Both the EU and the US authorities are taking actions which make private sector job creation more difficult and dearer. In the USA there are many corporate worries about President Obama’s Health care plans. Most agree on at least one thing – companies on average will have to pay more for the health insurance for their staff. Many company pension funds are languishing with deficits. The poor performance of US shares over the last decade has hit them, as many of these plans are substantially invested in domestic equity. Companies have to put more money into them. This background makes employers cautious about hiring more people.

In the EU the lawmakers are moving towards a big new raft of financial services regulation with new supervisory authorities. Taxes generally are rising in Europe, including taxes on employment and earnings. The USA too is busily putting in more Wall Street and banking regulation.

The creators of jobs and success in Shanghai, Singapore, Hong Kong, Mumbai and other dynamic centres must be rubbing their hands with glee as they see all these moves. Of course the west needs to learn from the big regulatory and management mistakes made during the Credit Crunch. That does not mean we need new regulators and more box ticking. It means we need Central bankers and lead banking regulators with better judgement. The old regulators and central bankers did not lack numbers of staff or powers. They simply got the judgement wrong, allowing too easy credit up to 2007 and then tightening too much too quickly to correct it.

The problem today is very different from the problems in 2006-7. Then the issue was excessive lending and credit. Today it is slow recovery held back by banks that cannot lend enough under the new rules and by companies that are happy to hoard the cash they generate for fear of more problems like 2008-9. The more western governemnts make it dearer and more complex to do business, the more the brake will drag on the recovery.

In the USA employees naturally value their healthcare plans, given the US health system. They also value their jobs, as the US incentives to work are more sharply defined than in some European countries. The President was doubtless well intentioned in his bid to raise healthcare insurance standards, but it raises the costs of US labour relative to other competitors. It will be good for productivty, and bad for the rate of job growth. The general fashion to much tighter bank regulation in the west will mean a slow recovery.

His statement confirms that he has shared hotel rooms with a young male assistant, and argues that this assistant was well qualified to become a Special Adviser to the Foreign Office. Mr Hague has now accepted the resignation of this Special Adviser, Mr Myers. Mr Hague tells us he did not have an inappropriate relationship with this young man.

Let us hope this is now an end to the matter. Mr Hague himself now seems to believe that it was poor judgement to share a hotel room with an assistant.

A bigger issue of judgement is far more important. What does Mr Hague intend to do to improve the UK’s relationship with the EU? How does he intend to win over Euroceptics to his tenure at the Foreign Office? When will he implement the Coalition’s promise to end transfers of power to the EU or to give us a vote on such transfers? How does he fit in EU criminal justice changes to this policy? The mutterings I hear from fellow Conservative MPs relate to this, not to the state of his marriage.

Last night’s “debate” on Channel 4 did not do Labour any favours. The candidates were all frustrated by the questions on Blair’s legacy and let their frustration show. They have to get used to the legacy issues, as they are an important part of the new Leader’s job. Any party has to decide what to fight and defend and what to criticise or ignore from a past Leader’s inheritance. Mr Blair’s impact on Labour was large, so there will be plenty of questions for many years. Only Diane Abbott looked comfortable on the topic of Blair, as she proudly reminded viewers of her major disagreements with the more contentious things Mr Blair did.

None of them managed to use a fairly free form discussion to get over a new vision of a Labour Britain. Brother David performed best, seeking to show that he could start to bring together the squablling bunch by fondly praising the better statements of his noisy charges. On a day when Mr Blair sensationally backed much of the Coalition’s economic programme the rest struggled to say something that was both distinctive and convincing. So most of them retreated to the Labour comfort zones of higher taxes, soak the rich and delay public sector adjustments, remembering who their audience is for this election. The whole point of the Blair legacy and the Blair questions was to find out if and when any of these Leaders might want to reassure or even attract strivers and successful people to their broken and reduced coalition.

Religious people will respond and ask where did the matter and force come from that led to the Big Bang? They will see in that the hand of God.

This one will run and run.

He is right to say bias to the left rather than pro Labour. There were many interviews during the Labour years that put Labour Ministers on the spot, just as surely as the BBC put Conservative Ministers on the spot. However, they were attacked for the wars in the Middle East, for their links with the USA, for failing to spend enough on a range of services and projects. The BBC did not take seriously the attacks of those of us who said the government were spending and borrowing too much, or who provided a critique of their approach to the banks and financial crisis,seeking an alternative to nationalisation.

The BBC does have an institutional tendency to think that most public spending is good and more is better. It does have a wish to look for a government solution to every ill. It finds it difficult to understand that some of us are Eurosceptic not because we are little islanders but because we dislike too much government. We are sceptics of the Brussels bureaucracy and legislative machine, not of our geographical or cultural position.

The BBC can show its new enthusiaism for impartiality by ensuring some interviews are conducted from the standpoint that there is no government answer to a given problem, or that any likely government answer will make it worse. It can show it by exposing the waste, incompetence and excessive intervention that characterises so much EU government. If it does so it will find a large number of new friends.

Tony Blair was wrong about the Middle East. He still thinks there are military solutions to Middle Eastern problems which the US and her allies can impose from without. At a time when both the US and UK administrations are learning the limits to the effects of military power in Afghanistan, Tony Blair tells us to prepare for the even bigger task of stopping Iran having nuclear weapons.

He may well be right that the world will be an even more difficult place if Iran holds nuclear weapons. That does not mean the west has the power or the right to bomb or invade Iran to stop her. The Iranian government may well be speaking for many people in the country in seeking such an armoury. Bombing installations will kill civilians nearby and may not remove all the offending stockpiles and work in progress. Invasion would entail taking on a hostile people as well as a hostile government. Bungling any such pre-emptive strike would intensify the feelings of hostility to the west.

Mr Obama is stressing again the short term nature of his surge in Afghanistan. Presumably the UK Coalition governemnt would agree in private that withdrawal from Afghanistan would be one of the most popular spending cuts they can make. The appetite for military adventure in the Middle East is waning in both the UK and the US. Over borrowed high spending governments need to rein back. They should heed their electors. Mr Blair’s views on this topic come from a different age. His belief in the efficacy of using force is an unhelpful guide to the future.

They contain two principal elements. The first is part of the general policy of cutting back the central overhead. Health, like eveything else, will have to demonstrate it is reducing the numbers of central executives, and curbing the amount of central and regional interference with the local surgeries and hospitals. That makes sense, and can be done.

The second is to transfer responsibility for “commissioning”, for selecting hospital or other treatment, from Health Authorities to GPs. This is the ultimate empowerment of the professionals, the ultimate localist move. Out will go the PCTs, Trusts of officials and part time unelected members, and in will come the budget holding GP.

I would be interested to hear your thoughts on this. Will GPs want to do this? What back up will they need to do it? Will it lead to higher quality of treatment and more patient choice?

All the time we have a system of planning that requires a national framework and a local plan it will fall to elected and unelected officials to come to a judgement about where things can be built and how much can be built. It requires us all to avoid ducking the quesiton of where building can take place, if we take the Nimby route in many popular places.

This is becoming a big issue in many areas like Wokingham, now that more power is being transferred to Councils for local decisions. Wokingham has been one of the fastest growing parts of the country in the last twenty years, with large new housing developments going in alongside substantial industrial estates and big new food stores.

The good news is that even in a crowded place like Wokingham where opinion is on the whole very concerned about continuing with the same pace of growth, there is plenty of scope to build for growth in appropriate places. The area contains the second largest Segro industrial estate in the UK at Winnersh triangle. The Council and local opinion is happy to see substantial new and redevelopment on this park, greatly adding to the available area of property, with improved road links to the motorway network. This is now underway. The Council and others are also likely to look favourably on proposals to modernise and extend the space available on the Molly Millars estate in Wokingham itself.

For those wanting to build shops there are substantial oppotunities in Wokingham Town Centre, where there are large redevelopment sites and a Council wishing to see more space completed. The Wokingham sites would also accommodate extra urban residential accommodation where permission is likely to be forthcoming.

The question of more housebuilding is the most contentious, but even here there is one large possible opportunity. The area contains the Arborfield Garrison. There are plans to move all the soldiers to Wales, freeing many acres where the brownfields could be redeveloped with a major new housing area. The final Arborfield decisions will be made as part of the Defence Review.

Sometimes it is possible to be both a realistic Nimby and to find land for the building a growing economy needs. This search for sensible answers and compromises needs to be undertaken throughout the country as we move to more local planning.

If the new localism is to work well we need to persuade more voters to engage directly with their Councillors, and more Councillors to have local media personalities and to welcome more correspondence and debate with local voters. That way we can move to a world where turnout is higher in local elections, and more thought and passion is injected into local decision making.

When people write to the local MP about a matter for the Council there are three possible responses. The MP can write back correctly pointing out that he has no power to make the decision, and that interference by him would probably be resented by local officials and Councillors. He could take the matter up with the Council, and act as an intermediary with the Council, sending on their reply when it is available. He could himelf take a view on the matter and end up defending the Council’s decision to the local voters,or in a public dispute with the Council.

None of these responses is ideal, because they all have the same main drawback. The public is not directly engaging with the people with the power to make the decision in question. Localism will require stronger local democracy. Democracy requires dialogue between decision makers and decsion sufferers. Bring it on. It will be healthier than central direction, and better than a system where there are so many layers of government you can never pin down who is to blame.

A typical local authority provides small schools for 5-11 year olds. This means they can be close to the homes of the parents. The Head can know all the children in the school and can do some teaching. It cuts the strain on local roads, and even allows the possibility of more children walking to school.

That same typical authority may think secondary school children should attend schools with 1200-1500 children on the school roll. This means they draw on children from a very wide area. It increases the strain on local roads. Head teachers often do no teaching, as the administrative and personnel tasks are all consuming. Whilst Heads and senior teachers would claim to know all the children, in practise their knowledge must be patchy at best in some cases. Only a small fraction of the pupils can walk to school.

The main argument for large secondary schools relates to student choice of subject, especially in the sixth form. A large school can afford a wider range of specialist teachers, offering a wider range of subjects. I think we need to ask if this is sufficient reason to justify building more of these large schools. It would be possible at sixth form stage for pupils from School A to go School B for a specialist course that School A cannot offer and vice versa. It is also possible to draw on the resources of local sixth form Colleges, FE Colleges and local universities for the occasional student who wants to offer an A level outside the mainstream.(I remember having reading rights at the local university library in the sixth form and attending some public lectures). In practise core subjects like maths, english, science, history and economics remain the most popular and can be staffed in a smaller school.

An ancillary argument is that a large school is more economic, allowing concentration of the overhead costs for a larger number of pupils. This argument, however, is not thought relevant in the case of primary education. It also ignores the fact that a smaller school can employ part time staff to carry out functions that need to be full time in a larger establishment, or can share administrative back up with other similar schools.

So what are the advantages of smaller schools? The first is they are less expensive to build, less of a major commitment. The second is a wider range of smaller schools offers more choice. The third is that in practise most pupils will come from the surrounding area, so travel is easier and transport strain and cost less. The fourth is they can develop more sense of community and common achievement. They could have a whole school assembly, and teachers and the Head will have more knowledge of every pupil.

I am not suggesting that big schools are necessarily bad schools – far from it. I know some very good large schools. I do, however, think more small schools in the mix would extend choice, and would offer some solutions to some of our problems. It represents the quickest way of expanding choice and cutting transport stress when capital money is limited.

In the UK Mr Ed Balls has warned that there could be an economic hurricane hitting as a result of the Coalition government’s “cuts” in public spending. In the US Ben Bernanke has pursued low interest rates and quantitative easing as the President has run very large budget deficits. Despite this, the word is that the growth reported for the second quarter of 2010 is about to be revised down substantially.

Ben and Ed have some explaining to do. Why did Germany grow the fastest of the major western economies in the second quarter, when they were running a relatively low budget deficit and announced spending cuts? Why did the Uk record reasonable growth in the second quarter when Labour had already legislated to halve the budget deficit,imposed a range of tax increases and spending cuts to capital spending and the Opposition made clear its intention to press on more rapidly with deficit reduction? Why didn’t the combination of QE and a large deficit with no immediate plan to cut it boost the US economy to the top of the pile?

We can discount Ed’s words. As a back runner in the Labour leadership contest he has to adopt more aggressive language to get some attention. The media should not take him quite so seriously, as there is little economic foundation to his UK hurricane forecast.

We need to study Ben’s words very seriously tonight. If the US does revise down its figures and if the US authorities are now very worried about a slow pace of recovery, we should expect more extraordinary monetary action. Mr Bernanke cannot cut interest rates, so he will end up printing more dollars.

Meanwhile the failed experiment with a very large budget deficit may gradually draw to a close after the mid term elections, when both Republicans and Democrats might think they need to slow the growth in the massive debt build up which current policy is encouraging. Debt can be to economic growth as alcohol is to happiness. Drink too much and you may get depressed. Borrow more and you may have a headache.

As a convinced localist, or course, all Eric can do is to suggest they think again. Let’s hope they do. Many Councils have fallen prey to the yellow line, red tarmac, bollard, aggressive kerb and sign salesmen. Our roads are in a constant state of flux, with endless niggling works to shift kerbs, erect bollards, insert refuges, add traffic lights, narrow lanes, construct artifical chicanes, remove lanes from operation, direct cycles to the front of traffic light queues, put traffic lights into all red sequences for traffic and re route traffic, turning two way into one way and one way into no way. Removing on street parking places adds to the numbers circulating looking for a spare place.

Much of this work fails to make the roads safer, but adds to congestion. It can make the roads less safe, leaving drivers lost as to the full meaning of the complex instructions, or forced into long detours to get back to where they wish to go. The road works themselves are especially good at adding to congestion, frustration and cases of bad driving as people foolishly try to make up for the time lost in the Council inspired traffic jam.

It would be good if Councils who claim to be short of money at least took a year or two off from all new schemes like these, whilst taking a good hard look at what they had done in the past. Then they might like to find money for reversing some of the more foolish schemes which have reduced road capacity without improving road safety.

I wait in vain to hear from the IFS on the impact of whether a 50% income tax is competitive when we need new inward investment to the UK, more entrepeneurship and job creation. We still do not know from them what rate of CGT the think would maximise the revenue.

The Budget document covered the ground on the impact on low and high income earners. Much of the Budget debate in Parliament and elsewhere was about this very subject. Chart A1 of the Budget red Book shows that if you take all the budget measures (Labour and Coalition) the bottom 30% by income will be less than £200 worse off. The top 10% will be £1600 worse off, and the second 10% by income will be more than £600 worse off. So far, so progressive.

If you look at the table A2 it shows it as a proportion of net income. That shows once again a progressive pattern, with the top 10% worse off by 2% of their incomes, and the bottom 30% by around 1% of net income. So far, still progressive.

Nor is it just the Labour income tax changes that are “progressive”. The Coalition’s Vat increase is very progressive. The top 10% by income will lose £850 in extra VAT compared to around £50 for the bottom 10% by income, reflecting the zero VAT on many of the staple items in a lower income budget. As the Budget books states, “the top income decile will lose almost fifteen times more” from the indirect tax changes.

I am not sure why we need to have this debate again, or how there can be new shocking evidence about the impact of the Budget measures, when it was all spelt out in so much clear and uncharacteristic detail in the Red Book.

It is time to look a bit more at what we all get for our money. Some of you have been critical of the idea that some part of your £10,000 should go to the neighbours. In practise most of the tax paid by people in good jobs goes to other people. We have a very progressive system, which gives quite large sums to people out of work (income related benefits, social housing etc)by taking larger sums from those in well paid work.

Our system of public spending includes three types of spending. There is expenditure on current publilc services which we all enjoy – we all use the roads, have our rubbish collected, are under the umbrella of the common defence, live with the same police force and seek to comply with the same Revenue, Customs, and criminal justice system. We all pay according to our means for these items of current spending which are incurred every year on our behalf equally.

There is then public spending on public services which we may need at some times of our lives but tend not to need when we are in work and earning. The state makes provision for the young and the elderly. We pay for the young and the elderly, partly because we are decent, and partly because we have been young ourselves and hope one day to be elderly. Public spending insures us by time shifting our payments in and our receipts out of the system.

The third type of public spending is spending for the greater good, spending on others which we would never experience for ourselves. Most people contribute to social housing but will never themselves live in a subsidised house. We all contribute to overseas aid.

In each case the debate on public spending poses three questions.

1.Is too much of the given service being provided? Do we fight more wars than we need do? Do we need so many regulatory systems?

2. Is the service being supplied in an efficent and cost effective way?

3. Could we pay for it in a different way?

We have spent a lot of time on this site discussing 1 and 2 about various services. Today I want briefly to touch on 3.

Some of the servcies in Category one like rubbish collection, lesiure facilities, public entertainments and sports could be paid for more by user charges and less by direct local and national taxation. We pay for our daily bread and water by direct user charging based on what we consume. More current public services could be charged in this way. We would then pay for what we needed and not for what the public sector wanted to supply and charge.

Some of the services in Category Two could be based more firmly on the insurance or loan principle. Students now pay for their university courses from loan money which they repay only if and when they are successful in finding well paid employment. The state pension is based loosely on the insurance pricniple, where you pay in over your working life in order to gain entitlement to a pension on retirement. These are two current ways in which the state helps you time shift between spending money and paying money in. This Insurance principle could be extended, to reward the prudent and to help the state balance its books.

There will always be causes and people deserving of our financial support which will not be able to repay one day. Civil government is about making good judgements about which and how much. I woudl appreciate your thoughts on whether and how we should also strengthen the insurance principle and the pay for what you receive principle in more public service areas.

The US General and the President in charge of the overall Afghan intervention need to resolve soon what “winning” looks like in Afghanistan. The langauge has changed over the long years of the conflict. We hear less now of war fighting, and more of seeking to buttress the civilian power, more emphasis on dialogue and policing type activities and less on winning a war. Yet our troops still live in dangerous conditions, and the death rate is high. The General himself still says there is hard fighting ahead, and sees the conflict in terms of putting down an insurrection. He simplifies the world into good guys and bad guys, those who support the current government arrangements and those who use violence and other means to try to oppose them or bring them down.

The Taleban are not an easily recognised uniformed army which one day will surrender to superior Allied forces. Nor will they all melt away over the Pakistan border to avoid Allied firepower, as if that were a good result. They can move around Afghanistan freely, blend into communities, win more recruits, win over a village here with their deeds and promises, terrify another village there into a kind of support. There is no advancing Allied front line, securing all behind it for the government.

So is winning going to be bringing the Taleban into the current government process, getting them to be an opposition which uses words rather than guns? Is it going to be driving enough of them elsewhere so the violence is at a less chronic level? Can Afghanistan produce a civilian government with enough credibility and political skill to unite most of the Afghan people behind a single central government of a non violent kind? When will the people of Afghanistan themselves have the confidence and strength necessary to say to the Taleban, you cannot use violence here to further political ends? Or will more Afghans end up saying they share some of the Taleban’s views?

In these difficult conditions there is only so much foreign troops can achieve at the request of the civilian power. Forcing the pace of our exit forces the pace at which the Afghan government has to tacke what are primarily its problems. Foreign troops have to leave some day. Saying the threat of our exit is undermining the job of buttressing the civilian power implies the civilian power is too weak to do the job it needs to do.

Ms Gillard did her best to clean up the mess, but she too belonged to a party associated with damaging higher taxes. It should act as a warning to all who think higher taxes are fair , green and popular. In Australian they were seen as mean, damaging and unhelpful.

The idea of public accountability, democracy and more transparency over how public bodies spend your moeny is that you should be more involved in how this money is spent.

I would like to hear from you on your priorities. How do you think your £10,000 a year should best be spent?

For my part I feel I am getting more defence than I want. I could live without the wars in the Middle East, but like to have professional forces to defend our country. I have more levels of government than I want, and wish to see the end to regional government and to much of the EU bureaucracy as it applies to the UK. I have more regulations than I need, and more quangos than I can remember the names of.

How would you like your £10,000 spent? And how much do you want of it spent on you, and how much are you prepared to see spent on the neighbours?

Yesterday the Coalition government announced a compensation and purchase scheme for home owners affected by a proposed new rail line from London to Birmingham, cutting through the Chilterns. The railway presumably has to be part of the public spending exercise.

Prior to the election the Shadow Cabinet led us to believe that this project could not be started on the ground before 2015, so the main costs of building it will fall outside the current spending review. However, initial costs of planning, land acquisition and the like may well fall in the next few years.

I would be interested to hear from bloggers if they think this is an important public spending priority. If it is, are there ways more of the capital cost can be met from private risk capital to save the taxpayer? Can future running costs and revenues be brought closer together to limit the subsidy cost? What should the timetable be for this project if it is one you like?

At last count Davis Street (Winnersh), Finchampstead Road, and Loddon Bridge Road are all closed. This means the B3030, the A 321 and the main Woodley spine road are all blocked, making north-south travel very difficult. In addition Waterloo Road, Lower Wokingham Road and Barkham Road have had or still have roadworks impeding flows one way.

I understand that the Council does not control the utilities if they need to do urgent work. However, surely it is possible to reach agreement about staggering works so more routes in a given direction stay open at any given time. It would also be good to see some new thinking, to get new utility pipes and wires put in concrete boxes under pavements, allowing easier access without digging trenches each time we need repairs. It does seem crazy that we are still laying things down the middle of busy roads and tarmacing over them.