Friday, 30 July 2010

Tory CND....

The Guardian is reporting that Liam Fox, the Defence Secretary, has been given a flea in the ear by Boy George over the funding of Trident.

It seems that the nuclear fleet has always been financed out of Treasury money, not the MoD budget. But now Osborne says the MoD must find the cash from within its own allocations.

Fair enough says I, but the effect will probably be on cuts in conventional military spending and/or cuts in the nuclear defence arena.

Who'dathunk, after all the jibes at Labour politicians with CND connections, that it would be the Tories who would drive nuclear disarmament?

Sunday, 25 July 2010

Fisking Janet...

Over at the daily Telegraph, Janet Daley has a typically looney well thought out critique of Michael Gove's "free school" bill which is currently being rushed through Parliament with very little scrutiny.
Among Ms Daley's insights is the thought that...
"...the condition of Britain's state schooling is pretty much on a par as a national peril with a campaign of dirty bombs."
A summary of Janet's thinking:

Gove is apparently proposing a “..revolution in state schooling...” the significance of which “.... is both substantial and symbolic ..“.  This revolutionary significance is a valid justification for the fact that “this Bill is being rushed through under emergency measures that are generally applied to such things as terrorist threats”. 

Put another way: Daley thinks that ordinary standard non-revolutionary and insignificant bills should be subject to tight Parliamentary scrutiny, but this bill’s very revolutionary and significant potential means that it is much too important to be hampered by in-depth scrutiny by MPs.

You might think that this stands logic on its head, but not Janet. Oh no. Her unique insight is that nasty opposition MPs are to blame “...the Labour front bench has focused its attacks on the fact that this Bill is being rushed through under emergency measures that are generally applied to such things as terrorist threats....” But that’s not a problem because as far as she is concerned...”the condition of Britain's state schooling is pretty much on a par as a national peril with a campaign of dirty bombs.” By the same logic, cutting 700 schools out of the building programme in England and Wales is a defence against terrorist attack....maybe we should cut the other 700....

Not that Janet wants the bill to escape scrutiny. Heaven forfend. As she approvingly reports...” .... as Mr Gove said... the content of this measure is what should be under discussion, rather than the process by which it is being passed”.  Which leaves the puzzling question: if it is right and a good thing (as the bold Janet suggests) that the bill is being rushed through Parliament without the normal scrutiny, how is Parliament supposed to “discuss” the content of the bill? Isn’t the fact that the “content of this measure” is not under proper discussion a factor of the “....process by which it is being passed”? If you rush a bill thorough Parliament on a timetable normally reserved for terrorist legislation, how can the content be discussed properly?

Janet further contends that “.. it is the content that is so very awkward for the vested interests that are fighting against these reforms..”. But if that were so the “vested interests” would be ushering the bill quietly through Parliament with as little overview as possible, thus avoiding any “awkward” questions: but these so called “vested interests” are actually calling for greater scrutiny... according to Janet’s “logic” they must be nuts..!!??
Or could the problem be Janet’s “logic”?

Wednesday, 21 July 2010

Do we really really really trust George?

It's remarkable how things change in politics. Two months ago George Osborne was a surly, spoiled-little-rich-boy dabbler in economics, a lightweight, needing the gravitas of Vince Cable (rememeber him?) to shore him up and convince the markets that the coalition had some "bottom". Today Georgey Boy is the Chancellor of The Exchequer, with the fate of the UK economy in his grasp. Vince, meanwhile, has been despatched to the department for counting paper clips and plastic rulers, the true domain of Lib Dems in a Tory government.

But what of George's plans for our economy? Labour's cuts were too little and too late for him, so he doubled and trebled them and brought them forward by a year. But wait. A report by the National Audit Office reveals that even Labour's planned cuts of £35 billion are not being achieved. The mechanisms do not exist within Whitehall and departments are struggling to make the cuts in the volume and time allowed. Now children, if these cuts are difficult to achieve, what are the chances that we are we going to get the Conservatives' £99 billions of cuts made even more quickly?

Not likely, is the honest reply. But when George Osborne was asked in the Commons last week what fallback plans he had in the event of failure to implement the cuts he said he had none..."confidence in the UK economy", was the bold George's plan B. In the past Mr Osborne has used the credit agencies as a frightener to whip opposition to his plans into line: "if the cuts are not draconian the agencies will downgrade our rating, and then where will we be?" I wonder what the credit agencies think of the situation where there is no plan B but, according to the NAO, plan A is unlikley to work.

A few days ago, despite savage and early cuts, the ratings agencies downgraded the Irish economy .......

Could it be , even with George Osborne's savage plans, plans which were conceived to placate these same  ratings agencies, that the UK be next in line?

Monday, 19 July 2010

I have seen two headlines today:

 Cameron defines his Big Society

Cameron defines his Big Society "passion"

First statement not true, second statement true.

It seems that Dave has a "passion" for the "big society" but, like a lovesick teenager, he can shout from the rooftops the strength of his emotions, but, blinded by desire, he is dumbstruck and tongue-tied, unable to explain the actual nature of his love.

This quote from ConservativeHome;
"The Big Society is about a huge culture change… where people, in their everyday lives, in their homes, in their neighbourhoods, in their workplace… don’t always turn to officials, local authorities or central government for answers to the problems they face… but instead feel both free and powerful enough to help themselves and their own communities."
and ...
"It’s about people setting up great new schools. Businesses helping people getting trained for work. Charities working to rehabilitate offenders... Paying public service providers by results."
All very nice, and some of happening right now....but what does that actually mean in any practical situation?

Take "setting up great schools". We have six secondary and about 30 primary schools in our council area. If  I decide to take one of these schools out of local authority control, what happens next? Does the council still have to provide support for the deserting school? Legal, environmental, help with social issues and health matters? With dyslexic kids and those who lag behind? Or will my new "great" school bar all these troublesome pupils in the interest of remaning "great"? What happens to the schools left behind? Do they absorb the problems pupils I have just shed? Do they get less money allocated as the new school gets set up help from the government?

"Setting up great schools" seems like a great idea... but it looks like the typical Thatcherite Tory fragmentation - not a cementation - of society, whether you call it "big" or just normal....

There's a lot more of it, all as vague and imprecise as the above.
So we drive in the direction of where Dave thinks the "big society" might be, but we have no assurance that we are using the right road map and we have no clue as to how we will identify the beast, should it really exist, and should we ever find it....

With a bit of luck it'll all peter out in the sands of the desert.

With less luck, it will recreate the broken Tory society that labour inherited in 1997....

Sunday, 18 July 2010

Public Enemy No. 1 ..... million

How many civil servants are there in the UK?  According to this analysis, about half a million in "Whitehall", i.e. based around London and government departments. This does not include local government staff, so the total could be around a million, or maybe more. And are they all a bunch of wasters?

Will Hutton in the Observer today is concerned with "fairness" and what it means to different people and in different situations. In the article he cites the case of the headmaster who earned £200,000 in a year, and the stir this caused in the tabloids and on TV news. Is it "fair" for one head Teacher to earn so much, and so much more than any other teacher? 

TBH, I thought the story was got-up by the tabloids. Sure the guy earned a lot, but some of it was back pay and some of it was earnings from a consultancy job. The Headmaster in question seems to have been very effective in turning round a failing schools and the pupils, parents, teachers and governors had nothing but praise for his efforts and for his success.

£200,000 is a lot of money, and you might think that it is still too much, but IMHO it is not as egregious as the headline writers made out...

Indeed, from recent stories in the press about this or that civil servant "earning more than the Prime Minister", it seems to me that all public servants are being painted by government agencies as over-paid, a "waste of money" and time serving shirkers all, the better to cut their jobs and livelihood: after all, who has sympathy for a waste of public money? If "public servant" can become a synonym for "waste of space", then the public will accept job losses in the public sector with no protest and maybe even a few cheers.

Elsewhere in the Observer we have the second week of "the Secret Diary of  Civil Servant", which outlines the confusion of government ministries in their search for "savings".

He/she touches on the same theme: the "vilification" of public servants as a prelude to the dismantling of public service itself.

The effect on public sector morale must be quite damaging: how can you do your job properly when your political masters have such a low opinion of your peformance, and are broadcasting their contempt far and wide? And if morale is low, what can we expect in performance terms from our public servants? Not a lot, would be the conventional wisdom.

The question then becomes: how can the Tory government declare war on a million of its own employees and still expect to govern effectively? And what happens to our public services if public servants are the government's public enemy No. 1?

Thursday, 15 July 2010

The Lie of Broken Britain....

"Broken Britain" was one of David Cameron's mantras, playing on the fear of crime that is so often exaggerated and inflamed by the Tory tabloids. But the crime figures released today show that crime is down to below the levels of 1981. This BBC Graph shows that crime in England and Wales shot up under the Conservatives in the 1980s and early 90s, and has fallen steadily under Labour. It is now at levels not seen since before the Thatcher Government. So much for the Tories as the so-called Party of Law and Order!

It's ironic that Cameron made so much of the fear of crime when his party drives crime up and Labour brings it down...

It's the same with the economy of course, and there's another Tory version of "Broken Britain", the one that says the economy needs such massive and early cuts that the Welfare State can no longer be afforded. This case is not accepted by the majority of economists and is clearly driven by right-wing Tory ideology.

And the Tory claim that There Is No Alternative (TINA) to the cuts, is not necesarilly true either. This document, The Great Tax Parachute, spells out some alternative ways to cut the deficit by raising taxes and by recovering some of the estimated £100 billion that is lost to the Exchequer by deliberate tax evasion, non-paymet and tax avoidance strategies.

It is issued by a group calling themselves The Green New Deal. I'm no economist, but the ideas that this group espouse seem to me to be at least worth considering. If we really are losing £100 billion a year through unpaid taxes, it must be worth trying to get some of it back from the thieves who are stealing it...

Wednesday, 14 July 2010

No Reputable Economic Theory Justifies This Bleeding...

The New York Times, no leftie rag, has this condemnation of George Osborne's budget. Scathing is hardly the word...

After praising the Tory government;
"We’ve found a lot to like in the first two months of Britain’s new coalition government"
and praising David Cameron for his planned review of alleged torture by British agaents and on his reaction to the Bloody Sunday Inquiry, it gets a bit more blunt about Boy George's budget....

First it addresses the Tory lie that our economy is as bad as Greece's...
"Britain isn’t Greece. Recovery would eventually have wiped out much of that red ink"
And the size and speed of Osborne's cuts...

"The ...... cuts Labour had planned would have done the rest, leaving a respectable full employment deficit of only 1.6 percent of gross domestic product by 2015"
It gets very blunt....
"No reputable economic theory justifies this bleeding"
And it reaches a conclusion many of us reached the day after the budget was revealed...
"The coalition budget reflects Conservative Party ideology"
Too bloody true it does...

The New York Times and the vast majority of reputable economists are agreed on this analysis of the budget, and Sir Alan Budd has effectivel admitted it's truth by chucking in his job at the OBR.

You can understand Tories sticking obstinately to their Thatcherite religion, but you have to ask: what on Earth are the LibDems doing suporting this openly ideological and damaging budget?

Whatever happened to their claim to be  a party of the left? Or even the centre...? By tying themselves to the Conservatives openly Thatcherite economic philosophy they are ditching their liberal credentials and damaging their future electoral prospects....... what wonderful and mysterious benefits are they getting in return for this Faustian bargain?

I don't know, but I hope, for their sake and the country's sake, that it's worth the pain...

Spending Challenge or Intellectually Challenged?

The Other Taxpayers Alliance has brilliant piece on the coalition's Spending Challenge website.....

When this site was announced it was predictable that all the neanderthals, hotheads, racists and other nutters would be out in force with their pent-up anger long-nursed grievances.

I wonder what this "money saving" exercise has cost us in set up and running costs....

Monday, 12 July 2010

The apprentices take over the workshop....

In France, young men of greatest promise who are at the best schools or studying the favoured subjects at the Sorbonne are spotted by their teachers and lecturers. Such individuals are singled out young, steered through the academic process and their careers monitored and nurtured. The most promising are regarded as "l'homme serieux".  These men of destiny will be from the right backgrounds, be exceptionally bright and have the right character and contacts. They will be nurtured through their academic studies and early careers because they are the future of the country, the coming establishment, the young men (and women) who will in twenty or more years will be running the country and  industry and academie.

Any hope that there might have been that the privileged group of young Conservatives who have taken over our country are the UK equivalent of the French chosen elite is fading fast. They do indeed come from the right background and they went to the right schools and clubs, they have the right connections and they formed the right relationships. They are the very heart of the old establishmnet, but on the evidence so far, they are far from prepared for power: they are not "serieux". Not by a long way.

The Observer had a piece yesterday, The Secret Diary of a Civil Servant. Purporting to be written anonymously by a senior civil servant, it was full of a misery and despair at the state of the civil service and, just a few weeks into the Parliamentary term, the quality of political leadership. It documented the growing gloom among civil servants at the actions of the coalition government.

The article pulls no punches. On a speech by David Cameron which was meant to boost morale, the author believes that; 
"Cameron meant well, but it was clear that he hadn't the faintest idea what a civil servant does, or the daily dilemmas we face."

Read that again: he is describing a Prime Minister who doesn't know how government works, a person who is totally unprepared for the job he sought and was given by the electorate.

The evidence is damning;
I have noted since the election that Conservative ministers seem very relaxed. I, like many others, interpreted this as confidence and competence. After last week, it started to look like naivety and arrogance. The gaffes were piling up and forming an edifice of stupidity. Ministers called to the Commons to apologise; Hillsborough survivors insulted; Jamie Oliver criticised; the Speaker called a stupid sanctimonious dwarf; school building programmes announced and then scrapped. It was a litany of carelessness and sloppiness, a series of avoidable own goals that illustrated a lack of preparation, a lack of seriousness and the failure to appreciate what it is to govern a country.
 And while the politicians are blundering about like a herd of bulls in a veritable mall of china shops, the civil service is in disarray;
At the very highest levels, some of the most experienced officials are packing their bags. Giddy with the glimpse of freedom, they are happily waving through these gigantic plans. Beneath them are scores of officials who would like to muster the fight to critique and improve them. Instead they are paralysed by the imperative to let the new regime make its own mistakes....
The most evident example of the incompetence that infects the coalition is the announcement, by Michael Gove, of the schools building programme in England. To call the announcement a fiasco is to unederplay the chaos and confusion leashed by the minister. Ed Balls has latched on the mess caused by Gove and intends to ask him some pointed questions in the House today.

Also today, Andrew Lansley will announce (although it's all leaked in advance anyway) his plans for the NHS in England. Trailed as the most radical change in health provision since the NHS was founded, the changes have been formulated with remarkable speed and absolutely no consultation. They are a real gamble with the Health Service as we know it. 

But if morale in the civil service is so low, and the politicians' grasp of the levers of power is so misdirected, it is unlikely that these huge changes to Health and Education (and much much more to come) can be introduced quickly or smoothly.  The confusion and chaos of Gove's cuts certainly doesn't encourage confidence in the future of the other radical changes that the coalition's plans, or for the good governence which is vital in the current economic situation.

Thursday, 8 July 2010

He who rides the tiger.....

Big things and small things.

The big thing is the economy and the awful suspicion that the coalition government is heading us back to recession and maybe even depression through its economic illiteracy. The Tories have always been economically illiterate (just look at the squandring of the oil bonanza in the '80s and Black Wednesday if you need evidence).

But that's not the only problem. They have always been in thrall to business, and opposed to the welfare state. This leads them to sell of our assets and privatise services that would much better be provided by the state and to defer to business in areas where the state is much better placed to address then problems..

And so to the small things, if you can call public health, and particularly the obesity explosion, a "small thing". Tory Health Minister Andrew Lansley is addressing the problem of obesity, not by more regulation of food providers, but by less. He has promised to loosen regulations in return for cash. To be specific, beer companies, confectionary firms and crisp-makers will be asked to fund the government's advertising campaign to persuade people to switch to a healthier lifestyle and, in return, will not face new legislation outlawing excessively fatty, sugary and salty foods.

The idea that Cadbury's or  Nestle or Unilever or the brewers are the fit people to conduct food policy in an advanced democracy is idiotic. In any case it was tried by the last Tory government, and it failed, with the results we see today.

There's an old Chinese proverb to the effect that "he who rides the tiger ends up inside...". The Tory policy on obesity is equivalent to the management at the zoo extracting an agreement from the tigers that they won't eat anybody in future, and in return their cages will be left open....

Professor Tim Laing, Professor of Food Policy at City University was interviewed on 5 Live this morning. I have seldom heard a government policy attacked with such venom: "nonsense", "utter nonsense" and "stupid politics" were just three of the insults I caught.

The interview can be found here . Just skip to 1hr 38 mins in. Worth hearing.

Wednesday, 7 July 2010

Nipped in the Budd.....

Sir Alan Budd, hand-picked chair of George Osborne's "independent" Tory quango, the Office for Budget Responsibility (OBR), has quit just two months after the election and a month after delivering its budget forecasts.

Rumours fly of bust ups and splits with Treasury ministers, or that Budd was miffed that David Cameron used leaks of his departments forecasts to counter newspaper allegations of predictions of huge job losses. Whatever the cause, the fact is that George Osborne's tame economist has chucked his hand in before his office is even properly established and its independence guaranteed. It's a disaster for the Tories, the coalition  and the Chancellor.

Of course such "independence" was not exactly guaranteed under Sir Alan. For younger readers who may not have heard of him, it is worth reminding them that Budd was a senior economic adviser to the Heath government in the early 1970s, helping to push through Anthony Barber's stock market and housing boom which was to culminate in a stock market crash and inflation rates of 27%.

Budd was also an advisor to the Thatcher government and one an advocate of Geoffrey Howe's disasterous 1980 budget, which doubled VAT (in breach of an election promise) and, in raising interest rates, led to a significant over-valuation of sterling on the markets.

British manufacturing and their export markets were rendered insolvent over night and unemployment trebled to 3.3 million. Budd admitted the hugely negative effects, but seemed to think they were a price worth paying for reducing the power of ordinary workers and the trade union movement.

Over the years, Budd's influence on economic policy has been disastrous, but he's a Tory to his bootlaces and he was Osborne's chosen man. So why would he quit now, before the spending review and before his forecasts have a chance to be proven correct (or not!)?

Could it be that Sir Alan has seen the light, that he realises that the coalition's economic strategy of cutting deep and fast is the wrong way to go, and he does not want to be tarred with its failure?

In any case, it's a fiasco, and an embarrassment for the coalition and for George Osborne in particular, and it bodes ill for economic policy if one of its mainstays has insufficient confidence and commitment to hang around for more than a few weeks.... 

Tuesday, 6 July 2010

Is this really the time to be cutting spending...?

A very pessimistic piece of analysis from the Telegraph financial section on the US economy. It's feels just like 1932, says the report, quoting Former US Secreatry for Labour,Robert Reich...
"The economy is still in the gravitational pull of the Great Recession. All the booster rockets for getting us beyond it are failing."
All the indicators in the USA are going in the wrong direction: unemployment rises while the workforce shrinks, earnings are down, consumption is down, revenues are down and production is down.

The USA is seen as the engine of world trade. Its enormous economic power drives the global financial and economic systems. If the US is in trouble, we're all in trouble.

And it's worse than that...
"Investors are starting to chew over the awful possibility that America's recovery will stall just as Asia hits the buffers. China's manufacturing index has been falling since January, with a downward lurch in June to 50.4, just above the break-even line of 50. Momentum seems to be flagging everywhere, whether in Australian building permits, Turkish exports, or Japanese industrial output".
Meanwhile, back in the good old UK, our government continues to shrink the economy far faster and deeper than necessary or sensible.  Yesterday Michael Gove announced that 750 school building contracts in England were to be cancelled at the cost of thousands of jobs, and billions of lost investment (not to mention the hopes of pupils and teachers). Meanwhile Danny Alexander sneaked out more cuts in already existing programmes.

Internal spending and consumption is shrinking and the government is making the contraction even greater. Meanwhile, with the USA and Europe contracting, the main markets for our exports are also shrinking.  Where exactly does the UK government expect growth to come from?

To hark back to 1932: the depression was made worse and longer by the very conservative policies that now prevail in Europe and the UK: cut spending, contract the economy, reduce activity. Recovery began with the USA spending on internal projects, good old Keynseian economics. As the US economy recovered, other countries could export to the USA, and slowly grow back to normality.

How stupid is our own government not to have learned that lesson? Why can they not see the logic of their policy is that there will be donward spiral, a race to the bottom, as governments cut and economies shrink, 'til there is nothing left to cut and nowhere else to go?  Unless all governments can agree on a growth and investment startegy, the recession continues and a double dip looks more and more likely.

Gordon Brown, above all others, recognised this and he knew the policies needed to reverse the recesssion. A great pity he's not in charge now...

Sunday, 4 July 2010

Can they be serious? Should we be afraid?

The Sunday Telegraph is reporting that ministers have been ordered to find 40% cuts in their departmental budgets. The £113 billion cuts they already say they want (25% cuts across departments) is already too much for many economists, who say that it will slow down the recovery and maybe even put it into reverse.But now they appear to want even more cuts....

A 25% cut in any single department is savage in itself, and will be achieved only at the expense of great pain. It is unikley that only "inefficiencies" will be cut. Cuts of 25% will mean real cuts to services. In which case, it is hard to think of any public service that can stand a 40% cut without completely destroying its effectiveness.

So are the Tories and Lib Dems serious? Can they really be contemplating 40% cuts to Transport, Education, Local Government and other vital services? Is it a veiled threat to ministers to make them take the 25% figure more seriously? Or a bluff to make the eventual cuts seem almost benign? Could it be that the Tories are really determined to destroy the Welfare State?

Cuts of this size will decimate the public sector, and severely limit its ability to meet the needs of the population. Already libraries and local village halls are under threat as councils make small efficiency savings to meet the current budgets. If cuts of 25 % go through there will be mayhem. If 40% cuts are demanded, it will stretch the bounds of anything that has so far been considered possible.