Ken leading the fight against the EU

Love this story about Ken Clarke being 'close' to reaching a deal with Europe over UK courts' ability to deport criminals. This will apparently enable judges to 'overrule' Human Rights legislation. 

While I'm sure there is much more to this than the headline on the BBC, I do enjoy the notion that the first tangible repatriation of powers from the EU to the UK could be achieved by Ken Clarke. 

Eurozone differences are still unresolved

This week Ireland had a very successful bond auction. The fact that there were €44.5bn worth of offers for €5bn worth of bonds suggests that investors have rediscovered their faith in the Irish economy, but unfortunately things are not that simple. Ireland's bonds were so popular because they are supported by the EU's new bailout fund, the EFSF (European Financial Stability Fund). And not only is this fund backed by 13 of the Eurozone members, but well over half of the €440bn that makes up the fund comes from European states which have AAA credit ratings: indeed €119bn, or 27%, comes from Germany alone. So the markets weren't really buying Irish debt – they were buying German. And they were doing it at a discount rate, for less than it costs to buy real German debt.

These problems are at the heart of the big struggle between Eurozone powerhouse Germany and the European Commission. Angela Merkel and Commission President Jose Manuel Barroso are at loggerheads over Barroso's desire to get the EFSF reformed at next Friday's EU Heads of State summit. Merkel wants to wait for two reasons: First, as the Irish bond auction illustrated, Germany is being put in a difficult position through the EFSF. It wants to wait until the next EU Heads of State summit in March to look at the issue and prepare a broader set of measures which force struggling states to agree to strict, standardised, fiscal controls. Secondly, parts of Germany are going to the polls in the upcoming months, and Merkel cannot afford to be seen to be bailing out the rest of the Eurozone and getting nothing in return.

The fundamental differences in Eurozone economies and the divide between the fiscally 'responsible' northern states like the Netherlands and Germany and the indebted southern states like Italy and Portugal have yet to be resolved. The recession and the creation of a permanent bailout fund have just brought them to the fore.

Weekly Round-up - 30.01.11

This week was dominated by figures released on Tuesday which showed that the UK economy had shrunk by 0.5% in the final quarter of 2010. Most economists had predicted 0.5% growth. Combined with December's inflation figure of 3.7% - way above the Bank of England's 2% target - and Mervyn King's warning that inflation could top 5% in 2011, it was a bad week for George Osborne. The figures were a gift to Labour but Ed Miliband failed to make the most of them at PMQs on Wednesday, as Cameron put in one of his best, and most statesmanlike performances.

The other big news this week was the belated publication of the Government's review into the UK's counter-terrorism measures. There was some good news - a reduction in the duration of detention without charge from 28 days to 14 days, curbs on police stop and search powers and measures to stop local councils using surveillance operations so much - and the review was definitely a success for Nick Clegg and the liberal wing of the Tories, but it did not go as far as some would have liked. Control Orders were replaced with TPIMs (Terrorism Prevention and Investigation Measures) but contain many of the same provisions, even if they are a little less stringent. The problem of dealing with these suspects outside the criminal justice system still exists though.

Elsewhere, Lord Lawson and Mark Pritchard helpfully stuck it to David Cameron by kicking up a fuss about the undesirability of coalition government. We also saw the MoD scrambling to defend itself against allegations from senior military figures that they were leaving a huge hole in Britain's defence capabilities by scrapping nine new Nimrod aircraft. And we were treated to more Eurozone grumblings as Germany continued to push for stringent budget checks across Europe rather than immediately back Commission President Jose Manuel Barosso's bail-out fund.  

PMQs Preview - 12th January 2011

So, at long long last, PMQs is back. And with it comes the very first PMQs Preview here at Woodman’s World. So after a relatively busy festive period, what issues are likely to dominate the first session of the new year?

This morning I was pretty sure that bankers’ bonuses would be Ed Miliband’s main focus. But watching today’s emergency questions to the Chancellor and seeing Alan Johnson and a host of other MPs fail to land a solid blow on George Osborne I’m not convinced it’d be a good idea for the Labour leader.

If Miliband does use this line, he better have a long list of retorts for Cameron when the PM – as he undoubtedly will – reminds the House of the scale of bonuses under the previous Labour government. A few choice quotes from Mandelson – 'haven’t the rich suffered enough' or 'We are intensely relaxed about people getting filthy rich' spring to mind – or maybe a quick mention of Sir (with emphasis on Labour’s knighthood) Fred Goodwin’s £14million bonus...

Today we found out that the decision on retaining control orders, which expire in March and was due this Thursday, has been delayed by another week or two. It’s clear that the Government is struggling to come to a decision. Given that Labour created them and took a strong line on law and order, this is a topic Miliband should focus on. Not only can Labour point to a strong, or at least unambiguous, record, but it can also make political capital from the confusion in Government – both within the coalition and in the individual parties.

Some of the detail has leaked to the BBC this evening, and Ed Balls has been quoted already as saying that the process has 'descended into a shambles', and that it is designed to 'keep the coalition together rather than exclusively about what is in the national interest'. A Labour attack on this would also tie neatly with a dig at Ken Clarke’s prison reforms and the plan to allow inmates the vote, which are making lots of Tories very unhappy.

One other option for Miliband is the EU Bill, which is being debated tonight and is likely to pass despite unease on the Conservative backbenches. The big problem with the Bill is this: it was designed to appease eurosceptic Tory backbenchers and it has failed. Indeed, this is the group which has been most vocally opposed. Labour is on risky ground with Europe after the shambles of the Lisbon Treaty but they could still make the Tories uncomfortable with a couple of well-targeted questions.

Anyway, that’s what I’d do – although previous experience suggests that it might well not be what Miliband does. The main thing is that he avoids bankers’ bonuses, because it’s worse for Labour than the Conservatives. Besides, any debate even touching on economics is likely to encourage Cameron to bring up Alan Johnson’s National Insurance gaffe earlier this week.

Other things to watch out for include the sluggish Q4 growth at the end of last year and the 50p tax rate, as well as comments on the 'nuclear option' outlined by Vince Cable before Christmas. I wouldn't expect to hear anything on Eric Illsley or David Chaytor from either party. 

Cameron's EU-Turn

Europe just never brings good news for the Tories, and many of their grass-roots members will be as unhappy as Tim Montgomerie is over on Conservative Home. Last week the government was aiming to keep the EU's budget at exactly the same level in 2011: a zero per cent increase. This week, David Cameron announced that he has 'succeeded spectacularly' by preventing a 6 per cent increase. Instead, he's got agreement from eleven states to support a 2.9 per cent increase. 

That's a definite U-turn. It's not that 2.9 per cent is good or bad (which I'll discuss later), it's just that you can't say you've 'succeeded spectacularly' when you've changed your position as obviously as he has. It's awful politics. His narrative is shot to pieces. Indeed, so obvious is this that I'm genuinely amazed that the PM has used such strong language. Because he knows that there is no group that will accept this decision. 

So Labour will attack him for his U-turn - which is an easy story to sell to the press because 2.9 is so obviously not zero let alone the 25 per cent cuts our domestic budget is facing. Which is why Yvette Cooper has pointed out that Labour made it clear at the election they would not support a rise and said that the PM was 'grandstanding' over a 'complete failure'. And Tory Euro-sceptics will complain that he abandoned them and was weak because he promised a zero per cent rise last week. So we heard Norman Tebbit saying that anything other then zero per cent was a 'Vichy-style surrender'. 

Even if it was a negotiating tactic - the EU wants 6 per cent, we want zero per cent, lets meet in the middle at 2.9 per cent - the fact that Cameron publicly went for zero per cent when 2.9 per cent was already on the table was a tactical error. Because that 2.9 per cent rise is the same 2.9 per cent rise that was agreed months ago by a larger number of EU states. And this group includes Germany and France, whose leaders carry a lot more weight in Europe than Cameron does, which makes it hard for him to claim that this is his success. Even the supposed panacea to the right, Cameron's claim that from 2012 onwards the EU's budget will be linked to the budget's of member states that are planning austerity measures, looks weak. Why 2012? Why not now? And how will that work when states have very different budgets and benefit from EU spending in different ways?

As for whether or not 2.9 per cent is a good deal, it both is and isn't. Because in so far as the EU wanted a 6 per cent rise and it does need a rise if it is to fulfil its ambitions and keep up its development then yes, 2.9 per cent is a good deal for Britain. But in so far as the fact that the ambitions the EU has and the goals it sets are totally inappropriate and lacking in democratic legitimacy from the British people, it is obviously not a good deal. 

But in reality, Cameron is in a coalition with a Liberal Democrat party that is pretty pro-European. He is not from the right-wing of his party and is, at heart, a moderniser and pragmatist. It is possible he moved from zero per cent because he had to give concessions to the Lib Dems, but it's unlikely because the Lib Dems are facing a local election nightmare and more money for the EU isn't really going to help them very much. 

Frankly I think the coalition would be happy if the EU would just keep quiet for the next five years so they won't have to deal with it. Yet if Cameron hadn't made such a simple political error in driving for a zero per cent rise he could never get then things would be looking a lot better for the PM right now. 

Quel surprise!

Liam Fox has come out and given a resounding non to the prospect of sharing an aircraft carrier with the French. This is not surprising as it was pretty much a non-starter - the prospect of sharing something of this importance with another country is logistically unworkable and politically suicidal. It has previously been suggested that we share nuclear subs with the French as well, but again that was just much too large an issue to be realistic. What is likely, however, is that less symbolic things, like troop transport planes, could be shared.

I think it was probably mooted to give traction to two other points. First, that the government will make big cuts in defence spending, and secondly that Fox wants more European cooperation on defence issues.

Crap wordplay

New Liebour

Tony Bliar

EUSSR

$ky TV

Londonistan

I keep seeing these on newspaper comments. It's partly my own fault for reading newspaper comment sections but surely I can't be alone in thinking these are pathetic?! Oh bravo, you got the word LIE into Labour because you don't like the war in Iraq. You're a hero. EUSSR?! Honestly, are people really comparing the role of the EU with the iron rule of the Communists during the cold war? Shock, horror, London has immigrants! aaaaaaah!! Whatever shall we do?! Come up with a witty pun by putting 'istan' on the end of London? Yeah, now I feel better.