Jonathan Wallace

The decision by the Treasury that Trident submarine replacement should be paid for from within the existing defence budget means the Ministry of Defence must now look seriously at whether or not a Trident replacement is needed. The Treasury has now significantly undermined the argument that Trident is in the national interest. Some of us go further and argue that Trident is not in the national interest at all.

The Defence Ministry argued that Trident should be paid for by the Treasury as it is a matter of national security and is needed in addition to our normal military requirements. That argument has been rejected and going ahead with the replacement for Trident now means something else within the defence budget will have to give.

Quite what Trident replacement will achieve is still beyond me. It was a deterrent that no one dared use and arguably prevented war between NATO and the Warsaw Pact. But the world has moved on and the "enemy" is no longer the Communist East. Defence needs to be intelligent, mobile and flexible in the twenty-first century. Trident is none of that. And as it cannot be used against groups such as Al Qaida, it no longer acts as its original purpose as a deterrent between superpowers.

Arguably, it could be seem as a deterrent to smaller powers believed to be developing nuclear weapons, yet even then, the point is rather stretched. North Korea and Iran are paranoid states whose governments believe they are under siege from the rest of the world. For them, nuclear weapons are a defensive strategy which warns the rest of the world to keep their distance. They are not necessarily a weapon of aggression. And even if they were, any attempt to use them would result in the aggressor countries being wiped off the face of the planet by a world community that would not need nuclear weapons to achieve this end. As for Pakistan and India, their nuclear weapons are maintained because of their regional dispute which has been a running sore for 60 years. They are not weapons being pointed at the rest of the world.

Now is the ideal time at least to put Trident into the defence review. Hopefully that will happen.

Given that Labour are opposing every cut going, it remains to be seen what posture Labour adopts on Trident. In the last Parliament, Labour voted to replace Trident with a new fleet of submarines. What their latest policy is on this issue is yet to be seen.

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When I was working in the Policy Unit in Cowley St, one of the policy proposals I wrote up was the plan to abolish compulsory retirement at 65. This morning I woke to the news that the Coalition is to end from October next year the forced retirement of people at the age of 65. Excellent news!

We have an aging population and we are part of a competitive global economy. Forcing people with a high level of skills and experience into retirement against their wishes runs contrary to commonsense. It is bad for the economy and bad for business. And ultimately it should be up to individuals whether or not they want to retire.

There will be issues such as redundancy payments and the physical problems of continuing in a job which may require a higher level of physical activity. There is a danger though that this is overplayed as an issue. Despite the small number of challenges, the principle of ending compulsory retirement is right.
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Pity Ed Balls. He was the rising star of Labour. A close ally of Gordon Brown and tribalist to the core, he made his ministerial start as City Minister. It was an exciting time for Balls, denouncing the Lib Dems for not being wholly in favour of minimalist regulation of the financial services sector and claiming we were party poopers for pointing out the risks of the arms-length approach to the City. Then Balls bounced his way into the Cabinet as Childrens Secretary under his beloved Brown.

A man at the heart of Labour, it was no surprise he threw his hat in the ring for the Labour leadership. Recently it was thought he was behind rumours that Andy Burnham was planning to pull out of the contest.

But now the boot seems to be on the other foot and it has kicked Balls hard. He has been forced to say he is not pulling out of the contest after failing to get the endorsement of the big unions who are looking for the "Stop Miliband" candidate by endorsing the other Miliband. This is rather humiliating for Balls given he was expected to garner reasonable levels of union support.

Not that all is lost for Balls. Union barons love to claim they are speaking for all their members but those same members haven't voted yet so maybe those who pay the political levy and vote (let's face it they will be a minority of TU members) will have different views. Balls will therefore get some votes in the Byzantine Labour electoral college.

Nevertheless, the omens for Balls are not good. Perhaps Labour members realise he is a guy who scares the voters. And having just got rid of one Leader who did that, they may be seeking to avoid making the same mistake twice.
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I have been rather busy over the past few days working on a project that has taken up most of my time. It still isn't finished but the light is at the end of the tunnel. I have found a bit of time to do another door knocking session in my ward which went ahead on Saturday morning. In addition, as it is the summer, I have had to spend a bit of time securing my self-sufficient food supply.

So, blogging will be returning to normal as of today. Watch this space.

The Guardian proclaims itself as a newspaper that supports progressive politics. It backs fair votes and therefore by implication, coalition government. As we all know, election results can produce interesting, challenging results. As politicians we have to work with what the electoral system produces. The hostility of The Guardian, and its sister paper, The Observer, to the Coalition Government undermines its own claims to being supportive of the new politics of cooperation. Their slavish support for any anti-Coalition comment by the Labour leadership contenders is frankly nauseating.

Only a few weeks ago, The Observer had a headline screaming doom and gloom for the Lib Dems based on a poll. It was only towards the end of the article that readers learn that the poll was conducted for Ed Milliband, not exactly an unbiased commentator on such matters. More recently, The Guardian screeched away as its front page lead that the Coalition was going to bring back selection in schools. The whole story was based on an allegation by Ed Balls rather than any practical evidence. His claim was based on the simple fact that the Education Department was looking at ways of reducing bureaucracy in schools. Again, it was some way into the story before readers discovered that the article was simply a Labour allegation rather than a report on hard facts.

The past few weeks has seen The Guardian and The Observer littered with hostile reporting and Labour propaganda. I know they were generally Labour supporting before the election (though backed the Lib Dems on polling day) but their tone is now different. If anything, they are slipping into reactionary postures that are hostile to the progressive political system they profess to back.

It is questionable that any newspaper that backs Labour is backing progressive causes. Look at the past 13 years of Labour rule. Look at the likes of the Labour party in my own North East backyard. They are hardly the embodiment of all things progressive.

The Guardian is no longer the guardian of my views. My newsagent has been instructed to stop delivering it. The Observer has been cancelled as well.
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The first Prime Minister's Questions to a Liberal Leader since 1922 (and I'm not sure they had PMQs back in Lloyd George's day) was from new Labour MP for Gateshead, Ian Mearns. So thank you to Ian for kick starting a historic occasion for the Lib Dems. I describe Ian as "new Labour" rather than "New Labour" as I am led to believe the latter has completely collapsed. Ian is "new" as in new MP. I have no idea whether or not Ian would like the description of himself as "New Labour". He was one of those people in the Labour Party who in the 1980s militantly held to his socialism but then jumped into bed with the Blairite Labour Party in the 90s quicker than it takes to form a Coalition Government! Anyway, I digress. Back to PMQs.

Whilst I find the chairing of debates by Speaker John Bercow normally to be fair, he behaved today more like the leader of the Jack Straw fan club. He allowed Straw to ramble on for ages. Only once did he tell Straw to speed up (and then let him ramble on for ages more). But he also stopped Nick from finishing an answer to a question.

Other than Afghanistan, Straw went for Nick on the Sheffield Forgemasters loan issue. Whilst I appreciate this is a major issue in Sheffield, for the rest of the country it is simply a Sheffield issue. The fact that Straw focused mainly on a provincial issue in an attempt to have a go at Nick meant that Labour lost an opportunity to speak to the nation about national matters. Labour however are completely obsessed with having a go at the Lib Dems, to the exclusion of the issues that matter to most people. It makes them feel good to be beastly to the Lib Dems but its not the sort of behaviour that will give them victory at the general election in 2015.

I got an email from my colleague Cllr Frank Hindle telling me that at Gateshead's Cabinet this morning, Labour were claiming that the Food Standards Agency had been abolished. Frank is keen to point out that this is nonsense. The FSA is not being abolished. Frank has kindly done a bit of digging to reveal the true situation and I thought that I would help educate all those Labour councillors who read my blog (but always deny doing so even when they quote back at me what is written in it) on what is actually happening.

The FSA is being retained but will be refocused on food safety. Nutritional labelling will be handled by the Department for Health. DEFRA will deal with country of origin labelling.

If any Labour councillor would like any further accurate information on say, the level of debt Labour left the nation, the level of joblessness they left us or the honest facts about the capital budget they agreed to slash by two thirds, please let me know! I'll be happy to publish them.
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I missed Gateshead's cabinet meeting this morning as I had a meeting in Tynemouth with Professor Norman McCord. We were meeting to discuss the Roman fort at Washingwell, near Whickham. I am doing some research on the fort and wanted to speak to Norman about it as he was the person who discovered it, back in 1970.

Norman was also one of my lecturers at Newcastle University and we meet as a group of historians every few weeks to discuss history, foreign travel, food and the occasional bit of politics over dinner. Norman's discovery of the Washingwell Roman fort was the first evidence that suggested the early Roman frontier was south rather than north of the Tyne (where Hadrian's Wall runs). What interests me is the Stanegate, the road that linked the frontier defences. Before Norman's discovery of Washingwell, there was no evidence for the Stanegate east of Corbridge in Northumberland. Washingwell suggests the Stanegate ran right through Whickham. No one knows the route, but I have my own ideas.

Washingwell has not been excavated and was only discovered from crop marks captured in ariel photos. A couple of surveys of the site have been carried out but not a great deal was found. Anyway, Norman and I talked about the historical issues relating to the site and agreed that I will be back in a couple of weeks to interview him on camera.

The point is that there is a vast amount of history under our feet, much of which we know nothing about. And under the feet of my constituents is evidence of a major Roman road and, speculatively, a Roman settlement. It would be great to discover them.

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I was out again this morning to visit constituents and talk to them about the Coalition as well as any local issues they wanted to raise. I had a very enjoyable three hours with conversations ranging from fair votes to the history of Whickham to my family's history. I was even invited in by the current owners of a house where my great great grandfather lived (the house was built for him in 1902). The house continued to be occupied by my great aunt Cissie until the 1980s and the current residents knew all about my connection with it.

I don't have a count yet for the number of replies to our Coalition survey we got back today as my ward colleague, John McClurey, still has some of them. Usefully, I picked up more email addresses from people who wanted to be on our email newsletter circulation list. The next edition will be produced shortly so they will be included.

This morning I went to the funeral of Councillor Frank Donovan. Frank was a widely respected and liked member of Gateshead Council. His funeral was held in Bensham and back at the Civic Centre afterwards, I was able to have a quick word with his daughter Catherine, who is also a Council Cabinet member in Gateshead. Because of the funeral I am making no political comments today.

This afternoon, my two ward colleagues - Marilynn Ord and John Mclurey - and I had a meeting with housing officers about Sun Hill aged persons accommodation in Sunniside village. There has been an issue about decent homes standard and replacing the existing building with a new one so that the current bedsit arrangement can end. This is going to be an on going issue and will come to the Council Cabinet for a decision later this year.

My exercise this evening was to deliver a couple of streets in the Whickham part of our patch with our survey on the Coalition. We will be calling back for replies tomorrow. Back home I had a large crop of raspberries and strawberries from the allotment to turn into jam. There we have it, jam today from the Liberal Democrats!

We have now called on 600 doors in my ward of Whickham South and Sunniside in Gateshead and so far persuaded 107 people to fill in a survey form about what they think of the creation of the Coalition government. The usual health warnings should be taken into acount: this is still a small sample so is subject to the usual statistical margins of error. We will, however, survey more residents in the near future to get a broader picture and bigger sample.

The results show that people are overwhelmingly in favour of political parties working together and support the creation of the Lib Dem/Conservative Coalition.

The first question was designed to see what people generally feel about the new politics - ie parties working together rather than confronting each other: generally, which one of the following do you prefer:

Political parties confronting each other and not working in partnership in Government - 19

Political parties working together in partnership in Government - 75

Other - 12

No answer - 1

The next question probed residents about what their favoured government was. The options were all those that could realistically have resulted from the House of Commons as elected in May. It does not allow for what people would rather the election have produced. In other words, we asked people only about the possible governments that could arise from the actual election result rather than from a general election result that never happened.

The question was: The following outcomes were all possible after the election. Which one do you prefer?

A Coalition of Lib Dems and Conservatives with a majority in Parliament - 60

A minority Conservative Government with no agreement with any opposition party and an election in the next few months. - 10

A minority Conservative Government with an agreement with the Lib Dems to allow through some, but not all, Conservative policies - 18

A minority Lib Dem/Labour Coalition dependent on Scottish, Welsh and Irish Nationalists for a majority - 12

No answer - 7

The following question was designed to see what people specifically thought of the Lib Dems and Conservatives working together in Coalition, as opposed to the first question which was simply about the principle of co-operation and coalition: Do you think that the Liberal Democrats and Conservatives were right to put aside party differences and work together to create a Coalition Government?

Yes - 78

No - 19

Don't know - 6

No answer - 4

There are a number of other questions asked about voting reform and the Coalition Agreement. I will publish them at some point shortly.

The profile of voting intention is fairly spread across the parties. My ward in local elections with typical local election turnout of around 40% (that's about typical for my ward at any rate) tends to give us a vote share of between 64%-74%. The voting spread in the survey means we are effectively engaging with people of other parties as well as our own supporters. If anything, our own supporters could be a touch under represented in the sample as plenty people on the doorsteps tell us they don't need to fill in the survey as we are "doing fine" and all we need to do is "keep up the good work." Another group that is slightly under represented is the strong Labour supporters. The small handfull I came across tended to respond by saying they are Labour and won't fill in the form, though some were then persuaded to do so.

Anyway the sample breaks down as:
Anti 1
Strong Conservative 11
Soft Conservative 17
Strong Labour 10
Soft Labour 19
Lab/Con 2
Lib Dem 38
No answer 8

When the sample size gets bigger, I will also publish results by party support.

It seems that the one member of the Labour Party who is not in denial about the deficit and the economy is Pat McFadden, shadow industry secretary. McFadden speaks today to the Fabian Society and will warn that Labour risks credibility with voters if they head into the "comfort zone of wishing away the need to cut spending."

He will go on to say, "Fight the cuts is a tempting slogan in opposition, and there are indeed some that must be fought. But if that is all we are saying the conclusion will be drawn that we are wishing the problem away." He also warns that the direction Labour are taking - of opposing all cuts - is exactly the direction in which the Coalition parties want Labour to head.

Well spotted Mr McFadden. Labour are clearly heading in the direction he warns should be avoided. I recently described Labour as clinging to their comfort blanket and offering painless palliatives. It's the same thing as McFadden suggests, just different words.

Few in Labour however will listen to him. After 16 years in which the "socialist" brethren of Labour have dumped so many of their principles under instruction from Blair and Brown so that they could build a "third way" utopia, they are now free of the responsibility of office and are reverting to type. They are loving the way the Blairite manual on what to say and definitely what not to say has been tossed on the bonfire. Suddenly, Labour MPs are taking about the "working class" as if it were some kind of organisation for which you need a membership card. Labour members have started to use the word "socialist" again. Some of them may even have looked up the meaning of the word. Some of them are dusting down their old hymn books and are learning the words to the Red Flag. Labour has "class war" as the new (old) rallying cry and they claim everyone in the City is a vile Tory banker who destroyed the last government (note - throughout history Labour have always blamed others for the mess their own governments get into). They have of course conveniently overlooked the widening of the wealth divide between rich and poor from 1997 - 2010. Also forgotten was the way they sucked up to rich bankers. Remember Ed Balls proclaiming the benefits of the light touch regulation of the City when he was City minister? I do. Labour MPs however have airbrushed that out of their history books.

Long may the drift by Labour into the realms of unelectable socialist posturing continue. The lessons of the 1980s have been forgotten. The wilderness beckons for Labour and their members want to set up camp there.

As I go about my council ward, talking to residents, one message I get from them is crystal clear - they know the country needs to go through some pain to put the economy right. None of us like that but we know it needs to be done. Only the most hardened Labour supporting constituents believe the deficit and economy can be put right by a wave of Labour's no-cuts magic wand. The more Labour waves this wand about, the less credible they appear to voters.

It was with great sadness yesterday that I learnt of the death of Councillor Frank Donovan. Frank was one of those people who, regardless of politics, just about anyone could get on with. He was a true gentleman and he will be greatly missed on Gateshead Council. Frank Donovan, rest in peace.

Margaret Thatcher famously "handbagged" her opponents within her own party. Now the weapon of choice for the Labour party, at least, is the diary. "Third Man", the probably less than gripping self-justifications of Peter Mandelson are about to hit the shelves of Britain's bookshops. He has certainly wasted no time in swinging his boot into the proverbial knackers of his Labour colleagues before any of them have a chance to get their words into print.

This does of course draw public attention back onto the Labour Party as a cauldron of warring factions. Gordon Brown, having vanished into thin air since he left office, is back in full view happily reminding us, thanks to the Prince of Darkness, of just how poorly fitted he was to be Prime Minister. With more diaries and autobiographies coming soon from the likes of Tony Blair, we are about to have a whole feast of Labour rows and self-destruction. Quite what ordinary Labour members think of their former leaders and bigwigs cashing in on the misfortune they themselves inflicted on the Labour Party would be interesting to know. Given that so many Labour members believe history started the moment the Coalition started, the stark reminder of the chaos, warfare and mess that was Labour before the general election probably doesn't go down well.

I've kept a diary since July 1990. The world can rest assured that I have no intention of publishing it!

Lib Dem blogger Jonathan Calder, who writes House Points for Lib Dem News, has written an excellent article and blog post about the absurd posturing and policy demands of Labour MP for Washington and Sunderland North, Sharon Hodgson. You can read Jonathan's blog at www.liberalengland.blogspot.com.

For those who have not heard of Sharon Hodgson (likely to be a significant majority), she was the Labour MP for Gateshead East and Washington West from 2005-10. When the boundaries were redrawn, Labour in Gateshead seized the opportunity to dump her as candidate in favour of someone who was not far off being nearly twice her age. She was eventually washed up on the shores of Sunderland. Quite what the good people of Sunderland North did to deserve Mrs Hodgson as their MP is something I simply cannot answer.

Mrs Hodgson's three claims to fame in the last Parliament were interesting, to say the least. She sprung to my attention when I discovered she had written an early day motion praising herself for her attempts to amend legislation which I'm not sure even saw the light of day. It was rather amusing to see the Guardian Diary column run with this story after it appeared on my blog. Her next attempt to stun the world was with her demand for more chocolate on flapjacks in primary schools. And finally, there was her crusade against cinemas which she accused of charging too much for pop corn, fizzy drinks and other healthy junk foods. She demanded they put an end to their ban on people bringing in their own food. As I pointed out in my own blog after she made her ridiculous demands, the logical conclusion of her proposal was the right to bring your own food and drinks into restaurants if you happen to feel that the cost of your meal and bottle of house white was a bit on the expensive side.

Jonathan Calder highlights Mrs Hodgson's latest crusades, including heckling the Independent Parliamentary Standards Authority, accusing Lib Dems of coming into politics to make children in poverty go hungry (not quite as bad as some Labour claims that we came into politics to eat babies for breakfast and generally spread pestilence, plague and famine). Jonathan also turns his attentions to Hodgson's recent attempt to introduce legislation to ban the resale of tickets for concerts or sporting events. So, the Delightful Sharon wants to turn those who buy tickets other than from an official supplier into a class of criminals. Just imagine, you've bought a ticket for that Kylie concert you've been wanting to go to for ages. You bought the ticket from the official Kylie ticket provider. Then suddenly you can't go. What a pity you can't sell your ticket to a friend without turning yourself and your friend into criminals. As for buying tickets from non-official sources and paying more than the original price, so what? If you are prepared to pay it, that's because you want it enough to pay the price demanded. No one is holding a gun to your head and forcing you to buy it.

Mrs Hodgson appears to come from a wing of the Labour Party that wants a staggering degree of state control over people's lives. It's a wing that wants people protected from their own decisions by preventing people from taking decisions about their own lives in the first place.

Jonathan Calder states, "When we hear less of Sharon Hodgson, it will be a sign that Labour is prepared to provide grown-up opposition." Yes, Jonathan, I agree with you. But I am also tempted to say that the more the likes of Sharon Hodgson are heard as the spokespeople of her party, the longer will be the road to recovery for Labour.
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My ward colleagues, John McClurey and Marilynn Ord, and I were out again this morning talking to residents about the Coalition Government. It is the first time for three weeks that we have been out door knocking as other things have cropped up in the meantime (mainly trips to London to take photos of Deputy Prime Minister Nick Clegg at various Lib Dem gatherings).

The response again was good. Out of 150 doors knocked on, only three were hostile to the Coalition. When questioned further, these three turned out to be hard Labour supporters. One however was interesting. He was a former Labour member who had helped in the early Blair years but was now hostile to Labour, indeed all politicians except, interestingly, he likes us as local councillors.

Approval for the coalition remains strong. People continue to like the new politics of cooperation. There is also an understanding that the public finances are in a mess and that we will all have to go through some pain to clear them up.

I am getting close to publishing the first figures from the survey. Watch this space.

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I blogged on Wednesday about being on an inspection carried out by the Port of Tyne Health Authority. I said I would post up a few photos. Here they are:


This is the Gateshead Millennium Bridge fully opened. A spectacular sight at any time but I understand the bridge is opened every day at midday during the summer. To the left is the Sage, Gateshead. This will be the location of the Lib Dem spring conference in March 2012.


A better view of the Sage.


If you want to know anything about any site along the banks of the Tyne, Cllr Tommy Graham is your man. Here he is pointing out the landmarks to Councillors Ione and Noel Rippeth.


North Shields lighthouse, at the end of the North Shields pier


The only oil rig currently on the Tyne


Both cranes were installed in 1924.


Lord Collingwood statue and Tynemouth Priory


Tynemouth Priory and the cliff battlements


Work on going on the new Tyne Tunnel


Tyne Ferry "Pride of the Tyne". It is likely to end its service when the new Tyne Tunnel opens.

There is a possibility that a bid will be made shortly for Northern Rock, the Newcastle based former building society turned mortgage bank turned car crash turned nationalised bank. A group led by Lloyds of London Chairman Lord Levene appears to have plans to take over the company that was the first banking domino to fall that led to massive state intervention in the banking sector to save it, and the economy, from going down the pan.

Public ownership was always a temporary solution for Northern Rock. The need to return it in some form to the private sector was always clear. The two issues we face are timing and ownership. When is best for both the bank and the taxpayer to end public ownership? What form should the new ownership take?

Is now the right time to relinquish public ownership? For that we have to decide two points: do we as taxpayers get a good return on the investment and will the company prosper better under new owners?

It's a bit of a What If scenario. It may be that the company's future growth will be greater if the public were no longer the owners. In such a scenario, we probably won't get much more for it in the future than we can get now. And given the state of public finances, realising an asset like this could reduce our need to borrow. It could be however that the bank will grow under public ownership and therefore a sale in the future would be more beneficial to the taxpayer. I tend towards the view that the company's growth in the public sector is going to be more limited. There are rules that restrict the bank because of the state aid it has received, rules that are designed to prevent unfair competition and prevent a public sector takeover of the entire banking sector by stealth. Freeing Northern Rock from those restraints, assuming the company is able to stand on its own two feet, could be more beneficial that leaving it tethered to the public sector. So perhaps an earlier change of ownership is better.

So that brings me to what sort of ownership would be best? There are some who want Northern Rock to be fully mutualised again. I am a great supporter of mutual organisations and want them to have a strong role in the economy and in the provision of public services. But, how to convert a state owned company into a mutual? At the moment it belongs to all of us. Can we really justify transferring the ownership to the existing customers? Why should they strike lucky in that way?

My solution is something more akin to our own proposals for the Royal Mail in which the employees become "partners" in the company though the overall employee stake is a minority of the overall ownership. There could also be an opportunity for long term customers to be given a minority of shares. Whilst this suggests a "lucky strike" for some, it should be only for those who were customers of the company before the crash, during it and after it. In other words, those who stuck with the company in the bad times rather than close down their accounts and shift their money elsewhere when the going got tough. Like the shares for employees, they would be held in a trust so could not be individually traded.

Unlike our Royal Mail proposals, I see no point in a public sector minority stakeholding. Such a stake could, under the rules on state aid, prevent the bank from growing further. Therefore, the rest of the shares could be sold within the private sector.

Other solutions are of course possible. A private sector consortium, private equity fund or existing company such as Virgin could buy the whole bank. Or it could be floated so that small investors could buy shares. The latter would be my second option (but combine it with the employee ownership model and suddenly it becomes very attractive!)

The reprivatisation of the banks gives us an opportunity to broaden direct ownership and especially to create a new culture of employee shareownership and participation. This may or may not be tried with Northern Rock but there are other opportunities coming up with the other banks and of course with Royal Mail.

It appears that a verbal punch up has broken out amongst Labour leadership contenders. Andy Burnham, according to The Independent, is having a bit of a spat with unnamed members of an equally unnamed rival leadership team (ie Ed Balls) over some poisonous media briefings. Startled bunny lookalike Andy Burnham is objecting to briefings which claim he will quit the leadership campaign shortly to avoid a humiliating last place. (Such a resignation could be a timebomb for Balls rather than a gift wrapped present as it could mean Balls coming last - what a humiliation that would be for Balls, coming in behind Diane Abbott!)

Should Burnham, indeed anyone, be surprised by the tactics allegedly employed by Balls? They shouldn't be. Briefing the media to destroy Labour opponents was a well used tactic of the Gordon Brown management team. Balls was the standard bearer of the Brown Praetorian Guard. Perhaps old habits are taking their time to die out.
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The Bank of England interest rate has been held again at the record low of 0.5% by the Monetary Policy Committee. This may continue for some time yet, despite the growing threat of inflation. The current inflation rate is significantly above the target set by the last government, a target which is continued by the Coalition. At some point, the ultra-low level of interest rates will not be able to be sustained. Interest rates will have to rise, especially once the £150 billion of "quantitative easing" (ie printing money) starts to work its way through into prices rather than simply bolstering bank balance sheets and reserves.

Businesses will clearly want to keep interest rates low for as long as possible (though savers may think the opposite). The formation of the Coalition almost certainly saved the country from an immediate interest rate rise and therefore put off the day that business fears.

Had there been no coalition, the likely outcome would have been a minority Conservative government, with or without Lib Dem support. The summer would have been spent as an extended election campaign with an October election a strong possibility. Business and the international markets would have feared that the action needed to tackle the deficit and economic problems was at best delayed by a government lacking the majority to do anything anyway. There would have been a run on the pound with interest rates going up to support it. The knock on of that would have been higher costs for business, more unemployment, an even bigger government deficit.

I have argued from the moment the election result was clear that Coalition was the right thing to do in the national interest. Today's interest rate decision is a vindication of the creation of the Coalition. Everything could have been so much worse without the Coalition being brought into being.

The Lib Dem Parliamentary Candidates Association annual reception took place on Monday in Westminster with Deputy Prime Minister Nick Clegg as guest speaker. I was asked to do the photos so here are a handful. I've put a larger number in a group on my Flickr site: http://www.flickr.com/photos/jonathanwallace/sets/72157624441476166/


Nick with members of the PCA exec who were at the event. This one may (or may not) appear in Lib Dem News this week. (Extra points for those who spotted that this will mean I've had three page lead pics in a row!)


The future is bright, the future is (Lib Dem) orange. Nick speaks to the reception, complete with glass of orange.


My former boss, Lib Dem chief exec Chris Fox, who has just become a member of the editorial board of Parliamentary Campaigner which I edit.


Deputy Leader Simon Hughes makes his point.


Meeting some of the guests.


Durham member Mark Wilkes and family with Nick.

I have just finished an inspection tour of the Port of Tyne, carried out by the Port of Tyne Health Authority. This body deals with health issues arising from the movement of goods and people through the various different port facilities. The tour taken place once every two years but this is the first time I have done it. We were taken by boat up the Tyne to view the different facilities until we got to Tynemouth when we headed back. Inevitably I went armed with camera (but not video). I will sort the photos soon and post up a selection on Flickr.

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I have just left the Lib Dem Parliamentary Candidates Association reception in Parliament and am heading back to the flat. Deputy Prime Minister Nick Clegg was the main speaker. Other speakers included Simon Hughes, Baroness Ross Scott, my former boss Chris Fox and Norman Lamb. I was there to do the photos which will be available for Lib Dem use shortly.

I head home to Gateshead quite early tomorrow morning. I could have done with getting a later train. I am rather tired after having been woken at 5am this morning by our cat and a fox having a noisy scrap in our back garden. It was ages before I got back to sleep. I also have a meeting at 3pm tomorrow so even if I wanted to lie in, the choice is not available.

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The debate about welfare went up a gear this week following the announcement by Ian Duncan Smith over the future of welfare benefits. Generally I think he is moving in the right direction. Frankly there is not that much to separate it from what Labour was planning when they were in office. That of course won't stop the sanctimonious posturing of Labour MPs who will accuse the Lib Dems of plague, pestilence and eating babies for breakfast. Labour will forgot the more absurd proposals they came up with, such as Caroline Flint's idea of evicting the unemployed from their council houses.

The welfare state is an important cornerstone of our society but it has developed in a way that was never intended. It was meant to be a partnership between the individual and the state to provide for people when they are in need. The problem is that there has grown up a presumption that it is the state's role alone to provide. Too often, individual responsibility to make provision for their own rainy days has been forgotten. Furthermore, the benefits system has created a disincentive to provide for oneself. Look at the penalty those on modest incomes have to endure who save all their lives for retirement and then lose pension credits and benefits because they have a modest private pension or savings. Saving is the right thing to do. Work is good and all help should be provided to help people to get into it. The benefits system too often does the opposite and traps people in poverty, discourages aspiration and leaves people believing that it is always someone else's responsibility to look after them. Welfare should be a joint responsibility of individual and state and should not operate by making people worse off or only marginally better off by being in work. The basic principle of the system should be to help people to help themselves with most help going to those who genuinely can't support themselves as their needs are genuinely far greater than that person's ability to address.

So the recent tax changes are moves I believe are going in the right direction. I believe work is good so we should tax it less. I believe saving is good so we should not take away from those who save for their retirement. Therefore increasing the state pension is the right thing to do. And we need less consumerism and need to move away from an economy based on the sale of consumer goods bought on credit. That was why the decision to raise VAT - ie taxing consumption rather than income - was the right decision.

So I was pleased to see my former boss Mark Littlewood articulating views similar to mine this morning on the BBC. Now I await the string of anonymous comments from local Labour members accusing me of eating babies for breakfast.
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On 29th October 2009, Blaydon Labour MP David Anderson called for a rise in VAT . However, on 28th June, Mr Anderson signed up to an Early Day Motion (2010/11 – 317) which claims “value added tax (VAT) is an unfair and regressive tax which disproportionately affects people on lower incomes”. The motion then goes on to oppose the recently announced VAT rise.

Mr Anderson has switched from being an advocate of a VAT rise under Labour to being a diehard opponent of a VAT rise when the rise is implemented by someone else.

This MP has made quite a fuss about the Lib Dems support for the Coalition budget which includes a rise in VAT. Perhaps he just needs reminding that his own record and his own sanctimonious posturing on VAT are not consistent with one other.

There seems to have been a bit of special pleading recently by Labour over the reduction in the number of parliamentary constituencies. Jack Straw, in the first Deputy Prime Minister's Questions recently presented a case for special treatment for urban areas where, he claimed, too many people were not registered to vote. Whilst I appreciate there is a problem in voter registration being too low, this is not an issue just for urban areas. It affects rural areas as well. Basically Labour are pleading a special case for urban areas which by an unbelievable coincidence, happen to be mainly Labour areas.

Equality in the size of constituencies is a fundamental feature of a fair electoral system. It is one of the demands of the Chartists still to be realised. Small size, Labour rotten boroughs distort the representation of the people. Before 2004, I represented the largest ward in Gateshead whilst down the road was a safe Labour ward which for years had only half the electorate of mine. This was grossly unfair to the people I represented. Fortunately, a long delayed boundary review equalised the wards in Gateshead in 2004. Such discrepancies are an unfair feature of the current system which needs reform.

Interestingly, Labour's over representation based on small constituencies, does not always help to give them a majority in Parliament. Blair temporarily cracked that problem by picking up a large number of seats in Tory (mainly southern) shire areas but with that ability now largely lost, Labour could get holed up in urban areas with a shrinking electoral base. No wonder they are pleading a special case.

I heard the Labour case this morning made again. I was at a council advisory group looking into how the election was handled and at forthcoming electoral matters. Ian Mearns, now Labour MP for Gateshead, and someone for whom I have quite a bit of time, argued that urban ares could lose out under the boundary review due to people not being registered to vote. As I said previously, there is a problem but it affects many different areas.

Restoring balance to the constitution needs to be more than just equalising constituencies. Voting reform is crucial as well.
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Two different messages from two different Labour leadership contenders today on voting reform. Having previously said something vaguely positive about Andy Burnham a couple of weeks ago, now I need to rebalance my judgement of him. He was very dismissive of electoral reform in The Guardian this morning. It seems that, for him, reforming the decrepit way our country has been run is not a priority. I suspect he is in something of an arms race with other Labour leadership contenders to outbid them on being the nastiest to the Lib Dems.

David Miliband however has just gone up in my estimation. He unhesitatingly backed the call for AV on Radio 4 this morning. This does begin to throw some light on what Labour's actual view on reforming the voting system is. In the last Parliament, Labour announced a manifesto commitment to the AV referendum. This however had to be dragged out of them only after they realised there was a public demand for reform which they felt obliged to address. It is questionable as to how far they were prepared to go in actively pursuing the policy.

It is likely that there are two main groupings within Labour: the diehard reactionaries who want to keep first past the post even if it means long term Tory majority government (which has been the most regular outcome of FPTP) and those who understand and accept the merits of voting reform. Around these two groups is a nebulous bunch with no fixed view. It will be interesting to see however which MPs eventually back which positions once they are smoked out of the nebulous stance.

There are significant fault lines in Labour on reforming the UK. The coming referendum campaign could well see more surprising and not surprising coalitions forming as the diehards in Labour join forces with the Tory right to try to defeat reform.
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Well, now we know. 5th May is the date for the fair votes referendum. That avoids two different polling days next year. Holding the referendum on the day of the local and devolved elections will help boost turnout. That however is not a guarantee of success. Campaign now and campaign hard if you want the Yes vote to win. This will be a hard slog and those opposed to change will throw all they can at keeping the existing system.

I have been conducting a survey of my constituents about their views towards the Coalition. I have included a question about people's attitude to voting reform. The early indications are that the majority support reform. I will publish figures when I have a bigger sample.

Meanwhile, if you were a Lib Dem parliamentary candidate, watch out for the next edition of Parliamentary Campaigner from the Lib Dem Parliamentary Candidates Assn. I completed it last night and it should be in your in box today. There are 2 pages on campaigning for the referendum.

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Northern Democrat No 52 June 10

This is the latest edition of the Northern Democrat, edited and produced by me for Lib Dems in the North East, Yorkshire and Cumbria.