I have always had more trouble understanding the actions of the politicians and Generals of Western Europe who unleashed the mass slaughter of 1914-18 on their publics. They brought death on an industrial scale, visiting fear and destruction from massive shells and from the machine gun when they ordered troops to move out of the trenches. From the early days when I first read of what had happened I have asked Why.

Mine was a fortunate family. Both my grandfathers volunteered as boys to go to war, one advancing his age in his enthusiasm to move from his poor homelife to something different. Both survived so 40 years on as a young boy I could talk to them about it. One was injured and came home with his wound. The other had a lucky war.

My later teenage opinions of the conflict were especially moulded by the poignant haunting voices of the war poets. They captured a sense of fear, futility, and enormous bravery against the odds. They implied criticisms of the high command. It was a war which pitted young officers and their men against the might of the newly powerful war machines, leaving the Generals and politicians safely behind the lines urging them onto ever braver and less plausible deeds, given the power of the weaponry they had assembled.

Why couldn’t the war lords have advanced the invention of weapons and vehicles which created a war of movement to settle it more quickly? Why didn’t they open new fronts to break the stalemate of the trenches? Why did they persist in thinking that ever greater bombardments would kill enough of the enemy to make an attack likely to succeed? Why didn’t the politicians think that a negotiated peace might be a better outcome than total victory, especially as that total victory over Germany created the conditions for the subsequent rise of something even worse to haunt Europe?

These are now academic questions that cannot help those who suffered. The aftermath of the war in England transformed the party political landscape, and led to the policy of appeasement in the 1930s. Today we can ask questions about our present war in Afghanistan. We can ask are we giving our troops the equipment and support they need, to minimise their loss of life. We can ask if they are being given the political and military direction that is wise. We can ask if there is some better way of achieving the various aims the government has set for our current war.

Dulce et decorum est, pro patria mori? The young officers of the first world war who suffered the highest casualty rate of all as they led their death charges across No Man’s land did not find any protection for themselves in their good classical education. They were not there to think and to assess, they were there to blindly follow orders. Thank heavens some of them did write so well. On this Remembrance day of all days we should read them again and understand their general message about war. Not all wars are avoidable, but war should be a last resort, or should be undertaken pre-emptively before the forces of darkness become too entrenched. If a war has to be fought, good political leaders and Generals make protecting their troops as much as they can an absolute priority.

They go on to say that we need to fight in Afghanistan because some terrorists are trained there, and because the terrorist plotters in the UK often have links there. They link Afghanistan to Pakistan by calling the area the border badlands. Under questioning, they admit that most of the training and links are to the Pakistan side of the border, rather than the Afghanistan side. They seek to imply that the position in Pakistan would get worse if we removed troops from Afghanistan.

This argument will not wash. It is clearly not strong enough to impress the President himself, so he dithers over reinforcing his exposed positions instead of committing the personnel for the task. In so doing he undermines the idea that the allied troops will be in Afghanistan for the long haul.

The truth is the US and UK cannot commit sufficient troops to fight and win all of Afghanistan for allied control, and cannot keep enough troops there to garrison the whole vast country. As allied troops move on from village to village, so insurgents reappear in once captured territory. The rebels can use the presence of foreign troops to recruit more.

Surely a first step for the allies should be to cease fighting to control new territory, give what troops need to remain strong areas to live in, and use them to support the civil power and to pursue selective targets identified by the anti terrorist surveillance. At the same time much more work should go into the political side. Given the weakness of the central authority and the tribal and local nature of power in Afghanistan, maybe the attention of the allies should turn to helping Afghanistan create stronger local government. If the main worry is the Pakistan border, maybe that is where we should concentrate efforts, and work closely with the Pakistan forces who should conduct what warfare needs waging.

If the Establishment is determined to stay, it needs to define its tasks more precisely, and then put in the trained personnel and equipment necessary to carry them out. Lecturing the Afghan President on how he should run a western style democracy is not going to work, and leads people to wonder how committed the PM and the President are to the current regime.

Taxpayers are going to find this difficult to understand or accept. If the trading and investment banking arms are profitable and require people who will only work for a large bonus, then they should be sold into the private ownership as soon as possible, so they can enjoy their bonus there with no suggestion of public subsidy. If these activities are not profitable the taxpayer should not be subsidising the remuneration. Private companies can pay bonuses to people working in loss making businesses, because private shareholders stand treat and pick up the tab. If it works and the business moves into profit they make money. If it fails they lose their capital. Taxpayers should not be expected to run risks like this, and should not be subsidising bonus payments.

The results from this nationalised industry are dreadful. They make past losses of past nationalised industries look quite modest. They explain why the government has been persuaded to put so much additional capital into this loss making bank. It would still be far better to split it up, sell what can be sold, and find out how much has to be written off the remaining parts to reach a fair value. Doing it the current way, taxpayers are subsidising things they should not be subsidising, and the bank is being let off the essential tasks of cutting costs and working off bad loans as quickly as possible. The bank remains far too large for comfort, and its stretched balance sheet far too large for taxpayers to stand behind securely.

It makes this government’s failure to licence and plan for a new generation of electricity plants most worrying. It is disappointing to see how little progress they have made in cutting energy use in the public sector. They have not incentivised people and manufacturers to shift to lower energy technologies sufficiently. They have failed to work with the grain of human nature. People will respond to encouragement if its makes sense for them to do so, if there is a win for them.

Bad environmentalism is the old policies of higher taxes and more regulation dressed up in new moral exhortation using climate change theory. It leads to posturing on a worldwide scale, with all the predictable humbug we have seen with the election of President Obama and the run up to Copenhagen. On the election of the President we are told in messianic terms the planet can now be saved. Democrats in Congress then decide they do not wish to back a bill for the higher taxes and regulations Mr Obama has in mind. Mr Obama loses political credibility over the war, the economy and his health proposals, and seems to demote his anti climate change proposals to a poor fourth place. Gordon Brown springs into the rhetorical breach and promises us a deal to save the world, only to back off a few days later with warnings that there may not be one after all.

It would make sense for both the US and the UK to pursue strong energy policies to limit imports of fossil fuels. This can be done by encouragement to domestic energy production, to non fossil fuel production, and to energy conservation. The sooner we can remove our dependence on Middle Eastern oil, the sooner the world will be a happier place. That would be a crusade worth leading, and one which a practical US and UK government could undertake successfully.

The death rate in Afghanistan is horrifying. The lack of clarity over the government’s strategy whilst we await President Obama’s decision is undermining confidence in the whole mission. Latest polls show now a majority share the view of this site that we should not be fighting a war in Afghanistan, and that we cannot capture enough territory and garrison it on a sufficient scale to bring victory by such means. The deaths this week even damage the notion that we can confine ourselves to a training role in support of the civilian power. The failure to hold a convincing election and to choose a government that can command consent across this very large and diverse country leads our electorate to question why we are supporting the current regime.

The second collosal bail out of RBS shows how wrong the first bail out strategy was. As again readers of this site will know, it was never likely the bank nationalisation would work. It has delayed tackling the real problems in RBS. They should have dismembered the bank more than a year ago, selling off the bits that can be sold and closing down the bits that could lose us more money, whilst protecting the interests of depositors. Throwing printed money after borrowed is a very bad idea. Sometime they are going to have to undertake or complete the patient work of deciding what can be saved and what has to be written off. Until they do so RBS cannot perform as a proper bank making a full contribution to our economy or to the economies of other countries where it operates.

Today we learn that the government is brieifng that there will be no climate change deal at Copenhagen, after they have spent considerable political capital on saying how important one is. I will write separately about this later.

This week the government has acquiesced in driving through the Treaty of Lisbon. Their failure to allow the British people a vote on this will long sour our country’s response to this bad Treaty. The unpleasant reply of our fellow members in the EU to Conservative wishes to belong to a grouping of independent democratic states rather than to a proto large centralised state called Europe shows how far this government has allowed the EU to go in the wrong direction against the wishes of most British people.

Yesterday the government allowed the Bank of England to begin printing another £25billion. This is simply going to permit further delay in correcting the large public deficit ahead of the election. It will not help lending to the private sector, as two banks remain distressed and all banks are under tight controls from regulators making it difficult for them to lend more. It is a damaging policy.

Meanwhile the government’s system of the Kelly Review and IPSA means there is unlikely to be a clear lower cost system for MPs expenses up and running before the Election.

Meanwhile the broken banks are regulated in such a way that they cannot lend more to the private sector. We limp on with a two tier economy. We have a public sector awash with printed cash, and a private sector squeezed by broken banks.

These people need to be more careful. The UK gets a rotten deal from its membership. Most are now agreed the UK needs to cut public spending. The EU itself has budget guidelines for member states which the UK has blown apart. Top of many people’s list of preferred cuts would be the wasteful and unauthorised expenditure which the EU auditors condemn year after year without the EU taking action to correct. Next on the list would be the marginal programmes part funded by EU cash, which the UK only undertakes because it offers a route of getting some of our contribution money back. French Ministers should remember just how useful it is to have the UK paying a large part of all the bills, and offering such a big market for all those French and German goods.

The Lib Dem and Labour federalist parties in the UK are always urging Conservatives to do more things together with allies in Europe. Then when the Conservatives choose allies who also believe the EU does too much and takes too much power away from national democracies, they cannot stand it and turn to crude political abuse of all involved. They will have to grow up and understand that many people throughout Europe think the EU has too much power, legislates too much,spends too much money and should do less. This is a respectable political view to hold. Attempts to stifle this sound democratic view will just increase the disillusion and dislike of the whole federal project.

We remember the 5th of November because it so shocked contemporary Britain and was deliberately kept alive through linking the commemoration to an enjoyable winter festival or fire and fireworks. The more successful terrorist plot to bomb the British political establishment of 1984, where three were killed and several injured, has not mothered a similar act of national memory. This reflects the different political mood of the time.

It would be a fitting memorial on this November 5th if the government moved in the direction recommended by Kim Howells. He has suggested saving the money we are currently spending on fighting a war in Afghanistan, and spending some of it instead on better surveillance of potential terrorists at home. I would add we could also usefully improve our border controls to exclude people who might be a threat to the public.

In practise it doesn’t matter whether MPs like or loathe Kelly. The government has legislated to take all this out of MPs hands. Kelly reports. The IPSA (Independent Parliamentary Standards Authority) is assembled in the next few months. IPSA then considers Kelly’s conclusions. If IPSA approves, they become the new rules. If IPSA disagrees, it can vary the conclusions. This is unlikely to be achieved before the end of this Parliament, as IPSA has not yet recruited most of its staff.

This Parliament has little authority, and thanks to the government has made sure it has even less by deciding it is not even competent enough to put in its own sensible value for money scheme for MPs expenses. The leaks from Kelly imply some savings by ruling some MPs out from claiming second home costs altogether, but this will be offset by many others being made to claim rent instead of mortgage costs where rental is likely to be dearer.

What the country needs is a cheaper scheme. Time will tell how successful this one proves. Time will also tell whether the officials when recruited at IPSA share Kelly’s certainties about allowable expenses, and his wish to sack all relatives currently employed in Parliament. As someone who does not employ a relative, I think a blanket rule against all such existing contracts may be unenforceable given current employment law.

No incoming Conservative government can live with the massive transfer of power that has now taken place. Parliamentary sovereignty has to be reasserted. The passerelle clauses, which give the new EU the right to take more power in the future without a renegotiaiton, clearly cannot apply in the UK. The UK will need to regain its rights to control its own criminal law codes, employment law, foreign policy and much else. The UK must reject unequivocally the single currency, a common army, and grandstanding officials claiming to speak for a Euro state.

The EU has been too clever by half. It should remember that to many British voters the EU is just a source of higher taxes to pay its bills, and more needless regulation. A body like this if it wishes to govern us in many areas need consent. Today the EU does not have popular consent for many of its policies and plans.

The failure of the Afghan regime to conduct a proper election is a blow to those who thought the US and its allies were there to create and sustain a democratic state on western lines. It may lead the ever dithering President to be even more cautious about committing more troops to the cauldron.

As someone who did not want us be fighting a war there, I have always thought the best use for our presence was to support the civilian power, and to train the forces of the Afghan state as quickly as possible to do their own police work. This has the added advantage that it would cut the risks to our troops and hold out the best hope of getting them home more quickly.

The lack of legitimacy in the Afghan regime is unhelpful even to this strategy. However, President Obama and Prime Minister Brown have accepted the legitimacy of the re-elected President, and believe they have to do business with him. Once you have recognised his legitimacy to that extent, the best you can do is to put pressure on the Afghan President to say you intend to withdraw as many of your troops as possible as soon as possible, and to narrow the definition of the remaining tasks they need to do.

The best of a bad job remains to train and support the forces of the current civilian power. We should stop placing our troops in front line combat with Afghans against the current regime.

What should they do? In the case of Lloyds, who at last want to extricate part of themselves from government clutches, the government should make it clear it will not subscribe to their rights issue. The government’s rights should be sold nil paid in the market as part of the transaction and any premium paid to taxpayers.

However, Lloyds is still 43% government owned. As the main owner the government should require the sale of HBOS, not yet fully merged into the wider group , and a TSB branch network bank or the equivalent. When sale proceeds come in for these assets the surplus on the transactions should be used to buy back the government’s shares so they can be cancelled.

RBS isn’t even trying to become independent. The government owns a majority. It should insist on major sales of overseas banks and the investment banking arm, to cut the problem down to size. Most of the proceeds should be returned to taxpayers in return for share cancellation. Some of the cash and capital coming in should be used to capitalise the remaining banks sensibly. The UK bank should be split into at least two retail chains and these then placed on the market. The end of the process would see all government shares purchased by the company and cancelled from the proceeds of asset sales. Minority shareholders in the holding group could have a choice of full pay out or retaining shareholdings in banks sold to new owners where this was a practical proposition.

Dear Shareholder,

I am writing to reassure you. Rumours that our Finance Director wishes us to cut spending and to start to rein in borrowing are today untrue. Following a most successful meeting I have the assurance from him that he is firmly committed to our widely admired strategy of spending, borrowing and printing more. How could we do otherwise, given the disappointing turnover figures we have produced for the last four quarters?

Some of my critics have even dared to suggest that the quicker recoveries being experienced by our US, German, French and and Chinese competitors should lead us to question the very foundations of all that we have bought and borrowed together in recent years. How wrong they are. I can confirm that the only way out of this temporary set back is to redouble our efforts to spend and borrow more.

You will see in roads and streets near you our most successful policy of committing ourselves to shovel ready projects to change kerbs, narrow streets, replace barriers, strengthen edges and carry out all sort of needless work to restrict traffic flows on a temporary and permanent basis. You will be pleased to know every penny of this is borrowed, and much of this work can be done again to an even more annoying plan in the years ahead. You can spend your time in the traffic jams it has caused working out all the interest you will have to help us pay on all that money. We would much prefer you to go by train, where the public subsidy is so much higher.

We are pressing ahead with new quangos, and have added extra jobs to our big make work schemes in the public sector. We are currently reviewing the 2010-11 budgets, as I think they are too low. We do not want to take the pedal off the floor at this late stage in our current business plan period.

Which brings me to our competitors, Conco. I am pleased to remind you they have made a collosal mistake, arguing that they should take over our business and run it on more orthodox financial lines, cutting back on spending. I have decided the obvious response to this act of folly is to double our bet. So I will be planning further increases in spending and borrowing as soon as possible, forcing Conco to admit they cannot cut out all that we have so carefully put in.

Our motto is and ever shall be – “Never have so many been employed and so well paid as today in our glorious company”. We will expand our workforce more, put their pay up, increase the pensions, and take over as much as possible to boost the spend and our influence. I have never felt more confident in how right we are. I am at the height of my powers as your CEO, and intend to build this company up to record levels of turnover and debt.

My critics still do not get it. If you owe the bank £1 billion, you have a problem. If you owe them £1 trillion they have a problem. Now we have our own printing presses and money creating banks, how can we fail? It’s all so liberating. A few years ago I was told I needed to marry Prudence and keep away from taking over banks. How things have changed!

Yours in generous salaries

CEO

I was pleased to read RBS is being forced to sell off more assets, but worried that RBS will get yet more taxpayer support. We should be slashing taxpayer support, not increasing it, by forcing them to sell assets, cut costs and raise capital in other ways.

The role of the Minister or elected politician is not to be the expert, but to use, interpret and deploy the expert opinion in framing policy and in making decisions about individual cases. Some Ministers are not up to doing this. Some Ministers are too political, failing to understand the government part of their role, and the need for hard work, attention to detail and good judgement based on fair analysis and reading good advice. The fact that there have been bad Ministers does not mean the theory is wrong – it may tell us more about how we recruit, fail to train and then fail to retain Ministers.

There are several dangers in moving over to a government by experts. The first is the absence of accountability. Place the experts in ivory tower quangos and tell Parliament it has to accept their judgement, and you place them beyond criticism, debate, pressure to reflect and change. The second is you trust people who might be most lacking in independence to come to a judgement on their issues. They are partisan for their cause, their profession, their way of doing things. The third is that many expert areas are riven by faction and disagreement. The experts who capture the quango or government body may only belong to one of the factions, and will not look fairly at other possible interpretations. The fourth is many issues run across more than one body of professional opinion and action, so it needs a generalist to pull it all together and make an overall decision.

Let us look at one or two examples. It has been fashionable for the last decade to say that monetary policy is too complex and technical to leave to politicians. Decisions about how much money to leave in the system and what price to charge for it was given to the MPC. In the decade of full MPC control we have had a more erratic lurch from boom to bust with an attempted lurch back again to boom than we had in the also erratic days of mixed control between the elected and the unelected officials. They did not even hit their inflation target, let alone create stable money market conditions. We had the first run on a bank for more than a century.

The previous poor decisions which damaged the Uk economy came about from a technical theory peddalled by the experts that we needed to belong to the Exchange Rate Mechanism to take politics out of settling interest rates. That was more evidence that Bank of England experts can get it badly wrong. It was also an expensive disaster. It was one which did less overall damage than today’s crisis because the elected officials stepped in and terminated the experiment.

Or consider the decision to take Ministers out of competition decisions. In recent years as Ministers have been excluded we have seen the rapid build up of mega banks that no sensible competition authority would have allowed with an ounce of political nous. In the end the government overrode its own so called independent authority to allow the foolish merger of Lloyds and HBOS, making it worse. The independence did not work when it mattered.

There is one simple truth many do not wish to acknowledge. If you want to live in a representative elected democracy, the experts can never be permanently in charge. Germany was said to have an indepednent Central bank which guaranteed the strength of the DM in the post war world. Yet when it mattered the elected officials overruled it on the issue of the Ost mark/DM merger, and then overruled it again with the decision to destroy the successful domestic currency people had been told was secure through Central bank independence, to replace it with the Euro. I think both decisions were poor, but I think the politicians had every right to make them, as it was their view of the democratic wish of the German people.

Elected officials may delegate powers to experts from time to time. If the experts make wise decisions, or are working in areas of little political interest, they may stay apparently independent for a long time. Once they make a mistake or their issue gains high political salience, the elected officials will intervene.

For this reason above all, I say there is no substitute for the elected officials getting better trained to examine and interpret expert advice. The public does not necessarily share expert views on gm foods, nuclear risks, climate change, human tissue experimentation, types of medical operation and a host of other things. It is the business of politics to explain the expert opinion and if necessary to limit or abate it in the light of public views and the government’s perception of the public interest. Good Ministers have judgement. If bad Ministers just trust the advice they sometimes will be let down by that.

The three highest constituency figures for unemployment in September were Brimingham Ladywood (21.2%), Birmingham Sparkbrook (18%) and Birmingham Hodge Hill (16.9%). The top 25 highest unemployment constituencies include parts of Liverpool, Wolverhampton, Glasgow, Middlesbrough, the Welsh valleys and East London. In contrast the four lowest in England are Westmoreland (2%), West Dorset (2.1%), Witney (2.1%) and Henley (2.1%). This is strikingly similar to the results in the Tory years.

The regional breakdown is much as it ever was, with the South East, South West and East of England experiencing relatively low unemployment and the West Midlands, the North East and the poorer parts of London relatively high. The only exception to the old pattern is the position of Scotland. There unemployment has fallen below the national average. The three constituencies with the lowest levels of unemployment are all Scottish.

So what does this prove? It shows that in most cases the decision to spend much more public money has not triggered independent growth and job creation. Unemployment has remained obstinately high. Well intentioned efforts to lift educational standards, raise skill levels, attract in more businesses, create more entrepreneurs and improve the local built enivronment have not in the main brought about a self sustaining economic revival. A community only grows and prospers when the private sector can sustain its own growth, and when many creative and entrepreneurial people live there or are attracted in. There are still large areas of the inner cities, of the Midlands and the North where unemployment has remained too high through good times and bad, where huge public spending has failed to transform.

It also shows that in the case of Scotland, when you get above a certain threshold of public employment, you can influence down the unemployment numbers. Even there the old areas of highest unemployment have remained difficult to shift, and there has been no breakthrough in growth rates. London has outperformed Scotland by a country mile in growth over the last decade.

A sustainable and strong recovery requires a strong and competitive private sector, with access to the talent, property and money it needs to make a success of it. The world is an ever more competitive place. The latest figures should send a shiver down the spine, if we are still not in recovery and are still not exporting enough with the pound devalued as much as it has so far.

The banks overdid it. They are now being forced to rein in their private sector lending, to improve their balance sheets. They are building up more money to lend to the government. The Regulator tells them lending to the government is a safe thing to do, and they should do more of it.

Now the government is overdoing it. The public debt is large and increasing at a rapid pace.

The government says it needs to borrow more to keep the economy going. They think more public spending and borrowing will produce recovery. The danger is it is starts to do the opposite.

If the government pre empts too much of the available cash, there is too little for everyone else to use and borrow. If the government demands too much money from markets, lenders may force up the interest rates before lending more. That would be bad news for the private sector as well.

In the short term the strain is being taken on the currency. International investors and governments do not like the look of sterling so they are selling it, or declining to buy.

Some fall in our currency could be good for exporters. It should enable them to sell at keener prices. It also will cut off some imports, as foreign luxury goods will be dearer. Too large a fall can get out of control, and just makes us all poorer.

As we import around one third of all that we buy, each 10% fall in the pound adds around 3% to our bills – or takes that much off our incomes.

If you print too much money you cut its value. At some point the government has to stop printing money and go back to a more normal approach. Every pound the government borrows on behalf of taxpayers one day has to be repaid. We do need to pay the interest on all that debt. We cannot put off the day much longer when we have to start putting our house in order, before markets do so in a painful and unhelpful way.

This was a crisis brought on by the private sector banks and others borrowing too much. It cannot be solved by the government borrowing too much. I wish it were otherwise. History shows that you can only have a sustainable recovery when the government puts its own house in order. We also need the banks to sort themselves out more quickly, as the broken ones are still not working for the rest of us in the way that is needed.

BBC top management, operating in a more rarified environment on pay and rations with 27 senior managers paid more than the PM, have also announced substantial cuts in executive costs. They have chosen to do their slimming down primarily by cutting numbers over the next three and a half years, reducing top executive costs by 18% through having fewer of them. An additional 7% saving will come from pay and other reductions.

What was interesting was the public reaction. Far from a grateful public thanking the BBC for listening and proposing a quite significant cut – at last – in the high costs of management, many are asking why the BBC needs to pay of its top executives more than the PM on his salary below £200,000.

For the point is this. The BBC is constantly reminding us that it is not a commercial organisation. Its people are motivated by a strong belief in public service. They are brought up in the ethos of public service broadcasting. It is a different pressure and a different motivation from for profit broadcasting , which has to chase audience and revenue to stay alive and to pay big bonuses when it works. It is paid for out of the forced levies on anyone with a TV, not out of the freely chosen spending of advertisers of subscription members. Now the issue of public reward is squarely on the agenda, the BBC like the rest of the public sector is vulnerable when it comes to explaining reward at or near the top.

For those of you who will want to ask, what am I doing to control public sector costs, I say this. In 20067/8 I was the 19th cheapest MP on total expenses for offices and personal Parliamentary expenses. Before the media interest in all this I announced I would cut my total costs by 10% in 2008/9 and by another 10% in 2009/10. I have just seen the half year unaudited figures for costs for 2009/10 and am pleased to see I will come in for the full year well below the target I set.