Thursday, 14 January 2010
I am not so one-eyed as to suggest there have been no successes: the NHS has certainly come a long way and schools have had a badly needed infusion of cash. These successes have, however, come at a cost, and for each one of those, there are so many more failures that we can point to. Energy? A looming energy gap. Environment? A yawning chasm between Labour’s rhetoric and its achievements. Defence? Characterised by a penny pinching, incompetent bureaucracy. Housing? Continuing chronic under supply of new housing. Immigration? A laissez-faire approach that has led to the build up of social pressures and public resentment. I could go on and on.
Maybe you are able to overlook all of that and focus only on the successes. However, surely the most ardent New Labour supporter' heart must sink when it reads that Britain now educates a smaller proportion of its 15 to 19 year-olds and its 20 to 29 year-olds than it did in 1995, an achievement shared only by one other country (France for the former and Portugal for the latter) among the 30 OECD members.
Perhaps all this proves is that governing is hard. I am sure that if this government could turn back the clocks, they would do things differently in many policy areas. But they cannot. The pact New Labour made with the capitalist devil when they took office has unravelled as the tax receipts have dried up in recession. Faced with the unthinkable prospect of cuts in public spending, their raison d’etre has been taken away and they look and sound defeated. The Conservatives, for their part, having been promising (pre-recession) largely to continue New Labour spending patterns if they won the election, also now sound lost and in search of a convincing narrative.
I’m not going to insult you by saying you should switch allegiance – that would be ridiculous. But do your conscience a favour and don’t go out and campaign for a party that you know you have run out of patience with. When it comes to election time, do the country a favour - stay at home and let the other lot have a go. After all, in all probability they too will foul things up at some point and someone else will take their place at the helm.
Friday, 4 December 2009
Perhaps she will, like her husband, embark on her own political journey, except this time in reverse…from New Labour identikit class war/equality warrior to genteel Lady Bercow of the Shire. Give it time…and a few years ensconced in a grace and favour apartment and, who knows? But let’s not damn her for sins not yet committed...unlike her damning of Cameron for potentially sending his kids to private school, like that is a crime in the first place.
I suppose her noteriety will earn her some votes out of some Jordan-esque misguided sense of feminist solidarity. She will doubtless horrify the Labour Party rank and file...a Jonny come lately urban champagne socialist as far removed from the labour movement as it is possible to be. If Mrs Bercow represents the future of the Labour Party, they have bigger problems than we ever thought.
Saturday, 24 October 2009
Perhaps they thought that
Yes, at times
Do you really think a
One final thought: isn’t it incredibly inconsistent for the BBC to have centred the programme around
Wednesday, 7 October 2009
"Why is our economy broken? Not just because Labour wrongly thought they'd abolished boom and bust. But because government got too big, spent too much and doubled the national debt"
To paraphrase, if Labour hadn't spent all the money whilst the economy was booming, we wouldn't be having to deal with such an impossibly large national debt now.
One of the reasons the
There is a sense at large in the popular consciousness that the goverment has become bloated, living beyond its means and needs to be reined in. This doesn't just relate to cuts in public expenditure but also means reversing the well meaning but ultimately anti-social upwards march of the state as surrogate parent. The fact is that the national debt is so huge that it would take cuts of humungous proportions to make a difference. It seems unlikely that the British population, whilst in the mood for a bout of belt tightening, would actually countenance the reduction in public services this would entail.
Instead, both the government and the opposition are proposing to snip away at the margins of public expenditure and chase after apocryphal efficiency savings. What else can be done? In a global economy, trying to tax multinational corporations or high net worth individuals will simply result in them departing for friendlier shores. The proposed levy on financial transactions will similarly lead to the exodus from
So, as always, the burden will most likely fall on those unable to escape. Consumption taxes (VAT, cigarette, alcohol and fuel etc) will therefore most likely rise once recovery has been secured to try and plug the gap. They are hard to avoid and fairly stable but tend to fall more heavily on the poor than the rich. It may be wealthy bankers and inept politicians that cause the crisis but the clean up is always paid for by the poor in the end.
Monday, 5 October 2009
However, with the conference season in full swing and the starting gun for the general election having sounded, this blog is BACK. And what’s more, I see I have been added to the wonderful and extremely useful House of Twits front bench as a Tory blogger, no less.
That feels slightly odd as I have never viewed myself as a true blue Conservative, finding the party’s traditional patrician and unfeeling character a total turn off. The party’s embrace of David Cameron has, however, allowed me at least temporarily to put aside my habitual dislike of both major parties. What I can say is that as long as the Conservatives stick to their current approach they will have my support; although not necessarily my trust and it absolutely won’t be unswerving devotion to the cause.
I am aware that the threat of the withdrawal of one insignificant blogger’s support will hardly have the Conservative brass quaking in their shoes. That, however, is not the point. For if they lose the support of someone like me then it is a sure sign that will be surrendering the hard won middle ground that Cameron and his cronies have fought so hard to claim.
Anyway, my message to the Conservative conference is this: please, please, please try to act normal and not like a bunch of disgruntled country squires out on a seaside jolly. Hide the old duffers at the back and try to sound firm but fair without being triumphal. Pretend Europe does not exist as far as possible. Then just sit back and soak up the column inches.
Wednesday, 3 June 2009
Heady times. Its 2006. The City credit boom is in full swing. Ed Balls is City Minister, winning friends and influencing people by championing the banks and preaching the virtues of his light touch regulatory system. Champagne corks pop and Ed feels like the king of the world. Its no wonder then that the FT reminds us this morning that business and the City have 'fond memories' of Ed's time as City Minister.
The FT and the media in general have decided on the back of this past cosy relationship that business should be pleased if Ed Balls is allowed to fulfil his destiny (in his eyes, anyway) and become Chancellor in the forthcoming Cabinet reshuffle.
In reality, the City should not be so quick to open its arms to Mr Balls, for three reasons. One, obviously, the world is a very different place and, ever the politician, Mr Balls has been quick to lambast his former banking friends for their contribution to the recession. To be fair, he has also sort of acknowledged that his system was at fault (
In retrospect we all underestimated the risks and we were nowhere near tough enough...).
The second reason is that since his stint as City Minister, Balls has spent much of the time cosying up to the left wing of the Labour Party. As Minister for Children, Schools and Families he has put into reverse the modernising agenda begun under Tony Blair, ousting Lord Adonis and putting restrictions on new foundation schools. Balls is said to be fond of drawing dividing lines between his agenda and that of his opponents. Having clearly placed himself on the side of a 'statist', interventionist government, it will be all the harder for him to row back from that position if he is made Chancellor.
The third reason is that given the state of the Labour Party in the polls and the proximity of the next election, he (and Gordon) will feel they have little to lose by swinging for the fences. Populist measures will be the order of the day - expect plenty of anti-banker rhetoric, scapegoating, headline-grabbing etc.
So, a Chancellor Balls should give business and the City pause for thought. He is likely to be a very different animal in 2009/10 than he would have been in 2006/7. It is ironic that, just like his master, Balls will be handed the one position he has always coveted at the worst possible time, in the depths of the worst recession in living memory and with mere months to go before his government is ejected from office.
Friday, 22 May 2009
There's a tug of war going on at the moment in the markets. Bulls, hoping for a classic V shaped recovery, point to the slowing pace of decline pretty much everywhere as destocking comes to an end and the credit markets begin to thaw. Bears, fearing a U shaped recovery or worse, worry that the rally in evidence since March has been overdone, that recovery is still a long way off and that the expansionary policies put to work to dig the global economy out of its hole will necessarily result in the brakes having to be slammed on hard in due course.
Alistair Darling's Budget in April may have proposed what seemed - at the time - an almost embarrasingly over-optimistic growth set of growth forecasts but now, with the benefit of hindsight, they make more sense. Back in April, we did not have the benefit of all the data evidencing the slowing pace of decline around the world. Whilst the recovery in stockmarkets was underway by then, the doomsayers prophesising another Great Depression were still very much in evidence.
Exactly one month on and the landscape feels quite different. Despite the reality of continuing job losses and weak economic activity, the debate has moved on to discussing when, not if, the upturn will arrive. This suits Labour just fine as it is a necessary precondition for their growth forecasts to prove true...the first part of their forecasts require the economy effectively to begin growing again in Q4 09 and it now looks as though that might well be possible, all be it anaemic growth.
The second part of their growth forecasts (+1.25% in 2010 vs the IMF's -0.4%) corresponds neatly with the debate over the V or U shaped recovery. If it is U shaped, then the Treasury's borrowing forecasts will need to be revised upwards yet again and Brown, Darling et al will be whipped out of Westmister. If it is V shaped, however, cue smugness all round and plenty of humble pie from, well, pretty much everyone except New Labour supporters.
Will a V shaped recovery be enough to win New Labour the General Election? Maybe not, but it may serve to avoid the sorts of apocalyptic drubbing the opinion polls currently envisage. So, Darling and co. had absolutely nothing to lose by being optimistic. Seen in that light, the growth forecasts no longer seem so illogical. Desperate, yes, but illogical, no.
Monday, 18 May 2009
[First post for a while...been a bit preoccupied with some work stuff but now have more time on my hands and lots and lots of issues to be cynical about. I know MPs expenses is the issue du jour but, hell, that's being done to death elsewhere...]
Sometimes I wonder why anyone wants to be a soldier. Sent to fight in far off lands for dubious causes by a government that seems only partially interested in their welfare and then largely ignored by the public, save for the odd bit of clapping while they march past or the handful of clowns who shout abuse at them in the name of islam.
The armed forces are, of course, staffed by honourable men and women striving to serve their country and keep the rest of safe to go about our daily lives free from getting shot or having our own limbs blown off by roadside bombs.
So it raised a little cheer this morning when I read that our judiciary was rallying to their cause by ruling that the government did indeed have to apply the Human Rights Act to its soldiers on the battlefield. You can read more about it here but suffice it to say that the government does not come across very well in seeking to block the aims of the families of dead and maimed soldiers bringing the case, namely that our boys and girls fighting over there deserve to have the government legally obliged to do everything they can to stop them getting killed. That means proper kit in sufficient quantities to support the job that the armed forces are being asked to do.
The government (boooo!) will doubtless appeal the case to the House of Lords but, for the moment, its score one for the good guys.
Thursday, 9 October 2008
However, HSBC, Standard Chartered and Abbey have already stated that they have no intention of making use of the £50bn lifebelt on offer from the government. Lloyds TSB, Nationwide and Barclays may or may not choose to use it - the vague, threatening noises about limiting dividends and executive pay will no doubt give them pause for thought. These banks continue to be answerable only to their current shareholders who doubtless would prefer their boards to continue searching under every unturned stone in the search for fresh capital before having to turn to the taxpayer.
The government should have been even bolder by announcing that it would take the power to force banks that it (in conjunction with the FSA) considered to be under capitalised to accept the taxpayers' money through the issuance of preference shares. By giving banks the option to use it or not, uncertainty still lingers over the banking sector. The banks should have been told effectively to negotiate the terms of a capital injection with the government now or have terms of the government's choosing forced upon you. That would have drawn a definite line under the issue.
Moreover, it seems strange that the government seems not, after all, to have insisted upon being issued with warrants to accompany its preference shares as without them, there is no way for the taxpayer to share in any upside, if and when it comes.
I am betting that the £50bn capital injection which has dominated the headlines will prove a damp squib, remaining largely untapped. What will have a far greater impact will be the £250bn of underwriting guarantees the government will give to participating banks. This is indeed ground breaking and is more likely to begin to ungum the interbank lending system than any other measure suggested thus far.
It may be nitpicking to suggest Brown and co. should have gone even further but in their timidity they have missed an opportunity. With all the headlines about nationalisation and political failure that resulted anyway, they may as well have been hung for the proverbial sheep as for the lamb. The banks should have been forced to take the taxpayer shilling.
Wednesday, 8 October 2008
Today's announcement of an injection of up to £50bn in UK banks represents an extraordinary and abject failure of New Labour's management of the economy. It is the job of politicians -at the very least - to create a stable framework for the private sector to do its job of wealth creation.
There is absolutely no point in Gordon Brown to claim this crisis has blown in from abroad when it was they who allowed the culture of debt to develop to such dangerous proportions, when it was they who designed and maintained the regulatory framework that was supposed to ring alarm bells , when it was they who were only to happy to accept the plaudits for the long period of economic growth that the credit bubble brought about, when it was they who accepted the donations and hospitality of the millionaires the system created.
The public want some blood in return for their cash. There is palpable anger on the streets that this situation has been allowed to develop. David Cameron's job as leader of the opposition was first and foremost to express that anger to Brown and his cohorts who were sitting smugly on their benches as if the problems had nothing to do with them. It was as if the partial nationalisation of our banking system was just another policy announcement and not the turning upside down of the economic and financial system that has sustained this country for the last 30 years.
Do they not realise the calamity that this represents for the country? The shame and stigma of being brought so low will remain with us for a very very long time. Our political capital around and influence in far flung corners, where we for so long were considered to punch above our weight, will have been diminished, probably permanently. Cameron could and should have let the PM know that a day of reckoning was coming for him and his party..not to do so was an error of judgement and let Brown off the hook.
Or is there? At last, Western governments have moved out of the denial phase and accepted that we are well and truly in it up to our necks. Central bankers and politicians have finally started to think strategically about how to deal with the crisis, ending their previous haphazard firefighting approach which could be likened to trying to kill the mythical monster, the Hydra, which would annoyingly grow back two heads if you ever managed successfully to lop one off.
The US $700 bn bail out and the UK £50 bn bail out, although different approaches, will not of themselves cure what ails the interbank lending market. But they do each represent a necessary prerequisite if the sick patient is to recover. As long as there is a chance that a bank might go bust, no other bank will lend to it. Remove the cause of the lack of confidence by recapitalising (or in the case of the US, by excising the impaired assets) and, in theory, the banks should be happy to start lending to each other again, and at more sensible rates.
Of course, there is no guarantee that banks will avail themselves of the capital that the UK government is making available. The conditions that will be attached to any assistance will undoubtedly cause the bank executives to think twice (not least restrictions on their ability to pay themselves and their emnployees). But at least the assistance is there as a last resort and interbank lenders should know that no counterparty need go bust for want of capital.
In the meantime, of course, the desperate deleveraging by the banking sector has started hitting the wider economy, rippling outwards in a now unstoppable wave. Credit is being tightened and new loans refused which will inevitably lead to companies, personal borrowers and individuals who have been borrowing at the margins of what their revenues and incomes could sustain going into administration and bankruptcy. Unemployment and home repossessions are the inevitable consequence. Sweeping up that mess will be a whole different challenge.
We are moving into the second phase of this crisis - the policies proposed so far may or may not do the trick...but at least they are a step in the right direction.
Friday, 19 September 2008
Despite trying to do everything to avoid the creation of moral hazard (the encouragement of irresponsible behaviour in market participants by allowing them to perceive that the goverment will always be on hand to bail them out if things get bad enough), this new toxic GSE represents the ultimate bail out.
It was, however, the lesser of two evils and hence the logical thing to do. As Former Fed chief Paul Volcker put it:
"Until there is a new mechanism in place to remove this decaying tissue from the
system, the infection will spread, confidence will deteriorate further, and we
will have to live through the mother of all credit contractions. This
contraction will undercut the financial system, and with it, the broader
economy. It will in the short run require serious money. But a failure to act
boldly would cost the taxpayer and the country far more. The pathology of this
crisis is that unless you get ahead of it and deal with it from strength, it
devours the weakest link in the chain and then moves on to the next link. Crisis
times require stern measures."
It could be argued that this move was inevitable ever since the decision was taken to nationalise Freddie Mac and Fannie Mae. In taking the decision to cut the shareholders loose, the US government effectively closed the door on troubled institutions raising fresh equity capital in the future. What would be the point for an investor, if the US goverment was just going to step in and expropriate your investment if things didn't go the right way?
The US Treasury should not be criticised for what they did - they needed to make a decision in the heat of the moment and, faced with the systemic collapse that the bankruptcy of Freddie Mac, Fannie Mae or AIG might have caused, they did what they thought was best. They then let Lehman Bros go to the wall, showing that when the system was not threatened, there would be no intervention.
When yesterday's firebreak (the $180 billion liquidity injection) failed to narrow the interbank lending spreads sufficiently and fears started to multiply over the previously rock solid money market funds, they realised what they had to do.
The creation of the "toxic GSE" is, in effect, the pushing of the big red button on the corner of the desk. It will push all the poisoned assets held across the spectrum onto the US national debt, left for future generations of US taxpayers to foot the bill. Fortunately, even the estimated $1 trillion of additional debt that this will entail will only push the US ratio of debt to GDP up by approximately 10%, to 55% - still lower than that of Germany, France, Italy or Japan.
Nobody should doubt, however, that this represents the US government running up the white flag with the biggest bail out of all time. As long as it actually gets approved (no mean feat so close to an election), we will never know how bad things would have got without it - but let's just be grateful that we may never have to find out.
Monday, 15 September 2008
Juande Ramos seems a manager well suited for the famous Tottenham tradition of looking attractive going forward but lacking spine and bite at the back. Only a fool would pretend that the summer's transfer dealings had left the team looking a stronger side, with the sale of our two most skillful attacking players, Berbatov and Keane, looking especially suspect.
Oh, but their sale was an excellent bit of business, I have heard more than one fan say. Maybe individually each deal made financial sense for the club's shareholders, but collectively they represented a colossal failure of nerve by the board. In deciding to take the money, they have shown up their lack of ambition and the late, panicky buy of the unproven (in Premiership terms) Roman Pavluychenko does nothing to dispel that feeling. Spurs came across having no proper planning in place and amateurish.
Yes, they have spent big in the close season but which player, other than Luka Modric, really has that feeling of Champions League quality about him? With Ledley King sadly only to be relied upon for a game now and then, where were the central defensive reinforcements that were so badly needed? The fact is, with so many players once again coming in and going out, it will be all but impossible for this new team to begin to gel any time soon. Aston Villa look a far better bet to make the Big Four into the Big Five...the reason? Consistency. Martin O'Neill has now been in the job for 3 years, fashioning a young, dynamic team and sticking with it. We Spurs fans can only dream of such luxuries.
Another "transitional" season beckons for Tottenham.
Monday, 8 September 2008
15 minutes later as I spy the front of the queue a mere 4 people ahead of me I have lost the will to live. When I eventually get to the front, I am grumpy with the poor unfortunate that has to serve me and came out thinking how awful the whole process was and cursing this government.
The Royal Mail may have saved themselves a bit of cash but they have lost whatever goodwill people still felt towards them. Next the posties will be going on strike again. Surely some enterprising private company can come up with an alternative business model that can fill the yawning service gap left by our public postal service?
Friday, 5 September 2008
Now she has revived her plan to criminalise prostitution, using a highly questionable survey to boost her case. Apparently, a government-commissioned poll (I wonder who commissioned it?) by Ipsos-Mori revealed that 58 per cent of people said they would support legislation making it illegal to pay for sex if it helped stop the trafficking of women and children into the UK. Harman has today pounced on this as evidence that the public backs her campaign.
This is disingenuous. Does she think we are idiots? The key is the "if". "If" it could be shown that wearing lime green underpants would stop global warming, I would bet that a fair few people could be persuaded to don them. The trouble is, there is no evidence that making prostitution would do anything to stop sex trafficking. In fact, there is a case for saying that it would make the situation worse, by driving prostitution and the trafficking that feeds it even deeper underground, thus making women more vulnerable to violence.
Harriet certainly has been busy lately. First there was the Equalities Bill in June of this year that forced public sector employers to publish their so-called 'gender pay gap' and allowed firms to discriminate in favour of women when making employment decisions.
In July she proposed that women who kill abusive partners could escape a life sentence if they could show that they were responding only to a “fear of serious violence”, while men would no longer be able to claim “provocation” from sexual jealousy or nagging, as a defence.
In August she said plans were 'well under way' to force all companies that bid for government contracts (30% of companies in the UK) to disclose their gender pay gap and to allow selection decisions to be based upon the figure where other factors are equal.
Also in August she came out in favour of plans to double the length of time (to one year) employers must keep open a job for a woman on maternity leave. Currently they have only to offer an equivalent position if the original one is no longer available.
Thursday, 4 September 2008
I, like the rest of the public, lost confidence in Sir Ian the day he went on television and incorrectly stated that his police force had shot dead a terrorist at Brixton. Whether he knew this not to the case or not does not matter, he is either a lier or allowed a seriously disfunctional system to develop. He should have carried the can. His continued presence at the head of the Met undermines public confidence in the police and contibutes to the generally low opinion that the public hold the police in. How many crimes have gone unreported as a result? How many decent officers attacked?
For one so caught up in politics, Ian Blair also showed a remarkable lack of awareness in rounding off his statement with a flourish: "I've a job to do and I'm getting on with it." Sound familiar?
Wednesday, 3 September 2008
Tuesday, 2 September 2008
Others are saying that it makes no sense to try and prop up falling prices or encourage those at the marginal end of affordable borrowing to get on the housing ladder. Economically this is hard to argue against but it is the Government's job to help people, after all. Yes they may be misguided in this attempt but at least they are trying to do something. The raft of measures introduced do at least look as if someone, somewhere, has been thinking hard about the problems.
When the dust settles, however, I think the most telling criticism might compare the cost of government action to support the housing markets in the US and the UK (in proportion to GDP) and conclude that it is precisely because the UK has so little fiscal room for manoeuvre that our Government has had to try and be so innovative.
US GDP: $14,312.5 bn-----Housing help: $300 bn = 2%
UK GDP: £1,410 bn------- Housing help: £1.6 bn = 0.1%
N.B. this is being kind as I am including the estimated £1bn of UK help that represents existing spending plans brought forward. Excluding this the UK figure is 0.04% of GDP.
Monday, 1 September 2008
"I can't think of any more important job I could have than making sure that the children in our country are equipped to learn going into primary school and can get the qualifications they need to be happy, to have fun and to do well in life."