Look-at-me MPs is not the answer to sleaze

A national newspaper phoned me last week asking if I was planning to stand against any of the sleaze MPs caught in the expenses row. My first reaction was that I couldn’t imagine see myself sitting in parliament with Esther Rantzen and I don’t look good in white.

But, look, you should never rule anything in or anything out. The fact that we have a Chancellor of the Exchequer intending to stand again for parliament after flipping his house four times in four years and charging tax advice to expenses in direct contravention of his own Inland Revenue rules, is enough to drive anyone to desperate measure. If there were a way to arrange a kind of electoral citizens arrest for the worst offenders, without actually electing active Members of Parliament, I would be first in the queue.

But fantasy politics aside, I really don’t see that electing a lot of media pundits and c-list celebrities standing for parliament is the answer to the crisis. I can’t think of any independents in the Scottish parliament or in Westminster who have made a significant contribution, apart from the magnificent Margo MacDonald - officially the country’s most cost-effective politician - and she of course had a long history in front-line Nationalist politics before going indie.

If a lot of self-opinionated populists were to stand for parliament, like the Telegraph columnist Simon Heffer - who is threatening to stand against the Tory MP Sir Alan Haselhurst - or like Kelvin MacKenzie or Richard Littlejohn, we could end up with the politics of the mad house replacing that of the duck house. How does Richard Branson MP or Sir Alan Sugar MP grab you? The Italian prime minister, Silvio Berlusconi is what we might end up with ultimately - a media personality politician who is elected because he controls most of the media. The political parties may seem an anachronism, but they remain the only plausible aggregators of policy ideas and the only organisations capable of forming a government.

However, something needs to be done to kick start the rehabilitation of the parties. The two main party leaders, Gordon Brown and David Cameron, seem paralysed by the crisis, unable to act because of the enormity of the consequences of cleaning up the Commons. They have tried to divert attention from the expenses scandal by making declarations of constitutional and political reform. All well and good, but the public want action to remove miscreant members, now, before changing voting rules.

And where is the Prime Minister at this moment of crisis? Gordon Brown has hidden himself in his flipped home in North Queensferry hoping that if he keeps his eyes closed long enough that the story will go away. Both parties have been waiting for the public to get bored and the press start to turning on the Daily Telegraph for getting the scoop of the century. But it ‘s not going to happen. There is an arrogant assumption in in Westminster that the voters are essentially stupid people with very short attention spans. But the public anger shows no sign of abating, and events are now moving out of party control. The departures last week of the “double dipping” Tory MP Julie Kirkbride and Labour’s dry rot specialist, Margaret Moran MP, suggest that the process has developed a momentum of its own.

David Cameron, who had promised swift and decisive action, slipped badly last week. He defended the indefensible Kirkbride, who seemed to be supporting most of her family her expenses, until she was eventually forced out. Cameron was hoping to get away with losing a few old buffers, already heading for retirement, and keeping the younger telegenic Tory MPs like the Bromsgrove MP. But this strategy no longer looks plausible. The line is not holding, and the public want blood. Shadow cabinet figures like Alan, “constant gardener” Duncan, Cheryl “dog food” Gillan and David “lightbulbs” Willetts must be feeling their collars. Looking at the Daily Telegraph lists, there could be another forty Tory members following them out the door. Conservatives have been responsible for the most of the headline-grabbing expenses, like moat cleaning, duck houses, tree surgery, learing moats, extending mansions, building servants quarters at public expense. Cameron claims he is stunned by these revelations, which suggests he is completely out of touch with his own party. He is promising retribution, and it will have to be swift.

Over at Labour, up to a quarter of the cabinet may have to go, led by Hazel Blears, Geoff Hoon and Alistair Darling, and followed by a similar number of Labour MPs as depart the Tory becnhes. Brown’s course of action was determined the moment he condemned Blears’ behaviour, rightly, as “totally unacceptable” two weeks ago. The communities secretary flipped her house three times in one year in order to maximise tax free capital gains and pay for improvements. As the former deputy leader of the Labour Party, Roy Hattersley said on Newsnight last week, Blears’ behaviour is simply incompatible with membership of the Labour Party, let alone the government. Brown can’t escape the consequences just because he is afraid to antagonise the Labour sisterhood. Eventually, she will have to join Margaret Moran on the dole queue, and her departure will drag down other flippers like Geof Hoon.

Some say this is arbitrary and against natural justice. Due process should be observed and all given a right to defend themselves. Maybe. But the problem here is that they will all say that they were only obeying the rules, victims of the system, couldn’t help themselves. Strictly legal standards of guilt and innocence don’t really apply in politics, where MPs are subject to the court of public opinion. The reality is that these MPs have been found guilty as charged and will be removed at the earliest election, if Labour doesn’t move first.

There are wider issues here too. The implosion of parliament’s moral authority is a serious matter. I spend a lot of time speaking to students and organisations like the Scottish Youth Parliament. In the past I have always told them that, while there may be problems with individual MPs’ expenses, the vast majority of politicians are not corrupt, and don’t go into parliament for personal gain. I can no longer say this in all conscience. There is simply too much evidence of conscious and premeditated dishonesty. Too many MPs were systematically milking the system and making tens and even hundreds of thousands of pounds of tax free gains. By any reasonable understanding of the word, they are crooks. It is intolerable that any of them are still in their jobs, when in any other walk of life they would be out on their ear. We are waiting.

The Duck House Parliament

“UK opposition leader dumps lawmaker over duck pond”, said the Taiwan News. It was the story that caught the imagination of the world. The duck island, charged to expenses by theTory MP Sir Peter Viggers, turned the great British parliament into an international laughing stock. Quackers...out for a duck...you silly ducker. The pond ornament was even spotted on Google Earth, until it mysteriously disappeared from aerial view on Friday. What, one wondered had the mallard community done to deserve this indignity?

Today presenters were reduced to helpless laughter, but in the House of Commons they weren’t laughing as parliament’s dignity and authority finally collapsed under the relentless bombardment of sleaze stories from the Daily Telegraph. MPs cowered in disgrace, afraid to face to their constituents and some - we are told - were contemplating suicide. The Speaker, Michael Martin, was forced to resign - the first to do so for three centuries. Not to be outdone, the House of Lords suspended two Labour peers, Lord Taylor of Blackburn and Lord Truscott for offering parliamentary services for money - the first in three hundred and fifty years.

Both institutions have been declared dysfunctional, unfit for purpose, ready for the knackers yard. A very British revolution, said the newspaper that had for fourteen days exposed the venality of MPs. It seems that the Fourth Estate - the press - is the only part of the British constitution that is still functioning. Just think what Westminster would be like if there had been no newspapers? What would politicians be doing now - buying duck mansions?

As the revelations rolled on and on, a window was opened into the private lives of Honourable Members. From tree surgery to trouser presses; from alarm clocks costing £250 to 28 tonnes of manure. MPs who claim to be servants of the people had been dipping deep into the public purse for their own enrichment. Buying London flats for their daughters at public expense; building property empires through “flipping” = dishonestly doubling and tripling their second home allowances. Lavishly equipping their own homes and gardens with luxury items paid for by the taxpayer.

. “The public are just jealous because I have a very, very large house”, complained the Tory MP for Totness Anthony Steen questioned about £80,000 worth of work to his country estate. “What right does the public have to interfere with my private life?”. What right? What right do voters have to ask how one of their MPs could justify claiming that £80,000 garden improvements was necessary for the conduct of his parliamentary duties? This arrogant sense of entitlement is what has most outraged voters - ordinary mortals who have to pay for their own houses, their own food and their own taxes. Who do not regard £63,000 as poverty pay and cannot understand how MPs could have become so morally deficient, so divorced from reality and so poisoned by greed that they would casually defraud the taxpayer of tens and even hundreds of thousands of pounds, and then claim that the public has no right to question it. By their own mouths they have condemned themselves.

Enough, cried political leaders, leaping onto the bandwagon of public anger. The tumbrils, we were assured, were trundling down Whitehall to claim the miscreants. Except of course that they weren’t. If this is a revolution, then it has been a largely bloodless one. Very few MPs stand to lose their jobs over this epic scandal, the worst since the Great Reform Acts of 1832 ended the rotten boroughs. There has been a lot of talk about criminal charges, about resignations and deselections, but no sign of handcuffs. A number of superannuated knights of the shire have stood down to spend more time with their moats and arboretums. A couple of Labour MPs have thrown themselves on the mercy of their constituency parties - though in the cases of Hazel Blears and Shahid Malik, the local parties have backed the disgraced MPs. Labour has set up a committee to investigate miscreants, which everyone assumes will spare no effort to sweep the whole scandal under the carpet.

Gordon Brown ruled that the Communities Minister Hazel Blears’ flipping her second home and avoiding capital gains tax was “unacceptable behaviour”. But it appears to be acceptable in Her Majesty’s Cabinet. For, after pressure from Blears, the prime minister cravenly back-tracked and said that she was "doing a great job". We soon learned why Brown had to give in : other cabinet ministers were in the same disreputable boat and were making clear that if the PM didn’t back them the government might fall. Geoff Hoon, the Transport Secretary had made a gain of £300,000 on his second home, paid for on expenses, without paying any capital gains tax, and despite having had the use of a grace and favour residence at Admiralty House in London. James Purnell, the work and pensions secretary, had also flipped homes in order to avoid tax on profits made on a London property financed by his expenses. He even billed the taxpayer for an accountant to help him avoid tax. Brown is not secure enough in his post to stand up even to a cabinet of crooks.

Of course, they were victims of “the system” as they keep saying; MPs didn’t break any rules. But in the court of public opinion - as Harriet Harman memorably put it - they are guilty as hell. Pocketing hundreds of thousands of pounds on properties bought with public money is legal theft. MPs expenses are there to allow parliamentarians to do their jobs, to give them accommodation when they are in London. The second homes allowance is not there to provide not seed corn for property empires. Any financial gain made on property transactions financed by the public purse should to back to the public purse.

Resignations and deselectons are needed, not just for spectacle or to appease the mob, but to vindicate the honest MPs who didn’t stick their snouts in the trough. And yes there are some. The Labour MP, Laura Moffat, could have cashed in like Hoon, but chose instead to sleep on a camp bed in her office when the house is sitting late. Not all MPs are waiting nervously for the four o’clock phone call from the Daily Mail. The Stroud MP David Drew travels standard class to London and stays in a Premier Inn. Chris Mullin, the former Labour minister shot to fame last week for claiming a black and white television licences. There are hundreds of MPs who have not been flipping, bending, fiddling and dipping - but if the guilty ones are exonerated, what incentive do they have to stay clean? Where is natural justice?

At least David Cameron has been prepared to condemn the worst practices of Tory MPs without equivocation. He made clear to Anthony Steen that the public did have a right to know, and that it was time for him to go. He condemned the duck house MP, Sir Peter Viggers unreservedly and while he has not actually withdrawn the whip from the miscreants, he has been prepared to draw a moral line in the sand. He forced his closest aide, Andrew Mackay, to resign after it emerged that he and his wife had been “double flipping” and charging both their London and their constituency homes to expenses. Mind you, Cameron has not condemned the practice of profiting from second homes. This may not be unconnected to the fact that he is one of the beneficiaries of this arrangement. He also claimed money to have his wisteria removed which is not quite in the duck house league, but an eyebrow-raiser nevertheless.

There’s no doubt that Gordon Brown has come out worst from this affair. He has been weak, blustering, confused. He told MPs at prime ministers question time that holding an election now would cause “chaos”, a remark which betrayed a contempt for democracy in a leader who gained his office without any election at all. Brown’s premiership is now beyond hope, his government heading for the rocks, his reputation destroyed. It was particularly cringe worthy seeing him air-kissing Joanna Lumley as if he’d had nothing at all to do with the government’s attempt to deny citizenship to the Gurkhas. Brown is now at the mercy of a cabinet of desperate men and women on stay of execution, determined to cling onto ill-gotten gains and willing to expose his hypocrisy as a confessed house-flipper himself..

The best thing Brown could do is set a date now for the general election, no later than the autumn of 2009, and convene a constitutional convention to prepare a manifesto for change, not just to parliamentary expenses but the whole system of government. Parliament must be restored to centrality in political affairs, the powers of the executive curbed, and the role of MPs redefined. In this Sunday Herald opinion we propose a range of reforms which this convention should investigate.

However, there is something more to be considered here than just the constitution, desperately though that is in need of reform. The collapse of parliament’s moral authority has not taken place in a vacuum; it is part of a general decline in standards of public life over the last three decades. We have seen the leaders of great institutions, like Sir Fred Goodwin of Royal Bank of Scotland, shamelessly enrich themselves why they helped to destroy their own companies and undermine British economy. Anti social behaviour by plutocrats has wrecked the security of a million of families who face unemployment in an economic recession caused by excessive leverage and risk-taking by the banks. And now politicians are up there with the bankers as candidates for the lamp post decoration.

I have spent nearly thirty years watching politicians in Westminster and Holyrood, but even I have been astonished to discover what has been going on. Of course, the Fees Office is partly to blame for running a lax system, but that doesn’t explain why so many Labour MPs, none of whom came into politics for the money, turned to self enrichment. I think it may go back to the “prawn cocktail” offensive in 1992, when the late Labour leader, John Smith, with colleague Mo Mowlem, launched a campaign to persuade the City of London that they were safe with Labour. Thereafter Labour MPs became much closer to the financial world, and many rising Labour politicians, like Patricia Hewitt, spent time working for city institutions. Mo Mowlem married a banker. Financiers from Goldman Sachs and Merrill Lynch spent time in the cabinet office, and took prominent roles in government, like Baroness Shriti Vadera, Brown’s key city adviser.

Some time after the turn of the century, as the property boom began in the South East of England, and bankers started paying themselves colossal bonuses, MPs stopped measuring themselves against the standards of their constituents and took to comparing themselves to the financial types they had taken to rubbing shoulders with in the City. From Tony Blair down, they resented seeing people with no better qualifications then they had earning mega-salaries. Unable to afford decent London houses, they used their flexible friend, the expense account, to even the score, surfing the housing boom to make themselves feel just that little bit richer. What never seems to have occurred to them was that the property bubble they were benefiting from was crucifying young families with debt.

Now the property bubble has burst and so has their credibility. Labour was captured by the financial interests in the city in much the same was as were the regulators in the Financial Services Authority. They felt both financially and intellectually inferior to the money managers, which is why they allowed the credit and property bubble to inflate to disastrous proportions. Tony Blair, true to form, got out when the going was good, and now has a comfortable sinecure in JP Morgan bank. But the rest of them, now dreading the prospect of having to face the voters in an election, have been left high and dry. They are loathed by their constituents, abused by the media, and laughed at by politicians in countries with much lesser claims to parliamentary probity. The members of the duck house parliament will go down as among the most disreputable in the long history of British democracy. The only positive is that they have ensured, by their behaviour, that parliament and the British constitution, must now be subject to radical and irreversible reform.

MPs expenses: Electoral reform is the answer.

Why have members of parliament lost their sense of purpose and self-respect? Why do so many of them apparently see elected office as a means of enriching themselves rather than improving the lives of their constituents? The reason is that ordinary MPs in Westminster have very little power: they are in a very real sense a waste of space, superfluous, lobby fodder. Many have become self-centred careerists, happy to do the bidding of the party whips, provided they get to put their snouts in the trough.

We need to make give MPs a proper job, with real responsibility. There is a fundamental deficiency at the heart of our democratic system which is the source of much of what is wrong in Westminster: the unfair electoral system. We do not have democracy in this country, but elective dictatorship by prime ministers given inflated majorities by a fundamentally unsound and unrepresentative method of voting in general elections. This allows the executive to ride roughshod over parliament and ignore the will of the people.

To revive parliamentary democracy we must first of all make parliament democratic. In 2005, Labour won an overall majority of 66 seats on just 35.2% of the vote. No government in history has rested on a flimsier base of popular support. In England, the Conservatives won a majority of the votes but Labour won 92 more seats in parliament than the Tories. I don’t know what you call this exactly, but it isn’t democracy.

It’s not just Labour governments that have benefited from artificially inflated majorities. In the 1980s Margaret Thatcher brought near revolutionary change to Britain - destroying the power of trades unions, privatising state assets, selling council homes - yet she never won more than 43% of the vote. In Labour’s largest landslide in 1997, Tony Blair won a 179 seat majority on the basis of only 43% of the vote. And it was very much a personal victory for Tony Blair, who proceeded to run the most centralised and personalised administration in modern times, ignoring parliament - he rarely turned up apart from Prime Minister’s Question Time - and ruling through a cabal of trusted advisers from his sofa in the den of Number Ten.

The electoral system is not an abstract issue but a very real cause of bad government. Consider Iraq, when a million people demonstrated against the invasion and the government faced the two greatest backbench rebellions in Labour history. Because of his artificial majority, Tony Blair was able to ignore parliament and the people and launch an illegal war without a second UN resolution. Tens of thousands of lives lost, billions wasted simply on the whim of a Prime Minister who seemed to believe that his judgement was based on divine inspiration. Yet the war would never have happened had the composition of the legislature in Westminster reflected the votes cast in the country at the 1997 and 2001 elections. Tony Blair would not have had a majority for the war because he would have needed the support of the Liberal Democrats and his own backbench to govern. He would have had to come to parliament and argue his case, as in the Scottish Parliament where votes are finely balanced.

Critics of electoral reform say that PR leads to instability. But we have seen in the Scottish case that a minority government elected on a proportional system can govern very effectively, and above all responsibly. Alex Salmond has had to bend to the will of parliament on issues like local income tax - an SNP election manifesto pledge which the Scottish government has abandoned because it could not win the support of the house. That is surely better than a system in which the First Minister had been given unlimited power to get his way. If the Holyrood had been elected under the Westminster system, Alex Salmond might have delivered a unilateral declaration of independence by now, even though a majority of Scots oppose separation. I don’t see how that can be seen as more stable than the balanced and

But this isn’t just about Prime Ministers. Consider the position of MSPs in Holyrood. In almost every significant vote, they have to examine their consciences and study the issue at hand before they vote. This is because every one of them in the governing party knows that their votes matter, and that they could bring down the government. Similarly, opposition MSPs in Holyrood realise that they can’t simply indulge in for opposition for opposition’s sake. If they vote against the government they have to accept the possibility that the government might fall and that they might have to step up to the plate. This gives MSPs a clear existential purpose, a profound sense of responsibility as stakeholders in a truly democratic assembly where they and not the executive hold the ultimate power.

Westminster will only be reformed when it grasps the nettle of electoral reform. Tony Blair promised a referendum on the electoral system in 1997, but after he won a landslide majority he conveniently forgot about it. The two party duopoly is underpinned by the electoral system which locks out minor parties. The entire focus of politics becomes the need to win the support of some 800,000 swing voters in key marginal constituencies. Hundreds of MPs in safe seats get a job for life and forget about their constituents. Voters stop voting because their votes don’t seem to count for anything.

No one can be in any doubt now that our parliamentary system requires urgent reform. We need openness and transparency at Westminster so that the public can see how public money is spent. We need more powerful select committees and a reduction of the power of the party whips. The unelected House of Lords needs to be reformed following scandals there, and the power to set the date of the general election needs to be taken out of the hands of the prime minister of the day. But before any of these changes can work the balance of power in Westminster must shift fundamentally and irrevocably to parliament and away from the executive. Only fair voting can achieve this, and spark the revival of democratic culture that Britain desperately needs.

What about MSPs' second homes?

The Scottish Parliament has, with some cause, been feeling rather smug about itself during the blazing row over MPs expenses. MSP well remember being laughed at by Westminster colleagues some years ago when Holyrood seemed mired in scandal over taxi chits, lobbying and second home allowances. The “bonsai scandals” of the Scottish Parliament, as they were called, were put down to inexperience by MSPs and their inability to 'handle' the media.


Papers like the Sunday Herald were criticised for damaging democracy by inquiring under freedom of information about the use of MSPs expenses. Trivial! A distraction! Not any more. These trivial issues have now plunged the Mother of Parliaments into its worst crisis since it the days of the suffragettes. Perhaps if Westminster had understood what was happening in Holyrood they might have avoided the scandal that has now engulfed them. For in its own chaotic way the Scottish Parliament was establishing the ground rules for the conduct of elected members in a modern, transparent democracy.


The Scottish Parliament had been designed to be much more open than Westminster. It was founded on the principle of freedom of information and grew out of the reaction to the sleaze scandals in Westminster in the mid 1990s. There are no archaic 'club rules' and no lobby to enforce them. MSPs are not seen to be above the law. The Presiding Officer in Holyrood doesn't have the power to enforce secrecy about members' behaviour. This presumption of openness made it inevitable that the financial conduct of MSPs would eventually be exposed to the light of day.


And that made it inevitable that the same standards would eventually be applied to Westminster. Democracy is porous. Heather Brooke, the freedom of information campaigner who pulled down the wall of secrecy about MPs expenses says she was inspired to persevere in Westminster because of the regime in Scotland. The Holyrood rules, she wrote in the Independent in April 2006, “make Scottish politicians some of the most accountable in the world”.


If Holyrood rules had applied in Westminster, MPs might not be suffering verbal assaults from their furious constituents. Honourable members might have thought twice about claiming for those trouser presses, hanging baskets, toilet seats and moats if they'd known their receipts were going to be published. They might have thought twice also about flipping their second homes to maximise their allowances. The very minimum that the public will demand now is that Holyrood's standards are applied in Westminster.


However, before the back-slapping gets out of hand in Holyrood, there is one area in which both Holyrood and Westminster are still in the dock of public opinion: the question of the pile of cash many MPs and MSPs have accumulated through property speculation during the boom years. In the Scottish Parliament, this whole disreputable system is to be brought to an end by 2011, after which MSPs will no longer be able to claim for mortgages on second homes. They will have to rent or use hotels when in Edinburgh for parliamentary business. However, MSPs seem determined to sit on the tens of thousands of pounds they have already made playing the Edinburgh property market.


According to an analysis by the Sunday Herald yesterday, some 28 senior MSPs, who have been charging their mortgage interest on expenses, stand to share around £2m in 2011 when they sell up. Five MSPs could pocket over £100,000 tax free. In a variable property market it is impossible to be precise about home values, but the paper had its estimates validated by a leading estate agent. It is the last big perk, and the most difficult to deal with.


This is because there are a number of former MSPs who left the Scottish Parliament some years ago and pocketed thousands of pounds in capital gains. It is not going to be possible to recover any cash from them. However, this doesn't mean that those MSPs who have yet to realise their capital gains will be able to profit in the same way. I have some sympathy for MSPs caught in this dilemma – they have at least moved to end the abuse. But the public is in an ugly mood, and MSPs contemplating selling their second homes before the 2011 deadline will have to examine their consciences very closely before they decide what to do. The voters may decide that to take matters into their own hands.


However, at least Holyrood has faced up to the problem and resolved to end the second homes scam. In Westminster, both the Conservatives and Labour are proposing only to make MPs liable for capital gains tax on their second homes currently 18%. But why stop there? If the taxpayer has been paying the mortgage, then surely the tax payer should make the profit not the MP. Why should members like Greg Barker, who according to the Daily Telegraph made £360,000 on the sale of his London flat, keep any of this money? He hasn't earned it. Other MPs who rent when they attend parliament don't receive a huge cash windfall from the taxpayer.


When people look back on this era they will be amazed that MPs ever thought they had a right to plunder the public purse in this way. I think the sense of entitlement came from the strange psychology of the property bubble, when we all lost any sense of values. 'It's not real money' we said, just a 'paper profit'. But of course it is real money to anyone who is trying actually to buy a house right now. First time buyers in Edinburgh have to put up four or five times average earnings to get a poky one bed flat. That is a debt that will burden them for life.


MSPs and MPs weren't responsible for the property spiral, but they benefited from it and they allowed it to happen. If MPs and MSPs had had to pay huge mortgages out of their own pockets to get on the property ladder, I suspect the housing question would have been addressed with rather more urgency. Well, it's payback time. The public are furious. MPs and MSPs stand to lose a lot more than their windfalls if they don't act soon. You don't get second home allowances when you are unemployed.

Weimar Parliament.

What do you do when the entire political system is exposed as corrupt? When one side is as bad as the other? The point of democracy is for the people to throw out the bad guys and bring in a new broom. But what if the broom has already been smeared with muck even before it has swept in? Who do you vote for now?

Many of us can still recall the naive optimism we felt after the Labour election landslide of May 1997. As Tory ministers fell like ninepins, it looked as if the age of sleaze was finally over; that the political system had worked and cleared out a corrupt and backwardlooking regime. How we cheered when Michael Portillo fell to Stephen Twigg. We talked of “people power” echoing the popular revolutions that destroyed the corrupt communist regimes of Eastern Europe.

There would be an end to MPs moonlighting as paid lobbyists and consultants to big companies. There would be an end to the unelected House of Lords There would be devolution of power to Scotland - well that happened at least, We genuinely believed that a new generation had taken over the reigns of power, one which understood the lives of ordinary people and did not rest on privilege and connections. It was not about class, anymore, it was about people.

And, though it seems incredible now, Tony Blair seemed like a new kind of politician, who spoke the modern language of democracy and wasn’t hidebound by class. A beacon of probity who promised to be ^whiter than white; purer than pure”. Then came Iraq, cash for honours, holidays with Silvio Berlusconi and a job with a big bank. The irony of course is that it is not plunging the nation into an illegal war that has finally done for Labour, but expenses. And it is “moral compass” Gordon who has had to carry the can. Not flash - just finished.

How did we get here? How did Labour get here? The Prime Minister has tried to deflect anger from his administrtion by insisting that all parties are in this together - and they clearly are. However, as the government of the day, Labour can’t escape a disproportinate share of the responsibility for this epic scandal. After all, it was Labour who promised to clean up politics; they have been in power for 12 years and can hardly blame the other lot now.

And, for heaven’s sake, they are the LABOUR Party - the party of the dispossessed, not the party of the must-haves. There is something doubly shocking about Labour MPs, most of whom came into politics because they wanted a more equal society, behaving like a bunch of avaricious used car dealers; fiddling their expenses to secure a lavish lifestyle at public expense. Somehow, it seems less morally offensive, more natural, when it is Tory MPs that are revealed to be obsessed the trappings of wealth.

Which raises the question ,of course, about whether David Cameron’s lot are going to be any better. Which is worse: Shahid Malik’s two grand telly or Douglas Hogg cleaning his moat at public expense? I’m genuinely not sure. Cameron reminds me very much of the people who launched Innocent Smoothies - pretty decent chaps, who then sold out to Coca Cola. Tories are generally thought to be less corrupt because they have more money - but that can just mean that they want even more than Labour.

Everyone has been saying that Cameron has started sounding Prime Ministerial in this crisis, and it’s true that he has shown a readiness to lead. And to face up to the responsibilities of leadership, which in his case meant depriving certain MPs of their jobs, if not their constituencies. He sacrificed his close parliamentary adviser, Andrew McKay after it was discovered that he had done a ‘double flip” with his MP wife, the former Daily Telegraph parliamentary hack, Julie Kirkbride. They had turned both their homes into ‘second’ homes to double up on the second homes allowance - potentially £48,000 a year. Cameron certainly caught the publc mood by announcing that he didn’t care if it was within the rules - it was wrong .

But a lot of people in his party don’t agree with him. More meritocratic Tories will feel that its ok for well-heeled, Eton-educated Cameron to get all high and mighty about expenses - he’s rich enough to do without them. We still know very little about the creatures that lurk on the Tory backbenches - though it is clear that they are mostly very far to the right of Cameron. This is because so many more moderate Conservatives - like er Michael Portillo - lost their seats in the Labour landslide elections.

We have to hope they are better, but we have no real grounds for believing that the Tories, even under Cameron, will be any different from the Tories under John Major. They may be even worse - eurosceptic, anti-Scottish, privatisers out to destroy the NHS. Given Labour’s complete moral implosion, the opposition will be in dissaray for a generation as Labour tries to rediscover its soul. So the Tories will have an easy ride. The Liberal Democrats have lost most of their radical gloss and seem to behave more like soft Conservatives.

In Scotland, of course, there has always been the alternative of the SNP who have so far largely managed to escape the Daily Telegraph inquisition. Though Angus Robertson, the MP for Moray, was fingered for buying a home cinema system and Alex Salmond tried unsucessfully to put drinks from a hotel minibar on the public tab. But they have long argued for transparency in Westminster and more importantly, are never going to be the government there. It will either be Labour or the Tories: fiddledum or fiddledee.

Some have described this as Britain’s Weimar moment, when the people finally lost faith in parliamentar democracy. This is something of an insult to the democratic German governments in the 1920who faced a much worse economic crisis and yet sparked a cultural and artistic renaissance. Unfortunately they did hand over to Adolph Hitler. Not willingly, of course: the Nazis were elected by free and open ballot by the German people who were fed up with the economic depression.

It has to be said. though, that there are very few charismatic leaders of right or left around right now bidding for power. The communists and the nazis were heavily organised in Weimar Germany, and there was a clash of ideologies that affected every aspect of public life. There is no such political dichotomy today - no party advocating revolutionary overthrow of capitalism, even though capitalism is manifestly in a bad way. Nor, thankfully is there any party promoting the racial superority of the Ayrian race. The BNP is more like Richard Littlejohn than Heinrich Goebbles. They have turned themselves into a kind of New Fascist party, with a leader, Nick Griffin, who has a lot of the manners of Tony Blair. And of course, Gordon Brown has pinched their slogan: “British jobs for British workers”. Nor is UKIP - the UK Independence Party - going to launch any revolutions either. Which leaves the Greens.

The Greens are the forgotten party of dissentm, but very very far from power. And while a vote for the Greens will never be wa wasted vote, it will not alter the character of British politics. I don’t want to sound too gloomy here, but this really might be a genuine crisis for the parliamentary system. Unless Westminster reforms itself utterly, and immediately, the people will turn away from representative democracy and onto Facebook. Well, it could be worse.

In Latvia even the opera is about nationhood

In Lativa even opera is about the national question. The magnificent Latvian National Opera next to the Pilsetas Kanals in central Riga was built when Latvia was under German occupation in 1865. It was built by and for Germans, with cameos of Goethe, Schiller, Wagner in the ornate plasterwork. Latvians would never go in the place and opera itself was seen as a uniquely Prussian and alien entertainment.

When Latvia was finally liberated from German domination in 1918, the opera briefly became a national hate-symbol - a monument to a century of foreign domination. When Riga fell under Soviet domination after 1945, the Russians rehabilitated the opera as a symbol of the cultural ambitions of the proletariat and 'modernised' it. The building was gutted, the stucco removed, neon lights were installed and the plush red seats replaced with proletarian brown corduroy. Latvians boycotted it even more. Never has a building designed for entertainment aroused such visceral loathing as the National Opera. It was a running sore.

All the more surprising then that the Latvians didn't raze the building in 1991 when they finally achieved liberation from the Soviets. Not only that, they decided to restore it to its former glory and extended the building to become a cultural centre. A team of architects and historians spent five years exploring the history of the building and then meticulously recreating its Belle Epoch splendour.

What a job. The interior is incredible - like a gold leave grotto. An enormous chandelier with 250 bulbs illuminates red plush seats - proper ones, not the kind of flip-up benches we are used to. Silk wallpaper and elaborate cornices adorn the public areas and even the wooden coat hangers have been reproduced from 1865 drawings. It is impossibly grand - a costly folly, surely, for a poor country of only 2 and a half million people.

Latvians were determined to show that they could do anything after liberation, so they decided to make their opera house an international symbol of national renewal. The opera was accorded top priority. Ex pat businessmen donated large sums of money. A suitcase of gold leaf appeared from nowhere. And the only stipulation was that it should be a Latvian National Opera for Latvians. Russians make up a third of the population of Riga, but they are very definitely not invited to perform, unless they can show that they are fluent in Latvian. Even the surtitles are in English and Latvian - no Russian spoken here.

But with Latvia on the rocks economically, what happens now? Well, they've just had to cancel a big Wagnerian epic because of cuts of a million euros. But the production of La Traviata that I saw was first class. Modernised and set partly in a bordello, complete with bare-breasted prostitutes, this was a very Latvian interpretation of Verdi's classic. Fitting perhaps for a city that has been called the "Bangkok of the Baltic" because of its reputation for lap dancing bars and women of easy virtue. Well, La Traviata is about a high class prostitute, and there was nothing tacky or sleazy about this production. Lavish costumes and sets must have cost a lot of money that this country doesn't have. Better go while they can still afford it.

Brown to go

   Last week, a jet lagged Gordon Brown headed for the exit after question time, forgetting he had a statement to make on his trip to Pakistan.  Oh how we laughed: ‘Brown to go...PM loses it... an.exit strategy at last”. He looked utterly exhausted, shattered. One hack said he was “like a drunk who can put on a fair impression of being sober until an empty gin bottle falls out of his pocket”. Hmm.

  

   Now, I hope this doesn’t sound to mealy-mouthed, but I am beginning to get just a little uncomfortable with the hounding of Gordon Brown. Yes, I know: this column has been only too willing to join the hunt on occasion.  And the Prime Minister has been very much the agent of his own misfortune recently - I mean, you just don’t take on Joanna Lumley and the Gurkhas unless you’re absolutely sure your troops will hold the line.

    But it isn’t pleasant to see a figure who used to be respected, certainly in Scotland,  for his intellect and his integrity becoming a figure of tabloid ridicule and contempt.  The Daily Mail ran a  headline last week saying:  “If Gordon Brown was a dog he’d be put down”.  This venomous coverage is partly down to the influence of the blogosphere which has taken political ridicule into a new dimension. Everyone is falling over themselves to be cruel.  

    The Libdem finance spokesman,Vince Cable, famously described Brown as a cross between Stalin and Mr Bean, but that seems almost benign  now that the PM routinely is portrayed as a bumbling sociopath, who can barely tie his own shoelaces and spends his time plotting nasty smears with sleazy chums.  Or as the former Number Ten staffer, Matthew Tayolor put it: “digging holes to trap the opposition and then jumping into them”.  Well, you can’t argue with that.  Certainly his choice of friends leaves a lot to be desired, as the Damian McBride ‘smear-mails’ affair underlined. 

  Comparisons are being made with the dying days of John Major, the Tory Prime Minister in the 1990s, who became a cartoon character with his pants over his trousers and a peculiar fascination for peas.  But Major was portrayed as an amiable and essentially harmless figure - a kind of political Chauncey Gardner, who’d somehow been mistaken for Prime Minister.   Brown is seen as a ruthless control freak, a vicious party infighter, a humourless issuer of vainglorious five year plans.  I don’t actually believe Brown relaxes by studying tractor production figures - he’s much more likely to be watching football.  But the image has stuck.  

   And he can be certainly be accused of being preoccupied with tactics rather than strategy.  The budget tax increases on the rich were seen as an attempt to wrong-foot posh David Cameron, rather than an attempt to revisit Labour’s fundamental egalitarian values.    I don’t think there was any political subtext to the Gurkha defeat, which was simply a failure to read the public mood.  Jacqui Smith, the beleaguered home secretary, is being blamed for not circulating concessions early enough to head off the revolt by Labour MPs.  And the expenses fiasco was another old fashioned political own goal.   Brown had tried to bounce parliament into accepting his pet scheme for flat-rate allowances, and it failed.  He had to withdraw the crucial motion to avoid two defeats in one week.  He just wasn’t on top of events, and now events are piling on top of him. 

   What happens now is fairly predictable, I fear.   Labour MPs are getting a taste for rebellion, just as Tory MPs did under John Major in 1995-7.  The fear is gone because the Prime Minister’s authority is gone.  They sense that Brown is finished, and that they are too, so why bother toeing the line anymore?  Current cabinet ministers are briefing against him, and will continue to do so. Former ministers, like David Blunkett and Charles Clarke, will seek attention by reprising their hand-wringing media interviews urging Brown to ‘up his game’. Clarke said he was “ashamed” to be in the Labour Party under Brown. There will be renewed muttering about Brown’s "psychological flaws".  

 The European Elections in June are going to be a bloodbath.  The opinion polls suggest a massive swing away from Labour, possibly mitigated by a very low turnout.  The party is bracing itself for losses in the south to the British National Party, who will be standing on a platform of “British jobs for British workers”  - a platform fashioned for them by Gordon Brown himself.  How he must regret making that pledge to the Labour conference in 2007.    

    In June, Brown will try to draw a line under the euro losses by reshuffling his cabinet.  Jacqui Smith is likely to go and possibly Blairite stalwart, Nick Brown.  There have been rumours that John Reid, chairman of Celtic and former Labour cabinet minister, could be due for a political comeback, replacing Harriet Harman as party chairman.  That would be a shock to the system,certainly,  but it seems unlikely that Brown would bring yet another of his old enemies into his tent to join Peter Mandelson.   Alistair Darling seems to have survived following his competent handling of the worst budget since the war.

    The reshuffle will be dismissed as ‘deck-chairs on the Titanic’.   However, the machinations might throw up a stalking horse candidate to stand against Brown at the party conference in October.  The last time Brown was on death row Charles Clarke made clear that he could be persuaded, and he looks persuadable again.  But with Labour MPs in their current enfeebled state, it seems  unlikely that they’ll have the bottle to go for a change of leader in 2009.  Most are just hanging on for the pension rights and to give them time to look for other jobs - not an easy task right now in the current depressed labour market.  For the next twelve months, the commons is going to be rather like a job creation programme for politicians.

   So, Gordon Brown shows every sign of hanging on to the bitter end, and losing to David Cameron in May 2010 - the only question is by how much. The Tories are 18% ahead in the latest Yougov poll, enough for a comfortable majority - though that could be cut to a few seats. As defeat looms Brown’s final task will be to place a poison pill in the Number Ten chalice to ensure that Cameron’s love affair with the voters is brief. People are already saying that this is a good general election to lose because whoever enters Number Ten faces years of cuts and tax increases. But there is one other consolation:  defeat will at least put Gordon Brown out of his misery and allow him get a night's sleep. 

Scrappage: it could catch on.

    Next week the government's cunning plan to revive the motor trade gets underway.  It's called scrappage: destroying things that are perfectly serviceable in order to keep people employed replacing them.  The government is effectively giving people £2000 to scrap their ten year old cars and buy a new one.  Banger prices have rocketed on Gumtree.  This will make lots of money for Britain’s Arthur Daleys as they exchange dodgy trade-ins in exchange for new motors. 

   So why not extend it?  If the principle of scrappage works for the motor trade, why not fridges and freezers and flat screen TVs?  Why not get people to junk their entire kitchens.  True, most white goods are imported, so it wouldn’t help British manufacturers, but then 85% of new cars are imported so the government’s scheme isn’t doing much for for British manufacturing either. 

 

   And why not vegetables?  The government could order that the sell-by dates on carrots and potatoes should be brought forward so that we have to buy more sooner.  The waste would be appalling, but think of the boost to Tescos.  We could pay vandals to go around the city breaking windows and smashing phone booths  and then employ them at public expense to repair the damage.   The great economist John Maynard Keynes once suggested that the government should pay people to dig holes and then fill them in again. Nowadays this is called the 2012 Olympics.

   Clever Edinburgh and Glasgow councils have already applied the scrappage principle to housing - knocking down thousands of council houses and then replacing them with dinky executive flatlets that are too expensive for anyone to y buy. The Edinburgh Tram scheme could be scrapped even before it has been built - why wait?   And if we need more shovel-ready projects to get the construction industry back to work, the Scottish Parliament building is getting a bit long in the tooth after nearly ten years. Then there's the Millennium Dome and the London Eye.

   About the only scrappage scheme the government isn't interested in is Trident, presumably because that would actually save money. .  To work properly, scrappage has to involve acts of pointless vandalism which only benefit our trading rivals.   £300 million, enough for a hundred hospitals, is literally being thrown away on the junk car scheme.  But the government should watch out.  As David Cameron observed at Prime Minister’s Questions, you take something ten years old, completely clapped out, pumps out hot air, pollutes its surroundings, it is absolutely ripe for the knackers yard.  “What a brilliant idea”.

   

Pigs might fly

It’s the question on everyone’s lips. Can you get swine flu from sticking your snout in the trough? Should the snuffling pigs of parliament and the City be required to wear face masks while in the pursuit of self-enrichment. Snout to snout contact can only be a major transmitter of the deadly disease, which has killed all of zero people in Britain so far.

Actually, it’s really an insult to the pig community to talk about swine flu. It should really be called non-specific animal-related influenza since it’s not even clear that it comes from pigs. And comparing pigs to porcine parliamentarians might also be seen as offensive to four-legged sty-dwellers. For all their reputation for gluttony, pigs are social and very intelligent creatures, which is more than you can say for many politicians.

You can put lipstick on Jacqui Smith but she’s still Jacqui Smith. Pigs don’t get porn films on expenses, or bath plugs = not that they would have much use for them. And they’re clean as a whistle when it comes to the second homes allowance. True, pigs have been known to eat their own young when under severe stress, but that’s just part of their culture.

Winston Churchill was on the money when he said that: “Dogs look up to man. Cats look down to man. Pigs look us straight in the eye and see an equal”. Though it has to be said that in Westminster you also find them looking down from the press gallery. In July, when the full horror is revealed about the exotic uses to which MPs have been using their expenses - resignations and even suicides are being talked about - the pigs of the press will be looking down in disgust.

But back to swine flu. We all suspected that God was angry with us for the credit crunch and global warming so it should come as no surprise that He has sent us a final warning not to take him for granted. Fair dos. But it seems, well, just a little indiscriminate. It’s all very well punishing antisocial elements like bankers and four-by-four drivers, but is it really necessary to inflict a global pandemic on the rest of us? Could He not send a narrowdemic that targets the real pigs like Sir Fred Goodwin and Jeremy Clarkson? The rest of us would get the message soon enough and change our ways. Then again, I suppose pigs might fly.

Poor benighted Gordon Brown is trying to frighten us all into supporting him again by issuing alarmist posters showing people spraying deadly germs from their mouths like a viral monsoon. This is beyond personal hygiene. Personally I think all people of working age should wear life-size condoms to practise safe socialising. It’s the only way of keeping it all in. Choose life.

The paradox of foresight. Vince Cable and the crash

"The Storm - the world economic crisis and what it means"  By Vince Cable. 

   We’ve heard of the paradox of thrift, but there is also the paradox of foresight.  People who see things coming are very rarely rewarded for their presience,  in fact they’re usually dismissed as a bit looney, much as Vince Cable was back in 2003/4 when he was telling anyone who’d listen that the housing bubble was out of control and would lead to economic disaster.  He was firmly put down by Gordon Brown then chancellor, for “writing articles in the newspapers that spread alarm, without substance, about the state of the British economy”.  Well, now we know.

   Cable wasn’t alone in being vilified for stating the obvious. Professor Nouriel Roubini, of New York University, was and  still is  called “Dr Doom” for his forecast that the credit bubble was going to collapse. In my own small way I was dissed by estate agents and economists for writing articles in this newspaper in 2004-6 criticising the banks for handing out mortgages in excess of 100%  at five or six times salary.   Nonsense, I was told, how else can people get on the “housing ladder”?  Irresponsible to talk the market down. 

    Cable is right to locate the origins of the financial crisis in the housing market, rather than in the inverted pyramid of exotic derivatives built upon it. It was the greatest asset  bubble in human history, a global madness,  fuelled by government subsidies and Asian lending, that led to the tripling of house prices, and the creation of trillions of in imaginary wealth.  This became securitized into toxic financial instruments,  like the infamous collateralised debt obligations,  which were sold on to other banks.

     People often ask why banks handed mortgages to people who couldn’t afford to pay for them.  It was because the prevailing wisdom, in financial institutions and in government,  was that house values always rise; therefore if the householder defaults, the property can simply be repossessed and sold on at a higher price.  It was a no lose bet. Until everyone lost when gravity reasserted itself, house prices collapsed, and all those myriad bonds based on mortgages became impossible to sell. 

    People in Scotland still get very angry if you say that house prices are  too high. Incredibly, local authorities like Edinburgh and Dundee are now offering 100% mortgages to first time buyers rejected by the banks who are now - rightly - demanding 25% deposits.  Utter madness. Actually using public money to lure people into negative equity.   The continuing decline of the housing market - Cable believes UK house prices have another 20%-30% to fall -  ensures that the banks and local authorities will have more write downs, more toxic assets, more losses which the public sector will have to pay for.   

  This is where it gets messy for Vince.  The paradox of foresight means that you  are called upon to give solutions for the very problems you sought to avoid.  In trying to get to a solution for the world economy Cable - like the Irishman- wouldn’t start from here.  Unfortunately he has to.  And he has to stick to Liberal Democrat party policy, which which is against nationalisation of the banks.   Cable says banks will have to be regulated “as if they were nationalised”. But he goes on to doubt whether the public will continue to finance the failures of this radioactive private financial sector with its obsession with bonuses.  He should grasp the nettle: either banks are part of the market economy, in which case they must be allowed to go under, or they are “too big to fail” in which case they should be nationalised.  The moral hazard is too great to allow banks to carry on speculating safe in the knowledge that the taxpayer will come to the rescue when things go wrong.  As he says, this is “socialism for the rich”. 

  Which brings us back to the paradox of thrift. Cable is torn between orthodox Keynsianism - borrowing to spend - and the realisation that we are all spent out and need to save.  “The longer term need will be to boost savings for pensions, long term care and the financing of mortgage deposits. There is a long period of austerity ahead”.  Damn right there is, but the Liberal Democrats aren’t calling for it. Their policy, when last I looked, was for tax cuts, increases in spending and yet more subsidies first time buyers.  

   Denial over housing has been replaced by denial over debt - public and private.  No one wants to tell the truth: that we have been spending beyond our means for decades and now have to face the reckoning. The great danger, as Cable warns, is that  democratic governments will not be prepared to tell the voters what they don’t want to hear.   Foresight is a terrible thing.  

    

Whatever happened to the moral compass

 You know things are really bad when Blairite ministers start attacking Brown for not being left-wing enough.  This week we had the extraordinary spectacle of one of the apostles of New Labour, the former Transport Secretary, Stephen Byers, calling on Gordon Brown to scrap identity cards and shelve the Trident missile system - in so doing joining an unlikely front with the SNP. Perhaps he had advance warning of the story from my colleague, Rob Edwards, about the latest radioactive discharges from the submarines in Faslane on the Clyde

The continuation of Britain's "independent" nuclear deterrent was a key issue for Tony Blair and he made sure that he secured a vote on the renewal of Trident before he left office. Biometric identity cards were also a touchstone for New Labour, seen as an indispensable weapon in the "war against terror". Stephen Byers coming out against these policies, even as economy measures, is a bit like Tony Blair saying he supports the tax increases on the rich - which, incidentally, he has made clear he does not.

Earlier, the Blairite old guard has emerged from the woodwork looking for payback.The Damian McBride smear e-mails affair allowed former Blairite ministers such as Alan Milburn and Charles Clarke to attack Brown by association.There is something tragic in this turn of events for a Prime Minister who made such a virtue of his "moral compass" when he took over. Most of us thought that Gordon Brown really was a "pretty straight kind of a guy", to echo Tony Blair's self-assessment, and that he had roots in Labour's social democratic traditions. "Best when we are Labour", as he said at the 2006 Labour conference.

 Everyone in Westminster knew that Brown had long supported a 50% tax on higher incomes but had been over-ruled by Blair. Similarly, his deafening silence on the Iraq war and on Trident replacement before he took over from Tony Blair gave many the impression that he was not thirled to Blairite defence policy either.

Perhaps if Brown had really followed his moral compass, and had had the courage of his convictions, he might have been able to renew the Labour project when he took office in the same way that Barack Obama has changed the climate of opinion in America. Brown could have taken the initiative and offered to put Trident on the negotiating table, not just to save money, but to stop nuclear proliferation. It is no longer the cold war shibboleth it was in the 1980s.

Last week's Budget tax increases looked like a political tactic designed to wrongfoot David Cameron by making him support the super rich. Yet it has been highly popular with a public which is sickened by the wealth and irresponsibility of bankers such as Fred Goodwin. If Brown had raised taxes as a matter of principle, he might have been on to a winner; unfortunately, it has been seen as just another exercise in the politics of spin.The McBride e-mails affair confirmed that, as far as the black arts are concerned, Brown is no different from his predecessor, and possibly a lot worse. No-one believes that he didn't know what his closest aides were up to.

And now, incredibly, the expenses scandal has landed on the No 10 doorstep, with Brown appearing to defend the indefensible. This is doubly ironic, since no-one believes that Brown is remotely corrupt or sleazy. If only he had approached the allowances question as a moral issue, and declared upon taking office that he would make Westminster as honest as Holyrood, he could have been the PM who cleaned up parliament. Instead, it looks like the Tories who will clean up at the next General Election. I don't know about New Labour, but it looks like Gordon Brown RIP.

MPs must wake up to the age of thirft

That YouTube video of Gordon Brown trying to explain his policy on MPs' pay looks like going down as his comic epitaph. Rather like James Callaghan at Guadeloupe saying "crisis, what crisis?" in 1978, or Thatcher elbowing John Sergeant aside at the Paris Summit in 1990, it's the one that will run and run. No politician since Richard Nixon has looked so shifty on camera. Partly, it was that plastic smile that the PM plants on his face at inappropriate moments, as if someone other than he is in charge of his facial muscles.

But it was also the sheer audacity of trying to bounce parliament and his party this week into endorsing a new scheme of MPs' allowances which is actually worse than the existing discredited system and likely to cost more.

There was no way that a flat-fee system - known as "sign on and sod off" in Brussels - was going to allay public concern about the misuse of public funds. Nowadays everyone, even journalists, has to furnish receipts before claiming expenses, and the public cannot understand why MPs should be treated any differently. It was the revelation that MPs could put all manner of items from bath plugs to porn movies on expenses, no questions asked, that brought about the crisis in the first place.

 Brown has been forced to dump his own plan to stave off a humiliating defeat in the Commons vote later this week. He still appears to favour a flat-rate fee, albeit one requiring MPs actually to stay overnight when they claim it. This will not work because it still fails the test of transparency. I don't understand why they don't just introduce the system in operation in the Scottish Parliament where everything is open and above board, and where parliamentary expenses are no longer a political issue.

Instead, there is talk of resignations in July when the public finally learn what MPs have been up to. Many have been using their £24,000 second-home allowance to leverage multiple mortgages and have become property developers owning second, third and fourth homes yielding hundreds of thousands in capital gains. Hardly surprising that MPs were relaxed about the house price bubble when so many of them were making so much money out of it. I'm sorry, guys, but the party is over. Wake up to the age of thrift.

The age of thrift or the age of inflation?

 David Cameron was right to warn about the debt crisis last year,  when everyone else was talking about fiscal stimulus and the need to boost spending.  You can’t stimulate a corpse.  But note how cagey Cameron is now about how the Tories would hack back the debt mountain .  Apart from scrapping identity cards and cutting out waste, he has been as vague as the Chancellor.  

     An ordinary person, burdened by debt, can do two things: save, or go bankrupt.  Governments have a third option:  eroding the value of the debts themselves.  Saving is hard: it needs a saving culture for a start, and we don’t have one. We have been conditioned by two decades of Ponzi capitalism into taking on ever greater debts to pay off the debts we already have.  The entire thrust of government policy is to force people to take on even more debt to boost retail sales. 

    So, let’s forget about saving - like the environment, you just know the government isn’t serious about it. So, how else do we pay back the debt?  Privatising he health service and education isn’t feasible, and cutting entitlements, like public sector pensions or unemployment benefits would likely cause civil unrest. The alternative is to rely on inflation to erode the value of the debt.   10% a year would do nicely, and in case you think inflation is ancient history, remember that inflation was running at nearly 10%  as recently as 1990, during the last recession. 

  Suddenly those frightening figures don’t seem so scary. A decade of inflation would turn a trillion into five hundred billion. The financial press has been discussing this openly since the Bank of England announced that it was going to start printing money, or “quantitative easing”.   Inflation is usually good for stock markets, first because it erodes corporate debt and discourages investors from holding cash.   Inflation is also good for the housing market because it disguises falling prices and because it encourages people to take on bigger mortgages paid back in depreciated pounds.   Governments love it because their debts just disappear; inflation is a kind of get out of jail free card.

     But problems arises when the people who lose out decide that they won’t go quietly.  The first casualties are pensioners, who see their living standards eroded, but traditionally they don’t go out on the streets. Nor do savers, who effectively have their savings stolen from them by inflation.  Resistance comes from foreign bondholders and organised workers. 

   The last time governments tried ride the inflation tiger was in the 1970s, after the disastrous “Barber Boom” under the Tory chancellor Ted Heath.  That “dash for growth”  ended up in bank failures, collapsing house prices, and mounting debts which the government thought it could ‘manage’ through inflation. That was until workers started to resist the erosion of their living standards.  Trades union membership was high in the 70s, and the UK was a largely manufacturing economy.   Led by the miners,  workers went on strike for higher pay, and the scene was set for the great industrial confrontations that led to Thatcherism. 

  The lesson of history is that once you start inflation, it’s very difficult to control it.  Price rises peaked at 24.2% in 1975.  Imagine your salary losing a quarter of its value every year.  Rampant inflation eventually forced the Labour government to negotiate a loan from the IMF in 1976 to stave off bankruptcy.  This was because bond investors at home and abroad refused to buy government debt.  In effect, the UK became insolvent, like HBOS,  and had to cut public spending and increase interest rates to restore the confidence. 

   There are suggestions that the government is preparing for a trip to the IMF today.  An unnamed minister told the Daily Telegraph before the budget that going to the IMF for funds should be thought of as “like going to a spa to recuperate”.  Years of living on debt have made politicians believe that, like the banks, we can all be bailed out. But they will likely discover that the only thing they have borrowed is time.