Labelling regulations

What the?

Under the draft legislation, to come into force as early as next year, the sale of groceries using the simple measurement of numbers will be replaced by an EU-wide system based on weight.

It would mean an end to packaging descriptions such as eggs by the dozen, four-packs of apples, six bread rolls or boxes of 12 fish fingers.

I want to know how many there are in the pack, not how heavy they are - weight is a measure most of us are unaccustomed to when we buy these sorts of products - our knowledge is of, for example, how filling a bread roll is. To sell by weight would confuse the customer - the EU clearly doesn't understand the whole reason they are sold by number is that customers know what they are buying, how many they need, etc when sold by number. It's a stupid restriction on the free sale of goods, and chances are the UK will adopt it without question.

To the EU: this sort of thing is why the average Briton opposes you. Silly and, to be honest, completely unnecessary rules that make our lives harder.

And the weight is on the back of the packet anyway. It's just pedantic and unnecessary.

Nationalising the labour market

First nurses and degrees, now bankers' contracts are being controlled by the state. In a piece of short-termist populism, Labour have potentially sounded death knells for the City.

London needs the City. Britain needs the City. Without the City, who are we? It all goes back to the comparative advantage we have in finance, a theory that Adam Smith talked about a couple of hundred years back. I complain that the minimum wage is an undue interference on the freedom of contract between employer and employee, so this potential maximum wage is horrendous. What right does the state have to stop a bank using its profits to pay its bankers? Perhaps instead the state should stop supporting irresponsible practices, by bailing out and guaranteeing everything, and by making credit far too easy for far too long. If the shareholders don't like the bonuses, shares will drop. That is deterrence in itself.

Gordon Brown keeps saying he wants to "change the banking sector" and suchlike. The market will reallocate and change the banking sector, not the government, who don't have a clue what's needed. In the meantime, sort out the regulation as to minimise the size of credit bubbles.

Six quarters of negative growth

Labour's recovery policies are really working, aren't they?

This is the longest and worst recession since records began in the 1950s - and the reasons we aren't coming out of it are quite simple.

1. No business confidence. The growing budget deficit is seen as deferred taxation. They also don't like the look of the 50% rate, or the possible EU hedge funds directive. Therefore, businesses don't want to expand supply again.

2. Banks cannot lend. The interest rates are low yes, and the money supply has been expanded through QE, but that extra money is just being stored up in banks' reserves. The problem here is that the regulator is trying to look like it's doing something, and has implemented a measure that should have come at the top of the boom, not in the recession - higher capital ratios. Banks don't actually have enough money to lend (and no one wants to save because of the ultra-low interest rates), so regulation is one reason that we aren't getting out of the slump. Then we have crazy suggestions like the windfall tax on banks' profits, which would surely stop the financial sector's recovery for a bit longer.

Keynesianism has been tried again. Just like in the 1930s, it's failed again. Regulation has been tried again. Just as its hopelessness helped the crash occur, its hopelessness will prevent recovery.

Banking regulation

First of all, I apologise for not posting in a while - although exams are over, life has been hectic.

David Cameron hits the right notes with the briefing for his speech on regulatory reform. Having already been told by Osborne that the FSA would be scrapped, we have an idea of how banks would be regulated.

It makes sense for the central bank to regulate - it knows how much banks are borrowing, knows what the economy is doing, and so on - after all it has to set interest rates every month. Not only this, but we are told that the Bank of England warned the FSA about the risks taken, but the FSA took no action - incompetence.

Breaking up RBS/HBOS is a welcome step too - no bank should become too big to fail, and no bank should be bailed out by the government - the economy is better off without bad banks.

However the MPC especially has to look at the prime cause of the financial crash - keeping interest rates too low for too long and encouraging over-borrowing. The only viable solution would be to allow the market to set interest rates, since it is more efficient than nine central bankers. That way, as demand for borrowing increases, interest rates are raised by banks to get a greater return and to encourage saving to build up a capital base; in the same way interest rates will fall if banks want to encourage borrowing. I know it isn't a perfect theory, but should be more efficient than the current macroeconomic consensus we have today.

National Democratic Renewal Council

Gordon Brown's new MP regulatory quango. It sounds more like what you get when a military junta takes over in a banana republic for the transition to democracy than in a supposedly democratic nation.

Democratic renewal? It's ever so simple - call an election! You cannot reform politics without giving the people power.

How ironic that his solution to a problem of democracy is an UNDEMOCRATIC body chaired by an UNELECTED prime minister? The voters are the regulation; they just haven't been given the chance to regulate.

The new HIP fines are rather stupid

Not only are the Home Information Packs unnecessary red tape and a colossal joke, but the government is introducing £200 fines for those who do not produce one.

If I am willing to sell you a house without a HIP, and you are willing to buy one without a HIP, why should the government say I must buy a HIP? You cannot alleviate excess demand by shifting supply inwards even further.

And HIPs cost anything from £350 to £500 to produce, while fines will be £200. Get the picture?