France v Britain in the relegation stakes.

The indignation of some of France's leaders that France rather than the UK should be singled out for possible downgrading by the ratings agencies has some justification, as figures published in last Saturday's Guardian (17th December, 2011) show. According to these figures France's current budget deficit for 2012 is predicted to be a "mere" 4.63% compared with the UK's 7.01%, and her total Debt/GDP ratio at 83.5%, is very comparable to the UK's 76.9%. France's inflation rate is predicted at 1.4% compared with the UK's 2.4%. (As a holder of savings I hope they're right and that the UK's inflation rate will come down, though I'd clearly be better off holding my modest wealth in France rather than the UK.)

Other figures, taken from the CIA's World Fact Book which I'm assured is reliable on these matters, throw up further interesting comparisons.

The level of investment, so very important for future growth and productivity, is 19.3% of GDP in France, compared with only 14.7% in the UK.

In spite of the fact that the UK has experienced a massive devaluation of the £ in the past few years, which the much-vaunted non-membership of the euro permits, our current balance of payments deficit is still slightly higher, at a dollar equivalent of $56.19bn, than that of France ($54.4bn), where the membership of the euro prevents such tactics.

Curiously, given France's boasted devotion to equality along with liberty and fraternity,their Gini co-efficient (a measurement of equality) of 32.7 is not much better than the UK's (34). However, only 6.2% of France's population live below the poverty line, compared with 14% in the UK. (I'm not quite sure how these two figures can be reconciled.)

So there's not all that much to chose between the performances of the French and British economies, although socially the French seem to do rather better. However, for me the "killer statistic" is that the French government takes 48.8% of GDP in taxation, (compared to 40.4% in the UK),with which it finances among other things, a health service with excess capacity, working fountains and beautiful municipal gardens in almost all towns and villages, and generous welfare payments to cushion the trauma experienced by unemployed people and others on benefits. Our monetarist mantra preaches that such a high tax take would be ruinous to innovation, growth and competitiveness, would drive all entrepreneurs out of the country and bring the economy to a virtual standstill. That little theory, like so much else of monetarist dogma, just doesn't seem to hold water.

I am genuinely puzzled as to why, given their gaffes on the credit-worthiness of Icelandic banks and the US sub-prime market, so much notice is taken of the assessments of these agencies. It has to be remembered that they are financed by the very organisations, primarily financial instructions, which they rate. These make their money by speculation. If markets are stable the opportunities for speculation are very limited. Hence it pays the agencies and their paymasters to throw as many spanners in the works as possible.

Surely the answer is to ignore these commercial agencies and replace them with an independent agency without a financial axe to grind, funded internationally through the UN.

A Christian country? No.

Although firmly on the right David Cameron seems to have spent the last week clomping around with two left feet. First he quite unnecessarily upsets our European partners (and three cheers for Nick Clegg in his attempts to undo the damage.) Now he risks aggravating all those with non-Christian faiths and those who aggressively hold no faith by his equally unnecessary claims that Britain is a Christina country.

What we really are is a country with a Christian heritage. We can be proud of that if you like, though I am suspicious of pride in something for which you have no responsibility. But equally we most certainly have no need to apologise for it. Two of our major holidays, Christmas and Easter, are Christian (there used to be a third, Whitsuntide, until Harold Wilson shifted it) and so they should remain. Sunday, the Christian Holy Day, is our national day of rest (or was until greedy capitalists eroded it in order to make more profit,) our four national "protectors" are Saints from Christian history or mythology, and may that happily continue.

But to bang on and on about our being a Christian country is simply to imply that those who don't subscribe to the traditional faith somehow or other don't quite belong, and even caries overtones of a threat that they must "must conform or else."

Even to claim that our values are specifically Christian is a nonsense. Although English common law is based on the Ten Commandments, these we hold in common with Judaism and Islam so there is nothing exclusively Christian about that. But the principles of decent behaviour: integrity, fair play, generosity, kindness, concern for others, and particularly for the underdog. are common to most if not all religions and non-religious codes of behaviour.

It is not churlish, I hope, to point out that these virtues are not particularly evident in modern Conservatism as it was practised under Thatcher and now under Cameron.

A virtue that is not perhaps evident in most religions is tolerance, but that is a virtue which can be claimed as part of the British heritage, and is one of the great glories of the Church of England. Cameron's remarks do not help nurture tolerance and respect for others, but rather give encouragement to those even further to his political right.

Ishues

As Tony Benn was so fond of pointing out years ago, the British media, and, indeed, many politicians themselves, prefer discussing personalities to what he pronounced as the "ishues" at stake. Things have now changed for the worse, in that the future of the coalition now joins the mix of who is up, who is down and who is out.

To take personalities first, after last month's Autumn Statement by the Chancellor of the Exchequer, in which he was forced to announce the many indications of the failure of his economic policy, true there was some discussion of alternatives to the policy, but also much speculation of how the statement affected George Osborne's chances of becoming Tory leader in, say ten years' time. At a time when the economic débâcle is seriously affecting the well-being of about a quarter of our population, and the future of probably the majority of our young people, it is astonishing that intelligent people, and expensive media, can waste time on such a frippery.

Like most Liberals and Euro-enthusiasts I regard David Cameron's use of the veto last week as a further and foolish step which will place Britain more firmly in the EU second division. As Paddy Ashdown put it in Sunday's Observer: "We have tipped 38 years of British foreign policy down the drain in one night." Again, true, there is discussion of the economic and real long-term political consequences of Britain's being "outside the room" where serious decisions are made, but, again much of the discussion centres around the personalities and future of the coalition.

Not only is this discussion superfluous at this stage: much of the reportage seems designed to maximise differences rather than report the facts calmly. The BBC's website over the weekend reported that Nick Clegg had issued a devastating attack (or words to that effect: I did copy them and print them out but the printer malfunctioned so I have to rely on an inadequate memory) when closer inspection of the story revealed that Clegg has not said anything publicly a all, but "sources close to him" revealed that he was "disappointed."

Now that Clegg has spoken publicly I admire his measured tones, and the fact that he and senior colleagues are making attempts to contact other European leaders and trying to ameliorate some of the damage. Yet even the formerly friendly Guardian has the front-page headline: "Clegg lashes out at Cameron..."

How on earth can we have responsible political discussion, concentrating on the real issues, with friends like these?

Archbishop of Canterbury and the Riots

When talking or writing about the causes of his summer's riots it is perhaps best to avoid the word "understanding." This word is taken to imply sympathy with he rioters and promote shrieks of indignation and vigorous assertions that it is not the rioters but the victims who need sympathy. Of course they do: no one has ever claimed that they didn't. So, in terms of Rowan Williams's very preceptive article on the causes of the riots (see the Guardian, 6th September: "We must prove ourselves to those with nothing to lose")I will think of his views as an "analysis."

The article drips with intelligent comment: "Too many of these young people assume they are not going to have any ordinary, human, respectful relationships with adults...Too many of them feel they have nothing to lose because they are told practically from birth that they have no serious career opportunities....These are not people who live complacently in a culture of entitlement*..."

The Archbishop goes on to write of the need of dependable family backgrounds which help young people to "take certain things for granted, so that they know they don't have to fight ceaselessly for recognition" and, bless him, that "we should be challenging an education philosophy too absorbed in meeting targets to shape character." He admits that "solutions will have to emerge slowly as we try to redirect a whole culture."

There are however two things with which I disagree: actually two words. Dr Williams writes of "unavoidable austerity" ahead.

Unavoidable? As has been hammered away by Nobel prize winners Stiglitz and Krugman, ex MPC member David Blanchflower and commentators such as Larry Elliot and Martin Wolf, among others, the UK's government debt is not at extraordinary levels, we are not in the same boat as Greece and so there cuts in public expenditure are not "unavoidable," they are ideologically driven. The correct approach to avoid further recession is for the government to spend more, not less.

Austerity? I define austerity as having to ration the essentials. Cutting back on the number of foreign holidays, making the car last a little longer, reducing the number of meals out, maybe drinking Languadocian wines rather than Bordeaux is not austerity. But it is in areas such as these that the majority of us will "tighten our belts" if we need to.

Unfortunately for the past 30 years, since the imposition of monetarist policies, some fifth of our population have suffered from real austerity: they have had to make choices about the basics, and in some cases do without some of them. Alas, the government's policies seem likely to increase this proportion to a quarter.

This punishment of the already poor is quite unnecessary. There are many solutions if we are prepared to share the problem and be "all in this together." For example, the closing of tax loopholes and the imposition of a wealth tax would ensure that this quarter could be brought back into the mainstream of a very comfortable society, and at the same time could close the current public deficit about which the government claims to be so worried.

* The Archbishop is far too Christian to say so, but I suspect he may have in mind such people as former members of the Bullingdon club.

Police and rioters

The publication of research into the thinking and motives (or lack of it and lack of them) of the summer rioters stimulated horrifying pictures of apparently mindless vandalism and thuggery on our television screens last night. The point of the research was that the views of the rioters had not been, but needed to be, heard. This does not, of course, condone their thuggery or justify the breakdown of law and order.

A common theme expressed from all parts of the country was antagonism towards the police.

It is a cliché of the left in Britain that most evils in our society can be traced back to Mrs Thatcher. This is unfair. After all it was a Labour Chancellor of the Exchequer, Dennis Healy, who introduced monetarism, and a Labour Prime Minister, Jim Callaghan, who began the authoritarian centralisation of our educational system.

However, my own personal unease about the police and their methods goes back to Mrs Thatcher and the miners' strike. I can still picture in my mind police being bussed from other areas to "keep order" outside closed pits, and, from the safety of their buses, taunting the striking, and thus unpaid, miners by waving through the windows their five pound notes from overtime pay. Miners bussing themselves to other areas were illegally stopped on the motorways. It was at this point, I believe that the police ceased to be seen as agents of the public and guardians of the peace, and became an arm of the government attacking what the government, but not most of the public, saw as "the enemy within."

This breakdown of trust and respect has been fuelled by numerous other incidents: trials rigged and people convicted on false evidence (eg the Birmingham Six); vital evidence mysteriously lost when the police themselves are accused (if I heard him correctly the Tottenham MP David Lammy claimed on TV last night that 300 people had died in police custody and not one police officer has been convicted as a result); decent citizens exercising their legal right to protest "kettled" for hours without water or lavatories; police identification numbers hidden during such protests; police helicopters deliberately circling over the platform at political rallies so that the speakers could not be heard; the running sore of "stop and search" targeted at the young black and Asian communities. It is even argued that the police response to the original disturbance was deliberately held back as a message to the government that police numbers should not be cut.

I acknowledge that the police have a difficult job , that they are exposed daily to insult and possible danger, and I should not like to be one. However, dificult as it may be, the police need to make a determined effort to try to restore "Dixon of Dock Green" relationships.

One of the greatest tributes paid to the quality of Britain's civilised society is a story told by Desmond Tutu. As a young black man studying theology in London he claims that he and his black colleagues would often ask a policeman "the way" even when they knew exactly where they were and where they were going, just for the sheer joy of the experience that not only did the policeman not arrest them or demand to see their passes, but actually called them "Sir!"

This is a mountain the police need to start climbing.

Some practical ideas

When Guardian columnist Deborah Orr appeared on Newsnight a few weeks ago as the token Liberal Democrat her performance was embarrassing to say the least. However, her ineptitude is redeemed by a splendid article on Saturday 3rd December entitled "Any one got a clue how to make things better? Well yes, actually, I have..."(sorry, the link thing is not behaving itself) with six very practical suggestions as to how the pain of the present economic situation could be spread more fairly and used positively to build a more equitable society. The article is well worth reading but if you haven't time then her suggestions are, briefly:

1. Concentrate on work sharing rather than sacking people or making them redundant.
2. When people can no longer afford to pay their mortgages, rather than their being turned out on the streets, Local Authorities should take their houses into joint ownership, let them live there as tenants, and thus increase the public housing stock.
3. Banks compelled to write off debts should have 100 year bonds in return. (I don't quite see how this would work but am sure M/s Orr will explain it to the Chancellor of the Exchequer if he's interested.)
4. Local companies, co-ops, mutuals and charities should have priority in local and national government procurement.
5. Companies registered offshore should not be allowed to have "free" labour on government work-experience schemes.
6. Offshore companies should have to pay an annual levy to compensate for the education their workforces have received and to which they haven't contributed. The income from the levy should be used for further education and training.

M/s Orr concludes her article: "This is no time to be backward in coming forward with ideas," a refreshing approach compared with the present negative and destructive policies. Let's hope Liberal Democrats in government will adopt it.

Are you H - A - P - P - Y?

In the past 48 hours keynesianliberal has passed another milestone and received its 2 000th "pagehit." This is an average of just over 30 "hits" a day, which is quite gratifying, but still nowhere near the "big time." I remain disappointed that I haven't been noticed or recommended by Libdemvoice but, even if readership is modest, feel a certain satisfaction in having my views on record, though, unlike Harold Wilson, I cant remember the time and date of when I said, or in my case, wrote, what.

I am proud to stand by my very first post, written before the 2010 election and pointing out that, as far as the UK is concerned, talk of a financial crisis is a Tory con to excuse and justify their ideological project to roll back the state. They have been very successful, both in their attack on our public services and in apparently persuading the majority of us that it is both necessary and inevitable.

The most viewed post continues to be "An airy fairy measure," now with over 800 "hits", though I suspect the "hitters" think it is about something other than its actual subject, the measurement of the UK's level of national happiness. As it happens, the results of the UK's first official survey on this, instigated by David Cameron, was published this week at a cost of £2m. Apparently, when asked how we feel about various things on a scale of 1 to 10 we come out with an average of 7.4.

Since I qualified in and earned my living through social sciences I cannot decry the value of such surveys, but I stick with the conviction that there are many more concrete measures of the overall health (and happiness) of our society: stability of marriages and partnerships, proportion of the population in prison, suicide rate, level of mental illness and depression, teenage pregnancies, unemployment rate and measure of equality (Gini coefficient), to name not a few.

An agreed index based on these could be used internationally, and also at the beginning and end of each government's period of office, to measure both comparative standards and real progress. As it is, we're left with vague allusions to Britain's good old Dunkirk spirit in the face of austerity. Comforting, but not really very useful.

Some green shoots...?

The Chancellor of the Exchequer's autumn statement does contain some signs of green shoots, not, alas, of economic recovery, but of a change of direction. Public investment is to be ploughed into upgrading some of our motorways and the railway network (including the electrification of the TransPennine route.) The money involved is peanuts compared with what is required, and much less than the amount of public expenditure that has been cut. In addition the extra spending on real investment will not come on stream for several years, (though doubtless consultants will gobble up their fees fairly quickly) whereas the cuts were and are heavily "front loaded." Even so, it is good to see signs of a change of heart, however small.

I have believed from the beginning that the Tories' public austerity policy is ideologically driven and not a matter of necessity. I suppose, to do them credit, that they genuinely believed, against all the odds and Keynesian teaching and supporting evidence, that state expenditure was crowding out private enterprise, and that if the state were cut back the private sector would expand and fill the gap. I do not believe that they deliberately set out to create misery among such a large proportion of the population.

Unfortunately, now that their policy is plainly demonstrated to be wrong, it is difficult to see what they can do without loss of face. These minor touches of the Keynesian tiller are welcome but they are not enough. However, I cannot see how the blustering harangues of Ed Balls will either bring about a more robust change of heart or convince the public that Labour's economic competence is superior. We are locked into a form of adversarial politics which may be fun for the participants in parliament (Labour members seemed to enjoy receiving news of economic failure, rather than be distressed by the consequences for the constituents for whose welfare they are so keen to seem concerned in other circumstances) but precludes changes which common sense demands

One thing that could come to and end is Liberal Democrat distortions of the truth in order to justify Tory folly. A letter from Danny Alexander to Liberal Democrat members repeats the tired old mantra of *the terrible legacy left by Labour" (it wasn't, it was left by the recklessness of the bankrollers of the Tory party, the financial sector) and that the Tory austerity programme is *sheltering households and businesses across the country from the worst impact of the (credit) storm" (it isn't, it is the relatively modest level of our long-term debt and the existence of a lender of last resort which makes our borrowing status secure).

Happily Alexander does not repeat another red herring put about by Osborne, that his policy is thrown off course by the crisis in the Eurozone. Admittedly the situation in the Eurozone doesn't help, but Osborne's policy was failing long before the Euro crisis broke. Another distortion of the truth which has come to Osborne's rescue is that UK interest rates are low as a result of his austerity programme. They are, but not in the way he would like us to think: bond yields are low because the returns from the depressed economy are even lower.

I suspect that few readers plough on to the end of a long post, but a not unexpected disappointment is that the government has not had the bottle to resist the calls for the abandonment of the 3p per litre rise in fuel duty. In this area the coalition is as supine as Labour, and claims to be the "greenest government ever" are, if not yet on the scrap-heap, at least severely dented.

St Andrew's Day Strike.

I have sympathy with some but by no means all of the three million or so public service workers who are expected to strike today. As I understand it the strike is to protest against three things: the increases in pension contributions, the postponement of the age of retirement and the switch from final salary to career average as the basis for assessing the size of the pension.

My sympathies are with the lower paid: the dinner ladies, care workers and those at the bottom of the pile, and especially those under threat of privatisation, with pension rights greatly reduced. I find it hard, however, to have much sympathy for the professionals, and am dismayed to see that my own old union, now called the NASUWT, is joining the strike. I've read somewhere that the average teacher now earns £34 000 a year, and head teachers' scales rise to over £100 000 a year. No one needs a pension based on half of salaries like that in order to fend off penury in old age.

It seems to me to be common sense that, as life expectancy increases, then contributions need to increase to fund the extra years of retirement. I'm less sure about the postponement of the age of retirement. Given the number of people, especially young people, who would like employment but can't get it, there is a strong case for enabling people to retire earlier (which, I can assure them, is a very pleasant option to take). This clearly implies a combination of both higher contritions and lower pensions in order to produce the necessary funding.

The switch to career average rather than final salary as the basis for calculating pensions seems to me to eminently sensible. It has the advantage of providing perfectly adequate pensions and at the same time unclogging the top echelons of various organisations (certainly some schools) where the people in charge are burned out but hanging on ineffectively in order to qualify for a higher pension.

If we accept that the purpose of a pension is to provide an adequate standard of living when one's earning life is over, then a pension equal to half the median wage, currently about £21 000 per year in the UK, should be quite adequate. In my view there should be no tax relief on any pension contritions designed to provide a "pension pot" which would generate a pension above the median wage rate.

One of our problems is that, in pensions as in so much else, we are not "all in this together." Fat cats in the private sector can award themselves pensions in the millions, funded perfectly legally by tax avoidance, and former ministers and MPs feather their nests. Until the government has the courage to tackle these abuses it will be difficult to have a rational discussion about pensions.

Help for young unemployed people

At one stage in my career as an economics teacher I stressed that we should always refer to "unemployed people" rather then "the unemployed" or the even move impersonal "unemployment": a reminder that we are discussing "people like us", in this case boys and girls, with aspirations like ours, for a decent lifestyle, respect, relationships and a purpose in life, and not just an abstract economic concept.

The £1bn aid package announced by Nick Clegg yesterday to help half the million unemployed young people into meaningful work is to be welcomed. The coalition has been accused of a "U" turn, since it abolished Labour's very similar "Future Jobs" fund. Although I supposed some form of "I told you so" knockabout is inevitable in a combative rather than a co-operative political structure, I believe we need to view changes of mind as evidence of a government prepared to learn from experience and respond to circumstances. How I should like to see asimilar change of mind on the present wrong-headed public spending cuts.

Because the problem we are facing, the reason young people can't get jobs, is lack of demand. Firms do not take on workers if they do not see demand, preferably growing demand, for whatever product they produce or service they provide. So Nick Clegg's "supply side measure," welcome as it is, will fizzle out and the young people will be back on the dole once the bribe to keep them in work runs out, if there is no demand for their products.

Honed and refined skills and and work-orientated ethos are not what is lacking, it is demand.

Missed opportunity (2)

It has become conventional wisdom to praise Gordon Brown for keeping us out of the Euro, but my own view remains that we ought to have joined at the beginning. I should much prefer to be on the inside trying to make a great project work rather than on the outside gloating over its problems and, I suspect, secretly hoping for its failure.

I am not an expert in counter-factual history but I think it plausible to argue that, had Britain joined, our adherence to rules and regulations would have caused us to block the membership of those countries - Greece and some other "Mediterranean" economies - which blatantly came nowhere near meeting the Maastricht qualifying criteria. Hence, with Britain on the inside from the beginning, the Euro may not have been in its present difficulties.

Be that as it may, our current failure to support France and Germany in their quest for a financial transactions tax (FTT - aka a Tobin tax or a Robin Hood tax) is deeply disappointing. The initial proposal by Tobin was that a tax of a fraction of 1% would curb currency speculation and thus lead to more stability in international trade. The World Development lobby latched on to the idea and suggested that the substantial proceeds of the tax could be used to tackle world poverty. More recently it has been suggested that the takings should be used to bail out European countries with sovereign debt problems.

I have some sympathy with David Cameron's view that such a tax, now proposed for all financial transactions, is not viable unless it is adopted by the US and other major financial centres. However, I should like to see him and George Osborne lobbying hard for this, as Gordon Brown lobbied hard for a package to "save the world" in 2009, rather than standing to one side and saying it can't be done.

I have read recently that, just as the Labour party was, and perhaps still is, the political arm of the trade union movement, today's Tories are now the political arm of the City of London. That seems to ring true. But it is a nonsense to force great democracies to dance to the tune of the greedy and amoral speculators of "the market." This should be stopped. An FTT of not just of a fraction of 1%, but 2%, 5% or what ever it takes to put the markets in their place is, in my view the obvious solution. Where are the politicians with the energy and vision to be working for this?

It is true that an FTT would place a disproportionate cost on Britain vis a vis our European partners because of London's financial pre-eminence. Perhaps the analogy is too strong, but I cannot help reflecting that, in the past British politicians have been prepared to send our young men to shed their blood in order to "save" Europe. When it comes to sacrificing the income of their paymasters, their priorities are different.

Missed opportunitiy (1)

The good thing that came out of the banking crisis was the chance to break the existing pattern of the industry by doing something constructive with the bank we taxpayers own and the two that we part own. Northern Rock in particular could have been returned to the mutual sector, from which it originated and to which it belonged for most of its existence. This would have provided a boost to the growing mutual, profit-sharing and co-operative sector of which Liberals have been keen advocates for most of our existence

Even better, in my view, Northern Rock could have been retained in public ownership and charged with the duty, not of maximising profits, but of providing investment finance at low rates of interest to businesses in its area, on the model of some of the German banks. That is just what the depressed North East needs and is in the fine tradition of the original Northern Rock, with its strong local roots and tradition of service to the local community.

Instead Northern Rock has been flogged off at a bargain price to the private sector: a return to the Tory practice established in the 1980s of flogging off public assets (comparable to the family silver, said Harold Macmillan) to their mates.

How green you are...or are you?

David Cameron promised us "the greenest government ever" so I hope his response to the current campaign for the government to abandon the 3p increase in fuel duty next January is more robust than that of the Blair/Brown government in 2000.

We cannot be serious about ameliorating climate change and conserving the earth's scarce resources if we cave in to every squeak of protest when sensible and modest measures to achieve these aims are implemented. I believe Monday's debate in parliament was laced with hyperbolic references to struggling motorists.

Yes, I own a car, and yes, I have noted that not very long ago £10 worth of petrol was enough to half-fill* its tank, then it was £20 and now it is £30. But I don't struggle: I just travel as much as is practical on foot, and by bicycle, bus and train.

And yes, I know that the public transport options are not so conveniently available in more rural areas. The responses we need to develop are not holding fuel prices down, but more car sharing, community buses and, in the long run living closer to our work.

Steve Bradley, chair of the Green Liberal Democrats, points out in Liberator 349: "It is strange indeed that a government that justifies its fiscal policy through the plea that 'we can't leave a burden of debt to the next generation' remains thoroughly indifferent to the prospect of handing countless future generations an inheritance of nuclear waste." The same argument applies to bequeathing them a polluted planet with unnecessarily depleted resources.

So on this issue let's hope the coalition will tough it out.

*"Green" motorists who don't travel very far don't fill their tanks, as that gives unnecessary extra weight to carry around and lowers fuel efficiency. They also use the Environmental Transport Association (http://www.eta.co.uk/) as their rescue service, as the ETA campaigns for green transport solutions rather than adds to the motorist lobby promoted by the AA and RAC. Very green motorists restrict themselves to the "green speed limit" of 55mph but I tend to be a bit self-indulgent and go up to 65mph. the fuel consumption calculator does not indicate much difference.

The recent proposal to raise our motorway speed limit to 80mph is clearly very ungreen. It is to be hoped that the recent dreadful accident on the M5 has scotched that idea.

Call to Remembrance

The long weekend of "remembrance" which has just passed has been the usual uneasy mixture of national pride, nostalgia, sanitisation of the effects of war, and mourning. What I believe should be its principal purpose, an acknowledgement of the horror futility of wars, which occur through the failure of politics, is barely acknowledged.

I applaud the British Legion's attempts to transfer the remembrance events (sure the term "celebration is a misnomer) to the 11th November rather than the nearest Sunday, which is something the French do, and it is a public holiday, perhaps meant to be observed in the original derivation of the word, as a "Holy" day. However, when I "observed " it in my year in Pau in 2005 the mixture was very similar to that in Britain. There were detachments of the French armed forces,, lots of "Garde-à-vous" and "Repos," a band playing bursts of chirpy French military music, and a dignitary in a cap with lots of gold braid whom I first supposed to be an admiral but later realised was the "préfet," who gave out medals on behalf of the President of the Republic.

Public attendance at the event was sparse. A young engineer whom I asked said that for him and his generation it was "just another day's holiday."

So changing to the correct day is not in itself enough. In my view the it is time to change the character of the day from one which effectively celebrates national pride and past military glory to one of repentance and reflection. There should be no marching in step, military music and "the usual shallah-humps and shalla-hoops," no politicians, no singing of nostalgic songs: just lots and lots of reminders, pictorial and otherwise, of the futility of war, the refugees, the loss of life, the mutilated, the widowed and nowadays widowered, the fatherless and motherless. No comforting hymns - just an acknowledgement and bleak reminder of the horrors when politics fails.

Greece and its debts.

Some time ago I read that the problem with the Greeks is that they regard paying their taxes in rather the same way as many people regard the collection plate at church: you put on what, if anything, you happen to feel like at the moment.

When I repeated this to a young Greek student he responded, rather indignantly, that "ordinary " Greeks, such as his family, do pay their taxes: it is the wealthy Greeks who evade and avoid their obligations.

Confirmation of this view comes in a letter to the Guardian last Friday (04/11/11) from a Professor Greg Philo of Glasgow University. He points out that "...the $43bn funding gap of Greece's government is matched by about the same amount going offshore..."

Professor Philo goes on to quote the head of Italy's biggest bank as saying that "Italy's $2,750bn debt could be resolved by a tax on Italy's private wealth. This is five times the size of its debt."

(The difference in scale of the Greek and Italian public debts is worth noting.

Incidentally, a graphic in yesterday's Guardian gave the following figures of the debt to GDP ratios of selected countries as:

Greece, 144.9%;
Italy, 118.4;
Germany, 83.2% (sic);
France 82.3%;
UK, 79.9%.

When will we realise that we are being taken for a ride by the Tory claim that the UK's public debt is so outlandish that immediate public austerity is unavoidable. This is a Con/con tick to justify the implementation of the Tory ideology of shrinking the state. Wake up, Liberal Democrats in government.)

Later in his letter Professor Philo suggests a "wealth tax" on the richest 10% as an immediate solution to governments' financial problems. I warmly support this and, although I am nowhere near being one of the "richest 10%", should have no objection to its applying to me. In the longer term governments, including ours, need to close tax loopholes, abolish tax havens and pursue avoiders and evaders with the same vigour and enthusiasm that our government currently applies to so called "benefits cheats."

In short, there is no financial problem, just a failure in fairness and a lack of political will to ensure that we really are "all in this together."

Leadership vacuum at G20 summit

Gordon Brown was ridiculed when, by a slip of the tongue in the House of Commons, he appeared to claim that he had "saved the world" at the London G20 summit. Even so, it is generally agreed that by his determined leadership he cobbled together a package which helped bring the banking crisis under control and averted a complete collapse

No such leadership has been evident at the Cannes summit, which appears to have been a crashing failure. Yet a remedy which would calm market turbulence and put the politicians rather than the speculators back in charge, a Tobin-type tax on all financial transactions, exists. What is lacking is politicians with the courage to grasp the nettle. Germany and France are in favour but, shamefully, Britain, dithers on the sidelines waiting for the US to give a lead.

Here was an opportunity for Cameron and Osborne to gain international status similar to that enjoyed by Brown. Instead they restrict themselves to giving patronising lectures to the leaders in the Eurozone on what they should do, whilst presumable privately heaving sighs of relief that they now have a scapegoat on which to lay the blame for the crass failure of their own policies.

It is fashionable and currently popular to heap scorn on Gordon Brown and pretend that his failings are the cause of Britain's present problems. But no-one of similar drive has emerged on the world stage stop the present drift.

Heads you lose, tails your lose - but only if you're at the bottom of the pile.

In the bad old Labour government days state welfare benefits and pensions were indexed in the following April according to the inflation rate in the previous September. One year, I forget which, the September inflation rate was so low that state pensioners received only a 75p increase. Even Labour was embarrassed, maybe more by the PR disaster than the plight of the pensioners, but, whatever the reason, Labour has promised that under them this should never happen again.

We Liberal Democrats promised in our election manifesto that such payments would be indexed according to a "triple lock" of wage inflation, price inflation,or 2.5%, whichever is the higher. To our joy this was accepted by the Tories and included in the Coalition Agreement. It was a bit of a let-down that the price inflation measure to be used was to be CPI rather than the normally higher RPI, but, even so, it wasn't a bad deal.

Even by this lower measure inflation last September was 5.2%. Pensioners and welfare recipients will still have to endure these increased costs for another six months before they get relief, but even so, it is something to look forward to.

Alas, George Osborne is alarmed and it is rumoured that instead of keeping to the agreement he is keen to adjust these payments to a six month average figure, which he hopes will be lower than the September figure

Well, our Liberal Democrat leaders have broken one promise and it could be years before we're allowed to forget it. Lets hope they have the guts to tough this one out. We must not connive with a government which seems totally incapable of tackling the bankers' bonuses and the near 50% rises of top CEOs, but as soon as those at the bottom of the pile strike it lucky, skim off their little bit of the cream.

Population bomb or Consumption Bomb?

The birth of the earth's seven billionth citizen this week has focussed predictable attention on the optimum size for the population of our planet.

Commentators on population matters have long been divided into "Isle of Wight optimists" and the "Malthusian pessimists." The former point out that we must get the issue into proportion. Large as it is, if you stood us shoulder to shoulder you could still get the world's entire population on an the Isle of Wight, so there's nothing much to worry about. The pessimists predict starvation and doom, as did the Rev'd T R Malthus in the 18th century. (The church's penchant for bad PR is nothing new.)

I tend to side with the Isle of Wight optimists. First, we are far from starvation point. If the world's food supply were divided equally between the seven billion there would be enough for 3 000 calories per person per day. In other words, if we all consumed our fair share we should all need to be enrolling for Weight Watchers. If 1bn people are starving and another 3bn hungry, the problem is one of distribution rather than numbers or resources. The real problem is one of coping with "waste", both natural and chemical, and the side effects of our industrial processes (pollution, greenhouse gasses etc.)

The truth about population size is that there is no acceptable method of doing much about it in the short run. Yes, we can make contraceptive methods available worldwide, and, more expensively, expand the most effective contraceptive method of all, girls' education. But forced methods such as the Chinese "one child" policy and the sterilisation programmes tried in India in the 70s and 80s are neither effective not acceptable.

Happily the long term solution is inbuilt. As poorer countries develop and children become expensive the population will control itself, as has already happened in the rich world. So welcome, little seven billionth citizen: you have entered an environment furnished with enough for everyone's need. Now we all need to work hard to make sure that you get your fair share.

100(?) Economists and Plan B (2)

As loyal follower Chris rightly points out (see his comment to "100 Economists and Plan B [1]"), the 100 may be a slight overstatement, as two of them, Prof Malcolm Sawyer of Leeds and Dr Pritam Singh of Oxford Brookes, appear on the list twice. However, as my former students and colleagues will acknowledge, I have never claimed that economics is all that precise a science: we look for trends and tendencies. The French, as usual, have a word for it,une centaine, which means "about a hundred."

The centaine make five specific proposals for their Plan B:

1. reversing public sector cuts:
2. directing quantitative easing to a green new deal;
3. increasing (welfare) benefits;
4. a British investment bank;
5. the introduction of a financial transactions tax.

I'm proud to say that, although I have never claimed to be a leading economist, all but the last of these appear in my own Plan B, posted on the 9th August. In a fit a absent-mindedness I seem to have failed to mention a financial transactions tax, but have advocated that on several other occasions so, though now retired, and never at the "cutting edge," I do feel reasonably "up to speed."

I do quarrel, however, with the leading economists' advocacy of quantitative easing, even if it is specifically directed at a green new deal. I should prefer direct government expenditure. Both that and quantitative easing risk fuelling inflation, but, of the two, direct expenditure is more subject to control.

It is heartening to see, in a letter to yesterday's Guardian, that a group of leading Liberal Democrats have also at last come to the conclusion that "enough is enough," that we should stop supporting the coalition's disastrous austerity programme and support the Compass Plan B.

Plot for a radio play

I offer his plot gratuitously to any author writing for Radio 4's Afternoon Theatre.

Scene 1: Heaven.

God notes with approval the work of St Paul's Institute in debating and producing reports on a "more excellent" New World Order, but fears few people are listening. He calls on His advisers, and they decide to inspire groups of young, trendy and attractive activists, good communicators all and with similar aims, to hold demonstrations.

Scene 2: major cities in the World.

Activists get together, not necessarily recognising that they are being inspired by God. They decide to take on the principalities and powers of the financial world whose activities are making poor people poorer. The London activists decide on a demonstration outside the Stock Exchange.

Scene 3: the London Stock Exchange.

God hardens the hearts of the Stock Exchange Council, so that they refuse to allow the activists to demonstrate outside their Exchange. God then inspires the activists to move to nearby St Paul's Cathedral instead.

Scene 4: Heaven

God rubs His hands in anticipation. Surely this combination of youthful enthusiasm combined with the intellect and wisdom of the current leaders of His church in England will make everyone listen and His Kingdom "on Earth as it is in Heaven" for which thy all claim to yearn will be established any day now.

Scene 5: The activists set up camp outside the Cathedral.

Scene 6: Huge numbers of police arrive to "protect" the Cathedral but a holy priest asks them, with an ironic twist, to move on.

Scene 7: The English speaking world enjoys the irony, which is well reported, and recognises that the Church is on the side of the poor.

Scene 8: Heaven.

God pats his stomach in satisfaction: the plan is working and the "Kingdom on Earth" may be just around the corner.


Scene 9: the Cathedral Chapter House.

The principalities and powers of the ecclesiastical establishment fail to recognise that his opportunity is heaven sent and, like the principalities and powers of the financial world, decide to put short-term financial gain before the long term achievement of the Kingdom they espouse. However, they realise that action against the activists will be unpopular with the masses. They recall the example of Pilate, and decide to shift the blame elsewhere, in this case onto the most popular contemporary scapegoat, "health and safety regulations."

Scene 9: outside the Cathedral.

God's senior representative in London, to whom few people listen, bizarrely offers to be the mouthpiece of the demonstrators if only they will go away.

Scene 10: Heaven.

God sighs. He is back where He started. He accepts the failure of his cunning plan, and calls his advisers to devise another mysterious way, His wonders to perform.

Scene 11: conclude as you wish.

100 Economists and Plan B (1)

I haven't actually read these proposals which I understand are set out in today's "Observer" but one of our "followers" Phil Pavey, has this to say in a letter with he hopes wil lbe published in tomorrow's "Guardian." I headline it s (1) as I'm sure I shall have something to add myself when I see the proposals. (I don't take the "Observer" as it takes me all weekend to read the Saturday "Guardian.)

‘Plan B’ published by 100 prominent economists in Sunday’s Observer deserves the support of all my fellow Liberal Democrats. The current government policy of cuts to halve the deficit in four years is about as sensible as sacrificing everything to halve your mortgage in four years. The degree of resultant self-deprivation would be likely to harm your health and so destroy your ability to earn and pay down your debt. In May 2010 the Liberal Democrats reverted to the fiscal orthodoxy of Montagu Norman which caused the agony of the 1930s. They should heed this Plan B which recognises that the deficit is only the symptom of the real problem, which is a recession and 2.5 million people in enforced and expensive idleness.

Yours sincerely

PHILIP PAVEY

"Stand up, stand up for Jesus..."

Thank goodness there is at least one senior clergymen of the Church of England prepared to "Stand up for Jesus" or, more prosaicly, for what Jesus stands. The protest immediately outside St Paul's was a heaven-sent (you can take that literally or metaphorically) opportunity for the Church to demonstrate its relevance.

Rather than grasp the opportunity to show the Church as faithful to the teachings of Jesus, our leaders, with the exception of Giles Frazer, have emerged tainted with hypocrisy. The initial appeal to "health and safety", an attempt to shift responsibly reminiscent of that of Pilate, is shown to be false as the Cathedral has now opened with the "camp" still there. Subsequent official statements showed the Cathedral management's primary concern to be their loss of income.

How different would be our Church's reputation if the Frazer approach had been followed, an accommodation made with the protesters for ease of access, and the Church seen to be a willing partner in promoting a debate on the creation of an economic order based on something other than short-term greed and self aggrandisement. After all, isn't that one of the principal reasons for its existence?

Happily our current top cleric, Rowan Williams, does have the courage to wrestle " against the rulers of the dankness of this world." Unhappily there are rumours that he is contemplating jacking it in and retreating to the relative peace and calm of an Oxbridge college. I hope he will tough it out (just as I wish Ming Campbell had toughed it out), but if and when a vacancy at Canterbury arises, I'm sure Giles Frazer will now be in the frame.

Lower case liberal's halo dimmed

Ken Clarke is often lauded, or dammed, as the fifth Liberal in the cabinet, but his decision to impose mandatory minimum sentences on certain crimes is a sad reversion to the Tory stereotype. With all their faults we have an experienced and generally competent judiciary, and it should be up to them, not politicians seeking to appease the Daily Mail, to decide, having heard all the evidence, what punishment, and rehabilitation, is appropriate to each individual criminal. There are always exceptions to prove any rule.

Measures to increase the certainty of getting caught, rather than simply ratcheting up the punishments, are the way to reduce crime. Clarke's earlier remarks about trying to develop constructive ways to reduce the numbers in prison, ("an expensive way of making bad people worse" to quote an earlier Tory,) are more appro0riate for a liberal, even a closet one.

Parliament

In the Epilogue to his one-volume gallop through English history Simon Jenkins, having discussed "game changers" such as Cromwell, Walpole, Chatham, Peel, Disraeli, Gladstone and Lloyd George, concludes (p354): "If there is one hero in this book, at least until the twentieth century, it is parliament."

His conclusion could doubtless be debated by historians, but there is no doubt that Parliament has played a crucial role in creating our present society. If we are to continue to develop our society on liberal and tolerant lines, parliament, rather than allow itself to be sidelined, should continue to be refreshed, reformed and made relevant to contemporary conditions.

An important first step has been made in this direction by the long-overdue achievement of a fixed term for parliaments. Further reforms are needed to:

*further enhance the power and importance of committees;

*reduce the number of MPs committed to supporting the government because they are on the "payroll";

*turn question time, for ministers as well as the prime-minister, into genuine question and answer sessions instead of a bear-pit exchanges of insults;

*and, of course, electoral reform, choosing members by single transferable vote in multi-member constituencies rather than the present largest minority system.

Jenkins takes the view that England has thrived in the past because, essentially, we have developed through representative democracy, however imperfect, rather than populism or charismatic leadership.

Modern communications technology makes populism superficially attractive, and moves to have directly elected mayors and police commissioners place the emphasis on personalities and encourage the promulgation of simplistic and normally erroneous solutions to complex problems. There is already far too much emphasis on the personality of the prime-minister and too little on other ministers, their policies and collective government.

I hope at least one MP in yesterday's debate had the sense to argue that we should not be having any referendums at all, on Europe or any other issue. Referendums have been correctly described as devices used in less democratic countries to obtain spurious legitimacy. They should have no part in our representative parliamentary democracy.

Happy United Nations Day

Today is United Nations Day, though no-one seems to be taking much notice. During the first 20 minutes of the Six O'clock News on Radio 4 this morning it wasn't mentioned, nor in the review of the daily papers.

The 24th October marks the anniversary of the signing of the Charter of the United Nations, and in 1971 the UN requested that it should be observed as a public holiday by all United Nations member states. I'm not aware that any country does, so here is an opportunity for those so desperately anxious for Britain to give a lead actually to give one. Much more sensible, forward looking and constructive than the Neanderthal proposal to transfer one of our May bank holidays to Trafalgar Day.

The UN is imperfect and desperately in need of reform but it is our main hope for a replacing the force of arms with a worldwide rule of law. Measure to focus on its aims and to try to re-create the vision with which it was created would be a constructive contribution to the building of a more civilised world.

Anti-capitalist or Pro-Justice?

The Lord Mayor of London, is reported to have complained that the protest outside St Paul's Cathedral is not a positive protest for jobs but " 'anti-this' and 'anti- that' (so) it's difficult to get a handle on how to respond." (Guardian 22/10/2011). This is not Boris Johnson but a Sir Michael Bear, who is Lord Mayor of the City of London. According to its website he is elected for one year, though they don't say by whom, and is, they claim somewhat improbably "apolitical."

According to Polly Toynbee's summary in the Guardian on 18/10/11 (yes I know that if I were a half-decent observer I should go for primary sources, but I haven't time) the occupiers believe;

1. That the cuts are neither necessary nor inevitable.
2. That regulators should be independent of the organisations they regulate.
3. That our democracy should represent the people rather than corporations.

and they support:
4. Global tax justice.
5. The strike by public service providers on 30th November.
6. The student strike on 9th November.
7. Actions to defend our health services, welfare, education and employment.
8. Actions to end wars and arms dealing.

That sounds a pretty positive manifesto to me and I subscribe to most of it. (I have reservations about the public service strike, which seems to be mainly about pensions, but that's a subject for another post).

In my view the Church would be fulfilling its mission of trying to bring about the Kingdom "on earth as it is in heaven" if it were solidly behind the movement rather than hiding behind weasel words of "health and safety." I also regret that the BBC reports the "health and safety" issue as a fact rather than an excuse.

Church puts Mammon before God.

When Giles Fraser, Canon Chancellor of St Paul's Cathedral, asked the police rather than the protesters to "move on" last week I felt proud to be a member of the Church of England. Now, apparently, the Church has changed its mind and the Dean of St Paul's, Graeme Knowles, has asked the protesters to leave. He is reported as citing "health and safety" as a reason, but is also concerned that access for potential visitors could curtailed (and in half-term week they can be a nice little earner.)

As the protesters seem a reasonable and peaceful lot it should not be beyond the wit of the two causes to negotiate an impediment-free passage so that the Cathedral can collect its whacking entrance fee.

There is little point in the Church reciting, or in St Paul's case, singing beautifully, every day about "putting down the mighty from their seats and exalting the humble and meek" if, when a group unites to try to do exactly that, it is they, rather than "the rich" who are "sent empty away."

Yet another vote of confidence in Keynesianism

My very good friend TGE John Cole, MLE, has pointed out via an Observer article by Bill Keegan on the 16th October (sorry,can't get the link ting to work)a pamphlet (hurray, it is now) by Oxford Professor Simon Wren-Lewis entitled "The Case Against Austerity Today." This pamphlet is only nine pages long, is highly readable and highly recommended for anyone who needs authoritative academic assurance (rather than taking Keynesian Liberal's word for it) that the government's present policies are misguided and dangerous, and that the alternative of a Keynesian fiscal stimulus in the UK is urgently needed, perfectly possible and, indeed, the only sensible thing to do.

Happily for those suffering the worst from the present ideologically motivated cuts, and particularly the near one million young unemployed, there are signs that at least the Liberal Democrat part of the government is beginning to see the light. Vince Cable now admits that a double-dip recession is more than possible and there is talk of expenditure on the infrastructure.

The reasons given for a possible change in policy are the problems of the eurozone and the "unexpected" rise in energy prices rather than an admission that the policy has been wrong from the start. However, we can forgive a face-saving formula if the correct policies are now implemented and hope that, although late, they are not too little.

Testament of Yoof, 3

For the background to this post please see Testament of Yoof 1

Fourthly, a Liberal is a Rationalist.
He will base his arguments on facts rather than emotion. He thinks with his head and not his stomach. Thus he is not hampered by delusions of imperialistic grandeur, nor attachment to a dogma that is already out of date. Hence to improve industrial relations he advocates, along with Co-ownership, Works Councils, rather than silly threats of penal sanctions against Trade Unionists which experience in other parts of the world shows simply do not work.

Well, forty years later I certainly stand by all of that, though once again it is interesting to see the emphasis on industrial relations, indicating a time when manufacturing industry was a much more significant part of the economy.

Around that time I was studying some social psychology and came across a thesis that purported to show that about 25% of the population were rational altruists. If I remember correctly the point of the thesis was that this 25% remained constant whether the populations were measured at age 25, 35, 45 etc. so, if rational altruism is equivalent to maturity, then we don't mature with age. A longitudinal study was required to confirm whether or not the composition of the 25% remained constant.

Be that as it may, I have since believed and still believe that most of those 25%, rational in that they were prepared to work things out rather than stick to tribal loyalties, and altruistic in the sense that they were prepared to give at least some consideration to the welfare of society as a whole rather than pursue mere self-aggrandisement, were and are potential Liberal voters. Of course, in order to garner their permanent support we need to tell them what our beliefs and principles are as well as prove ourselves worthy and successful "pavement politicians."

Unfortunately there are still a lot of "delusions of imperialistic grandeur" around, hence all the huffing and puffing about Dr Fox's antics being a "threat to national security," though I suspect the Labour leadership, if not their followers, have abandoned much of their "outdated dogma." Equally unfortunately, although Tony Blair toyed for a while with the "stakeholder society" industrial and commercial partnership has made little progress, and, alas, we don't now hear much about it from the Liberal Democrats either.

My own belief remains that a revision of company law, so that all firms are required to take into account the interests of their workers, customers and the communities in which they operate, is still urgently needed. As long as the profits of shareholders remain the sole formal objective of operations we shall not create a society "at ease with itself."

A more robust, and a more enlightened, age?

From page 212 of Simon Jenkins's "Short History of England":

"The so-called south Sea Bubble burst in September that year (1720) and stunned the nation . Thousands, mostly in London, were ruined and the Riot Act had to be read in the lobby of parliament. Stanhope ("first" minister) had a stroke in the House of Lords. The postmaster general took poison and the chancellor of the exchequer...was thrown into prison. It was proposed that bankers who had loaned against the (South Sea Company) shares be 'tied up in sacks filed with snakes and tipped into the murky Thames.'"

And also perhaps more enlightened. From page 216, quoting the younger Pitt:

"...it (is) dangerous to our liberties and destructive to our trade to encourage great numbers of our people to depend for their livelihood upon the profession of arms."

Messers Fox and Werritty please note.

Unequal Britain

A few days ago I read that a Lord Hunt of Wirral is the "front runner" to become Chairman of the Press Complaints Commission. I am sure he is eminently qualified for the post, which doesn't seem to me to require any particular expertise (it can't be al that difficult to decide whether something is genuinely in the public interest, or just of prurient interest to the public and therefore likely to sell more newspapers) but am appalled that if he gets the job he will be paid £170 000 a year for a three-day week.

Lord Hunt of Wirral is 69 years old so presumably already receives his Old Age Pension of £102.15 a week (£160.65 if he has a partner), assuming he has a full record of stamps. He will receive his £200 winter fuel allowance and free bus pass whether he has paid his stamps or not. In addition he is a former Tory MP so will have a generous pension for that. He is also a former Minister and may even get more pension for that - I don't know. In addition, Lord Hunt of Wirral is a member of the House of Lords, so can claim £86.50 for every day he attends (I believe he doesn't have to do anything - just sign the book) plus an overnight allowance of £174 as he lives outside London, which, being "of Wirral" he presumably does.

So what on earth does he need an extra £170 000 a year for, over £1 000 for each day's "work" even if he does three days for every week in the year? Even more intriguing, since all his needs are already more than comfortably supplied, what on earth is he going to do with it, other than shore up further advantage and privilege for his children and their children if any.

Perhaps I'm being unfair and he'll give it to Oxfam, but it seems to me a nonsense for the public purse to lavish further wealth on the already well-heeled whilst expecting job seekers to fire off application after application for non-existent jobs and remain keen, enthusiastic and dedicated while they survive on £67.50 a week.

UK Crisis? Maybe... but where's the real crisis?

In an article on the effects of the economic crisis on the morale of we UK citizens Guardian columnist Marina Hyde uses such phrases as "weird formless terror," "the horrors still to come," "the cataclysmic event around the corner," and "vague inchoate dread." Little is to be gained from this wild exaggeration of the true state of affairs. Even if our economy will take several years to return to our 2008 level of output (when. as I recall, we lived extremely comfortably), we continue to be extremely rich. With a bit of courage from the government and a modest bit of sharing no one need suffer at all. If some of us need to start shopping at Aldi rather than Sainsbury's, tough, but there's absolutely nothing to justify M/s Hyde's hyperbole, and the Guardian should be ashamed for printing it.

Unfortunately large parts of the world are suffering genuine hardship from the financial crisis. The World Development Movement (wdm.org.uk)points out that that, when the housing bubble burst in 2007/8, the get rich quick monetarist "masters of the universe" turned their attention to speculation in food futures. As a result the prices of cereal crops have risen by 80% or so:a minor inconvenience for us, who spend around 10 to 15% on our incomes on food, but disastrous for those in the poor South, where families typically spend over 50% of their incomes on food, and amongst the very poorest, 90%.

As a result, many parents cannot feed their families. Children, already undernourished and with few reserves, are dying. This generates genuine "inchoate dread." Instead of making such a fuss about what, with sensible policies which we are rich enough to implement without difficulty to ease our own situation, our politicians should be taking urgent steps to haul into line the speculators whose greed and amorality is causing genuine, present day "horror" among millions of the most vulnerable.

Quantitative Obstinacy

About 20 years ago someone, (I forget whom, but the quote used to appear on NUJMB economics exam papers,) said that trying to steer the economy using monetary policy only was like trying to play golf using only one club.

Not only is it a "one club" policy, but it is an ineffective club. Expanding the money supply, which is what we used to call Quantitative Easing before this fancy new term was coined, is an ineffective method of stimulating the economy for two reasons and, in the current circumstances, is also highly dangerous.

It is ineffective because:

1. There is no guarantee that the money will be used for useful employment-creating purposes. When the Heath government tried it in the early 70' it mostly went into a commercial property boom. In 2008 the banks used the money to shore up their balance sheets rather than lend if for investment. What lending there was went largely into speculation in commodities rather than real investment.

2. Keynes likened monetary expansion as a means of economic stimulation to pushing on a piece of string. In the more prudent 1930s households would not borrow if they could see no means of paying back. That may be less true today, but, even without David Cameron's non-exhortation, households may be more concerned to pay off their credit cards rather than take out new debt.

More crucially, then and now firms would not borrow to invest if they see no demand. Large firms are apparently awash with cash at the moment but will not use it for productive investment when all the signs are for a world economic slump.

Quantitative Easing is highly dangerous because, if an when the economy does pick up, the excess money is likely to lead to high inflation. The 1950s explanation of "Too much money chasing too few goods" precisely describes the likely situation. Of course, if the Bank gets its timing right and does some nifty "quantitative tightening" that problem could be averted, but timing is not one of the Bank's strong points.

The obvious alternative solution is, of course, Keynesian government spending on public works: the infrastructure, green energy, clearing brownfield sites, social housing... and, if they can't think of anything better, burying the pylon lines. This policy would ensure that the money was spent on useful productive projects and also that most of it remained within the economy and, when workers obtained employment they would spend their wages and create additional demand via the Keynesian multiplier effect.

The government ignores history and has obstinately excluded this fiscal option. There are, perhaps, signs of a change of heart, and it may be that George Osborne's wheeze of "credit easing" is a method of squaring the circle and putting money where it will do most good without losing face. We shall see.

Reform of Second Chamber

According to Unlock Democracy a joint committee of both Houses of Parliament is at present considering reform of the second chamber and graciously requesting submissions from we, the public, which, again according to Unlock Democracy, must be both electronic and on paper (presumably just to make life more difficult). We have until 12th October.

The easy way out is to go to this site to answer an electronic questionnaire, and this site to send them a letter.

If you're short of ideas, my own submission was along the following lines.

Dear Committee Members,

I believe that a fully elected second chamber is the only legitimate authority in a modern democracy. The method of election should be different from that of the Commons. Whilst the Commons continues to use the largest minority system (misleadingly known as FPTP, but, if you think about it there is no post)I suggest PR by STV in constituencies based on the Wales, Ireland and Scotland, plus the regions of England.

Should the Commons adopt STV then the second chamber could use an open list system. The closed list system should not be considered as that tilts the balance of power in favour of the parties rather than the electorate.

As the Commons now has a fixed term of five years I suggest eight for the the second chamber.

If it is necessary, in order to persuade opponents to get rid of the present anachronism, to have some appointed members, then these should be no more than 20% of the membership. They should be selected by an appointments committee which contains no politicians and is as far as possible devoid of political influence. Anyone who has ever held or stood for election to public office should be ineligible for selection. The second chamber should not be a refuge for retired or failed politicians.

I believe the second chamber should be called a Senate and we should stop talking about the "reform " of the House of Lords. We want to replace it, not reform it.

For the time being the powers of the second chamber should remain as at present, with a commitment to revise them in, say, ten years' time, when we see how the new system is working.

Yours faithfully,


Please feel free to adopt or amend any of the above, and add comments for the benefit of others, but do please write, before 12th October. While the Tories fool around with the alleged effects of cat ownership on deportations it is important that some of us get on with serious politics.

Mansion Tax or more Council Tax bands?

The following letter is self-explanatory:

27th September, 2011.
The Rt Hon Vince Cable M.P.

Dear Vince Cable,

I believe you were too dismissive of my suggestion, put to you at the Guardian debate last week, that, instead of a Mansion Tax, we should simply slap a few more Council Tax bands on top of the existing ones, which in England presently stop at Band H (over £320 000.)

My argument is that your proposal of a tax on “mansions” worth over £2million (though I preferred your original proposal of over £1m, from which our party cravenly back-tracked) is politically unpopular because it is both a new tax, and appears vindictive in singling out the very rich indeed whilst letting those almost very rich indeed off the hook.

The advantages of extending the Council Tax bands are that:

1. It is merely an extension of an existing tax, and
2. It would apply progressively to the very large number of houses valued at between £320 000 and £2m (and why stop at £2m?)

Your objection, given at the debate, that the largest part of such an extension would accrue to a handful of wealthy London boroughs is invalid, in that there are plenty of houses worth more than £320 000 outside London – there are even some here in Kirklees. The excesses of revenue received by more wealthy areas could be re-distributed to poorer areas by an equalisation scheme.

The only valid objection I can see to this proposal is that, ideally, it would involve a re-valuation of all properties, from which, because it was misrepresented as a precursor to increased council taxes, the Labour government shied away. However, we are the party of honest politics, so should get on with it. If we too , choose to duck this issue, then it should not be beyond the wit of your civil servants to impute a 1992 value to all properties worth above £320 000 at 1992 prices.

Of course, as good Liberals we should see this as a temporary measure pending the long overdue introduction of site value taxation on all land. This will probably require a government in which we Liberal Democrats are the main party, so may be some time off.

Yours sincerely,



Vince Cable's department promises a reply within fifteen days. Watch this space.

Respect

This is a post-script to the previous post, Upwardly Mobile Tadpoles.

One of things things I do in order to try to keep senility at bay is try to memorise things. For many years this took the form of brushing up my schoolboy French, but that has now been put on the back burner (mettre en veilleuse)at a disappointingly modest level. Now my efforts centre round taking small parts with not many lines in plays.

In between plays I've been brushing up on selected verses of Gray's "Elegy", one of the poems I "did" for "O" level. This stanza, slightly amended, is, I think, highly relevant to the equality debate:

Let not th'Ambitious mock our useful toil,
Our homely joys and destiny obscure;
Nor grandeur hear with a disdainful smile
The short and simple annals of the poor.

In a word, in a truly egalitarian society, "all sorts and conditions of men" (and women)deserve, and will receive, respect.

Upwardly mobile tadpoles

All the parties, and even the egalitarian Polly Toynbee, are currently obsessed by the concept of social mobility: that everyone, regardless of their background, should have the ability to rise. This is essential a Tory concept as it accepts as an ideal a hierarchical society. Liberal Democrats should have no part in it.

In the context of social mobility equality of opportunity means equal opportunity to become unequal. Surely for Liberal Democrats the ideal is for everyone to have an equal opportunity to develop their full potential, be it barrister or bricklayer, plasterer or politician, businessman or blacksmith (or both, as with Christopher in The Archers), or even just a successful parent with 2.4 children in a decent council house near a competent school and a bus stop with a reliable service

No one puts this better than R H Tawny in his celebrated Halley Stewart lectures on Equality, given in 1929

It is possible that intelligent tadpoles reconcile themselves to the inconvenience of their position, by reflecting that, though most of them will live and die as tadpoles, and nothing more, the more fortunate of the species will one day shed their tales, distend their mouths and stomachs, hop nimbly on to dry land, and croak addresses to their former friends on the virtues by means of which tadpoles of character and capacity can rise to be frogs.

Page 142, Allen and Unwin edition

Rather than upward mobility, Liberal Democrats should be looking to build a society in which: "The aristocrat who banks with Coutts, The Aristocrat who cleans the boots...They all shall equal be." I know it didn't quite work out in Barataria, but Liberal Democrats are nothing if not optimistic, as our Birmingham conference demonstrated.

Anonymous fame

In his G2 "review" of the Liberal Democrat conference (23/09/11) Alexis Petridis writes:

"The moment when a lone voice shouts:'Rubbish!' as Danny Alexander suggests Gordon Brown spent too much turns out to be a dizzying pinnacle of insurrectionary excitement that the conference will never scale again."

I am happy to acknowledge that the lone voice was mine and sad that no other Liberal Democrat was prepared to express dissent to a blatant distortion of the truth. The prime cause of the current expenditure deficit is not Labour profligacy but the collapse of revenues resulting from the financial crisis which in its turn was caused by the financial deregulation which is part of the monetarist creed with which almost everybody went along. True, Vince Cable uttered a few words of caution in 2006, but as far as I can remember that was more to do with private rather than public debt, and I don't recall any sustained Liberal Democrat campaign to urge people to cut up their credit cards and live within their means.

At the 2010 election we promised more honest politics. Latching on to a dishonest myth, however popular and convenient, will not restore the public's confidence in politicians and the democratic process. I understand that today's headline in the Daily Mail calls upon the Labour Party to apologise for the economic mess in which it claims they left the country. If Liberals and the Daily Mail are singing from the same hymn sheet we have cause for worry.

Petridis is wrong, however, to think that there was only one expression of dissent. Alexander's claim that an immediate coalition and savage cuts were necessary to avoid the fate of Greece brought from me a cry of "Nonsense!", and his insistence that the government will not alter course (as the economy stagnates and unemployment rises) a cry of "Shame!" Again, alas, a lone voice. Where were the other Liberal Democrats who are proud to be inheritors of the traditions of Keynes and Beveridge?

For my own suggestions of how the course should be changed please see My Plan B post (09/08/2011)

Whilst on the subject of the Labour record, it is worth remembering that, with all his faults (and especially PFI) Gordon Brown is credited with taking the lead in organising prompt and effective international action which possibly averted an even worse financial crisis in 2008. There is no evidence of similar action by any member of the present cabinet. Again, my own suggestion is that the G8 finance ministers should get together and slap a Tobin-type tax on all financial transactions with effect from this-afternoon. Maybe I do George Osborne and Danny Alexander a disservice and they are working on this at this at this very moment, but I'm not holding my breath.

Liberal Democrat Conference; morale booster

Liberal Democrat activists are certainly a hardy lot. In spite of the loss of about one third of our (their) council seats last May endless repetitions of our achievements in government:

* pensions linked to earnings
* 880 000 low earners out of income tax
* the pupil premium
* the green investment bank
* loans rather than up-front payments for part time students
et al
were endlessly cheered. Surprisingly, fixed term parliaments, which I feel in the long run may be the most important achievement, weren't mentioned all that often.

There were also, unfortunately, endless repetitions of the half-truths, if not the downright lies, that the public deficit is all the fault of Labour's profligacy, and that savage cuts are necessary to avoid the fate of Greece. Polly Toynbee's headline, "Balderdash and Mendacity " (Guardian 20/09/11 - sorry, link thing is not behaving itself) may be a bit strong, but really she has the conference bang to rights

Happily, light may be beginning to dawn. Vince Cable called for "stimulus" along with stability and solidarity, and there were hints of small gobbets of extra expenditure.

I've just heard on the "Today" programme an American whose name I didn't catch say that normally he was in favour of balanced budgets but current American attempts to lower their interest rates even further are a waste of time and that "fiscal stimulus" as advocated by "your Mr Keynes" is what is needed. Maybe the world is learning.

Brownfield sites - a public-private partnership.

A must-read article by by Simon Jenkins, a Guardian columnists who is also chairman of the National Trust, provides a devastating critique of Eric Pickles's plans to "reform" planning laws in order to release protected greenfield land for housing. Among other things Jenkins claims that existing brownfield sites are estimated to have room for a further 3m houses.

A friend of mine who specialises in housing finance tells me that the major reason why builders prefer to build on previously undeveloped land is that the risk is substantially less. Building on brownfield land involves the risk of subsidence due to the possible collapse of old drains and culverts, seepage of noxious gases and other undesirables. If local authorities were to clear and prepare brownfield sites for building, and guarantee them, that would produce a more level playing-field.

That seems to me to produce an excellent opportunity for a viable public-private partnership. As a bonus the public works involved in clearing and preparing the sites would produce an income injection into the economy which would help create the demand for the houses to be built.

Changes in the planning rules may seem small beer compared with the effects of businesses bankruptcies and public services cuts caused by the government's misguided economic policy. But the effect of these falls mainly on present generations. A free for all by greedy developers looking for short-term profit will damage our green and pleasant land, and the quality of life of future generations, for centuries.

The Banking Firewall

George Osborne's repose to the Vickers proposal to create a "firewall" between the retail and "casino" activities of the banks is perhaps more robust than many feared. However, several questions remain.

Most obvious is: why on earth do we have to wait until 2019?. It is already four years since the run on Northern Rock. Four years after the Great Crash of 1929 the Americans actually introduced their Glass-Seagall Act which created a similar separation, not proposals to think about it. It is the repeal of the Glass-Seagall Act in 1999, with similar deregulation in the UK, which is largely responsible for our present financial woes.

Why therefore is there to be a seven year pause: time for the banks to find ways round the new regulations? VAT has been increased, benefits are being cut and public services slashed now, not in seven years time for us to get used to the idea. Just to put things into perspective, the recent riots are said to have cost the UK taxpayer £133m. Such rioters as have been caught and convicted have been punished now rather than been given seven years to sort themselves out. The cost of bailing out the banks is said to be in excess of £850bn but the bankers do get their seven years potentially to wriggle out of the consequences of their folly. So much for justice and all being in this together.

A second question is to ask whether a "firewall" or "ring-fence" is enough. There's already a whole financial industry devoted to finding ways round new rules, and this area will provide another lucrative field. Vince Cable has advocated complete separation between retail and merchant banking activities, and he is probably right.

Much is made of the estimate that the cost of the proposals, if fully implemented, is said to be between £4bn and £7bn. £7bn is roughly the total paid out in City bonuses in 2010.

Testament of Yoof (2)

For the background to this post please see Testament of Yoof (1)

“Third, a Liberal is an Internationalist. He realises that the inequalities that exist in this country are nothing compared with the inequalities between this country and the developing world. He believes that our rich country should, as one of its highest priorities, play its full part in assisting the Third World in its fight for economic development. In practical terms this means that he will not only press for the raising of Britain's Aid Bill to 1% of our G.N.P., at once, but he will also fight for trade agreements which will help the poor countries , and against those (like the Labour Government's new Cotton Tariffs last year) which hamper them. "

Well, I certainly stand by all that. It is shameful, after forty years, how relevant it remains. As far as I can remember Britain signed up to the UN call for rich countries to devote 1% f their GDPs to development aid in 1967. Three years later Liberals were calling for this target to be achieved "at once." We still haven't got there though, to his credit David Cameron has agreed to honour the Labour government’s promise to reach the government's share of the target (0.7%) by 2013.
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Progress on the reform of the international trading system has been equally modest Still today international trade agreements, supervised by the World Trade Organisation, remain heavily skewed in favour of the rich.

However, a great deal has been achieved in bringing the subject of world poverty on to the political agenda, not least through the Jubilee 2000 campaign to cancel much Third World Debt. Unfortunately the promises made at summits are rarely honoured in full.. For example, Egypt, where more than 18 million people live below the poverty line, still has an international debt of $30 billion, much of it borrowed by Hosni Mubarak, not for development but to prop up his regime. Mubarak has been overthrown but the people of Egypt are still required to pay his debts. Details of a "Dictator Debt Day of Action” in London on the 31st October can be obtained from the Jubilee Debt Campaign.

That 50% tax rate

As every student of elementary economics will have been taught, there are two ways of analysing the effect of income tax on effort and enterprise.

One assumes that work is disagreeable and leisure is agreeable. All workers have to do some work but at the margin have the choice of whether to do a little bit more or a little bit less. The higher the net wage (ie after tax) the more attractive work becomes compared to leisure. This is the rationale for paying time and a quarter or time and a half for overtime. A high marginal tax rate reduces the net wage and makes work less attractive. Therefore the worker reacts by doing less work and enjoying more leisure.

The other analysis comes to the opposite conclusion. It assumes that the worker has in mind the income necessary to maintain his/her household's standard of living. Most households live up to their incomes. An increase in the marginal tax rate means that net household income falls. Hence the worker will work more in order to maintain the household standard of living (whereas under the first argument he would say something on the lines of "Sod this for a lark," work less and lower the household standard of living even further.)

There are flaws in both analyses. Both are couched in terms of hours worked and most workers don't have much choice: we are given a job with a stated number of hours and that's it (apart from the possibility of overtime, mentioned above.) Only part-time workers tend to have much flexibility on the number of hours worked, although, of course, some "full timers" can get a second, part-time (evening) job.

A more serious flaw, in my view, is that both analyses assume that the monetary reward is the only or most important factor in determining how hard one works. Beyond earning enough for the basic necessities, this is unlikely to be true for most people. Pride, the respect of one's colleagues, desire for promotion, doing a fair day's work for a fair day's wage, all motivate the employees. Entrepreneurs are similarly motivated, along with aims such as to maintain the reputation of a respected business, to increase the size of the business or market share, fame (for actors, singers, artists etc), to wield more power, gain in prestige, or even have enough to contribute to a political party and get a knighthood.

Empirical evidence suggests that marginal tax rates may affect the amount of work offered by part time "second income" earners (in earlier times usually housewives earning "pin money) but not many others. That high marginal tax rates discourage effort and enterprise is a convenient myth promulgated by the rich.

Personally I would keep the 50% tax rate, introduce it at a lower level and consider even higher rates for for higher incomes. Remember at present it is only paid once taxable income has reached £150 000 a year, Depending on allowances, that's around £3,000 a week. Over half the working population would be in the seventh heaven if they received that amount a month. If we really are "all in this together" then the rich have to play their part, not opt out of the society that enables them to be rich.

More peaked caps

Not long ago my fellow passengers on a bus journey were school children, boys and girls from 11 to 16 or so. They sat still, talked to each other quietly and most thanked the driver when they got off. I was so impressed that I toyed with the idea of writing to their head to congratulate him on their impeccable behaviour, with a request that he should not identify them publicly or it would destroy their "street credibility." Unfortunately, as with many generous impulses, I never got round to this.

Some weeks later I travelled on the same bus and the school children yelled loudly, insulted each other, used offensive language, horsed around and were generally an intimidating nuisance.

It was then that I realised that on the first bus was, in addition to the driver, a second bus company "official." He didn't inspect the tickets so I think he was carrying out some sort of survey. Whatever, it was clearly his obvious presence which accounted for the different behaviour of the young people.

Of course, in the high and far off times when most people behaved well on buses, and few, adults or children, put their feet on the seat opposite and if they did were promptly asked to take them off again, all buses had that second official, the conductor.

This incident came to my my mind yesterday when I read of proposals to close the ticket officers in a further 675 railways stations, and therefore leave them unstaffed. This will surely lead to more vandalism and hooliganism.

I do not feel it is illiberal or an advance of the police state to want more bus conductors, station masters, park keepers, concierges and other semi-official figures, with or without peaked caps, to keep a friendly eye on our public property and improve the quality of life in our public spheres. CCTV cameras are no substitute for the personal touch. At a time of high unemployment it is an obvious step to begin to re-introduce real live guardians of our public spaces.

Another cheer for Nick

Nick Clegg spoke out strongly yesterday against the lazy idea that the recent riots are all the fault of the schools and all that is needed is for the teachers to be tougher (hence fast-track in some former soldiers), teach traditional subjects in the traditional manner and and make the kids behave.

"Teachers are not surrogate mothers and fathers," said Nick. "They cannot do it all."

Blaming the schools for perceived social ills, from bad spelling through teenage pregnancies to hooliganism and rioting, is nothing new: in fact it has been around throughout my career, and possibly longer. I well remember, in the 1960s, when I was a keen union representative for the NAS (now the more politicly correct NASUWT) our general secretary, the formidable Terry Casey, forcefully pointing out that schools are often oases of virtue amidst deserts of immorality. (Mr Casey put it rather better than that: he had a way with words.)

However it is put, the truth remains. With or without the statutory act of "broadly Christian" worship at the beginning of each day (and what other organisations other than parliament attempt that?) schools try to develop the concepts of integrity, modesty, honour, loyalty, endeavour, reliability, tolerance, respect for others, sportsmanship, teamwork, the pursuit of truth, justice and the appreciation of beauty in a world motivated principally by greed,sex and self-promotion.

A respected deputy head for whom I worked used to ague, in relation to length of hair, dangly earrings and other items with which deputies are required to concern themselves, that "the school cannot be too far in advance of society." The same applies to the more important aspects of life. If society expects the young to behave honourable and decently then it must adopt those values itself.

Nick deserves another cheer for trying to block the idea that free schools could become "for profit" businesses. A pity he didn't stick the Liberal Democrat neck out even further and try to block the largely self-serving free schools altogether.

With firends like these...

The "revelations" in Alistair Darling's memoirs do nothing to enhance the British public's respect for politicians and the political process. Darling was allegedly a principal supporter of Gordon Brown over a long period, and a senior partner in government, but shows no hesitation in "slagging him off." What has happened to decency and loyalty? Clearly they take second place to self justification and the desire to make a fast buck.

On a slightly different plain, but equally demeaning and off-putting, the editorial in this week's Liberal Democrat News repeats yet again the tired and misleading mantra of "the economic mess this country had been left in by the previous Labour government." Yes, there is an economic mess, and it was created principally by the collapse of the unregulated capitalist banking system. Trying to pretend that the blame lies with Labour and its profligacy is an an unworthy distortion of the truth from a party that offered a more honest form of politics.

Cleaning up politics is a much larger task than cutting down on MPs' unjustified expenses. Loyalty, decency and honesty are all required.

I shall not be buying the Darling memoires. However, I have just received the third volume of those of Chris Mullin. I look forward to a good read which, if like the earlier volumes, will be "funny, fascinating - and free of malice."

Testament of Yoof (1)

A member of the Literal History Group is researching the Liberal Revival in the Batley and Morley constituency (as it then was) in the 1960s and 70s. He has unearthed an article I wrote as PPC for our Members' Newsletter in April 1970, and has asked me to what extent I'd stand by it today. Well, pretty much all of it, actually.

The article is rather long (members were assumed to have a longer attention span than in in today's "sound bite" era,) so I'll reproduce in in smaller snippets.

"In past issues of Contact I have tried to explain aspects of Liberal policy in detail. In this issue I should like to ignore, for the moment, the trees and examine the wood - the philosophical basis of Liberalism in the 1970s.

What then is a Liberal?

First a Liberal is a Radical. He believes that the world is a god place, but is wrongly organised at the moment, so wrongly that it cannot honestly be maintained as it is, as the Conservatives believe, nor can it be put right by a few minor adjustments here and there, as the Socialists now believe. A full and fundamental reorganisation is required.

Second, a Liberal is an Egalitarian. He believes that one of the major things wrong with this country is the concentration of power, privilege and property in the hands of the few, whilst the many have little share in the making of the decisions that shape their lives, and very little share in the products of their labour. Some have so little share that, despite our national prosperity, they are very poor indeed. This is the basis of the Liberal's belief in co-ownership in industry , which will improve the distribution of wealth, and comprehensive education, which will improve the distribution of opportunities."

Well, apart from the assumption that all Liberals are male, I stand by all of that. Indeed, in the forty years since it was written "Socialist" tinkering has become even more minor and conservative (vide Tony Blair), the "have nots" have become an even larger group with an even smaller share and, despite the advance of comprehensive education (hampered in my view because the schools are too big through of an over-emphasis on subject choice) opportunities are still very unevenly distributed, and there is much less industry for us to co-own

So a Liberal (Democrat) party with a clear vision of where it wants to go is even more necessary now than in the 1970.