The purpose of morality is to teach you,
not to suffer and die, but
to enjoy yourself and live.

A speech on money and banking given to Positive Money’s conference last October (sorry about the cold!):

See also my writing on economics here and for The Cobden Centre.

The British Chambers of Commerce has published a report showing that the Coalition still has a long way to go to tame the state’s mania for excessive regulation.

Red Tape Challenged? reveals that 42% of new regulations are not covered by the Coalition’s One-In, One-out (OIOO) rule for regulations. This is because they concern tax or the environment or come from the European Union. Such a high figure – if it continues – will make a mockery of the Coalition’s aim to be the first administration to leave office having reduced the volume of regulation.

Equally disappointing, the study argues convincingly that the current volume of regulations is still  too high and that the process for passsing regulations is still flawed. The Government’s Statement of New Regulation, published in September 2011, showed that the net regulatory cost to businesses in the UK is £45 million for the October Common Commencement date. We are still strangling our wealth producers in red tape.

The situation is not totally bleak. There has been some progress with the introduction of the OIOO policy, the deregulatory measures on employment law and the Regulatory Policy Committee’s work.

Yet the problem is far from under control. The scrutiny of regulations is weak without a ‘guardian’ to ensure it is being delivered – the BCC argues this role should go to the Better Regulation Executive.  ‘One-in, One-out’ has potential to have a big effect, but the current exemptions and lack of transparency with Impact Assessments make it difficult to police. Brussels is still churning out proposed regulations especially over employment and health & safety.

In a timely warning, BCC Director General John Longworth writes “To be blunt, businesses the length and breadth of the country are yet to feel any concrete or positive change. Only substantive reductions in the regulatory burden will give companies confidence and enable them to plan for future growth with certainty and clarity.”

Indeed.

Via Bucks County Council:

Time running out for consultation on the future of home to school transport

There are only [8] days left for parents to have their say on the proposed changes to Buckinghamshire’s home to school transport policy, due to be implemented in September 2012. 

The changes, likely to affect the majority of secondary school pupils, would mean that transport will only be provided to the pupil’s nearest secondary school.  Under the existing policy, pupils currently receive free transport to their choice of catchment school, including grammar schools, if they live over 3 miles away from the school. If a child is from a low income family and is entitled to free school meals; a family is in receipt of maximum working tax credit; a child has special educational needs, a disability, mobility problems or is eligible on specific road safety criteria, the Council will continue to provide free home to school transport where the statutory criteria are met.

Mike Appleyard, Buckinghamshire County Council’s Cabinet Member for Education and Skills, has already met with parents during public meetings held across the county before Christmas. A further five meetings are due to take place before the consultation ends on 31 January.

Cllr Appleyard said: “Through these meetings, I have been made aware of some specific issues that had not been fully considered when drawing up these proposals and I am now seeking solutions which will be used to form the final policy. The final policy is not a done deal and remains subject to the findings of the consultation.  I’m grateful to parents for bringing these issues to my attention and I encourage as many parents to come along to the meetings as possible.”

The new proposals will help achieve savings of £1.4m (or 10%) from the home to school transport budget, all part of the Council’s need to cut its overall spending by 50% over the next nine years. To read the proposal in full and complete the survey online visit www.buckscc.gov.uk/schooltransport

I travelled yesterday to Belfast East, where I spoke with Conservatives from across Northern Ireland who are working to normalise politics, diffusing and moving beyond sectarianism:

I learned and saw far more than I can share today but my overwhelming impression was of a great people who have been hamstrung by violence, sectarianism and the growth of the state. Taken together, the result has been the destruction of great industries and the conversion of prosperity based on production into dependency. That is the lesson we must all learn: live in peace and produce what others value.

There is much to be done to bring positive change to the entire UK, but Northern Ireland is a part within it which requires our help. I am thankful that Northern Ireland Conservatives have such determination, spirit, kindness and insight. I wish them every success.

The Bank of England’s Executive Director Financial Stability, Andy Haldane, has set out the case for banks to be held to different accounting standards because the existing rules have may allowed banks to overstate their profits and exacerbate their losses. This is something I covered in a private members’ bill last year, with particular reference to derivatives.

As reported in the Guardian:

Accounting rules for banks have bent with the financial stability wind in ways which have amplified investor and regulatory uncertainty. To lean against the prevailing wind, accounting rules for banks may need to recognise more explicitly their differences…It is, after all, precisely these differences that justify separate regulatory and resolution regimes for banks. A distinct accounting regime for banks would be a radical departure from the past. But if we are to restore investor faith in banking sector balance sheets, nothing less than a radical rethink may be required.

And via The Telegraph:

and:

In December, I chaired an event with Gordon Kerr, launching his report The Law of Opposites, which showed that banks use accounting loopholes to inflate their profits and bolster staff bonuses. In response to Mr Haldane’s recent comments on the reform of accounting rules, Gordon said:

Andy Haldane is right that fair value accounting is being used by bankers to game taxpayer bailout funds. My recent report “The Law of Opposites”  supports this view, highlighting how RBS in particular paid staff “profit based bonuses” when the bank was in fact loss making under UK Company Law.  

But Mr Haldane deserves particular congratulations for having the courage to put his name and reputation behind this.  HM Treasury, the FSA and UKFI have stood passively by and watched the health of the bailed out RBS and LloydsHBOS deteriorate whilst their senior employees work on plundering, this month, bailout funds.  The prevalence of accounting devices such as underprovisioning for expected losses, booking profits based on the fall in value of banks’ own debt, and failing to deduct from profits and capital deferred but promised bonuses, exposes the abject failure, post bailout, of state regulation of the banking sector.

This kind of crony capitalism at taxpayer expense must be brought to an end through the reform of our institutions. One of those institutions in desperate need of reform is accounting, dry as that may seem. The Government should now make progress in this direction.