Oil!

I am indebted to Mr Bagehot's excellent publication for drawing my attention to an interesting book by a Mr Kenneth Pollack. Mr Pollack was at some point on the National Security Council of the United States. His book is entitled A Path Out of the Desert but of equal interest is his description of the path into the desert.

Mr Pollack is frank where others have dissimulated. I am aware of controversy both sides of the Atlantic about the source of the invasion of Iraq in 2003. It is an undoubted fact that the public and legislators of both nations were assured that the nation of Iraq possessed what were termed as "weapons of mass destruction". In time it became clear that these weapons did not exist and there was no reasonable evidence at the time that they might exist. The invasion was therefore a fraud.

However it is my recollection that when, occasionally, challenged on the matter the Prime Minister of the United Kingdom and the President of the United States would affirm that they did not regret the invasion as, on the one part, the leader of Iraq was an evil person and, on the second part, that the insurgents associated with Al Qaeeda had somehow established a foothold in this nation. The title of Mr Pollack's tome epitomises the problem that then arose: that the allies were unable to pacify Afghanistan as they had diverted forces to Iraq; that whether or not Al Qaeeda had a base in Iraq prior to invasion it became established ten times over following invasion; that there is little gratitude to invaders who promise "liberation".

Mr Pollack, as I stated, is frank. The title of his first chapter is simply OIL.

And that is the nub of the matter. Mr Pollack argues that the western powers were right to secure their "strategic" interest in oil in the Middle East and that they were right to act out of "self interest". His publishers have posted his first chapter for all to read at no cost.

If anyone doubted that there was a kind of secret diplomacy lying behind the outrage of the 2003 invasion, the slaughter of tens of thousands of innocents, this is evidence indeed. Undoubtedly Britain and the USA conspired to conduct a war for commercial purposes solely.

As I have stated repeatedly over many decades, commerce and warfare should not be bedfellows. When Palmerston terrorised China over opium imports, he was wrong, morally and strategically. These are mistakes that return with interest ten-fold, undermining international relations for generations.

Civilised nations now stand on the brink of a precipice as the price of this oil rises relentlessly. There is a forgetfulness that oil is not the only lubricant of commerce and industry. The world has come to rely upon it; but that is a mistake the world has made. Variations in price have signalled many times, I suspect, that oil is expendable, that it is limited. The world economy will now have to adjust as best it can. And the invasion of Iraq in 2003 will not have made the slightest difference to the risks posed by a continued over-reliance on oil.

They have made a nation...

They have made a nation.

I reflect on these words that I uttered some 150 years ago in a somewhat premature and erroneous fashion; and I do not claim they apply to the current situation in Scotland.

Nevertheless it is apposite that the Scottish now have a nationalist government and last night the people of Glasgow rejected a century of socialism to embrace their new nationalist future. I do not believe the strength of nationalism or the injustice experienced by the Scottish people compares in any respect to the situation in Ireland during the years of my ministry.

But when a people express a yearning for national determination, when they reject their historic bonds with England, it is a matter that must be treated with seriousness. The prime motivation of the Glaswegian voter may well have been to reject the Queen's ghillie and all his works; to demonstrate the hardship they experience in the current dire economic situation. But it is part of a movement, and a movement that cannot be ignored, towards nationalism in Scotland.

The leaders of British politics must respond to this. There is a government in Scotland but it is a peculiar government that spends money, governs great departments of state but has very little responsibility in the raising of taxes. Some argue that it makes it irresponsible; that it makes Scots ungrateful for the largess bestowed on them by English tax-payers. It would therefore be a wise and far-sighted move to transfer tax-raising power to Holyrood; it would make the nationalists take fiscal responsibility for their nation.

Now I can envisage many objections to this. How will the British state continue to raise taxes for its chief objectives of foreign policy and defence? Will governments have to levy a separate English and Welsh tax? Will fiscal transparency increase regional resentment and further loosen the ties between the nations of this island? These are all risks that exist but to overstate them is to understate the significant differences that already exist between Scotland and England and the privileges enjoyed by Scottish people as a result of even some limited measure of self-government.

For I believe it is far more serious when the Scottish people see their choices as lying between socialism and nationalism. It places them in a European backwater and puts them at odds with their own heritages of liberalism and enterprise. This is the nation of Mr Adam Smith, of Midlothian, of Sir Walter Scott, of a million adventurers. It would have distressed our own dear Queen to the marrow of her bones; for she had a great and abiding love of the Scottish nation and its people.

It is time for British leaders to be bold. I have every hope in Mr Nick Clegg in this respect for he has already outlined proposals to offer similar fiscal responsibilities to municipalities. He must demonstrate the boldness that secured him his office and appeal directly to the peoples of this island.

Why talk of gods...?

There is no call for me to discuss matters in the Church while the people of this land, indeed of the world at large, are suffering. Hunger grows as the price of food rises while fuel costs also increase. Homes are in peril and businesses teeter on the brink of solvency.

The world is in poor shape and so is Britain. It may be too late for one country to consider how to escape whatever may happen. Not all will be impoverished by the crisis. Those that can supply fuel and food may emerge wealthier and stronger. Those that can manufacture with minimal recourse to primeval residues may find they enjoy price advantages.

All in all this makes a bad time for Britain. The Chancellor and his predecessor twist and turn, wriggle this way and that in order to escape. Now the price of fuel is to be restrained; now they will borrow more to pay for this extravagance. And all the while the excellent Mr Vincent Cable is in their pursuit.

It is heartening therefore to see Mr Nick Clegg becoming bold in liberalism. For a century this party has wrestled to reconcile its historic mission - that with which I invested it - not to burden the people, not to deprive them of their earnings with an equally deep felt compassion for the poor, the suffering. In my age there was less conflict; by freeing the state of the shackles of mercantilism we created economic growth and ensured wealth and employment. But now...now it may be time to return to these original principles.

Mr Clegg therefore promises to look for ways to "cut Britain's overall tax burden". There is an honesty here which, I am led to believe, has been lacking in recent years when parties have pledged to reduce income tax and have done so by increasing the Treasury's revenues by other means. Such measures have been utterly contrary to my principles, so warmly endorsed, so frequently by Her Majesty. I would rather have cut income tax; I would rather have raised income tax than raise other taxes which may serve to confuse and depress the populace. In this statement I may seem to diverge from Mr Clegg's proposals, which envisage the raising of other taxes. But there is now a new, unforeseen factor in the economy alongside labour, capital and land - and that is energy. It is reasonable therefore to increase taxes on this factor and reduce them on labour.

Switching taxes between factors is straightforward and will reinvigorate the economy and ready it for the future. To reduce the overall tax burden however requires reductions in expenditure. To borrow more is not to be contemplated as this will place pressure on bank rates and on the competitiveness of our goods overseas. To reduce expenditure is not impossible but it will require a programme that is clear to administrators as well as to the party in government. Peace and retrenchment are clearly two pillars of such a programme and would furthermore assist in stabilising the world at large.

I will correspond privately with those who wish to discuss matters of the Church. These are affairs of great moment in the spiritual realm but should not distract from the immediate crisis of the state.

desine pervicax referre sermones deorum et magna modis tenuare parvis

WEG

The excellent Mr Cable

My attention has been drawn to a speech delivered this week by the excellent Mr Vincent Cable, who shadows the Chancellor of the Exchequer for the Liberal Democrat party.

Sometime ago I noted that Mr Cable was unjustly dissuaded from aspiring to leadership of this great party in spite of the proven quality of his debating skills and his stature as an aspiring Chancellor.

Recent experience may have led the parties to believe that combining skill in the Exchequer with skill in the greatest ministerial office may not be possible. They may also have come to believe that experience and age are not valued by the public in their leaders. I can assure them that on both counts they are wrong. If the British people retain a fraction of their qualities of some 100 years ago, my own humble experience would suggest the contrary to these current beliefs.

So to Mr Cable who delivered a significant lecture to an organisation named the Institute for Fiscal Studies. In doing so he demonstrated his status as a true Liberal by speaking with deep respect of the work of Mr JS Mill, whose achievements included some profound analysis of the "Bubbles" that afflicted the economy of the industrialised Great Britain.

Of even greater significance are the remedies proposed by Mr Cable, which in many ways seem little more than common sense to anyone with knowledge of the economy and yet, it seems, have been neglected in policy for many decades.

The first is to acknowledge the peculiar nature of the market for housing and its impact on the economy of the nation as a whole. It has been allowed to "boom" without control because our economists and Chancellors have been unable to treat it as any different from the market for soft toys or electronic calculating machines. Yet there are many ways in which it is different, foremost amongst them being that it is based on the supply of land, which should be treated as a scarce and separate part of the economy.

Housing is also a great deal more important for the welfare of the population than the supply of soft toys, which, it appears, is inexhaustible. When housing was predominantly rented or leased the risk to the population was always from landlords and the poverty of tenants deprived of the opportunity to work. Now I understand the significant risk arises from the banks desire to "repossess" properties when loan repayments are not kept up to date. This is a nonsense, which is bound to destabilise the economy and cause widespread misery. Our own dear Queen was always distressed by her occasional inadvertent glimpses of beggars on the streets as I am sure the current occupant of the Throne would also be moved. I would mention that she was also a little impatient of my explanations of measures of relief that might be offered.

If a householder has surplus capital in a property when the value of their loan is deducted it is quite wrong and immoral that they should be required to forfeit that capital for which they have worked and paid because their property must be put up for auction at a time of low prices. Mr Cable therefore proposes that when a householder is unable to make loan repayments, they should agree with the bank to hand over that share of the property which is covered by the outstanding loan. This seems eminently fair and would leave banks with considerable assets to be placed on their balance sheets. The householder in turn would continue to live in their property and benefit from its good maintenance.

However there is little benefit in declaring a good policy if it is only known to an audience of economists. Mr Clegg and Mr Cable should work in tandem to offer hope to a public oppressed by financial woes and alarms.
WEG

Mr Clegg and Mr Cameron

Drifted down to the coast today, to the admirable town of Bournemouth, and happened upon both young Mr David Cameron and young Mr Nick Clegg addressing municipal representatives.

Mr Cameron has the charm and wit one would expect of an aspiring Disraeli and rather like Mr Disraeli, lacked substance when exposed to rigorous questioning. However he makes some useful points and offers some hope should great men of good will be required to cooperate after the next election.

My hearing is not what it was but I believe he stated that some 287 pieces of socialist legislation since 1997 have sought to regulate and control the Town Halls. His promise to remove many is welcome.

But there are substantial matters to be considered to revive local government; and Mr Cameron was loath to discuss them. While Parliament continues to raise excessive amounts of tax and dispense it to municipalities, they will always be in thrall to Whitehall.

Mr Clegg therefore offered the better proposition: that municipalities should raise 75 per cent of their revenue rather than a paltry 25 per cent as at present.

Sadly he offered his proposition in such tones that his audience was unlikely to warm to the proposition. Indeed it was said I held my position and respect by my power to command audiences. I am thus willing to offer my services to young Mr Clegg to assist him in developing his oratorical skills; indeed I will do it without requiring him to learn the great Greek and Latin orators.

A leader should never read his speech and , if he does, he should ensure that his audience cannot tell his doing so. To hear a leader stumble over words he has misread and then repeat those same words without emphasis or embroidery is a distressing experience indeed. A mistake such as "Gordon's brown aim" can be turned to merriment, but not when you act the pedant and rush to correct it to "Gordon Brown's aim".

A great orator holds his words in his head and spends time preparing his phrases, planning his delivery. I always found that walking to the station, chopping trees or walking the streets of the Capital enabled me to consider my words and prepare for great occasions. I hear that statesmen of this age sometimes employ hacks to compose their words for them. Such scribes should never be allowed to dictate one's every word.

I am sure this young man can be allowed to take time to polish his skills. His coterie must allow him this time. Indeed I hear this is not an unusual procedure and that some 30 years ago similar tuition was offered to the woman who became the nation's first female Prime Minister.

This was a sorry business since Mr Clegg offered both announcements of substance and further insights into the ludicrous nature of this government. He tells me it has appointed "ministers for the regions" who neither answer to Parliament nor to municipalities. Nor do they propose policy or handle budgets. These sops, it seems, these bags of wind will cost the public purse some two million pounds by the time they are evicted in an election.
WEG