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.