We should only arm Syria with embedded personnel

If the UK government is considering arming Syrian rebels, it should also consider embedding British personnel with rebel forces.

This arms supply method was developed by Fitzroy MacLean in his dealings with the Partisans in WW2. It is accounted for in MacLean’s famous book Eastern Approaches.

Trust will be the tst for Miliband at the general election

In 1997, Tony Blair won an election by occupying the traditional home ground of the Tories. In 2010, Gordon Brown fought off the Tories by creating a clear dividing line between us and them. Today, Ed Miliband’s strategy is less easy to define, but I contend that it involves avoiding debate with the Tories. This is not good. This can be extremely damaging.

Miliband said at conference 2012: “The Labour party lost trust on the economy. And under my leadership, we will regain that trust.” I don’t think he has increased trust in the Labour brand. In some ways it has been damaged since he made this speech.

Both QE and FLS are in a mess

George Osborne’s nanny state policy responses are failing our banks and perverting our markets. In the midst of the political rhetoric on welfare and debt, there is one economic policy that the chancellor has implemented which has a genuinely significant impact: Quantitative Easing (QE).

This has had a profound impact on the economy.

The normal way for the money to be supplied into the economy is for banks to provide loans. If ten £1k loans are made for every deposit of £1k, then £9k of new money has been put into circulation. The banks are liable for it if it isn’t paid back, so they have become expert at judging risk. The supply of money makes a good demonstration of the private sector achieving a public good, normally.

The problem is that lending is too slow. As a result there is a lack of new money going into the economy but people are continuing to repay the loans they previously took out. The net effect is less and less money in the economy. If money is the oil on the cogs, then without it, the machinery will grind to a halt.

As a policy response, we’ve had QE. The Bank of England is creating money on a grand scale. Under Quantitative Easing they have so far produced an extra £375billion. In this respect it is the largest nationalisation of private sector service since the 1945 Labour government. I wonder if George Osborne realises that.

For a long time the banks have been receiving contradictory instructions from government. They must lend more, but they must increase their capital reserves. It’s like telling a schoolboy to spend his pocket money then scolding him for not saving it.

As a result, innovative policies are not only proving expensive but also potentially counter-productive. The government driven Funding for Lending Scheme (FLS) aims to subsidise bank lending for small businesses.

It is bad economics. It has lowered the interest paid to savers, but achieved little increase to the loans given to small businesses. With the state competing with savers, the banks no longer need to attract deposits as they have cheaper source with government cash.

Ending Legal Aid will lower standards.

The government’s reputation for incompetence shows no signs of abating, as they mimic the management ethos of Mid Staffs hospital and apply it to the criminal defence service.

These are government proposals which are to be applied to solicitors’ firms providing advice in police stations and courts. They propose the removal of choice of solicitor from the service user, in order to create a greater economy of scale and drive down costs. But, by doing so they will remove the competition which drives up standards and establish a local monopoly, rarely the most effective model to promote efficiency.