European Union

Letter to my employees about the Brexit referendum


The CBI think that bosses should inform employees about Brexit.

This patronising suggestion is typical of the Confederation of Big Business, and of a Remain campaign that will use every trick in the book to try to influence people through authority and intimidation, rather than through reason. You may suspect, when the bosses of our big corporations gang up with our political leaders to try to sell something, it may be more in the interests of the corporatist establishment than in the interests of the people they are selling it to.

Corpulent Antisocial Irresponsibility

The latest Economic Affairs (the quarterly journal of the Institute of Economic Affairs) arrived today. Its leading topic - Corporate Social Responsibility (CSR) - reminded me that I never published the short talk I gave at an EU "stakeholder" workshop on CSR (or Environmental Social and Governance [ESG] disclosure, as they have re-named that rancid and decaying rose) in Brussels a few months ago. I thought it might be of some interest: (I didn't choose the title.)

Why do some enterprises choose not to disclose ESG information? 

Let me be clear first about two reasons why I am not opposed to ESG Disclosure.

  1. I am not opposed to companies taking account of environmental and social issues. We do, to a greater extent (relative to our size) than most companies who are enthusiasts for CSR.
  2. I do not argue that small companies should be treated differently to big companies. A sign of a bad system is one where it is necessary to treat small companies differently to big ones.

Indeed, I am not opposed to companies choosing to promote their environmental and social activities in any way they choose, including ESG Disclosure if they want.

What I oppose is any attempt to make it mandatory, or to give preference to companies who do it, or to make it a condition of doing business, or indeed to portray it as somehow virtuous or effective.

Running a business is not easy. Businessmen have large amounts of information to digest, possibilities to consider, and responsibilities to uphold. They must be good at predicting the future course of events, and at reacting quickly to changes they didn't foresee. They must be able to tell the difference between conventional wisdom and fundamental truth. Failing to do so can be catastrophic, as we have had to learn yet again.

Anything that distracts them from this focus - that complicates their judgments or clouds the information available to them - can be detrimental not just to their business, but to society at large. CSR does exactly that.

Accounts and prices are ways of condensing a lot of information into an easily-comprehensible, commensurable form. Commensurability is key to business information, and it is absent from the many CSR standards. What does it mean when we quote an “employee engagement score”? How do we weigh a change in that score against a change in our “business practices measure”? Can we compare our “business practices measure” against other companies' “business practices measure”? And where these scores are achieved through surveys, what are we really measuring – fundamental performance, or how we have influenced people's perceptions on the issue?

Even where you think you have something objective, like a firm's carbon footprint, it often turns out to be illusory. For example, BT (a firm with a strong reputation for CSR) claimed to have cut their carbon footprint dramatically by buying "green electricity", when in reality their contribution to the carbon savings was negligible. Despite an unfavourable decision by the energy regulator, BT maintain this fiction in their latest CSR report.

Where you have a material externality, the right approach is to create an appropriate institutional framework to internalize it. Businessmen and other leaders will then be able to take account of it through their conventional business tools and will have sufficient incentive to act where appropriate. Investors will be able to measure a business's success in acting on the externality through their single bottom line.

What drives real change is not fine words and woolly numbers in glossy reports, but incentives of sufficient value that they justify action. One danger of CSR is that, by creating greenwash for companies to pretend that their minimal and often illusory contributions are somehow significant, it provides cover for those companies to oppose measures that would have real effect.

We must judge, promote and reward businessmen according to their entrepreneurial ability, not their ability to direct or present their company's activities in a way that accords with some prescriptive attitudes to certain social and environmental issues. Otherwise, we will end up with the wrong type of people leading homogenised businesses, undermining the diversity that is vital to the effective functioning of markets.

All of the following businesses were strong proponents of CSR: ABN Amro, ING, Bradford & Bingley, Northern Rock, HBOS, RBS, Woolworths, Anglo Irish Bank, AIG, Bear Sterns, Lehman Bros, Merrill Lynch, Morgan Stanley, Washington Mutual, Fannie Mae, Freddie Mac, SachsenLB, Hypo Bank, Kaupthing, Martinsa Fadesa, General Motors, Chrysler, Nortel, and of course Enron before that.

I don't intend to be that type of businessman running that type of business.

Consultation on the IMS&ER of the EUEEUP&ELF Directives

I have just received the following invitation from AEA Technologies (energy bureaucrats who have separated but not divorced from the greater bureaucracy, and who are "managing" this aspect of the "Market Transformation Programme" for DEFRA). Truly, the EU, the Labour government and its client consultancies have perfected the art of combining menace with incomprehensible language in pursuit of illiberal and bureaucratic objectives in every nook and cranny of our lives:

Dear Stakeholder,

We wish to inform you that Defra has just launched a consultation on Implementation of the Market Surveillance and Enforcement Requirements of the EU Eco-design of Energy Using Products and Energy Labeling Framework Directives and seeks your views and comments.

It's hard to wrap your brain around so many (upper-cased) nouns in short succession in one sentence. Nevertheless, you get the drift without reading the consultation documents that this is something to do with the application of authority in pursuit of standardization and homogenization, with the (supposedly unintentional) outcome that choice, innovation, and flexibility to circumstance will be limited.

Market Transformation indeed. Our markets are being transformed into non-markets - places where we exchange what the Government thinks is the appropriate proportion of the income that the Government thinks we are entitled to, for those goods that the Government thinks we ought to want, designed in the way that the Government thinks is best for us.

Orwell wrote about it, the Soviets implemented it, and now Western governments are following suit. Corruption of language and inversion or elimination of meaning are a sure sign of a bureaucracy that is looking to intervene in every aspect of our lives.

Dollar or Euro votes?

Noticed this poster at a tube station today:

EU elections 09 poster: biofuels

My immediate thought was: none of your bloody business.

(After a moment's additional thought, perhaps I should moderate that to: none of your bloody business between the two on the right, and between all three if you internalize carbon externalities with a mechanism more rational than the EU-ETS.)

It turns out that this is part of a series. The others are shown below.

EUobserver points out that these exaggerate the powers of the European parliament. Typical euro-deception. But would it be better if they didn't?

Is this the Euro equivalent of a dollar vote? In free markets, how much gets produced of which goods is determined by the dollars (or other currency) that customers spend (vote) on the products.

In the EU, it seems, how much gets produced of which goods is determined by the political trade-offs between politicians returned as a result of an election on multiple issues.

In a free market, we will gradually discover what works in which circumstances, and are free to have horses for courses, and to change the balance in response to changing market information.

In the EU, the parties who form the ruling coalition (and their electors) are assumed to have 20:20 foresight, deciding what immature technologies will be best for all of us, and imposing them on us by legislation, with all the associated responsiveness and flexibility.

It tells you something about the mindset of the Eurocrats and politicians that they think this is the job of the European parliament, and that the suggestion that they have this power will attract people to the project.

If this is a Euro vote, I don't want it, and I don't want other people to have it either. I want us to cast dollar votes for economic choices. Political votes are to decide those rules that we need for effective cooperation, on questions that cannot be decided more efficiently by dollar votes.

EU elections 09 poster: energy   EU elections 09 poster: packaging  EU elections 09 poster: work/life balance

More political funding from Gordon's Investment Bank

It is not clear how these projects meet the EIB's objectives, but very clear how they meet the Government's political objectives. How much money is being laundered through the EIB to bail out the Government's favourite projects and corporate friends?

It seems I am not the first to notice that the EIB is being used primarily to bail out projects favoured by its shareholder-governments, most of which have little relevance to the supposed objectives of the bank. See CounterBalance and CorporateWatch.

Gordon's Investment Bank

The European Investment Bank (EIB) "has 6 priority objectives for its lending activity":

  • Cohesion and Convergence
  • Support for small and medium-sized enterprises (SMEs)
  • Environmental sustainability
  • Implementation of the Innovation 2010 Initiative (i2i)
  • Development of Trans-European Networks of transport and energy (TENs)
  • Sustainable, competitive and secure energy

Our company (an SME in renewables) recently approached them about funding for a project in a remote part of Scotland to produce sustainable heat and power (including district heating to social housing), and sustainable heating fuel to be distributed from the local port (which needs the business since the decline of the fishing industry) to parts of the UK where resources for sustainable heating are scarcer. This ticks most of the above boxes, but we were told by the EIB that the project is too small. They have a "priority objective" to support SMEs, but a project costing tens of millions of pounds is too small? How big are these SMEs that they hope to support?

Still, no one is guaranteed finance, and perhaps the EIB have more suitable projects elsewhere. Happily, there have been a spate of announcements recently on projects that have received or are in the running for funding from the EIB, so we can see how they are meeting their objectives:

A delightful list of innovative projects by SMEs, promoting cohesion, convergence, sustainability, competitiveness and security in the transport and energy sectors.

"Falling emissions in declining economy" shock!

Preliminary data released today (as reported in EurActiv, and picked up by OpenEurope) indicates that emissions from the sectors covered by the EU-ETS fell 6% in 2008.

Naturally, the pro-EU-ETS brigade have hailed this as evidence that the EU-ETS is working. I think they should be a little more cautious.

We need to know to what extent the reduction was the result of the economic downturn, to what extent it was the result of increased energy prices, and to what extent it was the result of the incentives provided by the EU-ETS.

The data is not yet available for the purposes of comparison, but there will be an easy way to test the effect of the EU-ETS, if not the relative roles of the other two factors (and there are probably others).

If we see emissions carry on up in those developed countries not covered by a cap-and-trade scheme while they fell in the EU, it will be reasonable to attribute some of the success to the EU-ETS. If, on the other hand, emissions fell in 2008 in countries that were not subject to a cap-and-trade scheme, we may reasonably infer that the fall was more the result of other factors such as economic tightening and higher prices, and less to do with the EU-ETS.

We also ought to look at emissions relative to indicators of economic health, not in abstract form. Most economic indicators of national prosperity are unsatisfactory in one way or another, but if we take GDP as an imperfect but widely-accepted measure, we should compare the change in emissions relative to changes in GDP in the different areas, not simply the absolute changes in emissions.

We should probably also take account of changes in population, as each additional head in developed countries tends to increase emissions by the per capita average.

Another give-away would be if the reduction over the course of a Phase of the EU-ETS were more than required by the mechanism. The mechanism is designed only to deliver just enough, and provides absolutely no incentive to go further, so if we see emissions fall to well below the cap, we will know that something else (e.g. economic decline or offshoring of industry) was up.

And we ought to remember that one swallow does not make a summer. We would need sustained evidence over several years that industries covered by the EU-ETS were reducing their emissions relative to their output by more than industries outside the EU-ETS (or other cap-and-trade schemes), to be able to attribute the reductions to the EU-ETS rather than to other factors. 

The preliminary figures for 2008 emissions strongly suggest that the price of EUAs (allowances under the EU-ETS) should fall further than their already low level (at which many large companies are already saying that there is insufficient incentive to invest in emissions-reducing technologies). With a minimal carbon-price, delivering further emissions-reductions over the coming years, other than as a result of a general reduction in output due to the state of the economy and the cost of energy, will be a challenge.

EU economics: boost the economy by using today's money to pay for white elephants in five years' time

Attention focused on the renewables component of Obama's stimulus plan today. But the Americans aren't the only ones using the credit crunch as an excuse to plough vast sums of public money into their pet projects.

The European Commission today issued a revised draft list of white elephants projects to be supported under its proposal for a Regulation "establishing a programme to aid economic recovery by granting Community financial assistance to projects in the field of energy". The programme is to cost €3.5bn. The money is to be drawn from the Common Agricultural Policy, which is obviously swimming in so much cash that several billion can be siphoned out at short notice without affecting its intended recipients.

In the  Explanatory Memorandum at the start of the Commission Communication accompanying the proposal, the budgetary implication (p.4) is described in the following words:

A financial envelope of €3,500 million is foreseen in total for the three sub-programmes, consisting of €1,500 million for 2009 and €2,000 million for 2010.

The main volume of payments will be made between 2009 and 2012 with the last payments, notably for carbon capture and storage projects, foreseen for 2014/2015.

So this is a package "to aid economic recovery" in which some of the payments will be made in 2014/15. And if we look at the draft list, we see that the share for carbon capture and storage (the money to be spent at that late date) is €1,150m, one-third of the total.

The text is a little obtuse, with the budget envelope being assigned to 2009 and 2010, but the spending parcelled out over a number of years upto 2015. The only sense I can make of that is that the money will be drawn from the 2009 and 2010 budgets, but spent over a wider number of years. So, in the name of aiding economic recovery, we are drawing money out of current budgets in order to spend them on white elephants in the future, one-third of it a full five years later. How exactly is that supposed to help ameliorate the current economic difficulties?

There may be an argument for some of these projects, particularly some of the Eastern European infrastructure projects. But why are they justified in the name of economic recovery rather than energy security? Is it because it would have been impossible to justify tacking on the CCS white elephants for Western European governments' favourite oligopolists (EDF, RWE, Eon, Centrica, Enel, & co)?

How much assessment was carried out on whether these particular projects provided the best stimulus effect or the best value for energy security and carbon reductions? If we have €1.15bn available to stimulate the economy by spending tax to reduce our carbon emissions (which is the only point of CCS), there are many other options that could be delivered sooner and would provide a better bang for the buck.

Or better still, we could return this money to taxpayers, create rational incentives that value carbon fairly and appropriately, break up the vertically-integrated utilities to create a genuinely competitive and liquid market, and leave it to the economy to work out where the money can be most effective. The market certainly wouldn't pick CCS, which is why it takes a political behemoth manned by apparatchiks whose only understanding of energy and environment comes from what they are spoon-fed by the oligopolists to blow this much money to such negative effect, at a time when we can least afford it.

Scottish pots and Swiss kettles

Gordon Brown wants us to make a mental connection in some way between our financial troubles and the competitive tax regimes in countries like Switzerland.

I have just come back from Switzerland, where we are looking at investing. The attractions are many, but include the fact that Switzerland is not in the EU (and if the opinions of my contacts are representative, are likely to remain so), the stability of the economy, the security of one's money from expropriation, the more rational attitude to planning, the highly devolved nature of its democracy, and the relative restraint they show in government expenditure.

The Swiss tax-take as a proportion of GDP is a good five percentage points lower than ours. When you consider the obstacles they face in the provision of public services, and the much higher quality and better value in those services, that is amazing.

Imagine how expensive British government would be if every village had to be reached by miles of winding hairpin bends up precipitous slopes, assaulted with snow and salt in winter, and Mediterranean temperatures in summer.

Imagine what the bus services would be like.

Imagine how our trains would run, and what they would cost, if most of our major cities were separated by vast mountain ranges requiring tunnels many miles long. 

Imagine the excuses of the politicians for the state of an economy that enjoys few natural resources, no direct access to the sea for trade, and wholly surrounded by a mammoth competitor determined to inflict the costs of its social model on you.

And yet, with few of our advantages and many disadvantages, the Swiss run a more successful economy, with better public services, lower taxes, a higher quality of life, and greater social cohesion, than we can dream of.

How do they do it? Gordon would like us to believe that it is because money is pouring in from abroad because of the tax regime. And the tax regime in parts of Switzerland is certainly cheaper than ours (each canton sets its own tax levels in significant aspects, so there is no universal rate). In particular, inheritance tax can be low (zero in some areas) and tax on employment is generally lower than ours. That may have something to do with their high levels of commercial continuity and reinvestment of capital, and high levels of employment.

But those low taxes are not particularly funded to a greater extent by inward capital flows than are our more plentiful government extortions. As one of my contacts pointed out when I compared the level of investment in Austrian and Swiss ski resorts, the Austrian government has ploughed hundreds of millions of schillings and euros into supporting investment by their tourist industry, and yet find themselves facing a repeat bill as the equipment ages and needs replacing before the nation has begun to recover its costs. The Swiss, if they want to build a lift, have to raise the finance privately. Hence, they build less, but they try to build only what is viable. That (and similar attitudes across the economy, other than in agricultural support, where they are more profligate even than the EU) keeps the tax bills down, at the cost of placing a greater responsibility on the Swiss population not to be self-indulgent at taxpayers' expense and only to pursue investments that can be justified in hard economic (rather than woolly social) terms. How unreasonable of them to make themselves an attractive destination through the illicit means of prudence and hard work.

In any case, Gordon shouldn't be throwing stones in his highly-elaborate fiscal glasshouse. Under Gordon's watch, Britain enjoyed a huge surge of inward "investment", largely based around the City's financial services to Russians, Arabs and others who had been notably successful in exporting the loot from the expropriation of their countries' natural resources.

Two sure signs of massive in-flows of wealth into a country are asset-price bubbles and a strong currency. On that basis, until the bubble burst, the UK was clearly being more successful (with the help of monetary, fiscal and regulatory policy) at attracting dodgy money into the country. While our property prices were nearly doubling to reach absurd levels, Switzerland's property values increased on average by under 20%.

The reality is that Gordon and his European pals are not motivated by righteous indignation, but by the pressing need to eliminate the few examples of countries whose more prudent economic management stands as a glaring reproach to our Great Leader's incompetence.

And this is the man that some European and British politicians are reported to want to make leader of an international financial regulatory body. In earlier, better times, he would have been left in a quiet room with a loaded pistol for what he has done to our country. Can we at least not reward the greatest incompetent in our political history with an extension of his powers? Surely there is some unoccupied Scottish island, from where he can cause no more trouble, on which he can be dumped and left to rot?

UFOs, apocalyptic visions, and the EU Emissions Trading Scheme

Prices in the EU Emissions Trading Scheme (EU-ETS) have hit new lows in Phase 2 (just over €10/tCO2). The mechanism became worthless in Phase 1. It looks likely to do the same in Phase 2 (as some of us predicted). It is not providing sufficient incentive for anyone to invest in any carbon-reducing projects. But it is still handing nice rents and market-protection to the beneficiaries of the allocation process. Uncertainty about its value, so vulnerable to political whim and economic fortune, is a significant factor in the reluctance of power companies to invest not only in renewables, but even in new coal, gas and nuclear stations, because their relative competitiveness depends on EU-ETS prices, and any investment can therefore be made uneconomic in the tap of a legislators' pen.

Naturally, Stavros Dimas (EU Environment Commissioner) has taken this confirmation of the irrationality and harmfulness of the scheme as a signal to try to draw others, particularly America, into a global ETS.

Robert Cialdini, in his book Influence, briefly recounts a real incident that was witnessed and analysed by the social scientists Leon Festinger, Henry Riecken and Stanley Schachter, recorded in their book When Prophecy Fails. The details are hilarious and illuminating in equal measure. I highly recommend you to read Cialdini at least, if not Festinger et al. But I will try to precis here the already potted version in Cialdini. A doomsday cult formed around a man with a long interest in mysticism, the occult and flying saucers, and a woman who claimed to channel messages from extra-terrestrial spiritual beings via the device of automatic writing. These messages started to foretell a disastrous flood that would engulf the world. However, they also reassured the members of the cult that they would be rescued by flying saucers that would be sent  a few hours before the flood was due to commence. During the period leading up to the appointed date, the members of the cult retreated into themselves, making little effort to warn others of the impending disaster. Of course, the spaceships failed to materialise, as did the flood. In the immediate aftermath of the non-appearance, there was silence, then introspection and despair, then signs that the group was starting to dissipate. At this point, the woman received a message from the extra-terrestrial spirtual beings, telling the group that "the little group, sitting alone all night long, had spread so much light that God had saved the world from destruction." A second message instructed her to publicize this news. The group set about contacting newspapers and trying to persuade as many people as possible of the truth of their experience.

Festinger et al and Cialdini provide a convincing explanation for this bizarre switch from secrecy to proselytization, at precisely the moment that it had become obvious that their beliefs were unfounded. The members had invested hugely in the cult's belief-system. The psychological cost of admitting it had been for nothing was too great to contemplate. Yet the evidence clearly indicated that it had indeed been a foolish waste. To avoid the spiritual cost of facing reality, they needed another way of maintaining their belief. Their best hope was in persuading others to share their views, for, if enough people agreed with them, it must (psychologically) be true, whatever the evidence seemed to suggest. The proselytizing was not a sign that they were now more confident of the truth of their beliefs, but precisely the opposite - it was the conscious response to the subconscious awareness of their folly.

Of course, people outside the cult could see the flaw in their beliefs, and the desperation that underlay their efforts. Not a single new member was attracted. Let's hope that those in the White House and elsewhere can spot the equally obvious evidence of the failure of the EU-ETS, and the motives for Mr Dimas's promotion of the cult of carbon-trading.

Western standards of trade and investment

In this week's Spectator (3 Jan), Robert Salisbury, reviewing Michael Stuermer's book "Putin and the rise of Russia" says "We have an interest in a stable and peaceful Russia and, even if we cannot hope to impose our own ideas of government on a proud and humiliated nation, we should insist that the rules under which we trade with Russia are transparent and up to Western standards, and the the rules of investment, both outwards and inward, are of an equal rigour".

Amen to the first part of the sentence (though it is the sort of statement of the obvious that doesn't really need saying, and gives us not a clue how to achieve it). But the second part is not only a non sequitur, but it seems to indicate that Mr Salisbury has been living in a cave with no form of outside communication for the past 18 months. Rules of trade and investment "up to Western standards"?

Not that the Russians would ever have been so completely suckered, as our intelligentsia were, by the pin-striped brigade. Nor that Mr Salisbury is wrong that rules (of all kinds) in Russia are more honoured in the breach than in the observance. But they certainly won't be listening now (other than for laughs) to Western exhortations to live up to our standards in trade and investment.

Is this not an example of exactly the limp-wristed European attitude that Mr Salisbury rightly castigates? How are we to force our trading partners to honour any particular rules? We must be prepared to walk away from trades with them. And the Russians believe, probably rightly, that Europe is not ultimately prepared to walk away from trading for their energy, mineral and agricultural resources.

Reputation is hard won and easily lost. The West has a hard slog ahead of it to regain the moral high ground.

Cap-and-trade - a steaming dish of tripe and baloney

I've been beating a fairly solitary path on this for a while, and in the process making myself unpopular with the major players in the electricity industry (which provides another clue to the huge rent-seeking potential of cap-and-trade) and their representatives. But, judging by this article in this weekend's Sunday Times, it looks like others may also be coming to share my view.

In vino veritas

Changes to EU rules may put many British winemakers out of business, The Observer reported yesterday. Britain being an inhospitable country in which to ripen grapes to their full sugary concentration, British winemakers often add sucrose or grape must to their fermenting grape-juice, to ensure a sufficient alcohol content. The EU intends to ban the use of sucrose, and stop subsidies on grape must. The EU will also continue its ban on planting more vines, thus preventing the recently British wine production from being expanded. Should we feel sorry for the British producers?

The man who invented the Euro

I am much obliged to Paul Nollen, with whom I have been having a discussion about the Basic Income concept, for pointing me at Bernard Lietaer. Here is how Professor Lietaer's Wikipedia entry begins:

Bernard Lietaer is an economist and author who was one of the designers of the Euro. He studies monetary systems and promotes the idea that communities can benefit from creating their own local or Complementary currency, which circulate parallel with national currencies.

Here is what Professor Lietaer has to say about himself on the website of one of his organizations:

Bernard Lietaer is the author of the forthcoming "Of Human Wealth" and "The Future of Money" (London: Random House, 2001), has been active in the domain of money systems for a period of 25 years in an unusual variety of functions. While at the Central Bank in Belgium he co-designed and implemented the convergence mechanism (ECU) to the single European currency system. During that period, he also served as President of Belgium's Electronic Payment System. His consultant experience in monetary aspects on four continents ranges from multinational corporations to developing countries. He co-founded one of the largest and most successful currency funds becoming its General Manager and Currency Trader. He was Professor of International Finance at the University of Louvain; and is currently Visiting Professor at Naropa University in Boulder, CO. He is the co-founder of ACCESS Foundation, (, an educational non-profit whose objective is to communicate best practices in the domain of complementary currencies. He is currently a Fellow at the Center for Sustainable Resource Development at UC Berkeley.

So this is the man who co-designed the ECU and the Euro, implemented the ECU, ran the Belgian EPS, and founded and ran one of the largest offshore currency trading funds (Gaia). He is also (according to his CV) a member of the Club of Rome, a Fellow at the World Academy of Arts and Sciences, a Fellow of the World Business Academy, and a Founding Member of the Global Futures Forum. He must be a pretty serious financial expert. Let's have a look at his intellectual efforts.

Government - burning our energy as well as our money

The Government thinks that we should be using energy more efficiently. They are right. So guess which sector increased its consumption of electricity the most in Europe between 1999 and 2004. Industry? Households? No, it was the "tertiary sector" - in other words, government, state-funded services, the voluntary sector and commerce.

Industrial consumption was up by 9.5%, domestic by 10.8%, and the tertiary sector by a wapping 15.6%. Were our leaders and bureaucrats getting more wasteful, or were there just more of them? Or both?

If you find ways to save energy in your business, profits are increased and your career or business should prosper. If you find ways to save energy at home, you save money to spend on other things. If you work for the government and you find ways to save save other people (taxpayers) some money, and your budget gets cut. I wonder why government has been least successful?

Howard Davies, Europe, Brown and the politicization of our institutions

Howard Davies is reported in Le Figaro as saying:

"On Europe, we do not yet know if Sarkozy is a friend or an enemy.... Selling the Brussels result will be arduous for Brown… It is crucial for him that Sarkozy continues to defend the idea that the new treaty does not mean much. The slightest suspicion that this treaty is the first step on a new federal adventure will be blown up out of all proportion. Any triumphalism about the withdrawal of the reference to competition will make Brown’s life very difficult. For the first time since the rejection by de Gaulle of our request for accession to the common market, a British government finds itself in the uncomfortable position of being liable to a French president. One false move, one word too many from the Elysée, and Prime Minister Brown will have big problems. Brown, who has waited so long and impatiently for his moment, is particularly frustrated at not being in charge on the European agenda. That means that he is condemned, whether he likes it or not, to keeping close relations with Sarkozy. Brown cannot let him leave his sight." (Hat-tip to OpenEurope for spotting this and translating it.)

Howard Davies is Director of the London School of Economics and Political Science (LSE), before which he was Chairman of the Financial Services Authority (FSA), before which he was Deputy Governor of the Bank of England, before which he was Director-General of the Confederation of British Industries (CBI). All roles in which he should have eschewed political partisanship. And all organizations (with the possible exception of the Bank) of which there is a strong whiff of Third-Way politicization. Now look at that statement again.

Energy liberalization and the EU reform treaty

One of the things that made me laugh in the BBC's typically-rigorous reporting (I think in last night's Newsnight) of the proposed EU reform treaty was the claim that the extension of Qualified Majority Voting would bring benefits such as the opportunity to force the break-up of national energy monopolies. Isn't that already required under existing agreements on deregulation of European energy markets? QMV is more likely to enable the majority of our partners who would rather protect their "national champions" at all cost to backtrack on this sort of requirement.

Campaign for a referendum?

I don't like referenda. But it is perfectly obvious that the majority in the country does not believe that the "Reform Treaty" is not the Constitutional Treaty dressed up, and that they want a referendum on the subject as promised. And yet Tony and Gordon seem inclined to push on with ratification without allowing the public to have a say. The question is, what are people going to do about it?

If we leave it to the parliamentary process, Gordon will be able to ram it through despite opposition. People need to demonstrate their strength of feeling on this issue, to force him and his MPs to consider the electoral consequences.

The Telegraph has the right idea, but is botching the implementation. They have launched an online "petition" for a referendum on the subject. Except, it's not a petition, it's a poll (and as such will be accused, rightly, of not being based on a representative sample). And you have to register with their site in order to vote. Currently, 58 people have voted. I wonder how many clicked on the "Yes" button, but then, like me, gave up when they were asked to register with the site before their vote could be registered? This isn't going to work, and will be used by the Government to argue that opposition is negligible.

Even without these obstacles, the Telegraph website is the wrong place to do this. The Times, Mail, Express and Sun have all called for the Government to honour its commitment to a referendum. In this age of modern media, we ought also to consider the readership of the various blogs, and those who get their news from the TV, radio, or from one of the pro-Treaty papers (The Mirror, Guardian, and, to some extent, The Independent) but disagree with their stance on this issue. Most of these people are not going to go to the Telegraph website to register and vote.

What is needed is neutral territory, where all the papers, bloggers etc can point their readership to register their call for a referendum. There is one obvious location. The road-pricing protest showed its power. It is the No.10 petition site.

There are already a number of petitions on there on this subject, but none of them expresses the issue clearly and in a way that is likely to find the greatest common ground amongst the public. And the existence of several alternatives dilutes the message if people don't know which one to vote for.

We need a new petition, carefully worded to attract a range of opinion, from those who want a complete withdrawal, to those who support the European project but feel that there is a point of principle at stake here - for the Government to honour its commitment. Once we have a good form of words, a new petition should be created, and all the papers, pundits and other members of the media and the blogosphere (is the blogosphere part of the media? I'm never quite sure) who support the call for a referendum should run campaigns to point their readers, listeners or viewers to the petition to vote.

This must be concerted action. A half-cocked campaign that did not garner substantial support would be thrown back at opponents of the Treaty as evidence that the country does not feel strongly on the issue. But if the five papers mentioned, the blogosphere and independent TV and radio (e.g. TalkSport) threw their weight behind a petition, I am confident that they could comfortably beat the number of signatures garnered for the road-pricing petition.

So what should the precise wording be? Something along the lines of:

That Her Majesty's Government should not ratify the so-called Reform Treaty without putting it to a referendum of the people of the United Kingdom.

How would you change/improve this? Drop the "so-called"? I put it in, because I didn't want to imply acceptance that this was a fundamentally different treaty to the Constitutional Treaty by appearing to accept the alternative designation, but it is probably unnecessary. Will everyone know what is being referred to by the "Reform Treaty" or does it need more clarification? Should it refer to "honouring their promise to put it to a referendum", rather than simply "putting it to a referendum"? I kept it simple, because it offers less wiggle room for the Government to cavil about whether this Treaty is sufficiently similar to the Constitutional Treaty for their promise to be relevant.

Does this offer the option for the Government to hold a referendum and then ignore the outcome, and still be able to say that they complied with the terms of the petition? I reckon that would be a sophism too far, even for this Government, and that they would be destroyed at the next election if they tried it on. But if you think it needs tightening up, how would you clarify that the results of the referendum should be binding? Have I just answered my own question? If I make that "...putting it to a binding referendum...", does that do the trick?

Or is this whole suggestion barking up the wrong tree?