The day they captured an Enigma machine

It was the morning of 9 May 1941 south of Iceland. The commander of U110, Fritz-Julius Lemp had fired four torpedoes into the convoy in quick succession.

There had been an audible explosion in the distance echoing through the icy sea, but there was also an immediate problem. The fourth torpedo had failed to leave the tube. Sea water had been pumped into the tube ready to fire, but it had failed to shoot out again with a burst of compressed air as it should have done. Consequently the submarine was now too heavy at the bows and Lemp began to lose control.

There was a short struggle to rebalance the trim and, when Lemp was finally satisfied and his crew breathed a sigh of relief, there was the warning throb of a warship coming straight towards them.

Lemp ordered U110 to dive and they could hear the terrifying and literally deafening roar of depth charges exploding all around them.

Silence at last. The crew looked for reassurance from Lemp, who was leaning theatrically against a periscope. “It’s OK,” he said. “We’re all going to be fine. You don’t think I’m going to let them catch me and shoot me, do you?”

It was a reference to the Athenia sinking eighteen months before, a Cunard liner sunk without warning on the first day of the war, and it was the kind of robust humour that was called for at this nervous moment.

Then the reports began coming into the control room. They weren’t good. The rudders were damaged. The batteries were giving off poisonous chlorine fumes, which they did in contact with water. The wheel that was used to blow the ballast tanks had come off. The depth meters had failed.

The engineer Hans-Joachim Eichelborn struggled quickly to fit new pressure gauges to the main cooling water pipes for the diesel engines, so he knew they were not actually sinking, but there was the noise of pressurised air escaping from somewhere. If they ever wanted to get to the surface, they would have to blow the tanks soon. The deciding factor was discovering that one of the propeller shafts had bent. It was clear they had no choice. They had to surface.

“We must wait and see what happens,” said Lemp quietly. “I want you all now to think of home, or something beautiful.”

It was a terrifying moment. The crew waited for the pressures on the hull to increase until it crushed them and the sea water rushed in as they sank to the depths of the Atlantic. Instead, there was a surprise. Suddenly, the boat was rocking. They must be on the surface after all. “Last stop!” shouted Lemp, like a bus conductor. “Everybody out!”

From the bridge of the destroyer Bulldog, they could see U110 on the surface dead ahead and the convoy commander Joe Baker-Cresswell ordered his engine room to increase speed to ram. As they got closer it was clear that the crew were on the deck and he put Bulldog’s engines into reverse to come alongside. Then there was a moment of indecision: were the crew actually clustering around the gun? Bulldog opened fire again with a machine gun until Baker-Cresswell confirmed that the crew were actually jumping into the water.

The scene on deck of U110 was almost as terrifying as it had been under water. Two warships were making fast towards them – the destroyers Bulldog and Broadway – and they were shooting. Shells and bullets were flying overhead. The journalist on board, Helmut Ecke, wrote later that he saw a man’s head blown to pieces next to him. He leapt into the water forgetting that his lifejacket had not yet been inflated. 

 Then came the crucial moment. The radio operator, Högel, climbed up the conning tower and asked Lemp if he should destroy the codebooks and Enigma machine. “The U-boat is sinking!” shouted Lemp. He went back inside to get the codebooks, but remembered his own notebooks and poetry for his girlfriend and got them instead.

Lemp and his first lieutenant, Dietrich Loewe, made sure than the vents had been opened and jumped into the sea themselves, the last to leave. It was only when they were halfway between U110 and Bulldog that it became clear that something was not right. The submarine was not actually sinking after all, at least not nearly so fast. Lemp shouted that they should go back, but a wave swept Loewe away and instead he made for Bulldog.

What happened to Lemp has never been clear. The British side suggests that he was never seen again. The German side suggests that he was shot before he could reboard his submarine. There are no eye-witness accounts either way. 

On board Bulldog, the same thought was also dawning on Baker-Cresswell – the U-boat next to him was not actually sinking. “By God!” he said on Bulldog’s bridge. “We'll do a Magdeburg!" Magdeburg had been a German cruiser, captured by the Russians in 1914 with codebooks intact. It was an enticing prospect.

Could they reach the submarine before it sank and take possession of the Enigma machine along with the codebooks with it? Could they change the balance of the Battle of the Atlantic? 

Find out in my new ebook Operation Primrose: U110, the Bismarck and the Enigma Code, a companion e-volume to my book about Alan Turing – attempting to set the Enigma breakthrough into some kind of context (and it only costs £1.99!)

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Cameron's big Lords misunderstanding

I am now 57 and feel too old to act like an Incredible Hulk, politically of course.  When that old despair and rage returns about the way my own government is behaving, my main feeling is exhaustion.  It saps the strength.

If I've occasionally seemed too much of a compromiser, here is my excuse. I feel I need to understand why decisions are taken, why officials don't understand, how we might in practice move things forward.

I'm not saying that everyone should share this, just that for me, personally, now, I'm no longer prepared just to campaign fruitlessly against things. I want to be part of making things happen.  That's why I wrote the book People Powered Prosperity: it was an honest attempt to break a logjam.

The last time I just felt furious was about the Blair-Brown approach to public services, and their determination to force me to carry an ID card. That was back in 2009.

It wasn't that I agreed with everything the coalition did - far from it (and the decision to build a new nuclear power station was pretty infuriating, but seems likely to cost so much that it won't ever happen). But I understood why the decisions had been taken in the way they had.  So for five years, I've been blissfully rage free.

So I've found the last week exhausting.  First there was the battery of wrong-headed decisions to end the progress made by the coalition on low carbon technologies - selling the Green Investment Bank, ending support for solar, closing down the low carbon homes initiative, wasting the resources of all the companies which had invested in it.

Then there was the perverse decision to overturn the ban on neonicotinoids in pesticides, which appear to be behind the death of bees. The Labour Party has less important matters on its mind, but I hope some parliamentarian will demand to see the suppressed minutes of the government's advisors - I hope a campaign group can challenge the decision in the courts. I know Parliament is in recess - that is why they made the announcement now - but this one should be winnable with sufficient opposition energy.

But I must say what really sent me into a fulminating spin of rage this afternoon was hearing David Cameron's answer about House of Lords reform, taken from his speech yesterday in Singapore. He was explaining that he intended to increase the number of Conservative peers:

“I'm not proposing to get there in one go. It is important to make sure the House of Lords more accurately reflects the situation in the House of Commons."

We know that Conservatives failed to keep their end of the coalition agreement to bring in some kind of democratic element to the Lords. In the absence of that, then the Lords certainly does need to be politically balanced.  But if the objective is to make it reflect the dysfunctional and undemocratic electoral system in the Commons, that simply compounds one injustice on another.

I accept, of course, that Lib Dems may now be quite well represented. But is Cameron intending to open the doors to Ukip or Green peers to reflect the number of people who voted for them?

The only justification for a second revising house is that it isn't a clone of the Commons. In those circumstances, what's the point?

As I raged to myself about this during the afternoon, I realised that this is not just a Conservative error, it is a utilitarian error often made by Labour too - to mistake the counting system for reality.

We have a bizarre democratic scoring system for electing governments. Perhaps it might be possible to accept the result, under certain circumstances, because it is at least a traditional method of election. But to fall into the trap of believing the perverse result of the election actually reflected the way people think is the same kind of boneheaded utilitarianism that New Labour used for its target system.

I remember hearing about a room under Labour at the Department for Education, set out like a dashboard, filled with information from targets and league tables pouring in from all over the nation - and encouraging a technocratic fantasy that the figures represented reality.

I happened to know one teaching assistant at the time in a school that was shooting up the leagues.  Her teacher had spent the whole term hiding in the stationary cupboard.

Which is a way of saying the following. We are not machines. Human objectives are complex and multi-faceted.  There are shades of black and white. The growth figures are not the economy. The target figures are not the hospitals. And the general election voting figures are not the only democratic blueprint.

When you think they are, it isn't just democracy that is undermined. The language is impoverished and we find ourselves in a narrowed universe, unable to see truths that were obvious to previous generations.

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The three problems with Corbynomics

My time for Labour MP Graham Stringer's conspiracy theory about the Labour leadership rather expired when he said there were Lib Dems joining his party to prevent Jeremy Corbyn becoming leader. In my experience, most Lib Dems I know find Corbyn's campaign rather a refreshing change.

I realise that contradicts the world view of many of the stodgy Labour Party types who are some miles from understanding their Liberal opponents. But so it is. Corbyn is offering an alternative, and it is about time somebody did.

But is it a forward-looking alternative or a backward-looking one? Well, spurred on by James Graham, I read his economics document and listened to his interview with Andrew Marr - and I think I agree with James.  The problem with Corbyn's economics is:

"His solution to everything is state centralisation."

It is fascinating and exciting that someone has managed to break the Labour blancmange but there are difficulties with an economic policy that claims to be about 'rebalancing' but is actually deeply conservative. So here are my three problems with Corbynomics:

1. Where are the mutuals? There is very little about transformative new structures of enterprise like mutuals, especially those which can be genuinely innovative running public services.

2. Where is the local lending?  The idea of a national infrastructure bank, spending money created by the Bank of England, is a sound one - but it doesn't solve the problem about how that money filters down to the entrepreneurs at local level because that requires access to local risk information. It makes precisely the same mistake as the coalition, assuming that - if they provided money to the big banks and told them to lend it to SMEs - they would be able to do so. In fact, as it proved, the banks had long since abandoned their own local structures and were consequently unable to lend the money effectively.

3.  Who is the community? Corbyn claimed in one sentence that "the state, the government, the community" were all one and the same. This is precisely the mistake that state socialists have made throughout - they can't see the distinction between the Man in Whitehall, the ministers who instruct them, and you and me. Here is the basis of a new kind of tyranny: The People have spoken, and we must do their bidding.

A nervous shiver ran down my spine when I heard that he wanted to re-nationalise energy production.  Because, of all the institutions that have disappeared over recent decades, I go down my my knees to thank providence that we don't any more have to contend with the old Central Electricity Generating Board (CEGB).

I remember the futurist Francis Kinsman describing an encounter with one of their managers after a talk he gave on the rise of the ‘inner-directed’ approach to life – those people who put independence, health and self-improvement above keeping up with the Joneses.

While much of the discussion had been about the benefits to business of independence of mind, the CEGB manager took him aside afterwards to ask how they could recognise inner-directed people on the payroll.

It transpired that his interest was not to promote them, or get ideas from them, but so that they could weed them out.

Let’s face it, only centralised bureaucracies on a truly Soviet scale – buttressed by centralised assumptions – could have succeeded in producing the staggering waste, delay, expense and secrecy of the British nuclear industry over the past half century.

This is not to suggest that the current oligopoly is much of an improvement, but don't let's leap out of the frying pan and into the fire.

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The Conservatives turn against business

The bizarre news stories yesterday morning about entryism into the Labour Party to support Jeremy Corbyn as leader convinces me of at least three things.

First, the Labour Party doesn't trust its own members. Second, the disappearance of their ideological foundations and purpose - some decades ago now - could mean that Labour might go in almost any direction.  Third, we are in one of those peculiar periods when party positions are seriously in flux.

We have Ukip and the Greens - sleeping at the moment - but poised to divide Labour support between them once they come back to life. We have Labour about to divide into two, or possibly three. But the potential shift that nobody really seems to be talking about is the strange way that the Conservative Party is turning against its traditional allies in business.

Joe Zammit-Lucia and I talked about this as a practical possibility before the election in our pamphlet A Radical Politics for Business here.  

We argued that the old relationship between business and conservatism has now broken. Business wants openness to ideas. They want open borders. They want long-term thinking, not the insane short-termism of the political world. They increasingly want education that promotes practical vocations, rather than suppressing them. They want schooling that looks beyond basic skills – important as they are – and which trains people to be entrepreneurial and creative, not just trains them to mind machinery.

None of those attitudes are offered by the current Conservative Party and, although some vestiges of the coalition attitudes remain in the current government, the evidence seems to be that they are prepared to undermine business to make an ideological point.

Why otherwise would you torpedo the progress of a new industry that is hugely important, not just for our own future, but for UK exports? The support for solar and wind was for a specific objective and for a limited period. Yet it has gone.

It can't really be about cutting energy bills because the other measure designed to cut people's energy bills - the low carbon homes initiative - has also been scrapped, to the horror of the volume housebuilders which have been gearing up for it.  

Nor has Hinkley Point nuclear power station, which is set to seriously increase bills for the foreseeable future, yet been cancelled - though it seems likely that it will be.

The damage to solar energy is limited. The cuts are regarded as necessary because solar is now so popular that it has exceeded the money set aside by the coalition.  It may well be that, for other reasons, solar will carry on growing - but what an opportunity to lead the world missed.

I'm not sure also that the perverse decision - which I hope will be challenged in the courts - to lift the ban on bee-killing chemical neonicotinoids falls into the same category. It is a direct threat to the emerging local food and organics sector.

What appears to be happening is that the government has taken against a number of new industries, rather as the Labour Party used to do in the 1970s, and is quite happy to torpedo those investors and undermine confidence in them if they can.

It will take some time for this to be clear one way or another. It will take even longer for it to be widely recognised, though the euro referendum will provide an opportunity to bring this shift to the forefront of people's minds. But the implications for politics are important - because it may be that business will once again be represented most successfully by a left of centre political force, dedicated to small enterprise, entrepreneurs and setting business free to challenge monopolies.

That sounds unlikely, but that was the case throughout the second half of the nineteenth century and it could be again. The question is whether Jeremy Corbyn or Tim Farron will be the one who can rise to the occasion.

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See you tonight to talk about Englishness

There was such an interesting article in Saturday's Guardian - alright, I admit it, it was written by me - listing five key aspects of English culture which are not English in origin.

But what really struck me were the responses. Within a few hours, there were more than 700 furious comments at the bottom of it from readers, variously accusing me and each other of various aspects of xenophobia or treason.

Of course, below the line in the Guardian is a frightening place, where monsters lurk. If you took all the comments about your articles written there too seriously you would quickly go insane. But it made me realise what a controversial subject this is.

One early comment put it like this, and clearly having known enough about me to guess my political affiliation:

"You can never win with liberals. If you take pride in your own culture, you are derided as being 'insular'. If that culture has enriched itself through aculturalisation, then they tell you it doesnt belong to you. In the next breath, they are lauding other cultures and defending some particular facet or other of it. In short they are reverse bigots and petty minded xenophiles. And then they wonder why their political representatives are rejected..."

That is clearly the first time I have ever been called a 'petty-minded xenophile', obviously from the UKIP satchel of minor insults.

I have been wondering why this should be so controversial. I couldn't have written How to be English unless I loved my own culture, but I suppose I am up against misunderstandings from two sides:

1. The right-wing obsession with purity, as if Englishness was either one thing or another, and as if every tradition must be unsullied by corruption from outside these islands.

2. The left-wing obsession with deconstruction, as if nothing - absolutely nothing - can be taken seriously because it is all an agglomeration.

I'm on the absolutely opposite side. English culture is wonderful because you can see its history in every twist and turn. It is gnarled and deep and confusing, and attracts the flotsam and jetsom from around the world and makes them its own. Nothing about that is critical. Quite the reverse.

One of those who left their comment who did understand this quoted Billy Bragg's song along similar lines, called 'English half English':

My mother was half English and I'm half English too
I'm a great big bundle of culture, tied up in the red white and blue
I'm a fine example of your Essex man
And I'm well familiar with the Hindustan
'Cause my neighbors are half English and I'm half English too

My breakfast was half English and so am I, you know
I had a plate of Marmite soldiers, washed down with a cappuccino
And I have a veggie curry about once a week
The next day I fry it up as bubble and squeak
'Cause my appetites, half English and I'm half English too

Well, I'm also half English... But if you would like to talk about these issues some more, especially the lighter side of them, I'm talking tonight on 23 July, at the Steyning Bookshop.... See you there!

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Services could conceivably be cheaper - but not the Osborne way

Regular readers of this blog (if there are any) will know that I am a great admirer of the systems thinker John Seddon.

He remains a controversial, even embattled figure, but I'm sorry he is no longer writing his furious e-newsletter about public services. I suppose, if you have not been well, it makes sense to calm down a little. But it always raised the blood pressure to read it; goodness knows what it must have been like to write it.

Seddon's great insight is the existence, in any system, of what he called 'failure demand' - the avoidable pressure that comes from its failures to be effective, or failures elsewhere in the system.  See his latest book about the profound implications this has for services.

The key to saving money is therefore to find out where the failure demand is coming from and to put it right.

But here is the snag. Saving money is paradoxical in the Seddon world. It's a bit like friendship - you can't do it directly.  If you can get rid of failure demand, by studying the system as a whole, and find ways of tackling it, then you can save quite large sums. If you start by trying to save money - putting IT systems in place, merging services across geographical boundaries - then the failure demand tends to rise.

What tends to happen is that the minority of cases that are not amenable to digital solutions then start banging about trying to find someone to help them, and every time they get failed they create more costs.

That is the fate of most money-saving attempts in public services, but it is also a source of hope. It means that costs could be brought down, if Whitehall understood the way services worked as a whole.

All of which is a way of saying that George Osborne's attempts to cut 25 per cent off public spending in some departments might be possible - but. if he goes about it in the way he seems to be, it will cost more money in the long-run.

It can't be done by asking Whitehall to propose 40 per cent cuts, which is a recipe for sclerosis and a boneheaded failure to see the system as a whole. Under the current set-up, it will mean that most of the cuts fall in practice on social care - which is uncivilised and will cause knock-on costs in the NHS.

This is what he needs to do instead:

1.  Scrap the vastly expensive white elephant projects (Hinckley Point springs to mind).

2.  Launch simultaneous studies into failure demand in the major services, including the NHS - if you can really improve services by reducing costs, as he says, why exclude the NHS?

3.  Give the services the time to innovate in a major way, and discourage lazy percentage cuts.

4.  Launch an initiative to turbo-charge the involvement of frontline staff in making services more effective, as Al Gore did as US vice-president. More of this later...

The truth is that, to really reduce costs, the government will have to row back from the disastrous public service policies of the Blair-Brown years, which concreted in costs in ways that Seddon has outlined.  They still haven't done that. The only way to cut costs is to develop flexible, integrated systems which can tackle people's problems or requirements once and, as far as possible, once only.

The way to lower costs is therefore not narrow efficiency, it is higher effectiveness. That requires thinking and innovation. It requires the involvement of people receiving public services in their delivery, and it requires a major devolution of power to the front line.

What isn't going to work, paradoxically, is an attempt to look at the balance sheet and shave bits off. Osborne needs to go beyond bleeding the patient.

More on some of these in my book The Human Element.

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Farron is stronger with his faith than without it

There is a kind of boneheaded Englishness, usually but not always Conservative, that believes someone's faith makes them a potential enemy within - that they somehow can't help being committed to other nations or ethics or moralities. That they are therefore not quite 'one of us', at least not to be trusted with political office.

It tends to go along with another English peculiarity, a strange and basically ignorant belief that the teachings of the Christian faith are mainly about homosexuality.

Actually, the condemnation of homosexuality is so central to Christianity that Jesus doesn't mention it once in any of the gospels.

Through the centuries, the English have returned over and over again to these themes. For some time it was felt that Roman Catholics must have their basic allegiance elsewhere - to the king of Spain, the Pope or some combination of the two.

Then, in the twentieth century, similar things were said about Jews: they must - or so it was said - owe their basic allegiance to the state of Israel.

These days, you usually hear this kind of nonsense spouted by crusty English establishment types about Muslims. Or by Guardian-reading 'evidence-based' types about people who describe themselves as Christians - again, the whole implication is that there must be some tyrannical hidden agenda, some secret allegiance elsewhere.

Tim Farron, the new Lib Dem leader, had to face this line of questioning over and over again from the media during his first weekend in office, and did so with his dignity intact. And I, for one, respect him enormously for it.

It is true that there are strands of illiberal socialism and conservatism which see no distinction between morality and policy. Who only have to disapprove of something to want to legislate against it (or, in the case of Tony Blair, to bomb it).  Liberals, it seems to me, are able to distinguish relatively easily between morality and public policy.  Not just their own conscience, but there is a difference between objective morality and policy too.  If we start trying to legislate against everything we believe is wrong, we will live in a tyranny.

When Bill Clinton famously closed down the abortion issue in 1992 in the US presidential election, he said he wanted it to be "legal, safe and rare", but did he get cross-questioned about why he wasn't urging more abortions? No, but I fear he would have done in the UK, where religious faith remains a source of suspicion - just as it did back in the days of the Tudors.

Why is this an English obsession? It is true that I may think this because my book How to be English is published this week and I find myself obsessed with the topic. But actually, I think there is a connection - there is a streak of puritanism which runs deep in these islands.

I don't mean puritanism as purely religious. English puritanism remains a kind of extreme protestantism, but it has moved its position since those days.  Once they used to smash stained glass windows or cut down maypoles and close theatres. These days, they rage at against anyone who believes anything beyond what can be verified by five senses - worse, it is their five senses that has to do the verification. This is puritanism reborn as a kind of narrow positivism.

Yes, my understanding of Dawkins is that he is an extreme protestant, so disapproving of spirituality that he has become an atheist. It is the logical conclusion of puritanism, in my humble opinion. It is the latest manifestation of the traditional English fear of priestcraft and mumbo-jumbo.

The kind of narrow empiricism it is based on is another seventeenth century idea, and it is getting a little frayed.  But I expect it will live on here long after it has bitten the dust everywhere else.

I am personally glad that the Lib Dems are led by someone who has some spiritual belief, some sense that this isn't all there is.  And since 77 per cent in the UK describe themselves as ‘religious’, it makes sense for aspiring political leaders to share some idea of what they mean.

Certainly, if there is a future for the left in the UK, we are not going to find it by withdrawing into a small cult of puritans, disapproving of everyone's spiritual beliefs and congratulating ourselves for being so 'evidence-based'.

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Time to work out what it means to be English

“Dinner was announced soon after our arrival, which consisted of the following things,” writes the Rev James Woodforde describing his meal on 20 April 1796, in a diary which – in a very English way – lists the food in great detail but barely mentions God at all. Then he takes a deep breath and sets out the table before him:

“Salmon boiled & Shrimp Sauce, some White Soup, Saddle of Mutton rosted &c; Cucumber &c., Lambs Fry, Tongue, Breast of Veal ragoued, rice Pudding the best part of a Rump of Beef stewed immediately after the Salmon was removed. 2nd course. A Couple of Spring Chicken, rosted Sweetbreads, Jellies, Maccaroni, frill’d Oysters, 2 small Crabs, & made Dish of Eggs... We got home about half past nine, as we went very slowly on Account of Briton’s walking, who ... was very imprudent indeed, but I believe he had been making too free with Mr Mellishs Beer &c.”

There is a glimpse here, perhaps, of the soul of the English. We have a culture like a rummage sale, like a white elephant stall, hideously divided and bizarrely coherent – and, over the last century or so, obscured by an even more varied invention known as ‘Britishness’.

The British have a terrible reputation for cuisine, but the English have a different reputation: for over-indulgence, and plain, gargantuan portions.

That is the way the English used to eat, and I have a feeling they would do again, given the chance. There is a little of the over-indulgent eighteenth century in all of us. Perhaps not in our genes, there are so many people here – and always have been – from other parts of the world. 

With the best will in the world, there is no way they can share the particular mixed English genetic heritage. Nor is it quite the English environment and weather which we all share that shapes us all, because the weather has changed from the heat of the twelfth century to the frost fairs on the Thames of the eighteenth.

No, it must be something else – some other historical imperative, some psychic beating of the traditional heart of the land – perched on the far north west corner of Europe, peering out towards the west. Something shapes the English – it does not homogenise them, which would not be English at all – but it makes them stand out, whether they like it or not, whether they are from the back streets of Karachi or the tiny Jewish villages of old Poland. 

We can’t know what that is, but we can look at the flotsam and jetsam of history that amount to the whole, and maybe celebrate Englishness for what it is - not for the purity but the sheer diversity of it. In fact, it's rather important that we do, and I've had a go in my new book (out today), How to be English.

Ask yourself this - if you made a list of the 100 elements that make up English culture for you, what would you put in the ragbag?

In the meantime, if you are in Sussex on 23 July, come and join me to discuss it at the Steyning Bookshop...

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To lead the political debate, you have to lead the intellectual debate

There is something bizarrely uniting about Lib Dem leadership elections, or so I realised last night.  Not for us the bear pit of the Labour leadership - which is more about uncovering the great chasms that lie between the candidates, and between the candidates and the people.

Norman Lamb managed to get nearly 44 per cent of the vote, and Tim Farron turned up the heat and produced an extraordinary performance last night. I felt hugely proud to be in the same party as both of them. And on top of all that, a 900 vote majority in a council by-election in Kingston the same evening.

I backed Norman Lamb because I believed he would shake up the party the most. But I became aware during the campaign that other people I respected were supporting Tim Farron for exactly the same reason.  I hope and believe he will.

Because I think we are poised for an exciting period, but - to lead political debate, you first have to lead the intellectual debate.

As they did in the early hours of May 9, the Guardian very kindly asked me to write a comment about the Farron victory shortly after it was announced, and I delivered as he climbed onto the rostrom at 7pm last night.

I'm always nervous about doing these things before I've had a chance to take the temperature - or at least think a little more deeply.  I don't know how I managed, but you can judge for yourself here:

http://www.theguardian.com/commentisfree/2015/jul/16/farron--lamb-to-help-create-flurry-of-new-thinking-the-party-needs

Turning off Labour's lazy funding tap

There is a new, or at least renewed, Co-op store in my town.  It is the only supermarket here and it isn't exactly cheap.  On the other hand, it is pretty convenient, and I find myself popping in and out in the most unsystematic way.

I bank with the Co-op (not actually a co-op, because there is no legal format for a co-op bank in this country, but owned by a co-op).  I carry a Co-op credit card. I'm steeped in the place.

But I must admit, I have a qualm every time I go through the door of my local store.  I remind myself that a slither of everything I buy there will go, against my will, to the Labour Party.  Last year, the Co-op group agreed to fund the Co-operative Party - a wholly owned subsidiary of Labour - to the tune of £625,000 over 18 months (£34m since 1992).

This is enough for me to choose a different shop whenever I have the opportunity. I don't like it and don't want it, and it irritates me that I have no say in it.

I thought of that when I read the government's proposals for trade union reform today.  Let's leave aside the other reforms - some are important but it is important that we have an active, responsible and healthy trade union movement in the UK.

But what about the question of opting into the political funds, especially when they go to the Labour Party, rather than opting out?

The Co-op doesn't give me either option as one of their customers. But funding a political party ought to be a conscious decision, and the current set up has only been allowed because neither Labour nor Conservative parties were prepared to work with the Lib Dems to clean up political funding and put it on a proper democratic basis.

I would go further. This kind of involuntary or at least lazy funding of the Labour Party has, in this respect, allowed the current situation to continue.

Worse, it has continued in existence a political force that is so linked to the era of big trade unions, mass membership, and industrial unrest, that the nation's political culture is still stuck there.

It seems to me - every time I go into the Co-op, in fact - that the Labour Party is a great useless lump, full of sound and fury when it is out of office, but a timid lamb too frightened to shift power when it is in office, because it is out of its time.

Perhaps, I say very tentatively, if we turned off the involuntary tap, it would not survive and would leave space for a political party of our own time, which might make the changes we need.  In the meantime, and over recent decades, the Labour Party has been kept alive artificially.

Turn off the life support mechanism, I say. But then, I'm a Lib Dem, and you might say that it's my party that is now on life support. We'll have to see, I suppose.

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The corrosive dangers of victimhood

I don't know about you, but it seems to me that putting a 94-year-old in prison for four years leaves a nasty taste in the mouth.  Perhaps you deserve it if you were the so-called 'Bookkeeper of Auschwitz', as Oskar Groening was, but this isn't to do with who deserves what - it is about the dignity of the judicial system.

I'm not of course arguing that there should be a statute of limitations on crimes against humanity, or on sexual predators in the BBC in the 1960s come to that. Just that prosecuting at that distance means you don't catch the worst offenders - just the minor offenders who happen to stay alive.

For Germany to send a 94-year-old to prison is to extract the pound of flesh in a way that brings these issues into disrepute.

But at least I was able to hear again the inspiring interview with the Auschwitz survivor Eva Kor, who not just forgave Groening but embraced him, and demonstrated the power of letting victimhood go:

"I am a victorious human being, who has been able to rise above the pain, forgive the Nazis; not because they deserve it but because I deserve it."It reminds me how damaging it is for people to hold too closely to their own victimhood. It isn't that a great wrong was not done to them - as Auschwitz survivors or child abuse victims. It was. It isn't that these crimes should not be investigated or the perpetrators brought to some kind of justice. They should be. But doing so for too long sometimes allows the victims to stay victims - and that can just close down their lives, and reduce them to nothing but victims.

Sometimes the appearance in court can help them release this status and it is important that they have it. Sometimes it will be the vindication that allows them to let go. But the systems should not give people an excuse to fail to break from the past, to do what they were born to do, to love wholeheartedly - and to keep making the effort to do so.

None of that suggests that they are not held back by the original crime.  They are.  Or that it is easy to escape it. But Eva Kor seems to me to have articulated why we have to help people escape if they can - because the key to life is to be a "victorious human being".

I'm just not sure that civilised societies pursue people into the mid-nineties.

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The economic consequences of the bail-out

I know the ferocious bail-out of Greece is not the Versailles Treaty. Nor are the debt-repayments reparations exactly The Economic Consequences of the Peace. but John Maynard Keynes knew a thing or two when he stormed home from Versailles in 1919 and wrote it.

There is something horrific when a great institution like the European Union becomes obsessive about one thing, so obsessive that it is prepared to put one corner of itself - one whole nation - into a state of semi slavery to achieve it.

This is what Keynes wrote in 1919 about the negotiators a century ago:

"The future life of Europe was not their concern; its means of livelihood was not their anxiety. Their preoccupations, good and bad alike, related to frontiers and nationalities, to the balance of power, to imperial aggrandizements, to the future enfeeblement of a strong and dangerous enemy, to revenge, and to the shifting by the victors of their unbearable financial burdens on to the shoulders of the defeated."

It is as if, in defence of a flawed continental currency - one designed so that it would suck up the available money and power into the centre - its first victims should be so punished. Because "the future life of Europe was not their concern". Apparently.

I must say, reading the outrageous terms visited upon the Greeks - apparently without any debt relief - I've been wondering whether I have been right about many things.  If the European Union can remove the rights of self-determination from a corner of Europe then, really, I want none of it.

If the peace of Europe becomes less important than the currency, or the debts, then it may well be best that we make our excuses and leave. Because I fear that what we saw today was a glimpse of a new European tyranny. From being the protector of the peace of Europe, the European Union is now threatening it.

It isn't that somehow they are squeezing the life out of Greece accidentally, it is that they are doing so deliberately - because Greece is less important than the currency.

What is even more frightening is that, if it hadn't been for the Lib Dems in 2010, the same kind of measures might have been visited on us. But at least we have a central bank. We can print our own currency if we need to, if national pride or desperation or ingenuity drives us to.

But our own austerity seemed such a temporary measure, a short-term pretence that the debt and the money is somehow real. Even Syriza, the great radicals, appear to have no alternative to offer their people but to sign on the dotted line of indentured servitude.

I don't feel very optimistic now, but there is an optimistic thought. That this is the beginning of the turning point, when we claw back a little of our futures from the financial world - because Greece will have to work out how, and we will follow where they eventually lead.

The worry is that they don't look as if they will lead us anywhere right now. And some of the places they might lead are extremely dark.

As Keynes concluded his book:

"If we aim deliberately at the impoverishment of Central Europe, vengeance, I dare predict, will not limp."

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The future of food is local after all

It is now nearly 12 years since I published my book Authenticity: Brands, Fakes, Spin and the Lust for Real Life. I can't say I exactly won the argument at the time, which was that the demand for authenticity - and especially in food - was a long-term major trend.

I also argued that it wasn't a con.  It wasn't about the big food manufacturers pulling a fast one, just by putting a picture of an old-fashioned farm on their packaging (see my more recent take on it in my ebook The Age to Come).

Another book, also called Authenticity, has been published by Harvard University Press, which makes the call the other way.  It was a tough argument.  I had a hard time with it, from people who felt I was being hoaxed to people (Vanessa Feltz springs to mind) who just got cross with me.

Then I opened a recent copy of Fortune magazine and realised that I was right, after all.  The demand for healthy, fresh, 'real' food is now so powerful in the USA that it is turning the food industry upside down, and beginning to re-localise the production of food.

Hershey's are taking BST milk, GM ingredients and artificial flavours out of their chocolate bars. Campbell's Soup has bought baby food maker Plum Organics, and - to keep its authentic spirit - has made it a public benefit corporation.

There are also - according to a separate article - now nearly 8,300 farmers markets in the USA, having grown at an average of 19 per cent a year for 19 years.

That is one hell of a lot of money shifting out of big food corporations and into small-scale local production. You can see signs of similar trends emerging here, but not nearly so fast.

The 25 biggest food and drink corps in the USA have lost a total of $18 billion in market share since 2009. That seems to me to be good for the economy: it is $18 billion not going in mega-salaries, and dedicated to the wrong kind of efficiency, and shifting instead into local employment and innovation.

This is what Campbell's CEO Denise Morrison said:

"We understand that increasing numbers of consumers are seeking authentic, genuine food experiences, and we know that they are sceptical of the ability of large, long-established food companies to deliver them." 

As I predicted, this is hard for the big companies. To demonstrate the same kind of authenticity, they are buying up small, healthy food producers, only to find that - in the stultifying big company culture - their new purchase kind of shrivels up like an elderly organic lettuce.

You can see something similar happening in the beer market. It is an overwhelmingly healthy sign - forcing the big food corporations to adapt and change or to die out. I hope something similar emerges here fast - and, perhaps, even in banking.  

It is even happening in the energy market, but extremely slowly. But the mere fact that it is possible at all - that we are not locked into buying from semi-monopolies as much as we feared we were - is a heartening thought on a less than heartening day.

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Voldemort returns to banking

The sacking of Anthony Jenkins as the Barclays CEO is a loss. It is also a commentary on his own belief that he was changing the culture of banking. As it turns out, he wasn’t - though he certainly tried. Clearly his board didn't really want him to.

It also puts into perspective the failure of the political system to shape an effective banking system that is capable of supporting the real economy. This is, it seems to me, one of the big failures of the coalition years.

Because the political elite– and this involves all the parties at Westminster – have managed to combine precisely the wrong kind of regulation with a kind of lazy idea that anything the market can’t do immediately somehow isn’t worth doing.

It is at the same time the wrong deregulation and the wrong regulation. The combination means that the economy will not succeed as fast as it should, and will be that much more vulnerable than other economies when the time comes – and the crisis is coming, whether it begins in Greece or China or somewhere else.

The wrong deregulation is a constant theme of this blog when it comes to banking. Every other nation in Europe has a network of local and community bank designed to look after local business needs.

We don’t.

Of course the P2P alternatives are growing fast, but they won’t look after the slow small companies, the backbone of the local economy. Nor will they provide bank accounts or places to put their takings at the end of the day.

Nor will they create the money in the form of loans. A world without bank loans will not have the means to create money, unless the Bank of England does – and they show no signs of expanding the ludicrously useless quantitative easing programme.

Of course the challenger banks will help too, but they are mainly not providing current accounts – and when they do, it is for wealthier areas.

That is the great failure of the coalition. Vince Cable’s British Business Bank will help local lending, but it provides no local infrastructure. It doesn’t provide the missing information which the big, centralised banks lack about potential loans.

Worse, the shift in yesterday's budget - from a levy on banking size to a surtax on banking profits - just excludes challengers.

Then there is the failure of regulation. The new Basel regulations, and the whole drift of the regulators here as well, has been the same – to insist on yet more safety margins. To require more capital held to cover small business loans. To stress test constantly.

To repeat, in a small way, the destructive announcement by the European Central Bank about Greece that – far from bailing them out – they would require more capital underpinning.

The result of this regulation will be to make small business lending virtually impossible, just as it will make small scale banking virtually impossible.

The more they demand in regulation, the narrower and more useless the banks will become. Until they are safe as rocks, but they are unable to carry out their basic functions.

So the news that Anthony Jenkins has been sacked by Barclays is double trouble. They have got rid of someone with a different vision and fallen back on the old useless model of investment banking, slaving away in the innards of the Great Economic Machine that funnels money to the very rich.

I cast no aspersions on the chairman who has taken Jenkins’ place, but note that the rule of Voldemort is clearly returning to the banking system. Mordor is rising again.

And in a way, you can’t really blame them. The regulator has been busy making effective, useful domestic banking virtually impossible. And after all that, the big banks are still too big to be allowed to fail - though there are of course new regulations that are said to be designed to prevent them from doing so.

Ironically, neither the bad regulation nor bad de-regulation are building a banking market - quite the reverse. Neither are doing anything to bring more competition.

What they should be doing is making it easier to start small or experimental banks, and copying the speedy American procedure to wind them up over the weekend if they fail. And of course getting the big banks to fund and mentor a new community banking infrastructure - starting with reshaping RBS (of which more later).

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The lesson from the Chicago police that never gets learned

It is now exactly four decades since the future Nobel laureate Elinor Ostrom carried out her groundbreaking research into the systems used by the Chicago police.

When she won the Nobel Prize for economics in 2009, it was doubly unusual: no woman had ever won it before, and she wasn't even an economist. She had been at Indiana University for most of her career, spending much of her time in the 1960s, by her own admission, getting her own students out of gaol after anti-Vietnam War protests.

It was the period which saw the huge consolidation of schools in the USA, reducing the number of school districts from 110,000 to just 15,000 in the four decades up to 1950. There was a similar consolidation of hospitals, police forces and companies. This was the emerging era of big corporations that has rendered so many of our public services so ineffective.

Ostrom was fascinated by the issue of scale. When she scraped up enough money to begin research, she decided she would look at the same phenomenon which was happening across the USA of consolidating police forces into larger and larger units.

She had just enough money to hire cars for her research students to drive around Indianapolis for ten days, and test out the effectiveness of different styles of policing. It was pretty clear, after the results came in, that the smaller the police force, the better they were at responding to emergency calls. It is the same in the UK, even now.

This challenged conventional thinking, which assumed then – as it still does – that bigger is better. Her black students urged her to have a proper look at policing in Chicago, and sure enough, it was the same there. The small police forces in the black suburbs were just as effective as the huge police force covering central Chicago, which had fourteen times the funding.

The Chicago police were interested in her research and asked her why she thought the crime rate seemed to be rising when police shifted from walking the beat to driving round in patrol cars. It was here that she made her real breakthrough, understanding how much the police need the public, and how cut off they had become.

She needed a word that described that indefinable co-operation between police and public which was so easy when they walked around. She called it ‘co-production’.  More about this in my book The Human Element.

If the police forget how much they need the public – and disappear into technocratic systems, patrol cars or bureaucracy – then crime goes up. It is the same pattern with doctors: they need the co-operation of patients if they are going to make them well.

It was such a momentous finding that public service managers have found it hard to swallow, then or now. But I thought of it after reports last week that the Bolton police have withdrawn their people from the beat - just as the Chicago police did 40 years ago.

Apparently, the days of police on the beat have gone, according to senior officers from Greater Manchester.

Of course, this isn't a decision that is entirely taken for its own sake. There have been warnings for months now that more spending cuts would mean withdrawing from the beat.

But for some reason, public service managers find it hard to learn the basic lesson.  If you take away the human element and rely on systems, and IT systems in particular, then your effectiveness will be seriously constrained. In this case, crime will go up.

Last week, I asked why politicians find it so hard to grasp the opportunities of new models for public services, even when they are proven and less expensive.  This question is just as important: why do public services managers have to learn the same lessons about the human element over and over again, but never remember it?

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Batmanghelidjh represents the killer question for Whitehall

Charities during the Blair-Brown years tended to go on one of two directions.  They either abandoned their services in favour of marketing to change government policy (the NSPCC springs to mind), or they became subject to central government targets by delivering public services.

In both cases, they kind of sold the pass - one of the virtues of the voluntary sector, at least from a Liberal point of view, is its independence from government. Its ability to see beyond government agendas and see through their targets. It's refusal to accept that governments have a monopoly on action.

The ultra-utilitarian approach to services was largely carried on by the coalition. It has a peculiar attitude to innovation.  On the one hand, no funding or grants is ever forthcoming without some claim to be doing something new - it is hard for charities to get funding to do the tried and tested things that always need doing.

On the other hand, when you measure answers in the way approved by Jeremy Bentham, you tend to become blind to big new ideas.

Camila Batmanghelidjh is bound to be an object of suspicion in Whitehall because she has partly bucked this trend.  Yes Kid's Company delivers services for the government, and I'm very glad they do, but they have been promoters of a big idea - and a vitally important one  - that doesn't really fit into the assembly line services that Whitehall currently aspires to.

I've never met Camila, though I've been hearing about her for the past 20 years or so, and the way she brought the latest understanding of child development into her practice - the idea that love is what literally switches on the brains of young children. Starved of love, they never quite come alive.

Yet can the way services are presently constituted ever provide love, when they are so obsessed with process?

And, if they don't make these kind of relationships possible in children's lives, are they making a difference?

So I've been feeling pretty dismayed at the whispering campaign against Kid's Company over the past week. I can see why they are extremely inconvenient for some of those in Whitehall, and my fear is that by sidelining Batmanghelidjh they may also sideline her radical edge.

She may not represent the answer yet for how we shape humane and effective services for children and vulnerable families - though she has presided over vital pieces of the puzzle - but she represents a deeply uncomfortable question for anyone who believes that the welfare state is effective in its current shape.

Or that it will remain even as effective as that after George Osborne has chopped away at it in the budget today.

I'm one of those who believes that the way to save money in public services is to revolutionise their effectiveness.  The worst of both worlds is to keep the existing model and then cut back the money. That is a recipe for ineffectiveness and therefore more expense in the medium-term.

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Time for emergency currencies for Greece

“The purpose of Free-Money is to break the unfair privilege enjoyed by money. This unfair privilege is solely due to the fact that the traditional form of money has one immense advantage over all other goods, namely that it is indestructible.” So said Silvio Gesell, the Argentinian trader who came up with the idea of rusting money.

It is always going to be easier to make money out of money, rather than using it to do something productive, wrote Gesell in 1913. Because money grows if you invest it – but real commodities tend to rust or go mouldy.

The answer, he said, is to have money that rusts too. The idea was taken up enthusiastically during the Great Depression, most dramatically in the Austrian ski-ing town of Wörgl. And by catching the eye of the great American economist Irving Fisher, rusting money was adopted all over the world before it was declared illegal by the world’s central banks, fearful of a threat to their own authority.

Wörgl was in a terrible state in the Great Depression when the burgomaster Michael Unterguggenberger persuaded the town to issue its own currency, to the value of 30,000 Austrian schillings, known as ‘tickets for services rendered’. But unlike ordinary money, these notes lost value by one per cent a month, and to keep value – if you hadn’t spent them – you had to buy their stamps once a month and stick them on the back. The proceeds of the stamps went on poor relief.

The notes circulated incredibly fast. Within 24 hours of being issued, most of them had not only come back, via shops and businesses, to the municipality in the form of tax payments – sometimes months in advance – but had already been passed on their way again.

During the first month, the money made the complete circle no fewer than 20 times. After four months, the town had built public works of 100,000 schillings, employing people who were jobless; most of the town’s tax arrears had been paid off too.

Fisher was inspired by what he found in Austria and rushed out his own instruction manuals, called ‘Stamp Scrip’, for the struggling American towns. Within months, about 300 US communities were printing their own negative-interest money. Senator Bankhead introduced a new law to congress that would have created a billion dollars of stamp scrip.

Then, on 4 March 1933, it was all over. President Roosevelt, advised that the monetary system was in danger, banned scrip systems and gave the existing ones a short time to wind themselves up. As he did so, he also created the conditions for a final flurry of activity. 

Fearing a complete collapse of the American banking system, he closed all the banks – and all over the country, communities and companies had to provide some kind of alternative to money. “I care not what kind – silver, copper, brass, gold or paper,” said one senator from Oklahoma. One community in Tenino in Washington state even produced its own wooden money.

Stamp scrip was like blood. As the stamp scrips were shut down on one side of the Atlantic, the Austrian National Bank was taking action to suppress the Worgl experiment too. Four years later, Austria was annexed by Nazi Germany.

These days, the fiddly business of sticking on stamps is unnecessary, because computers can do those calculations. Stamp scrip might not provide the stability people need for real money – money they can use for savings – but it might as well serve for exchange money. We can still learn something from Gesell, Fisher and Unterguggenberger.

I was thinking about this when I heard that the Greek's had rejected the bail-out terms, and you can see why. It looked just a little like slavery for comfort.

The Greeks have been led into debt partly by the failures of successive Greek governments, and partly because the euro is a machine for recycling money from poor cities and countries to rich cities and countries. Neither makes me feel any more comfortable about the fate of the Greek people.

One of the great problems with the euro, as presently constituted, is that it prevents governments creating money if they need to.  The Greeks are doubly hamstrung because their own mints are only allowed to print low denomination euro notes. The rest have to be trucked in.

The re-establishment of the drachma, at least with coins, will take a long period. I remember that it took the Belgian government three months and 80 lorries a day to dispose of their old Belgian franc coins when they joined the euro. Presumably it would take a similar effort to bring them all back again.

But this is now an unprecedented period of economic crisis for a corner of Europe and I have no idea what contingency plans the Greek government has made, and worry that maybe they haven't.

The key in an emergency, it seems to me, is not to fall into the trap of thinking that all money needs to be denominated by a central bank.  Or that it needs to mix the functions of money - store of value, medium of exchange and so on - in exactly the same way as conventional money. It can be different - maybe even should be to suit a variety of new situations.

The medium of exchange function needs to be foremost in situations like this.

What Greece needs now is a major set of experiments with new kinds of money, and it seems to me that there are a number of institutions inside and outside Greece that might be able to help:

1. Greek cities. They must take the lead in creating 'self-liquidating' currencies to provide a means of exchange, along the lines of Worgl in 1934.

2. Silicon Valley. There hardly seems to be a Silicon Valley entrepreneur who doesn't have ambitions to create a new payment system or currency innovation. Facebook and Google have both been experimenting with them. Well, now is the time to test it out: provide a means of exchange - preferably using mutual credit systems - that can keep the Greeks alive while their leaders sort out some kind of long-term solution.

3. Bartercard. The leading Australian barter company could lend its online system to a couple of Greek cities, and waive their usual rake-off.  This is about life and death, after all.

4. STRO and other currency entrepreneurs. There are so many online systems of virtual exchange now available, from Cyclos to HourWorld, CES in South Africa, Zumbara in Turkey. It is time to partner with a Greek city and be a bit useful.  Start perhaps with Community Currencies in Action.

5. Brazil. Their highly successful community banking network, co-ordinated by Banco Las Palmas, has developed a use for a parallel currency designed to support women entrepreneurs. Greece needs it, and now that it is backed by the Brazilian central bank, I suggest a link up.

6. The big banks. If they lend their considerable IT knowhow to the Greeks to provide credit systems, then the credits will at least carry the kudos from them.

I may be surprised.  Perhaps Greece's government has some idea what it is doing. Perhaps the European Central Bank may draw back at the brink from allowing the destruction to go ahead. But if they don't, it seems to me it is at least an opportunity for the new money world to step forward and offer their services.

Let's forget the debt for a moment.  Because without some kind of means of exchange, the Greeks face what Keynes used to call "a perigrination in the catacombs - with a guttering candle".  

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Turning the Lib Dems inside out and upside down

I can’t remember whose joke about the Lamb/Farron leadership contest it was, but I repeat it here. It is a wonderful thing to take part in an election and know that, whoever wins, it’s going to be a Lib Dem.

I’ve even voted already. I’ve been hugely impressed by both leadership candidates and the way they have kept level heads. There have been peculiar incidents but nothing like the ‘calamity Clegg’ business of the last Lib Dem leadership tussle.

I’ve found the focus on what either candidates did or didn’t vote for or against more than frustrating because – in the end – what they did in the past, while interesting, doesn’t really go to the nub of the issue between them. It's an important issue and it needs some resolution.

Which seems to me to be this: should the party shout louder or should it turn itself upside down and inside out?

I’m pretty definitely in the inside out camp. I’m only too aware of how much the future of Liberalism needs to be thought through, how the old slogans seem emptied of meaning, how much thinking has to be done.

Tim Farron is a ferocious campaigner, but I looked at the ‘six steps to rebuild our party’ in his magazine – I don’t know if he wrote them himself – and they really are extraordinarily vacuous.

In some ways, they are a demonstration of the problem: exhausted phrases without underpinning – “defend our values”, “rebuild our base”, “do things better”, “concentrating on winning elections”.

Perhaps emptiest of all is the phrase “grow our membership” – No. 2 of the six points – as if somehow this was a point of issue, or as if there was some particular proposal for doing so.

I feel pretty confident that Tim had little to do with these – the read as if they were written by a random Lib Dem phrase generator – but that’s the problem: I’m sure he has six better steps than this up his sleeve – but why hasn't he set them out?

Norman Lamb on the other hand has a short book which he’s published and which at least has a plan that it might be possible for someone to disagree with.

I've tried to make sure this blog doesn't criticise people individually, and this is emphatically not intended as a criticism of Tim Farron himself, who I'm sure understands this. Also he has written a little more on the subject here.

To be fair to him, the introduction to these six steps hints at something deeper, but the bottom line is this. None of the things the six steps say should be done better - “concentrating on winning elections, building our membership, fundraising, training and development” – can be done without a great deal of rethinking the intellectual underpinnings of Lib Dem policy.

That means turning the party upside down (more thinking) and inside out (open up the party to the outside world) as well.  Otherwise we are in danger of finding ourselves campaigning using a Random Lib Dem Phrase Generator, and that won't feel good. It also won't work.

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Heathrow: a sad tale of cost-benefit analysis

Waking up to the miserable and depressing conclusions of the Davies Commission, that there should be another runway at Heathrow, reminded me of the biggest cost-benefit analysis ever carried out - to somehow calculate where to build the third London airport.

I tell the story in my book The Tyranny of Numbers and it casts a sad shadow over the current debate, with its bogus talk of 70,000 new jobs.

Back in 1969, the government had rejected the preferred site at Stansted and, for the next two and a half years, the commission chaired by the senior judge, Mr Justice Roskill, combed the evidence. 

To make sure there was a choice of sites, the Town and Country Planning Association put in their own planning application to build an airport at Foulness, on marshland off the Essex coast much-frequented by Brent Geese. An early version of Boris Airport.

Cost benefit analysis had been used successfully a few years before to defend the idea of extending the Victoria Line to Brixton. But this wasn't so much a calculation – it was a way of giving transport minister Barbara Castle an excuse to say yes, which she duly did. 

The Roskill Commission, on the other hand, were determined to work out the answer mathematically. They would do a cost benefit analysis on all the possible sites - the biggest analysis of its kind ever carried out. They would put a value on the noise of aircraft, the disruption of building work, the delay of flights, the extra traffic and they would calculate the answer. 

For the Roskill Commission, there was going to be no value judgement at all. The figures would speak for themselves.

To avoid any chance of judgement and to keep the process completely ‘scientific', the measurements were put together in 25 separate calculations. They were only added up right at the end of the process. And to the horror of some of the members of the commission, when the final addition was made, the answer was wrong.

The site they believed was best - Foulness - was going to be £100 million more expensive in cost benefit terms than the small village of Cublington. After 246 witnesses, 3,850 documents, seven technical annexes and 10 million spoken words, some of the planners on the commission felt cheated. 

In public, they stayed loyal to Roskill. The commission was excellent, said Britain's most famous planner Colin Buchanan - a member of it – “it just got the small matter of the site wrong".

The team had managed to measure the exact cost of having too much aircraft noise by looking at the effect noise tended to have on house prices. But when it came to measuring the value of a Norman church at Stewkley, which would have to be demolished to make way for the runway, things got more confused. How could you possibly put a money price on that? One joker on the team suggested they find out its fire insurance value. Everyone laughed, but the story got out and reached the press. 

Doing it like that would have measured the value of the church at just £51,000.

As it was, the government rejected Cublington for political reasons, and went for Foulness/Maplin/Boris. This in turn fell victim to the energy crisis and the airport was built at Stansted anyway.  As we know.

The planning professor Peter Self - Will Self's father - wrote a book about it as a revenge for the mauling he received at the hands of the commission's planning barristers. "It struck me at the time as strange," he wrote, "that so many intelligent people should apparently accept trial by quantification as the only sensible or possible way of reaching such a decision."

The whole thing was a "psychological absurdity and ethical monstrosity", he said. He advised economists to take Dr Johnson's advice and kick a wall hard to convince themselves that the external world exists. His attack destroyed cost-benefit analysis for nearly two decades.

What I find bizarre about cost-benefit, of the kinds put forward by the Davies Commission, is that this of nonsense gets accepted by the Treasury - which is so sceptical about cost-benefit arguments about jobs put forward by anyone else. And rightly so. 

At least Roskill's team tried to do some subtraction, but somehow Heathrow's lobbyists convince people that there will be no jobs lost by making London dirtier and noisier and by accelerating climate change.  As if somehow you can construct a financial 'package' that will offset the noise.

And there is the rub.  What anyone who loves London wants to know is if there are any limits to the destruction of London's environment - especially today when the heat becomes intense and the air like soup.

I don't live there any more. But I don't want London to become any more of a third world city than it already is - the noise and air pollution visited on the poor, the ridiculous house prices visited on everyone, and the vanity runways for the international elite who can't re-arrange the existing runway slots to accommodate new priorities.

Go to some of the nearby suburbs, like Southall, to see where it leads. Dirty, overcrowded, polluted, ruined. That's the future for London by cost-benefit analysis.

Are there limits?  Would they ever stop? Or do we really believe the Heathrow chief executive who implied we had been vacillating about a runway for half a century, when the first runway was only built by stealth, and wartime emergency requisition powers, in 1946?

It isn't vacillation.  It's civilisation.

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