Incisive and topical campaigns and commentary on today's issues and tomorrow's problems

         This morning on the Today programme and accompanying news bulletins the BBC suggsted that if the UK voted to leave the EU the Nissan jobs could be at risk. Yet listening to the clip of the interview, Nissan made very clear that they have a great factory in Sunderland and have no intention of closing that, whether the UK stays in or leaves the EU. Their comments were about future additional investment, not a threat to what they have.

        Of course when planning any future UK investment the UK’s relationship with wider European markets will be a relevant consideration. If the Uk leaves the EU I expect we will have decent arrangements to continue buying and selling cars to each other . The German industry will inists on this. So I expect Nissan would continue to find the UK a great place for new factories, just as it clearly likes its present investment.

            Indeed, if we negotiate a new relationship that allows us to cut some of the regulatory and other costs   of the EU rules, companies might like the Uk more, not less. Companies will also understand that they want to sell to the important UK market, where consumers are also voters and where those voters want a referendum on the EU.

          The BBC should questioning peoples’ jobs, and just report what is actually said, which was carefully nuanced and about future investment.

The USA, Greece, Portugal, Ireland and other Euro area countries have all cut their total public spending by more than the UK since the crisis struck. The USA has grown faster than the UK over the last five years, whilst much of Euroland has remained in a long recession for the same period. What can we deduce from this about austerity policies?

It is true that the spending cuts have been much larger in parts of Euroland than anywhere else. Irish total public spending is down by 15% in cash terms from the 2009 peak. Greek total spending is down by a bit more. In the USA total public spending fell marginally in cash terms in 2010 and in 2013, and was just 2.7% up in cash terms in 2013 over 2009, reflecting a real terms reduction. In comparison UK current public spending has shown real terms increases over each of those years and is up 13% in cash terms, 2013-14 compared to 2009-10. Total UK spending is up by 7.6% in cash terms, reflecting a substantial decline in capital spending resulting  from Labour’s cuts at the end of its administration.

The Irish economy has just started to grow again after five years of falling output and serious problems. The further recent reduction in public spending has not prevented a small improvement. Meanwhile, in the UK public spending control is now tighter than in the period 2010-12, but output is now expanding much more rapidly.

The poor performance of the peripheral Eurozone economies has not been helped by very large public sector cuts, reducing employment incomes and other spending in the public sector. However, the bigger impact on their output has come in the private sector. The high exchange rate for their cost base has limited their ability to export or to substitute home production for imports. The lack of independent control over money means they have not been able to stimulate demand by monetary means as the USA and UK have. As a result the sharp fall in public sector output has not been offset by rises in private sector output, but reinforced by declines in private activity. High and rising unemployment has added to the misery and subtracted from demand.

Meanwhile, the better performance of the USA with tighter controls on spending, and the better performamnce of the UK now it also has tighter controls on spending, suggests that public sector spending  controls do not prevent gr0wth. The private sectors of the USA and UK are able to expand, thanks to easy money policies. The US has also had the added advantage of early exploitation of shale gas, adding directly to output and making US industry more competitive thanks to cheap energy.

I awoke to the sound of a Radio 4 interview concerning CO2 reduction. A poor interview produced no figures, but left listeners with the opinion that China, the USA and others are doing more to cut their CO2 emissions than the UK. The Chancellor was wrong by implication to warn us that the UK is in danger of  doing more CO2 reduction (by higher energy prices)than competitors which could just result in  more of our industry going elsewhere. The UK was urged to do more.

I have found UN figures which tell us the story of the 20 year period from 1990-2010, the first 20 years of the Kyoto targets and the CO2 campaign. Over that time period US CO2 emissions rose by 20%, China’s by 165%, and the UK cut by 7.6%. Other comparable countries like Australia saw a 42% increase, Japan a 14% increase and France a 0.8% increase. Only Germany of the majors did  more than the UK to cut its CO2 output.

In the last 3 years the US had developed a lot of cheaper shale gas which has helped cut its CO2 output. Doing it that way helps competitiveness, as it cuts energy costs. The UK is doing it the dear way, through renewables, which does the opposite. It puts prices up and means fewer industrial jobs in the UK.

I think the Chancellor was right to say the UK should not follow policies which simply divert good business from the UK to other centres. Policies which develop new cheaper sources of energy which also cut CO2 would be a good idea.

The UK Parliament is continuously evolving. The battle to have power and to use it wisely is a daily one. Constitutional theory may still say Parliament is sovereign, but that is only true if Parliament retains the political will to assert itself.

Parliament gained its supremacy by limiting the power of Kings and then taking over power from the monarch. It retained it by making the institutions of the country bend to its will, reshaping the aristocracy through taxes and changes to the Lords, fashioning regulation and tax for business and the professions, and undertaking a large redistribution of income through the public sector.

In more recent years Parliament has had to rein in the large government it created and sponsored. Even though most government Ministers are also MPs, the Commons has had to use its voices, votes and abilities to prevent the executive using power to excess or taking Parliament for granted under a majoritarian system.

By far and away the largest and as yet unbridled challenge to Parliament’s power has come from the EU. It is true that all the powers the EU possesses were powers that Parliament has granted. A single Act of Parliament could still take back this jurisdiction. However, the longer Parliament leaves a new settlement of powers with the EU the more danger that these powers will eventually be beyond the political power of Parliament to wrestle back. Treaty law is in conflict with Acts of Parliament.

Meanwhile, Parliament has had some successes in recent months and years reminding the executive of its role and supremacy. Ministers’ careers can be broken as well as made in Parliament. The Select Committee system provides a further check on departmental actions and decisions. This Parliament has played a major part in issues like the Syrian war. When no single party has a majority government has to work harder to ensure it has the votes for any measure it wishes to introduce.

The political parties are now descending on the water industry.It’s a race to be the toughest, after the battle of the energy companies over the last few weeks. The red corner has told us to expect water industry menaces soon. The blue corner has got their retaliation in first, with a letter to the industry telling them to tread carefully when it comes to price changes this winter.

You should not need this degree of political concern about prices. We do not have sharp exchanges on bread prices in the Commons, so why do we need them on water? The answer is simple. The water industry does not benefit from competition.

Some competition has been introduced in Scotland for water supplied to business. It all passed off peacefully. The worst fears of the critics were confounded. There was no interruption to supply. The taps stayed on. The best hopes of advocates were not realised either. Prices did not tumble, though they came down a little. Businesses on the whole approved. They said they got a better service as they could always switch supplier now if they were not looked after.

Usually when you introduce competition to an industry that has not enjoyed it, prices fall, quality rises, and innovation comes to the party. More of all of those would probably have happened in Scotland if the whole industry had been open to challenge, rather than just the accounts of some big businesses. The shock to the water industry was modest as the area for competition was modest.

If the political parties are serious about getting a better deal for English consumers they should go ahead an allow competition throughout the industry. Water is no natural monopoloy. It falls from the skies on all of us. The business task is to harvest enough of this plentiful and renewable resource, and clean it to the appropriate standard for its users.

We debated all this yesterday in the Commons. I will post my speech when it is available in Hansard.

Mr Cameron responded yesterday to the growing attacks on the costs of HS2 by saying the government would work away to get the costs of this very expensive project down. If you are going to build it, that is a sensible aim. The statement was made on the same day as the MOD announced yet another escalation in the costs of building the two new aircraft carriers.

Why do we have such problems in this country with runaway costs on big projects? When I buy a new piece of equipment for my home I choose one I like and agree a fixed price for its manufacture and supply. The contract is binding and I end up paying the original price. Why can’t we buy trains and boats like that?

The boats are different because the UK state wants one offs that have never been built before and will doubtless never be built again. The state as customer gets dragged into the costs of design. the state then regularly changes its mind about what it wants, giving the contractors need or excuse to hike the price. The state as customer needs to get better at deciding what it wants and sticking to it. It also needs to nail down more of the purchase cost as a fixed price.

When it comes to buying trains, there are plenty of fast trains available around the world without having to design completely different ones. Given we have in mind a big order, it should also be possible to ask the winner of the bidding competition to build significant amounts of them in the UK under licence. Building track is a one off in terms of the route, but other wise can be standardised to a considerable extent.

The difficult to knows in the case of HS2 include the compensation and land acquisition costs,and the amount of work that will have to be done to create stable and flat ground conditions for laying the track. More surveys and preliminary negotiations with landowners can start to cut the risks of overrun on the estimates. The costs of the track and signals themselves should not be open to a lot of guesswork and can be specified precisely, in advance, to a standard already in use and production. A sleeper or a signal is a ubiquitous railway product that can be costed and calculated.

I remain against HS2 overall. If it has to go ahead then at the very least it should be possible to lop £10billion off the current projected costs, by going for as many components as are in current production and by completing accurate survey work of the land costs, and conditions. There should be a deadline for the final plan which then does n to allow variations for fear of cost escalations. If the idea is to add stations, vary the routes and make other changes as we go along then the bills could get even bigger.

I support a system which delivers a minimum income. The Minimum wage in most cases is below the minimum income, so families top it up with income related benefits. The idea of raising the Minimum wage is partly to get employers to pay a higher proportion of the minimum income the state thinks appropriate. Some of the increase in wages will be balanced for the individual worker by loss of benefit top up.

The living wage is just a higher Minimum wage. The living wage is closer to the Minimum income, but there will still be income top ups from the state for many people on the living wage. The so called living wage would be difficult to manage on for families without housing, child and other support from the state.

Above all I want to promote policies that will deliver more better paid jobs. The only way we can all enjoy higher living standards is if our economy produces more, either to sell to ourselves or to sell to foreigners in exchange for imports. If we produce more we can consume more. If we fail to produce more we can argue about how much we take off the richer to give to the poorer, but on average we will no better off. If we go too far down the road of redistribution we make ourselves collectively poorer, as some of the rich leave and cease to make any contribution.

Labour’s latest idea of offering employers a tax break to pay more to their employees is mainly redistributing what we have. We will need to see the numbers. The state accounts will lose tax revenue from the tax cut but will also reduce spending from the top up benefit reductions. The employment effect will hinge on what such a scheme does to the costs of employing people. If the tax cut balances out the extra wage cost it will be neutral. Were the tax cut to be less than the extra pay cost then it could damage employment.

The last time I took an early morning train on the East coast mainline, only one in four of the Standard class seats and one in ten of the First class seats were taken in the carriages where I counted. The West coast mainline was similarly little occupied when I have taken early morning trains to the north on that. I reported on journeys to Birmingham and Manchester.

This makes the tri party decision to build more capacity on these train routes all the more curious. I can think of plenty of places where we need more transport capacity now. Providing more on routes where the existing train franchisees are finding it difficult to fill the places is not a model for success or a good investment. Whilst travellers will welcome the eventual fare cuts competition between HS2 and the WCML will bring should HS2 be completed, the poor taxpayer will be left with a large bill to pay the big running losses on both lines.

We could start by looking at the chronic shortage of capacity on our major motorways. They could all do with widening and improving in many locations. We could continue by completing proper capacity on major trunk routes, like the A14, the A 303, and the A 27.

We could move on to the commuter trains into our major cities. We are short of commuter capacity into Manchester, Leeds, London and Birmingham. We need better brakes, lighter trains, better signals so we can run more trains per hour. We need longer trains and in some cases longer platforms. All these improvements could delay the need for more track, though doubtless there are some pinch points and shorter sections into city centres where more track would be a good idea, and even some where it is also possible.

There are a host of detailed local road and rail improvements needed in many towns and cities around the country, that come a lot cheaper than the prospective bill for HS2.
Your thoughts on priorities would be interesting.

The Good bank/Bad bank campaigners were seen off in the Treasury decision on restructuring RBS. Those of us who wanted to see more than one competing UK clearing bank formed from the parts of RBS were also disappointed.

However, the new policy does include selling off Citizens, the US banking Group owned by RBS, and further reductions to the Investment Bank, whether by divestment or slimming down. These are both policies I have called for in the past.

The bad news still continues from RBS. The Bank reported more losses and still pays no dividends. It has published a report on its own small and medium sized business lending and service which is extremely critical.

The new Chief Executive sounded the right note, when he admitted past mistakes and promised full attention to creating a better quality more responsible UK clearing bank. He pledged himself and his team to being a better bank for UK business, and a more attentive and helpful bank towards its retail customers.

The Chancellor was able to welcome all this by saying there is now a new strategy. This new approach is designed to make RBS an asset rather than a burden for the UK economy. It is time RBS was available to make a full contribution to UK economic recovery.

RBS has got its portfolio of bad loans down to a mere £38bn, a relatively small sum for a bank of its size. The plan is to sell more of these on from within the ring fenced bad bank RBS will itself continue to own.

I wish the new management well. Splitting up RBS more fundamentally would have been a good idea 5 years ago or even 3 years ago. Now we need what is left to work better for UK economic recovery. We also need to speed the day when RBS can make profits and pay dividends, to get some of the taxpayers’ money back. Labour made a very bad investment. They should have broken up RBS at the time of its collapse, and only supported with loans those bits essential to the UK’s money transmission and deposit system. Now we have to move on, and manage the inherited mistakes as well as possible.

               The Conservative backbench Bill before Parliament to grant a referendum on membership of the EU has as its question:

                 “Do you think that the UK should be a member of the EU?”

                Voters have the right to vote Yes, or No.

                The Electoral Commission have now considered this draft question. They have asked is it clear enough? Is it fairly weighted? They have considered other possible wordings.

              They have come up with two versions which they prefer. The first is inviting the same Yes/No answer. It is

                ” Should the UK remain a member of the EU?”

                 This is shorter than the Bill proposal. It also makes clear should anyone be in any doubt that the UK is currently a member of the EU.

                The second version requires a longer supplied answer: It is

              “Should the UK remain a member of the EU or leave the EU?

              Voters can tick a box to say “Remain a member of the EU”  or a box saying “Leave the EU”

           I am happy with the wording in the current Bill. Anyone voting in the referendum will understand we are currently in the EU, and will also understand that voting No means leaving. Of the two Electoral Commission versions I prefer the shorter one.

            Any amendment to the Bill slows down its passage, so has to be weighed carefully. What do you think?

PS The Electoral Commission amended the Scottish referendum question to “Should Scotland be an independent country?”. This question does not tell people in Scotland that they are not currently an independent country, and gives to the “out of the union” camp the advantage of answer Yes. Yet when it comes to the EU the Electoral Commission does wish to explain the UK is in the EU, and give Yes to those who want to stay in, not to those who want to some out. Their approach seems variable.