Cabinet split over Australian trade deal

A battle royal is in progress in Cabinet on whether Britain should agree a tariff free trade deal with Australia.  Brexiteers think that if a trade deal cannot be concluded with Australia no deals will be possible for the new 'Global Britain'.

However, farmers - already reeling from the phasing out of support payments - are concerned that it could hit their markets and be a precedent for future deals, particularly those with the US and New Zealand.

On one side of the argument is international trade secretary Liz Truss, a popular figure among Conservative activists.   On the other side is Defra secretary of state George Eustice, backed up by Michael Gove.   Gove is concerned that rural areas in Wales and Scotland would be hard hit, further undermining the union.   Reports are suggesting that Boris Johnson may come down in favour of the deal.

Beef and sheep meat would be the main commodities affected, although Australia is also interested in exporting more cheese.   There is a 20 per cent tariff on beef at present which would be phased out over 15 years.   

Waltzing the AV

I must admit that I find different election systems anorak territory, but here is a useful short guide to the impact of AV in Australia: Matilda

This guide is a bit dated, but it is brief. A more comprehensive and up to date account is to be found at: ABC

The ABC guide shows that the number of constituencies (or electorates as they are called down under) in which preferences have had to be counted is increasing. It should also be borne in mind that although Australia has third parties (setting aside the Country/National party which has generally been in alliance with the Liberals) they have not been as electorally strong as the Lib Dems in Britain - which is not to say that they could not be important in a close contest.

As a general rule, one can state that at maximum just over 10 per cent of outcomes have been changed by the redistribution of preferences, but the figure is often smaller.

Probably recent New Zealand experience is even more relevant as they switched to a mixed member system - and one gets, as one might expect, mixed reviews of its impact on Kiwi politics.

It's being so cheerful as keeps me going

This was the catch phrase of Mrs Mop in the wartime radio show It's That Man Again and it seems that it could apply to British voters who are very gloomy about the state of the country: Broken Britain

I find it difficult to recognise the country represented in the survey as the one I live in. I suppose it's reflective of people who complain that Britain is like a third world country without ever having been to one. For example, Chile may be only a few years off developed status (at least its new president thinks so) but the standard of living enjoyed there is well below that in the UK.

Britain enjoys reasonably good public services. It has world class football (and top events in many other sports). The standard of theatre, opera and other arts is generally good and a wide range of music events to suit all tastes is available. The countryside has a diversity in a small space that is found in few other countries and there are plenty of historic sites to visit if that's what interests you. And if shopping is your life, you are spoilt for choice. The one downside is the winter weather and lack of light.

42 per cent of those interviewed say they would emigrate if they could, perhaps to Australia where they might be greeted with some justification as 'whingeing Poms'.

The survey will be mood music for Dave Cameron and his 'broken Britain' thesis. However, he has to be careful. If Britain is broken, can he put it back together again? Moreover, gloom and pessimism can actually disempower people from working towards effective solutions.

Je ne regrette rien

Being on the other side of the world for three weeks has an odd effect on one's perception of short-term British politics. Of course, one can visit the BBC and other websites. Papers like The Australian include quite a lot of coverage of British politics. That's just as well as the ABC nightly news seems to focus on shark and crocodile attacks and cats fighting off snakes.

Of course, one can get interested in Australian politics, in particular the election in Queensland. Australian state politics is poorly covered in the UK and I have to confess that I was not aware that the state Labour government had been voted out in Western Australia last November.

I come back to Britain and find there is a fashion for political apologies. I suppose it was all started by those rather grudging and scripted apologies made by bankers to a Parliamentary committee.

Dave Cameron is a very smart tactical politician and he set a trap for Gordon Brown by apologising for past Conservative errors last Saturday. The difficulty is that if Brown makes a partial apology, it can gives ammunition to the Conservatives, but also allows Dave to claim that it doesn't go far enough.

Brown now seems to have made a rather guarded and partial apology here:
Brown

It's supposed to be the start of a fight back, but I doubt whether it will get off the ground. A return to statism is pledged, although the Conservative seem to be edging in that direction as well. That leaves open the question of where a classic liberal might vote.

Not for the rather lightweight utopians represented by the Liberal Democrats, although I would have to qualify that by saying that Vince Cable is a very impressive politician who has been proved right by events and communicates very effectively. In fact, he is now regarded as a national treasure and sage.

Interesting that in an ageing society ageist considerations barred him from the Lib Dem leadership. Of course, Ming Campbell was mercilessly satirised on television as giving bedtime talks from his nursing home with a blanket over his knee and a cup of cocoa in his hand.

Satire often defines politicians. Some of us can remember David Steel portrayed as being in David Owen's pocket. It was a very damaging image.

Can government(s) solve the global financial crisis?

A common assumption is that if there is market failure, as there has been in the global financial markets, government must step in and sort things out. This overlooks the risk of government failure.

A great deal of hope is being pinned on the forthcoming G-20 summit in London but will it amount to anything more than warm words or photo opportunities? The predecessor G7/G8 summit did not have a very distinguished record of achieving anything, other than perhaps in the 1970s.

Now we have a G-20 which may represent a trade off of legitimacy for effectiveness. The Foreign Office has recognised the realities of the situation by creating a list of A list and B list countries which to their chagrin has leaked out. Australia is on the B list which will go down well there where they understandably dislike being patronised by poms. Australia has moved a long way from the 'stone age diplomacy' it was accused of in the 1970s.

Getting anything meaningful out of a G-20 discussion is going to be very hard, particularly given that some countries such as Germany are reluctant to provide a further fiscal stimulus. Meanwhile government debt piles up with no discernible effect on the economy. Of course, traction takes time but there has been a massive failure of confidence in the financial markets.

Meanwhile, the UK government has been plagued by initiativitis, often badly coordinated with tensions within the Government and between the Government and the Bank of England coming to the surface. One response has been to beef up the Treasury press office which was used to being busy just twice a year for the main budgetary events. At least Alastair Darling seems to have realised that the cupboard is so bare that he cannot afford more ineffective tax cuts.

The latest idea from Peter Mandelson is that if you get a car that is nine years or more old recycled you will be able to claim a £2,000 credit that can be used to purchase a new or nearly new car. Bingo! It's green and it stimulates the car industry.

But wait a minute. How many people with nine year old cars can afford a new one? And what about the taxpayers who have slightly older cars and don't benefit from this handout? I have to declare a personal interest here as my car is seven years old. But I am going to look at a replacement next week and provide my own stimulus to the economy.

At the end of the day it's going to come down to individuals and their confidence in the economy rather than government gimmicks and declarations from the G-20. That confidence is not going to be easy to restore. David Cameron is going to inherit a poisoned chalice and is going to have to make some very tough decisions.

I don't envy him his task and it will be interesting to see how the new influx of Conservative MPs is likely to shape up such as Chris White who is odds on to win Warwick and Leamington. Chris, of course, has motor industry experience and getting that industry going again will be one of the biggest challenges.

The harsh fact is that there is overcapacity in the industry. General Motors have been going round with their begging bowl threatening to close plants and playing one European government off against another. It's all very reminiscent of the game that Chrysler played in the 1970s, allowing them to walk away with a large pile of public money, leaving a business that was far from viable. Whether we learn from past mistakes is open to question.

More from Beaudesert

Brisbane: Australia has some sophisticated politicians and some good ideas. After all, that's why I'm here, to do some policy learning. But you wouldn't think it if you were following the campiagn in Beaudesert.

#1: Warwick Capper's short political career is at an end and he can return to Surfers Paradise. Having undertaken to launch his campaign with placard waving bikini clad girls, he failed to file his nomination papers. Add a 'r' to his name and it would be a good pseudonym for a student writing in the Warwick Boar.

#2: The seat is currently held by the LNP although the incumbent is not standing again. The LNP candidate was arrested and fined for storming the set of Big Brother apparently to promote his rock band. I know the federal environment minister is an old rocker who still does the occasional gig for a good cause but ...

#3: Pauline Hanson has already had a go at free trade. Immigrants next? Of course, there's always a market for nativist populism, even more so in a recession. In vox pops, some voters praise her for her honesty. So accepting Australia as a multi-cultural society is not honest?

At least it's a distraction from increasingly grim financial news.

Brown features in Queensland poll

Brisbane: With the Queensland state election now under way, voters watching television this evening were confronted with the grim visage of Gordon Brown in an election advert. For reasons best known to himself, the LNP opposition leader seems to be in denial about the fact that there is a recession. His words of repudiation were juxtaposed with those of the British prime minister and President Obama.

At least the election is providing a little light relief. Former fish and chip shop owner Pauline Hanson at one time led the populist One Nation Party. She then went on to found Pauline's United Australia Party. This could start a fashion: Dave's Conservative Party or Nick's Liberal Democrats.

Now she is standing as an independent in an electorate south of Brisbane. Confronted with old allegations about the misuse of election funds, she had an impressive temper tantrum on television.

One of her opponents is a former rugby player who is being backed by a mens' magazine and has free false teeth as part of his platform. Read more here: Beaudesert

And we thought that Lembit Opik had a few kangaroos loose in the top paddock!

Whingeing poms

Canberra, ACT: Seen in Britain a couple of days before I left a roadside sign declaring 'Welcome to our third world country. No salt.' I suspect that those who use this phrase, one often heard in relation to delays on the railways, have never been to a real third world country.

The Adelaide Sunday Mail carried a column about all Britain's social problems, not that Australia is free of them. The columnist said that Britons themselves had labelled the ceountry a 'broken society'. Actually it was Dave Cameron.

In doing so, he may have made a mistake. Deep rooted and extensive social problems are unlikely to be solved by political action. Indceed, the perception that 'they' can or should sort it out may be part of the problem as it absolves others of responsibility.

I am sure Harriet Harman, who is the social engineer par excellence, believes that government could solve all these problems. I see that she is manoeuvring to be Labour leader after the next election.

No crisis - meat raffle tonight

Adelaide, South Australia: I suppose that sign seen in an Adelaide street tonight is one way of responding to the recession. Actually it hasn't fully hit home here yet, although some primary industries have taken a hit. But interest rates are still at 2.25% and the Reserve Bank has said it may not lower them any further.

Opposition politicians seem to be engaging in a bout of infighting among themselves, but it's probably no more undignified than a spat between Peter Mandelson and Starbucks.

The r-word is much in evidence. That's fine if it means avoiding the kind of catastrophic market failure represented by a collapse of the financial system. What is different is the call by one trade union leader for controls on foreign ownership and the restoration of export licenses.

Similar protectionist calls have been heard in Britain and other parts of the world, some with a xenophobic tinge. But remember that the old 'mixed up' economy was a notionally market economy that was unable to function as such and hence deliver the benefits of competition.