Back to work today (for some).

September 1 marks the end of the Summer Holiday period and a return to work for millions of people who have either been on summer leave, or working in half empty offices and factories as their colleagues take time off.

However this autumn there will be a lot fewer returning to work than last year (and last year was the worst for a decade) and many people will be working in offices half empty as a matter of course from now on as the recession creates more and more empty desks and vacant workspaces.

The Government admits unemployment is rising, but is still in denial about the scale of the problem.

The Chartered Institute of Personnel and Development (CIPD) is keen on broadening who is included in UK unemployment figures. They argue there are large numbers of people who should be counted because they say they would like to work but are considered ‘economically inactive’. If they were included in the count the figure for UK unemployment would rise to more than 4.5m. Even official figures agree that already nearly two million children now live in workless households, shattering Gordon Brown's pledge to halve child poverty by 2010.

The Government claimant count, which measures people who are actively claiming Jobseekers Allowance (JSA), as opposed to the unemployment count that includes people who are unemployed but not signing on, is the published measure of unemployment.

The two different ways unemployment is calculated in the UK relates to the different people included in the counts. Key to this is the group considered ‘economically inactive’ and so not included in the 'official' figure of 2.43m.

In the three months to June, unemployment rose by 220,000, but in July the number of people signing up for unemployment benefits and contributing numbers to the claimant count rose by just less than 25,000.

On this basis there are more than 2.1m “hidden jobless” who when surveyed say they want to work but are not claiming JSA. On top of this there are around a million people currently working part time because they can not find full time work.

Of course every obstacle imaginable is put in the way of people trying to claim jobseekers allowance to keep the numbers down, and in many cases other benefits become available that pay more and encourage people to 'sign off' the register. These include various training programmes, and sickness and disability benefits.

There is a lot more prosperity about than the 1930's and general living standards are far higher on average, so I doubt if we will see soup kitchens, but in my view this recession will create unemployment unprecedented in scale - perhaps as many as 7m Britons capable and willing to work will be without a job at the peak.

And unlike the unemployment of the 1980's which affected the country unevenly (some areas where coal and steel had been the backbone of the economy were blighted where other parts of the UK were relatively unscathed) this unemployment will affect the whole country.

One part of the solution to this is to create a lot more flexibility in the labour market, particularily for very small businesses. Currently the most daunting leap any business makes is when it goes from one employee to two. The hurdles a small business needs to leap in order to employ their first person is mindlblowing, ranging from the need to set up an expensive and hard to operate PAYE system through providing pensions and then navigating what is now a minefield of unfair employment legislation.

Hardly suprising therefore that a record number of one man businesses are staying one man, but if every sole trader employed one young person as a trainee our youth unemployment crisis would end overnight.

Not a good time to be Scottish.

Before I write another word I must point out that while I am not Scottish, many of my best friends are, and I can never remember a time when they are less proud of the fact.

As one of them said to me this weekend, "I am surprised you will even still talk to us, much less want to keep us in the Union. First we demanded and got extra MP's, then special treatment by way of devolution and then extra money from you so that our old people get care your old people do not. Then we foisted on England a Scottish Chancellor and Scottish Prime Minister who between them have ruined a perfectly good economy and run up debts you English will be paying back for 100 years, then our greedy and stupid bankers bought out your Nat West and the Halifax and promptly bust them, too; requiring an expensive bail-out by another Scottish company, Lloyds TSB which then also needed billions from English taxpayers to avoid going bust."

"Then, if all that were not enough, at a time when the 'war on terror' has enabled the Scots run English Government to take unprecedented levels of invasion into your private lives, take record amounts from you in tax to pay for it and caused the death of nearly 500 soldiers in Iraq and Afghanistan we decide to release the highest profile terrorist ever convicted, making British justice a laughing stock."

"I think you could fairly call us the neighbour from hell actually."

What is clear is that the Union is under strain because the English are indeed beginning to resent the privileges and extra benefits their neighbour is granted, especially when the net result is to embarrass and humiliate the whole country.

If Al Megrahi was innocent he should have been freed on appeal, if he was guilty he should not have been freed at all. Any British prisoner found guilty of multiple murder would have been left in prison to die, that was certainly the fate of the Moors Murderers, for example, why should he have special status?

Japan
becomes third
major economy
out of recession.

So what does this mean for "Mr No-more-boom-and-bust" ?

The news this morning is that Japan is officially out of recession, joining France and Germany who confirmed last week that growth had returned to their economies in the second quarter of the year; and Hong Kong also recorded growth of 3.3% in the three months from April to June. If Japan's latest quarterly rate were maintained for a full year, the economy would grow 3.7%.

In January 2008, Mr Brown said:

“By being prepared to take difficult decisions about pay, about being prepared to take difficult decisions about the public spending round, we’ve put ourselves in a better position to withstand a global turbulence that is affecting every economy.”

This is, was and remains a complete lie. British national income continued to shrink by 0.8 per cent over the same period, although the performance was an improvement on the 2.5 per cent contraction in the previous three months.

The International Monetary Fund have always forecast that Britain will be the last major economy out of recession, and most international commentators agree that because our economy was in a worse condition to begin with we will suffer more than most economies as our over borrowed and overheated property and financial markets unwind.

Separate data earlier this month showed unemployment in the UK rose by 220,000 in the three months to June to a total of 2,435,000, the highest figure for 15 years.

Leading economist David Blanchflower, a former member of the Bank of England monetary policy committee, has said: “Unemployment is going to increase for many months to come. There is a huge amount more to do.” Some estimates put unemployment in the UK peaking in 2010 /2011 at over 4m.

In the UK unemployment has risen by 1.3 per cent in the last year, whereas in Japan it has only risen by 0.6 per cent and in France by 0.7 per cent. In Germany it has actually fallen by 0.4 per cent ( Labour Market Statistics, March 2009, Office for National Statistics)

The facts are pretty bleak; as usual Britain's 'economic good times' have been built on little more than asset price inflation financed by borrowed money, (Rising house prices and lot's of remorgaging for you and I, and rising share prices and lots of take-overs for the City). Our economic growth for much of the last ten years has been a mirage based on speculation whereas in France, Germany and Japan economic fundamentals remain based on sound money, real industrial output growth and increasing productivity gains.

This crisis has been caused by a loss of confidence in the long term sustainability of the level of borrowings and lasting confidence and stability will not return in Britain or America until the level of borrowing by Government, companies and individuals has been reduced significantly.

This can happen only one of two ways, either the debts have to be paid off, or they have to be inflated away, or more likely a bit of both. In any event this will take decades, not months and the British Economy will be constrained to very slow growth or face rampant inflation and a currency crisis - just like we were for the first three decades after the war - for a long time yet.

We remain a nation of speculators. Successive Governments have allowed people to believe that the best way to make money was not to start a business making something, or to buy shares in industry, but to invest in property.

Gordon Brown certainly didn't start that problem, but his ten years at the Treasury and especially his tax treatment of pension funds (which was a huge deterrent to people making pension contributions and drove people into iether spending their money or investing in other assets) was a huge contributing factor.

I don't believe it!

No, really. I dont believe it - this is a story that has done the rounds in hours today, a report that people close to Brown are saying that he has become resigned to losing the next election. This was sparked off by a report in todays FT concerning the lack of MP's prepared to come forward to replace the many parliamentary private secretaries who resigned this summer - something that would normally cause great irritation in camp Brown; but apparently not this time. The FT reports various sources giving a variety of reasons for this, one of which reads: "One Downing Street insider said the prime minister was more relaxed because he now realised that he was certain to lose the next election and was powerless to defy political gravity.""

You can't access the FT story without paying a subscription but the Spectator Coffee House Blog has a second-hand report on it here.

The speculation is running that Brown has come to recognise the futility of his situation and that defeat is inevetable.

I simply don't think this is credible on two counts.
Firstly, to accept the possibility of defeat would give Brown a level of humility that is completely absent from his personality - I could imagine Jim Callaghan being resigned to defeat in this way - even John Major; but Gordon Brown?
Secondly it would suggest that Gordon Brown was reasonably in touch with public opinion such that he knew the level of anger and mistrust and the appetite for change that exists in the country at large, something that is in my view utterly inconceivable. Gordon Brown was not exactly a man-of-the -people type politician to begin with and for twenty five years has gone out of his way to avoid meeting the people who elected him. His fascinating biography by Tom Bower also demonstrated that he prefers to keep in touch with the public via a small cabal of loyal acolytes who filter public opinion to make sure what the Leader hears, he likes.

As I have said before, far from accepting defeat Gordon Brown thinks that he is poised for a historic victory based on the grateful hoardes thanking him for a heroic turnaround in the World Economy that he, Gordon mastered last year.

He may well be the only person alive who thinks this, but he really and truly believes it.

Lib Dems in call for yet another ban.

As 'on the money' as ever the Lib Dems pop up this morning calling for yet more bans, - this time they want to outlaw Photoshopped images.

The Independent has this today:

"The party is calling for a ban on the use of altered or enhanced pictures on publicity material aimed at the under-16s as part of a wider drive to boost the self-esteem of young girls. It also wants the introduction of new rules insisting that advertisements aimed at adults disclose how much images have been airbrushed or digitally enhanced."

Well before I go any further, and for the avoidance of any doubt and to make sure the self esteem of young politicians everywhere is not 'damaged' I should point out immediately that this picture of 'Calamity Clegg' is digitally enhanced. It is not really Nick Clegg, it is his face pasted over an old photograph of the actress Doris Day in the film Calamity Jane.

Being a bit less sarcastic the Liberal Democrats continue to display an alarming aversion to showing any Liberal tendencies at all. I thought this Labour Government were bad but compared to this lot they are saints.

The Liberal Democrats would, if allowed, outlaw an awful lot of things, far too many to list on here. Clearly all Governments need to ban things, most laws are in effect a ban on something or other; but the Liberal Democrats have turned 'calling for a ban' into an art form.

If you type "Liberal Democrats ban" in Google you get 814,000 results ranging from the crazy to the laughable. Among things that would become banned in Lib Dem land are: the Billy Smarts Circus, MacDonald's, carrier bags, Range Rovers, flying the Union Jack, all alcohol, all second homes, happy hours, Convents, Evian water, white vans, cigarette machines, patio heaters, light bulbs, petrol cars... the list goes on, and on.

And like today's call for a ban on airbushed photographs they all share one thing in common, they treat the public as idiots.

I don't doubt that some young teenage girls suffer low self-esteem when they see Keira Knightley looking slender and perfect, but as the father of two teenage girls my experience of their age group is that far from low self esteem the opposite is true; because of the 'all must win prizes' culture in our schools many young people have totally unrealistic high expectations of their abilities which their eventual attainment in real life can only fail to live up to.

And if either gender is especially at risk of suffering low self esteem it's boys, not girls, they are the ones being forced to occupy a world where society is trying to strangle their natural instincts such as aggression and competitiveness and where their traditional role of breadwinner for their family is being increasingly supplanted by the State.

No-one is suggesting nothing should ever be banned, but the balance has to be struck between what may or may not be good for us, and freedom.

And anyway I use up all my carrier bags as rubbish sacks.

The Totnes Primary
Are Lib Dems foolish to interfere?

This is a screenshot from Newsnight on Tuesday, who ran a long feature on the Totnes selection for a candidate to replace Anthony Steen as the next Conservative MP there, featuring an interview between bay MP Adrian Sanders and editor Michael Crick.

Sanders was repeating much of what he said in his newspaper column the previous week - which I found equally surprising. What he said was that he urged Lib Dems to vote for Nick Bye as he believed Nick would be the easiest person for their candidate to beat at the next election.

Firstly, it is a high risk strategy for any MP to interefere in the business of neighbouring constituents and one that most MP's run a mile from. To be blunt, there are no votes in it.

Secondly, presumably if Mr Sanders believes that Nick Bye is an electoral liability he must think that Nick Bye will lose the next mayoral election if he fights it. As a Lib Dem therefore the last thing he would want would be for Mr Bye to be selected in Totnes and then not stand for Mayor next time in Torbay opening the way for someone new.

On the other hand it could be that perhaps Mr Sanders is trying a double bluff? Is he hoping that if he publicly urges Lib Dems to vote for Nick Bye then Tories might do the opposite in droves, depriving Nick of the nomination and forcing him to stay on as mayor?

A third and much more intruiging possibility is that Mr Sanders is hoping that Nick does get picked for Totnes, wins the seat and then has to resign the mayoralty - creating a juicy well-paid political job vacancy immediately after the next election, suitable for an unemployed local man with political experience to try and get elected into.

I wonder who could be up for that, then?

Either way trying to gerrymander in the internal politics of another constituency is a very high risk activity, it made the Lib Dems seem unusually petty and party political, something they usually go out of their way to avoid. But then personal ambition and what is good for the party have never been happy bedfellows with the Torbay Lib Dems.

A long history of pain in Afghanistan

How many times have Imperial powers been vanquished in Afghanistan? Well the British Army was defeated twice during the Victorian era (as the first picture above illustrates).

For a simply and very well written account of the First and the Second Afghan Wars go here, (and note how depressingly familiar the problems sound to us today). It's a shocking tale of death and destruction with very little upside for the British. We invaded to impose order, unify the country, and install an Empire sympathetic Government and we ended up with a fragmented and deeply hostile tribal wasteland - and a massacre.

But in spite of this had another go at invading the country in 1921 and once again we were comprehensively beaten in battle and forced to withdraw.

Then in the 1980's Afghanistan was invaded by the Soviets - the same Red Army that we had feared invading Europe for 30 years - in a similar ill-fated attempt to impose a single Government across the whole country, this time a communist one. For ten years they suffered massive casualties and continuous military humiliation. Eventually they also had to pull out, with even more loss of life; events that so traumatised the Russian population that many people believe it was the catalyst for the downfall of the Soviet Empire. Afghanistan ended up even more inhospitable, ungovernable and lawless than before.

Various accounts and explanations have been given by the invaders of the reasons for their ultimate failure and all of them still apply. The inhospitable terrain, the lack of resources and above all the ruthless nature of the enemy.

I am a great believer in accepting that people make honest mistakes. What is unforgivable is not to learn from them. The idea that an invasion by the Americans or anyone else from the West could impose any kind of order on the Afghans was flawed from the start; Bush and Blair's crime was choosing not to learn from the lessons of history.

I do not believe that Britain is safer as a result of invading Afghanistan, the people who have attacked us have all done so since the invasion - and all of them have links with Pakistan.

What we need now is a good excuse to withdraw with what little remains of our pride intact. Then what we need to do is agree not to make any more military commitments anywhere in the world until we have equipped our forces to do the job properly.