If I ask nicely, could we rethink the euro?

A decade or so ago, when we were all very exercised about the euro, there were two kinds of people who were against it.  One was nationalist head-bangers; the other was the people - including Liberals - who were afraid that fluctuating exchange rates played an important role. 

I was in the second category (definitely not the first), and felt somewhat alone in the Lib Dems.

Those in favour of the euro at the time, though otherwise charming and sane, took on a kind of Napoleonic certainty when it came to discussing currencies.  Which is a way of saying that they didn't engage much with the exchange rate argument.

There seemed to me to be a danger that one interest rate could not possibly suit the whole of Western Europe.  It was bound to suit the cities at the heart of Europe, but prevent those peripheral places and nations from devaluing when they needed to. It would trap those poorer cities and nations in a currency which was too valuable to suit them, and would usher in fierce populist right-wingers in their devastated cities.

Unfortunately, that is what seems to be happening - and, sure enough, in the outlying nations like Portugal and Ireland.  Before the euro, Ireland could devalue and balance their economy by doing so.  Now they have to cling to the mast, cut everything in sight and hope - like Phineas Fogg, chopping up the train to feed the fire that drove it - that there will be something left at the end.

That is an illiberal disaster and it should not have happened.  None of which suggests that the euro should be abolished.  We need more international currencies.  But we can't survive without other currencies that serve our needs alongside them.

There is still a Napoleonic tendency that doesn't really believe in economics.  I'm hoping maybe, maybe, if I approach them very delicately, we might have a rethink on the euro...

Why Liberals might like a good royal wedding

The prospect of another royal wedding makes me feel old. The last big one seems like yesterday – my first few months as a reporter on the Oxford Star – but it is actually, by definition, a generation ago.

Not quite sure what I’ve been doing in the intervening years. Washing up, I think.

There are Liberals among us who believe their political beliefs lead them inexorably into being republicans. So let’s mark the occasion by explaining why Liberals really ought to be constitutional monarchists.

I suppose the reason I would describe myself like that is history. It is the antidote to the kind of utilitarianism imposed on us from New Labour, where their ignorance of history led them to make the most extraordinary mistakes (invading Iraq, for example) - plus an all-pervading dullness and technocracy which is fast becoming the main thing I remember from the Blairbrown years.

Citizenship is a key Liberal concept, and – to be citizens – we need to know who we are, as Simon Schama said in the Guardian last week. The continuity of the institution of head of state provides an absolutely vital factor in this. We don’t have to navigate our self-identity via President Blair.

But the real reason is that the monarchy is the antidote to fascism and extreme nationalism. Monarchies take those emotions and render them harmless in a little bit of ceremony, flag-waving and tradition. Without that lightning rod, the inevitable forces of nationalism - which are powerful in former empires - can become fierce and demanding, because there is no monarchical tradition you can compare them with and trump their patriotism with.

Throughout the twentieth centuries, former monarchies which became republics invariably became fascist states, with disastrous consequences for us all.

It is all very well to somehow tidy away the monarchy, because it somehow seems more equal to do so. But then it won’t be us that will suffer first from fascist violence. It is cheap at the price.

Traditionally, monarchs are supposed to be bastions against the tyranny of the executive. That was why the Peasant’s Revolt appealed to the king. We have the worst of both worlds – the monarchs powers are used by the Prime Minister to bypass Parliament. It isn’t the monarchy we should worry about as Liberals – it’s the powers of the monarchy.

Tough on inequality, tough on the causes of inequality

Well, I have scraped back onto the Liberal Democrats' Federal Policy Committee.  Rather by the skin of my teeth.

So thank you so much to everyone who voted for me. 

Every time I get re-elected onto the FPC I feel a little bit more strongly that I didn't try hard enough to shift things over the previous twelve months, and I feel that even more strongly now I have been on it for twelve years.  So I shall try very hard not to let any of you down this time...

Because everything is changing now.  For the past twelve years, the policy committee has been about agreeing safe policy that ruffles no feathers, and that fits neatly into a small box marked 'bright ideas, not too dangerous'.  Heavens, that has to change now - at least if the Lib Dems are to survive their encounter with government.

The policy committee isn't really designed for achieving anything else, but we have to somehow make sure it does.  Starting with a distictively Liberal vision of public services - which are human-scale, effective and preventive (rather than inhuman-scale, ineffective and symptomatic in the New Labour model).

But what strikes me most about our policy failures over the past decade, and our failure to spell out a distinctive public service vision is one of those, is that it is way beyond time we rid ourselves of the old Fabian legacy.

Fabians have put tax and benefits at the heart of their policy, and have led Labour to do the same.  The result is that the causes of inequality - of the stark divisions between rich and poor - have been left untackled.  They are happy just to pick up the pieces after the damage has been done, and ameliorate it a little.

No more.  If I have anything to do with it (and maybe I will), the Liberal Democrats will be constructing radical policies that deal with the causes - which means tackling corporate privilage and monopoly power.  The sooner the better, as far as I'm concerned.

Why someone might say 'bring on the cuts!'

I’ve had a fascinating day in Wales yesterday, talking about co-production to the voluntary sector in Pembrokeshire – meeting some amazing people, and getting what was, to me, a new take on the spending review and the cuts.

I was taken aback by how frustrated so many of the people there seemed to be with the county council, and with local government in general. For its slowness, its risk averse caution, its silo-based bureaucracy, its lumbering lack of imagination.

There was a great deal of fear about the cutbacks, but that was only half the story. I don’t come across the other half of the story so much, until I go outside London, and this was no exception. There was a feeling that only extreme austerity had any chance of re-creating the public sector in a way that was genuinely flexible, bottom up and – most important this one – able to use the resources effectively that people represent.

“Bring on the cuts,” said one of those at the conference I spoke at. I’m sure that isn’t the attitude of everyone; the surprising thing was that it could be said at all.

The theorists of ‘co-production’ argue that, at neighbourhood level, some social problems may actually be solutions to others (for example, lonely older people and children who need reading help – you could tackle them separately, but it might be most cost-effective to link them together).

But being in Pembrokeshire reminded me of the gulf that may now open out between the imaginative local authorities – using their newfound powers – and the unimaginative ones.

The director of one local organisation told me that they had re-organised their various programmes for older people so they could feed off each other. No more separate silos for fire prevention, befriending, visiting and other services.

The response of the local authority? As soon as they heard that the member of staff did not have ‘fire prevention’ in their job title, they cancelled their contract for fire prevention advice.

Don’t waste a good crisis, says Richard Kemp. And maybe, just maybe, the financial crisis is so huge that we can carve out a public service system that not just works, but works on a far more local, responsive and humane level.

But that requires a little imagination from the statutory sector, and in some places – thanks to two generations of recruitment for bone-headed obedience – that is in very short supply. The danger is that we will keep all the bureaucracy and hopelessness, and lose a great deal of valuable, civilised institutions as well.

What we need, politically at least, is a discussion about how we can make sure – given all the constraints of localism – that what we actually get is the other way round.

Post offices: three cheers, one thumbs down

Heavens, this coalition business is certainly tough on the blood pressure.  Never before has it been quite so stressful turning on the news or opening a newspaper.  It isn't even as if my over-reactions to almost everything were exactly simple. 

All of which is a way of providing a verdict on Ed Davey's announcement about the future of local post offices.  In short, three cheers and one major thumbs-down.

Cheer 1: the end of Labour's local post office closure programme is a major step forward.  The New Economics Foundation worked out tht a local post office was worth about £300,000 flowing through the local economy of a ward.  These things matter and it is a breakthrough that, thanks to Ed and his team, we have a government that recognises it.

Cheer 2: the admittedly distant prospect of mutual ownership of the network, by customers and staff.  That is bold, imaginative, Liberal and absolutely right.

Cheer 3: letting many more people access their bank accounts in post offices, as long as that means they can bank their takings.  This is another crucial element in local economic revival, though it is hard to see where the extra resources will come from this to sustain the network.

But there is a major thumbs-down.  The failure to grasp the opportunity and launch a proper post bank, like those in Germany, Italy and New Zealand, not only flies in the face of our manifesto commitment - it is also profoundly wrong.  Why should our competitor nations have a local banking infrastructure when we have a small oligopoly of mega-banks whose attention is elsewhere?  We have the local post office infrastructure - it badly needs a major project to sustain it financially, yet the government have backed off the postbank idea.

I'm extremely sorry about that, and I hope we can revive the idea in the next Liberal Democrat manifesto - and preferably some time before.  Especially since I am far from clear whether the annoucement is enough to sustain the network as it stands.  Just ending the closure programme isn;t enough; we have to find ways of making it pay for those who run it locally.

Lib Dem successes on post offices - and maybe even guilds...

Last week's announcement that the coalition has ended the post office closures programme is a major step forward.  Read the full blog here:

http://www.neweconomics.org/blog/2010/11/08/the-post-offices-and-the-guilds

But what really warmed my heart was a speech by a Conservative BIS minister quoting William Morris, calling for a return of the guilds, and condemning "the anonymous, impersonal supermarket or out-of-town megastore".  I look forward to the coalition's plans to tackle them - but I'm not holding my breath...

The perils of obsessive measurement

One of the great achievements of the coalition so far is the rid us of most central government targets.  The trouble is that Whitehall has agreed to get rid of them without really understanding why.  The result is, I'm afraid, is that we are tiptoeing right back where we came from - at least that is, I believe, what the flagship policy of 'payment by results' will mean.

It's a good idea in theory.  In practice it will mean targets again, with all the waste and bureaucracy and distortion that they caused.  But it isn't too late and there is an alternative.

This is what I've said about it on the website of the Royal Society of Arts:

http://comment.rsablogs.org.uk/2010/11/01/perils-obsessive-measurement/