Friday, September 28, 2007

A Certain destiny

As the despotic regime in Burma continues to attempt to crush the drive for freedom with bloodshed, the dignity and bravery of the long oppressed Burmese continues to shine through.

I continue to believe that the junta should be isolated and that all practical measures to promote the cause of Burmese freedom should be undertaken. The fact that the Chinese government seems to be calling for restraint, is perhaps mildly optimistic.

The fact that Russia is supporting the tyrants should be noted and is contemptible.

An Op-Ed piece in The Times by Ben Macintyre caught my eye.

I think it is worth quoting the last two paragraphs:

"Two sets of beliefs are colliding today in Burma today. On one side the monks, devotees to an ancient creed, demanding democratic freedom and modern economic reform, and on the other a vicious modern military machine, adhering to a medieval code of prophecies, astral omens and superstitious symbolism.

You do not have to be clairvoyant to be able to predict which of these beliefs will triumph in the end."

As the aftermath of the bloody revenge of the despots continues and as blood is washed from the streets of Rangoon, our thoughts should be with the people who have already suffered enough, and our determination should be to use all the pressure that we can bring to bear to secure an end to this vile regime.

Thursday, September 27, 2007

Bonkers Boris waits to strike again

I was at a wedding a few years back when a very nice Conservative Lady came in (a little late) and sat down next to me and with an air of triumph declared that :

“I am late because we Conservatives have been selecting our candidate for Mayor of London. Its great news: its going to be Jeffrey Archer !!"

My jaw hit the floor. I really did not know whether to congratulate her, as she clearly expected , or to commiserate her on the inevitable doom to follow.

Boris Johnson may not be a crook (although of course his ex-mate Darius Guppy is)- but who needs another Archer-style “character”?

I am with those who think that the Tories will rue the day- whether it is that Boris gets found in bed with a giraffe or some other more outre offence against sense and decency, I suspect that he will come to grief somewhere.

As regular readers will know, Ken Livingstone has always struck me as a pretty sleazy kind of politician, with a far bigger ego than his "cheeky chappy" TV persona would let you believe- and indeed the questions over his dealings with the pretty nasty regime of Hugo Chavez in Venezuela have still not been satisfactorily explained.

But Boris?

Nope- if that is the answer then the question must have been:

"Who can the Conservatives chose as a candidate with a more questionable reputation for sexual shenanigans and insensitive gaffes than Ken"

Georgia on my mind

I managed to catch the second half of the Georgia against Namibia match in the Rugby World Cup.

I have been pretty disappointed so far with the coverage of the RWC. Partly this is a function of the very patchy coverage by ITV, but mostly it is due to the very poor performance of the Home nations. However there has been an incredible timidity too. I was shocked and very angry to see Scotland turning out what was essentially a B team to face the All Blacks at Murrayfield. Unsurprisingly Scotland were totally blanked- even on home ground. This is hardly the kind of display that will encourage the required increase in support for the game in Scotland. While the players may still feel proud to be playing in the (mostly) blue jersey, the cynics of the SRU refused to give the paying public the kind of contest that demonstrates the power and the passion of the game.

By contrast several up and coming teams have played with a commitment and pride that puts the Home nations to shame. The first match, where Argentinian Pumas shocked France with an energy and creativity which gave Les Bleus no quarter, has been a taste of a renewed enthusiasm amongst the emerging nations. Georgia too, having taken Ireland to the brink have played Rugby with incredible power, a fact that lead directly to their well deserved first win of the RWC last night.

The coverage by TV has been poor, simply because the quality games have come from unexpected quarters: this has been a tournament demonstrating Northern hemisphere weakness, Southern hemisphere clinical rugby, but with the many of the best games coming from the emerging nations. As Georgia face France over the weekend, whatever the result, they can certainly be proud of their achievements. As for Scotland, although even a scrappy win over Italy would be a win and qualify Scotland fro the next round, the SRU have already betrayed their fans. Running away from a contest at this, the highest level, is pitiful. No wonder Murrayfield is usually half empty these days. It is a long way from the last golden days of the amateur era, when players like David Sole, John Jeffrey, Craig Chalmers, Gavin Hastings, Finlay Calder and Tony Stanger amongst many others played with belief , commitment and pride and no little integrity.

Wednesday, September 26, 2007

Rogue polls and Vogue Pols

The endless merry-go-round of opinion polls is not something I ever get too thrilled about- leaving it to the more anorak-y commentators on Politicalbetting.com.

In particular the gyrations of YouGov do not give me much confidence as to their methodology. The latest YouGov showing Gordon Brown 11% ahead of the Tories, with the Lib Dems, despite a good conference, losing 3% strikes me as more than usually strange. Yet, in the vague atmosphere of election fever, such a strong lead is creating a media frenzy.

For what it is worth, I am not convinced that an election over half term (October 25th) or even in early November is a particularly likely option. Rather, it seems to me that stoking the election speculation achieves two goals: one it leaves the Conservatives on the back foot, and secondly since the lead story in the media is all about a potential election, it eliminates some more difficult questions on things like Northern Rock, which only the most informed journalists even understand the implications. While I am sure that Labour do have a couple of nasty surprises with which to sabotage the increasingly hapless David Cameron- such as rumours of possible defections- I am unconvinced that Brown would go at a time which is so tricky logistically.

In fact, judging by the Comments from Norman Tebbit on David Cameron, it may still be the case that the young Conservative leader has still not eaten his full ration of crow. The open contempt of Thatcherites for the regime of the toffs has now become entirely unconcealed loathing. The visit of Margaret Thatcher to 10 Downing St was in many ways extraordinary- Norman Tebbit's warm words about Gordon Brown merely underline the increasingly shaky control that Cameron has within his own party. It is hard to avoid the idea that, as with William Hague, the Conservatives have looked for youth but found a lack of experience. It seems almost too emblematic that the pin-up boy for Cameron's Conservatives, Adam Rickett, is facing shoplifting charges in New Zealand.

I think there is the serious risk that the forthcoming election- whenever it is held- would be the last for the Conservatives in their current form. Certainly in Scotland, the Conservatives show no signs of emerging from their coma.

The challenge for Liberal Democrats is to demonstrate the practicality of our policies: why they actually deliver what the Daily Mail populists only promise in the criminal justice system, why they will strengthen our economy and why they will deliver a fairer and more open society.

The unlikely alliance of New Labour and Old Thatcherite only serves to underline our contention that we are dealing with an authoritarian and reactionary consensus amongst the other two parties. The more libertarian, more open and freer principles of Liberalism mark out the battle lines, and whenever the election is called it is on those key issues that we can fight our ground.

Tuesday, September 25, 2007

The Saffron Revolution

The Burmese junta is one of the nastiest governments on the world.

Down there with Mugabe and King Jong Il it has conducted the impoverishment and oppression of an ancient and dignified culture.

From having been the wealthiest country in Asia upon gaining independence in 1948, the dictatorship that seized power in 1962 has pursued a catastrophic economic mismanagement of the country. For example, replacing all the kyat notes divisible by ten with notes only divisible by nine- a more"auspicious" number, then moving the capital from Rangoon to an isolated clearing in the jungle called Naypyidaw.

In 1988 the Burmese people rebelled, and chose Aung San Suu Kyi as their leader in free elections. However the kooks in the regime are also utterly ruthless, and massacres of thousands took place before the revolution was stilled and the cruel, corrupt and rapacious tyranny was resumed.

Now, once again, the Burmese are openly struggling for their rights and defying the junta. Rumours abound that more massacres are planned.

When I was a teenager I first became involved in the struggle for Baltic freedom. At the time it seemed an impossible cause, yet miracles happened, and largely peacefully the USSR disintegrated and Estonia, Latvia and Lithuania gained their freedom.

I dare to hope that Burma too will achieve her freedom. As the peaceful demonstrations grow across the country, is it too much to ask that the UK will join the United States in isolating the vile regime and lend practical support to the protesters?

The time has come to condemn the junta and stand up for the human rights of the Burmese that have been crushed for so long under a capricious and cruel regime.

Support the Saffron Revolution! Isolate the Junta!

Monday, September 24, 2007

Its blog-tastic

I notice that Iain Dale, as part of the tease for his latest "collaboratively" written book, "Iain Dale's Guide to Political Blogging 2007" [that's enough plugs- Ed] has marked out this blog for particular praise:

"If I were to pick out one Lib Dem blogger who had the potential to make the big time it’s James Oates from Cicero’s Songs. He’s a consistently brilliant writer, who provides insight with every blogpost. If he posted more often and updated his blog design he would be in the top three next year.

As a Conservative I probably read more Lib Dem blogs than most others. I find them consistently more entertaining than Labour blogs, as their authors tend to inject their own personalities into their blogs in a way that Labour bloggers tend not to.

It’s clear that LibDem have harnessed the blogosphere well, and their influence is likely to grow over the next twelve months. I’m not sure what it says about their leader that his blog is rated 100 out of 100 by LibDem bloggers, but they say that the exception proves the rule. The LibDem blogosphere is undoubtedly in rude health."

Well, modesty aside *blush*, I do think that the Lib Dems are getting their act together in the way that we communicate in the wider world- while it is nice to gain a measure of recognition (though I notice that the selection criteria remains refreshingly opaque and hopefully elitist...), in fact the standards are improving across the board- with many people putting forward interesting and informed Liberal views: Jonathan Calder, James Graham, Tristan Mills amongst many others.

Since one good plug deserves another, I should also point out that Iain has invited me onto 18 Doughty St on Tuesday 25th at 9.00 PM to discuss the Liberal Democrat conference. [Er... that is 2 plugs- Ed]

So on to the top 100, with a note that someone is being a bit dark by placing our leader at 100/100 again!:

1 4 Liberal England
2 17 A Liberal Goes A Long Way
3 15 Quaequam
4 1 LibDem Voice
5 5 Peter Black
6 26 Liberal Burblings
7 77 Millennium Dome Elephant
8 19 Cicero's Songs
9 24 Andy Mayer
10 8 Love & Liberty
11 7 Lynne Featherstone
12 NEW Norfolk Blogger
13 12 No Geek Is An Island
14 30 Liberal Bureaucracy
15 74 Hug a Hoodie
16 2 Niles's Blog
17 10 A Posh Sounding Northumbrian
18 38 Hot, Ginger & Dynamite
19 8 Jock Coats
20 27 What You Can Get Away With
21 51 Jonathan Wallace
22 NEW Liberal Mafia
23 49 Liberal Alone
24 37 Whiskey Priest
25 6 LibDem Blogs
26 NEW Adrian Sanders MP
27 60 Sandals are Off
28 NEW Steve Webb MP
29 3 Liberal Review
30 91 On Liberty Online
31 62 Mary Reid
32 NEW Ed Maxfield
33 NEW Wouldn't it be Scarier…
34 NEW Diary of Chris K
35 40 Pink Dog
36 86 Republic of Hyde Park
37 44 Richard Allan
38 NEW Duncan Borrowman
39 54 Colin Ross
40 NEW Clowns to the Left of Me
41 NEW David Nikel
42 NEW Jonathan Fryer
43 42 Moonlight over Essex
44 NEW Mike Barker
45 21 Anders Hanson
46 36 Eaten by Missionaries
47 NEW Jeremy Hargreaves
48 NEW Matt Davies
49 18 John Hemming MP
50 20 Ballots, Balls & Bikes
51 NEW Greengauge
52 58 Rick's St Mary's Diary
53 NEW Home Office Watch
54 NEW Lindyloo's Muze
55 43 Arwen Folkes
56 61 Liberal Legend
57 NEW Process Guy
58 16 Suz Blog
59 Bernard Woolley
60 34 Sajjad Karim MEP
61 25 Charles Anglin
62 NEW Barcharters Anonymous
63 NEW Liberal Leslie
64 NEW Hooting Yard
65 28 Progressive Politics
66 NEW Disgruntled Radical
67 59 Simon Jeram
68 NEW Joe's Extra Bold Blog
69 NEW Mark Young
70 NEW Belsize Libdems
71 NEW Hunting for Witches
72 NEW All Along the Watchtower
73 50 Ryan Cullen
74 32 Agent Mancuso
75 23 Liberal Action
76 NEW The 3 P's
77 48 Chris & Glynis Abbott
78 52 Paula Keaveney
79 NEW Ann Garner
80 35 And Then He Said
81 NEW A Radical Writes
82 NEW JohnBM:Liberal
83 73 Neil Woolcott
84 NEW Liberal Polemic
85 NEW Freethink
86 NEW Voice of Young Liberal Democrats
87 14 Eric Avebury
88 79 Oliver's Battery & Badger Farm
89 NEW Long Despairing Young Something
90 NEW Anything Caron Can Do
91 29 Forceful & Moderate
92 69 Fraser MacPherson
93 NEW Ian Eiloart
94 75 Stodge
95 NEW 5tracks
96 92 David Walker
97 89 Flock Together
98 NEW de moribus liberalibus
99 98 MKNE Political Information
100 100 Ming Campbell

Gordon Brown: the seeds of his own downfall

As the reverberations from the Northern Rock debacle continue to echo, and as the evidence grows for a major fallout from the growing US Dollar crisis- one major casualty emerges: the credibility of the independence of the British Central Bank.

The first act of Brown as Chancellor was to grant the Bank of England independence. one of the first acts of Brown as Prime Minister is to demonstrate that the Bank is in fact not independent at all.

The political fallout of Northern Rock placed the Governor, Mervyn King under some pressure to resign, but even more pressure to change his policy of limiting support to lenders who get into trouble. The Governor's long held view is that to provide generous credit terms to banks that get into trouble would eliminate moral hazard and therefore encourage banks to take even greater risks.

More importantly still, the wash of extra money would add to inflationary pressures in the economy.

None of this seems to have counted with the UK Treasury- they have insisted on an all encompassing state guarantee for the Northern Rock depositors- such that remain- and have railroaded the Bank of England into giving their consent.

The next crisis will doubtless leave the independence of the Central Bank looking even more threadbare. In the meantime, despite the economic success claimed by Gordon Brown, the fact is that British interest rates have continued to be consistently higher than our European counterparts in the Eurozone. In the past few years the Sterling premium has allowed British financial system to take advantage of the "carry trade", and borrow in cheaper currencies now, however, even the premium has not been enough, and liquidity in Sterling has vanished.

In such a crisis, it is critical that the Central Bank has credibility. Unfortunately, by undermining this credibility, Gordon Brown has created a moral hazard for his own government: it is now expected that he would underwrite large parts of the banking system, and if he does not, then even greater volatility could result. Meanwhile, there are substantial inflationary pressures in the economy that imply a necessary brake on lending.

As the growing fallout of the Dollar crisis shows: there is now a real risk that the UK could join the US on the road to 1970's style "stag-flation". As in the early 1970s, the US is headed by a discredited administration, deeply embroiled in a disastrous land war in Asia. The difference now is that the US is not the world's creditor, but its debtor. The UK, as one of the largest investors in US business, has already lost billions as the value of those investments, measured in Sterling, diminishes. Yet our competitiveness versus the rest of the EU is also falling, as the supply of cheap and high quality labour from Central Europe now dries up.

These inflationary risks remain, yet the risk of a slowdown, based on falling house prices, has now risen dramatically. Brown may have already laid the seeds of his own downfall, by reversing the one single policy that Liberal Democrats could support whole-heartedly: an independent Central Bank.

The Blind leading the Blind

The media frenzy on the (fairly remote) possibility of a snap election in the UK has continued, despite some pretty clear non-denial denials. After a while this begins to make the media look somewhat over-excitable and also pretty dumb.

It is hard to respect journalists who keep coming out with unsubstantiated rumour and treating it as fact. I saw a good deal of it last week at the Liberal Democrat conference in Brighton.

The conference was cheerful and good natured, with well mannered and informed debates. There supposed splits between Economic and Social Liberals were not evident to me- indeed I have rarely seen the party so united.

Nevertheless, the only story that the media wanted to talk about was Ming Campbell's age- "Isn't he past it, not up to the job" were a couple of the most polite comments I heard from journalists. Frankly this outrageous ageism simply reflects ignorance of a terrifying degree.

Firstly Ming gave a damn good speech- thoughtful and passionate in equal measure. There is no desire for a new leader at this point- and the Liberal Democrats do not need a new leader. Ming Campbell has what the other party leaders, David Cameron in particular, lack: a broad life away from politics. He has been an over achiever in most things he has ever done: As an athlete, he was an Olympian, and the captain of the British athletics team. As a Lawyer he is a QC, and were he not in politics he could have risen to the highest legal positions in the land. He has received many academic honours, including three honorary degrees, and the Chancellorship of St Andrews University. The other honours: a knighthood and a CBE reflect his years of service to his country.

By contrast the Conservatives chose an untested leader, whose life outside politics has essentially consisted of the pleasures of the wealthy undergraduate, leading to membership of exclusive London clubs together with an obvious enjoyment of country sports. His lack of years is now being called immaturity by the same commentators who lauded him in the spring. His comments on the economy are branded as self serving, and on tax, it is hard to avoid the idea that the commentators may be right. So, Ming has actually overtaken Cameron in the popularity stakes whatever the media might have people believe.

Meanwhile, as the windows of the global financial system continue to be rattled by the emerging dollar crisis in the USA, the case for informed and experienced leadership grows yet stronger. And Ming has achieved much. Indeed, he has pulled together a hugely impressive front bench. Nick Clegg, Edward Davey, Vince Cable and David Laws all have Oxbridge 1st class degrees- and Vince Cable has a PhD in economics (unlike "Dr." John Reid who has a PhD on the Communist writer, Gramsci, Vince does not use his title), David Laws indeed has a double first in economics from Kings College, Cambridge. It is well known that Vince has been chief economist at Shell, but has also been a senior diplomat. David Laws was head of currency trading at BZW, making his first million before he was 30. Chris Huhne (another Oxford first) was the founder of Fitch, now one of the leading credit rating agencies worldwide. It seems almost cruel to make comparisons with the Labour front bench, and still less the pale ciphers amongst the Conservatives.

Ming's experience and achievements are a giant asset- and the simple minded denigration of his age by 20-something graduates in media studies is irritating not just Liberal Democrats. A red blooded Conservative said to me that he felt that at a time when average lifespans are rising well into the eighties, that it is absurd to consider that 50 is a sensible retirement age. As a man in his seventies he was growing increasingly angry that "young know-nothings" were attacking Ming for being in his sixties. Ageism is becoming illegal not just for fairness but for economic necessity- but some cynical journalists simply look for the lazy story.

So: this week it is the unlikely general election that will drown out whatever else happens in Bournemouth, last week it was the non-story of Ming Campbell's age, doubtless next week it will be some other spurious story from the Conservatives.

Brighton was an important conference for the Liberal Democrats. The wounds of Blackpool in 2005 were healed, as Liberal values were being used to formulate policy across the spectrum. The Liberal policy on immigration reflects precisely the same intellectual roots as the Orange Book Economic policies. Even The Economist, not often a fan, felt compelled to recognise that the Liberal Democrats had set out a Liberal and well thought out set of ideas, that indeed the party is a trailblazer for a new kind of politics of the kind that this blog has talked about in the past.

And there is the rub: even one of the most informed and influential magazines in the world, is just playing catch-up with the debate that is happening outside the traditional media. More people are turning to blogs for the cutting edge of debate. "Media studies" may teach something about communication, but it is no substitute for informed intellectual debate. As the inky scribes seek to simplify, the world grows more complicated- and they themselves are moving farther and farther away from the centre of the argument. The power of the press and broadcast media declines as it continues to dumb down. Those that follow the mass media agenda will end up in a simplistic world that is a long way from the crux of politics: a message that Conservative and Labour strategists now must take to heart. The legacy of Blair has made both the other parties into media creatures- and the electorate are learning to spot the phonies.

The Liberal Democrats are already learning the power of their principles and their honesty, and as the months pass, with more local success under our belt, and the prospect of improving polls, we can face the future with more optimism than for some time.

Thursday, September 20, 2007

Ming Campbell's answer to Triangulation

I see that in this morning's Independent Michael Brown makes the case for an alliance between the Conservatives and the Liberal Democrats.

I find it hard to feel warm and cuddly about such an alliance, but that is not because I have any great ideological hang ups about working with Conservatives. The problem is that, were cross party coalitions required in the future, I find that the Conservatives have more in common with Labour.

It is Labour who have proposed most of the key planks of the surveillance state, which the Conservatives have supported.

It is Labour who proposed the Iraq war, the Conservatives who supported it.

It is Labour who try to impose unworkable but supposedly draconian legislation on immigration, the Conservatives who have supported it.

In fact the Conservatives have supported Labour on several of their key mistakes.

The Liberal Democrats have been a far more effective opposition to Labour than the Conservatives, simply because the supposed left and the supposed right have converged on a mildly reactionary, mildly authoritarian consensus.

The Liberal Democrats are supporters of a progressive, far more libertarian world view.

As Ming Campbell finished his speech this afternoon, he completed a Liberal Democrat conference which has underlined our commitment to Liberalism as a force to promote individuality and freedom. The message is clear: if you support less restrictive, more individualistic society, then the Liberal Democrats are on your side.

As for Michael Brown: the Tories just aren't in favour of the kinds of freedom that we are working for, any more than Labour are. In fact the other two have more in common with each other than either have with us. So, since you will not ask whether Labour would go into coalition with the Tories, why bother to ask the Lib Dems? Your agenda is to create a spoiling tactic and distract the electorate from the reality of the current Tweedledum/Tweedledee politics.

Our politics remains about principles and, after a successful and business like conference, the Liberal Democrats can look forward to putting our case to the country at local, European and eventually the general elections ahead of us.

Monday, September 17, 2007

Brighton Belle

I spent some of the weekend at Brighton to hook up with old friends at the Lib Dem Conference- and the atmosphere is positive. I hope to return this evening, but I am extremely busy, so my plans perforce must remain flexible.

I have been shortlisted in Aberdeen, so I will also need to be at the other end of the country for most of next week (but only after attending the England-Estonia match at Wembley).

It is always good to to meet old friends from across the country, and I am also profoundly encouraged by the increasing sense of purpose in the party. Nick Clegg's profile in today's Indy was also a really interesting and effective exposition of Liberalism.

Despite the iffy press so far, I think this is set to be a good conference.

The Economic (& Political) Conseqences of the Crunch

As regular readers of this blog will know, I, like many Liberal Democrats, have been warning about the extreme imbalances in the global economy for some time. Vince Cable first talked about the problems more than two years ago.

It does not give me much satisfaction to say "We told you so".

The old fashioned run on the Northern Rock is not supposed to be happening- the Bank is reported as solvent and has the support of the full faith and credit of the Bank of England. Nevertheless with every hour that passes the depositor base is draining away and when only the loan assets are left the Northern Rock will simply have to be sold. This was the fifth largest mortgage lender in the UK market and in the course of a week it has ceased to exist as a business. The shareholders who in February owned shares worth £12 each may end up being lucky to get more than £2, and there is the possibility that they will end up with nothing.

The crisis in US sub-prime has claimed its first British victim, and it will not be the last.

In the face of this, it is easy to panic. Will Hutton on the Today Programme this morning was exhorting the government to press every panic button in site- extending depositor protection- which might be reasonable- to nationalising the Northern Rock and the credit vehicles like SIVs, coupled with massive new regulation; this is not only unnecessary, it is potentially extremely dangerous and horrifically expensive.

There is a real risk that the turmoil in the global financial markets will start to have an effect on the real economy pretty soon: and that pretty much guarantees a deep recession, even a prolonged depression. However this spectre will not be propitiated by massive government or Central bank intervention.

The key is to establish as quickly as possible the scale of the market losses, and to start to carve out the good loans from the bad. At Jackson Hole, last month David Hale spoke of "a crisis of information". He is right. Right now each regulator across the globe should be quizzing their banks about the extent of the write downs that they may need to take. Once the scale is understood, then the markets can price in their risks. Admittedly that would in normal circumstances mean a likely increase in interbank interest rates, which could deepen the problem, so the central banks should continue to provide liquidity at the discount window in order to maintain order in the interbank market.

Part of the particular problem for the UK is that there is at present a great deal of borrowing in Sterling Commercial Paper (CP)- the short term IOUs that companies issue to the market, and which are underwritten by the banks. As we close out the quarter, a record amount of CP needs to be rolled over. However the market is not willing to take on the new lending, so the banks will, under the terms of their underwriting, need to take the paper onto their own balance sheets. This is why they have largely withdrawn from the interbank market, while they establish the scale of their own obligations. Unfortunately, the Sterling market is relatively small, compared to the US$ or the Euro-zone, and despite interest rates that are 2% higher than the Euro zone, there has simply been insufficient liquidity to fund these new CP obligations and maintain stability in the Sterling interbank market. Sterling thus faces a liquidity drought that could be very damaging to the domestic economy. Had we been members of the Euro, this problem would have been far less likely to occur.

We stand now at the inflexion point that we have been discussing as a possibility for the past few years. The asset price bubble, led by house prices, is well and truly over. The availability of cheap and easy credit is likewise over. The benign circumstances that have supported the long surf of the British Economy along a giant wave of liquidity is over. The 15 year boom is over.

The air is dark with chickens coming home to roost.

Many political assumptions will now need to be recalculated. Unless Gordon Brown announces an election in the next two weeks, his room for manoeuvre next year is likely to have gone- it means that the chances of a full Parliament are now dramatically higher. Labour will get the blame for the bust, as they have claimed the credit for the boom.

The Conservatives too will be wrong footed- the spivvy bunch of estate agents that they represent have been in the thick of those getting their noses in the trough- and their anti-Europeanism will be seen as the ill judged mistake that it is.

The mature gravitas of Ming Campbell, previously derided as old and out of touch, suddenly begins to look reassuring and wise, compared to the shallow, puppyish eagerness to please of David Cameron and the hapless would-be Stalinism of Gordon Brown.

This inflexion point in the economy could turn British politics upside down- there is suddenly all to play for.

Friday, September 14, 2007

The Nasty Parties

Since David Cameron became leader of the Conservative Party he has made plain his desire that the British Tories should leave the European People's Party (EPP) in the European Parliament. Although virtually every other right wing party in the EU is a member, Cameron and some of the more anti European elements amongst the Conservatives have considered that the EPP is dangerously socialistic and pro European.

Apart from the European Parliament of the European Union there is another Parliamentary Assembly in Europe: that of the Parliamentary Assembly of the Council of Europe.

The Council of Europe is a rather worthy organisation that was set up independently of the European Union by the Treaty of London in 1949 in order to promote the values of human rights and democracy. It is open to all those countries that accept the rule of law and the principles of Human Rights. Unfortunately it now embraces such countries as Russia whose actions in recent years have shown a remarkable contempt for these principles.

In the Council of Europe, the British Conservatives in fact are already not part of the EPP group, but they sit with a different group, the so-called European Democrats (EDG). I think it is instructive to notice that amongst others, the group includes:

The Italian neo-fascist group, the National Alliance.
The Polish ultra Conservative "Law and Justice Party"
The Latvian Nationalist Party: "For Fatherland and Freedom"
The Slovak Nationalist Party

So, Perhaps we think we get the picture, a few small, slightly nutty, right-wing parties have crept under the benign wing of the British Conservatives for organisational purposes. Isn't that what has happened before?

Well, actually, no.

The British Conservatives are not even the leaders of the group.

Putin's Party, United Russia, is.

So just to recap:

The British Conservatives are formally allied to a party that has been implicated in the undermining of Russian human rights and attacks on Russia's neighbours from Estonia to Georgia. The British Conservatives prefer to be allied to Vladimir Putin to rather than Angela Merkel and Nicolas Sarkozy.

It is, put quite simply, a disgrace and is indefensible.

It is time that the Conservatives came to their senses.

It is wilful blindness to continue this dangerous and disgraceful alliance, and if they do not withdraw from it, we will know that the Conservatives have sacrificed common sense on the altar of blind anti-Europeanism.

Wednesday, September 12, 2007

Determination

Once again in Tallinn, finally completing the paperwork of a transaction that we executed a few weeks ago to fund a reverse takeover of a Polish company listed on the Warsaw stock exchange.

Coincidentally, a party of British Liberal Democrats is visiting Estonia, and since the party of Parliamentarians is being led by my Uncle, I am able to tag along to a couple of the meetings. Some of the members of the group visited Tallinn four years ago on a similar mission. They are, inevitably, astonished to notice the dramatic changes, not least in the Tallinn skyline, that have taken place since then.

As with the last trip, the delegation meets the All-Party British Group in the Estonian Parliament. Several heavyweights, including former Prime Minister Mart Laar, come to join the exchange of views. As before I am struck by the fact that the debates between the different factions are over issues that are encompassed with the UK Lib Dems. Both Mart Laar, a nominal Conservative, and Sven Mikser -a leading Social Democrat- express views that are identical to UK Liberal policy. Indeed Mart Laar clearly has little time for the virulent anti Europeanism of the British Conservatives, and his general disappointment with the Party of his hero, "Maggie Thatcher" is palpable.

As I talk with the British MPs and members of the House of Lords later, they finally help me make my mind up about committing to run for Parliament next time. I have been asked to stand for one of the most winnable seats for the Liberal Democrats in the country. Initially I was concerned that my commitments, especially my job, would not allow me to make the massive effort that actively fighting a seat requires. However after much thought I have now found a way that I can make that commitment. It will not be easy, and is certainly a significant loss of income. However the messages of support and encouragement from the constituency have made up my mind for me. Having such close family ties to the area has meant that many of the members of the party have known me most of my life, and all of them have been definite that I should fight this. So, this morning I have sent in my application and the supporting paperwork. The shortlisting meeting is this week, and I will know over the weekend if I have gone through to the next round. There is at least one other candidate, so we shall just have to see if my application is successful.

However, seeing the success of Liberal Estonia, I am determined that the same ideas can make a real difference to Aberdeen, to Scotland and to the UK.

Tuesday, September 04, 2007

19th century Rail

As the high speed rail link is finally tested between Paris and London, it is certainly progress to report that the journey time between the two capitals is now set to be 2 hours and 15 minutes.


Unfortunately, it is rather depressing to report that the average speeds into London on other railway lines are now slower than they were in 1910! I am sure that the Victorian engineers that had such vision to create the network in the first place would be astonished to find that it takes five minutes longer to get from Richmond to Waterloo, for example, than it did 100 years ago..

Mind you, across the UK, we seem to be missing the vision to create an effective and efficient transport system. Partly this is put down to cost. The price of land and other inputs makes investing in infrastructure a far more expensive proposition per mile of track than it is in France, for example. On the other hand the UK is half the area of France, so any high speed track is likely to be more densely used. Nevertheless it is frustrating to note that London is linked by a high speed line only to Paris and Brussels, whereas Paris is linked to at least ten other destinations- and the number is growing rapidly. It can surely not be long before taking the train to Paris-Charles de Gaulle Airport seems a better bet than transiting the squalid corridors of Heathrow- and at what cost to British jobs?

In there was a single French-style 200 mph high speed line from London to Aberdeen, for example, it would only take about two and a half hours to get between the two cities. Edinburgh would be an hour and twenty minutes from London, and Newcastle barely an hour. Instead the rail service from Aberdeen, even the Express, takes over 7 hours to King's Cross. Even the plane, city centre to city centre takes nearly four hours.

Once, we could have argued that investment in motorways was more justified than in rail. Now, however we have inadequate motorways, inadequate railways, and mostly even our airports look tatty, tired and seedy. Driving across France over the summer, there is still new investment going into French infrastructure. In the UK, however investment in infrastructure, the new terminals at Heathrow aside, whether public or private has essentially ground to a halt.

Hard to believe that there won't be serious consequences for British competitiveness.

Monday, September 03, 2007

Electric Cars- getting much closer

Electric Cars have generally had two problems: poor range and long recharge times. Unless you can recharge in not much more time than it takes to fill a petrol tank, then the popularity of the electric technology is not likely to be more than a niche segment.

However, in today's Telegraph there comes news of two significant breakthroughs. If the reality of the technology is anything like this then there is the possibility, very soon, of fast, long range, rapid rechargeable, even sexy, new electric cars.

Given the price of the new Audi Supercar is about the same as this electric sports car, this could actually become a popular product.

Maybe the Lib Dems might be bang on when saying that petrol technology should be phased out by 2050. With the right technology and the right car, we might see the introduction of charging points at service stations within 5-10 years.

Or were those conspiracy theorists about big oil suppressing electric cars in the 1960s not in fact paranoid nutters after all?

The price of EU withdrawal: be careful what you wish for

There is a substantial minority in the UK that would like to see the country withdraw from the European Union. Not reform, not regroup, but leave, period. They base this argument upon they idea that the EU is the enemy of Liberal economics and increasingly is restricting and not enhancing the cause of freedom in Europe.

Nevertheless, over the course of the past 20 years, the cause of Liberal economics has won many victories inside the European Union. From the Single European Act, which proved to be a breakthrough in the creation of a genuinely common market, to the expansion of the Union to include the Liberal economies of the east, to the erosion of the old statist consensus in trade, competition and agriculture, much as certainly been achieved to create a dramatically more liberal economy amongst the states of the EU.

For the anti-Europeans, though this does not go far enough- "too little, too late"- seems to be a fairly constant refrain.

I see too major risks about the exit of the UK from the EU, one is political and one is economic. It is generally accepted that should the UK leave the structure of the EU, it is not likely to want to leave the economic zone, since being outside the common external tariff would be damaging to both our exports and inward investment to the UK. So to a considerable extent, we are likely to have to retain most of the regulation and tariffs that we have now. The difference of course is that these would now be set without reference to the UK. Furthermore, without British influence it may well be that mercantilist voices in France and Germany can be heard more loudly, so there is an increased risk of a "fortress Europe"- a far less liberal economic direction, and event the possibility of the kind of beggar they neighbour policies that were last seen in Europe before the Second World War.

The political risks of withdrawal could be yet more serious. At the edge of our continent, Russia continues to nurse old grievances, and since the end of the democratic experiment, there are powerful forces in the Kremlin that are flirting with fascism- as the advent of the Nashi groups show all too clearly. The disruption of the EU is highly unlikely to reinforce NATO, indeed it is probable that the organisation will be weakened further. The USA, humiliated in Iraq and distrustful of its European allies be become more disengaged at precisely the time when Russia is resurgent. The new weapons of the Kremlin are money and oil. Already murky deals have implicated Gerhard Schroder and Jacques Chirac in allegations of corruption involving Russian money. An EU that lacks the shining torchlight of accountability that liberal economics demands could see the triumph of a corrupt and somewhat pro-Russian policy. In the meantime, a British withdrawal may well make the SNP, whose policy, let us not forget is Independence within Europe", far more assertive in its attempts to break up the UK- and backed by a great deal of money, they may even achieve their goal.

The Anti Europeans believe that liberal economics can only be served by withdrawal. I believe that the risks of withdrawal are so high that they can not seriously be countenanced. The world is increasingly unstable. As the Credit crunch begins to unleash a financial hurricane, from which no economy can remain immune, I believe we will look back on the last 15 years as an oasis. As the threat of tyrannical China in alliance with tyrannical Russia grows, as the Environmental meltdown has more economic effects, as the financial system stands on the brink, the idea that such a fundamental plank of our economic and political security can be so lightly abandoned is at best fool hardy, at worst an major challenge to our future political and economic stability and prosperity.

I am happy to fight a referendum campaign in support of the reform treaty which contains, I believe, necessary reforms. The EU is essential as a part of the future of the United Kingdom, and on that basis let us take our case to the British people.

Market Power

As the forecast credit crunch continues, it is interesting to note the themes coming out of the Jackson Hole Fed conclave. While Central bankers like Axel Weber of the Bundesbank spoke of the reaction of the markets being "a classic bank run"- in fact the fear persists that under the crisis of liquidity there is a more fundamental real economic crisis. As my friend David Hale notes, there is in fact a "crisis of information"- and in uncertain times, the fear is becoming all too real and filling the information gap with horrible imaginings.

After the Great Crash of 1929, I believe that it was Alistair Cooke who first observed that the Everest in the markets achieved in 1929 was "a mountain of credit resting upon a molehill of actual money". Unfortunately, the asset bubble in US sub-prime mortgages rested upon an income stream that was too small to sustain the inflated valuations. Ultimately it became a giant game of pass the parcel- and the meltdown has undermined the security of global credit across the board.

Over the twentieth century, and particularly after the financial crises of the 1920s and 1930s, the system of central banks has managed to protect a credit system based upon banks. Reserve requirements, depositor insurance and the regulatory framework have been set to protect depositors, and the wider financial system, from major losses as the result of a loss of confidence. Just as important, the SEC was set up to police the excesses of the market place. After all, as Dr Henry Kissinger remarked, "The most powerful source of discipline we have around the world," he said, "is the power of the markets".

Even still, as the Chairman of the Swiss Central Bank, Jean-Pierre Roth remarked, with something close to disbelief in his tone: "People [in the US] who had neither income nor capital got credit with very attractive conditions that could only be tightened with time". Roth underlined that the situation was encouraged throughout the US economic system from financial institutions that set up structured products covering such lending, to ratings agencies that gave their seal of approval. "And now we are seeing that there isn't a market for such papers. Now reality is striking back. That leads to massive losses and there will be victims".

In other words, there may be something close to an old fashioned "run" on the financial system, but that does not mean it is not justified. Until the Markets know the full scale of the problems, they will be inclined to fear the worst.