Mark Reckless MP: At Last, Democracy Is Coming To Policing

Originally posted on ConservativeHome Today and tomorrow the House of Commons will put its finishing touches to the Police Reform and Social Responsibility Bill. It is a long title for one key reform, putting a directly elected individual “in charge” – as the Home Secretary put it on Monday – of each police force. That reform will have huge ramifications as power in policing shifts from the Chief Constable to the elected Commissioner. Unsurprisingly, the Chief Constables don’t much like that. However, unlike police authorities, which have spent public money fighting their own abolition, most Chief Constables, if not necessarily their Association of Chief Police Officers (ACPO), accept very professionally that it is for elected politicians to set policy under which they operate. Police authorities are generally considered to have been the weakest of the ‘tripartite’ pillars of police governance, the others being the Home Office and the Chief Constable. Our plan to deal with that, which I passed to Douglas Carswell to develop further when he replaced me at the Conservative Policy Unit in 2004, was to transfer the police authority powers to people who are elected, so as to reinforce those powers with a democratic mandate. David Cameron wrote that plan into our manifesto in 2005 and has evangelised it ever since, so much so that he appointed the hugely impressive Nick Herbert as Police Minister, having seen him make the case for democratic control of policing when leading the thknk-tank Reform. The Prime Minister then promised in July 2006 that “We will enshrine operational independence in legislation”. It is unfortunate that some concessions have since been made to ACPO, but any apparent increase in Chief Constables’ powers will surely prove illusory once they face Commissioners empowered with a democratic mandate. If this bill fails to give the elected Commissioners the power they need to deliver what the public wants, then they will come back and demand that power, and Parliament will give them the power, as we have for the Scottish Parliament and the Welsh Assembly. I will nonetheless make the case today and tomorrow for us to get it right first time, to give the elected commissioners the powers they need now, and to give a clear steer to the courts that, in the Home Secretary’s words, the elected commissioners must be “in charge”. Chief Constables must of course make operational decisions regarding investigations and arrests independently of politicians, but it is for the elected commissioners to determine policy and set priorities. Moreover, if panels of elected councillors are to scrutinise elected commissioners and potentially second-guess their budgets, then we shouldn’t need the Secretary of State to third-guess that process. It may make sense to give the Secretary of State a reserve power to require a referendum if a local council wants a really excessive council tax increase. For policing, that power would surely better be exercised in extremis by the Panel which will scrutinise the police budget and represent the local councils and electorate which would pay for a referendum. David Cameron, Theresa May and Nick Herbert are truly driving home the Direct Democracy agenda with the police. They deserve our support.

Mark Reckless MP: At Last, Democracy Is Coming To Policing

Five More Years...?

Five More Years...?

Where's The Justice In That?

A Message from Conservative Home and Chris Grayling, Shadow Home Secretary

Sometimes Britain seems to be going quietly mad. A country where an elderly lady can be prosecuted for poking a teenager in the chest, where a police force can be prosecuted under health and safety laws when an officer is injured chasing a criminal, where a mother is driven to suicide by years of unchecked menace by a gang of troublemakers, where a vicious attack on a stranger is all too often dealt with by a caution, is a country that is getting things badly wrong.

How did we ever get ourselves into such an extraordinary position?

How did we get ourselves into a position where it is the criminal whose rights seem to come first, and where the victim is all too often forgotten or ignored?

And how did we get ourselves into a position where all too often the offender just gets away with it?

The picture set out in the most recent figures released to the Conservative Party by the Government is stark. They blow the lid off Britain's caution culture, and of a system that is sending all the wrong messages to offenders.

- Over the past decade, the number of offenders let off with a caution has risen sharply and now stands at nearly 1,000 a day.

- A third of those committing violent offences are now dealt with by a caution. That proportion has also more than doubled since 2001.

- A smaller and smaller proportion of offenders ever come before a court. Nearly half of all offences are now dealt with by a warning, a caution or a fixed penalty notice.

- Even sexual offences are treated in this way, with nearly one in three sex offenders let off with a caution. Detection rates have plummeted too.

- Only ten per cent of burglaries are solved.

- The detection rate for sexual offences has dropped by a quarter.

- So has the detection rate for violent offences - down by around a fifth.

Small wonder that so many people have lost faith in criminal justice in this country.

This short document sets out some of the reasons for the failings. It paints a picture of police stuck behind computer screens and not on the streets. Of unwieldy bureaucracy. And a system where justice is not being done.

It is a snapshot of a system that desperately needs a fresh start.

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Where's The Justice In That?

Government borrowing is preventing private lending

Originally posted on Conservative Home on 28th November 2008

Does 'radical monetary action' mean more than guaranteeing certain bank loans if the European Commission allows and suggesting the Bank of England cuts interest rates? What will we do to make monetary policy work and the economy recover?

We should start by recognising how the government and its Debt Management Office (DMO) have disabled monetary policy. They are flooding the market with short-dated government debt, doubling the outstanding stock of treasury bills from £16 billion to £32 billion and increasing short-dated gilt issuance from the £25 billion planned to £63 billion. The DMO is even 'overfunding', i.e. selling more gilts than needed even to fund Labour's current borrowing, a policy last used by us to slow the money supply between 1980 and 1985 and one which is utterly perverse in current economic conditions.

Given this flood of gilt-edged debt, risk-averse investors, particularly banks, lend to the government rather than to the private sector. They buy up the surging supply of short-dated government debt, instead of holding short-term private debt such as commercial paper or bank certificates of deposit. Surely it would be better to tackle this problem by cutting supply of the former rather than setting up an EU-backed bureaucracy to guarantee favoured categories of the latter?

Investors, including banks, are clearly scared to lend, so whether or not they do so will depend crucially on the riskiness of the alternatives. Historically in the UK there has been very limited supply of the lowest risk assets, i.e. debt that is government guaranteed, liquid and short-term. Banking problems in the past have not been exacerbated by the supply of huge amounts of low risk government paper to serve as an alternative to private lending.

If we want monetary policy to work and the banks to lend to the private sector we should stop flooding them with low risk public sector debt. The government says it is using fiscal policy to support recovery but it is funding its borrowing spree - and ironically its bank bail-outs - by shovelling treasury bills into the banking system in exchange for sucking cash out.

We need to reverse this policy by cancelling treasury bills and returning the cash to the banking system. The government should instead fund its borrowing by issuing debt which is riskier for banks than private sector lending, so that they do the latter rather than buy the former. That means borrowing by issuing long-dated and/or index-linked gilts, the prices of which are fixed in the long-term but volatile in the shorter term, meaning that they tend to underpin insurers and pension funds instead of offering banks an alternative to private lending.

An even more powerful way to get monetary policy working would be to switch some of the current flood of short-dated sterling denominated government debt into foreign currency borrowing. Presumably not understanding the resulting disablement of monetary policy, the government continues to instruct the DMO solely to minimise borrowing costs subject to risk. However, in this instance, saving borrowing costs and supporting monetary policy point in the same direction - to a measure of foreign currency borrowing.

Given that the UK government is borrowing incomparably more than any other major government, it must make sense to tap at least some of the pools of savings in other currencies, particularly given that our government starts from a position of having an already depreciated currency and virtually no foreign currency debt.

The current alternative of borrowing solely in sterling implies two things. Firstly, it means having to devalue sterling to a level from which foreign investors will anticipate a future rise sufficient to compensate them (at our expense) for the risk of holding large amounts of government debt in a currency other than their own. Secondly, it means denuding UK investors, including banks, of the capital which they could otherwise lend to the UK private sector to bring about recovery.

To make monetary policy work to generate recovery, and mitigate the tax bombshell, the government needs to stop borrowing short-term from UK banks in sterling and start borrowing some of what it needs from overseas in foreign currency.

Government borrowing is preventing private lending

Time to correct investors' mistake

Originally posted on Conservative Home on 10 October 2008

The banking crisis arose because banks became too leveraged. Their assets (mortgages etc.) were funded by too much borrowing (deposits, bonds, interbank loans etc.) and too little shareholder equity.

When it became clear that bank assets were not worth what was thought, creditors asked banks to repay some of their over-borrowing. Banks can't sell their assets quickly at anywhere near to their book value and they don't have enough equity to carry on covering creditors who refuse to renew loans.

Therefore banks will fail unless they recapitalise, i.e. increase their equity relative to their borrowing
They tried to do that through rights issues but now the replacement equity is worth less then shareholders paid in for it only months ago. Few shareholders want to throw good money after bad when they are not sure that the equity will be worth anything.

Unless someone else is made to buy new equity then banks will go bust. We are being told that there is no alternative to the taxpayer buying that new equity. But there is - the creditors. It is the creditors (excluding depositors with <£50,000 who are insured) who lent the banks money who stand to lose most in a lengthy liquidation if banks go bust and armies of lawyers and accountants are left to pore over the mess. It is therefore those creditors who should recapitalise the banks. They should do that by swapping a small proportion of what they lent to a troubled bank for new equity in that bank. The Bank of England should determine how much debt has to be swapped and at what price in order to restore solvency. This would have to be done quickly, if necessary by using emergency legislation and keeping markets closed until exchange terms are announced. Inevitably, not everyone would agree that the terms chosen were fair, but this may now be the least bad alternative open to us.

Existing shareholders would be diluted but their bank would be solvent. If confidence recovered both the shareholders and the creditors could benefit - the prospect that the government is optimistically holding out for taxpayers now. However, a debt for equity swap, or a Bank of England supervised reconstruction as we described our equivalent policy for Northern Rock, is more likely to work because - unlike a taxpayer bailout - it reduces banks' over-borrowing at the same time as it increases banks' equity. Moreover, if it doesn't work as well as hoped, it would be the creditors who invested their wealth in the banks - and chose to keep it there as the banks took greater and greater risks - who would have to absorb the loss. The way to protect the economy, while mitigating moral hazard, is not for government to prop up failing banks, then arbitrarily push one into liquidation, and then change its mind and semi-nationalise all the rest with an open-ended taxpayer commitment. Instead, the Bank of England should step in and swap debt for equity as necessary to restore bank solvency. This would be an extraordinary interference in decisions investors freely made as to how to finance banks. But they got the decision wrong and put in too much debt and too little equity. Government should not make taxpayers pay for the mistake it allowed investors to make. Instead it should require the investors to correct it.

Time to correct investors' mistake

Criminal justice should be localised and democratised

Originally posted on Conservative Home on 17th July 2008

Only a single directly elected individual, unlike what is suggested in the Green Paper, is likely to be able to give the political lead to make the police do what the public want. However, merely transferring Police Authority powers to such a person is unlikely to be sufficient to ensure that police chief officers implement a democratic mandate.

Unfortunately "political" is a dirty word in policing, generally used by chief officers as a reason not to do something. There is a danger that the "political" objection will be deployed more frequently against a directly elected individual than it is against an only partly indirectly elected police authority. We should also guard against assuming that the main problem with the Tripartite Structure is that the Police Authority leg is too weak compared to the Home Office leg and that the problem can thus be solved merely by endowing the former with greater democratic legitimacy. The more significant problem is that Constabulary operational independence leg has been colonised and nationalised by the Association of Chief Police Officers (ACPO).

Whilst its representative role for chief officers has ostensibly been hived off, ACPO acts as an overbearing and unaccountable club of chief officers which tends to subjugate its members' individual and local judgement. Its Committees and Cabinet (!) promulgate ACPO policy (sorry, ACPO operational guidance) on almost every conceivable policing matter to supposedly independent Constabularies which too often then implement it with little or no reference to either Home Office or Police Authorities.

For instance the Kent Intelligence Model was rolled out across all forces as the National Intelligence Model by Kent's previous Chief Constable as the last part-time head of ACPO. While that approach to policing may have helped cut crime in one county in particular circumstances, over time and applied nationally it was too often used to justify ignoring 'small' crimes and low-level disorder, and placed insufficient emphasis on visible Neighbourhood Policing. ACPO's reach is now such that last month at the Kent Police Authority we were even told by our Chief Officer team that we should implement national guidance on charging local community events for policing because "ACPO had decided this was necessary" and we therefore needed to "divorce ourselves from public feeling on this issue".

It is possible that our elected Police Commissioners may somehow manage to draw their Chief Officers out of this ACPO mindset and together run policing locally as the public would like. This may depend on whether those commissioners are able and prepared to push through significant increases in police precept as a quid pro quo for that co-operation. The other possibility is that Chief Officers fall back on ACPO nationally to shield them from "political" Commissioners locally. The courts would then have to adjudicate. A Conservative government committed to localism would be left hoping that the judges would rule that only local constabulary independence was entrenched in the tripartite arrangement and that Chief Officers were therefore unlawfully fettering their discretion when just implementing national ACPO guidance.

A better approach for the Conservatives would be to localise and democratise criminal justice as a whole, subject of course to an independent judiciary. This might prove easier and more effective than trying to do this to just one part of the jigsaw, i.e. policing. We could allow the CPS locally to be overseen by the same directly elected Commissioners as the police. Local priorities could then be aligned. However, there would still be proper protections as the localised CPS would operate at arms length from the police, while having operational independence for individual prosecutions just as the police have with respect to individual investigations.

Our directly elected Commissioners could also take control of probation and youth offending teams as well as play a role in commissioning places in prison and funding community sentences. Over time money in the criminal justice system would begin to flow towards what worked best in preventing crime and rehabilitating offenders. Instead of exchanging sterile sound-bites nationally over what works best, we would soon find out as local electorates did their work. Instead of seeing directly elected Commissioners as rivals in a turf battle police Chief Officers could look to them as allies who could get the criminal justice system working in a way that the public wants and which would allow the police to do their job.

Criminal justice should be localised and democratised