HS2 – Time to get organised

It was interesting to hear your comments about the HS2 ‘Town Hall’ meeting in Wendover.  As you said, this is not only going to blight the area, it is going to waste a lot of money.  The Washington Post did an article on high speed rail in China (HT International Liberty), emphasising what a disaster these projects tend to be:

High-speed rail is a capital-intensive undertaking that requires huge borrowing upfront to finance tracks, locomotives and cars, followed by years in which ticket revenue covers debt service — if all goes well. “Any . . . shortfall in ridership or yield, can quickly create financial stress,” warns a 2010 World Bank staff report. Such “shortfalls” are all too common. Japan’s bullet trains needed a bailout in 1987. Taiwan’s line opened in 2007 and needed a government rescue in 2009. …the Beijing-Tianjin line, built at a cost of $46 million per mile, is losing more than $100 million per year.…

Despite this it sounds like the MP has made a calculation that whatever happens, the majority of people will continue voting Tory and so it’s in his personal interest to toe the party line and ignore what his constituents want.   In the absence of a system of open or party primaries, I like the idea of fielding a single issue candidate against him.  It could be that a tie-up with UKIP might be useful, but whatever is decided, it’s important that people start organizing now to put pressure on the government.

UKIP – A tiny minority, and so extreme. Just like the Lib-Dems.

 

Angus and Reid's March Poll

I see that Daniel Hannan has posted on the anti-UKIP bias at the BBC.  All parties opposed to the EU whether they be the True Finns of Finland or the PVV of Holland are always portrayed as small, extreme and with a whiff of fascism about them.  Something right-minded people should cross the street to avoid.  Hence when discussing poll numbers the BBC tends to lump the BNP and UKIP together.  “Minority parties such as the BNP and UKIP….”  You will never catch them putting the BNP and the Greens together.  This though would actually be much more representative of the real numbers and indeed more representative of their actual policies (apart from immigration).  For both the BNP and the Greens essentially adhere to old school Big Government Socialism whereas the UKIP are more small government types. 

Anyway, with the Lib-Dems tanking in the polls and UKIP going from 5% in December 2010 to 8% in March 2011(H/T The Tap Blog), I can’t wait for the day when I’ll switch on the BBC and hear, “minority parties such as the BNP and the Lib-Dems….”.

HS2, Wendover and Cricket – It’s all for the greater good.

 I have a wonderful memory of Wendover from a couple of years ago, sitting on the cricket pavilion watching Billy playing cricket.  As a long term ex-pat living in a city surrounded by desert, it’s a quintessential image of what you would like England to be.  Ernest young boys in cricket whites, green lawns, oak trees and further off, the rolling wooded hills of the Chilterns.  Which is why it’s so distressing to hear that the government is going to ram the high speed rail line through the town. 

There is something about high speed rail which seems to attract big government statists.  Obama in the US has similar plans for throwing billions at high speed rail too.  Yet a report from the Tax Payers Alliance shows that this could become a white elephant, saving only 30 minutes from the London to Birmingham journey.  They argue that the estimated £30bn in HS2 expenditures would be better spent on updating the existing crumbling commuter network or on other more productive activities.  Indeed they argue that the project destroys 4 jobs for every 1 created.  However despite this, the government is still going ahead.   Witterings From Witney  suggests that the government is just following EU policy.   He argues that transport is a shared competence with the European Union and that the government is merely following European plans for a unified transport network.  This was defined in the 1992 Maastricht Treaty which first laid the plans for a Trans European Network – Transport (TEN-T).

“Establishing an efficient trans-European transport network (TEN-T) is a key element in the relaunched Lisbon strategy for competitiveness and employment in Europe. If Europe is to fulfil its economic and social potential, it is essential to build the missing links and remove the bottlenecks in our transport infrastructure, as well as to ensure the sustainability of our transport networks into the future. Furthermore, it integrates environmental protection requirements with a view to promoting sustainable development.”

And he argues that High Speed Rail is an essential part of that program.  You can read what they say here.  Especially given that TEN-T’s High Speed Rail network seems to miraculously mirror the Conservative’s plan for HS2.

Hey Ho.  Billy’s cricket field is a small price to pay when you consider the glory that is a Unified European Transport Policy. 

If it’s true, did anybody vote for this?

Neither Master nor Commander. Goodbye to the Royal Navy

One of my favourite war films of recent times is Master and Commander.  Based on the Patrick O’Brian series of books it follows the fortunes of HMS Surprise and Captain Aubrey, as they duel it out with a much larger French ship off the coast of South America.

The makers of the film researched the period well.  In some spectacular set piece scenes they ably portrayed how a frigate of the time functioned as a unit and how important were the leadership qualities of the Captain.  The charismatic Aubrey led from the front and knew how to motivate his crew to accomplish the exceptional in very difficult circumstances.  He had some memorable  lines in the film, such as when Aubrey urged his crew on at gun practice.

Officer:    Last gun fired, sir.          

Aubrey:  Timing?

Officer:   Two minutes and one second, sir.

Aubrey:  Lads, that’s not good enough.  We need to fire two broadsides to her one.  Want to see a guillotine in Piccadilly?

Crew:      No!

Aubrey:  Do you want to call Napoleon your king?

Crew:      No!

Aubrey:  Want your children to sing The Marseillaise?

Crew:      No!

 Then as the film moved on to the last climatic battle, Aubrey laid out his battle plan to the crew before finishing with these stirring lines:

Aubrey:    England is under threat of invasion.  And though we be on the far side of the world, this ship is our home.  This ship is England.  So it’s every hand to his rope or gun.  Quick’s the word and sharp’s the action.  After all, Surprise is on our side.

And so for the next 150 years and more our navy went out to project British power around the world.  Ships run by men such as Captain Aubrey, were acting under and answerable to the British Crown, serving the strategic objectives of the British Government and always acting to protect British interests abroad. 

This is why the news that the Navy is going to acquire two hideously expensive aircraft carriers, is a very disturbing development.  Not the acquisition itself.  The purpose here is not to talk about whether we need them or not.  Whether, for example, we could just instead convert a couple of small container ships and then launch helicopters from them.    No, it’s the fact that these aircraft carriers will have no aircraft.  Which obviously seems completely ridiculous as in, what’s the point?  

Unfortunately there is a very logical reason to having aircraft carriers without any aircraft, and it is all to do to with our commitment to being part of a European Defence Force.  As my favourite blogger Richard North has been pointing out for years, Tony Blair in 1998 at the Saint Malo Summit, entered into an agreement with Chirac for a Combined European Force.  This though was just a continuation of the post-Maastricht defence policy espoused by Major, and supported by Portillo (Defence Secretary) in 1996 and continued ever since.  As Richard North admirably puts it:

Amazingly, after the debacle of the “carriers with no planes”, we are now told that, trying to bridge the “capability gap”, ministers have said the new carriers will be redesigned to have catapults to launch aircraft. That “will allow them to carry planes like the French Rafale”. Oh, what a surprise.

The beans have been spilled by French defence minister Morin, who has told a “Euronaval conference” that: “I’ve asked our military command to consider the feasibility of stationing British aircraft on our aircraft carrier and vice versa.” He added: “The idea is an exchange of capacity and an interdependence. It’s a new approach.”

Is it b******s a new approach. That has been the plan all along … even the BBC recorded it in 2003. It was picked up by The Daily Telegraph and on 4 February 2003, AFP reported that “Britain and France will use a joint summit to announce plans for a European naval force equipped with an aircraft carrier battle group on standby at all times … “, all under the headline “Europe plans joint naval force”.

And, of course, all this was agreed by the EU General Affairs and External Relations Council on 17 May 2004 and endorsed by the Helsinki European Council of 17 and 18 June 2004 as the Headline Goal 2010, where there was an undertaking to supply the European Rapid Reaction Force with an aircraft carrier, its associated air wing and escort. Do they think we are that stupid?

He then adds that the French and British are discussing a new fleet of tanker aircraft as well as the French supplying us with a maritime reconnaissance capability, to replace the scrapped Nimrod MR4s.

For this is the whole point of a Combined European Force.  And despite what Liam Fox in the Daily Telegraph on Saturday was trying to hoodwink us with, combined doesn’t mean allied or helping each other in times of need, it means, well combined.   We provide this equipment, you provide that bit, we provide this unit, you send that one.  Bung it all together, put on Ode to Joy, fly the yellow-starred blue flag and bingo, a European Army.

That is why we have been spending fortunes on big-ticket items which don’t make much sense from a purely British Strategic Interest point of view.  Not just the European strike fighter, but also the Armoured Fighting Vehicle, the FRES.  Billions went into this useless program as part of our commitment to Europe.  Then when a real war started, we had to rework a bunch of rusty Snatch Land Rovers from Northern Ireland and send them to Basra, resulting in the death or mangling of hundreds of British soldiers.  

When assessing what military equipment you have to acquire, you need first to know what your Strategic Interest is and then assess what equipment you will need to achieve your strategic interest objectives.  Maybe it means that all you need to do to meet your objectives is ally with the Americans and their Carrier groups, and then make do with those cheap converted container ships.  Spending tens of billions of pounds on fancy war toys with no clear sense of strategic interest other than that of forming a European Army is inherently wasteful and ultimately against our national interest. The European Army is being put together within a framework of 27 competing strategic interests, though dominated by the French and Germans, where the only clear one is that of ‘ever closer union’.  Liam Fox in his article stated, ‘Yet it has always been my view that defence must be a sovereign, and therefore an inter-governmental issue’.  This is completely illogical, given that when it is inter-governmental, it is no longer sovereign.  It could be, for example, that in two years time our national interest will be to ally with the US to prevent Iran from acquiring nuclear weapons.  Then despite having spent billions on them, we would only be able to use those carriers if it was in the French national interest to do so as well.  We have effectively lost sovereignty of our Armed forces.

 Imagine Nelson at the Battle of Trafalgar. “ Ur Hardy, could you send a dispatch to all the heads of the European Governments.  ‘May we engage the enemy more closely?’”  And somehow I don’t think the cry of ‘God, President Von Rompuy, and the EU’ would have encouraged Aubrey’s men to leap over the gunwales and risk getting a cutlass through the guts.  Especially as they are now more likely to get a musket ball in the back from the Italian marine contingent seconded to them as part of the Combined Naval Task Force.

Cast Iron Dave Battles for Britain

It’s been fun watching David Cameron’s European Council pantomime routine this week.  You have to wonder about his political acumen.  Broadcasting to the great British public before the event that he was going to tell Johnny Foreigner where they could put their contribution increase was only setting himself up for a fall.  You have to hope that it wasn’t complete ignorance of reality that drove him to do it, that he does know something about where the current strands of sovereignty run in the European Union.  That being our elected Prime Minister, he did know that nothing he says will have any impact whatsoever on how much we pay the European Union.   That if the European commission and parliament decide that our contribution will increase by 5%, 8% or 12%, the hard pressed British Taxpayer will have to shovel over the readies however much Cast Iron Dave huffs and puffs.  Given that he knew this, he could have taken the principled route and told us the truth – that we were stuffed by the Lisbon Treaty and that we either have to get out or keep taking it in the shorts.  Hey, he could even have just blamed it all on Gordon.  However, instead he decided to go the usual kabuki theatre route of British politicians since the start of the EEC.   That being:

1)      Talk in serious tones of red lines, protecting British interests, in Europe but not run by Europe ecetera.

2)      Walk through the journalist throng to the meeting with furrowed brow.  David and Goliath, our man in enemy territory outnumbered but unbowed.

3)      Come out with a weary yet resolute look.  It was a hard fought negotiation but you stood your ground and carved out some very meaningful guarantees for Britain.

4)      Hope the media train moves on and no one notices the huge tranche of British sovereignty you’ve just signed away.

Unfortunately for Cameron, so far this hasn’t been working out and his insistence that he has got guarantees that the increase will only be 2.9% does make you wonder if he fully comprehend the political reality.  The excellent Richard North dissects the situation for Mr Cameron over at Eureferendum.

The procedure, however, is arcane. In the final analysis, the initiative lies with the EU parliament. Here, its position is straightforward – and powerful. Its response to the EU Commission proposal for a 5.9 percent hike – and the 5.9 percent was a Commission, not a parliament proposal – was to increase the figure from €130.1bn to €130.6bn, bringing it to about six percent. That is its negotiating position. The difference is between the Council’s €126.5bn and the parliament’s £130.6bn.*

Not only is the parliament not going to accept the Council’s 2.9 percent, if by some strange – and extremely unlikely – chance the Council actually stuck to its position, the parliament has a veto. It can pull the budget and force the whole procedure to start over, causing a humungous crisis in the EU, which can be laid at the door of the member states.

That ain’t going to happen. The Council negotiating team is going to compromise on a figure somewhere between 2.9 and 6.0 percent, most likely at the higher end.

Cameron claims the letter he has got is a “guarantee” the rise will not be any bigger than 2.9 percent. “What we’ve done is guarantee, with the support of other member states, that this is 2.9 percent,” he says. “They’ve given their word – 2.9 percent and no further. That’s the word they’ve all given. That’s the word I’ve given.”

It is not a guarantee. The letter has no status whatsoever. His “word” is an empty promise. If Cameron thinks he has actually got a guarantee (or given one) – he is delusional. Moreover, his advisors should be fired. If he is listening to them, they are turning him into a laughing stock.

So stage 3 in the Kabuki theatre guide to the British Politician in European Council Meetings, is not going too well for Cameron.  However, not being in the UK, I can’t quite gauge how stage 4 is going.  That is the bit where you hope that no one notices the huge wedge of national independence you’ve just handed over to Brussels.   However, England Expects for one has noticed.

The grins and smirks of Mrs Merkle whose satisfaction is a quite something to perceive, and as the Economist has pointed out, this Council was not about the budget, it was about the Treaty, and Cameron has OK’d a Treaty change in a way that he thinks will avoid a referendum.

“I AM on the whole quite satisfied with the decision.” With these modest words, Angela Merkel, Germany’s chancellor, rounded off a remarkable victory at the end of a bruising European summit that concluded today.

Less than a fortnight ago, members of the European Union were universally opposed to Germany’s demand to reopen the EU’s treaties to strengthen the means of maintaining fiscal discipline among members of the euro zone. But within days of winning over Nicolas Sarkozy to her cause at the Deauville summit on October 18th, she got everyone to sign up to the idea of a “limited treaty change”. By the slow-moving standards of the EU, this happened in an eye-blink. It is a testament to the authority of Mrs Merkel, as well as the power of Germany’s constitutional court in Karlsruhe.

Douglas Carswell is very unhappy about this,

The spin says that the proposals from France and Germany for fiscal governance extend to the Eurozone only and so will not affect the UK.

The truth is that the EU might not be able to impose sanctions at this time, but our budget will be subject to as much scrutiny like every member state, including in theory Greece.

Having established common EU scrutiny over our budget, this deal also means a common EU legal framework applicable to “all EU Member States” – irrespective of us being outside the Euro. The path is now clear for us to be out voted on future EU legislative initiatives involving our internal fiscal affairs.

We’ve not just given ground over how much of our money we give the EU. We’ve given the EU a say over how we spend our own money at home. Some victory, eh.

Now correct me if I am wrong, but didn’t Cast Iron Dave promise a referendum on any more transfers of powers to the EU?  Mmmm.  

The Devils Kitchen reminds us that not long after the Lib-Cons got into power, they went over to Brussels and handed over control of the City and the Banking and Financial sector to the EU.   It was at the time blamed on Labour.  Not the Lib-Cons’ fault, and not worth rocking the boat over, and besides, they managed to nail down some Cast Iron guarantees about vetoing the EU vetting of our budgets. 

Now what happened to that guarantee?

Ireland circles the drain – blame the Euro

UPDATE: An excellent interview on Bloomberg of Lombard’s Dumas.  I put the link in the comments below but it summarizes this post well so I thought I would bump it up to the top.  Worth watching. (H/T The Boiling Frog Blog)

A Citigroup organized conference call with the Irish Finance minister and around 300 investors, descended into chaos last week as investor’s poked fun at the minister by making monkey noises and crying “Dive! Dive!”  Immature as the behaviour was, it illustrated the dire predicament Ireland now finds itself in.

 The Government’s effective nationalization of Anglo Irish Bank has pushed the budget deficit for this year to 32% of GDP (the danger level for deficit/GDP is considered by many economists to be 14%) sending the yield from Ireland’s government debt beyond that of Iceland and into default territory.   The nationalization of Anglo Irish may have cost up to €35 billion or nearly €10,000 for every person in Ireland with its junk bond purchase scheme adding another €22,000 per person.                           

Last Thursday, the Irish finance minister Brian Lenihan made clear that while junior debt holders would make a “significant contribution” to the cost of the bank bailouts, depositors and senior debt holders would be protected. However, some hedge funds holding this junior debt are not happy about taking a ‘haircut’ on their holdings while senior debt holders are to be paid in full.  They are taking the Irish government to court threatening that they will force Anglo Irish to be declared insolvent.  Having guaranteed 100% of all bank deposits this would likely tip Ireland over the edge into bankruptcy and the embrace of the European bailout fund.  This would end all semblance of financial independence for Ireland, as well as for its low corporation tax rate – one of the few sensible economic policies of the Irish Government in recent years.

 Now there is much to criticize about the actions of the Irish banking industry.  Those chief executives should all have lost their jobs and Anglo Irish allowed to fail with a much lower deposit guarantee.  The hedge funds’ high stakes game threatening to declare Anglo Irish insolvent could be considered to be immoral, given the consequences to the Irish taxpayer.  However, the lion’s share of the blame for this whole sorry state of affairs lies squarely with the political class.  The hedge funds have a fiduciary duty to protect their investors’ money and are acting accordingly.  Irish politicians had a duty to protect the interests of their citizens and instead acted against them.  For the reason why Ireland is now staring into the financial abyss is mainly due to its government’s decision to take it into the Euro.

 The Euro was created as a political construct.  Its purpose was to force the need for the creation of all the institutions of a European State.  It would necessitate a central bank, a unitary interest rate and monetary policy, financial supervision and further down the line, a unified economic and taxation policy.  However, as an economic idea it really didn’t make much sense.  A one-size fits all interest rate and monetary policy can only create financial bubbles in high growth economies, and depress growth in the low growth economies.  The European Central Bank set the interest rate at a sensible level for the German economy, but the rate was way too low for Ireland whose economy was inflated by essentially ‘free’ money from Frankfurt.   In 2006, the GDP in Ireland was cracking on at a pace of 6%, pushing inflation to 4.5%, while the main interest rate from the European Central Bank was 2.25% (H/T Tax Payers Alliance).  Ireland effectively therefore had negative interest rates, which meant that any project made sense.  Without a proper pricing of money, all you needed to do was borrow some money, buy or construct something and then watch your wealth, grow no matter how bad or worthless the project was. 

 So how does Ireland find its way out of this disaster?  My suggestion to the Irish people would be to grab some pitchforks and expel the entire political class to one of the deserted isles of the west coast.  However, over at the Adam Smith Institute they have some more boring ideas.  Essentially, get out of the Euro, let the banks fail, don’t guarantee all the deposits, make some real budget cuts, and sell off as many assets as they can. 

Ireland should take three painful steps to end its purgatory and put itself on the road to recovery. Firstly, it should end its 100% bank deposit guarantee and stop protecting banks and savers from their own mistakes. This would remove a large part of the budgetary burden. Secondly, it should default on some or all of its debt and fix its budget deficit through cuts in current expenditure. A fire sale of capital building projects and the privatization of other state assets (the state-owned gas and electricity companies, for instance) would bring in some much-needed revenue and help with the private sector recovery by opening up the number of industries subject to competition. Finally, the government should withdraw from the euro zone immediately. This would allow for a currency revaluation that would end the trade stasis that the euro has locked Ireland into, with artificially high prices depressing Irish exports.

 I still think my idea was better.

Bouncer Ken is not on the job

Remember this from the last election? From the Times in October 2009 we had Kenneth Clarke promising a bonfire of red tape.

Ken Clarke promised a nightclub-style “one in, one out’ policy on new rules on business today, vowing that a Tory government would introduce no new regulation without getting rid of an old law.

I wonder what happened to that policy?

“We will introduce a system of regulatory budgets across government, that means no new red tape will be introduced without a compensating cut in the costs and burden somewhere else,” Mr Clarke said.

He would serve as a “bouncer” to prevent red tape from reaching the statute book, promising to chair a new body to scrutinise regulation.

That sounded great.  So why then why do I see this over at Douglas Carswell’s blog (One of the few truly conservative MPs).

This great pile of papers are copies of all the new laws that Brussels has imposed on us over the past six weeks. 

My friend James Clappison, the brilliant MP for Hertsmere, plonked them on my desk on his way to the European Scrutiny Committee – which can neither delay nor veto any of it.

On the day we launch a campaign for an “in / out” EU refereundum, it is appropriate that you should be able to physically see that most of the laws and regulations that govern us are imposed by commission officials – merely rubber stamped by those we actually voted for.

Now I wonder why Europhile Ken Clarke forgot to mention that more than 75% of our laws and regulations come directly from Europe, completely bypassing Parliamentary scrutiny? 

So Ken, where’s the other pile of papers of all the old laws you promised you were going to get rid of then?  Just asking.