Liberal Vision

Peter O’Bore’s Erroneous Comparison

Political discourse is full of unhelpful comparisons: shrieking keffiyeh wearing activists like to demonize Israel by comparing it to Nazi Germany or apartheid South Africa and unlettered Eurosceptics (usually found skulking the Telegraph’s comments section) like to compare the European Union to the USSR. Pro-Iraq War Tories had the impertinence to dub Charles Kennedy ‘Charlie Chamberlain’ in the lead up to the 2003 invasion. And not to revert to easy-Lib-Dem-clap-on-Question-Time mode, we all know how that turned out…

So those uneasy with inappropriate analogies must have been taken aback by the Centre for Policy Studies publication ‘Guilty Men’ (if you don’t want to read the whole thing, you can view a brief précis at The Spectator website).

The term ‘Guilty Men’ of course refers to the classic text of 1940 that condemned fifteen British public figures for their appeasement stance against Germany throughout the 1930s. The journalist Peter Oborne and his colleague Francis Weaver have appropriated the term for their critique of British pro-Euro public figures of recent decades. Today’s ‘Guilty Men’ include Danny Alexander, Tony Blair, Paddy Ashdown, Ken Clarke, Will Hutton, Michael Heseltine and Nick Clegg amongst others.

In the foreword, Peter Jay justifies the title:

“In choosing the title of their book from that famous earlier study of national betrayal by the nation’s élite, the authors of this book  have chosen well. Like the appeasers, those who after 1950 worked to deliver their country into the hands of a foreign power…” (piii)

Eurosceptics may have the upper hand given the current political and economic turmoil unfolding in the Eurozone but that is no excuse for historical ignorance by applying such a loaded term to Europhiles (even if they have indulged in some unsavoury character assassinations in the past).

All in all, there isn’t anything particularly revelatory in the book. We all know about the Beeb and FT’s pro-Europeanism just as we know that The Daily Express, The Times, The Sunday Times, The Telegraph, The Sunday Telegraph and The Sun are not too keen on the whole project.

Oborne and Weaver’s work is also based around a number of counterfactuals such as:

“Mr [Danny] Alexander ran the pro-euro campaign, and had he had his way would have steered Britain directly to economic catastrophe.”

Yet it is just as easy to respond with another; that is, if the criteria set out at Maastricht had been adhered to, then the Eurozone would not have been in the mess that it is in.

Invoking Churchill in their final chapter, they call on a number of British politicians to come out and apologise: “Top of the list comes Tony Blair, who during his party conference speech of 1999 implied that Conservative euro-scepticism stood  in the foul tradition of South African racism. There can be no  place in our national debate for this kind of cheap and debased argument, which sadly poisoned so much of the British debate over the single currency.” (p65)

But come on Mr Oborne, just look at your title. Are Europhiles analogous to the Nazi appeasers of the 1930s? Really?

Greece Is The Word

How to solve a problem like Greece? Former queen of daytime chat Fern Britton was flummoxed on the BBC’s Question Time on Thursday night. And like David Mitchell, I don’t really know either. However, on the wider issue of the durability and endurance of the European Single Currency – and to evoke that quote widely attributed to Mark Twain – some obituaries are prematurely written. Even as early as the turn of the Millennium, the late Milton Friedman prophesied its demise.

But claims of the Euro’s death have been greatly exaggerated. The current membership may change slightly with the most damaged economies perhaps opting to revert to their former national currencies, or in another scenario we could see the emergence of two monetary unions: a ‘Debtor €’ comprising the Med countries and a ‘Creditor €’ including Germany and other low-inflation states.

Personally, I’ve felt largely ambivalent on Euro membership. The fanatics for and against frequently bore me and the whole debate is couched using hyperbolic language. Nonetheless, I don’t think the Euro per se is intrinsically flawed or irredeemable. In the case of Greece, Europe would have been a lot better off if it had stuck rigidly to the rules set out at Maastricht, thus avoiding premature or inclusive membership.

Greece consistently breached the 3% deficit limit even prior to the current crisis and went unpunished despite the legal duty to comply with convergence criteria. Their unreformed public sector and high and unstable rates of inflation should have raised eyebrows prior to Eurozone accession. It is widely recognised that they were economical with the actualité and massaged the figures in order to meet entry requirements, something acknowledged by the former ECB Chief Economist Otmar Issing:

“When I worked for the ECB, I suffered every time countries didn’t meet the criteria. Greece cheated to get in, and it’s difficult to know how we should deal with cheaters…There should have been better monitoring, better scrutiny and more sanctioning. This crisis wasn’t unavoidable.”

As in any other private members club, individuals are obliged to abide by the rules. Accepting EMU rules, devaluation or inflationary monetary policy were no longer avenues the Greeks could go down. They did nothing to lower their public debt but instead went on a spending binge. It does not seem fair or just that taxpayers’ money is being moved from countries who stuck (by and large) to the respective criteria to those who did not.

European leaders should not use the Greek crisis purely as a catalyst for more integration which would only further embitter sceptical national populations but rather to end the slack monitoring of the fundamental rules of the club.

Other Member States should not end up with a hangover for a party they did not attend.

In Insurance, markets and equality collide

Insurance is a difficult, not widely understood industry, in which equal treatment and markets collide. Pensions are very specific form of income insurance.

What Insurance does is put a price on risk. It does that by assessing the different profiles of groups, across thousands of data points, and evaluates the likelihood of default.

By nature this work is discriminatory. If for example it is the case that women generally have fewer motor accidents than men, they pay less for their car insurance.

And this is usually a good thing. The differential pricing discourages higher risk groups from engaging in risky behaviour while benefitting the cautious.

It is not entirely fair. Cautious male drivers pay more than girl-racers, at least at first, until the weight of evidence of their actual behaviour cancels out the group assumption.

That though is largely unavoidable. Perfectly fair personal insurance would require perfect foresight and perfect information about an individual. Neither will ever exist. Even future health insurance based on genetic profiling is still a probabilities game. Insurance needs to make assumptions.

Today’s furore about an CJEU ruling that gender discrimination in insurance and pensions is illegal then removes one assumption they can make.

It is not as the press are reporting a particularly ‘bonkers’ judgement by the Daily Mail’s least favourite Euro-quango. More a direct consequence of the law agreed between Member States in the European Council in 2004, as this analysis makes clear.

If the decision is daft, it is direct consequence of a daft consensus between national governments.

Whether it is so daft is where economic and political liberalism offer conflicting advice. Purists from either tradition will reach opposite conclusions. Pointless intervention that will distort prices and create many examples of reverse discrimination, or a valuable protection against undue penalty.

In the muddy middle we tend to believe exemptions from discrimination prohibitions should be proporionate, evidence-based, and carry few unpleasant unintended consequences. You might consistently believe that race discrimination in insurance was completely unacceptable (it creates a poverty trap), whilst welcoming post-code discrimination (you can move), and gender discrimination (men die younger and should have cheaper pension annuities).

The data on this specific change though would tend to suggest the status quo is pretty reasonable. It’s not clear what problem this change is trying to solve or what benefit it brings. 

Discouraging testerone-fuelled video games fanatics from competing for the M40 title strikes me as generally more beneficial than the resolving the injustice it imposes on Kid Cautious in his lonely struggle to achieve perfect cruise control sensitive to the conditions of the road.

The Council of Ministers need to think again…

Prisoner votes uses same law as Gibraltar votes

The basis of the current debate on votes for prisoners is the Article 3 of the First Protocol of the European Convention on Human Rights, and a case bought by a former convict, John Hirst, arguing the UK’s blanket ban was in breach.

“The High Contracting Parties undertake to hold free elections at reasonable intervals by secret ballot, under conditions which will ensure the free expression of the opinion of the people in the choice of the legislature. “

In 2005 he won. Or rather the court decided the ban was “disproportionate”, upheld on appeal. Meaning the onus was on the UK to demonstrate why for example shoplifters and those in prison for a day should not vote, if that day happens to coincide with an election. The deprivation of liberty should be proportionate to the crime, argues the court.

The expected compromise is that UK law will be adapted, in line with most other European countries, to raise the bar, perhaps to sentences of four years or more. The line from gloating idiot Hirst, that “murderers, rapists, and paedophiles” will get the vote, is then unlikely to be correct. The Liberal Democrat position is that removal of the vote should clearly be a part of the sentence, which is sensible. Keeping prisoners registered to vote in their home rather than prison constituencies would avoid prisons influencing marginal seats, and the miserable politics of canvassing votes you’d rather not have.

It should be noted though that some prisoners, those for example guilty of civil offences such as non-payment of fines can already vote.

It should also be noted by the Right, that the same article of the Convention was used by the Gibraltarians and Conservative Lord Bethell in 1999 to secure their voting rights in European elections, against the wishes of Spain and the then Labour government. The Liberal Democrats in the Lords shamefully supported Labour trying to stop this happening, on the ludicrous grounds that it might “complicate rather than help… relations with Spain”.

Our Party, or rather a part of it, then rather inconsistently seems to support universal human rights for those deprived of their liberty for some criminal offences, but not for law abiding residents of an overseas territory occasionally deprived of their liberties by an aggressive neighbour.

Conservatives conversely seem perfectly content to use the convention when it suits. Labour believe passionately in rights, unless it means bad headlines, at which point they are prepared to risk paying large amounts of compensation to prisoners from the national Treasury.

Dodgy principles and politics all round.

EU SWIFT Vote Ends Bank Data Sharing

This is quite possibly one of the best things I’ve heard come out of the EU in some time and yet has been woefully under-reported:

The European parliament rejected an agreement on sharing banking data with the US yesterday, delivering a potential setback to long-running US efforts to track down terrorist financing.

Citing concerns about European citizens’ privacy, the parliament voted to scrap a deal that would have given the US continued access to data compiled by Swift, a co-operative that handles interbank money transfers.

The move means that for the first time since the September 2001 attacks, the US will not have access to large parts of the Swift database, which includes information from more than 8,000 financial institutions globally.

Crucially in this vote it was the Liberals (ALDE) who helped sway the vote in favour of our right to privacy. We should be very proud of the role LibDem MEPs played in ensuring this result. The end result was 378 MEPs voting to block the data sharing and 196 voting in favour of it’s continuation with 31 abstentions.

One has to wonder at the sheer nerve of the US:

The US had lobbied hard to keep the data flowing, with Hillary Clinton, the secretary of state, and Tim Geithner, the Treasury secretary, both contacting Jerzy Buzek, the parliament’s president, in an attempt to sway the vote.

The US Treasury had previously obtained the data through repeated subpoenas sited on US soil, but a decision by Swift to move key computer servers to Europe from last month means Washington must now persuade the EU to hand over the data voluntarily.

EU governments agreed, on an interim basis, to continue co-operation last November. Though some had reservations, most were swayed by US arguments that the Swift data led to valuable intelligence that could prevent terrorism in Europe.

No matter how the US try to spin this, it is a victory for the little people against the state. The US demands were grotesquely disproportionate to the threat posed by terrorism. Dutch Liberal rapporteur Jeanine Hennis-Plasschaert explained:

“If the US administration proposed something equivalent to the Congress – transferring in bulk all banking data on American citizens to a foreign power – we know what they would say”. In other words, the agreement provides for no reciprocity for the EU.