Monday, November 30, 2009

I fear the Greeks...

As the markets scratch their heads about the impact of the suspension of debt payments by Dubai, several other markets are coming into question.

One of these is Greece.

The fact that the Greeks are members of the Eurozone has certainly provided protection in the eyes of global investors. Other markets, such as the Baltic states of Estonia, Latvia and Lithuania were said to be more vulnerable, yet now that Latvia has been refinanced by a syndicate including the ECB, IMF and several other states, led by Sweden, attention is turning to other countries. Whereas Hungary and Poland have devalued, Greece has not been able to, and now questions are being asked about the national debt capacity of the country.

The problem is now not just the perennial political instability of the country and how that has led to a failure to tackle the structural deficit, but also the exposure of the domestic banking market to the problems of the country's northern neighbours. The puncturing of the Bulgarian property bubble has been particularly painful to banks like NBG that had invested substantially in the Balkan markets.

More problems may be in sight.

I will be discussing this on the BBC early morning business news tomorrow.

Monday, November 23, 2009

Getting Real about Climate Change

In 2001 the English version of The Skeptical Environmentalist by the Danish statistician, Bjorn Lomborg, was published. It marked the beginning of an increasingly vehement debate about the impact of Human activity upon the levels of Carbon Dioxide in the atmosphere and the potential that this has for changing the climate of the Planet. Lomborg himself was skeptical about some of the findings of others, and he was able to highlight some weaknesses in some of the work that had been conducted up until then. In turn, however, the response to The Skeptical Environmentalist, was extremely hostile. Lomborg's scientific skills, indeed his very integrity were bitterly attacked. Yet, in fact much of Lomborg's work underlined the very high likelihood that CO2 emissions were the result of the activity of man, and that they could in turn lead to significant alterations in climate.

The scientific work in studying the climate contains some of the most difficult mathematical questions that humans have faced. The extraordinary complexity of the planetary climate requires huge computing power even to approximately model it- and the most sophisticated climate modelling programs can outstrip even economic modelling in their detail and complexity. It is- in short- a very serious business.

Furthermore, the fundamental question is not whether or not human activity alters the climate- the evidence is utterly overwhelming that it does. The question is how much human activity is changing the incredibly complicated and interlinked systems that allow life to flourish on Earth as- so far as we can tell- no where else. As one of the Apollo Astronauts said "we are living in the Garden of Eden- and we don't take very good care of it".

Scientists owe some of their understanding of the atmospheric greenhouse effect by the pure research done on the atmosphere of Venus. The consequences of a runaway greenhouse effect have been to bake Venus at extraordinary high temperatures and render Earth's near twin uninhabitable to any life form that we can recognise. We do not know what the impact of large scale release of CO2 by mankind is, but we have seen on Venus that the consequences could include impairing or even ending the capacity of the Planet to support mankind, even if the risks of this may be quite small, the fact is that we are playing a game a game of Russian roulette and we do not understand how many bullets are in the chamber nor how many chambers there actually are.

In that sense the large number of "climate change deniers" are kind of missing the point. They may dispute the meaning of data, they may imply that a few scientists have done poor work and that they manipulate results that are biased against the "climate change denier" lobby. However there is no scientific doubt whatsoever that human activity has changed and is changing the climate. They may dispute how much it matters, but they cannot- indeed do not- dispute that it happens. The problem is that if it does matter, it matters a lot. We are injecting great instability into a fiercely complicated system, that we still do not fully understand. It is a matter of simple prudence that we should try to moderate human impact on the atmosphere.

Then there is a second, allied, aspect to the debate about climate change: it is the issue of sustainability. We have created a society that is not just profligate in energy use, but in many other resources. We do not know how much oil and gas or coal exists in the Earth's crust, but we do know that it is finite. We do not know how many metals, from Iron to Platinum to Uranium exist, but we know that these are finite too.

Humans are a very young species- perhaps not older than 100,000 years in our modern form. civilisation, including agriculture is far younger than that: less than 10,000 years. Compared to the roughly 4.5 billion years of the existence of the solar system, and our planet amongst it, or the roughly 500 million years since the explosion of life in the Cambrian era, we are mere mayflies. As a matter of common sense we should be reusing the resources that we have and conducting our economic business in a way that allows us to continue to benefit from the bounty that the earth provides us with. That means using constantly renewed sources of energy, such as solar, and it also means using more living things to serve our purposes. For example, bacteria or plants that can breakdown waste products so that they are no longer toxic, perhaps even breaking down CO2 itself. We do not have to reject technology in order to create sustainable ways of doing things, although in some ways we simply need to relearn old technologies: the creation of modern maritime wind power could reduce the third of CO2 emissions that come from shipping for example.

As we await the deliberations of the Copenhagen summit, we already know what we have to do, we just have to make the decisions to do it. If we do things now, the costs and consequences are likely to be dramatically lower than if we wait. It is time to be quite clear: even if the total risks arising from the dramatic elevation in CO2 may be small (which is debatable), some of the potential consequences are so severe as to be unacceptable. As for sustainability: it is already a certainty that we are using up finite resources. It is only a matter of time before we will be forced to take action- now might be a good time to act while we still have some cushions and margins for error.

We need to get into better habits and avoid the kind of waste that our rather short-sighted, disposable culture is embedding in our social values. This is a process of reform that could take a while. Human beings may take time to see that their short term wishes may not be in the interests of their long term survival.

Friday, November 20, 2009

When it comes to supervising the Police, many heads are better than one

Sir Hugh Orde, the chairman of the Association of Chief Police Officers (ACPO), has had a pretty successful career in the Police, handling difficult jobs like the inquiry into the the circumstances of the murder of Stephen Lawrence and ultimately becoming second head of the Police Service of Northern Ireland. He is not a man with a political axe to grind.

Therefore, his forceful criticism of Conservative proposals to place local Police forces under the control of new directly elected commissioners should be taken seriously. In recent years, there has been much discussion of the problems of modern policing. The challenges of international terrorism, drug trafficking and organised crime are said to require a wholesale reform to the smaller county-based forces that are the backbone of British crime fighting. Leaving aside the fact that the largest crime investigation of recent years- the search for the Lockerbie bombers- was led by the smallest force, that of Dumfries and Galloway, there clearly are questions about how the pooling of expensive resources such as forensics can be done in the most effective way.

Despite this emerging debate around policing, public accountability is not the major problem. Police Forces are already supervised by local Police Authorities which are made up of elected local councillors and independent members who are appointed through public advertisements and at least one of which should be a Magistrate. The role of these Independent Police Authorities is to set the policies and the budget for local forces and ensure that it is followed. The Authority already has the power to hire and fire chief constables.

On the face of it, the Conservative proposal to replace this committee system with directly elected commissioners looks like gimmickry in its purest form. Sir Hugh Orde is right to point out that this commissioner would be a political figure that would not supervise but essentially command the force- and this breaks a fundamental principle that underlies the non-political operations of Policing in the UK.

The Tories say they would "consult" on this proposal, but the fact that they say that they "remain committed" to Commissioners suggests that this will be a pretty one-sided exercise. A real consultation would focus on issues of resources rather than on issues of public accountability. When senior professional Police officers say that they would rather resign rather than operate under a system of commissioners, it is not just minor adjustments to the idea that are needed- it should be sent straight back to the drawing board.

Policing is too important to be subjected to the half thought out and unworkable gimmickry dreamed up by the adolescent back rooms of Conservative think tanks.

Wednesday, November 18, 2009

But we really mean it...

The Queens speech is set to be one that Her Majesty will have to read through clenched teeth. Leaving aside the fact that there are only seventy days left in the Parliamentary session before it is prorogued, the fact is that the "gracious speech" is set to contain yet more evidence of the moral and intellectual bankruptcy of New Labour.

We are told that the government will introduce legislation to guarantee the right to a good education and to guarantee- with legal force behind it- that the deficit will be reduced.

Could it be that ,like some kind of wavering alcoholic, the government doubts its own commitment to existing policies? In any event how can any government leaving binding commitments to its successors? The Parliament is sovereign and may change laws at any time as it sees fit.

The fact is that the government knows that the public no longer- if it ever did- believes that it can fulfil its promises, and by trying to back its promises with the force of law it rather gives the game away, for it shows that the government itself recognises this.

It is, however, a travesty that the government resorts to force of legal decree when it knows that the issues are not simply a matter of black and white. Imposing new legislation will, at best, distort the policies they are trying to get through. It is simply trying to railroad things that should always be a matter of common commitment and ultimately of general consensus. Using the legal process where it is not need causes more harm than good.

These are also the actions of a bully that resorts to force when it fails to persuade.

More and more I think that there should be a wholesale review of legislation at the earliest opportunity with a view to the abolition of the obsolete, intrusive, and badly thought out legislation that has been put onto the statute book without even a proper vote in Parliament.

The government currently controls parliament- it is time that it was the other way around.

Tuesday, November 17, 2009

Low Expectations

The latest poll apparently show that voters believe that David Cameron is thought to be a better leader than Gordon Brown, and much is being made of the idea that Mr. Cameron has "sealed the deal" with the British people.

The reality is of course rather different. As someone said to me the other day: "If Cameron or Brown are the answer, then Goodness knows what the question was!". The fact is that the voters have not forgotten the chaotic and sleazy end to the last Conservative administration, and the fact that Labour has got itself into something like the same kind of trouble is creating a certain resigned despair amongst the electorate.

The failure of the constitution and the creation of an isolated political class is leading to exceptionally low expectations of our political leaders, and even these vanishingly small hopes are usually crushed.

As Nick Clegg noted the other day, the state of our Constitution amounts to an emergency, and yet the cosy cabal of LabCon will not reform a system that gives them- and them alone- all the power and privileges of government, even when they themselves know that they do not have the competence to rule.

As the long and grinding election campaign gets under way, only the Liberal Democrats are prepared to offer genuine reform- and that is a message of hope that might yet confound the low expectations of the voters.

Monday, November 16, 2009

"Because the stakes are so low.."

Although the attribution is contested, the aphorism "Academic politics is the most bitter and vicious form of politics, because the stakes are so low" is nowadays usually credited to Wallace Sayre, a political scientist at Columbia in the mid sixties.

British politics is increasingly shrill, and as we enter the long run into the general election in 2010, it is already clear that we can expect the battle between Mr. Brown and Mr. Cameron to be one of the dirtiest campaigns on record. Yet in fact, although the struggle may be noisy, in the end it may ultimately change very little. The problem is now not so much the party of government, but the system of government that offers up such limited political choices. The current government has governed by ignoring the will of Parliament and the Conservatives, with their cosmetic commitment to local devolution will inflict further damage on Parliamentary authority. Of course, many will say that the expenses scandal means that Parliament has brought this upon itself.

Yet the fact is that we face a crisis of the constitution. The fundamental basis of our democracy is under attack. The increasing lack of accountability of government to anyone except itself is creating unresponsive and occasionally despotic decision making. The lack of privacy of citizens in the face of state snooping is already undermining the fundamental ideas of our constitution. Our intrusive libel system is undermining the right to free speech. The public sector expenses dwarf those of Parliament, and they remain unchallenged.

The immediate response to the expenses scandal has been to ask MPs to wear a hair shirt, and for a while this is certainly appropriate. However the fact is it is absurd to pay MPs less than an executive at a medium sized council. With many people at the state owned broadcaster, the BBC, being paid more than the Prime Minister, we are at least entitled to question whether these priorities are morally right, never mind whether they are a good use of taxpayers and license payers money. The loose expenses regime was an attempt to compensate MPs when it proved politically inconvenient to pay them the salaries of comparable civil servants. Yet the Office expenses, as opposed to the living expenses, while they may seem lavish in monetary terms are barely enough to deal employ enough staff to run a constituency office on top of a secretary at Westminster. A few intern style researchers is hardly lavish when compared to the resources available to most other democratic Parliamentarians. Of course this suits the government of the day very well, because greater resources available to MPs would allow them to impose greater oversight over the administration.

And that is what is needed. The Labour government has rammed through expensive and ill thought out legislation at a truly hectic rate- guillotining and curtailing discussion as it thought fit. The government has passed more criminal justice legislation in twelve years than was thought necessary throughout the twentieth century- and much of this legislation requires repeated amendment to get it to work. Parliamentarians- under resourced and whipped in by the parties- have an ever decreasing input into the legislation that under our constitution they are supposed to author and to scrutinise.

The evidence is growing that Mr. Cameron's instincts are to be equally contemptuous of the House of Commons- to the great detriment of our democracy. Changing the party of government will not restore the democratic power of the legislature, but increase the unelected patronage of Quangos and lobbyists- of which of course Mr. Cameron was once one himself.

The election will be shrill, but unless the power of the House of Commons can be restored, it will indeed be a battle of low stakes, for membership of Parliament will continue to be a matter of opprobrium, while it ill only be being a member of the government that will be a matter of power- and as Peter Mandelson repeatedly proves, you don't have to be elected to have that.

Wednesday, November 11, 2009

Rights and Freedoms

The continued determination of the British state to hold on to the DNA of innocent people in the face of huge opposition reflects the tenacity of a certain mindset. This same mindset insists that the intrusive and expensive positive vetting of anyone who comes into the slightest contact with children is the only way to protect kids from potential abusers. The fact that it patently does no such thing and effectively brands everyone as a criminal unless they can prove they are not, thus breaking the fundamental rule of justice: innocent until proven guilty, is answered with a shrug. Even so fundamental a rule should surely be ignored because "the kids" must be protected at all costs.

This is the way to total subservience to the state. Instead of society being based on a fundamental contract amongst free citizens, there are now large new areas of law which demand complete obedience. Whether the insulting anti-paedophile laws or the draconian anti terrorism laws, the last few years have seen a huge extension of state power. This power has not only come at the expense of the rights of individuals, but also at a huge financial cost too. The costs of administering the mechanisms of legal intrusion and economic dependency have turned Britain from one of the cheapest countries to administer into one of the most expensive- and this fiscal drag is undermining our economic competitiveness dramatically.

It is not just a matter of the moral benefits of freedom, the costs of the creation of the suspicious, and snooping society so beloved of Labour apparatchiks are well beyond our financial capacities too.

Thursday, November 05, 2009

Castrating Parliament

In the 19th century MPs were not paid at all, but Parliament was at the centre of national life.

Over time as the Parliament of landowners and lawyers also began to include simple employees, a small stipend was granted- and it remained small. Even now, back bench MPs only earn £64,766 a year. Meanwhile, even with allowances, they usually have to fund two places to live and two offices- in London and in their constituencies. They have to employ staff in both places too. By contrast all of the senior civil service grades earn a lot more than this, and of course do not have to fund their own office costs.

As the journalists of the Daily Telegraph relish the power that their scoop on MPs expenses has brought them they should reflect that most of them too are better paid than MPs are. Now the Kelly report proposes to cut back MPs compensation still further. For example, it is suggested that Parliament will only pay for a rented one bedroom flat in London. This, together with the ban on employing spouses, will severely damage the family life of MPs. Personally I think that the price of being an MP- in terms of the isolation that living away from ones family- creates enough problems as it is: marriage break downs and alcoholism are just two of the known consequences of such isolation. As MPs return to their single flats after the House rises at 10 PM, it would be hard for them to consider that they were being treated in any way except shabbily.

In my view by trampling on the prestige of Parliament and treating MPs in this way, we are in grave danger of getting at best a distorted representative body, at worst one that is positively dysfunctional. MPs should be paid properly- well above the civil servants (after all even a GP can be earning more than twice what an MP does)- and they should not be expected to destroy their families to serve their constituencies.

It is healthy to be sceptical about or political leaders, it is extremely dangerous to treat them with such contempt- and very hypocritical of the journalists who are doing the kicking to avoid mentioning the absurd compensation packages that media personalities in their own world can command.

Tuesday, November 03, 2009

The Treaty of Lisbon ratified

"Gentlemen, you are trying to negotiate something you will never be able to negotiate. If negotiated, it will not be ratified. and if ratified, it will not work"

Thus spoke the British civil servant, Russell Bretherton, who had been sent to represent Britain at the Messina conference in 1955. The other six countries represented at that conference: Belgium, France, (West) Germany, Italy, Luxembourg and the Netherlands had sent their foreign ministers. The UK sent this relatively minor civil servant who essentially boycotted the discussions. It was the beginning of a continuously fraught relationship between Britain and the rest of the European Union.

In the same way that the UK tried to ignore the reality of the early moves for European co-operation, so it has tried to ignore the reality of the treaty of Lisbon. At the signing ceremony, 26 European leaders celebrated with a formal signing ceremony followed by a formal dinner. One- Gordon Brown- arrived deliberately late and did not want to be photographed with the other leaders. In the face of the substantial reorganisation of the European Union that the treaty will now require neither Labour, nor -especially- the Conservatives have had the slightest positive thing to say. Indeed the majority of Conservatives profoundly oppose the very basis of the treaty. David Cameron demanded a referendum and publicly urged President Vaclav Klaus of the Czech Republic to veto the treaty, irrespective of the Czech constitution, which was frankly outrageous.

Now the treaty has come into force and the -pretty unedifying- jockeying for position in the new set up will begin. Nevertheless, the time has come for the United Kingdom to grow up about our relations with the rest of the EU. This organisation, for all its faults, is being developed to allow the relatively smaller states of Europe to work together to avoid being pressured by the larger global states such as China, India, the United States, Russia, and increasingly even Brazil. It makes sense strategically and economically for relatively small powers- of which the UK is clearly one- to work closely with our neighbours and major economic partners to promote our common interests. Of course the great diversity of European societies especially with so many languages, ensures that there is a clear limit to the level of integration that can be achieved.

Nevertheless the benefits have been palpable and significant.

All of the European Union members have recognised that membership of the organisation has benefited their own national interests significantly. Britain, pretty much alone, continues to regard membership as a challenge to its national interest and even a threat to its identity. We lost an Empire and then found that the denominations of our money- L.s.d- our measurements system- Imperial and even the idea of the Pound Sterling itself, were hindrances to our economy. We have still not yet found a role and have become passive in the face of own decline.

Yet there is a role waiting for our country. It was after all Winston Churchill himself who first mooted the idea of a United States of Europe. Britain has been in the forefront of a far more fundamental integration: the integration of European defence forces both within and beyond NATO- and is recognised as a leader in this sphere because of this. By failing to lead Europe in other fields and be clinging to an increasingly one sided unilateral alliance with the United States, our country has forfited the respect of our allies, even including the US.

Lisbon, with all its faults, is ratified. This should not be seen as a threat to the United Kingdom, but now an opportunity. In the same way that British leadership, in the shape of the Cockfield plan, created the single market, so we should now take the opportunity to shape the European Union in a way that emphasises the value of free and open markets- including the financial markets.

The history of the British relationship with the EU is a litany of misunderstanding and failures by the British to recognise the values but also the agenda of our fellow members. The time has come for the British to reappraise their whole relationship with the EU: and to "reset" it as the current jargon has it.

If that requires a referendum to confirm our membership, then so be it. I am confident that people like Dan Hannan, whose world view so resembles that of Russell Bretherton, can be taken on and defeated.

Sunday, November 01, 2009

David Cameron faces a challenge

Oh dear! the deselection of Liz Truss by Norfolk Conservatives is something of a challenge for the so-called modernisers around David Cameron. To most people these days, the deselection of someone because they had an extra-marital affair several years ago looks pretty absurd. These days the majority of the population are understanding about the pressures that can cause marriages to fail, and know that the idea of blaming someone is often wide of the mark.

Nevertheless it is only to be expected that Conservatives would be more concerned about the issue of marriage and morality. Social Conservatives pay a great deal of attention to institutions, and are naturally conservative about maintaining them. There is indeed a real cost to society from the failure of such institutions, but while Conservatives try to defend the institutions themselves, a Liberal will focus of the role of individual rights and responsibilities, rather than an imposed sense of -often hypocritical- social morality.

Given that Ms. Truss's affair was extremely public, and details could be found in a single google search, one can only assume that there may be another agenda amongst the local Conservatives. Mr. Cameron, by forcing candidates on local parties is breaking an old tradition amongst both Conservatives and Liberal Democrats- the local party is the final arbiter in the selection of a candidate. Personally I think that David Cameron, by forcing all women short lists on an unwilling party, is sending a message that a candidate's gender is more important that their character- which is why the Liberal Democrats don't make their candidate selections based on gender preference, but gender balance in the selection process. In any event, in virtually any other job, an employer that expresses such a gender preference, irrespective of merit, is breaking the law.

It seems to me that the deselection of Ms. Truss underlines the huge gap that has opened up between the "Notting Hill Set" and the rest of the Conservative Party. The leadership is already making the bedrock of the Conservatives nervous with his talk of social liberalism: the majority of the Conservative Party remains socially, well, conservative. Frankly Cameron's views on imposing all women short lists, apart from being a challenge to the independence of local parties, also puts him well to the left, not only his own party, but a significant swathe of Liberal Democrats and even some Socialists.

With growing suspicions about his views on the EU, Mr. Cameron may face a series of rebellions from his local parties. Given the scale of the job that is need for the Conservatives to get a working majority, there is real danger that such rebellions could undermine party unity and leave the Tories short of their majority.

David Cameron will only have himself to blame his he continues to tread on the toes of his own party. Liz Truss may be simply the first casualty of the growing discontent at the Conservtative grass roots against the self-styled "heir to Blair".