October 31, 2006

EU metric change will cost tyre industry £billions

And of course that's just for starters.

Auto Industry picks up the warning from Tyre Trade News that the previously deferred EU Directive 80/181 now ‘threatened’ for 2010 intends to banish imperial measures, to the detriment of the tyre industry, which still uses inches to describe rim sizes while expressing tyres’ section width in millimetres.

Given the hundreds of thousands of tyre manufacturing moulds in existence around the world, says the magazine’s e-mail newsletter, “the gigantic cost and inconvenience of conversion would only be matched by its huge unimportance”.

Indeed, that's exactly the point.

For example, North America will stay with its inches for a while longer so that will mean maintaining strictly separate inventories for Europe-destined products, the sidewalls of which will need to be untainted by any non-metric markings or symbols. Pounds per square inch will be out as a gauge of pressure.

“There may be no more love of the inch than one has of the centimetre,” continues the magazine, “but we should be left to accommodate both for as long as it makes economic and commercial sense. The criminalising of the one in favour of the other serves no purpose and will cost billions of dollars which industry and ultimately the consumer will be charged with … If enough tyre manufacturers (and these are not the only ones who will be affected) complain about this to their governments and enough governments have the will to impress their concerns on Europe's legislators it may still be avoided.”

Note the mechanism here. Business should lobby its governments to go cap in hand to "Europe's legislators" - our unelected masters.

October 30, 2006

More government waste

Wat Tyler picks up newspaper reports of
  • £10,000 spent on day trips for a convicted pedophile

  • £2bn blown on Millenium duds - ... More than half the projects have either closed, opened late or encountered serious problems... Chris Smith, Labour’s first culture secretary, said in 1997 that millennium projects would “reflect the aspiration and achievements of the British people as we cross the threshold of the year 2000”. That's more of our money down the drain then.

  • PFI hospitals will cost £45bn more over the next 30 years. Chunks of the NHS are locked into these costs whether they continue to use these hospital buildings or not, at a time when government wants (rightly or wrongly) to decentralise more healthcare to community facilities and GPs.

More mess over Bulgarian & Romanian workers

Discussed by Open Europe, too dense to summarise. Read it and scratch your head. Farmers have been challenging the competence of the Home Office.

Hmm.

October 29, 2006

The true cost of public sector pensions

David Farrer at Freedom and Whisky blogs on the subject of public sector pensions.

A big chunk of the private sector pension problem, he writes, is Gordon Brown's tax raid on pension funds made as soon as Labour came into office in 1997. Reversing that would fix most of the problem for the private sector.

But Gordon needs all that cash to pay for the massive public sector benefits.... Divide £1,025 billion by 6.7 million. The average pension liability per "public" worker is £152,915. In the private sector it's £71,812. The public sector pension costs are so much higher because the benefits far exceed those typically found in the private sector.

Does any of this matter - apart from the damned unfairness of the whole thing? After all, the government can just pay future pensions at the time out of current taxation. I think it does matter. An aging population implies extraordinarily high levels of taxation in the future. We should be treated like adults and be told the true size of the liabilities that are being incurred. The private sector must disclose almost everything. Why won't the government?

This is the boring stuff of which governing - as opposed to politics - is made.

REACH directive again

Richard North notes that the REACH directive (Registration Evaluation and Authorisation of Chemicals) has been picked up by a US commentator at The Corner. That American writer initially follows The Telegraph's report by focusing on Cameron (surely its least interesting aspect), but then notes that
The REACH directive would have severe consequences for American businesses too, which is why this issue is important here. The EU is seeking to regulate for the US too - this is one particularly outrageous example. Cameron's pusillianimity on such a serious economic issue is exceptionally disappointing. It looks like both HM Treasury and the Department of Trade and Industry will become mere branches of the Environment Ministry in any Cameron government.
Of course, as we have seen before, the unelected officials of the EU glory in their ability to lead the world in regulation. These few bureaucrats can create and force through hugely expensive dirigiste directives based on dodgy science - and because they are mandatory for one of the world's biggest economies, importers across the world have to comply, and the regulations become de facto standards for manufacturing across the world.

This is the aspect which Mr Murray in the US has failed to understand. It won't be Mr Cameron's environment minister who calls the shots, but the Brussels bureaucracy.

We know already that thousands of animals will die in this retrospective testing of chemicals which have no known ill effects (or they would have been banned already). We also knew already that this was the brainchild of Mr Meacher (another strong indicator of loopiness). We can now add to the picture from The Telegraph's report.

Melvyn Whyte, the chief executive of Whyte Chemicals, a distribution company, said the proposal was "arduous and expensive and not necessarily effective".

He said REACH rules were 1,200 pages long with 6,000 pages of guidance to companies about how to comply.

Taxes, taxes, taxes

Before we look at some of this weekend's wheezes for new taxes, let's see where some of our money is going.

I have blogged before on over-regulation. The Better Regulation Commission warns government to be wary of knee-jerk reactions to hard cases. One instance is highlighted by the Manifesto Club in today's Telegraph. "A new law passed last Monday ... will make it a crime for unchecked adults to work or volunteer with children, punishable by a fine of up to £5,000." Once you are cleared, the writer adds, "there are then 100-page child protection booklets to read for guidelines".

It all costs money.

It's also reported that speed camera fines are being used to buy plasma TVs and t-shirts.
Avon, Somerset and Gloucestershire safety camera partnership spent £326,400 on publicity, £81,700 on accommodation, and just under £500,000 on administration.

Hampshire & Isle of Wight spent £86,524 on publicity and appointed a public relations officer, while Cheshire spent £50,000 on refurbishment. Warwickshire spent more than £500,000 on processing costs, £105,450 on management and administration, and £116,693 on communications. Essex ran up an £8,855 bill for photocopying, spent £9,052 on smartboards and £7,495 on a plasma screen and miscellaneous software. Derbyshire budgeted £15,000 for "promotional items" and £250 for staff T-shirts.

The figures also show huge differences in average running costs and profits of cameras in each area. In Hertfordshire, a camera costs £73,167 to maintain and makes a profit of £113,334, while in Lancashire the equivalent figures are £8,972 and £12,615.

A text book example of public sector costs expanding with no checks. The telegraph adds that

The Government has presided over the introduction of about 7,000 cameras which caught nearly two million motorists last year, raising £120 million in fines. Traffic police have been cut by 11 per cent in the same period.

Channel 4's Despatches showed how road mending contractors try to rip off Devon council, and claimed that other councils don't employ anyone to do the checks that Devon makes. So how much are other authorities being ripped off? (Incidentally, the name of Balfour Beatty seemed to come up rather a lot.)

No wonder our taxes have to keep rising to pay for our bloated public sector - whether it's Devon Council running a monopoly on selling seats (expensively, of course), or the woeful and anti-democratic Standards Board, chaired by Sir Anthony Holland may his name live in infamy.

But never fear, you public sector pipsqueaks with your fat pensions, you should be well provided for. The talk now is of green taxes to come - for our own good, of course.

Politicians love talk of green taxes because it gives them a new toy to play with, a whole new field for regulation and legislation and telling us what to do. The public hasn't tumbled yet to what behavioural changes this new faith based zeal may require of us.

Not that this new hair-shirt-we're-holier-than-the-rest-of-you-do-as-we-say-at-your-expense preaching backed by sanctions will do the world any good.
It is extraordinary to consider that if every light in Britain were turned off for good and every gas-guzzling suburban citizen decided to live like Swampy, all the eco-slack would have been picked up by China in 13 months.
But there's always council tax, where Labour shows signs of intending to bleed the property owning classes to further its cherished expansion of the state.

And where is the opposition to this?

October 28, 2006

Britain's move to a high tax economy

Martin Wolf joined this debate in the Financial Times yesterday (subscription only), claiming that Britain is moving towards higher tax with no debate.
The country is heading ... towards high taxes, inefficiently raised and wastefully spent.
He reminds us that "the UK has become a significantly higher tax country since the mid-1990s, while taxation has moved in the opposite direction in most other high-income countries".
By 2007 UK's [public] spending will be 45.9% of GDP, fractionally below the eurozone's average of 46.8%, but almost 11 percentage points highrer than in Australia and nearly 7 percentage points higher than in Canada.
But the UK spends less on pensions than most eurozone countries.
Its spending elsewhere must, therefore, be generous by all but the standards of the world's most highly taxed countries.
The UK, he says, "seems to have moved, without serious debate, towards a political consensus in favour of a high-tax, high-spending state even though there is next to no confidence that the state knows how to spend money well" (my emphasis).
Thatcherism looks ever more like a brief interlude between Butskellism and something that may be called "Browneronism".

October 27, 2006

Margaret Hodge again

Today the underpowered Margaret Hodge receives a roasting from Jeff Randall, which merely scrapes the surface of her uselessness (nothing about Islington, nothing about falsely accusing an opponent of being psychologically damaged) but once again the real interest is in the Financial Times, which reports that she is to be asked to reveal the cost of her new Companies Bill provision.

The amendment - requiring directors to include in their annual business review information on "persons with whom the company has contractual or other arrangements which are essential to the business of the company" - has provoked a backlash from business and investor groups.

Business will demand a costed rationale for the amendment in a meeting with Margaret Hodge, industry minister, on Monday.
As the paper remarks, "All government proposals are supposed to be subject to a regulatory impact assessment, with new laws introduced only if this analysis shows their benefits outweigh their costs".

The article concludes with the breathtaking news that
The Department of Trade and Industry promised that a new regulatory impact assessment for the bill as a whole would be produced to coincide with the legislation going onto the statute book when it gains royal assent.
And the paper leaves it hanging there. But RIAs are intended to help the country reach a view on a proposal before it is voted into law, not afterwards.

The government is openly thumbing its nose not only at business - the ultimate source of all that money it loves to spend - but also at its own procedures of good governance.

This really is rubbish governing. If they followed their own discipline, then maybe - just maybe - we could be spared fiascos like the waste of £5m on the abandoned non-emergency 101 call number reported by Wat Tyler.

Some hope.

October 26, 2006

Boris knocks Tory policy (again)

Boris has done it again. He starts today's Telegraph piece by saying he understands why Tories can't advocate lower taxes, and then proceeds in great detail to explain how one lower paid RAF employee is saddled with crippling taxes.

He concludes that -
I think it's true that much of Middle Britain is suspicious of "tax cuts" as a political slogan. It's true that people want good hospitals and schools.

But then much of Middle Britain doesn't feel the impact of tax in the way that low-paid personnel in the Armed Services feel it, and it is people like the helicopter lady who should have the first call on our protection and support.
The truth is that the state is just too large. Policy should not be about jiggling at the edges of tax burdens with subtle redistributions, but rather about sharply reversing the trend to higher taxes and greater centralisation and control.

That's why I support The Taxpayers' Alliance. So should Boris.

So what did happen about the Companies Bill?

The Financial Times reports that
The prime minister came under pressure in the Commons yesterday to pledge he would not be swayed by business lobbying into a U-turn over the companies bill when it goes to the Lords next week. Margaret Hodge, the industry minister, provoked a furious business backlash this month by introducing an amendment to the bill requiring directors to reveal relevant information on suppliers.
A Labour MP pressed for an assurance that the new provision would not be altered. The FT reports
Mr Blair then appeared to suggest the bill was based on the 2004 Warwick agreement struck between Labour and the unions, in which politicians offered new employee rights in return for the unions' backing for a policy package. "The commitments we set out in the Warwick agreement which form the core of this bill, they are commitments we have said we will honour and we will," the prime minister said.

The Department of Trade and Industry said last night the deal with the unions was relevant to the supply chain amendment. "The Warwick agreement recognised the importance of narrative reporting. The bill implements this commitment."

But business reacted with bemusement to Mr Blair's argument that the wide-ranging company reform, previously presented as principally a deregulatory measure, had the Warwick agreement at its core.

So was it a political ambush, as suggested yesterday, or a carefully planned provision in line with the Warwick principles?

And why did Alistair Darling - pencilled in as Gordon Brown's Chancellor - say on 15 September, "The government does not intend to make significant changes to the bill"?

Did they set out to con the business lobby, or did they have a late change of mind. And why?

October 25, 2006

Oops

I managed to delete everyone's comments by mistake. Apologies to everyone except the spammer.

The EU auditors do it again

The report in The Times suggests that the Commission has improved the control of its own immediate spending but that big discrepancies are still turning up in EU countries.

Half the cattle that Slovene farmers said they owned, so qualifying them for special EU cow and beef grants, did not exist, the paper reports. A quarter of their sheep and goats were equally invisible. Nine payments worth €2 billion to olive oil producers in Spain, Greece and Italy last year were either inflated or wrong.
The auditors discovered that two thirds of the 95 EUfinanced regional projects that they examined, which include new roads and bridges, contained “material errors”. These ranged from a lack of proper invoices for expenditure being reclaimed to declaring costs that had no relation to the scheme being funded. There are also considerable variations in the way that national authorities apply EU rules.

Last year Poland simply gave a warning to anyone who did not apply good farming practices. Under EU law, they should have been fined almost €1 million. In Greece, farmers’ unions input agricultural data into insecure computer systems that can be modified externally at any time.

What's the lesson? Standards differ across the EU and these sprawling expenditures are too huge to be monitored properly, especially since we know that OLAF is ineffectual at best.

Nor is it easy to see any plausible reforms which could deal with this expensive problem. The institution is just too big.

The Bulgarian/Romanian immigration foul-up

Nothing to add to the general derision surrounding the government's so called solution to this conundrum, but Open Europe's comment sums it up -
Both the main parties are indulging in junk politics here. A £1,000 pound on-the-spot fine? Migrant workers are unlikely to carry such sums, and indeed unlikely to even have bank accounts. If they say they have no money the Government are certainly not going to throw them in our already overcrowded jails. Other accession workers are not covered by the fine. So why not just claim to be Polish or Estonian? How many translators are the police going to employ?

What do we ultimately want? People to come here to work rather than to claim benefits, and to be able to throw out criminals. But what have we ended up with? Many people will be working illegally, they will still be able to claim up to £10,405 a year in benefits and the Government, ludicrously, is unable to throw even criminals out of the country. Liam Byrne’s admission on Newsnight that it would be “very difficult” to evict criminals from the UK was genuinely pathetic.

The only satisfying thing about the situation is that John Reid’s attempt to get headlines saying how “tough” he is has already turned into a media disaster, with the Government (quite rightly) being hammered by the press for introducing a system that won’t work.
Open Europe cannot, of course, swallow the only logical conclusion, that it's our very membership of the EU which removes our ability to control our borders.

That Companies Bill clause

I suggested yesterday the new clause suddenly added to the Companies Bill showed the civil service mindset. Not at all, according to the FT, who trace it to a backbench Labour MP ambush.

Either way, it shows the shallowness of the government attitude to deregulation. They are prepared to pass onerous new regulations without consultation at the drop of a political hat.

October 24, 2006

UKIP silent on big issues, recruits idiot

The cost of regulation may be the heart of the economic case against the EU (see next post), but UKIP hasn't commented on it at all, or on the recent Open Europe survey of UK businesses.

They do run an item that "Brussels wants 60-hour limit on working week" (copied from The Telegraph, actually). That's not a limit which seems likely to trouble their webmaster.

We also learn from an Evening Standard piece they've copied that "The outspoken TalkSport broadcaster [Whale] will challenge Ken Livingstone for the capital's top job in 2008 as the UK Independence Party candidate". He will "recruit advisers ranging from Peter Stringfellow to Lord Archer", which strikes me as a pretty narrow range. Enough said.

Deregulation is a lie

This is a boring post. All it does is to stress an important truth.

I commented before on the report of the Better Regulation Commission, which called for a new attitude to risk.

The body is named the Better Regulation Commission. Not the Lesser Regulation Commission. This is the Verheugen approach, to merge a few regulations and call it better regulation, but he can't even manage that.

Why is this apparently boring topic important? Because the cost of regulation is the heart of the economic case against the EU.

As Ruth Lea points out succinctly, the single market costs outweigh the benefits.

The Single Market's regulations do not come cheap. Günter Verheugen, EU commissioner for enterprise and industry, recently announced that EU regulations were costing the European economy some €600bn a year (this was almost twice as high as previous estimates). €600bn is some 5.5pc of total EU GDP, equivalent to the size of the Dutch economy....

In 2003 the Commission published its assessment that EU GDP in 2002 was around €165bn higher than it would have been without the Single Market. Even after allowing for the extra GDP growth since 2002, this means that the benefits are less than a third of the costs.

Commissioner Barroso claims his is a free market commission. But, as Christopher Booker points out,

The Commission is so set on stamping out the hated non-metric system that, as of January 1, 2010, it is imposing a total ban on what it calls "supplementary indications" – i.e. any mention of inches, pounds or other non-metric units in advertising, labelling, catalogues, manuals and the like.

In other words, says Booker, any US company wishing to sell to the EU will have to set up separate inventories and warehousing to ensure that its products carry no reference to non-metric units.

Any European firm wishing to sell to the US will not be allowed to refer at all to the units its American customers understand. This in itself will be illegal under the US Fair Trade and Packaging Act, which permits use of metric units only so long as they are accompanied by a US non-metric "translation".

And remember, these are the people who brought you the REACH directive and the RoHS directive. So any suggestion that this Commission doesn't favour regulation is a lie.

The British government is no better. There have been 33 Acts of Parliament and at least 1000 regulations introduced so far this year, doubtless most of them without debate. Gordon Brown says the Treasury will cut the cost of its regulations by 25%, in line with the policies of Holland and Denmark, and now Germany. This from the man who has increased the complexity of the tax system to unprecedented levels.

And now what has the government done? Today's main FT headline, unusual in its bluntness, said

Industry slams new law on disclosure

The government rushed through this big change to the Companies Bill last week without any warning or consultation. Now, the minister is the ineffable Margaret Hodge, who is clearly inadequate to this sort of challenge and doubtless played no part in the exercise at all. So what we are seeing is the mindset of the civil service, which has been calling the shots here.

Mr Blair in his response to the BRC report called for a national debate on our attitude to risk. This for him is a convenient way to kick the issue into the long grass (has the government got no view?). But alas! a huge botched, bloated regulation is about to be placed in his in tray. Tsk tsk, a decision.

And, sadly, there will be more to say about the BRC report.

Arguing for lower taxes

The Taxpayers' Alliance comments on the latest YouGov poll suggesting that voters still don't favour big tax cuts.

As we have repeatedly argued on this blog, when low-tax campaigners focus narrowly on abstract economics, they don't win. When they engage in a debate on whether people want tax cuts if that means cuts in health and education, they don't win. And when the debate is deliberately focused on whether people want lower taxes or whether they want stability (which is really like asking "do you want to keep your job?"), they don't win. None of this should come as any surprise to anyone. This is the ground the Conservatives have been fighting on for years.

That, they say, is why low-tax campaigns have to focus on how tax cuts benefit ordinary families, not concepts like "the economy" and certainly not businesses.

The TPA's recent opinion research programme showed clearly that the best argument in favour of lower taxes was the one that stressed how lower taxes would give people more money to spend on their own priorities. The research also showed that the tax cuts people were most in favour of were those which focused on ordinary families - raising the threshold at which people start paying top rate tax, abolishing / reforming inheritance tax etc.

The message also needs to be banged home repeatedly that the government is an intrinsically bad spender.

This is a week when Wat Tyler reported that the NHS spent millions of pounds last year removing tattoos, £55m was spent on bungled prosecutions, over £1bn of debt has been written off at the Child Support Agency, and convicts are being paid by the Prison Service to play Scrabble, look after fish tanks and learn the guitar.

Plenty of scope for savings, plenty of scope for indignation too.

BBC shows more green bias

BBC Radio 4's 6 o'clock news tonight reported on a WWF report saying nations consume unequal amounts per head (this is news?) and we need to curb our consumption now.

These green bodies take a great deal upon themselves. Have they never heard of the price mechanism? What difference would wholesale change in the UK make in the light of rising global consumption, especially in the so called BRIC countries (Brazil, Russia, India and China)?

Could they find no one to criticise these conclusions? How hard did they try?

This is the second evening running where we have seen green bias from the BBC.

Yesterday Radio 5's Drive interviewed a woman advocating lower speeds on motorways to cut carbon emissions. Again, are there any arguments against this? - because the interviewer certainly didn't put them. Indeed, she agreed that the total savings would be significant.

Well, here are some.

1. What will be the costs of the extra time it takes people to reach their destinations?

2. How significant would such a cut be in terms of world carbon output? Not everyone supports this government strategy.

She could also have asked whether any countries had similar proposals.

These are examples of the institutional bias of the BBC we read about at the weekend. Good that they're admitting it, but disappointing to see it in action two evenings running.

October 23, 2006

Wasting police time

Congratulations to PC David Copperfield on having a book published on the back of his blog. The book sounds a must read, and you can get it from Amazon.

The blog medium gives people on the ground a chance to speak easily and anonymously to their colleagues and to the public at large about what's going in in their field.

All power to the policeman and his blog.

Overkill from the ... Better Regulation Commission

If you want e-mail updates from their site, you have to supply a password. Why?

An official writes

A good question. We use passwords so that users can log-in with some level of security to update their details, or unsubscribe.

Admittedly, at the moment, the BRC are only offers emails updates via the site, so passwords probably seem like security overkill. But if BRC decide to over more services via a single registration (particularly if they ask users to enter details or prefereneces) then we do need to provide a log-in method and some level of security....

In other words, we are causing you extra work now in case we decide to do something different in the future. And this from the people whose job is to try to make your life simpler.

October 20, 2006

The Tory Tax Commission

Comment from Wat Tyler, The Economist, and the Taxpayers' Alliance (much of this making the TPA's own points but still worth reading).

The document itself (176 pages) is here.

October 19, 2006

And now it's energy saving

David Miliband may approve (well, it diverts attention from the farce at the Rural Payments Agency). As the FT announced on Monday's front page, the European Commission proposes to set energy saving standards in directives which it expects will become norms around the world.

So much for Commissioner Barroso's claims that the Commission is becoming more market liberal in its policymaking.

The plan proposes 75 measures aimed at "slashing energy waste by 20% by 2020".

Targeting buildings, transport and manufacturing, the scheme proposes a series of new directives from 2007 to 2012 that would force car makers to cap CO2 emissions at 120 grammes/km, link national car taxation to vehicle efficiency and harmonise EU25 tax credits for clean technology firms.

The raft of proposed measures - many of which will require member states and MEPs' approval - would also impose mandatory standards on 14 groups of household products ranging from lightbulbs and TVs through boilers and see goods labelled with eco-credential stickers to help change consumer tastes.

Tim Worstall quotes The Telegraph -

Under the plan, the Commission will begin issuing a stream of directives next year setting out "minimum energy performance standards", or "eco-design requirements" for 14 priority product groups.

They will include boilers, water heaters, consumer electronics, copying machines, televisions, standby modes, chargers, lighting, electric motors and other products.

As he points  out, "if this goes anything like past plans have they'll specify the technology to be used and in a decade's time we'll all be stuck with something out of date". Not to mention agencies arguing that something producing waste heat is in fact a space heater.

However, Margaret Beckett welcomed it. The UK tradition is to ration on price with a bit of government arm-twisting on the side but we seem condemned to the clunky prescriptive approach again. So much for this week's optimism from the chairman of the Better Regulation Group.

And there's probably fat chance of any political opposition. Green Cameron doesn't do economics and the LibDems are pro EU. And UKIP? They're exercised about the Dartford Toll Bridge.

EU costs v benefits

Richard North summarises a Times piece by Tim Worstall where he manages to source a European Commission estimate of the benefits of the single market programme.

While Gunter Verheugen, the EU enterprise commissioner, complains that compliance with Single Market regulation costs €600 billion a year, Tim has found out that the commission boasts only that the Single Market benefits the economies of the EU to the tune of €164.5 billion a year.

Losing €600 billion to get €164.5 billion back in order that the politicians can enjoy and exercise their power is not something which passes a cost-benefit analysis, writes Tim.

Now you might think they'd be interested in this on planet UKIP. Nope.

Anti-tax campaigns should focus on waste

BBC News Lite (the BBC1 6 o'clock version) sent a reporter to an Essex shopping centre yesterday to see if a few passers-by preferred more spending on the NHS, tax cuts, or more spending on the environment.

There were no numbers - naturally - but apparently the NHS ran out a comfortable winner.

Perhaps this item wasn't wholly insignificant after all. Perhaps tax campaigns at high street level shouldn't be focusing on tax at all, but on government waste.

For instance, Wat Tyler has picked up the story on The Daily Propaganda about the Energy Saving Trust -

The EST has cost us £135m in the last two years, in exchange for which it has pumped out almost as much half-baked eco propaganda as the BBC.

And its recommended eco-car is "more carbon generative than a bog standard Ford Focus 1.6D.... So that's £70m pa on a quango that's so useless it's actually encouraging the very behaviour it was supposed to stop."

These examples have to be dripped into people's heads so that the government becomes a byword for its profligacy with our money.

October 18, 2006

Regulation again

Yes, I know, yet another post about regulation. But the annual cost of £100bn is too huge to ignore.

The Head of the Better Regulation Commission (BRC) claims that the government has "the most comprehensive better regulation programme undertaken anywhere in the world". This is absurd, as one look at Holland and Denmark shows. Germany has now also adopted their target of cutting the cost of regulation by 25%.

Indeed, despite this wonderful government attitude, "there have been 33 Acts of Parliament and at least 1000 regulations introduced so far this year". By their results shall ye know them.

There is froth in the Commission's recommendations, but two stand out -

  1. Change our national approach to risk: Emphasise the importance of resilience, self–reliance, and innovation; separate fact from emotion; balance necessary levels of protection whilst preserving reasonable levels of risk
  2. Empower individuals to take more personal responsibility for risk: Give the responsibility for managing risk to those best placed to manage it; embark on state regulation only as a last resort and when nothing else will work; examine areas where the state has assumed more responsibility for people's lives than is healthy or desired.

“The BRC contends that the root cause of our over–reliance on regulation is a flawed dialogue between government and society about risk and how to manage it. What is risk? How far should risk be reduced? What is necessary protection? Protection from what…by whom…at what cost… to whom? Our report looks into these issues and uses a series of case studies to illustrate the extent of the current problem. We also set out proposals for remedying the situation.”

We shall be looking at these in future posts.

Forget "a campaign against inconsistencies and absurdities", which will only tinker at the edges.

The BRC urges the government to come clean with the public about risk and regulation, about where ownership and responsibility should start and stop. It needs to spell out that there are costs as well as benefits of risk reduction measures. It must explode the myth that the government can and should manage all risk. It must admit that zero risk is unachievable, unattainable and undesirable.

This will require government to take on people like Polly Toynbee - and probably many Labour MPs - for whom more regulation is a badge of a higher civilisation.

And - ahem - let's not mention the EU. Much of the regulation just cannot be repealed while we remain members.

The BRC is probably spitting into the regulatory wind.

Costly failure at the Rural Payments Agency

This is old news, but the National Audit Office has just reported.

In summary, it had to take on nearly 400 extra staff when it had been expected to cut 1,800 jobs as part of the government's Gershon efficiency drive, and added £387m to the cost of a new scheme for paying subsidies to farmers in England.

It's a catalogue of basic project errors. The agency failed to scope the project properly, fixed on an ambitious strategy, set an earlier deadline than required under EU law, and reduced its headcount before the new scheme was introduced. It had no contingency plan in case things went wrong, and ignored repeated warnings from the Office of Government Commerce that it was in danger of failing.

Margaret Beckett, who was Environment Secretary, and Lord Bach, the farming minister, were both warned that the scheme would not work in June 2005, seven months before it was due to come into action. But they did not invoke a contingency plan. The FT adds -

There was also a substantial risk that the European Commission would refuse to reimburse Defra fully for the cost of the subsidy, because of errors and procedural mistakes. The department has already estimated that up to £131m might be disallowed.

The NAO said efficiency savings from the new scheme might be only £7.5m over the four years to 2009, compared with the £164m forecast by the agency.

Meanwhile, the former chief executive is still drawing his £114,000 salary more than six months after he was removed from the post. A Defra spokesman said: "Mr McNeill is on paid leave of absence until the department is in a position to agree the terms of his departure".

Er ... what about our money, Mr Miliband?

A government internet accommodation service?

No, this is not a joke about a government trawl to find another house for John Prescott.

£10 million of our money has been spent on an internet accommodation service which produced 428 bookings this summer.

VisitBritain, the national tourism agency, confirmed that millions of pounds of public money had been spent developing a new internet tool to boost online bookings for English hotels and B&Bs. But

A VisitBritain spokesman insisted that EnglandNet had been fully operational only from last month, even though work on it began in 2002.

Tim Worstall asks some good questions. Incidentally, don't try to find EnglandNet. It's not a website.

October 17, 2006

"Execs: Ditch EU bossy boots"

Open Europe has picked up commentary on its survey of businesses' attitudes to the EU.

They summarise Commissioner Mandelson's interview on PM thus -

Peter Mandelson attacked Open Europe.  He claimed  “This was a poll designed by and conducted on behalf of the no to Europe campaign, very hardened anti-Europeans... designed by the no campaign even though it was technically carried out by ICM.”  

He cited the findings of a poll for the pro-euro “Business for New Europe” group, chaired by his colleague Roland Rudd: “Interestingly it contradicts a YouGov poll of 50 Chief Executives… [which] showed 68% believed the single market has been good for British business.  70% said enlargement has been good for British business. 78% saw it as in their businesses’ interests to be in the EU, so I think if you go to those business leaders who in the main conduct in and through Europe you get a very different view to the impressions - and I quote impressions - found by this poll for the no to Europe campaign.”

Challenged later in the interview to name a single regulation the EU had repealed as part of its much-hyped “deregulation drive”, Mandelson was unable to give a single example.

Open Europe then add their own comment -

It’s no surprise that the BBC allowed Peter Mandelson to repeatedly describe us as the “no to Europe campaign” without challenging him.  It’s no surprise either that they then allowed him to cite the findings of a poll for his own “Business for New Europe” group as if it were from an independent polling agency. It was slightly surprising that he couldn’t name a single regulation which the EU repealed or wanted to repeal (so much for 1997-style instant rebuttal).

It’s ludicrous for Mandelson to compare our poll of 1,000 Chief Executives with his poll of 50 business people: when Mandelson talks about what “68% of business” thinks what he really means is just 34 people.  In other words, his claim that “business leaders” overwhelmingly think the EU is doing a great job is based on a lead of just nine people. And yet this statistical nonsense goes totally unchallenged on the BBC…

The FT comments that the increase of onerous EU financial services regulation means that, “It is in the service sector, with the City of London at its heart, that sentiment has most turned against the EU.” 

The FT leader is feeble. First, it says, the Commission has to be held to its promises to respect subsidiarity, to properly assess the impact of new laws and to roll back unnecessary old ones. Second, UK ministers will have to fight harder. And ... er ... that's it. The FT's got the same disease as Open Europe. What they want is probably impossible. So then what?

The Sun reports the survey more robustly, under the heading
Execs: Ditch EU bossy boots

BRITAIN’s top boardroom bosses want us to quit the European Union, a poll suggested yesterday.

They want to take back powers from Brussels, claiming red tape costs millions of pounds a year.

Nearly two thirds of 1,000 chief executives quizzed prefer simple trade deals to the current political bloc.

Fifty four per cent say over-regulation “outweighs” single market benefits. And 52 per cent say the EU is “failing”.

Just a third polled by ICM for think tank Open Europe called it a “success”.

Next chief exec Simon Wolfson said: “There are just far too many prescriptive regulations coming out of Brussels.

“This regulation doesn’t seem to be doing either business or employees or consumers much good.”

City financier Michael Spencer — tipped as the next treasurer of the Tory Party — added: “In the City, people are becoming more and more sceptical about the value we are getting from it all.”

Meanwhile, EU Commission president Jose Manuel Barroso urged Britain to opt to be at the heart of Europe or “sulk in the periphery” during a speech in London.

Meanwhile, as all the commentators note, the silence from UK politicians is deafening. And - to judge by its website - news of the survey has not filtered through to UKIP yet, though it is reported by the Speakout campaign.

We will surely be hearing more of this survey.

Toynbee gets it slightly right

Today Polly Toynbee is claiming that "Only a fully secular state can protect women's rights", a striking contention but one she loses sight of during her piece.

Tim Worstall rightly criticises two telltale phrases in her piece, personal "choice" (i.e. hers is right), and public officials and their clients (she means masters).

What's unusual about today's piece is that Ms Toynbee is half right, once she has got past her notion that feminist liberationism can point in only one direction. (If daughters choose to rebel by taking the veil that is their - odd - choice, which is fine in most circumstances).

Where she's right is in opposing the Blair government's support for faith schools. She rightly traces this to Blair's personal religious faith (maybe it stems from Mrs Blair's as much as from his).

Religions should not be supported with taxpayers' money. Religious segregation in education is divisive. Thus by the wrong route Ms Toynbee stumbles onto the edge of a far more important issue than the veil.

That issue is the continuing scandalous failure of the school system. The government has no idea how to address this. Its central policy goals are wishy washy. It does not even know what its core aims are.

Thus the prime minister's personal favouring of faith schools slips through because it cannot be tested against any rigorous policy framework.

His personal conviction on this issue will cause divisions in society for years to come, for which he will be personally responsible. If there is one argument for a wholly secular state it is Mr Blair.

October 16, 2006

Climate change consensus?

Ruth Lea attacks the notion that the consensus is always right, and then briefly summarises a new paper from a Danish scientific team.

The latest DNSC research shows how cosmic rays from exploding stars can encourage cloud formation in the earth's atmosphere. As the Sun's magnetic field, which shields the earth from cosmic rays, strengthened significantly during the 20th century the average influx of cosmic rays, and hence cloudiness, was reduced over this period. The resulting reduction in cloudiness, especially low-altitude clouds which have an overall cooling effect, could, therefore, be a highly significant factor in the last century's global warming.

If this proves to be a significant causal factor, adaptation will have to be the order of the day. More broadly, it would suggest how fragile is humanity's hold on life.

REACH directive fundamentally flawed

The other day I highlighted the REACH & RoHS directives as examples of spectacularly bad regulation. A letter to the FT today attacks the logic at the heart of REACH. The writers say

The concepts behind Reach are fundamentally flawed and thus the proposal cannot be fixed. It should be rejected outright. The programme's "substitution principle", which prevailed in the environment committee draft, is one example. It is based on the idea that regulation can prompt industry to find products that are superior to "dangerous products".

If the substitutes were really superior, they would prevail in the marketplace. Mandated substitutes are usually not used voluntarily because they carry trade-offs - higher prices, reduced product quality and increased level of product failures. In some cases, mandated substitutes are actually more dangerous.

The banning of DDT offers an example of why we should not trust regulators to mandate substitution. This pesticide was banned in many places based on faulty information about its health risks and because people assumed that substitute controls like bed nets could do as well to fight malaria. After DDT use halted, malaria rates skyrocketed and millions of people have died from the disease every year since. Some nations are returning to DDT use for malaria control, but it is tragic that so many people have to die first. The Reach programme, unfortunately, shows that policymakers still have not learnt from that tragic mistake.

This is not a complete argument - it might be a legitimate aim to rebalance the calculation by making safety issues more important. DDT, for instance, is not without its disadvantages. But the writers are probably right to suggest that this process is much too cumbersome.

As I suggested before, many rabbits will agree. So will many more bosses, in time.

The EU is too expensive

The main story on the front page of today's Financial Times is headed Brown and Cameron battle over business. Then there's the mandatory picture, and over on the right we have Business chiefs say costs outweigh benefits.

This is a report of Open Europe's survey of businesses, with the opening paragraph

Most UK chief executives want Britain to renegotiate its membership of the European Union and take back powers from Brussels, the biggest survey of its kind for years found.

59% felt the regulatory burden was generally increasing. Remarkably, 35% said it was staying at about the same level. Perhaps no one told them 50 new business regulations were introduced on 1 October.

54% said the burden of extra regulation has outweighed the benefits of the single market. This included 51% of the businesses that do "a lot" of trade with the EU. 35% said the benefits of the internal market have outweighed the cost of extra regulation for their company. For the EU as a whole, of course, Commissioner Mandelson estimated the value of the single market at €150m, while Commissioner Verheugen says regulation is costing €650m.

52% agreed with the statement that “The EU is failing. Britain will be more prosperous and secure if we keep the Pound and take back powers from the EU”. 36% agreed with the statement that “The EU is a success. Britain will be more prosperous and secure if we join the Euro and give more powers to the EU”.

Respondents were asked, “Do you think that Britain should or should not renegotiate the existing EU treaties so that they are reduced to trade and association agreements only?” 60% thought it should, 30% thought it should not. Even the largest businesses (250+) supported
the idea by a margin of 52% to 37%, and those who do a lot of trade in Europe, by 55% to 38%. Interestingly, the FT report does not reveal the extent of repatriation of powers respondents were looking for.

Of course this option is completely unrealistic, especially at a time when many EU politicians want more curbs on business rather than fewer.

Reportedly Commissioner Barroso is to ask

Does the UK want to shape a positive agenda, which reflects its own agenda, or be dragged along as a reluctant partner? Do you want to drive from the centre or sulk from the periphery?"

By putting these two stories at the top of its front page the FT is effectively saying to Brown and Cameron in their battle over business, well here's a big item on the business agenda.

Maybe Commissioner Barroso should be careful what he wishes for, especially since Mr Cameron's score for trust is a net +1 (reflecting how little he has said), while Mr Brown scores a whopping net -31. He will have ground to make up, and what better whipping boy than the Commission.

October 14, 2006

Polly the regulator

We saw previously that Polly Toynbee believes the answer to our immigration problem is an army of wages inspectors. Yesterday in The Guardian she returned to her defence of business regulation.

The piece is typical Toynbee, with plenty of examples provided to bolster a wrong core argument. Quotation would be easy but tedious and I'm not contracted to deliver a fixed number of words. Her central thesis is that unfettered business activity is not a sign of a civilised society. And of course that's true, but it's a straw man, for her opponents do not argue for abolition of all business regulation.

Indeed, as Martin Wolf suggests in his more austere FT piece (subscribers only), it is not an all or nothing issue, but a matter of the increasing number of regulations, the straws that strain the camel's back.

For the sake of his argument Wolf assumes that each new regulation may in itself be desirable - though this is not so. Wolf is less interested in the detail, so let us put to one side nonsenses like the REACH and RoHS directives. But he argues that it is the sheer speed of introduction of new regulations which is a danger signal.

The problem with this mature shape of argument is that it deals in shades of grey rather than Toynbee's black and white. It's hard to deliver a killer argument that this particular shade of grey is markedly worse than that slightly lighter shade. And the argument relies on a basic understanding of how businesses, institutions and the economy actually work. To Toynbee all this is a black box, so you don't have to consider the effect of bringing in 50 new business regulations on 1 October.

It's not only small business which has problems keeping up. Yesterday's FT separately reported the chief executive of the OFT claiming that company bosses often have only a shaky grasp of merger and takeover rules - and those would be the larger businesses.

So while Toynbee's attack on her straw man may be more spirited and colourful than Wolf's sober high level analysis, it is Wolf who connects with the real world.

But that doesn't mean Toynbee's rhetoric can be ignored. The Taxpayers' Alliance approvingly quotes Wolf's warning that
What is needed is a halt to new employment demands and a roll-back of at least some of the old ones. My guess – it cannot be more than this – is that the UK is sleep-walking towards a precipice. I have no idea how close it is to the edge. Nobody does. But, given the risks, the time to halt this journey is now. Do any of the political parties dare to take on this cause, before it is too late?
But Toynbee is not alone. A string of comments added to her article support her view. Is this to be a dialogue of the deaf? Advocates of deregulation need to counter their opponents' arguments head on, not merely state their own.

Who's for a Ukrainian study tour?

The tour, in September, has its own blog.

A post from one Clare Twelvetrees catches the eye. She declares that
I am the International Relations Manager in the Environment Agency England and Wales and manage our programme of capacity building projects with sister organisations overseas. I was lucky enough to get involved in this visit at a fairly late stage and happened to be in East Ukraine with Groundwork UK the week before it took place.
That's nice. Who pays for all this? Can anyone join in?

October 13, 2006

Incapacity in government

The Taxpayers' Alliance's campaign literature points out that
Three times more people claim Incapacity Benefit now than did in 1980 – nearly three million people.
Tim Worstall in his blog picks up a report in The Telegraph that 100,000 people are being paid incapacity benefit because they are alcoholics or drug addicts - a figure that has doubled in nine years. Claimants are paid up to £78.50 a week, around £20 more than they would get on Jobseekers' Allowance. Incapacity benefit costs £12 billion annually.

"Ministers are pushing legislation through Parliament that will replace the benefit with a new employment and support allowance which they say will focus on getting people back to work", the paper reports. Speaking best Cameronese, a Tory MP commented that "Instead of helping people sort out their problems and get back into work, more and more people with drink and drug problems are being condemned to a life on benefits."

"Condemned". Hm. Who's condemning them, then? Not the state. Not "society". The Telegraph's leader suggests that some may be "addicted to idleness". At some point the funding and caring by society at our expense has to stop unless people are genuinely unable to contribute.
A spokesman said the number of people on incapacity benefit had been falling in recent months as a result of reforms that required claimants to take part in work-focused interviews.
The professional "caring tendency" see this as a moral issue and spurn talk of resources. MPs should perhaps consider that their working, taxpaying constituents - many of whom are coping with problems of their own - are paying for this.

Political correctness and oppression at school

It's worth peering into a report in yesterday's Manchester Evening News which will doubtless be picked up by the national media today. The paper summarises the story.
A teenage girl was questioned by police after allegedly making a racist remark to Asian students in the classroom.

The 14-year-old pupil had refused to take part in a science tutorial with five other students at Harrop Fold High School, Salford, after claiming they didn't speak English.

After questioning by police she was released without charge but the school say they are investigating the matter.
Her mother's version was that
"She was not being racist. She was in a science lesson and the teacher split them up into discussion groups.

"She asked to be taken out of her group because the other five students were Asians and four didn't speak English so there was no point in her being with them. When she pointed this out to the teacher she was accused of being racist.

"The matter was referred to the community police officer based at the school and she was taken to the police station and kept in custody for over six hours while they questioned her."
Now maybe she said something racist, maybe she didn't. But it was careless or stupid of the teacher to set up a discussion group where four out of six didn't speak english in the first place. Why did this seem sensible? The aim of the exercise should have been to understand a scientific issue, not promote language translation skills.

So the initial fault was probably with the teacher - the adult involved at this stage - who seems to have attracted no blame whatever.

Maybe the girl went beyond what she should have said, maybe she didn't. But someone at the school decided it was a police matter, and she spent six hours at the police station.

We now have several more useless adults on the scene, in addition to the teacher. School staff who couldn't or wouldn't defuse the issue. It's not the job of the community police officer based at the school to resolve classroom spats, but the hamfistedness continued and the girl was taken to the local police station.

Police there reportedly kept her there for six hours, which seems in itself to merit a complaint against the police. And is this how the local community want their taxes spent?

The line-up of hamfisted adults is getting pretty long now. All paid for by us. Maybe they could all be sent for "retraining" at our expense. Is the head teacher apologising for this serial incompetence by (apparently all) the adults involved?
Head Dr Antony Edkins said: "An allegation of a serious nature was made concerning a racially motivated remark by one student towards a group of Asian students new to the school and this country."
Ah, it was all the fault of a (perhaps lippy) 14-year-old.

October 10, 2006

Regulation hurts

The Sunday Times reports that retrospective testing of chemicals under the EU's REACH directive will cause millions of animal deaths. "Current estimates of the number of animals to be affected range from the 16m predicted by the chemicals industry to 45m over 15 years". Mr Cameron has just decided that his MEPs will support the proposal. UKIP - to judge by its website - has not caught up with The Sunday Times yet.

There is also the small matter of what all this retrospective testing is going to cost.

Meanwhile Commissioner Verheugen has been speaking to his friend at the FT again.
He said new evaluation methodology of the administrative costs of EU legislation - including "gold plating" of laws by some member states - put the annual burden for business at up to €600bn ($756bn, £405bn) compared with the original estimate of €320bn. That figure does not include the compliance costs of the laws.
Open Europe reminds us that the Commission’s estimate of the benefit of the Single Market is around €160bn. "This suggests very strongly that the cost of increased regulation has outweighed the benefit of the Single Market programme – as Peter Mandelson admitted at the CBI conference in 2004."

Just what "administrative costs" includes I'm not quite sure (compliance for example apparently being separate from administration), but the Taxpayers' Alliance (TPA) has come up with the formulation that
1. Eurostat figures show that GDP for the 25 EU countries this year is just over €11 trillion, so the cost of EU regulation is around 5.5 per cent of EU GDP.

2. Eurostat figures show that there are 367 million people aged 18 or over in the 25 EU countries. This means that the cost of EU regulation is €1,634 per adult in the EU, or around £1,100 per adult.
As the TPA points out, there is no allowance here for the knock on effects of fewer jobs, high prices and lower wages.
People and businesses in Britain are being hammered from both sides. British taxes and regulations are increasing and getting more complicated, while EU regulations are another huge burden. It’s not surprising that companies which are able to are locating in lower tax EU countries or outside Europe altogether.
Again UKIP has not caught up with this. But it prefers to limit each of its statements to one point.

Meanwhile Mr Verheugen continues to concentrate on missing his pathetic target of simplifying (not abolishing) 54 laws, blaming uncontrollable officials - according to Coulisses de Bruxelles they are in other Directorates.

Thus euobserver has picked up a report from Handelsblatt that the new commission document on the EU's innovation strategy was drafted by the commission's secretariat-general without any involvement of Mr Verheugen, who is in charge of the policy area.
Commission sources told the daily that the responsible official in the secretariat-general did not like Mr Verheugen's political views on innovation and therefore drafted the paper himself without involving Mr Verheugen's cabinet.
Is this man in control or not? Clearly not.

euobserver has also picked up the FT report that the commission staff union FFPE said Mr Verheugen should either apologise for his remarks or resign.
"If the boss of an enterprise like Coca-Cola blamed a lack of sales on his workers he would either have to apologise immediately or resign," said Jean-Louis Blanc, the FFPE president.
Well, up to a point, Mr Blanc. What that boss should be doing is to bottom the problem, which would doubtless lead to some sackings. What would Mr Blanc have the Commissioner do?

This highly paid elite is of course too grand to concern itself with what its measures actually cost pensioners in Penzance or peasants in Poland. Maybe Mr Sykes will find some material here for his campaign.

Regulation hurts people as well as rabbits.

October 09, 2006

Regulation, regulation, regulation

Ruth Lea points out that 50 new business regulations came into force on 1 October. Meanwhile, a Danish and Dutch minister in the FT claim progress in their own countries.
For the first time in history, the Dutch government has formulated hundreds of simplification plans that will reduce the administrative costs by 25 per cent in 2007. About half of the reductions have been realised and the rest will follow in 2006 and 2007. The Danish government has also launched ambitious simplification plans focusing on the most burdensome legislation. The aim is to reduce the administrative burdens by up to 25 per cent in 2010.
This blunt approach, they say, could work in Brussels, the source of 40% of their burdens, and where Mr Verheugen is still at the stage of considering his target - and formulating a view on how costs should be measured. As we saw, he is also busy making excuses.

Meanwhile, the UK government has run through various reviews and commissions with little result. Even reducing the number of business support schemes from 3,000 is proving a major administrative challenge, especially since it emerges that over 1,200 of them are run by local authorities. The DTI runs more than 100, with the rest being spread across other departments.

You do this elegantly and achieve nothing and make Sir Humphrey proud, or you can chop brutally and achieve results. But hardly a start has been made. Maybe Ms Hodge is not of the right calibre.

And this is only the business support schemes. If the attack here is so feeble, what hope is there for slashing and buring on a broader front?

The government would no doubt say this is "a priority".

In the blogs

Discussing the shortage of prison places, the Taxpayers' Alliance says the government should actually have spent more in this area.

What happened in the Belgian municipal and provincial elections? A fistful of euros provides an overview, while the right wing Brussels Journal focuses on the influence of the immigrant population on the results.

Helen Szamuely is more apocalyptic.
However, one cannot help wondering how long Belgium will remain a single country or, even, member state of the European Union. Nor will a potential splintering help the EU as the constitutent parts are unlikely to call themselves regions. Flanders will most certainly want to be a country.
Commentators love the thought of change (look at the number predicting Italy's early exit from the euro). But don't underrate the power of inertia. It will probably take a long time, and when it happens - if it does - it will be messy and slow.

Speak "Out"?

Paul Sykes is to launch a £10 million campaign to bring the UK's relationship with Europe back to the centre stage of British politics, reports The Telegraph. His "Speak Out" campaign will seek to harness mass support for a referendum on repatriation of seven powers now transferred to the EU.
According to the campaign, powers surrendered to an "undemocratic and unaccountable" Brussels include the unfettered right to make laws, control Britain's borders and run an independent UK trade policy as well as to manage farming and fisheries policy.
The Telegraph tells us Mr Sykes "insisted that this was not about withdrawing from the EU".

On the face of it, this follows William Hague's fatuous formulation, In Europe, but not run by Europe, and OpenEurope's equally incoherent call to reform the EU (by when? and if not, what then?). He also seems to have rejected the idea of working through UKIP.

It's hard at this point to make out what the real game plan is. The major parties will surely not welcome this potentially disruptive initiative, and UKIP will be disappointed to be apparently sidelined. £10m is a lot of money for political campaigning.

Will "Speak out" morph into "Speak, 'Out'"?

The benefits of the eurozone

The usually astute Wolfgang Munchau of the FT has let his enthusiasm for the euro get the better of him this week (subscribers only). He argues that economic management in the new members of the EU is poor, and "the fundamental lie of central European politics is that there is a good life outside the eurozone, but inside the EU".

This argument is based on the understandable fiscal laxness of the newly independent ex-Soviet states. Paradoxically, the more disciplined a country's economic management, the more likely it is to qualify for early eurozone membership, and the less likely it is to benefit from it.

The argument also ignores the problems that the incoherent currency union is storing up for its members. Indeed, Munchau's argument is based on this rosy view.
While the euro did not solve Italy's structural problems, it certainly led to substantial budgetary reforms that otherwise would not have taken place. Italy may find life inside the eurozone unbearable, but life outside would be far worse.
If the countries of central Europe cannot run a proper deficit policy that is a shame. Observers of France, Germany and - for different reasons - Greece might wonder whether eurozone membership is a guarantee of a firm fiscal régime. But in any case, probably burdening your economy with the wrong interest rate for as long as you remain in the eurozone seems a high price to pay for this questionable quick fix of fiscal responsibility.

Indeed, the Polish Prime Minister has promised a referendum on euro membership in 2010 – the end of the current government’s mandate, warning that euro membership would “limit the sovereignty” of Poland. (It was also, of course, a condition of membership!)

Some optimistic eusceptics hope that the eurozone will disintegrate if Italy has to leave. John Kay a few weeks ago took a narrow focus on the huge enough immediate problems this would cause for Italy, but Munchau is surely right to argue that France and Germany will maintain the common currency between themselves, whoever else departs.

October 08, 2006

The IRA campaign is over?

Mr Blair says it is, so it's probably suspect. We surely all recall tales of crime, and punishment beatings. And so it proves. Blair may be in his last few months of office, but he is still without shame.

A reading of the full article will show just how shameless he remains.

The veil controversy

Jack Straw's careful comments about the veil have been pilloried by Oliver Letwin, and now John Prescott seems to be saying he does not see the point.
Mr Prescott told the BBC he would not ask a woman to remove her veil, adding: "If a woman wants to wear a veil, why shouldn't she? It's her choice."
Mr Straw had said he did not want to be "prescriptive" but he believed that covering people's faces could make community relations more difficult. Too difficult a point for Mr Prescott to grasp, apparently, but there may still be something in it.

Mr Prescott would certainly look better in a Burqa.

October 07, 2006

An electoral myth

One of the big political myths justifying the Conservatives' move to ever-so-slightly left of Labour is the myth that the Tories' policies got them trashed in the last election.

So it is worth repeating some numbers from the last general election, taken from the BBC.

In England, the Conservatives got 8,116,005 votes - slightly more than Labour. Yet Labour got 92 more seats than the Conservatives.

If the seats had been distributed according to the votes, Labour's overall Commons majority would have disappeared.

In Wales, Labour took 42.7% of the vote, but 72.5% of the seats.

In Scotland they took 39.5% of the votes, and 69% of the seats.

If we look at the full national scoreboard, Labour took 35% of the votes and 55% of the seats. That was, by the way, on a turnout of 61%.

So the Conservatives weren't badly spurned by the voters - they were massacred by the electoral system. A competent Opposition which valued democracy would now be calling loudly and persistently for fair, meaningful votes. But the intellectusally idle Tories say nothing.

This electoral unfairness is distorting the choice of policies we are likely to be offered at the next election. The Tories feel they have to move onto Labour territory - not because it was overwhelmingly more popular, but because our electoral system happened to give an unfair advantage to the party which happened to advocate those policies.

Thus does the seemingly obscure subject of electoral arithmetic distort our policy choices, much as invisible movement in foundations can cause serious cracks in a building.

Our political house needs major repair.

October 06, 2006

Verheugen: Why I'm failing

Every so often Commissioner Verheugen explains why he's failing in his trumpeted but pathetically modest project of simplifying 54 EU laws. Back in July he was blaming everyone else, and now he's at it again, claiming that Commission bureaucrats are getting too powerful.

"The whole development in the last ten years has brought the civil servants such power that in the meantime the most important political task of the 25 commissioners is controlling this apparatus."

"There is a permanent power struggle between commissioners and high ranking bureaucrats. Some of them think: the commissioner is gone after five years and so is just a house keeper, but I'm sticking around."
This man in his second term as a Commissioner has just discovered this?

I have blogged recently about the "managed democracy" model in Belgium. The Commission model looks 99% managerial. And Verheugen seems to be saying that it is beyond the Commissioners to control it.

One of the topics to be discussed at the Bruges Group on 18 November is "The EU's anti-democratic agenda".

October 05, 2006

UKIP leadership candidate resigns

Richard Suchorzewski, who came second to Nigel Farage in UKIP's leadership contest, has resigned, citing Nigel Farage's behaviour.

October 04, 2006

Could this happen here?

Brussels Journal reports that the Supreme Court has barred the leader of the Belgian Front National from office for ten years, implying that he will lose the seat he already holds in the Brussels regional assembly because of a leaflet he published. He may also serve time in prison.

It also tells us that
Two years ago the Belgian Supreme Court ruled that the Vlaams Blok, the largest party in Flanders, the northern half of Belgium, was a criminal organisation. The VB leaders disbanded their party and established a new one, the Vlaams Belang (Flemish Interest). It is expected to win between 25 and 30% of the votes in next Sunday’s local elections in Flanders.

Yesterday the Belgian authorities announced that court procedures to defund the VB will begin on October 17th.

Belgian political parties are funded by the state in accordance with the number of voters gained in the last elections. It is illegal for parties to accept private donations. On the grounds that it is illogical for the state to fund its own enemies, parties that are considered to be “enemies of the state” can be defunded by the judges of a Belgian administrative court, the Council of State (CoS). Last May a procedure was initiated by the Socialist Party to defund the Vlaams Belang.
Is this democracy?

The Vlaams Belang is said to be "an enemy of the Belgian state because it rejects the ideology of multiculturalism and aims for the dissolution of Belgium and the establishment of an independent Flanders. The CoS is expected to issue its verdict later this year or in early 2007".

So this is how democracy runs in the capital of the EU. Could this happen here?

October 03, 2006

Immigrants and integration - the new dilemma?

Helen Szamuely has picked up a Guardian piece about Denmark one year on from the Danish cartoons.

Although the cartoons were published on 30 September, the rioting in the Middle East did not start until February, after a tour there by Danish Imams. One of them is quoted bizarrely saying, "I had a vague feeling that something bad would happen". And when nothing did happen, he made it happen, and most of the cartoonists are still in hiding, following what the Guardian calls "a provocative exercise in free speech". And now, according to the paper, Denmark "has drifted to the right" (why not just "moved", one wonders).

However, to be fair, the editor of the newspaper gets to make some interesting points in the article too.
Rose makes a persuasive case that the paper did the right thing. It has still not apologised - and does not intend to, he said. In an article in the New York Times Rose argues that Europe's left is deceiving itself about immigration, integration and Islamic radicalism in the same way "young hippies" like him fooled themselves about Marxism and communism 30 years ago. "It's part of the Enlightenment tradition in the history of Europe and western civilisation to mock religious symbols. I think the debate we started was fruitful. We live in a state where there are basic democratic and constitutional values. And then you have immigrants with other value systems. How far do you go in accommodating these newcomers? What is a deal-breaker? The question of integration and assimilation is the number one issue facing Europe over the next decade."

While Danish milk products were dumped in the Middle East, fervent rightwing Americans started buying Bang & Olufsen stereos and Lego. In the first quarter of this year Denmark's exports to the US soared 17%. The British writer Christopher Hitchens organised a buy-Danish campaign. Among the thousands of emails sent to Rose was one from an American soldier serving in Iraq. "He told me he was sitting in Iraq, watching a game of football and drinking a can of Carlsberg," Rose said.
A thought-provoking comparison with the hippie days.

Care or no care?


Inter Care "collects appropriate surplus medicines and matches them in response to specific requests from partner health units in Africa". They are now being prosecuted by the Environment Agency.

An online petition against the prosecution was started in July:
Inter Care, a UK charity has for 32 years collected unused, returned but perfect, as-new medicines from GP practices to send to 100 African clinics.

World Health Organisation guidelines on medicine supply overseas are closely followed. This activity is now being stopped by impending prosecution of the UK Environment Agency (the enforcement agency of the Dept of Environment) as they say the law designates these prescription medicines as waste, which must only be disposed of in landfill sites.

Inter Care has been sending out 6000kg per year of these life-saving medicines with a market value of £300,000pa. This is less than 1% of the total NHS prescriptions wasted and destroyed.

There needs to be a change in the law to allow the re-use of NHS returned & unused medicines in developing countries provided meticulous standards are met as follows:- at least 18 months before expiry date; perfect, unopened and undamaged; each drug specifically requested by local health professionals in the area of use.
Derek Clark, a UKIP MEP, has now noticed this and publicised it in a press release. Probably (though he does not mention this) the law has an EU origin.

A cause worth supporting.

Booker on the EU & the Tories

An excellent demolition job by Christopher Booker on the Cameron version of Conservatism, well worth reading in full.

October 02, 2006

Naughty Kalms

This blog has a small soft spot for Dixons, as the writer spent some of his childhood living across the road from their famous first Edgware shop.

(Note to The Times - it's not spelled "Edgeware".)

Mr Cameron has told the Tories to stop talking about the EU, but that doesn't stop Lord Kalms.
“I think Europe has totally failed. I would like to see a much looser arrangement than this nonsense pouring out of Europe: the sheer inefficiency, the sheer corruption of the political system of Europe. It doesn’t actually work and never will in the way the federalists really want it to.”
He also favours deregulation.
Q If you could change one thing about the business, financial and commercial environment, what would it be?

A Much more deregulation. This country has too many people in a regulatory role, and it has become nightmarish. It’s nonsense. Bureaucracy grows and, if you give people power, the first thing they will do is try to expand that power. I always tell people to bend the rules. I always say: “Bend the rules, gentlemen; rules are for bending.” There are only two rules that should never be bent: say what you mean, mean what you say; and don’t steal.
Oh, and learn to count.

He's absolutely right about bureaucracies' tendency to expand. He has good down to earth stuff to say about leadership, too.

Haughty words

Jacques Chirac has been up to his old tricks, instructing foreigners how to behave. On a visit to Armenia he told Turkey to own up to genocide before joining the EU and compared the killings to Nazi Germany's holocaust.

Meanwhile, the president of the EU pseudo-parliament (who's not even french) has upset the Swedish originators of the petition against the Strasbourg parliament.
Referring to Strasbourg as a symbol of Franco-German reconciliation after World War II, Mr Borrell said "this historic dimension cannot be perceived in the same way in 'some Nordic country' which did not participate in WWII".
In his later statement, Mr Borrell wrote
"Obviously I was referring at that moment to one of those countries where there are most petitioners in favour of one single seat - not in Strasbourg - for the European Parliament," meaning Sweden which was neutral during the war.

"To suggest that the President of the European Parliament is ignorant of the history of Europe and had any intention other than to refer to a particular country... demonstrates a certain amount of bad faith and a taste for useless polemics".
Sensing something of an open goal, the Swedish MEP who started the petition pertinently asked, "Since when is suffering in World War II a criteria for having permission to speak your mind on EU matters?", adding that more Belgians and Dutch have signed than Swedes. "I suppose Belgians and Dutch suffered sufficiently in the war, so the argument falls on that", Mrs Malmstrom said.

If French and German voters want to pay everyone else to participate in their historic gesture that is up to them. But at the moment we are being bled by pipsqueaks as smug in their moral superiority as the Roman Catholic Church.

There is clearly an EU fault line in the type of political utterance that is acceptable. Is it a North-South divide? On second thoughts, does it reflect a difference between the protestant and more authoritarian catholic tradition?

Scorpions don't have religious beliefs. But whatever the origin, these differences in political discourse reflect some deep-seated attitudes.