Labour Hypocrisy

Labour's hypocrisy in choosing Hester's bonus and its condemnation as the subject of one of the Opposition Parliamentary debates is quite staggering. After all it was a Labour government which wrongly bailed out RBS and which settled the terms of Hester's contract. Miliband was a member of that government. His hypocrisy will rebound on him. It is also breathtaking that Miliband should have the gall to say that Cameron has sold us down the river on the fiscal union treaty. Much to my surprise and delight Cameron did not sign up to the treaty yesterday. From all the reports I read yesterday I thought he was going to cave in completely like Blair and Brown. Cameron has in effect though said that the eurozone countries can use the EU institutions to run the treaty process. Not to do so would look mean spirited. Generosity on that could be used as a bargaining chip on something else and one hopes that the government will have the guts to use it at an appropriate time and will not be pusillanimous about taking complaints to the ECJ if the eurozone countries abuse the latitude we've given them. Not that a complaint to the ECJ is likely to prevail, hell bent as it is on turning all EU members into one state by any means possible. Frankly if Miliband wants to have any authority on issues relating to either the EU or banking he needs to apologise profusely for not holding a referendum for the last treaty we signed up to and for having put this country into the truly dreadful economic mess we're in.  

Appeasement

It is deeply disappointing that Cameron is meekly going to accept the fiscal union treaty he refused to sign up to in December. On each occasion a situation like this arises our Government, to the fury of the majority of us, caves in. Is there some secret treaty that requires us to give in or is it our europhile civil servants that do the damage? Why won't anyone stand up for us and our way of life and democracy? We know the LibDems and Labour won't do so. Churchill we need you at this hour to combat the disease of appeasement. We do not want to be run by Germans who frankly have milked the so called periphery by selling hardware to them at deep discounted prices. In my book this is dumping and each time I see a German car it makes me sick to my stomach. Since the vast majority of cars on the roads these days are German I am sick to my stomach most of the time. Even my children have German cars. German selfishness is as appalling as the stupidity of the rest of us in letting them get away with this unfair competition which of course is directly the result of the euro. We must ensure that the euro sinks without trace for our own benefit and that of the so called periphery. To allow the euro to continue will inevitably lead to Spain and Portugal and perhaps other eurozone countries suffering civil unrest which must be much worse than what will happen with the collapse of the euro. Boris Johnson raises this question here. Of course another reason why the Germans and French are so keen on the euro being saved is because their banks have so many bad investments in dodgy sovereign debt which they are covering up. This is a scandal and I do not know why we don't exploit this to our own advantage. No doubt it would upset Mr Clegg if we were to do so but so what whilst he is looking at annihilation at the polls if an early general election were to be called. The last thing he wants is an election. If Cameron is serious about our position in Europe he must use Clegg's fear of losing the election to Britain's advantage. A small opportunity to repatriate some police and justice EU laws will arise in 2014. Open Europe have an interesting report on this that they have released today. After the climbdown on the veto I won't hold my breath that Cameron will do the right thing in 2014.    

Bonuses

Should Stephen Hester have his bonus or not? He was given a contract which entitles him to one and this contract is still seemingly in force. He is therefore entitled to one and the one he has been given only becomes cashable in 2014 and, being in the form of shares, the amount he can cash it in for will depend on the value of the shares at that time. Will he have to pay tax on the value of the shares at the time he receives the right to the shares or when he cashes them in? This could make a big difference to him. I have to say I have some sympathy for him. He was not responsible for the RBS disaster but has taken on a job for which he receives nothing but brickbats at what I am told is a salary that is less than anyone else would do the job for and certainly less than he would be paid if he were to leave for another post. Its competitors seem to think that RBS will have to revert to a commercial bank as it has no future competing with the likes of Barclays. The reason given to me for this view is that Sir Fred rashly gave all his officers above a certain pay grade final salary pension entitlements making it economically advantageous for these officers to remain in situ thus causing what I understand is called bed blocking. The effect of bed blocking will ensure that no bright and ambitious youngsters are going to even attempt to push their way through to  a position in the bank that they would otherwise have aspired to. They will go to work for banks where there is a more fluid career path. When I started off as a solicitor all those years ago a bonus was a rare and uncertain thing. You had to do something exceptional to get other than a tenner at Christmas and the firm you worked for had to have had a good year as well. Bonuses have now become something else entirely. They are more like deferred salary payments and certainly the employment contracts of investment bankers I occasionally advised on made it very clear that a bonus was always going to be paid - they only uncertainty was the amount although often a minimum amount was stipulated. Charles Moore in the Telegraph today has a good piece on Hester's bonus and the Coalition's honour here.

Sarko Needs Higher Platforms

Not content with getting us to subsidise their grossly inefficient farmers (thanks Ted Heath), the French now want us to subsidise their old age pensioners so that they can reduce their pension age to 60. The pension subsidy of course will come from the tax they want to impose on financial transactions which naturally hits us hard as 80% of the revenue raised in this way will come from the City. These are a couple of points from the manifesto of Francois Hollande, the socialist candidate for the French Presidency. I thought Sarkozy was bad enough but Francois Hollande, who also according to his manifesto, wants French farmers to be subsidised to an even greater degree, is even worse. This is simply madness and if anyone had any doubts about the need to leave the EU Hollande's proposals should persuade them that now is the moment to go. Archbishop Cranmer has another good reason for leaving the EU here. Hollande has stated that if elected President of France (at the moment he is way ahead in the opinion polls) he will want to re-negotiate the fiscal treaty that is due to be signed next Monday. He's not so keen on austerity and says the treaty should be more about growth and employment and changing the role of the ECB. He is going to have his work cut out trying to make Mrs Merkel change her mind and agree with him. It will be fascinating to watch the tussle from the side lines. If Hollande does win the election two things will happen (1) frog bashing will be back in fashion and (2) the euro will implode even more quickly than otherwise. This will not surprise the British of whom a majority, according to a poll, believe the euro will cease to exist, with one third thinking this will happen within a year and with two thirds thinking this will happen within five years. Having heard economist Gabriel Sterne of Exotix (specialists in illiquid bonds and loans) and formerly of the Bank of England and of the IMF on Jeff Randall Live last night my bet is that the euro will implode in a great mess this year.

Jagger and the Tories

Did Mick Jagger do the right thing by attending Boris Johnson's event yesterday rather than Cameron's? Is the Prime Minister underrated? Cameron certainly comes across as someone who deals in understatements which one assumes is deliberate and done in order to change people's opinions about the Tories being the nasty party. I think the understatement is now overdone and that he should become a little more passionate and prepared to go into greater detail about what he wants to achieve. The Tories are the party of low taxes and Osborne should take up Clegg's call for speeding up the process of increasing the personal allowance to £10,000. Clegg's statement that hedge fund managers paid less on their shares (by which he means dividends?) and on capital gains than a secretary on her income should be dismissed as the complete nonsense it is. Janet Daley has a good blog about this here. It is essential that there is a bit of passion at the top about the Union, Taxes, Welfare and long needed Reforms. The last thing we need is a technocratic government which it seems to me that coalitions often become because  coalition parties pull their punches in order to help their government survive. Nothing wrong with that so long as each of the parties remains true to itself. A show of some passion by Cameron on the issues he feels strongly about will help to improve the public's view of politicians so despoiled by the last Labour government. Peter Oborne has a very interesting and thoughtful article about the degeneration of public morals here.

Go for Growth

Ken Livingstone said apparently that the fare reductions he would put into effect if he is elected London Mayor would be paid out of the £729 million surplus lying around in the London coffers. Such surplus does not exist according to Fact Check and that if he were to cut fares the reduction would cost £1.12 billion so that he would have to make cuts elsewhere to pay for lower fares. Sounds to me like typical Labour economics all over again. Tory economics may not be that great but they are nonetheless significantly better than Labour's. What should the Tories be doing to bring down both the deficit and the debt burden? Lower regulation and taxes are seen as essential by some think tanks in order to kick start the economy. Others would add that we cease quantitative easing and begin to raise interest rates so that saving becomes more attractive again. If the government were to lift the regulation burden on small and medium size businesses in a meaningful manner e.g. by scrapping employment, planning and health and safety laws,  freeing employers from acting as unpaid collectors of taxes and having to file annual returns and accounts at Companies House, a good start would be made. The government should also carry out real cuts rather than cuts to future increases and stick to its guns on reforms including those to the NHS. The government should also stop saying we want the euro to succeed. It won't and it would be much better to say so and to tell the eurotrash elite to sort out its orderly dismantlement with all possible speed.

Explosions

Lord Irvine, Blair's first Lord Chancellor and author of the Human Rights Act 1998, has said that some of our most senior judges have misinterpreted the Act and that all that must be taken into account in deciding a Human Rights case is the view of the Strasbourg Court. He goes on to say that having considered the view of the Strasbourg Court UK judges may make their own decision on the case before them. Will the Strasbourg Court though accept a UK court's decision on appeal if it does not coincide with the views of the European court? I doubt it and so it seems that if we want to run our own affairs in the way we have for centuries we must repeal Lord Irvine's Act. It was clearly an otiose Act anyway enacted with the sole purpose of making Blair and his government look good and what has the result been? Disaster - unless, of course, you think it is right and proper that we should have to allow the radical cleric Abu Qatada to remain here amongst us. This obligation imposed on us of accommodating the extremists amongst us will in the end result in a change to the law. Tolerant we may be but there is a limit. There is a limit too to the public's tolerance of welfare benefits being paid to the likes of Firuta Vasile who the welfare appeal tribunal decided that by selling the Big Issue she was self employed and thus entitled to benefits of £28,147.60 a year. This after having lived here for all of about four years. Why did she come here? This is yet another example of the crass stupidity of the EU. There will have been no proper vote on whether or not to agree to this kind of charitable donation. Who makes these rules and why do we agree to them or allow them to be imposed on us? We cannot go on like this. Unless our politicians do something about these types of cases there will be a quite understandable explosion.  

Bonuses

Even the BBC is reported to be talking about having a cut price CEO when it replaces its present one. If implemented this sounds like a good idea which could help bring a touch of salary and bonus modesty to those companies where the senior executives have paid themselves huge rewards at the expense of their owners. The main culprits are the banks of course and the amounts paid to their CEO certainly stink. The CEOs of the two banks saved by the taxpayer should not be paid bonuses, although they will be with the government hiding behind the entity they set up to hold the taxpayers' shareholding. Will though UK executives get to spend their ill gotten gains or will the financial tsunami coming our way wipe them out along with the rest of us? Ambrose Evans-Pritchard has a chilling article in the Telegraph to day here that makes for frightening reading and makes one wonder how those responsible for bringing this country to its knees should be made accountable for their grievous failures and what we should do to prevent the same thing happening again. No matter what is said about increasing transparency there are too many layers of government which lead to greater opaqueness and thus make it impossible to tell what is really going on and who to praise when things go right and who to blame when things go wrong. One layer of government holding us back, costing us a bomb, opaque in the extreme and unbelievably undemocratic is the EU. We don't need it and we'd be better off out. John Redwood has a good blog on this here.

The Argentine

Argentinian socialists or fascists or nazis or whatever you want to call them have marched on the British Embassy in Buenos Aries and burnt Union Jacks. They are particularly upset because David Cameron called them Colonialists which of course describes admirably their attitude to the Falkland Islands. The British claim to the Falkland Islands goes back decades before any Argentinian involvement in the Islands. The Argentinians first occupied the Falklands from November 1832 to January 1833 when they agreed to leave on the return of the British at that time. The British have occupied the Islands ever since apart from the two and a half months in 1982 following the ill-fated Argentinian invasion. The Argentinians can have the Falklands in the same way as the Spanish can have Gibraltar, that is if and when a majority of the Islanders vote in favour of ceasing their relationship with the UK. Mrs Kirchner is a loose cannon having made friends at one point with Chavez and having restricted the movements of the US Ambassador  when her party was accused of voting irregularities. She is someone you would not want to turn your back on and Cameron better have our forces ready to counterattack if she continues her anti UK campaign. Sadly with her friend Bummer Obama in the White House we will not be able to rely on the same level of help from that quarter again. It will be a miracle if we're able to rely on any US help at all. Not that it may change much but we have to hope that Bummer does not get re-elected in November.

Insanity and the EU and the IMF

It seems at long last that the police will be able to make a decision about whether or not to prosecute Huhne. They are now to be handed the emails held by the Sunday Times which are thought to be incriminating. Huhne will have to resign if a prosecution is brought against him. No doubt a LibDem will be appointed to replace him but hopefully not someone who is as arrogant and so convinced about global warming. As on so many issues we have to stand up to the EU on its suicidal emissions policy. The EU no doubt believes along with the Irish Times that the natural disasters that befell the world last year and cost insurers more than in any previous year were mainly due to climate events. In fact the earthquake and tsunami in Japan and the earthquake in New Zealand together cost the insurers almost two-thirds of the total. Another suicidal EU policy is the Trans European Networks Plan which seeks to impose on all EU countries to link cities and states by rail, road, canal and broadband and will cost us billions. The EU wants us to control our budgets and reduce our expenditure on the one hand and yet wants to increase its own expenditure on the other hand. It really is about time we left the asylum of technocrats who are clearly devoid of any sense of responsibility. Sadly this same sense of irresponsibility has infected the IMF so much so that the USA is refusing to make further contributions to it so that eurozone countries can be bailed out and we must stick to our guns and do the same. The IMF has been successful in the past in helping countries out of their financial problems by insisting on a mix of austerity and devaluation. It follows that it should be insisting on its tried and tested model with the eurozone countries but instead of telling Greece and the others to leave the euro so that they can then devalue it demands austerity only in the mistaken belief that the euro can survive. Sadly this is because Christine Lagarde cannot admit that the euro is fundamentally flawed. It is as flawed as the last Labour Government's immigration policy (two and a half million immigrants from non EU countries over the period they were in office) which has landed us in an incredible situation. Why did we give so many of these immigrants citizenship or a right to remain and how many of them are claiming benefits when they have contributed nothing or very little by way of National Insurance? What a shower the Labour Party are.

The NHS and the Market

Although not necessarily a fan of Lansley he is obviously right that the objection of the doctors, nurses and midwives to the NHS reforms is about their pay and pensions and not about making the NHS more efficient. If Cameron wanted to demonstrate his belief in open markets and free enterprise he would have announced in his responsible capitalism speech today a truly radical form of the NHS. The NHS is an unwieldy, inefficient, smug, monolith and it would help the economy enormously if the NHS were split up into several competing entities. Each entity would then be given a budget and allowed to choose how it would run itself. No doubt some would choose a socialist model and others a free market one and perhaps others something in between. I have no doubt that the free market ones would be the winners by providing the best care at the cheapest price. The government is never going to follow my suggestion so I hope it will at least stick to its guns, ignore the trade unions and impose its reforms. It is about time they were brought in for the minimal efficiency savings they will produce. In an answer to a question following his speech today Cameron stated that Sir Fred Goodwin's knighthood was up for review. There should be no hesitation in withdrawing the title which was given on a totally false premise. Sir Victor Blank's knighthood should also be withdrawn since he should never have agreed to accommodate Gordon Brown's request that Lloyds buy HBOS. Those at the time who said that the deal should not go through have been vindicated in light of the reports of the unprofessional manner in which the transaction process was carried out and the resultant disaster - it seems there was no real due diligence. There is nothing more crony like than a knighthood given to a "friend" and so the withdrawal of a title for failure on the scale over which Sir Fred and Sir Victor both presided will demonstrate to all the world that Labour type crony capitalism of which we saw so much in the Blair/Brown years has ended. From remarks he made this week Ed Miliband thinks he invented anti crony capitalism. He didn't and indeed he was part of the government that loved it in a way that hasn't been seen in these Isles since before the Second World War.

Ports, Air and Water

One would have thought that the LibDems would have welcomed the idea of a new airport in the Thames. It is difficult to understand their objections which seem to have something to do with being against further development in the South East of the country. They are more than happy to ruin the countryside by the construction of wind farms, the greatest white elephants ever seen (and which we now learn are not allowed to operate when the wind is strong but for which downtime the owners are paid compensation costing us £25million last year). As airports are profitable operations private enterprise should have no problem raising the necessary finance as Boris Johnson has stated. No reason either why the road and rail network extensions to and from the airport should not be financed by private enterprise with the investment recouped out of road tolls and train fares. The only problem there appears to be is the World War 2 US Liberty ship which sank in the estuary with a cargo of explosives on board. Boris Johnson also pointed out that Singapore and Hong Kong built their new airports in something like 6 years. The reason for having a new airport is because our present airports are unable to take further traffic and we need to provide additional capacity to ensure we remain the biggest airport hub in Europe at least. So let's get on with it. We also need to provide additional shipping facilities and so its good to know the proposed deep water facilities at London Gateway are coming on stream in the fourth quarter of 2013. London Gateway will then be the largest deep water port in the UK and is capable of more than doubling its capacity. It will compete with the deep water ports of Rotterdam and Antwerp. London Gateway is being developed and financed by private enterprise and will create a significant number of jobs both directly and indirectly as of course will the new London airport, if it's built. Perhaps we should get private enterprise to build more of our infrastructure such as roads and railways. John Redwood has an interesting blog today on private enterprise roads here. 

Three Apple Carts

The Political Betting blog is asking whether the best White House bet is for Romney to win. We all know that Romney is a Mormon and like all of us this side of the pond one does not know quite how to react to a Mormon with their, to us, strange customs or beliefs. Will the fact he's a Mormon make some people in the USA wary of voting for him? Why should we think they are like aliens from outer space when these days we accept without question and find quite normal all sorts of people with different colours and religions? Is it because we are perhaps a little afraid of sects where the members are somewhat cliquey? Romney may be a little less cliquey than most Mormons having been born in Mexico, brought up in Michigan and lived in France for 30 months, albeit as a Mormon missionary. Will this make him more electable than a Utah brought up Mormon or does the fact that he's a Mormon have little bearing on voting intentions in the USA? We all know he made a fortune as a co-founder and partner in Bain Capital and has used this fortune to promote his political career. Folklore says that he needs to win the South Carolina Primary in order to be sure of the Republican nomination. Will he do it? Possibly but Newt Gingrich did rather well in the latest TV debate and could yet upset Romney's apple cart. Talking of apple carts it is outrageous that that excuse for a court, the European Court of Human Rights, has overruled a House of Lords decision that Abu Qatada, a man who arrived here on a false passport, could be deported back to Jordan for trial on terrorist charges. It is long past the time we should have thrown off the jurisdiction of the ECHR. If the highest court in our country decides that Qatada can be sent back to a country to be tried for his alleged crimes where evidence may have been procured by torture why should we allow that decision to be overruled? An apple cart that certainly needs upsetting though is Alex Salmond's and the man to do it could be Daniel Hannan who it is to be hoped the government will use in their campaign for the continuance of the Union. Hannan's blog today makes him pre-eminently suitable for such a role which you can read here.

Guido's DUEMA

There is a Ken Livingstone advertisement on Guido's blog here which shows a silhouette of a Boris type figure stealing money out of someone's handbag preceded by a message to 'beware: pickpocket operating on public transport'. It is followed by other messages stating that Boris has again raised fares above inflation and that Ken will save the average Londoner £1000 on fares over four years. I wonder what makes an average Londoner and I also wonder how Ken will pay for the £1000. I could find nothing on the Ken Re-Election Website here about how the cut would be paid for. No doubt someone has asked the question and no doubt Boris will make a point about it but it seems Ken has learnt nothing about the disastrous tax and spend policies of every Labour government there has ever been. Labour makes promises which sound absolutely wonderful but which sadly can only exist in Lalaland. For confirmation you only had to listen to Ed Miliband on the Andrew Marr Show yesterday morning. He has clearly demonstrated to me that we will be skint once again shortly after they get back into power. Miliband was saying that the coalition is cutting too far and too fast and should change course but that when Labour is re-elected they will have to live with the coalition cuts. This sounds to me like having your cake and eating it or your left hand not knowing what your right hand is doing or just plain daft. Miliband is apparently a highly intelligent person but perhaps his intelligence is of such a kind that we'd be better off if he lived on another planet. There are those of course who believe both he and his equally awful brother come from Mars. No wonder Guido's Don't Unseat Ed Miliband Association is attracting so many members each day.

Cameron on a Camel

Cameron is criticised by some for his visit to Saudi Arabia on the basis that it is not a true democracy and has assisted Bahrain, for example, to deal heavily with its protesters. Furthermore the critics point out that Saudi Arabia is not a democracy and is not going to become one any time soon. From a British perspective these are perfectly valid criticisms and there are occasions from stories one hears, if true, when Saudi Arabia acts like a police state. Having said that we would be quite wrong to refuse to treat with them. They sell us oil, buy properties and businesses and employ people here and buy a significant amount of our military hardware. It should also be pointed out that Saudi Arabia does not approve of Assad's policy against his own people in Syria and neither is it happy about the Iranians and in particular their nuclear bomb programme. Cameron gave an interview on Saudi Arabian TV where he was asked about several of these issues. Here is a snippet from that interview. It has to be said that little by little Cameron is growing into his job. He still looks fresh faced and ridiculously young and you wonder if he will stand up for this country when push comes to shove as it's about to with the continuing euro shambles. We have to hope that the boy will do good which is the last thing that can be said about Balls even if he now seems to be accepting Osborne's Plan A, for the most part anyway. The damage Balls has inflicted on us all through his stint at the Treasury is now obvious although we must thank him for helping to keep us out of the euro. What can we thank the other Ed for? I can think of nothing. Ed was in charge of Climate Change and instituted a policy which will bankrupt us and which this government is sadly doing nothing to stop - certainly not Huhne. I hope Huhne resigns and that a realist is appointed in his place. Whatever is happening with the speeding offence case? It still seems to be in limbo. Surely the CPS must have made up its mind by now about either proceeding or dropping it? If not why not? I hope they have enough evidence to charge the smug little man, then he'll have to resign!

Hearts as well as Minds

Now Scotland is to have a referendum on its future in the United Kingdom why, as others have asked, cannot we have a referendum on our future in the EU? After all the integrity of the United Kingdom is of far more importance than the integrity of the EU. In this regard I am glad to see that questions are now being raised about the effects of Scotland's departure such as what will its rating be and which currency will it use to begin with? Those campaigning must though not concentrate solely on the nuts and bolts of devolution but spend just as much effort on the 'heart' type reasons for the Union. We can be sure that Salmond will blow the bagpipes and so on to whip up the emotions for separation - why else is he insisting that the vote be given to 16 year olds? He will though not be able to ignore the last 300 years of Scotland's glory as a full participant in the United Kingdom's triumph and it is just that kind of thing that the Unionists need to emphasise. Scotland would never have had the glory if they had not been a part of the Union. It also needs to be driven home that the contribution of the Scots to our momentous past has always been recognised through for example the Scottish regiments. Returning to the nuts and bolts it must be somewhat alarming for Salmond to see that the euro he was so keen on a few months ago is continuing to implode. The ratings of France and Austria are about to be downgraded by S&P, the rating of others are on a watch list and the Greek debt talks have stalled. Will any of this be relevant when Scotland is likely to hold its referendum in 2014? I guess Salmond hopes not but if that is so will Britain have kept its rating and its freedom of action such as it is or will we have given into the EU yet again as the pessimists are now predicting? I saw the play '3 Days in May' yesterday evening about the War Cabinet decision to carry on fighting rather than to seek terms with Hitler through Mussolini's offices. Despite the inference that he wobbled it did not seem to me that Churchill had done so but that he needed those three days to try and get Chamberlain and Halifax to agree to continue the fight. He succeeds with Chamberlain but not with Halifax who was the odd man out and who was forced to resign. Again the government was a coalition and it is to be hoped that Cameron has seen the play and has learnt that appeasement gets you nowhere at the end of the day.        

Romney in New Hampshire

Romney wins in New Hampshire and unsurprisingly a third of those asked said that electability was their main consideration in deciding which way they voted. His win is a little surprising as my father always told me you cannot trust a man who doesn't drink. A lot of others say you cannot trust a politician. Yet despite these two reasons supposedly for not voting for him Romney he has won the Primary. Perhaps the bit about not trusting a man who doesn't drink doesn't apply to Romney because he's a Mormon and Mormon's are not allowed to drink. By contrast they were allowed to have four wives but this rule was changed when it became apparent that they couldn't handle having four mothers-in-law. A Mormon told me that. He had some really good jokes too but that's the only one I remember as I found myself drinking for the two of us. It seems Mormons have no problem with other people drinking, they just don't partake themselves. If Romney makes it to the White House I wonder what the parties will be like there and what will happen when it comes to proposing a toast. I guess they will just toast in coca cola or water or something similarly tame. From all accounts it seems as if PMQs today was tame as well with Cameron being kind to Miliband. This did not stop Miliband making a bit of a fool of himself over the cap on rail fare increases as Guido Fawkes makes clear here. He did well on Scotland though.   

Scotland and North Sea Oil

The idea of high speed trains is a good one but, having said that, HS2 does not make any sense to me since the cost of building the whole project is huge and that's only to get to Birmingham. If it went up to the north of Scotland that might be one thing but only to Birmingham, what's the point? Is the reason for stopping at Birmingham because there's no point going further if it is not going to be extended to Scotland? Is the reason for not extending the project to Scotland because of the uncertainty about that country remaining in the UK? The economic case for Scotland going it alone is as bad as the economic case for HS2. Scotland's case is based on its view that it is entitled to 91% of all the oil and gas coming out of the North Sea but that only works if the normal rules that apply to international boundaries are ignored. Why should England agree to abandon those rules which state that the boundary line over the sea should be an extension of the line dividing two countries. As we all know the western boundary between Scotland and England is further south than the eastern boundary between them. Thus extending the line out into the North Sea means a significant part of North Sea oil and gas belongs to England. Even if England were to give into the claim of Mr Salmond and go along with measuring the sea boundary so that Scotland takes 91% of the North Sea oil and gas it seems the economic case for Scottish independence does not add up as the Spectator demonstrates here. Salmond will thus have to base his appeal to his voters on other than economic grounds. Cameron is right to take the referendum bull by the horns on this. There is absolutely no reason why Salmond should rule the referendum agenda - the UK parliament should do so and the UK government should produce all the arguments in favour of Scotland remaining in the UK. If I recall correctly Quebec was desperate to secede from Canada and two referenda were held on the subject which I'm very glad to say the separatists lost on both occasions.  

Free Markets

It is disturbing that Cameron is quite prepared to interfere in private contracts and also in market pricing. I'm referring here of course to his wish to interfere in (a) contracts between companies and their senior executives and (b) the setting of prices of certain alcoholic drinks. Such interference is certainly out of line for someone who believes in free markets. It is also disturbing that the government has gone along with the EU carbon cap and trade mechanism which Civitas (see the article in The Commentator on the Civitas report here) has amply demonstrated distorts the market by increasing energy prices apart from being more costly than a carbon tax, assuming one is needed at all. Cameron has every right though to give shareholders the power to veto salary and bonuses for senior staff in companies they own. The pendulum has swung far to far against company owners in the split of profits between themselves and the executives who in effect work for them. It is also clearly wrong for senior executives to receive salaries and bonuses which do not reflect success and the government as the owner of 80% of RBS on behalf of taxpayers surely has every right to vote against the huge bonus to be paid to that company's chief executive. The government is also quite right to prohibit the cosy arrangements between two companies where executive directors of one become non-executive directors and members of the remuneration committee of the other and set the salary and bonus of the executive directors of the other company.    

Force of Nature

The wind brought down a number of trees in the London area yesterday including aged Limes suffering from something called ganaderma disease. We think we live in a world we control and so it always comes as something of a shock when we come face to face with the forces of nature. We are lucky in this country where the forces of nature are rarely extreme and when they are that they do not last for any length of time. Some people might find this boring but our weather suits our temperament and enables us to take a lot of things in our stride. It is perhaps why there have been no demonstrations against the bank bail outs, bonus payments and the relationships that have been built up between government and the big corporations, including the banks. The Lloyds takeover of HBOS has though aroused the American shareholders of Lloyds to take action in the USA against Lloyds and both its former chairman and chief executive for having failed to disclose to the shareholders that HBOS had been propped up by billions in loans from the Bank of England and the Federal Reserve. Americans live in a land where the force of nature can often be seen in all its might and awe and so to bring such an action is natural to them but it is good to learn that Lloyds UK shareholders are hoping to bring a similar action here. And so they should for what can only be said to have been a disastrous deal. Did Sir Victor Blank agree to buy HBOS because as was rumoured he was offered a peerage if he pushed the purchase through? Unlikely but it will be interesting to see whether the question is asked during the trial. Jesse Norman MP has written a fascinating polemic The Case for Real Capitalism which argues that what happened to both Goldman Sacks and Lloyds HBOS was as a result of cosy, as opposed to real, capitalism. Such polemic is well worth reading, that is why I have linked to it.        

Progress?

I always hope that New Year's Eve will bring something better along in its wake but sadly I am often disappointed. My golf certainly gets no better. Perhaps the trick is not to expect too much in the first place! On the political scene I do see advances on the educational, local government and welfare fronts which could well bring forth good news little by little as the year goes by. I am less certain about the medicine being applied to the economy as not only has there been a failure to cut regulation, the deficit has increased leaving us dangerously exposed if we fail to make growth in the private sector. I am also somewhat doubtful that the measures to improve the NHS will work and all the signs are that the government has backed off the root and branch reform so urgently needed. When I went to the Western Eye Hospital for the post laser check up on my eye I was told by the Consultant to come back again in 10 days but when I got the appointment letter it was for a date 3 months after my check up. This rather goes to confirm my doubts. The growth front looks problematic and no doubt Osborne is making plans to counteract any downturn which should include faster and deeper deficit reduction, a bigger cull of civil servants, a halt on wind farms, solar panels and other barmy and ridiculously expensive ideas and a reduction in taxes. I shall not hold my breath though. On the tax front the statements by both Cameron and Clegg on tax avoidance are either somewhat sinister or illiterate. There is nothing illegal or indeed immoral about tax avoidance and the idea that if there are two ways of calculating the amount of tax to be paid that one should choose the one that pays more is contrary to nature. Taxation is theft and can only be collected with the consent of the people. Those governments which overtax their people have to use strong arm tactics in recovering taxes which is clearly unacceptable.  In my view any tax rate above 33% is totally unjustified. Greeks believe the taxes they are supposed to pay are used in the main to line the pockets of the civil servants and politicians in an unjustified, even criminal, way and thus do everything to refuse payment. If the Greeks are right about their politicians and civil servants frankly who can blame them for being on a 'tax strike'.

Happy New Year

Despite the denial of the euro elite it has become even more clear that the euro cannot survive for much longer. Whether or not the euro's implosion will cause as much havoc as the euro elite are saying is doubtful but there is no doubt it will be painful for a time. That is what makes it clear as well that to reduce the damage an orderly wind up is needed which must involve the departure of the Germans and the strong economies from the euro in order to allow the euro to devalue before Greece, Portugal, Ireland, Italy and everyone else left in the euro convert from the devalued euro less painfully back into their original currencies. There is no reason why the EU should not survive this although the EU should at the same time make some fundamental changes so that it can become a proper free trade area. If the EU cannot change then it will implode also, in part because without change we will eventually have to leave it as it is killing our ability to trade in the way we need and want to trade. We will probably need to leave the EU anyway since there is disquiet in the French Alps and no doubt in the Dordogne and elsewhere at British entrepreneurialism. Examples given to me by a French businessman friend from the Alps include the taxi service being run by Brits out of Chamonix, the independent ski schools run by Brits and more worryingly for my friend the incursion of Brits into the local building industry where the Brits are buying property for development or refurbishment and instead of using local labour are bringing in teams of east europeans to do all the work. A number of local craftsmen  and so on have no work as a result. French farmers are always demonstrating to get their own way and succeeding and it will not be a surprise if other French workers start demonstrating and getting their own way too. This will bring the single market to a crashing halt or should do. What is going to bring the ruinous climate change policies to an abrupt and overdue end? Surely there must be an epiphany moment amongst Tory MPs on this issue soon.