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Diary Note /0048
Sunday 12 May 2002

for previous DiaryNote

Emergency
Edition No 2

This time, published early on Saturday morning 11 May, from Kinko's in High Holborn, a great New York facility brought to London, open 24 hours. Still having to use prehistoric webdesign processes (i.e. drafting in the HTML code, on floppy disk) - my Swansea PC, with its all-dancing Microsoft Frontpage program should be on-stream again by end-Sunday 12 May, but I cannot risk that... Roger WE

English Regions
at long last

Your Region, Your Choice: Revitalising the English Regions. That's the title of the long-awaited White Paper, now gracing my desk and already thumbed. By clicking through, you can consult the White Paper

"Long awaited", that is, by constitutional anoraks like me. The bated breath brigade is tiny, the aficionados few and far between. For the overwhelming majority, this constitutionalism is just a yawn, I must accept that. And the context is not propitious for radical reform. For I am under no illusions: the prevailing disenchantment "with politics" is in truth a disenchantment with salaried politicians. Recent years have seen the rapid advance of a new political salariat, and voters resent their well-heeled lives, their easy prominence, their personal influence and their unique access to publicity and power. And these new reform proposals come from the heart of that salariat.

But my Thoughts on English Regionalism will have to be deferred to next week. I shall be arguing for a proper accommodation of our great cities in the new constitutional set-up. City Region Campaign (of which I am Director) is preparing a major Policy Statement, for future publication - watch this space. Where do you stand, on Regional Devolution? It would be good to have your views Drop me a line

TV Reforms Too Timid

 Tessa Jowell has tried very hard, to re-think the media regulatory regime. "A cleverly-drafted halfway house", as reported by the FT, quoting an insider Whitehall source. Maybe, but it is still a halfway house. And I fear it will continue to operate against the interests of the listeners and viewers. For once, the Tories have the better line. Shadow Minister Tim Yeo immediately opposed the Communications Bill on the grounds that regulation should be removed altogether.

I agree with him, although certainly for different reasons. Yeo was simply repeating a standard free-market mantra. My reasoning springs from my perception, based on my business experience, that regulatory regimes play into the hands of the big corporate players, and prevent competition. Big companies love regulatory regimes, because they are large enough to fight their way past them - and once they are in, the regulation authorities dutifully keep the competition away. The Government is right to open up the market dramatically: in the UK, we have an impoverished radio and TV network, relieved principally by the quality of BBC output. But by retaining "access regulation" the Government will be protecting future Murdochs from competitive pressures (which is just what they want)...

The problem does not lie with "regulation" in general, because certain forms of regulation are throughly desirable - content regulation, standards regulation, timetabling regulation, these all have their place. The problem is with access regulation, which limits ease-of-access to the market by new firms. We are in the presence of one of the market's murkiest secrets...

Two current examples must suffice. MPs complained this week that Camelot now had an unchallengeable monopoly position, in running the Lottery, simply because no company would in future be able to afford to compete. But why is the sector a Government-regulated monopoly in the first place? Why should not other national lotteries compete? Why does the Government not simply tax Lottery income and give the proceeds to the Lottery Fund? Why is Government intervention necessary at all? Government regulation, so carefully crafted by the Conservatives, has operated to create a seedy, legally protected private monopoly.

My other example is of more general application, because it concerns town planning. One of my part-time jobs is as Managing Director of Green Park Station (Bath) Limited, which is a wholly-owned subsidiary of J Sainsbury plc, my former employers. And Sainsburys in Bath have enjoyed a Government-protected monopoly of the Bath trade for almost 20 (yes, twenty) years. That is because peripheral supermarket development has been prevented by "the planners" (both local and national) throughout this period. No competing supermarket development has been permitted, although Tesco tried hard for many years, before giving up. A small and unsatisfactory Safeway now competes with Sainsburys, from the constrained "Old Bus Station" site. Because of "access regulation", the shoppers of Bath have been delivered into the hands of a Sainsbury monopoly. 

Indeed, one of the reasons why the planning system is such a jungle is that the big corporations prefer a jungle. They have the resources to survive jungle warfare, but the mere prospect of such warfare deters the competition. That is why the corporations will be purring with delight at Labour's Competition Bill: there will still be a Regulator, to protect them against newcomers.

I favour the use of statutory regulation in many sectors. But it should not pickle the market. I like Alistair Darling's recent conversion to the regulation of standard savings and pensions packages, which will greatly reduce the scope for market deceit and mis-selling [ tho' I want him to go further, and give pensions-savers a Government minimum-return guarantee...] But that is not a form of access regulation. Access regulation creates systemic tensions and can even engender corruption.

The Labour Government desperately needs a better understanding of how the world of business actually works. For all their powerful business friends, Ministers are woefully woefully naive. You may ask (Dear Reader) "If access regulation is to be abandoned, how are high standards to be maintained? And can we, as socialists, assure to our fellow-citizens the delivery of high standards?"

My answer is - "By the cultivation of public service broadcasting companies". We have the glittering example of the BBC, which should be retained and cultivated. Along with the NHS, it was a great 20th century public-service invention, and retains its force. But there ought to be hundreds of other regional and local not-for-profit broadcasters (there are 1600 such stations in the United States). They could avoid the limitations of our local commercial radio-stations and create a new world of communal TV. For their formation, a new company format is needed, which Labour could easily deliver [ see The Public Interest Company ] Public service objectives and values should be generated by active participation of such companies in the market-place (with grant income as necessary) - not by trying to make profit-based companies behave in an unprofitable way. I favour market competition between public-service and private-profit broadcasters, with clearly-defined rules of engagement. I believe that good quality local public service broadcasting would find a worthwhile audience. Coupled with the BBC, this would supplement the range of profit-based programming. In both sectors, new ideas and new companies would be encouraged to come forward all the time. OFCOM, as envisaged by Labour, will never be able to do that - even though Jowell claims it will regulate "with a light rein". Blair should have the courage of his New Labour convictions, and go one step further.

Are you with me? Or with Tessa? Drop me a line.

Public Primacy Misunderstood

When I recently re-examined my own socialist thinking New Socialist Settlement ] I surprised myself by identifying the new doctrine of public primacy, by which I mean the presumption that public functions should be discharged by directly-employed public servants, unless the contrary were demonstrated. This week there have been two examples of incorrect PP analyses, each pointing in a different direction.

First, the Government is unwisely planning to privatise the fire-and-rescue services at all military/RAF airfields. The contract would be for twenty-five years which is itself an indication that something is wrong with the idea. Services are currently provided by a civilian staff of 2,100, directly-employed by the Ministry of Defence, as near-military personnel. Their work is inevitably closely inter-related with that of the military personnel. Privatisation would effectively create a long-term monopoly, where the lucky private monopolist could eventually name his own price. There could be no effective long-term control of staff appointments, and control of the servce would quickly pass to the private company. Understandably, there are three eager bidders, to take over 96 airfields for the next twenty-five years. This represents a profound error of judgment by Government. The length-of-contract is unconscionable - proof alone, if it were needed, that this is a daft idea. It's the perfect licenc e to print money, for the private monopolist.

And who is the greatest opponent (apart from me)? The American Air Force. One-third of the 2,100 staff work on secret American airfields. AAF Lieutenant Colonel Lonny Baker is threatening to recruit his own directly-employed force, if the Government goes ahead with this barmy plan. Would it not be truly symptomatic if New Labour favourite Geoff Hoon were forced to abandon this privatisation - by the opposition of the American Air Force?

My advice to Geoff Hoon is to abandon these plans, pronto. Find an elegant excuse, and drop them. Simply make sure that the existing public service is better occupied. Geoff: I know that you must be desperate to privatise something, just to prove your NL manhood to Tony Blair - but don't go ahead with this one. It would make you the laughing-stock of the Labour movement, and wreck your prospects of advancement, once Tony has gone...

The second PP mistake is made by the Kings Fund, this week castigating the Government for building too many big new hospitals - in the wrong places. King's Fund Director John Appleby blamed PFI for "locking in traditional patterns of acute care". What nonsense! It is the NHS that decides on the location and scale of each new hospital. It is true that the sheer professional fire-power of the Hospital Doctors has resulted in a big-hospital-centred system, which has adversely affected cottage-hospitals and local clinics - but that is the fault of the medical profession itself. The King's Fund is disingenuous, in blaming the builders rather than the doctors. It is absurd to blame the construction industry for these manifest and self-serving professional errors of judgment. I continue to favour PFI for the property aspects of both hospital and school construction. The provision of property facilities-for-rent is one sector in which private companies are extremely skilled and competitive. However, as I am Director of a quoted public property company Estates & Agency Holdings plc, I should remind you of my "interest" in this argument...

Have you unpacked "PFI" for yourself? Drop me a line

 

New Mayor Elected

The country's youngest mayor was elected this week on a reform-and-clean-up platform. He took office this week. He is 37, stood as an Independent, and is committed to cutting municipal debt. He won in a whirlwind electoral contest, declaring his candidacy only a few days before the campaigning period began. He benefited from voter-disgust with scandal-prone politicians from the traditional parties. All this has been said of him, in the Financial Times, to whose excellent reporting I am indebted.

For he is not from Hartlepool, as you may have thought. He is Hiroshi Nakada, the new Mayor of Yokohama. Not a monkey in sight. He was directly elected. "The country" is Japan. Nakada beat the 72-year old Liberal Democratic incumbent Hidenobu Takahide, who had already been in office since the age of 60.

Nakada's election is a sign that the awful rule of the Liberal Democratic Party may be crumbling. Given a single last-minute opportunity to vote against the LD Candidate, Yokohama voters did so.

Is this how Blair envisaged the emergence of Independents, against Labour Councils? Do you think we have seen the end of the daft idea of separately-elected Mayors? Let me know what you think

Go Slow for
EU Enlargement?

Say it not in Gath, or whisper it in Zion... But I can see emerging a powerful case for delaying the enlargement of the European Union. This week I was pole-axed by the Polish, and further news of the Polish economy. Did you see the reports? One-quarter of Polish industry in the public sector, and by all accounts in some very ineffective public companies. The Polish State owns or partly owns 1,762 companies, and its economy is weaker than it has been for a decade. The Polish Government this week published a report alleging mismanagement and criminality at 22 leading State companies. Pro-European Polish Ministers must feel gutted.

Now: the problem does not lie specifically with Polish economic weakness. EU systems are perfectly capable of handling that kind of differential economic performance. It lies rather with migratory pressures generated by economic failure, and in particular migration to Germany. More Poles will want to leave Poland. In the EU access negotiations, a key issue has already been the length of the transitional period to full labour-access rights. Germany contends for an extended seven-year period, Poland is seeking much less.

The issue is a needle one, for German politics. And they have a General Election in September. My nose tells me that, if "enlargement" is to be achieved, the EU will have to "row back" on its Schengen Agreement, and allow Member States to re-assert national quota-control of immigration-rates. 

I cannot give you chapter-and-verse,  because I have not read this anywhere. And the UK is not in any event a party to the Schengen Agreement. But with the forces of xenophobia strengthening throughout Europe, Governments will have to find some sensible way of accommodating voters' emotions. That will I think mean either deferring enlargement or suspending the working rights guaranteed by the Schengen Agreement.

Do you think my worries are misplaced? What do you think should be done?  Drop me a line

Green Belts
and Social Class

At last!  There are signs that the Government may have begun to understand that "Green Belts" have nothing to with custody of the environment, and everything to do with the conservation of middle-class exclusivity, coupled with high property values. To start with, high suburban property values in London are a sure indication that commuters are not paying enough for their railfares, and that a steady but major increase should be put in hand, as it has been for petrol. But second: the so-called "Green Belt" should be used to accommodate Londoners on a very large scale.

I can feel the shudders already, from many Labour supporters. But just as New Labour is poor at understanding "business" generally, it is hopeless at understanding the housebuilding and land development sectors. There is no prospect of our being able to meet Londoners' reasonable housing requirements by merely using recycled land. The massive London economy is larger than it has ever been, and the London population is rising decisively - and the two are linked. London's prosperity will not continue, unless residential capacities are rapidly increased. Ken Livingstone sees that. The Housebuilders Federation sees that. And now the town-and-country planners are coming to see that. There is now hope that the Government will come to understand the issue as well.

Sadly, since 1997 we have had nothing but the repetition of tired old fallacies from the Government, blaming everyone else but the planning system for which it is responsible. In this respect, my Party has been no more perceptive than the preceding Tory regime. "Green Belt" was a designation dreamt up in 1937 by the old London County Council, merely to identify the zone outside the LCC area in which the Council proposed to acquire land for conversion to public parks, to give trapped Londoners access to the countryside. That's all. It was a practical piece of Morrisonian intervention, unambiguously good for the working classes.

Tragically, when the new Town and Country Planning Act was enacted by Labour in 1947, "Green Belts" were adopted and given a statutory force and rigidity which they had not originally had, and the middle-class Home County shire councils enthusiastically adopted Green Belt as a wheeze for defending their territory against the Working Classes of London. Ils ne passeront pas. Since then, even peripheral Labour Councils have shamelessly "defended" the Green Belt, to the detriment of poorer people excluded from England's green and pleasant environments. As a chapter in the History of Unintended Consequences, it has no equal.

I do not of course oppose the protection high-quality amenity land from development, though priority should be given to bringing such land into public ownership, in the public interest. But much of the so-called Green Belt is private, seedy and second-rate, and there should be no planning impediment to its use for housing Londoners. If Labour in London were to give the lead, other cities would also begin to look more critically at these ridiculous "Green Belt" policies.

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