kong, New York, Shanghai or Mumbai for a spell. Those countries which restrict this movement risk economic isolation in the age of globalisation.

The problem with the immigration debate is that it is stifled by a lack of candour. In truth, the movement of international business people and students is not the nub of the issue for most Britons. Instead, worries about immigration broadly stem from a sense of rapid change to our communities which no longer seems under control and for which there has never been an explicit mandate.

Privacy and the internet: a call to arms

Tomorrow afternoon (Thursday) MPs will, for the first time, have the opportunity to fully debate the issue of privacy and the internet - an astonishing thought given that more than 60% of the public use the internet every day. 

The debate was secured following a successful application by CentreRight.com contributor Robert Halfon MP to the Backbench Business committee and will take place in Westminster Hall from 2:30pm to 5:30pm.  The debate is fully open to the public.

A wide range of privacy-related issues will be discussed including the Google Street View service, the targeting of online advertising to internet users based on the websites they have visited in the past and data security concerns surrounding Facebook.

It is crucial, particularly in light of the discovery that Google has recently harvested thousands of personal e-mail addresses and other sensitive personal information from domestic WiFi connections, that CentreRight users play their part in ensuring as many Members of Parliament as possible attend and contribute to the debate.

Please do get in touch with your MP and ask them to attend.  If you don't have their contact details to hand, visit http://www.theyworkforyou.com

We need house prices to go up

The property market. It’s part of the trinity of dinner party conversation topics – alongside the weather and the children’s school (fees or catchment area) – and is a bit of a national obsession. We have gone from a nation of shopkeepers to a nation of small scale property speculators, with an act once rare – buying your own home – now considered so normal that any short term difficulty in achieving this aim is deemed a national problem. The Housing Minister makes pronouncements on desired price growth (none), the right-leaning press passes judgement (thumbs down), the Mayor of London follows suit, and the argument arrives at ConservativeHome. In our property owning democracy everyone has a view, but all too often it is based on only half the story.

It all started when Grant Shapps as Housing Minister invoked the wrath of the Daily Mail among others by suggesting a "It is in everyone's interest to have stable house prices for a long time, because the only way we can make sure housing is more affordable for future generations is not to have these crazy housing booms. We can't go on as a nation thinking that housing is something too expensive for regular people." He added that “We can’t go on thinking that your home is your investment, your retirement plan”. This was backed on ConservativeHome by Tim Collins of the Home Builders Federation. I have a problem with this view however for several reasons.

(1) Housing is affordable

Critics of the property market like to claim housing is no longer affordable and point out data such as this from the Council of Mortgage Lenders which shows that – over the last 50 years – property value as a multiple of salary has increased. Indeed it has, greatly. People today on average spend a far higher percentage of their income on housing costs – rent or mortgage – than in the past, but that doesn’t make housing unaffordable.

Firstly, many of the complaints exist because what is deemed ‘unaffordable’ is often really just ‘unrealistic’ – whether due to location or size – and away from the trendy hot spots there are cheaper properties. You only have to watch Location, Location, Location to be told it’s all about compromise as house hunters seek perfection at a bargain price in a single postal code or handful of streets. It’s a simple fact of life that some things are unaffordable to some people, but that doesn’t mean all things are. Finding a place needing renovation, buying a stepping stone property for the time being, and moving to another area, are all options.

And secondly, people in the UK in comparison to those elsewhere in the EU do not spend a particularly large proportion of income on housing costs. The Dutch, in particular, spend considerably more of their post-tax income on rent or mortgage payments, but other countries do also. This suggests that if forced to, people will prioritise housing over other consumption. Although the percentage of income spent on housing is near record levels, records set in 2007 I believe, you must take into account the fact other prices have fallen. Clothes, electronics, holidays, cars and everything else have fallen in comparison to our incomes, leaving more income for housing. Property – which is limited in supply by its very nature – is thus obviously going to be more inflationary than consumer goods which generally aren’t, whether you accept it or not. We have to accept that property has become less affordable, other things more affordable.

(2) Lower prices reduces supply, rising prices increases it

If we passed a law stating all apartments in Mayfair must sell for £50,000, does that mean we’d all be able to buy one? Of course not. Supply would dry up, and what would come onto the market could only be allocated by some other mechanism such as “needs based assessment”, lottery or corruption. Price is the free market mechanism, and the only one that encourages new supply. Rising prices are needed to give confidence to property developers – who I differentiate here from house builders who profit by building on their extensive green field land banks purchased often years before – to make regeneration of urban areas viable commercially. Indeed developers often need rising prices to make the sums add up and to get the confidence of lenders to even buy the land.

Talk of reducing costs through less regulation is fine if you want to build on green fields, but to regenerate our inner cities we need prices to be rising and the outlook strong. Like a stone dropped in a mill pond rising prices in one area ripple out, lifting previously poorer neighbouring areas as investors and property developers flock in. As these units come onto the market they will give some stabilisation to prices from increased supply, but we need a good outlook to make brown field and urban regeneration viable.

(3) First time buyers don’t need lower prices

Of course they’d like them, but the price isn’t the issue (with the exception of those wanting it all). The real issue is banks demanding a large deposit, in some cases as much as 25%. Saving this up whilst paying rent is obviously hard. Banks however are demanding these huge deposits due to fears about the housing market, and falling or stagnant prices will worsen these fears. It's counter-intuitive but rising prices will make it easier to buy property as lenders will have more confidence that the property is still worth what they loaned if they repossess it. Once prices start to rise, over time, competition between lenders for customers will force banks to work with lower deposits.

(4) Bribing councils is a bad idea

The New Homes Bonus, a means of making development attractive to local councils, is little more than a bribe – if we’re being honest – and will have bad consequences. By making it worth their while, councils – particularly in cash strapped times – will see giving the green light to development as a kind of ‘Get Out of Jail Free’ card. When the money runs out, they’ll go again, and again, ad infinitum. By making no distinction between good development such as regeneration and bad development such as building on green fields, the New Homes Bonus will be a recipe for urban sprawl as that’s what is most profitable for home builders (indeed with some prices it’s all that’s viable). That’s assuming it works. Home builders already have large land banks without plans to develop them, sites with planning consent aren’t selling, half constructed housing estates lie silent, and unless prices start to rise there will be no change (see 2). What is needed is for developments to be made more profitable. Rising prices, and perhaps a cut in Capital Gains Tax for developments on brown field sites.

Should other economic think tanks receive some of the money the IFS gets from the taxpayer?

I have no problem that the Institute for Fiscal Studies (IFS), takes a centre-left approach to the CSR of the Coalition Government.  In fact it is healthy for our democracy for economic and public spending to be debated in this way.  But is it right that the IFS takes such a large proportion of its income directly or indirectly from the Taxpayer?

95% of their £5.1 million funding comes from "research contracts", but detailed information for these "research contracts" is not published in their accounts. However, 90% of their Funding Bodies are Government, the public sector, think tanks, or charitable organisations.

IFS major clients include:

• The BBC
• The European Commission
• Her Majesty's Treasury
• Department of Work and Pensions
• Government Equalities Office
• Department for International Development
• Department of Health
• Department of Trade and Industry
• Department for Education
• Department of Finance and Personnel for Northern Ireland
• Inland Revenue
• Food Standards Agency
• International Monetary Fund
• Low Pay Commission
• Office of National Statistics
• Office of the First and Deputy First Minister for Northern Ireland

In 2009, the IFS received a substantial part of their core funding from the Economic and Social Research Council (ESRC), worth up to £6.8 million over five years. ESRC in turn is funded by the Department for Trade and Industry.

Is it fair that the IFS is subsidised by the taxpayer in this way? And in particular, does this public subsidy create an unlevel playing field for other economic think tanks, who don't have access to taxpayer's largesse, and may take a different point of view?

Europe's economic government; of the committee, by the committee, for the committee

It came out late on Friday, so most journalists would have missed it. Van Rompuy has transmitted to heads of government the results of the Task Force on economic governance. This was, you may remember, the result of ministers kicking certain controversies into the long grass in the summer.

The grass has now been mown. In particular, we can observe how there is a clear call for an increased use of “sanctions” to control government recklessness. We note with particular concern “These sanctions will be first applied to euro area Member States only” (my emphasis), and take the form of an interest-bearing fine. Given the existing net British contribution to the EU budget, and the prospect of voting rights also being suspended, I’m not entirely convinced the co-opted buzzword “progressive” quite fits the bill.

It also, crucially, appears that the Commission seems to believe that enough authority already exists for such sanctions to be applied under the current terms of the treaty, a stance which although highly dubious (even were one to consider the use of the “rubber articles”) is only to be expected given the 'minor democratic difficulties' that seem to accompany treaty change.

There is also this bold assertion, as has already been flagged up by Dan Hannan: “For the new sanctions that will be adopted in secondary legislation, we will move towards qualified reverse majority vote.” This means the Commission gets its way unless a blocking majority votes against it – the threshold for the majority vote is thus reversed, and, moreover, a deadline is attached to make it that little bit harder.     

We are informed that “There have been some misunderstandings about this issue.” Quite so. Since the treaties don’t provide for it, this looks exactly like the sort of legerdemain that integrationists were involved with at the time of the Convention on the Future of Europe, where there was an attempt by the drafters to allow the treaty to be ratifiable without all the member states ratifying it.

It is as if the Commission has been spotted strolling into the storeroom in Rome where the EU treaties are held, carrying a rubber-tipped pencil.

Meanwhile, as a pointer to how the EU is developing a perverse form of subsidiarity in ever-closer union, this paragraph proves quite instructive;

    In order to further reinforce national ownership of the recommendations issued under the "European     semester", governments, when submitting the draft budget to the national parliament are expected to     include policy recommendations by the Council and / or the Commission accompanied by an     explanation of how these have been incorporated.

Let’s take a step back. What this all signifies is that we shall soon be able to judge the mettle of the Treasury – all the more easily if it publically releases its submission to the Task Force, dated 9 July.

Hopefully, ministers will stand up to this prestidigitation. If they do so, they have an opportunity to strengthen their negotiating hand elsewhere. Even better, they have a heaven-sent opportunity to renegotiate powers back to the UK.

Some of the suggestions on ConHome of late as to what should come back have been ambitious, but given the realities of the current coalition I think the proposals are meaningless because they are unachievable. It is not that they are undesirable, but that the terms of this debate and latent reticence in the FCO limit our reach even if not our horizons. I have suggested repatriation of Fisheries as an achievable quid pro quo that some Lib Dems might agree with as the price for our agreeing a deal on the Eurozone, providing that non-Eurozone countries are unambiguously and permanently kept out of the equation.

Others will have different, very possibly bigger ambitions. But the real argument is not over the price tag; first we have to wake up Treasury and Foreign Office ministers to the real dangers and equally real opportunities now before them. Carpe diem!

New EU Treaty: What should we seek to renegotiate?

Later this week - on October 28th - Cameron goes to attend the EU summit in Brussels.  Top of the agenda will be the Franco-German proposal for a new EU Treaty.  I have already explained, many times, that Eurosceptics want a new EU Treaty - one that renegotiates our position within the EU, repatriating key powers as we have promised in our past three General Election manifestos.  This is a superb opportunity to achieve what Eurosceptics have wanted for years.

To enable our leaders to take this opportunity, though, they must have confidence that renegotiation will not result in our leaving the EU.  One past fear about that can be discounted on this occasion - namely the fear that our EU partners would respond to a request for renegotiation through simply rejecting it and that the logic of suggesting that renegotiation was vital would be that, absent renegotiation, we would be forced to leave.  That's not going to happen here, because our EU partners absolutely must have a new Treaty in order for the Eurozone to survive at all, and no such Treaty can proceed without British agreement, so there is no chance of their being able simply to deny us any discussion of renegotiation.

The other problem is slightly more tricky.  This is the fear that renegotiation would result in a referendum in the UK, and that once one had started down the path of referendum it could ultimately prove difficult to avoid holding a referendum on membership - such a referendum potentially resulting in our leaving.  Since our government and Party leadership have no interest whatever in leaving, that means that there must be no risk that renegotiation would lead to a referendum on continued membership.

This week at the LSE, Jesús Huerta de Soto will set out how to reform banking.

A year ago today, I was in Salamanca for the joint Ludwig von Mises Institute and Instituto Juan de Mariana Supporters Summit 2009. It's not a trip I shall forget: the call from Wycombe Conservatives, letting me know I had been shortlisted, brought me to within seconds of missing my flight. 

Salamanca was the birthplace of systematic economic theory. Long before Adam Smith, between the 14th and 17th centuries, it was in Salamanca that the Thomist scholastics set out the mechanisms of human social cooperation. They opposed intervention by the state, particularly in money, recognising the damage and disruption it would do.

It was in Salamanca that I met entrepreneur and academic Professor Jesús Huerta de Soto, a thoroughly inspiring man with the most exceptional intellect and passion for society. Jesús is this year's Distinguished Hayek Visiting Fellow at the London School of Economics, supported by Toby Baxendale.

In his masterpiece Money Bank Credit and Economic Cycles (PDF), first published in 1998, Jesús set out the origins of the business cycle – flaws in the system of money and bank credit – and proposed five stages in the process of bank reform. Following in the footsteps of Irving Fisher's 100% Money, drawing on the tradition of Peel's 1844 Bank Charter Act and as verified by economist Sean Corrigan, the next step of Huerta de Soto's plan offers the possibility of restructuring the national debt, potentially paying it off and delivering a substantial tax cut.

On Thursday, Jesús will deliver his lecture at the LSE, Financial Crisis and Economic Recession. Admission is free: I hope you will join me.

The 2010 LSE Baxendale Hayek lecture

Date: Thursday 28 October 2010
Time: 6.30-8pm
Venue: Sheikh Zayed Theatre, New Academic Building
Speaker: Professor Jesús Huerta de Soto

Jesús Huerta de Soto is professor of political economy at King Juan Carlos University and a Senior Fellow of The Cobden Centre. This event is free and open to all with no ticket required. Entry is on a first come, first served basis.

More details via the LSE.

Other coverage

• Dan Hannan MEP
• The Adam Smith Institute
• The Cobden Centre

As Good As It Gets

Here is a story about my father, one that I’ve not told you before. When I studied at Glasgow, I lived in a tenement block on Maryhill Road, near St George’s Cross. We were driving from there up towards the University one Saturday morning (I can’t remember why), which meant turning onto Great Western Road. As we waited to turn at the junction, I was looking down at the river Kelvin on our right, alongside which I used to run (to feel the city air rush past my body). As we watched, a girl was struggling to carry her bicycle down the steps to the riverside. She had bright pink hair and a full complement of piercings on lips and brow, a not untypical sight in the studentland near the University. So my father, a died-in-the-wool Conservative (he had a tea mug bearing this motto), someone who, at the same age as this girl (the same age as me) had to work through nightshifts and take day release in order to gain his qualifications, who had never in his life contemplated setting aside four years in order to live in subsidised housing and to study something for the sheer pleasure of it, who lived with my mum in an Ayrshire house of pleasing conformity, a Thatcherite of gut reactions - my father looked at this girl, enjoying her life of cycling freedom on the back of his taxes, and said:

- it’s so great that this place exists; that there’s somewhere people can be just as they want to be.

Jonathan Isaby: Rupert Murdoch's unfortunately dismissive attitude to the blogosphere

By Jonathan Isaby

Earlier in the month, Andrew Marr took a pop at bloggers, as I noted here.

Last night it was the turn of Rupert Murdoch.

Paul summarised his Centre for Policy Studies Margaret Thatcher lecture here, but I thought I should explicitly quote his words about blogging:

"Our journalism is hard-driving and questioning of authority. And so are our journalists. Often, I have cause to celebrate editorial endeavour. Occasionally, I have had cause for regret. Let me be clear: We will vigorously pursue the truth – and we will not tolerate wrongdoing.

"Now, it would certainly serve the interests of the powerful if professional journalists were muted – or replaced as navigators in our society by bloggers and bloviators. Bloggers can have a social role – but that role is very different to that of the professional seeking to uncover facts, however uncomfortable."

For someone who has been such a pioneer in the media world, it's a shame to hear him being so dismissive of blogging - not least because we bloggers are regularly questioning authority and uncovering facts, as he was claiming to favour last night.

Moreover, I would wager that his news outlets are running stories which originated on blogs with increasing regularity (and probably failing to credit them as the source more often than not).

N.B. Declaration of interest/resentment: I did try to get an invitation to last night's lecture, but was told that the guest list was "strictly controlled by News Corp"...

Five reasons why the Comprehensive Spending Review is good for the poor

It was inevitable that Labour, the Unions, the IFS, parts of the BBC and Channel 4 would present a particular slant from the Comprehensive Spending Review.  It is not so inevitable however that Conservatives need to be on the defensive.

However difficult the cuts, the Budget, CSR - and Coalition policies as a whole - will result in a fundamental shift: from a society of dependency to one of aspiration.  From a client state waiting for handouts (to one interest group or another) to one which is entrepreneurial - both socially and economically.  Our whole aim is to rebuild economic capital - and social capital as well.

To take just five priorities: our support for apprentices, our plans for housing, the transformation of education, benefit reform and taxes:

1. Apprentices. Pushed through by John Hayes - we now have a Coalition Government commitment for 75,000 extra funded apprentices every year.  Not just for economic efficiency, but for social justice reasons as well, the apprenticeship and skills policy will get young people off the street and give them opportunities and jobs for the future.
2. Housing. Coalition plans will give people a chance to get on the housing ladder by giving social housing tenants a ten percent equity in their own homes which can be used as a deposit to buy their first home. There are proposals to give tenants in social housing the right to run businesses in their own homes - not allowed at present.
3. Education: Academies, Free schools and the poor pupils premium.  All of which give children a chance to get on the ladder of opportunity.
4. Benefit Reform. The whole thrust of the CSR is to make it financially viable for people to get back into work.
5. Tax policy. Raising the threshold for lower taxpayers.

To win this argument, we  need to ensure that we take the CSR, Budget as the context within a range of aspirational policies, rather than be forced to defend individual items just within the CSR.  We must make every effort to define 'progressive' and 'social justice' as meaning aspiration and opportunity.

RE: No EU Treaty, No EU tax, No EU budget increase …

Jim's headline misrepresents Cash's motion, and it is crucial - absolutely vital - that we do not go down the path his headline implies.  It is simply not true that Cash's motion says there should be "No EU Treaty".  What it says is that the British government should make clear to France and Germany that it "will veto any [treaty that transferred areas of power, or competences]" - we can insert "from Westminster to Brussels".  Bill Cash is not opposed to all EU Treaties - as far as I am aware, he never has been.  He has long favoured renegotiation of our position within the EU, and is thus in favour of a new Treaty - namely a renegotiated Treaty.

Eurosceptics really must get this right.  We are not opposed to new Treaties - our position is precisely the opposite of this!  Our position is that not having any more Treaties is unacceptable, as it would leave the position post-Lisbon where it lay!  Our position is to favour renegotiation of the Treaty, not to oppose renegotiation!

Furthermore, whilst we are about it, in response to my post and to the Editor's, many commenters said things like "I quite agree - let's have our referendum now!"  There must be no referendum.  Forget that.  It isn't going to happen.  Why on earth would we want a referendum on a renegotiation we had pursued ourselves?  We would only want a referendum if what was produced involved some constitutional change that was felt to require the consent of The People.  Apart from disagreeing with that concept in principle (I have no real interest in "the consent of The People" as manifest in a referendum - I believe in Parliamentary Democracy, in sovereignty of the Crown in Parliament, and as such am of course as much an opponent of sovereignty being lost by Parliament to plebiscites as I am to its being lost to Brussels) - apart from disagreeing with it in principle, even in its own terms there would be no function in such a referendum.  The reason is that (as Cash's motion actually states) we should absolutely not consent to any new Treaty that passes yet more powers to Brussels - and so should not present any such Treaty for a referendum.  The Treaty we want (we must have) is one that passes powers from Brussels back to Westminster - why would we need any kind of referendum on that?

No EU Treaty, No EU tax, No EU budget increase …

Late last night, Bill Cash put down this Early Day Motion:

“That this House notes that there are increasing demands from France and Germany for a new European Union Treaty; further notes that the European Parliament itself has now proposed a 5.9 per cent. increase in the European budget; further notes that the United Kingdom Parliament on Wednesday 13 October 2010 rejected the increase; furthernotes that the EU Budget Commissioner Janusz Lewandowski is proposing a European tax; recalls that the Coalition Agreement is committed to a referendum on `any proposed future treaty that transferred areas of power, or competences'; calls on the Government to make it immediately clear to France and Germany, to the European Commission and to the European Parliament that the United Kingdom will reject a European tax and an increase in the EU budget and EU economic governance over the UK and will veto any such treaty; and reasserts and reaffirms the United Kingdom rebate and the sovereignty, in practice, of the United Kingdom Parliament, about which the European Scrutiny Committee is holding an inquiry.”

It has so far been signed by Brian Binley, Peter Bone, Graham Brady, Douglas Carswell, Christopher Chope, James Clappison, Philip Davies, David Davis, Zac Goldsmith, Bernard Jenkin, Edward Leigh, Peter Lilley, David Nuttall, Priti Patel, John Redwood, Richard Shepherd, Bob Stewart and John Whittingdale. I am told that more signatures will be added today.

Of course recent developments – such as EU Budget Commissioner Janusz Lewandowski proposing a European tax and the irresponsible European Parliament itself proposing a 5.9 % increase in the European budget – remind us that the Conservative Party and the Parliament must push forward the sovereignty issue, because ultimately that is what decides ‘how we are to be governed’. For example, spending cuts and austerity measures in general must only be considered if a Government is prepared to make a comprehensive financial analysis of all elements of the nation’s finances – including the vast amounts of money we seem prepared to hand over to the European Union through our contributions to its budget.

Jonathan Isaby: What was Nigel Farage doing during George Osborne's statement on the CSR?

By Jonathan Isaby

The answer to the question I pose above is that the former UKIP leader was evidently updating the list of those he follows on Twitter, as the email I received (reproduced below) demonstrates:

I know many ConHome readers follow me (@isaby) already but certainly suggest that Farage, who is most likely about to be re-elected UKIP leader, is worth following on Twitter too @Nigel_Farage.

Incidentally, if you didn't catch his autobiography, Fighting Bull, which came out at the beginning of the year, it's well worth a read if you want to get a feel for the man and what motivates him, as well as a potted history of UKIP and the variety of characters which populate it...

Alex Deane: In resurrecting the Intercept Modernisation Programme, the Government breaks a clear, basic and fundamental promise

Having been controversial enough that even Labour suspended it, it has emerged today that the appalling "Intercept Modernisation Programme" is to continue.

Buried in the Strategic Defence and Security Review, the Government plans to introduce

a programme to preserve the ability of the security, intelligence and law enforcement agencies to obtain communication data and to intercept communications

The IMP will allow the security services and the police to spy on the activities of everyone using a phone or the internet. Every communications provider will be obliged to store details of your communications for at least a year and obliged in due course to surrender them up to the authorities. The authorities will be able to track every phone call, email, text message and website visit made by the public on the absurd pretext that it will help to tackle crime or terrorism.

This is despite the Conservative Party's recent pledge to reverse the rise of the surveillance state: a commitment now fairly and squarely broken.

This can't be blamed on the formation of the Coalition. The Coalition Agreement promised to "end the storage of internet and email records without good reason".

Couple this with the disgusting u-turn on the Summary Care Record, despite similarly clear and concrete promises, and a troubling picture emerges; it is fascinating and dreadful to see the speed of bureaucratic capture, the reversion to bureaucratic authoritarianism on show - intrusions are piling up so fast that my extended essay published last week is already out of date.

Just see how the surveillance state is being reversed, eh!?

Jill Kirby: Does the Coalition really believe in better for less?

The Coalition has to demonstrate that its purpose in government is not simply to cut public debt and rein in spending, but to govern better for less. George Osborne opened his remarks today by outlining what he described as the principles governing his spending review: public service reform, 'fairness' (defined as 'we're all in this together') and promoting economic growth.

But missing from this list was the overriding principle which might have been expected to set the basis for the whole exercise: that increasing government spending on services is not inherently virtuous. Perhaps the Chancellor felt that this would be to state the obvious, and he must be commended for sticking to (most) of his Budget plans and for reasserting his determination to deal with the deficit and get spending back down to 2008 levels. But his failure to remind his audience that more public spending does not = better outcomes (as ten years of Labour profligacy comprehensively proved) meant that there were some worrying inconsistencies in the review.

Given that the cuts are also hugely variable across departments, these inconsistencies add up to a very confusing message. Why should we commend as "good" the decision to inflate the already-massive spend on the NHS, when we see prison places being slashed through lack of funds? It's very hard to discern a principle here. And since Sure Start has been proved a colossal waste of money, failing the most vulnerable children, why continue to fund it?

Most controversially of all, if the government believes that working families should keep more of their earnings (to spend more effectively than government can) then why means-test child benefit - the only remaining recognition in the tax system of the cost of raising a family - in order to preserve free bus rides and winter fuel payments to well-off over 60s?

If you believe in the general principle that money is better spent by individuals on their own behalf and worse spent by government in their name, then you will, like me, have been rather disappointed today.

Martin Sewell: The BBC is wrestling with precisely the same budgetary issues as the Coalition Government - and Legal Aid lawyers

By Martin Sewell, a solicitor based in Kent.

When I heard that the proposed financial settlement for the BBC is likely to play out as a 16% revenue reduction, my mind went immediately to a local firm of Legal Aid Lawyers who were obliged to make identical across  the Board pay reductions 18 months ago.

Unlike the BBC, legal aid lawyers have had but one extremely modest pay increase in 12 years, and have become habituated to making do with less, whilst facing a year or year exhortation that standards need not suffer if efficiency savings were pursued.

If anyone has demonstrated that much can be done in such difficult financial circumstances, then this sector might offer themselves in a consultancy role to others. There comes a point however when the pressure tells and the toughest decisions have to be taken. As far as I am aware, nobody left the firm in question. A combination of loyalty, stoicism, and lack of alternatives meant that people just had to take the pain.

It was, incidentally, Labour-inflicted pain.

I am sure that there are many in the upper echelons of the BBC who regard such decisions as the end of civilisation as they know it, and in a way they are right. They contemplate a future with fewer sequins, hospitality vans, taxis and hotel nights. Some are even facing having to face the indignity of moving to Salford.

Yet when you reach the point where there is no more money, indeed there is less, there is only one way to respond and that principle applies whether you are a small business, a State broadcaster, or a Government.