How coalitions should work

This morning's (March 18) news that a deal has been done over post Leveson press regulation is a welcome development as there was a danger that it would go the way of Lords reform where all agreed on the need for a change, but nothing happened because they could not agree on the precise nature of that reform. Whatever the merits of this agreement it seems to be a good model for how coalition government should work, as opposed to how it has been working. The Liberal Democrats, for once, put their money where their mouth is and stood their ground. The government, recognising that its policy was in a minority, accepted a compromise. In other words coalition may have been successful in achieving consensus, rather than simply highlighting the differences within government and demonstrating the weakness of the junior partner. It may have been an exercise in brinkmanship, but the truth is that brinkmanship often works, as has been seen recently in Scotland and in the USA.

Two requirements for a dynamic economy

I will not claim these two truisms , but can't remember where they came from, so I am merely recycling. It could be said that there are two requirements for an economy to work efficiently - and these go back to the Roman Empire and perhaps beyond. The first is an efficient and effective method of collecting and using taxes. This invloves reducing to a minimum inefficent collecting, evasion, avoidance and corruption. It also means that ALL taxes collected should be used for the public good, as identified by government. The second is the effective conversion of savings into investment. This, of course, involves the banks, equity and bond markets and other financial institutions. In the UK we are certainly making progress in the first requirement. It is the second that remains a huge problem. The recent poor lening figures from the banks illustrates the depth of this shortcoming. Governments need to make this a major priority and this emans they will have to face down the banks and call their bluff regarding competition and the threat to wihdrw their operations. They won't, so do it.

Beastly Eastleigh

Eastleigh is an unusual constituency. It ought to be a very safe Conservative seat but has been held by Liberal Democrats for many years, probably because of a very strong local organisation. It was therefore inevitable that the by election would also be unusual, and so it has proved. The most extraordinary event, even by Nick Clegg standards, was his assertion that the LIb Dems won a 'stunning' victory. He has to be upbeat to be sure, but one suspects he may believe his own rhetoric. It was a very poor result for the Lib Dems, who lost so many of their votes, though not as bad as it might have been given the circumstances. The fees issue probably does not play too much in a place like Eastleigh because the population is very well heeled. the fees issue will dog the Lib Dems in less well off places. The only stunning thing about it was that the Lib Dems were stunned that they won. It was bad for the Conservatives - obviously - and very bad for Labour, whose candidate, whom I like in general - fought a hopeless campaign. Labour should be gaining votes simply on two issues - the NHS and inequality. It is not and that is extraordinary to see. Miliband 's role was almost invisible. It also demonstrates the severe damage that Ukip can inflict on them. Even if their vote halves in a general election, it will be enough to deprive the Conservatives of many otherwise winnable seats. The electoral system is now turning back and biting its own master ! So all three parties will be gald to see the bacl of Eastleigh at least until 2015. They will all feel on safer ground in kinder places. Who was the real winner ? Probably Boris Johnson.