24 MAR 2017

Secrecy in family courts must stop

New research on the family courts documents that, despite transparency guidance, only a tiny minority of proceedings are published. That’s deeply concerning – because secrecy promotes injustice.

Sadly, children do sometimes need to be taken into care. Most of the time, I’m sure, family courts make the right call.

However, some families are broken up unnecessarily. In 2008, Camilla Cavendish wrote a number of articles for The Times, documenting serious mistakes by social services. In several cases, expert witnesses gave testimony without ever having met the families involved.

The problem is that we don’t know how widespread these errors are, because the courts sit in secret. Adoption order proceedings are closed to the public and the press, and rarely published. Moreover, the identities of expert witnesses are protected. Secrecy allows injustice to be covered up.

It has long been recognised – by both ministers and judges – that more transparency is required. Yet efforts to increase it have fallen short.

Sir James Munby’s transparency guidance, for example, left the decision as to whether to publish to judges’ discretion. The new research by academics at Cardiff University reveals that very few judges have opted to do so – as a paper published by the UKIP PRU predicted.

The system needs much bolder reform. In our paper, we called for the publication of judgments to be mandatory, greater media access to both proceedings and case documents, and expert witnesses to be identified.

We also advocated greater use of Special Guardianship Orders, so that, if children do have to be taken from their families, they are placed at least temporarily with grandparents or other relatives, rather than total strangers.

Transparency helps ensure justice. It shouldn’t be resisted.

22 MAR 2017

Monetary policy is hurting productivity

 

Andy Haldane, the Bank of England’s chief economist, has admitted that ultra-loose monetary policy is a drag on productivity. So why won’t the Bank change course?

Productivity is the key to prosperity. Increased wealth comes from producing more using less effort, time, and resources. If productivity stagnates – as it has in the UK – prosperity will follow suit.

One of the drivers of low productivity growth is cheap credit. Inefficient companies that would otherwise have failed, and replaced by better competitors, have been sustained by artificially low borrowing costs.

Haldane’s case for record-low interest rates is that they prevented mass unemployment. Perpetuating zombie companies was worth it, he claims, to safeguard jobs.

That argument had some force in the immediate aftermath of the financial crisis. Less so nearly a decade later. Keeping interest rates at record lows indefinitely means making low productivity growth the norm, while at the same time creating the conditions for another job-destroying financial crisis.

Cheap money is not the only reason for poor productivity. Another, which Haldane neglected to mention, is corporate welfare. Tax credits incentivise employers to use cheap (often imported) labour, rather than invest in new technology – as UKIP’s Economy Spokesman, Mark Reckless, explains in a recent paper.

But the economic effects of artificially manipulating the price of capital shouldn’t be underestimated. Experience has shown that official price controls create either gluts or shortages. Market prices always allocate resources better.

Capital is no different. Lower productivity is one of many dangerous imbalances caused by ultra-loose monetary policy. They need to be corrected, not excused.

21 MAR 2017

Give voters the right to sack MPs

 

Like so much of what the House of Commons does these days, yesterday’s debate on MPs double-jobbing was mostly virtue signalling. That’s because MPs don’t like the real solution: recall elections.

In the United States, representatives can be recalled by their electorate. If enough local people sign a petition, they trigger a by-election. Voters then decide whether or not to renew their representative’s mandate at the ballot box.

We could have had the same system here. In 2014, a Recall of MPs Bill was announced in the Queen’s Speech.

But the title was misleading. Under the final legislation, voters can only trigger a by-election if a committee of grandees – or a court of law – has first found an MP guilty of wrongdoing. Rather than put voters in charge, the Bill let MPs act as a self-serving cartel.

Indeed, the government made sure Zac Goldsmith’s amendments to the Bill – which would have led to a real right of recall – were rejected.

Now we see why. Would the former Chancellor would have taken on so many roles outside Parliament if a recall election in Tatton were a possibility?

The debate about MPs taking jobs outside Westminster in any case misses the point. The most common form of double-jobbing is the appointment of MPs as ministers. Voters should have a say on that too.

Until a century ago, they did. Prior to the Re-Election of Ministers Acts (1919 & 1926), MPs had to face ministerial by-elections to join the Cabinet. They could only become ministers with their constituents’ consent.

Consent wasn’t always given. Between 1895 and 1926, there were 127 ministerial by-elections. On eight occasions, the ministers-designate lost.

The way to keep MPs in check isn’t to empower a toothless regulator. It’s to let their constituents hold them to account.

20 MAR 2017

Politicians and press have become indistinguishable

 

George Osborne’s appointment as Evening Standard editor says a lot about the state of the press. It ought to be perverse for a politician to be a journalist. But, when many so-called journalists do little more than push a political agenda, what’s the difference?

The idea of journalists as brave, independent scrutineers of politics may be appealing, but it’s not accurate. The relationship between the Fourth Estate and the political class is actually far too cosy.

Because politicians trade access for positive coverage, many journalists end up going native. Instead of exposing the governing elite, they act as its cheerleaders.

“That’s nothing new,” you might think. “Newspapers have always had a clear bias.”

Of course, there has always been an editorial point of view. The difference now is that there is little but opinion. Subjective analysis now masquerades as news.

During the referendum campaign, for example, it was striking how both print and broadcast media reported George Osborne’s Project Fear narrative as objective fact. No matter that none of it has turned out to be true.

Pundits frequently make out that established media are losing market share because consumers are now more interested in fake news than truth. The people, we’re told, are at fault.

The reality is the opposite. People are losing faith in established media because they see through the false pretence to objectivity. There’s a market for truth which the press is failing to deliver. Rather than cater to the public, pundits have joined the oligarchy.

Osborne will no doubt use his perch at the Standard to push the same spin he did as Chancellor. Far from being unqualified, he’s taking up an all too familiar role. That’s the problem.

17 MAR 2017

The Bank of England should follow the Fed’s lead

 

Ultra-loose monetary policy is one of the biggest risks to the global economy. Belatedly, the Federal Reserve raised interest rates this week. The Bank of England should follow suit.

There is no justification for record low interest rates. They were supposed to be temporary measure, in the wake of the financial crisis. Instead, they have become permanent. Indeed, the Bank cut them even further last August.

The consequences of artificially cheap credit are disastrous. It encourages consumers to borrow too much, banks to take excessive risks, and companies to buy back shares rather than invest in improving productivity.

Moreover, it transfers wealth from the asset poor to the asset rich. It is stoking a housing bubble that is preventing a generation from buying their own homes. 

Central banks are reluctant to raise interests because they fear the only thing keeping the global economy afloat is consumer borrowing and spending. Yet they must know that is an unsustainable model.

Eventually, borrowers will default, and contagion will spread to the entire system – just as it did a decade ago. Compounding the problem with more debt will only make the ultimate correction all the more painful. (For more on this, see my paper After Osbrown.)

Yesterday, Kristin Forbes, one of the nine members of the Bank of England’s Monetary Policy Committee, dissented from the majority decision to leave rates unchanged, and voted to raise them. Let’s hope she persuades the rest of her colleagues next month.

16 MAR 2017

Forcing U-turns is Parliament’s job

 

Pundits see the government’s decision to scrap its planned rise in NI contributions for the self-employed as the Chancellor’s failure. Perhaps it should just be seen as Parliament doing its job.

Politicos have become so used to budgets being nodded through by MPs that they have come to believe Parliament is supposed to work like this. But it’s not.

Prior to the 1930s, backbench MPs could table amendments to the budget resolutions. The national government changed the rules to prevent it. Since then, Parliament has tended just to rubber stamp hundreds of billions of pounds’ worth of spending and taxation.

Yet opposition from MPs has now forced a volte face on the centrepiece of the budget after only a week. Perhaps Parliament isn’t quite so powerless after all.

It will be interesting to see how the Chancellor now replaces the ditched measures.

In autumn 2015, George Osborne backtracked over tax-credit reductions without replacing them with alternative cuts. Instead, he conjured up an extra £27 billion from nowhere – based on conveniently revised borrowing projections. In effect, he simply borrowed more money.

By contrast, Hammond has hinted at a broader rethink of the treatment of the self-employed in the tax system – so as to achieve the same ends by different means. That suggests self-employed people shouldn’t celebrate just yet. Alternative tax rises may be coming in the autumn.

That’s the wrong approach. Rather than tax – or borrow – more, government needs to spend less.

Parliament has demonstrated that cross-party opposition can block tax rises. Now we need cross-party support for spending cuts.

15 MAR 2017

We need a Bloggers Freedom Bill

 

Five years ago, I crowdsourced a Private Members’ Bill on Guido Fawkes. From five options, the people picked a Bill to repeal the European Communities Act. How prescient they were. Now I’d like to revive another of my suggestions: a Bloggers Freedom Bill.

Britain’s libel laws are out of date. They were developed at a time when very few people published anything. Those who did were affiliated to large organisations with the financial resources to defend themselves in court.

Yet they are now applied in a world where millions of individuals – without financial backing – publish constantly, both online and on social media.

The law needs to be updated for the digital age.

People do need protection from libel, and their intellectual property should be safeguarded. But, at the same time, those posting on social media should have some security against being sued.

The Bloggers Freedom Bill I suggested would be a compromise. It would give bloggers and tweeters a 48-hour period of grace – to remove content – before legal action could be taken.

The status quo skews the law in the interests of big media, rich claimants, and lawyers. It restricts the democratisation of media made possible by the digital revolution.

Let’s make libel law reflect today’s reality – and the public interest.

14 MAR 2017

WTO terms are an asset – not a foe

 

The UK should be able to strike a free-trade agreement with the EU. It is in our mutual interests to do so. However, if we cannot reach a good deal, the World Trade Organisation helps us ensure workable terms of trade even if we walk away.

Some MPs seem to think that trading under WTO terms is tantamount to isolation or protectionism. It appears to escape their notice that the precise purpose of the WTO is to facilitate trade.

Under the most-favoured-nation principle, the EU would not be able to discriminate against UK goods with extortionate tariffs even if it wanted to.

As to non-tariff barriers, remember all British companies already comply with single-market regulations and standards by default – unlike those of any other country that trades with the EU on WTO terms.

Imports, meanwhile, would be entirely at our discretion. We could not only set tariffs as low as we want, but also unilaterally allow any product manufactured to EU standards to be sold here – thereby keeping the compliance costs passed on to UK consumers as low as possible.

Those MPs who claim any deal with the EU is better than no deal are being disingenuous about what a bad deal would mean.

An agreement that failed to restore our sovereignty, or our control over our borders and fishing waters, or our freedom to determine our own regulatory environment, or our ability to sign free-trade deals with other – growing – economies beyond Europe is an agreement we cannot accept. Acquiescence would be not only counter to our economic interest, but anti-democratic.

Those who want the government to rule out trading with the EU on WTO terms are, in effect, attempting to rule out Brexit. They are seeking to give the EU sole discretion over our terms of exit – which would mean never leaving.

But Brexit is happening. Parliament has – finally – voted for it. There is every reason to believe we will sign mutually beneficial trading deal with the EU. Yet, whatever the outcome of negotiations, we must all now adapt to a new reality.

13 MAR 2017

Brexit begins

 

264 days since the referendum, Article 50 could be triggered this week. Finally, Brexit is becoming a reality.

Assuming the House of Commons votes down the Lords’ amendments to the Article 50 Bill today, the Lords will be unlikely to obstruct the Bill again. The PM could then trigger Article 50 as soon as tomorrow morning.

Of course, there will be other big Parliamentary votes on the Brexit process – both on the final deal and on the Great Repeal Bill.

But the nature of the debate will now change. There will be no going back.

Ideally, from now on, Parliament would play a constructive – rather than obstructive – role. We can now have substantive discussions about vast areas of policy that were delegated to the EU.

Taking back control shouldn’t be thought of as the end of the process, but the beginning. Power should be spread outwards and downwards: not just from Brussels to Westminster, but from Westminster to local communities, and ultimately to individuals.

But, as the budget debate testifies, the instincts of both the government and the opposition are fundamentally statist. There is a gap in the political marketplace for a localist, classically liberal domestic agenda.

I set out some ideas for what that agenda could look like in my new book, Rebel – published April 6th. No time to lose.

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