One week on and I still have neither a phone line nor a broadband connection. I am expecting a long saga trying to get it sorted out. I have to go elsewhere to carry on blogging.

Competition is the answer, and we need more of it.

Conservative Hammersmith and Fulham have got off to a great start, by cutting the Council tax and improving services. When you take over from Labour that is not difficult.

They are doing it by market testing many of the Council’s activities, and reducing the administrative overhead. They are using the large savings they are making to boost neighbourhood policing as well as reducing the tax bill. They are going to promote home ownership and help people on lower incomes to buy their own place.Their aim is to get their tax level down to Wandsworth levels. Judging by the intensity of Labour protest in the Commons, Labour MPs realise this is the way for a Conservative Council to be popular and to remain in?? office, as Wandsworth and Westminster have shown. Labour MPs never bother to criticise Conservative Councils that put the tax up, because Labour always approves of charging people more for everything provided by the public sector.

I hope other Conservative Councils will set themselves the same objective. They too could impose a staff freeze at the Town Hall, and could market test more of their service provision. People are sick and tired of Council tax rises, with endless glossy brochures, networking committees and busybody programmes, anti motorist road changes and the rest that comes from the high spenders.

Most people in the UK strongly oppose a federal EU state. We are fed up with the continual power grab??by Brussels, and the dissimulation by this government as they give more and more power away. Yesterday in the House??Conservatives failed to get a commitment to a referendum on part of the Constitution when we pressed, if they decide to smuggle some of it in by the back door. It is typical of this government’s approach.

Some now think the only answer is to declare unilateral withdrawal from the EU. There are two big problems with this approach. The first is there are??no MPs??elected??to vote for this in the present Parliament, and no-one thinks there will be any elected on such a ticket for a fringe party after the next election either. Secondly, we would need a series of agreements with the EU and other European countries which would need to be negotiated when changing the relationship. For example, we need agreement for landing rights at continental airports, train route agreements through the Tunnel, general trading agreements, environmental agreements over cross border pollution, agreements over the use of the North Sea and Channel.

Countries outside the EU like Switzerland have a complex series of agreements with the EU to sort out trade, transport, environmental and border issues.

The issue therefore is a simple one. If you like me belong to the Eurosceptic majority that wants a different relationship with the neighbours, is it best to negotiate without unilateral withdrawal, or try to negotiate after you have pulled out?

It seems obvious that you should negotiate. The best approach is for the UK government to seek to negotiate a relationship we can be happy with, and then put that to the UK people in a referendum. The fact that the result of the negotiation will?? be put to the people would give the continental negotiators an incentive to give us a better deal, for otherwise the UK will reject it.

In the last three General Elections Eurosceptics have split their votes, giving the federalists an even bigger majority. It is ridiculous that a country which opposes the Euro, common borders, a common foreign and security policy and the constitution by big margins should be represented by a Lab Lib majority who want all these things.

When I asked the Home Secretary today to comment on why we will, according to the PM, be at war against terror for a generation, and why it would end after one generation,??he told me it was likely to last "as long as the Cold War".

He said he did not himself use the pharse "war on terror", but he meant somehting similar by his words. There was no comment on why it will last so long, and no sense of strategy that could help bring it to a swifter and better conclusion.

??I am asked what should the government do?

How about:

1. Get proper control of our borders, to deny entry to potential terrorists. That means 24 hour surveillance at all main ports of entry and proper examination of passports and travel documents of people that give grounds for suspicion.Concentrate the security measures against those most likely??to be terrorists. Drop the farcical ID card scheme, aimed at UK residents rather than at visiting terrorists.

2. Use intelligence to build a comprehensive picture of who at home and abroad wishes to take terrorist action against us.

3. Use control of borders to deal with people leaving this country temporarily to train as terrorists abroad.

4. Accept we will not be able to invade and conquer all countries that harbour terrorists, and seek to tackle the problem here in the UK,?? not by invading overseas.

5. Register information about all people with previous convictions anywhere in the world, and have this information at ports of entry to control the movement of criminals. Also keep records of people under suspicion, to monitor their movements, and to allow questioning if their movements??strengthen the suspicious pattern of behaviour.

The memory of some who now??want out of the EU??is very hazy.

Some of them voted Yes to remaining in the EEC?? when we had a referendum in 1975.It was a great pity they did not read the Treaty of Rome then . which is the origin of all the transfers of power which have happened since.

In 1975 I had just got my first job in the City after graduating. My employer asked me to write a memorandum on the consequences??for the economy and shares of a Yes and a No vote in the referendum. As I read the Treaty of Rome and the terms of British entry I realised that we would have to pay a lot in by way of contribution. We would liberalise trade in goods, giving German and French manufacturers a great advantage as they were better than many of our producers then were. The French and Germans would not liberalise services, where we had the advantage. My forecasts set out how we would run two large?? deficits – a deficit on revenue account as we paid many of the bills for the Community as a whole, and a bigger deficit on trade account as we bought their BMWs and bottles of wine, but they would not buy our insurance policies or our?? banking services. So it proved, and the numbers remained horrendous until Margaret Thatcher insisted in a?? renegotiation on getting some of our large contribution back. Incidentally, my employer did not like my analysis showing what a bad deal the government had negotiated, and added to my memo that share prices would fall if people voted "No", as that was the prevailing mood at the time, created by the government that argued the UK would not have a good economic future outside the EEC, for no obvious reason.

Some try to suggest today that it is all the Conservatives fault that the EU has so much power. In practise it is the fault of?? the Labour government who advised people to vote Yes in 1975 without spelling out just how much power was being transferred, and all those who were taken in by their misleading statements. All three main parties officially proposed joining and staying in. There were always more Eurosceptics on the Conservative side, although there were some good sceptics in the Labour party as well. Liberal Democrats have been consistently federalist.

Subsequently this Labour government has given more power away than any other, through surrendering so many vetoes at Nice and Amsterdam (??all opposed by the Conservatives)??, by wanting to join the Euro in principle, and signing up to the Constitution.

We need a vote on our relationship with the EU. It is so frustrating that this government will not give us the vote we need on either the Euro or the Constitution, so people could show that they are happy to trade with the continent, but do not wish to be governed by an ever more powerful and centralised EU.

Mr Blair in his closing months seems to take a delight in telling us we are sentenced to a war against terrorists which will last a generation.

After the mess in Iraq, isn’t it time for a reappraisal of this war? What does he have in mind for the next twenty years? Is he suggesting we need to invade more countries that might be harbouring terrorists, just as he ordered the invasions of Afghanistan and Iraq? Does he still think that is the right way to tackle suicide bombers? Isn’t that what he is implying by his wish to have "a debate" on our armed forces, in support of his view that we need the capability to intervene overseas?

I helped and then belonged to a government that had to deal with a prolonged terrorist campaign by Irish terrorists.Many of them were from the Republic of Ireland or assisted by people living in??the Republic. No-one dealing with that problem in the Conservative government??imagined that bombing Dublin or invading Ireland would be the way to tackle those difficulties. Two different approaches were tried.

The first was to try to arrest all the leading figures responsible for the illegal acts and prosecute them. Whenever normal judicial process was?? modified or suspended to make that task easier there were more problems as it gave the terrorists cause a boost.

The second was to negotiate with all parties, including those using violence, to see if a political solution could be found.

Mr Blair has followed the same course with Northern Ireland, relying mainly on negotiation.

If he is to sustain his view that we need to fight a 20 year war against terror, he needs to tell us more about who he thinks the enemy is, where they are fighting, and what they might do next. He then needs to explain how he intends to prosecute his war against them. Does he still believe regime change in the Middle East is the main answer?

What??is this government going to do about policing our borders, to make it more difficult for potential terrorists to enter the country?

What is he going to do about foreign visitors to this country found guilty of terrorist offences? Will they be deported after a time in prison? Could they in some cases be deported instead of being put in prison?

What is he doing to monitor and control seminaries for terrorism at home and abroad?

Does the government now agree that Guantanamo Bay was a bad idea, suspending judicial process when suspected terrorists should have been prosecuted?

If a Prime Minister wishes to lead a country into a twenty years war, he needs to tell us who the enemy is, why it matters to defeat them, and how we can defeat them. We can all see the need to prevent future terrorist attacks here int he UK, but many of us cannot see that Mr Blair yet has a winning policy for dealing with it.

Maybe Mr Brown takes a different view on this. It would be useful to hear from him on whether he wishes to spend his time as Prime Minister prosecuting the "war on terror" which has become Mr Blair’s main preoccuaption. We certainly need to know what the objectives of the war are, and what typre of battles we will have to fight to bring it to a successful conclusion. Why will it take 20 years, and how do we know we will win after such a long war?

Yesterday morning when I wanted to bring my diary up to date I discovered that in the middle of the UK’s Silicon Valley I had neither phone line nor internet connection.

I used a mobile to phone BT. They tried to tell me it was a fault with my equipment. They then told me how I could test my system to establish who was at fault.

After a few minutes with a screwdriver and a spare phone I proved to my satisfaction what I had known all along – the fault was with the BT line.

I was then told that no-one could come to reestablish the line until Tuesday, and I would have to be at home to allow them entry (difficult to see why they need it when the fault clearly lies outside the house). Nor of course could they give me an appointment time. If they decided the fault was with my equipment there would be high penalty charges.

I am very glad my income does not hinge on putting work out on the web, and that I have a mobile so I can stay in touch with people. It really is not good enough BT – you should raise your game, and be ready to repair lines that go down without arguing it’s not your fault, without threatening penalty tariffs, and offering prompt appointment times if you really do need access to people’s houses.

I am only back blogging because someone has allowed me to use their computer.

It’s a bit rich that Gordon blames Conservatives and nationalists for the current unease with the bodged devolution proposals he and his colleagues gave to Scotland and forced on England without ever asking us our opinion.

You reap what you sow.

It was never a good idea to offer Scotland more powers of self government than Wales, and to cap it with no self government for England. Now??Mr Brown presumes to lecture Conservatives, who wish to give to the English similar powers of self government through the MPs elected to Westminster for English constituencies, in an effort to restore some symmetry and fairness to our governing system.

Mr Brown will discover that the English are slow to arouse, but if he and his party continue to give England such a bad deal it will be difficult for him to control the forces for fairer treatment for England which his one sided devolution has unleashed.

Naturally as a Scottish MP aspiring to be Prime Minister of the UK Gordon Brown feels uneasy about the present position. The Prime Minister of the UK has wide powers as the chief politican of the Union over foreign affairs, defence and taxation. He also has large powers as the de facto Prime Minister of England, able to settle English education, local government, the environemnt, planning,law and order, health, social services?? and much else besides – all the issues that in Scotland are settled by the First Minister and his colleagues in the Scottish Parliament.

Gordon Brown probably remebers the huge fuss his Labour MP friends made in 1992 when a Conservative government assumed power for the whole UK with very little representation in Scotland. They claimed it meant we had no authority or right to settle "Scottish" matters. Exactly the same argument could come back to haunt a Scottish MP seeking to be Prime Minister of the UK today, for the Conservatives gained more votes in England than Mr Brown’s party in 2005.

Many will ask what does Mr Brown know or love about England? Isn’t he determined to introduce the heavily centralised, public sector led slow growth model he and his friends have pushed onto Scotland in the last decade, with such poor results for the Scottish standard of living and freedoms.

Last year the government and Pensions Regulator listened when business lobbied strenuously about the amount of money a company had to pay to the Pensions regulator to create a fund to take over pension funds in trouble and meet the payments to pensionsers.The levy came in?? at a lower level than orginally mooted.

This year they have quietly made a large increase in the required payments. The Regulator has?? to raise money under the government’s unfair and foolish legislation. Many companies will now face a large increase in?? their required payments, for two main reasons.

The first is the big increase in the total amount of money the Regulator thinks it needs, leading to an increase in the levy rates.

The second is the introduction of the pension deficits onto each company balance sheet, required by new accounting rules.?? Because companies with weaker balance sheets pay more, all companies with a pensions deficit now have weaker balance sheets than they would otherwise do because of the accounting change.

The irony is the government’s own position. The government’s balance sheet is flattered because this government just shows some of the outstanding debts. It misses out the estimated ??700 billion of pension deficit the public sector is running, thanks mainly to completely unfunded schemes where people have to rely on the future solvency and goodwill of the state.????It?? also misses out ??100-200 billion of off balance sheet liabilities for PFI, PPP, Network Rail and other items. It’s one rule for companies – show everything or face prosecution??- and one rule for the government – show very little and claim the rules do not apply to you.

The consequence of the government’s decison to set up a tax raising regulator will be to kill off??most final salary pension schemes. More and more companies??have shut their final salary schemes to new members, and some are trying to sell the closed scheme on or to wind????it up altogether. Companies are deterred from setting up new ones, because they have to pay twice – once for their own scheme, and again to help underwrite every other scheme.

It is sad that the UK’s pension position, the envy of Europe in 1997, has been so badly damaged in the last few years. It began with the government’s??large tax on pensions, taking around ??5,000 million a year out of the funds, and??the ??22 billion tax on the telecoms industry in the form of the sale of airwave rights. These two decisions led to a bigger decline in UK share prices, especially of the leading telecoms stocks, than elsewhere in the world. This??undermined the very strong solvency position of funds around the end of the last century which were heavily invested in shares ,including telecoms shares.

The problem has now been compounded by actuarial advice persuading or requiring Trustees to hold large portions of their funds in government debt. This investment strategy has undermined funds further in the last three years, when property and equity investment has been so much more worthwhile than holding government bonds. The flight into bonds has only benefitted the government, enabling them to borrow cheaply at the expense of pension funds. The pension??funds have had to buy more and more??government IOUs??regardless of the low returns to fill the gaping hole caused by the taxes and to meet the actuaries requirements.

Yesterday we had another very unsatisfactory debate on the Post Office in the Commons.

The Conservative front bench pointed out that 2500 sub Post Offices will close according to the government, but the top management of the business probably will close many more over the years ahead as they do not think they can make money out of the large network they currently enjoy. Conservatives proposed that sub post office contracts should be loosened to allow them to undertake more business for others to give them a chance of survival. It was a sensible and modest proposal, but the government could not bring itself to say "Yes". It was difficult to understand why.

The whole Post Office suffers today from poor morale and a very lop sided management approach. In recent conversations with senior management at the local level, I discovered that local postal businesses are set cost reduction targets, but they are not told what their revenue is and have no control over their property and other assets. In a normal business senior managers are set profit targets, and have some freedom to grow the reveneue rather than cut the costs to deliver. They also have more influence over property and capital investment than postal managers have to help them meet their targets.

There are a whole series of good property deals to be done to give the postal business better premises for the mail activities, freeing in town sites for other commercial development as well as for the counters business. There are ways of growing postal and other related revenues. The bosses of the Post Office should have another look at the way they organise the business, and give good managers more scope to manage. Instead of managing cuts and decline we then might see more growth. Local business units need to know what their own revenue account and balance sheet look like. The top management might then be surprised at how innovative some would become.

Last November the No Turning Back Group of MPs decided we needed to do more work on how to tackle the problem of too little social mobility.?? By clicking <a id="p44" href="http://www.johnredwoodsdiary.com/wp-content/uploads/2007/01/social-mobility-3.doc">here</a>??you can download a file which sets out my thoughts in this area.

As always, I welcome your feedback.

I have no problems with a Labour Cabinet Minister choosing a better school for her child. I do have problems that there is insufficient choice for many under this government.

I would like to see all schools becoming independent, with money from taxpayers sent to the schools chosen by parents up to a reasonable limit, so that all who want a free place can still have a free place, but at a better school with more choice than some experience today.

I also want to see better provision for special needs within the taxpayer financed sector. Conservatives have warned that too many special needs schools are being closed. Some children are better off in mainstream schools, whilst ??some are better off in special schools. Again, there should be the choice for those who rely on state schools, just as there is choice for those who can afford private educaiton.

I was fortunate to win a scholarship to a Direct Grant school from my local state primary. A previous Labour government knocked away that ladder of opportunity for people from lower income backgrounds. It is high time Labour now accepted that we need to remove the apartheid between independent and state schools, by making all schools independent, and by offering payment of fees for everyone who??wants ??that help, up to a sensible limit. Such a change would not only give people more choice, whatever their background, but would also help raise standards.

It is shocking?? but not surprising to read of the damage being done to the army and navy by this government’s budget plans and poor management of the money. I have never known morale so low, or money so badly spent.

The poor state of barracks and quarters has caught the attention of the media. Many soldiers would like to be able to gain a foothold on the housing ladder, like their friends on civvy street. The MOD should look at ways of helping soldiers acquire a property of their own – maybe by allowing them to take on poor MOD housing and fix it up for a share of the equity, coupled with a further share based on their mortgage capacity.??When they leave the armed services the equity could be sold on to the replacement coming into the service under the same equity share/mortgage scheme at market prices.

Officers I have talked to say the army does not have the expertise to go into the housing market, yet that is exactly what it has done in the rented market. Ministers need to move with the times, and let organisations into defence housing that can help arrange the finance. Another way of protecting people from rising house prices would be an army savings scheme that put the soldiers money into financial instruments linked to house prices, so they could be saving for the deposit/share of a house whilst serving.

Each naval person has a home port they return to after each operation. Maybe each soldier should have a home barracks/married quarters they return to after overseas tours. If they are going with their families on long overseas tours the army could help find a temporary tenant for their property to give them an additional rental income. Maybe more marriages would survive the stresses of army life if there was home that remained permanent during their time in the army, where wife and family or husband and family could stay during most courses of duty for the service member of the family.

If you want an independent England and an independent Scotland, with no Union, then of course my proposal is not for you.

I think it is worth a try to give England a fair devolution settlement, and then see if the public would rather live in a Union with such a settlement or wants to vote to break up the Union.

Of course if the British people voted to break up the Union then England would be governed by the English Parliament at Westminster, which would have fewer MPs than the Union Parliament, and fewer officials.

All who have written in seem to agree we need change to Labour’s bodged devolution fix, and all seem to agree that the position of England needs recognition. There also seems to be universal support for banishing all the much unloved English regional government.

The disagreement seems to be over whether the Union is worth saving, with some wanting to go straight to an independent England. Such a country would not ened a new Parliament bulding, as the Union Parlaiment at westminster would revert to its origins as the English Parliament.

I think it is worth trying the federal model I have proposed, with symmetry and fairness between Scotland, England Wales and Northern Ireland. If that did not suit the majority because they did not think it worked well or fairly, then we would have to consider referenda on whether to dissolve the Union or not. The pace may be forced by Scottish nationalists. The interesting issue is who should decide on whether Scotland should stay or leave the Union? Just Scottish voters in a referndum, or all UK voters? It is high time the government told us what they would do if Scotland votes for a Nationalist government in Edinburgh.

Many of the local and national government services in my part of the world closed down from 22nd December until 2nd January, and many public sector workers (including MPs of course- we are locked out of Parliament by??a government that does not like us asking too many quesitons)??are not yet back at work.

I would be interested to know from people elsewhere in the country of their experiences with shut down public services over this long Christmas and New Year break.

Churchill’s ringing phrase about an iron curtain coming down across Europe proved prophetic. For forty years Europe was split into a social democratic part in the west with considerable freedoms and an economic system that could keep?? within sight of the USA’s rear view mirror, and a communist east which performed so badly it was soon out of sight economically.

Conditions in the east were so bad they had to shoot people?? to stop a mass exodus to the more prosperous and freer west.

??I was proud to play a small part in the great drama of the end of communism as a governing system in Eastern Europe. When I wrote the <a href="http://www.amazon.co.uk/Democratic-Revolutions-Popular-Capitalism-Eastern/dp/1870265378/sr=8-2/qid=1168351201/ref=sr_1_2/203-2466118-7917518?ie=UTF8&s=books">Popular Capitalist Manifesto</a> in the 1980s I self consciously modelled it on the far more infamous and better known Communist party manifesto, recommending that countries seeking prosperity and freedom should do the opposite of nine of the ten central tenets in the original Marxist document.(Free education for all paid for from tax was the exception). I advised Margaret Thatcher on the changes that were emerging in Eastern Europe, and had the privilege as a UK Minister to make the first visits to leading Eastern European countries to offer advice on how to establish free enterprise economies and democracies once the Berlin Wall fell.

It is a sadness to me that after such glorious beginnings in those countries, and after such bravery displayed by the people who broke free of the evil empire, we should now be witnessing a bureaucratic curtain or blanket being thrown around the whole of Europe by the EU. We do not want over government, or erosion of?? freedom. We do not need the daily infuriating nit picking intervention in our lives that is the common fare of EU officialdom. We do not want the EU to seek to cut us off from the rest of the world, where many countries are growing more quickly and are more lively.

It is good news that Angela Merkel has said she will place deregulation at the heart of her EU policy as President in the first half of 2007. It is good that some Commissioners now understand just how damaging to our interests this hyperactive lawmaking has become. It is far more worrying that at the same time Angela Merkel thinks she can breathe life into the Constitution. That?? is part of the system which is failing, and should be buried as quickly as possible.We want less central power and freer trade, not further progress to a??forced and unloved EU nationhood.

Let me try to explain my idea again. This is not official Conservative policy which is still being discussed. The official Conservative policy in 2005 was to create English votes on English issues in the Westminster Parliament to deal with the worst imbalance of Labour’s bodged and biased devolution "settlement". My proposal goes further.

I suggest that England, Scotland, Wales and Northern Ireland all have devolved assemblies settling a range of agreed issues on the Scottish model. We elect MPs to Westminster who are dual mandate MPs in every case. Those sitting for Scottish seats sit in the Edinburgh Parliament part of the time to settle Scottish matters, and sit in the Westminster Parliament to settle Union matters for the rest of their working time with MPs from the other three parts of the UK. There would no more Scottish elections for a different cast of characters to be MSPs – instead Westminster MPs elected for Scottish seats would also be the MSPs.

Those sitting for English seats would sit in the English Parliament – meeting in the Westminster building which has been the home of the English Parliament for many hundreds of years, prior to it becoming the Union Parliament in 1707. They too will meet with colleagues from the rest of the UK to settle Union matters at Westminster, which would also remain the home of the UK Parliament. It would be up to the elected English MPs to decide what office holders they wanted to carry out their business.

These proposals would

a) Restore symmetry and fairness between the different countries of the Union

b) Save money compared with a model which required yet more politicans to be elected to a new English Parliament, and compared to the present model with the current additional elected people in Scotland and Wales

c) Ensure full time use of the Westminster Parliament and facilities, and??better value from??all elected politicians.

d) Overcome some of the weaknesses of the Scottish (and English) Parliaments being the subsidiary bodies, dependent on tax and grant votes in the Union Parliament for the money they spend. If we carry on with two different sets of elected representatives, one in the each of the devolved bodies and one in the UK body, it provides every excuse for no accountability. The devolved representatives blame the Union for insufficient funds, and the Union MPs blame the devolved administrations for running things badly. No-one is to blame. if the same people carry out the devolved functions and share responsbility for the Union functions it is easier to establish accountability.

Of course the Union can only survive if enough people in all parts of it want it to. At some point we need a referendum throughout the Union on whether the settlement is working and whether the Union is still supported.

Parliament does not meet this week – we are having another nineteen day gap.

As someone who thinks there is too much legislation already I am not concerned that we are failing to produce new laws, but I am concerned that another nineteen??days pass when the government does not have to face questioning on any of its deeds or words. It also means that when we are allowed back more legislation will be rushed through with insufficient time to??examine and amend??it.??

??I am not surprised. Doubtless the government does not wish to be asked how the cash for peerages enquiry is proceeding, what influence they are having on Mr Bush’s new policy towards Iraq, how much??sway they have with Mrs Merkel who seems determined to bring back the much hated EU Constitution, or whether over the last month they have had any better thoughts on how to get some of the 5.3 million on benefit back to work.

Devolution

No, I am not proposing the abolition of the Scottish Parliament. I am suggesting that the same people that Scotland elects to Westminster should represent them in Edinburgh as well, whilst we English MPs represent people at Westminster on both the English and the UK issues. Scotland shows just how much money the public sector can spend on setting up a new devolved Parliament. England already has a Parliament building in London which should be used for the English issues as well as for the Union Parliament. Why waste money on a new building and another set of politicians?

??Railways

Yes, we should reunite track and trains on a route by route basis, and give the franchise holders greater freedom to invest in expansion of capacity. To do this a franchise holder will need more power to make decisions, and a longer franchise to make it worthwhile.