The disagreement between the UK and the USA over withdrawing troops from Iraq always seemed to me to one about when rather than if.
The UK’s change of Prime Minister always made it likely the government would want to speed up the disengagement of UK troops. The UK analysis of the value of the troop patrols in Basra probably also pointed towards an early transfer of responsibility to the Iraqi forces the Uk has been training to do the job, allied to stronger Iraqi national efforts to get some political progress amongst the warring factions on the streets.
The US President wanted to give extra force a try as his reponse to mounting criticism of the war at home in the mid term elections and afterwards.It was unlikely that this could amount to a lasting settlement. At some point the US has to allow a democratic Iraq to police its own country.
We know that George Bush has only a little over a year to complete his mission. It is likely that the next President, whoever that may be, will want to bring US troops out of Iraq as a sign that things have changed.
What is needed is more effort at exploring how the differing communities within Iraq can live in peace together or as neighbours. That requires some political leadership from within the new Iraqi democracy. It is late for the allies to try to impose a new settlement from outside. Uniting the country will require great powers of leadership. Power sharing or devolving power might be tried. Holding a referendum on whether there is a desire to make a country called Iraq work or whether people want different arrangements might concentrate minds.

Yesterday I concluded the public sector could prevent me working in my London office. Parliament is the customary expensive building site for the long Parliamentary vacation. The road is closed outside, the escalator to my office is out of action, and only one lift manages the journey to the higher floors in my corner of the building. I am sure some of the works they do each summer are unnecessary. It means every time there are noisy machines going, blocked up entrances and exits and parts of the building you cannot use.

Worse still the tube went on strike. Trying to get to meetings in London beyond walking range became extremely difficult. It is easier to work from the constituency using the technology of the email and the web.

I do hope the authorities find a way of cancelling the Metronet contracts and getting control of the main part of the tube back in house. The PPP was an expensive mess, as the problems of Metronet have now shown. When I first read details of the 30 year contracts with so much vagueness about pricing and financing beyond the seven and a half year stage I was amazed that government could sign them.

I favour the Londoners Tube system I proposed as an alternative to the PPP. The idea was to offer free shares to all Londoners and staff in a series of competing companies, that owned single tube lines, and all the trains and signals that go with them. At the same time more money would be raised from the market by selling additonal new shares in these companies, so they had cash to improve and expand their line. They would also be free to dig new lines like Hackney-Chelsea.

There would be a London Underground company which owned the overall franchise, handled ticketing and promotion of the tube through the tube map and by other means. Individual companies would own stations that only served one line, and would own the part of an interchange station on their line. The common parts of the interchange stations would be owned by the London Underground company.

Then we might have tube systemn which worked, which did not go on strike, and which had some cash to install air conditioning, more trains and even extra lines.

The Prime Minister has spoken about a great idea. It’s time the political classes allowed people to feel more involved with their democracy. There are a number of ways of making this come true.

1. Hold a referendum on the EU Constitution - we were promised a vote and need a vote. This country’s relationship with the EEC/EU has changed dramatically since the last referendum in 1975, and the electorate has changed a lot too!

2. When local and national government hold consultations and there is a clear majority feeling sent back, government should abide by the wishes of those who have responded.

3. Elected politicians belonging to the majority should take more responsibility for government decisions, and should hide behind advice, EU requirements and the ubiquitous quango rather less.

4. Scrap unelected regional government, so it is clearer who is making the decisions.

5. Encourage a more serious debate about the pros and cons of choices facing government, instead of one side having to assert that every decision was perfect in case the opposition claims the decisons were always bad.

I am glad the Sunday Telegraph has revealed that in the last four years Corporation Tax receipts have gone up by 50% in the UK.

Earlier in the week we were told that one third of UK companies paid no or very ltitle Corporation Tax in 2004-5. The proponents of this story did point out that banks and oil companies were paying substantial sums, but they implied there was something wrong with the rest of business.

It now appears that one of the reasons many British companies were not paying very much Corporation Tax was that they were not generating very much profit in the UK, or they had large tax losses from previous years to offset profit. Meanwhile more foreign companies had come to the UK and were paying more tax on their profits here.

I am all for lower tax rates and removal of reliefs that are too generous, to create a fairer and flatter structure. I also think that those who complain about comanies not paying enough tax should look first of all at how much money they are making. They should also remember that those same companies with small profits were doubtless making large contributions to the Exchequer in the form of national Insurance and employer payments of Income Tax for employees.

I do not like regimes that burn books, impose heavy censorship or require the teachers to stick to a script the state approves. I was brought up in an educational system which was influenced quite strongly by left of centre thinkers and by sympathisers with Marx, but because I had access to other ideas they did not capture me!

The biggest success of the post war world was the victory of the idea of freedom over communism, visible when the Berlin wall came down and the Eastern European states voted for change and democracy. It was not NATO troops or invading US forces which brought about such a dramatic change, but the bravery of people in Eastern Europe who had the flame of freedom in their hearts despite the censorship and tyranny they lived under. Earlier attempts in Hungary, Poland and Czecholsovakia at uprising had been brutally dealt with, but by the end of the 1980s the USSR high command realised their system could not compete with the West and could no longer maintain its iron grip over the satellite countries.

Sometimes people put forward proposals based on censorship. We ourselves have some censorship in the UK, to deal with abuse of freedom of expression by those who deal in pornography, libellous remarks, or promote terrorism and racism. Of course a free society has the right to protect itself against such abuses. We should ,however, generally welcome freedom of expression, as our shared democratic ideals offer hope to those who do not currently live in such freedom.

Readers of this blogsite will know that I think the Central banks hold the future of the markets in their hands at the moment, and have felt for some time that both the Fed and the European Central Bank will shift to lower interest rates and a looser policy to limit the damage they have been doing to the banking system.

This week has seen movement in that direction. The Fed has now said that it will take necessary action to limit damage to the real economy and housing market in the USA. The ECB has removed its presumption of a further rise in interest rates. Unfortunately for them the French President is now claiming that his insistence on lower interest artes has worked, implying that the ECB is now a creature of political interference, which is not helpful for their credibility as an independent Central Bank.

Both the Fed and ECB have looked over the precipice of the debt mountain they encouraged, and have decided that it is too far to fall without a parachute. They have both injected susbtantial cash into their respective markets when the banks have been unwilling to lend to each other, to avoid more painful and embarrassing adjustments. They are now sending out messages to all those who have borrowed too much that the squeeze will not get worse.

Meanwhile, US house prices will fall further, fewer new mortgages will be available, and the building industry will feel the change. The Euroland economy is slowing, and investors around the world will gradually assess the damage as they find out if their pension funds, insurance savings schemes and other funds have lost out in the intricate world of the highly indebted hedge funds. Banks have to reassure their depositors and shareholders, by publishing up to date figures on what has happened to their profits and reserves, as a result of the big change in values of many of the dodgy debt packages which had become so prominent in financial markets before the bubble burst.

Keith Vaz MP usually sticks to the government line, so it was interesting to hear him calling for a referendum on the Constitutional Treaty and to hear official unnamed sources telling him he could not have one. Meanwhile Mr Miliband was left saying Parliamentary ratification was better than a popular vote, as if he was afraid the ground might shift under this current position.

I guess the Brown strategists have looked at a possible "golden" strategy for an autumn eleciton allied to a referendum on the EU constitution. Their first impressions might have been favourable, as taking the sting out of the Euro mess might well help the Labour vote. It would certainly reassure some floating voters that this PM, unlike the outgoing one, was prepared to stick to Labour’s word on this important matter, and it would allow partially disenchanted Labour supporters the liberty to vote against the government’s unpopular grand EU project whilst keeping a Labour government. It would remove the potency of David Cameron’s strong support for a referendum, and end the otherwise remorseless embarrassing questions about why Labour had lied over a referendum in the 2005 election. It might give Mr Brown the best chance of a majority he is likely to have.

Second thoughts would have set in as the strategists realised that Mr Brown is apparently as signed up to selling this country out in Brussels as his predecessor. Mr Brown would presumably recommend a Yes vote to the Comnstitutional treaty, and would have to make speeches and statements in favour. As he is likely to lose the referendum, probably by a very large margin, this would leave him in an impossible position. A Prime Minister who has just lost a referendum on a major plank of his policy would find it difficult to provide credible leadership from then on. He would be in the same positon as one who had just lost an important vote in the Commons, showing he no longer commanded a majority. How could he handle the follow up in Brussels to the UK’s refusal to go along with yet another dose of federalism? How would he go about freeing us from the many aspects of EU meddling that we do not like, when he and his colleagues have brought in so many of them?

The only way the "golden" scenario would work is if Mr Brown distanced himself from the EU Constitutional Treaty, reminded people of the Eurosceptciism journalists tell me he used to express in private, and make it clear he wants a renegotation of the UK’s position and would feel his hand for that would be strengthened by a "No" vote. It does not look as if he is up for that, which is a pity for us. It also means an autumn election is likely to be judged too risky for The PM.

I am a free trader. Countries that trade with each other on a grand scale are less like to fight each other. The theory of international specialisation, which says we all get richer if we specialise and trade with other specialists, does work.

Since 1945, the freer world has made big economic advances, creating many more better paid jobs, and raising average living standards greatly. Countries that have opted for protectionism, or for completely closed systems like communism, have kept their citizens in poverty.

The UK entered the Euroepan Community because the British establishment felt it was the way to create free trade between Western European countries. They sold this to a majority of the British people in the 1975 referendum. They failed to explain that there was a parallel global process under way, the successive rounds of the General Agreement on Tariffs and Trade (GATT - developed subsequently by the World Trade Organisation, WTO). This has made a bigger contribution than the EU to creating free movement in goods, adding many more countries in, and creating a framework of rules to police freer trade between most countries. Pro Europeans usually claim that our membership of the Eu brings the benefit of free trade with other European countries, without pointing out that this trade is now underpinned by the World Trade Organisation rules.

The EU has become one of the restraining influences on world trade, often opposing liberalising rule changes in the WTO, and obstinately refusing freer trade in agricultural products along with successive US administrations. This keeps us poorer than if we did liberalise, and prevents developing countries selling as much of their agricultural produce as they would like to richer markets.

Even many of the mnost ardent free traders accept that there should be restrictions on trade in dangerous substances from nuclear materials through weapons to narcotics. Outside this limited list, the freer the trade is the richer people will become. There are worrying signs of protectionism on both sides of the Atlantic, from the French President to the Democratic Congress, which need to be resisted.