The British government is persisting in its horrible plan to collect details (though not, thank goodness for small mercies, the content) of every telephone call, email and visit to a webpage made in the UK. It has presented its plans to the industrial companies who would be affected by them, either because they carry the traffic or could be involved in development. But the exact plans for this hyper-surveillance are being kept from the British public, which will be expected to (a) acquiesce to it, and (b) pay for it.

Lord Avebury of the Liberal Democrats has asked, quite properly, for the Powerpoint slides of the presentation to be made public, in order that there might be a sensible debate about it. It is possible that the public will agree that such surveillance is justified in an age of cybercrime and global terror. But without a public debate, any “agreement” is of course meaningless. The plan may be sensible; the secrecy is an outrage.

But then, outrageous infringements of civil liberties have been a trademark of the Labour governments of 1997 onwards. Jacqui Smith’s refusal to see liberty and privacy as important values in British society is only part of a trend. We should deplore her attitude, but recognise that it is not her fault as an individual, but rather the most conspicuous failure of the ideology of the ‘Third Way’.

And, of course, once the technology is perfected and paid for from the British science and engineering budget, it will constitute a marketable resource which can, and will, be sold on to other interested parties, such as totalitarian governments the world over.

Occasionally, the fatuous argument is made that if one has nothing to hide, one has nothing to fear. This is garbage. As I have argued before, it would be more correct to say that if one has nothing to hide, and the government keeps within the law, and its employees keep within the law, and the computer holding the database doesn’t screw up, and the system is carefully designed according to well-understood software engineering principles, and the Treasury doesn’t try to micromanage the implementation, and the system is maintained properly, and the government doesn’t scrimp on the outlay, and all the data are entered carefully, and the police are adequately trained to use the system, and the system isn’t hacked into, and your identity isn’t stolen, and the local hardware functions well, you have nothing to fear.

That is a somewhat different proposition, but probably doesn’t fit Labour’s simplistic Manichaean world of goodies and terrorists, where the only thing preventing the ultimate victory of the forces of good is the lack of technology that – it goes without saying – will function perfectly, be unhackable and only be used for good purposes. Our only hope is the government’s traditional incompetence in the implementation of large software systems; probably the best outcome is that it wastes a couple of billion on something that doesn’t work.

“..So complicated, so elaborate, so costly are the processing mechanisms that they cannot be employed except on a mass scale: hence they eliminate all activities of a fitful, inconsecutive, or humanly subtle nature… That which is local, small, personal, autonomous, must be suppressed. Increasingly, he who controls the processing mechanism controls the lives and destinies of those who must consume its products, and who on metropolitan terms cannot seek any others. For processing and packaging do not end on the production line: they finally make over the human personality…… Process and mechanism is about control.” Lewis Mumford, The City in History 1961

Processes killed Baby P.  To describe this as a tragedy, as Brown and Balls have insisted on labelling it, is a misnomer. It is a horror, like the holocaust, over which people presided.  Baby P was killed not for lack of visits or for lack of carers, not for lack of meetings, nor for lack of forms or ‘for sharing of relevant information’. He was killed because of today’s preferred form of government; because not one of those involved was brave enough to buck the system the government has imposed, not one of them brave enough to challenge their working practices and compliances and to physically rescue this baby from his torture chamber. He was killed because government apparatchiks have been indoctrinated by the higher demand of process at the price of humanity.

Procedures and systems have become the enemy of responsible social welfare. Process allows, indeed encourages, ‘health professionals’ to abdicate common sense and let go of any personal responsibility for the situations that confront them. Everyone must be supported. No one must act or make judgment.  ‘Process’ has imposed a standardised response in which crisis is swallowed up. It suppresses the immediate and urgent response crisis demands.

When Lord Laming conducts his next report into how his previous reforms have been implemented he surely must reflect on this; because child welfare is in multiple crisis and has to be responded to as such.

Back in 2003 it was estimated that some 350,000 children had drug addicted parents; in 2006 it was estimated that a further million children had alcohol addicted parents.  Since then the figures have gone up. Adult ‘problem drug users’ total over 400,000 and alcohol problems have got much worse. ‘Treatment’ entails another mass administration, the state sponsored drugging of some 200,000 adults with the prescribed opiate substitute, methadone, now added into the mix.  All of this is catastrophic for the increasing numbers of children involved.  At best addiction and substance abuse make for neglectful and irresponsible parenting; at worst for cruel and abusive parenting. Yet nothing is being done to protect these children in our progressively administered, morally neutral and non judgemental society. All that has happened is that the threshold of risk that social workers respond to has gone up.  It was back in 2003 that the Hidden Harm Report noted that substance abuse was the first thing that social workers met with in their problem families and that it was the last thing to be addressed. Plus ça change, plus c'est la même chose.

Process demands neutrality and takes right and wrong, good and bad out of the equation. This is no where more apparent than in the treatment process this government has devised for drug addicts. Encouraged to ‘access’ the treatment administration process, addicts are not required to answer for their children or indeed to acknowledge whether they have any or who may be taking responsibility for them, for fear it may put them off.  The result is a culture in which drug addiction or alcohol abuse is no longer seen as an index of irresponsible or neglectful parenting; a culture of indifference to children’s most basic of emotional and physical needs.

This is the new liberal fascism created by our process driven government - one which ensures that no one individual is ever responsible or held to account. It has created an anything goes society in which the most vulnerable, children and old people go defenceless.

Yesterday, one it its apparatchiks, Sharon Shoesmith, the conscienceless head of Children’s Services at Haringey, predictably rejected calls for her resignation. She had the gall to say that her department had worked effectively in the case of Baby P and that, “the child was killed by members of its own family, not by anyone who works for social services”. 

Our Children’s Minister, Ed Balls, showed up little better and also extracted himself from any responsibility – though being responsible for children’s welfare is the very job that was created. ‘In the end’, he asserted, ‘I can’t account for evil acts by parents, I can’t account for mistakes made by health professionals’. No?  If he was honourable he could - if only to show what a grotesque parody his ministry is.  His resigning, along with that of Sharon Shoesmith, would be the first and most important marker not just of this government’s acute and chronic failures of direction but for the change in political culture we need.  But his performance on Newsnight, last night,   showed him to be a slave to the process that that has already caused the damage, that so conveniently protects the incompetent and the self serving, and which he is determined to protect at all costs. ‘I’ve got to stand back’ he declared with staring eyes, ‘and say we’ve got to get the systems in place around the country …’.  Tragically he is not standing back at all. He remorselessly continues to drive the system that is at the root of the problem.

There are not many people displaying sympathy for the banks at the moment.  But on one basis at least, I think some sympathy is fair.  The Government's messages about what it wants the likes of RBS, Lloyds TSB and HBOS to do are impossible to reconcile.  Management must be baffled.  The shareholders who have already lost most of their investment must know that the Government's Janus-like approach is probably continuing to push the share price down.

The Government appears to want the banks who have benefitted from its aid scheme both (a) to recover from their present travails as quickly and effectively as possible, so that it can obtain a rapid, profitable exit, and (b) to undertake uncommercial lending.  

Much of the noise in the press has focused on the restrictions on executive pay which have been demanded of the aided banks - but more significant is the apparent obligation on the aided banks to maintain previous levels of lending.  This is bad policy in so many ways: it risks creating yet another bubble, it simply isn't realistic in the current climate, and it forces the banks to adopt policies which hinder their ability to provide the taxpayer with a profitable exit.  When you add the Government's naked pressure on all banks this week to pass on interest rate cuts (despite the fact that the reduction in their own cost of borrowing has so far been rather smaller), it's clear that Gordon Brown is determined to use whatever influence he can to direct the policies of the banks.

So is a rapid exit what the Government really wants? Is getting the taxpayer's money back as quickly as possible really its goal?  Or will it be quite content to hold its stakes over a longer period of time in an effort to maintain direct influence over the banks and their lending policies? At present, the best that can be said is that its signals point in both directions.  The Government needs to clarify its intentions as quickly as possible.

At times of crisis the assumptions that underpin political debate can change rapidly. For over a decade Bank of England independence was hailed as the greatest, perhaps only, achievement of Gordon Brown’s Chancellorship. Politicians of all parties sought to learn the lessons of this success and transfer the model of decision making by independent ‘experts’ to other areas of public policy, even beyond the sphere of economic policy. Now that the relationship between the Government, the Bank and the financial system has come under intense strain we are now beginning to see this supposed triumph in a new light.

In truth, Gordon Brown didn’t make the Bank of England fully independent in 1997. In some important respects he nationalised it for a second time, finishing the job Hugh Dalton begun in 1946. Then the Bank of England Act nationalised an institution which depended for its authority on its prior relationship with the City. As John Fforde outlines in his excellent history of the Bank of England, the Bank’s authority continued to rely on informal relationships for enforcement. While the Act increased the formal power of the Bank in the field of credit policy it reduced the self-regulatory authority that made credit policy effective in practice.

Brown’s reforms ended the system of self-regulation that had already been weakened by nationalisation. As Howard Flight outlines in a new CPS report, Brown stripped the Bank of its role in banking supervision and market regulation and gave it to the FSA, creating a tripartite regulatory structure which failed to avert the biggest banking crisis in 80 years. The bank was left with the power to set interest rates, but within strict criteria set by the Government. These changes have reversed the relationship that existed before 1997. Officials must now take responsibility for monetary policy decisions while it is the elected politicians who can work behind the scenes, applying pressure, and taking the credit when the outcome is favourable.

In truth, Bank of England independence was not successful because it was a great idea per se, but because so many people thought it was. It inspired confidence in the financial system at a time when people had lost faith in the ability of politicians to set interest rates. One of Keynes’ greatest insights was his understanding of the importance of what he termed ‘animal spirits’ in the economy. Once, the de-politicisation of economic policy inspired confidence, now if anything, the opposite is true. At a time when people are again turning to politicians for the answers they must also take responsibility for their actions.

The spectacle of our three party leaders all claiming to be Barack Obama’s new best friend during Prime Minister’s Questions last week resembled the politics of the playground, where everyone wants to hang out with the cool new boy. Gordon Brown highlighted the triumph of “progressive policies” while David Cameron sought to co-opt Obama’s message of ‘change’ and Nick Clegg tried to link the new President’s tax policies with his own.   

Since Obama’s victory all the talk has been on what lessons it has for British politics – and Kieron alluded to some of those lessons on the blog last week. In this vein, it is striking how everyone agreed that McCain’s campaign went seriously off the rails when the financial crisis exploded in September. It was not just due to his erratic response but also the fact that he was unable to disassociate himself from the blame being heaped on the Republicans’ economic record.

Ironically, McCain failed to break free of Bush’s unpopularity even though he was not involved in the Presidency, yet here in Britain Gordon Brown has shown a startling ability to disassociate himself from his own economic record – so far. Somehow he feels able to talk as if he has had nothing to do with Government fiscal and monetary policy over the last decade, and as if the regulatory system was designed by someone else. As we enter a recession it seems unlikely that Brown will be able to continue to get away with it – people are not fools and can see that his claim of ending boom and bust now looks culpably hollow. And the national polls, notwithstanding the result in Glenrothes, still point to a significant Tory lead despite all the talk of a 'Brown bounce'.

The danger now though, as Fraser Nelson has noted, is that Brown borrows another lesson from Obama – and seeks to steal a policy of tax cuts from under Cameron’s nose. With Nick Clegg already having shifted Lib Dem strategy on the issue and the Conservatives set to announce their own proposals this week it is clear that all the parties are going to be claiming the tax cutting mantra for themselves. So the political question now is whose plans are going to stand up to public scrutiny - and who will reap the benefits in the polls of a new economic strategy as we enter the grim times.

There are several reasons why John McCain failed to secure the US Presidency on Tuesday night, and not all of them are relevant to British politics. For instance, McCain found himself the candidate immediately succeeding the worst American President since the Civil War, which was always going to be a hard sell. Furthermore, McCain was probably too old for the job and certainly looked it; what a disaster for America and the world that he did not manage to win the nomination in 2000, when he was in his prime. These issues were specific to the American contest.

But there are at least two important lessons that we can take from the contest, where the analogies with British politics are strong enough to count. First of all, McCain had based his long career on straight talk, and not pandering to the more swivel-eyed of the Republican base; he was prepared, when necessary, to run against his party when he believed it was in the wrong and out of touch with the American people. This was his selling point, and what a marvellously independent thinker he was. But Candidate McCain ditched the long-term strategy, and tried to energise the base 2004-style, thereby undoing all Senator McCain’s hard work. The Senator railed against Bush’s ‘unaffordable’ tax cuts, while the Candidate promised to make them permanent, and even to extend them. The Senator maintained a lofty and wholly laudable indifference to America’s puerile and toxic culture wars, while the Candidate worried about gay marriage and abortion. The Senator was concerned about climate change, while the Candidate offered a gas tax holiday. The Senator, buoyed by years of experience, criticised the cronyism of Washington where people were often selected for reasons of ideological soundness rather than ability; the Candidate put the manifestly inadequate Sarah Palin (who managed to make Dan Quayle look like Jack Kennedy) onto the slate. And Palin was much closer to Candidate McCain than the Senator.

Lesson 1 therefore is highly relevant to David Cameron; if your strategy has been a message of change, then there is no route back from that. Even if things are not going well on the vegetarian diet, throwing scraps of red meat to party activists would be a colossal error.

The second lesson comes from McCain’s less-than-nimble response to the financial crisis. Its recent phase, stemming more or less from the bankruptcy of Lehman Brothers in September, has shifted the focus of politics completely, and frankly, Obama coped better than McCain, largely by keeping shtum. In the UK, the Tories have not responded brilliantly to the crisis either, and need to thrash out some positive messages and analysis to support their criticisms of the government (which have at least begun to register). Obama’s best move was to consult top-notch experts, and Cameron and co need to be seen to be using their best financial brains in similar fashion; maybe it is time for a prominent role for John Redwood.

The difficulty, of course, would be to arrange matters so that the inclusion of Redwood into the Cameroonian circle, learning lesson 2, did not appear to be a reversion to a rejected Tory past, contradicting lesson 1. Tricky, but not insuperable – Redwood, thank goodness, is no Sarah Palin – but it would require, at a minimum, Redwood to buy into the Cameroonian view of recent Conservative Party history.

Last Thursday’s headline summary released by the Home Office bragged ‘a record 186,028 drug seizures by police and HM Revenue and Customs in England and Wales in 2006/07, compared with 161,1132 in 2005; an increase of 15 per cent’. It further claimed that ‘between 2004 and 2006/07, drug seizures have increased by 73 per cent’.[1]

Great news, one might think. Certainly the press lapped it up: ‘Cocaine seizures “highest ever” ‘ announced the BBC website; ‘Drugs use declines as seizures reach record’ was the headline in the Guardian; and ‘Cocaine seizures up b a third’ proclaimed the Metro.

Sadly, this was all another shocking distortion of the truth – and yet another example of Labour’s attempt to control the news in face of the evidence. The summary headlines could and should have read, ‘the latest figures show that quantities of Class A Drugs seized fell by 30 per cent on the previous year and are the lowest figures since 1999. They have fallen by a combined 64% per cent on peak takes of heroin in 2001 and cocaine in 2003.’

This is what a reading of the original data tables tells you. Scroll down though the statistical bulletins and hyperlink through to the summary tables and you can track down the real ‘figures’ – that is the quantities of drugs seized.

The reality is that far from going up, the amount of Class A drugs has slumped once again, as it has every year since 2003. Cocaine quantities seized have dropped to 3,191 tonnes, 53% down 2003’s record take. And the amount of crack cocaine seized in 2006/7 was a shocking 73% down on 2003. The continuing failure to stem the importation of heroin is no less worrying. The paltry 1,003 kilos taken in 2006/7 shows a 62% drop since 2003.

So why the deception and what is, or what is not, going on? Cocaine has flooded the streets of Britain, its consumption continues to rise here to the highest in Europe, it has become ever cheaper and more people are seen to use it with impunity. Anecdotal evidence tells us that there is so much heroin around it is being re exported out of the country. One conclusion may be that the figures have been spun to disguise massive incompetence, a crisis at the heart of SOCA our major enforcement agency and a breakdown of enforcement at all levels.

And why, just one day before the release of official figures, did a rather strange story find its way onto the BBC, openly sourced from the normally unforthcoming SOCA, headlined ‘Cheap Cocaine – barely 10% pure’?[2] Drugs dealers, the SOCA source says, are cutting cocaine with other dangerous chemicals to make it go further. Hmmm – difficult and dangerous chemicals when they could get cheap talc from Boots? Was SOCA carefully positioning itself in case it was criticised for these disastrous figures? Cocaine has to be cut because there is a shortage might have been a useful story to plant ahead of the collapsing seizure figures...

One last thought. How come Sweden – a country with a seven million population and a huge coastline, with many fewer policemen and customs and excise officers than the UK – managed to seize more heroin than the UK did in the same year and nearly a quarter of cocaine total? Not surprising perhaps that they don’t have the drug problem we have.

It is widely assumed that the renewed fashionability of Keynesian economics means, by implication, that public policy will drift to the left. Much of this thinking stems from the still widely held misconception that post war economic policy was based on a consensus, established by the Attlee Government, around the use of Keynesian mechanisms to even out the economic cycle and maintain full employment.  

In fact Keynesian economics is a broad church. My fellow blogger Sam Talbot-Rice reminded me today of a story about Keynes attending a dinner with Keynesian economists in Washington in 1944. After dinner he told his wife that ‘I was the only non-Keynesian there.’ Keynesian economics can be used to justify fundamentally different economic policies. In his memoirs Rab Butler, one half of the supposed personification of consensus ‘Mr Butskell’ wrote that there was no such thing as Butskellism. While both he and Hugh Gaitskell ‘spoke the language of Keynesianism’ Butler added, however that they ‘spoke it with different accents and with a differing emphasis.’ Indeed there was sustained argument about the use of physical controls, monetary policy, the level of public expenditure, the convertibility of the pound and the benefits of a multilateral trading system. Not much of a consensus.  

Today, the Government wants to present a Keynesian solution as one dependent on ‘public works’, where all public spending is presented as ‘investment’ and where the size of the state will continue to grow regardless of economic conditions. But there is an alternative vision based on stimulating economic activity through targeted tax cuts. As 12 economists, led by Andrew Lilico, wrote in a letter to the Sunday Telegraph, a solution based on spending is likely to be inexact and ineffective due to time lags. Targeting tax relief to small business and people on modest incomes, both of whom are most likely to spend this extra income and so pass the benefits on to the wider economy, would have a much greater effect. By taking less money out of people's pockets we can also establish a momentum for a smaller, not an ever bigger state.

I had to laugh when I saw a cartoon over the weekend showing a framed picture of Gordon Brown’s old flame, the mythical Prudence, being removed from the wall at HM Treasury and replaced with a portrait of Keynes. 

This would almost be a true depiction of events, were it not for the fact that prudence really has been a myth in government finances for most of the last decade.  Having observed their 1997 manifesto commitment to keep to Conservative spending levels, after 1999 the Government turned on the spending taps and let money gush out. 

To their credit, the Conservative leadership have been warning about excessive levels of public sector debt, as well as private debt, for a number of years now.  It is only with the impact of recession that the fuller implications of this become clear, as businesses go under and people have their houses repossessed.  It is clear to most households in the country that an appropriate reaction in these straitened times would be to cut out non-essential expenditure and pay back some of the debt.   This is a rational and understandable response.

By contrast, the Prime Minister’s pledge yesterday, as I understand it, is to borrow and borrow until government spending powers the country back into growth.  This is neither rational nor understandable.  It’s like saying “I can barely afford the monthly interest payments on my mortgage, so I’ll borrow even more from the Taxpayer Building Society and my grandchildren can pay the debt back in, oh, 50 years or so”. 

Starting from a point where public sector borrowing is at its highest for 62 years, it is clear that whoever wins the next election (and let us imagine for a moment that the Conservatives do win) is going to face a debt mountain which will severely constrain future flexibility for either government spending or affordable tax cuts, even after we are back into a period of growth.  The announcement expected from the Government later this week, widely trailed in this morning’s papers, that they are abolishing the vaunted “fiscal rules” (although of course it won’t be described as that) is a further sign of the panic at the heart of government and a knee-jerk return to the failed quasi-socialist policies of the past. 

This Keynesian (and who thought we would hear his name again?) policy was strongly criticised in a letter from some leading economists to the Sunday Telegraph.  As John Greenwood, the chief economist at Invesco Perpetual, so pithily put it: “Japan tried to spend its way out of recession in the early 1900s and the result was nothing except huge debt.  Private firms will not be able to improve their own balance sheet if the government gets to the table first”.

Increasing government spending and public sector borrowing is not the answer.  It will simply result in a burden for future generations and will not bring about the outcome which the Prime Minister and Chancellor seem to think it will.  A monetary policy response in the form of interest rate cuts, combined with a fiscal policy response of reducing tax rates, particularly on businesses which are the drivers of economic growth and prosperity (and not the government) as advocated in my last post, is surely the best response to the current challenge. 

Fans of the West Wing will have observed the striking parallels between the plot of the American political drama and the real-life presidential contest in recent months. The programme’s final series hinged on the run-off between a centrist Republican with decades of experience (who picks a right-wing running-mate to appease the Party’s base) and a young, charismatic Latino Democratic Congressman who rises from obscurity to a dramatic victory.

In fact the show’s producers have said that the character of the Democratic candidate was actually modelled on a certain aspiring Senator from Illinois, who was new to Washington at the time of the programme but already turning heads. And in a classic twist of art imitating life, and then vice versa, Obama’s rise since then has followed the trajectory mapped out in the programme’s final series.

It remains to be seen whether Obama continues the parallel and – in the event of victory – offers a post in his new administration to his defeated rival, as happens in the West Wing. This seems unlikely given the direction and tone of the McCain campaign in recent weeks. The Arizona Senator seems to have forfeited much of his appeal to independent and floating voters, both by his response to the financial crisis and the way his campaign has veered into a cul-de-sac of personal attacks on Obama.

At the same time Obama has moved his tanks onto McCain’s lawn – making inroads in traditionally Republican states and unveiling new supporters from conservative ranks, such as Colin Powell. Even one of President Bush’s religious advisers is now backing Obama. It has been an impressive display from a politician who seems to have shrugged off the label of having the most liberal voting record in the Senate – and a sure sign that the rise of the ‘Obamacons’ is not just an indictment of McCain’s campaign nor a purely opportunistic exercise in jumping on the bandwagon. It is also an acknowledgment that Obama has succeeded in doing what was supposed to be McCain’s trump card but which he has singularly failed at – building an appeal beyond party lines and defying the narrow liberal/conservative polarisation that has defined American politics in recent years.