Uk politics

Thursday

Mark Bathgate

Printing money is not the solution

From our UK edition

With another £40bn disappearing down the black hole known as the British Banking sector, the financial cost of the economic and banking collapse is now only rivaled by the two World Wars in it’s cost to the UK taxpayer. Rather than going to support credit to business or households, the further £25bn of “newly printed money” announced today is likely to go to help prop up the Government debt mountain.   The above chart shows how the Bank of England has been using quantative easing since March. 98.8 per cent has been used to purchase Gilts. As fast as the Debt Management Office “sells” Gilts to the “market”, the Bank of England shows up and buys them.

David Blackburn

Leaked minutes reveal a party short on ideas and low on confidence

From our UK edition

It’s worth flagging up the minutes of a regional Labour Party meeting, dated 2 November, that have been leaked to Iain Dale. The first stand out passage shows the Labour Party’s reliance on Barack Obama as a source of inspiration: ‘Claude[Moraes MEP] has been to Washington DC where Obama administration key players made it clear they don’t want to have to deal with a Eurosceptic Tory Government here as they want to be able to deal with the EU as a whole.’ Iain argues that the claim has no basis in fact. But, as Daniel Korski pointed out recently, it is clear that the US administration would prefer to work with an assertive and united EU, not one embroiled in internal squabbles.

David Blackburn

A bit of French stock in play

From our UK edition

Describing foreign dignitaries as ‘castrated’ and ‘autistic’ is terribly Gallic. As a rule, British politicians tend not to invoke ‘sensitive conditions’ to aid their critiques and the force of their rhetoric. I can’t imagine Chris Bryant, for instance, describing David Cameron’s euroscepticism as ‘autistic’ – he’d probably even baulk at describing it as ‘political halitosis’, preferring wink-wink, nudge-nudge gags about “cast-iron guarantees”. It is because this expansive sensationalism is so alien to our political culture that Pierre Lellouche’s comments sound so provocative and make Mr Cameron’s ambitions look unrealisable, with Europe seemingly united against him.

Fraser Nelson

Labour and the KGB

From our UK edition

How close were Labour and the Soviets during the cold war? At the time, many newspapers were on the hunt for links - but allegations were hard to prove. Today, the Spectator tells the story from the horse's mouth - Anatoly Chernyaev, the Kremlin's link man with Labour in the 70s and 80s. Unbeknown to his visitors - Michael Foot (who welcomed Brezhnev as 'comrade') and even Charles Clarke (who comes out of this quite well) Chernyaev was keeping a diary. It shows how various Labour visitors begged for help - after all, Labour and the Soviets had a common enemy: the Conservatives. They said so in terms. Edward Short, as Harold Wilson's deputy, said: "if you, the Communist party of the Soviet Union, want a Labour government in Britain then help us". It goes on like this.

David Blackburn

Fifth columnists

From our UK edition

The Afghan police were supposed to be layabout drug addicts and petty crooks, but that the force has been infiltrated by murderous, cowardly fifth columnists has concentrated Westminster minds. Current strategy in Afghanistan is failing. Paddy Ashdown’s is one of the most distinct voices on Afghanistan; and although he resembles a crazed Cockleshell hero when in full flow, he provides much needed clarity. In an op-ed in this morning’s Times, he writes: ‘It is at the political, not the military, level that we are failing. And if we did not have enough problems already, we now have a Government in Kabul whose legitimacy has been fatally damaged and for whom respect has reached a new low.

Wednesday

Fraser Nelson

There is only one question that frightens Brussels

From our UK edition

So David Cameron will let it rest there after all.  And in fairness to him, he can do nothing else. Thanks to the Blair/Brown stitch up, Britain has no options left. It never did. Cameron knows that and today’s speech was just a longwinded way of saying it. He is right not to promise what he calls a “made-up referendum”, that would accomplish nothing other then vent rage. But nor should he kid us all that he is going to renegotiate some powers back from Brussels. That would need the unanimous approval of all other member states, and it would never be granted. If Britain were to repatriate powers, then who would ask next? Where would it stop? The post-Lisbon EU is more powerful, bullying (as we saw with Ireland and Czechs) and it will refuse any request Cameron makes.

Lloyd Evans

How much longer must we wait?

From our UK edition

Cameron had little choice today. At PMQs he played it sober and he played it statesmanlike. The Afghan issue, which is close to becoming a crisis, dominated the session. Both main party leaders were standing shoulder to shoulder, and Cameron used five of his six questions asking the same thing. ‘Are we both right in thinking we’re both right?’ Yes, said the PM, we’re right. Afghanistan’s salvation lies in the usual mantras. More ‘training up’ of security services, more help for the economy, greater attempts to root out corruption etc. It must all be ‘better targeted’ and ‘more focused’. The question of a ‘single, strong co-ordinating figure’ is being discussed in Washington. Nothing has been decided.

Mark Bathgate

Failing to address the banking crisis is hampering recovery

From our UK edition

As another £30 billion of taxpayers’ money is handed over to banks, the role of banking sector in the continuing UK recession cannot be understated. 1990s Japan taught the world that developed economies with zombie banking systems don’t grow.  Crippled by bad debts, lending margins on solvent borrowers increase, credit availability declines and ongoing bailouts are needed. This hampers growth in the rest of the economy. The more indebted the private sector, the greater the damage a bust banking system inflicts. The above chart shows how margins on UK mortgages – the gap between borrowing from the Bank of England and what is then leant to mortgage holders – have soared since September last year.

Tuesday

Mark Bathgate

The bills just keep coming in

From our UK edition

Two years after Northern Rock became the first bank failure of this crisis, another £30 billion of taxpayers’ money needs to be thrown at the banking system. Behind all the noise about improving competition and the European Commission lies one core fact: the UK banks have lost an astonishing sum of money. The above chart shows bank losses as a percentage share of GDP, and illustrates the scale of the crisis that has overwhelmed the banking system and the taxpayer. The IMF estimates that losses could be as high as 25% of UK GDP.   UK banks went on an orgy of lending around the world, becoming the biggest source of credit growth in many countries. RBS trebled its total lending in just three years, expanding its balance sheet to almost 1.5 times the size of the UK economy.

James Forsyth

What Cameron should now say about Europe

From our UK edition

The accusations of betrayal being hurled at David Cameron are, for the reasons I outlined earlier, deeply unfair. It is Labour that has broken its promise, not the Tories - a point that the Tories should be shouting from the rooftops. Also, Euro-sceptics should remember that Cameron did keep the pledge he made during the leadership to take the party out of the EPP despite the many siren voices urging him to renege on this commitment.  The whole referendum question, though, is turning into one of trust. Part of the reason for this is that the Tory leadership always seems slightly embarrassed by the issue of Europe.

David Blackburn

Vaclav Klaus signs the Lisbon Treaty

From our UK edition

According to the BBC's Laura Kuenssberg, Czech President Vaclav Klaus has signed the Lisbon Treaty. As James wrote this morning, Cameron has not broken any promise concerning a referendum because there was no such pledge except under circumstances that have passed; but Cameron must now detail how he intends to repatriate powers and obtain an opt-out from the Social Chapter. What is peculiar is how this has become a story about the Tories breaking pledges. It should be nothing of the sort. That 'honour' lies squarely with Brown and Blair. Labour's mock-outraged line that Cameron has '"reneged on his cast-iron guarantee" defies belief; it's incredible, brazen and unmistakably wrong.

David Blackburn

Next step for banks provides further vindication of Osborne

From our UK edition

Alistair Darling has unveiled the initial phase of his plan to get the majority state owned banks back into private ownership. RBS and Lloyds will dispose of more than 918 retail branches across the country over the next four years and will receive up to £40bn of taxpayer funds to strengthen their capital bases. In exchange for this injection, both banks have deferred cash bonuses for 2009. Also, Lloyds will not join the government’s asset protection scheme by securing £13.5bn privately through a rights issue. There is an argument that the government should have gone further and demanded the complete separation of retail and investment arms, followed by additional demergers, and John Redwood makes a clear case as ever.

James Forsyth

One in five children live in jobless households

From our UK edition

The Guardian reports this morning that, “One in five – two million – British children now live in households where neither parent has a job.” This is an incredibly worrying statistic. The evidence suggests that worklessness is corrosive and soul-destroying. A child growing up in a workless household will, for obvious reasons, tend to have limited ambitions and opportunity. Obviously, as the economy recovers this number should go down — the recent rise indicates that many of these parents have been laid off in recent months. But even before the credit crunch really kicked in, there were more than 1.8 million children living in workless households.

James Forsyth

Cameron hasn’t broken a pledge on Europe

From our UK edition

With the Czech constitutional court’s decision removing one of the final barriers to ratification of the Lisbon Treaty, attention is turning to what the Tories will do next. What we know they won’t do is hold a post-ratification referendum. This is prompting cries of betrayal from some. But this charge is unfair. Cameron’s “cast-iron pledge” has been overtaken by events — the treaty will already have been ratified by the time Cameron comes to power and so a referendum would only be demonstrative. This is one of those instances where an analogy can be instructive.

David Blackburn

Public contempt for political elites extends beyond the expenses scandal

From our UK edition

Rachel Sylvester’s essential Times column describes the ‘Court of Public Opinion’ as a lynch mob that must be placated by MPs embracing the Kelly Review. She writes: ‘The real problem about expenses is that they have made it harder for politicians to show leadership about the things that matter far more. The verdict of the court of public opinion is too harsh on many MPs. But unless they accept it, serve the sentence and move on, they will never be able to convince the voters to listen to them on anything else.’ Even if MPs accept the Kelly Review in its entirety, grovel, flagellate and repent, the Court of Public Opinion’s desire to impose a Bloody Code on Westminster will not be assuaged.

Monday

James Forsyth

A Grieve error

From our UK edition

The Conservative leadership claims that a British Bill of Rights would serve to guide judges in interpreting the European Convention on Human Rights and so give Britain some discretion in how the rights which exist in the Charter — many of which are vague — are applied in this country. But in the new issue of Standpoint the eminent legal commentator Joshua Rozenberg reports that Dominic Grieve, the shadow justice secretary and a firm supporter of the ECHR, thinks that a British Bill of Rights would only be introduced towards the end of a Cameron first term and might well not be on the statue book by the end of it. Grieve tells Rozenberg, "I would like to think we could do it in the course of a parliament".

David Blackburn

The Euroball is rolling

From our UK edition

Well, it hasn’t taken long, but outright opposition to the Tories’ new stance on Europe is underway. Conservative Home has a copy of an email sent by Bill Cash calling for a full referendum on the Lisbon Treaty. Here’s the key section: ‘As David Cameron has said, we need an association of member states. In order to achieve this, we cannot simply cherry-pick individual aspects of the treaty and call for renegotiation of those. We need a full referendum on Lisbon as we were promised and as we voted in the House of Commons. No ifs or buts. This is about the Government of the United Kingdom operating in line with the democratic wishes of the electorate.

Daniel Korski

The end of special relationships

From our UK edition

Today, two of my colleagues, former senior MoD official Nick Witney and US analyst Jeremy Shapiro, issued a hard-hitting report about transatlantic relationships. Their message is simple. Europe has the US president it wished for, but Barack Obama lacks the strong transatlantic partner he desired. With EU leaders heading to Washington for their transatlantic summit on 3 November, Shapiro and Witney caution European governments: an unsentimental President Obama has already lost patience with a Europe lacking coherence and purpose. In a post-American world, the United States knows it needs effective partners. And if Europe cannot step up, the US will look for other privileged partners to do business with. Unfortunately, many Europeans are in denial about how the world is changing.

David Blackburn

Wilshire: This is exactly how Nazi Germany started

From our UK edition

No it isn’t. The disgraced Tory MP, David Wilshire, who used £105,000 in Commons’ offices expenses to pay for a company owned by him and his good lady and was forced to stand down at the next election, has, with a flair for historical analysis possessed only by geographers, written to his constituents: ‘The witch hunt against MPs in general will undermine democracy. It will weaken parliament - handing yet more power to governments. Branding a whole group of people as undesirables led to Hitler's gas chambers.’ Jacqui Smith and Tony McNulty cast themselves as victims, which defied belief. But Wilshire’s attempt is worthy of Basil Fawlty in its absurdity; it is also grotesquely offensive and Cameron is right to demand a retraction.

David Blackburn

Nanny knows best

From our UK edition

Does Professor David Nutt's dismissal concern the impossibility of relaxing drugs legislation, or the relationship between experts and ministers? David Nutt was sacked because he spoke the unspeakable and criticised the government for failing to acknowledge the self-evident scientific truth that horse-riding, especially after quaffing sherry, is more dangerous than taking ecstasy and dancing maniacally in a night club. As Bruce Anderson notes in today’s Independent, it is impossible to have a rational debate about drugs. The politics of narcotics always trumps evidence.