It's interesting, this coalition stuff

I can't say I had ever considered what a coalition really meant. In 1974 Ted Heath's attempts to woo Jeremy Thorpe never really got out of the closet and the Lib-Lab Pact of 1977 was not a coalition at all merely the acceptance of some Liberal policies in return for a promise not to vote the Labour government out of existence. The current coalition involves much more than just agreeing to a few tweaks of policy, senior and junior ministerial positions are held by Lib Dems and they are fully involved in deciding the detail of policy as well as its general drift.

So far the mock-chumminess has been rather nauseating but we can be sure it won't last for long. No doubt both sides think it necessary at the moment to say what super chaps they are working with after having spent the last five years denigrating them. Once people are settled into their new jobs they will just get on with it and window-dressing will not just be unnecessary it will be a distraction. Yesterday Clegg and Cameron giggled on the lawn of 10 Downing Street like a couple of school girls who had just been smiled at by the captain of the rugby team, I put that down to nerves and uncertainty, there is no reason to believe it will be repeated.

The greatest problem with a coalition is that it almost guarantees disappointment. Those who voted Conservative or Lib Dem because of a particular policy which has now been jettisoned have, in one sense, been betrayed. Their vote has been taken and used for a purpose for which it was never intended and in which the voter had no say. The same applies to those who voted for the package of measures proffered by one or other of the parties and would not have voted the same way had the compromise portfolio been offered to them. Those who will support the Conservatives or Lib Dems come what may might well feel their loyalty has been abused by a backroom deal in which the other party has got too much of its own way. Members of the Shadow Cabinet during the last Parliament will feel even greater disappointment as they see their precious jobs taken by others and the title "Right Honourable" denied them, perhaps for ever.

The formality of a full coalition gives far more to the Lib Dems than it takes from the Conservatives but the real beneficiaries are not Lib Dem backbenchers and party members but a small and select group of leading lights. They will become even more remote from their supporters than they were as the elite of a small Parliamentary party.

I can't help thinking that the continued existence of the coalition will be determined by Lib Dem figures in opinion polls. They are happy enough now, they have ministerial positions, some Conservative policies they disagree with strongly have been ditched and some of their own have been adopted. They are in government and that is a powerful drug. Unless something very odd happens it is hard to see the coalition being under threat for at least a year or two. Realistically, it can only collapse if the Lib Dems pull out and there must be little chance of that happening quickly given that they have waited decades to get any real power in national government.

Within a year or so a clear pattern will probably emerge of how power is really split between the two parties. Only the practical effects of a range of personality battles will set that pattern, but once it is set we will get a view of how the public see things and, in particular, of how the public sees the Lib Dems. It has been proclaimed that the coalition has been established to serve as government for five years. Two years in and the first whiffs of the next general election will be in the air, falling support for the Lib Dems will raise questions whether they should keep to the deal and risk a substantial fall in their vote. Substantial rising support and they might wish to cement their position by insisting on further senior government posts and a greater say on policy, which could upset the whole fruit basket.

There are all sorts of potential pitfalls of being the junior partner in a coalition that would not be encountered by a minor party giving informal support to a minority government. The latter can portray itself as an honest broker acting in the interest of stable government whereas a coalition partner is part of the government and subject to all the flak that can ensue.

Perhaps the most difficult thing of all for the Lib Dems is to keep a separate identity when all its big fish are swimming in the murky Whitehall pond. David Cameron has done something very clever already in this respect. By accompanying Vince Cable to his new offices he prevented Cable from presenting himself to "his" civil service team as the man in charge. Cameron was there to say he is in charge and he has allowed Cable his own department. His somewhat unctuous speech lauding the economic genius of Cable set a high standard for his minister to live up to. It was all there in the apparently kind and supportive act of holding his hand on the first day at Big School, - Cameron is the boss, Cable is the underling and Cable must be brilliant to justify his appointment. The man has nowhere to go but down. He has no room for carving his own empire because Cameron has made clear it is his empire not Cable's.

And what of Mrs Batty now that he is Deputy Prime Minister but has no specific ministerial portfolio? How does he mark Lib Dem territory when he cannot dissent publicly and has no department through which to do his own will? He would have done better by taking even the poisoned chalice of the Home Office alongside his position as Deputy PM, at least it would have given him something substantive to work with - as party leader he could run a department with an authority Cable does not have and cannot now try to create.

It's going to be very interesting to see what happens. I am not a betting man but if I were my money would be on ructions starting before the second anniversary as the Lib Dems find themselves marginalised in power and unable in practice to put forward an independent policy platform.

A new kind of politics?

It must be old age but I don't believe there is anything new in human behaviour. Gadgets - yes, fads - yes, styles - yes; but not human behaviour. Politics reflects this and has always reflected it. Principled politicians stand up for the things they believe in whether or not it gives them ministerial office and whether or not they effect changes in the law to reflect their beliefs. We have had plenty of absolutely genuine extremists in Parliament. At the other end of the scale are the flip-floppers who have no fixed view of anything. In between lie the majority who have certain core values they wish to see enacted but accept they cannot necessarily get everything they want and are amenable to making a little progress towards their aim when the alternative is no progress at all.

Where the government has only a small minority in the Commons it is inevitable that those of hardened views will seek to gain the maximum movement towards their position because they know their vote will really count and a stubborn refusal to go along with a wishy-washy proposal can cause the government immense difficulties. We saw this towards the end of the last Conservative administration, particularly on the issue of the EU. A large majority allows the government to ignore the fringes of its party and still pass legislation, so the entrenched views of some gain little serious attention because no one has to keep them sweet.

The new coalition government will have a nominal Commons majority of 49 (306 Conservatives, 57 Lib Dems and 8 DUPs out of a total vote of 644 because the Speaker won't vote and the IRA won't take its 5 seats). That is enough to last a full term in normal circumstances. Mrs Batty, the new Deputy Prime Minister, made a rather pathetic speech about the coalition marking the start of "a new kind of politics". I cannot see that the arrangement is new at all.

All political parties are coalitions between people whose views generally coincide on most issues but can be radically different even on core subjects. They hold together when the members feel there is more to lose than to gain by placing their true beliefs above the compromise position the party holds on each policy. In my lifetime it has always been the case that the Cabinet and ministries have contained people with strongly opposing views about what should be done but they reach a compromise in order that they can all keep their perks. The Labour Governments from 1964 to 1970 and 1974 to 1979 contained a rag bag of assorted naive lefties of greater or lesser intensity in their loathing of the little people. The Heath government from 1970 to 1974 contained what were called at the time "hard liners" and "moderates". The Thatcher and Major governments from 1979 to 1997 contained essentially the same mix although they were then known as "drys" and "wets". Even under the more autocratic Blair and Brown years a wide range of views was held by ministers. It would be absurd to believe that anything else could be the position.

A formal coalition between the Conservatives and the Lib Dems is no different. Some Conservatives MPs undoubtedly share more opinions with mainstream Lib Dems than with the mainstream of their own party and the same applies in reverse. Where there is a difference is that the Lib Dems also include some pretty extreme left-wingers for whom Labour is a natural ally and the Conservatives a natural opponent. But the Lib Dems only have 57 MPs and it would take dissent by almost half of them for important Bills to be defeated. That does not seem very likely, at least in the first year or so of the Parliament.

The idea that decisions will now be taken with a smile and a group hug over a cup of warm pureed tofu and that everyone will be happy is laughable. Decision making will be more difficult because there is no detailed Con-Lib manifesto providing the blueprint for the position on each main policy issue, but if they all want to keep their armoured cars and their faces on the telly they will just have to compromise and reach a decision by which they must all stand. Neither party can say "we are only doing this because the other lot insist", decisions will be joint decisions. If the situation ever arises in which the Conservatives simply refuse to give ground on something and the Lib Dems cannot agree with them the coalition itself will be at risk. Either Mrs Batty gets his people to back down or they must all stomp out in a hissy fit and risk being blamed for the arrangement collapsing. That is hardly the new kind of politics he can have in mind.

I find it rather difficult to see what's in it for the Lib Dems in the long run. There are insufficient of their policies being adopted for them to be able to point at successes and claim them for themselves, indeed they can't claim them for themselves because they are the junior partner and any decisions that prove successful will be made predominently by Conservatives and only to a small extent by Lib Dems. For very much the same reasons, if things go wrong they can hardly go to the electorate saying "it wasn't our fault" because at least in part it was, and whether or not it was their fault it was their responsibility.

At the next general election there will not be Con-Lib Coalition candidates, so the voters will be faced with separate candidates from the two parties who form the government. If it is a successful government I would expect the Conservatives to reap a greater reward than the Lib Dems. If it is a failure neither will earn any credit from the electorate.

Perhaps that is what he meant by a new kind of politics - a kind of politics in which his party will share blame but not be in a position to claim praise without that praise also reflecting on Mr Cameron's merry men.

Perhaps he meant that we will see a return to proper cabinet government in which matters are thrashed out between senior ministers rather than dictated from Downing Street. Although it would be a departure from the disastrous approach taken by Labour over the last thirteen years, it is nothing new; it was accepted as the only sensible way to operate for decades before autocracy and spin took over.

One new thing has happened. Mr Cameron said nice things about Gordon Brown. He will do so again when Parliament sits for the first time. Then the gloves will be off and the full panoply of Labour corruption and misjudgment should be exposed ruthlessly. Mrs Batty will join in the rubbishing of poor Gordon and his uncanny ability to have got every major decision wrong for more than a decade. There will be nothing new about that, it's been the way for generations because politics involves a constant fight for seats at the next election not the last one. The people involved always have the same range of abilities and characteristics as their predecessors and they will all have to fight for votes from now on just as they fought for them during the recent campaign. It's the same kind of politics and always will be.

I don't know where to place my "X"

It's getting close to the time I have to decide. Where should I place my little "X" on Thursday? The only elections in London are for the Euro-Parliament, so the outcome is irrelevant to anything. I'm not concerned about the results, it will make not a jot of difference to my life or that of anyone else in London if the eight available seats all go to the Conservatives, Labour or even the Monster Raving Loony Party; the Parliament has no real power and individual MEPs have no effective representative role to play. For me, Thursday's election is not about the European so-called Parliament, it is about momentum in the run-up to the next general election.

I can discount four possibilities immediately. Voting for Labour, the LibDems or either of the national socialist parties, BNP and Green, is a non-starter. I'd rather urinate into the very fine mulligatawny soup I made this afternoon. So should it be Conservative or UKIP?

Voting UKIP this time is something of a two-edged sword. In the past it has been a fair bet that UKIP's strong showing in Euro elections was evidence of the degree of distaste for the EUSSR project. It achieved little in swaying the main parties towards the Eurosceptic cause in their avowed policies however it is noticeable that neither Labour nor the Conservatives has argued for further centralised power to be held in Brussels (although some of us might think their actions have achieved exactly that end). Sending a message has always been part of local and Euro elections as well as Parliamentary by-elections. The issue of one-world, post-democratic government has never been more serious and the chance of extricating ourselves from the stranglehold of Euro-fascism hasn't been greater since the 1975 referendum. A strong showing for UKIP could help to move the argument away from the pro-EU consensus dominating the official line of both Labour and the Consevatives.

I am not much deterred by UKIP being essentially a one-man show. Nigel Farage, for all the tales of his drinking and womanising, is a highly proficient operator and a good spokesman for his party's cause. I know virtually nothing about any other UKIP candidate but that really doesn't matter because, as I have explained above, for me this election is not about the European Parliament. The more the main parties seek to portray UKIP as a one-trick pony, the more attractive a vote for them appears because it allows UKIP votes to be seen for what they usually are - votes to get out of the deeply corrupt EUSSR regardless of any other policy they have.

Things are rather complicated by the MPs' expenses issue; not because UKIP has anything to do with glittery lavatory seats and "flipping" but because a vote for a fringe party can be construed as a protest vote and nothing more. The benefit from signifying disgust with the EUSSR will be diluted.

The other option is to vote Conservative, which is not an easy choice because of my firm opposition to their official line on the EU. Yet if I cast my mind forward to the general election, the wider the gulf between them and Labour this week, the greater the chance of the Labour machine becoming even more demoralised than it is already. For me there is no more important political task than to replace this bankrupt government with something better. Then I have to ask what the replacement will be and it's not exactly a cornucopia of sweetmeats. They are still wedded to the EUSSR project, they are still wedded to the concept of big government, they are still too mindful of opinion polls to put forward the sort of radical shift in power from the State to the little people that we need. Mr Cameron says some encouraging things from time to time but he said some awful things when he thought they would be popular; it is hard to see a strong vein of principle running through his various pronouncements.

So it's either UKIP to try to shift the debate firmly in the Eurosceptic direction or Conservative to try to screw down the lid on the Labour coffin. The former might reduce the momentum required to achieve the latter and the latter might be premature and allow a bounce-back by encouraging all the sad old Trots to put aside their superior disdain for the democratic process and turn out to boost the leftist vote. After all, we must never underestimate the power of religion. Socialism is the opiate of the people, nothing else can explain the current government being able to command loyalty from around a quarter of the populace in opinion polls. Hit them too hard now and they might be able to rouse the apathetic troops of the hard left.

It's not an easy choice. What is easy is to say that I will not disclose how I vote. I am happy to let anyone who cares to listen, and even more who don't, know where my general sympathies lie, but my vote is a very personal thing. It is mine. All mine. I have it because people like my father risked their lives to quash a previous plan for the EUSSR. I will walk to the polling station with a spring in my flabby step and remember how lucky I am to have the right to apply the pointy end of a stubby pencil to a piece of paper and exercise my tiny little bit of influence. With any luck I will have made up my mind by then.

How do you cut without cutting votes?

Hillaire Belloc identified an important influence on modern politics when writing about a boy being eaten alive by a lion (here). He ended the poem with the words "always keep a-hold of Nurse for fear of finding something worse". This sums up a widespread attitude to the State machine in Britain and presents one of the greatest difficulties to those who wish to take a sharp axe to both the scope and cost of big government.

Some aspects of the government operation, such as the use of expensive consultants, cause little difficulty because they don't involve the public directly and can be eliminated without any risk of losing votes. Perhaps more pertinently with an election due in the next year, such cuts can be announced without fear of alienating potential voters. The same can be said of numerous relatively small areas of spending which are essentially either purely bureaucratic or little more than ministerial navel gazing. The amounts spent are, I would expect, measured in the millions but are a tiny drop in the putrid pool of government debt. To make real inroads requires changes to the whole method by which the State operates. Current favourite topics in this field are education and health. The Conservatives are dipping their toes in the water with suggestions about changing the way these services are provided and are careful always to say that the amount spent at the point of delivery will not be reduced. I believe they face an uphill battle to persuade the voters.

Their greatest difficulty is the culture of reliance on the State to provide these services and much more besides. Say it was proposed to abolish all the national and local government jobs relating to "healthy" lifestyle so that we were not any longer paying for people to tell us what to eat and what not to eat, what to drink and what not to drink, how much and what type of exercise to take. I doubt that it would have any effect on health at all. Can there really be anyone who does not know that a balanced diet and reasonable exercise are generally good for their health and an unbalanced diet and sloth are generally not? That is quite an important question because whatever the answer it proves the case for getting rid of the naggers. If everyone knows, the jobs are not needed because everyone knows. If some people don't know, the jobs are not needed because they are not achieving what they aim to achieve despite every effort having been made to get the message across to everyone.

What would happen if the Conservatives proposed getting rid of all such jobs? It is a fair guess that there would be uproar on the BBC and the other more left-leaning media with allegations that the party doesn't care about peoples health. From there it will be suggested that this would be the first step to dismantling the NHS, no doubt the reasoning would be that a party that is happy to get rid of supposed preventative measures would be just as keen to dispense with treatment for those whose lifestyles lead to ill health. It's all a nonsense, of course, but the overarching nannying by all aspects of the state health regime has, I believe, led to a culture that the more the government does the better our health will be. Any attempt to remove part of the apparatus is portrayed as an attack on it all and, more worryingly, the argument seems to be accepted by a large number of those the Conservatives need to woo into the voting booth.

If the same issue is addressed in a different way the result should be different, but I wonder whether it would be. Instead of saying these jobs will be abolished, what if they ask people whether they benefit from the work done. Ask Mr & Mrs Ordinary whether they need someone to tell them what a "healthy" diet is and that exercise is good for them and the chances are they will think you are stark raving bonkers. Ask them whether other people need such advice and they might say they do. Ask them whether those other people are likely to follow the advice and I suspect the answer will be in the negative. If my assumptions about their answers are correct, they should support attempts to cull these worthless non-jobs, yet that does not necessarily follow.

Curious though it might be in an age when trust in politicians has never been lower, I believe there is still a general feeling of trust in the government's judgment about the range of so-called health services that are necessary. Once something has been added to the list it is presumed to be beneficial and so it is also presumed that its removal will be detrimental. Of course there is a logical flaw in that approach because a government that says something is not necessary is exercising the same judgment as its predecessor that said it was necessary, if government judgment were the crucial factor a change of judgment should lead to a change of public perception. So there must be a secondary factor at work causing expansion of government-led services to be considered wise judgment and contraction to be error. My view is that that secondary factor is the great myth that sustains the majority of State expenditure, namely that it must be beneficial because it is being done and if it is beneficial today it must also be beneficial tomorrow.

In essence we are seeing the precautionary principle in operation, in other words that we should do something just in case not doing it will make things worse. It is not just in relation to five-a-day counsellors and all the other modern naggers (without whom human life existed quite happily for millions of years) that this point arises. More generally in relation to the big expense areas of health, education and welfare, any attempt to change the method of delivery faces the same objection - "it might not work perfectly now but if they change it things might get worse". Ironically this attitude could be enhanced by the continual failure of increased State expenditure to deliver proportionate improvements in services - "they spend all this money and it only gets a bit better, it can only get worse by cutting the money".

I believe the general population has little if any idea of the convoluted spaghetti-heap of bureaucracy lying between Westminster and their local school or hospital. Layer-upon-layer of committees, quangoes and paper-pushers suck-up cash. Any attempt to save money by dispensing with these intermediaries can only satisfy the precautionary electorate if it is spelled out clearly and forthrightly where the savings will come from and why eliminating bureaucracy will not adversely affect the service delivered to the public. It is not an easy task. All exercises in persuasion have to battle against contrary arguments and the Labour Party paymasters in the public sector trade unions have very loud mouths and very deep pockets. That makes it all the more important for plans to change the structure of the NHS and State education to be detailed and fully thought-through, as well as fully costed.

At the moment Mr Cameron and his merry men are putting out feelers with a view to judging the mood. They might or might not want to take a hachet to the public sector as I do. Whatever their desired position, it cannot be achieved unless they win a general election with a working majority. Fighting against the force of the precautionary principle there is only so much they can propose and remain electable.

A lesson for the government

An interesting proposal has been made by the Conservative Party to release primary schools from central and local governmental control. It is one of those truly inspired policies that comes along from time to time. What makes it so interesting is its acknowledges that teachers, headteachers and school governors might actually know better than politicians what is best for the pupils they have to educate. I have never understood where politicians get the magical powers that make them all-knowing and all-wise, this policy seems to accept that there are no such magical powers.

The proposal links two themes dear to my heart. One is that services paid for out of taxes do not have to be provided from the centre. The second is that government ministers cannot possibly know how best to deliver any service at ground level.

I am perpetually intrigued by the very concept of central government directing the provision of anything to the public across the whole country. Take food as a most obvious example. We all need to shop for food every week or so. Making food available at affordable prices is an essential service, arguably no service is more essential. Yet we don't hear many calling for the production and supply of food to be nationalised and run by the government. The point can be taken further. Is there anyone who would argue that the government, through a National Food Service, could provide the range and quality of food provided by the existing supermarket chains? It's completely untenable, utterly laughable. Of course the cost of setting up a scheme would be prohibitive but it is not that that makes it untenable, it is the idea that centralised direction of a monopoly provider could even begin to approach the efficiency and flexibility of Tesco, Sainsburys, Morrisons, Waitrose, Lidl and the rest. So why should it be that the provision of good quality education requires direct management from Whitehall?

I read various figures for the average annual cost of school education ranging from £6,000 per pupil to about £9,000. The actual figure really doesn't matter very much, what does matter is delivering an appropriate education for every child. This requires schools to be able to cater to a wide range of abilities and to be flexible enough to vary their approach year-by-year as the new intake varies in ability. Only those at the metaphorical coalface can do this. They can be, and are, told by government that a certain level of test must be passed by a certain percentage of pupils at a certain age but that doesn't make it happen. Nor does it make it possible where the pupils of the relevant age group do not have the ability to pass the prescribed test in sufficient numbers.

To my mind the biggest problem with government-directed education is that doing the best for the pupils comes second to doing the best for the government's chances of reelection. Every year we hear ludicrous claims being made about increased performance when what is measured is the ability of schools to squeeze pupils through arbitrary tests. The government boasts "look how well we are doing" when they are doing nothing other than forcing schools to follow a particular path that will result in statistics the government hopes to use for its political advantage. Indeed, I find the very concept of government claiming it has achieved anything in education to be deeply offensive. Teachers and parents combine to elicit the best from children, government ministers add nothing of value. Getting government out of schools will be a good start, it will allow teachers to educate in a manner appropriate to their little charges rather than in a manner appropriate to the opinion polls.

That is not to say that there is no legitimate role for government in school education. In fact it has two extremely important roles. The first is to fund schools from taxation. There is no other way of paying for universal school education than through taxes. The second is to supervise standards. This second point is where, in my opinion, they have got it completely wrong. Let me explain why.

I'll go back to food to explain the point, because I am a fat boy and I like food. The supermarket chains I mentioned above, and all other sellers of food, could try to foist unfit meat and fish on their customers. They would probably get away with it most times because any illness suffered is as likely to be attributed to the cook as to the ingredients. They cannot and do not do so because the law requires certain standards to be met. Those standards are imposed by government through laws passed in Parliament. They are basic quality standards that set the culture for the industry. Supermarkets know that any breach of the quality standards could damage their business through adverse publicity far more than any fine imposed by a court could ever do. But without a legal standard setting the benchmark for adverse publicity it is impossible to know whether they would keep the quality of their products as high as it is. And the same principle extends across the whole range of what they sell, the law requires a minimum standard to be met and that pervades the very culture of retail food sales.

Schools don't sell products in the way supermarkets do, they provide a service, but that is a distinction without a difference. The provision of services is subject to legal quality controls just like the sale of goods. Failure to maintain a satisfactory standard of service leaves you open to legal action by your customers and to damaging adverse publicity. I have never heard of any such claim being made against an independent school. Perhaps such claims could have been made but instead the parents chose to take their child out of the school and send him or her elsewhere rather than wasting time reopening old wounds through the courts. The role of government is to keep the law under review and to propose changes to Parliament if a deficiency is found. In that way, and that way only, does government have a legitimate supervisory role over the quality of education provided in schools. With parents as direct customers and schools competing to attract their money normal commercial pressures will operate to keep standards as high as can be afforded, just as happens in the private education sector.

Not only does government have no magical powers to deliver good quality education but education itself is not a magical business, it is just another service. It is an important one but so is selling food. What we know for certain is that central direction and interference have not resulted in universally high standards in state schools. The system has had long enough to prove itself and it has been found wanting. The Conservative's idea is a radical change from the status quo. The government says it would be expensive to implement, I doubt that very much because it will (or should) involve the removal of vast amounts of bureaucracy through which current meddling is effected every year. The unions are against it lock stock and barrel. No higher praise can ever be bestowed on a new policy.

Perhaps the most important aspect of this proposal is that it marks a shift of primary responsibility for education from government to parents, thereby putting it firmly where it should be. Education will then be funded from the centre but run by the schools themselves. There lies the heart of the matter ... state-funded. State-funded does not need to mean state-run. We know that from the simple fact that some children are funded by the state to attend independent schools. We know it also from state funding of medical procedures at private hospitals when NHS hospitals cannot provide surgery without undue delay. We know it again from state funding of legal advice and representation. The quality of the service is determined by the people providing the service not by the source of funding. And the quality of the service they provide is driven by the need to keep the quality high or lose business to a competitor. It is always possible that a particular school will fail miserably to provide a satisfactory standard of education for its pupils ... or is it? Does that happen in the private sector? I don't know the answer to that question but I do know what will happen in that situation, the school will have to change its ways pretty sharpish or it will have no pupils.

If now, why not then?

If I am presented with a problem I think it's a good idea to look at what has caused the problem in order to identify the solution. A drip coming from a water pipe seems to me to be evidence of a hole, so my first investigation aims to identify where the hole is. The solution is then to close that hole. An insufficiently tasty sauce seems to me to be evidence that an essential ingredient has not been added in sufficient quantity. It is necessary to identify that ingredient and add more. Unless the solution is suited to the problem you might as well not bother because at best you will make no difference but more likely you will make things a lot worse. Putting a new washer on a bathroom tap will not cure a leaking radiator, so no further harm done but no good done either. On the other hand, adding more salt to a sauce that has enough results in a ruined dish.

Now that recession is confirmed we stand on the brink of a depression deeper and more painful than any in British history. The steps being taken by government to deal with the problem trouble me because they are such a mish-mash of contradictory measures, lacking a coherent strategy and aiming to be all things to all men. That is not the role of government. The role of government is to give a lead, to have a clear strategy so that we all know what is being attempted and why. Only if their plan is made clear can it be improved by debate and discussion. The 2.5% reduction in VAT is a fine example. Had that been proposed in a Commons debate the pros and cons would have been examined in detail and the shambolic mess it turned into could have been avoided.

As far as I can tell the current strategy seeks to address three elements of the economy, banking, housing and retail. Yet there is no overall strategy for all three, each has its own and they are in the starkest conflict.

The government tells us it wants to act to kick-start bank lending to businesses. It does not seem to be in dispute that many businesses rely on overdrafts to provide cash-flow for wages and other expenses pending receipt of money owed by customers. Starving them of credit will cause some, perhaps many, to fold. What stands in the way of the banks making those credit facilities available at the moment? Three things, it seems to me: first the banks themselves do not have as much money available to lend as they did even a year ago, secondly the risk they take in lending to any business is increased in a recession and thirdly they are required to keep their capital high.

If government wants to increase the amount of money banks have in the safe it can lend to them at sensible rates - rates that allow a profit margin when they then lend it on to customers. This cannot happen because government simply does not have money available at such rates. An alternative is to take steps to encourage greater deposits from the banks' customers, yet the Conservatives' plans to reduce tax on savings income for basic rate taxpayers has been dismissed as a gimmick, so the government is giving no encouragement there. A further option is to relax the rules on the amount of capital the banks have to hold. Capital essentially means money the banks are required to have but are not allowed to lend, they must keep it to act as security for the banks' own liabilities. For good reasons the capital requirements were made more stringent after Northern Rock and Bradford & Bingley hit the skids, but they cannot have it both ways, they cannot insist on more capital and them complain that money is held as capital rather than advanced to customers.

Now they claim to be preparing to force banks to lend to worthy customers. That is an absurd proposition. The government cannot assess the risk involved in lending to Fred Bloggs' Flooring Ltd, only the banks can do that and even they have to make educated guesses as to what the future might hold. The only positive step the government can take is to provide additional security to make it more attractive for the banks to lend to Fred Bloggs. This has been discussed for months, having been dismissed out of hand when the opposition first suggested it, but we still seem to be some way away from a workable plan being put into place. In the meantime there is simply nothing the government can do other than relax the capital requirements, and they show no sign of being willing to do that.

Housing is an area where the government really is coming into its own. The level of incompetence and waste in their various proposals is quite breathtaking. On the one hand they want the banks to lend more for house purchases, on the other hand they want the banks not to take action when a customer defaults. It does not take a genius to understand that defaults by customers undermine a bank's capital. Nor is superhuman mental agility required to see that a falling housing market requires the bank to lend a smaller percentage of the estimated value of a house for fear that it will fall below the amount of the loan if a high percentage is advanced. And one might expect even a primary school pupil to appreciate that lending money to someone at risk of losing his job is not sound business. So how can the banks lend more? To be fair there is, in part, an answer to that question. It might be that the banks are being over-cautious at the moment, that certainly seems to be the view of some commentators. Perhaps they are looking at potential loans as being more risky than they are in fact. But even if that is the case, there is nothing government can do about it because Mr Darling doesn't have the time to examine individual mortgage application forms and point out that the bank could lend £5,000 more than it is offering at the moment. These are decisions for the banks. After all, the banks don't want to be bust, they want to make profits and they know they have to do business to achieve that. It will take time for them to assess how deep the recession is likely to be and how it will affect particular types of businesses and particular areas of the country. Diktats from the Treasury cannot change the need for the banks to take time to form their own lending strategies.

The retail sector is being hit like never before. Major retailers are folding with the loss of thousands of jobs and those that stay alive have to reduce costs dramatically to cope with falling income. So far the only substantive thing the government has come up with is the 2.5% cut in VAT, which did nothing to help sales. Poor Gordon is telling us all to spend spend spend but it is a futile message because people everywhere are retrenching. Those who can get credit are choosing not to do so or are spending it propping up their businesses rather than shopping. Far more feel the need to pay back existing credit rather than take on more.

Every week we hear statements from the government about their desire to "stimulate" the economy. I find this a quite ridiculous concept. A stimulant is something that wakes you up and gets you moving forward and can be likened to the accelerator pedal on a car. The problem is that the economy is not moving forward, it is in a fast reverse gear. Attempts to keep people in work through bringing forward future government expenditure on such things as school building and road repairs are not stimulants, they can help to slow the reverse speed by dabbing gently on the brakes but they cannot depress the clutch and engage a forward gear. And all the time more money is borrowed against future taxes, which will then slow the rate of acceleration once the bad times have been exhausted.

We know that government expenditure is not a stimulant, we know it as a cast iron fact. If it were a stimulant it could be increased without limit and there would be nothing but benefits. When the economy is moving well, government could just spend more to make it move even faster. But that does not happen. Government expenditure in good times slows rates of growth, it does not increase them. If it is not a stimulant then, it cannot be a stimulant now.

If I had enough spare, I would tear my hair out at the willful failure of the government to acknowledge the central problem facing the British economy today. For many years we have been living beyond our means. Now we have been caught out and have to retrench. Millions are retrenching all over the country. They are doing so because they know they have to in order to get back to a position where they live within their means. There is no escaping this fact, we have been living on money we did not have. The same is true of many other countries but that does not change the fact that it is the position here. The economy is shrinking because it has to shrink to get back to a sustainable size. Not once has the government acknowledged this. If they did, they would find it a lot easier to build a strategy and the greater chance they would have of providing a helpful strategy.

Trying to prop-up the housing market and encouraging people to spend in the shops how they did a year or two ago it utterly misconceived. There needs to be a humble acceptance that we are a Waitrose country not a Fortnum & Mason country (perhaps I mean a Lidl country not a Tesco country). You cannot plan for the new, realistic, state of the economy by pretending that it will be just as it was before. Living beyond our means did not work before and it will not work now. Government expenditure as a means of furthering economic growth did not work before and it will not work now. We should be preparing for a new economy of severely restricted credit and living standards that only improve with real wealth creation.

The Big Bail Out, Round 2

I was up quite early this morning and decided to conduct an (entirely unscientific) investigation into mass panic. Before retiring to my hugely comfortable bed yesterday news had come through that The Big Bail Out had fallen on stony ground. Wall Street was a-crumbling and those who like to spend other people's money were complaining left right and centre. It was no surprise that the BBC was dragging in all its favourite doomsayers to opine upon the airwaves, and still less of a surprise that they felt they knew better than the people with responsibility to take the decision. So today I decided to follow the BBC radio news all day and see what pattern emerged.

This morning there appeared to be no wail unwailed and no tooth ungnashed as the doomsayers predicted the end of the world as we know it. It being the BBC, most of them made that prediction with glee. Many seemed to take obvious delight at having a new reason for abhoring the capitalist economic structure now that their former ammunition, global warming, has turned into global cooling. The west cannot survive, they crowed, without fundamental change. Only state control of banks can ensure bounty for all, thank goodness we have the supreme wisdom of Gordon Brown to lead the world at this pivotal moment. Thank goodness I had some Marmite on toast to keep me calm in the face of this feeble minded lunacy.

By the time my breakfast teapot was empty the London Stock Market was trading well. The collapse wished upon it by the BBC's finest guests was nowhere to be seen. By 10am a new set of doomsayers were being paraded. They had consulted the doomsayers' manual which advises them to use failure of the first prediction as evidence that things are even worse than previously feared. Just wait, they said, when Wall Street gets going there will be banks falling aplenty. Gordon Brown was brought out again: "doing the right thing", "global problem", "getting on with the job", "difficult times", "world stage", "experience". Yesterday the BBC spent much time promoting Gordon as the brains behind The Big Bail Out and the message had to be rammed home again today. There is a central message on the BBC today, Gordon is in charge and he has the answer.

Recovery in the stock markets continued, suggestions were coming forward for market-led measures to alleviate the problem (I got these from the internet, of course, not the BBC) and noises from across the pond were that things had calmed considerably. The message arrived that American taxpayers were not exactly cock-a-hoop about throwing vast sums of money at wealthy bankers when it was the bankers' bad decisions which had caused the mess. It became clear that a deal will be done in the next few days but it will be one the incumbent Congressmen can sell to their constituents (not a minor consideration when the whole House of Representatives is up for re-election in four weeks' time). The banks will be saved. Mass panic was over and the BBC turned to damage limitation mode.

Oh dear, poor doomsayers. Mid afternoon the BBC ditched them and turned to cementing Gordon's supposed reputation. A special interview was recorded and played widely. Just the same as he said earlier except that now it is the revised Big Bail Out for which he must be thanked. There's a lot of "we" in the interview, as though the man has been involved. He has not. He has been sitting on the sidelines giving interviews while the Americans responsible for the decisions have been busy discussing options among themselves. You would never guess that from listening to the BBC.

My mind goes back twelve months to last year's Conservative Party Conference. Poor gauche Gordon, the Marxist idealist who considers the Conservative Party to be Hitler in a blue suit, is such an obsessive, bigotted and downright rude man that he could not abide by convention. Convention requires each party to keep quiet while one of the other parties is holding its annual conference. The reasoning behind it is simple. No one has a monopoly on good ideas and democratic government requires the people to have a chance to hear what everyone has to say. For one week and one week only the opposition parties have greater access to the airwaves than throughout the rest of the year and, of course, the governing party also has a week in the spotlight. It is only one week for each opposition party, the rest of the time they are in the background as the government's decisions and proposals are aired. But Gordon is not a fair man. He is deeply spiteful. Any chance to cause trouble for his opponents is music to his ears, so last year he decided to drop into Iraq during the Conservative Conference and seek to grab some headlines for himself. It backfired hugely because it showed even those favourable to him what a devious and nasty piece of work he is, so uncertain of his own abilities that he feels the need to drown out dissent.

This week he is doing the same. He has no business being in Washington. Neither the White House nor Capitol Hill asked him to visit and neither is consulting him. It is a pure stunt to divert attention from the Conservatives. As always, the BBC backs Gordon all the way so he gets lots of airtime and even more supportive editorial comment.

Today was a fine example of mass panic as an excuse to display prejudices. Positions harden when the chips are down. That is why the Americans are ignoring Gordon, there is no benefit to them from pretending to consult a man who has bankrupted the Treasury he has commanded for eleven years. It is also why the BBC has mounted an all-out campaign to promote him. As a keen listener I have noticed increasing concern among BBC radio hacks in recent months as the polls have shown ever increasing Conservative leads. They were desperate for an excuse to close down coverage of the Conservative Conference and place Gordon centre stage.

Panic over, The Big Bail Out will become The Big Stringent Loan With Painful Consequences For Bad Bankers. Gordon will claim credit, the BBC will give Gordon credit and it will take up to three months for his empty position to be exposed fully. As always, panic brings out prejudices and, as always, prejudices come back to haunt those with a duty to be impartial.