Peter Hain resigns at last

Peter Hain has resigned. This is not shock news, what is a shock is that up until today he was still in office. The man failed to declare over £100,000 in donations to his campaign for the Deputy Leadership of the Labour Party which were routed via a fake think tank that seems to have served no other purpose, and which therefore suggests a degree of premeditation at least. His defence was pressure of work, or as Gordon Brown put it ‘incompetence’, neither of which would be allowed by any judge in the land as a reason for breaking the law. Sill, he clung on to office, despite little or no support from within the Labour Party, never mind from anyone else. Brown, typically, couldn’t decide to sack him, so he limped on until today when the Electoral Commission’s decision to refer the matter to the police finally convinced him that the game was up.

The declaration of donations and the associated administration has become something of a stick used by politicians to beat each other, but the law has a serious purpose. Without transparency on where a politician, and an officeholder in particular, obtains the funds for political purposes then there is always the danger that a decision can be taken to favour a party for reasons other than the public good. More than £100k from anonymous donors hidden behind a front organisation would have meant that there were people to whom Hain was beholden unbeknownst to anyone but Hain and his funders. This is not a technical breach and he should never have made such an arrangement and should have been turfed from office as soon as the scheme was uncovered.

A criminal investigation could be bloody, especially as the police are so keen on Labour at the moment.

Public Finances gutted to support Northern Rock

So, for all of the tough talk the government have caved in and have now offered an absurd level of public financial support for a private sector bailout of Northern Rock. Let us not forget that an offer by Lloyds TSB when the crisis first broke was rejected out of hand, even though it entailed a much lower level of public risk than what it is now on offer. Now they are going to guarantee all of the Rock's exposure to the Bank of England as some sort of long-term bond issue, which drops it neatly on top of Britain's existing public debt. This was already running perilously close to the limits set by the government and this breaks it completely. So what? Well, it will affect Britain's sovereign debt position, because the cost to our country of borrowing money is very much dependent on the UK's existing level of indebtedness. That means a bottom-line cost to our taxpayers, and for years. More public debt also reduces the government's room for manoeuvre in the short-term, and let us not forget that we have a real danger of either reduced growth or outright recession in 2008. Basically, the government position means that of all of the other potential commitments for public money, it has decided that Northern Rock is the most important. That is patently absurd. What is really going on is that Gordon Brown has bottled it again. This time he is too scared to take on Northern Rock and shut it down, which is the only way the public's financial position can be safeguarded. What they are proposing makes no sense in business or public policy terms, unless you want to avoid short-term political pain. Once again the country's interests are sacrificed to manage tomorrow's headlines. And Brown was meant to be different.

Radicals on the Internet

The internet is a wonderful thing. It allows social networks to form that bring small numbers of interested people together in ways that were impossible before. So, new mothers with twins, or cancer patients, or coin collectors can virtually meet and converse in a community, representing a real change to the way that people with the same issue or outlook or hobby organise themselves. Unfortunately, this also applies to suicidal people, anorexics, or those deluded by the half-truths of bogus science. It also applies to terrorists. Now, this social shift happened years ago and it has taken years for the government to belatedly wake up to the new dangers of an interconnected world. Some wannabee terrorist can put up a load of inflammatory material on a website, moderate a forum for violent nihilists from across the country and recruit and indoctrinate the vulnerable by remote control. At last something is being done about it, with an announcement by the government that what action can be taken will be taken. Regulating the Internet is very difficult because it crosses frontiers and material that is illegal or offensive in one jurisdiction can be sited in another, and so evade legal action. However, difficulty is no excuse for doing nothing. Let's hope the government doesn't get so far behind the next technology and social trend.

Northern Rock Nationalisation Endgame

Some time I blog posted that Northern Rock has been effectively nationalised by the extension of huge government loans to prop it up. Now, it looks like the de facto nationalisation will be formalised in a week or two. The chances of a private-sector rescue for Northern Rock were always pretty low because of the fundamental state of the business. With a damaged credit rating and a low-margin loan book, Northern Rock would always struggle to be profitable without the cheap finance that was available before the credit crunch. Then there is the business logic of buying into a business with a mortgage book secured on UK houses just as house prices start to slip. It is no surprise that institutional investors are reluctant and so the final consequence of the the government's blundering is likely to be a giant liability in the form of the wreck of a middle-sized financial institution. One thing is not clear, however. What will the government do with the Rock if they get it? There are two options: one is run the business down, fire most of the staff and sell of the assets to refund the public loans. The other is to try and run it as a bank, hoping that it can turn a corner and pay back the taxpayer when the now successful company is sold. Option one, break up and asset realisation, is probably the most sensible. It is also immensely politically painful and that is why the government will probably go for trying to keep the business going. This would be a mistake. Northern Rock is finished in its current form, the market is saying so by refusing to fund a bailout and, for once, the government should listen.

Sporting Village Pre-Qualification Ends Successfully

We have just finished the pre-qualification stage in the procurement of the Sporting Village for Basildon District. This will provide our community with absolutely top-notch sporting facilities for sports from casual use all the way to elite sports of the highest standard. The Council is currently engaging in the process to select a development partner to build and operate the Sporting Village, a process which is dictated by EU regulations and which is rather long and tortuous. This is first stage where companies who want to be a part of the project have to more than just express an interest, they have to provide reams of information for evaluation. So, that cuts it down the field to those with a serious interest. While there will be an official Council communication later, I can say at this point that we are pleased with how things have gone. The project stays firmly on track, with a timescale that, if everything works out, will see Basildon with the facilities to support the London Olympics in 2012.

The Sporting Village will make Basildon the hub for sport in South Essex, and one of the key locations for sport in the East of England, if not England itself. This is good for our young people and good for our community, and a credit to our partners, including Essex County Council and the Department for Communities and Local Government as well as the officers of Basildon District Council, who have worked so hard get us to this stage.

John Baron MP: Welfare reform needed to tackle long-term poverty

MP backs plans to help people get back to work in Billericay and District

John Baron MP today added his support for calls to reduce long-term welfare dependency, tackle long-term poverty and re-create stable families. The policy ideas entitled “Work for Welfare” were launched by Conservative leader, David Cameron. They aim to help people find fulfilling jobs, while continuing to support those who genuinely cannot work. Currently across Billericay and District, there are 3,550 people on Incapacity Benefit and 970 on Jobseeker’s Allowance.

John said:

Labour’s old politics on welfare reform simply are not working. Despite the New Deal costing the taxpayer more than £3 billion, it is has become a revolving door back on to benefits with nearly 50% of young job seekers leaving the New Deal ending up back on benefits within a year. Someone on Incapacity Benefit for more than 2 years is more likely to die or retire than get a job.

People need better opportunities to take responsibility for their own success rather than being dependant on Whitehall handouts. The existing benefits system does not do enough to help people find work. Higher numbers of Incapacity Benefit claimants and high youth unemployment show that the policies of the last ten years have failed.

The Government boasts about the millions of new jobs it has ‘created’. But official statistics clearly show that 4 out of every 5 new jobs have gone to migrant workers in the past ten years despite having nearly 5 million people on out of work benefits.

Real welfare reform will help reverse the disastrous rise in family breakdown under Labour and tackle the persistent and often hidden poverty that shames our nation.

Under the new Conservative proposals:

Respect for those who cannot work: Recipients of Incapacity Benefit who really cannot work will receive continued support and will remain outside the return-to-work process.Employment for those who can.

Employment for those who can: Every out-of-work benefit claimant will be expected to work or prepare for work. There will be a comprehensive programme of support for job seekers including training, development and work experience. Welfare-to-work services will be provided by the private and voluntary sectors on a payment by results basis.

Assessments for those claiming benefits: There will be rapid assessments of all new and existing claimants for out-of-work benefits.

Limits to claiming out of work benefits: People who refuse to join a return-to-work programme will lose the right to claim out-of-work benefits until they do. People who refuse to accept reasonable job offers could lose the right to claim out-of-work benefits.

Community work: Those who claim for more than two years out of three will be required to help out on community work programmes.

End Tax Credit discrimination: The savings from these reforms will be used to end the discrimination against couples in the Tax Credits system.

Conservatives on Welfare Reform

Why do fit and able men and women choose to stay on the dole instead of going out to work? The short answer is because they can. Of course, unemployment and incapacity benefits exist for very good reasons. People do find themselves out of work through no fault of their own. People do get sick and a society that has any sense of solidarity looks after its members who fall on hard times, but that is not going on here. Every calculation, and plenty of direct evidence, suggests that there are large numbers of people for whom benefits have become a way of life, despite the fact that they are perfectly capable of providing for themselves. This is bad not only for public funds, but for wider society and the individuals themselves. Work brings order and stability to lives that can otherwise drift into the chaotic or criminal. It also, on average, brings a better standard of living over the medium and ling term. Put simply, if you live on benefits then you are likely to be poor, remain poor, bring up your children in poverty and have a much worse quality of life.

Tony Blair talked tough on this, but did more or less nothing about it. In fact the hidden unemployment of the benefit-dependent has grown sharply under Labour. Gordon Brown has belatedly started to talk about this issue, but it is the Conservatives that are making the running. Drawing on the US experience, where sharp curbs on welfare have reduced unemployment and all of the related social problems. The Conservatives have proposals to make Incapacity Benefit more rigorous, to stop the benefits of people who refuse to take a job that they are offered and to require that the long-term unemployed work in the community instead of sitting around at home. There are also proposals to contract private companies to find people work on the basis of no jobs, no fees. All in all this is first fresh thinking on this issue since Frank Field was sacked by Tony Blair for actually trying to reform the system. If I was Brown then I would be worried by all of this. A rule in politics is that you don’t hand the initiative to your opponents. Now, anything that he proposes will be measured against the Conservative proposals, and because they got in first he will seem like a copycat.

One good thing for the country though is that people are at least seriously thinking about benefits reform. A policy bidding war in this area is no bad thing.

Barack Obama wins first Democratic Primary

Barack Obama won handsomely in the Iowa Democratic Primary, beating John Edwards into second place and trouncing Hillary Clinton. Leaving Edwards aside, he has lurched sharply to the left in an effort to court Democrat activists and would find it hard to move back to the centre where elections are actually decided, it is already obvious that the Democratic candidate will be Obama or Clinton. Their sharp divide is less in policy terms, though Obama wants universal health care and Clinton is steering well clear of her great failure, and is more in terms of their political style. Barack Obama is an optimist, a one-nation politician, who wants to lead his whole country, not just the faction that voted for him. Clinton is a percentage politician, triangulating interest groups on an influence grid and running systematic attacks on her opponents. So, her people have been caught trying to push the notion that Obama was a drug dealer or is secretly a radical Muslim, never mind very public and personal attacks on his perceived lack of experience. This is the Alastair Campbell School of politics, and it leaves a bad taste even when it is effective. The good news here is that it doesn’t seem to be. Rumour-mongering hasn’t worked, in fact it has backfired with Clinton forced to personally apologise to Obama about some of the activities of her staff. The inexperience thing hasn’t resonated either, reminding people more of Hillary’s past ups and downs more than damaging her opponent. So, a positive, inclusive politician is leading over a divisive, negative one. That works for me.

As a Conservative, I map more to the Republicans than the Democrats and of their candidates I have time for Giuliani and McCain and no-one else. In particular people who overstate their religion in an effort to boost their appeal worry me greatly, which covers several of the Republican front-runners. The Huckabees and Romney’s of this world would be crushed by either Clinton or Obama in a general election. Put them up against someone like Giuliani and that would make for a contest.

New Business in Basildon

Basildon's economy carries on growing, with the Crane's Corridor industrial area now hosting a new kind of business. The old York International site is being redeveloped with a distribution centre and a backup Data Centre. A computer centre is a first for Basildon, and it is exactly the sort of high-technology industry that we want to compliment our established businesses, so I am very pleased at this development. Even better is the fact that businesses of this kind tend to cluster, because the reasons why one Data Centre gets built hold true for more Data Centres. So, good communications to London, a skilled workforce, local business services and support, and prime development sites could all lead to more of the same.

By the way, the that's Tony Ball, Deputy Leader of the Council, in the photo for the article on this in the Evening Echo. He's as pleased about this as I am. One thing though, the Echo article spins this as some sort of reaction to the 9/11 terror attacks and the continuing fear of terrorism. This might make for a splashy headline, but it is nonsense. Backup computer systems can be required for all sorts of reasons, most of the quite prosaic. Power cuts, fire, flood or even a serious system failure can take you to your backup site. This is why every serious company that I know of makes this sort of provision. It's not just about Osama Bin Laden.

Election prediction: Con 309 Lab 285, LibDem 22; Con short 17 of majority

A note from Electoral Calculus:

A new prediction has been posted on 1 January 2008 at www.electoralcalculus.co.uk/

Recent polls show a continuing but smaller Conservative lead over Labour. Ipsos-MORI has a lead of 7% (down from 9%); Populus (Times) has 8% (up from -1%); CommRes (Independent) has 11% (down from 13%); ICM (Guardian) has 5% (down from 11%); and YouGov (Sunday Times) also has 5% (up from 11%).

Overall the Conservatives are now 7% ahead of Labour (down from 9%), which is enough to be the largest party, but not to form a majority. As a rule of thumb, the parties are level if the Conservative lead is around 5%. The Conservatives need a lead of about 10% to have a majority, and Labour needs a lead of about zero. The current prediction is that the Conservatives will be short 17 seats of a majority, winning 309 seats (-20 seats since 6 December 2007).