New evidence abounds that Gordon Brown is not a Eurosceptic after all. Anyone sceptical about more power going the Brussels would talk differently about the latest Treaty of Amendment, and would offer a referendum. Eurosceptic sites are pointing out that Kitty Usher, the new City Minsiter, comes from a pro EU integration background, and is probably an advocate of the tax harmonisation going on by stealth.

Today the GMB have joined the campaign for a referendum. Good for them. They understand this is the old Constitution reheated, and understand??it takes substantial power away from the UK. We need to increase the pressure on the new PM. If he does not deliver a referendum, all his words on restoring trust in politics and listening to the people are so much hogwash.

The last decade has been good for the world economy, thanks to very low interest rates and easy money on both sides of the Atlantic, and interest rates of around zero in Japan. Even in badly run Britain, where interest rates have been higher than in Japan, the EU or the USA thanks to the public spending excesses leading to so much waste and inefficiency in the growing public sector, rates have been relatively low reflecting the international environment.

As a result there has been a massive expansion of debt. Many companies and individuals have borrowed in yen, paying practically no interest on the borrowings, to buy dollar investments. Clever financiers have developed ever more elaborate debt instruments and packages, mainly in dollars but also in sterling and euros, to sell to these footloose investors using other people’s money to buy their bonds. Investment products have used borrowing to buy more packages of loans to increase the return to the savers.

One of these pyramid structures for borrowing, the so-called sub prime mortgage market in the USA, has fallen badly following increases in interest rates by the Fed. At a certain level of interest rates, the poorer mortgage borrowers with low or irregular income can??no longer keep up the payments. They default on their mortgages. This means the financiers and investors who have bought up packages of these mortgages, and have borrowed more money against the mortgages they hold, have to tell their bank managers the assets (the mortgages) they bought are no longer worth what they paid for them. As this becomes apparent, some have to sell the mortgages on at greatly reduced prices to pay the interest and repayments on their own borrowings. The collapse begins, and can get vicious. If interest rates are hiked again the squeeze will intensify, as more of the original mortgagees will be unable to pay the interest, and more of the investors in the mortgages will be unable to pay the interest on the money they borrowed to buy up ??the mortgages.

So far the general view is that the sub prime mortgage market will continue to be in distress, but these problems will not spread. However, a similar pyramid of debt has been built up around company borrowing around the world. If the Fed, the ECB and the Bank of England keep raising interest rates there could come a tipping point where there was a sharp fall in corporate debt markets just like the sub prime collapse. As interest rates rise so people’s incomes are squeezed. They then spend less, which cuts revenues and cashflow to a whole range??of companies that rely on consumers. As companies find it more difficult to pay their interest on highly borrowed balance sheets, so those investors who have bought the company debt have problems with their bankers.

Today company debt is still expensive in the marketplace. There is little allowance by investors for the risks of higher interest rates and the problems that will bring. There are three possible outcomes to all this:

1. The Central banks back off - no more interest rate rises. The world economy can then probably muddle through, with?? no big increase in debt collapse beyond the sub prime mortgage market.Pyramid debt structures will stay in place.

2. The Central banks literally go for broke and hike rates substantially. They will trigger a major decline in corporate debt as well as sub prime lending. Inflation will be well and truly broken, but so will much else. The worst case would be they do to the USA and the Uk what the Japanese authorities did to Japan in 1990, leading to a decade of recession or little growth.Highly borrowed investment funds will be in serious trouble.

3. The Central Banks tighten a little more, and then switch to interest rate cuts when they see trouble emerging in company debt markets. This is the most likely course they will follow, and will require great judgement or good luck to get it right. If they go too high or leave the switch to lower rates too late they will bring down more of the debt structures just as they have the sub primes.

??

It is a dreadful idea that the taxman should have the power to take money out of our bank account when he judges it right to do so without a by your leave. There will, of course, be no reciprocal ability for us to take money out of the taxman’s bank account when he has wrongly taken our cash.

The tax authorities under Brown have become aggressive and are losing their reputation for fairness. They are busily reinterpreting tax laws to take as much money off enterprising and prudent people and companies as possible. If they were also armed with this extra power it would be a nightmare. Indeed, it could bankrupt people and companies who did not have enough money to pay what the taxman wanted and to meet their other requirements, when they had good reason to disagree with the taxman’s view of how much he should take.

I used to live in a democracy, where the tax authorites were fair and tried to interpret the law sensibly. We are losing this as??the tax collectors push new boundaries to take ever more money from us.

I hear that the government is going to ask the voters in some trial areas what they would like extra money spent on by their Council.

it just never occurs to them that most of us would like our Council to cut the Council Tax - but I bet that won’t be an option they offer!

I also wonder why we would??want to go on paying so many Councillors, if we now have to do the spending budgets ourselves. it’s just another tacky gimmick that will cost us more money as taxpayers.

The PM’s 12 points, where he intends to shift power from government to Parliament in areas of the so-called prerogative are fine. They were hyped to be more than they are. The need for?? a?? Parliamentary vote on war is not entirely new. We had a vote on the Iraq war. Parliament met to approve the Falklands war - no vote was taken because no-one disagreed. The requirement for Parliament to vote on dissolution and a General Election will make no difference in normal circumstances. The PM of the day has a majority and will be able to use it easily to facilitate??an election when he wishes. Nonetheless, it is a welcome move in the right direciton.

??

The incendiary proposal for most Conservatives - and indeed for many electors - is the proposal to balkanise England further, replicating the unloved Regional Assemblies with Parliamentary regional committees and regional Minsiters answering questions. I want SEEDA, the South East Regional Assembly, the governemnt office in Guiildford and all the rest of the regional baggage in "my region" abolished. The money saved should be given back to taxpayers. If this government really is serioous about listening to people it should understand the strength of feeling in the North-east (traditional Labour territory) where they voted down regioanl government 4 to??1 against it.

??

The regioanl proposals showed a partisan meanness of spirit after a good first half to the PM’s statement. We will fight the regional proposals all the way. If this is a listening PM reaching out he will quietly drop this provocative folly.

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">HOW CAN WE GET MORE TRAINS ON OUR TRACKS?</font>

<font face="Times New Roman" size="3">??</font>

<font size="3"><font face="Times New Roman">???????? The UK lacks transport capacity of all kinds. More people would use trains for their journeys if</font></font>

<font face="Times New Roman"><font size="3">a)</font>?????????? <font size="3">there were more seats at busy times</font></font>

<font face="Times New Roman"><font size="3">b)</font>?????????? <font size="3">there were more frequent train services, so they did not have to wait a long time if they just missed one</font></font>

<font face="Times New Roman"><font size="3">c)</font>?????????? <font size="3">they could get to the station easily</font></font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">The Railway industry has been reluctant to tackle the shortage of trains in any novel way. They are looking at two main options new signals which reduce the safety margin between trains on the tracks, and longer trains which require longer platforms.</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">The signalling option is unlikely to yield more than a 25% increase in train frequency at best. Longer trains by definition do not increase service frequency and convenience.</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">There are two other possible ways of greatly improving train frequency and network capacity, without eroding the safety margins by different signalling.</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">The first is to include some rubber on the wheels, or on separate fly wheels, to provide more grip and traction on stop start commuter services. The Paris metro uses some rubber tyres on lines with steep gradients to give the trains grip. Stop start commuter services need long lengths of track to accelerate and brake because there is so little friction between steel wheel and steel track. With more friction capacity on commuter lines could be doubled, as trains would accelerate and brake much better allowing smaller gaps between trains. The railway industry has so far been reluctant not invented here. Their only argument against is the cost of the rubber.</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">The second, now being considered by Network Rail, is lighter more modern trains. Current trains are very heavy. A 125 train set on the Great Western is 350 tonnes of train.?? 250 locomotives on the passenger network in England and Wales are over 10 years old. Old and heavy trains use a lot of fuel, are slow to accelerate and take a long distance to stop. If the manufacturers halved the weight of trains it would be possible to accommodate many more on the network, as stopping distances would be?? much reduced. Acceleration would also be enhanced, and fuel burn reduced. This in turn reduces the need to haul substantial quantities of fuel for the journey.</font>

<font face="Times New Roman" size="3">??</font>

<font face="Times New Roman" size="3">The railway industry should be encouraged by government which pays so many of the bills at the moment to use new technology to increase capacity substantially. </font>

<font face="Times New Roman" size="3">Network Rail needs to be more responsive to access and car parking problems at stations, and could embark on a rebuild programme. In many cases, as with my local station, there would be private money for a suitable redevelopment at the station site.</font>

It is good news that Caroline’s work highlighting the intrusive efforts by Labour to tax us out of house and home through their Council tax changes has led to her promotion to party Chairman. We need a Chairman who can take the attack to the government, and can represent the party rank and file to the leadership.

I also welcome Michael Gove taking over the crucial schools brief from David Willetts. Michael opposed the Home Information Packs shrewdly. He will be surer footed over excellence in grammar schools, and will have fun jousting with Ed Balls.

One of the ironies of 10 years of such a pro EU PM as Blair is the way his tenure has encouraged many more people to listen to the arguments of Better Off Out.

At regular intervals Blair said he would conduct a great debate, to tell people the advantages of membership of the EU. Each time he failed to turn up for the debate, and failed to marshall arguments in favour of his vision of ever closer union.

Meanwhile, Better off out has got across the large deficit on trade account the UK has consistently run with the rest of the EU. It has highlighted the large gross contribution to EU funds we make, made worse by Blair’s dreadful budget deal for the future. It has underlined how much costly regulation now comes from Brussels. Above all, it has shown how undemocratic the process has been, with no referendum allied to the balkanisation of England into unloved unelected regional government areas.

We badly need a referendum on the latest attempt to hijack our constitution and transfer yet more power.

It certainly looked different. The Home Secretary was attentively supported by the Prime Minister, the Chancellor, the Foreign Secretary and a bench full of other Ministers.?? Under Blair statements were usually made, if at all, by senior Ministers with just a handful of junior supporters and an otherwise empty bench.

It didn’t sound so different. The Home Secretary did not tell us anything we had not already in the newspapers, and understandably glossed over the most interesting bits about likely suspects by telling us it was a fast moving police investigation that we need to leave to them.

There was good news, in that there were no knee jerk responses in the form of new laws or further losses of civil lliberties. It was all done calmly, with the Opposition largely taking its cue from David Davis who loved bombed his opponent on her first outing.

What was worrying was the lack of real thought or new direction over the terrorist issue, despite having an intelligent and well educated new woman in the job. Her inexperience shone ??through in Commons matters, stripping David Davis of his Privy Counsellorship,?? endowing a wayward Liberal Democract with one he does not have and following it up by calling a Conservative MP her "honourable friend" even though he showed no signs of crossing the floor. More importantly, when I asked her to explain the difference in approach to air and tube travel she lamely replied that they had to strengthen security at airports because that was where the last attack had come. Surely what matters is where the next attack may be?

I agreed with her when she said we must show the terrorists we will carry on our lives as normal, but if you try to drive to an airport today it just isn’t normal. Every extra inconvenience for the travelling public is a small victory for the terrorists. As recent events have shown, intelligence and vigilance will keep us safe. No amount of physical checks and barriers can do so, given the complexities of modern life in a society of 60 million people.

If you read some of the highly spun comments here in the Uk it sounds as if Tony Blair is Secretary of State for George Bush in the Middle East in all but name. If you read the sensible statement from Miss Rice in the USA, Mr Blair’s task is much more limited. He is to help the Palestinians build their institutions. He has not been sent to broker a Middle Eastern peace settlement.

Mr Blair may believe he can bring the patience and skills he showed in the Northern Ireland peace process to the Midle East. He has to learn first that he is not in the same powerful position vis a vis Israel and Palestine that he was vis a vis Ireland as the Uk Prime Minister. He also needs to work at winning the trust of the true US ??Secretary of State, instead of trying to push the limits of the remit before he has even begun.

??I read plaudits about Gordon Brown’s measured response on TV to the three car bombs of recent days. I agree he said the right things, but the issue should be will the government now do the right things?

??This morning I read more about the continuing war on terror. Calling it a war glamorises the terrorists - they are common criminals of a particularly nasty and violent kind and should be treated as such. They enjoy the privilege of living in a relatively free democratic society - they are free to express their views, campaign for change, stand for election where they are British citizens. They should not be given a special status as political criminals if they instead decide to bomb and kill.

Is this government really new? If it is in this area it should

1. Stop tallking about a war on terror

2. Allow intercept evidence in court with suitable protection of?? sources where necessary

3. Intensify surveillance, eavesdropping and infiltration of terrorist networks.

4. Stop people from entering the UK who have links with terrorist organisations or who give reasonable grounds for suspicion concerning their intent.

5. Deport non UK citizens already here where there are grounds for concern.

What it should not do is intensify asymetrical physical controls in the belief that they will catch terrorists by making everyone else’s life more difficult. This morning we are told the BAA is stopping people driving to the doors of an airport terminal to drop people off. Yet this same morning I got on a crowded tube train with no checks on people, baggages or packages, despite previous successful bomb attacks on the underground railway. Why do the authorities think the next attack will be like the one that has just failed at Glasgow airport, rather than like the one that killed people on the undergound?

It is sufficient to warn us all to be vigilant, and to concentrate scarce police and security resources on getting closer to terrorist cells and suspects, rather than making life more difficult??for the long suffering passenger. As a tube traveller I??understand the difficulty in providing ??more physical security at tube stations. The last intensification of security at airports did not prevent the car bomb at Glasgow. Unfortunately there are always different methods??for criminals to attack us. If the airport authorities succeed in persuading more people?? to go to Heathrow by tube, rather than by car, it makes a tube bomb even??more worrying.

I read in the press - presumably from "friends of William Hague" - that George Osborne should lose his job as Shadow Chancellor, to make room for William.

That kind of comment just makes tensions at the top and is far from helpful. It is especially odd, as George Osborne has been????very robust about Brown’s pensions tax raids and other Treasury matters. Put a sock in it and show we are a team wanting to win.

The much advertised long hot dry summers of global warming have clearly not arrived??as forecast??this year in the UK. I cannot remember such a wet and cold June as the one we have just experienced.

It was good to hear the BBC tackling this subject this morning. Although there was the usual genuflection against drivers, they acknowledged that opinion is now moving on from how to stop the carbon outputs, to how to adapt to the likely consequences of global warming. Three cheers for that, as anyone who thinks China and India are about to stop their growth??in carbon dioxide outputs??is foolish.

The two things we need to do in the Uk are concerned with water. We are short of water because we have not increased supplies in reservoirs to match the rapid growth in population and the natural wish of people as they grow richer to use more water - more expensive plants to care for when it is dry, more cars to wash,more showers to use.We should get on with putting in more reservoir and borehole capacity quickly.

We should also turn our attention to better flood defences, especially to the east of London where we are building on a large scale in?? low lying areas subject to floods. The Environment Agency needs to be shaken up so it starts to take the need seriously to clear water courses, improve storm drains, and find ways to channel surface water when we do get heavy rains. The scenes this week around the country are a disgrace and show what a failure the EA is in this crucial area.

We learn that the PM was angry that he was not woken at 2.30 am to be told of the car bomb in London, and is briefing against officials.

The officials behaved entirely properly. They woke the Home Secretary and briefed her. If anyone is to blame for not waking the PM it is the Home Secretary, as she could have instructed officials to tell the PM immediately if she thought it necessary. The important democratic nicety was that a senior elected official knew and was in charge.

I think the officials were right to wake the Home Secretary, and she was right not to wake the PM. There was nothing he could have done. It is a bad sign that he does not wish to delegate and that he thinks his Home Secretary was incapable of handling the first professional response to the car bombs herself.

Too many officials report that Labour Ministers have??treated them badly - brieifng against your own officials is the height of folly and will come back to haunt him.??