At the Mansion House tonight the government will doubtless tell us the economic problems of Britain come from a global crisis – they are more the result of sub prime USA, not a sub Prime Minister. Our attention will be turned by attentive spin doctors and gullible media to wicked oil producers overcharging for petrol and diesel, and to greedy speculators chasing up the price of food and other commodities. We will doubtless be given huge reassurances that the UK is being managed well in the circumstances, that the UK economy will keep on growing despite it all, and the inflation will be temporary.

If that is the message, it won’t wash. It will reinforce most people’s impressions that the government either does not know what is going on, or is so steeped in the business of disinformation that they cannot help themselves. It is probably a combination of the two. They have spun their line so many times, many of them now do probably believe it. They may once have understood the need for Prudence, for proper management of the public sector, for avoiding nationalisation and going with the grain of markets, but they have forgotten much of that in their crude political rush to spend money wherever they wrongly think it might buy them votes.

What the government should say tonight if it wished to re-establish some economic authority would be very different. They could of course point out that the Credit Crunch is an international phenomenon, but they should tell people part of it is made in Britain. They should admit that the handling of Northern Rock was unique British bungling, and set about repairing the Bank of England before the crisis gets much older. They need to restart the sale process for Northern Rock and get it back into the private sector as quickly as possible, to limit the amount of damage they have to do to the business by running it down, exacerbating the shortage of housing finance.

They should accept that past errors of monetary control have helped fire the inflation we are now experiencing. They should say that now there is a cruel dilemma – should they mainly fight inflation with high interest rates, or fight slowdown and possible recession with lower rates? If they would take some of the pressure off the economy by moving to reduce wasteful public spending and lower the government’s borrowing requirement, they could then risk lower interest rates, and start to give a little hope to the collapsing housing market.

Proposing some self discipline on public spending, instead of the sorry rake’s progress which passes for a public spending policy, could make a lot of difference. The large transport schemes they favour should be privately financed. Regional government, ID cards, central computerisation schemes, extra civil servants, more laws and regulations – these are all luxuries we cannot afford and many of us think we do not need. Let’s have a few billion off public spending by axing these and similar costs. Let’s have a staff freeze on the public sector, exempting teachers, medical staff, police, armed services personnel and other key front line professionals.

That would send a message to markets that the government would take some of the pain of adjustment, as excess demand is removed and borrowing reduced. At the moment an honest Chancellor would have to say that all the adjustment is planned for individuals and families, which means a year or more of greatly reduced mortgage finance, of rising prices going up faster than wages, falling house prices and a cut in real incomes. This will be especially savage on the lower paid.

I would like to thank the Wokingham Choral Society for a great evening on Saturday. They performed a number of sacred and profane pieces around the theme of love, interspersed by readings.

It was a pleasure to be able to read Shakepeare’s Sonnet, “True Love”. It made a welcome break from credit crunch and the trench warfare over the EU. Well done to all the singers.

Let me not to the marriage of true minds
Admit impediments. Love is not love
Which alters when it alteration finds,
Or bends with the remover to remove:
O, no! it is an ever-fixed mark,
That looks on tempests and is never shaken;
It is the star to every wandering bark,
Whose worth’s unknown, although his height be taken.
Love’s not Time’s fool, though rosy lips and cheeks
Within his bending sickle’s compass come;
Love alters not with his brief hours and weeks,
But bears it out even to the edge of doom.
If this be error and upon me proved,
I never writ, nor no man ever loved.

The Governor may soon have to write a letter to the Chancellor apologising for the high rate of inflation and saying what if anything he needs to do about it. In a way it should be the Chancellor writing to the Governor, as the Treasury has been at the bottom of the economic mistakes that have led us to higher inflation, and the Treasury has had more power than the Bank in many of the important matters which guide our economy.

The Governor, in an honest letter, would say:

“Dear Chancellor,

I am writing to report that inflation is now above 3%. This has come about because we held interest rates too low in the period 2004-6, allowing a credit bubble to emerge. The government’s decision to switch target from RPI to CPI made our task more difficult, as the CPI at the time was lower than the RPI, and has since proved to be a very poor indicator of the overall inflation people are experiencing in their daily budgets. Indeed the gap between RPI and CPI has got larger, meaning our failure on inflation as measured by the old target is worse. We felt we had to respond to a lower, easier target once set.

The government’s love of PFI/PPP off balance sheet liabilities and its rapid expansion of public spending and borrowing made conditions far looser in credit markets than was desirable, but we did not feel we could take full action to offset the government’s own wish to expand borrowing so rapidly. We felt the Treasury clearly had good policy reasons for wanting to increase public sector costs and the size of the public sector as much as it did. It was not for us to try to throttle the economy with very high interest rates to offset this huge public sector expansion. I accept that this was wrong in retrospect.

We were also wrong to keep the markets so illiquid in August and September last year leading to the run on Northern Rock. Our options have now been narrowed by the decision to nationalise Northern Rock. This has proved expensive to the taxpayer, boosting public spending still more, and has meant thanks to EU competition law that we are having to run down a leading mortgage bank at a time of mortgage famine and credit squeeze.

What should we now do? The Bank’s options are very limited. If we chase the historic inflation with higher interest rates we will make the credit crunch worse, and cause a sharper slowdown or a recession which seems a bad idea. If we take no action commentators may well say we are neglecting the high and persistent inflationary problem. This is mainly the result now of excess liquidity elsewhere in the world creating strong upward pressure on commodity prices. There is little sign of this spilling over into wage increases at home which would give another twist to the inflationary spiral. In due course it is quite possible the speculative froth in commodities will be corrected and ease the inflationary impact.

However, it is unfair that all the pressure of adjustment to harder times is currently falling on the private sector, with housing and property at the eye of the storm. I am very conscious of the government’s ambitions and high targets for new housebuilding, which are currently unrealistic. If the government wishes to rebalance the economy and ease some of the unreasonable pressure on property and finance it needs to reduce its own claims on the economy. I suggest the government redoubles its efforts, begun with the Gershon Report, to eliminate waste and less desirable spending from the large public sector, to help the adjustment . I would be happy to assist with this process, and can see many easy targets.

Yours etc”

An honest Chancellor would write back:

“Dear Governor,

Thank you for your letter. I agree we have made mistakes together, and we need to reform our system for inflation control. I wish to discuss with you strengthening the role of the Bank in managing the money markets by restoring powers to you to monitor the clearing banks day by day and to run the government debt. Like you, I now realise the Northern Rock decisions were not well made, and we need to be careful how quickly we run the business off.

The government is concerned about the state of the housing market. We see now that getting prices down to make housing more affordable does not allow more people to buy if the mortgage market has dried up. Nor does it help if people generally decide to sit tight rather than change their houses, as it limits choice and increases the number of families living in less suitable accommodation.

It will not be easy with colleagues, but I do see the force of your argument that too much of the adjustment is being taken by the private sector in general, and by the property and mortgage sector in particular. I think there is scope to reduce public spending without in any way damaging services. You are right in hinting that public sector efficiency and productivity can and should be raised. I will take your letter to Cabinet along with spending suggestions the Chief Secretary has been preparing on a contingent basis and see what we can achieve.

I agree with you that putting up interest rates now would be an inappropriate knee jerk response. I just hope you are right and that commodity prices start to subside. It will be uncomfortable to live through much more of this commodity boom, but I see no alternative that is less damaging to UK jobs and output.

Yours etc”

It is not surprising that when China and India come to the party they need a lot more oil and the price goes up. Striking delivery drivers here do not help the situation either.

I can still buy a litre of petrol for around 45 pence, pre tax. That is good value compared with bottled water or soft drinks sold by the same measure. What I can’t afford so easily is the 70 pence of tax the UK authorities stick on top. (Based on the last price I checked out of 115p a litre – and I know it’s still going up at the pumps)

The Saudis have shown some political wisdom by offering to produce some more oil, as western politicians demand, if the West will, at the same time, cut its heavy consumption taxes on the products. As the UK government takes more than 60 pence in every pound charged for petrol, they should provide more than 60% of the price cut they are now claiming to want.

If Mr Brown really feels my pain at the pumps, he can ease it more quickly than the Saudis. I am ready to vote Yes to a government proposal to cut petrol duty any time he likes to make one.

Mr Miliband is presiding over a dreadful period for the UK’s reputation abroad. Our foreign policy bears the imprint of the last foreign visitor or international institution we have dealings with. We retreat and change positions as overseas visitors and meetings demand. The US delivered the insult to the French at the time of the Iraq war that they were “surrender monkeys”. Who are the surrender monkeys now?

In the last few days we have seen the humiliating spectacle of the UK government rushing to reassure France and Germany that the UK will speedily complete its ratification of the Constitutional treaty without asking the people, as if Ireland had not voted against. The UK government surrendered to the common Franco-German position. Simultaneously we have seen the government plant a story on the front page of the Sunday Times that the same Treaty is dead, just before inviting sensibly Eurosceptic Mr Murdoch to dinner at Number 10 with the US President. Clearly the government was unwilling to stand up to Mr Murdoch in defence of its view that the Constitutional treaty has to be railroaded through the UK Parliament, ignoring the wishes of the British people. The President announced in advance of his visit that he wished to stiffen the UK’s resolve not to pull out of Iraq to any prearranged timetable. The government went on radio and TV and dutifully said they had no pre-arranged timetable to leave, yet we have seen suggestions in the media that they do intend to get our troops out within the next year.

No wonder people hold our government in low esteem, and no wonder people do not believe much of what they say. Mr Miliband should have stood proud for the UK. He should have said to France and Germany:

“The Irish vote changes everything. The Treaty cannot now be ratified by all 27 states. If we held a referendum in the UK as we should it would be voted down here as well. Let us use the next summit to discuss ways of reducing the unpopularity of the Union with many of the people who live within it. By all means cut the numbers of senior officials and streamline its procedures, but with a view to it doing less and better, not with a view to it grabbing more power away from elected governments. We could cut officials, reduce regulation and do less without the need for a big new Treaty. The EU has to say to the people of Ireland that their views are respected, and mean it. It is quite unacceptable for the Union to be threatening or sidelining any member because they have the wrong views or are a small country.”

He should have said to Mr Bush:

“The UK Parliament and people are unhappy at the way our joint military interventions in Iraq and Afghanistan have worked out. We admire all that our troops have done, and are concerned by the continuing high casualty levels. We would like to agree a private timetable with you for joint withdrawal, but if that is not possible we do intend to get our troops home from Iraq soon. It was never our intention to become a permanent army of occupation or a police force for Iraq. We believe in self-determination of peoples.”

This morning we learn that, privately, Gordon Brown thinks the Constitutional Treaty is dead, in a carefully crafted piece briefed to the Eurosceptic Sunday Times. How can this be a private thought when it has been so thoughfully shared with the nation through a major newspaper’s front page? How can it be anything other than covering Eurosceptic fire from the top, when in practice we learn that the government intends to grind on with Lords ratification next week. It is false fire, cynical manipulation, when by their every action the government demonstrates it does not trust the British people to decided this and does not intend to be railroaded out of the project by the Irish people either. I could only be persuaded to a different view if there were an on-the-record statement by the government that the Treaty is dead, followed by cancellation of the legislation currently before the Lords to ratify.

I believe the on-the-record statements of the Euro Minister, who implies dollops of Brussels fudge to sort out the Irish once the other 26 countries have ratified whilst wisely avoiding all contact with their electors which might derail the project. Meanwhile, plucky, democratic Ireland is to be treated like some pariah who must not be allowed to “hold up” the others, and who will have to live in limbo or the dog-house for a bit whilst the Irish public cools off and is softened up for the next move towards the Euro centralising state.

It is a predictable disgrace that the Euro elite see the Irish vote as cause for annoyance, condescension and sidelining of the one country in the Union that has asked the public for a view. No wonder so many people mistrust European politicians, and so many are cynical about politics. What is it about these public servants that they arrogate the right to do the opposite of what the electors, their paymasters want? Why do they think they should be able to draw salaries and expenses of a generous nature in order to take more power away from us, and order us about in new ways, when we want the opposite?

If anyone in the European bureaucracy is listening, understand the mood of many people living in the EU. The economic performance is not good enough, taxes are too high for the amount of public service we get, and there are too many laws and regulations. Why, in such a context, do you think we want more of the same? We want change – we want more freedom.

The UK Europe Minister this morning gave us more of the tired old rubbish from the Euro elite following the stunning victory of the Irish people against their politicians in this week’s referendum.

He tells us that all other 26 states should carry on ratifying, as if nothing had happened, avoiding any further referenda which may show that this Treaty remains unpopular with a majority in many countries. The scorn for democracy is now doubly apparent – no referendum for us when one was promised, because they think we will vote the wrong way, and no agreement to scrap the Treaty, now that the one country that is allowed a say has said No. Exactly what part of “No” do they not understand?

Worse still, the EU Minister thinks all 26 other governments will ratify – over the heads, and despite the views, of their electors. Then presumably, the arm-twisting starts on Ireland, with a view to offering an odd opt-out or a transitional arrangement, and the odd, meaningless clarification of the Treaty, to “deal” with the Irish problem.

It is a disgrace that the UK government behaves in this cavalier way towards the clearly expressed views of the people of Ireland, and fails to understand the even larger majority here in the UK who oppose this Treaty according to Opinion Poll evidence. There is no mandate for this Treaty. The people do not think it either desirable or necessary. They should bin it.

They should come back with proposals to restore power and rights to the democracies of Europe, removing power from unelected officials in Brussels. They should come up with positive proposals to reduce both the cost and burden of Brussels, so we can have a tax cut and some deregulation instead of the endless diet of more spending, more taxes and more rules. When they say they need to streamline the decision processes in a larger community, it means they want to pass more laws. Why can’t they get it? WE WANT FEWER LAWS. TRY ABOLISHING SOMETHING. We do not need another bunch of expensive wannabe politicians and officials in Brussels bossing us around in ever more detail and more areas of our lives. The voters say “Get off our backs”. Instead they ignore us and make us even angrier.

Thank heavens the Irish were allowed a vote – the only country where they dared test their unwanted Treaty. Thank heavens they have voted No, showing that wherever the Constitution has been put to the people it has been defeated.

Instead of talking about the “crisis for the EU”, and saying the voters have made a mistake, the EU elite really must this time listen and change its mind. They should

1. Say sorry for pressing ahead this far, at our expense, against the wishes of so many people in the EU
2. Say they will now look at how to strengthen people and Parliaments and cut the powers the EU holds over us all as that is the clear message from a majority of voters who are consulted
3. Agree that no elements of this constitutional Treaty which strengthen the powers of the EU will go ahead. Lisbon should now be dead.
4. Accept that this is not the voters who have “plunged Europe” into more constitutional wranglings, but the elite of the EU who have plunged themselves into this by their obstinate refusal to listen

The UK should press ahead with its own referendum to reinforce the message to the elite. Given that these unrealistic bureaucrats are still talking about defying the wishes of the voters, they need to be taught another lesson in democracy.

Meanwhile our government should abandon all attempts to ratify the Treaty by Parliamentary process.

A recent blogger on this site kindly praised me for backing David Davis immediately he resigned, rather than waiting to see which way the wind was blowing. Of course – I make up my own mind on these things, and wanted to influence what happened next by being quick to judgement.

I am pleased that David Cameron has appointed Dominic Grieve as Shadow Home Secretary. We do need someone in that post in the next few weeks to carry on the campaign in Parliament. Dominic is talented and entirely in agreement with the stance we have been taking in defence of liberty. I look forward to his contributions as the government gets embroiled in battles in the Lords for its grubby legislation. It is also good news that David Cameron has supported David Davis’s view on the issue, to give the lie to any idea that there was a split on it. It is more welcome than the sniping we have got used to at the top on the Labour side.

To those who ask, why did David Davis do it, can’t they for once think that maybe he did it for the reasons he set out? He is a clever enough politician to know that David Cameron’s position is rightly strong in the Conservative party, and there is no question over the leadership. Sometimes commentators can be too clever or cynical. There is no split in Conservative ranks over 42 day detention (save for Miss Widdecombe who is retiring at the next election).

The EU should stop grabbing power from democracies, stop pretending it is a bastion of liberty and modern purpose, and understand just how hated its bureacratic and self serving ways have become.

It should issue a simple statement:

“The EU is grateful to the Irish people, and to the French and Dutch people before them, for voting No to this Treaty. It understands that if the British people and others had been allowed a vote they too would have voted it down. The Constitution will be abandoned, the EU will make no further demands for the transfer of pwoers, and it wil look at ways to make itself less intrusive and less annoying to the people it wants to serve and who pay its wages”

That was a pig you saw flying past the window.

The US Supreme Court made the right decision yesterday, giving to the interns of Guantanamo rights to justice from the civilian courts in the USA.

One of the many attacks upon our liberties perpetrated by this Labour government was its acquiescence in the arrest and detention without charge or trail of UK citizens at Guantanamo. I and others spoke out against this, urging the then Prime Minister to bring them to trial for terrorist plotting or to give them their freedom if there was no evidence of wrong doing. It took all too long before the UK authorities negotiated the homecoming of the detainees, for their freedom or their punishment.

When great democracies form a coalition to champion liberty around the world it is especially important that they do not damage that liberty they wish to champion in the name of security. Of course in extreme and dangerous wartime conditions combattants have to be locked up under the rules applying to military prisoners. There may have been a case for this in the early days of the Iraq conflict, but once the President had declared victory and the troops became policemen in a new democracy established by the invasion the authorities should have charged or released the prisoners.

Some think this position is naïve. Surely, they say, if we have suspicions about these people and think they might be planning mass murder in our countries, we should lock them up for long periods? Such conduct breeds distrust with minority communities in our own society, acts as a further grievance to recruit more evil people of violence and damages the very causes we hold dear. If the authorities have suspicions about certain people, we have given them powers to keep them under surveillance. Such powers are designed both to protect us, by gaining advance warning of any evil they may be planning, and to allow the security services to collect evidence so they can be brought to trial.

The UK government’s idea that it should be able to arrest people on suspicion and then hunt the evidence of wrong doing is dangerous as well as wrong. Let us suppose the UK authorities rightly have worries about an individual. If they arrest him and detain him for 42 days in order to try to find evidence that he has committed an offence already they alert all other members of his network to their suspicions. Those who have not been arrested can then destroy evidence, lie low, leave the country for a time or do whatever it takes to avoid arrest. If, on the other hand, the authorities use their powers to intercept communications and eavesdrop, they have more chance both of collecting evidence to charge the first person with an offence, and of finding out who all the others are. Terrorists do not normally operate on their own.

Liberty is not just the right approach. It may also be our best security.

I agree with everything David said about the erosion of our freedoms. He expressed the frustration many of us feel about the build up of the controlling state – the way ID cards, spy cameras, the loss of Habeas Corpus, the daily assault on our freedoms by nit picking regulation – now add up to an unacceptable loss of liberty. He spoke for me when he listed the monstrous assaults on freedom this government has mounted.

His selfless act to give more prominence to this issue is a bolt from the blue. I do hope the Conservative party will allow him to fight the seat as he sees fit, and welcome him back if and when he wins. He deserves to win, for surely he speaks for the overwhelming majority of English people who want to keep their freedoms, or regain control over their lives after years of stealthy assaults on our liberties. It is a commentary on the way that this government has marginalised and sidelined its part time Parliament that a leading MP feels he needs to trigger a by election to get the message across.

Good on you David. I want you to win.

If Labour fail to put up a candidate we will know they are frit, unable to face the electors on a crucial topic where they claim to be on the popualr side of the argument. Clearly they do not really believe it is the popular side if they don’t want to fight.

The Treasury and the Bank lurch from policies which promote boom, to bust, and from boom to bust again. In the period 2001-6 they followed a low interest rate strategy, supplemented by a regulatory approach which encouraged the most extraordinary boom in off balance sheet financings and a credit bubble. The government was especially keen on this, ballooning its own true balance sheet with PFI and PPP packages which it did not include in its stated borrowing figures.

In the summer of 2007 the Chancellor and the Governor concerted their rhetoric to blame the banks for this inflationary bubble, telling them that there would be no bail outs and they would have to correct it on their own. Readers of this site will remember I urged them (as others did from the banking sector itself) to make the markets more liquid in August and early September to avoid a banking crunch. The pleas fell on deaf ears, so we witnessed the run on Northern Rock. If the authorities had made less than £50 billion available in September to the markets the Rock crisis could have been avoided.

Once the Rock run began, many of us urged a quick deal to buttress the bank’s mortgage book. Instead, the Bank claimed it could not do this owing to EU rules – although on the continent under the same rules banks were rescued quickly. We had to watch the agony of the Rock leading to the eventual nationalisation of the bank.
I argued strongly against nationalisation. The government, the BBC and others allowed Vince Cable to front the ridiculous case for nationalisation and give it plenty of airtime so it would go through without it being an Old Labour idea. The Lib Dems showed themselves to be old time spend and tax socialists wanting to stick anything really expensive onto the taxpayers account: now the taxpayer has to pay the losses as the business is run down. As a result Northern Rock has effectively withdrawn from the mortgage market (for good competition reasons as a nationalised and subsidised bank) making the housing market worse. It will have to sack more than half its staff as it retrenches and fights to pay back the huge sums of money taxpayers were forced into lending it. The collapse of Northern Rock is a huge hammer blow to the housing market in the UK, as it was a large participant who can no longer play any serious part and is effectively in run off.

After the Rock had been nationalised at huge cost to taxpayers – with a maximum potential liability of over £100 billion – the Bank then made available up to a £100 billion to ease credit shortages in the markets! Why on earth didn’t they do that before the run on the Rock? Then they would have saved themselves the large sums they spent on the Rock as well. At last it seemed the authorities understood that they had to be in the downturn fighting business, and had to ease the credit squeeze.

More recently, following further increases in international oil and food prices, the Bank has decided its policy is too loose, and has warned that it might have to put interest rates up again! It effectively declared war on the property sector, and helped trigger large share price falls in the shares of the housebuilders. It threatened higher rates at a time when banks were seeking to recapitalise themselves by asking shareholders for more funds, helping to drive their share prices lower and jeopardise those fund raising activities.

The idiotic inconsistency of the authorities has reached new heights. The early 2000s saw low rates and boom boom. 2007 brought higher rates and bust. Early 2008 saw edging to lower rates and more liquidity. Middle 2008 has delivered the threat of higher rates and bust. This is made worse by their gross insensitivity to markets struggling to recapitalise the banks, and to the financial plight of the housebuilders, retailers and others. They should want a better equity market to raise the large sums of new capital it will take, following the wealth destruction brought about by their lurch from credit boom to credit bust.

It seems clear that we no longer have an “independent” Bank of England, if we ever did. The Chancellor and the Governor concerted their tough talk and their decision to say “No” to more liquidity in the crucial summer months of last year. They concerted their bungled response to the run on the Rock, and agreed the eventual nationalisation. They clearly agreed the extra liquidity earlier this year, and are now both trying to talk price increases down. I just don’t think the international oil and food markets are listening, and it makes the Governor and the Chancellor both look silly.

As a result the government’s housebuilding strategy is in tatters. When the government published its work telling us the problem in the UK was one of a shortage of new homes being built, I pointed out that you need to understand the impact of mortgage finance on the market. Take the excess credit creation away, as they have now done, and you have no shortage of homes for sale, as you cut off the possible buyers. The government went out with a demand that the UK industry move towards building 300,000 homes a year at the very top of the cycle when ti was obvious there would be a sharp fall, not an increase. How stupid can you get? They should revise their position, for this year will see a big downturn in the numbers of new houses being built.

The government should recognise there is a credit crunch, for after all they created it. In a credit crunch businesses can’t afford to build new homes, and people can’t afford to buy them. The government needs to be in downturn fighting mode.

I know my critics think I am too careless about the inflationary threat. I tell them that was something to worry about a couple of years ago when the authorities were encouraging a bubble with too much credit. You cannot stop global demand for oil and the action of global oil speculators by hiking UK interest rates. Tightening money here is not going to stop Chinese and Indian housewives buying more meat and grain. The UK economy is no longer inflationary. Each time oil and food prices go up we do not demand more wages – we take a further cut in our real pay, and rein back on other items in our budgets. That’s not evidence of an inflationary problem. It’s evidence that the government has declared war on individuals and families, and is going to make them pay for its economic mistakes by a very nasty squeeze on the living standards of us all.

I awoke this morning to hear the BBC say the irish “No” campaign had “sniped” at the Treaty with a series of “improbable claims”.

Why can’t these journalists get into their head that many Irish and English people want to keep the right of self government – hard won in Ireland’s case – in their own country. Why do they use such pejorative language about people struggling against a monstrous bureaucracy to keep some control of their own lives and some meaning to their own votes?

The BBC just can’t help itself coming over as a pro European government organisation in receipt of Euro money.

UKIP showed its true colours in the Commons yesterday, voting for Brown’s ghastly Bill. They voted against Habeas Corpus and the doctrine that someone is innocent until proved guilty, by voting for 42 day detention without charge. Don’t rely on them to save our constitution.

On his way to power at Number 10 Gordon Brown was keen to associate himself with the ever larger sums of public money the government decided to raise and spend on public services. I remember grasping just how single minded and professional he was about the use of public money when I went to a briefing on FE colleges one day.

I went because my local FE college had asked me to take up a matter for them. I was invited along with every other MP because Ministers wished to use the Civil Service to help them with the organisation of the meeting, so it could not just be a Labour party affair. I went expecting the HE/FE Minister or maybe a Junior Treasury Minister to take us through the detailed numbers of individual FE colleges and answer our queries. To my surprise we were greeted by no less a figure than the then Chancellor himself, who showed great grasp of the detailed numbers of each FE college constituency by constituency. Most of the MPs present were Labour MPs, and Gordon Brown was good at either showing them just how well their FE college was already doing, or promising them theirs would do better next year whilst thanking them for their interest and good work as constituency members.

It was a virtuoso performance which told you half of what you need to know to understand how Brown governs (The other half is when in doubt throw the kitchen sink at your opponents, never sparing the vilification). He believes that people vote for you if you associate yourself with spending large sums of money in their town or district. In this view all public spending is good. Big public spending is better. Lumps of money buy votes. Conservatives can be regularly condemned for not having spent as much, or for probably not spending as much in the future,whatever their true intentions.

Watching the PM I think we should expect more of this simple combination of bash the Tories and spend the money. The fact that the government has spent far too much and is getting such shocking value for what it is spending will not concern him unduly. The fact that the more he spends the more unpopular he becomes will not be a thought which crosses his mind. The fact that the hugely overborrowed public sector is now the main cause of poor UK economic performance will not occur to him. The limit on new debt and borrowing placed by the high levels of total debt outstanding and of new debt being drawn down will be ignored. Instead the PM will order Ministers to spend what it takes – in the naive belief that more spending will in the end win through.

First World War Generals in the first couple of years of the war, safely encamped well behind the front trenches and far back from the shellfire, ordered yet more men over the top and across No-Man’s Land in the belief that it was just a matter of time and numbers before they won. The PM takes a similar approach to public money in the face of adverse opinion polls. This week we have seen the offer of £1.5 billion to Manchester for public transport schemes, and £3000 a day to anyone wrongfully detained under the government’s lock up anyone suspicious scheme. In recent weeks we have seen £2.7 billion for the Crewe by-election problem of the abolition of the 10p tax band. The fact that Crewe did not say “Thank you” for the extra does not seem to have led to any rethink on the strategy.

This generosity is unlikely to extend to constituencies where Labour have no hope. Do not expect a generous package of infrastructure money for Henley this week to help the by-election there.

This morning we hear that the Prime Minister is offering more of our money to try to appease his backbenchers who disagree with him over extended detention without trial. Apparently people locked up for weeks who turn out to be innocent will be offered £3000 a day, as if that were sufficient compensation for the ignominy and frustration of being locked up for a month and a half, cut off from your job, your friends and your family. If you run your own business you would be bankrupt by the time the state had decided it had made a mistake. It shows how desperate the PM is to try to win over his own side. It illustrates that they do at last realise that innocent people will be treated in this disgusting way by the government. It also shows a wider point – that Mr Brown now squanders and throws money at any problem, in the mistaken belief that money can buy him popularity.

Many of us who will vote against 42-day detention without charge or trial do so out of principle. We believe in Habeas Corpus. We were proud to be born in a country which had developed strong liberties for the subject over centuries, and can scarce believe that this Labour government is so careless of them. We have hated the incoming tide of European regulation and Napoleonic law, debauching and overwhelming important parts of our law codes. We have loathed the ever more intrusive state, sending us form after form, demanding tax after tax, and expecting us to drop everything when the inspector calls or the government statistician wishes to record us in yet another data bank. We are spied on continuously, watched over by 4.2 million government spy cameras, and may now even have the contents of our rubbish bins analysed by over-zealous councils. There is no sum of money you could offer as compensation to the badly treated to persuade us that the state should have yet more power to boss people around and take its time with its investigations.

This government does not know the meaning of the word FREEDOM. Its ignorance of history means it fails to grasp the skilful English settlement based on the presumption that someone is innocent until proven guilty, and we all have the right to know who accuses us of what if we are dragged into the criminal justice system. It also means that the government does not understand the peaceful but doughty resilience of many English people to overmighty government. The opinion polls and the Sun may think the further erosion of Habeas Corpus to be a good idea, but I know of no true born Englishman or woman who thinks he or his neighbour should be locked away for 42 days on the whim of authority with no good cause shown and no case brought before a magistrates court.

Yesterday, at the second reading of the Climate Change Bill, John Redwood urged the Government to lead by example and ensure that it sets and meets rigorous enough targets for its own carbon footprint.

Later in the debate, he reminded Ministers of the need for multilateral action on climate change, and the danger that unilateral obligations might merely shift carbon emissions overseas rather than reduce them, hitting the UK economy in the process.

The two exchanges, taken from Hansard, follow.

(1) Mr. Redwood: I am very grateful to the Minister for giving way; he is being very patient. I find targets much more convincing and plausible if they relate to the next year or two, rather than to a 40-year period, and if they relate to things that the Government themselves can manage and are responsible for. Will the Minister propose targets for the next one year and two years to cut the carbon footprint of the Government? We would find that very welcome.

Mr. Woolas: On the latter point, the Government’s carbon footprint is clearly a priority. As the Sustainable Development Commission reported, we have made some progress, but we are the first to say that we must do a lot more. The important point about the Bill is that greenhouse gas emissions are cumulative, and therefore whatever one’s end target after a period of years, it is the cumulative gathering of gases that is important. To my mind, therefore, the interim targets are much more important than the end targets. That is why at the heart of the Bill is the idea of five-year carbon budgets—another way of saying targets—with the built-in idea that annual, indicative ranges should fall within them. That, I think, meets the right hon. Gentleman’s point about immediacy. The Government as an organisation will be covered by the carbon reduction commitment, and I expect that that will accelerate change as well.

(2)Mr. Redwood: Does my hon. Friend agree that it would be foolish of this House to impose costs and obligations on businesses operating in Britain that are not matched by similar obligations elsewhere, as that would simply drive business overseas and not actually cut total carbon output?

Mr. Ainsworth: My right hon. Friend makes an important point that I will touch on later if he is patient and that will no doubt receive a lot of scrutiny in Committee. However, it is worth reiterating that we are not dealing here with trivial issues. The Climate Change Bill is a small but potentially important part of a global effort to reduce the impact that our generation of human beings is having on the ability of future generations to live in peace and prosperity.

This week sees the vote on 42 day detention without trial. The Prime Minister has managed to unite the Labour left, the Liberal Democrats, the Welsh and Scots Nationalists and the Conservatives against him. The DUP are still making up their minds. The PM thinks this is a sign that he is both tough and right. Polls show the British people have no objections to locking up possible terrorists before due process, but, if you asked them whether the government should have the power to lock up whoever it likes for 42 days whilst it goes on a fishing expedition for evidence of a crime, there might be a different answer. Brown clearly wants to be able to make Parliament vote for an extension of the detention limits to show he can do something Blair failed to do. It is pathetic gesture politics. If he wins we will then have to put up with days of spin. telling us he is strong, brave, consistent and on the side of the people. If he loses it is a further nail in the political coffin his party and policies are making for him.

On the other side of the Irish Sea an even more important vote is taking place. The latest opinion polls put the two sides neck and neck, after months in which the polls and the pundits assumed an easy victory for supporters of the EU Constitutional Treaty. Cynics say that even if the Irish vote “No” to the EU plan it makes no difference. The EU will carry on regardless, and in due course maybe Ireland will be required to vote again to come up with the answer the Eurolords demand. Listening to Peter Sutherland on the radio reminded me of the vacuity and laziness of the pro EU case. Sutherland just assumes that all enlightened people must want to “share sovereignty”, and will see the inevitability of the Union. He made no attempt to explain why it would make voters’ lives better. He was not asked by incompetent BBC journalists how you can “share” sovereignty, or how far he wished the Euro superstate to go – as so often he was just allowed to get away with a Euro rant. The big extension of powers of the new Treaty, and the remarkable similarity of the Treaty to the old Constitution rejected by voters in France and Holland did not trouble Sutherland or his interviewer.

There is a chance that in the current mood of displeasure with all established governments, because of the poor performance of many economies, the Irish voters will turn out and defeat the Constitution. If they do we must then join them in demanding proper consideration of the implications. Everytime so far the Constitution has been put to electors in a referendum it has been rejected. Surely all those of us who value and support democracy can demand that on this occasion the EU has to understand the meaning of “No”. If Ireland votes “No” the implementation of the Constitutional Treaty must stop, and the provocative advances to a European army which the Irish will be especially worried about should be reversed. Either way, we need to demand the right for UK people to have their say – for we doubtless would say “No” given the chance.

Yesterday in Business Questions, John Redwood urged the Leader of the House for a debate on tax poverty to address the current squeeze on lower-income households, and the Government overspending which underlies it.

The exchange, taken from Hansard, follows.

Mr. John Redwood (Wokingham) (Con): May we have an early debate on tax poverty, now that the Government are driving so many people into despair over the ever-rising taxes, charges and impositions? That would give us an opportunity to expose the wasteful and needless expenditure on things such as unelected regional government, over-manned quangos, ID cards and computer schemes, and to offer some relief to people if only the Government would manage things better.

Ms Harman: Taxation and poverty are important issues, but I find it a bit much that that request should come from someone who voted for VAT on gas and electricity to be 17.5 per cent. I might consider that request if it came from someone else, but not from the right hon. Gentleman.

Later, in the debate on knife crime, Mr Redwood encouraged the House to consider the behavioural trend of some youths, rather than simply focussing on their choice of weapon.

The exchange, taken from Hansard, follows.

Mr. John Redwood (Wokingham) (Con): On a related point, is not the problem primarily one of feral youths in gangs going armed? If they are prevented from going armed with knives, they might go armed with something else. We need to concentrate on how concerned adults somewhere in their communities—parents, relations, teachers, youth workers or whoever—gives them a purpose for living, other than going out on the streets and causing trouble.

Mr. Coaker: Again, that is a perfectly reasonable point to make. Indeed, the young people whom I met this morning made the point that good role models are needed, that people need to be responsible for young people and that their roles and those of schools, voluntary organisations and faith organisations are crucial. However, as well as all that, we are trying to put across the message that there must be a deterrent in the law, so that people also know that the expectation is that they will be prosecuted if they carry knives. That, as well as the other measures that the right hon. Gentleman refers to, is an important part of our work in trying to attack the problem