Theatre and practice

No, not a misprint – we did not mean to write "theory and practice" only to have the automatic spell-checker substitute a different word, as it sometimes does, with unfortunate effect.

Watching the political scene from our lofty heights, we observe two different phenomena. One is the reality, the practice, of government – the nuts and bolts of the management of this country (insofar as it is managed at all) and the other is the theatre. The latter is the froth, the jousting over PMQs and the "scorecards" over who did better, or the performance of Brown on the Today programme; etc., etc., etc…

The great danger – if it is that – is that the political commentators (or theatre critics, as we prefer to call them) get so wrapped up in reporting their bits of the soap opera that, like some watchers of the TV genre, they begin to believe they are dealing with the real thing.

Hence, as do you get TV viewers writing quite genuine letters of condolence when one of their favourite characters "dies" on screen, so you get the theatre critics believing their own fantasies, projecting them into the media as if they had genuine substance.

Meanwhile, the business of government goes on, entirely unaffected and unobserved, the effect of which is of far more importance – and of greater lasting impact than the ephemera that dominates the headlines.

One of those bits of "business" that are going to have a profound effect is the ongoing exchange between the chancellor of our provincial government, Alistair Darling and the EU commission, over the immediate management of our food (aka agricultural) policy, and its shape in times to come.

As we left it, last Monday, Darling had written to his counterparts in the EU member states, pleading with them to support the continuation of the import tariff waivers on grains, and to re-think the biofuels policy. In the longer term, he also wanted an end to direct subsidy payments to farmers.

All this is in the context of spiralling food prices, which now have considerable political resonance, yet the move went almost entirely unremarked by the theatre critics in the MSM.

Nevertheless, as you might expect, Darling's action did not escape the attention of the farmers, with the result that the Farmers Guardian now reports: "Darling under fire for CAP attack in EU treasury letter".

Rarely do we ever find ourselves in agreement with the NFU (the initials of which we usually take to mean No F*****g Use), but it is hard to disagree with the words of NFU president Peter Kendall, who condemns Darling's letter as "badly timed and tactically inept". Although we might have different reasons for agreeing, we would also accept Kendall’s view that:

All the indications are that this letter will irritate others in Europe and be counter-productive to the Government's wish to see constructive progress on agriculture and trade.

NFU Scotland president, Jim McLaren, also pitches in. He adds:

I find it remarkable that as we're about to enter negotiations on reform of the CAP the UK Treasury would undermine the UK Government's credibility by making suggestions for reform which are so far out of touch with reality. Going into important negotiations, such statements make the UK look like a voice in the wilderness.

Again, he is right – and The Scotsman - which is still in touch with its agricultural roots – has more. Whatever one might think of the CAP, the fact is that what Darling is suggesting is totally at odds with the direction being taken by France and Germany that his pleas were almost guaranteed to fall on deaf ears.

The worst of it is that Darling does need to get some action. In EU agriculture commissioner Mariann Fischer Boel, we possibly have the worst agriculture minister (and yes, she is our agriculture minister) in living memory, a report in The Guardian confirming that she is living in the land of the fairies.

The paper is retailing a Reuters story which tells us that Boel is about to publish details of how she wants to build on the "radical 2003 reform of the CAP", with plans "change agricultural subsidies in a reform blueprint that would divert more cash from larger holdings into projects for enhancing the countryside."

This is a continuation of previous thinking, still predicated on controlling excess production, putting more money into environmental schemes, through a process known as " modulation". Yet this is at a time when pressure on farming has never been greater, with set-aside land released for food production to order to re-build depleted grain stocks.

Boel still has not come to terms with the idea that we are looking at structural changes in the global food supply, exacerbated by the rush to biofuels, and is still locked in the "over-production" paradigm that has driven the CAP ever since its inception.

Intriguingly, Reuters observes of this opening round in what are to be protracted negotiations: "So far most countries have played their cards closely." It adds: "However, the real debate is only just beginning and no deal is likely until at least November when France, by far the largest beneficiary of CAP spending, will be EU president."

And, as we observed at the end of last month, the debate goes on without us – unaffected by Darling's "tactically inept" intervention.

COMMENT THREAD

Update on Burma

There is very little good news from that country. Another cyclone is on its way and the Burmese government seems as determined as ever to reject help though it could be that they do not want NGOs in the country.

Gateway Pundit has an excellent round-up with many quotations about the uselessness of the UN (nothing new there). There are also pictures and videos taken at some risk to their lives by members of Burmese pro-democracy movements. They are, I must warn our readers, harrowing.

It seems that some American aid is reaching the country and, as ever, the much maligned United States of America, its navy and air force are standing by to send in whatever they can.

The elephant lives!

They are at it again … ignoring the elephant, even though it is alive and kicking – and dumping dirty great turds on the carpet.

Leading the fray in the eyes-wide-shut brigade is the BBC which retails the news that Postcomm's chairman Nigel Stapleton is calling for Royal Mail to be partly privatised "to safeguard the quality of the UK's mail delivery service".

He is warning that Royal Mail's financial difficulties would worsen unless bold action was taken and, without private sector involvement, the company "may require a government subsidy".

Apart from anything else, Stapleton's comment in the respect is, shall we say, as tad tendentious. He must know, better than most, that any idea of a subsidy is not on the cards – without the approval of the EU, which would be unlikely to give it. It would, in this context, be deemed illegal state aid.

But then Stapleton, according to The Daily Mail (which also does not mention the elephant) is comparing the Royal Mail's plight to "a person climbing up a very steep hill with a rucksack on his back filled with rocks", neglecting to say that the "rocks" are the postal services directives.

Is then a coincidence, one asks, that Stapelton should also happily chirp that, "Private sector partnerships had worked in other European countries," which is setting up precisely the agenda set up by the EU commission: first you break up the business; you allow it to be taken over by cross-border providers; then you move in to create a pan-European regulator on the grounds that the services can no longer be regulated nationally.

But it is the BBC that kindly reminds us that Royal Mail's troubles started with the ending of its 350-year monopoly at the start of 2006 – without mentioning why – telling us that other licensed operators were then given the right to collect and deliver mail, while the Royal Mail it is still obliged to deliver letters to and from anywhere in the UK at a uniform tariff. It is this which has given rise to a loss of £279m in the year to the end of March.

This gets agreement from Jeff Randall in the Daily Telegraph, who gets another comment piece on the issue. But, unlike his previous op-ed there is no mention of the elephant at all.

Instead, bizarrely, having referred to the problems of the universal service, and the possibility of reducing the burden, he notes that this is "enshrined in law". Amazingly though, he then goes on to say: "But laws can be changed."

That this man should make this comment is almost incredible. A man who told us that: "There exists no commercial, political or social problem that meddling by the European Union cannot make worse…", must know that the "law" to which he refers is EU law. As such, it cannot be changed - certainly not to suit Royal Mail.

Has Randall been got at, or have they applied a new coat of "stealth" paint to the elephant, so that it is invisible to him as well? I think we should be told.

COMMENT THREAD

"Next-War-itis"

US Defence Secretary Robert Gates has given a massively important speech under the aegis of the Heritage Foundation – link here.

In his speech, he states that: "I have noticed too much of a tendency towards what might be called 'Next-War-itis' – the propensity of much of the defense establishment to be in favor of what might be needed in a future conflict…".

He then goes on to say:

But in a world of finite knowledge and limited resources, where we have to make choices and set priorities, it makes sense to lean toward the most likely and lethal scenarios for our military. And it is hard to conceive of any country confronting the United States directly in conventional terms – ship to ship, fighter to fighter, tank to tank – for some time to come. The record of the past quarter century is clear: the Soviets in Afghanistan, the Israelis in Lebanon, the United States in Somalia, Afghanistan, and Iraq. Smaller, irregular forces – insurgents, guerrillas, terrorists – will find ways, as they always have, to frustrate and neutralize the advantages of larger, regular militaries. And even nation-states will try to exploit our perceived vulnerabilities in an asymmetric way, rather than play to our inherent strengths.

Then adding:

Overall, the kinds of capabilities we will most likely need in the years ahead will often resemble the kinds of capabilities we need today.

This is precisely the debate we have been pushing over on Defence of the Realm – the conflict between what we call the "future war" lobby and those who are more concerned with fighting and winning the current wars.

It is also a debate which also goes to the heart of our relations with the EU and it ambitions for increased military capabilities – yet the major players (France and Germany), not being engaged in any meaningful fashion in the current wars, are more interested in the "future war" scenarios. This is the driver behind the European Rapid Reaction Force, so that British future war advocates find in the EU their natural allies.

I have thus written an analysis of Gates's speech, which can be found on Defence of the Realm.

COMMENT THREAD

Spending your money

You will be very pleased to learn that 14 films representing in total over €900,000 of co-funding from the European Union's MEDIA programme have been selected for screening at the 61st Cannes International Film Festival, opening today.

Chirps our supreme leader, José Manuel Barroso: "Europe can be proud of the cultural diversity and global attractiveness of its vibrant cinema … European productions such as La Môme, Das Leben der Anderen, Belle Toujours and Kontroll have been celebrated at international film festivals and watched by millions of people, projecting the message around the world that Europe is about 'Unity in Diversity'."

Amongst the other delights, we get Better Things directed by Duane Hopkins – A group of young people grow up together in a rural community in the Cotswolds, experiencing sexual awakening, boredom, and drug use. That cost us €90,500. Then we get Home directed by Ursula Meïer – The story of a handful of people gradually cut off and disconnected from the world, who end up shutting themselves in.

That latter film rather sounds like a description of the EU commission – no wonder they were so keen to fund it and, at a mere €50,000, it was a real bargain. For the rest of us, we really should be so pleased that our money is in such good hands.

COMMENT THREAD

Wash your mouth out with soap and water

Chancellor Angela Merkel is travelling in South America (and I thought she had given up on her endless flitting round the world and settled down to being the leader of Germany) and in her absence, as the German media wrote indignantly, the Dalai Lama will not be received either by the President or the Foreign Minister, a left-wing Social-Democrat but, I am sure, that is merely a coincidence.

More interestingly she has fallen foul of the ever more ludicrous and sinister Venezuelan President Hugo Chávez, who is, presumably, feeling a little miffed because his best friend in Europe has lost an election. Will that fate ever befall President Chávez, one wonders. It has not befallen his other great friend, the now retired leader of Cuba, Fidel Castro, but things are not what they used to be. Chávez, after all, lost the referendum, which would have effectively made him dictator for life.

President Chávez has a weekly TV show on Sundays (one can’t help feeling sorry for the people of Venezuela) and on it he attacked Chancellor Merkel. Well, attacked is not the right word. He threw a bucketful of verbal garbage at her, though, I suspect, she can cope with it.

She is from the German right, the same that supported Hitler, that supported fascism, that's the Chancellor of Germany today.

The man’s understanding of politics makes me think that if ever the people of that unfortunate country manage to get rid of him, he will have a successful career in various Western drive-by media outlets. Of course, he has also attacked in strong terms other politician, including those of Latin America, who happen to disagree with the Great Hugo.

Chavez on Sunday also called Colombian President Alvaro Uribe a "liar" who "shouldn't even run a corner store."

Chavez once called United States President George W. Bush "the devil" at the United Nations General Assembly. He has also railed against other leaders including former British Prime Minister Tony Blair and former Mexican President Vicente Fox.”

King Juan Carlos once told President Chávez to shut up and the world applauded. The Great Hugo was clearly nettled as he keeps referring to the episode in supposedly careless fashion.

Chancellor Merkel may be easy-going but not so the European Commission President, who is also in South America. In his case there is little to do back home so he may as well travel and stack up those carbon footprints, though, obviously we would prefer it if he did so at his own expense.

Presumably, he, too, will attend the forthcoming meeting between heads of European and Latin American states in Peru. (These summits are getting to be rather a bore. What’s wrong with internet conferencing? I suppose, you don’t get to do a trip round South America at the taxpayers’ expense.)

The German newspapers have reacted in various fashion, mostly calling on European countries, and Germany in particular, to deal with the phenomenon of Latin America as it comes (that is including churlish boors who are wrecking their countries’ economy) because Europe could fill the gap left by the United States.

Whether this is an accurate description of what is going on in Latin America is questionable. It is probably true that “most voters feel they are globalization's losers” and it is easy for incompetent dictators to blame some outside influence such as the United States for that state of affairs. But that does not work for long. Eventually, the electoral swing will go back to more right-wing parties even in the countries that have now gone to the left (and not all have), as the voters become disenchanted with the populist thugs.

The so-called summit in Peru will give a certain indication of what might happen in the next few years by way of agreements between European and Latin American states, the relationship not having been terribly successful until now. Our guess is that Chávez and his few allies will once again be sidelined and he will once again rave at his weekly TV show.

Fax machine law?

At first sight, the headline looks pretty damning for the Eurosceptic cause: "EU targets Norway's water quality". And the UPI story is even worse.

European Union officials, it tells us, say Norway needs to build new sewage treatment plants and clean up polluted harbours to comply with EU water quality standards, despite it not being a member of the EU.

The story actually comes via the Norwegian national daily, Aftenposten, and refers to compliance with "water regulations to be a included in a European economic cooperation agreement," which has the assent of Erik Solheim, Norway's minister in charge of environmental issues.

He says that 25 percent of the country's water fails to meet EU standards and has committed his country to investing in new water quality monitoring schemes, construction of new water and sewage treatment plants.

Thus we have, on the face of it, a classic example of what the Europhiles love to call "fax machine law". The legend is that Norway, not being a member of the EU, has no say in the formulation of laws in Brussels but, by virtue of its membership of the EEA, is obliged to obey a whole tranche of them.

Therefore – or so the Europhiles would have us believe – they receive their laws by fax machine from Brussels and have no choice but to implement it. Such would be the fate of the UK, if we were to leave the EU.

The truth, however, is somewhat different – and far more interesting. We are in fact dealing here with our old friend UNECE – the United Nations Economic Commission for Europe, and "dual international quasi-legislation" – see here - the so-called “diqule”.

As it happens, the standards to which Norway has agreed to comply originate not with the EU but with UNECE, of which Norway is a member. As such, it is bound by several agreements, to which it was party, and was instrumental in framing. Most notably, these are the 1992 Convention of the Protection and Use of Transboundary Watercourses and International Lakes and the 1999 Protocol on Water and Health (background here).

As such, Norway was fully engaged in the (intergovernmental) process which framed the standards which it has agreed to adopt and merely uses the EU as an administrative convenience, the commission framing the standards in legislative form which is suitable for direct implementation.

Whether associated with the EU or not, therefore, Norway would still be bound by the standards. They come not from any association with the EU, but by virtue of Norway's membership of UNECE, and its agreement of the "water convention" and subsequent protocols.

Should the UK leave the EU, as founder members of UNECE, we would be in the same position, should we chose to remain within that organisation as well. But, as members, we would have a full part in framing any standards – and we could chose, if we so cared, to use the commission's administrative services to turn these into useable standards.

Whether we then received them by fax or even e-mail is neither here nor there. The Europhiles are whistling in the dark.

COMMENT THREAD

Rumbles from the East

We hate to say it, but we were writing about China on the brink in February – albeit that we had some help at that time from the Telegraph's Beijing correspondent, Richard Spencer.

Nevertheless, we had been writing in a similar vein the previous December, the combination of our two pieces suggesting that the Chinese economy is much more fragile than was generally reckoned.

Now, The Times is retailing in its business section warnings from analysts that yesterday's earthquake "could unravel the Chinese government's recent efforts to rein-in bank lending and cool inflation". But because of damage to roads and other transport facilities, there could be shortages of food and consumer prices are now liable to rocket further. Construction material prices are also expected to soar.

In a previous piece, however, the same paper points to more fundamental problems, with the headline: "Fears of unrest as China's growth slackens", echoing the tenor of our own pieces.

Incidentally, it is interesting how, like The Telegraph, real news is relegated to the business sections which the main papers deal with the entertainment industry, of which domestic politics is part.

Anyhow, that earlier piece in The Times tells us that "astronomic food price surges and a winter of freak snowstorms have taken the edge off China's roaring economic growth." These, it says, are "stoking government fears of embarrassing social unrest before the Beijing Olympics".

Those fears may well explain Premier Wen Jiabao’s extraordinarily rapid and very public response to yesterday's earthquake in Sichuan Province, with him flying to the scene to oversee the emergency relief effort within hours of the disaster being reported. This is so unlike the Chinese leadership that it suggests there is serious concern at the very highest levels over the mood of the people – hence the need to be seen to be responding directly to yet another crisis.

Behind the scenes, China’s economy expanded at 10.6 percent over the first three months of 2008 – slipping from the 11.2 percent growth logged in the previous quarter. Admittedly, this is still very substantial growth rates, but it has triggered concern that China’s expansion has peaked, with additional fears that, as the western economies slow down, its export trade will also decline.

Against this background, there is also what The Times terms "the negative effect of the Olympics on industry". Factories in and around Beijing, we are told, are preparing themselves for long, government-enforced shut-downs in an effort to clear some of the pollution from the city's smoggy skies.

To this must surely be added the effect on the economy generally, as food, supplies – and water – are diverted to the capital in order to put on a "good show", denuding the countryside and industry. An estimated $40 billion has been spent on the Olympics, on improving infrastructure and building sports venues.

What alarms Chinese policymakers, though – or so The Times asserts - is growing evidence that efforts to curb inflation are not working. Consumer prices were 8.3 percent higher in March than the same time a year ago, placing inflation near a 12-year high and far surpassing the government's target of 4.8 percent for 2008. High inflation has, in recent decades, been a trigger for street protests and other unrest.

Adding an extra layer of sensitivity, much of the inflationary pressure now arises from soaring costs of basic foods such as cooking, oil, wheat, pork and other meat. Because food has such a high weighting in China’s consumer price index (38 percent), the effect of 21 percent rise in the cost of food since the beginning of the year is very marked.

What is not factored in (to this report) is the remarkable finding which we highlighted in our report on the modest rise in China’s share of the global grain harvest, rising a mere 1.8 percent in 2006-07, from 382.2 million tons to 389.1 million.

Much has been made of the growing prosperity in China, fuelled by the manufacturing boom, but this figure suggests that the spread has been very limited. And if that prosperity has been linked with increased grain consumption – having been used to feed less efficient meat animals – then the indications are that many regions have been untouched by China's new-found wealth and may, indeed, be slipping backwards.

Whatever the broader projections of growth might be, therefore – and some suggest that it will stabilise at nine percent for the year – if what seems to be the majority of Chinese are not sharing in the "proceeds of growth", then the country as a whole will we ill-equipped to deal with the multiple problems besetting it.

Some of these are set out in a "backgrounder" from AP, which catalogues, amongst other things, the earthquake, the "snow disaster" and the Tibetan troubles.

In a way, Tibet – and the attendant Olympic protests, may have diverted attention from the more fundamental social and economic problems in China, not least because the unrest seen in Lhasa was by no means confined to the capital, or even Tibet itself. Other provinces, populated by Han Chinese, have also been the scenes of violent unrest.

Obviously, the Chinese government will do its best to keep the lid on dissent until the Olympics (and afterwards) but, as AP also reminds us, the rise in inflation did set off protests in the 1980s and '90s.

But, while the focus in the popular media is on the rescue attempts after the recent earthquake, it is as well to remember that there are political rumblings as well, which – in the fullness of time (perhaps sooner, rather than later) - which could have a more profound effect than even the current disaster.

COMMENT THREAD

Where we lead…

… others follow. We did it a week ago and now The Daily Telegraph has it on its front page – the BA 777 crash, which it attributes to a "fuel freeze".

Being The Daily Telegraph, although it mentions that the weather was "unusually cold", it rushes in to add that this "was not unprecedented" – even though some pilots in the region reported that they had never experienced such cold conditions. Thus, the paper misses out on the "global cooling" inference.

Neither does it mention the fuel pump software concerns, or the possibility of a temperature gauge malfunction, omitting to tell us that, while the BA flight opted for a higher altitude, other aircraft were taking refuge at lower flight levels because of fuel temperature problems.

Not only do we do it first, it seems, we do it better. The only consolation is that The Times is even worse, while a story in the London Evening Standard is so similar to that of the Telegraph that one suspects the journos have been doing the usual "cut and paste" job from a press release, rather than doing their own homework.

COMMENT THREAD

Now you can blame the EU

Despite the insistence of the groupuscules that the EU is responsible for the post office closures, which are currently the subject of controversy, we have
robustly maintained that the closure programme is a home-grown affair, brought upon us by our own government without the intervention of the EU.

However, a piece in yesterday's Daily Telegraph (business section, of course) puts something of a different slant on the issue.

It records how an additional 3,000 post offices might face closure if the government awards a contract to handle pension and benefit payments to a rival company. This is the "Post Office Card Account 2 (Poca2)" contract – which deals with pension and benefits payments and is due to expire in 2010.

The 24 million or so transactions involved are valued at £1 billion between 2003 and 2010 and provide a key element of post offices' income. The problem is that the contract for 2010 onwards has now been put up for tender and attracted two rival bidders. If the Post Office loses the contract, many small branches would go out of business, as the transactions provide about 12 percent of sub-postmasters' earnings, as well as attracting customers who spend on other services and products.

The rub here is that the reason the contract has been put up to tender is because of the EU’s procurement directives, which apply to service contracts valued at over £93,738, excluding VAT. And, as part of that process, the contract must go to the lowest bidder.

This requirement has affected other services provided by post offices, which have as a result suffered a steady loss of income. For instance, the government's decision to remove from post offices the responsibilities for the provision of driving licences, television licences and benefits payments resulted in income worth £168m being lost. By contrast, the government subsidy for post offices is £150m.

The TV license contract is especially interesting as this was worth £100 million to the post office in the financial year 2000-2001 and would undoubtedly be worth more now.

With effect from 1 July 2002, however, collection and enforcement activity was handed over to Capita Business Services Limited, following a competitive tender under EU rules, a loss to the Post Office which must no account for a substantial part of the overall losses of the network.

On this basis, it is fair to argue that, while there is no direct involvement of the EU in the post office closure programme, the dead hand of EU law has been indirectly responsible for undermining the network's income stream, the resultant losses triggering the need for closures.

So, we get there eventually – you can now blame the EU for post office closures, in part at any rate.

COMMENT THREAD